DOL Issues Initial Guidance Under the Families First Coronavirus Response Act

The U.S. Department of Labor has issued initial guidance on various issues under the Families First Coronavirus Response Act, publishing a Fact Sheet for Employers (here), a Fact Sheet for Employees (here), and a Questions and Answers document (here) addressing some of the questions posed by businesses and their workers over the past week.

The March 24 guidance does not contain any of the agency’s draft regulations or its anticipated notice to employees, which will be released soon. The guidance is not legally binding but could be persuasive to courts and other agencies due to the DOL’s oversight role under the Act.

The Fact Sheet for Employees covers basic qualification, length of leave, and pay issues under both the Emergency Paid Sick Leave and Expanded Family Medical and Leave portions of the new law. It also reiterates that Paid Sick Leave is available immediately to employees upon hire, while Expanded Family and Medical Leave requires workers to have been employed for 30 days. Other important issues, such as when employers with fewer than 50 employees may be excused from certain parts of the law, are left to future regulations that are “expected [in] April 2020.”

The Fact Sheet for Employers is similar but contains a few important details. First, it clarifies that employees are not required to use the Emergency Paid Sick Leave benefit during the first two weeks of Expanded Family and Medical Leave (saving it, perhaps, for later in the year) but may “elect to substitute any accrued vacation leave, personal leave, or medical or sick leave.” Second, it reiterates that leave does not carry over from year to year (which makes sense, as the law sunsets on December 31, 2020) and is not cashed out at termination. Third, it promises that a model notice to employees will be published by March 25, 2020.

The guidance also notes that employers of Health Care Providers or Emergency Responders may elect to exclude such employees from leave under the Act, but it does not define these terms. “Health Care Provider” presumably has the same meaning as under the Family Medical Leave Act, which includes physicians, podiatrists, dentists, clinical psychologists, optometrists, chiropractors, Nurse Practitioners, nurse-midwives, clinical social workers, physician assistants, certain religious practitioners, and – more broadly – any provider from whom an employer or its group health plan will accept “certification of the existence of a serious health condition … for benefits.” See 29 C.F.R. § 825.125.

“First Responder” presumably has the same meaning used under the federal Fair Labor Standards Act, which includes law enforcement and correction/probation personnel, park rangers, firefighters, emergency medical and rescue personnel (paramedic, EMT, etc.) and other similar employees. See DOL Fact Sheet No. 17.

The Questions and Answers sheet addresses several important issues under the new law, including:

· The paid leave provisions apply only to leaves between April 1 and December 31, 2020 – and is not retroactive (so paid leave provided before April 1 will not count toward the minimums and will not be reimbursable under its tax-refund program);

· The 500-employee maximum includes only employees in the United States, including joint employees but excluding independent contractors, and “integrated employers” may aggregate their employees toward the threshold;

· Employers with fewer than 50 employees must “document” why they meet the exemption criteria (to be addressed in April regulations) but will not be required to submit materials directly to the DOL;

· Employers follow the methods described in the Act to determine part-time employees’ benefit, and overtime is included when calculating any employee’s usual schedule (though the maximum benefit is capped at 80 hours);

· The “regular rate” of pay used for benefit calculation refers to an employee’s regular rate of pay (calculated the same way regular rate is calculated for overtime) over the past six months; and

· Employees have been employed for 30 days if they were on the employer’s payroll 30 days prior to the day leave starts (regardless of time worked). Employees who worked as temporary employees may count that time toward the 30-day requirement.

We expect more guidance in the coming week, and a model notice within the coming

day.

The DOL’s landing page for today’s guidance can be viewed here.

Whether a Business May Continue Operating Under Stay-at-Home Orders ... (and what is "CISA"?)

In the past days, states and municipalities have issued various emergency and stay-at-home orders to require isolation and, where appropriate, social distancing. These orders effectively close many businesses except for a few minimum operations. The main order now in place for California employers is Governor Newsom's March 19 Stay-at-Home order, which is posted online here.

