FFCRA Updates: DOL Guidance Keeps on “Rolling”

Ballard Spahr LLP

Ballard Spahr LLP

This alert incorporates the guidance issued by the United States Department of Labor (DOL) on March 28, 2020 and updated on March 29, 2020, with our prior alerts related to FFCRA leave. We have removed those prior FFCRA alerts from the Resource Center so you can find all of the guidance issued by DOL in one place. We will update this alert if DOL issues additional FFCRA guidance.

As promised, the DOL continues to issue “rolling” guidance in the form of Frequently Asked Questions (FAQs) under the Families First Coronavirus Response Act (H.R. 6201) (FFCRA or Act), signed into law on March 18, 2020. The enacted federal legislation provides covered employees with two forms of paid leave—Emergency Paid Sick (EPSL) and FMLA-Public Health Emergency Leave. The leave mandate applies only to private-sector employers with fewer than 500 employees or covered public agencies regardless of size. The law goes into effect this Wednesday, April 1, 2020.

On March 24, 2020, the DOL issued the first written guidance for employers and employees, and published a set of FAQs, which it has updated a number of times in the past few days. These documents provide insight on various issues with which employers have been grappling over the last two weeks related to FFCRA leaves. The DOL indicated that it will promulgate regulations on an unspecified date in April 2020. The following information also highlights FFCRA amendments adopted with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Model Policy

In addition to updating this Alert with the latest information under the FFCRA, Ballard Spahr’s Labor and Employment Group continues to update its model FFCRA Leave Policy. The latest version of the Policy can be found in our COVID-19 Resource Center here. We will continue to update the Policy, as necessary, based on the guidance and regulations as they become available.

Emergency Paid Sick Leave Act (EPSL)

Covered Employers. The Act only covers certain employers—private employers with fewer than 500 employees, and public agencies regardless of size. Covered employers also include successors in interest. See 500 or Fewer Employees and Multiple Entities below for additional information.

The Secretary of Labor may exempt small businesses with fewer than 50 employee from the EPSL requirements if the leave is requested “to care for the employee’s son or daughter if a school or place of care is closed, or the childcare provider is unavailable, due to COVID-19 precautions,” if imposing such requirements would jeopardize the viability of the business. See Small Business Exemption below.

Covered Employees. The EPSL is available for immediate use by all employees, full-time and part-time, regardless of how long the employee has worked for the employer.

Amount of Leave. Covered employers are required to provide full-time employees with 80 hours of EPSL. “Full-time” is defined as normally scheduled to work 40 hours per week. Any employee scheduled to work fewer than 40 hours per week is part-time and subject to a reduced entitlement. Part-time employees are entitled to EPSL at their regular rate of pay for the average number of hours that the employee works in a two-week period. See Calculation of Leave Hours below for instructions on how to calculate the amount of leave for part-time employees who do not work regular hours. EPSL does not carryover from one year to the next; nor is it paid upon separation from employment.

Qualifying Reasons for Use. Employees who are unable to work or telework are eligible for EPSL for the following reasons:

  1. To comply with 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. To care for an individual who is subject to an order as described in (1) above or has been advised as described in (2) above;
  5. To care for the employee’s son or daughter if a school or place of care is closed, or the childcare provider 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 in consultation with the Secretary of Treasury and the Secretary of Labor.

Calculation of Paid Leave. EPSL is to be paid at the employee’s full regular rate of pay, subject to a cap of $511 per day ($5,110 in the aggregate) for the uses described in 1, 2, and 3 above. Paid sick leave for the uses described in 4, 5, and 6 above is limited to two-thirds of the employee’s regular rate of pay, subject to a cap of $200/day ($2,000 in the aggregate). See Pay Rate below.

Employer Policies and Other Mandated Leave. The Act provides that it does not diminish an employee’s rights or benefits under state or local laws or an existing employer policy. An employee may first use EPSL under the Act for qualifying reasons, and an employer may not require employees to use other paid leave provided by the employer before the employee uses EPSL. See Existing Employer Leave Policies and Concurrent Usage below for more information.

Termination of Leave. EPSL ceases on the employee’s next scheduled work shift immediately following the termination of the need for such leave for a qualifying COVID-19 reason or when the employee runs out of EPSL, whichever is sooner.

Bargaining Units. The Act applies to bargaining unit employees and provides that it does not diminish any rights under a bargaining agreement. For employees in multiemployer bargaining units, the Act and DOL FAQs contain explanations for how the EPSL provisions will operate under multiemployer funds or plans.

Notice and Documentation. Once leave has commenced, an employer may require the employee to follow “reasonable” notice procedures of an employee’s need for leave in order to continue receiving EPSL. There also are specific notice and documentation requirements that apply to requests for leave, which apply to both forms of leave and are discussed below under Notice and Documentation.

