Updated: U.S. Department of Labor’s Wage and Hour Division Issues Initial Guidance and Model Employee Notice Regarding the Leave Provisions of the Families First Coronavirus Response Act: Part I

September 17, 2020
September 17, 2020 Update. On September 16, 2020, the U.S. Department of Labor (“DOL”) published revisions and clarifications to its Temporary Rule (“Rule”) implementing the provisions of the Families First Coronavirus Response Act (“FFCRA”). Additionally, on September 11, 2020, the DOL updated its FFCRA Questions and Answers document to reflect these changes. These revisions are in response to the United States District Court for the Southern District of New York’s August ruling which vacated certain provisions of the DOL’s initial temporary rule. The revised Rule: (i) affirmed that FFCRA leave may only be taken if the employee has work from which to take leave; (ii) affirmed that, where intermittent FFCRA leave is permitted, an employee must obtain employer approval; (iii) revised the definition of “health care provider” to be consistent with the Family and Medical Leave Act (“FMLA”); (iv) clarified that an employee should provide to its employer information supporting his or her need for leave as soon as practicable; and (v) corrected an inconsistency regarding when an employee may be required to give notice of his or her intention to take leave under the FFCRA. The revised Rule became effective upon publication. The below post has been updated to reflect these changes and our updated memorandum on the Rule is available here.

September 4, 2020 Update. On August 27, 2020, the DOL issued guidance on the FFCRA and school reopenings. Our blog post on the guidance is available here.

August 6 Update. On August 3, 2020, the Southern District of New York issued a decision in New York v. U.S. Dep’t of Labor, No. 20-cv-3020 (S.D.N.Y. Aug. 3, 2020) (Oetken, J.) that vacated certain provisions of the DOL rule implementing the provisions of the FFCRA. Specifically, the decision vacated provisions of the rule that (i) prohibited employees from taking leave if an employer “does not have work” for the employee; (ii) defined “health care providers”; (iii) required employer consent for taking intermittent leave; and (iv) required employees to provide documentation related to their leave prior to taking that leave. The remaining provisions of the rule are unaffected.  Notably, the Court was silent on whether its decision applies to jurisdictions other than the Southern District of New York. The below post has been updated to reflect this decision.

Additionally, on July 20, 2020, the DOL’s Wage and Hour Division provided additional guidance in its Questions and Answers documents regarding COVID-19 and (i) the Fair Labor Standards Act (“FLSA”), (ii) the FMLA, and (iii) the leave provisions of the FFCRA. Among other things, the new guidance discusses compensation of exempt and non-exempt employees; hazard pay; “in person” telemedicine appointments; COVID-19 testing for employees; returning to work after taking FFCRA leave; and the interaction of FFCRA leave entitlements with employee furloughs. Our blog post covering this guidance is available here.

May 11, 2020 Update. On May 7, 2020, the DOL provided additional guidance in its Questions and Answers document regarding the leave provisions of the FFCRA. Among other things, the new guidance provides that (i) domestic service workers are entitled to paid leave under the FFCRA when they are “economically dependent” on the household in which they work; (ii) if a worker is employed by a temporary placement agency with more than 500 employees, and is placed at a business with less than 500 employees, the second business must provide the worker with paid leave under the FFCRA if it is found to be a “joint employer”; (iii) employees who have been teleworking with children in the home over the past several weeks may still be eligible for paid leave under the FFCRA to care for a child in certain circumstances; (iv) an employee seeking paid leave under the FFCRA to obtain a medical diagnosis may be required to identify his or her symptoms and a date for a test or doctor’s appointment, but may not be required to provide further documentation or similar certification that he or she sought a diagnosis or treatment; and (v)  employees may be eligible for paid leave under the FFCRA if a summer child care provider, such as a summer camp, is closed for a COVID-19-related reason.

April 22, 2020 Update. On March 27, 2020, nine days after its enactment, the FFCRA was amended in part by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the third emergency federal legislation adopted in response to COVID-19. Our memorandum to clients covering how the CARES Act amended the leave and tax provisions of the FFCRA is available here. On April 6, 2020, the DOL published a temporary rule implementing the leave provisions of the FFCRA, which was amended in part on April 10, 2020 (the “Rule”). Our memorandum to clients covering the Rule is available here. Among other things, the DOL’s latest update of April 20, 2020 provides more information regarding how an employer should calculate an employee’s regular rate of pay and the hours of paid leave to which the employee is entitled under the FFCRA. Additionally, on April 20, 2020, the DOL announced the end of the temporary period of non-enforcement of the FFCRA’s leave provisions.

