Let me start with a toast.
A toast to the Department of Labor, which was thrust into a spotlight it didn’t seek. After Congress hastily cobbled together a bunch of confusing words on paper providing many American workers with a modest amount of paid sick leave and amending the FMLA to do the same, DOL was tasked with making sense of Congress’ ramblings in a matter of days.
Almost immediately, DOL started issuing FAQs (FAQs 1, FAQs 2, and FAQs 3) to help employers and employees better understand the expectations of the Families First Coronavirus Response Act (FFCRA) with a looming April 1 start date.
With minutes to spare, and on April fools day no less, DOL issued regulations earlier this week setting the playing field for employers as they begin to provide paid sick leave (EPSL) and paid FMLA leave (FMLA+) beginning yesterday, April 1, through December 31, 2020.
Under these circumstances, a job well done.
The new regulations cover a ton of ground — overall, they support the general requirement that employers with fewer than 500 employees must provide EPSL and FMLA+ to employees who cannot work due to reasons relating to the coronavirus pandemic and who must care for a child whose school or childcare is closed or unavailable due to the virus.
But the DOL covers a whole lot more: in 124 pages of regulations (pdf), DOL extensively covers employer coverage, how small businesses may be exempted from the new law, regular rate calculations, intermittent leave, substitution of accrued paid leave with EPSL and FMLA+, employer/employee notice issues, and documents employees must provide to request a leave.
Much to cover here. I can’t possibly answer every question you have, but here’s my take, which I hope eases your burden a bit.
Grab a cup of coffee, put your feet up, and let’s work through these regs:
As we knew from the law itself, the DOL has confirmed the new law applies to a private-sector employer with 499 or fewer employees and most public employers.
When does the employer calculate? The DOL makes clear that an employer should calculate its total head count when employee’s leave is to be taken. But the regulations also appear to grandfather an employee once the employer is covered and for the remainder of that same leave. For example, an employer has 480 employees on April 5 when an employee requests leave covered by the law. Even though the employer head count might increase to 520 on April 6, the employee still can remain on leave until they return and/or leave is exhausted. After the employee returns and needs leave again, the employee would be subject to the new head count as of the date of the new leave. Got it?
Which employees should be counted? In making this determination, the DOL makes clear the count is a pretty broad sweep, so employers should include: 1) full-time and part-time employees (no independent contractors are counted); 2) only those employees within the United States; 3) employees on leave; 4) temporary employees jointly employed by the employer; and 5) day laborers supplied by a temporary agency.
What about multiple corporate entities – will they be counted together? Two or more entities are generally separate employers unless they meet the “integrated employer” test under the “classic” FMLA. If two entities are an integrated employer under the FMLA, then employees of all entities that make up the integrated employer count to determine employer coverage for EPSL and FMLA+ purposes. Both of these tests are highly fact-specific and look to a series of factors, including common ownership, management, business purpose, and day-to-day operations. Insofar as these tests are not susceptible to simple analysis, employers with questions as to whether they should aggregate affiliated companies should consult their favorite employment counsel. [Fyi, I know one.]
For EPSL: An employee is immediately eligible for paid sick leave
For FMLA+: Any full-time or part-time employee that has been on the employer’s payroll for 30 calendar days. The regulations explain that an employee will be considered to have been employed for at least 30 calendar days where:
- the employee was on the employer’s payroll for the 30 calendar days immediately prior to the date on which the employee’s leave would begin; or
- the employee was laid off or otherwise terminated by the employer on or after March 1, 2020, and rehired or reemployed by the employer on or before December 31, 2020, provided that the employee had been on the employer’s payroll for 30 or more of the 60 calendar days prior to the date the employee was laid off or terminated.
Exception for Health Care Providers and pretty much any one with whom they work: In the new rules, the DOL allows an employer to exclude health care providers and pretty much anyone associated with a health care provider. The regulation defines health care provider broadly for this purpose as: anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity (my emphasis added).
The DOL doesn’t stop there. The regulation’s definition also includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. This definition includes any individual employed by an entity that contracts with any of the above institutions, employers, or entities institutions to provide services or to maintain the operation of the facility.
