On March 24, 2020, the Wage and Hour Division of the Department of Labor (“DOL”) published a news release and three guidance documents on the Families First Coronavirus Response Act (“FFCRA” or the “Act”).  As we explained in our recent post, the FFCRA will require covered employers to provide certain levels of paid emergency sick leave and paid Family and Medical Leave Act (“FMLA”) leave to employees for specified coronavirus-related reasons, the  cost of which will be refunded to private employers through tax credits.  As DOL recognized in a Field Assistance Bulletin also issued yesterday, the tax credits are unavailable to public sector employers.

On March 25, DOL published posters, which covered employers can use to satisfy the FFCRA’s notice requirement.  The  FFCRA Employee Rights Poster is for private sector employers and certain public employers; the FFCRA Federal Employee Rights Poster is for federal employers.  DOL also announced today that it will be conducting an “online dialogue” about the FFCRA through Sunday, March 29, which will provide “an opportunity for employers and workers to play a key role in shaping the development of the Department of Labor’s compliance assistance materials and outreach strategies related to implementation of FFCRA.”

The three guidance documents released yesterday —a Fact Sheet for Employers, a Fact Sheet for Employees, and a Questions and Answers document (collectively, the “Guidance”)—answer some questions about the FFCRA but leave other important questions unanswered.  According to DOL, additional fact sheets and FAQs will be released soon, and regulations (originally expected this week) are now expected sometime in April.

Key issues addressed in yesterday’s Guidance documents include:

The Act’s Effective Date.  The FFCRA provides that it will become effective “not later than 15 days” from the Act’s March 18 enactment, meaning April 2.  The Guidance states that the leave provisions of the FFCRA will be effective April 1.

Notice Requirement.  The Guidance states that “[e]ach covered employer must post in a conspicuous place on its premises a notice of FFCRA requirements.”  DOL’s model  FFCRA Employee Rights Poster (for private sector employers and certain public employers) and FFCRA Federal Employee Rights Poster (for federal employers) can be used to meet this requirement.  A Notice FAQs released yesterday also states that employers may satisfy the requirement “by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.”              

Counting Employees to Determine Coverage.      Unlike public sector employers covered by the FFCRA’s leave provisions, private employers are required to provide the new leave only if they have fewer than 500 employees.  The Guidance states that in counting employees to determine coverage, employers should consider all full- and part-time employees in the United States, its possessions, and territories, including employees on leave; temporary employees “jointly employed” with another employer (even if the employee is not on the employer’s own payroll); and “day laborers” (who must be counted both by the temporary agency that supplies them and the client firm “if there is a continuing employment relationship”).  Independent contractors are not counted.  According to the Guidance, related entities should count all of their employees together if they meet the FLSA joint employer test, for purposes of determining coverage under both the FFCRA’s sick leave and FMLA leave provisions.  Additionally, entities that meet the FMLA integrated employer test (set forth in 29 C.F.R.
§ 825.104(c)(2)) should count their combined employees for purposes of determining coverage under the FMLA leave provision (but not the sick leave provision).

Pre-Act Leave and Retroactivity.  The Guidance makes clear that covered employers who have already provided paid leave to employees prior to April 1 (including for coronavirus-related reasons) are not exempt from the Act’s coverage.  These employers still must provide all of the paid leave required under the Act.  Also, the Guidance states that the Act’s leave requirements are not retroactive.

Small Business Exemption.  The FFCRA authorizes the Secretary of Labor to exempt small businesses with fewer than 50 employees from the Act’s requirements for leave related to school closures or the unavailability of a child care provider when the requirements “would jeopardize the viability of the business as a going concern.”  The Guidance states that criteria for applying this exemption will be announced in forthcoming regulations.  For now, DOL recommends that small employers should document why their businesses would meet the criteria but should not send any supporting materials to DOL.

30-Day “Good Faith” Grace Period.  In the Guidance and the above-mentioned Field Assistance Bulletin, DOL states that it will observe a “temporary period of non-enforcement” of the FFCRA sick leave and FMLA leave requirements for the first 30 days after the Act takes effect (that is, from March 18 through April 17), but only for employers who act “reasonably and in good faith” to comply, including by remedying any violations and making employees whole as soon as practicable.

Tax Credits.  The Guidance states that for private employers, “every dollar” of FFCRA leave, including the cost of employees’ health insurance premiums during leave, “will be 100% covered by a dollar-for-dollar refundable tax credit available to the employer,” and directs employers to the Department of Treasury website for more details.  Note that the FFCRA provides that the tax credits are unavailable to “the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing.”

Other Matters. The Guidance also addresses several practical matters, such as how to count an employee’s hours and how to determine an employee’s “regular rate of pay” for purposes of calculating the amount of paid leave owed; and how the FFCRA’s sick leave and FMLA leave requirements interact with one another.

Unresolved Questions.  Several important questions under the FFCRA remain unanswered, in addition to the scope of the small business exemption discussed above.  For example:

• Although the FFCRA authorizes both the Secretary of Labor and employers to exempt “health care providers” and “emergency responders” from the Act’s leave requirements, the meaning of those terms is an issue. The Act adopts the FMLA definition of “health care provider” (set forth at 29 U.S.C. 2611(6) and 29 C.F.R. § 825.102), which was developed in a different context, and the Act does not define “emergency responder” at all.  It remains to be seen how broadly DOL will define these terms to ensure continuity of services necessary to the country’s coronavirus relief efforts.
• In yesterday’s Guidance, DOL promised additional FAQs on the application of the FFCRA to public sector employers.
• The Guidance does not address whether the Act’s leave provisions apply to employees who are on a furlough or layoff status.
• The Guidance does not address whether a state or local “stay home” or shutdown order qualifies as a “local quarantine or isolation order” entitling an employee to FFCRA paid sick leave.
• The Guidance does not address whether employees who take twelve weeks of coronavirus-related FMLA leave are eligible to use FMLA for other reasons within a twelve-month period, or whether those who have already exhausted their FMLA benefits for other reasons are eligible for coronavirus-related FMLA leave.

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