The Department of Labor (DOL) has published its model poster for the Families First Coronavirus Response Act Families First Coronavirus Response Act (FFCRA) and has issued compliance assistance materials, including “Questions and Answers,” and a Field Assistance Bulletin. The DOL has clarified the FFCRA is effective as of April 1, 2020, and issued a Field Assistance Bulletin indicating that the DOL will not bring enforcement actions against employers for violations of the FFCRA which occur within the first 30 days of its enactment, provided the employer made a reasonable, good-faith effort to comply. Nonetheless, every employer should act now to ensure compliance with the FFCRA’s requirements. As a reminder, the FFCRA requires covered employers (those with fewer than 500 employees) provide both Emergency Paid Sick Leave and Expanded Family and Medical Leave under the FMLA.
Covered employers must post a notice of the FFCRA requirements in a conspicuous place on its premises. As many employees are currently teleworking, the DOL has clarified that the notice poster can be emailed or direct mailed to employees or posted on an employee information internal or external website. A copy of the DOL Employee Rights poster for non-federal employees can be found here. This poster does not need to be provided to recently laid-off workers or job applicants but should be provided to any new-hires. Employers are not currently required to post the notice in multiple languages although the DOL is working on translating it into other languages.
This compliance assistance, which was issued pending the DOL’s issuance of implementing regulations, offers answers to important questions as to what employers need to do to comply with the FFCRA. Key clarifications are noted below.
The DOL has clarified that covered employers should begin providing paid leave benefits effective April 1, 2020 (even though the law as written was not technically supposed to take effect until April 2, 2020, 15 days after the President signed the bill). The right for employees to take emergency paid sick leave, and paid, job-protected leave under the FMLA expansion, extends until December 31, 2020.
The DOL has also indicated that the FFCRA is not retroactive. Accordingly, paid leave provided before April 1 does not count towards satisfying the obligation to provide two weeks of Paid Sick Leave and 12 weeks of Expanded FMLA Leave to eligible employees under the FFCRA.
Employers are covered by the Act if at the time the leave is to be taken, they have fewer than 500 full or part-time employees within the United States (including any U.S. territory). In making this determination, employers should count all employees who are on a leave of absence as well as temporary employees who are jointly employed by them and another employer (regardless of which employer’s payroll the employee is on) and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Independent contractors should not be counted.
When counting employees, employers should be aware of the application of “joint employment” and “integrated enterprise” concepts. If two entities are “joint employers” under the Fair Labor Standards Act, all of their common employees are counted for determining whether Emergency Paid Sick Leave and Expanded FMLA Leave must be provided. Joint employment under the FLSA can occur where an employer allows the employee to work for another employer and simultaneously benefits from that work, or where two employers are sufficiently associated with respect to the employee’s work that they must aggregate the employee’s hours for determining overtime liability.
With respect to the Expanded FMLA Leave rights under the FFCRA, the integrated enterprise test (which generally applies to determining whether an employer is covered under the FMLA) may also be applied to determine whether an employer has more than 500 employees. Under the integrated enterprise test, the following factors are considered: (1) whether there is common management; (2) whether there is interrelation between operations; (3) whether there is centralized control of labor relations; and (4) whether there is a degree of common ownership or financial control.
An employer unsure as to whether they are covered by the FFCRA should consult with counsel before deciding against providing benefits under the law as they can face liability if they fail to comply. An employer who provides benefits but actually exceeds the 500 employee threshold may not be subject to liability but likely will not be able to take advantage of the tax credits being provided by the FFCRA.
The FFCRA gives DOL authority to develop criteria to exempt employers with fewer than 50 employees where compliance would jeopardize the viability of the business as a going concern. DOL states that it will address the criteria for this exemption in regulations and encourages employers to document (but not send to DOL) the basis for their claimed exemption. Employers who believe they may qualify for this exemption should consult counsel.
The DOL has clarified that employees who have been on an employer’s payroll for at least 30 calendar days immediately prior to the start of the leave are eligible for the FFCRA’s Expanded FMLA Leave—up to twelve weeks of paid, job-protected leave if they are unable to work (remotely or otherwise) due to the need to care for a son or daughter whose school or childcare is unavailable due to the public health emergency. For example, if an employee wanted to begin taking Expanded FMLA Leave on April 1, he/she would have had to be on the employer’s payroll as of March 2, 2020, to be covered by the law.