Employees on furlough, laid off, or on a leave of absence are not eligible to take EPSL and FMLA+: The new rule clarifies that an employee may not take paid leave under the EPSL or FMLA+ if the employer does not have work for the employee (furlough), whether they are on other forms of leave, or have been terminated.
Reasons for EPSL
For EPSL, an employee can take up to ten days/two weeks of paid sick leave for any one of six reasons. In its new rules, DOL had much to say about these reasons:
1. The Employee is Subject to a quarantine or isolation order
After the law was enacted, we presumed this provision would be limited in scope. After all, very few employees are themselves subject to an isolation order. The new rules tease us by stating that a “federal, state or local isolation order” that might qualify as a reason for a leave includes a broad range of governmental orders, including orders to shelter in place or stay at home.
However, an employee may only take the leave when the employee would otherwise be able to perform the work or telework permitted by the employer had the order not been in place. Note that if an employer’s business is shutdown as a result of an order, it is not required to provide paid leave to employees, because the employer – not the employee – is the subject of the order to shut down. In other words, EPSL and FMLA+ will not apply where an employer no longer has work for an employee.
Oh goodness! What the heck does this mean!?! By now you’re screaming: Jeff, just tell me whether an employee can take EPSL or FMLA+ for a general shelter in place or business closure order!
To be honest, I’m still trying to process this one myself. But let me point you to two examples the DOL gives in the preamble to the regulations which might give us a better idea of what’s going on here:
. . . if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, it would no longer have any work for its employees. A cashier previously employed at the coffee shop who is subject to a stay-at-home order would not be able to work even if he were not required to stay at home. As such, he may not take paid sick leave because his inability to work is not due to his need to comply with the stay-at-home order, but rather due to the closure of his place of employment.
This analysis holds even if the closure of the coffee shop was substantially caused by a stay-at-home order. If the coffee shop closed due to its customers being required to stay at home, the reason for the cashier being unable to work would be because those customers were subject to the stay-at-home order, not because the cashier himself was subject to the order. Similarly, if the order forced the coffee shop to close, the reason for the cashier being unable to work would be because the coffee shop was subject to the order, not because the cashier himself was subject to the order.
Here is an example of when a shelter in place order would provide for EPSL or FMLA+:
. . . if a law firm permits its lawyers to work from home, a lawyer would not be prevented from working by a stay-at-home order, and thus may not take paid sick leave as a result of being subject to that order. In this circumstance, the lawyer is able to telework even if she is required to use her own computer instead of her employer’s computer. But, she would not be able to telework in the event of a power outage or similar extenuating circumstance and would therefore be eligible for paid sick leave during the period of the power outage or extenuating circumstance due to the quarantine or isolation order.
So, is this where we have arrived — that the employee can take leave if the power goes out? If you’re scratching your head, that makes two of us. Bottom line: this covers very limited circumstances, shelter in place orders are unlikely to support EPSL or FMLA+.
2. The Employee is advised by a health care provider to self-quarantine
DOL provides the roadmap for leave when the employee is advised to self-quarantine. In this situation, a health care provider must advise the employee to self-quarantine on a belief that one of the following apply:
a) the employee has COVID-19;
b) the employee may have COVID-19; or
c) the employee is particularly vulnerable to COVID-19.
Oh yeah, the employee in this situation also must be unable to work or telework.
3. The Employee is experiencing symptoms and seeking a medical diagnosis for COVID-19
The regulations clarify that an employee who experiences the symptoms of fever, dry cough, shortness of breath, or other COVID-19 symptoms identified by the CDC and is affirmatively taking steps to obtain a medical diagnosis, may be eligible for paid leave. Both the symptoms and the step-taking are critical here.
Also included in the period of leave is time spent making, waiting for, or attending an appointment for a test for COVID-19.
4. The Employee is caring for an individual who has been quarantined or been advised to self-quarantine
Simply put, who’s the “individual” that the employee must care for? The regulations tell us “individual” means either an immediate family member, roommate, or a person with whom the employee has a relationship and would be expected to care for the employee if the roles here were reversed. So, someone who means a bit more to you than the guy at the end of the bar.
5. The Employee is caring for a child because of school, child care closures
Where the employee requests leave to care for a child whose school or place of care is closed, DOL adopts recently-issued IRS guidance by limiting EPSL and FMLA+ only to those situations where the employee must actually care for the child and no other suitable person (e.g., co-parents, co-guardians, or the usual childcare provider) is available to care for the child during the period. If another caretaker is available to care for the child, the employee is not entitled to leave.
