Type: Law Bulletins
Date: 04/17/2020

Paid Sick and Family Leave for COVID-19: DOL Issues Amended Regulations on April 10, 2020

On Wednesday, March 18, 2020, President Trump signed the Families First Coronavirus Response Act, H.R. 6201 (FFCRA) to address the impact of the COVID-19 national health emergency. The FFCRA became effective on Wednesday, April 1, 2020.

Among other provisions, the FFCRA requires employers to provide up to two weeks of paid sick leave for one of six different situations and up to 12 weeks of family medical leave, 10 of which must be paid, to help those dealing with a need to care for children affected by school or child care closures — subject to a total cap of $12,000 per employee.

Beginning on March 24, 2020, the Department of Labor (DOL) has issued guidance to clarify certain aspects of the FFCRA and its requirements. That guidance has been updated on several occasions, and further updates are expected. On April 1, 2020, DOL issued final regulations that clarify several issues that had been left unclear by the legislation itself. The DOL then issued amended regulations on April 10, 2020. The changes in the amended regulations are mostly clerical with one notable exception: The amended regulations make clear that both employees and employers may require use of any accrued PTO concurrently with paid E‑FMLA.

This summary includes the paid sick leave provisions as set forth in the statute as well as DOL’s regulations and informal guidance.

FFCRA’s Applicability

The FFCRA applies to nearly all employers with fewer than 500 employees, including persons acting on behalf of an employer and successors in interest. It also applies to public employers. 29 CFR § 826.40(c). Any college or university that is a political subdivision of a state is a public employer.

The 500-employee threshold for private employers is dependent on the number of employees at the time an employee would take leave. 29 CFR § 826.40(a)(1). It includes both full and part-time employees among all worksites/divisions within the United States, as well as employees currently on leave, temporary employees, and day laborers supplied by a temporary placement agency. 29 CFR § 826.40(a)(1). Not included in the count are independent contractors and employees who have been laid off or furloughed and have not subsequently been reemployed. 29 CFR § 826.40(a)(1)(iii). Separate corporations may be considered a single employer if the two entities meet the integrated employer test under the FMLA. 29 CFR § 826.40(a)(2)(iii); see also 29 CFR 825.104(c)(2).

The Emergency Paid Sick Leave Act

Included within the FFCRA is the Emergency Paid Sick Leave Act (E-PSL Act). The E-PSL Act mandates that certain employers provide employees who are unable to work or telework because of one of six reasons related to COVID-19 with a period of paid leave.

Exemptions

The E-PSL Act gives employers the option to exclude any employee who is a “health care provider or an emergency responder” from the application of the leave provisions. These terms are defined by regulation. 29 CFR § 826.30(c). Taft’s summary of this exclusion option is available here.

In addition, the E-PSL Act also may not apply to certain categories of government employees designated by the Office of Management and Budget. 29 CFR § 826.30(e).

Finally, employers with fewer than 50 employees may qualify for an exemption from the requirement to provide leave “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” 29 CFR § 826.40(b)(1). This exemption is discussed in more detail below.

Qualifying Reasons for Leave

As mentioned above, to take paid leave under the E-PSL Act, the employees must be unable to work or telework because of one of six reasons related to COVID-19:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  2. The employee has been advised by a health care provider to self-quarantine due to concerns directly related to COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and is actively seeking a medical diagnosis from a health care provider;
  4. The employee is caring for an individual covered under reasons one or two above;
  5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions; or
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

29 CFR § 826.20(a)(1). If an employer allowed an employee to go on paid leave prior to the effective date of the E-PSL Act (April 1, 2020) for one of these reasons, the employee will still be permitted to take the full amount of time permitted under the law after its effective date.

