United States: DOL Issues Initial Guidance And Employee Notice For Families First Coronavirus Response Act

Highlights

• As employers are preparing for the impact of the Families First Coronavirus Response Act (FFCRA) on their businesses, the U.S. Department of Labor (DOL) has issued three forms of guidance and an employee notice to help employers and employees understand how the FFCRA will take effect.
• Of primary note, the DOL guidance states that the FFCRA goes into effect on April 1, 2020. Therefore, covered employers must comply with the FFCRA from then until the law expires on Dec. 31, 2020. The DOL guidance also clarifies a number of additional points relating to benefit determinations and implementation of the law.
• Although a number of questions remain unanswered, the DOL stated that it will issue further guidance on a "rolling basis," and it continues to solicit public comments as it prepares its FFCRA regulations.

The Families First Coronavirus Response Act (FFCRA) was enacted into law on March 18, 2020 in response to the COVID-19 national emergency. (See Holland & Knight's previous alert, " New Law Requires Employers at Certain Firms Provide Leave, Gives Employer Tax Credits," March 19, 2020.) As employers are preparing for the FFCRA's impact on their businesses, the U.S. Department of Labor (DOL) issued three forms of guidance to help employers and employees understand how the FFCRA will take effect: a fact sheet for employers, a fact sheet for employees and a question-and-answer document.

The DOL has also issued an employee notice (with an accompanying question-and-answer document) summarizing employee's rights under the FFCRA that employers must post or otherwise provide to employees. The poster and the questions and answers may be found on the DOL website.

The DOL has also issued two question-and-answer documents specific to the Fair Labor Standards Act (FLSA) and COVID-19, as well as to the Family and Medical Leave Act (FMLA) and COVID-19. These documents include helpful answers to common employer questions, but appear to have been drafted without taking the FFCRA into account.

Accordingly, employers should look to the collective guidance provided by the DOL, and should not rely solely on any one guidance document.

Effective Date of the Act

Of primary note, the DOL guidance states that the FFCRA goes into effect on April 1, 2020. The Act itself states that it becomes effective "not later than 15 days after the date of enactment," which is April 2. It appears that the DOL has opted to enact the law one day prior to the end of the 15-day period. Therefore, covered employers must comply with the FFCRA from April 1, 2020, until the law expires on Dec. 31, 2020.

Even if an employee has already been provided paid leave due to COVID-19, they are still eligible to take paid leave under FFCRA after the effective date. The guidance clarified that the emergency paid sick leave and expanded family and medical leave benefits are not retroactive.

Calculating Total Number of Employees for Coverage Determination

The FFCRA applies to employers with 500 employees or less. The DOL clarified that in calculating the total number of employees, all full-time or part-time employees working within the United States (which includes all U.S. territories or possessions) are counted, including all employees on leave and temporary employees who are jointly employed with another company as determined under the FLSA.

The DOL confirmed that the joint-employer test from the FLSA and the integrated-employer test under the FMLA will be used to determine if multiple entities constitute a single employer for purposes of determining whether the employer has 500 employees or less.

Small Business Exemptions

The DOL guidance states that businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern. The DOL states that it will issue exemption criteria in forthcoming regulations and employers wishing to seek the exemption should document why their business meets such criteria, but not send any such documentation to the DOL. It is also anticipated that the DOL will also issue small business exemption criteria pertaining to paid leave provided for other qualifying reasons under the Emergency Paid Sick Leave Act.

Employee Notice

The DOL's Employee Rights notice defines eligible employees and details an employee's paid leave entitlements under the FCCRA, including qualifying reasons for leave. The notice also includes a statement regarding DOL enforcement of the FCCRA. All covered employers, including small employers who may ultimately qualify for an exemption from the FCCRA, are required to provide a copy of the notice to their employees. Of particular note given the number of employees now teleworking, the DOL explains that in addition to posting the notice in a conspicuous place on the employer's premises, an employer "may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website." The notice need be provided only to current employees and applicants for employment.

Additional Clarifications

The DOL guidance clarifies a number of additional points relating to benefit determinations and implementation of the law, including the following.

• Employees are eligible for up to two weeks, or 10 days, of paid leave under the Emergency Paid Sick Leave Act, subject to an 80-hour cap for full-time employees. The DOL guidance clarifies that paid sick leave can be taken for any combination of qualifying reasons, but that no employee is entitled to receive more than 80 hours of leave.
• The FFCRA provides that for part-time employees, an employer must calculate the average number of hours an employee works in a two-week period to determine the amount of emergency paid leave that the part-time employee is entitled to receive. The DOL guidance further clarifies that when the employee's hours vary, the employer can use a two-week average for the past six months. If the employee has not been employed for the previous six months, the employer can look to the number of hours that the employer and employee agreed that the employee would work upon hiring. If there is no agreement, the employer should use the average number of hours per day the employee was scheduled to work during the term of employment.
• The calculation of paid leave benefits under the FFCRA is based on the employee's regular rate of pay subject to the caps specified in the law. The DOL guidance clarifies that the regular rate of pay is calculated based on the average of an employee's regular rate of pay as defined under the FLSA, for a period of up to six months prior to the date the employee takes leave.
• The DOL guidance provides that overtime worked by an employee must be included for calculating the number hours paid to an employee in a single workweek under the Emergency Paid Sick Leave Act, subject to the 80-hour cap. However, an employee's overtime premium is not used to calculate the employee's regular rate of pay for purposes of calculating the amount of the paid leave benefit.

Conclusion and Next Steps

A number of questions about the FFCRA remain unanswered by the guidance. The DOL also states it will issue further guidance, including additional fact sheets and question-and-answer documents, on a "rolling basis." In addition, the DOL continues to solicit public comments as it prepares its regulations for the FFCRA, which it anticipates publishing in April 2020, potentially after the FFCRA takes effect.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.