COVID-19: DOL Provides Answers to Questions About Federal Paid Sick and Family Leave Laws
Over the past several days the U.S. Department of Labor (“DOL”) released dozens of FAQs that provide clarity and explanation to employers who are scrambling to understand the employer’s responsibilities under the Federal Families First Coronavirus Response Act (“FFCRA”). Below is a recap of several questions that many of us have considered since the enactment of these new paid leave laws. As always, Berry & Fritzinger is ready to help you navigate this leave laws and apply them to your work force.
- Small Business Exemption to New Paid Leave Laws
When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?
An employer with fewer than 50 employees is exempt from providing (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:
- 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;
- 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
- 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.
- Emergency Paid Sick Leave and FMLA Doesn’t Apply if Business Isn’t Open or Furloughed/Reduced Employee Hours
If the employer closed the worksite before April 1, 2020 (the effective date of the FFCRA), can an employee still get paid sick leave or expanded family and medical leave?
No. If, prior to the FFCRA’s effective date, the employer sent the employee home and stops paying the employee because it does not have work for the employee to do, the employee will not get paid sick leave or expanded family and medical leave but the employee may be eligible for unemployment insurance benefits. This is true whether the employer closes the worksite for lack of business or because it is required to close pursuant to a Federal, State, or local directive (i.e. shelter in place order).
If the employer closes the worksite while the employee is on paid sick leave or expanded family and medical leave, what happens?
If the employer closes while the employee is on paid sick leave or expanded family and medical leave, the employer must pay for any paid sick leave or expanded family and medical leave the employee used before the employer closed. As of the date the employer closes the worksite, the employee is no longer entitled to paid sick leave or expanded family and medical leave, but the employee may be eligible for unemployment insurance benefits. This is true whether the employer closes the worksite for lack of business or because the employer was required to close pursuant to a Federal, State or local directive.
If the employer is open, but furloughs the employee on or after April 1, 2020 (the effective date of the FFCRA), can the employee receive paid sick leave or expanded family and medical leave?
No. If the employer furloughs the employee because it does not have enough work or business for the employee, the employee is not entitled to then take paid sick leave or expanded family and medical leave. However, the employee may be eligible for unemployment insurance benefits.
If the employer closes the worksite on or after April 1, 2020 (the effective date of the FFCRA), but tells the employee that it will reopen at some time in the future, can the employee receive paid sick leave or expanded family and medical leave?
No, not while the worksite is closed. If the employer closes the worksite, even for a short period of time, the employee is not entitled to take paid sick leave or expanded family and medical leave. However, the employee may be eligible for unemployment insurance benefits. This is true whether the employer closes the worksite for lack of business or because it was required to close pursuant to a Federal, State, or local directive. If the employer reopens and the employee resumes work, the employee would then be eligible for paid sick leave or expanded family and medical leave as warranted.
If the employer reduces the scheduled work hours, can the employee use paid sick leave or expanded family and medical leave for the hours that the employee is no longer scheduled to work?
No. If the employer reduces the employee’s work hours because it does not have work for the employee to perform, the employee may not use paid sick leave or expanded family and medical leave for the hours that they are no longer scheduled to work. This is because the employee is not prevented from working those hours due to a COVID-19 qualifying reason, even if the reduction in hours was somehow related to the employer not having work for the employee because of COVID-19. The employee may, however, take paid sick leave or expanded family and medical leave if a COVID-19 qualifying reason prevents the employee from working his or her full schedule.
If the employer closes the worksite on or after April 1, 2020 (the effective date of the FFCRA), but before the employee goes out on leave, can the employee still get paid sick leave and/or expanded family and medical leave?
No. If the employer closes after the FFCRA’s effective date (even if the employee requested leave prior to the closure), the employee will not get paid sick leave or expanded family and medical leave but the employee may be eligible for unemployment insurance benefits. This is true whether the employer closes the worksite for lack of business or because it was required to close pursuant to a Federal, State or local directive.
- Paid Leave Laws Do Not Apply if Employee Can Work Irregular Hours
What does it mean to be unable to work, including telework for COVID-19 related reasons?
The employee is unable to work if the employer has work for the employee and one of the COVID-19 qualifying reasons set forth in the FFCRA prevents the employee from being able to perform that work, either under normal circumstances at the normal worksite or by means of telework. If the employee and the employer agree that the employee will work the employee’s normal number of hours, but outside of the employee’s normally scheduled hours (for instance early in the morning or late at night), then the employee is able to work and leave is not necessary unless a COVID-19 qualifying reason prevents the employee from working that schedule.
