On March 24, 2020, the U.S. Department of Labor (DOL) released a Q&A document which provides important information regarding the Families First Coronavirus Response Act (“FFCRA”), as well as a Fact Sheet for Employers. Additionally, today, March 25, 2020, the DOL issued the anticipated mandatory notice, which certain employers will be required to post or distribute. The FFCRA was enacted in response to the COVID-19 pandemic and its effect on U.S. employees. It requires certain employers to provide their employees with Paid Sick Leave and Expanded Family and Medical Leave for certain specified reasons related to COVID-19. This Alert summarizes the key takeaways for employers from the new Q&A and poster.

In its Q&A, the DOL clarified that the FFCRA’s paid leave provisions will take effect on April 1, 2020, and apply to leave taken between April 1, 2020 and December 31, 2020.

Meeting the Fewer Than 500 Employee Threshold Qualification

The FFCRA generally applies to private employers with fewer than 500 employees, as well as certain public sector employers. The Q&A clarifies that an employer has fewer than 500 employees if, when an employee’s leave is to be taken, it employs fewer than 500 full-time and part-time employees (excluding independent contractors) within the United States, including those employed in any Territory or possession of the United States.

To determine if a company falls under the 500-employee threshold, the company should include employees on leave, temporary employees who are jointly employed by your company and another employer (e.g. a staffing company) under the FLSA, and day laborers supplied by a temporary agency.

At least for purposes of the Expanded Family and Medical Leave provisions, the DOL reiterated that employers should apply the FMLA’s integrated employer test to determine if multiple entities should be counted as one integrated employer or separate employers. It is still unclear as to whether the same test will apply for the Paid Sick Leave provisions.

Small Business Exemption

If compliance with the FFCRA would threaten the viability of a business with fewer than 50 employees, the DOL has stated that it may apply for a small business exemption. Further details on the small business exemption are expected in forthcoming DOL regulations.

Paid Leave Provisions

Generally, the Act provides that covered employers must provide to all employees:

  • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.

A covered employer must provide to employees whom it has employed for at least 30 days:

  • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Counting Hours Worked for Part-Time Employees

Under the FFCRA, part-time employees are entitled to leave for their average number of work hours in a two-week period. Employers should calculate those hours based on the number of hours that the part-time employee is normally scheduled to work. If the individual does not have a regular schedule, employers may use a six-month average to calculate average daily hours. Part time employees may take Paid Sick Leave for the number of hours they work each day, for up to a two-week period, and Expanded Family and Medical Leave for the same number of hours per day for up to ten weeks thereafter. The Q&A offers additional calculation scenarios where part-time employees have not been working for at least six months.

Paying Employees and Counting Overtime

How much employees will be paid while taking paid sick leave or expanded family and medical leave under the FFCRA depends on their reason for taking leave. Consistent with the reasons and caps described in the FFCRA, in its mandated Employee Rights notice released today, the DOL summarizes the calculations as follows:

According to the DOL’s Q&A, for reasons (1)-(4) and (6): A full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible for the number of hours of leave that the employee works on average over a two-week period.

For reason (5): A full-time employee is eligible for up to 12 weeks of leave (combined) at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.

According to the DOL’s Fact Sheet for Employers, in the event an employee is unable to work due to FFCRA-covered COVID-19 related reasons, the Emergency Family and Medical Leave Expansion Act requires employers to pay the employee for hours the employee would normally have been scheduled, even if that is more than 40 hours in a week. However, during the two weeks of emergency paid sick time, even if an employee is normally scheduled for more than 80 hours during that two-week period, the total number of Paid Sick Leave hours will still be capped at 80 hours. Also, employers are not required to pay overtime premiums when paying employees under the FFCRA.

Calculating the Regular Rate of Pay

For purposes of the FFCRA, the regular rate of pay used to calculate paid leave is an employee’s regular rate over a period of up to six months prior to the date the employee takes qualifying leave. Employers should include any commissions, tips, and piece rates in making the calculation.

Paid Sick Leave vs. Expanded Family and Medical Leave

Some employees will be entitled to up to 12 weeks of at least partially paid time off under the FFCRA. For example, employees needing to stay home with their children because of school closures or the unavailability of childcare providers due to COVID-19 may be eligible for both Paid Sick Leave and Expanded Family and Medical Leave, capped at 12 weeks total. An employee may take an initial two weeks of Paid Sick Leave for qualifying COVID-19 related reasons. After that, an employee may take an additional 10 weeks of Expanded Family and Medical Leave, at 2/3 of their regular rate of pay for the hours they would have been scheduled during those ten weeks. Expanded Family and Medical Leave may only be taken to care for a child whose school is closed or whose childcare provider is unavailable due to COVID-19 related reasons.

Mandatory Poster and Related FAQ

In addition to releasing the mandatory notice/poster, the DOL also issued FAQs for employers about the posting requirements for this notice. In this FAQ, the DOL clarified that each FFCRA-covered employer must post this notice in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.

The DOL also clarified that all employers covered by the paid sick leave and expanded family and medical leave provisions of the FFCRA (i.e., certain public sector employers and private sector employers with fewer than 500 employees) are required to post this notice. While not explicitly stated, this particular FAQ implied that private employers with 500 or more employees do not have to post this notice since they are not covered by the paid leave provisions of the FFCRA.