US Department of Labor Issues Temporary Final Rule Implementing Families First Coronavirus Response Act

Temporary Final Rule

Multiple Guidance

Overview of the FFCRA

The FFCRA contains two new emergency paid leave programs: the Emergency Family and Medical Leave Expansion Act (EFMLEA) and the Emergency Paid Sick Leave Act (EPSLA). Employers with fewer than 500 employees must comply with both the EFMLEA and the EPSLA.

Under the EFMLEA, covered employers are required to provide up to twelve weeks of leave to employees unable to work or telework because they must care for a son or daughter whose school or place of care has been closed, or whose child care provider is unavailable, due to the COVID-19 pandemic. The first 10 days of leave may be unpaid, but the remaining 10 weeks of leave must be paid at 2/3 of the employee’s regular rate of pay, up to a $200 daily maximum.

The EPSLA requires covered employers to provide up to eighty hours of paid sick leave to employees who are unable to work or telework due to any of the following:

1. The employee is under 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 related to COVID-19;
3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
4. The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
5. The employee is caring for a son or daughter whose school or place of care has been closed, or whose child care provider is unavailable, due to COVID-19 precautions; or
6. The employee is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services.

An employee who is unable to work for the circumstances described in (1), (2), or (3) above is entitled to paid leave at the employee’s regular rate of pay, up to a maximum of $511 per day. An employee who is unable to work for the circumstances described in (4), (5), or (6) above is entitled to paid leave at 2/3 of the employee’s regular rate of pay up to a maximum of $200 per day.

The new temporary final rule provides some much-needed guidance on what covered employers must do to achieve compliance with the EFMLEA and EPSLA’s requirements. A summary of the rule’s major components is below.

Determining Employee Eligibility

Employees are only eligible for EFMLEA leave if they have worked for the employer for at least 30 calendar days prior to the first day of the requested leave. However, the rule clarifies that employees who are laid off after March 1, 2020, but subsequently rehired before December 31, 2020 are eligible for leave immediately upon rehire if they were on the employer’s payroll for 30 or more of the 60 calendar days prior to the date the employee was laid off. For example, an employee who was originally hired on January 15, 2020, but laid off on March 14, 2020, would be eligible for leave under the EFMLEA if the employer rehired the employee on October 1, 2020.

Determining Employer Coverage

The EFMLEA and EPSLA apply only to employers with fewer than 500 employees. The rule states that coverage should be determined at the time an employee would take leave. For example, if an employee requests leave on April 20, 2020, an employer who has 510 employees on that date would not be covered. However, if an employee requests leave on May 1, 2020, and on that date the employer only has 490 employees because it has laid off 20 employees, the employer would be covered under both leave programs.

In determining whether an employer is below the 500-employee threshold, the employer should count full-time and part-time employees, employees on leave, temporary employees, employees who are jointly employed by the employer and another employer, and employees of affiliated entities who satisfy the “integrated employer” test under the existing FMLA. Independent contractors, furloughed employees, and employees employed outside of the United States should not be counted.

Qualifying Reasons for EFMLEA and EPSLA Leave

The rule further describes the circumstances in which employees may take leave under the EFMLEA or EPSLA.

For employees taking EFMLEA leave to care for a son or daughter whose school or normal care provider is unavailable, the rule adopts the existing FMLA’s definition of “son or daughter,” which includes (1) children under the age of 18, and (2) children 18 years of age or older who are incapable of self-care because of a mental or physical disability.

For the qualifying reasons entitling an employee to EPSLA leave, the rule states as follows:

1. “Federal, State, or Local COVID-19 quarantine or isolation orders” include a broad range of governmental orders, including orders advising some or all citizens to shelter in place, stay at home, quarantine, or otherwise restrict their own mobility.
2. Where an employee has been advised by a health care provider to self-quarantine, that advice must be based on the health care provider’s belief that the employee has COVID-19, may have COVID-19, or is particularly vulnerable to COVID-19.
3. Leave where an employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis is limited to the time necessary for the employee to take “affirmative steps to obtain a medical diagnosis.” This includes time spent making, waiting for, or attending an appointment for a COVID-19 test. An employee experiencing COVID-19 symptoms is not eligible for leave without seeking a medical diagnosis.
4. Where an employee requests leave to care for an individual subject to a local quarantine or isolation order, or who has been advised by a health care provider to self-quarantine, the individual in question must be someone with whom the employee has a personal relationship—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 if he or she self-quarantined or was quarantined.” And, leave is available only if the employee has a “genuine need” to care for the individual.
5. The same definition of “son or daughter” described above applies to leave where an employee must care for a child whose school or place of care has been closed.

The rule states explicitly that, with respect to each qualifying reason under the EFMLEA or EPSLA, the employer is obligated to provide leave only if (a) the employer actually has work for the employee to perform, and (b) the qualifying reason actually renders the employee unable to work. For example, if an employer permits its employees to telework from their homes, an employee able to do so would not be able to take leave due to the fact that he or she is subject to a governmental stay-at-home order. Conversely, if a retail business or restaurant has been forced to close due to a governmental order, employees who cannot work for that reason would not be eligible for leave because the employer has no work for them to perform.

