FFCRA Regulations Have Been Issued
Today, the Department of Labor (DOL) issued formal regulations implementing the FFCRA, which takes effect today. The FFCRA is, of course, the new federal law that requires employers with less than 500 employees to provide paid sick leave and, in some instances, paid family leave to employees who cannot work due to Covid-19 reasons. The regulations are available here. Of particular note, the regulations clarify (contrary to much of the legal interpretations of the FFCRA that have been published) that a state or local shelter-at-home order qualifies as an “isolation” order for purposes of the FFCRA’s paid sick leave entitlements. The regulations also unjustly clarify that employers who began complying with the FFCRA upon its enactment on March 18, 2020 and provided paid leave for FFCRA reasons between March 18 and March 31 (prior to the Act’s technical effective date of April 1) will NOT get credit for those payments and will still have to provide employees with another 10 days of paid sick leave in order to comply with the Act. This is unjust because on March 20, 2020 (two days after the Act was signed into law) the DOL and Treasury issued a joint press release saying that employers “may begin” taking advantage of the payroll tax credits “immediately.” The press release omitted any reference to the Act not taking effect until April 1 (indeed, this was not announced until several days later) and certainly did not explain that employers who began providing the paid leave required under the Act prior to April 1 would unfairly be required to provide yet another 10 days of paid leave after April 1 in order to satisfy their compliance obligations. Some employers will now have had to provide 160 hours of paid leave at a time when their businesses have been hard hit by the various shutdown orders. Unfortunately, that is the present state of the law. Below is additional information from the regulations you may find useful. However, the regulations cover many more details than this, so covered employers will want to review them to ensure compliance, particularly on issues like how to calculate the pay required under the Act.
To understand the context of the regulations, let’s first review the reasons paid sick leave may be used under the FFCRA:
- The employee is subject to a federal, state, or local quarantine or isolation order for Coronavirus;
- The employee is advised by a health care provider to self-quarantine due to Coronavirus concerns;
- The employee is experiencing symptoms of Coronavirus and seeking a medical diagnosis;
- The employee is caring for an individual who is under a quarantine or isolation order or has been advised to self-quarantine;
- The employee is caring for a child whose school or child care has been closed due to Coronavirus;
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Here’s the regulatory guidance on what each of these means:
“The first reason for paid sick leave applies where an employee is unable to work because he or she is subject to a Federal, State, or local COVID-19 quarantine or isolation order. 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. Section 826.20(a)(2) explains that an employee may take paid sick leave only if being subject to one of these orders prevents him or her from working or teleworking as described therein. The question is whether the employee would be able to work or telework “but for” being required to comply with a quarantine or isolation order. An employee subject to one of these orders may not take paid sick leave where the employer does not have work for the employee. This is because the employee would be unable to work even if he or she were not required to comply with the quarantine or isolation order. For example, if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, it would no longer have any work for its employees. A cashier previously employed at the coffee shop who is subject to a stay-at-home order would not be able to work even if he were not required to stay at home. As such, he may not take paid sick leave because his inability to work is not due to his need to comply with the stay-at-home order, but rather due to the closure of his place of employment.” The regulations add that this remains true even if the closure was substantially caused by a stay-at-home order.
Reason Four (yes, I know I’m going out of order, but this is similar to reason (1), so just go with it)
“The fourth reason for paid sick leave applies where an employee is unable to work because he or she needs to care for an individual who is either: (a) subject to a Federal, State, or local quarantine or isolation order; or (b) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. This qualifying reason applies only if but for a need to care for an individual, the employee would be able to perform work for his or her employer. Accordingly, an employee caring for an individual may not take paid sick leave if the employer does not have work for him or her. Furthermore, if the employee must have a genuine need to care for the individual. Accordingly, § 826.20(a)(5) explains that paid sick leave may not be taken to care for someone with whom the employee has no personal relationship. Rather, the individual being cared for must be an immediate family member, roommate, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person if he or she self-quarantined or was quarantined. Additionally, the individual being cared for must: (a) be subject to a Federal, State, or local quarantine or isolation order as described above; or (b) have been advised by a health care provider to self-quarantine based on a belief that he or she has COVID-19, may have COVID-19, or is particularly vulnerable to COVID-19.”
