The Wage and Hour Division of the United States Department of Labor (USDOL) has enacted a temporary rule (“Rule”) regarding the implementation of the Families First Coronavirus Response Act (FFCRA). The Rule clarifies the Emergency Paid Sick Leave Act (EPSLA) and Emergency Family and Medical Leave Expansion Act (EFMLEA) portions of the FFCRA.
By way of background, EPSLA entitles employees who cannot work or telework to paid emergency sick leave if they meet one of six qualifying conditions, which generally involve the employee: (1) suffering from or needing to quarantine because of COVID-19; (2) needing to care for another person who is suffering from or needs to quarantine because of COVID-19; or (3) needing to care for a child because of school closures or the unavailability of child care relating to COVID-19. The precise amount of pay to be provided depends on the reason for leave.
EFMLEA entitles employees who have been on an employer’s payroll for at least thirty days, and who cannot work or telework because of the need to care for a child because of school closures or the unavailability of child care relating to COVID-19, to up to twelve weeks of emergency family leave. The first ten days of such leave are unpaid (unless an employee utilizes paid leave under EPSLA or accrued paid time off during this time), and the remainder of leave is paid at 2/3 of the employee’s regular rate of pay, capped at $200 per day.
The Rule and its accompanying commentary are 124-pages long and there is a lot to unpack. We will cover some of the highlights here.
Most of the definitions applicable to EFMLEA and EPSLA are borrowed from the Family Medical Leave Act of 1993 (FMLA) or the Fair Labor Standards Act (FLSA), and do not require explanation. A few definitions, however, are notable.
Where leave is sought under EFMLEA because of an employee’s need to care for a child due to the unavailability of a childcare provider, the text of EFMLEA states that a “childcare provider” means a provider who is ordinarily compensated by the employee. However, Section 826.10 of the Rule makes clear that “the eligible child care provider need not be compensated or licensed if he or she is a family member or friend, such as a neighbor, who regularly cares for the Employee’s child.”
Additionally, Section 826.10 of the Rule states that the term “son or daughter” as used in both EPSLA and EFMLEA includes: “a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is under 18 years of age; or 18 years of age or older who is incapable of self-care because of a mental or physical disability.” The definition is significant to the extent it makes clear that paid leave is available to care for children over age 18 in limited circumstances.
The Rule also more clearly defines “telework,” which is important because employees who are capable of “teleworking” are not eligible for paid leave under either EPSLA or EFMLEA. According to the commentary to the Rule, telework is “no less work than if it were performed at the employer’s worksite” even though it is done from an employee’s home or another offsite location, during ordinary work hours or at other agreed upon times.
Reasons for Leave Under EFMLEA and EPSLA
EPSLA provides for paid emergency sick leave in six independent situations. First, paid sick leave is available if employees are unable to work or telework because they are subject to a federal, state, or local COVID-19 quarantine or isolation order. The Rule somewhat surprisingly indicates that it covers shelter-in-place and stay-at-home orders in certain situations. This is in contrast to the New York Quarantine Law, under which temporary business closures and social distancing measures do not qualify as quarantine or isolation orders according to New York State’s frequently asked questions website.
The Rule does place certain qualifications on the use of sick leave where the employee is subject to a stay-at-home order. In this situation, paid sick leave is only available if the employer has work for the employee, but that work cannot be completed because of the stay-at-home order. If the employer does not have work available, the employee may not utilize paid sick leave.
What does this mean? The Rule provides the following example: if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, a cashier of the business who is subject to a stay-at-home order may not take paid sick leave. That is because the lack of work is due to the downturn in business, not the cashier’s inability to leave home.
Similarly, the commentary to the Rule explains that paid sick leave is not ordinarily available if the employee can telework despite the stay-at-home order. There is one exception: if the employee’s ability to telework is disrupted by external circumstances, he or she may qualify for paid emergency sick leave.
