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DOL Regulations on New Paid Leave Requirements Contain Some Surprises

On April 1, the Department of Labor issued a Temporary Rule providing further clarification on implementation of the Families First Coronavirus Response Act (“FFCRA”), which went into effect on that date.  The rule follows earlier guidance issued by the DOL. These regulations contain some  surprises – even appearing  to rewrite the legislation in some instances.  This article summarizes some key provisions of the FFCRA regulations.

Leave Related to Quarantine or Isolation Orders

The Emergency Paid Sick Leave Act (EPSLA) provides for paid sick leave when an individual is subject to or is caring for someone subject to a federal, state, or local quarantine or isolation order.  The regulations explain that EPSLA is triggered if a “quarantine, isolation, containment, shelter-in-place, or stay-at-home orders issued by any Federal, State, or local government authority that cause the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order.”  Additionally, the regulation states that EPSLA is available when “a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them.”  Requests based on this provision should be carefully evaluated.

In a non-binding summary of the regulations, the Department of Labor points out that the individual is only eligible for leave if the reason for not working is the quarantine or isolation order as applied to the individual employee.  For example, if a coffee shop closed due to low customer volume resulting from a stay-at-home order or because a government order forced the coffee shop to close, the employee would not be eligible for paid sick leave.  In such a case, the employee is unable to work because of the closure, not because the employee was subject to the stay-at-home order.

The regulations also clarify that when taking leave to care for an “individual” under a quarantine or isolation order, the employee must have some relationship to the individual.  An “individual,” for this purpose, is defined as “an Employee’s immediate family member, a person who regularly resides in the Employee’s home, or a similar person 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.  For this purpose, ‘individual’ does not include persons with whom the Employee has no personal relationship.”

Leave for Childcare Reasons

The FFCRA uses different language in describing the expanded FMLA provision for childcare leave and the EPSL provision for childcare leave.  A literal reading suggests that the Paid Sick Leave provision is available to care for a disabled child over the age of 18, while the expanded FMLA provision expressly states that the son or daughter must be under the age of 18.  The DOL reads the express “under the age of 18” provision out of the statute to ensure a consistent application of the two leave provisions.  Therefore, in some cases, both EPSL and expanded FMLA can be available to parents of children over the age of 18 who are disabled.

The regulations also make clear that the employee may only take leave for childcare reasons if “no other suitable person is available to care for the Son or Daughter during the period of such leave.”  This suggests that spouses cannot both take leave for this reason, even when the spouses work for different employers.  This is consistent with IRS guidance, discussed here, explaining that to claim the tax credit, the employer must require the employee to certify that no other person will be providing care for the child during the period for which the employee is receiving family medical leave.

Computing Available Leave

To ensure consistency between the expanded FMLA provision and the EPSL provision of the FFCRA, the regulations state that the unpaid period for expanded FMLA is two weeks rather than ten days.  In many cases, this will result in no change to the computation.  However, since some of the statutory language speaks in days while other statutory language speaks in weeks, this clarification helps to ensure that the 12 weeks of available paid sick leave will result in continuous payment when the employee elects to use the paid sick leave during the first two weeks of expanded FMLA leave.

Concurrent Leave

The regulations clarify that an employee may elect to use or an employer may require an employee use available paid time off concurrently with expanded FMLA to result in the employee being paid in full as opposed to at 2/3.

Employee Eligibility Under Expanded FMLA

Employees are eligible for expanded FMLA if they have been employed by the employer for at least 30 calendar days prior to the leave.  The regulations provide that employees who were laid off or otherwise terminated on or after March 1, 2020 and are reemployed by the employer by December 31, 2020 can meet this requirement provided that the employee had been on the employer’s payroll for 30 or more of the sixty 60 days prior to the date the employee was laid off or otherwise terminated.

Counting Employees for 500-employee Threshold

The regulations go into great detail on counting employees for the 500-employee limit above which the FFCRA does not apply in the private sector.  Employers who may function as joint or integrated employers should look at the regulations on this issue in more detail.

The regulations address certain other issues in counting employees.  They make clear that independent contractors, employees who have been laid off or furloughed without subsequent reemployment, and employees outside the U.S. do not count toward the 500-employee limit.

Reemployment Provisions

Under the FFCRA, employers with 25 or more employees are required to return employees from Emergency FMLA to the same or equivalent position.  Employers with fewer than 25 employees are excluded from this requirement if the position no longer exists following the Emergency FMLA due to an economic downturn or other circumstances caused by a public health emergency during the period of leave. However, even these smaller employers still must make reasonable attempts to return the employee to an equivalent position and to continue to make attempts for up to a year.

This language raised a question of what obligations a larger employer would have to reinstate an employee to a position that was eliminated.  Existing FMLA regulations provide that employees who take job-protected leave have no greater reinstatement rights than if they did not take the leave.  For example, if a department is eliminated and all employees in that department are laid off, the employee on FMLA leave does not have a right to be reinstated.  Based on this existing FMLA regulation, the DOL advises that an employee is not protected from employment actions that would have occurred regardless of whether the employee took leave.  Further, a “key employee,” as defined under existing FMLA regulations, may be denied job restoration, if such denial is necessary to prevent substantial and grievous economic injury to the operations of the employer.

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As new laws and regulations go into effect faster than ever, the labor and employment team at Berchem Moses PC is available to help you meet your legal obligations.  Please call us if we can be of assistance.