“The second reason for paid sick leave applies where an employee is unable to work because he or she has been advised by a health care provider, as defined in 29 CFR 825.102, to self-quarantine for a COVID-19 reason. Section 826.20(a)(3) explains that the advice to self-quarantine must be based on the health care provider’s belief that the employee has COVID-19, may have COVID-19, or is particularly vulnerable to COVID-19. And, self-quarantining must prevent the employee from working. An employee who is self-quarantining is able to telework, and therefore may not take paid sick leave for this reason, if (a) his or her employer has work for the employee to perform; (b) the employer permits the employee to perform that work from the location where the employee is self-quarantining; and (c) there are no extenuating circumstances, such as serious COVID-19 symptoms, that prevent the employee from performing that work. For instance, if the lawyer in the above example would be able to work while self-quarantining at home, she may not take paid sick leave due to a need to self-quarantine.”
“The third reason for paid sick leave applies where an employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis. Section 826.20(a)(4) explains that symptoms that could trigger this are: fever, dry cough, shortness of breath, or other COVID-19 symptoms identified by the U.S. Centers for Disease Control and Prevention (CDC). Additionally, paid sick leave taken for this reason must be limited to the time the employee is unable to work because he or she is taking affirmative steps to obtain a medical diagnosis. Thus, an employee experiencing COVID-19 symptoms may take paid sick leave, for instance, for time spent making, waiting for, or attending an appointment for a test for COVID-19. But, the employee may not take paid sick leave to self-quarantine without seeking a medical diagnosis. An employee who is waiting for the results of a test is able to telework, and therefore may not take paid sick leave, if: (a) his or her employer has work for the employee to perform; (b) the employer permits the employee to perform that work from the location where the employee is waiting; and (c) there are no extenuating circumstances, such as serious COVID-19 symptoms, that may prevent the employee from performing that work. An employee may continue to take leave while experiencing any of the symptoms specified at § 826.20(a)(4), however; or may continue to take leave after testing positive for COVID-19, regardless of symptoms experienced, provided that the health care provider advises the employee to self-quarantine. In addition, an employee who is unable to telework may continue to take paid sick leave under this reason while awaiting a test result, regardless of the severity of the COVID-19 symptoms that he or she might be experiencing. In the case of an employee who exhibits COVID-19 symptoms and seeks medical advice but is told that he or she does not meet the criteria for testing and is advised to self-quarantine, he or she is eligible for leave under the second reason, provided he or she meets all the requirements spelled out above.”
“The fifth reason for paid sick leave applies when the employee is unable to work because the employee needs to care for his or her son or daughter if: (a) the child’s school or place of care has closed; or (b) the child care provider is unavailable, due to COVID-19 related reasons. Again, the employee must be able to perform work for his or her employer but for the need to care for his or her son or daughter, which means an employee may not take paid sick leave if the employer does not have work for him or her. Moreover, an employee may take paid sick leave to care for his or her child only when the employee needs to, and actually is, caring for his or her child. Generally, an employee does not need to take such leave if another suitable individual— such as a co-parent, co-guardian, or the usual child care provider—is available to provide the care the employee’s child needs.” Implication: only one person can claim full-time paid sick leave to care for a child whose school is closed.
No additional guidance, folks (or I’m just missing it). We don’t know what “substantially similar conditions” mean.
Calculation of Amount of Paid Sick Leave
On the issue of paid sick leave, the regulations provide additional guidance on how to determine the amount of paid sick leave to provide to a part-time employee without a regular schedule of hours. The regulations suggest that part-time employees whose weekly schedule varies must be provided with paid sick leave “equal to fourteen times the ‘number of hours that the employee was scheduled per [calendar] day,’ averaged over the above-mentioned six-month period.” (Try not having to re-read that sentence at least five times to understand it.) For those wanting a simpler formula, the regulations alternatively provide that “an employer may also use twice the number of hours that an employee was scheduled to work per workweek, averaged over the six-month period.” If you have part-time employees who have not been employed for 6 months, you’re going to want to read the regulations because there is a (bizarrely) long section on how to calculate the amount of sick leave for part-time employees. Full-time employees are those regularly scheduled to work at least 40 hours per week. 80 hours of paid sick leave must be provided to the full-timers.
