Paid Leave and Coronavirus—Part XI: Department of Labor Issues Families First Coronavirus Response Act (“FFCRA”) Final Regulations

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Seyfarth Synopsis: As reported through our “Paid Leave and Coronavirus” series, the Families First Coronavirus Response Act (“FFCRA” or the “Act”) went into effect on April 1, 2020. That same day, the Department of Labor (“DOL”) issued final regulations further describing the obligations of employers, and the rights of employees, under the Act’s paid sick time (“PST”) and expanded family medical leave, i.e., paid family medical leave (“PFML”), mandates.[1] This week, the DOL also updated its paid leave FFCRA FAQs to add approximately 20 additional Q&A on the Act.

The regulations, although termed “temporary” in the issuance, are final regulations effective immediately, invoking the “good cause” exception to the normally required notice and comment rulemaking procedures, and to the 30 day delay in effective date, under the Administrative Procedure Act. The notice does not invoke procedures for follow-up comments.

Below are some nonexclusive highlights of the DOL’s final regulations:

Threshold Qualifications

As we have previously discussed, the FFCRA generally applies to private employers with fewer than 500 employees, as well as certain public sector employers. Consistent with the DOL’s FAQs, the final regulations note that for purposes of both PST and PFML, employers should apply the FMLA’s integrated employer test to determine if multiple entities should be counted as one integrated employer or separate employers. In addition, for both PST and PFML, the final regulations state that where a corporation has an ownership interest in another corporation, the two corporations will be considered separate unless they are joint employers under the FLSA.

The final regulations also contain provisions on how employers should determine if they fall below the above-referenced 500 employee threshold. In particular, employers must count all full-time and part-time employees employed within the United States at the time the employee would take leave.[2] The number of employees includes: (A) all current employees; (B) any employee on any type of leave; (C) employees of a temporary placement agency who are jointly employed under the FLSA by the employer and the temporary placement agency; and (D) day laborers supplied by a temporary agency. The number of employees does not include: (A) independent contractors, and (B) workers who have been laid off or furloughed and have not subsequently been reemployed.

Small Employers

As we have previously reported, the DOL was expected to codify through good cause rulemaking an exemption for employers of less than 50 employees from the PFML mandate and from the PST covered reason for use related to an employee’s absence to care for a son or daughter whose school or place of care has been closed due to COVID-19 if imposing the mandate would jeopardize the viability of the business as a going concern.

The final regulations state that a small business can claim this exemption if an authorized officer of the business has determined that:

• The provision of PST or PFML 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 PST or PFML 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 PST or PFML, and these labor or services are needed for the small business to operate at a minimal capacity.

To elect this small business exemption, the employer is required to document its determination under one of the above criteria. Employers should not send such documentation to the DOL, but rather retain the records in their files. Regardless of whether a small employer chooses to take advantage of the above exemption for one or more employees, the employer must still post the required notice under the Act.

Qualifying Absences

Employees can use PST under the Act when the employee is unable to work (or telework) due to a need for leave because: (1) they are subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis; (4) The employee is caring for an individual [note - need not be a family member] who is subject to an order as described in reason for use (1) or has been advised as described in reason for use (2) (as described above); (5) The employee is caring for a child of such employee if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID-19 precautions; and (6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

By comparison, PFML under the Act can be used only where the 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.

Here are some notable points from the DOL final regulations on the above qualifying absences:

Subject to a Federal, State, or Local Quarantine or Isolation Order

Language in the DOL FAQs stating that PST is not available when an employer’s worksite closes pursuant to a Federal, State or local directive suggests that employees are unable to use PST under the Act when they are not working due to a shelter in place, workforce reduction, non-essential business closure, or other government order. However, the final regulations define the phrase “Subject to a Quarantine or Isolation Order” to include quarantine, isolation, containment, shelter-in-place, or stay-at-home orders issued by any Federal, State, or local government authority that cause the employee to be unable to work even though his or her employer has work that the employee could perform but for the order.

Notably, final regulations further state that any employee subject to such an order may take PST under this reason for use only if, but for being subject to the order, he or she would be able to perform work that is otherwise allowed or permitted by his or her employer, either at the employee’s normal workplace or by telework. Finally, the final regulations note that PST is not available to employees where the employer does not have work for the employee as a result of the order or other circumstances, such as closure of the business for economic reasons, furlough of employees, etc.

Unpacking this update and its corresponding “but for” clause is not simple. While the analysis will be heavily fact specific based on the nature and language of the specific order in question, the nature of the employer’s operations and employee populations, and additional analysis and guidance from the DOL, there are a few general takeaways at this time.

