COVID-19 and the Workplace: How to Comply with Rapidly Changing Legislation

We received a few questions on how to determine if you’re covered – and how to count your employees for purposes of determining if you have fewer than 500 employees. So we’ll start there … The first question is whether non-profit organizations are covered.

The answer is yes. Just like other private companies, the FFCRA applies to non-profits with fewer than 500 employees. And the same criteria for the small employer exemption -- for those with less than 50 employees -- also applies if you can establish all of the criteria that we went over for that exemption.

It looks like most of you understand the new FFCRA law only applies to private companies if you have fewer than 500 employees, but there are a few questions around how to count your employees – who to include or not include. Here’s a common question we received on this: When counting my employees, should we include temporary employees?

The answer is yes – you should count temporary employees. The FFCRA regulations state that a private company or a non-profit entity, for purposes of determining whether you’re a “covered employer” with fewer than 500 employees, should count the number of employees as follows:

• Include all current full and part-time employees you employ in the United States, District of Columbia, or any territory or possession of the United States -- without regard to the employee’s length of employment;
• Include all employees on any type of leave;
• Include temporary employees who are jointly employed by you and another employer (regardless of whether these employees are maintained on only your payroll or the other employer’s payroll); and
• Include any day laborers supplied by a temp agency (regardless of whether you are the temp agency, or the client in a continuing employment relationship).

You don’t have to count workers who are truly considered independent contractors under the Fair Labor Standards Act (FLSA) – and that’s a specific legal test – it’s not just about whether they receive a 1099 or not.

For counting employees, what if we are a small business with less than 500 employees, but we are owned by a much larger parent company. Do we fall under the 500-employee threshold?

According to the regulations, all employees of integrated employers must be counted together, and all common employees of joint employers must be counted together. Typically, a corporation (including its separate establishments or divisions) is considered a single employer and all of its employees must be counted toward the 500-employee threshold. However, this can get complicated when a corporation has an ownership interest in another corporation – in that case, the two corporations are counted together if they meet the current legal test for “joint employer” status under the FLSA.

Whether or not a company is a joint or integrated employer is complicated and has other legal implications, so if you are relying on “joint or integrated” status to claim that you collectively have more than 500 employees and thus are not covered by the FFCRA, I would suggest that you speak to an attorney first about whether the entities can indeed be counted together.

We have employees who have requested paid leave because they are caring for a child whose school has closed – and the question is “Does it have to be the employee’s own child?”

The guidelines are pretty clear on this. If the reason for leave is to care for a child whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions, the child must be the employee’s “son or daughter.” The FFCRA says the definition for “son or daughter” follows the traditional FMLA definition, which is the employee’s biological, adopted or foster child, stepchild, legal ward, or child for whom the employee is standing in loco parentis, who is under 18 years of age. It also includes the employee’s adult son or daughter (i.e., one who is 18 years of age or older), who (1) has a mental or physical disability and (2) is incapable of self-care because of that disability.

Note that this is specifically for childcare leave due to school and daycare closings. If the reason for FFCRA leave is to care for an individual who is subject to an isolation order or advised to self-quarantine by a healthcare provider, it does not have to be the employee’s child. It doesn’t even have to be a family member. The regulations specify that an “individual” can be anyone with whom the employee has a personal relationship, such as an immediate family member, someone who regularly resides in the employee’s home, or a person with whom the employee has a relationship and would be expected to provide care during an isolation order or self-quarantine.

We also got a lot questions asking about leave taken due to a federal, state or local quarantine or isolation order related to COVID-19 -- and whether that includes a stay-at-home order. Does “quarantine” include a local stay-at-home order?

The answer is yes. For purposes of the FFCRA, “subject to a quarantine or isolation order” includes 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. This also includes 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.

Can you please clarify what it means when you say up to 80 hours of paid leave. What does up to 80 hours mean – is that a cap? Then what?

