Department of Labor Regulations on the FFCRA: Summary
The Department of Labor (“DOL”) has issued regulations codifying the DOL’s prior guidance on the Families First Coronavirus Response Act, summaries of which can be found at our Firm’s Coronavirus Research Center, and providing additional clarifying regulations regarding the FFCRA’s implications for employees and employers.
General Regulatory Provisions
The DOL regulations address several issues that apply to the FFCRA’s paid sick leave and expanded family and medical leave provisions. First, an employer is covered if it has less than 500 employees within the United States, at the time an employee’s leave is to be taken. This requires the employer to maintain a headcount of their employees, because an employer with less than 500 employees in mid-April will be required to provide leave to its employees, but if the employer hires more in May and exceeds 500 employees, then it is no longer covered under the FFCRA. The regulations also note that employees who have been laid off or furloughed do not count towards the 500 total until they are subsequently reemployed.
Small Business Exemption
The small business exemption also applies to protect certain employers with less than 50 employees. Further, the exemption only applies to sick and/or expanded family and medical leave under the FFCRA when a child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons, and does not exempt small businesses from the other qualifying reasons for paid sick leave. The employer must document that an authorized officer of the employer determined that providing the leave would jeopardize the viability of the business as a going concern based on the following factors:
The leave requested would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
The absence of the employee or employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
There are no sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting leave, and these labor or services are needed for the small business to operate at a minimal capacity.
The regulations state that for all three reasons, the employer may deny paid sick leave or expanded family and medical leave only to those otherwise eligible employees whose absence would cause the small employer’s expenses and financial obligations to exceed available business revenue, pose a substantial risk, or prevent the small employer from operating at minimum capacity, respectively. However, as a practical matter, this could leave small businesses open to possible discrimination claims if they provide leave to certain employees and not others, depending on the circumstances.
Small employers who decide to deny paid leave for the reason(s) above must document the facts and circumstances that meet the exemption’s criteria and should retain the records of the officer who made the decision for four years, but not send the documentation to the Department of Labor.
Existing Employer Leave Policies
There is no retroactive coverage for sick or expanded family and medical leave taken before April 1, 2020. If an employer voluntarily provided leave to employees for COVID-19 related reasons before April 1, they must still provide FFCRA leave to eligible employees. However, if an employer had not already amended its leave policy to reflect the voluntary offering, it may stop paying for leave under its voluntary offering and instead provide leave under the FFCRA. This means that an employer must pay employees for leave already taken under the voluntary offering before it is terminated, but the employer is not required to continue the offering in light of the FFCRA taking effect.
The DOL regulations also provide different notice requirements depending on the reason for the leave. If the employee is taking leave to care for a child because of a school or child care facility closure, then the employee must provide as much notice as is practicable under the circumstances. For any other reason for leave, the employer can only require employee notice after the first workday that an employee takes the leave, and the employer must accept notice from an employee’s spokesperson, such as a family member, if the employee is unable to provide notice personally.
The regulations also address recordkeeping rules for employers. Employers must retain records regarding an employee’s FFCRA leave for four years. It is the employer’s responsibility to document oral statements of employees regarding leave and any associated information for the four-year period. In order to receive tax credits from the IRS, the DOL states that the employer must maintain documentation to show how the employer determined the amount of leave paid to employees (including records of work performed, telework, and paid leave credits) and documentation to show how the employer determined the amount of qualified health plan expenses that were allocated to wages, because certain qualified health expenses can be recoverable under the FFCRA tax credit provisions. The employer should also keep IRS specific forms listed in the regulations.
Expanded Family and Medical Leave
The DOL regulations provide further clarification regarding the applicability of the expanded family and medical leave provisions. The regulations state that an employee must be employed by the employer for at least 30 calendar days, and this covers employees who were terminated on or after March 1, 2020, had worked for the employer for at least 30 of the prior 60 calendar days, and were subsequently rehired by the same employer.
As to enforcement under the expanded family and medical leave provisions, an employee generally has the right to sue his or her employer for a violation, but the employee cannot sue an employer who is not already covered by the general FMLA provisions, i.e. the employee cannot sue an employer that has less than 50 employees during each of 20 or more calendar workweeks in the current or preceding calendar year. (However, it appears that such employers may still be subject to enforcement actions by government agencies, such as the Wage & Hour division.)
The regulations also clarify certain definitions and practical concerns that arise regarding expanded family and medical leave. For example, the regulations state that the FFCRA will use the same definition of “son or daughter” as the FMLA, so children over 18 years of age who are incapable of self-care because of a mental or physical disability are also covered, as well as a biological, adopted, or foster child, a stepchild, a legal ward, and a child of a person standing in loco parentis. Additionally, the regulations suggest that both parents cannot take leave to care for their child while the school or child care facility is closed, since only one guardian is necessary.
Continuous Workday Rule’s Inapplicability
The regulations also explain that the continuous workday rule does not apply to the FFCRA. Normally, the continuous workday rule states that all time between the performance of the first and last principal activities of an employee is considered compensable work time. However, the DOL recognized that this would disincentivize employers from allowing flexible telework schedules, which the DOL states is critical to Congress’ intent under the FFCRA. Therefore, the employee and employer can agree to create a flexible telework schedule with large breaks within one workday where no compensable time occurs. For example, the employer and employee can agree that the employee can work from 7:00-9:00 a.m, from 12:30-3:00 p.m., and from 7:00-9:00 p.m. The employee will only be compensated for the time actually working under the FFCRA. It is worth noting that this does not resolve the accountability issues often associated with teleworking, but does help the employer and employee have more control over the teleworking process.
