Last week, we reported on our blog that the U.S. Department of Labor (DOL) issued temporary regulations clarifying employers’ obligations under the Families First Coronavirus Response Act (FFCRA). If you are interested in some leisurely reading, the regulations can be found here.
All of our attorneys have studied the regulations carefully and our collective take is that they are generally consistent with the Q&A guidance DOL has been putting out over the last two weeks. (We did a two-part series covering this guidance. You can access Part One here and Part Two here.) However, the regulations did clarify a few things that we had questions about and, not surprisingly, they also raised some new questions and created some areas of ambiguity.
Below, we have summarized our most important takeaways from the new regulations. Before we get there, however, we wanted to let you know that we have developed a Coronavirus/COVID-19 Resource Center for employers, which can be accessed here: https://www.skoler-abbott.com/coronavirus/. It includes our blog posts and other content we have published about how the pandemic is affecting employers, access to our previous webinars in downloadable format (both to the audio and our slides), and links to useful government resources. We will be updating the site frequently, so we encourage you to check it out regularly.
Quarantine or Isolation Order
As you probably know by now, there are six reasons an employee can take Emergency Paid Sick Leave (“EPSL”) under the FFCRA. More on those reasons can be found here. On its face, the first reason seems straight forward – the employee must be unable to work, or telework, as a result of being “subject to a Federal, State, or local quarantine or isolation order related to COVID-19.” But what qualifies as an order? The Discussion section the DOL published with the regulations states that “[q]uarantine or isolation orders include a broad range of governmental orders, including orders that advise some or all citizens to shelter in place, stay at home, quarantine, or otherwise restrict their own mobility.” That is a very broad definition and its inclusion of the term “stay at home” may be concerning to employers in states who were forced to close their physical locations as a result of recent orders related to non-essential businesses (such as Massachusetts, Connecticut and New York). The DOL included examples addressing this type of scenario involving a coffee shop and a law firm:
- 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.
- 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.
Got that? Admittedly, we are still trying to process this ourselves. The DOL seemingly tries to balance a broad definition of “order” with a very narrow application to an individual employee. Does it leave room for confusion? Absolutely. But the key is to remember that the order itself has to be directed to the employee AND be the reason that the employee cannot work, or telework. The employee is not entitled to EPSL under reason one if the business was closed as a result of an order and there is no work for the employee to do. They will also not be able to collect EPSL if they are able to telework while subject to an order. Given the DOL’s definition of an “order” and the examples offered to outline how to apply such “orders,” we think that a general stay-at-home advisory to individuals will not be sufficient to sustain a claim for EPSL under reason one.[Also, because the regulations specifically mention working for a law firm, we figured it was appropriate to share this picture of our conference room last week. We’re all working remotely but our office plants are having quite a party.]
Important Clarifications Regarding Use of EPSL
The DOL also clarified when an employee is eligible for EPSL based on a health care provider’s recommendation to self-quarantine. In particular, the DOL confirmed that the incredibly broad definition of “health care provider” that is used in the health care provider exemption does not apply here. Instead, only certain health care providers – licensed doctors, physician assistants, nurse practitioners and others whom the DOL has deemed qualified to provide health care services for purposes of the “classic” FMLA – can advise an employee to self-quarantine. The regulations also specify that EPSL will be available for this reason only if (1) the health care provider’s recommendation to self-quarantine is based on a belief that the employee actually has COVID-19, may have COVID-19 or is “particularly vulnerable” to COVID-19 and (2) the employee is unable to work (or telework) during his or her self-quarantine.
The regulations also explain that an employee can take EPSL for the third reason – experiencing symptoms and seeking a diagnosis – only if he or she is experiencing a fever, a dry cough, shortness of breath and/or any other symptom of COVID-19 that has been identified by the Centers for Disease Control and Prevention (CDC) and only for so long as the employee is taking affirmative steps to obtain a diagnosis or is waiting for a test result.
When an employee seeks to take EPSL in order to care for someone else who is in quarantine, the regulations clarify that the quarantined person must be someone with whom the employee has a “relationship that creates an expectation that the employee would care for the person if he or she were quarantined or self-quarantined” and that it must be a “personal relationship.” Further, an employee may only take EPSL for this reason if he or she would be able to work or telework “but for” the need to care for the person. In other words, an employee may not take EPSL even if he is providing care to a covered person if the employee would not have any work to do anyway.
Finally, the DOL regulations explain that an employee may only take EPSL due to the unavailability of child care if “no other suitable person is available” to care for his or her child(ren) and the employee would be able to work or telework “but for” the need to provide such care. The DOL also defined “place of care,” “child care provider” and “son or daughter” broadly. “Child care provider” includes not just licensed child care programs, but also family members and friends who regularly care for the employee’s child(ren), even if they are unpaid; a “place of care” covers any physical location where child care is provided while an employee works for an employer, even if the location is not exclusively dedicated to providing such care; and “son or daughter” does not mean only minor children, but also adult children who are “incapable of self-care because of a mental or physical disability.”