The commentary gives the following example. If a lawyer is subject to a shelter-in-place order but can telework, he or she may not take paid sick leave. However, if a power outage or other like circumstance occurs that prevents the attorney from teleworking for a period of time, he or she may be eligible for paid sick leave.
The second reason for paid sick leave under EPSLA is an employee’s inability to work or telework because he or she has been advised by a health care provider to quarantine for a reason related to COVID-19. The Rule clarifies that the health care provider’s advice must be based on a belief that the employee has COVID-19, may have COVID-19 or is particularly vulnerable to COVID-19. The latter category is the most surprising clarification to this portion of EPSLA, as existing FMLA guidance provides that the desire to avoid exposure to “pandemic influenza” is generally insufficient to justify an employee taking medical leave.
The third reason for paid sick leave under EPSLA is an employee’s seeking of a medical diagnosis because he or she is experiencing symptoms of COVID-19. Section 826.20(a)(4) of the Rule clarifies that “symptoms” in this context means symptoms of COVID-19 as defined by the Centers for Disease Control (CDC), presently including, but not limited to, shortness of breath, dry cough, and fever.
The Rule also clarifies that this type of leave is available for time spent by the employee to make, wait for or attend an appointment for a COVID-19 test. The commentary explains that this provision also covers employees who seek a test, are told that they do not meet the criteria for testing, but are advised to self-quarantine, if that prevents the employee from working. On the other hand, leave is generally not available to employees who are self-quarantining without seeking a medical diagnosis, or to employees who are waiting for test results but are able and allowed to telework.
The fourth reason for paid sick leave under EPSLA is an employee’s inability to work because he or she needs to care for someone who is: (I) subject to a Federal, State, or local quarantine or isolation order; or (ii) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. Section 820.26(a)(5) of the Rule explains that this leave is not available when the employee has no personal relationship to the person being cared for—rather, the person being cared for must be an immediate family member, roommate, or a similar relationship that would create an expectation that the employee would provide care. And, the employee’s responsibility to provide care only entitles him or her to leave if it renders the employee unable to work.
The fifth reason for paid sick leave under EPSLA is an employee’s inability to work because he or she needs to care for a son or daughter if, for COVID-19 related reasons: (i) the child’s school or place of care has closed; or (ii) the child care provider is unavailable. An employee may only use this type of leave if someone else, such as a co-parent, guardian or child care provider, is unavailable to provide childcare. The same rules apply when an employee takes paid emergency family leave under EFMLEA.
The sixth reason for paid sick leave under EPSLA is an employee’s inability to work because he or she is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services (HHS Secretary) in consultation with the Secretary of the Treasury and the Secretary of Labor. The Rule does not identify any such conditions and, as of now, the HHS Secretary has not released any other guidance.
Calculating Paid Sick Leave Under EPSLA
Under EPSLA, full-time and part-time employees are entitled to different amounts of leave. However, the statute does not define “full-time” and “part-time.” Section 826.21 of the Rule explains that a full-time employee is one who is normally scheduled to work at least 40 hours per workweek. Those who ordinarily work less than 40 hours per workweek are part-time employees.
Full-time employees are entitled to 80 hours of paid leave. Calculating leave is more difficult in the case of part-time employees, who are entitled to paid leave for the “number of hours that such employee works, on average, over a 2-week period.” In the case of a part-time employee whose schedule varies from week to week, EPSLA provides that an employer must first calculate the average number of hours the employee was scheduled per day over the six months before the date the employee begins taking paid sick leave. Once the employer calculates the daily average, it must multiply that number by 14 to determine the two-week average.
The amount of pay an employee may receive during leave under EPSLA depends on the reason for leave. For reasons one through three (described above), an employee is entitled to be paid at his or her regular rate of pay, capped at $511 per day and $5,110 for the entire period of leave. For reasons four through six (described above), an employee is entitled to be paid at 2/3 of his or her regular rate of pay, capped at $200 per day and $2,000 for the entire period of leave. The employer may not require an employee to use other accrued paid time off (PTO) currently with paid emergency sick leave, although an employee is free to do so if his ordinary rate of pay exceeds the applicable monetary caps on EPSLA paid leave.
