Families First Coronavirus Response Act Update #3 (Benefit Minute)

Posted in: Benefit Minute, COVID-19, Employee Benefits

On April 1, the Department of Labor (DOL) issued temporary regulations intended to implement the Emergency Paid Sick Leave Act (EPSL) and Emergency Family and Medical Leave Expansion Act (EFMLA) under the Families First Coronavirus Response Act (FFCRA). The effective date of these regulations was April 1, and they expire on December 31, 2020. The regulations mostly confirm existing information in the law and DOL FAQs, but do clarify certain items as summarized below.

Quarantine and Telework Definitions

An  employee is subject to a quarantine or isolation order if they are the subject of any quarantine, isolation, containment, shelter-in-place, or stay-at-home order issued by any Federal, State or local government authority that causes the employee to be unable to work or telework even though their employer has work they could perform.  This would also extend to specific orders directed at categories of citizens, such as those of certain age ranges or with certain medical conditions. The DOL is narrowly applying this quarantine reason for EPSL by making it clear that the existence of the order must be the only reason the employee is unable to work or telework.

An employee is able to telework if the employer has work for the employee, the employer permits the employee to work from the employee’s location, and there are no extenuating circumstances that prevent the employee from performing the work. Telework may be performed at normally scheduled hours, or at other times agreed to by the employee and the employer. FLSA regulations regarding the determination of compensable hours between a teleworking employee’s first principal activity and last principal activity (continuous workday rule) do not apply when employees are teleworking for COVID-19 related reasons.

Paid Leave Entitlements under EPSL

The regulations confirm that EPSL will not be available under any of the qualifying reasons in situations where a business does not have work for an employee to perform, even if the lack of work or closure is related to COVID-19. In these situations, the DOL concludes the employee’s inability to work is because the employer has no work available, and not because of a COVID-19 related reason. Employees of any business that voluntarily closes due to a downturn brought on by COVID-19 or is forced to close by a government order related to COVID-19 will not be entitled to take EPSL, though unemployment benefits may be available.

Health Care Provider Advice to Self-Quarantine

EPSL is available only if the order to self-quarantine is based on the health care provider’s belief that either (1) the employee has or may have COVID 19, or (2) the employee is particularly vulnerable to COVID-19 when the advice to self-quarantine due to either prevents the employee from being able to work or telework. The advice of the health care provider must be specific to the individual; therefore, recommendations made to the public or made for specific categories of citizens (i.e. the elderly) do not satisfy this basis for leave.  Employees are not entitled to EPSL if they make the decision to self-quarantine on their own.

Experiencing Symptoms and Seeking a Diagnosis

The DOL provides a list of specific symptoms that are a sufficient reason to take EPSL to seek a medical diagnosis. These include fever, dry cough, shortness of breath or any other symptom identified by the CDC. EPSL is only available for time the employee is unable to work because they are taking steps to obtain a diagnosis, such as making, waiting for, and attending appointments for COVID-19 testing. EPSL is neither available while waiting for results if an employee can telework, nor if exhibiting symptoms, but not taking steps to obtain a diagnosis.

Employees who subsequently test positive for COVID-19 may take EPSL, regardless of symptoms, provided that a health care provider advises the employee to self-quarantine. While there does not appear to be an independent entitlement to EPSL for having COVID-19 under the law or regulations, positive results should always lead to an advisement to quarantine.  This would result in a total combined EPSL entitlement of 2 workweeks.

Caring for a Son or Daughter

If an employee has to care for a child whose school or place of care has closed or whose child care provider is unavailable due to COVID-19 reasons, EPSL will only be available if there is no other suitable person to care for the child during the period of leave. Employees may not take EPSL to care for a son or daughter unless, but for the need to care for the child, the employee would be able to work at their worksite or through telework. An IRS FAQ has stated that employers should request a statement of special circumstances when an employee takes leave to care for a child older than 14 to substantiate basis for the EPSL tax credit.

Covered Employers & Fewer than 500 Employees Rule

For purposes of EPSL and EFMLA, a private employer is only required to provide leave if they have fewer than 500 employees (any size for a governmental employer). This count is made at the time the leave is requested by the employee. The regulations state that the number of employees does not include workers who have been laid off or furloughed and have not been subsequently reemployed. This may cause some large employers that experience significant reductions in force or furloughs to be required to provide EPSL and EFMLA to their remaining workforce.

Small Business Exemption

A small business (under 50 employees) may be exempt from providing EPSL for purposes of caring for a child whose school or place of care has closed, and from providing EFMLA, if granting this leave would jeopardize the viability of the business as a going concern.  The criteria set by the DOL is based on the documented determination of an authorized officer that the leave would cause the business to cease operating at minimal capacity; or the absence of the employee for this reason would entail substantial risk to the financial health or operational capabilities of the business; or there are not sufficient workers who are able, willing and qualified to perform the labor/services needed for the business to operate at minimal capacity.  While not clear from the regulations, it appears that small employers can use the exemption on an employee by employee basis. Small employers are not exempt from providing EPSL to employees for any of the other qualifying reasons.

Concurrent Use of Employer Provided Paid Leave and EFMLA

For the first 2 weeks of EFMLA, EPSL may be available to an employee, unless exhausted previously for another reason. If exhausted, an employee may elect to substitute accrued paid leave time for the unpaid EFMLA, but an employer cannot require it.

After the second week, an employer may compel employees to use any applicable accrued leave under their leave policy concurrently with EFMLA, up to 100% of wages. However, the EFMLA tax credit is still capped at 2/3 of the regular rate of pay up to $200 per day.  The regulations reverse the DOL’s previous position (as stated in the FAQs) that employers are not permitted to compel employees to use any accrued leave during this time period.