[co-authors: Emily Schifter, Andrew Henson, Richard Gerakitis, Moses Tincher]*
On April 1, the U.S. Department of Labor (DOL) posted a temporary rule issuing regulations pursuant to the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA), both part of the Families First Coronavirus Response Act (FFCRA). These regulations are in addition to the Frequently Asked Questions that the DOL has issued in recent days. Below we answer questions about some notable aspects of the regulations.
How does an employer determine if it has fewer than 500 employees for purposes of the FFCRA?
Only employers with fewer than 500 employees must comply with the paid leave requirements under the FFCRA. For purposes of determining whether the 500-employee threshold is met, employers must consider the total number of employees at the time a particular employee seeks to take FFCRA leave. As a result, employers may be subject to the FFCRA at one moment in time but not subject to it at a different time. For example, seasonal employers that currently have fewer than 500 employees may be subject to the FFCRA now, but may no longer be covered during the summer when business expands and the number of employees increases. Conversely, employers that currently have 500 or more employees may undergo a workforce reduction in the future that causes them to become subject to the FFCRA.
Who counts as an “employee” for purposes of determining the 500-employee threshold?
All currently employed employees in the United States, including full-time and part-time employees (including employees of joint or integrated employers), employees of temporary placement agencies jointly employed by the employer and the agency, and day laborers supplied by a temporary placement agency, are considered to be “employees” for purposes of determining the 500-employee threshold. Individuals who are not counted include independent contractors, furloughed or laid off employees who have not been subsequently reemployed, and employees of a related entity unless there is a joint or integrated employment relationship. Employers should apply both the Fair Labor Standards Act’s (FLSA’s) “joint employer” test and the Family and Medical Leave Act’s (FMLA’s) “integrated employer” test for purposes of counting employees. We recommend that you consult legal counsel for assistance in applying these tests to your business.
Who is exempt from providing paid leave under the FFCRA?
An employer with fewer than 50 employees (including a religious or nonprofit organization) is exempt from providing paid leave under the FFCRA when doing so would jeopardize the viability of the small business as a going concern, provided that an authorized company officer of the small business determines, with respect to the particular employee requesting leave, that (1) the leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity; (2) the leave would entail a substantial risk to the financial health or operational capabilities of the business because of the employee’s specialized skills, knowledge of the business, or responsibilities; or (3) there are not enough workers who would be able to perform the services provided by the employee in order for the business to operate at minimal capacity. If an employer believes it qualifies for the small business exemption, it must document that it denied a request for leave for one of the three reasons identified above. This document should be retained by the employer for four years. Employers claiming this exemption must still post notice about the FFCRA’s paid leave provisions and information about how to file a complaint with the DOL’s Wage and Hour Division for alleged violations of the FFCRA.
Must an employer with fewer than 25 employees restore an employee taking EFMLEA leave to his or her job?
Not necessarily. An employer employing fewer than 25 employees may deny job restoration to those who have taken expanded family and medical leave if the following conditions are met: (1) the employee's position no longer exists due to economic or other changes in operating conditions that affect employment and are caused by COVID-19 related reasons; (2) the employer makes reasonable efforts to restore the employee to the same or an equivalent position; and (3) if the employer’s efforts fail, the employer makes reasonable efforts to contact the employee for one year if an equivalent position becomes available. The one-year period commences on the earlier of the date the employee’s leave concludes or the date 12 weeks after the employee’s leave began. This job restoration exception does not apply to EPSLA leave.
Can an employer of a health care provider or emergency responder deny FFCRA leave to those employees?
Yes. The definition of a “health care provider,” only for purposes of this exception, is significantly broader than the definition under the FMLA. Whether a person is a health care provider covered by this exception is determined by the nature of the entity where the provider is employed, not the job he or she performs for that entity. The regulations permit an employer to deny leave to an employee in a doctor’s office or a hospital, even if that employee is not directly engaged in providing health care to patients. The exception also broadly includes “anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments” in the definition of “health care provider.” Similarly, the term “emergency responder” is quite broad and includes law enforcement officers and firefighters, as well as child welfare workers/service providers and public works personnel. However, an employer of a health care provider or emergency responder may choose to provide FFCRA leave and will be eligible for the tax credits resulting from the provision of that leave, if the employer elects to provide it.
How must teleworking employees be paid?
The DOL guidance typically provides that all time between performance of the first and last principal activities (the “continuous workday” rule) is compensable work time. However, the preamble to the FFCRA regulations makes clear that employers do not need to follow this rule for teleworking employees. Rather, when employees work remotely, or “telework,” they must be compensated for all actual time spent teleworking, and for all hours that an employer knew or should have known were worked.
