Implementing the Families First Coronavirus Response Act: Department of Labor Provides Updated Guidance
Following the enactment of the FFCRA on March 18, 2020, employers and employees alike had many questions regarding the Act’s implementation and are left to move forward with uncertainty. However, the Department of Labor (“DOL”) has provided new questions and answers to provide much needed clarity to all those struggling to ensure compliance with the new Emergency Family and Medical Leave Expansion Act (“E-FMLA”) and The Emergency Paid Sick Leave Act (“E-PSLA”).
Over the past week, the DOL has issued written guidance in the form of a published set of FAQ’s on its website found here, as well as facts sheets and a new required workplace poster. The DOL has already updated and expanded its written guidance several times, and readily admits that such guidance will continue to be issued on a rolling basis. Also, the DOL has indicated it intends to promulgate further regulations on an unspecified date in April 2020.
Interpretation and implementation of the FFCRA is changing quickly. But to date this is what we know based on the guidance provided by the DOL:
New Effective Date
A considerable curveball, the DOL announced that the FFCRA is going to become effective a day early on April 1, 2020.
Benefits Will Not Apply Retroactively
The DOL clarified that FFCRA benefits are not retroactive. As a result, any paid leave given to employees before the effective date of the FFCRA (April 1, 2020), which would have otherwise qualified for either E-FMLA and E-PSLA benefits, will not be counted to towards the FFCRA’s leave requirement. However, employees are entitled to their full entitled of FFCRA leave on April 1, 2020, and beyond.
The DOL has issued the notice poster employers must use to educate employees on the new leave opportunities and requirements. Employers can satisfy their notice obligations under the FFCRA by: (1) posting the notice in a conspicuous location in the workplace; (2) directly emailing or mailing the requisite notice to each individual employee; and (3) posting the notice on an employee information internal or external website.
Employers should have the poster up by April 1. The DOL recognized employers are still grappling with the FFRCA going into effect and plans to give a 30-day grace period for enforcement. Employers are not required to issue notices to recently laid-off employees. However, notice should still be provided to furloughed employees, even though they are not entitled to paid leave under the law. Copies of the required notice and the DOL’s guidance concerning notice are available here and here.
Small Business Exemptions
The most needed point of clarity pertains to the possibility of small business exemptions from the E-FMLA and E-PSLA. Under the FFCRA, the Secretary of Labor reserved the authority to issue regulations exempting small businesses with fewer than 50 employees when the imposition of the Act’s requirements would jeopardize the viability of the business as a going concern. Unfortunately, the DOL has not issued any further elaboration on the implementation or requirements of these exemption provisions. The DOL simply advised small businesses should “document” why the E-FMLA and E-PSLA provisions of the FFCRA “jeopardize the viability” of your business. However, the DOL promised that forthcoming regulations will address this is in more detail.
Large Employers (500 or more employee)
The DOL clarified that the number of employees should be calculated “at the time your employee’s leave is to be taken.” This could greatly impact the 500-employee threshold outlined in the FFCRA. Based on this language, the DOL is requiring employers to determine whether it has 500 employees at the time any individual employee takes leave under the FFCRA. As a result, the 500-employee threshold to qualify as a large employer is a moving target. For businesses hovering around 500 employees, this could have substantial implications for businesses contemplating layoffs before and after the April 1 effective date. If the contemplated layoffs would bring the overall number of employees under 500, then FFRCA coverage would be triggered.
Moreover, the DOL also issued detailed guidance on how to calculate the number of employees when multiple entities exist under the same corporate family, and in situations where multiple entities may constitute “joint employers” or “integrated employers.”
Documentation and Certification Requirements
The DOL clarified that employers must require employees to provide appropriate documentation and written notice supporting the reason for their leave in order for the employer to claim a payroll tax credit for FFCRA leave payments. The appropriate notice should include:
the employee’s name;
the qualifying reason for requesting leave;
a statement that the employee is unable to work for that reason; and
the date(s) for which leave is requested
Documentation of the reason for leave is also necessary. This includes the source of any quarantine or isolation order, the name of the health care providers who advised the employee to self-quarantine, or notice of a school disclosure or lack of child care. Importantly, unlike traditional FMLA leave, no signed third-party certification is required for FFCRA paid leave.
Employers should retain all documentation and create written policies advising their employees of the documentation required to receive benefits. Employers who grant their employees paid leave under the FFCRA without keeping such documentation will not be eligible for a payroll tax credit.
Layoffs, Worksite Closures, and Furloughs
The DOL explained that if an employer closed its worksite before or after the April 1st effective date, but prior to the employee requesting leave under the FFCRA, the employee is not entitled to leave under the FFCRA. Additionally, if an employer closes its worksite during a time when an employee is on leave pursuant to the FFCRA, employee is no longer eligible for FFCRA benefits.
In the case of a furlough, an employee will not be entitled to leave under the FFCRA, even if the employer remains in operation. Further, if an employer reduces an employee’s hours, the employee may use leave under the FFCRA to supplement for the hours the employee is no longer working.
Existing Employer Leave Policies and FFCRA Paid Leave
The DOL clarifies that E-PSLA benefits are not to be denied or reduced based on existing accrued leave provided by the employer. As of April 1st, employers may permit—but may not require—employees to choose between their existing accrued leave and FFCRA’s E-PSLA or E-FMLA. However, employers may permit—but may not require—employees to supplement any partially paid leave under the FFCRA with existing accrued paid leave in order to receive their full compensation. Ultimately, an employer cannot require an employee to use existing accrued paid leave if the employee prefers not to.
In sum, the DOL has provided beneficial guidance for the interpretation and implementation of the FFCRA. However, we are still far from clarity on each detail. And for employers trying to ensure compliance with the FFCRA, the devil is in the details. We anticipate this is still going to be an evolving area of law in the upcoming months. The employment law team at ShuffieldLowman is available to advise employers in these uncertain times based on the current legal updates available. For more information on COVID-19 legal updates, visit our resources page HERE.
View our other FFCRA Blogs Here:
FFRCA Emergency Unemployment Insurance Stabilization Act
**ShuffieldLowman anticipates changes to develop as both federal and Florida government responds to this unprecedented health emergency. We will provide updates as we are able in this developing legal situation and other COVID-19 related employment legislation that may be enacted in the coming weeks and months.
***Disclaimer: The information contained herein provides an overview of developing and ongoing legislation and does not constitute legal advice for any particular situation.
Authors: Dillon McColgan & Clay Roesch