By Jamie Hasty, Vice President, SESCO Management Consultants
On March 18, 2020, President Trump signed the Families First Coronavirus Response Act, an economic stimulus plan aimed at addressing the impact of the COVID-19 outbreak on Americans, and introducing paid sick leave and an expanded family and medical leave act to the nation’s employers. Less than 10 days later, on March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, intended to stimulate the national economy in the wake of the COVID-19 pandemic. The bill provides direct financial assistance to Americans, eases access to loans and other economic assistance to businesses of all sizes and provides aid and support to healthcare providers.
The regulations, swiftly passed by legislators, left employers scrambling to understand the complex legislation and the direct impact it will have on their business operations. Furthermore, the Department of Labor (DOL), Internal Revenue Service (IRS) and other government agencies were seemingly not fully prepared for the new legislation and continue to push clarification, formal fact sheets, employer guidance etc. With rapidly changing information, employers were often left frustrated and searching for answers from professional sources during this unprecedented pandemic. To summarize the more recent clarification from the DOL, consider:
- Families First Coronavirus Response Act (FFCRA)
- Shelter-In-Place and Shutdown Orders
The new DOL rule states that a quarantine or isolation order broadly includes “quarantine, isolation, containment, shelter-in-place, or stay-at-home orders,” that cause the employee to be unable to work, even though the employer has work for them. The DOL states that this also includes when such orders advise categories of citizens (such as of certain age ranges or of certain medical conditions) to shelter in place or stay at home.
As the DOL explains, the key question in this analysis is “whether the employee would be able to work or telework ‘but for’ being required to comply with a quarantine or isolation order.
For many employees currently unable to work because their place of employment has closed – even as the direct or indirect result of a shutdown order, this DOL rule means they will not be eligible for Emergency Paid Sick Leave under this qualifying reason.
Health Care Provider/Emergency Responder Definition
The FFCRA permits an employer to exclude Health Care Providers and Emergency Responders from receiving EPSL and EFMLA. Employers should consider the language of the DOL’s Temporary Rule, issued on April 2, 2020, which explains that a “Health Care Provider” is:
Anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site, where medical services are provided that are similar to such institutions.
An “Emergency Responder” is:
Anyone necessary for the provision of transport, care, healthcare, comfort and nutrition of such patients, or others needed for the response to COVID-19. This includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, child welfare workers and service providers, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency, as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility. Again, this includes any individual whom the highest official of a State or territory, including the District of Columbia, determines is an emergency responder necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.
Intermittent Leave
Employees who seek to take EPSL or EFLMA intermittently must come to an agreement with their employer regarding intermittent leave as well as the increments of time in which the leave may be taken. Without such an agreement, no leave under the FFCRA may be taken intermittently. While best practice is to reduce the agreement to writing, it is not required by rule.
Required Documentation
The DOL’s new rule goes beyond its previous question-and-answer guidance, and clarifies what records employers may request from employees and are required to keep under the FFCRA. Documentation supporting an employee’s request for EPSL or EFMLA must include an employee’s signed statement with:
- the employee’s name;
- the date(s) the employee is requesting leave;
- the COVID-19 qualifying reason for leave; and
- a statement that the employee is unable to work or telework because of the COVID-19 qualifying reason.
Depending on the COVID-19 qualifying reason for leave, additional documentation may be required Finally, normal FMLA certification requirements still apply for leave taken for an employee’s own serious health condition related to COVID-19, or to care for the employee’s spouse, son, daughter, or parent with a serious health condition related to COVID-19, under the FMLA.
Regular Rate of Pay Issues
The “regular rate” under the FFCRA applies typical Fair Labor Standards Act (FLSA) principles, but in a slightly different context – since it amounts to pay for hours not worked. Instead, the regular rate should be representative of the employee’s regular rate from week to week. This should be calculated using an average weighted by the number of hours worked each workweek. Specifically, the employer must look at each preceding, full workweek that the employee has been employed during the six-month period ending on the date on which the leave is taken.
Put most simply, applying the usual regular rate principles such as how to address tip credit, incentive pay, and other non-hourly compensation, an employer would total the compensation earned across the relevant (full) workweeks and divide it by the total hours worked during the same period.
