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Paid Leave for Coronavirus: Department of Labor Issues Its Temporary FFCRA Rule

Client Alert

The Department of Labor issued its Temporary Rules under the Families First Coronavirus Response Act (FFCRA) pertaining to the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA). The rule became operational on April 1, 2020 and was officially published on April 6, 2020. 

Reasons for Leave - BUT FOR CAUSE. The coronavirus-related reason must be the "but for" cause of the need for leave. If employees would be unable to work even in the absence of the qualifying reason, they are not entitled to paid sick or family leave under FFCRA. This confirms our guidance that, if the workplace is closed, the employee is not entitled to paid leave. An employee is not entitled to paid sick or family leave if the employer does not have work for them to perform. The new rule also provided additional information related to each qualifying reason for leave.    

Reason 1 – Leave Due to Quarantine or Isolation Order – Quarantine or isolation orders do 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 own mobility. 

Reason 2 Leave Based on Medical Advice to Self-Quarantine – The advice to self-quarantine must be based on the health care provider’s belief that the employee has or may have coronavirus or is particularly vulnerable to it. 

Reason 3 Leave Due to Symptoms and Seeking Diagnosis - Must be limited to the time the employee is unable to work because she or he is taking affirmative steps to obtain a medical diagnosis, for example, time spent making, waiting for, or attending an appointment for a test for coronavirus. 

Reason 4 Leave Based on Caring for Another Affected by Coronavirus - 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 she or he self-quarantined or was quarantined. 

Reason 5 Leave Based on Childcare Needs - 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 his or her 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. 

Reason 6 – Leave Due to a Substantially Similar Condition - The Department of Health and Human Services has not yet specified any conditions "substantially similar" to coronavirus, so there is no recognized basis for leave under this category at this time.  

Documentation of Leave - Employers should obtain a signed statement containing the following information: (1) the employee’s name, (2) the dates for which leave is requested, (3) the coronavirus- qualifying reason for leave, and (4) a statement representing that the employee is unable to work or telework because of the coronavirus-qualifying reason. Employers should also document verbal statements from employees related to the need for leave. The IRS has also issued separate requirements related to employers obtaining the tax credits for paid sick and family leave payments.  For more detailed information see Bryan Meek's article here: https://www.bmdllc.com/resources/blog/record-keeping-requirements-to-receive-ffcra-irs-tax-credit/  

EFMLEA 30 Days of Employment Requirement – EFMLEA requires that employees be employed for 30 calendar days to be eligible for the childcare leave available under the expansion of FMLA. The rule clarifies that this includes employees who were laid off or otherwise terminated on or after March 1, 2020, had worked for the employer for at least thirty of the prior 60 calendar days, and were  subsequently rehired or otherwise reemployed by the same employer. 

Definition of Son or Daughter - Son or daughter, for purposes of the childcare leave provisions, should be understood in the same manner as the FMLA.  It includes children under age 18 and children of any age incapable of selfcare because of mental or physical disability. 

Definition of Childcare Provider - Although the definition in the act refers to providers who are compensated and licensed, the eligible child care provider need not be compensated or licensed if she or he is a family member or friend, such as a neighbor, who regularly cares for the employee's child. 

Viability Exemption for Small Employers - The viability exemption relates only to childcare leave under FFCRA, and not the five other reasons for paid sick or family leave available under FFCRA. The exemption is available to employers with fewer than 50 employees, in the following circumstances: 

  • such leave would cause the small employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity;
  • the absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or
  • the small employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor or services are needed for the small employer to operate at a minimal capacity. 

Health Care Provider and Emergency Responder Exemption - This exemption is at the election of the employer (an employer could choose to provide paid leave consistent with FFCRA and still receive tax credits, even if eligible for exemption), and it should be exercised "judiciously."  

The definition of healthcare provider is broader than the usual FMLA definition. It includes any individual who is capable of providing health care services necessary to combat coronavirus - which means workers who are needed to keep hospitals and similar health care facilities well supplied and operational and workers who are involved in research, development, and production of equipment, drugs, vaccines, and other items needed to combat coronavirus.  

The definition of emergency responder includes employees, anyone necessary for the provision of transport, care, healthcare, comfort and nutrition of patients, or others needed for the response to coronavirus. The new rule also allows for the highest official of a state or territory to identify other categories of emergency responders, as necessary. 