A “quarantine" or "isolation" order includes a broad range of governmental orders, including stay-at-home and shelter-in-place orders directed toward some or all citizens. 29 CFR 826.10. However, an employee subject to such an order may only use E-PSL if, but for being subject to the order, he or she would be able to perform work, either at the employee’s workplace or by telework. 29 CFR § 826.20(a)(2). Thus, E-PSL will not be available if an employer closes its business, even if the closure is due to a governmental stay-at-home order. 29 CFR § 826.20(a)(2).

If an employee is able to telework, he or she may not take paid sick leave if (1) his or her employer has work for the employee to perform, (2) the employer permits the employee to perform that work from the location where the employee is self-quarantining, and (3) there are no extenuating circumstances, such as serious COVID-19 symptoms, that prevent the employee from performing that work. 29 CFR § 826.20(a)(2); 29 CFR § 826.10(a).

Regarding an employee’s need to care for another (the fourth E-PSL provision mentioned above), the employee must have a genuine need to care for the individual, and the individual being cared for must be an immediate family member, roommate, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person. 29 CFR § 826.20(a)(5).

An employee may take E-PSL to care for a son or daughter whose school or place of care has been closed, but only if no other suitable person is available to care for the child during the period of such leave. 29 CFR § 826.20(a)(8). If another suitable individual, such as a co-parent, co-guardian, or other child care provider, is available to provide care to the child, then the employee does not have a need for leave. 29 CFR § 826.20(a)(8).

Pay Requirements During E-PSL Leave

Full-time employees can receive up to 80 hours of sick pay. Part-time employees are eligible for up to the number of hours they are normally scheduled to work in a two-week period.

Pay is calculated differently depending on the reason for the leave. If the employee takes leave related to reasons (1), (2), or (3) above, then the employee will be paid his or her average regular rate (or minimum wage, if higher) up to $511/day or $5,110 in the aggregate. 29 CFR § 826.22(a, c). If the employee takes leave related to reasons (4), (5), or (6) above, then employees will be paid two-thirds their average regular rate (or minimum wage, if higher) up to $200/day or $2,000 in the aggregate. 29 CFR § 826.22(b, c).

Obligation to Restore Employee to Equivalent Position 

Employers are obligated to restore employees who take E-PSL to an equivalent position upon their return to work. 29 CFR § 826.130(a). Employees are not protected from employment actions, such as furloughs or layoffs, which would have affected the employee regardless of whether leave was taken. 29 CFR § 826.130(b)(1). To deny job restoration, the employer must show that the employee would not otherwise have been employed at the time of reinstatement. 29 CFR § 826.130(b)(1).

Single-Use Benefit

Once an employee has used his or her E-PSL benefit (up to 80 hours), the employee is not entitled to additional paid sick leave, even if the employee changes employers. 29 CFR § 826.160(f). If an employee uses some, but not all, of the E-PSL benefit and then changes employers, then the employee is entitled only to the remaining portion of E-PSL from the new employer. 29 CFR § 826.160(f).

Enforcement

Employers are prohibited from discriminating or interfering with employees’ exercise of rights with respect to eligible employees taking or attempting to take E-PSL leave. 29 CFR § 826.150(a).

The penalties for noncompliance mirror the Fair Labor Standards Act (FLSA). The failure to pay sick leave under the E-PSL Act will be treated the same as not paying minimum wage. 29 CFR § 826.150(b)(1). Aggrieved employees will be entitled to lost wages; an additional amount equal to the lost wages as liquidated damages and attorneys’ fees. The E-PSL Act further provides that an unlawful termination is a willful act. Thus, violators could face a fine of up to $10,000, and the FLSA’s criminal provisions apply if there was a prior violation. Reinstatement of affected employees is also an available remedy.

The Emergency Family and Medical Leave Expansion Act

Also included within the FFCRA is the Emergency Family and Medical Leave Expansion Act (E-FMLA), which amends provisions of the FMLA to broaden coverage and require a period of partially-paid leave taken from April 1, 2020, to Dec. 31, 2020. 