With respect to both leave programs, the rule states that telework “is no less work than if it were performed at an employer’s worksite.” Employees who are teleworking for COVID-19 must always record—and be compensated for—all hours actually worked, including overtime, in accordance with the requirements of the Fair Labor Standards Act (FLSA). However, the rule states that the DOL is relaxing its “continuous workday” rules with respect to employees who must telework for COVID-19 reasons. Typically, the FLSA requires employers to compensate employees for all time from when an employee first starts working until the employee stops working that day. But, to avoid undermining “the very flexibility in teleworking arrangements that are critical to the FFCRA framework,” the agency will not require employers to count as hours worked all-time between the first and last principal activities performed by an employee teleworking due to COVID-19. This means that employees who cease teleworking in the middle of a workday to assist children with distance learning, for example, would not be entitled to compensation for those hours—instead, they simply must be compensated for all hours actually worked, regardless of when they occur during the course of a day.

Calculating the Number of Paid Leave Hours for Full-Time and Part-Time Employees

Under the EPSLA, full-time employees are entitled to 80 hours of paid sick leave, and the rule clarifies that an employee who works at least 40 hours each workweek is considered a full-time employee for the purposes of EFMLEA and EPSLA leave.

Part-time employees are defined as employees who are normally scheduled to work fewer than 40 hours each workweek. If the part-time employee has a regular weekly schedule, the employee is entitled to the “number of hours that such employee works, on average, over a 2-week period.” For part-time employees whose schedule varies from week to week, employers should calculate the leave hours owed to variable employees using one of three methods:

• First, the employer should calculate the average number of hours that the employee was scheduled per day over the 6-month period immediately preceding the employee’s first day of paid sick leave. Because there are fourteen calendar days over a two-week period, the rule states that part-time employees are entitled to paid leave hours equaling fourteen times that daily average.
• Second, if the employee has not worked for the employer for at least six months, the employer should look to “the reasonable expectation of the employee at the time of hiring” as to the average number of hours per day the employee would normally be scheduled to work. That daily average should then be multiplied by fourteen. The rule states that the employee’s “reasonable expectation” is best evidenced by an offer letter or employment agreement, but an agreement in writing is not required so long as the employer and employee had a clear understanding at the time of hire.
• Third, if the employee has not been employed for at least six months, and the employer or employee did not have a clear expectation at the time of hire as to the hours the employee would regularly be expected to work, the employer may calculate the employee’s average daily hours over the employee’s entire period of employment. That daily average should then be multiplied by fourteen.

The same principles described above should also be used to calculate the number of EFMLEA hours to which an employee is entitled. The rule also makes clear that the EFMLEA does not extend the 12 weeks of leave an employee is entitled to under the existing FMLA. As such, if an employee has already exhausted his or her 12 week leave entitlement due to the birth of a child, for example, the employee would not be entitled to any additional leave under the EFMLEA.

Calculating EFMLEA and EPSLA Leave Pay Rates

Employees taking EPSLA leave are entitled to pay equal to their regular rate of pay for each hour of leave taken for the first three qualifying reasons, and 2/3 of the employee’s regular rate for the remaining three reasons, up to the daily maximums.

The FFCRA states that employees taking EFMLEA leave are not entitled to pay for the first 10 days of the leave period. The rule clarifies that this provision should be interpreted to mean that an employee does not need to be paid for any hours worked during the first two weeks of the leave period. The rule provides the example of an employee who works six hours each day for six days each workweek, for a total of 36 hours each workweek. Even though that employee would work for twelve days over the first two weeks of leave, the employee would only be entitled to pay beginning with the third week of the leave period.

However, employees are entitled to use other paid leave made available by their employer, including paid EPSLA leave, during the initial two-week period of EFMLEA leave. And, employers may require that an employee take leave under the employer’s policies that would be available to the employee to care for a child, such as vacation, PTO, or personal leave, concurrently with the first two weeks of unpaid EFMLEA leave. But, an employer cannot require that an employee take available leave under the employer’s existing policies before taking paid EPSLA leave.

Finally, the rule explains how employers should calculate the regular rate that is used to determine the amount an employer must pay an eligible employee who takes EFMLEA (after the initial two-week period) or EPSLA leave. Typically, the FLSA requires that an employee’s regular rate be determined using the hours the employee works during a single workweek. However, for EFMLEA and EPSLA purposes, the rule states that employers must use an average of the employee’s regular rate over multiple workweeks, which should be weighted by the number of hours worked each workweek. The rule provides the example of an employee who receives $400 in one week for working 40 hours and $200 the next week for working ten hours. The employee’s regular rate for paid leave purposes should be calculated by adding up all compensation over the two week period and then dividing that sum by all hours worked over the period: $400 + $200/50 hours = $12/hour regular rate.

For employees with variable schedules, employers should calculate their regular rate using the same principles used to calculate the number of leave hours to which they are entitled: if a two-week period is not representative of the number of hours an employee typically works, the employer should calculate the employee’s regular rate over the six-month period immediately preceding the first day of the employee’s requested leave.

