Family First Coronavirus Response Act: US Department of Labor regulations provide additional guidance for employers

Abstract Building 4

Employment Alert

COVID-19 Alert

By:

EXECUTIVE SUMMARY:

The US Department of Labor (“DOL”) recently published new regulations (the Regulations) interpreting the Family First Coronavirus Response Act (“FFCRA”). Key developments include the following:

  • Clarifies that mass “shelter-in-place” or “stay-at-home” orders, such as those in effect in California and New York, will be considered a government quarantine or isolation order under FFCRA.
  • Confirms that there is no entitlement to leave where the employer does not have work for the employee (such as where the business has temporarily closed) “because the employee would be unable to work even if he or she were not required to comply with the quarantine or isolation order.”
  • Clarifies the treatment of affiliated entities for purposes of calculating the number of employees (separate corporations are generally treated as separate entities, unless they meet the joint employer test under the Fair Labor Standards Act (FLSA) or integrated enterprise test under the Family and Medical Leave Act (FMLA).
  • Clarifies that an employee who is advised to self-quarantine because the employee may be particularly vulnerable to COVID-19 (even where there is no reason to believe the employee has or may have COVID-19 at the time) is eligible for leave.
  • Clarifies both employee and employer documentation requirements.
  • Provides guidance for small businesses claiming the “carve out” exemption from the obligation to pay certain categories of leave under the FFCRA.

FFCRA BACKGROUND:

The FFCRA, signed into law on March 18, 2020, creates two new emergency paid leave requirements in response to the COVID-19 global pandemic. “The Emergency Paid Sick Leave Act” (EPSLA), entitles certain employees to take up to two weeks of paid sick leave. “The Emergency Family and Medical Leave Expansion Act” (EFMLEA), which amends the FMLA, permits certain employees to take up to twelve weeks of expanded family and medical leave, ten of which are paid, for specified reasons related to COVID-19. The leave benefits under the FFCRA are in effect between April 1, 2020 and December 31, 2020.  The FFCRA covers private employers with fewer than 500 employees and certain public employers. Small employers with fewer than 50 employees may qualify for an exemption from the requirement to provide paid leave due to school, place of care, or child care provider closings or unavailability, if the leave payments would jeopardize the viability of their business as a going concern.  Please see our prior alert summarizing the key elements of the FFCRA.

In general, the FFCRA requires covered employers to provide eligible employees up to two weeks of paid sick leave when the employee:

  1. is unable to work because the employee is subject to a government quarantine or isolation order related to COVID-19;
  2. has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. is experiencing COVID-19 symptoms and seeking a medical diagnosis;
  4. is unable to work because of a need to care for an individual subject to a government quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  5. is unable to work because of a need to care for the employee’s son or daughter whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons;
  6. is experiencing a substantially similar condition, as specified by the Secretary of Health and Human Services.

The FFCRA also requires covered employers to provide up to twelve weeks of expanded family and medical leave, up to ten weeks of which must be paid, when an eligible employee is unable to work because of a need to care for the employee’s son or daughter whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.

Under the FFCRA, covered private employers qualify for reimbursement through refundable tax credits for all qualifying paid leave (both sick leave and expanded family and medical leave) paid to an employee who takes leave under the FFCRA, up to daily and aggregate caps, and for certain costs related to the maintenance of health care coverage under any group health plan while the employee is on the leave provided under the FFCRA.

The rapid passage and implementation of the FFCRA left many key questions unanswered.  The Regulations represent the DOL’s most comprehensive effort to date to clarify and provide guidance to employers on their legal obligations under the FFCRA.  Because of the exigency created by the COVID-19 crisis, the DOL issued the Regulations as a “temporary rule,” meaning that they became effective immediately, bypassing the notice and comment period applicable to normal rulemaking.  However, to enable businesses covered by the FFCRA time to come into compliance with the new law, the DOL had directed its field staff to observe a temporary period of non-enforcement of the FFCRA until April 17, 2020, provided the employer has made reasonable, good faith efforts to comply with the FFCRA.

Below we provide an overview of some of the key issues addressed by the Regulations.  This is not intended to cover all of the subjects addressed by the Regulations but rather provide an overview of certain issues of particular interest to employers seeking to better understand the FFCRA:

Employer Coverage:

What employees are counted in determining whether an employer is covered by the FFCRA?