Subject to limited exceptions, discussed below, private employers with fewer than 500 employees — and also most public employers — are required to provide E‑FMLA (a) because of a qualifying need related to a public health emergency (b) to all employees who have been employed for at least 30 days before leave is requested.

Eligible Employees

E-FMLA applies to all employees who have been employed by the employer for at least 30 calendar days before the leave is requested. 29 CFR § 826.10(a).

The employee must have been on the employer’s payroll 30 calendar days immediately prior to when the leave would begin. 29 CFR § 826.30(b)(1)(i). However, if the employee was laid off or terminated by the employer on or after March 1, 2020, but subsequently rehired or otherwise reemployed by the employer on or before December 31, 2020, the employee would be eligible for E-FMLA, provided that the employee was on the payroll for 30 or more of the 60 calendar days prior to the date the employee was laid off or terminated. 29 CFR § 826.30(b)(1)(ii). If a temporary employee employed by a temporary placement agency is subsequently hired by the employer, the days worked by the employee as a temporary employee at the employer’s workplace will count toward the 30-day eligibility period. 29 CFR § 826.30(b)(2).

Other eligibility requirements associated with traditional FMLA do not apply to E-FMLA. 29 CFR § 826.30(b)(3).

Exemptions

E-FMLA gives employers the option to exclude any employee who is a “health care provider or an emergency responder” from the application of the leave provisions. These terms are defined by regulation. 29 CFR § 826.30(c). Taft’s summary of this exclusion option is available here.

In addition, the E-FMLA does not apply to federal employees covered under Title II of the FMLA, which was not amended by the E-FMLA. 29 CFR § 826.40(c), and/or to certain categories of federal employees designated by the Office of Management and Budget. 29 CFR § 826.30(d).

Finally, employers with fewer than 50 employees may qualify for an exemption from the requirement to provide leave “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” 29 CFR § 826.40(b)(1). This exemption is discussed in more detail below.

Qualifying Reasons for Leave

Employees are entitled to up to 12 weeks of E-FMLA — less any FMLA the employee has already used in the preceding 12 months — based on a qualifying reason. 29 CFR § 826.23(a–b). If an employee has exhausted his or her 12 weeks of FMLA, the employee is not eligible for E-FMLA (but may be eligible for E-PSL). 

Under the E-FMLA, a “qualifying need related to a public health emergency” means that the employee is “unable to work due to a need to care for his or her Son or Daughter whose School or Place of Care has been closed, or whose Child Care Provider is unavailable, for reasons related to COVID-19.” 29 CFR § 826.20(b).

The term “child care provider” means a provider who receives compensation for providing child care services on a regular basis; however, the child care provider need not be compensated or licensed if the caregiver is a family member or friend who regularly cares for the child. 29 CFR § 826.10(a). 

Pay Requirements During E-FMLA Leave

Under E-FMLA, the type of leave is unpaid leave for the first two weeks of leave. After the first two weeks of unpaid leave, employers must pay employees two-thirds their average regular rate times the employee’s scheduled number of hours for each day of leave taken. 29 CFR § 826.24. However, in no event is the employer required to pay the employee more than $200 per day, or $10,000 over the entire course of E-FMLA leave. 29 CFR § 826.24(a).

While the first 10 days of leave are unpaid under the E-FMLA, this period of leave may be paid under the E-PSL Act — the details of which are set forth above. Employees can also elect to use other available paid leave — vacation, personal, medical, and sick — concurrently with the unpaid 10 days of E-FMLA. And once the employee exhausts his or her allotment of E-PSL Act time, the employer could demand that the employee use other available paid leave — vacation, personal, medical, and sick — concurrently with E-FMLA.

12-Week Allotment

The inclusion of E-FMLA as an additional qualifying reason for FMLA leave does not expand the 12-week allotment that an employee is otherwise entitled to under the FMLA. Employees are entitled to a total of 12 workweeks for FMLA or E-FMLA reasons during the 12-month period used by the employer to measure its employees’ 12-week allotment. 

