April 8, 2020
The United States Department of Labor (“DOL”) released temporary regulations (“regulations” or “guidance”) interpreting the Families First Coronavirus Response Act ( ”FFCRA”) — effective April 1, 2020 — that requires private employers with 499 or fewer employees, and certain public employers, to provide covered employees emergency paid sick leave (EPSL) and emergency unpaid and paid family leave (EFMLA). The temporary guidance is published on the Department of Labor website and at CFR Part 826.
The FFCRA provides for Emergency Paid Sick Leave and Emergency FMLA Leave benefits in response to the COVID-19 global pandemic.
Signed into law on March 18, 2020, the FFCRA, as amended by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created two new emergency paid leave requirements in response to the COVID-19 global pandemic: Emergency Paid Sick Leave (EPSL) and Emergency FMLA Leave (EFMLA). With the EPSL, an employee may take up to 80 hours (two weeks) of Emergency Paid Sick Leave for COVID-19 qualifying reasons. With the EFMLA, an employee may take up to 12 weeks of Emergency FMLA Leave for child-care COVID 19-related reasons. Nelson Mullins summarized the FFCRA in earlier publications (see links below). Nelson Mullins also published a summary the initial guidance provided by the DOL (see links below).
In addition to the regulations, the DOL continues to update its Q&A Resources at this link.
Employer Coverage — Determined by Number of Employees: An employer must provide EPSL and EFMLA leave if it has 499 or fewer (i.e., less than 500) employees within the United States at the time an employee’s leave is to be taken. This requires an employer to maintain a “live” headcount/census. The DOL Guidance recognizes that a company with 499 or fewer employees in April may need to grant leave to Employee X, but if its payroll is over 500 in May, it can deny a request for leave from Employee Y at that time (although Employee X would be entitled to continue leave previously granted). In other words, coverage is subject to fluctuations in headcount/census.
To determine the number of employees, the regulations advise that the headcount is to be broadly construed and that employers should include: employees on leave; temporary employees whom they jointly employ with another employer (regardless of whether another employer maintains the jointly employed employees on its payroll); and day laborers a temporary agency supplies (regardless of whether you are the temporary agency or the client firm if a continuing employment relationship exists). Further, the regulations confirmed that employees outside of the United States, independent contractors, and employees who have been subject to layoff or furloughed are not included in the FFCRA headcount.
The regulations specify and acknowledge that a corporation (including its separate establishments or divisions) is a single employer so it must count all U.S.-based employees. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA. If two entities are joint employers, they both must count all their common employees.
Further, two or more entities are generally separate employers unless they meet the integrated employer test under the traditional FMLA (sometimes referred to as FMLA “classic”). If two entities are an integrated employer under the FMLA, then employees of all entities that make up the integrated employer count to determine employer coverage for EPSL and EFMLA purposes.
Both tests and calculations are fact-specific and look to a series of factors, including common ownership, management, business purpose, and day-to-day operations. As such, employers with questions as to whether they should aggregate affiliated companies should consult counsel. In considering these issues, employers should also be cautious of the potential impact that aggregation, or separation, might have on existing litigation, claims and investigations, either now or in the future.
Small Business Exemption (fewer than 50 employees) — An employer, including a religious or nonprofit organization, with 49 or fewer employees, is exempt from providing FFCRA leave for child-care purposes when allowing such leave would jeopardize the viability of the business as a going concern.
To use this exemption, an authorized officer of the employer must determine that:
To elect this small business exemption, the employer must document that an authorized officer made this determination. DOL guidance advises employers they should retain those records related to the determination in their files. Finally, even where a small employer chooses to exempt one or more employees, it still must display the mandatory FFCRA poster.
Eligible Employees — For application of EPSL, all employees of a covered employer are eligible to take EPSL leave unless they fall within the exception for employers of health care providers or emergency responders (or the employers are otherwise are exempt under the small employer exemption or are certain federal employees the Office of Management and Budget exempts).
For EFMLA, employees employed by the employer for at least 30 calendar days are eligible for leave.
An employee is employed for at least 30 calendar days where:
Finally, like traditional FMLA analysis, the regulations provide that, where an employee is employed by a temporary placement agency and subsequently hired by the employer, the employer must count the days worked as a temporary employee of the agency toward the 30-day eligibility period.
