On April 1, 2020, the Families First Coronavirus Response Act (FFCRA) went into effect, and later the same day, the U.S. Department of Labor (DOL) issued the regulations that employers had been waiting for (published in the Federal Register on April 6, 2020). These are Vogel Law Firm’s Employment and Labor Practice Group’s “Top 10 Take-Aways” for employers:
1. “Telework” takes center stage under the new regulations.
“Telework” is a key term and concept that reappears throughout the regulations. Any telework performed for COVID-19 related reasons must always be recorded and compensated (including overtime) in compliance with the Fair Labor Standards Act (FLSA). An employer is not required to compensate for unreported telework hours, unless the employer knew or should have known about such telework. The regulations relieve employers from following the “continuous work day” guidance from the DOL regarding telework in other (non-COVID-19-related) situations. Rather, the regulations encourage employers and employees to work together on highly flexible telework arrangements that allow employees to perform work at unconventional times and while tending to family and other responsibilities (including teaching children whose schools are closed). Employers who allow such flexibility during the COVID-19 pandemic are not required to count as hours worked all time between the first and last principal activity performed by an employee teleworking for COVID-19 related reasons. Unique work schedules can be performed (e.g., 7-9 am, 12-3 pm, 7-9 pm), and the employer must only compensate for all hours actually worked.
The regulations also indicate that if an employee experiences one of the first three qualifying events under FFCRA’s Emergency Paid Sick Leave Act (i.e., a Federal, State, or location quarantine/isolation order; health care provider-advised self-quarantine; COVID-19 symptoms/seeking medical diagnosis), he or she may not eligible for emergency paid sick leave if telework is an option, meaning: (a) the employer has work for the employee to perform; (b) the employer permits the employee to perform work from location where he/she is quarantining, isolating, or waiting; and (c) no extenuating circumstances, such as serious COVID-19 symptoms, prevent the employee from performing work. Telework seems to be encouraged throughout the regulations for the remaining qualifying events as well (i.e., caring for an individual subject to COVID-19 order, self-quarantine, or seeking symptoms/diagnosis; school/child care closure or unavailability; experiencing substantially similar condition) even if in conjunction with an intermittent leave arrangement. Overall, the regulations “intentionally afford teleworking employees and employers broad flexibility under the FFCRA to agree on arrangements that balance the needs of each teleworking employee with the needs of the employer’s business.”
2. “Shelter in place” or “stay put” orders may qualify an employee for paid sick leave, but only when the employee is unable to work because he or she is subject to the order.
The regulations specify that quarantine or isolation orders include a broad range of governmental orders, including orders that advise some or all citizens to “shelter in place, stay at home, quarantine, or otherwise restrict their own mobility.” However, an employee is only entitled to emergency paid sick leave if one of those orders prevents the employee from working or teleworking. This means that an employee subject to an order may receive emergency paid sick leave only if (1) the employer has work for the employee, despite the order; and (2) the employee would be able to perform the work, but for being required to comply with the order.
Example 1: Coffee shop closes due to downturn in business related to COVID -19. Employee subject to a stay-at-home or quarantine order is not eligible for emergency paid sick leave because the inability to work is due to the closure of shop (not due to the order).
Example 2: Coffee shop closes due to customers being subject to a shelter-in-place order. Employees are not eligible for leave because their inability to work is due to the customers being subject to the order.
Example 3: Coffee shop closes due to an order. Employees are not eligible for leave because their inability to work is due to the coffee shop being subject to the order.
Example 4: Coffee shop is open and work is available at the shop or at home via telework. Employees subject to order are not eligible for leave because they can telework at home.
Example 5: Coffee shop is open and work is available at shop (but not at home via telework). Employees subject to order ARE eligible for emergency paid sick leave because but for the order, the employees would be able to perform the work.
3. The regulations preserve the “key employee” exception and explain the small employer exceptions to job restoration.
While exercising rights or receiving benefits under the FFCRA may provide an employee job protection and restoration, the regulations confirm the same restoration exceptions under traditional FMLA apply. An employee is not protected from lay-offs or other employment actions that an employer can demonstrate would have occurred regardless of whether the employee took leave. For leave taken under the EFMLEA, an employer may deny job restoration to “key employees” (as defined under existing FMLA regulations) if (1) employees receive prior notification that they held “key employee” positions and may be denied restoration; and (2) such denial is necessary to prevent substantial and grievous economic injury to the operations of the employer.
