Updated Guidance on the Families First Coronavirus Response Act

Updated Guidance on the Families First Coronavirus Response Act

The U.S. Department of Labor (“DOL”) continues to provide guidance regarding the Families First Coronavirus Response Act (“FFCRA”). The DOL has updated its FFCRA Questions and Answers in regard to calculating paid leave.

Below are key takeaways for employers when calculating paid leave under the FFCRA. As you know, the DOL has updated the Questions and Answers multiple times, and we will endeavor to continue to provide updates as we learn more. Generally, the questions address how to calculate paid leave for employees with irregular hours and the average regular rate of an employee. It also further clarifies when an employee is entitled to benefits in relation to an isolation or quarantine order, including stay-at-home order.

Employee’s Regular Rate for the Purpose of the FFCRA

As discussed in our previous blog, as an employer, you are required to pay your employee based on his or her average regular rate for each hour of paid sick leave or expanded family and medical leave taken. See https://www.renozahm.com/blog/2020/march/changes-amidst-covid-19/#~Q8w4j42. The average regular rate must be computed over all full workweeks during the six-month period ending on the first day that paid sick leave or expanded family and medical leave is taken.

If during the past six months, the employee is paid exclusively through a fixed hourly wage or a salary equivalent, the average regular rate would simply equal the hourly wage or the hourly-equivalent of their salary. But, if your employee were paid through a different compensation arrangement (such as piece rate) or received other types of payments (such as commissions or tips), his or her regular rate may fluctuate week to week. For more information on how to calculate the average regular rate that fluctuate, see https://www.dol.gov/agencies/whd/pandemic/ffcra-questions#8.

Lastly, as an employer, you should identify the six-month period to calculate each employee’s regular rate under the FFCRA based on the first day the employee takes paid sick leave or expanded family and medical leave. That six-month period will be used to calculate all paid sick leave and expanded family and medical leave the employee takes under the FFCRA. If your employee has been employed for less than six months, you may compute the average regular rate over the entire period during which the employee was employed.

Calculating Paid Sick Leave for Employees with Irregular Hours

Generally, under the FFCRA, you are required to provide an employee with paid sick leave equal to the number of hours that employee is scheduled to work, on average, over a two-week period, up to a maximum of 80 hours as discussed in our previous blog post. See https://www.renozahm.com/blog/2020/march/changes-amidst-covid-19/#~Q8w4j42. However, if an employee works an irregular schedule such that it is not possible to determine what hours he or she would normally work over a two-week period, the employer must estimate the number of hours. The estimate must be based on the average number of hours the employee was scheduled to work per calendar day (not workday) over the six-month period ending on the first day of paid sick leave. This average must include all scheduled hours, including both hours actually worked and hours for which the employee took leave.

Consider the DOL examples below involving two employees with irregular schedules who take leave on April 13, 2020. For both employees, the six-month period used for estimating average hours consists of 183 calendar days from October 14, 2019, to April 13, 2020.

  1. During that six-month period, the first employee worked 1,150 hours over 130 workdays, and took a total of 50 hours of personal and medical leave. The total number of hours the employee was scheduled to work, including all leave taken, was 1,200 hours. The number of hours per calendar day is computed by dividing 1,200 hours by the 183 calendar days, which results in 6.557 hours per calendar day. The two-week average is computed by multiplying the per calendar day average by 14, which results in 98 hours. Since this is greater than the statutory maximum of 80 hours, the first employee, who works full-time, is therefore entitled to 80 hours of paid sick leave.
  1. The second employee, in contrast, worked 550 hours over 100 workdays, and took a total of 100 hours of personal and medical leave. The total number of hours the employee was scheduled to work, including all leave taken, was 650 hours. The number of hours per calendar day is computed by dividing 650 hours by the 183 calendar days, which is 3.55 hours per calendar day. The two-week average is computed by multiplying the per calendar day average by 14, which results in 49.7 hours. The second employee, who works part-time, is therefore entitled to 49.7 hours of paid sick leave.

For each hour of paid sick leave taken, you are required to pay the employee an amount equal to at least that employee’s regular rate.

Calculating Expanded Family and Medical Leave Hours for Employees with Irregular Hours

Generally, under the FFCRA, employers are required to pay employees for each day of expanded family and medical leave taken based on the number of hours the employee was normally scheduled to work that day. However, if the employee works an irregular schedule such that it is not possible to determine the number of hours he or she would normally work on that day, and the employee has been employed for at least six months, employers must determine the employee’s average workday hours, including any leave hours.

The average must be based on the number of hours the employee was scheduled to work per workday (not calendar day) divided by the number of workdays over the six-month period ending on the first day of your employee’s paid expanded family and medical leave. This average must include all scheduled hours, including both hours actually worked and hours for which the employee took leave.

Consider the DOL examples below involving two employees with irregular schedules who take leave on April 13, 2020. For both employees, the six-month period would consist of 183 calendar days from October 14, 2019, to April 13, 2020.

  1. The first employee worked 1,150 hours over 130 workdays, and took a total of 50 hours of personal and medical leave. The total number of hours the employee was scheduled to work (including all leave taken) was 1,200 hours. The number of hours per workday is computed by dividing 1,200 hours by the 130 workdays, which is 9.2 hours per workday. You must therefore pay the first employee for 9.2 hours per workday times 2/3 his or her regular rate for each day of expanded family and medical leave taken, subject to a $200 per day cap and $10,000 maximum.
  1. The second employee, in contrast, worked 550 hours over 100 workdays, and took a total of 100 hours of personal and medical leave. The total number of hours the employee was scheduled to work, including all leave taken, was 650 hours. The number of hours per workday is computed by dividing 650 hours by the 100 workdays, which is 6.5 hours per workday. You must therefore pay the second employee for 6.5 hours per workday times 2/3 his or her regular rate for each day of expanded family and medical leave taken, subject to a $200 per day cap and $10,000 maximum.

Stay-at-Home Orders

The DOL provided additional clarifications on the stay-at-home orders. The DOL is limiting what it means to be unable to work due to a quarantine or isolation order (including stay-at-home orders. Essentially, an employee is only entitled to benefits if there continues to be work available, but the order prevents the employee from working. Therefore, an employee may not take paid leave due to a stay-at-home order if the employer does not have work for the employee to perform, as a result of the order.

For example, if you are prohibited from leaving a containment zone and your employer remains open outside the containment zone and has work you cannot perform because you cannot leave the containment zone, you may take paid leave under the FFCRA. Similarly, if you are ordered to stay at home by a government official for fourteen days because you were on a cruise ship where other passengers tested positive for COVID-19, and your employer has work for you to do, you are also entitled to paid sick leave if you cannot work (or telework) because of the order. Lastly, if your employer closed one or more locations because of a quarantine or isolation order and, as a result of that closure, there was no work for you to perform, you are not entitled to leave under the FFCRA and should seek unemployment compensation through your State Unemployment Insurance Office.

The attorneys at Reno & Zahm LLP continue to monitor COVID-19 related statutes, rules, regulations and guidance, and we will endeavor to provide regular updates when warranted. Please contact us with any questions. We are here to help you make it through these challenging times.