The Department of Labor issued new guidance on March 24, 2020 related to the Families First Coronavirus Response Act. Here are the highlights:
April 1 effective date. Given the FFCRA’s statement that it would go into effect “not later than 15 days after enactment” most the world calculated that date as April 2. But the DOL took advantage of the “not later than” language and made April 1, 2020 the effective date.
No guidance on exemption for small employers. The FFCRA holds out a promise of relief for employers with fewer than 50 employees if the leave requirements “would jeopardize the viability of the business as a going concern.” But nothing in the new guidance expands upon that promised relief. Employers are counseled to “document” why a small business would be jeopardized as a going concern if it provides the required benefits, but they are cautioned not to “send any materials to the DOL” when seeking an exemption. As a result, small employers should make whatever decisions will help them survive and document the reasons for those decisions.
Tax credit plan applies to wage and health insurance payments. Here’s what the DOL said with regard to the tax credits employers are meant to receive: “Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps. Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage. For more information, please see the Department of the Treasury’s website.”
You have 30 days to get it right. The DOL announced it will not take enforcement action for the first 30 days after the FFCRA takes effect, so long as violations are remedied, and the employee is made whole as soon as practicable.
Overtime counts. FFCRA benefits are based upon an employee’s “normal schedule” and “regular rate” which the DOL says should include all pay for “hours the employee would have been normally scheduled to work even if it is more than 40 in a week.” If the employee’s pay fluctuates, you should take an average of the employee’s pay over the past six months.
The “regular rate” is uncertain. The FFCRA states that an employee’s regular rate is determined pursuant to the FLSA’s definition. Under the FLSA, the regular rate is the “total pay for employment (except for the statutory exclusions) in any workweek.” But in the FFCRA Q&A, the DOL says the “regular rate” is the “average of your regular rate over a period of up to six months prior to the date on which you take leave.” Under the FFCRA, this six-month average approach is to be used only in the case of a part-time employee whose schedule varies from week to week. But the DOL’s Q&A applies it to all employees. It is, therefore, unclear how far you need to “look back” to calculate an employee’s regular rate. It is also unclear what will happen when economic realities require employers to adjust an employee’s normal schedule and regular rate. For that reason, if economic conditions mandate reductions in pay rates and work schedules, we are recommending that employers clearly establish those new rates and schedules in advance of April 1, 2020 by communicating the change to employees.
Part-time work equals part-time benefits. The DOL guidance makes it clear that part-time employees are NOT entitled to 80 hours of paid sick leave, but only “the average number of hours that the employee works over a typical two-week period.”
There is now a poster! You can get it here: https://www.dol.gov/agencies/whd/pandemic
There is also a link to all sorts of questions about how you “post” this poster here: https://www.dol.gov/agencies/whd/pandemic/ffcra-poster-questions