By Daniel Finerty, Sally Piefer & Oyvind Wistrom
On Wednesday, April 1st, the Department of Labor (DOL) released its regulations applicable to the Families First Coronavirus Response Act (FFCRA). This E-Alert provides an explanation and comments regarding the interpretations and how each may apply in practice.
Please note that these are interim regulations, not the final regulations, and are subject to change. In fact, a group of Congressional members have sent a letter to the DOL criticizing some of the regulations and interpretive guidance DOL has already provided. Some of the issues addressed in that letter include:
- Whether an employer can require any sort of certification of the need for leave from an employee;
- Whether an eligible employee has a right to emergency paid leave if the company furloughs the employee or has to close due to a “safer at home” order
- Use of intermittent leave
- Definition of a “health care provider” for purposes of who can advise an employee to self-quarantine
- Definition of a “health care provider” for purposes of who may be exempted from the leave provisions
We will continue to monitor these important issues. Should you have any specific questions that are not addressed, please contact your Lindner & Marsack attorney or the Firm at (414) 273-3910 to seek counsel.
“Average Regular Rate” is calculated using the same method that is used under the Fair Labor Standards Act (FLSA) and includes commissions, tips and piece rates received by the Employee.
“Child Care Provider” is defined to include both a provider who receives compensation for providing child care services on a regular basis, as well as a friend, neighbor or family member who regularly cares for the Employee’s child, even if not licensed or compensated.
“Eligible Employee” for purposes of the Expanded Family and Medical Leave (EFMLA or EFML) means an Employee who has been employed for at least 30 calendars days with the Employer. There is no prior work requirement for employees to qualify for Paid Sick Leave under the Emergency Paid Sick Leave Act (EPSLA or EPSL).
“Employer” is clarified to include any private employer or individual with fewer than 500 employees, as well as any Public Agency employing at least one employee. A “Public Agency” is further defined to include the Government of the United States, the government of a State or political subdivision thereof; any agency of the United States (including Postal Service), a State, or a political subdivision of the State; or any interstate governmental agency.
“School” is defined to include both elementary school and secondary schools, which is further defined as a nonprofit institutional day or residential school, including charter schools that provides instruction as determined under State law. For-profit private elementary and secondary schools are excluded from the definition of a school.
“Son or daughter” is given the same meaning as under the FMLA, and includes a biological, adopted, foster child, stepchild, a legal ward, or child of a person standing in loco parentis, who is under age 18; or 18 years of age or older who is incapable of self-care because of mental or physical disability.
“Telework” means work the Employer permits or allows an Employee to perform while the Employee is at home or at a location other than the Employee’s normal workplace. An Employee is able to Telework if: (a) his or her Employer has work for the Employee; (b) the Employer permits the Employee to work from the Employee’s location; and (c) there are no extenuating circumstances (such as serious COVID-19 symptoms) that prevent the Employee from performing that work.
Definition of Employer
Generally, according to the DOL draft regulations, the definition of employer tracks the textual language of the FFCRA, the FFCRA Questions and Answers and other DOL summaries and guidance.
A private employer (“employer”), includes, but is not limited to, any private entity or individual who employs fewer than 500 employees. Such employers must provide Paid Sick Leave and Expanded Family and Medical Leave.
In order to determine the number of employees employed, an employer must count all full-time and part-time employees employed within the United States at the time the employee would take leave. All part-time employees should be counted as if a full-time employee; in addition, the employer should count “any [e]mployees on leave of any kind,” such as those on existing leave under the FMLA, worker’s compensation leave or other leave. Further, for counting purposes, the number of employees includes all employees currently employed, regardless of how long those Employees have worked for the Employer. The question of eligibility for leave is separately dependent upon whether or not the employee has worked for the employer for at least 30 days.
For purposes of counting employees of temporary placement agencies, employers must count employees who are jointly employed under the FLSA, see 29 CFR Part 791, by the Employer and another Employer (regardless of which Employer’s payroll the Employee appears on) and day laborers supplied by a temporary placement agency (regardless of whether the Employer is the temporary placement agency or the client firm).
However, employer can exclude from their count workers who are independent contractors, assuming properly classified as such under the FLSA, and employees who have been laid off or furloughed and have not subsequently been reemployed.
