On the heels of its invitation to individuals and businesses to participate in a dialogue on the Families First Coronavirus Response Act (“Response Act”), the U.S. Department of Labor’s Wage & Hour Division issued a much needed Q&A late Tuesday afternoon.
Effective Date. The biggest question weighing on everyone’s mind has been answered. The law passed to provide emergency paid sick leave and emergency paid family leave to employees impacted by the pandemic gripping the nation will be effective April 1, 2020 and apply to qualifying leave taken by December 31, 2020. This means that employers cannot take credit for any paid leave extended to employees prior to April 1, 2020, even if they did so in an effort to comply with the Response Act. To be perfectly clear, the paid sick leave and expanded family and medical leave requirements are not retroactive.
500-Employee Threshold. Another grey area we highlighted in yesterday’s edition has been answered. The DOL advised that in counting your U.S. “employees” you should not include independent contractors, but you should include:
- full-time and part-time employees;
- employees who are on leave;
- temporary employees who are jointly employed by you and another employer (regardless of whose payroll they are on); and
- day laborers supplied by a temp agency
This counting can get a little tricky where one corporation has an ownership interest in another corporation and (a) they are Joint Employers under the Fair Labor Standards Act or (b) they are Integrated Employers under the Family and Medical Leave Act.
- The DOL’s Joint-Employer Fact Sheet explains the final rule on Joint Employers. According to Tuesday’s Q&A, if two entities are joint employers, all of their common employees must be counted.
- The DOL’s Regulation on Integrated Employers is found According to Tuesday’s Q&A, if two entities are an integrated employer, then the employees of all entities making up the integrated employer will be counted.
Under either the Joint Employer or the Integrated Employer count, if the employee count is 500 or more, you are under no obligation to pay the emergency paid sick or emergency paid family and medical leave provided by the Response Act. You also will not qualify for the tax credits, if you do extend paid leave to your employees during this pandemic. If you have operations outside of the U.S. and its territories, you should not count them.
Eligibility for Emergency Paid Family and Medical Leave. This grey area was cleared up as well. Employees who need leave because they are unable to work/telework and must care for a child whose school or place of care is closed are eligible if they were employed and on the payroll for the 30 calendar days immediately prior to the day their leave would begin. For example, if the employee requests paid leave for this singular purpose on April 1, 2020, that employee would need to have been on the payroll from March 2, 2020. If an employee converted from temporary to regular, the time as a temporary employee counts.
We will have to wait for the actual regulations to learn more, including how to help our small business clients apply for the exemption. Please stay tuned and subscribe to the blog for updates.