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Written By: Kylie E. Mote

The United States Department of Labor’s (“DOL”) Wage and Hour Division has just published its first round of guidance addressing certain provisions of the newly-enacted “Families First Coronavirus Response Act” (“FFCRA”).  Signed into law on March 18, 2020, the FFCRA is an emergency relief package aimed at assisting individuals impacted by the COVID-19 (“Coronavirus”) public health emergency.  Among other support, the FFCRA provides eligible employees with temporary paid leave benefits, including paid sick leave and family leave.

While the DOL has not yet issued official regulations to help clarify the FFCRA’s paid leave provisions, it has released a preliminary set of “Questions and Answers” in an effort to provide employers and workers with general information about the law’s requirements.  Following below are the key takeaways from the DOL’s initial guidance.

To see answers to frequently asked questions about the FFCRA’s paid leave benefits, please refer to our earlier notice titled “Information for Employers on New Coronavirus Relief Law”

DEPARTMENT OF LABOR GUIDANCE

FFCRA EFFECTIVE DATE:

While it was previously anticipated that the FFCRA would take effect on April 2, 2020, the DOL clarifies that the law’s effective date is April 1, 2020.

REQUIRED NOTICE TO EMPLOYEES:

The FFCRA requires employers to post a notice to employees of their rights to paid leave under the law.  The notice must be posted in a conspicuous location in the workplace.  On March 25, 2020, the DOL released a model notice, available here: DOL Notice.

HOW TO COUNT EMPLOYEES:

Both the paid sick leave and family leave provisions of the FFCRA apply to private employers with fewer than 500 employees.  The DOL specifies that employers should include in that count:

  • Full-time and part-time employees within the United States;
  • 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 (regardless of whether the employer is the temporary agency or the client firm if there is a continuing employment relationship).

Workers who are independent contractors (under the standards of the Fair Labor Standards Act) are not considered employees and should therefore not be included in the count.

COUNTING EMPLOYEES OF RELATED BUSINESSES:

For purposes of counting employees, the DOL clarifies that a corporation, including its separate establishments and divisions, is considered a single employer and all of its employees must be counted toward the 500-employee threshold.

If a corporation has an ownership interest in another corporation, the two corporations will typically be considered separate employers unless they qualify as joint employers under the Fair Labor Standards Act.  If two entities qualify as joint employers, all of their common employees must be counted in determining whether FFCRA paid leave benefits are required.

The DOL’s guidance also refers to the integrated employer test under the Family and Medical Leave Act for determining whether two or more entities are separate or combined for purposes of calculating the number of employees.  Whether two entities qualify as an integrated employer depends on multiple factors, including whether they have common management, shared operations, and a degree of common ownership.  If the two entities constitute an integrated employer, then employees of both entities must be included in the count.

For more information on whether an entity qualifies as a joint or integrated employer, please contact the attorneys at Milligan Lawless.

EXEMPTIONS FOR SMALL BUSINESSES:

While the FFCRA’s paid leave requirements apply to all private employers with fewer than 500 employees, the law provides an exemption to businesses with fewer than 50 employees if the benefits would jeopardize the viability of the business.

The DOL’s guidance does not provide further information on the process for seeking the exemption, except to recommend that employers document why they qualify for the exemption.

The DOL notes that the small business exemption will be addressed in detail in its forthcoming regulations.  It also emphasizes that employers should not send any materials to the DOL for purposes of seeking an exemption.

CALCULATING HOURS FOR PART-TIME EMPLOYEES:

The DOL reiterates that all part-time employees are entitled to paid leave based on their average number of work hours in a two-week period.

If an employee works a varied schedule, the employer may use a six-month average to calculate the employee’s average daily hours.

If the employee has not been employed for at least six months, then the employer may use the number of hours that it and the employee agreed the employee would work at the time of hiring.

If there is no such agreement, an employer may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of his or her employment.

OVERTIME HOURS:

The DOL’s guidance makes clear that employers must pay employees for hours they would have been normally scheduled to work even if that number is more than 40 hours in a week.

With that said, the DOL emphasizes that paid sick leave benefits are still capped at 80 hours total over a two-week period, noting by way of example that an employee who is scheduled to work 50 hours in a week may take 50 hours of paid sick leave during that week but the employee would only be eligible to take 30 hours of paid sick leave the following week.

The FFCRA does not require employers to pay a premium rate of pay for overtime hours.

REGULAR RATE OF PAY:

The DOL reiterates that employers must pay an employee for paid leave based on the employee’s regular rate of pay or two-thirds of the regular rate, depending on the employee’s reason for taking leave (payment is subject to caps).  Commissions, tips, and/or piece rates should be included in calculating an employee’s regular rate of pay.

For purposes of the FFCRA, the regular rate of pay is the average of an employee’s regular rate over a period of up to six months to the date on which the employee takes paid leave.  If an employee has been employed for less than six months, the regular rate is the average of the employee’s regular rate of pay for each week he or she has worked for the employer.