Calculating Paid Family Leave Under EMFLEA
Under EFMLEA, employees are entitled to up to twelve weeks of leave. The first ten days are unpaid, unless an employee opts to use accrued PTO or paid sick leave under EPSLA. The remainder of leave is paid at 2/3 of the employee’s regular rate of pay, capped at $200 per day and $10,000 for the entirety of leave.
The Rule contains an interesting wrinkle about the concurrent use of PTO while taking leave under EFMLEA. Under an earlier iteration of FFCRA, the EFMLEA provided that an employee could choose to use accrued PTO concurrently with EFMLEA (in order to receive full pay), but that an employer could not require the employee to do so. In the version of the FFCRA that was enacted, the EFMLEA is silent on whether an employer can require an employee to use accrued PTO concurrently with paid emergency family leave. Section 826.24(d) of the Rule explains that an employer can require an employee to utilize PTO concurrently with EFMLEA leave in the same manner that an employer can require an employee to use accrued PTO concurrently with FMLA leave.
The Rule also clarifies that, because EFMLEA is technically an expansion of the leave available under FMLA, any leave taken pursuant to EFMLEA counts against the 12 workweeks of FMLA leave to which employees are otherwise entitled.
Exclusion of Healthcare Workers
EFMLEA and EPSLA allow employers to decline to provide paid leave to employees who are health care providers or emergency responders. The Rule provides extensive definitions as to who is considered a “health care provider” or “emergency responder” for these purposes.
Exemption of Small Businesses
EPSLA and EFMLEA both provide the Secretary of Labor with authority to exempt employers with fewer than 50 employees from providing paid leave where an employee needs to care for a child due to a school closure or unavailability of a child care provider, if doing so would jeopardize the viability of the business as a going concern. The Rule explains that this exception applies when an authorizer officer of the business determines that:
- The leave requested 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; or
- The absence of the employee requesting leave would entail a substantial risk to the financial health or operational capabilities of the 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 requesting leave, and such labor or services are needed for the small business to operate at a minimal capacity
Employers using this exemption do not need to submit an application to DOL. They should simply document their entitlement to the exemption and, pursuant to the Rule’s record keeping provisions (discussed below), maintain that documentation for four years.
The Rule explains that leave under EPSLA and EFMLEA may be taken on an intermittent basis if certain conditions are met. Leave can only be taken intermittently if both employer and employee agree to the arrangement, and to the increments of intermittent leave that will be used.
At bottom, the Rule recognizes that the FFCRA’s goal is to provide as much flexibility as is necessary to contain the spread of COVID-19. For that reason, where an employee is teleworking, employer and employee can agree to the use of paid leave in any increment. Where an employee reports to the worksite, however, the risk of transmitting COVID-19 is elevated. Therefore, intermittent use of paid sick leave under EPSLA by a person who reports to work in person is only allowed where the employee is utilizing leave to care for a child because school is closed or a childcare provider is unavailable. In the case of all other EPSLA qualifying reasons, the employee is at too great a risk of spreading COVID-19 to be permitted to return to work intermittently.
Where leave is taken intermittently, only the actual amount of leave used may be charged to an employee’s paid leave allowance.
Providing Notice and Supporting Documentation
We have received many inquiries from employers as to what type of documentation employees must submit in order to establish an entitlement to leave.
The Rule explains that an employer can require an employee to follow reasonable notice procedures after the first day for which an employee takes leave, other than in cases where leave required to care for a child due to a school closure or a childcare provider’s unavailability. Where leave is needed to care for a child in such circumstances, the employee must give as much notice as is practicable. Notice may be provided by the employee’s “spokesperson,” i.e., a spouse, other adult family member or a responsible party, if the employee cannot provide it directly.
