Emergency Paid Sick Leave Q&A—Families First Coronavirus Response Act

Jackson Walker
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Jackson Walker

How do you determine the hourly rate to be paid to hourly employees during paid sick leave?

Under the Emergency Paid Sick Leave Act, an employee should be paid an hourly amount during paid sick leave that is not less than the greater of the following:

  1. The employee’s regular rate of pay (as determined under section 7(e) of the Fair Labor Standards Act);
  2. The federal minimum wage; or
  3. The minimum wage rate in effect for such employee in the applicable state or locality (whichever is greater) in which the employee is employed.
What is basis for applying the FMLA integrated employer analysis to the Emergency Paid Sick Leave Act even though the Paid Sick Leave Act is not an amendment to FMLA and, instead, seems to reference FLSA definitions?

The Families First Coronavirus Response Act (FFCRA) does not clarify whether separate but related entities that have their own distinct employee head counts can aggregate those head counts for purposes of the FFCRA’s 500-employee threshold. We anticipate that the regulations issued by the Secretary of Labor will clarify how companies should calculate their employee headcount, including which test(s) should be used in making that determination. The new regulations will likely require the same test(s) for both the Emergency Paid Sick Leave Act and for the Emergency Family and Medical Leave Expansion Act.

Until the regulations are issued, and because the Act amends the Family and Medical Leave Act, among others, companies can look to the “single integrated employer” test that has traditionally been used to determine coverage eligibility under the federal Family and Medical Leave Act for guidance.

If a salesperson is paid a base plus commission, would the commission amounts be included when calculating sick pay?

At this time, the Secretary of Labor has not clarified whether commissions should be included in calculating an employee’s regular rate of pay for purposes of the Emergency Paid Sick Leave Act.  However, using the Fair Labor Standards Act as guidance, we anticipate that commissions should be included in calculating an employee’s regular rate of pay.

Does the amended definition of covered employer take into account the time period of “20 weeks or more in the current or preceding calendar year” that has been a part of the existing definition of covered employer under the FMLA?

The definitions of covered employer and employee under the Emergency Paid Sick Leave Act do not take into account the “20 weeks or more in the current or preceding calendar year” language that is part of the definition of covered employer under the Family and Medical Leave Act.  The Secretary of Labor may add such language to the definition of covered employer when the regulations are issued.  However, at this time, employers should look to the number of employees they have on the effective date of the Families First Coronavirus Response Act to determine coverage by the Act.  Employers will need to reevaluate whether the Act applies if they adjust their head count after the effective date of the Act.

If our company offers PTO of a minimum of 3 weeks per employee, does that cover the 2 weeks of sick time required by the Emergency Paid Sick Leave Act?

The Emergency Paid Sick Leave Act specifically states that an employer may not require an employee to use other paid leave provided by the employer before using the paid sick time provided under the Act.  Further, the Act asserts that nothing in the Act in any way diminishes the rights or benefits an employee is entitled to under any federal, state or local law, collective bargaining agreement or an existing employer policy.  As such, the 80 hours of paid sick leave must be offered to employees in addition to, and prior to, any other paid time off already offered by the employer.

Do employees who have been furloughed qualify for paid sick time under the Emergency Paid Sick Leave Act?    

Some employers have made the decision to furlough their employees during this time due to business necessity.  A furlough is generally an unpaid leave of absence. Because employees who have been furloughed are placed on leave for a reason outside of the six (6) reasons listed in Section 5102 of the Emergency Paid Sick Leave Act, we do not believe that furloughed employees are eligible to receive paid sick time under the Families First Coronavirus Response Act during the unpaid leave of absence.  However, some state or local paid sick leave laws may cover employees who are on leave due to a workplace closure.

Should your company decide to furlough employees, we recommend that you consult with legal counsel to ensure you are in compliance with the Families First Coronavirus Response Act as well as any state or local paid sick leave laws.

Are government employers required to comply if we are over 500 employees?

Under the Emergency Paid Sick Leave Act, public agencies or entities that are not private entities must comply if they employ one (1) or more employees.

If a full-time employee only works 70 hours per week, will their paid sick leave be only 70 hours or will they be entitled to 80 hours?

Under the Emergency Paid Sick Leave Act, full-time employees are entitled to 80 hours of paid sick leave.  If an employee is part-time, the employee is entitled to the number of hours of leave that is equal to the number of hours the employee works, on average, over a two (2) week period.

