COVID-19: U.S. Department of Labor Issues Initial Guidance Regarding the Families First Coronavirus Response Act (FFCRA)

As noted in McNeelyLaw’s March 19, 2020 post, the federal FFCRA will provide partial income replacement benefits to employees working for private employers with fewer than 500 employees and public employers with more than one employee, if, among other reasons, employees are unable to work due to isolation or quarantine orders or advisories. The U.S. Department of Labor (DOL) has now published materials to aid employers in ensuring compliance with this new law, including fact sheets, questions and answers, and the required workplace poster.

Effective Date of the Act

The DOL guidance provides that the FFCRA goes into effect on April 1, 2020. The FFCRA itself states that it becomes effective “not later than 15 days after the date of enactment,” which is April 2. It appears that the DOL has opted to enact the law one day prior to the end of the 15-day period. Therefore, covered employers must comply with the FFCRA from April 1, 2020, until the law expires on Dec. 31, 2020. Even if an employee has already been provided paid leave due to COVID-19, they are still eligible to take paid leave under FFCRA after the effective date. The guidance clarified that the emergency paid sick leave and expanded family and medical leave benefits are not retroactive.

Calculating Total Number of Employees for Coverage Determination

The FFCRA applies to employers with 500 employees or less. The DOL clarified that in calculating the total number of employees, all full-time or part-time employees working within the United States (which includes all U.S. territories or possessions) are counted, including all employees on leave and temporary employees who are jointly employed with another company as determined under the FLSA. The DOL confirmed that the joint-employer test from the FLSA and the integrated-employer test under the FMLA will be used to determine if multiple entities constitute a single employer for purposes of determining whether the employer has 500 employees or less.

Small Business Exemptions

The DOL guidance states that businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or childcare unavailability if the leave requirements would jeopardize the viability of the business as a going concern. The DOL states that it will issue exemption criteria in forthcoming regulations, and employers wishing to seek the exemption should document why their business meets such criteria, but not send any such documentation to the DOL. It is also anticipated that the DOL will also issue small business exemption criteria pertaining to paid leave provided for other qualifying reasons under the Emergency Paid Sick Leave Act.

Employee Notice

The DOL’s Employee Rights notice defines eligible employees and details an employee’s paid leave entitlements under the FFCRA, including qualifying reasons for leave. The notice also includes a statement regarding DOL enforcement of the FFCRA. All covered employers, including small employers who may ultimately qualify for an exemption from the FFCRA, are required to provide a copy of the notice to their employees. Of particular note given the number of employees now teleworking, the DOL explains that in addition to posting the notice in a conspicuous place on the employer’s premises, an employer “may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.” The notice need be provided only to current employees and applicants for employment.

Additional Clarifications

The DOL guidance clarifies a number of additional points relating to benefit determinations and implementation of the law, including the following:

• Employees are eligible for up to two weeks, or 10 days, of paid leave under the Emergency Paid Sick Leave Act, subject to an 80-hour cap for full-time employees. The DOL guidance clarifies that paid sick leave can be taken for any combination of qualifying reasons, but that no employee is entitled to receive more than 80 hours of leave.
• The FFCRA provides that for part-time employees, an employer must calculate the average number of hours an employee works in a two-week period to determine the amount of emergency paid leave that the part-time employee is entitled to receive. The DOL guidance further clarifies that when the employee’s hours vary, the employer can use a two-week average for the past six months. If the employee has not been employed for the previous six months, the employer can look to the number of hours that the employer and employee agreed that the employee would work upon hiring. If there is no agreement, the employer should use the average number of hours per day the employee was scheduled to work during the term of employment.
• The calculation of paid leave benefits under the FFCRA is based on the employee’s regular rate of pay subject to the caps specified in the law. The DOL guidance clarifies that the regular rate of pay is calculated based on the average of an employee’s regular rate of pay as defined under the FLSA, for a period of up to six months prior to the date the employee takes leave.
• The DOL guidance provides that overtime worked by an employee must be included for calculating the number of hours paid to an employee in a single workweek under the Emergency Paid Sick Leave Act, subject to the 80-hour cap. However, an employee’s overtime premium is not used to calculate the employee’s regular rate of pay for purposes of calculating the amount of the paid leave benefit.

Conclusion and Next Steps

A number of questions about the FFCRA remain unanswered by the guidance. The DOL also states it will issue further guidance, including additional fact sheets and question-and-answer documents, on a “rolling basis.” In addition, the DOL continues to solicit public comments as it prepares its regulations for the FFCRA, which it anticipates publishing in April 2020, potentially after the FFCRA takes effect.

We will continue to update you about this and other major federal and state measures addressing the ever-developing COVID-19 pandemic. For additional information on this or any related topic, please contact McNeelyLaw’s attorneys by visiting www.mcneelylaw.com or calling our office at 317-825-5110.

This McNeelyLawLLP publication should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.