Department of Labor Guidance on the Families First Coronavirus Response Act
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The Department of Labor, Wage and Hour Division, has issued guidance explaining the Families First Coronavirus Response Act provisions and discussing how the Division will enforce the Act. This update addresses the major clarifications that the Guidance provides. The Division’s news release also clarifies that the effective date of the Act is now April 1, 2020, rather than April 2nd as previously considered based on the language of the Act itself. However, there is a 30-day grace period during which the Department will not enforce the Act. The Department of Labor has also issued notices that employers can use to satisfy their obligation to notify employees of their rights to expanded leave under the Act, one for Federal employees and one for all other employees.
Employer Fact Sheet
The Division provided a Fact Sheet addressing the obligations of employers under the Act. Although our previous Summary of the Act addresses much of the information in this Fact Sheet, the Fact Sheet does provide two major clarifications. First it clarifies that most employees of the Federal government are not covered by the expanded family and medical leave provisions, but are covered by the paid sick leave provisions. So, a federal employee is not eligible for the 12 weeks of family and medical leave, consisting of 2 weeks of unpaid leave and 10 weeks of paid leave at 2/3 the regular rate of pay. However, federal employees do get the 10 days of emergency paid sick leave.
This Fact Sheet also provides that the DOL will not enforce the Act for 30 days after April 1, or until May 1, 2020. During these 30 days, the Department will not enforce the penalties listed in the Act, if an employer acted in good faith. Good faith exists when the employer remedies the violation as soon as practicable, the violation was not willful, and the DOL receives written commitment from the employer to comply with the Act in the future.
Please note that the Employer Fact Sheet appears to contain information that is inconsistent with the Question and Answer Sheet also issued by the DOL and the Act itself, including the following:
The Employer Fact Sheet states that “an employee qualifies for expanded family and medical leave if the employee is unable to work (or unable to telework)” for the six reasons listed by the Act and Q&A as qualifying reasons for paid sick leave under the Act. In contrast, the Act and Q&A state that the expanded family and medical leave only applies to leave to care for an employee’s child whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.
The Employer Fact sheet states that for employees taking leave to care for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19, a full-time employee is eligible for up to 12 weeks of leave at 40 hours a week.
However, the Act and Q&A indicate that the family and medical leave calculation is based either on “the number of hours the employee would otherwise be normally scheduled to work” or the calculation used for employees with varying hours, subject to the $200/day cap for the 10 weeks of paid family and medical leave--not 40 hours per week as stated in the Employer Fact Sheet.
And assuming an employee uses the new sick leave to cover the first 10 days of otherwise unpaid family and medical leave, the sick leave provisions are not based on 40 hours/week either, according to the Act and the Q&A.
Employee Fact Sheet
The major clarification provided in this Fact Sheet is that the employee must provide as much notice of leave to the employer as is practicable. After the first workday of expanded family and medical leave, the employer may require employees to follow reasonable notice procedures in order to continue receiving the leave. This raises the question of what qualifies as “reasonable notice procedures” regarding the expanded family and medical leave, which is only allowed if the employee is at home and unable to telework to care for a child whose school or daycare is closed (or the child care provider is unavailable). It is not clear what ongoing notice the employee must give, but hopefully this will be clarified in future DOL guidance or regulations.
Question and Answer Sheet
The Question and Answer Fact Sheet clarified a number of issues in this Act, but still left several questions unanswered.
Interaction of Paid Sick Leave and Paid Family and Medical Leave Provisions
The Q&A clarifies the interaction of the sick leave and expanded family and medical leave provisions where an employee stays home with his/her child due to school or place of care closure or unavailability of a child care provider. As expected, the Guidance states that such employees may be eligible for both types of leave, up to 12 weeks of paid leave. The paid sick leave law provides for an initial two weeks of paid leave, which covers the first ten workdays of expanded family and medical leave that would otherwise be unpaid under the family and medical leave provisions, unless the employee chooses to use existing vacation, personal, or medical or sick leave under an employer policy. After the first ten workdays, the employee may receive up to 10 weeks of paid leave under the family and medical leave provisions.
Paid Leave Previously Provided by Employer
Even if an employer previously provided paid sick leave for a reason listed in the Act before April 1, an employer cannot deny paid sick leave under the new law, which is effective on April 1.
The Guidance explains how to count employees to determine whether the employer is below or above the 500-employee threshold for the sick leave and family and medical leave provisions. For both types of leave, employers must count employees on leave; temporary employees jointly employed by the employer and another employer, even if the employees are not on the first employer’s payroll; and day laborers from a temporary agency (if there is a continuing employment relationship, both the temporary agency and the client firm must count such day laborers).
