On Wednesday, March 18, 2020, Congress passed, and President Trump signed, the Families First Coronavirus Response Act (“FFCRA”). The Act took effect April 1, 2020, and it sunsets on December 31, 2020. This set of FAQs is intended to answer many of the questions employers may ask as they try to comply with this complicated emergency legislation and to provide sick or leave pay to affected employees. These FAQs have been updated continuously based on guidance released by the United States Department of Labor (“DOL”).
Release of temporary regulations (April 1, 2020)
The DOL promulgated temporary regulations on April 1, 2020. Many of the regulations track the FAQs the DOL released between March 24 and 28, but others contained additional material. The significant new material includes:
- The temporary regulations address the question of whether and when a state or local government’s “shelter-in-place” or similar order might constitute a “quarantine” or “isolation” order for purposes of determining entitlement to 80 hours of paid sick leave under the act;
- The regulations better define the kinds of familial or other relationships that might permit an employee to take leave for “caring for an individual” with a COVID-19 related condition;
- The provisions relating to the need for leave to care for a son or daughter due to the closure of a school or childcare includes consideration of whether others, such as family members, could watch the child;
- Extended family and medical leave is under the FMLA and counts against the 12-week maximum in whatever 12-month period the employer is using for FMLA purposes;
- Important rules for documentation, including a requirement to retain records relating to FFCRA leave for four years.
The remainder of these FAQs include not only the material from the DOL’s own FAQs, but also reflect the now-available temporary regulations.
Q: What is the Act all about?
A: The Families First Coronavirus Response Act is really a set of acts designed, as the name implies, to address several facets of the ongoing coronavirus COVID-19 pandemic. Two of these acts directly affect employers’ obligations to provide a measure of leave pay under certain circumstances related to the pandemic.
Unfortunately, neither of these statutes has a convenient short name. The first, the Emergency Paid Sick Leave Act (we’ll call it the “EPSLA”, but keep in mind the “SL” for sick leave for ease of reference), provides up to 2 weeks/80 hours of sick pay for many employees who miss work for designated reasons related to the coronavirus. The DOL refers to this as “paid sick leave.”
The second, the Emergency Family and Medical Leave Expansion Act (“EFMLEA”, but keep in mind the “FML” part) amends the Family and Medical Leave Act to provide up to 12 weeks of leave, 10 of which are paid at 2/3 pay. The DOL refers to this as “expanded Family and Medical Leave.” As explained below, there are distinct differences and some overlap between the two.
In many respects, it may be easier to analyze issues under the two acts separately, much as employers are accustomed to considering FMLA and Americans With Disabilities Act issues separately for the same condition.
Q: What are the notice requirements?
A: The FFCRA requires employers to post a notice regarding the act’s requirements. The DOL released the model notice on March 25, 2020.
The poster can be found here.
In addition to traditional posting, employers may satisfy the notice requirement by emailing or direct mailing the notice to employees, or posting this notice on an Employee information internal or external website
Temporary regulations now available.
The FFCRA assigns responsibility to the United States Department of Labor (“DOL”) to issue regulations in regard to many of the questions left open by the act itself. During the week of March 23, 2020, the DOL issued and then supplemented its own FAQs as a prelude to the regulations. The DOL then issued temporary regulations on April 1, 2020, along with over 80 pages of summary material. Many of the regulations echoed statements made in the prior week’s FAQs, but there are still many unanswered questions and areas of significant ambiguity. These FAQs will attempt to identify those areas, but also provide at least some guidance as to how to approach them.
Q: Which employers are covered?
A: Both statutes apply, in the case of the private sector, to employers of fewer than 500 employees. This is unusual, and the product of legislative compromise, as employment statutes more commonly exempt smaller employers than larger ones. Part of this relates to the tax relief provisions that will apply to many payments under the act.
For purposes of determining whether the employer is covered, only employees in the United States, or its territories or possessions, are counted.
Private employers with 500 or more employees are not covered and do not have obligations under either statute. Smaller employers are covered. The smallest employers – those with fewer than 50 employees – will be subject to the EPSLA sick leave provisions and may or may not be subject to the longer EFMLEA provisions.
The statute permits the DOL to create an exemption for employers of fewer than 50 employees for the EFMLEA and the portion of the EPSLA regarding child-care related leave. The statute, however, limits the potential “small employer” exemption to circumstances in which compliance with the EFMLEA “would jeopardize the viability of the business as a going concern.” As explained below, new DOL temporary regulation recognize this small employer exemption and articulate when it will apply. In short, to take advantage of the exemption, an authorized officer of the business must determine in writing that one or more of the following are true:
- The requested 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;
- The absence of the employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting leave, and these labor or services are needed for the small business to operate at a minimal capacity.
To elect this small business exemption, the employer must document that a determination has been made pursuant to these criteria. The employer does not (and should not) provide this documentation to the DOL but should keep the records in its files. Importantly, small business that fall under this exemption are still subject to the EPSLA sick leave provisions and must still post notice of the act’s requirements.
Even though the act does not apply to employers with more than 500 employees, a number of states are beginning to adopt their own emergency sick leave statutes, like the State of New York. Many of these statutes do not exempt large employers. Proposals in Congress would remove this 500-employee cap. So, even those employers with more than 500 employees should be carefully monitoring legislation at the state and federal levels.
All public agencies subject to the Fair Labor Standards Act are covered employers under both the EPSLA and EFMLEA, regardless of their number of employees.
Q: Which employees are covered?
A: Unfortunately, the answer is not the same for the EPSLA and EFMLEA. This is due in part to the fact that the EPSLA (sick leave) amends the Fair Labor Standards Act and the EFMLEA (extending FMLA protection) amends the FMLA, and the two amended statutes use definitions that aren’t entirely alike.
As to the EPSLA sick pay provisions, all employees are covered, regardless of how long they have worked (even a day) and whether they are part-time or not. Coverage under the EFMLEA requires 30 days of employment, far shorter than the FMLA it amends, and applies to part-time employees as well. As a practical matter, all but the most recent hires will be covered by both acts if the employer is also covered.
Q: What about health care providers and emergency responders?
