Posted by: Edward Phillips & Brandon Morrow on Apr 23, 2020

Journal Issue Date: May 2020

Journal Name: Vol. 56. No 5

Social distancing. Flattening the curve. Federally mandated paid leave. A few months ago, these terms didn’t mean much to most of us. The COVID-19 pandemic changed all that. We address that last one – paid leave – below.

The Families First Coronavirus Response Act (FFCRA) represents the second phase of  Congress’s response to the COVID-19 crisis. The FFCRA provides eligible employees with paid sick leave through the use of two new acts: (1) the Emergency Paid Sick Leave Act (EPSLA) and (2) the Emergency Family and Medical Leave Expansion Act (EFMLEA). These provisions took effect on April 1, 2020 and expire on Dec. 31, 2020. Additionally, the new law includes refundable payroll tax credits for employers who are required to provide paid leave under the EPSLA or EFMLEA.

The Emergency Paid Sick Leave Act

Are all employers subject to the EPSLA? No. Only government employers and employers with fewer than 500 employees. Businesses with fewer than 50 employees can request an exemption if they meet certain parameters, which we’ll discuss below.

Are all employees eligible? Yes. All employees are immediately eligible regardless of days of service.

How does an employee qualify under the EPSLA? The employee must be unable to work (or telework) because of one of six COVID-19 related scenarios. These scenarios are important, but the threshold question is always whether the employee is able to work (or telework). 

What documentation is required? Documentation is important not only to properly administer paid leave benefits, but also to ensure that businesses receive the appropriate payroll tax credits.

For each leave request, an employee is required to provide the following documentation: (1) name; (2) date(s) for which leave is requested; (3) qualifying reason for leave; and (4) oral or written statement that the employee is unable to work because of the qualified reason for leave.1 Employees will need to provide scenario-specific documentation, which is outlined below. Employers are not required to provide leave if materials sufficient to support the applicable tax credit have not been provided.2 Employers should also retain documentation that indicates how the employer calculated the amount of paid sick due to each qualifying employee.3

What scenarios qualify an employee for paid leave under the EPSLA?

1. The employee is subject to a Federal, State or local quarantine, or isolation order related to COVID-19.

Quarantine or isolation orders include a broad range of governmental orders, including orders that advise some or all citizens to shelter in place, stay at home, quarantine, or otherwise restrict their mobility.4 However, the regulations clearly state that employees are not entitled to receive paid sick leave when the employer does not have work for the employee as a result of a government order or other circumstances.5 How do we reconcile these two directives? 

It depends on whether the employer has work for the employee to perform. If a place of businesses is required to close its doors due to stay-at-home order, then paid sick leave is not available because the business does not have work for employees to perform.

Shelter-in-place and stay-at-home orders, however, may still form the basis of a request for paid sick leave under certain circumstances. This would be true in some situations where an employee lives and works in two different jurisdictions. Assume, for example, that an employee resides in Knox County but works in Blount County. Also assume that Knox County issues a strict stay-at-home order, but Blount County does not. The Blount County employer is still operational and has work for the employee to perform. Assuming the employee was unable to telework, then the employee would likely be entitled to paid sick leave because he or she is unable to work due to a local quarantine or isolation order.

In order to qualify for leave under Scenario 1, the employee must provide the employer with the name of the government entity that issued the quarantine or isolation order to which the employee is subject.6

2.The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.

Under Scenario 2, the advice to self-quarantine must be based on a health care provider’s belief that the employee (a) has COVID-19, (b) may have COVID-19, or (c) is particularly vulnerable to COVID-19.7 If the employee is allowed to telework and there are no symptoms that prevent the employee from being able to telework, then he or she would not be eligible for paid sick leave.

In order to qualify for leave under Scenario 2, the employee should provide the employer with the name of the health care provider who advised him or her to self-quarantine for COVID-19 related reasons.8

3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.

This scenario contemplates two occurrences: (a) COVID-19 symptoms and (b) the employee is seeking a diagnosis. COVID-19 symptoms include fever, dry cough, shortness of breath, or other COVID-19 symptoms identified by the U.S. Centers for Disease Control and Prevention (CDC).9

Paid sick leave taken for this reason is limited to the time the employee is unable to work because he or she is taking affirmative steps to obtain a medical diagnosis. This would include time spent making, waiting for or attending an appointment for a test for COVID-19.10 But, the employee may not take paid sick leave to self-quarantine without seeking a medical diagnosis.

