New FAQs from the DOL shed more light on paid leave
Congress wrote the Families First Coronarvirus Response Law and the Coronavirus Aid, Relief, and Economic Security Act in a hurry. Now the Department of Labor and the IRS must implement it in a hurry.
First order of business: The DOL and the IRS have set the effective date of the Families First Act as April 1, 2020, even though 15 days from the date of enactment is April 2. Suspected reason: April 1 is the start of the second calendar quarter.
Second order of business: The IRS is letting the DOL take the lead in interpreting the Families First law. And, according to the DOL’s FAQs, the circumstances under which employees qualify for emergency paid sick leave or paid FMLA leave are more limited than meets the eye.
Leave doesn’t apply if you:
- Close (before or after April 1) because business has dried up
- Close the business after April 1, but tell employees you’ll reopen sometime in the future
- Remain open but reduce employees’ hours
- Furlough employees after April 1.
It’s also unavailable after you close the business for employees who were taking paid leave prior to the closing. In all these circumstances, employees may qualify for unemployment benefits.
It should be noted, however, that employees won’t qualify for unemployment benefits if their employers take out federally-guaranteed loans to cover their payroll or elect to take the employee retention credit. Click here for information on loans and the retention credit.
The Families First Act sets the parameters for who can take leave under what circumstances. Click here for more information.
The DOL has whipped up a poster for covered employers. If your business is closed, you can email the poster to employees or email them the link to the DOL’s website.
The DOL has begun rolling out frequently asked questions documents. The first set of FAQs, released on March 24, makes these key points:
- To determine whether you have fewer than 500 employees, count employees on leave, part-time employees, temps, employees who are employed by joint employers and employees in other divisions or locations. If two entities are considered one integrated employer under the FMLA, then employees of all entities making up the integrated employer must be counted.
- Part-time employees are entitled to leave for their average number of work hours in a two-week period, including overtime they were normally scheduled to work. If employees’ normal hours are unknown, or if part-time employees’ schedules vary, you may use a six-month average to calculate their average daily hours.
- Employees’ regular rate of pay used to calculate their paid leave is the average of their regular rates over a period of up to six months prior to the date on which they take leave. If employees haven’t worked six months, paid leave is the average of their regular rates of pay for each week they’ve worked for their current employers.
The second set of FAQs, which was released on March 26, makes these key points:
- You may require employees to present proof of their need to take paid sick or family leave. Examples: A notice of closure or unavailability from schools or day care centers that’s posted on a government, school or day care website; published in a newspaper; or emailed to you from an employee or official of the school or day care center.
- Employees who begin telecommuting, but then find they can no longer telecommute, are eligible for paid FMLA benefits. Catch: Employees remain ineligible for benefits if they can telecommute and work their normal hours, but not during their normal working times.
- Employees may take their paid FMLA leave on an intermittent basis, if they are unable to telecommute during what would be their normal schedule of hours, and you agree.
The DOL seems to be releasing FAQs on almost a daily basis. It’s advisable that you check the DOL’s website often for updated information.