A: An Employer whose employee(s) is a health care provider or an emergency responder may exclude such employees from the EPSLA’s Paid Sick Leave requirements and/or the EFMLEA’s Expanded Family and Medical Leave requirements. The DOL regulations construe the list of healthcare providers and emergency responders extremely broadly, and includes not only physicians and nurses, but also all doctor’s office employees, laboratory workers, and those manufacturing medical products. Simultaneously, however, the FAQs encouraged employers to be “judicious” in using the exception at the risk of spreading the virus.
Q: What will trigger entitlement to benefits?
A: This is an important area where the two acts diverge. The shorter sick leave coverage under the EPSLA applies to a wider range of COVID-19 related absences. The longer durational benefits under the EFMLA apply in a narrower range of instances and may pay lesser benefits. For ease of reference, we’ll treat them separately.
Q: What triggers entitlement to paid sick leave?
A: As to sick leave under the EPSLA, employers with fewer than 500 employees must provide paid sick leave to employees who are unable to work, or telework, because they:
- Are subject to a federal, state or local quarantine or isolation order.
- Have been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
- Are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- Are caring for an individual who is subject to a quarantine or isolation order or has been advised by a healthcare provider to self-quarantine as described above.
- Are caring for his or her child whose school or place of care has been closed or whose child care provider is unavailable due to COVID-19 precautions.
- Are experiencing any other substantially similar condition specified by the Secretary of Health & Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
All of these are related to the COVID-19 virus. Among the provisions causing concern for employers, however, are those relating to payments for employees who take time to care for a child whose school or place of care has closed. These concerns stem primarily from students who are old enough, such as 17, not to need parental supervision at home, but the requirement to provide leave exists in the statute nonetheless.
As will be noted below, absences for the first three reasons above (such as being under a quarantine order) are treated somewhat differently from the second three (such as staying at home to care for a child whose school or daycare provider has closed).
Note: the shorter list of reasons triggering entitlement to the longer EFMLEA benefits are discussed further below.
Q: When determining how many hours of paid sick leave to pay to an employee under the EPSLA, should I count overtime?
A: Yes. But, there are two very important caveats.
First, an employee is entitled to a total of 80 hours of paid sick leave under the EPSLA. So, let’s say that an employee takes EPSLA sick leave for a week in which she would have worked 10 hours of overtime, for a total of 50 hours. She is owed 50 hours of paid sick leave for that week, with a remaining balance of 30 hours. If the employee takes EPSLA leave for the next week, she will be capped at 30 hours of paid sick time regardless of how many hours she would have worked.
Second, the employee is not owed the normal time and one-half overtime premium on paid sick leave under the EPSLA. So, in the above example, the employee would be owed 50 hours of paid sick leave, all of which would be paid at straight time.
Q: Can an employee take paid sick leave under EPSLA for more than one reason?
A: Yes, but the overall 80-hour cap applies regardless of how many qualifying reasons the employee experiences. So, if an employee takes 48 hours of EPSLA paid sick leave because his doctor advised him to self-quarantine after exposure to COVID-19, he will have 32 remaining hours of paid sick leave to use under the EPSLA. As a result, if he subsequently needs additional sick leave because his childcare provider closes due to COVID-19, he will be capped at 32 hours.
But, remember—an employee in this circumstance (i.e., in need of childcare) may still be entitled to 10 weeks of partially paid leave under the EFMLEA after exhausting EPSLA leave.
Q: What are the sick leave benefits under the EPSLA?
A: As to the EPSLA, full-time employees are eligible for 80 hours of leave. Part-time employees are eligible for the number of hours they work, on average, over a two-week period. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, you may use a six-month average to calculate the average daily hours.
The rate of pay depends in large part on the reason for the leave. For the first three reasons stated above (such as being under a quarantine order), the employee is entitled to their regular rate of pay, subject to certain caps.
For the remaining reasons (such as caring for a child due to a school closure), the pay is at two-thirds of the employee’s regular rate of pay.
These amounts, however, are subject to fairly generous caps on the amounts paid to employees. Specifically, leave taken for the first three reasons above, such as the employee’s own COVID-19 related condition, is capped at $511 per day. Leave for the remaining reasons, such as leave taken to care for an individual or child, is capped at $200 per day.
Q: How do I figure out the regular rate of pay under the FFCRA?
A: Keep in mind that both the EPSLA and EMFLEA entitle the employee to a measure of sick or leave pay based upon the employee’s regular rate of pay. The regular rate of pay is based on the employee’s average rate of pay over the six months prior to the leave. If the employee has been employed for less than 6 months, you can use the average over the time that the individual has been employed.
Generally, this is a straightforward calculation. You divide the employee’s total compensation over the past 6 months (or the period of employment, for newer employees) by the total number of hours worked.
Where the employee has earned non-discretionary bonuses, commissions, tips or piece rates, these amounts typically must be included in the calculation. The rules in these circumstances vary, however, and will depend on the particular facts involved.
Q: If my employee already meets one of the six conditions above, and I provide paid sick leave to the employee before the EPSLA goes into effect April 1, will the paid sick leave I am already providing count toward the 80 hours of EPSLA sick time?
A: No. The DOL’s FAQs indicate that employers are required to provide 80 of paid sick leave to qualifying employees starting April 1, even if the employer – acting out of kindness – has provided the employee with paid sick time beginning before April 1. The 80-hour clock starts April 1, and employers will get no credit for sick leave provided before that date.
If an employee has an EPSLA-qualifying condition and is out of work before April 1, employers may require the use of ordinary PTO consistent with the employer’s regular policy; or the employer may allow the employee to take unpaid leave; or the employer may allow additional sick days to be taken. But none of that time will be credited toward the 80 hours of paid sick time required under the EPSLA.
Q: What circumstances trigger coverage under the EFMLEA for longer benefits?
A: As to the longer coverage under the EFMLEA, the circumstances are narrower (and, as will be explained, the level of pay may be less). Coverage under the EFMLEA exists only when the employee is unable to work (or telework) because the employee’s child’s school or care center is closed, or the child’s care provider is unavailable due to COVID-19. It isn’t available for the remaining five reasons, such as the employee’s own illness from the coronavirus. Thus, it applies in a much narrower range of instances – only those related to the closing of schools or day care centers.
Q: What are the EFMLEA (expanded FMLA) benefits?
