U.S. Dept. of Labor Provides Additional Guidance For Employers

March 27, 2020 | Kenneth A. Novikoff | John K. Diviney | Tamika N. Hardy | Employment & Labor

As we have previously reported, on March 18, 2020 President Donald J. Trump signed the Families First Coronavirus Response Act (FFCRA). The FFCRA provides for two leave requirements arising in different portions of the Act:

  1. The right to Public Health Emergency Leave, which amends the existing statutory text of the Family and Medical Leave Act (“FMLA”); and
  2. The right to Paid Sick Time, which creates a new statute known as the Emergency Paid Sick Leave Act.

The FFCRA will take effect April 1, 2020, and private-sector employers with 499 employees or less must comply with the Act’s requirements. To assist employers, the U.S. Department of Labor (DOL) has issued a Q & A and guidance.

Employee Threshold

As we previously reported, the FFCRA is applicable to private-sector employers with 499 or fewer employees. Following the enactment of the law, one of the key questions for many private employers is how to calculate the 500-employee threshold for coverage. The U.S. DOL Q & A helps clarify the headcount for purposes of the FFCRA. Included in the employee count is:

  • full-time and part-time employees within the United States;
  • employees on leave;
  • temporary employees who are jointly employed by the employer and another company (regardless of whether the jointly employed employees are maintained on only one employer’s payroll); and
  • day laborers supplied by a temporary agency (regardless of whether the employer is the temporary agency or the client firm if there is a continuing employment relationship).

The headcount excludes independent contractors who are otherwise not entitled to the protections of the Fair Labor Standards Act (FLSA). For related business entities, an employer counts employees who fall within the FLSA’s joint employer test and/or the integrated employer test under the Family and Medical Leave Act (FMLA). To that end, the Q & A clarifies that:

  • When a corporation has an ownership interest in another corporation, the two corporations are deemed separate employers unless they meet the joint employer test under the FLSA. If two entities are found to be joint employers, all of their common employees must be counted for purposes of the 500-employee threshold for both the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act.
  • Two or more separate entities are generally deemed separate employers unless they meet the integrated employer test under the FMLA. If two entities are found to be an integrated employer, then the employees of all the entities that make up the integrated employer must be counted for purposes of the 500-employee threshold for the Emergency Family and Medical Leave Expansion Act.

Pursuant to the guidance, the FFCRA applies if a private employer has fewer than 500 employees at the time an employee seeks to take applicable leave. In other words, employees whose employers have 500 or more employees on April 1, 2020, but subsequently reduce their workforce so they have fewer than 500 employees, will be eligible for FFCRA leave if, at the time the employee takes eligible leave, the employer’s workforce is fewer than 500 employees

Small Business Exemption

Under the FFCRA, small businesses with fewer than 50 employees may qualify for an exemption from providing paid sick leave and/or expanded family and medical leave due to the closure of a child’s school or place of care as a result of a public health emergency if doing so would jeopardize the viability of the business. The U.S. DOL will further specify the criteria to meet the small business exemption in forthcoming regulations. However, the guidance states that small employers wishing to avail themselves of this exemption should document why their business meets the criteria that will later be set forth by the U.S. DOL.

Amnesty Period

To enable businesses covered by the FFCRA to come into compliance with the new statute, the U.S. DOL issued a memo to field staff directing them to observe a temporary period of non-enforcement of the FFCRA for the period until April 17, 2020.

Between April 1, 2020 and April 17, 2020, the U.S. DOL will not bring enforcement actions against any private employer for violations of the FFCRA, provided the employer has made reasonable, good faith efforts to comply with the FFCRA. For purposes of this non-enforcement position, an employer who is found to have violated the FFCRA acts “reasonably” and “in good faith” when all of the following facts are present:

  1. The employer remedies any violations, including by making all affected employees whole as soon as practicable.
  2. The violations of the Act were not “willful.”
  3. The U.S. DOL receives a written commitment from the employer to comply with the Act in the future.

If an employer either (i) violates the Act willfully, (ii) fails to provide a written commitment to future compliance with the Act, or (iii) fails to remedy the violation upon notification by U.S. DOL, the employee seeking payment must be made whole as soon as practicable. After April 17, 2020, this limited stay of enforcement will be lifted, and the U.S. DOL will fully enforce violations of the Act, as appropriate and consistent with the law.

As noted above, the U.S. DOL is expected to publish additional guidance and regulations on implementing these new laws in the near future. We will monitor this issue and report on significant developments. In the meantime, if you have any questions about the Families First Coronavirus Response Act, please contact an attorney in the Employment & Labor Practice Group.

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