• A shelter-in-place or stay-at-home order generally will not apply to employees who work at an “essential business.” This means that the order will not prevent employees who work at an “essential business” from performing work at their normal workplace, thereby making any such employees unable to receive PST under this reason for use to the extent the employer has work for them.
• If an employer is not an “essential business” under the shelter-in-place or stay-at-home order, the employer’s employees will not be able to perform work at the employer’s normal worksite, and thus one of the two situations below would apply.
  • If these employees are able to telework from home and the employer has work for them to perform, they will not be able to receive PST under this reason for use.
  • If, on the other hand, an employee is permitted to telework and the employer has work for them to perform, but the employee is unable to actually conduct their work due to extenuating circumstances, such as (a) a power outage prevents them from logging on, (b) the employer has not provided the employee with a work laptop and the employer does not have an online portal or intranet that the employee can access through their personal device, or (c) the employer has an online portal but the portal is inaccessible for a period of time, the employee likely would be able to use PST under this reason for use. This is because the employee would not be able to telework in the above extenuating circumstances and would therefore be eligible for PST during the period of the extenuating circumstance due to the quarantine or isolation order.

Advised by a Health Care Provider to Self-Quarantine

The final regulations state that an employee may take PST for this reason only if: (1) A health care provider advises the employee to self-quarantine based on a belief that (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 a health care provider to self-quarantine prevents the employee from being able to work, either at the employee’s normal workplace or by telework.

Experiencing Symptoms of COVID-19 and Seeking a Medical Diagnosis

The final regulations state that an employee may take PST for this reason if the employee is experiencing any of the following symptoms: (i) fever; (ii) dry cough; (iii) shortness of breath; or (iv) any other COVID-19 symptoms identified by the U.S. Centers for Disease Control and Prevention. Notably, any PST used for this reason is limited to 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.

Care of an Individual

The final regulations note that, for purposes of using PST, “individual” means 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. For this purpose, “individual” does not include persons with whom the employee has no personal relationship.

School or Place of Care Closures (for both PST and PFML)

The final regulations note that an employee can use PST or PFML for this reason if 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 only if no other suitable person is available to care for the son or daughter during the period of such leave.

“Substantially Similar Condition”

Like the Act, the final regulations do not contain an explanation of what types of absences would qualify under this reason for use. However, the DOL’s latest FAQs state the following on this point - “The U.S. Department of Health and Human Services (HHS) has not yet identified any ‘substantially similar condition’ that would allow an employee to take paid sick leave. If HHS does identify any such condition, the Department of Labor will issue guidance explaining when you may take paid sick leave on the basis of a 'substantially similar condition.' ”

Coordination of Employer-Provided Paid Time Off and Expanded Family Medical Leave

The final regulations contain multiple provisions regarding how to coordinate expanded family medical leave under the FFCRA and employer-provided paid time off. How the provisions interplay appears to depend on whether an employee is using expanded family medical leave during the two-week unpaid period of “public health emergency leave” or the 10-week period of paid “public health emergency leave” under the Act. While this point is subject to further analysis and clarification, at this time it appears that the relevant provisions under the final regulations work as follows:

• Two Weeks of Unpaid “Public Health Emergency Leave”
  • The final regulations imply that if the employee has not used any of their PST under the FFCRA, then either the employee can elect or the employer can require use of employer-provided paid time off during this two week period. However, and significantly, the Paid Sick Leave Act under the FFCRA expressly notes that “An employer may not require an employee to use other paid leave provided by them employer to the employee before the employee uses the paid sick time under [the Act].”
  • If the employee has used some or all of their FFCRA paid sick leave prior to the unpaid portion of expanded family medical leave, then the employee can choose to substitute employer-provided paid time off during this two week period; however, it appears that the employer cannot require substitution.
• 10 Weeks of Paid “Public Health Emergency Leave”: Because the 10 week period of expanded family medical leave is paid at 2/3 of an employee’s regular rate, up to a $200 per day cap, and thus is not unpaid, the final regulations explain: a) the employer and employee must mutually agree to substitute employer-provided paid leave; and b) if such an agreement is reached, it appears that the amount of substituted employer-provided paid time off can only be in an amount equal to the unpaid portion of expanded family medical leave.

Interplay Between Standard FMLA and FFCRA PFML

The final regulations clarify that an employee who uses PFML under the FFCRA for “public health emergency” leave would have that time counted against his or her standard FMLA allotment. By the same token, if an employee works for an employer who was covered by the FMLA prior to April 1, 2020, and the employee has taken some or all of the 12 workweeks of standard leave under the FMLA during the current 12-month period as determined by the employer, the employee’s entitlement to PFML under the Act would be reduced accordingly.

