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Labor Department Offers Guidance On Families First Coronavirus Response Act, Effective As Of April 1

March 25 - Posted at 1:54 PM Tagged: , , , , , , , ,

The U.S. Department of Labor released a preliminary “Questions and Answers” page today, attempting to answer some preliminary compliance questions related to the new Families First Coronavirus Response Act, which will bring emergency family and medical leave, as well as paid sick leave, for many employers across the country. The agency stated it also will be issuing implementing regulations regarding the new law in the near future. The big news is that the law will take effect April 1, 2020 – not April 2 as originally expected – but there are also plenty of other helpful pieces of information in the document. What do employers need to know about this latest development? 

Not An April Fool’s Joke: Law Effective April 1, 2020

As a major surprise, the Department of Labor (DOL) announced the paid leave provisions of the Families First Coronavirus Response Act (FFCRA) are effective on April 1, 2020 and will apply to leave taken between April 1, 2020 and December 31, 2020.

This effective date took many by surprise. The FFCRA states the leave provisions “shall take effect not later than 15 days after the date of enactment.” As the FFCRA was signed by President Trump on March 18, 2020, many assumed DOL would implement the law on April 2, 2020.

The DOL gave no reason why it chose to move up implementation by one day, but there is speculation this was done to line up the effective date of the law with the calendar quarter.

How Do You Count To 500?

Both leave provisions of the FFCRA apply to private employers with fewer than 500 employees. One of the most common questions for employers regarding the FFCRA involves uncertainty as to how and when you count employees for these purposes, and when you consider separate entities to be a single employer for these purposes. The DOL’s Questions and Answers attempt to address the following by stating:

You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold.

Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.

In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.

Therefore, the DOL provides the opinion that an employer is covered if, at the time the leave is to be taken (a “snapshot” approach), the business employs fewer than 500 employees.  Moreover, the analysis addresses important issues regarding whether separate entities are counted as one employer for purposes of the new leave laws. First, the DOL states that if two entities are found to be “joint employers” under the FLSA, all of their common employees must be counted in determining whether leave must be provided under for Emergency Paid Sick Leave and Emergency Family and Medical Leave.

The DOL document also states that if two entities are an “integrated employer” under the Family Medical Leave Act (FMLA), all of the employees of the integrated employer will be counted in determining employer coverage for purposes of Emergency Family and Medical Leave.

The “joint employer” analysis under the FLSA and the “integrated employer” analysis under the FMLA are complicated and involve a critical analysis of specific facts. Employers with questions about how these tests may apply to their specific situation should reach out for legal opinion.

Is The FFCRA Retroactive?

Another common inquiry was whether employees can take paid sick leave under the FFCRA prior to the effective date (that would count towards their FFCRA paid sick leave entitlement), and whether the law will have retroactive effect. The DOL attempted to address these issues by stating:

Can my employer deny me paid sick leave if my employer gave me paid leave for a reason identified in the Emergency Paid Sick Leave Act prior to the Act going into effect?

No. The Emergency Paid Sick Leave Act imposes a new leave requirement on employers that is effective beginning on April 1, 2020.

Are the paid sick leave and expanded family and medical leave requirements retroactive?

No.

Does Emergency Paid Sick Leave And Emergency FMLA Run Concurrently For Leave Related To School Closures?

The qualifying reason for leave under the Emergency FMLA involves caring for a child when their school or place of care is closed. One of the six qualifying reasons for Emergency Paid Sick Leave similarly addresses this same reason. Therefore, many employers have inquired as to whether these leaves will run concurrently when taken for the same qualifying reason. The DOL addressed this issue when it stated:

If I am home with my child because his or her school or place of care is closed, or child care provider is unavailable, do I get paid sick leave, expanded family and medical leave, or both—how do they interact?

