On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”), a law which affects most employers with fewer than 500 employees. The new law has two statutes of immediate importance to employers: (i) the Emergency Paid Sick Leave Act (“EPSLA”), which requires employers to provide 80 hours of paid time off to employees for COVID-19-related reasons, and (ii) the Emergency Family and Medical Leave Expansion Act (“EFMLEA”), which provides employees with 12 weeks of job-protected leave for leave to care for children whose schools or places of care have closed, or whose childcare provider is unavailable, due to COVID-19-related public health emergencies. The information available about this new law is limited, but new information is coming out almost daily. The U.S. Department of Labor (“DOL”) has released several rounds of informational FAQs for employers and employees in preparation of the law taking effect, and more guidance materials (in addition to formal regulations) are expected to be released in the near future. This article outlines what employers should know about the new law based on the text of the law itself and the Department of Labor guidance issued to date.
Please note that the DOL will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with FFCRA. Under this policy, the DOL will not bring an enforcement action against an employer for violations of FFCRA so long as the employer has acted reasonably and in good faith to comply. This grace period, however, does not shield employers from liability in connection with an employee’s private cause of action.
Emergency Paid Sick Leave Act (EPSLA)
1. When does the EPSLA become effective?
The EPSLA becomes effective on April 1, 2020, and expires on December 31, 2020.
2. Which employers does the EPSLA apply to?
The EPSLA requires that paid sick time be provided by employers with fewer than 500 employees. Absent an exception (see below), even an employer with only one or two employees must provide paid sick leave.
Coverage is determined on a request-by-request basis. When a request is made for paid sick leave, an employer is covered if it has fewer than 500 employees on the first date the employee’s leave it to be taken. To determine the number of employees, full-time, part-time, regular, temporary, and seasonal employees are counted. Only employees employed within the United States (which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States) are counted. Also, employees on leave, employees who are jointly employed by the employer and another employer, and day workers supplied by a temporary agency, count as well. This means that if an employer’s employee count fluctuates between having fewer than or more than 500 employees, some employees may be entitled to leave while others may not be based on the start date of their leave. This possibility should be addressed in any EPSLA policy adopted by such an employer to avoid estoppel arguments from employees whose leave requests are denied due to an increase in employee count.
If a business has multiple related entities, multiple entities may jointly employ employees. In that case, the jointly employed employees count for both employers. Also, multiple related entities may be considered an “integrated employer,” in which case all of their employees are aggregated for determining coverage.
Under the FFCRA, the DOL is authorized to issue regulations to provide a limited exception to businesses with fewer employees. Recent guidance from the DOL states that this exception will exempt employers with fewer than 50 employees from providing paid sick leave only when the need for leave is due to school or place of care closures or child care provider unavailability for COVID-19 related reasons, if doing so would jeopardize the viability of the business as a going concern. This exception is only available if a request for this kind of leave is made and an authorized officer of the business has determined that:
(1) the provision of paid sick leave 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;
(2) the absence of the employee or employees requesting paid sick leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
(3) there are not 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 paid sick leave, and these labor or services are needed for the small business to operate at minimal capacity.
This exception does not apply to paid sick leave available under EPSLA for reasons other than school closures or unavailability of childcare (see #4 below).
The EPSLA also counts as a covered employer “anyone acting directly or indirectly in the interests of the employer.” It is unclear at this time whether this includes managers or officers which make decisions regarding the use of paid sick time.
3. Which employees are eligible for paid sick leave under the EPSLA?
The EPSLA entitles all employees of covered employers (see #1 above) to paid sick time. An employee does not have to be employed by an employer for any particular amount of time before he or she is eligible for paid sick leave.
4. What can paid sick time be used for?
Under the EPSLA, employers must provide paid sick time to an employee who is unable to work (or telework) because:
(1) the employee is subject to a quarantine or isolation order related to COVID-19, issued by federal, state, or local government;
(2) the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
(3) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
(4) the employee is caring for an individual who:
a. is subject to a quarantine or isolation order related to COVID-19, issued by federal, state, or local government, or
b. has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
(5) the employee is caring for a child whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 precautions; or
(6) the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor.
