Employer settles with DOL for FFCRA violation

Yesterday, the DOL issued a news release, Tucson, Arizona, Company to Pay Back Wages After Denying Paid Sick Leave To Worker Whose Doctor Ordered Coronavirus Quarantine. The employee provided documentation to his employer of his doctor's instructions to self-quarantine. Of course, people who are directed by their doctor to self-quarantine are entitled to 80 hours of emergency paid sick leave under the FFCRA.

So, what's the settlement? The employer agreed to pay the employee $20/hour wage for the 80 hours of leave available under the FFCRA - or $1,600. It is not clear from the press release whether the employer will receive the tax credit ordinarily available for FFCRA leave payments. Here, the employer could end up effectively paying nothing if they get the money back via tax credit. 

Note, however, that the FFCRA regulations make clear that FFCRA violations may result in the penalties available under the FLSA. Under 29 U.S. Code § 216, that includes lost wages, doubled as liquidated damages, and in extreme circumstances, potentially even fines up to $10,000 and jail time for repeat offenders. Enforcement may also include injunctions under 29 U.S. Code § 217.

DOL clarifies interplay between PTO and FFCRA Leave

After a little bit of a lull, DOL updated its Q&A page with a few new tidbits. Question 86 specifically addresses paid time off (I'll just use "PTO" to encompass PTO, vacation, sick, etc.) and its interaction with FFCRA leave. A few scenarios arise:

Emergency Paid Sick Leave (EPSL)

Easy enough - "An employer may not require employer-provided paid leave to run concurrently with—that is, cover the same hours as—paid sick leave under the Emergency Paid Sick Leave Act."

Emergency Family and Medical Leave Act (EFMLA)

Not official use.

A little more complicated - Yes, "an employer may require that any paid leave available to an employee under the employer’s policies to allow an employee to care for his or her child or children because their school or place of care is closed (or child care provider is unavailable) due to a COVID-19 related reason run concurrently with" EFMLA. But! The employer must pay the employee 100% of their pay (whereas EFMLA alone only requires 2/3 pay), and the employer will still only receive a tax credit for that required 2/3. Finally, the employer and the employee may agree to use PTO to supplement the 2/3 pay and instead provide full pay.

* Reminder, that 2/3 pay is also capped at $200/day, $10,000 total.

EPSL and EFMLA together

The first two weeks of EFMLA are unpaid (subject to the use of PTO above). The employee may choose (but the employer may not require) the employee to use their two weeks of EPSL during the first two weeks of EFMLA. The EPSL pays out at 2/3 pay. If the employee runs out of EPSL in the first two weeks, then the employee may choose (bit, again, the employer may not require) to use PTO provided for under the employer's policy (so long as that leave would be available to stay home to care for one's child).

EEOC issues "updated and expanded" COVID-19 ADA guidance

The EEOC "updated and expanded" its guidance: What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws. The document provides important guidance regarding screening employees for symptoms during the pandemic. One interesting note:

During a pandemic, ADA-covered employers may ask such employees if they are experiencing symptoms of the pandemic virus. For COVID-19, these include symptoms such as fever, chills, cough, shortness of breath, or sore throat. Employers must maintain all information about employee illness as a confidential medical record in compliance with the ADA.

This is an important reminder for employers dealing with requests for FFCRA paid sick leave (or emergency FMLA) in writing. To the extent such documents include information about the employee's illness, they must be kept separately from the employee's personnel file and must be confidential. 

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.

Yes, on 4/3 DOL is still adding to the FFCRA Q&A

Just a quick update to point out that DOL added Questions and Answers 60-79 to the FFCRA Q&A yesterday. A lot of emphasis on the care-for-others provisions. And, a helpful guide for calculating paid sick leave for seasonal employees.

How to document employee paid sick leave and FMLA requests under FFCRA

The new DOL FFCRA regs provide important rules for documentation of employee leave requests and recordkeeping. As a reminder, for the rest of the year, employees get up to 80 hours of paid sick leave for any of the following six reasons:

1. The employee is 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 who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; 

5. The employee is caring for his or her son or daughter because the school or place of care of the employee’s son or daughter has been closed or is unavailable due to COVID-19 precaution; or 

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.

Employees can take up to 12 weeks of emergency FMLA (the last 10 weeks, paid) only for reason #5 above. Note that "paid" for FMLA and sick leave here is capped and only 2/3 pay for reasons 4-6. What documentation can an employer require?

For all reasons (1-6):

(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.

Plus reason-specific documentation for Reasons 1, 2, 3, and 5.