 

All full-time and part-time employees within the US (which includes any State, the District of Columbia, or any Territory or possession of the US) are to be considered in calculating whether an employer has fewer than 500 employees for coverage by the FFCRA.  29 C.F.R. § 826.40 (a)(1).  This count also includes employees on leave, employees of temporary placement agencies who are jointly employed under the FLSA, and day laborers supplied by a temporary placement agency.  Id. Importantly, it does not matter how long an employee has been employed to be considered part of the analysis in determining FFCRA applicability.  Id.

 

Are employees counted together if a corporation owns multiple establishments or has an ownership interest in another corporation?

 

Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold.  29 C.F.R. § 826.40(a)(2). A corporation with an ownership interest in a different corporation, however, is considered a separate employer unless the two corporations either (i) qualify as joint employers under the FLSA, or (ii) meet the integrated employer test under the FMLA.  Id. 

 

Information concerning the DOL’s final rule interpreting joint employer status for purposes of the FLSA, which took effect March 16, 2020, is available here and here.  If two corporations are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the EPSLA and expanded family and medical leave must be provided under the EFMLEA.

 

The multi-factor integrated employer test for purposes of the FMLA considers the extent to which two or more entities have: (1) common management; (2) interrelation between operations; (3) centralized control of labor relations; and (4) the degree of common ownership/financial control. If multiple entities are found to be integrated employers under this test, then the employees of employers that constitute the integrated employer will be counted together. 29 C.F.R. § 825.104.  If two corporations are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the EFMLEA.

 

How do I obtain the small business exemption?

 

The FFCRA provides an exemption for employers with fewer than 50 employees from providing paid sick leave under the EPSLA and expanded family and medical leave under the EFMLEA. To qualify, an authorized officer of the employer must determine that: (1) the paid sick leave or expanded family and medical leave would cause the employer’s expenses and financial obligations to exceed available revenues, causing the business to cease operating at a minimal capacity; (2) the absence of employee(s) requesting leave would entail a substantial risk to the business due to their skills, knowledge, or responsibilities; or (3) there are insufficient workers who are able, willing, qualified, and available to perform the labor or services provided by the employee(s) requesting leave.  29 C.F.R. § 826.40(b). This determination must be made in writing and kept on file in the business’ records, though it need not be submitted to the DOL.  Id.

 

Employee Eligibility

Are employees whose employers are temporarily closed eligible for paid leave while the employer is closed?

An employee is only eligible for leave if the employer has work for the employee that the employee would be able to do but for the COVID-19 related reason.  29 C.F.R. § 826.20(a)(2).  For example, if the employer is temporarily closed, there would be no available work. Id.; see also 85 Fed. Reg. 19329 (noting, as an example, that an employee of a coffee shop that temporarily closes down due to a downturn in business or stay-at-home order would not be entitled to leave as the employee would not be able to work even if the employee were not subject to the stay-at-home order).

Are employees who are permitted to telework “unable to work”?

Under the FFCRA, leave is subject to the employee being unable to work. The Regulations set forth how this plays out with regards to telework. Anyone who meets the definition of one of the leave categories is able to telework, and therefore may not take paid sick leave, if (a) his or her employer has work for the employee to perform; (b) the employer permits the employee to perform that work from the location where the employee is being quarantined or isolated; and (c) there are no extenuating circumstances that prevent the employee from performing that work. 29 C.F.R. § 826.20; 85 Fed. Reg. 19329.

Additionally, the Regulations provides that if an employer directs or allows an employee to telework, subject to an agreement between the employer and employee, the employee may take paid sick leave or expanded family and medical leave intermittently, in any agreed increment of time, while the employee is teleworking.  29 C.F.R. § 826.50(c); 85 Fed. Reg. 19337.

What is a “Quarantine or Isolation Order” that triggers eligibility for leave under the FFCRA?

The first enumerated reason that an employee may take covered sick leave is if an employee is subject to a Federal, State, or local quarantine or isolation order.  The Regulations give more clarity on which government orders qualify, including quarantine, isolation, containment, shelter-in-place, or stay-at-home orders.  29 C.F.R. §§ 826.10(a), 826.20(a)(2).  Employees may take paid sick leave only if being subject to one of these orders prevents them from working or teleworking as described therein. 

