DOL Issues Guidance On Emergency Paid Sick Leave & Emergency FMLA Required By Families First Coronavirus Response Act
The U.S. Department of Labor ("DOL") released "Frequently Asked Questions" on March 24, 2020, regarding the emergency paid sick leave ("EPSL") and emergency paid Family and Medical Leave ("E-FMLA") pursuant to the Families First Coronavirus Response Act (the "Act"). While we still await regulations regarding these new requirements, the FAQs provide some insight into employers’ obligations during these uncertain times, including that the Act will become effective April 1, 2020.
As set forth in our prior E-Alert, the Act provides that employers with fewer than 500 employees must provide all employees with:
- Two weeks (up to 80 hours) of EPSL at the employee’s regular rate of pay (up to $511 per day and $5,110 in the aggregate over a two-week period) for employees unable to work or telework because: (1) the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; (2) the employee has been advised by a health care provider to self-quarantine because of COVID-19; or (3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; or
- Two weeks (up to 80 hours) of EPSL at 2/3 the employee’s regular rate of pay (up to $200 per day and $2,000 in the aggregate over a two-week period) for employees unable to work or telework because: (4) the employee is caring for an individual subject or advised to quarantine or isolation; (5) the employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or (6) the employee is experiencing substantially similar conditions as specified by the secretary of Health and Human Services, in consultation with the secretaries of Labor and Treasury.
Additionally, the Act provides that employers with fewer than 500 employees must provide employees who have been employed for at least 30 days with:
- 12 weeks of E-FMLA where an employee is unable to work or telework due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. Although the first ten days of this leave are unpaid, the remainder must be paid at 2/3 the employee’s regular rate of pay (up to $200 per day and $10,000 in the aggregate).
Interaction of EPSL and E-FMLA
The FAQs address how EPSL and E-FMLA interact for an employee unable to work or telework because his or her child’s school or place of care is closed due to COVID-19. In such situations, the employee is eligible for both EPSL and E-FMLA, but only for a total of 12 weeks of paid leave. EPSL provides for an initial two weeks of paid leave. This period covers the first ten workdays of E-FMLA, which are otherwise unpaid unless the employee elects to use existing vacation, personal, or sick leave under the employer’s policy. Thus, the employee is entitled to two weeks of EPSL followed by up to 10 weeks of paid E-FMLA.
How To Determine If An Employer Has Fewer Than 500 Employees
Because the Act is only applicable to employers with fewer than 500 employees, the FAQs provide information as to how employers may calculate whether they fall under this threshold.
The FAQs state that an employer should calculate its coverage threshold at the time the employee’s leave is to be taken. Additionally, employers should count:
- full-time employees;
- part-time employees;
- employees on leave;
- temporary employees who are jointly employed by the employer and another company (regardless of whether the individuals are maintained on only one company’s payroll); and
- day laborers supplied by a temporary agency.
Workers who are independent contractors under the Fair Labor Standards Act ("FLSA") are not considered employees for purposes of the 500-employee threshold.
Are Related Businesses Aggregated For Counting Employees Towards Threshold?
The FAQs state that, typically, a corporation (including separate establishments or divisions) will be considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are still typically separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether EPSL and E-FMLA leave must be provided.
The FAQs also adopt the integrated-employer test under the Family and Medical Leave Act of 1993 ("FMLA"). If two entitles meet this test, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of E-FMLA. Factors for meeting this test include: common management, interrelation of operations, centralized control of labor relations, and a degree of common ownership/control.
Are Employers With Fewer Than 50 Employees Exempt From The Act?
The Act allows the Secretary of Labor to issue regulations exempting small businesses with fewer than 50 employees from providing EPSL and E-FMLA when such requirements would "jeopardize the viability of the business as a going concern." However, the FAQs do not clarify whether or to what extent this exception may apply. The FAQs state that this will be addressed in more detail in forthcoming regulations, and advise employers to document why their business with fewer than 50 employees meets the criteria for possible exemption.
Calculating Hours Worked By Part-Time Employees
Under the Act, a part-time employee is entitled to EPSL for his or her average number of work hours in a two-week period. The FAQs state that employers should calculate hours of leave based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, the employer may use a six-month average to calculate the average daily hours. Such a part-time employee may take EPSL for this number of hours per day for up to a two-week period, and may take E-FMLA for the same number of hours per day up to ten weeks after that.
If a part-time employee has not been employed for at least six months, then the employer should use the number of hours that the employer and employee agreed the employee would work upon hiring. If there was no such agreement, the employer may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of his or her employment.
Must Overtime Hours Be Included In Calculating Pay To Employees?
The FAQs state that E-FMLA is required for all hours an employee would have been normally scheduled to work, even if that is more than 40 hours in a week.
EPSL benefits, however, are capped at 80 hours over a two-week period. For example, an employee who is scheduled to work 50 hours a week may take 50 hours of EPSL in the first week and 30 hours of EPSL in the second week. In any event, the total number of EPSL hours is capped at 80 hours.
How Must The Regular Rate Of Pay Be Calculated?
The FAQs state that, for purposes of the Act, the regular rate of pay used to calculate paid leave is the average of an employee’s regular rate over a period of up to six months prior to the date on which the employee takes the leave. If an employee has not worked for an employer for six months, the regular rate used to calculate the paid leave is the average of the employee’s regular rate of pay for each week the employee has worked for the employer. Commissions, tips, and piece rates are included in this calculation.
Alternatively, an employer can compute an employee’s regular rate for purposes of the Act by adding all compensation that is part of the regular rate over the above period and dividing that sum by all hours actually worked in the same period.
The FAQs state that the paid leave provisions of the Act are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. The leave provisions will not be retroactive for leaves taken prior to April 1, 2020. Consequently, the tax credits available to employers for monies paid under the Act only apply to leaves taken on or after April 1, 2020.
All employers covered by the Act must post a notice of the Act’s requirements in a conspicuous place on their premises. The DOL has provided a Model Notice for posting, available here. An employer may satisfy the posting requirement by emailing or direct mailing the notice to employees, or by posting the notice on an employee information internal or external website.
We expect the DOL to issue regulations regarding EPSL and E-FMLA in April, and we will report on any such developments.
Contact your SFSS&W attorney if you have any questions relating to the Families First Coronavirus Response Act or any other workplace challenges associated with the COVID-19 pandemic.
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