March 31, 2020 Update. On March 30, 2020, the DOL revised its guidance on March 30, 2020 to provide that the integrated employer test is applicable to determining who is a covered employer under the Emergency Paid Sick Leave Act as well as the Emergency Family and Medical Leave Expansion Act.

The DOL continues to update and provide additional guidance in its Questions and Answers document, and, in addition to the below post, our other posts on the guidance are available here: Part II, Part IIIPart IV, and our July 21, 2020 post.

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On March 18, 2020, the Families First Coronavirus Response Act, the second emergency federal legislation adopted in response to Coronavirus (“COVID-19”), was enacted. Our memorandum regarding the leave and tax credit provisions of the FFCRA is available here, and our post regarding the U.S. Department of Treasury, IRS, and U.S. Department of Labor March 20, 2020 joint news release regarding their plan to implement the leave and tax credit provisions of the FFCRA is available here. The leave and tax credit provisions apply only to private employers with fewer than 500 employees and to public entities.

On March 24, 2020, the DOL issued a news release (No. 20-512-NAT) announcing its first round of published guidance regarding the leave provisions in (1) the Emergency Family and Medical Leave Expansion Act (the “Expansion Act”) and (2) the Emergency Paid Sick Leave Act (the “Sick Leave Act” and, together with the Expansion Act, the “Acts”). This guidance consists of a Fact Sheet for Employees, a Fact Sheet for Employers, and a Questions and Answers document.

On March 25, 2020, the DOL issued a news release (No. 20-514-NAT) announcing a plan to have a “national online dialogue” on the paid leave provisions in the FFCRA through March 29, 2020; the dialogue was later extended to April 10, 2020. The DOL also published two workplace posters (one on federal employee rights and one on other employee rights), Frequently Asked Questions (the “FAQs”) regarding workplace posters, and Field Assistance Bulletin 2020-1 (the “FAB”) regarding the temporary non-enforcement period applicable to the leave provisions of the FFCRA. On April 20, 2020, the DOL announced the end of that temporary non-enforcement period.

The following are the key employer takeaways from this guidance:
  • April 1, 2020 Effective Date. The FFCRA provided that the leave provisions would become effective “not later than” fifteen days after its March 18, 2020 enactment, which is April 2, 2020. The guidance states that these provisions are effective on April 1, 2020 and apply to leave taken between April 1, 2020 and December 31, 2020.
     
  • Non-Enforcement Period. Although the leave provisions of the FFCRA are effective on April 1, 2020, and the DOL previously stated it would observe a 30-day period of non-enforcement, the FAB provides that the DOL will observe a “temporary period of non-enforcement” for the period from March 18 through April 17, 2020, provided that the employer made “reasonable, good faith efforts” to comply with the FFCRA. The DOL “reserves its right to exercise its enforcement authority” if an employer: (1) “willfully” violates the paid leave provisions of the FFCRA; (2) does not remedy a violation after being notified of the violation by the DOL, an employee seeking paid leave, or a representative of an employee seeking paid leave; or (3) does not provide the DOL a “written commitment” to comply with the FFCRA going forward.
     
    • Remedy Any Violations. An employer making reasonable, good faith efforts to comply with the FFCRA during the non-enforcement period must “mak[e] all affected employees whole as soon as practicable.”
       
    • Insufficient Cash Flow. During the non-enforcement period, an employer who has insufficient cash flow but is eligible for tax credits “should make payment of sick leave or family leave wages as soon as possible.” In any event, an employer should not make payment “later than” seven calendar days after (1) “withdraw[ing] an amount equal to the required paid sick leave and expanded family and medical leave wages from the employer’s Federal payroll tax deposits” or, if such deposits are insufficient, (2) “receiv[ing] a refund of the credit amount from the IRS to cover the required wages.”
       
  • Counting Employees. The guidance, specifically the Questions and Answers document, provides direction regarding how an employer should determine whether it has fewer than 500 employees. A corporation is generally considered a single employer, and a corporation should count all employees of the corporation’s separate establishments or divisions.
     
    • Timing. An employer should count its employees “at the time [an] employee’s leave is to be taken.”
       
