On March 18, 2020, Congress passed (and the President signed into law) the Families First Coronavirus Response Act (FFRCA) requiring employers with less than 500 employees in the United States to provide family and paid sick leave related to the Coronavirus (COVID-19) outbreak to eligible employees. The law took effect April 1, 2020 and is set expire on December 31, 2020. For additional information on the FFCRA requirements, please visit our blog post.

On April 1, 2020, the U.S. Department of Labor (DOL) announced the Wage and Hour Division’s (WHD) final temporary rule providing direction relevant to the administration of the FFCRA’s paid leave requirement.  The announcement discusses:

  • Paid Leave Entitlements
  • Employee Eligibility
  • Employer Coverage
  • Intermittent Leave
  • Leave to Care for a Child Due to School or Place of Care Closure or Child Care Unavailability — Interaction between the EPSL and the EFMLA
  • Leave to Care for a Child Due to School or Place of Care Closure or Child Care Unavailability — Interaction between the EFMLA and the FMLA
  • Employer Notice
  • Employee Notice of Need for Leave
  • Documentation of Need for Leave
  • Health Care Coverage
  • Multi-employer Plans
  • Return to Work
  • Recordkeeping
  • Prohibited Acts and Enforcement
  • Effect of Other Laws, Employer Practices, and Collective Bargaining Agreements

What follows are key highlights from the DOL’s final temporary regulations, corrections issued on April 10, and additional DOL FAQs that have been released to date.

I. General Clarifications Under the FFCRA

When is the Employer Headcount Taken for Purposes of the 500 Employee Threshold?

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, as opposed to a one-time count to determine whether an employer is subject to FFCRA. Given that, employers close to this 500-employee threshold should be mindful that its obligations may differ from one day to another if it hires new employers or has a reduction in force that places it above or below the threshold

The 500-employee threshold includes any employees on leave (of any kind). Employers should only count employees in the United States (including U.S. territories or possessions). (See DOL FAQ, #2)

What are the Circumstances Where the Small Business Exemption May Apply?

The Small Business Exemption allows an eligible businesses to deny leave to employees that would otherwise be eligible under the FFCRA when the qualifying reason is to care for the employee’s son or daughter whose school or place of care is closed, or child care provider is unavailable, for COVID-19 related reasons. (See DOL FAQ, #2, #4, #58-59)

According to the temporary regulation, such exemptions apply when:

  1. Such leave would cause the small employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity;
  2. The absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or
  3. The small employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor or services are needed for the small employer to operate at a minimal capacity.

Do Employees Need to Provide FFCRA Leave to Employees Who are Laid Off?

No. The temporary regulations issued by the DOL specifically state that an employee is not entitled to take FFCRA leave “where the employer does not have work for the.” Put more simply, an employee is entitled to FFCRA leave only if the employee would be performing work for the employer but for one of the FFCRA qualifying reasons. In essence, 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.

How Should Employers Charge Employees for Partial Weeks While Taking FFCRA leave Intermittently?

The regulations clarify that an employer may only charge an employee for partial weeks of Emergency FMLA when the employee is taking intermittent leave. The regulations provide the following example:

An employee who normally works 40 hours in a workweek and only takes 3 hours of leave each workday (for a weekly total of 15 hours) has only taken fifteen hours of Emergency Paid Sick Leave or 37.5% of the employee’s EFMLA entitlement.

Employers should note that employers are not required to allow an employee to use intermittent leave under the FFCRA, however, it may be used only if both the employer and employee agree.

When Must Employees Provide Notice of the Need for FFCRA Leave?

The DOL notes that while advance notice is not required, employees are encouraged to notify employers of their request for FFCRA leave as soon as practicable. It is generally reasonable for an employer to require oral notice providing sufficient information to determine leave entitlement under the FFCRA. Employers should allow employees who fail to give proper notice an opportunity to provide required documentation before denying the request.

For purposes of Emergency FMLA, employers may require employees planning on requesting it to follow reasonable notice procedures as soon as practicable after the first workday for which leave is taken in order to continue to receive such leave.

Who is Considered a “son or daughter” for purposes of FFCRA leave?

The regulations clarify that the definition of  “son or daughter” for purposes of both EPSL and EFMLA includes “a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is under 18 years of age; or 18 years of age or older who is incapable of self-care because of a mental or physical disability.”

Is a School Providing Instruction Online Considered “Closed” Under the FFCRA?

A school or place of care is considered “closed” for purposes of FFCRA leave, if the physical location where the child received instruction or care is now closed, even if instruction is being provided online. (See DOL FAQ, #70)

Can More Than One Parent/Guardian Take FFCRA Leave Simultaneously to Care for the Same Child?

