On August 3, 2020, the U.S. Department of Labor issued FAQs providing guidance on Families First Coronavirus Response Act (FFCRA) compliance for employers with federal government service contracts covered by the McNamara-O’Hara Service Contract Act (SCA) and federal construction contracts covered by the Davis-Bacon Act. Both the SCA and the Davis-Bacon Act set wage rates for employees and require covered employers to either provide fringe benefits, e.g., health insurance and paid sick leave, or pay the employee a cash equivalent.
The FAQs clarify what employers covered by either of these laws must pay when employees take leave under the FFCRA, using either Emergency Paid Sick Leave (EPSL) or Emergency Family and Medical Leave (EFML). The answers are:
- If the employee is using only EPSL or EFML (under the FFCRA) the employer is not required to include the fringe benefit cash equivalent in the employee’s pay rate. However, employers that provide health insurance rather than the cash equivalent must continue to provide the employee with insurance while the employee is on paid FFCRA leave.
- If the employee is using FFCRA leave and also using paid sick leave, vacation, or holiday hours provided by the SCA or under the terms of Executive Order 13706 (which requires paid sick leave), then the employer must continue to provide SCA health and welfare payments to the employee (up to the maximum of 40 hours per week and 2,080 hours per year on each contract) or any applicable health and welfare benefit, Davis-Bacon fringe benefits, or monetary equivalent required by the executive order for the hours paid under the executive order.
Federal contractors should confirm that their pay and fringe benefit practices during FFCRA leaves comply with the most current guidance provided. They should also consult legal counsel if they have any questions.