The Families First Coronavirus Response Act (FFCRA) was signed into law by President Trump late on March 18, 2020. Among other things, it temporarily expands the federal Family Medical Leave Act (FMLA) and creates an additional paid leave of absence.

This Alert only addresses private sector employers; federal, state, and local public sector employers are subject to different requirements. There are also tax credits for qualified employers which are not addressed here.

Both of the new federal COVID-19 related leave laws currently become effective on April 1, 2020 (unless action is taken to advance the effective date) and expire on December 31, 2020. Both allow an employer to exclude employees who are health care providers or emergency responders from coverage. Employers should take this time to become familiar with the new requirements, coordinate them with existing federal/state/local requirements as well as their own policies, and be prepared to implement them on short notice.

The federal Department of Labor (DOL) has indicated that there will be a temporary period of non-enforcement for the first 30 days after the FFCRA takes effect, so long as the employer has acted reasonably and in good faith to comply. For purposes of this non-enforcement position, “good faith” exists when violations are remedied and the employee is made whole as soon as practicable by the employer, the violations are not willful, and the Department of Labor receives a written commitment from the employer to comply with the FFCRA in the future.

Expanded COVID-19 related FMLA leave:

The new expanded COVID-19 related leave must be provided by private sector employers, who have fewer than 500 employees, to employees who have worked for the employer for at least 30 calendar days prior to the beginning of the designated leave. Thus, it covers employers who may not have been covered under the traditional FMLA, does not indicate a look-back period to count the number of employees for coverage or number of hours worked for eligibility, and provides this new leave to employees sooner than they would have otherwise been eligible for regular FMLA leave. It is possible that regulations will exempt small (fewer than 50 employees) employers and healthcare providers and emergency responders, but those regulations have not yet been issued. (CLICK HERE FOR THE NEW EMPLOYEE RIGHTS POSTER)

It is available to an eligible employee who is unable to work or telework due to
(1) the employee’s need to care of the employee’s child (under 18 years old) if the elementary or secondary school of the child has been closed due to a public emergency, or
(2) the childcare provider (a paid provider of childcare services) of such child is unavailable, due to a public health emergency (an emergency with respect to COVID-19 declared by a federal, state, or local authority).

The new leave is up to 12 weeks. The first 10 days may be unpaid, although an employee (not the employer) may elect to substitute any accrued paid leave (e.g., vacation, PTO, other sick leave) to cover some of all of this otherwise unpaid period. After the 10th day, the employer must generally pay the employee at 2/3 of the employee’s regular rate for the number of hours that the employee would normally be scheduled to work. There is an upper limit of the compensation to be paid for this new leave, which is $200/day and a total of $10,000 per employee. There are special rules for these calculations if the employee was part-time, worked variable hours (involving an average over a look-back period of 6 months) or if such an employee has not worked for the entire look-back period, the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work. The latter could be particularly problematic since it is based on the employee’s expectation; documentation about employment offers or conversations in connection with recruiting and hiring could therefore become very important.

An employer with 25 or more employees has the same job reinstatement obligations to an employee returning from the new leave as it did for traditional FMLA leave. However, an employer with fewer than 25 employees generally does not have this reinstatement obligation if the employee’s position no longer exists following the new leave due to an economic downturn or other circumstance caused by a public health emergency during the period of the new leave, subject to the employer making ongoing reasonable attempts to return the employee to work for up to a year following the employee’s leave.

Note: There is nothing in the new law that indicates that the employer must maintain group health insurance at the same level and on the same terms during the new leave as it would if the employee were still working, although that is a requirement for traditional FMLA leave. There is nothing that extends this new leave to service members or their family members or that specifies whether or under what circumstances the employee can use the new leave on an intermittent or reduced schedule basis, such as is the case under traditional FMLA leave. Similarly, there is no specific provision addressing the impact of taking the new leave by an FLSA-exempt employee on the FLSA salary requirement, and no “key employee” provisions. There are no provisions requiring or specifying any particular medical or other certification of the need for the new leave.

Emergency Paid Sick Leave (EPSL)

EPSL must be provided by private employers with fewer than 500 employees if the employee is entitled to it. While the new law allows the Secretary of Labor to issue regulations that (a) exempt certain health care providers and emergency responders from the definition of “employee,” (b) exempt small businesses with fewer than 50 employees from the leave requirements if they jeopardize the viability of that employer as a going concern, and (c) to ensure consistency between the paid family and paid sick standards and tax credits, at the current time no such regulations have been issued.

There is no “waiting time” before an employee becomes eligible for this leave, if the employee otherwise qualifies.
An employee is entitled to EPSL if the employee is unable to work (or telework) because:
(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 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 an order as described in subparagraph (1) or has been advised as described in paragraph (2);
(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 childcare 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.

Full-time employees are entitled to 80 hours of EPSL. Part-time employees are entitled to the number of hours equal to the number of hours that the employee works on an average, over a 2-week period. EPSL does not carry over from year to year.

During the leave, pay is generally at the employee’s regular rate of pay, and no less than the federal minimum wage or other applicable hourly wage requirements (including higher state or local requirements). The law limits an employee’s pay for EPSL to $511/day (and $5,110 total, over a 2-week period) where the EPSL is taken for reasons (1)-(3) above, and $200/day (and $2,000 total, over a 2-week period) where it is taken for reasons (4)-(6) above. There are special compensation rules where the leave is to take care of the employee’s family member (2/3 of what the EPSL pay would normally be), if the employee was part-time with variable hours (using a 6-month look-back period), or the employee did not work the entirety of the look-back period.

The law prohibits retaliating against any employee taking leave in accordance with the new law.
The EPSL does not diminish the rights or benefits that an employee has under any other federal, state, or local law, a collective bargaining agreement, or an existing employer policy. Nothing requires financial or other reimbursement to an employee upon the employee’s termination, resignation, retirement or other separation from employment for unused EPSL.

