For anyone else trying to navigate the flurry of developments in the world of employment law, the Department of Labor Wage and Hour Division ("Department" or "DOL") has provided some additional information about the new Families First Coronavirus Response Act (FFCRA). As we outlined previously (see our Families First blog post), the FFCRA grants new paid leave rights to employees in certain COVID-19 related scenarios. Although the information is still limited, we’re eager to glean any possible guidance we can to help navigate these complex issues and interplay with other workplace requirements. A few noteworthy points:
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A (tiny) bit more information about the small employer exception
The expansive leave rights allowed under the new federal law offers a potential exception for small employers with fewer than 50 employees, if providing required benefits would jeopardize the viability of the business as a going concern. Although this little nugget was dropped into the bill, there wasn’t much insight into how that’s actually going to play out. Instead, the law said the contours of this exception will be spelled out in regulations to come. Query when we’ll see those regulations (no, really: see Item 2, below), but we do see at least some additional clarification on this point in the agency’s updated Q & A section. Specifically, the guidance online says that “to elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.” (Alas, another cross-reference to regulations we still don’t have.) The DOL does go on to say, however, “You should not send any materials to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family and medical leave.” Perhaps this clarification was added because many of us were wondering whether employers would need to proactively apply for this exception or get some kind of formal determination from the WHD. It sounds like it may be more a matter of an individual employer’s good faith application of an internally documented exemption (and then employer has the documentation if later challenged, perhaps?), versus a formal application and approval process. Still, we still don’t know for sure and await those regulations with bated breath ... which brings me to my next bullet point.
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Do not expect formal regulations until April
We have a lot of other unanswered questions, of course, as employers need to understand all the potential interplay – and have been holding out hope that these forthcoming regulations would help clarify some of those lingering questions. In the updated information on the DOL website, however, several footnoted references to forthcoming guidance refer to “Department FFCRA regulations (expected April 2020).” So, it sounds like we won’t be seeing regulations before the law goes into effect. However, likely recognizing the impossible situation all of this creates for employers trying to comply: it does sound like the agency will have a temporary 30-day period of non-enforcement, so long as the employer acts reasonably and in good faith to comply with the Act.
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Effective date of April 1
The updated information also clarifies the effective date of the federal legislation is April 1, 2020. Most practitioners had interpreted / anticipated the effective date to be April 2, 2020.
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Regular rate of pay calculation look back
There was some confusion about the regular rate of pay for purposes of the leave Acts under the FFCRA. The updated DOL information says the regular rate used to calculate the paid leave will be “the average of your regular rate over a period of up to six months” prior to the date leave is taken. If an employee has not worked for the current employer for six months, the regular rate will be the average weekly regular rate of pay for the weeks the employee has been employed. (Remember, “regular rate” under the FLSA has a specific legal definition – it needs to include any commissions, tips, piece rates, or other incentive pay as part of the calculation.) The DOL also articulates an alternative way to get this number, which actually sounds a little more consistent with the regular rate determination under the FLSA parlance: “You can also compute this amount for each employee by adding all compensation that is part of the regular rate over the above period and divide that sum by all hours actually worked in the same period.”
If you have any questions please reach out to your BrownWinick attorney or submit a message through our Contact Us form. For updates on COVID-19 and new guidance provided by BrownWinick attorneys, please visit our COVID-19 Resource Page.