To reach the correct number of employees, all common employees of joint employers or all employees of integrated employers must be counted together. A corporation is considered a single employer, including its separate establishments or divisions, and all of its employees must be counted together. Further, where one corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA test. See 29 CFR Part 791. This test was recently rolled back by the Trump Administration and is unfavorable to aggregation of employees. The guidance tends to indicate that a large corporate entity cannot aggregate employees of all subsidiaries and divisions for counting purposes.
However, two or more entities should generally be considered to be separate employers unless they meet the integrated employer test under the FMLA. 29 CFR 825.104(c)(2). If two entities are an integrated employer under this test, then employees of all entities making up the integrated employer must be counted under the FMLA’s comparatively less strenuous integrated employer test. A determination of whether or not separate entities are an integrated employer is not determined by the application of any single criterion, but rather the entire relationship is to be reviewed in its totality. 29 C.F.R. § 825.104(c)(2). Factors considered in determining whether two or more entities are an integrated employer include common management; interrelation between operations; centralized control of labor relations; and, degree of common ownership/financial control. 29 C.F.R. § 825.104(c)(2).
Employers with questions regarding this analysis should work with counsel to ensure a proper counting under both the FLSA and the FMLA during the grace period while ensuring that adequate preparations are made to ensure compliance with the FFCRA mandates as may be necessary.
According to the FFCRA, an “eligible employee” means an employee who has been employed for at least 30 calendar days by the employer; however, employers should note this applies only with regard to employees who request EFMLA. Those employees who have not been employed for that duration do not become eligible for EFMLA until after employed for 30 days. By contrast, all employees are eligible for EPSL regardless of when hired or re-hired by the employer.
The regulations further refine “eligible employee” to include:
- Any employee on an employer’s payroll for the 30 calendar days immediately prior to the day that the employee’s leave would begin;
- Any employee laid off or otherwise terminated by the Employer on or after March 1, 2020, and rehired or otherwise reemployed by the Employer on or before December 31, 2020, provided that the Employee had been on the Employer’s payroll for 30 or more of the 60 calendar days prior to the date the Employee was laid off or otherwise terminated.
If an employee employed by a temporary placement agency is subsequently hired by the employer, the employer must count the days worked as a temporary employee for the employer toward the 30-day period. Finally, an employee who has been employed by an employer for at least 30 days is eligible for EFMLA regardless of whether or not the employee meets or does not meet the traditional FMLA eligibility criteria.
Exemption from Coverage
The exemptions from the obligation to provide EFMLA and EPSL includes employers with fewer than 50 employees (“small business” or “small employer”), health care providers and emergency responders who may be excluded by their employer from the definition of “eligible employee,” among other governmental entities.
DOL’s prior guidance on this issue caused frustration among small business. Small business found themselves having to make adequate preparation in the event the exemption was narrowly defined while also hoping the exemption would be more clearly and broadly defined.
However, the regulations provide a comparatively more clearly delineated exemption for small businesses with fewer than 50 employees. These small employers do not have to provide employees with paid sick leave and expanded family and medical leave to care for children whose school or place of care is closed, or child care provider is unavailable, when such leave would jeopardize the viability of the business as a going concern. This FFCRA language is put into context by the regulations.
Using the definition “ongoing concern assumption” (“concern”) from the American Institute of Certified Public Accountants (AICPA), the regulations note that the definition permits companies to use the concern to defer prepaid expenses until a future accounting period to allow the entity to continue in business for the foreseeable future without the intention nor the necessity to liquidate, cease trading, or seek protection from creditors pursuant to laws or regulations and remain a viable business for the foreseeable future. The concern standard considers conditions or events in the aggregate. To utilize this exemption, an authorized officer of the small business must determine that:
- The leave requested under either the EFMLA or the EPSLA 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 an employee or the employees requesting leave under either the EFMLA or the EPSLA would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient employees 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 leave under either the EFMLA or the EPSLA and these labor or services are needed for the small business to operate at a minimal capacity.
As such, it is recommended that, the small business conduct an analysis of the impact of the EFMLA, the EPSLA or both under each of the criteria set forth above.