The DOL has issued guidance suggesting that an employee is not “subject to a quarantine or isolation order related to COVID-19” simply because the federal, state, or local government has issued a general “stay home” or “shelter in place” directive.
5. How much paid sick time is an employee entitled to?
Full-time employees are entitled to 80 hours of paid sick time. Part-time employees are entitled to the number of hours the employee works, on average, over a two-week period.
If a part-time employee’s schedule varies, the employer may use a six-month average to calculate the employee’s average daily hours. Such part-time employee may take paid sick leave for this number of hours per day for up to a two-week period. If this calculation cannot be made because the employee has not been employed for at least six months, the employer should use the number of hours that the employer and employee agreed the employee would work upon hiring. If no such number exists, the employer may calculate the employee’s leave entitlement based on the average hours per day the employee was scheduled to work over the entire duration of his or her employment.
6. Can an employee take paid sick leave under EPSLA intermittently?
If an employee is teleworking and the employer and employee agree, the employee may take paid sick leave intermittently.
If an employee is working at the employee’s usual worksite, the employee must take paid sick leave in full-day increments if the leave it being taken for reasons (1), (2), (3), (4), (6) above. However, if the employer and employee agree, an employee who is taking paid sick leave for reason (5) above (to care of a child whose school or place of care is closed, or whose childcare provider is unavailable) may take paid sick leave intermittently.
7. How much does an employee get paid while using paid sick time?
If paid sick time is being used for reasons (1), (2), or (3) above (generally, an employee’s own illness or quarantine), then the paid sick time is paid at the employee’s regular rate of pay, not to exceed $511 per day and $5,110 in the aggregate.
If paid sick time is being used for reasons (4), (5), or (6) above (generally, caring for others and because of school closures and childcare-provider unavailability), then paid sick time is paid at 2/3 the employee’s regular rate of pay, not to exceed $200 per day and $2,000 in the aggregate.
An employee’s regular rate of pay is the employee’s average rate of pay over a period of up to six months prior to the date on which the employee’s leave begins. If an employee is paid with commissions, tips, or piece rates, these amounts should be incorporated into the calculation above to the same extent they are included in the calculation of regular rate of pay under the Fair Labor Standards Act.
8. When can paid sick time be used by an employee?
Paid sick time is available for immediate use by employees. An employee is not required to be employed by the employer for any set number of days before using the paid sick time.
9. How does paid sick time relate to other paid leaves offered by an employer, like vacation time, sick time, or paid time off?
An employee is entitled to use paid sick time before using any other paid leaves. An employer cannot require an employee to use other paid leaves before using paid sick time under the new law.
Any paid leave provided by an employer before the EPLSA was enacted cannot be credited against the employee’s paid sick time entitlement.
An employee may choose to use existing paid vacation, personal, medical or sick leave offered by the employer to supplement the amount the employee receives from paid sick leave, up to the employee’s normal earnings, but only if the employer agrees to such use. Likewise, an employer cannot require an employee to use existing leave provided by the employer.
10. Are furloughed workers entitled to paid sick leave under the EPSLA?
No. If an employer furloughs an employee because it does not have enough work for business for the employee, the employee is not entitled to take paid sick leave under the EPSLA.
11. If an employer closes an employee’s worksite, is the employee entitled to paid sick leave under the EPSLA?
No. If an employer closes an employee’s worksite, the employee is not entitled to paid sick leave under the EPSLA, even if the employee requested leave prior to closure. This is true whether the worksite is closed due to lack of business or pursuant to a federal, state or local directive. If an employee is actively on paid sick leave at the time of closure, the employer must pay the employee for any sick leave used before the employer closed, but the employee is not entitled to paid sick leave from the date of closure forward.
12. Can an employee use paid sick leave under the EPSLA to supplement a reduced-hours schedule?
No. If an employer reduces and employee’s work hours because it does not have work for the employee to perform, the employee may not use paid sick leave under the EPSLA to make up the difference.