Obligation to Restore Employee to Equivalent Position 

Employers generally must restore employees who take E-FMLA to an equivalent position upon their return to work. 29 CFR § 826.130(a). However, employees are not protected from employment actions, such as furloughs or layoffs, which would have affected the employee regardless of whether leave was taken. 29 CFR § 826.130(b)(1).

Employers with 25 employees or less must make reasonable efforts to restore the employee to an equivalent position with equivalent pay and benefits unless the position was eliminated due to: (1) economic conditions or (2) other changes in operating conditions affecting employment and caused by the coronavirus emergency. 29 CFR § 826.130(b)(3). If an equivalent position is not available, the employer must make reasonable efforts for one year — after the employee’s leave starts or after the COVID-19 health emergency concludes — to contact the employee regarding any equivalent positions that become available. 29 CFR § 826.130(b)(3)(iv).

Enforcement

Employers are prohibited from interfering with employees’ exercise of rights, discriminating, and interfering with proceedings or inquiries under the FMLA with respect to eligible employees taking or attempting to take E-FMLA leave. 29 CFR § 826.151(a).

Violations of the E-FMLA are subject to the same penalties and enforcement mechanisms as the FMLA, except that an eligible employee may not file a private action to enforce the E-FMLA if the employer is not otherwise subject to the FMLA in the absence of E-FMLA. 29 CFR § 826.151(b).

Impact of a Furlough, Business Closure or Reduction in Hours on FFCRA Leave

If an employer furloughs employees or closes its business, resulting in the employee not working, the employer will not be required to provide E-PSL or E-FMLA leave after the date of the furlough or closure.

Similarly, if an employer reduces an employee’s work hours because it does not have work for the employee to perform, the employee is not entitled to E-PSL or E-FMLA leave for the hours that the employee is no longer scheduled to work. 

In both of these situations, the employee is not unable to work due to a need for leave; rather, the employee is not working because the employer is no longer operating or does not have sufficient work to do.

Additionally, an employee who is subject to a stay-at-home or shelter-in-place order directed toward some or all citizens may only use E-PSL if, but for being subject to the order, he or she would be able to perform work, either at the employee’s workplace or by telework. 29 CFR § 826.20(a)(2). Thus, E-PSL will not be available if an employer closes due to a governmental stay at home order. 29 CFR § 826.20(a)(2).

Interaction Between an Employer’s PTO Policy and FFCRA Paid Leave

An employee’s entitlement to or use of E-PSL or E-FMLA is in addition to — not instead of — existing rights and benefits to which the employee is entitled under (1) another federal, state, or local law (except FMLA); (2) a collective bargaining agreement; or (3) an employer policy in existence prior to April 1, 2020. 29 CFR § 826.160(a)(1).

In addition, an employee who takes leave to care for a son or daughter whose school or place of care is closed due to COVID-19 may take E-PSL concurrently with E-FMLA. 29 CFR § 826.60(a). Thus, the 10-day (or two-week) period of unpaid leave under the E-FMLA may be paid through the use of E-PSL. 29 CFR § 826.60(a)(2). If an employee has exhausted his or her E-FMLA entitlement due to prior use of traditional FMLA, the employee is not precluded from using the E-PSL benefit. 29 CFR § 826.60(a)(4).

An employee may elect to use other accrued benefits prior to using E-PSL, but an employer may not require an employee use other available benefits prior to taking E-PSL. 29 CFR §826.160(b)(1)-(2). However, after an employee exhausts any E-PSL, the employer may require an eligible employee to use provided or accrued leave, such as vacation or PTO, concurrently with the employee’s use of E-FMLA. 29 CFR § 826.160(c)(1). If the employee elects or the employer requires the use of accrued leave concurrently with E-FMLA, then the employer must pay the employee the full amount to which the employee is entitled under the employer’s existing policy for the period of leave taken. 29 CFR § 826.160(c)(2).