You may be eligible for both types of leave, but only for a total of twelve weeks of paid leave. You may take both paid sick leave and expanded family and medical leave to care for your child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons. The Emergency Paid Sick Leave Act provides for an initial two weeks of paid leave. This period thus covers the first ten workdays of expanded family and medical leave, which are otherwise unpaid under the Emergency and Family Medical Leave Expansion Act unless the you elect to use existing vacation, personal, or medical or sick leave under your employer’s policy. After the first ten workdays have elapsed, you will receive 2/3 of your regular rate of pay for the hours you would have been scheduled to work in the subsequent ten weeks under the Emergency and Family Medical Leave Expansion Act.

Next Steps

Employers should note that this is an initial and informal compliance assistance document from DOL. These answers may change or be added to over time. Moreover, the DOL will be developing more formal guidance and regulations that may definitively answer these questions and may do so in a different manner. Nevertheless, this preliminary “Questions and Answers” document may give some indication about how the agency is likely to formally interpret and enforce the new law in the near future.

We will continue to monitor the rapidly developing COVID-19 situation and provide updates as appropriate. 

Workplace Law Predictions For 2019

January 09 - Posted at 7:15 PM Tagged: , , , , , , , , , , , , , ,

Courtesy of Fisher Phillips LLP

2018 has seen quite a few changes in labor and employment law. But with the New Year having just rung in, it’s time to look forward rather than backward. The question on the tip of everyone’s tongue is: what’s next? Here are our predictions for what to expect in 2019 when it comes to workplace law.

Expect More Class Actions

We’re going to start out with the bad news. Because of the potential for a big payout, class and collective actions are a favorite for plaintiffs’ attorneys. You should not expect that to change in 2019.

The California Supreme Court’s decision in Troester v. Starbucks Corporation has opened up even more avenues for potential wage and hour claims in the Golden State, and the trend could hit the rest of the country, too. In July 2018, the California Supreme Court narrowed the scope of the de minimus doctrine under state law and held that employees must be paid for off-the-clock work that regularly lasts several minutes per day. While the California Supreme Court refused to shut the door entirely on the de minimus doctrine, it noted that technological advances should help employers track small bits of time, and that employers can restructure work to avoid off-the-clock time.

Employers outside of California may see plaintiffs’ attorneys attempting to use the same rationale employed by the California Supreme Court to argue that the de minimus doctrine should not apply in the circumstances of their case. Moreover, with more employees having remote access to emails and other mobile platforms, the number of ways for employees to argue that they were working off the clock has increased. 

The Ascendance Of Arbitration Agreements 

One way for employers to avoid class actions is through arbitration agreements. Last May, the Supreme Court ruled in Epic Systems Corporation v. Lewis that mandatory class action waivers in arbitration agreements are enforceable. As a result, you can expect to see an increase in the number of companies rolling out updated agreements to include class action waiver language. (Note: if you have not had your arbitration agreement reviewed since May when Epic Systems came out, make it your New Year’s Resolution to do so.)

However, while popular with employers, arbitration agreements are decidedly not so with the plaintiffs’ bar. Expect to see plaintiffs’ counsel becoming more creative in challenging arbitration agreements on grounds related to unconscionability. 

We may even be starting to see a backlash against arbitration agreements. Most recently, some law students have been pressuring big law firms to do away with them when it comes to their own hires. And last year, the California legislature passed a law banning mandatory employment arbitration agreements for claims arising out of alleged violations of the Fair Employment and Housing Act or California Labor Code. Although the bill was ultimately vetoed by outgoing Governor Jerry Brown, expect to see the fight continue in 2019.

Don’t Look To Congress To Lead The Way

With Democrats controlling the House, and Republicans controlling the Senate and Executive Branch, you can expect that most employment legislation will be dead on arrival. When it comes to innovative legislation impacting the workplace, you should look to the states to lead the way. This is not to say that there won’t be any changes to labor and employment law on the federal level in 2019. However, we expect the most significant changes to be made by agencies (such as the National Labor Relations Board, the Department of Justice, the Equal Employment Opportunity Commission, etc.) rather than Congress.