When does an employee’s self-quarantine qualify for sick leave?

The second enumerated 825.102, to self-quarantine for a COVID-19-related reason.  The Regulations explain that the advice to self-quarantine must be based on the health care provider’s belief that the employee has COVID-19, may have COVID-19, or is particularly vulnerable to COVID-19. 29 C.F.R. § 826.20(a)(3).  Following the advice to self-quarantine must prevent the employee from being able to work.  Id.

When do an employee’s COVID-19 symptoms qualify for sick leave?

The third enumerated reason for paid sick leave is when the employee has COVID-19 symptoms and is seeking a medical diagnosis.  The Regulations give more clarity on what symptoms qualify: fever, dry cough, shortness of breath, or other COVID-19 symptoms identified by the US Centers for Disease Control and Prevention (CDC).  29 C.F.R. § . Additionally, paid sick leave taken for this reason must be limited to the time the employee is unable to work because he or she is taking affirmative steps to obtain a medical diagnosis. Thus, an employee experiencing COVID-19 symptoms may take paid sick leave, for instance, for time spent making, waiting for, or attending an appointment for a test for COVID-19. But, the employee may not take paid sick leave to self-quarantine without seeking a medical diagnosis. An employee may continue to take leave while experiencing any of the symptoms specified above however; or may continue to take leave after testing positive for COVID-19, regardless of symptoms experienced, provided that the health care provider advises the employee to self-quarantine. 29 C.F.R. § 826.20(A)(4); 85 Fed. Reg. 19329.

When may an employee take leave to care for another individual?

The fourth enumerated reason for paid sick leave is when the employee needs to care for an individual subject to certain COVID-19 related circumstances.  The Regulations clarify the type of personal relationship that the employee must have with the individual being cared for -- the individual being cared for must be an immediate family member, a person that resides in the employee’s home 29 C.F.R. § 826.20(a)(5). Additionally, the individual being cared for must: (a) be subject to a Federal, State, or local quarantine or isolation order as described above; or (b) have been advised by a health care provider to self-quarantine based on a belief that he or she has COVID-19, may have COVID-19, or is particularly vulnerable to COVID-19.  Id.

When may an employee take sick leave due to school/child care closures?

 

The fifth reason for paid sick leave applies when the employee is unable to work because the employee needs to care for his or her son or daughter if: (a) the child’s school or place of care has closed; or (b) the child care provider is unavailable, due to COVID-19 related reasons. 29 C.F.R. § 826.20(a)(6).  Notably, “place of care” is defined broadly to include, among other things, day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs, and respite care programs.  Generally, an employee will not be deemed to need to take such leave if another suitable individual—such as a co-parent, co-guardian, or the usual child care provider—is available to provide care for the child. Id.; 85 Fed. Reg. 19330.

 

When is an employee eligible for expanded FMLA due to school closures or child care unavailability?

 

The EFMLEA provides that this reason for leave is for closures or unavailability “due to a public health emergency,” which the statute defines as “an emergency with respect to COVID-19 declared by a Federal, State, or local authority.” FFCRA section 3102(b).  The DOL has interpreted this to match the regulatory text related to the same reason for taking paid sick leave. In other words, the leave authorized by the EFMLEA is the same as the fifth reason discussed above authorized by the EPSLA.  Thus, just as with sick leave, generally, an employee will not be deemed to need to take such leave if another suitable individual—such as a co-parent, co-guardian, or the usual child care provider—is available to provide care for the child.  85 Fed. Reg. 19330.

 

Can an employee take both sick leave and extended FMLA leave to care for a child due to a closure or unavailability of child care or school?

 

An employee who needs to take leave to care for a child due to a school or place of care closure, or unavailability of child care, due to COVID-19 may be eligible for leave under both the EPSLA and EFMLEA.  As these benefits may run concurrently, eligible employees may take twelve weeks of expanded family and medical leave to care for their child.  29 C.F.R. § 826.60(a).  An employee may receive pay for the first two weeks (up to 80 hours) of leave under the EPSLA at two-thirds the employee’s regular rate of pay, while the remaining ten weeks may be paid under the EFMLEA at two-thirds the employee’s regular rate of pay (capped at $200 per week). 85 Fed. Reg. 19333.