    • Included Employees. An employer should include both full-time and part-time employees, including employees on leave, temporary employees who are jointly employed with another employer (regardless of which employer maintains the payroll), and day laborers provided by a temporary agency (regardless of whether the employer is the temporary agency or the client firm, so long as there is a continuing employment relationship), so long as such individuals are “within the United States,” including any territory or possession of the United States.  An employer should not include independent contractors, as determined under the FLSA.
       
    • Related Corporations. Two corporations are considered separate employers, even where one corporation has an ownership interest in the other, unless the corporations meet the joint employers test under the FLSA with respect to certain employees. A corporation must count all employees over which it is a joint employer in determining whether it has fewer than 500 employees for purposes of determining coverage under the FFCRA.
       
    • Integrated Employers. Generally, two or more entities are considered separate employers, unless the entities meet the integrated employer test under the FMLA. Entities must count all employees of all entities comprising the integrated employer in determining whether the integrated employer has fewer than 500 employees for purposes of determining coverage under the FFCRA.
       
  • Determining Hours of Paid Leave. The Questions and Answers provide guidance regarding how an employer should determine the number of hours to which an employee is entitled to paid leave. Under the Expansion Act, an employer must provide paid leave to all employees (both full-time and part-time) based on the hours the employee would have been “normally scheduled to work.” Under the Sick Leave Act, an employer must provide (1) full-time employees up to two weeks (or up to 80 hours) of paid leave and (2) paid leave to part-time employees based on the hours the employee would have been “normally scheduled to work.” An employer generally may round to the nearest tenth, quarter, or half hour in calculating the hours of FFCRA leave to which an employee is entitled, but the employer must be consistent and round to the nearest increment typically used to track the hours that employees work. The employer should consistently use any rounding principle for all employees taking FFCRA leave.
     
    • Leave Hours. An employer must include any hours during which an employee took leave in calculating the number of hours to which the employee is entitled to paid leave under the Acts.
       
    • Overtime Hours. If an employee is normally scheduled to work overtime hours, an employer must include those hours in calculating the number of hours to which the employee is entitled to paid leave, subject to any applicable daily or aggregate caps. However, an employer is not required to include a premium for overtime hours under the Acts.
       
    • Variable Schedule. If an employer does not know an employee’s normal schedule, or if the schedule varies, the employer “may use a six-month average to calculate the average daily hours,” subject to any applicable daily and aggregate caps. Part III of our coverage on this topic covers in more detail the guidance on how an employer should calculate the hours of paid leave to which such employees are entitled under the Acts.
       
      • Employed Less Than Six Months. If an employer has employed an employee less than six months, the employer should use the number of hours that it was agreed the employee would work at time of hiring. Absent such agreement, an employer “may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of his or her employment.”
         
  • Sick Leave Cap. An employer is required to provide up to two weeks (or up to 80 hours) of paid leave under the Sick Leave Act, and an employee may take that paid leave for “any combination of qualifying reasons.” However, an employer is not required to provide more than 80 hours of paid leave under the Sick Leave Act, even if the employee normally would have worked more than 80 hours over a two-week period or has multiple qualifying reasons for paid leave.
     
  • Regular Rate of Pay. An employer generally should determine an employee’s regular rate of pay  over all full workweeks during the six-month period ending on the first day of the employee’s FFCRA leave. The Questions and Answers provide guidance regarding how to calculate an employee’s regular rate of pay in different circumstances, as described below.
     
    • Fixed Hourly Wage. If an employer paid an employee “exclusively through a fixed hourly wage or a salary equivalent,” the employer should use the employee’s hourly wage or the hourly equivalent of his or her salary as the employee’s regular rate of pay. If an employer paid an employee through any other compensation arrangement, the employer should calculate the employee’s regular rate of pay as set forth below.
       
    • Six-Month Average. The employer generally should calculate the employee’s regular rate of pay by adding up the “non-excludable remuneration” paid to the employee over all full workweeks in the past six months and dividing that sum by the total number of hours the employee actually worked in those workweeks.
       
      • Other Leave. An employer should not include any payments an employee received for taking leave during the relevant workweeks in calculating the total non-excludable remuneration.  Further, when calculating an employee’s regular rate of pay, an employer should not include any hours of leave taken in calculating the total number of hours actually worked during the relevant workweeks.
         
