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DOL Issues Temporary Regulations and Additional Guidance on the Families First Coronavirus Response Act and the Cares Act

By Joseph S. Brown, Esq.

On April 1, 2020, the U.S. Department of Labor (DOL) released temporary regulations interpreting the Families First Coronavirus Response Act (FFCRA) that requires private employers with 499 or fewer employees, and certain public employers, to provide covered employees emergency paid sick leave (EPSL) and emergency unpaid and paid family leave (FMLA+).  The new regulations are available here.

The DOL covers a lot of ground in its 124-page rulemaking document.  After a lengthy preamble, the new regulations create Part 826 of Title 29 of the Code of Federal Regulations and will be referred to 29 C.F.R. §§ 826.10-826.160.  In addition, the DOL has issued four installments of Q&As – the most recent batch on April 3, 2020 – which provides insight on several pressing FFCRA questions.  The Q&As can be accessed here

Below we have highlighted some of the key regulations that may be of interest to small businesses.

Small (Fewer than 50 Employees) Business Exemption

The regulations provide that an employer, including a religious or nonprofit organization, with 49 or fewer employees, is exempt from providing FFCRA leave for child-care purposes when allowing such leave would jeopardize the viability of the business as a going concern.

To use this exemption, an authorized officer of the employer must determine that:

  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 or employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
     
  3. There are no sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting leave, and these labor or services are needed for the small business to operate at a minimal capacity.
     

To elect this small business exemption, the employer must document that an authorized officer made this determination. Employers are advised to address exemption decisions with specific reference to employees and specific leave requests rather than a blanket decision on day one, or a decision that it simply takes the position that it is “exempt.”  The Employer should not send such documentation to the DOL, but instead should retain the records in its files.

Importantly, small businesses are not exempt from providing leave for any of the other types of permissible requests under the FFCRA.  And even where a small employer chooses to exempt one or more employees, it still must comply with the notice requirements. Speaking of which, this task should have been completed by April 1st, however, this obligation may have been overlooked by businesses who have understandably been pre-occupied with other workplace issues.  The DOL website has the poster available for download in several languages as well as FAQs about the poster. Employers can satisfy the requirement by emailing or direct mailing the notice or posting on an internal or external employee information website.

Employee Notice and Documentation Requirements

For employees needing leave for school closures/childcare unavailability, and where such leave is foreseeable, employees must provide notice as soon as is practicable (consistent with “classic” FMLA standards). On the other hand, when an employee needs leave for any other reason under EPSL, the standards loosen, and employers can only require employee notice after the first workday (or part of a workday) that an employee takes EPSL. The DOL reminds employers that if an employee fails in some regard with respect to providing notice or supporting information or documentation, the employer should give the employee notice of the failure and an opportunity to correct the deficiency prior to denying the leave.

In its regulations, the DOL has explicitly said that an employee can request leave orally. If an employer relies upon an employee’s oral statements in granting or denying leave under FMLA+ or EPSL, “the employer is required to document and maintain such information in its records.”  Employers can require oral notice and documentation of the requested leave date(s), qualifying leave reasons, and an oral or written statement that the employee is unable to work because of the qualifying leave reason. Employers may not require the notice to include information that exceeds the information employers can seek in supporting documentation. Employers must generally maintain documentation supporting an employer’s decision to grant or deny FMLA+ or EPSL for four years.

An employer can deny an employee leave under the EPSL or FMLA+ if the employee does not submit materials sufficient to support the employer’s applicable tax credit (the Internal Revenue Service’s (IRS) guidance indicates that employers must receive a written request to substantiate a tax credit to recover paid leave). Please note that employers should exercise caution when denying leave for this reason.  

Notably, the DOL regulations do not prevent an employer from directing employees to then follow the organization’s usual and customary procedures from that point forward.  Employers should strongly consider preparing an emergency leave policy and forms addressing FMLA+ and EPSL leaves and ensure that it aligns with existing paid time off/leave policies as well as any mandated paid leaves under State or local laws. 

Job Restoration Requirements

With certain limitations that also exist under FMLA, employees are entitled to be restored to the same or an equivalent position upon return from EPSL or FMLA+ leave. The FFCRA does not protect employees from employment actions, such as layoffs, that would have affected employees had leave not been taken.

The FMLA+ restoration provisions do not apply to employers who have fewer than 25 employees if all four of the following conditions are met:

  1. The employee took leave to care for his or her son or daughter whose school or place of care was closed or whose childcare provider was unavailable;
     
  2. The employee’s position no longer exists due to economic or operating conditions that:

Affect employment, and

Are caused by a public health emergency (i.e., due to COVID-19 related reasons) during the period of the employee’s leave.

  1. The employer made reasonable efforts to restore the employee to the same or an equivalent position; and
     
  2. If the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts for a period of time to contact the employee if an equivalent position becomes available. The period of time is one-year beginning either on the date the leave related to COVID-19 reasons concludes or the date 12 weeks after the employee’s leave began, whichever is earlier.
     

Effect of Other Laws, Employment Practices, and Collective Bargaining Agreements

An employee’s entitlement to, or actual use of, EPSL leave is in addition to—and shall not in any way diminish, reduce, or eliminate—any other right or benefit to which the employee is entitled under any of the following: (1) Another federal, state, or local law, except the FMLA as provided in § 826.70; (2) A collective bargaining agreement; or (3) An employer policy that existed prior to April 1, 2020.

Enforcement

The DOL will not bring enforcement actions against any public or private employer for violations of the Act occurring within 30 days of the enactment of the FFCRA, i.e. March 18 through April 17, 2020, provided that the employer has made reasonable, good faith efforts to comply with the Act.

Businesses with fewer than 50 employees are exempt from civil actions brought by employees for violations regarding emergency paid FMLA.


Hurwitz & Fine continues to monitor and analyze these updates and advise employers on matters related to the coronavirus outbreak.  Please contact any member of the firm’s Labor & Employment team for guidance on these evolving issues at 716-849-8900, by e-mail, or visiting our website at www.hurwitzfine.com

Joseph S. Brown – [email protected]

Ann E. Evanko – [email protected]

Katherine L. Wood – [email protected]

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