Enforcement Provisions. The Act contains anti-discrimination and non-retaliation provisions. It also contains penalties for non-compliance, which is deemed a violation of the FLSA.

FMLA-Public Health Emergency Leave

The FFCRA contains the “Emergency Family and Medical Leave Expansion Act,” amending the FMLA to create a new category of public health emergency leave related to COVID-19. This leave is partially paid.

Covered Employers. The FMLA-Public Health Emergency Leave covers private employers with fewer than 500 employees, and public agencies regardless of size. The law grants the Secretary of Labor the authority to issue regulations to exclude certain health care providers and emergency responders as eligible employees under the Act. The Secretary of Labor also may exempt small businesses with fewer than 50 employees from the Act’s requirements if imposing such requirements would jeopardize the viability of the business. See Small Business Exemption below. In addition, health care providers or emergency responders may be excluded at their employer’s discretion. For a discussion of which employees qualify for these exclusions, see Health Care Provider and Emergency Responder Exclusions below.

Covered Employee. The leave benefit is available to any employee who has been employed for at least 30 calendar days. Please note that this eligibility criterion does not apply to EPSL. The CARES Act amended this provision to add a provision for eligibility of rehired employees. Under this provision, an employee will be considered employed for at least 30 calendar days, and therefore eligible for leave under FFCRA, if the employee was: (1) laid off by the employer not earlier than March 1, 2020; (2) had worked for the employer for not less than 30 of the last 60 calendar days prior to the employee’s layoff; and (3) was rehired by the employer thereafter.

12-Workweek Entitlement. Employees are entitled to a total of 12 workweeks of FMLA-Public Health Emergency Leave, including the initial two weeks which either are unpaid, or may be paid if the employee has another form of leave available, including EPSL. The 12-workweek entitlement is the same entitlement under an employer’s existing FMLA policy, so that employees can only use any remaining balance of their 12 weeks under the FFCRA, based on the “leave year” definition adopted by the employer. For example, if an employee has used six weeks of their FMLA entitlement already, only six weeks remain for FMLA-Public Health Emergency Leave. Any FMLA-Public Health Emergency Leave also counts toward the 12-workweek entitlement. Any prior FMLA usage does not impact the EPSL entitlement, but using EPSL after April 1 will run concurrently with two weeks of FMLA-Public Health Emergency Leave.

Leave Usage. FMLA-Public Health Emergency Leave applies only to employees unable to work, including telework, due to a need for leave to care for the employee’s son or daughter under 18, if the son or daughter’s school or place of child care has been closed, or the child care provider is unavailable due to a public health emergency. Public health emergency is defined to mean an emergency with respect to COVID-19 declared by Federal, State, or local authority. See Son or Daughter below.

Relationship to Paid Leave. As noted, the first 10 days of FMLA-Public Health Emergency Leave will be unpaid, unless the employee elects to substitute paid leave. Employees may elect, but are not required, to substitute any accrued vacation leave, personal leave, or medical or sick leave for unpaid leave, including EPSL pursuant to the FFCRA.

Paid Leave Amount. After the first 10 days, eligible employees will be entitled to not less than two-thirds of their regular rate of pay for the number of hours that the employee would normally be scheduled to work, capped at $200/day ($10,000 in the aggregate). See Calculation of Leave Hours and Pay Rate below.

Guidance Applicable to Both Forms of Leave

According to the DOL FAQs, the following principles apply to both EPSL and FMLA-Public Health Emergency Leave.

500 or Fewer Employees. The DOL clarified that the calculation of the 500-employee threshold under the FFCRA should be done “at the time your employee’s leave is to be taken.” Based on this language, an entity must determine whether it has 500 employees at the time any individual employee is to take leave under the FFCRA. For businesses hovering around the 500-employee mark and considering layoffs, be advised that the 500-employee threshold appears to be a moving target. Thus, any contemplated layoffs that would bring the number of employees below 500, either before or after the April 1 effective date, would trigger FFCRA coverage.

Multiple Entities. Another question asked by many employers is whether all entities in the corporate family, or employees of staffing entities, are counted when determining the 500-employee threshold. The FAQs explain that two tests are relevant. Based on a revision to the FAQs on March 29th, both of the tests apply to both forms of FFCRA leave.

An employer’s employee count must include all “joint employees” if the employer meets the DOL’s newly amended joint employer test under the Fair Labor Standards Act (FLSA). The FLSA’s joint employer test was in January 2020, and the DOL issued final regulations re-defining the test, which took effect on March 16, 2020. In addition, the DOL clarified in its guidance that joint employees employed on the employer’s premises (e.g., staffing agency employees) are eligible for leave under FFCRA.