Intermittent Leave – The right to intermittent leave for coronavirus reasons is limited, so as to be consistent with the law’s objective of slowing the spread of coronavirus. As a threshold matter, intermittent leave is only available to employees if the employer and employee can come to an agreement about it. There must be a clear and mutual understanding of the parameters of any intermittent leave. Further, if the employee is still reporting to the worksite (as opposed to teleworking), they may only take intermittently leave for the purpose of childcare. They are prohibited from taking leave intermittently for reasons 1, 2, 3, 4, and 6 when reporting to the worksite due to the risk of spreading coronavirus to other employees at the worksite.   

EFMLA Cause of Action for Interference/Discrimination - An employee’s private right of action under the FMLA to file a lawsuit directly against an employer for violation of EFMLEA does not extend to employers who were not previously covered by the FMLA (in other words, employers who do not meet the threshold of 50 or more employees within a 75 mile radius).  

FLSA Telework Guidance - Employees must be compensated for all hours actually worked, including overtime, when teleworking for reasons related to coronavirus. An employee must record and report hours worked, and an employer is not required to pay for unreported hours while teleworking unless it knew or should have known about such telework. In addition, the DOL explained that its continuous workday guidance is inconsistent with FFCRA and the CARES Act with respect to teleworking employees.  In other words, employers providing telework flexibility related to coronavirus need not count as hours worked all time between the first and last principal activity performed by the employee in a day.  

For more information, please contact Russell T. Rendall at 216.658.2205 or rtrendall@bmdll.com.

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HHS Issues Opinion Regarding Illegal Attempts by Drug Manufacturers to Deny 340B Discounts under Contract Pharmacy Arrangements

The federal 340B discount drug program is a safety net for many federally qualified health centers, disproportionate share hospitals, and other covered entities. This program allows these providers to obtain discount pricing on drugs which in turn allows the providers to better serve their patient populations and provide their patients with access to vital health care services. Over the years, the 340B program has undergone intense scrutiny, particularly by drug manufacturers who are required by federal law to provide the discounted pricing.

S.B. 263 Protects 340B Covered Entities from Predatory Practices in Ohio

Just before the end of calendar year 2020 and at the end of its two-year legislative session, the Ohio General Assembly passed Senate Bill 263, which prohibits insurance companies and pharmacy benefit managers (“PBMs”) from imposing on 340B Covered Entities discriminatory pricing and other contract terms. This is a win for safety net providers and the people they serve, as 340B savings are crucial to their ability to provide high quality, affordable programs and services to patients.

DOL Finalizes New Rule Regarding Independent Contractor Status, But Its Future Is In Jeopardy

On January 6, 2021, the Department of Labor announced its final rule regarding independent contractor status under the Fair Labor Standards Act. As described in a prior BMD client alert, this new rule was fast-tracked by the Trump administration after its proposal in September 2020. The new rule is set to take effect on March 8, 2021, and contains several key developments related to the "economic reality" test used to determine whether an individual is an independent contractor or an employee under the FLSA.

Bankruptcy Law Changes - 2020 Recap And What To Expect In 2021

In a year of health challenges and financial distress to many individuals and businesses affected by the pandemic, the year 2020 brought some significant changes to the bankruptcy laws. Some of these changes were in place prior to the pandemic; others were a direct response to the pandemic with the goal of helping struggling businesses and individuals. Ahead, we can likely expect further changes to the Bankruptcy Code with the incoming Congress.

UPDATE - SBA Releases Rules and Guidance for Second Round PPP Funding

Late yesterday (January 6, 2021), the U.S. Small Business Administration released rules and guidance for businesses wishing to take part in the long awaited second round of Paycheck Protection Program (“PPP”) funding. As most businesses are aware, the rules governing PPP loans have been updated as part of The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Act”). The Act was just one section of the massive 2021 Consolidated Appropriations Act that was passed by Congress and signed into law by the President on December 27, 2020. To combat the ongoing disruptions caused by the COVID-19 pandemic, the Act generally provides (a) first time PPP loans for businesses that did not obtain a loan in the first instance, (b) PPP second draw loans for businesses that already obtained a loan but need additional funding, and (c) additional funding for businesses that returned their first PPP loan or did not get the full amount for which they qualified.