How do you calculate the hourly rate to be paid to part-time hourly employees who work a varying schedule?

Under the Emergency Paid Sick Leave Act, an employee’s hourly rate of pay during leave is based on their “regular rate of pay” as defined by the Fair Labor Standards Act.  Keep in mind that this amount may be greater than an employee’s base hourly rate.

The Emergency Paid Sick Leave Act provides specific guidance for calculating the paid leave rate for part-time hourly employees whose schedules vary from week to week to such an extent that an employer is unable to determine with certainty the number of hours the employee would have worked if such employee had not taken paid sick time under the Act.  In those cases, the employee’s paid leave rate should equal the average number of hours the employee was scheduled per day over the six-month period prior to the leave.  This includes any hours for which the employee took leave of any type.

If the employee did not work in the preceding six-month period, the paid leave rate should equal the “reasonable expectation” of the employee at the time of hire with respect to the average number of hours per day that the employee would be scheduled to work.

Is the amount of leave in addition to what an employer may have already given employees during this time off (before the Act was passed)?

Yes. The Emergency Paid Sick Leave Act specifically states that an employer may not require an employee to use other paid leave provided by the employer before using the paid sick time provided under the Act.  Further, the Act asserts that nothing in the Act in any way diminishes the rights or benefits an employee is entitled to under any federal, state or local law, collective bargaining agreement or an existing employer policy.  As such, the 80 hours of paid sick leave must be offered to employees in addition to, and prior to, any other paid time off already offered by the employer.

My company has 54 employees, but we have only been at that number recently. Is the law stating a look back period or is it how many employees you have as of April 2?

The definition of covered employer and employee under the Emergency Paid Sick Leave Act does not take into account a look back period or any type of averaging.  The Secretary of Labor may add such language to the definition of covered employer when the regulations are issued.  However, at this time, employers should look to the number of employees they have on the effective date of the Families First Coronavirus Response Act to determine initial coverage by the Act.  Employers will need to reevaluate whether the Act applies if they adjust their head count after the effective date of the Act.  Remember that even if employers have fewer than 50 employees, the Emergency Paid Sick Leave Act will still apply unless the Secretary of Labor issues regulations to exempt small business with fewer than 50 employees from the requirements of the Paid Sick Leave Act.

How do you determine whether a business entity or a group of separate but related entities has 500 or more employees under the Act?

We have had several questions about how you count the number of employees for purposes of the 500 employee maximum.  As we stated in the presentation, the Secretary of Labor should be circulating regulations for the Families First Coronavirus Response Act very soon, and those regulations will hopefully clarify the specifics for calculating the number of employees and defining who the employer is.

Until the regulations are issued, and because the Act amends the Family and Medical Leave Act, among others, companies can look to the “single integrated employer” test for guidance as that test has traditionally been used to determine coverage eligibility under the federal Family and Medical Leave Act.

A corporation is considered a single employer under the FMLA rather than its separate establishments or divisions; thus, all employees of the corporation, at all locations, are counted for coverage purposes.

Separate businesses may be part of a single employer for FMLA purposes if they are an “integrated employer.” The FMLA essentially provides a test for determining if separate businesses are an integrated employer.  Factors that are considered as part of the test include:

  • Common management;
  • Interrelation between operations;
  • Centralized control of labor; and
  • Degree of common ownership or financial control.

Keep in mind that a determination of whether or not separate entities are an integrated employer is not made based on any single factor but instead on the entire relationship reviewed in its totality. Many courts and administrative agencies consider the third factor to be the most important. The fourth factor is somewhat discounted because common ownership and financial control is an ordinary aspect of the parent–subsidiary relationship.  If separate entities are found to be an integrated employer, then the employees of all entities making up the integrated employer must be counted.

Joint employment relationships may also have an impact on the number of employees an employer is considered to have.  The Emergency Paid Sick Leave Act specifically references joint employers in the definition of a covered employer and directs us to the Fair Labor Standards Act to determine whether there is a joint employer relationship that might impact the number of employees an entity has.

Conveniently, the DOL just released its Final Rule on Joint Employer Status Under the FLSA in January.  Under that Rule, where an employee performs work for the employer that simultaneously benefits another individual or entity, there is a four-factor balancing test to determine whether the potential joint employer is directly or indirectly controlling the employee.  The factors to be considered in assessing direct or indirect control include whether the potential joint employer:

  • hires or fires the employees;
  • supervises and controls the employees’ work schedule or conditions of employment to a substantial degree;
  • determines the employees’ rate and method of payment; and
  • maintains the employees’ employment records.

