US Dept. of Labor Issues Guidance on Families First Coronavirus Response Act, Effective April 1, 2020
On Tuesday, March 24, the U.S. Department of Labor (DOL) released its first round of guidance - provided in a Fact Sheet for Employees, a Fact Sheet for Employers and a Q&As document (together, the “DOL Guidance”) – addressing some compliance questions related to the Families First Coronavirus Response Act (FFCRA) passed last week. The big news is that the law will take effect April 1, 2020 - not April 2 as originally expected. The DOL Guidance also explains how employers should count the number of their employees to determine coverage, how to count hours for part-time employees, and how to calculate the wages to which employees are entitled under the FFCRA, and clarifies that the FFCRA applies to Guam employees and employers. Click here for more information about the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act.
Key Takeaways
Effective Date is April 1, 2020
The DOL Guidance sets the effective date of the FFCRA as April 1, 2020, not April 2, 2020 as originally expected. It is scheduled to expire on December 31, 2020.
Employee Threshold: How Do You Count To 500?
Both leave provisions of the FFCRA apply to private employers with 499 or fewer employees. The DOL Guidance provides additional information as to how employers may calculate whether they fall under that threshold.
The DOL Guidance states that when determining whether an employer meets the under-500 threshold, the employer must calculate at the time an employee’s leave is to be taken. (Note: Application of this rule may present a practical challenge if an employer’s headcount fluctuates above and below 500 during the time employees are seeking leave under the FFCRA). It further makes clear that the employer should count:
Full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States (Note: This makes clear that the FFCRA applies to Guam employers and employees);
Employees on leave;
Employees who are jointly employed by the employer and another company (regardless of whether the jointly-employed employees are maintained on only one employer’s payroll); and
Day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship).
Independent contractors under the Fair Labor Standards Act (FLSA) are included for purposes of the threshold for benefits under the FFCRA. (See Q&A No. 2)
Related Companies: Are Related Companies Aggregated for the Employee Threshold?
The DOL Guidance notes that typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and all of its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are still typically separate employers unless they are joint employers under the FLSA, as detailed in the DOL’s new Joint Employer Rule (issued on January 12, 2020), and as explained in the Fact Sheet on the Joint Employer Rule. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act. The DOL Guidance (citing the DOL’s Field Operations Handbook) further adopts the “integrated employer test” under the FMLA to determine whether two or more entities are separate for purposes of coverage threshold. Those FMLA factors include common management, interrelation between operations, centralized control of labor relations, and degree of common ownership or financial control. See 29 CFR 825.104(c)(2). If two entities constitute an “integrated employer” under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act. (See Q&A No. 2)
Small Business Exemption: What About Employers with Fewer than 50 Employees?
The FFCRA provides that an employer with fewer than 50 employees may seek an exemption to the FFCRA if the employer can show that compliance with the law would jeopardize the viability of the business as a going concern. The DOL Guidance does not offer further information as to the exemption at this time, other than to say that the DOL’s criteria is forthcoming and employers should document why this exemption applies to them. (See Q&A No. 4)
How is Required Leave for Part-Time Employees Calculated?
Under the FFCRA, part-time employees are entitled to leave for their average number of work hours in a two-week period. For purposes of determining this number, the DOL Guidance states that employers must calculate hours of leave based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, the DOL Guidance permits employers to use a six-month average to calculate the average daily hours. If this 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 and employee agreed that the employee would work upon hiring; if there is no such agreement, the employer may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of employment.
The DOL Guidance does make clear 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. The DOL Guidance notes, however, that the EPSLA requires that paid sick leave be paid only up to 80 hours over a two-week period, and explains (by way of example) that an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week. In any event, the total number of hours paid is capped at 80. (See Q&A No. 5)
What is the Regular Rate of Pay Under the FFCRA?
The DOL Guidance states that an employer must pay employees at their regular rate of pay (or 2/3 that regular rate, depending on the reason for which leave is taken). The DOL Guidance further explains that the regular rate of pay used to calculate paid leave under the FFCRA is, generally, the average of the employee’s regular rate over a period of up to six months prior to the date on which they take leave, and that commissions, tips, or piece rates, are included in this calculation.
An employer can also compute an employee’s regular rate by adding all compensation that is part of the regular rate over the above period and dividing that sum by all hours actually worked in the same period.
How Much Will An Employee Be Paid While Taking Leave Under the FFCRA?
The DOL Guidance makes clear that for purposes of the FFCRA, employees who have been on the covered employer’s payroll continuously as of March 2, 2020 prior to the effective date of April 1, 2020 may be entitled to the following benefits:
Two weeks (up to 80 hours) of paid sick time at the employee’s regular rate of pay, federal minimum wage rate, or Territorial minimum wage rate (whichever is greater) where the employee is unable to work or telework because:
the employee is quarantined or isolated (because of a Federal, State, or local quarantine/isolation order related to COVID-19 or advice from a health care provider to self-quarantine due to concerns related to COVID-19); and/or
the employee is experiencing COVID-19 symptoms and seeking a medical diagnosis.
In these circumstances, the employee is entitled to a maximum of $511 per day, or $5,110 total over the entire paid sick leave period.
Two weeks (up to 80 hours) of paid sick time at two-thirds the employee’s regular rate of pay, federal minimum wage rate, or Territorial minimum wage rate (whichever is greater) where the employee is unable to work or telework because:
the employee is caring for an individual subject to isolation or quarantine (because of a Federal, State, or local quarantine/ isolation order related to COVID-19 or an advice of a health care provider to self-quarantine due to concerns related to COVID-19); and/or
the employee is caring for child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or
the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor;
Up to an additional 10 weeks of expanded FMLA leave at two-thirds the employee’s regular rate of pay, federal minimum wage rate, or Territorial minimum wage rate (whichever is greater) where:
the employee is unable to work because the employee has to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19 and
the employee has been employed by a covered employer for at least 30 calendar days.
Are the Leave Provisions Retroactive?
The DOL Guidance provides that benefits under the FFCRA are not retroactive, and that the requirements for employers are effective beginning April 1, 2020. The DOL Guidance also makes clear that paid leave provided prior to April 1, 2020 (even for reasons covered under the FFCRA) would not count towards the new requirements.
What are the Notice Requirements?
The DOL has issued a FAQs page to provide guidance to covered employers on how to satisfy the notice requirements under the FFCRA. Each covered employer must post a notice of the FFCRA requirements in a conspicuous place on its premises. An employer may satisfy the notice requirement by emailing or direct mailing the notice to employees, or posting the notice on an employee information internal or external website. The DOL’s FAQs page about the notice requirement also makes clear that an employer is required to provide notice to current employees and new hires, but is under no obligation to provide notice to recently laid-off individuals or new job applicants. The notices are free of charge and can be obtained by contacting the Department’s Wage and Hour Division at 1-866-4-USWAGE (1-866-487-9243). Employers can also access, download, and print the notices by clicking on the links below: