On April 1, 2020, Congress passed the Families First Coronavirus Response Act (the "Act") in response to the ongoing COVID-19 pandemic. On this same day, the U.S. Department of Labor ("DOL") published temporary regulations interpreting the new law. In general, the Act and its regulations require private employers with under 500 employees (and certain public employers) to provide covered employees: (1) emergency unpaid and paid family and medical leave; and (2) emergency paid sick leave.
New Family and Medical Leave under the Act
The Act amends the Family and Medical Leave Act ("FMLA"), 29 U.S.C. §§ 2612(a)(1)(F) and 2620, to provide new family and medical leave rights specific to COVID-19.
The amendment provides that employers with fewer than 500 workers must give eligible employees up to 12 weeks of FMLA leave for a "qualifying need related to a public health emergency." 29 U.S.C. § 2612(a)(1)(F). "Qualifying need" means where an "employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency." 29 U.S.C. § 2620(a)(2)(A). "Public health emergency" is defined as "emergency with respect to COVID-19 declared by a Federal, State, or local authority." 29 U.S.C. § 2620(a)(2)(B)).
The term "employee" has a limited definition for purposes of that new amendment—a definition which is materially different from the normal definition of "employee" under the FMLA. Under the new FMLA section created by the Act, "employee" is defined as one "having been employed for at least 30 calendar days by the employer." 29 U.S.C. § 2620(a)(1)(A). In other words, this definition of "employee" does not require an employee to have worked 1,250 hours in the last 12 consecutive months to be protected.
The Act's regulations explain what it means to have "been employed for at least 30 calendar days by the employer." An employee is employed for at least 30 calendar days where:
- the employee was on the employer's payroll for the 30 calendar days immediately prior to the date on which the employee's leave would begin; or
- the employee was laid off or otherwise terminated by the employer on or after March 1, 2020, and rehired or reemployed by the employer on or before December 31, 2020, provided that the employee had been on the employer's payroll for 30 or more of the 60 calendar days prior to the date the employee was laid off or terminated.
In a general sense, employees are covered by the Act if they have worked at least 30 calendar days and are unable to work due to a qualifying need. To take leave, employees must be unable to work or telework. The regulations distinguish situations in which no work is available from those in which a qualifying need event causes an employee to be unable to work or telework. In explaining the rule, the DOL notes that, if a coffee shop closes temporarily or indefinitely due to a downturn in business related to COVID-19, then it does not have work for employees to perform, so employees cannot take leave; this applies even if a stay-at-home order substantially causes the closure.
Leave would be available to an employee who is unable to perform work due to a qualifying need, as defined above. An employee likely cannot claim the recent Missouri stay-at-home order alone, without a qualifying need, as a basis to obtain leave under the Act if he is employed by a business which performs essential services. Rather, an actual childcare qualifying need must be experienced to claim leave (e.g., the employee is unable to work due to a need for leave to care for a child under 18 for whom the employee cannot obtain childcare). With that said, to the extent a business stays open for business and continues to require some workers to come into work, such workers—if they cannot otherwise telework—might be entitled to leave if they have to take care of their kids during the workday due to school closures resulting from the public health emergency. It is best practice to work in good faith with each individual employee in relation to these issues, as everyone's work and personal situations are different.
This new amendment to the FMLA applies to even the smallest employers, though the Department of Labor is authorized to issue regulations "to exempt small businesses with fewer than 50 employees from the requirements of [29 U.S.C. § 2612(a)(1)(F)] when the imposition of such requirements would jeopardize the viability of the business as a going concern." Despite extending these particular leave requirements to employers with less than 50 employees, there is no private right of action for violations by these smaller employers, although the Secretary of Labor has the power to bring an administrative or civil action against them for enforcement (Section 3104 of the Act). In other words, only the government—not employees or private parties—have the right to sue in the event of violation(s) of these leave requirements.
The Act's regulations provide that an employer with 49 or fewer employees is exempt from providing leave for child-care purposes when allowing such leave would jeopardize the viability of the business as a going concern. However, the language of the regulations specifically references the exemption with respect to leave that is requested. As a result, employers should not make any blanket assertion that they are exempt from complying with these leave requirements. Making such an across-the-board assertion would likely be unlawful. So, employers should be careful in considering each request by each employee in terms of the actual circumstances, effects, consequences and options at issue with the employee at hand.
To use and apply the exemption on a case-by-case basis, an authorized officer of the employer must consider, evaluate, and determine that:
- The leave requested would result in the business's expenses and financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are no 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 leave, and these labor or services are needed for the business to operate at a minimal capacity.
In considering this small business exemption as to an employee, the business must remember that it "will need to demonstrate this burden, and to show that [its employee(s)] are exempt." In doing so, the business must document, among other things, any oral statements made by employees in support of his or her request for leave, as well as its authorized officer's determination that the abovementioned criteria for the exemption are satisfied. The employer must keep record of documents provided to it by employees. The business must retain this documentation for four (4) years, regardless of whether leave was granted or denied. Finally, even where a small employer chooses to exempt one or more employees, it must still display the mandatory poster (see below explanation of poster requirements).