When is an employee able to telework?
An employee is “able” to telework if (1) his or her employer has work for the employee, (2) the employer permits the employee to work from the employee’s location, and (3) there are no extenuating circumstances (such as serious COVID-19 symptoms) that prevent the employee from performing that work. Telework may be performed during normal hours or at other times agreed by the employer and the employee.
When is an employee unable to work and entitled to paid sick leave under the EPSLA because he or she is subject to a federal, state or local quarantine or isolation order related to COVID-19?
The FFCRA does not address whether a shelter-in-place or stay-at-home order constitutes a quarantine or isolation order as used in the EPSLA. The regulations confront that issue directly by providing that a quarantine or isolation order includes a shelter-in-place or stay-at-home order. The regulations also state, however, that an employee is considered “unable to work” because of a shelter-in-place or stay-at-home order only if, but for being subject to the order, he or she would be able to perform work that is otherwise allowed or permitted by his or her employer, either at the employee’s normal workplace or by telework. An employee subject to a quarantine or isolation order may not take paid sick leave when the employer does not have work for the employee as a result of the order or other circumstances, such as if the employer is a “nonessential” business that is not permitted to operate under a state or local government order. The preamble to the regulations provides the following example:
if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, it would no longer have any work for its employees. A cashier previously employed at the coffee shop who is subject to a stay-at-home order would not be able to work even if he were not required to stay at home. As such, he may not take paid sick leave because his inability to work is not due to his need to comply with the stay-at-home order, but rather due to the closure of his place of employment.
This analysis holds even if the closure of the coffee shop was substantially caused by a stay-at-home order. If the coffee shop closed due to its customers being required to stay at home, the reason for the cashier being unable to work would be because those customers were subject to the stay-at-home order, not because the cashier himself was subject to the order. Similarly, if the order forced the coffee shop to close, the reason for the cashier being unable to work would be because the coffee shop was subject to the order, not because the cashier himself was subject to the order.
This regulation lacks clarity and will likely apply only in limited circumstances. Employers should conduct a case-by-case analysis of when an employee is unable to work due to a quarantine or isolation order.
When is an employee unable to work and entitled to paid sick leave because a health care provider has advised him or her to self-quarantine?
An employee is unable to work in this circumstance if a health care provider advises that the employee should self-quarantine because the employee has COVID-19, might have COVID-19, or is particularly vulnerable to COVID-19, and the employee follows that advice and cannot work due to self-quarantine.
When is an employee unable to work and entitled to paid sick leave because he or she is experiencing symptoms of COVID-19 and seeking a medical diagnosis for COVID-19?
An employee may be entitled to paid sick leave when he or she has a fever, dry cough, shortness of breath or other COVID-19 symptoms identified by the Centers for Disease Control and Prevention (CDC). However, paid sick leave is “limited to the time the employee is unable to work because the [e]mployee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.”
When is an employee unable to work and entitled to paid sick leave because he or she is caring for an individual subject to a government-ordered quarantine or a health care provider’s recommendation to self-quarantine?
An employee may be entitled to paid sick leave when he or she is caring for an immediate family member, housemate “or a similar person with whom the [e]mployee has a relationship that creates an expectation that the [e]mployee would care for the person if he or she were quarantined or self-quarantined,” and, but for the need to care for the individual, the employee would be able to work at either the employee’s normal workplace or by telework.
When is an employee unable to work and entitled to leave under the EPSLA or the EFMLEA because he or she is caring for a son or daughter due to COVID-19?
An employee may use paid leave under the FFCRA to care for a child whose school or childcare provider has closed due to “COVID-19 only if no other suitable person (e.g. co-parent, co-guardian, or the child’s usual care provider) is available to care for the [s]on or [d]aughter during the period of such leave.” The regulations specify that there must be not only a need to care for the child but that the employee “actually is” caring for the child.
May an employee take intermittent leave under the FFCRA?
Under certain types of FFCRA leave, an employer and an employee may agree that the leave may be taken intermittently so long as there is a clear and mutual understanding between the parties of when the leave is to occur. If the employee is expected to report to an employer’s worksite, the employee may not take EPSLA or EFMLEA leave on an intermittent basis unless it is for the purpose of caring for a child whose school has been closed or whose childcare provider is unavailable due to COVID-19. Once such an employee takes paid sick leave for any of the other qualifying reasons outlined in the law, he or she must continue to take paid sick leave consecutively each day until he or she either uses the full amount of paid sick leave or no longer has a qualifying reason for taking paid sick leave. Conversely, an employee who is teleworking may take intermittent EPSLA or EFMLEA leave for any qualifying reason if the employer and the employee agree.