6. The Employee is experiencing any other substantially similar condition that may arise as designated by the Secretary of Health and Human Services
Know what DOL has to say about this reg? Nothing. Nada. Zip!
And I can’t blame the DOL, as I have no idea what this statutory provision means either. We punt for now as we await further guidance.
How Much EPSL Can an Employee Take?
Per the regulations, employees are “full” time and receive 80 paid sick leave hours in two situations:
First, employees are “full” time if their employer normally schedules them to work at least 40 hours each workweek.
Second, employees without a normal weekly schedule will be “full” time if the average number of workweek hours their employer schedules them to work (including leave hours they take) is at least 40 hours per workweek over the entire period of employment or the six-month period that ends when the employee takes paid sick leave, whichever is shorter.
Under the regulations, if you’re not full-time, you are considered “part” time. In the new rules, DOL creates a standard for employers to apply to determine how many EPSL hours they receive:
Standard schedule: Part-time employees with a normal weekly schedule receive an amount of EPSL that equals the total amount of hours worked in a two-week period. For example, if employees work 20 hours each week, they receive up to 40 hours under EPSL over the two-week period.
Wacky schedule: For employees who lack a normal weekly schedule, the DOL advises employers to use the total hours the employee worked during the six-month period (or the entire period of employment, if shorter) before taking leave, divide that by the number of calendar days in the period, then multiple the result by 14. For example, if an employee works 520 hours in a six-month period, that roughly equates to 2.857 hours per calendar day, so, multiplied by 14, the employee receives up to 40 hours of EPSL.
Quick note: if at the time of hiring, the employer and employee have an agreement concerning the average number of work hours each calendar day (few, if any, will), that daily number multiplied by 14 produces the amount of EPSL the employee is eligible to receive.
How Much FMLA+ Can an Employee Take?
In addition to EPSL, employees are entitled to take up to 12 weeks of FMLA leave for “a qualifying need related to a public health emergency.” This “qualifying need” is limited to circumstances where an employee is unable to work (or telework) to care for a minor child if the child’s school or place of child care has been closed or is unavailable.
As it forecast in its earlier Q&As, the DOL confirms in the regulations that FMLA+ cannot exceed a total of 12 weeks of leave during the applicable 12-month period. Any amount of FMLA “classic” leave an employee uses earlier in that same 12-month period reduces FMLA+ entitlement. For example, if during an applicable FMLA 12-month period an employee takes 4 weeks of FMLA “classic” leave, the employee has 8 weeks of FMLA+ leave left to use in that same period. Similarly, during a single FMLA 12-month period, an employee can use a combination of FMLA “classic” and FMLA+ leave, up to a maximum amount of 12 weeks.
If an employee exhausts all 12 workweeks of FMLA “classic” or FMLA+, the employee still can make use of any remaining EPSL leave that has not already been taken, in which case it is possible that the employee could end up taking 14 weeks (instead of 12).
Use of Intermittent Leave
Notably, the DOL significantly limits intermittent leave for EPSL and FMLA+. In an effort to limit the risk that an employee might spread COVID-19 to other employees, DOL limits the use of intermittent leave for those who are working onsite to two main conditions:
1) that the employee and employer agree to the use of intermittent leave; and
2) such use is limited to the employee’s need to care for a child whose school or place of care is closed, or where child care is unavailable.
In doing so, DOL slammed the door on the use of intermittent leave for any of the other five reasons under EPSL for employees working onsite. Its reasoning is practical: where an employee is absent due to COVID-19 symptoms or diagnosis or is taking care of an individual in a similar predicament, it is not acceptable for the employee to take intermittent leave due to the “unacceptably high risk” that the employee might spread COVID-19 to other employees. In these situations, DOL made clear that the employee must continue to take continuous paid sick leave each day until the employee either exhausts paid leave or no longer has a reason for leave from work.
In the case of telework, intermittent leave is available for employees who are taking EPSL or FMLA+, but again, only if the employer and employee can agree. DOL contemplates that the employee and employer will “agree on an arrangements” for intermittent leave “that balance the needs of each teleworking employee with the needs of the employer’s business.”