According to section 826.90 of the Rule, oral notice is generally sufficient if enough information is provided to determine whether the reason for leave is qualifying under EPSLA or EFMLEA. In no event may the employer require the notice to consist of more than the supporting documentation required by section 826.100.
Section 826.100 describes the type of documentation that an employer may require in considering a request for leave. In general, the information provided should include the employee’s name, the dates for which leave is requested, an oral or written statement of the qualifying reason for the leave and a statement that the employee is unable to work or telework because of that reason. In addition:
- Where leave is required due to a government order of quarantine or isolation, the employee must provide the name of the government entity that issued the quarantine or isolation order to which the employee is subject.
- Where leave is required due to a physician’s recommendation of self-quarantine or isolation, the employee must provide the name of the health care provider who advised him or her to self-quarantine for COVID-19 related reasons.
- Where leave is taken to care for another person under a government order or physician’s recommendation of quarantine or isolation, the employee must provide, depending on the nature of the request, the government entity that issued the quarantine or isolation order to which the individual is subject or the name of the health care provider who advised the individual to self-quarantine.
- Where leave is taken to care for a child because of a school closure or the unavailability of a child care provider, the employee must provide: (i) the name of the child being care for; (ii) the name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19 reasons; and (iii) a statement representing that no other suitable person is available to care for the child during the period of requested leave.
The employer may also require an employee to provide such additional material as is needed for the employer to substantiate its entitlement to tax credits pursuant to the FFCRA. An employer is not obligated to provide leave in the absence of such materials. A frequently asked questions section on the IRS’ website currently indicates that employers should also keep:
- Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.
- Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
- Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
- Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).
The employer may not require any further information and, if the employee initially provides insufficient information, the employer should give the employee an opportunity to correct any deficiencies before denying leave.
Employees who take leave under EPSLA or EFMLEA are entitled to continue their coverage under the employer’s health insurance on the same conditions as if they had not taken the leave (i.e., if an employee was previously required to contribute to the cost of such coverage, he or she must continue to do so).
Return to Work
In most instances, an employee is entitled to be restored to the same or an equivalent position upon return from EFMLEA or EPSLA leave. However, just as in the case of FMLA leave, an employee is not immune from employment actions that would have occurred regardless of whether the leave was taken. The employer must be able to demonstrate that the employee would have been laid off or furloughed, as the case may be, even if he or she had not taken leave. In the case of the EFMLEA, job restoration may be denied to key employees if “such denial is necessary to prevent substantial and grievous economic injury to the operations of the employer.”
Additionally, an employer who has fewer than twenty-five employees may deny job restoration to an employee if all four of the following conditions are met:
- The 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;
- The employee’s position no longer exists due to economic or operating conditions that (i) affect employment and (ii) are caused by a public health emergency (i.e., due to COVID-19 related reasons) during the period of the employee’s leave;
- The employer made reasonable efforts to restore the employee to the same or an equivalent position; and
- If the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts for a period of time to contact the employee if an equivalent position becomes available.
Section 826.140 of the Rule explains that an employer is required to retain the following documents for four years:
- All documentation provided pursuant to § 826.100 in order to substantiate a request for leave, regardless of whether leave was granted or denied.
- If an Employee provided oral statements to support his or her request for paid sick leave or expanded family and medical leave, the employer is required to document and retain such information.
- If an employer denies an employee’s request for leave pursuant to the small business exemption under § 826.40(b), the employer must document its authorized officer’s determination that the prerequisite criteria for that exemption are satisfied and retain such documentation.
- Documents to support an employer’s claim for tax credits from the Internal Revenue Service (IRS).
When it comes to FFCRA, a vast amount of information has been released by the government in a short amount of time. We should all hope the need to provide such leave is short-lived and that the sunset of this crisis is on the horizon. If you have any questions, please contact me at (516) 393-8292 or firstname.lastname@example.org.