The explanation of regulation provides that a small business, for reasons 1., 2., and 3. above, may deny EPLS or EFMLA only to those otherwise eligible employees whose absence would cause the small business a hardship provided it examines whether its expenses and financial obligations to exceed available business revenue, whether use of either the EFMLA or the EPSL pose a substantial risk, or would prevent the small employer from operating at minimum capacity.
Notably, while the explanation of this regulation uses the conjunctive “and,” and seems to indicate that all three conditions must be met, as noted above, the actual text of the regulation uses the disjunctive “or,” and, as a result, permits a small business to deny requests for either the EFMLA or the EPSL if such leave may impact any one of the three conditions outlined above.
There appears to be some suggestion by DOL that this analysis must be conducted when a request for leave either the EFMLA or the EPSL is received from an employee. This conclusion is supported by later indication that, regardless of whether a small business chooses to exempt “one or more employees,” the small business is still obligated to post both the required the EFMLA notice and the EPSL notice.
Accordingly, it is reasonable to assume that a small employer can conduct an initial analysis with regard to the application of the exemption and conduct a partial analysis each time a request is made by any employee deemed ineligible to provide an updated analysis.
Regardless, the regulation provides that a small employer must document the facts and circumstances that meet these criteria to justify such denial and maintain all such documents within its own files. As noted, because a small employer is not normally covered by the FMLA, its records do not need to be the type of formal records required by that law. However, the records should be sufficient to defend the small business if an employee files a complaint with the DOL contesting the small business’s decision to exempt its employees. The documentation may be reviewed by a DOL investigator during an investigation, but rather should retain such records for its own files. As a result, while a small business may create a form to analyze this issue in each instance, such examination likely should be conducted in order to fend off any subsequent DOL claims.
Health Care Providers and Emergency Responders
The regulatory language initially notes that “an [e]mployer whose [e]mployee is a health care provider or an emergency responder may exclude such [e]mployee from the EPSLA… and/or the EFMLA’s… requirements.” Following up on the prior guidance provided by Questions and Answer Nos. 56-57, the regulations further clarify the extent of this exemption, which permits these employers to remove employees from the definition of “eligible employees.”
Health Care Providers
A health care provider that may be exempted from the EFMLA and/or EPSL obligations by their employer under the FFCRA is broadly defined to include “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” including “any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.”
In a more detailed fashion, the regulations note, as did Question and Answer Nos. 56-57, that the broadly-worded definition includes:
- Any individual employed by an entity that contracts with any of these institutions described above to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility;
- Anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments; and
- Any individual that the highest official of a State or territory, including the District of Columbia, determines is a health care provider necessary for that State’s or territory’s or the District of Columbia’s response to COVID-19.
Because the term “health care provider” is used elsewhere in the regulations, this definition applies only for the purpose of determining whether an employer may elect to exclude an employee. The other definition of “health care provider” is the traditional definition used within the FMLA and the EFMLA as those providers that can provider medical certification of the need for leave.
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 including, but not expressly limited to, the following:
- 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; and,
- Individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility; and,
- 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.
One cautionary note is that the Background section of the regulations explain, at page 65, that “although the rule exempts certain health care providers and emergency responders from the definition of eligible employee for purposes of the FFCRA, their employers may have some employees who do not meet this definition, so these employers may still be impacted by the provisions of the FFCRA.” However, as a result of the fact that the regulations do not further clarify which employees may not meet the broadly-worded definitions, this may be an area rife for future disputes.
Paid Leave entitlements under Emergency Paid Sick Leave (EPSL)
Under the EPSL, a covered Employer must provide to each of its Employees Paid Sick Leave to the extent that an Employee is unable to work (including telework) due to any of the following reasons:
(i) The Employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
(ii) The Employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
(iii) The Employee is experiencing symptoms of COVID-19 and seeking medical diagnosis from a health care provider;
(iv) The Employee is caring for an individual who is subject to an order as described in (i) or directed as described in (ii) of this subsection;
(v) The Employee is caring for his or her Son or Daughter whose School or Place of Care has been closed for a period of time, whether by order of a State or local official or authority or at the decision of the individual School or Place of Care, or the Child Care Provider of such Son or Daughter is unavailable, for reasons related to COVID-19; or
(vi) The Employee has a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor. The substantially similar condition may be defined at any point during the Effective Period, April 1, 2020, to December 31, 2020.