No. An employee may only utilize FFCRA leave to care for a child only when they are needed to, and actually are, caring for that child and if the employee is unable to work or telework as a result of providing that care. Generally, an employee does not need to take such leave if a co-parent, co-guardian, or their usual childcare provider is available to provide care. (See DOL FAQ, #69)

Who is Considered a “Child Care Provider” or what is a “Place of Care” under the FFCRA?

A “childcare provider” includes individuals paid to provide childcare, like nannies, au pairs, and babysitters. It also includes individuals who provide childcare at no cost and without a license on a regular basis, for example, grandparents, aunts, uncles, or neighbors. (See DOL FAQ, #68)

A “place of care” is a physical location in which care is provided for a child. The location does not have to be solely dedicated to such care. Examples include: day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs, and respite care programs. (See DOL FAQ, #67)

Can Employees Take FFCRA Leave While Receiving Workers’ Compensation or Temporary Disability Benefits?

In general, no, unless the employee was able to return to light duty before taking leave. If an employee receives workers’ compensation or temporary disability benefits because they are unable to work, the employee may not take EPSL or EFMLA. However, if an employee is able to return to light duty and a qualifying reason prevents them from working, the employee may take FFCRA leave as the situation warrants. (See DOL FAQ, # 76)

Can an Employee Take FFCRA Leave While on a Leave of Absence?

Employees on a voluntary leave of absence may end their leave of absence and begin taking FFCRA leave if a qualifying reason prevents them from being able to work (or telework).  However, an employee may not take FFCRA leave if their leave of absence is mandatory under other federal or state law (i.e., FMLA; American with Disabilities Act; jury duty; military leave). The DOL’s reasoning is that a mandatory leave of absence—and not a qualifying reason for leave—is the reason that prevents the employee from being able to work (or telework). (See DOL FAQ, #77)

What Should Employer’s Know About Health Coverage Continuation During FFCRA Leave?

The regulations contain several new provisions with respect to health care coverage. What follows is a summary of those provisions:

  • If an employer provides a new health plan or benefits (including a new benefit package option) or changes health benefits or plans while an employee is taking FFCRA leave, the employee must be entitled to the new or changed plan/benefits  to the same extent if they were not on FFCRA leave;
  • The employer must give the employee notice of any opportunity to change plans or benefits while on FFCRA leave, and if the employee requests the changed coverage it must be provided;
  • If an employee chooses not to stay on group health plan coverage while taking FFCRA leave, the employee is entitled to be reinstated on the same terms when returning from leave;

Employees are generally still required to make any normal contributions to the cost of the health care coverage while on 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.

How Should Employers Calculate FFCRA Leave Entitlements for Employees with Irregular Hours?

Emergency Paid Sick Leave

Entitlement to paid sick leave under the EPSL is available immediately upon employment. Employers are required to provide an employee with paid sick leave equal to the number of hours that employee is scheduled to work, on average, over a two-week period, up to a maximum of 80 hours.

If an employee works an irregular schedule such that it is not possible to determine the number of hours normally worked over a two-week period, an employer must estimate the number of hours. The estimate must be based on the average number of hours the employee was scheduled to work per calendar day (not workday) over the six-month period ending on the first day of paid sick leave. This average must include all scheduled hours, including both hours actually worked and hours for which the employee took leave. (See DOL FAQ, #80)

Emergency FMLA

To be entitled to EFMLA, an employee must have had 30 days of employment. Employers are required to pay an employee for each day of EFMLA taken based on the number of hours the employee was normally scheduled to work that day.

If an employee works an irregular schedule such that it is not possible to determine the number of hours he or she would normally work on that day, and the employee has been employed for at least six months, an employer must determine the employee’s average workday hours, including any leave hours. The average must be based on the number of hours the employee was scheduled to work per workday (not calendar day) divided by the number of workdays over the six-month period ending on the first day of the employee’s EFMLA. This average must include all scheduled hours, including both hours actually worked and hours for which the employee took leave. (See DOL FAQ, #81)

How Do Employers Calculate an Employee’s Average Regular Rate for Purposes of the FFCRA?