A: As noted above, these last somewhat longer than the 80 hours of sick pay, but they apply in fewer instances and at a potentially lower rate of pay.
The EFMLEA first provides a measure of job protection, much like that already contained in the FMLA that, like the FMLA, lasts for a total of 12 weeks.
Leave under the EFMLEA is unpaid for the first 10 workdays. Please note, however, that pay might be available during those 10 workdays under the sick leave provisions of the EPSLA. After the first 10 workdays, leave is paid at two-thirds of the employee’s usual pay, with a cap of $200 per day. For employees with schedules that vary from week to week, a six-month average is to be used to calculate the number of hours to be paid. If this calculation cannot be made because the employee has not been employed for at least six months, you should use the number of hours that the parties agreed that the employee would work upon hiring.
An employee, if they satisfy both the EPSLA and EFMLEA, will be entitled to benefits under both statutes and thus receive some measure of paid benefits both for the first 10 workdays (under the EPSLA) and then the remaining ten weeks under the EFMLE with a cap of $10,000 in the aggregate, for a total of no more than $12,000 when combined with two weeks of paid leave taken under the EPSLA.
Q: Do employees have a right to return to their positions after taking expanded leave?
A: Generally, yes. Employers are prohibited from firing, disciplining, or refusing to reinstate employees because they took expanded sick leave or family and medical leave. However, employees returning from such leave are not protected from employer actions (such as layoffs or furloughs) that are unrelated to the employee(s) taking leave.
Q: How do we afford this?
A: Congress was well aware of this issue, and it is part of the reason the bill was written the way it was. Subject to certain caps and restrictions, covered employers are eligible to receive refundable tax credits for paid sick and protected leave based on the type of leave and whether the leave is for the employee or the employee’s family member. Although the DOL notes that it does not administer this portion of the act, it has described it as “dollar for dollar” reimbursement for covered employers through tax credits. The IRS guidance on how the credits will work can be found here.
As explained by the IRS, the tax credits for the paid sick leave benefits and expanded family and medical leave benefits will be provided for “each calendar quarter in an amount equal to 100 percent of the ‘qualified sick leave wages’ and ‘qualified family leave wages’ required to be paid” under the FFRCA. With the April 1, 2020 effective date, the IRS has further noted that “the refundable tax credits for employers apply to qualified sick leave wages and qualified family leave wages paid for the period from April 1, 2020 to December 31, 2020.” Put another way, the IRS guidance seems to comport with that given by the DOL, which is that dollar for dollar tax credits will apply to the amount of paid leave properly provided under the statute.
Accordingly, to qualify for such credits, employers must maintain the following records for four years:
- Documentation to show how the employer determined the amount of paid sick leave and expanded family and medical leave paid to eligible employees, including records of work, Telework and Paid Sick Leave and Expanded Family and Medical Leave;
- Documentation to show how the employer determined the amount of qualified health plan expenses allocated to wages;
- Copies of any completed IRS Forms 7200 submitted to the IRS;
- Copies of the completed IRS Forms 941 submitted to the IRS or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third-party payer regarding the employer’s entitlement to the credit claimed on IRS Form 941, and
- Other documents needed to support its request for tax credits pursuant to IRS applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit.
This is a continually evolving area, with Congress considering and debating additional legislation to deal with the COVID-19 pandemic. Please also see programs that might ease the cost under the heading “What tax or other benefits are available to offset the cost?”, below.
Q: This is really hard. How do we approach these issues?
A: It is hard. Part of this difficulty arises from the fact that the two sets of benefits are so different that they must be analyzed separately. In general, one way is to approach it like this:
- Is the employer covered? If private, does it have fewer than 500 employees? If so;
- Is the employee covered? This will likely be true of all employees for 80 hours of sick leave under the EPSLA and those of 30 days’ tenure under the EFMLEA.
- For the first 10 workdays, what has triggered the absence? If it is one of the six items above, the employee will be entitled to sick leave benefits under the EPSLA. To determine the amount, look at the reason why they are seeking benefits (i.e. is the reason among the first three listed above, or the second three?).
- Afterwards (i.e. weeks three through twelve), the question is much more limited, whether they are absent to care for a child home because of the closure of a school or loss of day care due to the virus.
It’s probably easiest to start with the EPSLA sick leave benefits and then, if necessary, look to those under the EFMLEA.
Q: This is still really hard. Can you give me a simple example?
A: Sure.
Let’s say employer has between 50 and 500 employees (and therefore is covered by both statutes. An employee has two grade-school aged children and the school has closed (as it has in many states). The employee has worked for over 30 days and is a full-time employee. They will stay home to watch their children as there is no available daycare. What do they get?
For the first 10 work days, an employee can use existing vacation, personal, medical or sick leave provided under an employer’s policy OR use the 80 hours of sick pay under the EPSLA The pay under the EPSLA is at 2/3 the employee’s regular rate, capped at $200 per day and $2,000 in the aggregate.
For the remaining 10 weeks after that they are on 2/3 pay under the EFMLEA, subject to caps of $200 per day and $10,000 in the aggregate.
In three months, the employer will be entitled to tax credits for the amounts paid.
Q: Is the analysis different if the employee is sick themselves?
A: It sure is. Let's assume now that the employee himself or herself is actually diagnosed with the coronavirus.
The employee gets the same benefits as described above, except that they receive all of their regular rate (not just two-thirds) subject to higher caps of $511 per day or $5111 per employee in the aggregate for the first 80 hours. The same would be true if the employee was asked by a health care provider to self-quarantine, or if they were having COVID-19 symptoms and are seeking a diagnosis.
They would not, however, have sick pay under the EFMLEA beyond the first 80 hours as the EFMLEA does not apply to the employee’s own illness. Thus, they would have higher benefits for the first 80 hours, but none afterwards.
Q: Can employees get both EPSLA and EFMLEA benefits?
A: Yes. As noted above, an employee absent from work to care for a child as a result of a virus-related school or day care closing could get 10 days of EPSLA sick leave benefits during the first 10 work days and then 10 weeks of lesser EFMLEA benefits for the following ten weeks, until coverage is exhausted.