Job Protection/Restoration — The regulations provide that upon return to work from EPSL or EFMLA leave, the employee has the right to be restored to the same or equivalent position, subject to certain limitations:
In addition, employers that employ 24 or fewer employees may deny job restoration under EFMLA (but not EPSL) where:
Health Care Provider Employee Exception — The regulations provide that employers may exclude from eligibility for EPSL or EFMLA leave certain employees if they are health care providers. The regulations define health care provider broadly as: anyone employed at any 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 includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. This 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. 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. It 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.
This definition is only applicable for determining employee eligibility for FFCRA leave, and not for purposes of certifying a need for leave under the traditional FMLA.
Emergency Responder Employee Exception — Employers may exclude from eligibility for EPSL or EFMLA leave certain employees if they are emergency responders. The regulations define an emergency responder as: 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 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. This definition 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.
EPSL for Full- & Part-Time Employees — Employees are full time and receive 80 paid sick leave hours in two situations. First, employees are full time if their employer normally schedules them to work at least 40 hours each workweek. Second, employees without a normal weekly schedule will be full time if the average number of workweek hours their employer schedules them to work (including leave hours they take) is at least 40 hours per workweek over the entire period of employment or the six-month period that ends when the employee takes paid sick leave, whichever is shorter.
All other employees are part-time. For those part time employees, the DOL creates a standard for employers to apply to determine how many EPSL hours they receive. Part-time employees with a normal weekly schedule receive an amount of EPSL that equals the total amount of hours worked in a two-week period. For example, if employees work 20 hours each week, they receive up to 40 hours total leave under the EPSL. For employees who lack a normal weekly schedule, the DOL advises employers to use the total hours the employee worked during the six-month period (or the entire period of employment, if shorter) before taking leave, divide that by the number of calendar days in the period, then multiply the result by 14. Note that, if at the time of hiring, the employer and employee have an agreement concerning the average number of work hours each calendar day (few, if any, will), that daily number multiplied by 14 produces the amount of EPSL the employee is eligible to receive.
EFMLA Unpaid Period Will Be the Time an Employee Normally Works in Two Workweeks — Although EFMLA has a “10-day” unpaid period, the DOL equates the period to two workweeks. Accordingly, if an employer normally schedules an employee to work three 10-hour shifts per workweek, "10" days will be the six days the employee normally works during a two-workweek period, after which the employee transitions to the "paid" EFMLA. If employees' work schedules vary, employer should base hours on a six-month look back period or the period of employment if the employee has worked fewer than six months.
Total FMLA Leave Entitlement Amounts to 12 weeks, but EPSL Could Extend That Period — As it forecast in its earlier Q&As, the DOL confirms that leave taken under the EFMLA cannot exceed a total of 12 weeks during the applicable 12-month period. Any amount of traditional FMLA leave an employee uses earlier in that same 12-month period reduces EFMLA entitlement. For example, if during an applicable FMLA 12-month period an employee takes 4 weeks of traditional FMLA leave, the employee has 8 weeks of EFMLA leave left to use in that same period. Similarly, during a single FMLA 12-month period, an employee can use a combination of traditional FMLA and EFMLA leave, up to a maximum amount of 12 weeks. However, employees who choose not to use their two weeks of EPSL concurrent with the first 2 weeks of unpaid EFMLA are entitled to a maximum of 14 weeks of COVID-19 related leave, depending on the amount of EFMLEA leave the employee has available. Employee can take two weeks of paid EPSL and then exhaust any available EFMLA leave, the first two weeks of which will be unpaid.
If an employee exhausts all 12 workweeks of traditional FMLA or EFMLA, the employee still can make use of any remaining EPSL leave.
Substitution of Accrued Paid Leave and “Top-Offs” — The DOL further clarifies how accrued paid leave interacts with EPSL and EFMLA:
Inability to Work or Telework and the “Shelter-in-Place” or Equivalent Order — To take leave under EPSL and EFMLA, employees must be unable to work or telework. The regulations distinguish situations in which no work is available from those in which a qualifying event causes an employee to be unable to work or telework. In explaining the rule, the DOL explains that if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, it does not have work for employees to perform, so employees cannot take leave; this applies even if a stay-at-home order substantially causes the closure.
For qualifying events, the regulations apply a "but for" standard: but for the qualifying event, the employee could perform work or telework that the employer has for the employee. Assuming the employer has work the employee can perform, and the employee can perform this work on site or via telework, the employee can only use leave if extenuating circumstances exist that prevent the employee from performing this work. These extenuating circumstances include serious COVID-19 symptoms. For example, if employees can only telework during a qualifying event, but the power goes out at their home, the power outage is an extenuating circumstance for which employees can use leave because they are unable to telework. Regardless of the type of qualifying event, e.g., isolation order, childcare, etc., employers must run through this analysis when determining whether an absence qualifies for FFCRA leave.