Employers are required to pay an employee based on his or her average regular rate for each hour of FFCRA leave taken. The average regular rate must be computed over all full workweeks during the six-month period ending on the first day that EPSL or EFMLA is taken. (See DOL FAQ, #82)

Employers must identify the six-month period to calculate each employee’s regular rate under the FFCRA based on the first day the employee takes FFCRA leave. If an employee has been employed for less than six-months, an employer may calculate the average regular rate over the entire period the employee was employed. (See DOL FAQ, #85)

For employees with a fixed salary, it depends if that salary is understood to be compensation for a specific number of hours in each workweek. If so, the employee’s average regular rate would be the hourly equivalent of that salary. If not, the regular rate may vary alongside the number of hours worked in each workweek. (See DOL FAQ, #83)

An employer may round when calculating the number of hours (to the nearest tenth, quarter, or half hours) when determining an employee’s hours worked for purposes of FFCRA leave that must be provided, however, employers must use a consistent rounding principle and apply it to all employees. (See DOL FAQ, #84)

II. Clarifications Specific to EPSL

What is Considered a “Quarantine or Isolation Order” Under the FFCRA?

Employees who are unable to work because they are subject to a federal, state or local COVID-19 quarantine or isolation order may be eligible for EPSL. The DOL did not define the term “quarantine or isolation order” in any of its previous guidance or FAQs, but the regulations describe a quarantine or isolation order broadly to include: orders that advise some or all citizens to shelter in place, stay at home, quarantine, or otherwise restrict their own mobility.

The regulations state that employees may take EPSL only if being subject to one of these orders prevents the employee from working or teleworking and the question is whether the employee would be able to work (or telework) if not for being required to comply with a quarantine or isolation order. Notably, the temporary rule provides that an employee that is subject to such an order cannot take EPSL when his or her employer does not have work available as a result of the order or other circumstances.

In the discussion of the regulations, the DOL provides two examples to illustrate this concept:

  • If a coffee shop closes temporarily or indefinitely due to a downturn in business or a stay-at-home order, it would no longer have any work for its employees. Therefore, an employee who is subject to a stay-at-home order would not be able to work even if they were not required to stay at home and will not be entitled to EPSL.

  • If a law firm permits its lawyers to work from home, a lawyer would not be prevented from working by a stay-at-home order, and thus may not take EPSL as a result of being subject to that order. However, the lawyer would not be able to telework in the event of a power outage or similar extenuating circumstance and would therefore be eligible for EPSL during the period of the power outage or extenuating circumstance due to the quarantine or isolation order.

Who is an “Individual” for Purposes of Providing Care under EPSL?

Emergency Paid Sick Leave can be taken where an employee is unable to work because he or she needs to care for an individual who is either: (1) subject to a Federal, State, or local quarantine or isolation order; or (2) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.

The DOL regulations define an “individual” as an employee’s immediate family member, a person who regularly resides in the employee’s home, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for them in a quarantine situation.

Can an Employee Take Emergency Paid Sick Leave to Self-Quarantine without Input from a Medical Professional?

Employees cannot use FFCRA leave to self-quarantine on their own without any input from a medical professional. If an employee becomes ill with COVID-19 symptoms, they may take EPSL only to seek a medical diagnosis or if a health care provider otherwise advises the employee to self-quarantine. If an employee tests positive for COVID-19 or is advised by a health care provider to self-quarantine, they may continue to take EPSL.

An employee may not take EPSL if they unilaterally decide to self-quarantine for an illness without medical advice, even if they have COVID-19 symptoms. (See DOL FAQ, #62)

What Does it Mean to Be Seeking a Medical Diagnosis?

Employees may take EPSL when experiencing symptoms of COVID-19 and seeking a medical diagnosis. The DOL has stated that symptoms that trigger this qualifying reason are: fever, dry cough, shortness of breath, or other COVID-19 symptoms identified by the CDC.  In addition, the regulations clarify “seeking a medical diagnosis” as limited to the time that the employee is unable to work because they are taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.

III. Clarifications Specific to EFMLA

Can Employers Require Employees to use Employer-Provided Leave and Emergency FMLA Concurrently?

As revised, the regulations make clear that an eligible employee may elect to use, or an employer may require and employee use, provided or accrued leave available under the employer’s policies, such as vacation or personal leave or paid time off, concurrently with EFMLA. However, concurrent use is limited by the following circumstances:

  • An employer may not require an employee to use other paid leave if the employee is using EPSL to cover the first two unpaid weeks of EFMLA.

An employee may only require concurrent use of paid time off if that employer-provided leave could otherwise be used to care for a child.

Employers should remember that if they require concurrent use of employer-provided paid time off, they may only claim tax credits under the FFCRA for the leave required under the FFCRA.  So, if an employee uses employer paid time off and FFCRA leave concurrently, the employer may seek reimbursement for 2/3 of the employee’s rate of pay, up to $200 per day, but not for the additional 1/3 of an employee’s pay that would be due under the employer’s own policy.

Additional Resources:

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Lizet Ramirez – Lizet is a Client Compliance Manager for Sequoia One, where she works with our clients to optimize and streamline benefits compliance. In her free time, Lizet enjoys live music, travel, hiking and spa days.