What happens, for example, when an employee has taken two days of paid sick leave and  obtains a negative COVID-19 diagnosis on the second day? Would the employee be entitled to paid sick leave until she is symptom-free? Probably not. Once the employee receives the diagnosis, then the opportunity to take leave under scenario 3 is foreclosed because the employee is no longer seeking a diagnosis. Employers would be wise to keep symptomatic employees out of work, but symptoms alone are insufficient to trigger paid leave under the EPSLA. If, however, the same employee tested negative, but was nevertheless advised to self-quarantine because she was particularly vulnerable to COVID-19, then he or she would qualify under Scenario 2. 

The Department of Labor (DOL) regulations omit any guidance on documentation for leave under Scenario 3. But without documentation, employers jeopardize receiving the payroll tax credit. So, we recommend that employees list the affirmative steps they have taken to seek a medical diagnosis, such as scheduling an appointment or getting tested. Employers are entitled to request employees to provide such additional material as needed to support a request for tax credits.11

4. The employee is caring for an individual who is subject to quarantine or isolation order, or who has been advised to self-quarantine due to COVID-19.

Scenario 4 presents a concept similar to FMLA caregiver leave. But it is not limited to family members. Just how broad is this scenario? Employees cannot befriend a quarantined stranger just to qualify for paid sick leave. There has to be a pre-
existing personal relationship. The individual being cared for must be an immediate family member, roommate, or a similar person with whom the employee has a relationship that creates an expectation that the employee would care for the person if he or she self-quarantined or was quarantined.12

In order to qualify for leave under Scenario 4, employees should provide employers with either: (a) the name of the government entity that issued the Quarantine or Isolation Order to which the individual being care for is subject; or (b) the name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19.13

5. The employee is caring for a son or daughter whose school or place of care is closed, or the childcare provider is unavailable, due to COVID-19 precautions.

An employee may take paid sick leave to care for his or her child only when the employee needs to, and actually is, caring for the child. Generally, an employee does not need to take such leave if another suitable individual — such as a co-parent, co-guardian or the usual childcare provider — is available to provide the care the employee’s child needs.14

The term “childcare provider” is broader than a daycare or nanny; it also encompasses an uncompensated family member or friend who regularly cares for the employee’s child.15

Scenario 5 would also trigger the EFMLEA, assuming the employee is eligible (see the EFMLEA section). In such a scenario, the employee could use paid sick leave under the EPSLA for the first two weeks of leave and then the paid leave component of the EFMLEA for the next 10 weeks, for a total of 12 weeks of paid leave. 

In order to qualify for leave under Scenario 5, the employee must provide: (a) the child’s name; (b) the name of the school or childcare provider that has closed or become unavailable; and (c) a representation that no other suitable person will be caring for the child.

6. The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

This scenario leaves open the possibility for the HHS Secretary to create an additional reason for paid leave based on “substantially similar conditions.” The regulations advise that “[t]he substantially similar condition may be defined at any point during the Effective Period, April 1, 2020, to Dec. 31, 2020.”16 Thus, this scenario has no current application.

Under the EPSLA, to how much paid leave is a qualifying employee entitled? Full-time employees are entitled to 80 hours of paid sick leave. Part-time employees are entitled to leave equaling the number of hours the employee works, on average, over a two-week period. An employee who uses 80 hours of paid sick leave and then changes jobs, however, is not entitled to receive an additional 80 hours of paid sick leave with the new employer.17

How much are employees paid? If the employee takes leave under scenarios 1-3, then the employee is to receive his or her regular rate of pay. This is limited to $511 per day and $5,110 in the aggregate.18

If the employee takes leave under scenarios 4-6, then the employee is to receive two-thirds of his or her regular rate of pay. This is limited to $200 per day and $2,000 in the aggregate.19

Can employers require employees to use PTO first? No. Employees are entitled to paid sick time under the new law in addition to any PTO already accrued.20

What are the penalties for violating the EPSLA? An employer who fails to provide eligible employees with paid leave under the EPSLA is subject to a minimum wage violation under the Fair Labor Standards Act.21 That, in turn, exposes the employer to back pay and liquidated damages, among other potential penalties. 

The Emergency Family and Medical Leave Expansion Act

An employee who requests leave to care for his or her child under scenario 5 above may be eligible to take leave under both the EPSLA and the EFMLEA. Under the EFMLEA, the first two weeks of leave are unpaid. However, in those first two weeks, the employee would be eligible to use paid leave under the EPSLA unless they have been exhausted for other reasons. The employee has the ability to substitute (concurrently exhaust) any form of available paid leave he or she may have during the first 10 days.

Are all employers subject to the EFMLEA? No. The EFMLEA applies to the same employers as the EPSLA does. Only government employers and employers with fewer than 500 employees are covered.

Are all employees eligible? No. An employee is only eligible to take leave under the EFMLEA if he or she has been “employed” for at least 30 calendar days. 

