In our prior blog post concerning the Families First Coronavirus Response Act (FFCRA), we summarized the new federal legislation extending leave benefits to employees affected by the spread of COVID-19 and stated that further guidance to employers would be forthcoming from the Department of Labor (DOL).
Yesterday, the DOL issued answers to some frequently asked questions that bring clarity to certain areas of the new law. We have summarized the new guidance below.
When Will the Law Become Effective?
- The DOL has identified April 1, 2020, as the effective date of the FFCRA. This is one day ahead of the 15-day deadline set forth in the statute. As of April 1, 2020, employers that extend benefits under the statute to their employees may claim a 100 percent payroll tax credit on those amounts.
- No tax credit is available for paid leave extended prior to that date.
How Does an Employer Determine Whether It Has Fewer Than 500 Employees (and Is Therefore Subject to the FFCRA)?
- If at the time the employee's leave is taken the employer employs fewer than 500 full-time and part-time employees within the United States (including all states, the District of Columbia, and any territory or possession of the United States), it is covered by the FFCRA.
- The following employees should be counted:
- Employees on leave;
- Temporary employees jointly employed by the employer and another employer (regardless of which employer maintains the employees on payroll); and
- Day laborers supplied by a temporary employment agency (regardless of whether the employer is the agency employer or hiring employer).
- Independent contractors under the Fair Labor Standards Act (FLSA) are not considered employees for the purposes of this calculation.
- The presumption is that separately incorporated business entities are not joint or integrated employers. However:
- If two entities are joint employers under the FLSA, then all common employees may be counted for the purposes of determining coverage for the Emergency Paid Sick Leave Act (EPSLA) AND Public Health Emergency Leave (PHEL) under the FFCRA.
- If two or more entities meet the integrated employer test under the FMLA, then employees of all entities may be counted in determining coverage for PHEL (not EPSLA) under the FFCRA.
What Should a Small Employer (Fewer Than 50 Employees) Do if Extension of Childcare Benefits Would Jeopardize Its Ability to Function as a Going Concern?
- Small employers should internally document why their business meets the criteria set forth by the DOL, which will be provided in future regulations. There is no need to send any materials to the DOL to seek this exemption.
How Is an Employee's Regular Rate of Pay Calculated?
- When determining pay under the EPSLA, the employer should take the average of an employee’s regular rate of pay (calculated by taking an employee’s total compensation over the workweek, divided by the total hours the employee worked during that workweek) over a period of up to six months prior to the date on which the employee started leave.
- If an employee has worked for less than six months, the regular rate used to calculate paid leave is the average of the employee’s regular rate of pay for each week the employee worked.
- Importantly, commissions, tips, or piece rates, should be incorporated into the calculation.
Can an Employee Take 80 Hours of EPSLA for Purposes of Self-Quarantine and Also Take Additional EPSLA for Another Reason?
No – An employee may take EPSLA for up to two full weeks (10 days) only.
Is an Employee Entitled to Both EPSLA and PHEL if the Employee Needs to Care for a Child When the Child’s School or Place of Care Has Closed?
Yes – but the combined paid leave may not exceed 12 weeks. The 10 days provided under EPSLA will cover the first 10 workdays of PHEL, which are normally unpaid (unless the employee simultaneously uses leave available under an employer policy).
After the first 10 workdays have elapsed, the employee is eligible to receive two-thirds of regular rate of pay for the hours he or she would have been scheduled to work in the subsequent 10 weeks under the PHEL.
Can an Employer Deny EPSLA to an Employee if It Already Provided Paid Leave for a Qualifying Reason for Sick Leave Under the FFCRA Prior to April 1?
No – The EPSLA under the FFCRA imposes a new leave requirement on employers that is effective beginning on April 1, 2020.
Is the FMLA Now Paid Leave? Does the EPSLA and PHEL Affect Leave Granted Prior to April 1?
No – The FMLA remains unpaid. The only type of family and medical leave that is paid leave is leave taken because the employee must care for a child whose school or place of care is closed or the childcare provider is unavailable due to COVID-19-related reasons. Additionally, neither the EPSLA nor the PHEL requirements are retroactive.
Is a Furloughed Employee Eligible for Leave Benefits?
It remains unclear, but at least for the purpose of PHEL, an employee is eligible for benefits if he or she was “on [the employer’s] payroll for the 30 calendar days immediately prior to the day [the employee’s] leave would begin.”
We anticipate additional guidance in the days to come and will update you accordingly. For our prior coverage of the Families First Coronavirus Response Act, see our advisories about workplace safety, other employer obligations, and what small employers should know.
Employers are required to post notice to employees regarding special leave rights under the FFCRA. The DOL’s model form can be accessed here. In addition to the poster, the DOL has published FAQs here.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.