Under subsection (i), an Employee is “subject to a Quarantine or Isolation Order” if he or she is subject to a quarantine, isolation, containment, shelter-in-place, or stay-at-home order issued by any Federal, State, or local government authority that caused the Employee to be unable to work even though his or her Employer has work that the Employee could perform, but for the order. An employee may not take paid sick leave where the Employer does not have work for the Employee as a result of the order or other circumstances.
Under subsection (ii), an Employee is “advised by a health care provider to self-quarantine” where a health care provider (as defined under 29 CFR § 825.102 (1)) advises the Employee to self-quarantine (1) because (a) the Employee has COVID-19; (b) the Employee may have COVID-19; or (c) the Employee is particularly vulnerable to COVID-19; and (2) following the advice of the health care provider to self-quarantine prevents the Employee from being able to work or Telework.
Under subsection (iii), an Employee will be deemed to be “seeking medical diagnosis for COVID-19” where the Employee is experiencing symptoms of COVID-19 and he or she is seeking a medical diagnosis involving any of the following symptoms: (a) fever; (b) dry cough; (c) shortness of breath; or (d) any other COVID-19 symptoms identified by the U.S. Centers for Disease Control and Prevention. Any Paid Sick Leave taken for this reason is limited to the time the Employee is unable to work because the Employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.
Under subsection (iv), “caring for an individual” means caring for an Employee’s immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined. This does not include persons with whom the Employee has no personal relationship. In order for an Employee to qualify under this subsection, the “individual” for whom they are caring must be (1) subject to a quarantine or isolation order; or (2) has been self-quarantined by a health care provider because (a) the individual has COVID-19; (b) the individual may have COVID-19 due to known exposure or symptoms; or (c) the individual is particularly vulnerable to COVID-19. An Employee caring for an individual may not take Paid Sick Leave where the Employer does not have work available for the Employee.
Under subsection (v), an Employee is entitled to paid sick leave to care for a son or daughter whose school or Place of Care has closed, or whose Child Care Provider is unavailable, for reasons related to COVID-19, only if no there is no other suitable person to care for the Son or Daughter during the period of the leave. This provision would seem to indicate that two parents cannot simultaneously take paid sick leave to care for the same child. An Employee caring for his Son or Daughter may not take Paid Sick Leave where the Employer does not have work for the Employee.
Emergency Family and Medical Leave (EFMLA)
Similarly, under the EFMLA, an eligible Employee may take emergency leave where the Employee is unable to work due to a need to care for his or her Son or Daughter whose School or Place of Care has been closed, or whose Child Care Provider is unavailable, for reasons related to COVID-19. An Eligible Employee has the need to take EFMLA for this purpose only if no other suitable person is available to care for his or her Son or Daughter during the period of such leave. An Employee caring for his Son or Daughter may not take Paid Sick Leave where the Employer does not have work available for the Employee.
Amount of Paid Sick Leave
A full-time Employee who is scheduled to work at least 40 hours per week is entitled to up to 80 hours of EPLS. An Employee is still considered a full-time Employee if he or she does not have a normal weekly schedule, but the Employee averages at least 40 hours per week during the six-month period preceding the leave.
A part-time Employee is entitled to take EPSL equal to the number of hours that the Employee is typically scheduled to work over two workweeks. If the Employee does not have a normal weekly schedule, and the Employee has worked for at least six months, he or she is entitled to EPSL equal to 14 times the average number of hours the Employee was scheduled to work each calendar day during that six-month period. If the Employee has worked less than six months, then the leave amount is equal to 14 times the average number of hours that the Employer and Employee agreed the Employee would work, on average, each calendar day. If there is no agreement, then leave entitlement is equal to 14 times the average number of hours that the Employee worked each calendar day, over the entire period of employment. Hours that a part-time Employee took leave from the employer is also counted in these calculations.
Amount of Expanded Family and Medical Leave
An Eligible Employee is entitled to take up to 12 workweeks of EFMLA between April 1, 2020 and December 31, 2020. Any leave taken under the EFMLA counts toward the total 12-week entitlement that the Employee would be entitled to take under the standard FMLA. Additionally, an Eligible Employee may elect, and the Employee may require an Eligible Employee, to substitute any accrued paid vacation leave, personal leave, or paid time off to cover a portion of the Employee’s salary during the first two weeks of EFMLA. If an Eligible Employee is also eligible to take EPSL leave during those two weeks. There appears to be a conflict between the regulations and the DOL’s Q&A’s on whether an Employer can force substitution of paid leave.