- Calculating Regular Rate of Pay for FFCRA
What is the employee’s regular rate of pay for purposes of the FFCRA?
For purposes of the FFCRA, the regular rate of pay used to calculate the paid leave is the average of the employee’s regular rate of pay over a period of up to six months prior to the date on which the employee takes leave. If the employee has not worked for the current employer for six months, the regular rate used to calculate the paid leave is the average of the employee’s regular rate of pay for each week the employee worked for the current employer.
If the employee is paid with commissions, tips, or piece rates, these amounts will be incorporated into the above calculation to the same extent they are included in the calculation of the regular rate under federal law. You can also compute this amount for each employee by adding all compensation that is part of the regular rate over the above period and divide that sum by all hours actually worked in the same period.
When calculating pay due to employees, must overtime hours be included?
Yes. The Emergency Family and Medical Leave 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. However, the Emergency Paid Sick Leave Act requires that paid sick leave be paid only up to 80 hours over a two-week period. For example, 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. In any event, the total number of hours paid under the Emergency Paid Sick Leave Act is capped at 80.
Please keep in mind the daily and aggregate caps placed on any pay for paid sick leave (i.e. total aggregate cap of $2,000 per employee) and expanded family and medical leave (i.e. total aggregate cap of $10,000 per employee).
Please note that pay does not need to include a premium for overtime hours under either the Emergency Paid Sick Leave Act or the Emergency Family and Medical Leave Expansion Act.
- Employer Record Keeping Requirements
What records do I need to keep when my employee takes paid sick leave or expanded family and medical leave?
Private sector employers that provide paid sick leave and expanded family and medical leave required by the FFCRA are eligible for reimbursement of the costs of that leave through refundable tax credits. If you intend to claim a tax credit under the FFCRA for your payment of the sick leave or expanded family and medical leave wages, you should retain appropriate documentation in your records. You should consult Internal Revenue Service (IRS) applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit, including any needed substantiation to be retained to support the credit. You are not required to provide leave if materials sufficient to support the applicable tax credit have not been provided.
If one of your employees takes expanded family and medical leave to care for his or her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19, you may also require your employee to provide you with any additional documentation in support of such leave, to the extent permitted under the certification rules for conventional FMLA leave requests. For example, this could include a notice that has been posted on a government, school, or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care, or child care provider.
- Counting Part Time Hours
What is a part-time employee under the Emergency Paid Sick Leave Act?
For purposes of the Emergency Paid Sick Leave Act, a part-time employee is an employee who is normally scheduled to work fewer than 40 hours per week.
In contrast, the Emergency Family and Medical Leave Expansion Act does not distinguish between full- and part-time employees, but the number of hours an employee normally works each week affects the amount of pay the employee is eligible to receive.
How do I count hours worked by a part-time employee for purposes of paid sick leave or expanded family and medical leave?
A part-time employee is entitled to leave for his or her average number of work hours in a two-week period. Therefore, you calculate hours of leave based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, you may use a six-month average to calculate the average daily hours. Such a part-time employee may take paid sick leave for this number of hours per day for up to a two-week period, and may take expanded family and medical leave for the same number of hours per day up to ten weeks after that.
If this calculation cannot be made because the employee has not been employed for at least six months, use the number of hours that you and your employee agreed that the employee would work upon hiring. And if there is no such agreement, you may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of his or her employment.
- Taking Intermittent Paid Leave
May an employee take paid sick leave or expanded family and medical leave intermittently while teleworking?
Yes, if the employer allows it and if the employee is unable to telework his or her normal schedule of hours due to one of the qualifying reasons in the Emergency Paid Sick Leave Act. In that situation, the employee and the employer may agree that you may take paid sick leave intermittently while teleworking. Similarly, if the employee is prevented from teleworking the employee’s normal schedule of hours because the employee needs to care for the employee’s child whose school or place of care is closed, or child care provider is unavailable, because of COVID-19 related reasons, the employee and the employer may agree that the employee can take expanded family medical leave intermittently while teleworking.
The employee may take intermittent leave in any increment, provided that the employee and the employer agree. For example, if the employee and employer agree on a 90-minute increment, the employee could telework from 1:00 PM to 2:30 PM, take leave from 2:30 PM to 4:00 PM, and then return to teleworking.
May an employee take paid sick leave intermittently while working at the usual worksite (as opposed to teleworking)?