As a reminder, all employees, regardless of their length of employment are covered under the FFCRA’s Emergency Paid Sick Leave provisions and are eligible to take up to 80 hours of paid sick leave if, for any of the following COVID-19 related reasons, the employee (1) is subject to federal, state or local quarantine order; (2) has been directed by a healthcare provider to self-quarantine; (3) is experiencing symptoms and seeking a medical diagnosis; (4) is caring for an individual who is either subject to a quarantine order or advised by a healthcare provider to self-quarantine; or (5) is caring for their son or daughter whose school or childcare provider is unavailable due to the public health emergency. The Act also includes a sixth catchall category of circumstances that would make an individual eligible for paid sick leave that has yet to be defined—those who are experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of Treasury and the Secretary of Labor. Whether there will be any clarification of this category before April 1 remains to be seen. In the meantime, employers should stay abreast of legal developments to ensure that they have the most update to information on the FFCRA.
The amount of pay an employee is entitled to receive while taking Emergency Paid Sick Leave and/or Expanded FMLA Leave under the FFCRA will depend on the employee’s normal schedule, regular rate of pay and the reason they are taking leave.
Employees taking Emergency Paid Sick Leave for reasons (1) – (3), described above, are entitled to the greater of the applicable minimum wage or their regular rate of pay, but in no case are employees entitled to more than $511 a day or a total of $5,110. Employees taking Emergency Paid Sick Leave for reasons (4) – (6) are entitled to 2/3 of the greater of the applicable minimum wage or their regular rate of pay, but in no case are entitled to more than $200 per day or a total of $2,000.
DOL has clarified that employees who take FFCRA leaves because their child’s school or place of care is closed are eligible for up to 12 weeks of Emergency Paid Sick Leave and Expanded FMLA Leave for up to $200 daily and $12,000 total.
For purposes of the FFCRA, an employee’s regular rate of pay is calculated by applying the following formula and averaging it across the six months prior to the start of the paid sick leave period:
total compensation for time worked in workweek ÷ total hrs worked in workweek = regular rate
Full-time employees (those who work 40 hours a week) may take up to 80 hours of Emergency Paid Sick Leave. Part-time employees are entitled to receive sick pay hours equivalent to the average number of hours they work over a two-week period. The DOL describes this as the hours the employee is normally scheduled to work and instructs employers to use a six month average of hours worked for part-time employees whose schedules vary.
DOL has also posted a Field Assistance Bulletin regarding its enforcement policy. DOL states that it will not enforce violations prior to April 17, 2020 “provided that the employer has made reasonable, good faith efforts to comply with the Act.” To avoid enforcement of pre-April 17, 2020 violations, an employer will need to remedy any violations, including making all employees whole as soon as possible and make a written commitment to comply in the future. Any violations deemed “willful” (the employee knew or showed reckless disregard for whether its conduct was prohibited), are not protected from enforcement actions by the DOL.
The DOL Field Assistance Bulletin notes that this “program is designed to ensure that all covered employers have access to sufficient resources to pay required sick leave and family leave wages, and states:
For purposes of this non-enforcement policy, employers who are eligible for tax credits but who have insufficient cash flow should make payment of sick leave or family leave wages as soon as possible, but not later than seven calendar days after the employer has withdrawn an amount equal to the required paid sick leave and expanded family and medical leave wages from the employer’s Federal payroll tax deposits or, to the extent such deposits are not sufficient, has received a refund of the credit amount from the IRS to cover the required wages.
This suggests some relief for covered employers whose cash flow would not permit them to make FFCRA payments before reimbursement. Employers in this situation should consult counsel to evaluate their options. It is important to remember that these guidelines provide useful insight into DOL’s current thinking, they are not formal regulations and may be changed, added to, or amended without notice. RJO will continue to monitor and report on the developments of FFCRA regulations as well as other COVID-19 related issues.
Based on the DOL guidance, here are five important take-aways that businesses should know in implementing the FFCRA:
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If you have questions or concerns related to the COVID-19 crisis and your workforce or any other employment matter, we are here to help. Please reach out to the Rogers Joseph O’Donnell attorney with whom you regularly work, or the authors of this legal update: Sharon Ongerth Rossi, Virginia Young, Gayle Athanacio, and Dennis Huie.