The DOL Issues Regulations to Guide Employers on Implementing The FFCRA

On April 1, 2020, the same date that the Families First Coronavirus Response Act (“FFCRA”) took effect, the U.S. Department of Labor (“DOL”) issued temporary regulations interpreting the FFCRA.  While we previously issued a detailed E-Alert on the FFCRA, including the Emergency Family Medical Leave Expansion Act (“EFMLEA”) and the Emergency Paid Sick Leave Act (“EPSLA”), below we focus on providing a summary of the DOL’s regulations impacting the FFCRA.  We hope this will provide a useful guide as you begin implementing the FFCRA in your respective workplaces.

Covered Employers

The EPSLA and EFMLEA both cover employers with less than 500 employees.  The regulations clarify that coverage is determined based on the number of employees at the time an employee’s leave is to be taken.  For employers close to the threshold number, it will be important to take a new headcount each time an employee leave request is made since the same employer could be deemed covered in certain months and not others depending on a potentially fluctuating employee count.  Employers should make certain to count employees out on leave, temporary employees, part-time employees and day laborers supplied by a staffing agency, while independent contractors need not be included.

Covered Employees

The regulations clarify that under the EPSLA, all employees of a covered employer are eligible to take paid sick leave (unless they fall within the exceptions for health care providers, emergency responders or certain federal employees of the Office of Management and Budget) without regard to how long they have been employed by their employer. 

Under the EFMLEA, employees must have been employed by their employer for at least 30 calendar days before becoming eligible for leave.  The regulations provide that an employee is considered eligible under this provision when: (a) the employee was on the employer’s payroll for the 30 days immediately preceding the date on which the employee’s leave would begin; or (b) the employee was laid off or otherwise terminated by the employer on or after March 1, 2020, and rehired or reemployed by the employer on or before December 31, 2020, provided that the employee had been on the employer’s payroll for 30 or more of the 60 calendar days prior to the date the employee was laid off or terminated. 

Leave Amounts and the Intersection of The EPSLA and EFMLEA

With respect to the two weeks or up to 80 hours of EPSLA, the employee has sole discretion to use such leave or use any accrued vacation or other paid time provided by the employer.  An employer cannot demand an employee substitute vacation or other paid off provided by the employer for the EPSLA leave.

With respect to the two initial unpaid weeks (out of a total of 12 weeks) of EFMLEA leave, an employee can choose to substitute paid time such as that afforded under the EPSLA, accrued vacation or other paid time off pursuant to an employer policy or both to reach 100% of the employee’s regular pay.  Should an employee choose to use accrued vacation or other paid time off pursuant to an employer policy, such amounts will count towards the aggregate EFMLEA entitlement amount or $10,000.

With respect to the remaining ten paid weeks of EFMLEA leave, the employer may not require an employee to use earned vacation or other paid time off pursuant to an employer policy, although the employee and employer can mutually agree to it.  Even with such mutual agreement, the regulations provide that the aggregate amount of the EFMLEA leave will not be increased.

Inability to Work or Telework and “Shelter-in-Place”

As the EPSLA and the EFMLEA make clear, to take leave under either, an employee must be unable to work or telework.  The regulations contrast situations where no work is available from those in which a qualifying event causes an employee to be unable to work or telework.  For instance, if a donut shop closes temporarily or indefinitely due to a reduction in business related to COVID-19, there would be no work for employees to perform, so employees of such shop would be deemed ineligible to take EPSLA or EFMLEA leave.  This would be the case even if a shelter-in-place order was the substantial cause for the closure.

The regulations apply a “but for” test with respect to qualifying events.  In other words, but for the particular qualifying event, the employee could perform work or telework that the employer has assigned to the employee.  The assumption underlying the “but for” analysis is that (i) the employer is functioning; (ii) the employer has work that the employee can perform; and (iii) the employee can perform the work on-site or via telework.  Employers are recommended to apply this analysis to each leave request regardless of the qualifying event at issue (e.g., isolation order, childcare, etc.). 

Intermittent Leave

The regulations limit the use of intermittent leave for on-site employees to circumstances where the employee and employer mutually agree to the use of intermittent leave, and such use is limited to the employee’s need to care for a child whose school or place of care is closed, or where childcare is unavailable.  In other words, employers need not allow employees to use leave intermittently for any of the other five qualifying reasons to take EPSLA leave.  The regulations make clear the reasoning behind this is so an employee who is exhibiting COVID-19 symptoms, has obtained such a diagnosis or is caring for an individual suffering from the same does not put other employees at risk by intermittently returning to work while still contagious.  The regulations clarify that in such situations an employee must either take continuous paid sick leave until the reason for leave is satisfied or the employee has exhausted the amount of paid leave, whichever comes first.

With respect to employees who are teleworking, intermittent leave is available under the EFMLEA and the EPSLA so long as the employer agrees.

Employment Restoration

The regulations clarify that upon return to work after leave under the EPSLA or the EFMLEA, an employee has the right to be restored to the same or an equivalent position, subject to the following exceptions: (a) layoffs which would have affected the employee had the employee not been on leave; and (b) for EFMLEA leave only, job protection may be denied to “key” employees where necessary to prevent “substantial and grievous economic injury” to the employer’s operations.  The traditional FMLA regulations define a “key” employee as a salaried, FMLA eligible employee who is “among the highest paid 10 percent” of all the employees (salaried and hourly) employed by the employer within 75 miles of the employee’s worksite.  It must be noted that satisfying the “substantial and grievous economic injury” standard is considered extremely difficult as minor inconveniences and costs experienced in the normal course of business would not qualify.  In any case, if you believe you have a key employee who has requested EFMLEA leave, please contact us so we may guide you through the process.