Reason #1

"Employee must additionally provide the Employer with the name of the government entity that issued the Quarantine or Isolation Order."

Reason #2

"Employee must additionally 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."

Reason #3 (This regulation refers to Reason #3, but contextually, this certainly seems to match more with Reason #4 - perhaps a typo?). 

"Employee must additionally provide the Employer with either:

(1) the name of the government entity that issued the Quarantine or Isolation Order to which the individual being cared for is subject; or

(2) The name of the health care provider who advised the individual being cared for to selfquarantine due to concerns related to COVID-19."

Reason #5

"[A]n Employee must additionally provide:

(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 Paid Sick Leave or Expanded Family and Medical Leave."

Catchall

"The Employer may also request an Employee to provide such additional material as needed for the Employer to support a request for tax credits pursuant to the FFCRA. The Employer is not required to provide leave if materials sufficient to support the applicable tax credit have not been provided. For more information, please consult https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs."

Recordkeeping

Employers must keep documentation for four years, including documentation of oral requests, rejected requests, and exemptions/exceptions. To claim the tax credit, employers are "advised" to maintain:

(1) Documentation to show how the Employer determined the amount of paid sick leave and expanded family and medical leave paid to Employees that are eligible for the credit, including records of work, Telework and Paid Sick Leave and Expanded Family and Medical Leave; 

(2) Documentation to show how the Employer determined the amount of qualified health plan expenses that the Employer allocated to wages; 

(3) Copies of any completed IRS Forms 7200 that the Employer submitted to the IRS;  

(4) Copies of the completed IRS Forms 941 that the Employer submitted to the IRS or, for Employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the Employer’s entitlement to the credit claimed on IRS Form 941, and  

(5) Other documents needed to support its request for tax credits pursuant to IRS applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit. For more information, please consult https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs.

Stay-at-home orders as "quarantine or isolation" orders under the FFCRA

Welp, yesterday's release of the DOL regs for the FFCRA answered one question: Are statewide shelter-in-place or stay-at-home orders a form of "quarantine or isolation" order that justifies emergency paid sick leave? Yes. But, the explanation sure seems to gut the rule.

Definition of "subject to a quarantine or isolation order"

Under the FFCRA, employees are eligible for emergency paid sick leave if they are unable to work (or telework) because they are "subject to a quarantine or isolation order." We finally have a definition:

Subject to a Quarantine or Isolation Order. For the purposes of the EPSLA, a quarantine or isolation order includes 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. This also includes when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them.

(underline added). Welp, that settles it - "shelter-in-place, or stay-at-home orders" count! Not so fast. 

The coffee shop is closed

The employee is still not eligible for leave if the employer does not have work for the employee. The regs include a lengthy (~60 pages) summary, which includes a coffee shop example:

For example, if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, it would no longer have any work for its employees. A cashier previously employed at the coffee shop who is subject to a stay-at-home order would not be able to work even if he were not required to stay at home. As such, he may not take paid sick leave because his inability to work is not due to his need to comply with the stay-at-home order, but rather due to the closure of his place of employment.

A footnote, makes it even harder for employees to take advantage of a stay-at-home order:

Gov. Wolf

This analysis holds even if the closure of the coffee shop was substantially caused by a stay-at-home order. If the coffee shop closed due to its customers being required to stay at home, the reason for the cashier being unable to work would be because those customers were subject to the stay-at-home order, not because the cashier himself was subject to the order. Similarly, if the order forced the coffee shop to close, the reason for the cashier being unable to work would be because the coffee shop was subject to the order, not because the cashier himself was subject to the order.

Let's take a step back and examine Governor Wolf's stay-at-home order and apply the rule to it. 

Governor Wolf's stay-at-home order 

In Pennsylvania, Governor Wolf has issued a statewide stay-at-home order. Notably, it allows people to leave their homes to work at a life-sustaining business. Therefore, those employees will presumably be unable to use emergency sick leave under the "quarantine or isolation" order provision (unless they are individually subject to something more specific). What about employees of non-life-sustaining businesses? The physical locations for those business have closed (they're the closed "coffee shops" from the summary of the regs). So, it's hard to see how those employees would be eligible for emergency paid sick leave either. To the extent those businesses can still operate remotely - well, a stay-at-home order will not generally prevent someone from working from home, right? So, what's left?