Relatedly and significantly, the final regulations note that an employee can take a maximum of 12 workweeks of PFML during the period in which the leave may be taken (i.e., April 1, 2020 to December 31, 2020) even if that period spans two FMLA leave twelve-month periods. For example, if an employer’s twelve-month period begins on July 1, and an employee took seven weeks of PFML in May and June, 2020, the employee could only take up to five additional weeks of PFML between July 1 and December 31, 2020, even though the first seven weeks of PFML fell in the prior twelve-month period.

Intermittent Leave

The final regulations layout several scenarios and factors that impact whether PST and PFML can be taken intermittently. In particular the relevant factors include whether the employee is teleworking or working at their physical worksite, and the nature of the absence (i.e., the relevant reason for use). In general, the final regulations are consistent with the intermittent leave discussion in the DOL FFCRA FAQs, which permit intermittent leave only in certain situations and only upon agreement with the employer in those situations, and which we further summarize here.

Worksite Closures and Furloughs

As previously reported, the DOL’s FFCRA FAQs include several Q&A regarding the availability of PST and PFML during worksite closures and “furloughs.” The FAQs currently contain more detail on these topics than do the final regulations. This includes information about whether PST and PFML are payable to employees who have been furloughed or whose worksites were closed before, on, or after April 1, 2020. 

Documentation:

The final regulations contain several provisions regarding appropriate documentation when an employee seeks to use PST or PFML. Specifically, the final regulations note that the employee must provide their employer documentation containing the following information prior to taking PST or PFML: (1) Employee’s name; (2) Date(s) for which leave is requested; (3) Qualifying reason for the leave; and (4) Oral or written statement that the employee is unable to work because of the qualified reason for leave. The final regulations also note the following:

• To take PST related to a covered “order of quarantine or isolation,” as described above, the employee also must provide the employer with the name of the government entity that issued the order.
• To take PST related to “self-quarantine based on a medical provider’s recommendation,” as described above, the employee also must provide the employer with the name of the health care provider who advised the employee to self-quarantine due to concerns related to COVID-19.
• To take PST related to “caring for an individual,” as described above, the employee also must provide the employer with either: (1) the name of the government entity that issued the order to which the individual being care for is subject; or (2) The name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19.
• To take PST or PFML related to “a school or place of care closure,” as described above, the employee also must provide the employer with (1) the name of the son or daughter being cared for, (2) the name of the school, place of care, or child care provider that has closed or become unavailable, and (3) a representation that no other suitable person will be caring for the son or daughter during the period for which the employee takes PST or PFML.

Finally, the final regulations state that the employer also can request an employee to provide such additional material as needed for the employer to support a request for tax credits pursuant to the FFCRA, and cross reference the IRS’ FFCRA FAQs.

Meaning of Health Care Provider and Emergency Responder

The final regulations contain definitions and examples of terms “health care provider” and “emergency responder” for purposes of a “health care provider” or a “emergency responder” who may be excluded by their employer from PST or PFML. The relevant provisions in the final regulations are generally consistent with guidance on the meaning of these terms from the DOL’s FFCRA FAQs, which we summarized here. A separate client alert also examined aspects of the regulation’s use of the term “health care provider.”

In addition and notably, the final regulations' definition of “health care provider” for purposes of the above exclusion states that the term includes “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.” This language could have broad implications, including potential application to manufacturing companies that are making medical equipment, COVID-19, tests, etc. for hospitals and other health care facilities.

We will be reviewing the final regulations in more detail in the coming days and will issue further alerts on topics not covered in this summary or expanded thoughts on the above topics, so stay tuned for further analysis. In the meantime, in light of the FFCRA’s April 1 effective date and newly issued final regulations, employers should consider taking the following steps:

• Monitor developments on DOL announcements for additional regulations and FAQs on the FFCRA.
• Review existing workplace policies relating to a wide host of issues, including travel, work from home, and other policies as well as existing leave policies, and assess the potential effect of the FFCRA on those policies. If necessary, implement additional policies specifically tailored to FFCRA compliance.
• Consult Seyfarth’s COVID-19 Resource Center for updated information regarding the rapidly evolving COVID-19 situation and its impact on the workplace.

With the COVID-19 and paid leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with the FFCRA and paid leave requirements generally. To stay up-to-date on COVID-19 developments, click here to sign up for our daily digest. To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list. Companies interested in Seyfarth’s paid sick leave laws survey should reach out to sickleave@seyfarth.com.

 

[1] As a reminder, the Act’s paid leave mandates sunset on December 31, 2020.

[2] The final regulations state that for purposes of this count, every part-time employee is counted as if he or she were a full-time employee.