The U.S. Department of Labor (DOL) has posted a “Families First Coronavirus Response Act: Questions and Answers” summary on its website, which can be accessed here. This is an attempt by the DOL to answer some preliminary questions related to the new Families First Coronavirus Response Act (FFCRA), which will bring expanded emergency family and medical leave, and also paid sick leave, for many employees across the country.
Law now effective April 1, 2020
Most notably, DOL announced that FFCRA’s paid leave provisions will go into effect on April 1, 2020, and apply to leave taken between April 1, 2020, and Dec. 31, 2020. This was somewhat surprising since the FFCRA states the leave provisions “shall take effect not later than 15 days after the date of enactment,” which occurred on March 18, 2020, and would lead to an April 2, 2020, effective date. DOL did not specify why it chose to implement the law a day early, but many assume it is because the new quarter begins on April 1.
What constitutes fewer than 500 employees?
Both the Family and Medical Leave Act (FMLA) Expansion and the Paid Sick Leave provisions of the FFCRA apply to private sector employers with fewer than 500 employees. One of the most common questions we have received from employers regarding FFCRA involves the ambiguity as to how and when you count employees for these provisions, and if you consider separate entities to be a single employer for these purposes. The DOL’s Questions and Answers guidance attempts to address these concerns, as follows:
You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any dtate of the United States, the District of Columbia, or any territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold.
Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold.
Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.
In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993. If two entities are an integrated employer under FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.
These analyses address important issues regarding whether separate entities are counted as one employer for purposes of the new leave laws. DOL states that if two entities are found to be “joint employers” under FLSA, all of their common employees must be counted in determining whether leave must be provided. DOL then goes on to state that if two entities are an “integrated employer” under FMLA, all of the employees of the integrated employer will be counted in determining coverage for purposes of the FMLA Expansion provision.
Small business exemption
The FFCRA authorizes the Secretary of Labor to grant exemptions to small businesses with fewer than 50 employees when the “implementation of the provisions of [the FFCRA] would jeopardize the viability of the business.” To elect this small business exemption, DOL states that employers “should document why [their] business with fewer than 50 employees meets the criteria set forth by the department, which will be addressed in more detail in forthcoming regulations.” DOL further advises that employers “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.”
Is FFCRA retroactive?
This is another common question many employers have asked following the passage of FFCRA. The DOL addressed this by plainly stating “no;” the paid sick leave and FMLA expansion provisions go into effect beginning April 1, 2020. DOL also further elaborated by stating that if an employer chose to pay its employees for reasons set forth in the FFCRA prior to April 1, 2020, it cannot deny later requests for the same relief after April 1, 2020.
As part of FFCRA, each covered employer will be required to post a notice in conspicuous places on the premises of the employer where notices to employees are customarily posted. The notice issued by DOL can be found here. An employer can also satisfy the notice requirement by e-mailing or direct mailing the notice to employees or posting this notice on an employee information internal or external website.
Employers should note that DOL’s “Families First Coronavirus Response Act: Questions and Answers” post is just an initial and preliminary assistance document from the Department of Labor. Over time, and as we get closer to April 1, 2020, the DOL will most likely develop more formal guidance and regulations that will help answer questions employers may have regarding FFCRA. Employers with additional questions about any of the topics discussed in this article, including how “joint employer analysis” or “integrated employer analysis” may apply to their specific situation, or any other issues regarding the requirements and implementation of the FFCRA should contact experienced legal counsel who is knowledgeable in these areas.
R. Eddie Wayland is a partner with the law firm of King & Ballow. You may reach Mr. Wayland at (615) 726-5430 or at firstname.lastname@example.org. The foregoing materials, discussion and comments have been abridged from laws, court decisions, and administrative rulings and should not be construed as legal advice on specific situations or subjects.