On March 18, President Trump signed into law the Families First Coronavirus Response Act (FFCRA). A component of the FFCRA is the Emergency Paid Sick Leave Act (EPSLA), which requires covered employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to the COVID-19 corona virus starting April 1.
Generally, EPSLA requires covered employers to provide all employees with two weeks (up to 80-hours) of paid sick leave at the regular rate of pay when the employee is unable to work because he/she is quarantined pursuant with governmental or doctor’s orders and/or experiencing COVID-19 symptoms and seeking a medical diagnosis. Additionally, if the employee is unable to work due to a bona fide need to care for someone else under quarantine, or a child whose school is closed for COVID-19 related reasons, then the employer is required to provide two weeks of paid sick leave at the rate of two-third (2/3) the employee’s regular rate of pay.
The question, however, for many employers is whether any employer provided, or local/state government mandated, paid sick leave policy or other paid time off (PTO) benefits can be used to meet the EPSLA mandate and if not, whether an employer can require employees to first use previously earned/accrued sick leave prior to availing themselves of this new ESPLA benefit.
The answer to both questions is NO. The EPSLA states that an employer “may not require an employee to use other paid leave provided by the employer to the employee before the employee uses the paid sick time.” The EPSLA does not expressly state paid sick leave in this limitation, but newly published guidance from the DOL clarifies that paid sick leave and expanded family medical leave under the FFCRA is in addition to employees’ preexisting leave entitlements. Accordingly, earned/accrued sick leave or other paid leave existing prior to April 1, 2020 cannot be used to offset or substitute for the mandates under the FFCRA.
Of course, existing employer provided, or local/state government mandated, paid sick leave or other PTO benefits can be used to cover absences that occur prior to April 1st or to extend the period of paid leave beyond FFCRA mandates. Employers may also choose to allow (but cannot require) employees receiving 2/3 pay under FFCRA’s paid sick leave or paid family and medical leave provisions to use existing paid leave to supplement the 2/3 pay up to the amount of the employee’s normal earnings.
As many of you know, employers with 500 or more employees are exempt from the Emergency Family and Medical Leave Expansion and the Emergency Paid Sick Leave provisions of the Family First Coronavirus Response Act (FFCRA). Now that the Department of Labor (DOL) released FAQs regarding the FFCRA, we know a bit more about how the DOL will count employees for the purpose of meeting the 500 employee threshold – including that it will apply the Fair Labor Standards Act’s (FLSA) joint-employer analysis and the Family and Medical Leave Act’s (FMLA) integrated employer test in making that determination. Now seems like as good a time as any for a brief refresher on the two tests.
FLSA Joint Employer Analysis
Under the FLSA, separate companies may become joint employers of an employee if both companies exercise control over the same employee. For example, say two companies benefit from an individual’s work but only one company designates the individual as their employee. To determine whether the two companies are the individual’s joint employer, the DOL would consider whether the second company exercises significant control over the employee’s work, including whether the second company:
hires or fires the employee;
supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
determines the employee’s rate and method of payment; and
maintains the employee’s employment records.
Employers with 500 or more employees under the above FLSA joint employer analysis are not subject to either the FFCRA’s paid sick leave or paid FMLA leave provisions.
FMLA Integrated Employer Test
Under the FMLA, separate companies may be considered to be part of a single employer if they are an “integrated employer,” determined by considering the following factors:
The companies share common management;
The companies’ operations are interrelated;
The companies share control of labor relations; and
The companies share common ownership and/or financial control
Employers with 500 or more employees under the FMLA’s integrated employer test are not subject to the FFCRA’s paid FMLA leave provision – but, unless they have 500 or more employees under the FLSA’s joint employer analysis, may still be subject to the paid sick leave provision.
Each of the above tests are complicated, and the FFCRA remains subject to pending DOL guidance and regulations. As a result, any employers with questions or concerns regarding their joint employer or integrated employer status – or anything else relating to the FFCRA – should consult with counsel.
On March 24, 2020, the Department of Labor (DOL) released the much anticipated FAQs regarding the Family First Coronavirus Response Act (FFCRA). The DOL’s FAQs offer clarification on some of the more pressing questions that have been on employers’ minds. Of particular note is information relating to the counting of employees, commencement of the leave and compilation of the leave. Of major significance is that the FFCRA will become effective on April 1, 2020 (not April 2nd) and it is not retroactive (and, any benefits provided by employers now through March 31, 2020 cannot be counted towards the FFCRA in any way).
Highlights of the FAQs include:
The effective date of the FFCRA, which includes the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act is April 1, 2020, and applies to leave taken between April 1, 2020 and December 31, 2020.
Counting Employees – How and when do you get to 500 – for purposes of paid sick leave and new FMLA mandates?
