Emergency Paid Sick Leave: Summary of the Temporary Regulations Issued by the U.S. Department of Labor
Prepared by David B. Walston
April 20, 2020
Earlier this month, the U.S. Department of Labor issued temporary regulations governing the Emergency Paid Sick Leave Act. Why is this event more significant than the “Questions and Answers previously published by the Department? The Questions and Answers were informal guidance. The regulations are binding interpretations. We offer a rather long outline of these even longer regulations.
COUNTING EMPLOYEES
- 500 or fewer employees
- Have to include:
- Full-time employee – Regularly scheduled to work 40 hours or more per workweek
- Part-time employees – Regularly scheduled to work than 40 hours per workweek.
- Employees on leave. Employees on lay-off or furlough DO NOT count toward the 500 threshold until the employee is called back to active work.
- Temporary employees / leased employees from a staffing agency.
- Day laborers from a temporary placement agency.
- INDEPENDENT CONTRACTORS DO NOT COUNT TOWARD THE 500 THRESHOLD.
- See above regarding workers working through leasing and placement companies. Many employers consider these workers to be independent contractors. Such workers ARE NOT for purposes of the EPSLA.
- Employers should be aware that the “joint employer” and “integrated employer” tests of the Fair Labor Standards Act will be used to determine “employee” versus “independent contractor status. *** This has been a hot issue in the last few years and if you have any questions regarding a worker’s status, please seek advice from an employment law attorney.
- Employees working outside the USA do not count toward the 500 threshold.
QUALIFYING REASONS
- Subject to Quarantine or Isolation order:
- Shelter-in-place
- Stay-at-home
- Quarantine
- Restrict mobility to preclude performance of work
- EPSL ONLY if the Public Health Order prevents and employee from working OR teleworking due the Public Health Order.
- An employer IS NOT required to grant EPSL if the employee is not working because of a lack of work.
- Closed business, reduced production or business volume requiring furloughs, lay-offs or reduction in force, reduced hours of work.
QUESTION 1: If the employer had work available, would the employee be able to perform the work if the Public Health Order was not in place?
NOTE:
Alabama’s Stay-at-Home Order has many categories of businesses that are deemed “essential” thereby allowing employees to travel to and from work.
The Jefferson County Public Health Order identifies non-essential businesses and is not a stay-at-home order.
We are able to obtain and evaluate Public Health Orders from other cities, counties or states if you have operations outside of Jefferson County or Alabama.
QUESTION 2: Does the Public Health Order prevent the employee from teleworking/accessing work remotely?
- Does the employer want to allow an employee to telework?
- Does the employer have telework for the employee to perform?
- The employer must allow employee to work from the location of employee’s quarantine/isolation.
- There are no extenuating circumstances that prevent employee from performing telework such as severe COVID-19 symptoms interfering with ability to perform work.
- Employer does not have to provide equipment to the employee, i.e., desktops, laptops, tablets or communication devices – just access to the work to be performed.
- Employer has to provide physical or technological access to the work to be performed without employee violating the Public Health Order.
- EPSL available if employee is unable to telework for periods of time due to COVID-19.
2. Employee advised by Health Care Provider to self-quarantine.
- “Health Care Provider” – Licensed doctor of medicine or osteopathy qualified and capable of diagnosing serious health conditions.
- Must be based on Health Care Provider’s belief that employee has COVID-19, may have COVID-19, or is particularly vulnerable to COVID-19.
- Self-quarantine must prevent employee from working.
- A self-quarantined employee should be able to telework. EPSL ONLY if order prevents employee from working OR teleworking.
QUESTION: Would the employee be able to work (if the employer had work or telework for the employee) if the Health Care Provider had not recommended self-isolation?
- NO EPSL if employee is not working because of a lack of work:
- Closed business, reduced production, restricted hours, reduction in business volume.
- Telework:
- If employer has telework for the employee to perform.
- Employer allows employee to work from location of employee’s quarantine / isolation.
- No extenuating circumstances such as “serious COVID-19 symptoms,” that prevent employee from performing work.
- Employer does not have to provide equipment to the employee – just access to the work to be performed.
3. Employee seeking medical diagnosis due to symptoms of COVID-
- Recognized symptoms:
- Fever
- Dry cough
- Shortness of breath
- Other symptoms identified by CDC
- Limited to time employee is unable to work due to taking affirmative steps to obtain medical diagnosis:
- Time spent making, waiting for and attending a testing appointment, and is not allowed to work while waiting for the results.
- No EPSL if an employee is able to telework (see above) while waiting for results.
- EPSL is not available to an employee who self-quarantines WITHOUT seeking a medical diagnosis.
- Employee who:
- Has COVID-19 symptoms;
- Seeks medical diagnosis;
- Fails to be referred for testing; and
- Is advised by a Health Care Provider to self-quarantine,
may qualify for EPSL under second qualification event – medical advice to self-quarantine.
4. Care for an individual.
- Subject to a Quarantine or Isolation Order
- Been advised by health care provider to self-quarantine due to concerns related to COVID-19 because:
- The individual has COVID-19;
- The individual may have COVID-19 due to known exposure or symptom; OR
- The individual is particularly vulnerable to COVI-19.