With respect to corporations, for both types of leave, the Guidance states that a corporation (including its separate establishments or divisions) generally is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. However, if a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they qualify as joint employers under the federal Wage & Hour law with respect to certain employees. For joint employers, all common employees must be counted. The joint employer test looks at whether multiple employers have the right of control over the job duties, functions, and actions of an employee during an employment relationship.
For the expanded family and medical leave (but not the paid sick leave), the integrated employer test also applies to determine if two or more entities are separate employers. The integrated employer test looks at the management, interrelation of operations, control of labor relations, and the degree of common ownership or financial control between two employers. If these factors indicate that the two employers are integrated employers, then all of the employees employed by both employers will count toward the 500-employee threshold for both employers.
Small Business Exemption for Jeopardizing the Viability of the Business
Regarding the small business exemption, the Guidance states that businesses with fewer than 50 employees may qualify for an exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern—meaning that small businesses cannot seek an exemption where an employee seeks up to 10 days of paid sick leave for other qualifying reasons. The Guidance states that future regulations will provide the criteria to determine whether a small business’s viability is jeopardized, and that employers should document why their business meets those criteria, but not send materials to the DOL when seeking the exemption.
The Guidance also explains how to calculate hours worked by part-time employees for both sick leave and expanded family and medical leave. Part-time employees may take leave based on the average number of hours the employee is normally scheduled to work in a two-week period. If normal hours scheduled are unknown, or if the part-time employee’s schedule varies, employers may calculate the average daily hours based on a six-month average. Part-time employees may take paid sick leave and/or family and medical leave for this number of hours per day.
However, if a part-time employee has been employed for less than 6 months, then the employer should use the hours agreed to at the time of hiring. If there was no agreement on the number of hours, the employer should use the average hours per day the employee was scheduled to work over the entire term of his or her employment.
The expanded family and medical leave is normally calculated as at least two-thirds of an employee’s regular rate of pay multiplied by the number of hours the employee normally would be scheduled to work, including overtime. The 10 days of paid sick leave are calculated at an employee’s regular rate of pay for 80 hours, even if an employee is normally scheduled for overtime and even if the distribution of work hours is not 40 hours each week, such that an employee who is scheduled to work 50 hours/ week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week. However, employers are not required to pay a premium for overtime hours under either the sick leave or family and medical leave provisions. In addition, daily pay is still capped at the $511 per day for individual Coronavirus illness reasons, and $200 per day for child-care leave or care for another individual, which caps apply even if overtime hours are included.
Regular Rate of Pay
The Guidance provides that an employee’s regular rate of pay used to calculate paid leave is the average of his/her regular rate over a period of up to six months before the date on which the leave begins. Commissions, tips, and piece rates must be counted when calculating the regular rate of pay. If an employee has not worked for the employer for six months, the regular rate is the average of the employee’s regular rate of pay for each week he/she has worked for the employer.
The Guidance also states that employers can compute the regular rate for an employee 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—however this wording is somewhat confusing, as “all hours worked” could conceivably include overtime hours. Therefore, it is not entirely clear what this part of the Guidance means.
Employer at Least Thirty Calendar Days
To be eligible for expanded family and medical leave, an employee must be employed by his or her employer for at least 30 calendar days. The Guidance provides that in calculating that time, the employer must count days worked as a temporary employee for employees later hired as full time.
The Department of Labor has provided notice posters that are available for employers to use to notify their employees of the rights available under the Act. The Department provided one poster for Federal employees and one poster for all other employees. All employers are required to notify their employees of their rights. The Act states that the employer must place the notice in a conspicuous place on its premises. However, the Department of Labor has issued a Frequently Asked Questions webpage to address issues caused by the shelter-at-home orders currently in effect across the United States. The Department guidance states that the employer can satisfy its duty to notify employees by emailing or direct mailing the notice to its employees, or by posting the notice on an employee information internal or external website.
When placing the notices in the workplace, the employer must be careful to place the notices in a place that all employees will be able to see it. For example, if the employees report to work through different buildings, and do not enter or take breaks in the same space, the employer must place notices in each building such that all employees will be able to see the notice.
The Department has informed employers that they must notify all current employees, including new hires. There is no duty to notify employees who have been recently laid off or to prospective employees. The Department has also noted that employers should check the Department of Labor website regularly to ensure that they are current on all updated notice requirements.
Although the Department of Labor Guidance clarified several of the Act’s murky points and provided the notices necessary for employers to satisfy their notice obligation under the Act, unanswered questions remain, including the definitions of a “health care provider,” “emergency responder,” and “part-time employee” under the Act. Hopefully, future guidance and regulations will answer these questions and others.