Documentation and Notice
The regulations include important information regarding what an employer should obtain from an employee who requests EPSL or EFML. Employees must provide their name; the dates for which they are requesting leave; the qualifying reason for the leave; and an oral or written statement that the employee is unable to work because of the qualifying reason. In addition, depending on the qualifying reason, employees should provide:
- the name of the government entity that issued the quarantine or isolation order;
- the name of the health care provider who advised the employee to self-quarantine; or
- the name(s) of the child(ren) being cared for, the name of their school, place of care, or child care provider that has closed or become unavailable, and a representation that no other suitable person will be caring for them during the period for which the employee will be taking EPSL or EFML.
Employers may also request “such additional material as needed for the Employer to support a request for tax credits.” In its Q&A guidance, the DOL advised employers to “consult Internal Revenue Service (IRS) applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit, including any needed substantiation to be retained to support the credit.” Here is the IRS guidance on substantiating eligibility for the tax credit, and here is IRS guidance on how to claim the credits, including information on the proper forms to use. Keep in mind that the failure to collect and retain this documentation could result in a denial of tax reimbursements, so it is very important to understand how this piece works. Be on the lookout for a future blog post from us discussing documentation and recordkeeping tips and strategies.
As for employee notice, employers can require employees to follow reasonable notice procedures, such as calling out in accordance with company policy, but they can only require compliance with a notice protocol after the first day of EPSL. If the time is used for EFML, employees can be required to provide as much notice as practicable.
Total FMLA Entitlement
The new regulations make clear that employees are only entitled to take 12 workweeks of FMLA leave in a single leave year. In other words, for employers who were already covered by the FMLA, an employee’s available weeks of EFMLA will be less than 12 if he or she has already used some, or even all, of their 12 workweeks in the current leave year (usually a rolling year, but sometimes a calendar year or other 12-month period). Such an employee is not entitled to take an addition 12 workweeks of EFMLA.
Substitution of Accrued Paid Time Off
The DOL’s Q&A guidance did not explain how FFCRA leave interacts with an employer’s other paid leave policies. The DOL regulations attempt to do this. They provide that, when an employee is using EPSL, an employer cannot require the use other paid time off in lieu of that time or in addition to that time. That much is clear. However, things get tricky when an employee is using EFML. For EFML, if the employee chooses not to use EPSL during the first two weeks, the employer can require the employee to use other accrued paid leave in accordance with company policy during this initial two-week period. After the first two weeks, neither the employee nor the employer may require the substitution of other available paid leave. However, employers and employees may agree, where federal or state law permits, to have accrued paid leave supplement the two-thirds pay an employee receives under the EFML, so that the employee receives the full amount of their normal pay.
Posting the New Notice
The new regulations require employers to post a notice outlining the FFCRA’s requirements in a conspicuous place where employees and applicants can view it. A free model version of this notice is available on the DOL’s website here in both in English and Spanish (note that the FFCRA does not require employers to provide translations of the notice to employees). The regulations also state that employers may distribute the notice to employees by direct mail or e-mail, or post the required notice electronically on an employee information website, to satisfy the notice requirement. Unlike “classic” FMLA, the FFCRA does not require employers to provide an employee who requests EFML with a formal notice of eligibility, notice of rights and responsibilities, or written designation that leave will count against the employee’s FMLA leave allowance.
Regardless of whether a request for leave is approved, employers must retain all documentation provided by employees that relates to EPSL or EFML for at least four years. Employers must do so even if this information was provided over the phone or through other means of oral communication, so it is important that employers document such communications. If an employee’s request is denied based on the small business exemption, the employer must also document the company’s determination that the criteria for that exemption are satisfied and retain that documentation for four years.
In order to claim the IRS tax credits, employers are advised to retain all of the following:
- documents showing how the employer determined the amount of FFCRA wages paid to qualified employees, including records of their work hours (including) telework and the amount of EPSL or EFML they took;
- documents showing how the employer determined the amount of qualified health plan expenses that the employer allocated to wages;
- copies of completed IRS Forms 941 and/or 7200 that the employer submitted to the IRS (or records provided to third-party payers in regard to Form 941); and
- other documents needed to support their request for tax credits pursuant to IRS forms, instructions, and other guidance.
Note: Our blog and other publications concerning coronavirus/COVID-19 are based on current information, which is changing daily. This is not legal advice. Information from administrative agencies like the DOL is constantly changing, and is also subject to review by the courts. If you have questions related to concerning coronavirus/COVID-19 legal issues, we suggest you speak to your labor and employment attorneys.