DOL’s Regulations for FFCRA, Part II: Calculating Amounts and Pay for Leave, Intermittent Leave, and How it Works with PTOIn Part I of this post we covered some of the logistics you need to get started with the FFCRA paid leave provisions. Today we will continue our review of the Department of Labor’s FFCRA temporary regulations and discuss the guidance on leave entitlement based on hours worked, calculating the amount of pay due for FFCRA leave, intermittent leave, and how your paid time off policies intersect with the paid leave.

Who Is a Full-Time Versus a Part-Time Employee and How Many Hours of EPSL Do They Get? (§ 826.21)

Full-time Employees – As you know, a full-time employee is entitled to up to 80 hours of Emergency Paid Sick Leave (EPSL) for one of six qualifying reasons. But who is considered a “full-time employee”? Under the regulations, full-time employees are normally scheduled to work at least 40 hours per workweek (§ 826.21(a)(2)). If the employee does not have a normal weekly schedule, then look at the average amount of hours the employee is scheduled to work (including leave hours of any type) over the lesser of a six-month period or the entire period of the employee’s employment. If that weekly average is at least 40 hours, the employee is full-time under this law.

Part-time Employees – Any employee who is not full-time is part-time (§ 826.21(b)). As with full-time employees, if the part-time employee has a normal weekly schedule, he or she can get an amount of paid sick leave hours equal to the hours normally scheduled over a two-week period. If the part-time employee does not have a normal weekly schedule, the calculation is more complicated, and it depends on how long he or she has worked for you:

    • If six months or more, calculate the average number of hours the employee was scheduled to work each calendar day during that six-month period (counting back from the date the employee’s paid sick leave begins). The employee is entitled to 14 times that average (up to 80 hours).
    • If fewer than six months, the employee is entitled to up to 14 times the number of hours to which you agreed at the time of hiring that the employee would work, on average, each calendar day. If there was no agreement, the employee receives 14 times the average number of hours per calendar day the employee was scheduled to work over the employee’s entire tenure, including any leave hours of any type (§ 826.21(b)(2)(i)).

How Much Money Do Employees Receive for EPSL? (§ 826.22)

The amount of an employee’s EPSL depends on the reason for the leave. The rule of thumb is that an employee who is or may be sick with COVID-19 (i.e., takes leave for reasons (1), (2) or (3), as outlined in our last post), then the employee is entitled to the higher of the employee’s regular rate of pay, the federal minimum wage, or any applicable state or local minimum wage. These payments are capped at $511 per day and $5,110 in the aggregate per employee.

On the other hand, if an employee takes leave to care for someone or has a child whose place of care is unavailable (i.e., reasons (4), (5) or (6), as outlined in our last post), he or she is eligible for two-thirds of the regular rate of pay. These benefits are capped at $200 per day and $2,000 in the aggregate per employee. How to calculate the “regular rate” of pay is explained below.

How Many Weeks of EFMLA Is an Employee Entitled To? (§ 826.23)

An eligible employee can take up to 12 weeks of EFMLA between April 1 and December 31, 2020. Recall this is only available to an employee who has worked for 30 days who is unable to work or telework because of childcare obligations (i.e., reason (5), as outlined in our last post). Also, if you have 50 or more employees and were previously subject to the FMLA, an employee still only gets 12 weeks total. Any EFMLA is counted against an employee’s 12 weeks of traditional FMLA (§ 826.23(b)).

How Much Money Do Employees Receive for EFMLA? (§ 826.24)

The first two weeks (or 10 days) of EFMLA are unpaid. These same employees, however, can use EPSL to cover this time or use any paid leave under company policies (such as PTO or vacation). If you want (and the employee is not taking EPSL), you can require an employee to take company-provided paid leave during this time (§ 826.23(c)). What you cannot do is require an employee to use PTO in lieu of EPSL.

After the first two weeks, you pay two-thirds of the employee’s average regular rate multiplied by the employee’s scheduled number of hours for each day of leave. If you want, you can calculate EFMLA pay in hourly increments, which will make sense in intermittent leave situations (§ 826.24(c)). These EFMLA payments are capped at no more than $200 per day and $10,000 total for each employee.

Interestingly, if the employee elects, or you require, the employee to use accrued vacation or PTO concurrently with the EFMLA, then you must pay the employee a full day’s pay for that day. You can only seek a tax credit for $200 per day or $10,000 in the aggregate for EFMLA for that employee. This perhaps provides a disincentive for employers to require employees to use their accrued PTO because the PTO is not covered by the tax credit.

How Do You Calculate the Regular Rate of Pay? (§ 826.25)

So how does an employer calculate an employee’s regular rate of pay for EPSL and EFMLA purposes? The FFCRA’s regulations provide some clarity on that point – use the Fair Labor Standards Act’s method at 29 C.F.R. § 778.109. Under that regulation, you calculate the regular rate of pay by dividing an employee’s total remuneration for the workweek (minus statutory exclusions) by the total number of hours worked. For example, if Employee A was paid $1,000 for a workweek, and worked 40 hours that week, then Employee A’s regular rate of pay for the week was $25 per hour. Some statutory exclusions from the regular rate of pay include gifts, payments for leave, reimbursements for expenses, and discretionary bonuses.

Per the FFCRA’s regulation, you then average the regular rates over a defined period to come up with the EPSL or EFMLA regular rate. For employees employed for at least six months as of the date that the employee takes the leave, you calculate a six-month average of regular rates. For employees who have been employed for fewer than six months, you calculate the employee’s regular rate over the entire period of employment.

Can Employees Take EPSL or EFMLA Intermittently?

It depends. The general answer is that you and the employee must agree to an intermittent leave schedule or it is not available. If your employee needs to take leave for child care (i.e., reason (5), as outlined in our last post), regardless of whether he or she is working remotely, you can agree to an intermittent schedule. Additionally, if the employee is working remotely (either regularly or because of the COVID-19 crisis), you and the employee can agree to an intermittent schedule.

Intermittent leave is not permissible if (a) an employee must report to a worksite (rather than work remotely) and (b) is taking leave because he or she is sick with or is taking care of someone who is sick with COVID-19 (i.e., reasons (1) through (4), as outlined in our last post).

Major points to remember about intermittent leave:

  • Keep good records of when an employee is or is not working. You must pay nonexempt employees for every hour worked at their usual rate. Also, you will need records of leave taken to take the tax credit.
  • You can only charge an employee for the amount of leave he or she actually takes.
  • An exempt employee may still be entitled to his or her weekly salary. Accordingly, while you can pay an exempt employee EPSL or EFMLA and get the tax credit for that payment, you need to be sure the employee’s weekly wage is not reduced for any workweek that the exempt employee performs any work, unless a deduction is permitted. While the FLSA allows a deduction from an exempt employee’s weekly wage for unpaid intermittent FMLA, it is unclear that paid EPSL or EFMLA will be treated the same way.

Can Employees Take PTO Instead of or to Supplement FFCRA Paid Leave? (§ 826.70(f)), § 826.160)

Maybe. The regulations are clear that you cannot require an employee to substitute available paid leave for EPSL or EFMLA. Also, an employee retains rights to other paid leave, such as a state paid sick leave entitlement, benefits under a collective bargaining agreement, or a company policy that existed prior to April 1, 2020 (§ 826.160(a)).

If your policy allows or requires an employee to use accrued paid leave benefits (vacation, PTO, etc.) concurrently with unpaid FMLA, you “must pay the Eligible Employee the full amount to which the Eligible Employee is entitled under the Employer’s preexisting paid leave policy for the period of leave taken” (§ 826.160(b)(2)). This will depend on your policy. For example, if your policy requires an employee to use any available paid leave before going on an unpaid status, you may have to permit an employee to supplement EPSL or EFMLA (even though you will not get the tax credit for the supplement).

More to Come

We are not done yet. Our next (and hopefully final) installment will address benefits issues, reinstatement to work, and enforcement.