      • Commissions and Piece Rates. An employer should include an employee’s commissions and piece rates as non-excludable remuneration in calculating the employee’s regular rate of pay.
         
      • Tips. An employer should include an employee’s tips as non-excludable remuneration only to the extent that the employer applies the tips towards its minimum wage obligations.
         
      • Overtime. An employer should not include overtime premiums in calculating an employee’s regular rate.
         
      • Employed Less Than Six Months. If an employer has employed an employee less than six months, the employer should calculate the employee’s average regular rate over the full period of employment.
         
    • Fixed Salary. If an employer paid an employee “exclusively through a fixed salary,” the employee’s regular rate of pay will depend on whether the fixed salary was “understood to compensate the employee regardless of the number of hours of work in each workweek.” If the fixed salary was understood to compensate the employee for a specific number of hours worked per workweek, the employee’s average regular rate would be the hourly equivalent of his or her fixed salary. If the fixed salary was understood to compensate the employee regardless of the numbers of hours worked per workweek, the employee’s average regular rate should be calculated using his or her six-month average, as set forth above. If an employer does not have records for the number of hours an employee worked, the employer should use a reasonable estimate.
       
    • Intermittent Leave. If an employee takes FFCRA leave intermittently or more than once (e.g., an employee takes FFCRA leave, returns to work because the COVID-19-related qualifying reason for the FFCRA leave ends, and then takes additional FFCRA leave because of the same or a new COVID-19-related qualifying reason), the employer should use the six-month period ending on the first day of the employee’s first FFCRA leave to calculate the employee’s regular rate of pay for all FFCRA leave that employee may take. On August 3, 2020, the Southern District of New York vacated a provision of the DOL Rule that required an employee to secure employer consent for taking intermittent leave. The DOL’s September 16, 2020 Rule reaffirmed the Rule’s April 1 position that employer approval is needed to take intermittent FFCRA leave in all situations in which intermittent FFCRA leave is permitted.
       
  • Interaction of Paid Sick Leave With Prior Paid Leave. The paid leave provisions of the FFCRA are not retroactive. An employer who provided an employee paid leave for any reason, including a COVID-19-related reason set forth in the Sick Leave Act, prior to April 1, 2020 cannot deny that employee the paid leave required under the Sick Leave Act. Because the Expansion Act amends the Family and Medical Leave Act of 1993 (the “FMLA”), an employee taking leave under the Expansion Act is subject to the applicable limits in the FMLA, as explained in Part II of our coverage of this topic.
     
  • DOL to Issue Regulations on Small Business Exemption for Child Care Leave. An employer with fewer than 50 employees should document why it meets the criteria for an exemption from the requirements to provide child care leave under the FFCRA. The DOL addressed the criteria in its Rule, as set forth in our memorandum to clients. The guidance notes that an employer “should not send any materials to the [DOL] when seeking a small business exemption.”
     
  • Eligible Employee Under Expansion Act. An employer should consider an employee to be an eligible employee under the Expansion Act if the employee has been on the employer’s payroll “for the 30 calendar days immediately prior to the day” the employee’s leave begins.
     
    • Temporary Employee. If an employer hired an employee on a full-time basis after the employee worked for the employer on a temporary basis, the employer should count any days the employee “previously worked as a temporary employee” towards the employee’s 30-day eligibility period.
       
    • Rehired Employee. The CARES Act amended the Expansion Act to provide that an employee is eligible for leave if the employer “laid off or otherwise terminated” the employee on or after March 1, 2020, and then “rehired or otherwise reemployed” the employee on or before December 31, 2020, and the employee had been on the employer’s payroll “for thirty or more of the sixty calendar days prior to the date the [e]mployee was laid off or otherwise terminated.”
       
  • Workplace Posters. According to the FAQs, a covered employer must provide notice of the FFCRA requirements to all current employees by (1) posting the applicable workplace poster provided by the DOL “in a conspicuous place on its premises” where all employees can see it; (2) emailing or direct mailing the workplace poster to employees; or (3) posting the workplace poster on “an employee information internal or external website.” An employer is not required to provide notice to recently laid-off workers or to prospective hires but must provide notice to newly-hired employees through one of the above-listed methods.
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The Coronavirus situation is fluid, and laws are changing rapidly. Our recent memoranda and other information discussing various aspects of Coronavirus can be found here.

DOL Wages and Overtime