The Secretary of Labor has been directed to issue guidelines to assist employers in calculating the amount to be paid for EPSL. The Secretary of Labor has the authority to issue, but has not yet issued, regulations for good cause (1) to exclude certain healthcare providers and emergency responders from the definition of “employee” including by allowing the employer of such employees to opt out; (2) to exempt small businesses with fewer than 50 employees from the obligation to provide EPSL to an employee who is caring for a son or daughter due to that child’s school or place of care being closed or the child care provider of such child is unavailable due to COVID-19 precautions, when the imposition of this requirement would jeopardize the viability of the business as a going concern, and (e) as necessary to carry out the purposes of the EPSL including ensuring consistency between this law and the Families First Coronavirus Response Act. There will also be a sample notice developed to help employers comply with the law’s posting requirement; the sample notice is expected to be available by March 25.

Note: There is nothing in the new law that (1) indicates that the employer must maintain group health insurance at the same level and on the same terms during the new leave as it would if the employee were still working; (2) specifies whether or under what circumstances the employee can use the new leave on an intermittent or reduced schedule basis; (3) addresses the impact of taking the new leave by an FLSA-exempt employee on the FLSA salary requirement if it is taken on an intermittent or reduced schedule basis; (4) requires or specifies any particular medical or other certification of the need for the new leave; (5) specifically requires reinstatement at the end of the leave (other than the non-discrimination provision) or gives any exception to reinstatement.

Existing Laws Remain in Effect

The normal Family Medical Leave Act (FMLA) requirements covering eligible employees with a serious health condition still apply. Since under the normal FMLA requirements, a “serious health condition” is defined as an illness, injury, impairment or physical/mental condition that involves “inpatient care” or “continuing treatment by a health care provider,” individuals that contract COVID-19 and experience serious symptoms that meet these criteria would be entitled to traditional FMLA leave, under the terms, conditions, prerequisites, and obligations of traditional FMLA leave. However, if a traditional FMLA-covered employee contracts COVID-19 but does not meet the requirements for a “serious health condition,” that employee would not be entitled to traditional FMLA leave. Furthermore, an employee who does not work for the purpose of avoiding exposure to COVID-19, or who takes off from work to care for children who do not have COVID-19 or who are home because the school is closed or childcare is not available is not entitled to FMLA leave. Employers also need to keep in mind that an affected employee may be entitled to a leave of absence under applicable state and local laws that have their own provisions for such things as paid sick leave, kin care, and leaves analogous to the traditional FMLA. Furthermore, there is nothing to prevent an employer from being more generous than any of the applicable laws, even on a temporary basis.

The Americans with Disabilities Act (ADA) allows an employer, during a pandemic health crisis, to require a doctor’s note, medical examination, or time period during which the employee has been symptom free, before it allows the employee to return to work. COVID-19 has now been determined to constitute an “immediate threat.”

The federal Fair Labor Standards Act (FLSA) also remains in effect. Hourly employees only have to be paid for the hours worked; thus, an employer does not have to pay non-exempt employees for hours they don’t work. Furthermore, hourly employees can be paid at a different rate if they telework, as long as it meets applicable minimum wage and overtime requirements. As is always the case, an employer is still required to maintain an accurate record of hours worked for all non-exempt employees, including those participating in telework or other flexible work arrangements.

Exempt, salaried employees generally must receive their full salary in any week in which they perform any work, subject to certain very limited exceptions. Where an employer offers a bona fide benefits plan or vacation time to its employees, there is no prohibition on an employer requiring that such accrued leave or vacation time be taken on a specific day(s). Further, this will not affect the exempt employee’s salary basis of payment so long as the employee still receives in payment an amount equal to the employee’s guaranteed salary. However, an exempt employee will not be considered paid “on a salary basis” if deductions from the predetermined compensation are made for absences occasioned by the office closure during a week in which the employee performs any work. Exempt salaried employees are not required to be paid their salary in weeks in which they perform no work. Therefore, a private employer may direct exempt staff to take vacation or debit their leave bank account in the case of an office closure, whether for a full or partial day, provided the employees receive in payment an amount equal to their guaranteed salary. In the same scenario, an exempt employee who has no accrued benefits in the leave bank account, or has limited accrued leave and the reduction would result in a negative balance in the leave bank account, still must receive the employee’s guaranteed salary for any absence(s) occasioned by the office closure in order to remain exempt.

The regular expense reimbursement requirements continue to apply under federal and state laws. The FLSA prohibits an employer from requiring their employees to pay for or reimburse the employer for business expenses of the employer if doing so reduces the employee’s earnings below the required minimum wage or overtime rates. This means that when a covered employee is required to provide the tools and equipment (e.g., computer, internet connection, facsimile machine, etc.) needed for telework, the cost of providing the tools and equipment may not reduce the employee’s pay below that required by the FLSA. State laws may impose more stringent expense reimbursement requirements on employers.

The federal Occupational Safety and Health Administration (OSHA) does not have any regulations regarding telework in home offices. The agency issued a directive in February 2000 stating that the agency will not conduct inspections of employees’ home offices, will not hold employers liable for employees’ home offices, and does not expect employers to inspect the home offices of their employees. If OSHA receives a complaint about a home office, the complainant will be advised of OSHA’s policy. If an employee makes a specific request, OSHA may informally let employers know of complaints about home office conditions but will not follow-up with the employer or employee. Employers who are required to keep records of work-related injuries and illnesses will continue to be responsible for keeping such records for injuries and illnesses occurring in a home office.

Should you have any question or concern, please contact SourceOne via email at sourceone@sourceonepayroll.com.