Expanded Family Leave for School Closures
Now, onto the expanded family leave portion of the FFCRA. By way of reminder, the expanded FMLA portion requires covered employers to provide up to 12 weeks of FMLA leave (10 of which are paid) to employees who cannot work because their son or daughter’s school or child care is closed due to Covid-19. The regulations explain that “son” or “daughter” means the same thing for purposes of both the paid sick leave and expanded medical leave provisions, and includes an adult child with a mental or physical disability who an employee needs to care for because of the Covid-19 emergency. The regulations clarify, as did recently issued DOL guidance, that the FFCRA does not give employees a new bucket of 12 weeks of FMLA leave on top of any 12-week bucket they may already be eligible for if they work for an employer with more than 50 employees. Such employees are entitled to 12 weeks total (for any FMLA-covered reason). Note, however, that if you are covered by state mini-FMLA laws, such as California’s CFRA, the 12 weeks of expanded family/school closure leave under the FFCRA will not run concurrently with an employee’s CFRA leave entitlement. Why? Because Covid-19 school closure leave is not a covered reason to use CFRA leave.
Expanded Family Leave and Use of Paid Leave
The regulations contain some confusing, and arguably conflicting, guidance on this issue. In the normal FMLA world, FMLA leave is unpaid. However, an employer may require (or an employee may elect) to substitute accrued paid leave (sick leave, vacation, PTO) for the otherwise unpaid leave. The FFCRA does not really address this for the expanded FMLA leave it provides to care for a child whose school/child care is closed. The regulations suggest that normal FMLA rules apply, meaning that an employer can require (or the employee can elect) to substitute accrued paid time off for the first two weeks of family leave that are normally unpaid. See Section 826.23. Elsewhere though, the regulations suggest that the employee may only elect (but may not be required) to substitute preexisting paid leave. See Section 826.60(b) and 826.70. Confusing to say the least. Sufficed to say, an employee is entitled to up to 12 weeks of leave, 10 of which are paid at 2/3 the employee’s regular rate (subject to a cap). The other 2 weeks are unpaid, but the employee may elect to use his/her two weeks of paid sick leave provided by the FFCRA. If the employee has already used that, the employee may elect to use other accrued paid leave provided by the employer. Additionally, it is clear that an employer and employee may agree to use some of the employee’s previously accrued paid leave to supplement the pay provided under the FFCRA (to provide the employee with 100% wage replacement instead of 2/3 wage replacement). However, the employer will only get the tax credit for the amounts allowed under the FFCRA (not for supplemental payments). Beyond that, it is not clear to me at the present time when an employer can REQUIRE the employee to use pre-existing paid time off during the expanded family leave provided by the FFCRA.
Supplementing Paid Leave Provided Under FFCRA With Other Forms of Paid Leave
The regulations, like earlier DOL guidance, make clear that an employer and employee can agree to supplement an employee’s FFCRA paid sick leave (or expanded family leave pay) with other paid sick or vacation leave available to the employee under employer policies. (Recall that the pay for sick leave and expanded family leave under the FFCRA is capped and may not equal 100% of an employee’s wages). However, the payroll tax credit is capped at the amounts set forth in the FFCRA.
Documentation Supporting Need for Leave
An employee must provide his or her employer documentation in support of paid sick leave or expanded family and medical leave. Such documentation must include a signed statement containing the following information: (a) the employee’s name; (b) the date(s) for which leave is requested; (c) the COVID-19 qualifying reason for leave; and (d) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. An employee must provide additional documentation depending on the COVID-19 qualifying reason for leave. An employee requesting paid sick leave for Reason (1) must provide the name of the government entity that issued the quarantine or isolation order to which the employee is subject. An employee requesting paid sick leave for Reason (2) must provide the name of the health care provider who advised him or her to self-quarantine for COVID-19 related reasons. An employee requesting paid sick leave for Reason (4) to care for an individual must provide either (1) the government entity that issued 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, depending on the precise reason for the request. An employee requesting to take paid sick leave for Reason (5) or expanded family leave to care for his or her child must provide the following information: (1) the name of the child being care for; (2) the name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19 reasons; and (3) a statement representing that no other suitable person is available to care for the child during the period of requested leave. Noticeably absent from the regulations is an indication of what, if any, documentation may be required to support an employee’s request for leave for Reason (3) (employee experiencing symptoms and seeking a medical diagnosis).