As a private sector employer you meet the 500 employee count threshold if at the time that the employee’s leave is to be taken, you employ under 500 full-time and part-time employees within the United States, which includes any state of the United States, the District of Columbia, or any territory or possession of the United States. When counting employees, employers should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold. Further, where a corporation has an ownership interest in another corporation, the two are separate employers (with separate employee counts) unless they are joint-employers as analyzed under the FLSA. The FLSA’s joint-employer analysis will dictate coverage under the new emergency paid sick leave mandate. Also, two or more entities are separate employers unless they meet the “integrated employer test” under the FMLA. If two or more entities are deemed “integrated” under the FMLA, then the employees of the integrated entities should be counted as one employer (combining the employee counts) for purposes of the new FMLA mandate.
Overtime Hours are included when calculating pay
When calculating the average pay under the FFCRA, the Emergency Family and Medical Leave Expansion Act requires employers 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, as such this would include regularly scheduled overtime.
Please note, the Emergency Paid Sick Leave Act only requires that paid sick leave be paid up to 80 hours over a two-week period. The example given is as follows: 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. In any event, the total number of hours paid under the Emergency Paid Sick Leave Act is capped at 80. This determination will change if the employee’s schedule varies from week to week. These amounts are subject to the daily and weekly caps as set forth in the FFCRA.
Leave is Not Duplicative
When answering the question of whether or not an employee may take 80 hours of paid sick leave for their personal self-quarantine and then another amount of paid sick leave for another reason provided under the Emergency Paid Sick Leave Act, the DOL clarified that this was not permissible. Rather eligible employees may take up to two weeks—or ten days—(80 hours for a full-time employee, or for a part-time employee, the number of hours equal to the average number of hours that the employee works over a typical two-week period) of paid sick leave for any combination of qualifying reasons. However, the total number of hours for which an employee will receive paid sick leave is capped at 80 hours under the Emergency Paid Sick Leave Act.
Interplay of Expanded FMLA
The DOL further clarified the interplay that can occur when employees are home with their child(ren) because their school or child care provider is closed or unavailable and whether or not they get paid sick leave, expanded family and medical leave, or both. Individuals in this scenario may be eligible for both types of leave, but only for a total of twelve weeks of paid leave. Eligible employees may take both paid sick leave and expanded family and medical leave to care for their child(ren) whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons. The Emergency Paid Sick Leave Act provides for an initial two (2) weeks of paid leave. This period covers the first ten workdays of expanded family and medical leave, which are otherwise unpaid under the Emergency and Family Medical Leave Expansion Act unless the employee elects to use existing vacation, personal, or medical or sick leave under the employer’s policy. After the first ten workdays have elapsed the employee will receive 2/3 of their regular rate of pay for the hours they would have been scheduled to work in the subsequent ten weeks under the Emergency and Family Medical Leave Expansion Act (up to $200 per day and $10,000 total).
Small Employer Exemption
Employers with less than 50 employees can attempt to justify why compliance with the mandates would jeopardize the viability of the business by documenting the reasons. The DOL will be issuing more guidance specific to this process in the coming days/weeks. At this time, such employers should be in contact with competent legal counsel to discuss this option.
While the FAQs answer some of the pressing questions, more clarification will emerge with the release of the regulations. The interplay between the FFCRA and existing state and local leave laws is a complex issue that must be analyzed prior to the determination of any leave. Because of the complexity and evolving nature of the issues it is always advisable to consult with counsel when implementing or denying leaves under the FFCRA.
Contributed by the SmithAmundsen COVID-19 Task Force, March 19, 2020
With the ink barely dry on the president’s signature, employers are now turning to whether they need to and how to comply with the Families First Coronavirus Response Act (“Act”) (HR 6201). Since the law was signed by President Trump on March 18, 2020, the leave provisions are set to go into place on April 2nd. The US Department of Labor (“DOL”) shall provide a sample notice for employers required to comply with the emergency paid sick leave provisions within seven (7) days, and we may see additional guidance from the DOL in the near future.
First, note that the paid leave mandates are not applicable unless the employee is: required or advised to quarantine by a healthcare provider or the government, experiencing symptoms and seeking a diagnosis, caring for an individual required or advised to quarantine, or caring for a child whose school/day care closed. (See our March 18, 2020 Blog Update). If the employee is not requesting paid leave for one of these reasons, then the leave is not covered under the Act.
So, if the employee requests or needs paid leave for a covered reason, does an employer’s existing paid leave policy come into play? The final Act removed language included in prior versions related to an employer’s limitation on using its own paid leave programs prior to providing paid leave under HR 6201. However, there still remains a prohibition in requiring an employee to use “other paid leave” prior to the use of the paid mandates in this new law.
