On April 1, 2020, the Department of Labor (“DOL” or the “Department”) issued regulations implementing the Families First Coronavirus Response Act (“FFCRA” or the “Act”). In addition, DOL continues to update its FFCRA Q&As with further clarifications.
As a reminder, the FFCRA generally requires private employers with fewer than 500 employees and many public sector employers to provide up to 80 hours of paid sick leave (“sick leave”) and up to 12 weeks (including up to 10 paid weeks) of expanded Family and Medical Leave Act leave (“expanded FMLA leave”) to eligible employees for qualifying reasons related to COVID-19. Employers may elect to exempt employees who are health care providers and emergency responders, and small businesses (employers with fewer than 50 employees) are entitled to an exemption in some circumstances. The amount of paid leave benefits differs depending on the reason for the leave and is subject to statutory caps. Private employers are entitled to fully refundable tax credits to cover the costs of the leave, including health plan expenses allocable to the leave wages. For an overview of the FFCRA and DOL’s previously issued informal guidance (some of which has changed, as discussed below), see our initial post about the Act and further posts here, here, and here.
The new regulations, like the Act, are effective from April 1 to December 31, 2020. The regulations generally track DOL’s prior informal guidance; however, they amplify and in some cases change the Department’s prior guidance in important respects. Covered employers should ensure that any FFCRA policies or procedures developed in reliance on earlier DOL guidance are up to date based on the most current guidance.
Below we summarize some important developments in the new regulations and Q&As.
- Qualifying Leave Reasons Clarified
The new regulations and Q&As provide important information regarding the qualifying reasons for sick leave and expanded FMLA leave. For background, under the FFCRA, there are six qualifying reasons for sick leave. Specifically, an employee may take sick leave to the extent the employee is “unable to work (or telework) due to a need for leave because” the employee:
(1) “is subject to a Federal, State or local quarantine or isolation order related to COVID-19”;
(2) “has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
(3) “is experiencing symptoms of COVID-19 and seeking a medical diagnosis”;
(4) “is caring for an individual who is subject” to an order or advice from a health care provider described in reasons (1) or (2);
(5) “is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions”; or
(6) “is experiencing any other substantially similar condition” identified by the Secretary of Health and Human Services (“HHS”).
Employees may take expanded FMLA leave when the employee is unable to work or telework due to qualifying reason (5) above.
Below are some of the ways in which the regulations and revised Q&As clarify the scope of the above qualifying reasons for sick leave and, as to qualifying reason (5), expanded FMLA leave:
Reason (1): Subject to a Quarantine or Isolation Order. Federal, state, and local shelter-in-place and stay-at-home orders qualify as “quarantine or isolation orders” under qualifying reason (1). However, an employee subject to a shelter-in-place or stay-at-home order is entitled to FFCRA sick leave only if the employer still has work (including telework) for the employee, which the employee cannot do as a result of the government order. The preamble to the regulations gives the example of a cashier employed by a coffee shop that is closed due to a stay-at-home order. “The cashier would not be able to work even if he were not required to stay at home. As such, he may not take paid sick leave because his inability to work is not due to his need to comply with the stay-at-home order, but rather due to the closure of his place of employment.” This is true even if a business can stay partially open through some employees who can telework. For those employees who do not have work available because their functions cannot be performed remotely, the leave is still unavailable.
Reason (2): Self-Quarantine on Advice of a Health Care Provider. Qualifying reason (2) applies when a health care provider has advised the employee to self-quarantine because the employee has COVID-19, may have COVID-19, or is particularly vulnerable to COVID-19 and the employee is unable to work, including telework, as a result of being in self-quarantine. For purposes of reason (2), “health care provider” means a licensed doctor of medicine, nurse practitioner, or other health care provider permitted to issue certifications regarding serious health conditions under the FMLA. (Note that the regulations adopt a broader definition of “health care provider” for purposes of an employer making an election to exempt health care providers and emergency responders from sick leave and expanded FMLA leave.)