If an employee seeks to use traditional FMLA leave because he/she has a serious health condition related to Covid-19, or because the employee needs to care for someone with a serious health condition related to Covid-19, the employee must submit medical certifications normally required under the FMLA.
The regulations explain, as did recent DOL guidance, that an employer and an employee may agree to allow sick leave or expanded family leave to be taken intermittently (in whatever increment is agreed to), particularly where an employee is teleworking. If an employee is reporting to the worksite, leave may still be used intermittently if the employer agrees, but only in circumstances where there is minimal risk that the employee will spread Covid-19 to others in the workplace.
The regulations explain that an employee who takes expanded family and medical leave or paid sick leave is entitled to continued coverage under the employer’s group health plan on the same terms as if the employee did not take leave. This means that an employee taking leave is still responsible for contributing to plan premiums the same as the employee would be required to do if actively reporting to work.
In most instances, an employee is entitled to be restored to the same or an equivalent position upon return from paid sick leave or expanded family and medical leave. However, the FFCRA does not protect an employee from employment actions, such as layoffs, that would have affected the employee regardless of whether the leave was taken. Where expanded family leave for school/child care closure is involved, there are some job restoration exceptions for small employers with less than 25 employees, and for “key” employees.
Determining Employer Coverage Under FFCRA
The FFCRA applies to private employers with less than 500 employees (as well as some public employers). The regulations provide some guidance for determining whether a private business is covered. Making matters very complicated for an employer who teeters on the 500-employee threshold, the determination of whether this threshold is met has to be made at the time any employee requests leave. Thus, if an employee says he cannot work on April 2 due to a covered reason, but the employer has 505 employees om that date, the employee’s leave request is not covered. However, if the employer loses some employees and is at 485 employees on April 20, and another employee requests leave on that date, the employee’s leave request will be covered. In terms of which workers “count” toward the 500-employee threshold, the employer should include full-time and part-time employees, employees on leave, temporary employees who are jointly employed by the employer and another employer, and day laborers supplied by a temporary placement agency. Independent contractors that provide services for an employer do not count towards the 500-employee threshold. Nor do employees count who have been laid off or furloughed and have not subsequently been reemployed. Furthermore, employees must be employed within the United States.
Small Employer Exemption
The FFCRA provides for possible exemption of employers with less than 50 employees. The DOL has stated that the exemption only applies with respect to providing paid sick leave/expanded family leave due to an employee’s need to care for a child whose school/child care has closed for Covid-19 reasons. The exemption does not apply to an employer’s requirement to provide paid sick leave for other covered reasons. The regulations provide further clarification that an employer need not apply for the exemption, but can self-claim the exemption in the following circumstances:
A small employer is exempt from the requirement to provide such leave when: (1) such leave would cause the small employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity; (2) the absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or (3) the small employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor or services are needed for the small employer to operate at a minimal capacity. For reasons (1), (2), and (3), the employer may deny paid sick leave or expanded family and medical leave only to those otherwise eligible employees whose absence would cause the small employer’s expenses and financial obligations to exceed available business revenue, pose a substantial risk, or prevent the small employer from operating at minimum capacity, respectively.
If a small employer decides to deny paid sick leave or expanded family and medical leave to an employee or employees whose child’s school or place of care is closed, or whose child care provider is unavailable, the small employer must document the facts and circumstances that meet the criteria set forth above to justify such denial. The employer should not send such material or documentation to the Department, but rather should retain such records for its own files.
Ability of Employers to Exempt Health Care providers and Emergency Responders from Paid Leave Provisions
The FFCRA allows employers to exempt "health care providers" and "emergency responders" from the paid leave provisions of the FFCRA. These terms are defined as follows:
A "health care provider" is anyone employed at any doctor’s office, hospital, health care center, clinic, postsecondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. This definition includes any individual employed by an entity that contracts with any of these institutions described above to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility. This also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments. This also includes any individual that the highest official of a State or territory, including the District of Columbia, determines is a health care provider necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.
An "emergency responder" is anyone necessary for the provision of transport, care, healthcare, comfort and nutrition of such patients, or others needed for the response to COVID-19. This includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, child welfare workers and service providers, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency, as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility. This also includes any individual whom the highest official of a State or territory, including the District of Columbia, determines is an emergency responder necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.