The Department of Labor (DOL) recently clarified numerous issues under the Families First Coronavirus Relief Act (FFCRA) in three notices released on March 24, 2020. We previously provided a summary of the law’s paid leave provisions in a client update on March 19, 2020. Some of the clarifications made in the recent guidance include the following:
The paid leave provisions go into effect on Wednesday, April 1, 2020.
The law does not apply retroactively, which means that employers who provided paid leave prior to April 1, 2020, cannot count leave payments as having been made under the FFCRA, and also cannot claim a tax credit for such amounts.
All employees (full-time and part-time) within the United States or any of its territories are counted in determining the 500-employee threshold for whether an employer must comply with the paid leave obligations. Employees on leave, temporary employees, and leased employees from a temporary employment agency are also counted. The threshold is determined as of the time an employee’s leave is to be taken.
For determining whether two or more entities must aggregate their workforces to calculate the 500-employee threshold, the guidance incorporates applicable standards under the Family and Medical Leave Act (FMLA). All employees of “joint employers” are counted in determining the 500-employee threshold. Also, all employees of a single “integrated employer” are counted in determining the 500-employee threshold, even if the integrated employer consists of two or more separate entities. In brief, the test to determine whether two or more entities are a single integrated employer is based on relevant facts and circumstances, such as the degree of common management, the amount of operational overlap, whether there is centralized control of labor relations, and the degree of common ownership and financial control.
The law authorized the DOL to exempt businesses with 50 or fewer employees if compliance would jeopardize the viability of the business as a going concern. The DOL indicated it was going to issue regulations on the relevant standard that employers had to meet in order to take advantage of the exemption. Note: Employers with 50 or fewer employees are exempt only from the provisions of the law requiring paid leave for employees who need to take care of children due to school or child care center closures.
Part-time employees are eligible to take paid leave for the number of hours they are normally scheduled to work. If the schedule varies, then a six-month average may be used for determining the number of hours an employee may take as paid leave. If the employee has not been employed for at least six months, then the number of hours the employee was expected to work upon hire or the number of hours worked on average in the past may be used.
Employees are entitled to their “regular rate” of pay for any hours of paid leave. The regular rate is the amount paid per hour over the six months prior to the date leave is taken, excluding overtime payments. If an employee is paid on a commission or tipped basis, such amount should be included in determining the regular rate. Note that some of the qualifying reasons for leave (including taking care of children and individuals who have been quarantined) are payable at two-thirds of the employee’s regular rate.
Eligible employees may take up to 80 hours of paid emergency sick leave for any qualifying reason and then subsequently take 10 weeks of paid leave under the expanded FMLA provisions, for a total of 12 consecutive weeks of paid leave. The first 80 hours can be for any qualifying reason under the emergency paid leave law, including the requirement to take care of a child whose school or child care center has closed. The reason for taking leave for the first 80 hours under the emergency leave provisions does not have to match the reason for taking leave under the expanded FMLA provisions (which are limited only to taking care of children). Note that some of the qualifying reasons for leave (including taking care of children and individuals who have been quarantined) are payable at two-thirds of the employee’s regular rate.
Links to the applicable guidance can be accessed below:
Questions and Answers
i. Families First Coronavirus Response Act: Questions and Answers
ii. COVID-19 and the Fair Labor Standards Act: Questions and Answers
iii. COVID-19 and the Family and Medical Leave Act: Questions and Answers
i. Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)
ii. Federal Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)
iii. Families First Coronavirus Response Act Notice – Frequently Asked Questions
Field Assistance Bulletin