COVID-19 Legislative Update: DOL Guidance on Emergency Paid Leave Requirements

Families First Coronavirus Response Act

Updated March 27, 2020

On March 18, 2020, President Donald J. Trump signed into law the Families First Coronavirus Response Act, which makes broad temporary changes to the Family and Medical Leave Act (FMLA) and requires employers to provide emergency paid leave to employees affected by COVID‑19, or Coronavirus.

Lloyd Gosselink’s Employment Law Practice Group has analyzed the new legislation and subsequent guidance from the Department of Labor with an eye toward the sections affecting employers.  This summary provides an overview of employers’ responsibilities under the new legislation and should be used to aid employers in their preparation for the fast approaching April 1, 2020 compliance deadline. 

The Firm encourages all employers to contact the attorneys in its Employment Law Practice Group with any questions related to implementation of this new emergency paid leave. We learn more hourly, and will continue to provide updates as new information comes out.

Emergency Family and Medical Leave Expansion Act (EFMLEA)

This emergency expansion becomes effective on April 1, 2020 and sunsets on December 31, 2020.

The EFMLEA expands the FMLA to require that employers provide FMLA leave when an employee is unable to work (including an inability to telework if offered by employer)[1] because they need to care for their minor child because the child’s regular care (school or otherwise) is unavailable due to COVID-19.  We are referring to this new type of FMLA leave as “leave to care for a child.”^[2] 

Guidelines for providing the new FMLA leave to care for a child:

• Requires employers to provide paid leave (rather than typical unpaid FMLA leave; see below for an explanation on calculating this new paid leave).
• Must be provided to all employees who have been employed for 30 days (rather than the standard FMLA coverage requirement of 12 months of employment).
• Must be provided by all public employers, no matter how many employees they have, and all private employers with fewer than 500 employees, subject to the following exceptions:
  • Small businesses with fewer than 50 employees may be exempted from providing this new paid leave.  The legislation allows for the Secretary of Labor to promulgate regulations that exempt small business if the leave would jeopardize the viability of the business.
  • Health care providers and emergency responders may be exempted from providing this new leave.  The law allows the Secretary of Labor to promulgate regulations to exclude these workers.  We expect the regulations to provide greater clarity regarding how broadly this exemption is applied, and whether other critical employees will be added.
• Small business with fewer than 50 employees are exempted from enforcement actions brought by employees.^[3] 
• Small businesses with fewer than 25 employees may be exempted from restoring an employee to their position at the conclusion of the new paid FMLA leave under certain conditions.
• It does not appear that “small businesses” includes public sector employers, but we hope for clarification from the regulations.
• Expanded FMLA leave to care for a child is not available to an employee on furlough, temporary layoff, reduced work hours, or permanent laid off, whether initiated because of lack of business or pursuant to a Federal, State or local directive.  The only pay employees may be eligible for is unemployment insurance benefits.[4]

Employee Notice Requirements for the new FMLA leave to care for a child:

• Employers must require employees provide them with appropriate documentation in support of entitlement to new FMLA leave[5]:
  • The qualifying reason for requesting leave with supporting documentation (e.g. notice posted on a government, school or daycare website or in a newspaper; an email or letter from an employee or official of the school, place of care or childcare provider).
  • A statement that the employee is unable to work (including telework); and
  • The dates for which leave is requested. 
• Employers should keep all employee documentation requesting leave.

Intermittent Leave under the new FMLA leave to care for a child:

• Employers may allow for intermittent use of expanded FMLA leave to care for a child, but are not required to do so. 
• Intermittent FMLA leave may be offered to employees working on-site or remotely. 
• If an employer decides to permit intermittent FMLA leave to care for a child, the employer and employee can agree to any increment of intermittent leave.

When are employers required to provide the new FMLA paid leave and how much paid leave must they provide[6]:

• The first ten days of FMLA leave to care for a child are unpaid, during which time the employee may substitute in any other accrued paid leave (i.e. vacation, personal, and sick leave, including emergency paid sick leave under EPSLA).^[7] 
• After the first ten days, the employer should pay the employee 2/3 of the employee’s regular salary/pay rate, up to a maximum of $200/day or $10,000 total.
• An employer may, but is not required, to allow an employee to supplement the amount received under the expanded FMLA with accrued paid vacation, personal, or sick leave from an employer’s paid sick leave policy to reach an employee’s normal earnings.  An employer cannot require that an employee supplement with his or her own accrued leave, unless the employee specifically agrees.[8]
• FMLA leave for any reason other than to care for a child is unpaid under this provision, and would be treated as other FMLA leave under the employer’s policies.

Emergency Paid Sick Leave Act (EPSLA)

This emergency expansion becomes effective on April 1, 2020 and sunsets on December 31, 2020.