Some have noted confusion over the first two weeks of leave because of the interaction of the two statutes. The DOL explains that Congress intended the two to work together—to permit an employee to have a continuous income stream while taking FFCRA paid leave to care for his or her child whose school or place of care is closed, or whose child care provider is unavailable, for a COVID-19 related reason. Admittedly, it still can be confusing, but it’s easier if you consider the goal of giving employees a reliable income stream during these uncertain times.
Q: We require employees to use sick/accrued PTO etc. for FMLA absences. Can we do so here?
A: No. The acts provide that the sick pay benefits they offer are in addition to whatever benefits the employer may already have available under its leave policies.
Q: Can the employee voluntarily use their employer-provided leave benefits (such as PTO/vacation/sick time) if they want?
A: This is largely a question of state law and the language of the employer’s own policies. In general terms, however, an employee can take advantage of their accrued sick, vacation, or PTO benefits in accordance with the terms of the employer’s policies. This means that, in the examples cited above, those benefits would be in addition to their leave rights under the EPSLA and EFMLEA. It appears that the employee could also choose to use their accrued sick/vacation/PTO policies first (if such leave is available) before using their paid sick leave under EPSLA. The total combined paid leave under EPSLA and EFMLEA would not exceed 12 weeks, but the employee may be able to take longer leave by using the accrued benefits under the employer’s sick/vacation/PTO policies if available.
The DOL considers the employer’s own PTO/sick pay/vacation benefits as a potential source of funds, but also takes care to avoid potential double-dipping for the same hours.
Typically, the employee must decide which type of leave they want to take (to the extent the different types are available). The statute gives some flexibility – for example the employee could decide during the first ten days/80 hours to use accrued sick pay rather than paid sick leave benefits under the EPSLA – but rights under different programs cannot be claimed for the same hours.
One exception is that an employer may allow employees to supplement hours where FFCRA benefits aren’t available. The most common example would be where an employee is receiving 2/3 pay and the employer can, if it wants, permit the employee to tap accrued paid leave time to make up for the other 1/3.
This is one area to proceed with a little care. Nothing prevents the employer from going above the FFCRA leave requirements, but it will only receive tax credit for the leave the FFCRA actually required, not the use of its own accrued leave time policies.
Q: What about part-timers?
A: They are covered, but receive lesser benefits based on the number of hours they have worked. Please see the questions about the amount of benefits above.
Q: If we an employee cannot work on site for a COVID-19 qualifying reason, can we require that they telework?
A: Yes, but only if the employee is actually able to telework. Otherwise, they are entitled to FFCRA benefits. One approach to these issues is to adopt an interactive approach to determine, if the employee is reluctant to telework, the reasons and how they may be addressed. The possibility of flexible scheduling and intermittent use of leave, by agreement of the parties, and permitted by the regulations, may provide a tool to enable the employee to telework. The use of intermittent leave in teleworking is discussed below.
Q: What if the employee wants to work a different schedule because they need to care for a child home from school?
A: If a COVID-19 qualifying reason prevents an employee from working a specific schedule, then he or she is entitled to the paid leave. One solution would be, if possible, to agree with the employee that he or she can work a modified schedule that allows for COVID-19 childcare during the day. In other words, if the employee is able to work early in the morning and late at night while taking care of a child or children during the day, then as the DOL explains the employee is “able to work and leave is not necessary.” Moreover, as the DOL further notes, to the extent an employee is able to telework while caring for a child, “paid sick leave and expanded family and medical leave is not available.”
Practically speaking, whether a given employee can telework may be fact specific, including the nature of the work as well as the employee’s COVID-related circumstances. For this reason, the Department of Labor recommends that the employer engage in a collaborative interactive process with the employee to determine if and to what extent a telework situation is feasible.
To accommodate the flexible nature of teleworking, the DOL regulations define “telework” to allow for creative arrangements. The regulations permit teleworking to be performed either during normal business hours or during other times that the employer and employee agree upon. They even permit schedules that would largely have been unthought of by most employees or workers even weeks ago. For example, the DOL supplemental commentary notes that and an employer and employee could agree on the following telework schedule: “7-9 a.m., 12:30-3 p.m., and 7-9 p.m. on weekdays” to permit the employee to juggle family commitments with work. Of course, the employer must compensate the employee for all hours actually worked, but not for significant gaps in work during the day. The precise contours of such arrange would be subject to the agreement between the employer and the teleworking employee.
Q: Can the employee take leave intermittently?
A: This is a common question and the answer depends largely on why the employee needs the leave, which benefit they are seeking (sick leave or expanded FML leave), whether they are permitted to telework, and what the parties are willing to agree to. We’ll break it down for ease of use.
General rule: With some commonsense limits, the temporary regulations permit, but do not require, the employer and employee to agree upon an intermittent leave schedule either while teleworking. These rules apply to a lesser extent when the employee must come into the worksite. In a departure from its usual stance in the past, the DOL encourages flexibility in these arrangements, especially in teleworking situations.
Teleworking employees. If the employer permits the employee to telework or the employee normally works from home it can permit intermittent leave, but it is not required to permit sick leave to be taken on an intermittent basis. The employer and employee can also agree to a modified work schedule, such as permitting the employee not to work for two hours mid-afternoon, with intermittent leave taken to cover that period. The temporary regulations permit, and even encourage, the use of creative schedules at home, such as the employee working in 2-hour blocks throughout the day or on weekends. The same rules appear to apply to both sick leave under the EPSLA and expanded leave under the EFMLA.
Employees who must come into the worksite. These rules look a more complicated, but the additional requirements are there for logical reasons.
First, for common sense reasons, employees absent for reasons other than to care for a child who is home due to the closing of a school or daycare cannot take intermittent leave. They should not come into the workplace at all due to the risk of transmitting the virus. Instead, they should be using paid sick leave and not coming into work.
As to absences to take care of a child due to the closing of a school or unavailability of day care, intermittent leave can be taken in any increment of time the parties may agree upon. One example would be to permit, if the parties want, the employee to work a different or shorter schedule, such as 10:00 to 2:00 instead of 9:00-5:00. Please note that as a practical matter these arrangements will be less creative than teleworking arrangements in that the employee will need to travel to home and work between working periods.