If an employee used any amount of leave prior to April 1, 2020, due to COVID-19, the employer cannot deny the employee use of E-PSL or E-FMLA — assuming the employee qualifies — or delay or postpone the employee’s use of such benefits, except as associated with the use of traditional FMLA. 29 CFR § 826.160(a)(2).

On the other hand, an employer is not required to provide financial compensation, payout, or reimbursement to employees for any unused E-PSL or E-FMLA upon the expiration of the FFCRA on Dec. 31, 2020. 29 CFR § 826.160(e).

Small Business Exemption

Employers with fewer than 50 employees may qualify for an exemption from the requirement to provide E-PSL and E-FMLA leave “when the imposition of such requirements would jeopardize the viability of the business as a going concern.” 29 CFR § 826.40(b)(1). To be entitled to the exemption, an authorized officer of the business must determine one of three conditions is present:

  1. The leave requested … would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity.
  2. The absence of the employee or employees requesting leave … would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities.
  3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting leave …, and these labor or services are needed for the small business to operate at a minimal capacity.

29 CFR § 826.40(b)(1)(i)-(iii). If a small business denies E-FMLA to an employee on the basis of the small business exemption, the employer must document that a determination has been made pursuant to the above criteria and maintain such documentation for four years. 29 CFR §§ 826.40(b)(2), 826.140.

Intermittent Leave

Intermittent E-PSL and E-FMLA leave is only available if the employer and employee agree, and only under certain circumstances. 29 CFR § 826.50(a–c). If the employee is working at the employer’s normal work site, E-PSL generally must be taken in consecutive, full-day increments. An exception permits the employer and employee to agree that the employee may take E‑PSL intermittently in agreed-upon increments of time if the reason for the leave is to care for the employee’s son or daughter whose school or place of care is closed, or if the childcare provider is unavailable, because of reasons related to COVID-19. 29 CFR § 826.50(b)(2). Similarly, employers and employees may agree that an employee may take E-FMLA intermittently.

Additionally, if the employer directs or permits the employee to telework, then the employer and employee may agree that the employee may take E-PSL and/or E-FMLA leave intermittently in any agreed-upon increments of time — but only for a COVID-19 related reason. 29 CFR § 826.50(c).

Health Coverage

While an employee is taking E-PSL or E-FMLA, the employer generally must maintain the employee’s coverage under any group health plan — as defined in the Internal Revenue Code at 26 U.S.C. § 5000(b)(1)) on the same conditions as coverage would have been provided if the employee had been continuously employed during the entire leave period. 29 CFR § 826.110(a). If the employer makes any changes to its group health plan, those changes must apply to all employees, including those on leave. 29 CFR § 826.110(c).

An employee on leave remains responsible for paying his or her portion of group health plan premiums that had been paid by the employee prior to taking leave, even if the employee’s leave is unpaid or insufficient to cover the employee’s share of the premiums. 29 CFR § 826.110(e). An employee may elect not to retain group health plan coverage while on leave; however, when the employee returns from leave, he or she is entitled to be reinstated on the same terms as prior to taking leave. 29 CFR § 826.110 (f).

Documentation of Reason for Leave

If the need for leave is foreseeable, employees should notify employers about their request to take E‑PSL or E-FMLA “as soon as practicable.” 29 CFR § 826.90(a)(1). Employees must also provide documentation substantiating the need for such leave prior to taking it. 29 CFR § 826.100. The employee must provide: (1) his or her name; (2) the date(s) for which leave is requested; (3) the qualifying reason for the leave; and (4) an oral or written statement that the employee is unable to work because of the qualified reason for leave. 29 CFR § 826.100(a). If the employee is requesting leave to care for a son or daughter, the employee must also provide the name of the son or daughter, the name of the school or childcare provider that is closed, and a representation that no other suitable person will be caring for the son or daughter during the period for which the employee takes leave. 29 CFR § 826.100(e).