The requirement that both the employer and employee agree raises a practical question: What if the employee is unwilling to agree to the intermittent leave arrangement proposed by an employer?
Substitution of Accrued Paid Leave and “Top Offs”
This is where the regulations get a bit confusing.
The statute requires that the employer allow the employee to first use sick leave provided for under this sick leave law, then decide to use any remaining accrued paid leave under an employer’s policy. Per the explicit terms identified in the law, the employer cannot require the employee to use accrued leave under an employer policy first.
In its new rules, however, DOL clarified how accrued paid leave would interact with EPSL and FMLA+.
- For the two weeks (up to 80 hours) of EPSL, the employee has the sole discretion to use EPSL or any accrued paid leave provided by the employer. The employer cannot dictate that accrued, employer-paid leave be substituted during this time.
- However, for the initial two weeks of FMLA+, which is unpaid according to the FMLA+, the employee can elect, or the employer can require, the employee to use accrued paid leave (through an employer’s plan or policy). This means that an employee may be eligible to use EPSL during this time, and/or leave under the employer’s policy, or both to top off to 100% of their pay. However, if the employee elects to substitute emergency paid sick leave for the first two weeks of emergency family and medical leave, an employer may not require the employee to first use another form of accrued paid leave.
- For the remaining 10 weeks of FMLA+, if the employee is eligible due to school closures/childcare unavailability, the employer cannot require that an employee “top off” EPSL or FMLA+ with his or her own accrued paid leave unless the employee specifically agrees. But note: The DOL’s FAQ #31 says the exact opposite, allowing employers to require that employees exhaust their accrued employer paid leave without the employee’s permission. Something has to give here: assuming that the regulations are correct, DOL will be required to update FAQ #31 in the day ahead to comport with the applicable regulations.
Employee Request to Take EPSL and FMLA+
Perhaps not surprisingly, the DOL outlines different employee notice requirements depending on the reason for leave. For employees needing leave for school closures/childcare unavailability, and where such leave is foreseeable, employees must provide notice as soon as is practicable (consistent with “classic” FMLA standards). On the other hand, when an employee needs leave for any other reason under EPSL, the standards loosen, and employers can only require employee notice after the first workday (or part of a workday) that an employee takes EPSL.
While many employers have policies requiring employees to make requests for various types of leave in writing, consistent with the spirit of recent case law under FMLA “classic,” oral notice of the initial need for leave is sufficient, as long as the employee provides enough information for the employer to determine it is an EPSL or FMLA+ qualifying reason for leave. However, nothing in the regulations prevents an employer from directing employees to then follow the employer’s usual and customary procedures from that point forward, and the DOL indicates that such expectations will typically be reasonable.
In any event, the DOL reminds employers that if an employee fails in some regard with respect to providing notice or supporting information or documentation, the employer should give the employee notice of the failure and an opportunity to correct the deficiency prior to denying the leave.
Employee Documentation to Substantiate Leave
In the regulations, the DOL tackles some of the documentation questions employers have been grappling with since the law’s enactment. Prior to being able to take EPSL or FMLA+, the employee must provide:
- the employee’s name
- the dates for which the employee requests leave
- the qualifying reason, and
- an oral or written statement that the employee is unable to work because of the qualifying reason.
The DOL also outlines what type of documentation or information employees must provide in support of various types of leave under EPSL/FMLA+:
- Employee subject to a federal, state or local quarantine or isolation order related to COVID-19: the name of the governmental entity that issued the Order.
- A health care provider advises an employee to self-quarantine due to concerns related to COVID-19: the name of the health care provider who advised the employee to self-quarantine.
- Employee is caring for an individual who is subject to a quarantine or isolation order or an individual who has been advised by a health care provider to self-quarantine: either the name of the governmental entity that issued the Order to which the individual being cared for is subject, OR, the name of the health care provider who advised the individual being cared for to self-quarantine.
- Employee is caring for a child whose school is closed or childcare is unavailable due to COVID-19 precautions: name of the child, name of the school, place of care or child care provider (each defined in the regulations) that has closed or become unavailable, and a representation that “no other suitable person will be caring for the child during the period” the employee is taking EPSL or FMLA+ for this reason.