An employer can also compute an employee’s regular rate of pay by adding all compensation that is part of the regular rate over the prior six months (or lesser period of time worked) and dividing that sum by all hours actually worked in the same period.

LEAVE FOR AN EMPLOYEE CARING FOR A CHILD DUE TO SCHOOL CLOSING OR CHILDCARE UNAVAILABLE:

The DOL’s guidance confirms that an employee who is using paid leave to care for a child whose school is closed, or whose childcare provider is unavailable due to COVID-19 factors, may be eligible to use both paid sick leave and family leave under the FFCRA.

In this case, an employee could initially utilize two weeks of paid sick leave.  This period would cover the first ten days of family leave, which would otherwise be unpaid.  The employee could then take an additional ten weeks of family leave, as provided under the FFCRA.

NO RETROACTIVITY; PRIOR LEAVE NOT COUNTED:

The DOL clarifies that paid leave benefits provided under the FFCRA are not retroactive – the law does not take effect until April 1, 2020.

Additionally, the DOL is clear that paid leave provided to an employee prior to the law’s effective date does not count toward the new requirements – even if the paid leave was taken for reasons covered by the FFCRA.

ADDITIONAL INFORMATION FOR EMPLOYERS

PAID SICK TIME PROVIDED UNDER ARIZONA LAW:

In addition to the paid leave requirements of the FFCRA, Arizona employers must ensure continued compliance with their obligations under Arizona’s Fair Wages and Healthy Families Act.  This state law, which was enacted in 2017, entitles all Arizona employees to paid sick time, subject to certain caps and requirements.

Arizona’s law permits employees to use paid sick time for the following reasons:

  • An employee’s medical care, illness, injury, or health condition;
  • Care of an employee’s family member with an illness, injury, health condition, or need for medical care;
  • A public health emergency; and
  • Issues related to domestic violence, sexual violence, abuse, or stalking affecting the employee or employee’s family member.

EMPLOYEES ENTITLED TO OTHER PAID TIME OFF BENEFITS:

The FFCRA prohibits employers from requiring employees to use vacation or other paid time off benefits, including paid sick time provided under Arizona law, prior to utilizing the paid leave provided under the FFCRA.

An employee who takes family leave pursuant to the FFCRA may elect to utilize vacation or other paid time off benefits to cover the initial ten days of unpaid leave, but an employer cannot require it.

EXCLUSION OF HEALTHCARE PROVIDERS:

The FFCRA states that an employer of an employee who is a healthcare provider or an emergency responder may elect to exclude such employee from the paid leave provisions.

The FFCRA also authorizes the DOL to exclude certain healthcare providers and emergency responders from receiving paid leave benefits.

The FFCRA incorporates by reference the following definition of healthcare provider set forth in the Family and Medical Leave Act:

  • A doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or
  • Any other person determined by the Secretary to be capable of providing health care services. Others capable of providing health care services include only:
  • Podiatrists, dentists, clinical psychologists, optometrists, and chiropractors (limited to treatment consisting of manual manipulation of the spine to correct a subluxation as demonstrated by X-ray to exist) authorized to practice in the State and performing within the scope of their practice as defined under State law;
  • Nurse practitioners, nurse-midwives, clinical social workers and physician assistants who are authorized to practice under State law and who are performing within the scope of their practice as defined under State law;
  • Christian Science Practitioners listed with the First Church of Christ, Scientist in Boston, Massachusetts;
  • Any health care provider from whom an employer or the employer’s group health plan’s benefits manager will accept certification of the existence of a serious health condition to substantiate a claim for benefits; and
  • A health care provider listed above who practices in a country other than the United States, who is authorized to practice in accordance with the law of that country, and who is performing within the scope of his or her practice as defined under such law.

Notably, the definition of healthcare provider does not include nurses or medical assistants.  As such, an employer should not (absent further direction from the DOL) exclude them from the paid leave benefits under the FFCRA.

The FFCRA does not define emergency responder, but it would be reasonable to assume that it includes EMTs and paramedics.  As the DOL continues to issue guidance on the FFCRA requirements, it may address what constitutes an emergency responder for purposes of the law (including whether nurses and other healthcare personnel who do not meet the definition of healthcare provider may be considered emergency responders).

The FFCRA is also not clear on whether a healthcare provider or emergency responder can be excluded from all paid leave benefits or only specific benefits. For example, the law does not clarify whether healthcare providers or emergency responders may be entitled to paid sick time in the event they personally become ill with COVID-19.

The DOL will hopefully provide additional guidance on the healthcare provider/emergency responder exclusion prior to the FFCRA’s effective date.

The attorneys at Milligan Lawless will continue to update employers on various workplace issues arising from the rapidly-developing COVID-19 public health emergency.

If you have any questions regarding how the FFCRA’s paid sick leave or emergency leave requirements affect your workplace, please contact John Conley at (602) 792-3535 or Kylie Mote at (602) 792-3523.