The lawyer's power outage

The summary provides an example of a lawyer who is working from home ("telework" in the language of the statute):

For example, if a law firm permits its lawyers to work from home, a lawyer would not be prevented from working by a stay-at-home order, and thus may not take paid sick leave as a result of being subject to that order. In this circumstance, the lawyer is able to telework even if she is required to use her own computer instead of her employer’s computer. But, she would not be able to telework in the event of a power outage or similar extenuating circumstance and would therefore be eligible for paid sick leave during the period of the power outage or extenuating circumstance due to the quarantine or isolation order.

Okay - so, employees subject to a stay-at-home order, who work for a non-life-sustaining business, that has not shut down, and provides teleworking will be eligible for emergency paid sick leave during a power outage? Frankly, I don't even understand this one relatively obscure example. Wouldn't it be the power outage, and not the stay-at-home order, that prevented the attorney from working?

I mean, presumably we can come up with other scenarios where the teleworking employee is prevented from working... but it sure seems like the general rule (that stay-at-home orders "count") has been swallowed by the explanation (that the orders don't count where there is a lack of work resulting from the order as applied to the business generally).  

New DOL regs ("temporary rule") for FFCRA are here!

Hot off the press, new DOL press release: U.S. Department of Labor Announces New Paid Sick Leave and Expanded Family and Medical Leave Implementation. The main attraction is, of course, the long-awaited (14 days is a long time in coronovirus response world) regulations dubbed the "temporary rule." DOL will also post a recorded webinar here on Friday. 

Yes, I will read the regs and provide some analysis. Not sure what form that will take yet - but probably a series of blog posts. Stay tuned (I feel like I've been typing that a lot lately).  

New IRS guidance on claiming FFCRA tax credits

Sick of all of the DOL updates? Well, now you can head on over to the IRS website instead for some new guidance: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs. That's not all! The IRS has an entire Coronavirus Tax Relief page, with news releases, FAQs, guidance, and more. There is way too much information for me to try to distill down to a blog post. That said, the number one question I'm getting on the tax credit front is: as an employer, what documentation do I need (similarly, what must an employee provide)?

See Question 44:

44. What information should an Eligible Employer receive from an employee and maintain to substantiate eligibility for the sick leave or family leave credits?

An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:  

1.  The employee’s name; 

2. The date or dates for which leave is requested; 

3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and 

4. 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 fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

Again, dive into the full FAQs for some great information. Also, I think we are supposed to see FFCRA regs from DOL later today, so check back soon!

DOL issues... you guessed it! Still more Q&A on FFCRA

Suffice it to say, you should get in the habit of checking the DOL News Releases and the Families First Coronavirus Response Act: Questions and Answers in particular. They just keep updating the Q&A. Don't get me wrong, I'm not complaining... I'll take all the guidance I can get!

Some highlights:

• As suspected, employees only get 12 weeks of FMLA and EFMLA combined: "You may take a total of 12 workweeks for FMLA or expanded family and medical leave reasons during a 12-month period."
• A "full-time employee" for emergency paid sick leave "is an employee who is normally scheduled to work 40 or more hours per week."
• We have some guidance on who is a "health care provider" who may be exempted from EFMLA and paid sick leave, including "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."
• Some clarification about the "small business" exception. It applies to employers with fewer than 50 employees, leave (paid sick leave or EFMLA) is requested because a child's school or daycare is closed, and an "authorized officer of the business" has determined that at least one of these three conditions is present:    

1. The provision of paid sick leave or expanded family and medical leave 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; 

2.  The absence of the employee or employees requesting paid sick leave or expanded family and medical leave 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 

3. 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 paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

I applaud DOL for providing so much guidance on such a short timeframe. We should get the actual regulations any day now. Stay tuned.

More FFCRA Q&A from DOL

Still rolling in folks . . . a new and expanded Families First Coronavirus Response Act: Questions and Answers. They hit a lot of the questions that I've been getting from employers:

• Yes, employees can take paid sick leave intermittently. 
• Yes, employees can take EFMLA leave intermittently, but only with their employers' permission;
• No, employees who have already been sent home due to a closed worksite (whether due to lack of business or shutdown order) are not eligible;
• No double-dipping between paid leave and UC;
• It looks like the ability to "telework" is based on the discretion (see Qs 17, 18, 19), notably  17. When am I able to telework under the FFCRA? You may telework when your employer permits or allows you to perform work while you are at home or at a location other than your normal workplace.

Great resource from the DOL. 