Telework (and Accurate Recording of Hours Worked) — Telework can occur during normal hours or at other times if the parties agree. In explaining the rule, the DOL addresses administrative challenges and how telework interacts with pre-FFCRA standards concerning when the workday begins and what constitutes "hours worked" for FLSA minimum wage and overtime purposes.
For FFCRA telework, the DOL indicates that "continuous workday" (CW) rule will not apply. Generally, under the CW rule, employees are "on the clock" once they first perform tasks that are “integral and indispensable to" their “principal activity.” However, for FFCRA purposes, recognizing flexible work arrangements that companies enter with their employees, the DOL clarifies that employers are not "required to count as hours worked all time between the first and last principal activity." Instead, employers must pay employees for "all hours actually worked." For example, if during a workday while teleworking from 7 a.m. to 9 p.m., an employee performs work from 7-10 a.m., 1-4 p.m., and 7-9 p.m., the employee works 8 hours, not 14 hours.
Subject to Quarantine or Isolation Order — The regulations broadly interpret this to cover "quarantine, isolation, containment, shelter-in-place, or stay-at-home orders" a federal, state, or local government issues, including advisories that "categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine."
Medical Diagnosis — The regulations broadly define symptoms, but narrowly define qualifying circumstances: employees are experiencing fever, dry cough, shortness of breath, or any other COVID-19 symptoms the CDC identifies and are unable to work because they take affirmative steps to actually obtain a medical diagnosis (making, waiting for, or attending an appointment for a COVID-19 test). Employees cannot use paid sick leave to self-quarantine without seeking a medical diagnosis. Further, employees cannot use paid sick leave if they can telework while awaiting test results. However, if a health care provider tells employees they do not meet the criteria for testing and advises them to self-quarantine, or if they test positive for COVID-19 and a health care provider advises self-quarantine, they might be eligible to use paid sick leave for that purpose.
Health Care Provider Advises Self-Quarantine — The regulations establish a two-part test. First, a health care provider must advise self-quarantine due to a belief the employee has, may have, or is particularly vulnerable to, COVID-19. Second, following this advice and self-quarantining, the employee is unable to work at the normal workplace or telework.
Caring for a Quarantining or Isolating Individual — The regulations define an "individual" as "an [e]mployee’s immediate family member, a person who regularly resides in the [e]mployee’s home, or a similar person with whom the [e]mployee has a relationship that creates an expectation that the [e]mployee would care for the person." The regulations exclude persons with whom employees have no personal relationship.
Caring for a Child — Where the employee requests leave to care for a child whose school or place of care is closed, the DOL adopts recently issued IRS guidance by limiting EPSL and EFMLA leave only to those situations where the employee must actually care for the child and no other suitable person (e.g., co-parents, co-guardians, or the usual childcare provider) is available to care for the child during the period. If another caretaker is available to care for the child, the employee cannot use leave.
Intermittent Leave — To reduce or limit the risk that an employee might spread COVID-19 to other co-workers, the DOL limits the use of intermittent leave for those working onsite (i.e. not teleworking) to three main conditions, that: 1) the employee and employer agree to the use of intermittent leave; 2) 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; and, 3) there is minimal risk that employee will spread COVID-19 to other employees at the worksite. As part of their agreement for intermittent leave, the employee and the employer must agree on the incremental units of leave.
The DOL thereby precludes the use of intermittent leave by on-site employees for any of the other five reasons an employee can take EPSL. Its reasoning is practical and in line with other federal government initiatives to reduce the spread of COVID-19: where an employee is absent due to COVID-19 symptoms or diagnosis or is taking care of an individual with symptoms/diagnosis, the employee cannot take intermittent leave due to the “unacceptably high risk” that the employee might spread COVID-19 to other employees. In these situations, the DOL made clear that the employee must continue to take continuous paid sick leave each day until the employee either exhausts paid leave or no longer has a reason for leave from work.
In the case of telework, intermittent leave is available for employees who are taking EPSL or EFMLA, but only if the employer agrees. The DOL presumes that the employee and employer will “agree on any arrangements” for intermittent leave “that balance the needs of each teleworking employee with the needs of the employer’s business.”
Exempt Employee Absences — The regulations advise taking leave does not affect an employee's exempt status. In explaining the rule, the DOL says taking intermittent FFCRA leave while receiving FFCRA paid leave will not affect whether the employer pays the employees a qualifying salary or fee.
