DOL ISSUES GUIDANCE REGARDING THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT
This month, President Trump signed the Families First Coronavirus Response Act (“FFCRA”), HR 6201, which will take effect on April 1, 2020. The Act contains eight divisions that include the “Emergency Paid Sick Leave Act” and the “Emergency Family and Medical Leave Expansion Act.” While both Acts contain provisions that allow eligible employees to receive “paid sick leave” and “paid leave,” these laws are dissimilar from conventional sick pay policies that allow employees to use sick pay for numerous reasons relating to illness and preventive care, such as California’s paid sick leave law in Labor Code Sections 245 – 249. The new Acts in HR 6201 authorize paid leave under very narrow reasons associated with COVID-19 and not for other illnesses.
On March 24, 2020, the U.S. Department of Labor (“DOL”) published guidance explaining paid sick leave and expanded family and medical leave under the FFCRA. This first round of guidance provides information to employees and employers about how each will be able to take advantage of the protections and relief offered by the FFCRA. The guidance ambitiously announces the FFRCA’s goal of combatting and defeating COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation is intended to ensure that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus while at the same time reimbursing businesses. The DOL also issued a new “Employee Rights” poster (WH 1422 REV 03/20) and is expected to issue implementing regulations under the law soon.
The March 24 guidance uses a questions and answers format to describe the new law. It begins by defining “paid sick leave” as paid leave under the Emergency Paid Sick Leave Act and “expanded family and medical leave” as paid leave under the Emergency Family and Medical Leave Expansion Act. The paid leave provisions will become effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.
The FFCRA apples to employers with fewer than 500 full-time and part-time employees in the U.S. This is measured at the time an employee’s leave is to begin. Employees on leave, temporary employees who are jointly employed and day laborers supplied by a temporary agency are counted, but independent contractors under the Fair Labor Standards Act (“FLSA”) (whose standards differ from those applicable under California law) are not.
The DOL made clear that a corporation that is considered a single employer must count each employee towards the 500-employee threshold. Even if an employer has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA. If they are joint employers, all of their common employees must be counted in determining whether paid sick leave and expanded family and medical leave must be provided. The guidance also recognizes the integrated employer test and states that two or more entities are separate employers unless they meet the test under the Family and Medical Leave Act (“FMLA”). If the test is met, the employees of all entities making up the integrated employer are counted in determining employer coverage. The Acts do not apply to private sector employers that have 500 or more employees.
Small Business Exemption:
The Acts contain a small business exemption for businesses with fewer than 50 employees that meet criteria that will be set out in the DOL’s regulations. Such businesses will be required to establish the criteria by establishing that child-care related paid sick leave and expanded family and medical leave would jeopardize the viability of the business as a going concern.
Part-time employees are entitled to leave for the average number of hours worked in a two-week period. You calculate hours of leave based on the number of hours the employee is normally scheduled to work.
Other Areas Of Guidance:
The DOL’s guidance includes 14 questions and answers. Additional questions address (1) calculating paid sick leave, (2) the amount of pay employees will receive when taking paid sick leave or expanded family and medical leave, (3) the employee’s regular rate of pay, (4) limitations on the total number of hours for which employees can receive paid sick leave for any combination of qualifying reasons, such as self-quarantining and another reason, (5) the availability of paid sick leave and expanded family and medical leave for child-care reasons, (6) the effect of providing paid sick leave for a qualifying reason prior to the Acts’ April 1, 2020 effective date, (7) the unavailability of paid leave for leaves covered by the FMLA prior to April 1, 2020, (8) the fact that the Acts are not retroactive, and (9) the 30-day eligibility requirement for expanded family and medical leave.
There are rumors that the DOL has issued an enforcement memo to field staff indicating a practical approach to FFCRA enforcement at the early stages following the Act’s April 1 effective date. If an employer does not intentionally violate the Act and has made reasonable, good faith efforts to comply, the DOL will apparently not sue the employer. This litigation amnesty enforcement policy will continue only until April 17. It is essential, however, that the employer correct any mistakes quickly and commit not to violate the law again.
It is important to note that the DOL’s March 24 guidance tackles a number of issues without providing a comprehensive review of the FFCRA. Additional information can be expected in the DOL’s anticipated regulations and other clarifications.
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