Is EFMLEA leave paid? The first 10 days of leave are unpaid. However, as noted, employees may elect to substitute EPSLA leave or accrued vacation leave, personal leave, or sick leave during this ten-day period. After the initial 10-day period, the employer is required to provide up to 10 weeks of paid leave, paid at two-thirds of the employee’s regular rate of pay. The law limits the dollar amount of paid leave to $200 per day and $10,000 in the aggregate.

How does the EFMLEA coincide with regular FMLA? Employees who qualify for leave under the EFMLEA are entitled to a maximum of 12 weeks of FMLA leave. If an employee has previously exhausted six weeks of FMLA in a 12-month period, and then qualifies for EFMLEA, then he or she would be entitled to use only the remaining six weeks under the paid leave component. It is important for employers to count the 10-day period under the EPSLA against the employee’s twelve-week FMLA entitlement.

Exemptions

Employers with fewer than 50 employees may be exempt, but only in limited circumstances. The exemption only applies to scenarios under the EPSLA and EFMLEA where the employee is requesting paid leave to care for a child.22

There are no blanket exemptions. Exemptions are based on individual employee requests for leave. What factors would qualify a business for the exemption?

  1. The leave requested would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of the employee requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of the employee’s specialized skills, knowledge of the business, or responsibilities; or 
  3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the work performed by the employee requesting leave, and this work is needed for the small business to operate at a minimal capacity.23

How does a small business elect an exemption? Surprisingly, employers don’t apply to the DOL. Instead, an “authorized officer of the business” has to document that a determination has been made pursuant to one of the three exemption categories above and retain that record in the business’ files.24 Even if a business chooses to document an exemption, it  is still required to post the notice of employee rights.25

Final Considerations

1. Other Accrued Leave. Under the EPSLA, employers cannot require employees to first use any accrued leave before being entitled to paid sick leave.26 Under the EFMLEA, employees may elect to use, or employers may require them to use, accrued leave concurrently with leave to which they are entitled under the new law.

2. Reinstatement. Employees who take leave under the EPSLA or EFMLEA are entitled to be restored to the same or equivalent position upon their return.27 There are limited exceptions under the EFMLEA. If the restoration of a “key employee” would cause “grievous economic injury” to the employer or the employer has fewer than 25 employees and certain other conditions are met.28

3. Intermittent Leave. As long as both the employee and employer agree, then generally leave may be taken intermittently under the EFLMEA and both the EPSLA.29 There are some limitations on intermittent leave to prevent individuals from spreading the virus to others. 

4. Notice of Leave. An employer may not require an employee to provide notice in advance of taking leave, and notice may only be required after the first workday for which the employee takes paid leave under the FFCRA.30 

 

EDWARD G. PHILLIPS is a lawyer with Kramer Rayson LLP in Knoxville, where his primary areas of practice are labor and employment law. He graduated with honors from East Tennessee State University and received his law degree from the University of Tennessee College of Law in 1978 with honors, and as a member of The Order of the Coif. He is a former chair of the Tennessee Bar Association’s Labor and Employment Law Section.

BRANDON L. MORROW is an attorney with Kramer Rayson LLP in Knoxville. He represents businesses, educational institutions and religious institutions in employment and civil rights related matters. He holds a bachelor’s degree from the University of Tennessee and a juris doctorate from the University of Tennessee College of Law.


NOTES

1. 29 C.F.R. §826.100(a).

2. 29 C.F.R. §826.100(f).

3. https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-
provided-by-small-andmidsize-businesses-faqs

4. 29 C.F.R. §826.10.

5. 29 C.F.R. §826.20(a)(2).

6. 29 C.F.R. §826.100(b).

7. 29 C.F.R. §826.20(a)(3).

8. 29 C.F.R. §826.100(c).

9. 29 C.F.R. §826.20(a)(4).

10. Id.

11. 29 C.F.R. §826.100(f).

12. 29 C.F.R. §826.20(a)(5).

13. 29 C.F.R. §826.100 (d).

14. 29 C.F.R. §826.20(a)(6).

15. 29 C.F.R. §826.10.

16. 29 C.F.R. §826.20(a)(1)(iv).

17. 29 C.F.R. §826.160(f).

18. 29 C.F.R. §826.22(c)(1).

19. 29 C.F.R. §826.22(c)(2).

20 29 C.F.R. §826.160(a)(1).

21. 29 C.F.R. §826.150(b).

22. 29 C.F.R. §826.40(b)(1).

23. Id.

24. 29 C.F.R. §826.40(b)(2).

25. 29 C.F.R. §826.40(b)(3).

26. 29 C.F.R. §826.160(b).

27. 29 C.F.R. §826.130(a).

28. 29 C.F.R. §826.130(b)(2) and (3).

29. 29 C.F.R. §826.50.

30. 29 C.F.R. §826.90(b).