The US Department of Labor's fifth set of FAQs under the emergency paid leave provisions of the Families First Coronavirus Response Act (FFCRA), provides examples of how to compute time and pay for employees with irregular hours, how to calculate the "regular rate of pay", clarifies government mandated "stay at home" orders, and expands on when an employee may choose, and an employer may mandate, the use of company paid leave.
As a reminder, effective April 1, 2020, FFCRA provides for emergency paid sick leave (EPSL), and emergency paid FMLA (EPFMLA) for specific reasons related to COVID-19, applicable to certain public employers and private sector employers with fewer than 500 employees. Thankfully, with this set of questions and answers, the DOL now organizes its somewhat mish-mash of prior FAQs into subject categories (i.e., definitions, eligibility, coverage, applications, and enforcement) with hyperlinks directly to the applicable FAQs
. A summary of the added FAQs and what is new are the subjects of this alert.
Computing time and pay for employees with irregular hours
: Employers must typically provide EPSL equal to the number of hours the employee is scheduled to work, on average, over a two-week period, up to a maximum of 80 hours. For employees working irregular schedules, employers must base sick leave entitlement on an estimate of the number of hours employees are scheduled to work every calendar day (not workday) over the six-month period preceding the leave ending on the first day of paid sick leave. (If employed less than six months, employers compute the average over the entire period during which an employee was employed). The average hours calculation must include all scheduled hours, including time actually worked and hours on leave. Luckily, the DOL provides us with two examples of how to calculate this EPSL. For each hour of paid sick leave entitlement taken, employers must pay the employee an amount equal to at least that employee's "regular rate". (FAQ #80, also referencing #82-85 on calculating the regular rate).
For EPFMLA, employers must pay for each day (after the first unpaid 10-days) based on the number of hours an employee was normally scheduled to work that day. For employees with irregular schedules where it is not possible to determine the number of hours they would normally work on that day, employers must determine the employee's average work day hours, including leave time, during the prior six-month period. Different from EPSL, this 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 work days over six-month period, ending on the first day of the employees EPFMLA. The average must include all scheduled hours, including both hours actually worked and leave hours. Once more and thankfully, the DOL provides us with two examples for computing the number of hours employers must pay employees with irregular schedules. Remember for expanded FMLA, starting with the eleventh day of leave (and as first explained in FAQ #7), employers must pay also pay employees 2/3 the regular rate for each day of leave, subject to a $200 day per day, and $10,000 maximum. (FAQ #81).
Computing the average regular rate and rounding
: Employers are required to pay employees under the FFCRA, based on their average "regular rate" for each hour of paid leave taken. The average regular rate is computed over full workweeks during the six-month period ending on the first day that leave is taken. The DOL provides examples of how to compute the average regular rate for FFCRA, with statutory FLSA exclusions (such as for overtime premiums and for paid leave) for employees who are paid by the hour, or are paid through different compensation arrangements such as piece rates, commissions, tips, on a fluctuating workweek basis, or on a fixed salary. (FAQ #82-83).
The DOL also provides guidance on rounding when computing the number of hours of EPSL an employer must provide an employee with an irregular schedule, or the number of hours they must pay an employee for each day of EPFMLA. (FAQ #84).
Employee choice and employer mandate to use company paid leave
: The DOL reminds us again that EPSL is in addition to any form of paid or unpaid leave provided by an employer (i.e., paid vacation, personal, medical, PTO), required by law (i.e., Oregon Sick Time), or through a collective bargaining agreement. We already know from FAQ #32, that employers may not require an employee to use state paid leave (like Oregon Sick Time), or to exhaust company paid leave before using EPSL, or to run it concurrently with EPSL. If the employee and employer agree, however, an employee may use pre-existing leave to supplement or top-off the amount they receive from EPSL up to the employee's normal earnings. Note however that employers are not entitled to a tax credit for any paid sick leave that is not required to be paid under FFCRA, or exceeds the limit under EPSL .
We now have further clarification of the interplay of expanded FMLA and employer paid leave. For EPFMLA (leave to care for a child due to school/childcare closed or unavailable), employees may elect to take EPSL or paid company leave for the first two weeks of unpaid emergency FMLA, but not both. If the employee has already used some or all of EPSL, the employee may choose to use any remaining EPSL, with the remainder of this two week period of EPFMLA to be unpaid, or use company paid leave. Unlike regular FMLA, during the first two weeks of EPFMLA an employer may not require the employee to use company paid leave. After the first 10-days and during the paid leave portion of EPFMLA, an employer may require employees to access company paid leave. In this situation, however, the employer would pay the employee's full pay out of the accrued leave bank, until it is exhausted, but the employer may only obtain tax credits for wages paid at 2/3 of the employees regular rate of pay, up to the daily and aggregate limits in the EPFMLA ($200 per day or $10,000 in total). If an employee exhausts available paid leave under the employer's policies, but has more paid EPFMLA leave available, the employee would receive any remaining paid EPFMLA in the amounts and subject to the daily and aggregate limits in EPFMLA. In addition, and only if both employer and employee agree, company paid leave may "top-off" and supplement 2/3 pay under EPFMLA so that the employee may receive the full amount of the employees normal compensation. (FAQ #86).Note that as a result of this FAQ clarifying the DOL regulations 29 CFR 826.23(c), 826.24(d), 826.60(b), and 826.160(c), employers may need to modify their policies and FFCRA forms.
Stay-at-home and shelter-in-place orders further explained
: The DOL further clarified that for purposes of FFCRA, a mandated quarantine or isolation order includes shelter-in-place or stay-at-home orders issued by a government authority (such as Governor Brown's Executive Order 20-12). However, for such an order to qualify an employee for leave, being subject to the order must be the reason the employee is unable to work or telework a job that is otherwise available. For example (says the DOL), if an employee is ordered to stay home by a government official for 14-days because they were on a cruise ship where other passengers tested positive for COVID-19, and the employer has work for them to do, they are entitled to EPSL if they cannot work or telework because of that order. If the employee could work remotely under the circumstances, they are not entitled to EPSL. In addition, however, if the employer closes one or more locations because of a stay-at-home order by a Governor, or lays off employees, and as a result of the closure or lay off there is no work for the employee to perform, the employee is not entitled to leave under FFCRA and should take unemployment. (FAQ #87).
We will continue to provide updates on DOL guidance related to COVID-19 as developments warrant.
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