CLIENT ALERT NOTICE
FAMILIES FIRST CORONAVIRUS RESPONSE ACT
At a time when information about COVID-19 is changing daily, this Alert is intended to simplify certain aspects of the Families First Coronavirus Response Act (“FFCRA”), enacted on March 18, 2020, and to incorporate the clarifications offered by the U.S. Department of Labor’s Wage and Hour Division (“WHD”), in its initial round of published guidance issued on March 24, 2020 (“WHD Guidance”). The FFCRA is designed to help Americans battle COVID-19 by allocating funds to be given to businesses with fewer than 500 employees, so that they can provide employees with paid leave, either for their own health needs or to care for their children and/or family members. In short, the FFCRA imposes new job protections for workers, paid leave mandates on employers, and a plan for reimbursement designed to help both non-profit and for-profit employers. The legislation was enacted to attempt to insure that employees are not forced to choose between their paychecks and the public health measures necessary to combat the Coronavirus, while at the same time reimbursing businesses. Please note, this Alert only focuses on the specific provisions of the FFCRA related to the Emergency Paid Sick Leave Act (“EPSLA”), and includes which employees are covered by the Act, the benefits employers must provide, as well as tips for calculating such benefits and the 500-employee threshold. We will endeavor to provide future Alerts as to other provisions of the FFCRA or new employment related regulations, as the information becomes available. This law goes into effect on April 1, 2020 and will remain in place until December 31, 2020.
Emergency Paid Sick Leave Act
In general, the FFCRA provides that all public sector employers, and private sector employers with less than 500 employees, will be required to provide two weeks [up to 80 hours] of paid sick leave at the employee’s “regular rate of pay” where the employee is unable to work because he/she is quarantined [pursuant to Federal, State, or local government order or advice of a health care provider], and/or experiencing COVID-19 symptoms and seeking a medical diagnosis [capped at $511/day and $5,110 in total per employee]; or two weeks [up to 80 hours] of paid sick leave at two-thirds (2/3) the worker’s “regular rate of pay” if the employee is unable to work due to a bona fide need to care for a person subject to quarantine [pursuant to Federal, State, or local government order or advice of a health care provider], or care for a child [under 18 years of age] whose school or childcare provider is closed or unavailable for reasons related to COVID-19 [capped at $200/day and $2,000 in total per employee]. Employees employed for at least 30 days are entitled to the benefits of the FFCRA. The Act only distinguishes between full-time and part-time employees with respect to the amount of pay an employee may be entitled to, but both qualify under the FFCRA. If an employer already provides paid sick leave, it cannot require, as a condition of providing paid sick leave under the EPSLA, that the employee use other paid leave before the employee uses the paid sick time under the EPSLA. The FFCRA has no effect on private employers with over 500 workers.
How to Calculate the 500 Employee Threshold for Coverage
The WHD Guidance reflects that for purposes of coverage, businesses must count all active employees, including employees on leave, temporary employees jointly employed by the employer and another employer [e.g. staffing companies], and day laborers supplied by a temporary agency. Independent contractors, as defined under the Fair Labor Standards Act (“FLSA”), should not be counted toward the total. As per the WHD Guidance, the FFCRA applies if a private employer has fewer than 500 employees at the time an employee seeks to take applicable leave. Simply put, employees whose employers have 500 or more employees on April 1, 2020, but later decrease their workforce so they have fewer than 500 employees, will still be eligible for FFCRA leave if, at the time the employee takes eligible leave, the employer’s workforce is less than 500 employees.
Moreover, a corporation – including its separate establishments or divisions – is typically considered to be a single employer, and its employees must each be counted toward the 500 employee threshold. Employers with related business entities are directed to apply the joint employer test under the FLSA and the integrated employer test under the FMLA to determine how to count employees for purposes of the EPSLA and the Emergency FMLA Expansion Act, respectively. We would be happy to assist you in interpreting these tests; however, generally, they both consider the following factors: a) common management; b) interrelation between
operations; c) centralized control of labor relations; and d) degree of common ownership/financial control.
Calculating an Employee’s Paid Sick Leave
Under both the EPSLA and the Emergency FMLA Expansion Act, paid leave is to be calculated based upon the worker’s “regular rate of pay”. Normally, “regular rate of pay” includes all compensation paid to the employee, and the WHD guidance confirms that commissions, tips, and piece rates must be incorporated into the regular rate calculation. For purposes of calculating paid sick leave, the worker’s “regular rate of pay” is considered the average of their regular rate over a period of up to six (6) months prior to the date the employee takes leave.