The EPSLA requires all public employers, no matter how many employees they have, and all private employers with fewer than 500 employees to provide paid sick leave, subject to the following exceptions:

• Small businesses with fewer than 50 employees may be exempted from providing this new paid leave, where providing the leave would jeopardize the viability of the business.
• Employers may elect to exclude health care providers and emergency responders from paid sick leave provisions. The regulations may expand this.
• Emergency paid sick leave is not available to an employee on furlough, temporary layoff, reduced work hours, or permanent layoff, whether initiated because of lack of business or pursuant to a Federal, State or local directive.  The only pay employees may be eligible for is unemployment insurance benefits.

Under EPSLA, employers are required to provide paid sick leave to the following employees who are unable to work (including an inability to telework if offered by employer)[9]  because of COVID-19:

• Employees subject to a quarantine or isolation order related to COVID-19.[10]
• Employees who have been advised by a health care provider to self-quarantine due to concerns related to COVID-19.[11]
• Employees experiencing symptoms of COVID-19 and seeking a medical diagnosis.
• Employees caring for an individual who is the subject of a quarantine order or has been advised to self-quarantine due to COVID-19.
• Employees caring for a child if the child’s school or place of care has been closed due to COVID-19, or other usual childcare is unavailable because of COVID-19.

How much paid sick leave must employers provide and at what rate of pay[12]:

• 80 hours or two weeks of paid sick leave at the employee’s regular rate of pay, capped at $511 per day (and $5,110 total) for employees who are quarantined or seeking a medical diagnosis related to COVID-19. Once either 80 hours or two weeks end, the paid leave benefit ends.
• Two weeks of paid sick leave at a rate of at least 2/3 of the employee’s regular rate, capped at $200 per day (and $2,000 total) for employees:
  • caring for a family member who is quarantined or seeking diagnosis related to COVID-19; or
  • caring for the employee’s child whose school or childcare facility is closed or regular childcare is unavailable due to COVID-19.^[13] 
• Part time employees receive a prorated amount of paid sick leave equivalent to the number of work hours in a two-week period based on their normal schedule, or averaged out over the prior six‑month period if their schedule varies.  Part time employees may take paid sick leave for this number of hours per day for up to a two‑week period, and may take expanded family and medical leave for the same number of hours per day up to ten weeks after that. 
• Employers may not require employees use other accrued paid time before they may use emergency paid leave under EPSLA.
• An employer may, but is not required, to allow an employee to supplement the amount received under the EPSLA with accrued paid vacation, personal, or sick leave from an employer’s paid sick leave policy to reach an employee’s normal earnings.  An employer cannot require that an employee supplement with his or her own accrued leave, unless the employee specifically agrees.[14]
• Employers will get no “credit” for being generous before April 1, 2020; the right to the emergency leave begins on April 1.
• Employers may not retaliate against employees who receive paid sick leave.

Employee Notice Requirements for Emergency Paid Sick Leave:

• Employers must require employees provide them with appropriate documentation in support of entitlement to emergency paid sick leave:
  • The qualifying reason for requesting leave with supporting documentation (e.g. source of any quarantine or isolation order, name of health care provider who advised self-quarantine, notice posted on a government, school or daycare website or in a newspaper, an email from an employee or official of the school, place of care or childcare provider).
  • A statement that the employee is unable to work (including telework); and
  • The dates for which leave is requested. 
• Employers should keep all employee documentation requesting leave.

Intermittent Leave under the Emergency Paid Sick Leave Act:

• The general rule is that intermittent emergency paid sick leave is not available when an employee is working at his or her usual worksite. 
  • Once an employee takes paid sick leave, they must continue to take paid sick leave until they either:   
    • Use the full amount of paid sick leave; or
    • No longer have a qualifying reason for taking paid sick leave.[15]
  • Exception for employees who are taking emergency leave to care for a child whose school or place of care is closed or whose childcare provider is unavailable because of COVID-19.[16] 
• Employers can allow intermittent use of emergency paid sick leave when an employee is working remotely, but are not required to do so. 

Tax Credits For Paid Sick And Paid Family And Medical Leave

Private employers are entitled to refundable tax credits related to the Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave described above.  To date, public employers are not eligible for the credit; however, there are lobbying efforts for further legislation that may change this. In addition, legislation is in the works for emergency funds for public entities to apply for reimbursement of COVID-19 spending, such as through FEMA or other state or federal programs.

• The tax credits for private employers are allowed against the employer’s portion of payroll taxes and employers will be reimbursed if their costs for qualified sick leave or qualified family leave wages exceed the taxes they would owe.  The tax credits are available in an immediate dollar‑for‑dollar offset against payroll taxes.  Employers may seek an advance from the IRS if the offset is not sufficient to cover the cost of the paid leave.
• Tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter in adherence with the Emergency Paid Sick Leave Act.
• Tax credit equal to 100% of the qualified family leave wages paid by employers for each calendar quarter in accordance with the Emergency Family and Medical Leave Expansion Act.
• Only those employers who are required to offer Emergency FMLA and Emergency Paid Sick Leave may receive these credits.