Employee Notice of Need for Leave
The DOL encourages employees to notify an employer of their need for EFMLA or EPSL as soon as practicable. If an employee fails to give proper notice, an employer should notify the employee and allow the employee an opportunity to provide required documentation before denying the leave. Employers may require employees to follow their reasonable notice procedures after the first workday the employee takes EPSL. Whether an employer’s notice procedure is reasonable will be determined on a case-by-case basis.
Notice may not be required in advance – and may only be required after the first workday that an employee takes EPSL or EFMLA. Notice may be given by an employee’s spokesperson (e.g. spouse) if the employee is unable to do so personally.
Documentation of Need for Leave
An employer may only require documentation which includes: (i) the employee’s name; (ii) dates for which leave is requested; (iii) qualifying reason for the leave; and (iv) oral or written statement that the employee is unable to work because of the qualifying reason.
In addition, an employer can require certain additional information related to EPSL:
- If the employee is taking leave because s/he has been issued a quarantine/isolation order, the employee must provide the name of the governmental entity that issued the order.
- If the employee needs leave due to being advised to self-quarantine, the employee must provide the name of the health care provider who advised the employee to self-quarantine.
- If the employee needs leave to care for another who has been issued a quarantine/isolation order or who has been advised to self-quarantine, the employee must provide the name of the person being cared for, their relationship to the employee and either (i) the name of the governmental entity that issued the order or (ii) the name of the health care provider who advised the employee to self-quarantine.
- If the employee is taking leave because a school or place of care is closed or provider is unavailable, the employee must provide (i) the name of the child/ren being cared for; (ii) the name of the school/child care that has closed or the name of the provider who is unavailable and (iii) a representation that no other suitable person will be caring for the child/ren during the period the employee is taking EPSL or EFML.
Finally, an employer can request an employee to provide additional material needed for the employer to request the tax credits, and an employer need not provide leave if materials sufficient to support the tax credits are not provided. Additional information on this point is noted below.
Employees are permitted to take intermittent leave for EFML and for some EPSL provisions in any increment of time acceptable to the employer. Intermittent leave is not permitted, however, for leave taken where (i) the employee is subject to a quarantine or isolation order, (ii) the employee has been advised to self-quarantine by a health care provider, (iii) the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis or (iv) the employee is caring for an individual who is subject to a quarantine/isolation order or has been advised to self-quarantine by a health care provider.
An intermittent arrangement must clearly be understood by the parties. We agree with the DOL’s recommendation that the intermittent arrangement should be reduced to writing.
If an employee is allowed or directed to Telework, the employee can use EFML or EPSL when the employee is unable to Telework because of a COVID-19-related reason. The regulations clarify that if leave is permitted intermittently, only the amount of leave actually taken by the employee will count toward his/her leave entitlement. For example, if an Employee needs only 4 hours of EFMLA each day because s/he can Telework 4 hours, then the Employee will only have taken 20 hours of EFMLA during that week.
Interplay between EFMLA and EPSL
The regulations also clarify that if an Employee needs leave because a child’s school or place of care is closed, or where the provider is unavailable, the Employee is allowed to take both EPSL and EFMLA, and the benefits run concurrently. For example, if Susan needs leave to care for her children because her daycare facility is closed, and if she has not already used her EPSL, she is allowed to use the 2 weeks of EPSL to cover the first 2 weeks of unpaid EFMLA, and then she is eligible for another 10 weeks of EFMLA. If, however, Susan had already used her 2 weeks of EPSL to care for a family member suffering from COVID-19, then Susan’s first 2 weeks of EFMLA are unpaid, and she remains eligible for 10 weeks of EFMLA. As noted earlier, there is a conflict in the regulations on whether paid time can be substituted for unpaid time.