The employer may also request additional documentation needed to support a request for tax credits. 29 CFR § 826.100(f). An employer is not required to provide leave if documentation is insufficient to substantiate the applicable tax credit. 29 CFR § 826.100(f).

Notice Posting

Employers covered under the FFCRA, including employers that meet the small business exemption, must post and keep posted on its premises, in a conspicuous place, a notice explaining the paid leave provisions and providing information concerning the process for filing complaints for violations of the FFCRA. 29 CFR § 826.80(a). An employer may also email or direct mail the notice to employees, or post the notice on an internal or external website available to employees. 29 CFR § 826.80(b).

However, the FFCRA regulations do not require employers to respond to employees who request or use E-FMLA leave with notices of eligibility, rights and responsibilities, or written designations that leave use counts against employees’ FMLA leave allowances.

Tax Credits for Paid Leave

The FFCRA also provides a tax credit to employers for wages paid for leave covered by the legislation. The amount of the credit is capped at $511 of wages per day paid to each employee to care for themselves and capped at $200 of wages per day paid to each employee to care for a family member or child if their school is closed. Additionally, the credit is generally limited to 10 days of wages per employee. The credit is applied to the employer portion of the 6.2% Social Security Tax and is refundable if it exceeds the amount the employer pays in such payroll tax. The legislation provides a similar tax credit for self-employed individuals against the self‑employment tax.  

State and local governments and any instrumentality thereof, including colleges and universities that are political subdivisions, are excluded from receiving the tax credit for paid leave under the E-PSL Act and E-FMLA.

Recordkeeping Requirements

The employer is required to retain all documentation for a period of four years, regardless of whether E-PSL or E-FMLA leave was granted or denied. 29 CFR § 826.140(a). An employer that denies a leave request based on the small business exemption must document the determination by its authorized officer that the employer is eligible for the exception and retain such documentation for four years. 29 CFR § 826.140(b).

The employer must retain additional documentation for a period of four years in order to claim tax credits from the Internal Revenue Service (IRS), including:

  1. Documentation to show how the employer determined the amount of paid sick leave and expanded family and medical leave paid to employees that are eligible for the credit, including records of work, telework and paid sick leave, and expanded family and medical leave.
  2. Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
  3. Copies of any completed IRS Forms 7200 that the employer submitted to the IRS.
  4. Copies of the completed IRS Forms 941 that the employer submitted to the IRS or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on IRS Form 941.
  5. Other documents needed to support its request for tax credits pursuant to IRS applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit.

29 CFR § 826.140(c).

Multi-Employer CBAs

Employers who are signatories to a multi-employer collective bargaining agreement (CBA) may fulfill their obligations to provide benefits under the E-FMLA and E-PSL by making contributions to a multi-employer fund or plan if such mechanisms exist under the applicable CBA, provided that the employee has access to secure payments from such funds. 29 CFR § 826.120.

No Impact on the Salary Basis for Exempt Employees

FFCRA does not impact an employee’s exempt status under the FLSA. Thus, an employee’s use of intermittent leave combined with either paid sick leave or expanded family and medical leave does not undermine the employee’s exempt status.

Further Guidance

Taft will continue to provide updates as this new law is implemented. Please contact a member of Taft’s Employment and Labor Relations practice group to discuss the effect the FFCRA will have on your organization. Although the new amended regulations clarify certain aspects of the FFCRA, several important issues remain unsettled. Employers should consult with their counsel to determine the appropriate actions regarding employee leave requests and related questions about this new leave law.

Update: On August 3, 2020, a federal court overturned four aspects of the Department of Labor’s Amended Regulations: (1) the work-availability requirement; (2) the definition of “health care provider”; (3) the requirement for employer consent to intermittent leave; and (4) the requirement that documentation be provided before taking leave. Click here for additional discussion about this development.

Please visit our COVID-19 Toolkit for all of Taft’s updates on the coronavirus.

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