An additional restoration exception exists for employers with fewer than twenty-five (25) eligible employees. Restoration may be denied if all four (4) following conditions are met:
• The eligible employee took leave to care for his or her son or daughter whose school or place of care was closed, or whose child care provider was unavailable, for COVID-19 related reasons;
• 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 that affect employment and are caused by a public health emergency during the period of leave;
• The employer makes reasonable efforts to restore the employee to a position equivalent to the position he/she held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment; and
• Where the reasonable efforts of the employer to restore the employee to an equivalent position fail, the employer makes reasonable efforts to contact the employee during a one-year period, if an equivalent position becomes available. The one-year period begins on the earlier of the date the leave related to a public health emergency concludes or the date twelve weeks after the employee’s leave began.
4. Small businesses may be able to claim an exemption under certain circumstances.
The text of the FFCRA provides that the DOL may exempt a “small business” (i.e. one with fewer than 50 employees) from the requirements of paid sick or EFMLEA leave for school and daycare closures when doing so “would jeopardize the viability of the business as a going concern.” The DOL issued guidance on this exemption prior to the regulations, but the regulations now fully explain under what circumstances this exemption may be claimed.
A small business may claim the exemption if an “authorized officer” of the business determines (i) the leave would result in the business’s expenses and financial obligations exceeding available revenue and cause the business to cease operating at a minimal capacity; (ii) the absence of the employee(s) would entail a substantial risk to the financial health or operational capabilities of the business because of the employees’ specialized skills, knowledge, or responsibilities; or (iii) there are insufficient able, willing, and qualified workers to perform the labor or services needed for the business to operate at a minimal capacity. The DOL explains in its introduction to the regulations that this determination is on a case-by-case basis and small businesses may only deny requested leave to those otherwise eligible employees whose absence would cause one of these circumstances to arise. If any of these circumstances exist, employers are required to document (and retain the documentation of) the determination, but not send anything to the DOL
5. Employees may not bring lawsuits against small businesses for EFMLEA violations.
Under the EFMLEA, as with the FMLA, an employer may not interfere with the exercise of an employee’s leave rights or discriminate based on the employee’s exercise of rights under the Act. Although the enforcement and complaint filing procedures under EFMLEA extend to small employers, the regulations expressly provide that eligible employees may not file direct lawsuits against employers. Although employees may file complaints with the DOL, they may only file direct lawsuits against employers if the employer would be subject to regular FMLA (i.e., employed 50 or more employees).
6. Paid leave for school or daycare closures is only available if no other suitable person is available to provide care.
The regulations have clarified that an eligible employee may take the paid sick or EFMLEA leave to care for a son or daughter whose school or daycare is closed for COVID-19 reasons only if no other “suitable person” is available to care for the child during the period of leave. Employees are further required to represent to their employers that no other suitable person is available in requesting the leave. While a “suitable person” is not expressly defined in the regulations, the DOL’s explanatory notes provide non-exhaustive examples, such as a co-parent, co-guardian, or the usual child care provider. Therefore, the regulations likely limit many parents taking leave at the same time to care for the same child.
7. An “individual,” for whom an employee may take caregiver leave, is defined.
The FFCRA allows an eligible employee to care for an “individual,” who is subject to a quarantine or isolation order or who has been advised to self-quarantine for COVID-19 reasons, but failed to define an “individual.” The regulations now shed some light on who is an “individual” for purposes of this leave and define an “individual” as (i) the employee’s immediate family member; (ii) a person who regularly resides in the employee’s home (such as a roommate); or (iii) a “similar” person with whom the employee has a relationship that creates an expectation of care. The regulations also exclude a person with whom the employee has no personal relationship. So, while the definition of an “individual” is rather broad, it is limited to persons with an existing personal relationship to the employee.
8. The amount and coordination of EPSL and EFMLEA with other paid sick leave, “regular” FMLA leave, and employer policies is clarified.
The regulations confirm prior guidance that emergency paid sick leave is “in addition to,” and not a substitute for, other leave which the employee has already been entitled to or used before the law became effective on April 1, 2020. The regulations clarify, however, that an employee is not entitled to compensation for any leave taken prior to effective date of the Act on April 1, 2020, even if the leave was taken for COVID-19 related reasons.