It depends on why the employee is taking paid sick leave and whether the employer agrees. Unless the employee is teleworking, paid sick leave for qualifying reasons related to COVID-19 must be taken in full-day increments. It cannot be taken intermittently if the leave is being taken because:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- The employee is caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Unless the employee is teleworking, once the employee begins taking paid sick leave for one or more of these qualifying reasons, the employee must continue to take paid sick leave each day until the employee either (1) uses the full amount of paid sick leave or (2) no longer has a qualifying reason for taking paid sick leave. This limit is imposed because if the employee is sick or possibly sick with COVID-19, or caring for an individual who is sick or possibly sick with COVID-19, the intent of FFCRA is to provide such paid sick leave as necessary to keep the employee from spreading the virus to others.
If the employee no longer has a qualifying reason for taking paid sick leave before the employee exhausts the employee’s paid sick leave, the employee may take any remaining paid sick leave at a later time, until December 31, 2020, if another qualifying reason occurs.
In contrast, if the employee and employer agree, the employee may take paid sick leave intermittently if the employee is taking paid sick leave to care for the employee’s child whose school or place of care is closed, or whose child care provider is unavailable, because of COVID-19 related reasons. For example, if the employee’s child is at home because his or her school or place of care is closed, or child care provider is unavailable, because of COVID-19 related reasons, the employee may take paid sick leave on Mondays, Wednesdays, and Fridays to care for the child, but work at the employee’s normal worksite on Tuesdays and Thursdays.
May the employee take expanded family and medical leave intermittently while the employee’s child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons, if I am not teleworking?
Yes, but only with the employer’s permission. Intermittent expanded family and medical leave should be permitted only when the employee and the employer agree upon such a schedule. For example, if the employer and the employee agree, the employee may take expanded family and medical leave on Mondays, Wednesdays, and Fridays, but work Tuesdays and Thursdays, while the child is at home because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons, for the duration of the employee’s leave.
- Health Insurance Coverage Continues While Employee is On Paid Leave
If the employee elects to take paid sick leave or expanded family and medical leave, must the employer continue the employee’s health coverage?
If the employer provides group health coverage that the employee elected, the employee is entitled to continued group health coverage during the employee’s expanded family and medical leave on the same terms as if the employee continued to work. If the employee is enrolled in family coverage, the employer must maintain coverage during the employee’s expanded family and medical leave. The employer generally must continue to make any normal contributions to the cost of the employee’s health coverage.
If the employee elects to take paid sick leave, the employer must continue the employee’s health coverage. Under the Health Insurance Portability and Accountability Act (HIPAA), an employer cannot establish a rule for eligibility or set any individual’s premium or contribution rate based on whether an individual is actively at work (including whether an individual is continuously employed), unless absence from work due to any health factor (such as being absent from work on sick leave) is treated, for purposes of the plan or health insurance coverage, as being actively at work.
- Interplay of Employer’s Prior Paid Leave Benefits and the New Paid Leave Laws
May the employee use the employer’s preexisting leave entitlements and the employee’s FFCRA paid sick leave and expanded family and medical leave concurrently for the same hours?
No. If the employee is eligible to take paid sick leave or expanded family and medical leave under the FFCRA, as well as paid leave that is already provided by the employer, unless the employer agrees the employee must choose one type of leave to take. The employee may not simultaneously take both, unless the employer agrees to allow the employee to supplement the amount the employee receives from paid sick leave or expanded family and medical leave under the FFCRA, up to the employee’s normal earnings, with preexisting leave. For example, if the employee is receiving 2/3 of the employee’s normal earnings from paid sick leave or expanded family and medical leave under the FFCRA and the employer permits, the employee may use your preexisting employer-provided paid leave to get the additional 1/3 of the employee’s normal earnings so that the employee receives his or full normal earnings for each hour.
If I am an employer, may I require an employee to supplement or adjust the pay mandated under the FFCRA with paid leave that the employee may have under my paid leave policy?
No. Under the FFCRA, only the employee may decide whether to use existing paid vacation, personal, medical, or sick leave from your paid leave policy to supplement the amount your employee receives from paid sick leave or expanded family and medical leave. The employee would have to agree to use existing paid leave under your paid leave policy to supplement or adjust the paid leave under the FFCRA.
Berry & Fritzinger will continue to monitor any guidance published by the DOL and will update you regarding how to interpret and implement the emergency paid sick leave and FMLA. In the interim, if you have any questions regarding these new Federal employment laws, please contact Elizabeth Fritzinger. Berry & Fritzinger can help your business understand and comply with these new federal employment laws.