13. Do employees have reinstatement rights after taking paid sick leave under EPSLA?
Yes, the DOL is reading the EPSLA and FMLA consistently, thus requiring employers to reinstate an employee after taking paid sick leave. However, employers with fewer than 25 employees do not have to reinstate an employee if:
1. The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer—
a. that affect employment; and
b. are caused by a public health emergency during the period of leave.
2. The employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment.
3. If the employer’s reasonable efforts fail, the employer makes reasonable efforts during “contact period” to contact the employee if an equivalent position becomes available. The “contact period” is the 1-year period beginning on the earlier of the date on which the qualifying need related to the public health emergency concludes, or the date that is 12 weeks after the date on which the employee’s paid sick leave begins.
14. Can an employer retaliate against an employee who uses paid sick leave under the new law?
No. An employer cannot discharge, discipline, or in any other manner discriminate against any employee who uses paid sick time, has filed a complaint, instituted or caused to be instituted a proceeding under the new law, or has testified (or is about to testify) in a proceeding.
15. Can an employer get tax credits for paying paid sick time under the EPSLA?
Yes. Employers can be eligible for a refundable tax credit for employers equal to the paid sick leave wages required to be paid under the EPSLA.
16. What documents does an employee need to provide to an employer in order to get paid sick leave under the EPSLA?
According to the DOL, employees must provide employers with documentation in support of paid sick leave as specified in applicable IRS forms, instructions, and information. to support future tax credits claimed. An employer is not required to provide leave to an employee if materials sufficient to support a tax credit have not been provided.
As of the date of this article, the IRS has stated that an employer should receive the following information from an employee to substantiate eligibility for tax credits related to leave under EPSLA and EFMLA:
- For all leave requests, the employer should require that the employee’s leave request be made in writing, in which the employee provides:
- the employee’s name;
- the date or dates for which leave is requested;
- a statement of the COVID-19 related reason the employee is requesting leave and written support for that reason; and
- a statement that the employee is unable to work, including by means of telework, for that reason.
- If leave is requested for reason (1) or (2) above, the employee’s statement should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine.
- If leave is requested for reason (4), the employee’s statement should include the name of the individual being cared for and his or her relation to the employee, and the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine.
- If leave is requested for reason (5), the employee’s statement should include:
- the name and age of the child (or children) to be cared for;
- the name of the school that has closed or place of care that is unavailable; and
- a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave; and
- with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
In addition, the DOL has stated that if leave is requested for reason (5), an employee may be required to provide documentation supporting the reason for leave, such as notices that have been posted on a school or daycare website, or an email from an employee or official of the school, place of care, or childcare provider.
Emergency Family and Medical Leave Expansion Act (EFMLEA)
17. When does the EFMLEA become effective?
The EFMLEA becomes effective on April 1, 2020, and expires on December 31, 2020.
18. Which employers does the EFMLEA apply to?
The EFMLEA imposes new FMLA obligations on all employers with fewer than 500 employees. Absent an exception (see below), even an employer with only one or two employees must provide this expanded FMLA leave.
Coverage is determined on a request-by-request basis. When a request is made for leave under EFMLEA, an employer is covered if it has fewer than 500 employees on the first date the employee’s leave it to be taken. To determine the number of employees, full-time, part-time, regular, temporary, and seasonal employees are counted. Only employees employed within the United States (which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States) are counted. Also, employees on leave, employees who are jointly employed by the employer and another employer, and day workers supplied by a temporary agency, count as well. This means that if an employer’s employee count fluctuates between having fewer than or more than 500 employees, some employees may be entitled to leave while others may not be based on the start date of their leave. This possibility should be addressed in any EFMLEA policy adopted by such an employer to avoid estoppel arguments from employees whose leave requests are denied due to an increase in employee count.
In general, each entity is considered a single employer. However, if a business has multiple related entities, multiple entities may jointly employ employees. In that case, the jointly employed employees count for both employers. Also, if two entities meet the integrated employer test under FMLA, they will be treated as a single employer. In that case, employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of EFMLEA.
