What Organizations Need to Know about Congress’s Major Coronavirus Response Bill
As one of the first emergency legislative efforts to combat COVID-19, the FFCRA raised many questions when it was first introduced in mid-March 2020 (as summarized in Pillsbury’s March 18, 2020 client alert). Prior to its April 1, 2020 effective date, the DOL addressed some uncertainties by publishing answers to various FAQs, which continue to be updated regularly. On April 1, 2020, the DOL published 124 pages of Final Temporary Regulations, providing additional guidance for employers regarding the FFCRA. These regulations provide answers to many outstanding questions and, in some instances, contradict prior guidance. (State and local regulations may provide employee protections and employer obligations that differ from, and are in addition to, FFCRA entitlements. Please consult with counsel to confirm whether any state or local statutes or regulations impose additional or different obligations than those discussed here.)
Employers must recognize that the FFCRA actually contains two emergency paid leave provisions—(1) the Emergency Paid Sick Leave Act (EPSLA), and (2) the Emergency Family and Medical Leave Expansion Act (EFMLEA). For employers with fewer than 500 employees, compliance with the FFCRA, as well as any state and local paid sick leave provisions, remains critical to avoid possible employee claims and litigation.
Usage Rules Confirm Prior FAQ Responses
The new regulations confirm that an employee is not entitled to take EPSL if there is no work available to the employee. To be entitled to EPSL, the employee must not be able to work (or telework) because the employee is impacted by one of the six covered reasons (explained in more detail in Pillsbury’s March 18, 2020 client alert). The regulations also clarify that an employee may take EPSL only if a local shelter, isolation, or quarantine order prevents the employee from working or teleworking, not if the entire business is prevented from operating. Therefore, instances where a business is forced to shut down temporarily or indefinitely due to a downturn in business attributable to COVID-19 would not meet the requirements for paid leave under the EPSLA.
For instance, if a coffee shop closes (temporarily or indefinitely) due to a downturn in business, a cashier who previously worked at the coffee shop and is now subject to a stay-at-home order would not be able to work even if not subject to the order, because the place of business is closed. Thus, the cashier would not be entitled to EPSL. By way of another example, a lawyer who is able to telework while self-quarantining would not be able to take EPSL for any period of time when he or she could telework, but would be entitled to take EPSL in the event of a power outage or other extenuating circumstance that prevented him or her from teleworking while self-quarantining. Finally, the regulations confirm that an employee is not entitled to payment for unused EPSL upon separation of employment.
Small Business Exemption is Not Automatic, and Limited in Applicability
Many employers with fewer than 50 employees have misplaced comfort that the FFCRA is not applicable to them. But the small employer exemption is not automatic, and it is limited in scope, even for qualifying establishments.
Section 826.40(b) of the regulations provides specific, objective criteria for the small employer exemption pursuant to which small, private employers with fewer than 50 employees may be exempt from having to provide an employee with EPSLA or EFMLEA leave to care for the employee’s child whose school or place of care is closed, or childcare provider is unavailable, when such leave would jeopardize the viability of the business as a going concern. The regulations provide that a small employer is exempt from the requirement to provide leave due to school closures or childcare unavailability when:
In these circumstances, the employer may deny EPSLA or EFMLEA leave only to those specific employees whose absence would cause the small employer’s expenses and financial obligations to exceed available business revenue, pose a substantial risk, or prevent the small employer from operating at minimum capacity.
To qualify for this small business exemption, employers must document that a determination has been made pursuant to the criteria set forth by the DOL in section 826.40(b)(1). The employer should not send that documentation to the DOL, but rather retain the records in its files.
It is important to note that small employers are not exempt from providing leave for any of the other types of permissible uses under the EPSLA; this exemption only applies to leave to care for the employee’s child whose school or place of care is closed, or whose child care provider is unavailable.
Intersection Between EPSLA, EFMLEA, and Existing Paid Leave Allotments
The EFMLEA requires employers to provide up to 12 weeks of leave for employees to care for their child whose school or place of care is closed, or whose childcare provider is unavailable, for a COVID-19 related reason. The first two weeks of this leave are unpaid. Unlike ordinary Family and Medical Leave Act (FMLA) leave, however, the subsequent 10 weeks of leave must be paid at two-thirds the employee’s regular rate of pay.
During these first two weeks of unpaid leave for a childcare closure, employees may receive EPSL to be paid at two thirds of their regular rate of pay (up to a maximum of $200 per day, or $2,000 in the aggregate). The Acts are intended to work together so that the employee is paid, but not double-paid, for the first two weeks of leave.
Total pay under the EFMLEA is capped at $200/day and $10,000 in total (for a total of no more than $12,000 when combined with the two weeks of EPSL). Notably, the regulations clarify that an employee may elect, or an employer may require, that an employee use any other available leave concurrently with the EFMLEA time, such as vacation or PTO, so that the employee receives 100 percent of their total compensation.