It is our interpretation at this time (as said, the DOL will be providing a notice, and could weigh in with additional guidance prior to or on April 2nd) that if an employer provides paid SICK leave (including local or state paid sick leave mandates), then that SICK leave could likely be used to satisfy the paid leave requirements of the Act. However, an employer looking to apply any existing paid SICK leave policy to off-set the new mandates would likely not receive the full tax credits available. On the other hand, a traditional Paid Time Off (“PTO”) or vacation policy would not be applicable, most likely.
Obviously, this is a very fluid situation and we continue to monitor all developments to share with our clients and contacts.
As you know by now, COVID-19 is changing things on a daily, if not hourly or minute by minute basis. In reviewing this advice, you must understand that guidance will change as the COVID-19 pandemic evolves. As such, employers MUST continue to get up to date information from public health authorities on maintaining workplace safety.
The CDC, EEOC and World Health Organization (WHO) each have their own guidance on addressing the workplace and employees under a pandemic situation:
During a pandemic, ADA-covered employers may ask such employees if they are experiencing symptoms of the pandemic virus. For COVID-19, these include symptoms such as fever, chills, cough, shortness of breath, or sore throat. Employers must maintain all information about employee illness as a confidential medical record in compliance with the ADA.
Our Take – Employers can also require employees to disclose if they are experiencing symptoms of the pandemic virus, including fever, chills, cough, shortness of breath or sore throat. In doing so, remind employees that this is a safety issue and that failing to do so can result in discipline up to and including termination.
Generally, measuring an employee’s body temperature is a medical examination.
HOWEVER – Because the CDC and state/local health authorities have acknowledged community spread of COVID-19 and issued attendant precautions, employers may measure employees’ body temperature.
That said, employers must be aware that people can have COVID-19 without experiencing a fever or any other symptoms.
Our Take – This clarifies that if you want to scan employees’ body temperatures that appear to have symptoms or before entering your facility you can. However, you will want to make sure you are being consistent and non-discriminatory in doing. Additionally, you will want to be careful in how you are measuring an employee’s body temperature to avoid potentially exposing employees (e.g. failing to implement proper safety procedures for who is taking the temperature, whether a thermometer that requires contact with skin is being used, etc.).
Yes. The CDC states that employees who become ill with symptoms of COVID-19 should leave the workplace. The ADA does not interfere with employers following this advice.
Our Take – Due to the safety issues, if you have an employee who is showing symptoms of COVID-19, but does not want to go home, for safety reasons you can send the employee home. In doing so, you should document the symptoms and observable facts as to why you are sending the employee home.
Yes. Such inquiries are permitted under the ADA either because they would not be disability-related or, if the pandemic influenza were truly severe, they would be justified under the ADA standards for disability-related inquiries of employees.
As a practical matter, however, doctors and other health care professionals may be too busy during immediately after a pandemic outbreak to provide fitness-for-duty documentation.
Therefore, new approaches may be necessary, such as reliance on local clinics to provide a form, a stamp, or an e-mail to certify that an individual does not have the pandemic virus.
Our Take – This is a difficult issue because sending an employee to a doctor or hospital, not only takes away health care resources that may be needed for the pandemic outbreak, but it could potentially expose the employee to COVID-19 as well. Another possible option is working with your workers’ compensation provider to see if they will provide screenings for employees returning back to work. Ultimately, once an employee shows symptoms, the best practice may be to follow guidelines by Public Health Authorities, including the CDC and WHO regarding time an individual should remain out of the workplace or public gatherings after showing symptoms.
If an employer is hiring, may it screen applicants for symptoms of COVID-19?
Yes. An employer may screen job applicants for symptoms of COVID-19 after making a conditional job offer, as long as it does so for all entering employees in the same type of job. This ADA rule applies whether or not the applicant has a disability.
May an employer take an applicant’s temperature as part of a post-offer, pre-employment medical exam?
Yes. Any medical exams are permitted after an employer has made a conditional offer of employment. However, employers should be aware that some people with COVID-19 do not have a fever.
May an employer delay the start date of an applicantwho has COVID-19 or symptoms associated with it?
Yes. According to current CDC guidance, an individual who has COVID-19 or symptoms associated with it should not be in the workplace.
May an employer withdraw a job offer when it needs the applicant to start immediately but the individual has COVID-19 or symptoms of it?
Based on current CDC guidance, this individual cannot safely enter the workplace, and therefore the employer may withdraw the job offer.
On March 14, 2020, the U.S. House of Representatives passed House Bill 6201 (HR6201). The legislation seeks to protect private sector workers and government employees during the COVID-19 pandemic. However, the legislation does not apply to any private sector employer with 500 or more employees. To be clear, the current legislation will regulate only those private sector employers who employ less than 500 employees. The Senate is expected to take up the bill early this week. The legislation would take effect within 15 days of enactment and expire on December 31, 2020.
