Thursday, April 9, 2020

Counting employees under the FFCRA

The FFCRA regulations specifically address the method for counting the number of employees:
  • "[C]ount all full-time and part-time Employees employed within the United States at the time the Employee would take leave;"
  • Part-time count as much as full-time;
  • Include employees on leave of any kind;
  • Do not count independent contractors.
But, of course, nothing is ever that simple. The regs also make clear that businesses must count employees under a "joint employer" or "integrated employer" test. Here, they incorporate the joint employer test under the FLSA:
[A] four-factor balancing test . . . to assess whether the other person: 
(1) hires or fires the employee; 
(2) supervises and controls the employee’s work schedule or conditions of employment to a substantial degree; 
(3) determines the employee’s rate and method of payment; and 
(4) maintains the employee’s employment records. 
No single factor is dispositive in determining joint employer status, and the appropriate weight to give each factor will vary depending on the circumstances.
The test for an integrated employer (or integrated enterprise) comes from the FMLA:
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. Factors considered in determining whether two or more entities are an integrated employer include: 
(i) Common management; 
(ii) Interrelation between operations; 
(iii) Centralized control of labor relations; and 
(iv) Degree of common ownership/financial control.
29 CFR § 825.104(c)(2).

This, of course, presents a double-edged sword. It could push some employers over 500 and exclude them from coverage. Other employers, however, will be pushed over 50 and outside of the small business exemption.

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