Alternatively, an employer comprised of multiple entities could have its employee count aggregated across the entities if it meets the “integrated employer” test under the FMLA. Again, this test, like the joint employer test applies both to determining employer coverage for EPSL and FMLA-Protected Health Emergency Leave. This test relies on multiple factors, including the degrees of common labor relations, management, operations, and ownership.

Coverage for “Son or Daughter.” Son or daughter is defined in the same manner as the FMLA (see FMLA Fact Sheet #28B and FMLA Fact Sheet #28K), including biological, adopted, or foster child, your stepchild, a legal ward, or a child for whom the employee is standing in loco parentis, in addition to adult children with disabilities who are incapable of self-care.

Calculation of Leave Hours. Full-time employees are entitled to 80 hours of EPSL. Part-time employees are entitled to the amount of leave equal to their hours in a two-week period. A part-time employee’s leave entitlement is calculated by determining their hours over a two-week period based on the normal number of hours the employee is scheduled to work. If unknown, or a part-time employee’s hours vary week to week, an employer should use a six-month average to determine the daily hours, which yields the number of hours per day the employee can use for the two-week period. The same number of daily hours would be used for the employee’s FMLA-Public Health Emergency Leave entitlement. This approach also is used to determine a full-time employee’s entitlement when the employee works a variable schedule.

Overtime Hours. An employee may be entitled to FFCRA leave pay for more than 40 hours in a workweek, if the employee normally would be scheduled for more than 40 hours in a workweek, including overtime hours. The DOL offers an example under which an employee is paid 50 hours of EPSL in a single workweek. However, there is no requirement for payment of EPSL hours at a premium rate, or that the employee receive more than 80 hours total of EPSL.

Pay Rate. The DOL also clarified that the employee’s “regular rate of pay,” used for purposes of FFCRA leave, is the average rate of pay over the six-month period prior to the date on which the employee takes leave. In other words, the rate could change if the employee’s pay rate changes, including presumably any pay reductions triggered by the COVID-19 pandemic. Commissions, tips, or piece rates also will be included in the calculation. Employers also can compute the rate of pay by adding all compensation that is part of the regular rate and dividing by all hours actually worked in the period.

Existing Employer Leave Policies and Concurrent Usage. The FAQs explain that EPSL is not to be denied or reduced based on leave provided by the employer, even if for an EPSL-qualifying reason. According to the DOL, the FFCRA created “a new leave requirement on employers” effective April 1, 2020.

In addition, the FAQs explain that employees cannot use both FFCRA leave and employer-sponsored paid leave concurrently. The employee must choose one leave type or the other. Employers, however, may agree to allow employees to supplement FFCRA paid leave with employer-sponsored leave to bring employees up to 100 percent of their customary pay, but employers may not require employees to do so. If an employer allows FFCRA leave to be supplemented with employer-sponsored leave, only the FFCRA portion is subject to the tax credit. See Tax Credits below.

Paid Leave Prior to April 1, 2020. The DOL clarified that FFCRA leave is not retroactive. As a result, any paid leave given to employees prior to the effective date of the FFCRA (April 1, 2020), which would have otherwise qualified under the FFCRA leave provisions, will not be counted toward the leave requirements under FFCRA. As such, employees will be entitled to their full entitlement of FFCRA leave as of April 1, 2020.

Notice and Documentation. The DOL explained that employees should provide written notice of the need for leave. Notice must include: the employee’s name; qualifying reason for leave; statement that the employee is unable to work, including telework, for that reason; and the date(s) for which leave is requested.

In addition, employees must provide documentation to substantiate the need for leave and the qualifying reason. For EPSL, documentation will depend on the reason for leave, but may be the health official’s quarantine/isolation order for the employee; or written documentation from the employee’s health care provider advising self-quarantine. For FMLA-Public Health Emergency Leave, documentation may consist of a notice published by the government, school, or daycare of the closure, on a website or in the newspaper, or an email from the school or place of care. In addition, the usual FMLA medical certification requirements continue to apply for reasons such as the employee’s own serious health condition or caring for a family member with a serious health condition.

Intermittent Leave. Intermittent or reduced work schedule leave, according to the DOL, is not permitted under the FFCRA, although employers may allow it by policy. In such cases, the employer is free to define the leave increment (e.g., full day). The DOL stated, however, that if an employee uses part of their EPSL entitlement for one reason, returns to work, and then needs the balance for another reason, it must be available to the employee, suggesting that two continuous blocks of EPSL (in no less than full day increments) are allowed if for separate reasons. The DOL did not discuss whether FMLA-Public Health Emergency Leave could be used in the same way.

Unless an employee is teleworking, once the employee begins taking leave for an EPSL-qualifying reason, the employee must continue to take the EPSL until the employee either (1) uses the full amount of paid sick leave, or (2) no longer has a qualifying reason for taking paid sick leave.

