DOL Issues Temporary Regulation Addressing the Families First Coronavirus Response Act

The U.S. Department of Labor (DOL) issued its temporary regulation addressing the Families First Coronavirus Response Act (FFCRA) on April 1, 2020. The new rule is effective immediately.

The rule addresses a number of outstanding questions about how the FFCRA will work, including its applicability to employers with fewer than 50 employees, clarification of the meaning of “son or daughter” under the laws, and how to calculate employees’ regular rate of pay in order to determine how much they will receive as paid leave under the two different paid leave requirements. Some additional topics are addressed including establishing hours of work for non-exempt teleworkers and how to treat unauthorized work performed by teleworkers.

Many topics in the new temporary rule were previously addressed in the DOL’s FAQs, which were updated most recently on March 28.

We have provided a review of the regulation and guidance in question and answer format:

Q. The FFCRA’s paid sick leave and paid emergency family leave provisions require paid leave when employees are caring for their “son or daughter” for certain COVID-19 related reasons. Who qualifies as a “son or daughter?”

A. “Son or daughter” for both paid sick leave and emergency family leave is defined to include children under 18 as well as children over age of 18 who are incapable of self-care.

Q. Must we pay teleworking non-exempt employees for all hours from when they start working each day until they stop?

A. No. The standard FLSA “whistle to whistle” rule does not apply to COVID-19 telework, so an employee and employer may agree that the non-exempt employee works 7-9 am, 12:30-3 pm, and 7-9 pm. So that employee can help care for/teach children, assist elderly parents temporarily living with the family, etc. We recommend that you document any agreements.

Q. If a non-exempt employee works time that we don’t know about while teleworking due to COVID-19, must we still pay them for it?

A. No. An employer is not required to compensate employees for unreported hours worked while teleworking for COVID-19 related reasons, unless the employer knew or should have known about such telework. This is another reason that we recommend that you document any agreements with employees concerning hours of work while teleworking.

Q. May employees receive paid sick leave or paid family emergency leave if a government stay-in-place order prevents them from working on site or teleworking?

A. No. An employee subject to one of the stay-in-place orders may not take paid sick leave or paid family emergency leave where the employer does not have work for the employee.

Q. If a salaried exempt employee is using intermittent leave for either paid sick leave or family emergency leave does that affect their salary basis and status as an exempt employee?

A. No. This type of intermittent leave is treated the same as intermittent leave under the FMLA: employees who do not receive their full regular weekly salary in any week because they are using intermittent leave maintain their status as exempt employees.

Q. Must we provide intermittent leave for FFCRA leaves of absence?

A. No. FFCRA leave may not be taken as intermittent leave unless the employer and employee agree. If an employer and employee agree to do so, they also must agree on the increments of time in which leave may be taken. Intermittent paid sick leave and family leave may not be provided to employees working on site as opposed to teleworking because there is a risk that the employee might spread COVID-19 to other employees when reporting to the employer’s worksite.

Q. Who is eligible for paid leave under the FFCRA?

A. For paid sick leave – all employees are eligible regardless of duration of their employment. For paid family leave employs must be employed for 30 days. That means that the employer had the employee on its payroll for 30 calendar days immediately before the day that the leave would begin. There are special rules for employees laid off or terminated before effective date of FFCRA and recalled or re-hired later during 2020: they become immediately eligible if employed 30 or more of the 60 calendar days before laid off or terminated or else they become eligible when they have reached at total of 30 days of employment over all periods of employment.

Q. Do employees of smaller related entities in our corporate structure count toward the 500 employee limit?

A. Joint or integrated employers must combine employees in determining the number of employees they employ for purposes of FFCRA. The FLSA’s test for joint employer status applies in determining who is a joint employer for purposes of coverage, and the FMLA’s test for integrated employer status applies in determining who is an integrated employer, under both the EPSLA and the EFMLEA.

Q. How does the joint employer test work?

A. Under the FLSA, a four-factor balancing test is used to determine whether the potential joint employer is directly or indirectly controlling the employee, assessing whether the potential joint employer hires or fires the employee, supervises and controls the employee’s work schedule or conditions of employment to a substantial degree, determines the employee’s rate and method of payment, and maintains the employee’s employment records.

