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Morris Manning & Martin, LLP

DOL Guidance on the COVID-19 Paid Leave Laws

03.26.2020

On March 24, 2020, the U.S. Department of Labor (DOL) published its first round of official guidance to help employers and workers navigate the paid leave provisions of the new Families First Coronavirus Response Act (FFCRA). The DOL’s guidance includes fact sheets for employees and employers, a Q&A article, and model workplace posters for nonfederal employers and federal employers that are covered by the mandate.

As detailed in our prior legal update, the FFCRA was signed into law on March 18 and requires businesses with fewer than 500 employees to provide emergency paid leave to workers for certain reasons related to COVID-19. As employers are preparing for the FFCRA's impact on their businesses, the DOL’s guidance answers some critical questions about how to apply the law when it takes effect. The following are highlights from the DOL’s guidance.

  • Effective Date - First, the DOL guidance states that the FFCRA goes into effect April 1, 2020. The Act itself established an effective date of no later than 15 days after its enactment, and as such, it was widely assumed that the DOL would implement the law on April 2. It appears the DOL has elected 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.
  • Prior Paid Leave - The guidance clarifies that the emergency paid sick leave and expanded family and medical leave benefits are not retroactive. Accordingly, even if an employee has already been provided paid leave for reasons related to COVID-19, they are still eligible to take paid leave under FFCRA after the effective date. Only paid leave provided on or after April 1 can be counted toward the federal paid leave requirements.
  • Calculation of the Total Number of Employees for Coverage Determination - For purposes of determining whether an employer has 500 employees or less, the DOL’s guidance clarifies who is to be counted, when the headcount should occur, and how joint-employers and related businesses are to be aggregated.
    • Who? Employers should count all full-time and part-time employees within the United States (including all U.S. territories), employees on leave, temporary employees who are jointly employed by the employer and another company regardless of whether the jointly-employed employees are maintained on only one employer’s payroll, and day laborers supplied by a temporary agency. Workers who are independent contractors under the Fair Labor Standards Act (FLSA) are not considered employees for purposes of the threshold.
    • When? An employer should calculate its coverage threshold at the time an employee’s leave is to be taken. 
    • Joint-Employers and Related Businesses - The DOL confirmed that the joint-employer test from the FLSA and the integrated-employer test under the Family and Medical Leave Act (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. With respect to emergency paid sick leave, if two entities are found to be joint-employers under the FLSA, all of their common employees must be counted in determining employer coverage. The same is true with respect to expanded family and medical leave benefits as determined by the FMLA’s integrated-employer test.
    • Calculation of Hours - The guidance makes clear that employers are required to pay an employee for hours the employee would have been normally scheduled to work even if that is more than 40 hours in a week, subject to the caps specified in the law. By way of example, the DOL explains that an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week, but that in any event, the total number of hours paid is capped at 80.
    • Calculation of Pay - Consistent with the FFCRA, the DOL’s guidance requires employers to calculate workers' sick pay based on their regular rate of pay as determined by the FLSA (or 2/3 that regular rate, depending on the reason for which leave is taken), subject to the caps specified in the law. Commissions, tips and piece rates, must be included in the calculation. However, unlike the traditional workweek-by-workweek regular rate calculation under the FLSA, the DOL states that the regular rate of pay used to calculate paid leave under the FFCRA is based on the average of the employee’s regular rate over a period of up to six months prior to the date on which they take leave. Alternately, an employer can compute an employee’s regular rate by adding all compensation that is part of the regular rate over the prior six month period and dividing that sum by all hours actually worked in the same period.
    • Small Business Exemptions - The FFCRA provided 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’s guidance states that it will issue exemption criteria in forthcoming regulations. Employers wishing to seek the exemption should document why their business meets such criteria, but should not send any such documentation to the DOL at this time.
    • Notice Requirement - All covered employers, including small employers who may ultimately qualify for an exemption, are required to provide a copy of the notice to their employees. Given the number of employees that are now teleworking, the DOL explained 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 only needs to be provided to current employees and applicants for employment.
    • Temporary 30-day Non-Enforcement Period - Employers will face penalties for violations of the FFCRA. However, the DOL announced a temporary 30-day non-enforcement period for employers that make good faith compliance efforts. The department will focus on compliance assistance during that time and noted that "good faith" means that violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and the department receives a written commitment from the employer to comply with the act in the future.

Although many questions remain unanswered, the DOL plans to release additional guidance and formal regulations on a rolling basis to further clarify the new law and to assist employers with their compliance efforts.

The fact sheets, Q&A, and workplace poster can be found HERE.

For questions about the DOL guidance and how it could specifically impact your company, contact the MMM Employment Team.