/>iOn March 27 and 28, the U.S. Department of Labor (DOL) released additional question-and-answer style guidance on the emergency paid sick and family leave provisions of the Families First Coronavirus Response Act (FFCRA), which we first reported here. We look below at seven key issues addressed in the DOL’s updated guidance.
1. Who Counts as an “Employee” for Paid Sick and Family Leave Under the FFCRA?
Both the paid sick and family leave provisions of the FFCRA use the definition of “employee” included in the Fair Labor Standards Act (FLSA).[1] Thus, the DOL guidance confirms that all of an employer’s U.S. (including Territorial) employees who meet this definition of employee are eligible for FFCRA paid sick and family leave benefits, “including full-time and part-time employees, and ‘joint employees’ working on your site temporarily and/or through a temp agency.”
2. Who is Eligible for Paid FFCRA Leave in the Event of a Furlough, Plant Closure, or Hours Reduction?
In its updated guidance, the DOL clarifies that notwithstanding the eligibility criteria set out in the FFCRA, if employees are off work due to a furlough or closure of their worksite, they are not entitled to paid sick or family leave benefits regardless whether the furlough or closure is due to a federal, state, or local directive related to COVID-19. So employees of businesses that are closed due to governmental shelter-in-place orders are not eligible for paid emergency sick leave benefits under the FFCRA, but may be entitled to unemployment compensation benefits.
Likewise, if an employer reduces hours because it does not have enough work, employees are not entitled to paid sick or family leave benefits under the FFCRA “even if [the] reduction in hours was somehow related to COVID-19.” On the other hand, where an employee is unable to work his or her full schedule (even a reduced schedule) due to a qualifying COVID-19 related reason (and not due to lack of work), the employee would be eligible for paid sick or family leave under the Act.
Relatedly, the DOL explains that if an employee is already receiving paid sick or family leave benefits for a qualifying COVID-19 related reason and the employer thereafter closes the workplace during the leave, the employee remains eligible for paid leave benefits only up to the date of closure. Thereafter, a furlough or workplace closure will cut off existing benefits under the FFCRA, regardless of whether the closure is due to a federal, state, or local directive related to COVID-19.
In these various situations where employees are ineligible for paid sick or family leave under the FFCRA due to a furlough, plant closure or hours reduction, they may instead be eligible for unemployment insurance. For further resources pertaining to eligibility and information for employees on applying for unemployment benefits, the DOL guidance refers employers and employees to: https://www.careeronestop.org/LocalHelp/service-locator.aspx.
3. Interaction Between FFCRA Paid Leave and Other Paid Leave
An employer may elect to allow employees to use existing paid leave simultaneous with FFCRA paid leave. But, employers are not obligated to do so. Accordingly, if an employee is receiving two-thirds of his or her normal earnings from paid sick leave (i.e., to care for a family member due to a COVID-19 related reason) or family leave under the FFCRA, the employer may, but is not required, to allow use of existing paid leave benefits to make up for the one-third of lost wages attributable to these hours.
Likewise, the DOL guidance also clarifies that while an employee may consent to using existing paid leave offered under an employer’s existing paid leave policies to supplement paid sick or family leave under the FFCRA, an employer cannot require its employees to use existing paid time off for such purposes.
Finally, paid sick leave under the FFCRA “is in addition to other leave provided under federal, state, or local law, any applicable collective bargaining agreement, or an employer’s existing company policy.” Thus, in states or localities where paid sick leave is mandatory, unless the law expressly provides otherwise (i.e., the recently passed New York emergency sick leave law), such state mandated paid sick leave is in addition to paid FFCRA sick leave.
4. Interaction Between Paid FFCRA Leave and FMLA Leave
According to the updated guidance, an employee’s eligibility for paid family leave under the FFCRA “depends on how much leave [the employee has] already taken during the current 12-month period determined by [the] employer.” So, for example, if an employee has already taken 12 work weeks of Family and Medical Leave Act (FMLA) leave during this 12-month period, he or she may not take additional expanded family and medical leave during the same period.
Also, the DOL guidance confirms that ordinarily, an employee taking paid sick leave or paid family leave under the FFCRA must be restored to “the same (or nearly equivalent) job” when returning to work following FFCRA leave. However, the FFCRA does not protect employees “from employment actions, such as layoffs, that would have affected [the employee] regardless of whether [they] took leave,” meaning an employer “can lay [an employee on FFCRA leave] off for legitimate business reasons, such as the closure of [the] worksite.”
The DOL guidance also confirms that, as with ordinary FMLA leave, employers may refuse to return an employee to their same position if they are “a highly compensated ‘key’ employee as defined under the FMLA” so long as appropriate notice procedures are followed.
