Update: DOL Emergency Paid Sick Leave/Expanded FMLA Regulations

The content of this email/post is as of 3:03 pm, Sunday March 29, 2020.

HR 6201 Families First Coronavirus Response Act (FFCRA) was enacted Wednesday, March 18, 2020.

FFCRA directed the Secretary of Labor (Department of Labor (DOL)) to issue regulations regarding it.

The DOL has not yet issued regulations (they have said they will do so by “April 2020”).  Meanwhile, DOL has published FAQs on their website.

DOL started with basic FAQs starting approximately March 24 (with FAQs 1-14). The DOL has updated the FAQs twice since, starting Fri 3/27 (added FAQs 15-37), then this weekend (added FAQs 38-59).  DOL has issued a FFCRA Notice that employers must “post.”

First, for context, we’ll discuss the general requirements of the FFCRA and then the DOL FAQs likely to be of interest to most covered employers.

FFCRA has two primary obligations for covered employers (employers with 1-499 employees).  The following is a summary of key obligations (not all the details/nuances, and there are many):

Emergency Paid Sick Leave

1. Available immediately to employee(s) (no waiting period)
2. Covered reasons (six specific reasons):
   1) The employee is subject to a Federal, State, or local quarantine or isolation order related to13 COVID-19.
   2) The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
   3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
   4) The employee is caring for an individual who is subject to an order as described in subparagraph 1) above or has been advised as described in paragraph 2) above.
   5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.
   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.
3. Amount of EPSL Leave – equivalent of 2 weeks
   1) For full time employees (40 or more hours per week) 80 hours
   2) For part time (anything less than full time):
   i. Number of hours during two-week period if known, and if cannot be determined with “certainty” then, either
   1. Average of prior 6 months, or if employee has not worked 6 months, then
   2. Employee’s “reasonable expectation . . . at time of hire.”
4. Rate of Pay – is “regular rate of pay” under Fair Labor Standards Act (FLSA)
5. Effective Date – “This Act, and the requirements under this Act, shall take effect not later than 15 days after the date of enactment of this Act.” Enactment date was March 18, 2020.

Expanded FMLA Leave

1. Available to employees that have worked at least 30 calendar days
2. Qualifying expanded FMLA leave (EFMLA) applies when the “employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”
3. Amount of leave – up to 12 weeks
   a.Paid or Unpaid
   i. First 10 days unpaid (but can use other forms of paid time off, including EPSL)
   ii. After first 10 days paid
   b. Hours calculation – same as above for EPSL
4. Rate of Pay – same as above for EPSL
5. Effective Date – “This Act shall take effect not later than 15 days after the date of enactment of this Act.” Enactment date was March 18, 2020.

The above are the basics of a covered employer’s obligations for EPSL and EFMLA. Now for the FAQs.

DOL FAQs

Here’s our summary of the key FAQs as they relate to covered employers (1-499 employees).  Certain carveouts apply to employers with 1-49 employees (addressed separately further below).  Note this is not necessarily our view of FFCRA; it is our best attempt to report as clearly as possible what the DOL FAQs say (and of course feel free to read them for yourself):