This leaves employers wondering whether they may continue operating, and what will happen to their workforce.

Governor Newsom's order, like other similar statewide orders appearing this week, prohibits non-home-based work in businesses not specifically allowed under its terms. It allows continued operation of businesses within the "Essential Critical Infrastructure."

"Essential Critical Infrastructure" refers to a broad set of sixteen "Sectors" and their interdependent businesses and resources. The concept behind the system is that many types of disasters (such as terrorism, military attack, natural events, and pandemic) could cripple entire categories of national operation (such as healthcare or transportation) by degrading even small important parts of the system. Each Sector is dependent on certain other Sectors (such as water and energy).

This system is defined and administered by the Cyberstructure and Infrastructure Security Agency ("CISA"), an arm of the Department of Homeland Security.

The various essential Sectors, descriptions of their operations, and the documents defining each Sector are on CISA's website, located here. The site contains guidance:

"intended to support State, Local, and industry partners in identifying the critical infrastructure sectors and the essential workers needed to maintain the services and functions Americans depend on daily and need to be able to operate resiliently during the COVID-19 pandemic response."

CISA maintains a page providing guidance here (which is cited in multiple state-wide orders such as CA and IL), and Governor Newsom's office has published its own guidance here.

Employers should review these materials, which actually permit a very broad set of infrastructure-important activities, to determine whether they arguably fall within the COVID-administered system.

We also believe that employers should continue their compliance with local ordinance, such as those discussed in our blog posting here, in addition to the state order(s) except where they conflict with state mandate. For example, we believe that a worker needed to support state-approved critical infrastructure in one county may travel out of or through another to work.

We also encourage employers to prepare a document employees may carry explaining that they work for the business in a particular position, that the business performs certain essential infrastructure functions, a description of the functions and why they are allowed, the address of the business and areas where the employee works, and a contact at the business for further information. This may assist employees traveling from home to work or while performing their duties. The same document should be carried by staff performing essential minimal operations under local orders, such as securing inventory or processing payroll while business is suspended.

We will continue watching developments and update this post as necessary.

Congress Passes Sweeping Law Requiring Employers to Provide Up to Twelve Weeks of Paid Leave

Introduction

On March 18, Congress passed and the President signed the Families First Coronavirus Response Act, H.R. 6201, 116th Cong. § 2 (2020), to address issues caused by the current pandemic. For employers, the law radically amends the federal Family and Medical Leave Act (“FMLA”) to require paid “Public Health Emergency Leave” for private employers with fewer than 500 employees and most public agencies. The law also requires these employers to provide up to ten days of “Emergency Paid Sick Leave” per year.

H.R. 6201 is designed to reimburse private employers (but apparently not public agencies) for 100% of the cost of paid leave through refundable payroll tax credits.

The new law takes effect 15 days after enactment, on April 2. Its full text can be viewed here.

Amendments to FMLA – Public Health Emergency Leave

H.R. 6201 Passes the Senate

Under the relevant terms of H.R. 6201, private employers with fewer than 500 employees (and most public employers) will be required to provide paid leave to most employees when they are:

“…unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”

“Child care provider” includes people who receive compensation for providing child care services on a regular basis. “School” includes both elementary and secondary schools. “Public health emergency” includes “an emergency with respect to COVID-19 declared by a Federal, State, or local authority.”

Unpaid and Paid Leave Required

H.R. 6201 requires an employer to provide qualifying employees with unpaid leave for the initial ten days and paid leave for each subsequent day up to twelve weeks of total time off. Federal Emergency Paid Sick Leave, discussed below, can be used for the initial ten-day unpaid period. Unlike other parts of FMLA, an employee need only have been employed for 30 days and need not have worked any minimum number of hours over the past year.