5. Can Employees Take Intermittent Paid Leave Under the FFCRA?
On the one hand, the DOL’s guidance provides that the decision to allow employees to take intermittent paid sick or family leave under the FFCRA is largely left to the employer’s discretion. On the other hand, the Department expressly “encourages employers and employees to collaborate to achieve flexibility.”
The upshot of the Department’s guidance thus appears to be: employers should carefully consider requests for intermittent leave, particularly where employees are teleworking, rather than simply rejecting such requests out of hand. But where intermittent leave is not appropriate due to the position or the reasons necessitating the leave, employers are not obligated to allow such arrangements.
Consider, for example, employees in telework situations or who are home to care for children whose schools are closed or child care providers are unavailable due to COVID-19. In such cases, the DOL guidance anticipates intermittent leave may be a feasible option, and such leave may, therefore, be appropriate (but again, only if the employer and employee agree).
In contrast, in situations where employees continue working at the work site, intermittent leave generally will not be appropriate if the reason for leave is that the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19, has been advised by a health care provider to self-quarantine, is experiencing symptoms of COVID-19 and is seeking a medical diagnosis, is caring for another individual who is subject to a quarantine order related to COVID-19, or is experiencing any similar condition. In all of these cases, the DOL guidance explains, employees should continue to take paid sick leave each day until they exhaust their sick leave entitlements or no longer have a qualifying reason for leave. Intermittent leave would not typically be consistent with the intent of the FFCRA, which is to provide such paid sick leave as necessary to prevent further spread of the virus to others.
6. What Documentation is Required Related to FFCRA Leave?
When employees take paid sick leave under the FFCRA, employers “must require [them] to provide . . . appropriate documentation in support of the reason for the leave, including: the employee’s name, qualifying reason for requesting leave, statement that the employee is unable to work, including telework, for that reason, and the date(s) for which leave is requested.”
Additionally, “[d]ocumentation of the reason for the leave will also be necessary, such as the source of any quarantine or isolation order, or the name of the health care provider who has advised [an employee] to self-quarantine,” including, for example, “a copy of the Federal, State or local quarantine or isolation order related to COVID-19 applicable to the employee or written documentation by a health care provider advising the employee to self-quarantine due to concerns related to COVID-19.”
Likewise, if an employee takes FFCRA family leave to care for a child whose school or place of care is closed due to COVID-19, employers “must require [its] employee to provide [it] with appropriate documentation in support of such leave, just as [it] would for conventional FMLA leave requests.” Such documentation includes, for example, “a notice that has been posted on a government, school, or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care, or child care provider.”
If employers intend to claim a tax credit for payments of sick or family leave wages under the FFCRA, they should retain these documents. In the weeks to come, the IRS is expected to make available specific forms, instructions, and information for the procedures to be followed to claim a tax credit, including the documents needed to substantiate the tax credit.
7. When Will Employers Be Entitled to a Tax Credit for Paid FFCRA Leave?
Finally, the DOL guidance clarifies that employers will not be entitled to a tax credit for providing additional benefits beyond those required under the express terms of the FFCRA. This includes if an employer provides more benefits than required under the FFCRA or permits an employee to use their existing paid leave to supplement partially paid leave (i.e., two-thirds paid leave for sick or family leave to care for a child) such that an employer would only be entitled to claim a tax credit for the portion of paid leave mandated under the FFCRA.
While this additional guidance provides some clarity for employers, there is still much uncertainty and a number of strategic decisions employers will face regarding COVID-19 in the coming days and weeks. Schiff’s Coronavirus Task Force will continue to address the significant business, legal, and economic challenges that accompany the COVID-19 pandemic. Stay tuned for additional insights on ongoing COVID-19 pandemic challenges and issues facing businesses. And if you or your business are in need of legal advice about how COVID-19 is impacting your workplace, contact Schiff Hardin’s labor and employment law professionals.
[1] The employer-employee relationship under the FLSA is tested by “economic reality” rather than “technical concepts.” In assessing whether a worker is an employee under the FLSA (as distinguished from a contractor), the DOL considers such factors as: (1) the extent to which the services rendered are an integral part of the principal’s business; (2) the permanency of the relationship; (3) the amount of the worker’s investment in facilities and equipment; (4) the nature and degree of control by the principal; (5) the alleged contractor’s opportunities for profit and loss; (6) the amount of initiative, judgment, or foresight in open market competition with others; (7) the degree of independent business organization and operation.
[1] The employer-employee relationship under the FLSA is tested by “economic reality” rather than “technical concepts.” In assessing whether a worker is an employee under the FLSA (as distinguished from a contractor), the DOL considers such factors as: (1) the extent to which the services rendered are an integral part of the principal’s business; (2) the permanency of the relationship; (3) the amount of the worker’s investment in facilities and equipment; (4) the nature and degree of control by the principal; (5) the alleged contractor’s opportunities for profit and loss; (6) the amount of initiative, judgment, or foresight in open market competition with others; (7) the degree of independent business organization and operation.