Intermittent Leave

Employees may take EFMLEA and EPSLA leave on an intermittent basis only if the employer agrees. Both the employer and employee must also agree on the increments of time in which leave may be taken. Furthermore, the rule states that employees who are teleworking have much broader flexibility to take leave intermittently, due to the fact that teleworking employees present no risk of spreading COVID-19 to co-workers.

In contrast, employees who continue to report to an employer’s worksite may only take leave intermittently—subject to the employer’s agreement—in circumstances where there is a minimal risk that the employee will spread COVID-19 within the workplace. As such, employees who still report to the worksite may take leave intermittently only if it is to care for a child whose school or normal care provider is unavailable.

Notice Requirements

Employers must provide employees with the DOL’s model notice of employee rights under the EFMLEA either by posting it in a conspicuous place within the worksite and/or by emailing it directly to employees who are teleworking. However, given the short duration of the EFMLEA program, employers are not obligated to comply with the existing FMLA’s “specific notice” requirements governing notices of eligibility, rights and responsibilities, and written designations that using leave counts against employees’ FMLA leave allowances. Employers who are already covered by the FMLA may nonetheless use their established practices for providing individual employees with specific notices if they wish to.

Employees who request leave must notify their employers of the need for leave as soon as practicable before commencing leave, and also on an ongoing basis during the period of leave. And, employers may require employees to comply with the employer’s usual notice procedures and requirements, absent unusual circumstances specific to COVID-19 that make those procedures unreasonable.

Employees are also required to provide appropriate documentation to substantiate a legitimate need for the requested leave, which should include the employee’s name, the dates for which leave is requested, the COVID-19 qualifying reason for leave, and a statement that the employee is unable to work or telework because of the reason. Employees requesting leave due to a quarantine or isolation order should provide the name of the government entity that issued the order. Employee’s requesting leave due to a health care provider’s advice to self-quarantine should provide the name of the health care provider. Employees requesting leave to care for an individual subject to a quarantine or isolation order or self-quarantining upon the advice of a health care provider should provide the name of the government entity that issued the order or the name of the health care provider. Employees requesting leave to care for his or her child should provide the name of the child, the name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19, and a statement representing that no other suitable person is available to care for the child during the period of the requested leave.

If an employee fails to give proper notice or provide appropriate documentation, the employer should inform the employee of the failure and provide an opportunity for the employee to correct it before denying the leave request.

Employers must retain leave-related documentation for four years.

Return to Work

Generally, an employee returning from EFMLEA or EPSLA leave must be restored to the same or an equivalent position in the same manner that an employee would be returned to work after FMLA leave. However, this requirement does not apply to an employer with fewer than 25 employees if:

• The employee took leave to care for a child whose school or regular care provider was closed or unavailable;
• The employee’s position no longer exists due to economic or operating conditions that affect employment and are caused by the COVID-19 pandemic;
• The employer made reasonable efforts to restore the employee to the same or an equivalent position; and
• The employer’s reasonable efforts to restore the employee fail, but the employer makes reasonable efforts to contact the employee if an equivalent position becomes available for one year from the conclusion of the employee’s leave or twelve weeks after the employee’s leave began, whichever is earlier.

The rule also clarifies that the FMLA’s existing limitation to job restoration for “key” employees is applicable to leave taken under the EFMLEA.

Exemptions

Both the EFMLEA and the EPSLA permit employers to exclude employees who are health care providers or emergency responders from the statute’s leave requirements. However, if an employer chooses not to exercise this option and provides EFMLEA or EPSLA leave to employees who could otherwise be exempt, the employer must comply with all of the requirements of the statute in order to claim the tax credits available to offset the cost of providing leave.

The rule also explains that “health care providers” who may be excluded from the leave requirements include not only medical professionals but also “other workers who are needed to keep hospitals and similar health care facilities well supplied and operational”—for example, administrative staff necessary to keep the health care facility running.

Additionally, the FFCRA gives the Secretary of Labor the authority to exempt small private employers with fewer than 50 employees from having to provide EFMLEA and EPSLA leave to an employee who cannot work due to a need to care for a child whose school or place of care is closed. This exemption applies only if providing the leave would “jeopardize the viability of the business as a going concern.” The rule clarifies that this exemption is available only if:

• Providing the leave would cause the small 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(s) requesting the 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(s) requesting leave provide, and those labor or services are needed for the small employer to operate at a minimal capacity.

Small employers who deny EFMLEA or EPSLA leave for any of these reasons must document the facts and circumstances that establish the criteria have been met, and retain those records for their own files.

Takeaways

The DOL’s temporary final rule answers many questions employers have started to face as they begin to implement the leave requirements of the FFCRA. In recognition of the speed with which employers must put complicated leave procedures and policies in place, the DOL has announced that it will not bring any enforcement action against employers who make reasonable, good faith efforts to comply with the FFCRA for violations that occur within 30 days of the statute’s enactment, i.e., from March 18 through April 17, 2020.