Employee Notice to Employer/Requests to Use Leave — The DOL outlines different employee notice requirements depending on the reason for leave. For employees needing leave for school closures/childcare unavailability, and where such leave is foreseeable, employees must provide notice as soon as is practicable (consistent with traditional FMLA standards). On the other hand, when an employee needs leave for any other reason under EPSL, the standards are less rigid, and employers can only require employee notice after the first workday (or part of a workday) that an employee takes EPSL. Employers must accept this notice from the employee’s spokesperson, such as a family member or other responsible party, if the employee is unable to provide such notice personally.
While many employers have policies requiring employees to make requests for various types of leave in writing, consistent with the spirit of recent case law under traditional FMLA, oral notice of the initial need for leave under FFCRA is sufficient, as long as the employee provides enough information for the employer to determine that it is an FFCRA-qualifying reason for leave.
However, nothing in the regulations prevents an employer from directing employees to then follow the organization’s usual and customary procedures going forward, and the DOL indicates that such expectations will typically be reasonable. The DOL reminds employers that if an employee fails in some regard with respect to providing notice or supporting information or documentation, the employer should give the employee notice of the failure and an opportunity to correct the deficiency prior to denying the leave. This is consistent with FMLA interpretive case law in recent years requiring that employees have an entirely clear understanding of what employers expect of them prior to an employer denying leave for such failures.
Consistent with an employer’s normal and customary procedures, Employee must provide a signed statement containing the Employee’s name; the date(s) for which leave is requested; the COVID-19 qualifying reason for leave; and a statement representing that employee is unable to work or telework because of the COVID-19 qualifying reason. The signed statement must also include the name of the government entity, or physician, that issued the quarantine or isolation order, if applicable. If leave is taken to care for a child, employee must identify the name of the child, the name of the school, place of care, or child care provider that is closed or unavailable due to COVID-19 and a statement that no other suitable person is available to care for the child.
Employee Documentation to Substantiate Leave — For EFMLA leave, employers may request documentation permitted under the certification rules for normal FMLA leave. For EPSL leave, employers may request documentation demonstrating the employee’s entitlement to leave based on one of the six qualifying reasons codified by the FFCRA
Given the extreme nature of the global COVID-19 pandemic, there appears to be a relaxation of leave documentation standards as compared to traditional FLMA leave. The DOL then defers to the tax credit process through the IRS and states that employers may also request that an employee provide other documents needed to substantiate FFCRA tax credits, though the DOL does not indicate further what such records may be. The DOL also confirms, as IRS guidance states, that an employer need not provide leave to employees who will not provide sufficient materials to support the tax credits.
Regular Rate Calculation Period Differs from FLSA — Although the FFCRA references the FLSA regular rate, the regulations require a different calculation period. Instead of using the workweek in which employees use leave, employers must use a six-month lookback period or the entire period of employment, whichever is shorter. Alternatively, employers can use this time period and divide the average weekly regular rate by the number of hours worked each workweek.
Mandatory Poster — The regulations do not contain significant, new employer notice requirements for the FFCRA, other than to align with earlier Q&A, and require that employers post on their premises in conspicuous places the FFCRA’s paid leave provisions and information about how to file a complaint with the DOL’s Wage and Hour Division for alleged violations of the FFCRA. The DOL refers to its model notice, WHD 1422 (the poster it provides on its pandemic resources page), as being sufficient notice, as long as the employer either posts it in the workplace in conspicuous places, emails, direct mails, or posts it on the employer’s internal or external website. Employers can post this in a different format than the DOL’s model poster, as long as the content is accurate and readable. Given the current remote work realities of COVID-19 for many workers, employers should ensure that employees not actually reporting to the worksite each day receive the selected notice via one of the above remote methods. Even where a small employer chooses to exempt one or more employees, it must nevertheless post this general notice.
Unlike the notice requirements of traditional FMLA, the DOL clarifies that this general posting does not need to be in languages other than English, though the DOL has published versions in other languages. For those employers that have no notice obligations under traditional FMLA, this posting satisfies such employers’ notice publication obligations under the EFMLA. The DOL notes that FFCRA does not require employers to provide employees seeking EFMLA leave with the traditional FMLA notice of eligibility, rights and responsibilities, or written designation—but suggests that employers may want to take advantage of their established practices for traditional FMLA to send such notifications.
