By Gary Fowler & Sara Harris
Congress enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020. The FFCRA includes provisions that require employers to provide employees with paid sick or family leave for specified reasons related to COVID-19. On March 24, 2020, the U.S. Department of Labor issued initial guidance—including a Fact Sheet for Employers, a set of Q&As, and a Non-Enforcement Bulletin—regarding the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. On March 25, 2020, the DOL also issued a model posting notice that covered employers should provide to their employees.
The Q&As and Non-Enforcement Bulletin provide some helpful information and a few clarifications about the new paid leave laws, but there remain many unanswered questions. The implementing regulations, when issued, should provide additional insight into the DOL’s interpretation of employer obligations under the FFCRA.
Effective Date of the Act Is April 1, 2020
FFCRA provided that the effective dates of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act are “not later than 15 days after the date of enactment of the Act.” The DOL Q&As make clear that the effective date is April 1, 2020.
Notice Requirements
On March 25, 2020, the DOL also issued a model posting notice that employers may use to meet the FFCRA posting notice requirement. A related FAQs page explains that the notice must be posed “in a conspicuous place” on the employer’s premises, but due to current teleworking realities, an employer can satisfy the requirement if it provides the notice to employees via email or regular mail, or by posting the notice to an internal or external website.
Employers Must Provide up to 12 Weeks of Paid Leave
The Emergency Paid Sick Leave Act (EPSLA) requires covered employers to provide eligible employees two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay if the employee is unable to work for one or more of six (6) specified reasons related to COVID-19 precautions. All employees are eligible for such leave, regardless of length of employment (but employers may choose to exclude “health care provider” or “emergency responder” employees from eligibility for this paid sick leave).
The Emergency Family and Medical Leave Expansion Act (EFMLEA) expands the Family and Medical Leave Act (FMLA) by adding a sixth category to the list of protected leave available to a covered employee. The new category provides paid leave due to a “qualifying need related to a public health emergency.” This coronavirus-driven expansion is narrowly defined to mean that the employee is unable to “work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed or the child care provider of such son or daughter is unavailable, due to a public health emergency.” An eligible employee is entitled to 10 weeks of such leave in addition to EPSLA leave. An employee who has been on the employer’s payroll for at least 30 calendar days immediately prior to the day the leave would begin is eligible for EFMLEA leave. The “health care provider” and “emergency responder” exclusion option also applies to EFMLEA leave.
The DOL guidance confirms that an employee eligible for both EPSLA and EFMLEA leave is entitled to a total of 12 weeks of paid leave.
Calculating the 500-Employee Threshold
Both EFMLEA and EPSLA leave apply to employers with fewer than 500 employees. The DOL Q&As explain that an employer should determine whether it meets the threshold at the time an employee’s leave is to be taken. The employer must include in its calculation all U.S.-based full- and part-time employees, employees currently on leave, temporary employees, and day laborers. If two entities are joint employers, all of their employees must be counted in determining whether EPSLA and EFMLEA leave must be provided to eligible employees.
In addition, the guidance indicates that the DOL will look to the “integrated employer test” to determine whether two or more entities will be treated as a single employer for purposes of determining covered employer status under the EFMLEA. The integrated employer test evaluates factors including include common management, interrelated operations, centralized control of labor relations, and the level of common ownership or control between the entities. Control over employment decision-making is the primary factor. Entities that constitute an integrated employer must count all of their employees in determining coverage.
Calculating Pay Owed
The Emergency Paid Sick Leave Act requires an employer to pay sick leave only up to 80 hours over a two-week period. The Q&As offer the following example: “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 under the Emergency Paid Sick Leave Act is capped at 80.”
For both EFMLEA and EPSLA leave, the calculation for both full-time and part-time employees must be based on the number of hours the employee normally works. If the normal scheduled hours are unknown or vary, the employer may use an alternative method to determine average daily hours, including for example by using a six-month average.
Under the EPSLA (i.e., the paid sick leave portion of the FFCRA), the maximum daily and total dollar amounts to which an employee is entitled differ based on the reason for such leave. Employees who fall into the first three categories receive a greater amount than those taking leave under the remaining categories. These first three categories include employees who are unable to work or telework due to a need for leave because the employees (1) are subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (2) have been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (3) are experiencing symptoms of COVID-19 and are seeking medical diagnosis. Employees in these three categories receive, for each applicable hour, paid leave at the employee’s regular rate pay (but not less than federal or state minimum wage rates). The maximum paid leave for employees in these three categories is $511 per day, or $5110 total over the entire two-week paid sick leave period. Employees who otherwise qualify for paid sick leave under EPSLA (those who take sick leave because of caring for an individual affected by COVID-19 or for a son or daughter under 18 whose school or place of care is closed or unavailable or who experience any other substantially similar condition that may be specified by the Secretary of Health and Human Services) must receive paid leave at no less than 2/3 of their regular rate of pay for the hours the employee would be normally scheduled to work, up to a maximum of $200 per day or $2,000, for the entire two week period.