1. Effective date is 4/1/2020. (FAQ 1)
2. EPSL and EFMLA leave Not Required Prior to 4/1/2020 (FAQ 11, 13)
3. What if covered employer “closes [employee’s] worksite”?
   a. If a covered employer has “closed” or “closes [employee’s] worksite” before, on, or after 4/1/2020, employees are not eligible for “paid sick leave or expanded family and medical leave but [they] may be eligible for unemployment insurance benefits.” The FAQs state, “This is true whether your employer closes your worksite for lack of business or because it was required to close pursuant to a Federal, State or local directive.”  (FAQs 23, 24) Note: this is particularly confusing to us with respect to Reason 1) above under EPSL.  It also seems contrary to the words in the statute (FFCRA).  The regulations will contain the ultimate answer.  Meanwhile, since the DOL has authority to create the regulations, all we have to go on for now is what they put on their website FAQs.
   b. If covered employer is open as of 4/1 and employee is on EPSL or EFMLA – and employer “closes [employee’s] worksite” – no more EPSL or EFMLA either. “As of the date your employer closes your worksite, you are no longer entitled to paid sick leave or expanded family and medical leave, but you may be eligible for unemployment insurance benefits. This is true whether your employer closes your worksite for lack of business or because the employer was required to close pursuant to a Federal, State or local directive.” (FAQ 25) Also interesting.
4. What if covered employer is “open” as of 4/1 but “furloughs” employees? No EPSL or EFMLA, “If your employer furloughs you because it does not have enough work or business for you.” (FAQ 26.) What if covered employer “furloughs” employees because they cannot come to work due to local or State order to stay home? Is this different from “closes [employee’s] worksite?” Very curiously, this particular FAQ 26 omits the language “This is true whether your employer closes your worksite for lack of business or because the employer was required to close pursuant to a Federal, State or local directive.”
5. What if covered employer “closes [employee’s] worksite” and plans on “reopening” (i.e. closes on temporary basis) and tells employees that? DOL says if covered employer “closes your worksite, even for a short period of time, you are not entitled to take paid sick leave or expanded family and medical leave. However, you may be eligible for unemployment insurance benefits.” “This is true whether your employer closes your worksite for lack of business or because the employer was required to close pursuant to a Federal, State or local directive.” (FAQs 27.) Once again, odd. Is there a difference between “furlough” as used in FAQ 26 versus “closes [employee’s] worksite” and plans on “reopening” and tells employees that in FAQ 27?
6. Zero Tax Credits/Refund for employers who pay “in excess of FFCRA requirements.” “You may pay your employees in excess of FFCRA requirements. But you cannot claim, and will not receive tax credit for, those amounts in excess of the FFCRA’s statutory limits.” (FAQ 34) Note: the FFCRA states, “The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section” (“this section meaning “Tax Credits for Paid Sick and Paid Family and Medical Leave”). It appears the Secretary of the Treasury has delegated is obligations relating to tax credits/refunds to the Secretary of Labor/DOL.

We are not sure what to make of the above FAQs.  A reasonable reading seems to say covered employers who are already closed or who close are not obligated to provide any form of EPSL or EFMLA (no matter the timing, or the reason). If the covered employer that is closed pays any EPSL or EFMLA wages (even if employer was “was required to close pursuant to a Federal, State or local directive”) it will not receive tax credit/refund for those payments.

The authority on interpreting the FFCRA EPSL and EFMLA is the DOL.  Until we have regulations, the DOL FAQs are all we have to go on at this time.  Effective date of FFCRA is only three days away.

Under 50 Employee Employer “Jeopardize the Viability of the Business as a Going Concern” Carveout:

1. The FFCRA gives DOL specific authority to issue regulations addressing this exemption. DOL FAQs 58 and 59 set forth details of what “jeopardize the viability of the business as a going concern” means:A small business may claim this exemption if an authorized officer of the business has determined that:
   1. The provision of paid sick leave or expanded family and medical 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 or expanded family and medical 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 or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
2. Does the exemption for small business (under 50 employees) apply to all six EPSL reasons, or only EPSL reason 5 (“The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions”)? FAQ 58 seems unclear; FAQ 59 seems more precise. It says, small business exemption applies:

“only if the:

• employer employs fewer than 50 employees;
• leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
• an authorized officer of the business has determined that at least one of the three conditions described in Question 58 is satisfied.”

The second bullet above limits the small business exemption only to when employee is unable to work due to need to care for son or daughter due to school closure or lack of child care due to COVID-19 related reasons (whether for EPSL or EFMLA purposes). Based on FAQ 59, the small business exemption does not apply for any other EPSL reason.

Note we are reporting based on the information posted by the DOL as of 3:03 pm, Sunday March 29, 2020.  DOL has been adding to the FAQs since first published and might continue to update the FAQs so recheck the FAQs.