On April 1, 2020, the US Department of Labor (DOL) issued a temporary rule providing key guidance on paid leave under the Families First Coronavirus Response Act (FFCRA). The rule clarifies that employees covered under a federal, state or local stay–at-home order may be eligible for paid FFCRA leave but only if work or telework is available. The rule also provides detailed guidance on teleworking, the small business exemption, required documentation and a number of other points.
Paid sick leave is provided if the employee is unable to work or telework due to an employee-related event (federal, state or local quarantine or isolation order, advice from a healthcare provider to self-quarantine, or being COVID-19 symptomatic and seeking a medical diagnosis) or a family-related event (care for an individual who is subject to the quarantine or isolation order or healthcare provider advice, or care for a son or daughter under age 18 whose school or place of care is closed or child care provider is unavailable). Emergency FMLA leave is provided only if the employee is unable to work or telework under the school closure/child care provider unavailability exception (although the rules are slightly different).
The law permits employers of health care providers and emergency responders to opt out and provides an exemption for businesses with fewer than 50 employees where compliance would jeopardize the viability of the business as a going concern.
In the past two weeks, the DOL has issued fact sheets, an expanding list of questions and answers, model posters and announced a temporary amnesty program
(until April 17). The rule, which with DOL commentary is over 124 pages, expands on earlier DOL guidance and provides detailed definitions and rules and procedures for employers to follow. The rule is temporary and is likely to be changed before it becomes final.
One question a number of employers have had is whether a government shelter-in-place, stay-at-home or similar order qualifies as a federal, state or local quarantine or isolation order triggering paid sick leave under the FFCRA. The DOL makes clear that a quarantine or isolation order includes a broad range of orders that advise some or all citizens to shelter in place, stay at home, quarantine or otherwise restrict mobility. However, an employee is eligible for FFCRA paid sick leave only if the employer would otherwise have work or telework available for the employee. For example, if a coffee shop closes temporarily or indefinitely due to a COVID-19 related downturn, a cashier subject to a stay-at-home order is not entitled to FFCRA paid sick because the employer does not have work or telework for the employee, not because of the stay-at-home order. This is the case even though the stay-at-home order may have caused the business to close.
However, employees subject to stay-at-home orders who would otherwise have work or telework may be eligible for paid sick leave if the order qualifies as a federal, state or local quarantine or isolation order. Whether the order qualifies as a federal, state or local quarantine or isolation order turns on whether, under the order, the federal, state or local government has “advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine....” This phrasing potentially opens the door for employees to assert that statements by local officials urging senior citizens and others to remain indoors constitute an isolation order under the FFCRA, even where the official’s pronouncement was phrased as advice or guidance, rather than an explicit order. We hope that this question will be clarified in future guidance.
Teleworking and flexible hours
The rule provides guidance on what constitutes “telework” and makes clear that telework is work that the employer permits the employee to perform offsite. Employers are not required (but are encouraged) to offer telework arrangements. Where telework is permitted, the DOL encourages employers and employees to be flexible with teleworking hours, including working outside of normal business hours. To encourage teleworking arrangements, the DOL has clarified that the Fair Labor Standard Act’s continuous workday rule (which otherwise provides credit from when the workday starts to when the workday ends for some employees) does not apply to employees who are teleworking due to COVID-19 related reasons. For example, an employee teleworking in intermittent blocks of time (7-9 am, 12:30-3 pm, and 7-9 pm) over a 14-hour period, with interludes for child care or other needs, may be compensated for the 7.5 hours of actual work.
Small business exemption
The FFCRA delegated to the Secretary of Labor the authority to exempt small private employers with fewer than 50 employees from providing an employee with paid sick leave and expanded family and medical leave to, if paying for the FFCRA leave would jeopardize the viability of the small business as a going concern.
The rule sets forth the following objective criteria for determining whether a small business meets the requirements of the exemption:
- Providing the paid leave would cause the employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity;
- The absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or
- The small employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor or services are needed for the small employer to operate at a minimal capacity.
The small business exemption is fact-specific and is limited to the specific employees to whom the employer can show presents financial or operational risk to the business. As a result, a small business may be exempt from the requirement to provide FFCRA leave to some but not all employees. If an employer denies an employee paid leave under the exemption, the employer must document the facts and circumstances showing at least one of the three justification exists, and retain the documentation in its files.
The rule provides guidance on documentation that employers should require to show compliance with FFCRA leave provisions and to support the related payroll tax credit:
Documentation of need for leave
- For all FFCRA leave requests, the employee’s name, requested date(s) of leave, qualifying reason for leave, and oral or written statement that the employee is unable to work or telework due to the COVID-19 qualifying event.
- For FFCRA paid sick leave, the following documentation is required, depending upon the qualifying event:
For federal, state or local quarantine or isolation orders, the name of the governmental entity that issued the quarantine or isolation order.
For healthcare provider self-quarantine advice, the name of healthcare provider that issued the self-quarantine advice.
For the care of an individual subject to a qualifying quarantine or isolation order or healthcare provider self-quarantine advice, the name of the individual being cared for, and type of order or advisory.
For care for a son or daughter whose school or place of care has closed or whose child care provider is unavailable, the name of the school or place of care or child care provider, dates of closure and reopening or unavailability, the name of the son or daughter, and a statement that no other suitable person (for example, co-parent, guardian) is available to provide care during the period of requested leave.
Note that, if a son or daughter is age 15 to 17, the employer may ask the employee to provide a statement supporting why care of such individual is needed (for example, if the son or daughter has special needs).
The rule states that employers should document any oral requests for leave, as well as decisions on whether leave requests are granted or denied.
Records supporting payroll tax credits
- Documentation to show how the employer determined the amount of paid sick leave that are eligible for the payroll tax credit, including records of work, telework, and leave.
- Documentation to show how the employer determined the amount of qualified health plan expenses allocable to the wages.
- Copies of any completed IRS Forms 7200 that the employer submitted to the IRS.
- Copies of completed IRS Forms 941 that the employer submitted to the IRS, or where third-party payers are used, records of information provided to third party payers.
- Other documents to support the request for tax credits.
Records showing that the employer has fewer than 500 employees and is therefore eligible for the FFCRA payroll tax credits. For this purpose, count all US full- and part-time employees, temporary employees and day laborers but not any non-US employees or independent contractors on the date that the leave begins.
Employers should retain records for at least four year, regardless of whether the request was granted or denied.
Other topics covered
The rule also provides detailed guidance on:
- How key terms are defined (including broad definitions of healthcare providers, emergency responders and family members).
- Paid leave entitlements.
- Amount of paid leave.
- Calculating regulator rate of pay.
- Employee eligibility for leave.
- Employer coverage.
- Intermittent leave.
- Intersection between FFCRA paid sick leave vs FFCRA emergency FMLA leave.
- Intersection between FFCRA expanded FMLA leave and regular FMLA leave.
- Other employer and employee notice obligations.
- Healthcare coverage obligations.
- Multiemployer plan contributions under the FFCRA.
- Return to work rights.
- Employer recordkeeping requirements.
- Prohibited acts and enforcement.
- Whistleblowing and DOL investigatory authority.
- Effect on other law, practices, and collective bargaining agreements.