DOL Issues Guidance on Paid Leaves: Effective Date April 1

On March 24, 2020, the Department of Labor (DOL) issued two fact sheets (one for employees and one for employers) and a Q&A related to the leaves required by the Families First Coronavirus Response Act. These are the first pieces of guidance we received from the DOL on the leaves. We expect the DOL will update the Q&A and provide further guidance as the week progresses, including the poster, which it previously stated would be ready March 25th. One of the most notable statements in the Q&A is that the leaves must be provided starting on April 1, 2020, not April 2, 2020, as previously thought. In addition, the Q&A clearly states that the leave requirements are not retroactive. An employer cannot deny an employee the paid leave required as of April 1 because the employer provided paid leave before April 1 for one of the covered reasons. In other words, if you are providing paid leave now, you will be required to provide additional paid leave as of April 1 (if you are a covered employer).
 
The Q&A also includes guidance on calculating the number of employees for purposes of the 500-employee threshold. In short, employers should include all employees in the United States or any US territory, including those employees who are shared with a temporary agency or jointly employed with another employer. Independent contractors should not be included. If a company holds an ownership interest in another company, the employee count may be combined if the companies are either joint employers or integrated employers. These are very fact-specific determinations that should be completed with the assistance of counsel.
 
The DOL also addresses how a business with less than 50 employees can use the small business exemption. The small business exemption applies if providing the paid leave would jeopardize the viability of the business as an ongoing concern. The DOL states the employer should document why the business meets the exemption criteria, which will be contained in forthcoming regulations. The employer does not need to file anything with the DOL.
 
The DOL also restates, with some clarification, how to calculate the pay due to employees. Specifically, the DOL confirms that overtime hours must be included in the calculation. The DOL provides an example that suggests an employee might exhaust the Emergency Paid Sick Leave in less than 2 weeks if the employee works more than 40 hours in a week. In addition, tips commission and other compensation must be included in the regular rate for purposes of calculating the amount owed to the employee for the paid leaves.
 
Finally, when calculating the number of days an employee has “been employed,” the employer must include any days on which the employee worked as a temporary employee prior to being hired by the employer.
 
We will continue to monitor the guidance issued by the DOL. If you have questions, please contact Tami Earnhart or any member of our Labor, Employment & Immigration Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.