Q. What is the integrated employer test?

A. The four factors considered in determining if separate entities are an integrated employer include common management, interrelation between operations, centralized control of labor relations, and degree of common ownership or financial control. A determination of whether or not separate entities are an integrated employer is not determined by the application of any single criterion, but rather the relationship in its totality. All four criteria need not be present in all cases, but s the first three criteria are considered to be the most important, with centralized control of labor relations to be most critical of these three. Although the standards are somewhat different, an employer who meets the “enterprise” test under the Fair Labor Standards Act (FLSA) will ordinarily meet the integrated employer test. For purposes of FLSA, the “enterprise” consists of the related activities performed (either through unified operations or common control) by any person or persons for a common business purpose. Thus, separate entities may be so integrated that they are considered to be one employer, whether commonly owned or not.

Q. We have less than 50 employees and understand that we may assert an exemption from the paid leave requirements under certain circumstances. How does that work?

A. An employer with less than 50 employees is exempt from the requirement to provide FFCRA –mandated leaves if: (1) such leave would cause the employer’s expenses and financial obligations to exceed available business revenue and cause the employer to cease operating at a minimal capacity; (2) the absence of the employee(s) requesting leave poses a substantial risk to financial health or operational capacity of the employer because of their specialized skills, knowledge of the business, or responsibilities; or (3) the employer cannot find enough other workers who are able, willing, and qualified, and who will be available, to perform work the employee(s) requesting leave provide, and work is are needed for the employer to operate at a minimal capacity.

If a small employer decides to deny paid sick leave or expanded family and medical leave to an employee or employees it may only do so for leaves to an employee or employees whose child’s school or place of care is closed, or whose child care provider is unavailable. There is no exemption for the other five kinds of leave provided in FFCRA. Additionally, the employer must document the facts and circumstances that meet the above criteria. The employer should retain the documentation for its files and does not have to send the material or documentation to the DOL.

Q. Who is a full-time employee for purposes of the EPSLA?

A. A full-time employee is someone normally scheduled to work at least 40 hours each workweek or someone is scheduled to work, on average, at least 40 hours each workweek (computed over the six-month period before beginning leave or the entire period of employment if employed less than six months).

Q. How do we calculate employees’ regular rates for purposes of determining the amounts of paid leave they may receive under the EPSLA and EFMLEA?

A. To make the paid sick leave and paid family leave entitlements under FFCRA consistent with the structure of the FMLA, DOL is using weeks rather than days to determine entitlements for employees who work irregular hours and schedules of more or less than eight hours per day. To compute what pay employees should receive for the various paid leaves, DOL requires employers to look back six months prior to the start of leave and use an average of the employee’s regular rate over multiple workweeks. Such an average must be weighted by the number of hours worked each workweek.

Q. How do we calculate paid sick leave and paid family leave for part-time employees?

A. The DOL states that it believes Congress intended for the EPSLA to provide part-time employees whose weekly schedule varies with paid sick leave equal to fourteen times the “number of hours that the employee was scheduled per [calendar] day,” averaged over the six-month period before the leave begins. An employer may also use twice the number of hours that an employee was scheduled to work per workweek, averaged over the six-month period.

Q. How do we treat newly hired employees, especially if they are part-time and their hours vary?

A. Part-time employees with a varying schedule who have been employed for fewer than six months are entitled to fourteen times the expected number of hours the employee and employer agreed at the time of hiring that the employee would work, on average, each calendar day. This is equal to twice the average number of hours that the employee would be expected to work each workweek.

Q. What if we just hired someone recently and there was no agreement or understanding about the number of hours they would work?

A. In the absence of an agreement regarding the expected number of hours worked each day, a part-time employee with a varying schedule who has been employed for fewer than six months is entitled to up to the number of hours of paid sick leave equal to fourteen times the average number of hours per calendar day that the employee was scheduled to work since they started working, including hours for which the employee took leave of any type. An employer may also use twice the number of hours that an employee was scheduled to work per workweek, on average, over the six-month period or length of employment, whichever is applicable.

Q. What kinds of notices and designations must we provide to employees requesting leave under the FFCRA?

A. There is no requirement for the types of notices or written designation required under the FMLA for FFCRA leave.

Q. What kinds of notices may we require employees to provide?

A. Employers may require employees, after the first day missed, to provide oral notice and sufficient information as soon as practicable so that the employer can determine whether leave is required to be provided. Employers may require compliance with their usual notice requirements absent unusual circumstances.