When we say that employees can take up to 80 hours of paid leave for the specific reasons allowed by law, that means the total number of hours for which an eligible employee may receive emergency paid sick leave is capped at 80 hours. They may not need all of it, but they have up to 80 hours. Once the employee returns to work, the employer is not required to provide any further emergency paid sick leave under the FFCRA. In other words, the employee may be eligible for other types of paid leave, including any leave available under company policy or state or local laws, but emergency paid sick leave under the FFCRA would be exhausted. Now remember, there is still an additional 10 weeks allowed for leave taken due to school or daycare closures, but the 80-hour cap applies to all the other reasons for leave we went over.

Another common question was: Can an employee take emergency paid sick leave on an intermittent basis?

It depends on the reason and a couple other factors. If the employee is reporting to your worksite and obtaining leave for any reason other than for childcare leave due to school or daycare closures, it must be taken in full-day increments (and used continuously until the qualifying reason is over). This is because the intent of FFCRA paid sick leave is to prevent employees from spreading the virus to others. If the reason for leave is to care for the employee’s child due to school or daycare closures, the employer and employee may agree to allow intermittent leave. So, for example, if the employee is working remotely or teleworking, this leave may be taken intermittently if the employer and employee agree to the arrangement.

Do employees need to exhaust their PTO or sick leave before using emergency FFCRA paid leave?

It depends. For emergency paid sick leave, an employer may NOT require employees to use paid vacation, personal, medical or sick leave before or concurrently with paid sick leave. This is because paid sick leave is in addition to, not a substitute for, an employee’s other leave entitlements.

For expanded family and medical leave, including the extended coverage due to school or daycare closures, an eligible employee may elect to use, or an employer may require that an eligible employee use, leave available under the employer’s policies, such as vacation or personal leave or paid time off, concurrently with expanded family and medical leave.

If employees are home because their child’s school or place of care is closed, or childcare provider is unavailable, do they get emergency paid sick leave, expanded family and medical leave, or both? How do they interact?

Employees may be eligible for both types of leave, but only for a total of twelve weeks of paid leave. Remember there are two separate parts of the FFCRA that apply when an employee has to miss work to care for a child whose school or daycare has closed. First, there’s the Emergency Paid Sick Leave Act which provides an initial two weeks of paid leave at 2/3 the employee’s regular rate of pay. Then, after the first ten workdays have elapsed, the Emergency and Family Medical Leave Expansion Act kicks in and allows eligible employees to receive 2/3 of their regular rate of pay for ten additional weeks, which is job-protected leave. Therefore, eligible employees may take both paid sick leave and expanded family and medical leave to care for their child whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 related reasons.

We have employees that have already taken FMLA for other reasons or they have exhausted their FMLA for the 12-month period. Do these employees get an additional 12 weeks if they need to care for a child due to school closings under FFCRA?

No, the EFMLEA expands protections, but does not offer additional leave beyond the typical 12 weeks. Therefore, if an employee has exhausted their FMLA in the plan year, they would not be eligible for additional leave under EFMLEA.

You mentioned that small businesses with fewer than 50 employees may qualify for exemption. How do we qualify?

For now, there is nothing to officially file. But you should go ahead and document how providing this leave would jeopardize the viability of your business. Specifically, you may claim this exemption if an authorized officer of the business determines that providing leave would do any of the following:

1. It would result in your small business’s expenses and financial obligations exceeding revenues and cause you to cease operating at minimum capacity;
2. It would create a substantial risk to the financial health or operational capabilities of your small business due to the specialized skills, business knowledge or responsibilities of the employee; or
3. There aren’t enough workers who are able, willing and qualified — and available at the time and place needed — to perform the labor or services of the employee requesting leave, and these labor or services are necessary for your business to operate at minimum capacity.

In these cases, you should document all the facts and circumstances that justify the denial of leave, and retain those records for your own files – again, you do not need to submit anything to the U.S. Department of Labor at this time.

And remember, even if you are a small business choosing to claim the exemption, you’re still required to post the mandatory federal FFCRA notice and distribute it to new hires.