US: DOL issues key federal paid leave rule, extends leave to certain employees under stay-at-home orders

In the past two weeks, the DOL has issued fact sheets, an expanding list of questions and answers, model posters and announced a temporary amnesty program (until April 17). The rule, which with DOL commentary is over 124 pages, expands on earlier DOL guidance and provides detailed definitions and rules and procedures for employers to follow. The rule is temporary and is likely to be changed before it becomes final. 

Stay-at-home orders

One question a number of employers have had is whether a government shelter-in-place, stay-at-home or similar order qualifies as a federal, state or local quarantine or isolation order triggering paid sick leave under the FFCRA. The DOL makes clear that a quarantine or isolation order includes a broad range of orders that advise some or all citizens to shelter in place, stay at home, quarantine or otherwise restrict mobility. However, an employee is eligible for FFCRA paid sick leave only if the employer would otherwise have work or telework available for the employee. For example, if a coffee shop closes temporarily or indefinitely due to a COVID-19 related downturn, a cashier subject to a stay-at-home order is not entitled to FFCRA paid sick because the employer does not have work or telework for the employee, not because of the stay-at-home order. This is the case even though the stay-at-home order may have caused the business to close.

However, employees subject to stay-at-home orders who would otherwise have work or telework may be eligible for paid sick leave if the order qualifies as a federal, state or local quarantine or isolation order. Whether the order qualifies as a federal, state or local quarantine or isolation order turns on whether, under the order, the federal, state or local government 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....” This phrasing potentially opens the door for employees to assert that statements by local officials urging senior citizens and others to remain indoors constitute an isolation order under the FFCRA, even where the official’s pronouncement was phrased as advice or guidance, rather than an explicit order. We hope that this question will be clarified in future guidance.

Teleworking and flexible hours

The rule provides guidance on what constitutes “telework” and makes clear that telework is work that the employer permits the employee to perform offsite. Employers are not required (but are encouraged) to offer telework arrangements. Where telework is permitted, the DOL encourages employers and employees to be flexible with teleworking hours, including working outside of normal business hours. To encourage teleworking arrangements, the DOL has clarified that the Fair Labor Standard Act’s continuous workday rule (which otherwise provides credit from when the workday starts to when the workday ends for some employees) does not apply to employees who are teleworking due to COVID-19 related reasons. For example, an employee teleworking in intermittent blocks of time (7-9 am, 12:30-3 pm, and 7-9 pm) over a 14-hour period, with interludes for child care or other needs, may be compensated for the 7.5 hours of actual work.

Small business exemption

Note that, if a son or daughter is age 15 to 17, the employer may ask the employee to provide a statement supporting why care of such individual is needed (for example, if the son or daughter has special needs).

The rule states that employers should document any oral requests for leave, as well as decisions on whether leave requests are granted or denied. 

Records supporting payroll tax credits

• Documentation to show how the employer determined the amount of paid sick leave that are eligible for the payroll tax credit, including records of work, telework, and leave.
• Documentation to show how the employer determined the amount of qualified health plan expenses allocable to the wages.
• Copies of any completed IRS Forms 7200 that the employer submitted to the IRS.
• Copies of completed IRS Forms 941 that the employer submitted to the IRS, or where third-party payers are used, records of information provided to third party payers.
• Other documents to support the request for tax credits.

Records showing that the employer has fewer than 500 employees and is therefore eligible for the FFCRA payroll tax credits. For this purpose, count all US full- and part-time employees, temporary employees and day laborers but not any non-US employees or independent contractors on the date that the leave begins. 

Employers should retain records for at least four year, regardless of whether the request was granted or denied.

Other topics covered

The rule also provides detailed guidance on:

• How key terms are defined (including broad definitions of healthcare providers, emergency responders and family members).
• Paid leave entitlements.
• Amount of paid leave.
• Calculating regulator rate of pay.
• Employee eligibility for leave.
• Employer coverage.
• Intermittent leave.
• Intersection between FFCRA paid sick leave vs FFCRA emergency FMLA leave.
• Intersection between FFCRA expanded FMLA leave and regular FMLA leave.
• Other employer and employee notice obligations.
• Healthcare coverage obligations.
• Multiemployer plan contributions under the FFCRA.
• Return to work rights.
• Employer recordkeeping requirements.
• Prohibited acts and enforcement.
• Whistleblowing and DOL investigatory authority.
• Effect on other law, practices, and collective bargaining agreements.