Documentation. The DOL only requires a “clear and mutual understanding of the parties” as to what intermittent schedule they might agree upon. It does not need to be in writing, but employers should consider doing so, even briefly, to avoid misunderstandings.
Q: If an employee is unable to work or telework because a child’s school is closed, does that mean the employee is automatically eligible for both kinds of leave?
A: Not necessarily. Leave under the EFMLEA is only available to employees who have been employed for 30 days before the start of the need for leave. Emergency paid sick leave under the EPSLA is available to employees regardless of the amount of time they have been employed.
Q: Hold on. What if a private employer has over 500 employees?
A: The new acts (EPSLA and EFMLEA) do not apply. The employees get whatever they would have received under the employer's pre-existing leave policies. As no benefits are being paid, there are also no tax credits.
The same would not be true for many public employers. All public agencies that are subject to the Fair Labor Standards Act are covered employers under both the EPSLA and EFMLEA, regardless of their number of employees.
Please note that Congress continues to work on COVID-19 legislation. Some in Congress have proposed removing the cap for employers with over 500 employees, potentially without the offsetting tax credits. Larger employers should continue to monitor legislative developments to ensure that they aren’t covered by subsequent enactments.
Q: What if the employer has fewer than 50 employees?
A: The FFCRA permitted the DOL to create an exception for employers with fewer than fifty employees if the imposition of the leave requirements “would jeopardize the viability of the business as a going concern.” To meet the exception, the employer must show one of three things:
- The provision of sick pay or expanded family and medical leave would result in the business’s expenses and financial obligations to exceed its revenues, and cause it to cease operating, even at a minimal level; OR
- In the case of an employee, that the absence of that employee, because of his or her specialized skills, knowledge, and responsibilities, would entail substantial risk to the company’s financial health or operational capabilities; OR
- There are not sufficient workers who are able, willing, and qualified to do the work to keep the business operating at even a minimal capacity.
An “authorized officer of the business” should make the determination and document the reasons based on the factors identified above. That document should be kept in the employer’s records, but need not be submitted to the DOL.
Employers, particularly smaller employers, will not want employees coming into work if they have been advised not due by their health care provider for COVID-19 reasons. Thus, this issue is of concern for paid sick leave only where the employee is caring for a child whose school or daycare has been closed, or a childcare provider is unavailable, because of COVID-19 precautions. For all other reasons for leave under the EPSLA, employers with fewer than 50 employees are not exempt, even if the status of the business as a going concern is in jeopardy.
Q: Which individuals should be counted (or not counted) in determining whether the employer has more than 500 employees?
A: The DOL regulations specify that the 500-employee threshold includes all full-time and part-time employees employed as of the date that the leave will begin, regardless of how long they have been employed. The 500-employee threshold includes any employees on leave of any kind.
Aside from its own employees, an employer also may count any individuals for whom it is a joint employer. In some circumstances, this may include employees and/or day laborers provided by a temporary placement agency, depending on the level of control that the employer exercises and the length of the assignment.
An employer may also count individuals employed by related entities (i.e., separate corporate parents, subsidiaries and affiliates), if the employer and the related entities constitute a single, “integrated employer.” Common corporate ownership is but one factor in the integrated employer analysis, and not even the most important one. Rather, this determination involves a detailed, fact-based analysis involving multiple factors that include centralized control over labor and employment relations. This is a complex analysis that is highly fact-specific and will need to be considered carefully on a case-by-case basis. As noted below, there could be significant risks for the employer in conceding single employer status. If it combines operations for purposes of avoiding FFCRA coverage through the end of 2020, it may find itself bound to obligations under a host of other statutes, including in particular the FLSA, FMLA, and NLRA.
In terms of who should not be counted, employers should only count employees in the United States or its territories or possessions. Employees overseas should not be counted. Independent contractors also must be excluded in determining whether the employer employs more than 500 employees.
Q: Given the above, aren't I better off being a large (500+) employer? Should I concede that related operations are a single employer to take advantage of that?
A: Probably not, but you will need to consider the matter carefully. The 500-employee threshold was created to be in tandem with what the DOL has described as “dollar for dollar” tax credits, the idea being that employers will be compensated for the FFCRA benefits they pay. Moreover, some in Congress have suggested that they intend to turn to large employers (i.e., those with more than 500 employees) with the next round of COVID-19 legislation, and there is no guarantee that tax credits will be made available in future measures. So, conceding status as a single enterprise to fall within the FFCRA exemption may ultimately result in an employer becoming subject to future legislation under which no offset is available for any increased benefits that are required.
Conceding single enterprise status for FFCRA purposes furthermore could have ramifications that ripple across a host of federal and state laws ranging from the FMLA and FLSA through NLRA union issues and ERISA benefit rights, obligations and liabilities, as well as state workers compensation and unemployment compensation rules. It may also affect other non-employment laws. Thus, the benefit of claiming to be a single enterprise to reach the 500-employee threshold in many cases will be outweighed by the risk of being found to be a single enterprise in other contexts.
An employer considering taking the position that it and its related entities are a single enterprise to meet the 500-employee threshold should therefore conduct a very detailed assessment of its operations and consult with counsel regarding the factors above, as well as others, and the inherent risk.
Q: Will these bills apply to other illnesses or FMLA absences?
A: No. The expansion is limited to COVID-19 related absences. The ten-day sick leave provisions of the EPSLA apply to the seven types of absences caused by the coronavirus. The longer EFMLEA provisions apply only to school/day care closings occasioned by the virus. Illnesses for other reasons are governed by the employer’s sick leave policies, the FMLA, and state law.
Q: So, how do these leave provisions coordinate with FMLA leave? Is it 12 weeks, 24 weeks, or something else?
A: Paid sick leave under the EPSLA is in addition to the 12 weeks of leave required under the FMLA.
Extended family medical leave under EFMLEA is more complicated. In general, it is treated as FMLA leave for purposes of counting the entitlement to 12 total weeks of FMLA/EFMLEA leave. Accordingly, an employee is entitled to a total of 12 weeks of FMLA leave during the annual period chosen by the employer (such as a calendar year or a rolling year), regardless of the reason(s). So, if an employee has used 10 weeks of FMLA leave thus far in the respective calendar/rolling year, that employee will have only two weeks of available EFMLEA leave to use during that year, assuming he/she is qualified for such leave.