Interplay between EFMLA and Traditional FMLA
The regulations acknowledge that some employers already have to comply with the FMLA. If, for example, an employee has already taken traditional FMLA for another qualifying reason during the applicable leave year, the employee can use the remaining portion of the 12 workweeks for EFMLA. If an employee has already exhausted the full 12 workweeks of traditional FMLA, s/he is not eligible for EFMLA, but is allowed to use EPSL. Similarly, if an employee has not used traditional FMLA and does not use all available EFMLA, the employee may still use the remaining 12 workweeks for traditional FMLA purposes.The regulations also clarify that an employee is allowed to take no more than 12 workweeks of EFMLA—even if the time period spans two of the employer’s leave years. For example, if the company’s 12-month period begins on July 1, and the employee took 7 weeks of EFMLA in May and June, 2020, the employee could take only up to 5 additional weeks of EFMLA between July 1 and December 31.
As we know, the pay for EFMLA is 2/3 of the employee’s regular rate of pay, up to $200/day. However, the employer and employee may agree that an employee may use available paid time to supplement the unpaid 1/3 of EFMLA. The employer may not require the employee to supplement the unpaid time with his/her available paid time.
Health Care Coverage During Leave
When an employee is taking EPSL or EFMLA, the employer must maintain the employee’s group health coverage on the same conditions as if the employee continued to work during the leave period. For example, if an employee has family coverage before taking leave, the employee must be allowed to continue family coverage while on leave. Maintenance of individual health insurance policies purchased by an employee, however, are the responsibility of the employee.
Employees remain responsible for paying their portion of group health plan benefits while taking leave. Increases or decreases to the employee portion must be applied to employees on leave. The employee’s share of the premium must be paid by the method normally used during any paid leave – e.g., by payroll deduction. During any unpaid leave or if an employee’s pay during leave is insufficient to cover the employee’s share of the premiums, an employer can obtain payment from the employee as provided under traditional FMLA, including making payment due at the same time as it would be made if by payroll deduction.
An Employee may choose not to retain group health plan coverage while the employee is taking EPSL or EFMLA. In such event, when an employee returns from leave, coverage has to be reinstated on the same terms as prior to taking leave, without a new qualifying period or other requirements.
If an employer offers a new health plan or changes its health plan while an employee is on covered leave, the employee is allowed to make changes to the same extent that would have been allowed had the employee not been on leave. Changes in coverage, premiums and deductibles which apply to all employees also apply to employees taking leave. Notice of changes must be given to an employee, and if an employee requests changed coverage, the employer must provide it.
An employer’s obligation to maintain health benefits while an employee is taking EPSL or EFMLA ends if the employment relationship would have terminated if the employee had not taken leave (e.g., the employee fails to return from leave or entitlement to leave stops because the employer closes its business). In such instance, COBRA rules apply.
Return to Work
Generally, an employee is entitled to be restored to the same or equivalent position when returning from EPSL and EFMLA. However, an employee is not protected from employment actions, such as layoffs, which would have affected the employee regardless of whether the employee took leave.
Key employees, as defined by the FMLA, who take EFMLA can be denied restoration if denial is necessary to prevent substantial and grievous economic injury to the employer’s operations.
Finally, employers with less than 25 employees may deny restoration to an employee who takes EFMLA if all of the following exist:
- The employee took leave to care for a child whose school or place of care was closed or provider was unavailable for COVID-19 related reasons;
- The position held when leave began does not exist due to economic conditions or other operating conditions caused by a public health emergency during the leave;
- The employer makes reasonable efforts to restore the employee to an equivalent position, with equivalent benefits, pay and other terms/conditions; and
- Where an employer’s reasonable efforts fail, the employer makes reasonable efforts to contact the employee during a 1-year period if an equivalent position becomes available. The 1-year period begins on the earlier of the date the leave ended or the date 12 weeks after the employee’s leave began.
An employer can satisfy its obligation to post by posting in all of its facilities. However, if you have employees who are already working remotely, the regulations allow you to communicate the notice to those employees through email or by posting on your internal or external website. Interestingly, you need only provide the notice in English; translation to another language is not required.
Employers are required to retain all documents supporting the need for an employee’s leave for 4 years – regardless of whether the request was granted to denied. If an employee provided oral statements to support a request for leave, it is the employer’s responsibility to document the request and maintain the required information described above for 4 years.
If an employer denies EPSL or EFMLA, the determination must be documented and retained for 4 years.