Paid leave for the remainder of the 12 weeks of available leave must be at least two thirds of an employee’s “regular rate of pay,” which in most cases will be their base hourly rate (though this could become very complicated at the start and end of leave, and during any intermittent leave), capped at $200 per day. Where an employee’s schedule varies weekly, employers usually must average the number of hours worked per day in the 6 months prior to the start of leave. (If the employee did not work over that period, the employer must use “the reasonable expectation of the employee” when hired.)

The maximum total payment to an employee is $10,000 per leave.

Restoration to Position

Employees taking Public Health Emergency Leave must be restored to the same position upon return, if possible, with the limited exception for employers with fewer than 25 employees that (1) the position has since disappeared for bona fide reasons, and (2) the employer has made reasonable efforts to place the employee in an alternate position with equivalent benefits, pay, and other terms. If not placed back to work, the employee must be contacted if a position with equivalent benefits, pay and terms becomes available within one year of the start or 12 weeks of the end of the leave.

Health-Care Providers, Emergency Responders, and Certain Unionized Employers

Employers may exclude employees who are health-care providers or emergency responders from these requirements. There also are alternative compliance options for employers who are part of a multi-employer collective bargaining agreement.

Federal Reimbursement Via Tax Credits

The federal government plans to reimburse employers for 100% of paid leave provided under the law via a refundable payroll tax credit in the quarter leave was paid. Where the amounts paid by an employer exceed the payroll tax due (which would be the case with many small employers), the excess credit will be refunded.

Expiration

The law expires at the end of 2020.

Emergency Paid Sick Leave

Federal Paid Sick Leave

H.R. 6201 also contains the Emergency Paid Sick Leave Act, which requires all employers to provide up to ten additional days of paid sick leave when an employee is unable to work (or telework) because:

· The employee is subject to a government quarantine or isolation order;

· The employee has been advised by a health care provider to self-quarantine;

· The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis;

· The employee is caring for an individual who is subject to quarantine or isolation;

· The employee is caring for a son or daughter whose school or place of care has closed, or whose care provider is unavailable due to COVID-19 precautions; or

· The employee is experiencing any other “substantially similar condition” specified by certain federal officials.

The leave must be made available to employees immediately.

This portion of the law also applies to private employers with under 500 employees and most public employers. Full-time employees are eligible for up to 80 hours of paid leave, while part-time employees are entitled to the number of hours worked on average over a two-week period.

Amounts Payable to Employees

The amount payable for each sick day is generally (1) the employee’s full regular rate of pay for hours an employee would have been scheduled (whether fixed, average, or reasonably expected), but not more that $511 per day, for an employee’s own illness or quarantine, or (2) two-thirds of the employee’s daily pay, but not more than $200 per day, for care of an employee’s family member(s).

These amounts are in addition to any amounts available under an employer’s existing policies or applicable law (such as California’s sick leave rules or local rules as in San Francisco).

Leave Conditions and Retaliation

Employers cannot require employees to use other types of paid leave, including other existing sick leave, before using the federal Emergency Paid Sick Leave for the purposes described above.

Employers may not require employees to help find a replacement when using paid sick time. They also must post a model notice to be prepared by the Department of Labor and, as might be expected, retaliation or other willful violation of the law would result in liability under the federal Fair Labor Standards Act.

Federal Reimbursement

Employers will be reimbursed for Emergency Paid Sick Leave under the same refundable payroll tax credit scheme applicable to Public Health Emergency Leave.

Conclusion

This law creates the most sweeping paid leave rights ever provided under federal law, while at the same time promising refundable tax credits offsetting employer costs.

The law will not fully reimburse employers because management must study, administer, and enforce its terms – each of which carries an unreimbursed administrative cost. It also remains to be seen how employers can advance pay on behalf of the government while continuing operations (when possible) with diminished staff and potential shutdowns under local shelter-in-place orders.

We will continue monitoring interpretations, postings, and regulations developed under H.R. 6201.

Note: Richard Rybicki and Heather Bussing prepared this update and will continue to monitor developments.