The details will not always be so simple. First, of course, coverage under the EFMLEA is broader than that under the FMLA. It applies (absent an exemption) to employers with fewer than 50 employees. And the EFMLEA applies to employees after only 30 days, as opposed to the FMLA’s one year. Many employees, particularly newer hires and those working for smaller employers, will be covered by the EFMLEA and not the FMLA.
Second, the FMLA focuses, among other things, on an employee or family members with a “serious health condition.” That term goes far beyond COVID-19, but would not include leave to take care of a child whose school has closed due to COVID-19 concerns. Leave under the EFMLEA is available for different reasons, and those reasons are related to the COVID-19 virus.
But assuming that the employee is eligible for both FMLA and EFMLEA time, the employee is entitled to 12 weeks (10 of them with some pay) between April 1 and December 31, 2020, but that time is also credited against their FMLA entitlement in whichever 12-month period the employer has chosen for FMLA purposes. Put another way, EFMLEA time counts against the employee’s FMLA “bank” and traditional FMLA time may cut into the employee’s EFMLEA entitlement.
Q: We may have to lay employees off in the future. Will we have to offer paid leave under the FFCRA to the employees who are laid off? What if the layoff is due to the consequences of the virus?
A: No, an employer is not required to offer FFCRA leave to employees who are laid off. The temporary regulations issued by the DOL specifically notes that an employee is not entitled to take paid leave under the EPSLA or the EFMLEA “where the Employer does not have work for the [employee].” In other words, an employee is entitled to FFCRA leave if and only if he/she would be performing work for the employer but for the qualifying reason. So, even if an employee’s childcare provider is closed or the employee is subject to a quarantine/isolation order, the employee still is not entitled to FFCRA leave if his/her employer would not have work to perform even if the employee was available.
Q: We’ve had to let employees go for lack of work due to the virus. Do we have to go back and offer them sick or family leave under the FFCRA?
A: No. Both acts provide benefits for absences based on specific, qualifying reasons (i.e., medical conditions or school/day care provisions caused by the coronavirus). The DOL has confirmed that a lack of work is not a qualifying reason, even where the lack of work is generally attributable to the COVID-19 pandemic.
Q: Do these new provisions have a “shelter in place” provision?
A: Employers deserve better guidance on this issue than the temporary regulations provide. Perhaps because the language of the many shelter-in-place or stay-at-home orders varies not only by state, but by city as well, the regulation on this point is more general and less helpful than it might be. It states:
For the purposes of the EPSLA, a quarantine or isolation order includes quarantine, isolation, containment, shelter-in-place, or stay-at-home orders issued by any Federal, State, or local government authority that cause the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order. This also includes when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them.
While this regulation is not especially well-written, it does provide a measure of clarity on several issues. First, of course, the issue is only of importance for the 80 hours of paid leave under the EPSLA, not the longer period under the EFMLEA (because it doesn’t have a quarantine provision – benefits are not payable in quarantine/isolation order circumstances). Second, it does seem to recognize the existence of such orders, but also notes both that, for this situation to apply, the employee must be unable to work because of the order and the employer must otherwise have work for the employee. Among other things, this underscores that benefits are not payable if the employer does not have work for the employee to do.
Of particular concern are the state travel orders that impose mandatory 14-day quarantines on individuals arriving from another state. Several states have implemented these types of orders, including Texas, Montana, Alaska, and Hawaii, and more continue to be released, seemingly every day. If an employee engages in personal travel outside the state and then returns home, having traveled with knowledge that one of these orders is in place, it would seem unfair for the employee to then be eligible for 80 hours of Paid Sick Leave – in effect allowing the employee to turn a weekend drive into 10 days of stay-at-home pay. More clarity on this issue from the DOL would be welcome.
The discussion accompanying the temporary regulations sheds some light. It provides the example of a coffee shop that is not designated an “essential business.” A lay-off due to a loss of business caused by the virus or a “stay-at-home” order is not considered a “quarantine” order under the statute and does not trigger a right to FFCRA benefits. That is also true if the order closes the business (e.g. an order that all restaurants close, apart from take-out) rather than being directed towards individual or specific groups of people.
Again, however, it is not a well-written or clear regulation in many respects. Unfortunately, it may require a review of which “stay-at-home” or “shelter-in-place” orders apply, how they might apply to the employee or business, and what work the employer might otherwise have for the employee to do.
Q: We’ve had to close (or we may have to close) our business because it isn’t an “essential business” or “critical infrastructure” under our state’s stay-at-home or shelter-in-place order. Are we required to offer our employees paid leave under the FFCRA for any portion of the time that the business is closed?
A: The temporary regulations, as noted above, are not well written and leave some room for ambiguity. As the DOL has recognized, the new leave provisions only apply where the employer has work available for an employee that the employee is unable to perform for one of the qualifying reasons (i.e., medical conditions or school/day care provisions caused by the coronavirus). If an employer’s business is closed under a general stay-at-home or shelter-in-place order, there is no work available for the employee to perform, so the leave provisions arguably do not apply.
However, if the employer is operating and has work available for an employee, the employee will be entitled to EPSLA leave if he/she is unable to work (or telework) due to a stay-at-home or shelter-in-place order. Typically, this situation will only arise where the employee lives in a different jurisdiction than the facility where he/she is employed (i.e., near a state line), and the employee’s jurisdiction is subject to more restrictive stay-home requirements. The precise restrictions will turn on how the state or local government has worded its stay-at-home or shelter-in-place order.
Extended family and medical leave under the EFMLEA isn’t available as it does not provide benefits for quarantine or isolation orders, only leave required because the employee is home caring for a child whose school has closed or childcare is unavailable due to the COVID-19 virus.
In any event, Congress did adopt the Emergency Unemployment Insurance Stabilization and Access Act, which will provide emergency funding to state unemployment trust funds and expanded unemployment benefits. Many states have relaxed their filing rules for unemployment as well.
Q: We may have to lay employees off in the future, after the FFCRA goes into effect, due to a lack of work caused by the pandemic. Will we have to offer paid leave under the FFCRA to the employees who are laid off?
A: No. A layoff for lack of work does not qualify an employee for benefits under the FFCRA, even if the lack of work is attributable to COVID-19 pandemic.