Under the EFMLEA, the DOL is authorized to issue regulations to provide a limited exception to businesses with fewer employees. The DOL has stated that an employer with fewer than 50 employees is exempt from providing paid leave under the EFMLEA if doing so would jeopardize the viability of the business as a going concern. This exception is only available if a request for EFMLEA is made and an authorized officer of the business has determined that:
(1) the provision of paid leave under the EFMLEA 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;
(2) the absence of the employee or employees requesting paid leave under the EMFLEA would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
(3) there are not 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 paid leave under the EFMLEA, and these labor or services are needed for the small business to operate at minimal capacity.
19. Which employees are eligible for leave under the EFMLEA?
The EFMLEA provides new leave rights to all employees who are employed by a covered employer for at least 30 days. An employee has been employed by an employer for at least 30 days if the employer has had the employee on its payroll for the 30 calendar days immediately prior to the date the employee’s leave would begin. If an employee has been working for an employer as a temporary employee, and is subsequently hired on a full-time basis, any days the employee worked as a temporary employee would count toward the 30-day eligibility period.
20. What can leave under the EFMLEA be used for?
Under the EFMLEA, an employee can take FMLA leave because the employee is unable to work (or telework) due to a need to a child whose school or place of care has been closed, or whose childcare provider is unavailable, due to a public health emergency in connection with COVID-19.
21. How much leave is an employee entitled to under the EFMLEA?
As with other qualifying reasons for leave under the FMLA, an eligible employee is entitled to up to 12 weeks of job-protected leave for the reasons described in #20 above. If an employee’s schedule varies, the employer may use a six-month average to calculate the employee’s average daily hours. Such employee may take leave under the EFMLEA for this number of hours per day for up to a twelve-week period. If this calculation cannot be made because the employee has not been employed for at least six months, the employer should use the number of hours that the employer and employee agreed the employee would work upon hiring. If no such number exists, the employer may calculate the employee’s leave entitlement based on the average hours per day the employee was scheduled to work over the entire duration of his or her employment.
22. Can an employee take intermittent leave under the EFMLEA?
Yes, an employee may take EFMLEA intermittently so long as the employer agrees.
23. How much does an employee get paid while taking leave under the EFMLEA?
The first 10 days (two weeks) of leave taken under the EFMLEA is unpaid.
After the initial 10 days (two weeks), the subsequent 10 weeks of leave are paid at a rate of at least 2/3 of the employee’s regular rate of pay, for the number of hours the employee would otherwise be scheduled to work, not to exceed $200 per day and $10,000 in the aggregate.
An employee’s regular rate of pay is the employee’s average rate of pay over a period of up to six months prior to the date on which the employee’s leave begins. If an employee is paid with commissions, tips, or piece rates, these amounts should be incorporated into the calculation above to the same extent they are included in the calculation of regular rate of pay under the Fair Labor Standards Act.
24. When can leave under the EFMLEA be used by an employee?
The leave under the EFMLEA can be used by an employee after the employee is employed for more than 30 days.
25. How does the new FMLA leave relate to other paid leaves offered by an employer, like vacation time, sick time, or paid time off?
An employee can elect to use paid leave (such as paid sick time under the EPSLA) concurrently with the first 10 days (two weeks) of leave under the EFMLEA. An employer cannot require an employee to use such other paid leaves concurrently.
An employee may choose to use existing paid vacation, personal, medical or sick leave offered by the employer to supplement the amount the employee receives from paid leave under the EFMLEA, up to the employee’s normal earnings, but only if the employer agrees to such use. Likewise, the employer cannot require employees to use existing leave provided by the employer.
26. Can the amount of leave available to an employee under the EFMLEA be reduced by the employee’s use to standard FMLA leave?