The regulations also confirm that, rather than create an additional and new 12-week leave entitlement, the EFMLEA adds a sixth reason to take the 12-week entitlement under the FMLA (specifically, to care for a son or daughter whose school or place of care is closed or child care provider is unavailable due to COVID-19 related reasons). Thus, an employee’s ability to take EFMLEA leave may be reduced by the employee’s use of traditional FMLA leave during the 12-month FMLA leave year. If an employee has already taken such leave, the employee may not be able to take the full 12 weeks of leave under the EFMLEA.
Finally, the regulations clarify that employers may allow employees to supplement the amount they receive from FFCRA leave for leave to care for a child up to their normal earnings by using accrued PTO, regular paid sick leave, or vacation. Thus, an employee using and receiving paid leave due to a daycare or school closing at 2/3 his or her regular rate of pay, could supplement other paid leave, with the employer’s consent, to make up the wage difference. If they elect to allow use of additional regular paid leave, employers are not entitled to a tax credit for any paid leave that is not required to be paid under the law or exceeds the FFCRA’s pay limits.
9. The regulations provide for a two-week initial unpaid period of EFMLEA, instead of the ten-work day unpaid period referred to in the original Act.
The regulations explain that a two-week unpaid period, and not ten workdays, must be used in calculating the unpaid period under EFMLEA. Because the FFCRA provides for emergency paid sick leave of 80 hours – or a traditional two-week pay period – the change is necessary to ensure that employees taking the leave for the care of a child have a steady stream of income availability during the first two weeks of unpaid, and subsequent ten weeks of paid, EFMLEA leave.
Although the ten-day formulation meets this goal for employees working traditional five-day, forty-hour work weeks, the two-week period is necessary to ensure fairness to individuals working non-traditional work weeks. For example, an employee working four 10-hour days would not be eligible to use paid EFMLEA leave until the middle of his or her third week of EFMLEA leave, since the employee would only have used eight work days and the ten-day period would still be in effect. Using a standard two-week initial unpaid period eliminates this schedule inequity.
10. The regulations explain the required documentation for leave requests.
The regulations expand on the DOL’s previous guidance and clarify what records employers may request from employees — and are required to keep — under the FFCRA. The documentation supporting an employee’s request for EPSL or EFMLEA must always include an employee’s signed statement with: (1) the employee’s name; (2) the date(s) the employee is requesting leave; (3) the COVID-19 qualifying reason for leave; and (4) a statement that the employee is unable to work or telework because of the COVID-19 qualifying reason.
Depending on the qualifying reason for leave, additional documentation may be required beyond the requirements above. An employee requesting EPSL due to a federal, state, or local quarantine or isolation order related to COVID-19 must provide the name of the government entity that issued the quarantine or isolate order governing that employee. An employee requesting EPSL to self-quarantine on the advice of a healthcare provider due to COVID-19 concerns must provide the name of the healthcare provider who advised the self-quarantine.
An employee requesting EPSL to care for an individual subject to a quarantine or isolation order, or for an individual advised by a health care provider to self-quarantine, must provide either (1) the name of the government entity issuing the quarantine or isolation order to which the individual is subject or (2) the name of the health care provider who advised the individual to self-quarantine.
An employee requesting to take EPSL or EFMLEA to care for a child due to a school or child care closures, or unavailability of child care due to a public health emergency, must provide: (1) the name of the child; (2) the name of the school, place of care, or child care provider that closed or became unavailable; and (3) a statement representing that no other suitable person is available to care for the child during the period of the requested leave.
The regulations further note that the employer may request additional materials from the employee as needed to support a request for tax credits, and they provide a link to IRS guidance on this issue. This guidance suggests employers can (and should) ask employees the following additional information to substantiate eligibility for the tax credits:
• For leave to care for another individual, the person’s name and relation to the employee; and
• For leave related to school/daycare closures, the age of the child(ren) and a statement that special circumstances exist requiring the employee to provide care to the child(ren) over the age of 14 during daylight hours.
Finally, the regulations clarify that regular FMLA certification requirements apply when leave is taken for an eligible employee for FMLA-qualifying reasons. Consequently, when an employee takes leave for the employee’s own serious health condition related to COVID-19, or to care for the employee’s spouse, son, daughter, or parent with a serious health condition related to COVID-19, the employee may be required to meet traditional FMLA certification requirements.
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