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

March 25, 2020
Note:  This post was updated on March 31, 2020 because the Department of Labor 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.

On March 18, 2020, the Families First Coronavirus Response Act (“FFCRA”), the second emergency federal legislation adopted in response to Coronavirus (“COVID-19”), was enacted. S&C’s memorandum regarding the leave and tax credit provisions of the FFCRA is available here, and S&C’s post regarding the U.S. Department of Treasury, IRS, and U.S. Department of Labor (“DOL”) 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, DOL’s Wage and Hour Division (“WHD”) 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”).  This guidance consists of a Fact Sheet for Employees, a Fact Sheet for Employers, and a Questions and Answers document.

On March 25, 2020, WHD 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.  WHD 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.

The following are the key employer takeaways from this newly-distributed WHD information:
  • 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 WHD 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 Fair Labor Standards Act (“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 Family and Medical Leave Act of 1993 (“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.”
    • 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 either the Expansion Act or the Sick Leave Act.
    • 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 caps.
      • 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 should determine an employee’s regular rate of pay by (1) calculating the employee’s average regular rate over a period of up to six months prior to the date on which the employee takes leave or (2) adding all compensation that is part of the employee’s regular rate of pay over that same period and then dividing that sum by all hours actually worked during that same period.
    • Commissions, Tips, or Piece Rates.  An employer should include an employee’s commissions, tips, or piece rates in calculating the employee’s regular rate of pay.
    • Employed Less Than Six Months.  If an employer has employed an employee less than six months, the employer should calculate the employee’s regular rate of pay as the average of the employee’s regular rate of pay for each week the employee worked.
       
  • 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 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.
     
  • 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 will address the criteria in forthcoming regulations.  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.
       
  • 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 WHD “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.
As the Coronavirus situation continues to develop, and federal, state, and local governments issue additional guidance, employers need to be cognizant of new guidance and requirements.  For more information, please visit S&C’s page regarding Coronavirus updates.

DOL Wages and Overtime