On March 24, 2020, the U.S. Department of Labor (DOL) released a Q&A page to resolve some of the most pressing questions regarding emergency Family and Medical Leave Act (FMLA) leave and paid sick leave offered under the Families First Coronavirus Response Act (FFCRA) and its application to employers. Additionally, the DOL released the required poster regarding the Act which an employer must maintain in its workplace.
While the public awaits the DOL’s final regulations interpreting the FFCRA, the DOL’s Q&A provides some guidance as to where DOL enforcement of the FFCRA is heading ahead of the act’s effective date of April 1, 2020.
Signed into law by President Trump on March 18, 2020, the FFCRA requires private employers with fewer than 500 employees and all covered public entities, regardless of size, to grant up to 80 hours of paid sick leave to employees for certain COVID-19 related absences. The law also expands the FMLA to provide up to 12 weeks of FMLA leave (the first 10 days of which may be unpaid) to any private employee who works for an employer with fewer than 500 employees and who must be absent from the workplace to care for a child if the child’s school or place of childcare has been closed or is unavailable because of a COVID-19-related closure. This FMLA leave does not expand the amount of leave that an employee has for FMLA leave during the year, it just gives employees an additional reason to request leave and provides a basis through which FMLA leave can be paid leave. Covered employers who provide leave required under the FCCRA are eligible for refundable tax credits to cover the full cost of paid sick leave and emergency FMLA leave.
The DOL’s Q&A is insightful guidance for employers gearing up to implement the FFCRA’s paid sick leave and emergency FMLA leave provisions in their workplace. Here are some of the ways the Q&A provides additional details about the FFCRA’s enforcement.
Effective April 1, 2020 – December 31, 2020
The DOL clarifies that the enactment date for the FFCRA is April 1, 2020. Before the DOL guidance was released, most interpreted the effective date as April 2, 2020. This means employers have one less day to prepare for enacting applicable FFCRA obligations in the workplace. Additionally, the act will expire on December 31, 2020.
Notably, the department will observe a temporary period of non-enforcement for the first 30 days after the FFCRA takes effect, so long as the employer has acted reasonably and in good faith to comply with its obligations. Good faith exists when (1) violations are remedied and the employee is made whole as soon as practicable; (2) the violations were not willful; and (3) the department receives a written commitment from the employer to comply with the FFCRA in the future.
No retroactivity and no credit granted for leave before effective date
The DOL guidance provides that the emergency paid sick leave provisions of the FFCRA are an entitlement that begins April 1, 2020. As such, paid sick leave granted before that date cannot be counted against an employee’s allotment of paid sick leave provided under the FFCRA, even if that leave was granted for one of the qualifying circumstances. Additionally, paid sick leave and expanded family medical leave is not retroactive, so an employer is under no obligation to reimburse employees for unpaid time taken before the effective date.
Assessing whether an employer is under the 500-employee threshold
The guidance makes clear that whether the employer has fewer than 500 employees should be measured at the time the employee takes leave. Thus, an employer that is not covered on the effective date because it has more than 500 employees, could later find itself required to grant leave under the Act if it drops below that threshold.
All full-time and part-time employees should be counted for purposes of determining whether or not an employer is covered. Additionally, employees on leave, temporary employees who are jointly employed by another, and day laborers provided by a temporary agency count towards the 500-employee threshold. Independent contractors, on the other hand, should not be counted.
When related business may aggregate employees
The DOL guidance provides that a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted toward the 500 employee threshold. When a corporation has an ownership interest in another corporation, the two are separate employers for purposes of the FFCRA unless they are joint employers under the Fair Labor Standards Act (FLSA). To determine whether one employer is a joint employer of a second company’s workforce, the DOL examines whether the alleged joint employer:
- Hires or fires any of the second company’s employees;
- Supervises and controls the work schedules or conditions of employment for any of the second company’s employees to a substantial degree;
- Determines the rate and method of payment for the second company’s employees; and
- Maintains employment records for the second company.
No single factor is dispositive in determining joint employer status. If two entities are found to be joint employers, all of their common employees can be counted in determining whether paid sick leave must be provided under the FFCRA’s paid sick leave or emergency FMLA provisions.
The guidance also adopts the Family and Medical Leave Act’s integrated employer test to determine if two or more entities should be considered separately or combined for purposes of determining employer coverage under the FFCRA’s expanded FMLA rights. Whether two entities should be considered an integrated employer is a fact-specific analysis that looks at the following factors:
- Interrelation of operations, i.e., common offices, common record keeping, shared bank accounts and equipment;
- Common management, common directors and boards;
- Centralized control of labor relations and personnel, i.e., hire and fire employees; and,
- Common ownership and financial control.
Small business exemption
The DOL guidance does not share any additional details about the small business exemption which may apply to businesses with fewer than 50 employees if offering paid leave would jeopardize the viability of the business. The DOL simply instructs employers who think this exemption might apply to their business to document why the exemption might apply as they await final regulations from the DOL.
Calculating paid sick leave for part-time employees
The FFCRA provides part-time employees with paid sick leave based on their average number of hours worked during a two-week period. When possible, employers should calculate paid leave based on the number of hours the employee is normally scheduled to work. However, if the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, the employer may use a six-month average to calculate the employee’s average daily hours. A part-time employee may take paid sick leave for this number of hours per day for up to a two-week period and may take expanded family and medical leave for the same number of hours per day up to ten weeks after that.
If the calculation cannot be made because the employee has not been employed for at least six months, the DOL guidance instructs employers to use the number of hours that the employer agreed with the employee that the employee would work upon hiring. If the employer and employee did not agree on these terms at hiring, the employer may calculate the appropriate number of hours of leave based on the average hours per day the employee was schedule to work over the entire term of his or her employment.
The guidance further provides that employers are required to pay an employee for hours the employee would have been normally scheduled to work even if that is more than 40 hours in a week. However, emergency paid sick leave is capped at 80 hours over a two-week period. Thus, an employee who is scheduled to work 50 hours a week could take 50 hours of paid leave in the first week and 30 hours of paid sick leave in the second week, but leave would be capped at 80 hours.
Regular rate of pay
Employers must pay employees at their regular rate of pay (or 2/3 that regular rate, depending on the circumstances for taking leave). An employee’s regular rate of pay is generally the employee’s average regular rate over a period of up to six months immediately preceding the leave, including commissions, tips, or piece rates. This differs from the FLSA’s work-week-by-work-week calculation.
The DOL guidance also provides that, in the alternative, the regular rate can be determined by dividing all compensation earned over the immediately preceding six month period and dividing it by the sum of all hours actually worked during the period.