Interaction Between the EPSLA, EFMLEA, and FMLA
An employee may only take up to 12 weeks of leave under both the EFMLEA and FMLA within the employer’s 12-month period. Thus, any prior FMLA time will count against an employee’s EFMLEA entitlement and vice versa. However, an employee who has already exhausted his or her FMLA entitlement may still take up to 80 hours of leave under the EPSLA.
Other types of leave, such as vacation or PTO, may not be counted against leave provided under the EPSLA or EFMLEA, even if such leave was taken for COVID-19 related reasons. In addition, employees are not permitted to apply EPSLA or EFMLEA leave retroactively to any COVID-19 related absences occurring prior to April 1, 2020.
It is critical to note that some states and localities have implemented, or are in the process of implementing, laws or ordinances that would expand employers’ requirements to compensate employees for purposes similar to the FFCRA. For example, in Los Angeles, there is currently an ordinance under consideration by the Mayor’s office that would potentially expand paid sick leave for COVID-related reasons to employers with more than 500 employees. San Jose is likewise considering an ordinance that provides for expanded sick leave entitlements beyond those set forth in the FFCRA. Thus, it is critical to consult your state and local laws in addition to the FFCRA.
Intermittent Leave and Flexibility
The regulations confirm that intermittent leave is not required under either provision of the FFCRA absent an agreement between the employer and employee. The regulations encourage employers to provide as much flexibility as possible to employees to care for children or other family members during the current crisis, so long as the employer’s business needs can be met, particularly when an employee is teleworking. But, ultimately, an employee is only entitled to intermittent usage if the employer approves it.
The regulations encourage employers to allow flexible scheduling in telework arrangements and to permit unpaid breaks in the workday (for example, so an employee may tend to children who are out of school) and allow an employer not to pay an employee for such time, thereby temporarily straying from the continuous workday doctrine, which generally requires an employer to pay employees for all time from their first to last principal work activity. An employer must still pay an employee for all time worked and reported during the workday.
The regulations note that providing maximum flexibility to employers and employees during this public health emergency should not impact the underlying relationships between an employer and an employee. Specifically, the use of intermittent leave should not be construed as undermining the employee’s salary basis for purposes of exempt status under the Fair Labor Standards Act (FLSA). The regulations also place additional limitations on the use of intermittent leave in circumstances where use of such leave would be incompatible with efforts to slow the spread of COVID-19 (e.g. allowing intermittent leave for reasons 1-3 under EPSLA for non-teleworking employees).
Notice, Documentation, and Recordkeeping Requirements
Employers are required to post a notice regarding the EPSLA and are subject to penalties, as discussed below, for failure to comply with this requirement.
Employees are required to provide advance notice to the extent practicable when the need for leave is foreseeable. The regulations acknowledge that an employee’s compliance with an employer’s preexisting notice policies is reasonable absent unusual circumstances.
An employer may not require employees to provide documentation beyond what is required by the regulations, which generally includes a signed statement detailing: (1) the employee’s name, (2) the date(s) for which leave is requested, (3) the COVID-19 qualifying reason for leave, and (4) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. Depending on the reason for leave, an employee may also be required to provide additional information, such as (1) the government entity that issued the quarantine or isolation order to which the employee is subject, (2) the health care provider who advised the employee to self-quarantine, or (3) the name of the child being cared for, along with the name of the school, place of care, or child care provider who has closed or become unavailable, and a statement that no other suitable person is available to care for the child during the time period of requested leave. Employees taking leave for their own serious health condition or to care for a family member with a serious health condition related to COVID-19 are subject to standard FMLA certification requirements. Employers must retain all documentation of requests, both granted and denied, for four years.
Unlike the FMLA, the EFMLEA does not require that employers respond to employee requests for leave with notices of eligibility, rights and responsibilities, or written designations. Employers may, however, continue to apply such procedures to EFMLEA requests if desired.
Penalties and Remedies
Failure to provide paid sick leave as required under EPSLA is considered a failure to pay minimum wages under the FLSA, subjecting employers to claims for unpaid wages, liquidated damages, and attorneys’ fees. The FFCRA also imposes anti-discrimination and anti-retaliation obligations on employers, akin to those provisions of the FMLA.
The FFCRA does not protect employees from employment actions, such as layoffs, that would have affected them regardless of whether they took leave pursuant to its terms. However, like with other FMLA claims, an employer must be able to demonstrate that the employee would have been laid off or terminated even if the employee did not take leave under the Act.
Pillsbury clients may obtain advice and strategic input on workplace issues concerning COVID-19 by contacting Laura Latham, Kimberly Higgins, Andrea Milano, Rebecca Carr Rizzo, Erica Turcios Yader or other Pillsbury employment lawyers, who can also coordinate involvement of colleagues on the Pillsbury Crisis Management Team. For more thought leadership on this rapidly developing topic, please visit our COVID-19 (Coronavirus) Resource Center.
This information is current as of April 7, 2020. Given the ever-evolving nature of the COVID-19 crisis and regulatory responses to it, readers are encouraged to consult the websites identified and links provided in this article. Furthermore, we recommend that employers work closely with legal counsel in making any decisions that impact their workforces during this dynamic situation.