 

If an employee previously has taken paid sick leave under the EPSLA, however, the amount remaining and available to the employee may not cover the entire first two weeks. If an employee does not have any remaining available paid sick leave at the time of any expanded family and medical leave, then the first two weeks (ten days) of leave taken under the EFMLEA may be unpaid. 29 C.F.R. § 826.60(b). Under this circumstance, an employee may choose to substitute earned or accrued paid leave during this period, therefore receiving pay for any sick leave earned during the unpaid period.  85 Fed. Reg. 19337.

 

How much sick leave are employees entitled to?

Full time employees are entitled to 80 hours of emergency sick leave under the FFCRA. The Regulations defines a full-time employee as an employee who is normally scheduled to work at least 40 hours each workweek.  29 C.F.R. § 826.21(a)(2). An employee who does not have a normal weekly schedule may also be a full-time employee if he or she is scheduled to work, on average, at least 40 hours each workweek.  29 C.F.R. § 826.21(a)(3).

Part time employees are eligible to take leave in the amount of the number of hours that such employee works, on average, over a 2-week period.  The Regulations provide detail on how this calculation would work in practice: the calculation is based on averaging the number of hours worked per day (for employees who have worked for more than 6 months) or the reasonable expectation of the amount of hours that the employee would work every two weeks, as expressed at the time of hire (for part-time employees with less than six months on the job).  § 826.21(b).

When does an employee meet the 30 days of work requirement for extended FMLA?

An employee is considered to have been employed for at least thirty calendar days for purposes of EFMLEA eligibility if the employer had the employee on its payroll for the thirty calendar days immediately prior to the day that the employee’s leave would begin.   29 C.F.R. § 826.30. An employee who is laid off or otherwise terminated by an employer on or after March 1, 2020, is nevertheless also considered to have been employed for at least thirty calendar days, provided the employer rehires or otherwise reemploys the employee on or before December 31, 2020, and the employee had been on the employer’s payroll for thirty or more of the sixty calendar days prior to the date the employee was laid off or otherwise terminated.  29 C.F.R. § 826.30(b)(1).

How does the extended FMLA relate to traditional FMLA and other leave benefits?

Any time taken by an eligible employee as expanded family and medical leave counts towards the twelve workweeks of FMLA leave to which the employee is entitled under the FMLA. C.F.R. §826.70(  An employee may elect to use, or an employer may require an employee to use, accrued leave that under the employer’s policies would be available to the employee to care for a child, such as vacation or personal leave or paid time off concurrently with the expanded family and medical leave under the EFMLEA (but note: an employer may not require an employee to use other sources of paid leave prior to using Paid Sick Leave under the EPSLA).  29 C.F.R. § 826.160.

Who qualifies as a health care provider or emergency responder exempt from the FFCRA?

The FFCRA allows employers to exclude employees who are health care providers or emergency responders from leave under the FFCRA.  The Regulations contain a broad definition of “health care providers,” which include any individual who is capable of providing health care services necessary to combat the COVID-19 public health emergency. 85 Fed. Reg. 19335.  Such individuals include not only medical professionals, but also other workers who are needed to keep hospitals and similar health care facilities well supplied and operational and further 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.  29 C.F.R. § 826.30(c)(1).  The definition of “emergency responder” is also broad, and includes “anyone necessary for the provision of transport, care, healthcare, comfort and nutrition of such patients, or others needed for the response to COVID-19.” 29 C.F.R. § 826.30(c)(2).  

Notice/Documentation

Does the employer need to provide a FMLA-like notice of leave use for extended FMLA?

The DOL did not adopt in the Regulations employer notice regulations or employer “specific notice” obligations for the FFCRA similar to those that are required by the FMLA regulations. Thus the Regulations do not require employers to respond to employees who request or use EFMLEA leave with notices of eligibility, rights and responsibilities, written designationsor notices of leave use against employees’ FMLA leave allowances.  85 Fed. Reg. 19338.

What kind of notice can the employer require from the employee to use leave?

