April 3, 2020

The Families First Coronavirus Response Act (“FFCRA”) was passed by Congress and signed by the President on March 18, 2020.  (The law in question is technically titled “Emergency Paid Sick Leave Act” see H.R. 6201 §5101.  We’ll call it FFCRA here to avoid confusion).

The U.S. Department of Labor has advised the public that the law took effect until April 1, 2020.  However, in a March 24 bulletin, DOL stated it would not take enforcement action for violations occurring before April 17, 2020, if the business was making reasonable, good faith efforts to comply with the act. (See https://www.dol.gov/agencies/whd/field-assistance-bulletins/2020-1).  However the bulletin makes clear “willful” violations will not receive this grace period.

The challenge here is that not DOL is not the only enforcer of the FFCRA.  Dissatisfied  employees have a right to sue under the Fair Labor Standards Act, 29 USC §216.  This would impose double damages on the employer, plus attorneys’ fees to the prevailing employee.

FFCRA is directed to employers who employ under 500 people – small and medium sized business.  There is a hardship exception for businesses who employ less than 50 people, if criteria we discuss below are met.  Very notably, however, the law does not require leave for employees who can “telework”.  See § 5102:

An employer shall provide to each employee employed by the employer paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave.

We discuss what “telework” is in Sec. 2 below.

  1. What Employees Are Covered and What Are They Entitled To?

Those employees eligible for the paid leave, and who the employer must pay, are those 1) under a “quarantine or isolation order” or 2) infected and “seeking a diagnosis”, or 3) who must care for a family member and cannot “telework”.  To summarize the Department of Labor’s guidance, the following persons are eligible:

a. Full Pay:  Employees in quarantine, or having COVID-19.  These employees must be paid up to 80 hours of sick leave at their regular rate of pay, or $551 per day or $5,110 for two weeks, whichever is less.

(An employee is considered “quarantined” if there is a Federal or state quarantine or isolation order or receives “advice of a health care provider”.  Whether communitywide “lock down” orders constitute a “quarantine or isolation order”, as have occurred throughout U.S cities and counties, is an unanswered question.)

 b. Two/Thirds Pay:  The Two/Thirds pay rule covers 3 different classes of workers. Employees “[a] unable to work because of a bona fide need to care for an individual subject to quarantine …. or [b] to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or [c] is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.”  (from DOL website, https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave).  These employees are entitled to, and the employer must pay, 2/3 of their usual pay, or up to $200 per day and $2,000, whichever is less.

c. Ten Weeks’ Additional Leave.  Employees who have been on payroll more than 30 days, and who must care for children whose schools are closed or whose day care providers are unavailable, are entitled to an additional ten weeks of family medical leave at two/thirds their usual rate of pay, or  up to $200 per day and $2,000, whichever is less.

(Note that because of the “or” between “school closed” and “no day care provider,” it appears the employee is eligible if either of those occur; both do not have to occur.)

The employee may invoke the paid leave under FFCRA before having to use any other sick leave, and the employer may not require the employee to use any other sick leave first.

For part time employees, the benefit available is limited to “the number of hours that such employee works, on average, over a 2-week period.”

  1. The “Telework” Exception.

The “telework” exception presents a path for employers to rearrange their work structures and limit their costs under FFCRA.  FFCRA contains no definition of “telework.”  However, another Federal statute does, and “telework” there means something much broader than “working over the phone”.  In 5 U.S.C.A. § 6501, “telework” means working anywhere the employer approves, other than the “location from which the employee would otherwise work”

The term “telework” or “teleworking” refers to a work flexibility arrangement under which an employee performs the duties and responsibilities of such employee’s position, and other authorized activities, from an approved worksite other than the location from which the employee would otherwise work.

This definition really has only one meaningful element – that the employer approves of the location.

This definition suggest an employer may have a lot of options to create a “telework” position for the employee that would require the employee seeking leave to continue to “telework,” and thereby exempt the employee for eligibility for paid leave under FFCRA.  A situation where the employee continues to have something useful to contribute to an economy in slowdown, while providing some, perhaps different, value to the employer, may be a win-win for both.