Effect On FMLA/Other Paid Sick Leave
The new DOL rule confirms the statutory language and previous DOL guidance regarding the interaction of the new leave requirements with existing leave laws or employer policies. With respect to EPSL, the DOL rule confirms that emergency paid sick leave is “in addition to,” and not a substitute for, other sources of leave which the employee has already accrued, was already entitled to, or had already used, before the law became effective on April 1, 2020.
However, employers in states with their own versions of “mini-FMLA” laws should be mindful that the new eFMLA leave will not run concurrently with those state family and medical leave entitlements, as those state laws generally do not cover leave related to COVID-19 school or child care closures. This may change in the future, as many states are already moving to amend their state family and medical leave laws to include leave for this same purpose.
Smallest Businesses Receive Partial Carveout
A new development announced in the rule provides a partial carveout for the smallest businesses in the country.Employers with fewer than 50 employees will not have to provide EPSL or EFMLA to employees who need to care for their son or daughter whose school or place of care is closed, or child care provider is unavailable, for COVID-19 related reasons, if one of three factors exist:
- doing so would raise expenses and financial obligations above available business revenue such that the employer would cease operating at a minimal capacity;
- the requesting worker’s absence would pose a substantial risk to the employer’s financial health or operations because of their specialized skills, knowledge of the business, or responsibilities; or
- the employer can’t find enough able, willing, available, and qualified workers to perform the work of the employee requesting an absence.
In such cases, the rule notes that employers must document the facts and circumstances that justify the denial and retain those records for their own files (not to be submitted to the DOL).
The CARES ACT
On April 10, the U.S. Department of Labor (DOL) provided states with operating, financial and reporting instructions for Pandemic Emergency Unemployment Compensation (PEUC) and other unemployment provisions of the act. The DOL explained that PEUC authorizes states to provide up to 13 weeks of federally funded unemployment benefits to people who:
- Have exhausted all rights to regular compensation under federal or state law for a benefit year that ended on or after July 1, 2019.
- Have no rights to regular compensation for the week in question under any other federal or state unemployment compensation law or to compensation under any other federal law.
- Are not receiving compensation for the week in question under the unemployment compensation laws of Canada.
- Are able and available to work and actively seeking work (although states must offer flexibility on the “actively seeking work” requirement when there are COVID-19-related constraints).
Notably, states may not charge employers for the PEUC benefits they pay, because such benefits are fully funded by the federal government.
Who Is Eligible for the Additional $600 a Week?
The Federal Pandemic Unemployment Compensation (FPUC) program, which provides an additional $600.00 weekly payment to certain people who are receiving state unemployment compensation. Under the FPUC, individuals must first apply for and be approved to receive regular state benefits. The department confirmed that anyone who receives an unemployment benefit from the state, whether full or partial, may receive the additional $600.00 a week. The DOL noted that “if the individual is eligible to receive at least one dollar ($1) of underlying benefits for the claimed week, the claimant will receive the full $600.00 FPUC.” However, people who are not entitled to an underlying benefit for any given week will also not be eligible for FPUC benefits for that week.
Displaced workers should contact their state’s unemployment office as soon as possible after becoming unemployed, and they should generally file their claim with the state where they worked (rather than where they live). Although eligible individuals will receive the additional $600.00 a week from the federal program, they should note that the underlying state benefits vary by location.
In Summary
Employers should review all regulations, documentation/forms and posting requirements to ensure full compliance with the FFCRA. If necessary, develop and adopt policies and procedures to ensure the health and safety of their workers during times of unprecedented uncertainty. Furthermore, explore any financial assistance resources available under the CARES Act as funds become available. Lastly, management, employees and other industry experts should communicate regularly to ensure that everyone is complying with all state and federal COVID 19 and employment law regulation.
SESCO Management Consultants will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s COVID-19 Resource Center as additional information becomes available. As a reminder, ASA members receive free telephone and email consulting for HR related matters with SESCO Management attorneys and consultants.
Ms. Jamie M. Hasty is a Vice President with SESCO Management Consultants, Richmond, Virginia. She regularly conducts management training for clients and serves as guest speaker for state and national associations. Jamie is a certified trainer for Vital Learning Corporation, John Maxwell and SESCO Leadership Institute. Jamie can be reached at Jamie@sescomgt.com.