Similar to the integrated employer test, the analysis of whether an entity is a joint employer will depend on all the facts in the particular case, and the appropriate weight to give to each factor will vary depending on the circumstances.

It is important to note that the Families First Coronavirus Response Act is unique in that employers may be motivated to aggregate employees from separate but related entities in order to have 500 or more employees and, therefore, be exempt from the requirements of the Act.

In making decisions relating to aggregation, employers should be mindful of the following:

  • Damages for violating the Families First Coronavirus Response Act are substantial. Employers aggregating employees and finding the Act does not apply should be certain that they are comfortable with their calculation and can support the determination that the Act does not apply.
  • Employee head counts will certainly change during this time. Employers should reevaluate whether the Act applies if adjustments to their head count occur.
  • Making a decision to aggregate employees now may negatively impact the employer during litigation in the future when aggregation could be problematic.

Additionally, only employees who physically work in the United States should be counted for purposes of the Act’s threshold.

Under what circumstances is an employee eligible for paid sick leave under the Emergency Paid Sick Leave Act?

Under the Emergency Paid Sick Leave Act, an employee is entitled to paid sick leave if the employee is unable to work or telework because:

  1. the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. the employee is caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19, or the employee is caring for an individual that has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  5. the employee is caring for his or her son or daughter 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. the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

If an employee is unable to work or telework for any other reason that is not specified in the Act, then they are not eligible for paid sick leave under the Act.

When does the Emergency Paid Sick Leave Act become effective? Does the Act apply to situations that have occurred prior to the effective date? 

The Emergency Paid Sick Leave Act takes effect on April 2, 2020 and eligible employees are entitled to paid sick leave under the Act beginning on the effective date.

Are employees entitled to leave under the Emergency Paid Sick Leave Act if they are unable to work because of a shelter-in-place order?

An employee is entitled to paid sick leave under the Emergency Paid Sick Leave Act if the employee is unable to work or telework because the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19. If a federal, state, or local government issues a shelter-in-place order that prevents an employee from working, he or she may be entitled to leave under the Act.

May an employer require an employee to exhaust his or her paid time off, vacation leave, or other paid leave allotment before taking paid sick leave under the Emergency Paid Sick Leave Act?

If an employee is eligible for leave under the Emergency Paid Sick Leave Act, an employer may not require an eligible employee to exhaust existing paid time off, vacation time, or other paid leave allotment before taking leave under the Act.

Is an employee entitled to paid sick leave under the Emergency Paid Sick Leave Act if the employee is sent home with symptoms, but after a doctor’s visit it is determined that they are not positive for COVID-19 and they choose to not return to work for several days?

Employees are only entitled to leave under the Emergency Paid Sick Leave Act if they are unable to work or telework due to a qualifying event, which includes leave for an employee experiencing symptoms of COVID-19 and seeking a medical diagnosis. It is possible that an employee may be entitled to paid sick leave under the Act for only a portion of a leave period.

Can leave under the Emergency Paid Sick Leave Act be taken intermittently, so that an employee initially takes a couple of days, returns to work, but then later takes additional days?

The Emergency Paid Sick Leave Act does not prohibit intermittent use of leave under the Act. 

What do you do if you have an over 65 employee who is healthy right now but does have a chronic condition and they cannot work from home?

An employee is only eligible to take leave under the Emergency Paid Sick Leave Act if they are unable to work or telework because of a qualifying event. If the employee is unable to work or telework because of advice from a health care provider to self-quarantine due to concerns related to COVID-19, he or she may be entitled to paid sick leave under the Act. In the event that an employee is unable to work or telework due to a medical concern that does not constitute a qualifying event under the Act, that employee may be eligible for leave under other laws, such as the Americans with Disabilities Act or state or local paid sick leave laws.

May employers require employees to provide written notification from a health care provider in order to take paid sick leave under the Emergency Family Paid Sick Leave Act?

It is unclear as to whether an employer may require written notification from a health care provider in order to grant leave under the Act. However, employers are permitted to require employees to follow reasonable notice procedures in order to continue receiving paid sick leave under the Act, after the first workday an employee takes leave under the Act.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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