If the employee has not worked for the employer for six (6) months, the “regular rate of pay” will be the average of the worker’s regular rate of pay for each week worked for such employer. Alternatively, the employer may calculate the regular rate of pay by adding all compensation over the prior six (6) months [or a lesser period of time worked] and then dividing that total by all hours worked in the same period.
Small Business Exemption for School/Child-Care Closure Related Leave
Under the FFCRA, small businesses with less than 50 employees may qualify for an exemption from providing paid sick leave and/or expanded FMLA leave due to the closure of a child’s school or place of childcare due to a public health emergency, if by doing so, it would jeopardize the viability of the business. In future regulations, the Department of Labor (“DOL”) will further clarify the criteria to meet the small business exemption; however, the guidance states that small employers wishing to elect this exemption should simply document why their business meets the criteria to be set forth by the Department. No further information has been provided yet.
Notices and Communications
Employers are required to advise employees of the rights under the FFCRA and post a notice in a conspicuous place, where notices to employees are customarily posted. A copy of the DOL’s recommenced notice is posted on its website and a copy is attached for convenience. If working remotely, an employer may satisfy this requirement by emailing or mailing the notice to employees, or posting it on an internal or external website.
Violations of the FFCRA
Employers who are found to have violated the FFCRA shall be considered to have failed to pay minimum wages in violation of the FLSA and will be subject to penalties related to such violation. Willful violations will result in greater penalties; however, provided the employer has made reasonable, good faith efforts to comply with the Act, the DOL will not bring enforcement actions against any private employer prior to April 17, 2020. Like most employment regulations, the FFCRA contains anti-retaliation provisions that prohibit employers from retaliating against employees who request to take leave under the Act or because the employee filed a complaint under the Act. Since the circumstances surrounding the pandemic are changing every day, Federal, State and local governments will likely pass additional legislation that could add more requirements and benefits. As a result, employers will need to amend their PTO and FMLA policies this year, to incorporate these new obligations.
The DOL has already stated that additional guidance and regulations pertaining to the FFCRA are forthcoming and we will continue to monitor and provide updates as further guidance and regulations are released. As the country attempts to combat COVID-19, our attorneys are here to answer your questions and/or research any issues that may arise during the crisis. Mitchell Pollack & Associates, PLLC is also available to assist you, should you wish to update/revise your employee handbooks, bylaws, or rules and regulations to incorporate new provisions such as: a) what to do during a pandemic/health crisis; b) rules for working remotely and accessing confidential server data from home; and/or c) what is required to request leave under the FFCRA, FMLA, or any other Federal, State and/or local law. Please do not hesitate to contact us for assistance with your employment related needs.
PAID SICK LEAVE AND EXPANDED FAMILY AND MEDICAL LEAVE UNDER THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT
The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. These provisions will apply from April 1, 2020 through December 31, 2020.
PAID LEAVE ENTITLEMENTS
Generally, employers covered under the Act must provide employees:
Up to two weeks (80 hours, or a part-time employee’s two-week equivalent) of paid sick leave based on the higher of their regular rate of pay, or the applicable state or Federal minimum wage, paid at:
- 100% for qualifying reasons #1-3 below, up to $511 daily and $5,110 total;
- 2/3 for qualifying reasons #4 and 6 below, up to $200 daily and $2,000 total; and
- Up to 12 weeks of paid sick leave and expanded family and medical leave paid at 2/3 for qualifying reason #5 below for up to $200 daily and $12,000 total.
A part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work
over that period.
In general, employees of private sector employers with fewer than 500 employees, and certain public sector employers, are eligible for up to two weeks of fully or partially paid sick leave for COVID-19 related reasons (see below).
Employees who have been employed for at least 30 days prior to their leave request may be eligible for up to an additional 10 weeks of partially paid expanded family and medical leave for reason #5 below.
QUALIFYING REASONS FOR LEAVE RELATED TO COVID-19
An employee is entitled to take leave related to COVID-19 if the employee is unable to work, including unable to telework, because the employee
- Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- has been advised by a health care provider to self-quarantine related to COVID-19;
- is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
- is caring for his or her child whose school or place of care is closed (or child care provider is unavailable) due to COVID-19 related reasons; or
- is experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services.
The U.S. Department of Labor’s Wage and Hour Division (WHD) has the authority to investigate and enforce compliance with the FFCRA. Employers may not discharge, discipline, or otherwise discriminate against any employee who lawfully takes paid sick leave or expanded family and medical leave under the FFCRA, files a complaint, or institutes a proceeding under or related to this Act. Employers in violation of the provisions of the FFCRA will be subject to penalties and enforcement by WHD.