The regulations also exempt small businesses with less than 25 employees from restoring an employee who has taken leave under the EFMLEA (not the EPSLA) where: (a) the employee took leave to care for a child whose school or childcare facility was closed due to COVID-19 reasons; (b) the employee’s position ceased to exist due to economic conditions or operating conditions caused by a public health emergency; (c) the employer makes reasonable efforts to restore the employee to an equivalent position; and (d) where such reasonable efforts fail, the employer makes reasonable efforts to contact the employee for up to one-year afterward if an equivalent position becomes available. 

Employee Leave Requests and Necessary Information

The regulations clarify the type of information that an employee requesting leave under the EPSLA or the EFMLEA must provide an employer. 

For all of the leaves generally, each employee seeking leave should submit (1) the employee’s name; (2) the dates underlying the leave request; (3) the qualifying reason for the leave; and (4) an oral or written statement that the employee is unable to work or telework. 

The regulations also require leave specific information as provided below:

• Employee subject to a federal, state or local quarantine or isolation order related to COVID-19: the name of the governmental entity that issued the order.
• A health care provider advises an employee to self-quarantine due to concerns related to COVID-19: the name of the health care provider who advised the employee to self-quarantine.
• Employee is caring for an individual who is subject to a quarantine or isolation order or an individual who has been advised by a health care provider to self-quarantine: either the name of the governmental entity that issued the order to which the individual being cared for is subject, or, the name of the health care provider who advised the individual being cared for to self-quarantine.
• Employee is caring for a child whose school is closed or childcare is unavailable due to COVID-19 precautions: name of the child, name of the school, place of care or child care provider that has closed or become unavailable, and a representation that “no other suitable person will be caring for the child during the period” the employee is taking EPSLA or EFMLEA leave for this reason.

Model Notice / Poster

The regulations clarify that the DOL’s Model Notice/Poster or an equivalent version that is accurate and readable must be hung in a conspicuous place, or in the event the workplace is not accessible, distributed to employees by email, direct mail, or posted on the employer’s internal or external website.  Unlike typical FMLA notice requirements, the DOL’s Model Notice/Poster need not be posted in any language other than English, although a Spanish language version is available on the DOL’s website. 

Recordkeeping

 Employers are required to retain documents and information regarding EPSLA and EFMLEA leave requests for four years, regardless of whether the employer grants or denies leave, as follows:

• Documentation to show how the employer determined how much leave was paid to employees (including records of actual work performed, telework, and paid leave credits);
• Documentation to show how the employer determined the amount of qualified health plan expenses that were allocated to wages; and
• Copies of any completed IRS Forms 7200 (Advance Payment of Employer Credits Due to COVID-19) that the employer submitted to the IRS, and the completed IRS Forms 941 (Employer’s Quarterly Federal Tax Return) that the employer submitted to the IRS (or, if applicable, records provided to a third-party payer to meet an employer’s employment tax obligations/entitlement to the credits claimed on IRS Form 941).

FFCRA Exemptions

            Small Businesses

The regulations clarify that an employer with less than 50 employees is exempt from providing FFCRA leave for childcare related purposes if doing so would jeopardize the business’ operations.  However, employers should take a conservative approach when applying such an exemption and should be prepared to justify their rationale as to precisely how the business would be impacted.  It is also recommended that small businesses revisit any original decision to take the exemption with respect to each future leave request as its financial position may improve over time.

In order to utilize the exemption, an authorized officer of the employer must determine and document that:

1. 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 operation at a minimal capacity;
2. The absence of the employee or employees 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 an insufficient number of 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 leave, and these labor or services are needed for the small business to operate at a minimal capacity.

            Health Care Provider Employees

The regulations clarify that certain employees who are “health care providers” are excluded from being eligible for EPSLA and EFMLEA leaves.  The regulations define “health care providers” very broadly to include anyone employed at a doctor’s office, hospital, health care center, clinic, post-secondary 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.  The definition also includes any individual employed by an entity that contracts with any of these institutions to provide services or to maintain the operation of the facility.

            Emergency Responder Employees

The regulations also provide that certain employees who are “emergency responders” are excluded from being eligible for EPSLA and EFMLEA leaves.  “Emergency responders” are defined to include an employee who is necessary for the provision of transport, care, health care, comfort, and nutrition of such patients, or whose services are otherwise needed to limit the spread of COVID-19.  This includes but is not limited to military or the 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, 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.

The full text of the DOL’s temporary regulations interpreting the FFCRA may be accessed here.

The DOL’s Frequently Asked Questions regarding the FFCRA may be accessed here.

The IRS’ Frequently Asked Questions regarding tax credits available under the FFCRA may be accessed here.

If you have questions related to implementing the FFCRA at your workplace or completing the Paycheck Protection Program application, please contact Naureen Amjad, a Partner and the Leader of Pedersen & Houpt's Employment Law Practice Group, at 312.261.2273 or at namjad@pedersenhoupt.com.