Employers with existing telework policies should be cautious to consider whether those policies limit their ability to make changes.  In addition, creating new telework job descriptions in the present emergency may be viewed as precedent setting for what accommodations may be required (such for employees with disabilities) in the future.  Specific changes and their legality are outside our ability to discuss in this article, and the employer or employee should consult with a qualified employment law attorney on the specifics.

  1. Posting Notice of Employee Leave Rights

Employers are required to post “conspicuously” a notice “in a form approved by the Department of Labor,” a notice of employee rights under the FFCRA.  Here is a link to the approved poster:

https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf

Employers must also notify off premise or teleworking employees.  DOL guidance suggests emailing the notice to those employees.

  1. Possible Exemption For Employers With Less Than 50 Employees:

While § 5111 of the statute authorizes the Secretary of Labor to exempt businesses under 50 employees “when the imposition of such requirements would jeopardize the viability of the business as a going concern”, as of April 3, there are no forms for securing an exemption.

Realistically, it is hard to expect the DOL could review, approve and evaluate exemption requests in time to give any small business an exemption before the April 1 effective date.

The commentary on FFCRA from the bar suggests employers preserve evidence that would support an exemption.

As discussed above, while DOL may refrain from enforcement, employers also face a risk of civil claims by employees.  Consequently a business with under 50 employees operating without an “official” DOJ exemption risks litigation after the fact to recover double damages and attorneys’ fees.      On March 29, DOl issued a “Q&A” concerning how to qualify fore the exemption.  See https://www.dol.gov/agencies/whd/pandemic/ffcra-questions) (Questions 58 and 59, quoted here in full.)

“58. When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?

An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:

*The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;

*The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business 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 sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.”

“59.  …A small business is exempt from certain paid sick leave and expanded family and medical leave requirements if providing an employee such leave would jeopardize the viability of the business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if the:

  • employer employs fewer than 50 employees;
  • leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
  • an authorized officer of the business has determined that at least one of the three conditions described in Question 58 is satisfied.

The Department encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety. “

The key here is for an “authorized officer” to promptly apply in writing to DOL for the exemption.  It would be important to promptly seek an exemption specifically requesting that the exemption be retroactive to the date the business was first affected. The exemption request should present documentation supporting that the conditions are met.

Payroll, profit and loss and similar records showing that the business could not stay open and keep paying other employees anything, if it had to pay the FFCRA paid leave to employees requesting it, would seem essential.  Employers should also consider applying for emergency loans to demonstrate efforts to go above and beyond normal cash flow during the COVID-19 emergency.

Note the exemption for 50 employees or less is available only from leave for child care, not leave requested because of a COVI-19 diagnosis or and quarantine order.

  1. The End of the Benefit

FFCRA currently expires by its terms on December 30, 2020.  In addition, this is not paid medical leave for any purpose; it is paid medical leave that is necessary because of COVID-19.  § 5102(c) suggests this paid leave is a one time benefit that the employee is not entitled to for a second COVID-19 related event after returning to work:

Paid sick time provided to an employee under this Act shall cease beginning with the employee’s next scheduled workshift immediately following the termination of the need for paid sick time under subsection (a).

  1. Interaction with Family Medical Leave Act

FFCRA also amended the Family Medical Leave Act to provide leave for caregivers of children out of school or with no day care (amending § 2611(a) to extend leave to an “employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”  The amendment to FMLA in §3102 of FFCRA preserves family medical leave for care for a sick or out-of-school child as without pay for the first ten days:

“(b) Relationship To Paid Leave.—“(1) UNPAID LEAVE FOR INITIAL 10 DAYS.— “(A) IN GENERAL.—The first 10 days for which an employee takes leave under section 102(a)(1)(F) may consist of unpaid leave.”

This appears to conflict with § 5102(a)(5), which requires two/thirds pay from day one of leave to care for “a son or daughter of such employee 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.”

  1. The Story Continues.

DOL continues to issue guidance online.  Please contact us if you have questions.

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