Calculation of Leave Period
The DOL also clarified that the unpaid period of expanded family and medical leave will correspond to the time an employee normally works in two workweeks. Although the law states that the first 10 days of the leave is unpaid, the DOL will equate the “10 day” period to two workweeks, which is particularly important for employees who do not work 8 hours/day for 5 days/week. So if an employee typically works three 12-hour shifts per week, then the “10 day” period will cover the six days the employee normally works during two workweeks, and after those two workweeks, the “paid” family and medical leave provisions apply.
Use of Other Paid Leave
The regulations also clarify when an employee may use other paid leave to supplement the amounts paid under the FFCRA. During the first two weeks of unpaid expanded family and medical leave, an employee may not take both the emergency paid sick leave under the FFCRA plus other paid leave offered under an employer policy to supplement the amount received up to the employee’s normal wages, unless the employer allows the employee to do so. However, during the next 10 weeks of expanded family and medical leave, employees may choose to take, or employers may require employees to use any existing paid leave under the employer’s policies at the same time as the remaining leave under the FFCRA. However, the tax credit provided to the employer is still capped at the $200 per day and $10,000 aggregate limit, regardless of additional paid leave taken concurrently.
Diminished Notice Requirements
The DOL regulations also recognize that the expanded family and medical leave covers employers who are not covered by the standard FMLA provisions and that the pandemic has interrupted normal business operations, and so the DOL diminished the notice requirements for all employers, such that employers are not required to provide specific notice to employees of their eligibility, rights, and responsibilities, as they typically would be required to under the FMLA. However, the DOL notes that employers who have established FMLA practices in place employers may apply them to expanded family and medical leave under the FFCRA.
Paid Sick Leave
Quarantine and Isolation Orders
The regulations state that quarantine or isolation orders include government stay-at-home orders or other orders, such as those directed at categories of citizens of certain age ranges or of certain medical conditions, to stay at home. However, the regulations clarify that employees subject to a stay-at-home order are not eligible for paid sick leave if the employer does not have work for the employees to do because the business has closed, including closures due to a stay-at-home order.
Further, employees who are subject to a quarantine or isolation order but who are able to telework may not take paid sick leave. An employee is able to telework 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. For example, if an employee who normally teleworks experiences a power outage or similar extenuating circumstance that prevents him from teleworking, the employee would be eligible for paid sick leave during the period of the power outage or extenuating circumstance due to the quarantine or isolation order.
Seeking a Medical Diagnosis
The regulations also addressed taking leave to self-quarantine and provide that an employee can only take paid sick leave to self-quarantine if he/she is experiencing symptoms of COVID-19, and the employee is actually seeking a medical diagnosis. Of course, if the employee is diagnosed with COVID-19 and told to self-quarantine by a health care provider, then the employee would fall under the second reason, a recommendation to self-quarantine from a health care provider, and still be able to obtain paid sick leave.
Caring for another Individual
If an employee is taking sick leave to care for an individual for COVID-19 related reasons, the employee must have a personal relationship with the sick individual. The individual must be a family member, roommate, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person if he or she self-quarantined or was quarantined. 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.
Calculating Paid Sick Leave for Full and Part-time Employee
The regulations clarify that employees are “full-time” and receive 80 hours of paid sick leave when (1) they are normally scheduled to work at least 40 hours per workweek or (2) they do not have a normal weekly schedule but the average number of hours they are scheduled to work per workweek (including leave hours they take) is at least 40 hours per workweek over the entire period of employment or the six-month period that ends when the employee takes paid sick leave, whichever period is shorter.
Employees who do not meet the above definition are “part-time” employees. Part-time employees with a normal weekly schedule receive an amount of sick leave equal to the total amount of hours worked in a two-week period. So, if an employee works 15 hours each workweek, they receive up to 30 hours of paid sick leave. For employees without normal weekly schedules, employers must use the total hours worked by the employee during the six-month period before taking leave (or the entire period of employment, whichever period is shorter), divide that number by the number of calendar days in the relevant period, and multiple the number by 14. However, if the employer and employee had agreed at the time of hiring that the employee would work a certain average number of work hours each calendar day, the employer must multiply that daily number by 14 to determine the amount of paid sick leave the employee receives.
80 Hours per Person
The DOL regulations clarify that the maximum of 80 hours of paid sick leave is 80 hours per person, not 80 hours per job. So, an employee who has already received 80 hours of paid sick leave cannot then quit their job and be rehired somewhere else, and then get an additional 80 hours of paid sick leave. Moreover, if the employee has only received a portion of the 80 hours of paid sick leave and then switches jobs, then the subsequent employer will have to provide the residual paid sick leave to the employee.
The DOL regulations provide additional clarification to employers regarding the calculation requirements, factors for determining exemptions, and notice rules of the FFCRA. However, there are still practical concerns with the applicability of the FFCRA, including how to enforce expanded family and medical leave violations against employers with less than 50 employees, and the proper application of the small business exemption. As the DOL continues to apply the FFCRA, prudent employers should reach out to counsel to consider how the FFCRA interacts with other labor and employment laws.