There seems to be a theme within the rule that the DOL is permitting employers to require information, but perhaps not much actual documentation, particularly compared to FMLA “classic” documentation standards. The DOL then defers to the tax credit process through the IRS and states that employers may also request that an employee provide other documents in support of the FFCRA tax credits, though the DOL does not indicate further what such records may be. The DOL also confirms, as IRS guidance states, that an employer need not provide leave to employees who will not provide sufficient materials to support the tax credits.
What’s left to discuss? Just a few more things . . .
DOL Poster and Employer’s Notice Requirements
The regulations do not contain significant, new employer notice requirements for the FFCRA, other than to align with its earlier Q&A, and require that employers post on their premises in conspicuous places the FFCRA’s paid leave provisions and information about how to file a complaint with the DOL for alleged violations of the law. The DOL refers to its model notice as being sufficient notice, as long as the employer either posts it in the workplace in conspicuous places, emails, direct mails, or posts it on the employer’s internal or external website. Employers can post this in a different format than the DOL’s model poster, as long as the content is accurate and readable. Given the current remote work realities of COVID-19 for many workers, employers should ensure that employees not actually reporting to the worksite each day receive the selected notice via one of the above remote methods. As noted above in this article, the regulations clarify that, regardless of whether a small employer chooses to exempt one or more employees, it still must post this general notice.
The DOL notes in the preamble to the regulations that this law does not require employers to provide employees seeking FMLA+ leave with the traditional FMLA notice of eligibility, rights and responsibilities, or written designation—but the agency also notes that employers may want to take advantage of their established practices for “classic” FMLA to send such notifications.
Editorial comment: Employers should prepare their own notices and forms and use them regularly. My friends, remember that proper documentation is one of the keys to compliance. It establishes that you have alerted employees of their rights and that you properly responded to their leave request.
The regulations note that, upon return to work from EPSL or FMLA+, the employee has the right to be restored to the same or equivalent position, subject to certain limitations:
1. An employee is not protected from employment actions, such as layoffs, which would have affected the employee had they not taken leave; to deny restoration of employment, the employer must be able to show that the employee would not otherwise have been employed at the time reinstatement is requested; and
2. For FMLA+ leave only, an employer may deny job restoration to certain “key” employees (as defined under preexisting FMLA regulations), if denial of restoration is necessary to prevent substantial and grievous economic injury to the employer’s operations. Note, however, that this is a designation and option that employers must exercise only through very specific steps the FMLA outlines.
In addition, the regulations explain that employers that employ 24 or fewer employees may deny job restoration under FMLA+ (but not EPSL) where:
1. the employee took leave to care for child whose school or childcare facility was closed for COVID-19 reasons;
2. the employee’s position no longer exists due to economic conditions or changes in operating conditions caused by a public health emergency;
3. the employer makes reasonable efforts to restore the employee to an equivalent position; and
4. where such reasonable efforts fail, the employer makes reasonable efforts to contact the employee for a one-year period if an equivalent position becomes available. The one-year period begins on the earlier of the date the employee’s leave concludes or the date 12 weeks after the employee’s leave began.
Small (Fewer than 50 Employees) Business Exemption
As we discussed in our Littler alert yesterday, the regulations provide that an employer, including a religious or nonprofit organization, with 49 or fewer employees, is exempt from providing FFCRA leave for child-care purposes when allowing such leave would jeopardize the viability of the business as a going concern. However, given that language in the regulations does specifically reference the exemption with respect to leave that is requested, we caution that employers should be judicious in applying the exemption, and prepare themselves to address exemption decisions with specific reference to employees and specific leave requests rather than a blanket decision on day one, or a decision that it simply takes the position that it is “exempt.”
To use this exemption, an authorized officer of the employer must determine that:
- 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;
- 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; or
- There are no 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.
To elect this small business exemption, the employer must document that an authorized officer made this determination. The DOL advises that employers should retain those records in their files. Finally, even where a small employer chooses to exempt one or more employees, it still must display the mandatory poster.
* This article borrows heavily from an alert that I co-authored with my Littler colleagues Alexis Knapp, Jim Paretti and Sebastian Chilco, with whom I’ve been in the trenches over the past several weeks, as together we have tackled EPSL and FMLA+ and every little morsel the DOL has tossed our way. I have learned much from them.