How do the benefits under the FMLA and the EFMLEA interact?
Leave under the EFMLEA is not in addition to the 12 weeks of FMLA leave to which an employee would otherwise be entitled during an employer’s 12-month FMLA leave year. Leave under the FMLA and leave under the EFMLEA are combined in calculating whether an employee has taken 12 weeks of leave. For example, if the employer uses the calendar year as its FMLA leave year, and an employee took six weeks of FMLA leave for a serious health condition in February 2020, the employee would have only six weeks of EFMLEA leave remaining between April 1 and December 31, 2020.
How do the benefits under the EPSLA and the EFMLEA interact?
An employee who is eligible for leave under both the EPSLA and the EFMLEA may choose to have the initial two weeks of unpaid EFMLEA leave covered by up to two weeks of paid EPSLA leave or any employer-provided paid leave. The initial two weeks of unpaid EFMLEA leave will run concurrently with the two weeks of paid EPSLA leave or any employer-provided paid leave. Thereafter, the remaining weeks of leave are paid under the EFMLEA (at two-thirds the employee’s regular rate, up to $200 per day and $10,000 in the aggregate). An employee’s entitlement to EPSLA leave is not impacted by prior use of FMLA or EFMLEA leave (nor does an employee’s prior use of paid EPSLA leave prevent the employee from taking EFMLEA or regular FMLA leave).
What type of notice and/or documentation must an employee provide in order to take leave under the FFCRA?
An employer can require an employee to provide notice after the first workday for which an employee takes paid sick leave. If the leave is foreseeable (e.g., in a case where the employee needs to care for a child due to a school closure), employees must provide employers with notice as soon as practicable. Employers also may require employees to produce documentation along with their request for paid sick leave or expanded family and medical leave. Appropriate documentation includes the employee’s name; the dates for which the employee is requesting leave; the COVID-19 qualifying reason for the leave; an oral or written statement that the employee is unable to work or telework because of a COVID-19 qualifying reason for the leave; if applicable, the name of the government entity that issued the quarantine or isolation order; the name of the health care provider who advised the employee to self-quarantine for COVID-19 related reasons; and the name of the being cared for, the name of the school, place of care, or child care provider that has closed or become unavailable and a representation that no other suitable person is available to care for the son or daughter during the period of requested leave. (In addition, under IRS guidance for obtaining payroll tax credit for providing such leave, an employer must obtain a statement from an employee seeking leave to care for a child over age 14 during the daytime that special circumstances exist that require the employee to provide care.) Employers must keep all records for a period of four years, regardless of whether leave was granted or denied. If an employee provides oral statements to support his or her need for leave, the employer must document those statements and save them for four years.
Does an employer need to maintain health care coverage for an employee on FFCRA leave?
Yes. An employee on FFCRA leave is entitled to continued coverage under the employer’s group health plan on the same terms as if the employee did not take leave. An employee remains responsible for paying his or her share of the group health plan premiums, if any.
If an employer provides paid leave under the FFCRA, does the employer still need to provide employees with other forms of paid leave?
An employee’s use of paid leave under the EPSLA is in addition to any paid leave to which the employee is entitled under an employer’s policy existing before April 1, 2020, a collective bargaining agreement, or other state/local laws. However, an employee may elect to use, or an employer may require that an employee take, employer-provided leave that would be available to care for a child, such as vacation or personal leave or paid time off, concurrently with leave under the EFMLEA.
Are employees entitled to retroactive paid leave for leave taken prior to April 1?
No.
Can an employer discharge, discipline or discriminate against an employee for using FFCRA leave or filing a complaint about FFCRA leave?
Of course not. And in most circumstances, employees will be entitled to bring lawsuits if they believe their rights have been violated.
What happens if an employer fails to provide its employees with paid sick leave under the EPSLA?
The failure to pay will be considered a failure to pay minimum wage under the FLSA and will subject employers to lawsuits. Lawsuits under the FLSA could lead to costly collective actions that could require an employer to pay damages, an additional amount of liquidated (double) damages, and reasonable attorneys’ fees and costs.
While this new temporary rule has provided much-needed clarity during these uncertain times, it will likely be supplemented with additional guidance in the coming days and weeks. We will closely monitor and update any changes as appropriate. In the meantime, please visit the Pepper Hamilton/Troutman Sanders COVID-19 Resource Center for COVID-19-related news and developments. Employers should also work with their legal counsel to develop policies related to the implementation of the FFCRA and seek advice regarding the myriad labor and employment issues brought about by COVID-19.
* Troutman Sanders