HR6201 contains major changes to the FMLA as it seeks to provide job protected paid leave to any employee who has been on the job for at least 30 days – for up to 12 weeks – related to the COVID-19 pandemic. The legislation also mandates up to 80-hours of paid sick leave for reasons related to COVID-19. It also provides $1 billion in additional funding to the Unemployment Insurance (UI) System and encourages states to relax UI eligibility requirements. Tax credits are provided to employers to help offset the financial cost of the paid leave.
Highlights of the legislation include:
PAID TIME OFF:
Emergency Paid Sick Leave – up to 80-hours for ALL employees working for a private employer with less than 500 employees or any public sector employer
HR6201 requires employers with fewer than 500 employees and all government employers to provide all employees up to 80-hours of paid sick leave, paid at the employee’s regular rate of pay in order to:
self-quarantine if diagnosed with COVID-19;
seek a diagnosis or care for symptoms of COVID-19; or
comply with an order or recommendation by a public health official or health care provider to self-isolate due to exposure to or symptoms of COVID-19.
Additionally, this paid sick leave entitlement must also be available – at two-thirds the employee’s regular rate of pay – for employees to care for a family member for such purposes or to care for a child (under 18 years of age) whose school has closed or paid child care provider is unavailable due to the coronavirus.
Full-time employees are entitled to 2 weeks (80 hours) of paid leave and part-time employees are entitled to the average number of hours that they work in a typical two-week period. Paid sick leave under HR6201 must be provided in additionto any paid time off provided under an employer’s existing policies and employers may not require employees exhaust existing accrued paid time off prior to using emergency paid sick leave. The bill ensures employees who work under a multiemployer collective agreement are also provided such benefits that meet the requirements of the Act.
EXPANDED COVERAGE FOR FMLA:
Paid Family and Medical Leave — up to 12 weeks for employees employed for 30 or more days by a private employer with less than 500 employees or any public sector employer
Employees of employers with fewer than 500 employees or government employers, who have been on the job for at least 30 calendar days, have the right to take up to 12 weeks of job-protected leave under the Family and Medical Leave Act to be used for any of the following reasons:
To comply with a requirement or recommendation by a public health official or health care provider that the presence of the employee in the workplace would jeopardize the health of others due to the employee’s exposure to or symptoms of coronavirus;
To care for a family member who is adhering to a requirement or recommendation by a public health official or health care provider to quarantine due to exposure to or symptoms of coronavirus; and
To care for a child (under 18 years of age) of an employee if the child’s school or place of care has been closed, or the child-care provider is unavailable, due to coronavirus
The first 2-weeks of time off for the above reasons are unpaid under the FMLA, but the Emergency Paid Sick Leave Law requires that an employee is paid during that time period, as described above. After the first 2-weeks of leave under the FMLA, employees will be entitled to receive a benefit from their employers that will be no less than two-thirds (2/3rd) of the employee’s usual pay. The bill ensures employees who work under a multiemployer collective agreement and whose employers pay into a multiemployer plan are provided with leave.
Certain small employers can be exempt from this expanded FMLA coverage if they meet a “viability” exception. While we can assume the general intent behind the exception, the precise mechanism and process for such an exception is subject to US DOL regulation yet to be published.
The Act also clarifies that individuals that are subject to a multiemployer collectively bargained agreement and whose employers pay into a multiemployer plan must be provided with leave and benefits on par with the benefits provided under the Act.
PAYROLL CREDIT FOR PAID LEAVE
HR6201 provides a refundable tax credit applied to the employer portion of the Social Security payroll tax equal to 100 percent of paid sick leave and family leave wages paid by an employer for each calendar quarter, subject to the following caps: Sick leave wages paid with respect to employees who must self-quarantine, obtain a diagnosis or care for symptoms, or comply with a self-isolation recommendation or order from a public health official or health care provider are capped at $511 per day for purposes of the payroll tax credit; Sick leave wages paid to employees caring for a family member or for a child whose school or place of care has been closed, are capped at $200 per day; and Family leave wages under the expanded FMLA taken into account for each employee are capped at $200 per day and $10,000 for all calendar quarters.
If the credit exceeds the employer’s total Social Security payroll tax liability for any calendar quarter, the excess credit is refundable to the employer. Employers may elect to not have the credit apply. A similar refundable tax credit is available for self-employed individuals.
SmithAmundsen’s Labor & Employment COVID-19 Task Force is continuing to monitor all local, state and federal orders and legislative initiatives in these unprecedented times. Be assured that we will continue to provide updates where and when warranted. We will also be providing ongoing webinars on the subject to try and help employers operate as effectively and safely as possible. With that in mind, please do not hesitate to contact your SA relationship attorney in the days and weeks ahead for direct guidance. We are here 24/7.