On March 24, 2020, the Department of Labor (DOL) posted a Frequently Asked Questions (FAQ) page for the new Families First Coronavirus Response Act (FFCRA), which contains both the Emergency Paid Sick Leave Act and the Emergency Family Medical Leave Act (FMLA) Expansion Act. The FAQ introduced a new detail that we were all waiting on: the actual effective date for the Families First Act.
As you may recall, the Families First Act simply stated that the law would take effect “not later than 15 days after the date of enactment,” which doesn't really address the more pertinent question of precisely when the law’s application would begin. Exercising its regulatory authority, the DOL has now announced that it has selected April 1, 2020, as the effective date of the law. Question 1 of the post provides that “The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.” This is very important as it is 2 days earlier than employers had planned.
That’s not all the guidance imparted by the newly released FAQ. Many employers have queried the Lanier Force COVID-19 Task Force about how they are to know if they are under 500 employees (rendering the Families First Act applicable to them), or under 50 employees (rendering them potentially eligible for certain exceptions to the paid leave requirement). In the new FAQ, the DOL has issued some preliminary answers.
First, the DOL has provided that “[y]ou have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States.” Further, DOL addressed the possibility of a joint-employment situation, essentially informing employers that they should count jointly employed individuals when determining the total size of their workforce. As DOL phrased it, “In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship).” Of course, bona fide independent contractors don’t count.
Keep in mind that having 500 or fewer employers only renders you subject to the law, rather than exempting you. To know if you might be exempt, it matters whether you have fewer than 50 employees. Unfortunately, the DOL still did not give any direct guidance on how it plans to count to 50. If we use the above example as a clue, it seems DOL might look to the number of employees at the time of leave, suggesting that employees have a potential incentive to layoff workers before the April 1 effective date if they wish to avoid coverage. That, however, is no guarantee because when we consult other laws, such as the FMLA itself, the test is often quite different.
Under the FMLA, for example, an employer does not have 50 or more employees unless it maintains that many on its payroll for 20 or more calendar weeks in the current or preceding calendar year. Employer size for purposes of Title VII of the Civil Rights Act, Americans with Disabilities Act, and other laws are likewise determined by measuring numbers of employees over time, rather than in a single moment. Lawyers following the Families First Act remain hobbled in giving advice until we better understand what the DOL will articulate as a test for small business exceptions under this particular law.
The DOL did offer some measure of guidance on the small business exception, though. The FAQ provides that to claim a potential exemption to the paid sick leave and paid FMLA leave requirements, a small business “should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.” This is not much more than we already anticipated, though the DOL adds that it will have somewhat of a passive role in making this determination, noting that “you should not send any materials to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family and medical leave.”
The DOL also provided guidance on questions of regular overtime and its impact on when the paid leave payments are to be made. DOL notes that the Emergency FMLA Expansion Act requires you to pay an employee for hours the employee would have been normally scheduled to work even if that is more than 40 hours in a week. Of course, this does not mean you must pay your employees an overtime premium; simply that you should calculate their regular hours by including anticipated overtime within a workweek. This could increase the compensation for nonexempt employees who regularly work overtime within a week. In my view, it should not impact exempt employees. In all events, this rule is subject to an exception in that the Emergency FMLA Expansion Act caps the daily amount payable to employees at two-thirds of regular wages and $200 per day.
The DOL’s guidance on overtime hours was different under the Emergency Paid Sick Leave Act. That law, which only requires up to 80 hours of paid sick leave over a 2-week period, does not account for any anticipated overtime hours. Accordingly, DOL states that “an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week,” but regardless, “the total number of hours paid under the Emergency Paid Sick Leave Act is capped at 80.” Again, the Emergency Paid Sick Leave Act imposes caps on daily and aggregate payments in addition to the hours cap, which vary depending on the circumstances. You can refer to our comprehensive post on the Families First Act for further discussion of those differences. For both the Emergency Paid Sick Leave Act and the Emergency FMLA Expansion Act, the DOL has made clear that employees who are paid with commissions, tips, or piece rates are entitled to have these forms of compensation incorporated into the above calculations.
As help to employers, DOL answered another question as to whether employees may double-dip under the Emergency Paid Sick Leave Act—taking 80 hours of leave to care for a child, and then taking another 80 hours for their own medical diagnosis or symptoms. The answer is simple: No. DOL states: “You may take up to 2 weeks-or 10 days (80 hours for a full-time employee, or for a part-time employee, the number of hours equal to the average number of hours that the employee works over a typical 2-week period) of paid sick leave for any combination of qualifying reasons. However, the total number of hours for which you receive paid sick leave is capped at 80 hours under the Emergency Paid Sick Leave Act.”
Finally, the DOL guidance serves as an important reminder for employers that they get no credit for any time off given to employees at any time before the law goes into effect. The DOL answers “no” to the question, “Can my employer deny me paid sick leave if my employer gave me paid leave for a reason identified in the Emergency Paid Sick Leave Act prior to the Act going into effect?” As I have been advising employers, no credit is given for leave taken or provided prior to the effective date of the legislation.
Items on this web page are general in nature. They cannot—and should not—replace consultation with a competent legal professional. Nothing on this web page should be considered rendering legal advice.