NLRB Will Narrow The Definition Of Joint Employer

One of those agencies—the NLRB—made noise last year when it published a proposed rule that would alter the definition of joint employment to make it more difficult to hold multiple businesses responsible for alleged labor and employment law violations by staffing companies, franchisees, and other related organizations. Expect to see continued movement and updates on this proposed rule in 2019. 

But before getting too excited at any potential changes, you should keep in mind that states may have their own rules regarding joint employment that could differ from what the NLRB comes up with. Any new rules may not affect your organization’s liability under state law.

USDOL Has A Full Plate

Another agency you should keep an eye on is the U.S. Department of Labor (USDOL).  Not only is the USDOL considering its own joint employment rule, but the agency has proposed regulations regarding the regular rate of pay and white collar exemptions (also known as the “overtime” rule). 

The regular rate of pay is of particular importance to employers because it is used to calculate the overtime rate of non-exempt employees. While we know that changes to the proposed regulations are targeting sections 7(e)(2) and 7(g)(3) of the Fair Labor Standards Act, the USDOL has been rather vague about what the proposed regulations will look like. The USDOL states that they aim to “provide employers more flexibility in the compensation and benefits packages they offer employees” and “lessen litigation regarding the regular rate.”   

The regulation relating to the white collar exemption is less opaque. As employers may recall, the minimum salary threshold for white collar exemptions was supposed to increase from $455 per week (or $23,660 annually) to $913 per week (or $47,476 annually), with the amount to be updated every three years. However, right before these changes were scheduled to take effect in December 2016, a federal court blocked their implementation. Under a new administration, we expect that we will see a more modest proposed increase in the white collar exemption in 2019—perhaps in the low $600s per week. 

Paid Sick Leave Will Continue To Be On Trend

Although there are no federal laws mandating paid sick leave (yet), you can expect that paid sick and family leave will continue to be a big issues, with states and localities picking up the slack. Right now, 11 states and the District of Columbia require paid sick leave. Additionally, various cities and counties have stepped in where states have not provided for such leave or to give more generous benefits than the state. 

You generally should anticipate an expansion of paid sick leave benefits in 2019. The New Jersey Paid Sick Leave Act went into effect October, while Michigan, Washington, and Westchester County (NY) have paid sick leave laws going into effect this year. 

While some municipalities in Texas want to get in on this trend, a Texas appeals courtruled the Austin Paid Sick Leave Ordinance violates the state constitution because it preempts the Texas Minimum Wage Act. San Antonio passed its own sick leave ordinance in 2018, but it may only be a matter of time before it, too, is challenged in court. 

Privacy Issues Remain Paramount

The EU General Data Protection Regulation (GDPR) went into effect in May 2018, ushering in sweeping reforms for companies that do business in the EU or employ EU residents. The GDPR threatens strict penalties for non-compliance—up to the greater of 20 million Euro or 4 percent of global annual turnover in the prior year. Having been in effect less than a year, it is still not clear how fines will be assessed and what the potential exposure will be for companies that are found to be non-compliant. As 2019 progresses, you can expect to see many investigations that began in 2018 come to a close, and we’ll begin to get a better idea of how regulatory authorities will assess fines for non-compliance—including whether the fearsome 4 percent penalty will be assessed.   

Lest you think the major developments in privacy are safely across the ocean in Europe, you can be sure there will be plenty of action closer to home in 2019. The Illinois Supreme Court currently has a case before it over whether a technical violation of the Illinois Biometric Information Act (BIPA) gives standing to sue absent a person suffering a concrete injury. If the court answers in the affirmative, you can expect to see a continued proliferation of BIPA class actions.

Further, California passed the California Consumer Privacy Act (CCPA) in 2018, which goes into effect at the beginning of 2020. While the law is not as comprehensive as the GDPR, California employers will soon need to figure out this year if it applies to them. You should take compliance seriously: the CCPA allows consumers whose rights have been violated under the Act to bring suit for actual damages or statutory penalties (whichever is greater) under a mechanism somewhat akin to a California Labor Code Private Attorneys General Act. You can expect the proliferation of CCPA lawsuits will be on next year’s list of predictions. 

 

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