The Department of Labor (DOL) released new Q&A guidance (questions 89-93) regarding the Families First Coronavirus Response Act (FFCRA). Among other things, the guidance provides new insight on various coverage issues relating to whether domestic service workers are covered by the new law, how FFCRA interacts with temporary employees of staffing companies who perform services for a covered employer, and what impact school closures during summer months might have on FFCRA leaves.
- Domestic Service Workers Might Be Covered by FFCRA
Perhaps as a surprise to homeowners who hire workers to perform domestic tasks (e.g., landscaping, cleaning, or childcare) at their house, the DOL’s guidance says that they may have to provide EPSL or EFML to such workers under FFCRA. According to DOL, the question is whether the homeowner is an employer under the Fair Labor Standards Act (FLSA), “regardless of whether [they] are an employer for federal tax purposes.” The DOL goes on to say that, “if the domestic service workers are economically dependent on you for the opportunity to work, then you are likely their employer under the FLSA and generally must provide [EPSL and EFML] to eligible workers.” The DOL offers the example of a nanny who cares for a homeowner’s children as a full-time job, follows precise directions while working, and has no other clients.
On the other hand, if the domestic workers are not “economically dependent” on the homeowner but, instead, are “essentially in business for themselves,” the homeowner is a customer, not an employer and would not need to provide EPSL or EFML. For example, a handyman who works sporadically on a project-by-project basis, controls the manner of their work, uses their own equipment, sets their own hours and fees, and has several customers, would not be considered economically dependent on the homeowner. Similarly, a daycare provider who works out of their own home and has several clients is likely not “economically dependent.”
Lastly, the DOL offers this rule of thumb: if you are not required to file Schedule H Household Employment Taxes along with your Form 1040 for the amount you pay a domestic service worker, then you are likely not the worker’s employer under the FLSA.
- Employees of Staffing Agencies with 500+ Employees May Still Qualify for FFCRA
The new guidance also states that temporary staffing agencies with 500+ employees will not have to provide FFCRA leave to those employees. However, if those employees are temporarily staffed at an employer that meets the threshold eligibility requirements (i.e., less than 500 employees), then that hiring employer where the employee is staffed may have to provide FFCRA leave if it is the employee’s “joint employer.” According to the DOL, if the hiring employer directly or indirectly exercises significant control over the terms and conditions of the employee’s work, then that company is a joint employer. Notably, the DOL does not completely relieve temporary agencies with more than 500 employees of all obligations. Even if the temporary staffing agency does not have to provide FFCRA leave to the employee, it cannot interfere with, discharge, or discipline the employee for using that leave.
- Employees May Not Take EFML Once School Closes for Summer Vacation, Unless Other Childcare Arrangements Are Closed or Unavailable
With the end of the school year rapidly approaching, the DOL’s guidance makes clear that employees may not continue to use EFML (which, as a reminder, is reserved for the need to care for a child due to a school or childcare closure related to COVID-19) once summer vacation starts. On the other hand, if the employee’s child care provider during the summer months (e.g., a camp or other programs the child is enrolled in) is closed or unavailable due to COVID-19 reasons, then the employee may qualify for EFML use.