Reason (3): Seeking Medical Diagnosis for COVID-19 Symptoms. The “symptoms of COVID-19” for purposes of qualifying reason (3) are fever, dry cough, shortness of breath, or any other symptoms identified by the CDC (U.S. Centers for Disease Control and Prevention). “Seeking a medical diagnosis” means that the employee is “taking affirmative steps, such as making, waiting for, or attending the appointment for a test for COVID-19.” Employees may not take FFCRA sick leave for COVID-19 symptoms if they are not seeking a medical diagnosis. And employees whose jobs can be performed remotely while they are waiting for a test result are not entitled to sick leave under reason (3) if their symptoms are not serious enough to prevent them from teleworking.
Reason (4): Caring for an Individual. “Individual” for whom an employee is caring under qualifying reason (4) means an employee’s “immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined.” FFCRA sick leave cannot be taken to care for someone with whom the employee does not have a “personal relationship.”
Reason (5): School and Place of Care; Unavailability of Child Care Provider. For purposes of qualifying reason (5), “school” means an elementary or secondary school. The regulations define “place of care” broadly as any “physical location in which care is provided” while the employee works, including, for example, preschools, day care facilities, respite programs, and summer camps and summer enrichment programs—thus clarifying that parents of school-aged children may be entitled to FFCRA leave when the school year ends if summer camps and similar programs are canceled.
“Child care provider” for purposes of qualifying reason (5) is defined as “a provider who receives compensation for providing child care services on a regular basis” and includes providers such as day care centers that are licensed, regulated, or registered under State law. Family and friends who provide child care need not be licensed or paid. The FFCRA Q&As state that “nannies, au pairs, and babysitters” who receive compensation for child care services also qualify as child care providers, although the regulations themselves do not expressly refer to them.
DOL’s Q&As also emphasize that leave for reason (5) is available only to employees who “need to, and actually are” caring for a child and are “unable to work or telework as a result.” If a “co-parent, co-guardian or [the employee’s] usual child care provider is available” to care for the child, the employee generally is not eligible for the leave.
Reason (6): Other Substantially Similar Condition. HHS has not yet identified any “substantially similar conditions” that would satisfy qualifying reason (6) for FFCRA sick leave. If such a condition is identified, DOL is expected to issue additional guidance about it.
- Documentation and Recordkeeping Requirements
The regulations identify the documentation that employers must collect from employees before granting FFCRA leave. Notably, employers may not require documentation exceeding DOL’s regulations or IRS requirements for substantiating a claim for the FFCRA tax credit. The IRS documentation requirements are available here. There are some differences between the current DOL and IRS documentation requirements. Most important, although the DOL regulations indicate that some information can be provided orally (or are ambiguous as to whether an oral statement is sufficient), the IRS requires that all supporting information be included in a written request from the employee. Employers should therefore strongly consider using written request forms to collect the necessary information (or, at a minimum, record in writing any oral requests, as required by the DOL regulations). Employers can satisfy both the DOL and IRS requirements by collecting the following information:
- All employees requesting FFCRA leave (both paid sick leave and paid expanded FMLA leave) must provide:
- the employee’s name;
- date(s) for which leave is requested;
- the qualifying reason for leave and written support for such reason; and
- an oral or written statement that the employee is unable to work, including telework, because of the qualified reason.
- Specific documentation is required when leave is requested for the following qualifying reasons:
- Employees requesting paid sick leave because they, or an individual they are caring for, is subject to a government-issued quarantine or isolation order related to COVID-19 must provide the name of the government entity that issued the quarantine or isolation order, and, if caring for another individual, the name of the person being cared for and his/her relation to the employee.
- Employees requesting paid sick leave because they, or an individual they are caring for, is in self-quarantine on the advice of a health care provider must provide the name of the health care provider who advised the self-quarantine, and, if caring for another individual, the name of the person being cared for and his/her relation to the employee.