Q: If we have to close our business in the future, and employees are receiving paid sick or family leave under the FFCRA, do they continue being paid even after the business closes?
A: No. Once there is no work available for an employee to perform, he or she is no longer qualified for the paid leave benefits available under the FFCRA. That’s the case even if the lack of work is due to the COVID-19 pandemic.
Q: If we need to put employees on reduced schedules due to business slowdown are we required to provide employees with the newly expanded benefits to cover the reduced hours?
No. If you reduce employee hours because of a lack of work, you should not provide employees with the newly expanded benefits to make up for the reduced hours even if the lack of work is somehow related to COVID-19. If you do, you risk not receiving the associated tax benefits for this leave. Employees may be eligible for partial unemployment benefits due to a reduction in their work hours and states now have additional flexibility to provide such benefits. However, you should still provide employees the expanded benefits if a COVID-19 qualifying reason prevents them from working a full schedule.
Q: Can employees receive unemployment benefits AND the newly expanded benefits?
A: No, at least not for the same time. For example, if you provide an employee with 10 weeks of qualified leave under the EFMLEA, the employee cannot also obtain unemployment benefits for those same 10 weeks. Although the DOL encourages employees to use unemployment where applicable, it looks at unemployment benefits as a distinct source of funds from those under the EPSLA and EFMLEA.
Q: Are employees still entitled to their employer provided health care coverage while on approved FFCRA leave?
A: Yes, so long as the employees are on qualified leave under the FFCRA, the employer must maintain coverage during the leave period. Employees are generally still required to make any normal contributions to the cost of the health care coverage while on such leave. If an employee does not return to work at the end of the leave period, the employer will need to consult their benefit plans to determine the employee’s continued eligibility (if any) for benefits under the plan.
Q: Does the Emergency Unemployment Insurance Stabilization and Access Act you just described require an employer to take any affirmative steps related to unemployment?
A: No immediate employer action is necessary. This provision expands unemployment benefits and provides grants for processing and paying claims to states who meet certain conditions, including taking steps to ease eligibility requirements and access to unemployment compensation for people directly impacted by COVID-19 (e.g., by waiving work search requirement and waiting periods).
Q: If we are laying off more than 50 employees and the Federal WARN Act applies, can we avoid providing 60 days’ notice due to “unforeseeable business circumstances”?
A: Maybe. Under federal law, there is a strong argument that a sudden loss in business due to closures, quarantines, or a significant decrease in demand resulting from COVID-19 is an “unforeseeable business circumstance” or that COVID-19 is a “natural disaster,” either of which provides an exception to the 60-day notice requirement. But there are three important caveats. First, the longer you wait, the less likely the downturn was “unforeseeable.” The results of COVID-19 are rapidly becoming all too foreseeable. Second, even if there is an exception to the 60-day notice requirement, the other requirements in the WARN Act still apply. Third, the exceptions to the notice period are not the same everywhere.
California’s WARN Act in particular does not have an exception for “unforeseeable business circumstances,” but an executive order dated March 17, 2020, suspends the 60-day notice requirement so long as other aspects of Cal-WARN are followed and the notice contains certain required information. You should consult with California counsel before undertaking mass layoffs or plant closings in that state.
Q: Do these two statutes override other federal and state law requirements?
A: No. Everything else still applies. Moreover, in states that already require paid sick leave, the leave available under the EPSLA is in addition to what an employee is eligible for under state law. In regard to the EFMLEA, the regular FMLA might apply even if the expanded leave provisions do not, and your employee who is sick or caring for a sick relative may still be entitled to up to 12 weeks of unpaid FMLA leave. Reasonable accommodation requirements under the Americans with Disabilities Act and state law may apply too, depending on the employee’s condition. The new law provides employees additional leave rights, but the law does not reduce other protections that employees have under existing federal, state, or local laws.
Executive and legislative responses have been swift and varied at all levels of government. You should ensure compliance with state and local law as these requirements evolve.
Q: Do these provisions override collective bargaining agreements?
A: For the most part, no. Employers must continue to honor the sick leave provisions of labor agreements with their unions. The benefits under the FFCRA are in addition to employer-provided leave, including that under collective bargaining agreements.
Q: How about multi-employer collective bargaining agreements?
A: Employers subject to multi-employer collective bargaining agreements may satisfy the FFCRA’s requirements for paid sick or FMLA leave by making contributions to a multi-employer fund, plan, or program consistent with the labor contract. Employees working under the multi-employer collective bargaining agreement must be able to secure payment from the fund, plan, or program based on the number of hours they have worked. It is important to note, however, that such a fund, plan, or other program must allow employees to secure or obtain their pay for the related leave they take under FFCRA. Alternatively, the employer can elect to satisfy its obligations under the Act by other means, provided they are consistent with the employer’s bargaining obligations and the pertinent bargaining agreement.
Q: When does the FFCRA become effective?
A: The DOL has announced April 1, 2020 as the effective date. It will not apply retroactively, however.
Q: What tax or other benefits are available to offset the cost?
A: As noted above, subject to certain caps and restrictions, covered employers are eligible to receive refundable tax credits for paid sick and protected leave and for allocable costs related to the maintenance of health care coverage under any group health plan. These will be based on the type of leave and whether the leave is for the employee or the employee’s family member. Employers should document what leave employees have taken and the reasons supporting the need for leave to assist in claiming those credits.
the employer is not required to provide leave if materials sufficient to support the applicable tax credit have not been provided by the employee upon request.
The DOL’s April 1, 2020 temporary regulations provide which documents an employer must keep (regardless of whether the leave was granted or denied) in order to claim tax credits. These records must be kept for four years. Those documents include:
- Documentation to show how the employer determined the amount of paid sick leave and expanded family and medical leave paid to employees eligible for the credit, including records of work, telework, and paid sick leave and expanded family and medical leave;
- Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages;
- Copies of completed IRS Forms 7200 that the employer submitted to the IRS;
- Copies of the completed IRS Forms 941 that the employer submitted to the IRS or, for employers that use third party payers to meet their obligations, records of information provided to the third-party payer regarding the employer’s entitled to the credit claimed on IRS Form 941; and
- Other documents needed to support its request for tax credits pursuant to IRS applicable forms, instructions, and information for the procedures that must be followed to clai ma tax credit.