Q. What should we do if an employee fails to provide our required notice?

A. The employer should give the employee an opportunity to provide required documentation before denying leave.

Q. What kind of documentation of the need for leave can we require?

A. Employers may require employees to provide a signed statement containing the following information: (1) name; (2) date(s) for which leave is requested; (3) COVID-19 qualifying reason for leave; and (4) statement that the employee cannot work or telework because of the COVID-19 qualifying reason.

Q. What if the employee is requesting traditional FMLA leave taken for their own serious health condition for COVID-19 reasons or leave to care for family member for COVID-19 reasons?

A. In such cases, the usual FMLA notice and designation procedures apply

Q. Can employees insist on receiving other paid leaves for the unpaid portion of family leave under FFCRA?

A. No, neither the employee nor employee may insist upon requiring substitution of other paid leaves (vacation, PTO, employer-provided sick leave, etc.) but the employer and employee may mutually agree to supplement the two-thirds paid leave with accrued employer-provided paid leave to bring employee to full pay.

Q. When an employee needs leave to care for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons, which leave applies and how do the two types of leave work with each other?

A. When employee qualifies under both, provide paid sick leave first as it runs concurrent with the first two weeks of unpaid family leave. If an employee has already taken some FMLA leave in the applicable year, amount of available paid family leave is reduced accordingly. Paid sick leave is still available even if the employee has already exhausted 12 weeks of FMLA leave for the year. If an employee already took two weeks of paid sick leave but later needs paid family leave, the employee may take up to twelve weeks but the first two weeks will be unpaid.

Q. What happens to employees’ health plan coverage while on FFCRA leave?

A. The employer must continue the employees’ health plan coverages just as under FMLA. Because the leaves are generally paid, the employer may continue to make the usual deductions for premium contributions.

Q. What return to work rights do employees have after FFCRA leaves are complete?

A. Employees have the same job protection rights for FFCRA leave as for FMLA leave that is the right to be returned to their same or equivalent position

Q. Are there any exceptions to the job protection rights for small employers?

A. The job restoration provisions do not apply to employer who have fewer than 25 employees if all four of the following conditions are met: (a) employee took leave to care for son or daughter whose school or place of care was closed or whose child care provider was unavailable; (b) employee’s position no longer exists due to economic or operating conditions that (i) affect employment and (ii) are caused by a public health emergency (i.e., due to COVID-19 related reasons) arising during the period of employee’s leave; (c) employer made reasonable efforts to restore employee to the same or an equivalent position; and (d) if the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts for one year to contact the employee when an equivalent position becomes available. The one year period begins either on the date the leave related to COVID-19 reasons end or the date twelve weeks after the leave began, whichever is earlier.

Q. We understand that employers may exclude “health care providers from FFCRA paid leaves. So, who is a “health care provider?”

A. First, any individual capable of providing health care services necessary to combat COVID-19, but also other workers needed to keep hospitals and similar health care facilities well supplied and operational (cleaning crews, kitchen workers, etc.). Also subject to exclusion are workers who are involved in research, development, and production of equipment, drugs, vaccines, and other items needed to combat the COVID-19 public health emergency.

Q. We understand the health care provider exclusion is optional. What happens if we decide to afford these kinds of paid leave to eligible employees?

A. If you provide such leave, you must follow all rules applicable to such leaves.

Q. We are a small government entity. Must we provide FFCRA leaves of absence?

A. Yes. All government entities and agencies are subject to the FFCRA leave mandates, although such employers may exclude employees who are health care providers or emergency responders.

Q. We understand that the FFCRA notice had to be posted April 1 and distributed to employees electronically. Do we have to post the poster in Spanish also?

A. There is no requirement to post a Spanish language poster but DOL will be providing a Spanish language poster. Here is a link to the Spanish language poster.

Q. What record keeping obligations do we have under FFCRA?

A. All records relating FFCRA leaves must be kept for four years. If an employee provides oral statements concerning requests for leave and/or the need for leave, the employer must document and keep documentation for 4 years.

Stay tuned to Stevens & Lee’s Alerts and Newsletters and COVID-19 Resource Center for further updates as coronavirus-related developments impacting employee rights and employer obligations continue to develop under the FFCRA and other federal, state and local laws. In the meantime, if you have any questions about how this, or any other, labor and employment law development may affect your business, please contact Joseph P. Hofmann, Daniel J. Sobol or the Stevens & Lee attorney with whom you regularly work.

This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.