On March 24, 2020, the Wage and Hour Division (“WHD”) of the U.S. Department of Labor (“DOL”) issued initial guidance (“Guidance”) on the Families First Coronavirus Response Act (“FFCRA” or the “Act”), which we detailed in a previous Advisory. In short, the Act requires private employers with fewer than 500 employees (“covered employers”) to provide paid sick and family leave for certain COVID-19 related absences and includes a tax credit for employers for the cost of the paid leave.
The Guidance comprises (i) a Fact Sheet for Employers, (ii) a Fact Sheet for Employees, (iii) FAQs about the Act, (iv) a model poster that employers may use to comply with the FFCRA notice requirements and (v) FAQs regarding the required notice. The DOL plans to issue additional guidance and regulations in the near future.
Fact Sheet and FAQs Addressing Employer Paid Leave Requirements
The Fact Sheet summarizes the FFCRA’s requirements to provide employees with paid sick leave and family and medical leave for specified reasons related to COVID-19. These provisions apply from April 1 through December 31, 2020 only.
To recap, the Act generally provides that covered employers must provide to all employees:
- Two (2) weeks (up to 80 hours for full-time employees) of paid sick leave at the employee’s regular rate of pay (up to a cap of $511/day) 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 (2) weeks (up to 80 hours for full-time employees) of paid sick leave at two-thirds the employee’s regular rate of pay (up to a cap of $200/day) because the employee is unable to work because of a bona fide need to care for an individual who is quarantined, or care for a child 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 determined by the Secretary of Health and Human Services.
In addition, a covered employer must provide to employees that it has employed for at least 30 days:
- Up to an additional 10 weeks of paid family and medical leave at two-thirds the employee’s regular rate of pay (up to a cap of $200/day and $10,000 in the aggregate) 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.
As the Guidance confirms, FFCRA includes some exceptions to the paid sick and family leave requirements for otherwise covered employers. Specifically, employers of health care providers or emergency responders may elect to exclude such employees from eligibility for the paid sick leave and expanded family and medical leave provided under the Act. In addition, small businesses with fewer than 50 employees qualify for a waiver of the requirement to provide leave due to school closings or child care unavailability, if the leave requirements would jeopardize the viability of the business as a going concern. The DOL stated additional guidance on the small business exemption would be forthcoming.
The Fact Sheet advises employers that the DOL will not enforce the FFCRA for the first 30 days after the law takes effect, provided the employer has acted “reasonably” and “in good faith” to comply. The WHD defines “good faith” to mean that the employer remedies violations and makes the employee whole as soon as practicable, the violations were not willful, and the DOL receives a written commitment from the employer to comply with the Act in the future. After the first 30 days (i.e., beginning May 1, 2020), employers who violate the Act will be subject to penalties.
Although the WHD does not administer this aspect of the Act, covered employers qualify for dollar-for-dollar reimbursement through tax credits for all wages paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.
Supplementing the Fact Sheet, the FAQs clarify specific aspects of FFCRA coverage and key provisions. Among the most helpful FAQs for employers are:
- FAQ #2, which explains how employers should count employees to determine if their business is covered (independent contractors are not covered; separate establishments or divisions may be considered a single employer, based on the joint employer test under the Fair Labor Standards Act, as well as the integrated employer test under the Family and Medical Leave Act);
- FAQ #4, which gives preliminary guidance applying for the small business waiver;
- FAQ #6, which addresses how to calculate pay due to employees and explains the difference between paying an employee for family and medical leave and paying for sick leave (which is capped at 80 hours over a two-week period);
- FAQ #10, which explains how the two types of leave interact: there’s a cap of 12 weeks of total paid leave (for example, if a child’s school is closed, an employee can take two weeks of paid sick leave, and then take an additional 10 weeks of family leave at 2/3 of the employee’s pay, up to the cap); and
- FAQ #14, which clarifies how to determine whether an employee meets the threshold requirement of 30 days employment to be eligible for paid leave (the guidance states that the employee must have been on the company’s payroll for the 30 calendar days immediately preceding the day leave would begin).
Model Poster and FAQs Addressing Notice Requirements
The FFCRA includes a notice posting requirement. The WHD has created a model notice for employer use. The notice must be posted in a conspicuous place in each of the employer’s locations, or alternatively, an employer may e-mail or direct mail the notice to employees, or post it on an employee information internal or external website (e.g., a company intranet). In addition, new employees must receive copies of the notice upon hire. Currently laid-off employees, however, are not entitled to the notice.
An employer must only provide the notice in English, although the DOL will issue translations in other languages (which, at this point, are to be determined).
As noted in EBG’s Wage and Hour blog post, the DOL is soliciting employer and employee comments and questions as it continues to develop materials to assist with FFCRA as the effective date approaches. The comments and questions the DOL receives may lead to further guidance and materials clarifying the Act’s requirements, so stay tuned for further updates.