For information on the tax credits, go to:
https://www.irs.gov/forms-pubs/about-form-7200
https://www.irs.gov/pub/irs-drop/n-20-21/pdf
As part of the March 27, 2020 $2.2 trillion package passed by Congress, forgivable loans are available for a period of time for smaller employers, as well as some medium-sized employers in the hospitality industries. For more information on the COVID-19 related small business loans to cover the costs, go to:
https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Q: Are these programs permanent?
As of now, no. They are scheduled to expire effective December 31, 2020.
Q: Can we count our non-U.S. employees towards the 500-employee threshold?
A: No. The temporary regulations explicitly state that, “To determine the number of Employees employed, the Employer must count all full-time and part-time Employees employed within the United States at the time the Employee would take leave.” It goes further to explain that, “within the United States” means any State within the United States, the District of Columbia, or any Territory or possession of the United States.
The summary provided in the annotation includes the following example: If an employer employs 1,000 employees in North America, but only 250 are employed in a U.S. State, the District of Columbia, or a territory or possession of the United States, that employer will be considered to have 250 employee and is thus subject to the FFCRA.
Q: Can I require documentation, such as under the FMLA?
A: The regulations make clear that employers not only can but should document the reasons why an employee has been granted leave, in large part to assist in obtaining the corresponding tax credits. The documents must contain:
- The employee’s name;
- The dates for which the leave is requested;
- The qualifying reason for the leave; and
- Oral or written statement that the employee is unable to work because of the qualified reason for leave.
If the employee is seeking to take paid sick leave because of a government quarantine or isolation order, the employee must also provide the employer with the name of the government entity that issued the order.
If an employee is seeking to take paid sick leave because of a healthcare provider’s instruction to self-quarantine or isolate, the employee must also provide the employer with the name of the healthcare provider who advised the employee to do so.
Note that the employer should keep a record of the documentation as it may be needed to support a later request by the employer for tax credits.
The reasons for extended leave under the EFMLEA are narrower than those for sick leave under the ESPLA, the most common of which will be the closing of a school/unavailability of childcare. The employee must provide the name of the son or daughter being cared for, the name of the school/place of care/child care provider that is now unavailable, and a representation that no other suitable person will be caring for the son or daughter during the period for which the employee takes paid sick leave or EMFLEA.
Q: What other guidance has the DOL provided?
A: The DOL released a series of FAQs during the week of March 23, 2020. These were intended to give employers advice in advance of the temporary regulations it issued on April 1, 2020. The material in those FAQs was largely also contained in the temporary regulations or its commentary and has been incorporated into the FAQs above. However, for those with specific questions, here are the primary areas they covered.
Third Updated DOL FAQs (March 28, 2020)
The DOL released a third set of FAQs on March 28, 2020. While much of the material was directed toward how employees might enforce their rights and on issues that might not be of concern in most situations, it did provide helpful guidance to resolve several common problems raised by employers. Among other things, the March 28 FAQs:
-Made clear that expanded family and medical leave is counted much like time under the FMLA and thus, to determine the available number of weeks employers should look at the total amount of FMLA/EFMLEA time taken during the year they use to measure FMLA usage;
-Fleshed out the requirements for an employer to qualify for the exception available to employers with fewer than 50 employees under certain circumstances (although the procedure has not yet been spelled out);
-Set forth a long list of health care providers and emergency responders who might be excluded by the employer from paid sick leave or expanded family and medical leave.
Second DOL FAQs (March 27, 2020)
The DOL released a set of 14 FAQs on March 24, 2020, and then supplemented them three days later (on March 27) to address many areas not addressed in the language of the act itself. A number of these new FAQs relate to nuts-and-bolts, practical aspects of implementing the FFCRA.
Among the March 27, 2020 supplemental FAQs:
-The FAQs describe the kinds of documentation employers can and should be requesting in connection with employee requests for FFCRA leave and pay;
-Several of the new FAQs address telework and scheduling issue;
-What circumstances will give rise to use FFCRA leave on and intermittent basis;
-Layoffs occurring before and after the effective date;
-The effect of stay-at-home and shelter in place orders on entitlement to FFCRA leave;
-Emphasis on unemployment compensation benefits being another pool of benefits affected employees can tap;
-Coordination of the employer’s own leave policies with FFCRA leave;
-Special rules applicable to employers subject to multi-employer collective bargaining agreements.
The new FAQs clarify that the leaves provided for in the FFRCA generally can be taken on an intermittent basis only if the employer and the employee agree. They also confirm that employees who are laid off or furloughed due to a lack of available work are not eligible for FFCRA leave, even if the lack of work is due to the ongoing COVID-19 pandemic.
Initial DOL FAQs (March 24, 2020)
Previously, on March 24, 2020, the United States Department of Labor had released a shorter set of Q&A’s. While these do not have the same effect as the anticipated implementing regulations, they do shed light on a handful of issues of importance to employers. For the most part, the Q&A’s do not depart from the expected requirements, but they do make some small but significant changes.
Most importantly the DOL moved the date of compliance up one day, to April 1, 2020. In separate guidance, the DOL has suggested that its efforts in the first 30 days will be directed to assisting employers in compliance, but that should not keep employers for planning for compliance now.
The other significant matters touched upon include:
-The DOL has confirmed that employers with more than 500 employees are not required to comply with the Act. It has also issued guidance on when nominally separate employers can be combined, guidance that is largely derived from its past guidance under the FMLA and FLSA. Those are discussed further below.
-The 500-employee threshold is measured as of the time the leave is taken.
-The DOL appears to be creating an exception for employers for fewer than 50 employees if compliance would jeopardize the viability of their business as a going concern, but is leaving the exact criteria to forthcoming regulations that have not yet been released.
-The amount of benefits for hourly employees will be based on their “regular rate” (so it includes things such as commissions and nondiscretionary bonuses). It will also include overtime subject to the 80-hour cap for paid sick leave under the EPSLA. More about that below.
Notice available (March 25, 2020)
On March 25, the DOL released the model notices employers will be required to post conspicuously in the workplace, in a manner much as they have done for past posters under the FLSA and other employment laws. The poster is available here.