Coverage For Testing For COVID-19

Private health plans (including insured, self-insured, and grandfathered) must provide coverage for COVID-19 diagnostic testing and related services to employees and their covered dependents, without cost sharing (like deductibles, copayments and coinsurance).  This provision is effective from the enactment of the Act, March 18, 2020, through the end of the national emergency period. 

Covered services and related cost waivers apply to diagnostic testing, healthcare provider services (i.e., in-person and telehealth visits), and facility costs (i.e., physician office, urgent care center and emergency room) to the extent the costs are related to evaluating the need for, or furnishing, COVID-19 diagnosis and treatment. 

Plans shall not require prior authorization or similar medical management requirements as a precondition of COVID-19 testing or services.

Notice Requirement

Employers must post notice of the provisions of the Act in a conspicuous place.  We recommend emailing a copy to employees working remotely and obtaining confirmation of receipt.  The Department of Labor’s new poster may be downloaded here.

This summary was prepared by Lloyd Gosselink’s Employment Law Practice Group:  Sheila Gladstone, Sarah Glaser, and Emily Linn.  If you would like more information, please contact Sheila (sgladstone@lglawfirm.com or 512.970.5815), Sarah (sglaser@lglawfirm.com or 512.221.6585), or Emily (elinn@lglawfirm.com or 214.755.9433).

---

[1]              While the DOL guidance does not explicitly state whether the employer or employee determines the feasibility of telework, the DOL encourages a collaborative discussion and suggests that employers afford flexibility to employees who are dealing with additional childcare obligations because of COVID-19, but who are still able to work under a flexible schedule (i.e. allowing work early in the morning or late at night). 

[2]              This is now the only qualifying reason for emergency FMLA leave and a significant departure from earlier versions of the bill, which had expanded FMLA leave to employees quarantined due to COVID-19 and to employees caring for a family member who was quarantined.  However, for employees eligible for traditional FMLA, having a serious health condition or caring for a family member who has one would still be covered as “regular” FMLA. It just wouldn’t be paid under this new expansion.

[3]              Therefore, the bill has significantly less “teeth” for employers with fewer than 50 employees.

[4]              The Texas Workforce Commission provides a number of no-cost services to assist employers facing altered work situations, temporary layoffs, or permanent loss of employment, including a program called “Shared Work” which provides partial unemployment benefits to supplement wages lost to reduced hours and other layoff aversion programming to facilitate employee training and remote work.  See the link for a list of the TWC’s COVID-19 Resources for Employers https://www.twc.texas.gov/news/covid-19-resources-employers

[5]              All existing certification requirements under the FMLA remain in effect if an employee takes regular FMLA leave.

[6]              An employer can pay employees in excess of the new FMLA requirements, however, an employer cannot receive tax credits for any amount in excess of the statutory limits.

[7]              The employer however cannot require an employee to use accrued paid leave during this time.  However, the two weeks of EPSLA run concurrently with the unpaid FMLA, and do not add additional pay or time to the expanded FMLA. Only a total of 12 weeks of FMLA is allowed.

[8]               An employer will not receive any tax credit for supplemental payments under an employer’s paid sick leave policy.

[9]              Again, the DOL guidance does not explicitly state whether the employer or employee determines the feasibility of telework, however, the DOL encourages a collaborative discussion and suggests that employers afford flexibility to employees who are dealing with additional childcare or caregiving obligations because of COVID-19, but who are still able to work under a flexible schedule (i.e. allowing work early in the morning or late at night).

[10]             We interpret this provision to include non‑essential employees covered by a local shelter in place order.

[11]             This provision may include employees who are ordered by a health care provider to self‑quarantine because they are part of a “vulnerable population” (i.e. immunocompromised, elderly, etc.).

[12]             An employer can pay employees in excess of the EPSLA requirements, however, an employer cannot receive tax credits for any amount in excess of the statutory limits.

[13]             Under this provision an employee using emergency FMLA to care for a child can use the emergency paid sick leave to cover the first ten unpaid days of FMLA leave.

[14]              An employer will not receive any tax credit for supplemental payments under an employer’s paid sick leave policy.

[15] If employees have remaining paid sick leave under the EPSLA, they can take any remaining paid sick leave at a later time, until December 31, 2020, if another qualifying reason occurs.

[16] The distinction between use of paid sick leave to care for a child compared to the other qualifying reasons, is that if an employee is sick or possibly sick with COVID-19, or caring for an individual who is sick or possibly sick with COVID-19, the intent of FFCRA is to provide paid sick leave to keep the employee from spreading the virus.  Allowing the employee to intermittently come into the workplace would frustrate that goal. 

---