Under EFMLEA (the emergency FMLA expansion leave), an employee is eligible for an additional 10 weeks of paid leave at no less than 2/3 of their regular rate of pay, but in all cases no more than $200 per day or $12,000 in total (inclusive of paid sick leave). The Q&As provide additional guidance on those details.
Prior Coronavirus-Related Leave Does Not Reduce Available Paid Sick Leave
The guidance confirms that paid leave an employer provided prior to April 1, 2020, for reasons covered under the FFCRA will not count towards the new paid leave requirements.
The Small Business Exemption – Document, Don’t Send
The FFCRA exempts small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
The DOL guidance explains that a business seeking this exemption “should document why your business with fewer than 50 employees meets the criteria set forth by the Department.” The employer should not send any materials to the DOL to request the exemption. Presumably, this guidance is designed to prevent a flood of requests, which the Department may not be able to handle at this time. The forthcoming regulations will provide additional details regarding the eligibility criteria.
Temporary Non-Enforcement Period
The DOL has also issued a Field Assistance Bulletin directed at DOL Wage and Hour Division staff regarding a short non-enforcement period applicable to the FFCRA paid leave provisions.
The Bulletin, issued March 24, 2020, states that the DOL will not bring enforcement actions against any employer for violations of the FFCRA paid leave laws “occurring within 30 days of the enactment of the FFCRA, i.e. March 18 through April 17, 2020.” This non-enforcement position is only applicable if the employer has made reasonable, good faith efforts to comply with the Act. However, employers should not view this non-enforcement period as a “get out of jail” free card because of the requirement to show that they have acted “reasonably” and “in good faith.” Also, employees who later sue under the Act will not necessarily be bound by this non-enforcement policy.
The enforcement guidance further explains that an employer who is found to have violated the FFCRA acts “reasonably” and “in good faith” if:
- The employer remedies any violations, including by making all affected employees whole as soon as practicable;
- The violations were not “willful” (where willful means the employer “either knew or showed reckless disregard for the matter of whether its conduct was prohibited”); and
- The DOL receives a written commitment from the employer to comply with the applicable paid leave requirements in the future.
This short non-enforcement window is intended to ensure that covered employers have access to sufficient funds to pay for required paid leave, and therefore would not protect an employer who has ready access to funds, but chooses not to timely pay employees taking covered leave. The guidance Bulletin further indicates that tax-credit eligible employers who have insufficient cash flow should make the paid leave wage payments “as soon as possible, but not later than seven (7) calendar days after the employer has withdrawn an amount equal to the required paid sick leave and expanded family and medical leave wages from the employer’s Federal payroll tax deposits or, to the extent such deposits are not sufficient, has received a refund of the credit amount from the IRS to cover the required wages.” See also the March 20, 2020 Joint Statement by the Department, the Treasury Department and the Internal Revenue Service.
More to Come
The DOL has also indicated that the forthcoming regulations are expected sometime in April 2020. Additional fact sheets and Q&As may also be published. We will keep you timely apprised of these developments.
Meet Gary
Meet GaryW. Gary Fowler advises and defends his clients on labor and employment matters, with particular interest in executive compensation and contracts, covenants not to compete, and disability law. Gary is recognized for his experience in the Americans with Disabilities Act and for his knowledge of covenants not to compete, which are particularly complex under Texas law. A Co-Chair of Jackson Walker’s Labor & Employment group, Gary is Board Certified in Labor and Employment Law and frequently speaks on non-competition issues and employment law. Since 2006, The Best Lawyers in America has recognized Gary for his work in Labor and Employment Law – Management and, in 2017, named him Lawyer of the Year for Dallas in that category.
Meet Sara
Meet SaraSara K. Harris regularly defends employers in discrimination and wrongful termination lawsuits, government investigations, and wage and hour matters. Her areas of interest include executive and physician employment agreements, labor union disputes, internal investigations, and non-compete contracts. Sara also has experience in healthcare litigation and regulatory matters, including telemedicine and digital health, state and federal regulatory compliance, entity licensing, and insurance disputes.
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Please note: This article and any resources presented on the JW Coronavirus Insights & Resources site are for informational purposes only, do not constitute legal or medical advice, and are not a substitute for legal advice from qualified counsel. The laws of other states and nations may be entirely different from what is described. Your use of these materials does not create an attorney-client relationship between you and Jackson Walker. The facts and results of each case will vary, and no particular result can be guaranteed.