QUESTION: Would the employee be able to work (if the employer had work or telework for the employee) if the employee was not caring for the individual?
- Employee must have a personal relationship to the individual:
- Immediate family member;
- Roommate;
- Relationship is such that it creates an “expectation” that the employee would care for the individual who is quarantined or self-quarantined.
5. “To care for the son or daughter if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable due to COVID-19 related reasons.
- Son or daughter:
- Son or daughter under 18 years of age , i.e., age 17 or younger;
- Son or daughter 18 years or older and incapable of self-care because of a mental or physical disability.
QUESTION: Would the employee be able to work (if the employer had work or telework for the employee) if the employee was not caring for their son or daughter?
- EPSL due only when employee is actually caring for son or daughter:
- An employee does not need EPSL if another suitable individual – such as a co-parent, co-guardian, or the usual child care provider is available to provide care.
- Employee must provide (required by IRS to claim the tax credit):
- Name and age of child;
- School or place of care closed;
- Representation from employee that no other person will be providing care for the child during the period of EPSL.
- SPECIAL REQUIREMENT FOR CHILD over 14 years of age, i.e., 15 years or older:
- Employee must explain the special circumstances related to the child’s care that prevent the employee from working or teleworking during daylight hours
- “[D]ue to COVID-19 related reasons”
- School or place of care is closed due to public health order.
- What about when school would have ended for the Summer?
QUESTION: Who cares for the son or daughter when school is out for the Summer?
6. Employee is experiencing any other “substantially similar condition” (due to COVID-19) specified by Secretary of Health and Human services.
- To date, HHS has not specified any other condition.
AMOUNT OF EPSL
- An individual is entitled to only 80 hours of EPSL (less if part-time).
- An employee who changes positions with an employer is not entitled to additional EPSL based on the new position.
- An employee who changes jobs does not “re-stock” EPSL with a subsequent employer.
EXAMPLE:
A full-time employee of Company X uses 60 hours of EPSL.
Employee is fired from Company X and hired by Company Y.
Employee has only 20 hours of EPSL available with Company Y.
***The implication of this regulation is clear: An employer can ask for information about the employee’s previous health history as it relates to COVID-19 without violating the Americans with Disabilities Act.
4. An employee has no right to be paid for unused EPSL upon leaving employment, or on or after the EPSLA expires on December 31, 2020.
5. An employer cannot reduce the amount of an employee’s paid time off accrued under the employer’s policies as they existed prior to April 1, 2020.
EXAMPLE: An employee has accrued 20 hours under the employer’s paid time off policy. The employer cannot take that accrued PTO away from the employee based on the employee’s use of EPSL.
***An employee CAN modify its leave policies after April 1, 2020, as long as the modification does not eliminate a benefit accrued prior to the modification.
RATE OF PAY
- Personal COVID-19 reasons:
- Employee is subject to a Federal, State, or local quarantine / isolation order;
- Employee has been advised by a health care provider to self-quarantine;
- Employee is experiencing COVID-19 symptoms and is seeking medical diagnosis.
Pay Rate MUST BE the greater of:
- Employee’s regular rate of pay (as determined under the Fair Labor Standards Act);
- The federal minimum wage ($7.25); or
- The applicable State or local minimum wage.
subject to a maximum of $511 per day, or $5,110 total over the entire paid sick leave period.
2. Other individuals COVID-19 reasons:
- Caring for an individual who is subject to a Federal, State, or local quarantine or who has been advised by a health care provider to self-quarantine;
- Caring for a child whose school or place of care is closed, or childcare provider is unavailable; or
- Experiencing any other substantially-similar condition that may arise, as specified by the Secretary of Health and Human Services (none to date).
Pay Rate MUST BE the greater of:
- Regular rate of pay x .667;
- The federal minimum wage under the FLSA; or
- The applicable state or local minimum wage.
subject to a maximum of $200 per day, or $2,000 over the entire EPSL period. The employer may require the employee to use accrued paid time off under the employer’s existing leave policies to cover the difference between the employee’s regular daily compensation and the amount received in DEPSL.
Example: A full-time employee’s regular rate of pay is $40 per hour, which equates to $320 per day. The employee is off due to a child’s school closure. Under the EPSL Act, the employee would be required to the $200 per day cap. If the employer chooses to do, it may pay the employee the $200 as EPSL AND an additional $120 from the employee’s accrued paid time off bank.
Although the regulations do not expressly state, it is a safe practice to reduce the paid time off bank in hourly increments.
$120 ➗Regular hourly pay rate = hour reduction from paid time off bank
Administrative concern: Each type of payment must be tracked.
- The $200 EPSL payment is reimbursable through a tax credit.
- The $120 payment from accrued paid time off can be included in loan forgiveness under a CARES Act Small Business Loan.