Recordkeeping — Employers must retain documents and information regarding EPSL and EFMLA for four years, regardless of whether they grant or deny leave. Moreover, if the employee provides oral statements only, it is the employer’s responsibility to document those oral statements and associated information for its records for the four-year period. Employers that decide to deny school/childcare leave to an otherwise-eligible employee (either under EPSL or EFMLA) based on the small employer (fewer than 50 employees) exemption must document the determination by their authorized officer that the organization is eligible for the exemption based on the criteria the regulations establish.
To qualify for the tax credits administered by the Internal Revenue Service, the DOL requires that employers must maintain, for four years:
EFMLA Generally Incorporates FMLA Protections — The FFCRA discusses only job restoration rights. In the regulations, the DOL says all pre-FFCRA FMLA protections apply to EFMLA, e.g., protections against interference and retaliation. Although FMLA remedies will be available to employees, the regulations limit private lawsuits employees can file to those against employers that are otherwise subject to traditional FMLA liability (e.g., employees of companies with between 50 and 499 employees).
Continuation of Health Care Coverage — The regulations state that where an employee is taking EPSL or EFMLA leave, the employer must maintain the employee’s coverage under any group health plan on the same conditions as it would provide if the employee had been continuously employed during the entire leave period. It must maintain the same group health benefits it provides to an employee prior to taking leave while the employee is on leave. If an employer provides a new health plan or changes its existing plan while the employee is on leave, the employee gets the new or changed plan/benefits to the same extent as if they were not on leave. Changes to plan components like premiums or deductibles that apply to all employees in the workforce would also apply to employees on FFCRA leave, as would notice of any opportunity to change plans or benefits.
Employees are responsible for paying their portion of group health premiums they were paying prior to taking leave. Where a payroll deduction is insufficient to cover the employee’s share of the premium, an employer should look to pre-existing FMLA regulations for alternative means to obtain payment. While on leave, an employee may choose not to retain group health plan coverage, but, upon return, can have coverage reinstated on the same terms that existed prior to taking leave, without any additional qualifying period, physical examination, or exclusion of pre-existing conditions.
Finally, subject to COBRA, an employer’s obligation to maintain health benefits while an employee is on leave ceases if the employment relationship would have terminated irrespective of the employee’s leave (e.g., a business closure, or an employee’s failure to return when leave is exhausted).
Employers that Offered Additional Leave Before April 1, 2020 — During the COVID-19 crisis, and prior to April 1, 2020, many employers provided employees with additional paid leave before federal law required it. The regulations make clear that, notwithstanding any leave employers previously provided, leave they must provide under the FFCRA is in addition to that existing leave. Additionally, employers need not retroactively pay employees for absences that would have qualified for FFCRA leave had the law existed when the absence occurred. Employers can, however, prospectively end these voluntary additional paid leave offerings that were created for the COVID-19 crisis, but must pay employees for leave taken thereunder before the policy change takes effect.
FFCRA Leave is Personal to an Individual — The regulations clarify that EPSL and EFMLA amounts are personal to employees, and do not change if an employee changes positions for the same employer.
Finally, the regulations address enforcement of the Act and consequences for failing to provide leave. Although generally the enforcement mechanisms under the Act are the same as under the Fair Labor Standards Act (FLSA) and FMLA – both the DOL and the affected individuals can bring claims, and workers can file a complaint with the DOL – employees cannot file a private lawsuit against employers who were not previously covered by the FMLA (e.g., employees of companies with under 50 employees). The regulations also reaffirm that, through April 18, 2020 the DOL will not seek enforcement against employers that make a good faith attempt to comply with the new law. If either the DOL or a worker brings suit against an employer, the regulations establish that the remedy for any denied sick leave will be the federal minimum wage for each hour denied, plus the same amount in liquidated damages.
Nelson Mullins will be providing additional analysis and information as to enforcement as more details become available.
Nelson Mullins is continuing to monitor developments related to COVID-19, including guidance from the Centers for Disease Control (“CDC”); World Health Organization; various health officials; and federal, state, and local government authorities. The firm is taking appropriate precautionary actions and has implemented plans to ensure the continuation of all firm services to clients. The following are some resources that might be helpful to you. For valuable insight from Nelson Mullins thought leadership on all issues related to COVID-19, please visit https://www.nelsonmullins.com/coronavirus-resources
 The FMLA’s definitions apply to all terms in the EFMLA and the EPSL unless those laws included specific definitions. The regulations clarified that under the EFMLA, which did not expressly adopt the FMLA’s definition of “son and daughter” (unlike the Emergency Paid Sick Leave law, which did adopt that definition), “son and daughter” includes not just a son or daughter under 18 years old, but also those older than 18 and incapable of self-care because of a mental or physical disability.
These materials have been prepared for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel.