The U.S. Department of Labor (DOL) has issued a number of materials interpreting and implementing the new employee leave provisions enacted as part of the Families First Coronavirus Response Act. In an earlier article, accessible at this link, we summarized the basic provisions of the Act, which creates two new types of leave, Emergency Family and Medical Leave and Emergency Paid Sick Leave, that employers with fewer than 500 employees must provide. This article provides information about key aspects of the recent DOL guidance.
Required Notice to Employees:
DOL has developed a poster for covered employers to use in notifying their employees about the new leave available under the Act. The Act requires employers to post the notice in a conspicuous place in the workplace where other workplace notices are customarily posted. To provide the notice to remote and teleworking staff, DOL is allowing employers to email or mail the notice to employees or to electronically post the notice on an internal or external website. Notice must be provided by April 1, 2020. Employers must also provide any subsequently hired employees with the poster.
Exemption for Small Employers:
Under the Act, DOL has the power to promulgate regulations that exempt employers, including nonprofit organizations, with fewer than 50 employees from certain requirements of the new law, if complying would jeopardize the viability of the employer’s business as a going concern. Small employers can potentially be exempted from providing employees with Emergency Family and Medical Leave, which is available to care for a son or daughter if the school or place of care of the son or daughter has been closed, or the child-care provider of such son or daughter is unavailable, due to COVID-19 precautions. Similarly, small employers can be exempted from the requirement to provide Emergency Paid Sick Leave for these same purposes (to care for an employee’s son or daughter if the school or place of care of the son or daughter has been closed, or the child-care provider of such son or daughter is unavailable, due to COVID-19 precautions). Note that there is no small employer exemption for providing other types of Emergency Paid Sick Leave.
DOL’s latest guidance provides that a small employer may claim this exemption if an authorized officer of the organization has determined that at least one of the following three circumstances applies:
- The provision of the leave would result in the small employer’s expenses and financial obligations exceeding available revenues and cause the small employer to cease operating at a minimal capacity;
- The absence of the employee or employees requesting paid leave would entail a substantial risk to the financial health or operational capabilities of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid leave, and these labor or services are needed for the small employer to operate at a minimal capacity.
If they believe they qualify for the exemption, small employers must document in their own records the basis for any determination that is made so as to establish that providing the required leave would jeopardize the viability of the employer’s business as a going concern.
Leave Timing and Applicability:
DOL has announced that the Act will be effective April 1, 2020, and employers must make Emergency Family and Medical Leave and Emergency Paid Sick Leave available beginning on that date. Leave provided by an employer before April 1st, even if for an absence that qualifies as Emergency Family and Medical Leave or Emergency Paid Sick Leave, does not count towards meeting the requirements of the Act. Conversely, employers are not required to provide the new leave available under the Act prior to April 1, 2020. The Act and the new leave requirements will expire on December 31, 2020.
If an employer’s business closes, even temporarily as a result of a government order that closes nonessential businesses, or if employees are furloughed or have their hours cut, they are not eligible for either form of new leave for those absences. Instead, those employees may be eligible for unemployment insurance benefits. Employees who cannot work or telework as a result of a general governmental shelter-in-place order, as opposed to an individualized order to isolate or quarantine or a healthcare provider’s directive to the individual to self-quarantine, also are not eligible for leave under the Act.
Taking Leave on an Intermittent Basis:
An employer may, but is not required to, agree to allow employees who are teleworking to take Emergency Family and Medical Leave or Emergency Paid Sick Leave used for any purpose on an intermittent basis if they cannot work a full schedule.