Under the Regulations, it is reasonable for an employer to require notice as soon as practicable after the first workday is missed, and to require that employees provide oral notice and sufficient information for an employer to determine whether the requested leave is covered by the FFCRA. 29 C.F.R. § 826.90(c).  If an employee fails to give proper notice, the Regulations state that the employer should give the employee notice of the failure and an opportunity to provide the required documentation prior to denying the request for leave.  29 C.F.R. § 826.90(d); 85 Fed. Reg. 19339.  The employer may not require advance notice or require the notice to include documentation beyond what is required to substantiate the leave request (discussed below).

What documentation does the employee need to provide to the employer to substantiate FFCRA leave?

An employee must provide his or her employer documentation in support of paid sick leave or expanded family and medical leave. 29 C.F.R. § 826.100(a).  Such documentation must include a signed statement containing the following information: (1) the employee’s name; (2) the date(s) for which leave is requested; (3) the COVID-19 qualifying reason for leave; and (4) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. Id.

An employee must provide additional documentation depending on the COVID-19 qualifying reason for leave. For example:

  • An employee requesting paid sick leave due to a government quarantine or isolation order must provide the name of the government entity that issued the quarantine or isolation order to which the employee is subject.   29 C.F.R. § 826.100(b).  
  • An employee requesting paid sick leave due to self-quarantine must provide the name of the health care provider who advised him or her to self-quarantine for COVID-19 related reasons. 29 C.F.R. § 826.100(c).
  • An employee requesting leave to care for an individual must provide either (1) the government entity that issued the quarantine or isolation order to which the individual is subject or (2) the name of the health care provider who advised the individual to self-quarantine. 29 C.F.R. § 826.100(d).
  • An employee requesting to take paid sick leave or expanded family and medical leave to care for his or her child must provide the following information: (1) the name of the child being cared for; (2) the name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19 reasons; and (3) a statement representing that no other suitable person is available to care for the child during the period of requested leave. 29 C.F.R. § 826.100(e). 
  • An employer may also request additional documentation from employees if required by the IRS to support a request for a FFCRA tax credit.  29 C.F.R. § 826.100(f).   

For leave taken under the FMLA for an employee’s own serious health condition related to COVID-19, or to care for the employee’s spouse, son, daughter, or parent with a serious health condition related to COVID-19, the normal FMLA certification requirements still apply. See 29 C.F.R. § 825.306.

 

Are employers required to maintain health coverage for employees who take FFCRA leave?


Yes.  An employee who takes expanded family and medical leave or paid sick leave is entitled to continued coverage under the employer’s group health plan on the same terms as if the employee did not take leave.  These requirements are similar to the regulatory requirements for employers when employees take FMLA leave for other reasons.  Further, if an employer provides a new health plan or benefits or changes health benefits or plans while an employee is taking paid sick leave or expanded family and medical leave, the employee is entitled to the new or changed plan/benefits to the same extent as if the employee was not on leave. 29 C.F.R. § 826.110.


Enforcement

What are the possible consequences of non-compliance?

A
n employer who violates the paid sick leave requirements is considered to have failed to pay the minimum wage required by the FLSA, and an employer who violates the prohibition on discharge, discipline, or discrimination under the FFCRA is likewise considered to have violated analogous sections the FLSA.  29 C.F.R. § 826.150(b). With respect to such violations, the relevant enforcement provisions of the FLSA apply. See 29 U.S.C. §§ 216, 217. 

For purposes of the EFMLEA, employers are subject to the enforcement provisions set forth in section 107 of the FMLA, with one exception: an employee may not bring a private action against an employer under the EFMLEA if the employer, although subject to the EFMLEA, is not otherwise subject to the FMLA. 29 C.F.R. § 826.151(b).

CONCLUSION

The FFCRA establishes new sick leave and paid family leave obligations for many employers, covering an estimated 61 million US workers.  The new Regulations provide much-needed guidance and clarification from the DOL on many of the key issues left unanswered by the rapid passage and implementation of the FFCRA. 

If you have any questions regarding these new requirements and their implications, please contact any member of the DLA Piper Employment group, your DLA Piper relationship attorney, or email us at CoronavirusEmployment@dlapiper.com. 

Please continue to visit our Coronavirus Resource Center and our Coronavirus COVID-19 Daily Update for Employers for the latest legal developments and analysis.

This information does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only. No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.