- Employees requesting paid sick leave or paid expanded FMLA leave to care for a son or daughter due to the closure of a school or place or care or the unavailability of a child care provider must provide (1) the name and age of the son or daughter; (2) the name of the school, place of care, or child care provider; and (3) “a representation that no other suitable person will be caring for the Son or Daughter” during the period for which leave is requested, “and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care”.
- To substantiate eligibility for the FFCRA tax credits, the IRS guidelines state that employers must also create and maintain records including the following information:
- documentation showing “how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework, and qualified sick leave and qualified family leave”;
- documentation showing “how the employer determined the amount of qualified health plan expenses that the employer allocated to wages”;
- “[c]opies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS”; and
- “[c]opies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941). Presumably similar rules apply to employers that file employment tax returns other than Form 941, i.e., small employers (Form 944), agricultural employers (Form 943),railroad employers (Form CT-1), and household employers (Schedule H).
Employers must retain all records related to FFCRA leave for the standard retention period for payroll tax records of four years, regardless of whether leave was granted or denied. Records substantiating eligibility for the tax credit must be retained for four years after the date the tax becomes due or is paid, whichever is later. Such records may be retained in paper or electronic form.
- FMLA Notices of Eligibility, Rights and Responsibilities, and Designation Not Required
Because expanded FMLA leave was enacted as an amendment to the FMLA, one previously unanswered question was whether employers must issue employees requesting expanded FMLA leave notices of FMLA eligibility, rights and responsibilities, and leave designation, as required under FMLA regulations for other purposes. DOL answered this question “no” in the preamble to the FFCRA regulations. Employers not otherwise subject to the FMLA (generally, employers with fewer than 50 employees) need not provide such notices to employees. Employers already operating under the FMLA may, but are not required to, use such notices.
- Coordination of FFCRA Leave, Employer-Provided Paid Leave, and State Benefits
The new regulations and current DOL Q&As concerning the interplay of sick leave and expanded FMLA leave with other sources of paid leave are clear, in part, but raise several questions.
As to sick leave, it is clear that the employer cannot require the employee to use other paid leave available under its policies before the employee uses the FFCRA sick leave. The regulations appear to allow the employee to choose to use other applicable accrued leave first (e.g., paid time off or similar leave, state paid sick leave) and use available FFCRA sick leave later. The Q&As seem to say the employee cannot elect and the employer cannot require the employee to use other employer-paid leave to “top off” ongoing sick leave to reach a full day’s pay unless the employer and employee agree. (As discussed in our prior blog post, the amount of pay an employee receives for leave under both the paid sick leave and expanded FMLA provisions of the FFCRA are subject to limitations and caps.)
As to expanded FMLA leave, it appears an employer may not require an employee to use other paid leave available under its policies before using expanded FMLA leave. Likewise, the regulations appear to disallow the employee from electing to use other paid leave first and then using expanded FMLA leave later. The regulations appear to intend to allow the employee to elect or the employer to require the employee to “top off” ongoing expanded FMLA leave with other available paid leave (such as vacation or PTO) to reach a full day’s pay, although there is a contrary indication that such topping off would not be allowed unless agreed to by the employer and the employee. DOL may clarify its position on these issues.
Employees receiving workers’ compensation or temporary disability benefits through an employer- or state-provided plan are not entitled to FFCRA leave unless they returned to light duty before taking leave.
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The DOL regulations cover many other topics, such as the exemption for health care providers and emergency responders; the small business exemption; amounts of paid leave available to eligible employees and how benefits are calculated; intermittent leave; multiemployer plans; and prohibited acts and enforcement. Some of these topics were addressed in our prior blog posts, linked above.
Because the Department continues to refine its guidance (including by substantively updating pre-existing Q&As ) and does not currently have a regular notification procedure for updates of its guidance, we recommend that employers monitor DOL’s website and this blog regularly for the latest updates.