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DOL Wage-Hour Division Publishes First Guidance Regarding Families First Coronavirus Response Act (FFCRA)

Written by Todd A. Leeson and Kelsey Martin, Gentry Locke Attorneys

March 25, 2020

On March 24, 2020, the U.S. Department of Labor Wage-Hour Division (WHD) published its “first round” of guidance regarding the new Families First Coronavirus Response Act (“FFCRA” or the “Act”). The Act was signed into law on March 18, 2020. As you likely know by now, the Act basically provides that private sector employers with 499 or fewer employees must give eligible employees up to 80 hours of emergency paid sick leave (EPSL), and up to 12 weeks of emergency paid FMLA leave (EFLMA) for defined COVID-19 reasons.

You can find the WHD’s March 24 news release here: https://www.dol.gov/newsroom/releases/whd/whd20200324

As you will see, there are 3 primary “guidance” documents set forth in this WHD news release: a Fact Sheet for Employees, a Fact Sheet for Employers, and a Questions and Answers document.

The WHD set the effective date for the new paid leave provisions as April 1, 2020. (This is 1 day earlier than anticipated.)

In addition, the WHD will be publishing a Notice today (March 25, 2020) that employers will be required to post and publicize to its employees regarding the FFCRA. Stay tuned!

As noted, WHD will be providing additional guidance in the near term. It specifically stated that it “expected” to publish its formal regulations in “April 2020.”

Here are a few additional items of note from the WHD documents

Calculating Hours Worked by Full or Part Time Employees. [Questions 5 & 6] The WHD outlines several scenarios to help employers determine the number of hours a part or full time employee works for purposes of determining the amount of leave available to the employee.

Calculating Employee’s “Regular Rate of Pay” for Purposes of FFCRA. [Question 8] For employees who have worked for you for more than 6 months, the “regular rate” is the average of his/her regular rate over a period of up to 6 months. Alternatively, you can add all compensation that is part of the regular rate for the above period and divide that sum by all hours actually worked.

80 Hours is Max for EPSL. [Questions 6 & 9]. Total number of hours for which an employee may receive Emergency Paid Sick Leave (EPSL) is capped at 80 hours over a 2 week period. For example, if an employee is scheduled to work 50 hours a week, she may take 50 hours of EPSL in the first work, but only 30 hours of EPSL in the second week.

Small Business Exemption. [Question 4]. A business with fewer than 50 employees does not have to provide child care-related EPSL or EFMLA if it would “jeopardize the viability of the business as a going concern.” As stated in the answer to question 4, the WHD expects to issue regulations in April to provide “more detail” on the criteria that will support this exemption. In other words, we do not currently have substantive guidance on this question.

Calculating Number of Employees. [Question 2]. A business with fewer than 500 employees is covered under the FFCRA (unless it qualifies for an exemption for having fewer than 50 employees). In making this determination, you should include employees on leave, temporary employees who are jointly employed by you and another employer, and day laborers supplied by a temporary agency. If two entities are found to be joint or integrated employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the FFCRA.

Refundable Tax Credit. On a related topic, businesses will receive a refundable tax credit for the entire cost of these payments to eligible employees. To this end, the IRS and DOL published helpful information on the tax credit on Friday March 20. See link below.

https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

In sum, the WHD will be publishing additional guidance and regulations in the coming days and weeks. Please let us know if you have questions or if we can assist you with compliance. Please also consult gentrylocke.com/coronavirus for additional information on the various laws and legal issues related to the COVID-19 pandemic.

 

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