DOL FFCRA Field Assistance Bulletin (important footnote about payment schedule)

DOL guidance for the FFCRA continues to roll in, including this Field Assistance Bulletin No. 2020-1. The main point of the bulletin is that DOL will not bring enforcement actions in the first 30 days after enactment (i.e. through April 17, 2020) if the employer made "reasonable, good faith" efforts. Employers may escape enforcement actions if they:

1. Remedy violations;
2. The violations were not willful;
3. Provide a written commitment to abide by the law to DOL. 

That said, the highlight of the bulletin may be buried in a footnote (fn3)!

For purposes of this non-enforcement policy, employers who are eligible for tax credits but who have insufficient cash flow should make payment of sick leave or family leave wages as soon as possible, but not later than seven 7 calendar days after the employer has withdrawn an amount equal to the required paid sick leave and expanded family and medical leave wages from the employer’s Federal payroll tax deposits or, to the extent such deposits are not sufficient, has received a refund of the credit amount from the IRS to cover the required wages.

Could be a huge relief for some employers.

HT: Amanda Baer on Twitter

FFCRA Posters and Q&A are now online!

DOL has posted the model notices for the FFCRA along with some Q&A:

• Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)
• Federal Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)
• Families First Coronavirus Response Act Notice – Frequently Asked Questions

Not official use.

Based on questions I'm getting from clients, you're all interested in Question 1:

1. Where do I post this notice? Since most of my workforce is teleworking, where do I electronically “post” this notice?  

Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.

Don't know why, but this cracked me up:

10. I am running out of wall space. Can I put the required notices in a binder that I put on the wall?  

No, you cannot put federal notices in a binder. Generally, employers must display federal notices in a conspicuous place where they are easily visible to all employees—the intended audience.

More DOL Guidance on FFCRA (EFMLA and paid sick leave) - including an effective date!

Drip.... drip.... the details about the Families First Coronavirus Response Act continue to emerge. Here's the DOL press release announcing additional guidance. The latest guidance is the Families First Coronavirus Response Act: Questions and Answers page. The big news is that we finally have a formal effective date:

The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.

Not official use.

There was some confusion about this because the statute says that it will take effect "not later than" 15 days after enactment. Some attorneys erroneously assumed that this meant it would take effect 4/2 (exactly 15 days after enactment). Meanwhile, guidance from the IRS over the weekend described "immediate" tax relief and included the word "can begin" as though employers could now begin taking advantage of the tax credits immediately.

They also announced a 6-month lookback calculation method for the "regular rate" of pay for the paid leave:

For purposes of the FFCRA, the regular rate of pay used to calculate your paid leave is the average of your regular rate over a period of up to six months prior to the date on which you take leave. If you have not worked for your current employer for six months, the regular rate used to calculate your paid leave is the average of your regular rate of pay for each week you have worked for your current employer.

Stay tuned because we're expecting the formal notice that employers must provide to their employees later today.

Treasury, Labor, and IRS issue some guidelines on EFMLA and emergency paid sick leave

On March 18, President Trump signed the Families First Coronavirus Response Act into law. Over the weekend, the Departments of Treasury and Labor, and the IRS, issued some guidelines. Frankly, they're more like notices of intent, with not a lot of "meat" yet. But, here they are:

• Plan to implement paid leave and tax credits to "swiftly recover the cost"
• Families First Coronavirus Response Act: Employee Paid Leave Rights 
• Families First Coronavirus Response Act: Employer Paid Leave Requirements

A few highlights:

• Complete Coverage
  Employers receive 100% reimbursement for paid leave pursuant to the act.
  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.
• Fast Funds
  Reimbursement will be quick and easy to obtain.
• An immediate dollar-for-dollar tax offset against payroll taxes will be provided
• Where a refund is owed, the IRS will send the refund as quickly as possible.

Easing Compliance

• Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. The Department of Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

New whitepaper: What does the Families First Coronavirus Response Act mean for employers?

New whitepaper on the Families First Coronavirus Response Act (including Emergency Family and Medical Leave Expansion Act, Emergency Paid Sick Leave Act, andTax Credits for Paid Sick and Paid Family and Medical Leave): What does the Families First Coronavirus Response Act mean for employers?

Authored by me, and my colleagues, Ethan Wilt and Madison Greenland (who, truth be told, took the lead on drafting).

New paid sick leave regs - come and get 'em!

Not official use.

Not gonna lie, I haven't even spent 30 seconds reviewing the Department of Labor's final rule regarding paid sick leave for federal contractors yet. However, I know it's a big deal and that a lot of you have been waiting for them. Here's the 466-page final rule; or, perhaps the much shorter Fact Sheet is more your speed. DOL has a whole host of paid sick leave-related resources here.

Enjoy! And fear not, I will read them and address them in greater detail soon.