As businesses scramble to develop their plan for the weeks ahead, it’s important to identify aspects of the Families First Coronavirus Response Act (“Response Act”) and related laws that are unclear at this point. Professional advisors may offer educated opinions on these questions – but, at the end of the day, we won’t know some of the answers with certainty until the U.S. Department of Labor (“DOL”) and other government authorities issue regulations or further guidance. The following is intended to assist businesses with identifying some of the gray areas in the law – and hopefully direct regulators to points where further guidance could be helpful:
Effective Date – The expanded FMLA and paid sick leave provisions of the Response Act are to take effect “not later than 15 days after the date of enactment of this Act.” The DOL is directed in the Act to issue regulations within the same time frame. Although the 15th day following enactment would be April 2, 2020 – it is possible the new requirements may take effect sooner – possibly upon issuance of DOL regulations, or shortly thereafter.
Counting Employees – The expanded FMLA and paid sick leave provisions both apply to private employers with “fewer than 500 employees.” Such statutory language always raises questions of how to count employees. May related companies be aggregated for purposes of determining the total employee head count? How closely related must the companies be to do so? Do temporary employees who have been engaged for a sustained period count? Do part-timers count – or may they count as a partial full-time equivalent? The DOL will presumably rely upon existing FMLA regulations and case law when interpreting the paid FMLA provisions in the Response Act. However, whether or not those regulations will apply to the paid sick leave provisions is unknown at this point. Hopefully, for the sanity of all employers, the same legal standards will apply to both benefits.
Eligibility – The expanded FMLA benefits apply to any employee who “has been employed for at least 30 calendar days by the employer” from whom leave is requested. Must those days be consecutive? Would an employee who was rehired yesterday be eligible based on 30 days of employment in 2017?
Unable to Work (or Telework) – The Act’s paid FMLA and sick leave benefits are available to an eligible employee who is “unable to work (or telework)” due to a need to care for a son or daughter under 18 years of age if the child’s school or child care arrangement is closed or unavailable due to a public health emergency. What if the employee has already used 11.5 weeks of FMLA week this year? What if both spouses are sent home by their respective employers due to the closure order. Spouse A has the ability to telework, but Spouse B does not. However, Spouse A claims that he/she is unable to telework because his/her 17-year old child’s school is closed. Must employers ignore the fact that the employee’s spouse is also at home – and is not teleworking? Must employers ignore the fact that most 17-year old children are capable of occupying themselves for several consecutive hours at a time? What if the child’s school building is closed, but continues to provide classes online? May employers inquire about the status of an employee’s spouse or child during the closure period?
Exempted Employees and Small Businesses – The DOL has been authorized to issue regulations exempting certain health care providers and emergency responders from the paid FMLA and sick leave requirements. Also, regulations may be forthcoming exempting small businesses with fewer than 50 employees, if the benefits would “jeopardize the viability of the business as a going concern.” The scope of these exemptions is not yet clear but hopefully will be soon.
Effect of Business Closure and Layoffs – The paid sick leave benefits are available when an employee is unable to work (or telework) for several reasons related to Covid-19. One qualifying reason for taking paid sick leave is “the employee is subject to a Federal, State, or local quarantine or isolation order related to Covid-19.” Does Governor Wolf’s recent business closure order qualify as an isolation order? Would an employee who has been laid off due to the closure order be eligible for the expanded FMLA and paid sick leave benefits once they take effect? What if the employee was receiving statutory paid sick leave or paid FMLA at the time of the layoff – do the benefits continue? We have strong opinions on these issues, but official guidance is needed to bring certainty.
Credit for Voluntarily-Provided Paid Leave – We know that if an employer has always provided an amount of paid sick leave or PTO to employees, the existing leave will not be credited against the 80 hours of paid sick leave that will soon be available to full-time employees under the Response Act. What if an employer supplemented its regular sick leave benefits with additional “pandemic paid leave” time that was made available before the Act took effect. Would these additional benefits be credited toward the statutory sick leave requirement? Will tax relief be available for such voluntarily-provided additional leave? (Note: Until the DOL says otherwise, cautious employers should assume the answer to these questions is no).
Notice of Rights – The DOL has been directed to promptly publish a Notice outlining employee rights under the Response Act. Employers must “keep [the Notice] posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted.” What if all employees are telecommuting? Is there a duty to distribute the Notice electronically?
Use of Paid Sick Leave – The Response Act makes 80 hours of paid sick leave available to full-time employees, and a pro-rated amount available to part-timers. Since the leave entitlement is expressed in terms of “hours”, it may presumably be taken on an intermittent hourly basis and not just full-day blocks – but official clarification on this point would be helpful. Similarly, one of the approved reasons for taking paid sick leave under the Act is to care “for an individual” subject to a local quarantine or isolation order. Does this right extend to caring for individuals outside of the employee’s family or household? Is paid sick leave available to care for friends? Neighbors?
Definition of Full-Time – The Response Act provides 80 hours of paid sick leave to “full-time employees”, and a prorated amount for part-timers. However, the Act doesn’t define “full-time.” Does the employer’s existing employee handbook govern who is “full-time” for purposes of eligibility for paid sick leave benefits? Is 40 hours per week the definition – or are we using the 30-hour standard utilized in the Affordable Care Act?
WARN Notices – Under the Worker Adjustment and Retraining Notification Act (“WARN”), employers with 100 or more employees may be required to provide 60 days’ advance notice to employees who are subject to a mass layoff that affects at least 50 employees and lasts more than six months in duration. Notices must also be given to the employees’ union and certain government authorities. Less advance notice is permitted if the layoff is due to “unforeseeable business conditions.” However, in those situations, the employer must give as much advance notice “as is practicable.” It’s unfathomable to believe that mandated closures will last anywhere near six months – however, some facilities may close permanently due to the business impact of Covid-19. How strict will WARN enforcement be in light of the fluidity of the current situation? Relief for businesses on this issue would likely require an act of Congress and shouldn’t be assumed.
Life-Sustaining Businesses – Most Pennsylvania employers already know that Governor Wolf’s closure order for “non-life sustaining” businesses took effect at 8:00 p.m. on March 19, 2020. An announcement was made on Friday that enforcement of the closure order has been delayed until Monday, March 23, 2020 at 8 a.m. Updated Business Guidance, a Waiver Process and an email address (ra-dcedcs@pa.gov) for seeking clarifications are available on the Governor’s website at www.governor.pa.gov. In addition, multiple clarifications as to which businesses are permitted to remain open have been added to the list. Here, the questions are unlimited. Perhaps the most pressing question is – “We are closed per the order, but I really need to retrieve that client file from my office – will I be fined and shackled if caught sneaking into my office under the cover of darkness on Monday night?” And, trust me, this is a purely a hypothetical question….
It’s important to “know what we don’t know” as we navigate these uncharted waters. We hope this outline of some of the gray areas in the law is helpful to you as you plan for the next few weeks.