By contrast, if employees are coming into the office, rather than teleworking, an employer may only agree (but is not required) to an employee’s intermittent use of leave if the employee is taking Emergency Family and Medical Leave or taking Emergency Paid Sick Leave for purposes of caring for the employee’s child whose school or place of care is closed, or whose child-care provider is unavailable, because of COVID-19 related reasons. Emergency Paid Sick leave cannot be used intermittently for any other eligible purpose including because:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- The employee is caring for an individual who is subject to quarantine or self-quarantine; or
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
If taking Emergency Paid Sick Leave for one or more of these qualifying reasons, employees must continue to take paid sick leave each day until they have exhausted their full amount of paid sick leave or no longer have a qualifying reason for taking paid sick leave. DOL imposed this limit because the leave is intended to encourage employees to stay home and not spread the COVID-19 virus.
Intermittent leave may be taken in any agreed upon time increments, e.g., an hour or 90 minutes.
Topping Up Compensation:
An employer may pay employees additional salary above the statutory caps to allow them to earn their full wages during Emergency Family and Medical Leave or Emergency Paid Sick Leave. However, an employee’s pre-existing paid leave, such as paid sick, vacation, or personal leave, can only be used to top up the employee’s salary with the consent of both the employer and the employee. Even if salary is topped up, employers may only claim the tax credit available under the Act for amounts up to the statutory caps.
To qualify for the tax credit available under the Act, employers must obtain documentation from employees that shows that the absences qualify for Emergency Family and Medical Leave or Emergency Paid Sick Leave under the Act. If adequate documentation is not provided, employers are not required to provide leave.
Documentation should include the employee’s name, the qualifying reason for the leave, the dates of leave, a statement that the employee is unable to work or telework, and supporting documentation of the qualifying reason, such as a copy of the isolation or quarantine order, a doctor’s note, or a notice of closure 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 about closure.
Interaction with federal FMLA:
Where an employer was already required to comply with the federal Family and Medical Leave Act (FMLA) for any of their employees prior to the effective date of the Families First Coronavirus Response Act, the eligibility of employees to take the new Emergency Family and Medical Leave depends on their prior usage of FMLA leave. Employees may take a total of 12 workweeks of leave during a 12-month period under the FMLA, including the new Emergency Family and Medical Leave. If an employee has already exhausted their 12 weeks of FMLA leave during the relevant 12-month time period, then that individual cannot take any Emergency Family and Medical Leave. If some portion of the 12 weeks has already been used for other FMLA purposes, then only the remaining number of weeks will be available for Emergency Family and Medical Leave. If an employee uses all 12 weeks of Emergency Family and Medical Leave by December 31, 2020, then that employee will not have any remaining leave available for other forms of FMLA leave during the relevant 12-month time period.
Emergency Paid Sick Leave is available to employees regardless of how much leave has been taken under the federal FMLA. Employers who are not otherwise required to comply with the federal FMLA must provide the full 12 weeks (2 unpaid and 10 paid) of Emergency Family and Medical Leave to eligible employees even if they provide other forms of family and medical leave to employees under organizational policies or state laws.
Continuation of Health Insurance Coverage:
Employers must continue the health insurance coverage of employees taking leave under the Act on the same basis as if they had continued to work. Employers may claim a tax credit for the cost of providing this coverage.
Employees Covered by Collective Bargaining Agreements:
Employers who have collective bargaining agreements (CBAs) with their employees are required to provide the new forms of leave mandated by the Act, regardless of existing leave and benefits provided under the CBA. If these employers are part of a multiemployer CBA, there are special provisions allowing the employer to meet its obligations by making contributions to a multiemployer fund, plan, or other program in accordance with existing CBA requirements.
Claiming the Tax Credit:
The Internal Revenue Service (IRS), in conjunction with DOL, has issued a notice that it will be promulgating guidance allowing employers to take immediate advantage of the tax credit available for providing qualifying leave under the Act. Employers may retain, rather than deposit with the IRS, funds that otherwise would be paid as employer payroll taxes (including withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes), up to the caps on benefits provided under the Act. If there are insufficient payroll taxes to cover the cost of providing qualified paid leave, employers will be able file a request for an accelerated payment from the IRS, which the IRS expects to process in two weeks or less.
Please contact us if you have any questions about the requirements for providing leave under the Act. We expect to send out updated information as additional guidance is released.