Yes. An employee’s eligibility for leave under the EFMLEA depends on how much leave the employee has already taken in the 12-month period that the employer uses for FMLA leave. The employee may take a total of 12 workweeks between EFMLEA and FMLA during a 12-month period. If the employee has taken some, but not all, 12 workweeks of available FMLA leave during the relevant 12-month period, the employee may take the remaining available leave. If the employee has already taken 12 workweeks of FMLA during the relevant 12-month period, the employee may not take any additional leave under EFMLEA. Please note, however, any such employee would still be entitled to leave available under the EPSLA.
27. Are furloughed workers entitled to leave under the EFMLEA?
No. If an employer furloughs an employee because it does not have enough work for business for the employee, the employee is not entitled to leave under the EFMLEA.
28. If an employer closes an employee’s worksite, is the employee entitled to leave under the EFMLEA?
No. If an employer closes an employee’s worksite, the employee is not entitled to leave under the EFMLEA, even if the employee requested leave prior to closure. This is true whether the worksite is closed due to lack of business or pursuant to a federal, state or local directive. If an employee actively on EFMLEA leave at the time of closure, the employer must pay the employee for any paid leave used before the employer closed, but the employee is not entitled to any EFMLEA leave from the date of closure forward.
29. Can an employee use paid leave under the EFMLEA to supplement a reduced-hours schedule?
No. If an employer reduces and employee’s work hours because it does not have work for the employee to perform, the employee may not use paid sick leave under the EPSLA to make up the difference.
30. Do employees have reinstatement rights after taking EFMLEA leave?
Yes, employers are generally required to reinstate an employee after taking the new FMLA leave, just as they would if the employee had taken traditional FMLA leave. However, employers with fewer than 25 employees do not have to reinstate an employee that takes new FMLA leave if:
1. The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer
a. that affect employment; and
b. are caused by a public health emergency during the period of leave.
2. The employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment.
3. If the employer’s reasonable efforts fail, the employer makes reasonable efforts during “contact period” to contact the employee if an equivalent position becomes available. The “contact period” is the 1-year period beginning on the earlier of the date on which the qualifying need related to the public health emergency concludes, or the date that is 12 weeks after the date on which the employee’s FMLA leave begins.
31. Can an employer retaliate against an employee who uses the new FMLA leave under the new law?
No. Just as with other FMLA leaves, an employer cannot retaliate against any employee who takes FMLA leave under the new law.
32. Can an employer get tax credits for paying paid sick time under the EFMLEA?
Yes. Employers can be eligible for a refundable tax credit for employers equal to the leave wages required to be paid under the EFMLEA. The amount of leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters. If the credit exceeds the employer’s total liability for the employer portion of Social Security taxes for all employees for any calendar quarter, the employer can get a refund in the amount of the excess credit.
33. What documents does an employee need to provide to an employer in order to get paid sick leave under the EFMLEA?
According to the DOL, employees must provide employers with documentation in support of paid sick leave as specified in applicable IRS forms, instructions, and information. to support future tax credits claimed. An employer is not required to provide leave to an employee if materials sufficient to support a tax credit have not been provided.
As of the date of this article, the IRS has stated that an employer should receive the following information from an employee to substantiate eligibility for tax credits related to leave under EPSLA and EFMLEA:
- For all leave requests, the employer should require that the employee’s leave request be made in writing, in which the employee provides:
- the employee’s name;
- the date or dates for which leave is requested;
- a statement of the COVID-19 related reason the employee is requesting leave and written support for that reason; and
- a statement that the employee is unable to work, including by means of telework, for that reason.
- For leave requests under FMLEA, the employee’s statement should include:
- the name and age of the child (or children) to be cared for;
- the name of the school that has closed or place of care that is unavailable; and
- a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave; and
- with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
In addition, the DOL has stated that an employee may be required to provide documentation supporting the reason for leave, such as notices that have been posted on a school or daycare website, or an email from an employee or official of the school, place of care, or childcare provider.
Employers have very little time to learn the ins and outs of the Families First Coronavirus Response Act, as the law becomes effective on April 1, 2020. The employment attorneys at RMWBH are ready to assist your company make the transition, and to tackle difficult issues to comply with the new law. If you would like assistance on this issue please feel free to contact Justin Markel or Clayton Hearn at RMWBH.