EXCLUSIONS FROM EPSL COVERAGE
***THESE ARE INDIVIDUAL EMPLOYEE EXCLUSIONS, NOT GENERAL, BLANKET EMPLOYER EXCLUSIONS
- Small Business exclusion:
- Fewer than 50 employees (count as discussed above);
- Requirements for exclusion of employee(s):
- Leave would cause employer’s expenses and financial obligations to exceed revenue and cause employer to cease operating at a minimal capacity;
- Absence of employee(s) would pose a substantial risk to the financial health or operational capacity of the business because of specialized skills and knowledge of the business or responsibilities; OR
- Employer cannot find other workers who are able, willing and qualified at the time and place to perform the work or services.
2. “Health care providers”
- The employer may elect to exclude individual or multiple “health care providers” from coverage of the EPSLA.
- Definition of “Health Care Provider” is broader for this exclusion than the definition of health care provider for purposes of ordering self-quarantine:
- Medical professionals;
- Employees needed to keep health care facilities supplied and operational;
- Employees involved in research, development and production of equipment, drugs, vaccines, needed to combat COVID-19.
3. First Responder
- The EMPLOYER may elect to exclude individual or multiple “first responders” from coverage of the EPSLA.
- Interact with and aid individuals with physical or mental health issues, including, but not limited to, Covid-19;
- Ensure the welfare and safety of our” communities and our Nation;”
- Have specialized training relevant to emergency response; OR
- Provide essential services relevant to health and well-being.
INTERMITTENT LEAVE
- For EPSL to be taken intermittently, the employer and employee must both agree.
- Employer and employee must agree to the time increments for intermittent use of EPSL.
- Where an employer and employee have agreed to intermittent EPSL use, only the amount of leave actually taken may be counted toward the employee’s leave entitlements.
EXAMPLE: Even if an employer and employee have agreed to 4 hour increments, employer cannot charge employee’s leave entitlement 4 hours when employee was absent for only two hours.
Advice: Increments of 1 hour or less are more easily managed.
- EPSL CANNOT be taken intermittently if:
- Employee has to report to the workplace (as opposed to teleworking);
- Employee:
- Is subject to a Quarantine or Isolation Order relating to COVID-19, or as been advised by a health care provider to self-isolate due to concerns with COVID-19;
- Is experiencing symptoms of COVID-19 and is taking EPSL to obtain medical diagnosis;
- Is caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; OR
- Is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
- Once an employee begins taking EPSL for any of the above qualifying reasons, the employee must continue to take paid sick leave each day until the employee either uses the full amount of paid sick leave or no longer has a qualifying reason for taking paid sick leave.
EMPLOYEE NOTICE OF NEED TO TAKE LEAVE
- Employer may require employee to follow “reasonable” notice procedures:
- Employee must report need “as soon as practical” after first workday or partial workday missed.
- Employer must notify employee of failure to provide notice and opportunity to provide required documentation.
- A spouse, adult family member or “other responsible party” may provide notice IF the employee is unable to do so.
ADVICE: Employers should not have an “employee-only call” rule.
- The Employer is not required to provide leave if materials sufficient to support the applicable tax credit have not been provided.
- Personal COVID-19 related reason:
- Employee’s name’
- Date(s) for which leave is requested;
- Qualifying reason for EPSL; and
- Oral or written statement that employee is unable to work due to a qualifying reason.
- Other individual COVID-19 related reason:
- The name of the individual;
- Name of:
- The government entity that issued the Quarantine; or Isolation Order;
- The name of the health care provider who advised the employee / individual to self-isolate.
- The school / place of care has been closed, or child care provider unavailable due to COVID-19 related reasons.
- Name and age of son or daughter;
- SPECIAL REQUIREMENT FOR CHILD over 14 years of age: Employee must explain the special circumstances related to the child’s care that prevent the employee from working or teleworking during daylight hours.
- Name of closed school / day care, or child care provider who is not available. (Not just “Granny,” but Granny’s real name).
- Representation from employee that no other person will be providing care for the child during the period of the EPSL.
- Name and age of son or daughter;
***Sample Employee Leave Request accompanies this summary.
NOTE: The Request Form provides for the election of intermittent leave. An employer is not required to allow employee to use EPSL intermittently. An employer may elect to do so.
RECORDKEEPING
- Employer must retain documentation provided by employee for 4 years.
- Employer is required to document oral notice from an employee. And retain for 4 years
- If employer denies EPSL under the “small business” exception (see above), employer must document its authorized officer’s determination that the requirements are satisfied and must retain that documentation for 4 years.
- Documents required for tax credits are found at http://www.irs.gov/forms-pubs/about-form-7200 and https://www.irs.gov/pub/irs-drop/n-20-21.pdf
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Christian & Small LLP represents a diverse clientele throughout Alabama, the Southeast, and the nation with clients ranging from individuals and closely-held businesses to Fortune 500 corporations. By matching highly experienced lawyers with specific client needs, Christian & Small develops innovative, effective, and efficient solutions for clients. With offices in Birmingham, metro-Jackson, Mississippi, and the Alabama Gulf Coast, Christian & Small focuses on the areas of litigation and business, is a member of the International Society of Primerus Law Firms, and is the only Alabama-based member firm in the Leadership Council on Legal Diversity. Our corporate social responsibility program is focused on education, and diversity is one of Christian & Small’s core values.
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