In order to claim tax credits from the IRS, an employer should maintain the following for 4 years:
- Documentation to show how the employer determined the amount of EPSL and EFMLA to employees eligible for the credit, including records of work, telework, EPLS and EFMLA;
- Documentation to show how the employer determined the amount of qualified health plan expenses allocated to the wages;
- Copies of completed IRS Forms 7200 submitted to the IRS;
- Copies of completed IRS Forms 941 submitted to the IRS, or if you use a third-party payer to meet your tax obligations, records of information provided to that third-party payer substantiating entitlement to the credit claims on the IRS Form 941; and
- The other documentation described in the tax credit section below.
Documentation Needed to Substantiate Eligibility for Tax Credits
The IRS has published FAQs relating to the tax credits. At this time, the IRS says the following information should be obtained to substantiate eligibility for the EFMLA and EPSL tax credits:
A written request for the applicable leave from the employee in which the employee provides:
- The employee’s name;
- The date or dates for which leave is requested;
- A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
- A statement that the employee is unable to work, including by means of telework, for such reason.
In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.
In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than 14 during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
Effect on Other Laws, Employer Practices and Collective Bargaining Agreements
An employee’s entitlement to EPSL and EFMLA is in addition to other rights or benefits employees have under any federal, state or local law (except FMLA), under a collective bargaining agreement (CBA) or under any employer policy that existed prior to April 1, 2020. In addition, EPSL must be used before an employee can be forced to use any other pay to cover a leave provided under the EPSL.
In addition, an employer cannot deny, postpone or delay EPSL or EFMLA to any employee who may have taken leave prior to April 1, 2020 for any COVID-19-related reasons—with the exception of employees who may have already exhausted traditional FMLA. Similarly, employees are not entitled to retroactive compensation through EPSL or EFMLA for leave taken prior to April 1, 2020.
Employees are not entitled to be paid out for unused EPSL or EFMLA upon employment separation or when the law sunsets on December 31, 2020.
Interestingly, EPSL is provided on a 1-time-use basis – meaning that if a full-time employee uses less than 80 hours of EPSL and then changes employers, the employee is only entitled to the remainder of the 80 hours from the new employer – provided the new employer is covered by the law. Notably absent in the regulations is a process or procedure by which the new employer is able to ascertain how to obtain this information from the employee or the former employer.
Employers who are signatory to multi-employer CBAs can satisfy their obligations under EPSL and EFMLA by making contributions to a multiemployer fund, plan or other program. Contributions must be based on the hours of EPSL and EFMLA an employee is entitled to receive. The fund, plan or program must allow employees to access payments. Alternatively, an employer signatory to a multiemployer CBAs may satisfy its obligations by other means, provided the means are consistent with existing bargaining obligations and any applicable CBA.
As expected, employers may not discharge, discipline or discriminate against an employee who takes EPSL or EFMLA. Similarly, you may not discharge, discipline or discriminate against an employee because the employee either files a complaint, institutes a proceeding relating to the leave or has testified or is about to testify in such a proceeding.
Employees who believe that they have been discharged, disciplined or discriminated against for taking or attempting to take EFMLA have a private cause of action against the employer only if the employer is otherwise subject to traditional FMLA.
Temporary Period of Non-Enforcement
As DOL previously noted in its Field Assistance Bulletin 2020-1, DOL not bring enforcement actions against any employer for alleged violations of the FFCRA until April 17, 2020, provided that the employer has made reasonable, good faith efforts to comply. For purposes of this non-enforcement position, an employer who may be found to have violated the FFCRA acts “reasonably” and “in good faith” when all of the following facts are present:
- The employer remedies any violations, including by making all affected employees whole as soon as practicable. As explained in a Joint Statement by the Department, the Treasury Department and the Internal Revenue Service (IRS) issued on March 20, 2020, this program is designed to ensure that all covered employers have access to sufficient resources to pay required sick leave and family leave wages.
- The violations of the Act were not “willful” based on the criteria set forth in McLaughlin v. Richland Shoe, 486 U.S. 128, 133 (1988) (the employer “either knew or showed reckless disregard for the matter of whether its conduct was prohibited…”).
- The Department receives a written commitment from the employer to comply with the Act in the future.
With that said, provided employers are able to establish its reasons and thought process used when applying the regulations to a particular set of circumstance with good faith, such information will provide a defense to a DOL enforcement action provided remedies any violations when necessary and commits to further compliance.