The first two weeks of such family or medical leave may be unpaid, although an employee at their option may substitute vacation/personal days (id. § 2620(b)(1)(A) and (B)), after which—for the next ten weeks—the employee is to be paid at a rate of no less than two-thirds of the employee's usual rate of pay, based on a formula set forth in the act (id. § 2620(b)(2)) but capped at $200/day. All other provisions of the FMLA, such as those entitling participants to continued participation in employee benefit plans, apply to persons who take leave under these new sections.
New Paid Sick Leave under the Act
The other type of leave created by the Act for COVID-19 is paid sick leave. Under Section 5102 of the new sick leave law, employers with fewer than 500 employees will be required to provide employees with paid sick leave for the following 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 an order as described in subparagraph (1) or has been advised as described in paragraph (2).
(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.
(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.
29 U.S.C. § 5102(a). Definitions of terms such as "employee," "employer," etc. are generally borrowed from the Fair Labor Standards Act ("FLSA") and/or FMLA.
The DOL indicates that school closures/childcare reasons for Act leave (which is reason number 5 in this section, above) are the only reasons for which the small employer exemption is available. This means that small employers with fewer than 50 employees, even those that claim this exemption, are not exempt from providing paid sick leave for reasons numbered 1, 2, 3, 4, and 6 above in this section. Again, while a business may claim an exemption as to a particular employee's request for leave under number 5, above, that business should be very diligent and exercise caution in utilizing an exemption, documenting any and all discussions with the employee about a leave request, the surrounding facts and circumstances, and careful analysis and explanation of the claimed exemption, supported by facts and documents, on a case-by-case basis.
If paid sick leave applies, the employer must provide it immediately, regardless of how long the employee has been employed, and the employer may not condition the leave on using other employer-provided sick-leave first or finding a replacement employee. § 5102(d) and (e).
Full-time employees may receive up to 80 hours of sick leave, while part-time employees may receive "a number of hours equal to the number of hours that such employee works, on average, over a 2-week period." § 5102(b). DOL regulations state: "[f]or an employee who takes paid sick leave because [of the reasons described in subparagraphs (1) to (3) stated above], the [Act] provides for paid leave at the greater of the employee's regular rate of pay [as defined by the FLSA] or the applicable minimum wage (federal, state or local), up to $511 per day and $5,110 in the aggregate." The DOL regulations continue: "[a]n employee who takes paid sick leave for any other qualifying reason…is entitled to be paid two-thirds of that amount, up to $200 per day and $2,000 in the aggregate."
For part-time employees with variable schedules, the DOL regulations note: "…if the part-time employee's 'schedule varies from week to week…the average number of hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes the paid sick time' shall be used in place of the 'number of hours that such employee works, on average, over a 2-week period'…to determine the number of paid sick hours." In addressing this issue, the DOL clarified that it "believes Congress intended to use the daily average to compute the two-week average"—that is, use the hours "scheduled per day" average over six months to create "a two-week average" of hours.
The right to sick leave terminates "beginning with the employee's next scheduled workshift immediately following the termination of the need for paid sick time." § 5102(c). An employee has no right to be compensated for unused sick-leave time under the Act. § 5107(2). Unused sick leave time does not roll over to the next year. § 5102(b).
Paid sick leave rights under this section are enforced under the FLSA—as denial of paid sick leave is treated as a minimum-wage violation—and subject to the same remedies as provided by 29 U.S.C. §§ 216 and 217, including but not limited to attorneys' fees and double damages. These rights are in addition to any rights employees may have to sick leave under local law, a CBA, or any other existing employer policy. § 5107(1). Employees are protected against interference from or retaliation for using the sick leave and have the ability to bring a private cause of action for such interference or retaliation § 5105.
The Act and its regulations require a business to post the Act's paid leave provisions on its premises in conspicuous places, in addition to information about how to file a complaint with the DOL's Wage and Hour Division for alleged violations of the Act. The DOL refers to its model notice, WHD 1422 (the poster it provides on its pandemic resources page), as being sufficient notice, as long as the employer either posts it in the workplace in conspicuous places, emails, direct mails, or posts it on the employer's internal or external website.
As noted above, to comply with the Act's paid leave mandates, the employer must retain documents and information regarding paid sick leave or any family or medical leave under the Act for four (4) years, regardless of whether it grants or denies leave. Moreover, if the employee provides oral statements in support of its leave request, it is the employer's responsibility to document those oral statements and associated information for its records for the four-year period. If an employer denies leave under the Act to an otherwise eligible employee based on an assertion of the small business exemption, then it must document, among other things, the determination by its authorized officer that it is eligible for the exemption based on the specific criteria discussed above.
If you have any issues or questions regarding compliance with the Act or are seeking guidance on the best policies and practices to implement and abide by during the pandemic, contact our firm directly at (314)645-4100 or by email at firstname.lastname@example.org.