If an employee is not teleworking, employers may permit employees to take either EPSL or FMLA-Public Health Emergency Leave intermittently if the employee is taking paid sick leave to care for their child whose school or place of care is closed, or whose child care provider is unavailable, because of COVID-19 related reasons. Again, if the employer permits intermittent leave for employees under these circumstances, the employer and employee should agree on the intermittent schedule and/or the length of the increments to be taken.

Return to Work. Employees have the right to return to the same or equivalent job after using FFCRA leave. However, employees are not protected from employment actions, such as layoffs, that would have affected them whether or not they were using leave under FFCRA. This includes layoffs due to workplace closures.

In addition, the “key employee” exception applies both to EPSL and FMLA-Public Health Emergency Leave. This means that an employer may refuse to return an employee to work in the employee’s same position if employee is a highly compensated “key employee” as defined under the FMLA.

Finally, if the employer has fewer than 25 employees, and the employee took either EPSL or FMLA-Public Health Emergency Leave for child care closure reasons, the employer may refuse to return the employee to the same position. However, specific conditions must exists, including that the position no longer exists due to economic or operating conditions that affect employment and due to COVID-19 related reasons during the period of employee’s leave.

Layoffs and Furloughs. The DOL clarified common questions as they relate to employees who have been or may be laid off or furloughed.

The DOL explained that if an employer closed its worksite (either before or after April 1, 2020), but prior to the employee requesting leave under FFCRA, the employee is not entitled to leave under FFCRA. Moreover, the FAQs state that if the employer closes its worksite during a time when an employee is on leave provided under FFCRA, the employee will no longer be eligible for FFCRA. Further, in the case of a furlough, an employee will not be entitled to leave under FFCRA, even if the employer remains in operation. Finally, if an employer reduces an employee’s hours, the employee may not use leave under FFCRA to supplement the hours the employee is no longer scheduled to work.

In most, if not all, of the above cases, an employee will likely become eligible for unemployment compensation under applicable state and federal law (as expanded under the CARES Act).

Health Care Providers – Quarantine Advice. Health care providers, for purposes of issuing quarantine advice for EPSL purposes, must be licensed doctors, nurse practitioners, or other health care providers permitted to issue certification for purposes of the FMLA (i.e. the same definition as FMLA).

Health Care Providers – Exclusion. "Health care provider," for purposes of exclusion from FFCRA leave entitlements, has a much broader definition than anticipated. It includes both a wide variety of health care positions, as well as others employed by institutions such as doctor’s offices, hospitals, health care centers, etc.

Emergency Responders – Exclusion. “Emergency responder” also is broadly defined. In addition to law enforcement, fire fighters, EMTs, physicians, and nurses, it includes military or National Guard. Note that there is the potential for interplay of military leaves under USERRA and FFCRA leave.

Public Sector Application

FFCRA leave applies to most public sector employers, subject to exceptions for employees who are “health care providers” or “emergency responders.” Additionally, the Office of Management and Budget has the authority to exclude some other categories of U.S. Government Executive Branch employees from taking certain kinds of paid sick leave. Finally, most federal government employees are not covered by the FMLA-Public Health Emergency Leave.

Small Business Exemption (including Religious and Non-Profits)

The DOL published three specific criteria for the small business exemption: (a) the employer employs fewer than 50 employees; (b) leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and (c) an “authorized officer” of the business has determined that at least one of the conditions relating to adverse impact on the business has been met.

Payroll Tax Credits

The FFCRA contains tax credits for employers and self-employed individuals (described in more detail in our alert here). Employer payroll tax credits cover the cost of granting the leave, as well as payment of health care premiums during the leave. Likewise, employees will not have payroll taxes withheld from such FFCRA leave. As described by the House Ways and Means Committee, the tax credit provisions are intended to “get money out the door quickly.”

However, the DOL did clarify that employers would not receive a tax credit for amounts they pay over and above the required payment amounts set forth in the FFCRA leave provisions. For example, if an employer voluntarily supplements the benefits provided under the FFCRA leave provisions so that its employees receive their full compensation, the employer will not be permitted to take a tax credit for the amounts paid over that which the FFCRA requires.

Outstanding Issues

Some issues still remain unanswered by the DOL’s guidance. Employers are wondering how to treat spouses employed by the same employer—are they entitled to one leave entitlement or two? What happens to eligibility for FMLA-Public Health Emergency Leave when the school year ends (or on school holidays, like Memorial Day)?

The Secretary of Labor has authority to issue regulations for good cause related to a number of the leave provisions of the FFCRA. Although DOL has issued FAQs on these issues already, it has not yet promulgated regulations.

Employer Preparedness

Employers should prepare emergency leave policies to address COVID-19 related absences. See our model policy here

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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