For the last several weeks, the Department of Labor has periodically updated its Families First Coronavirus Response Act: (FFCRA) “Questions and Answers” page by illustrating real-world applications of the FFCRA.  We covered previous updates on March 31, 2020 and March 25, 2020.  The most recent updates – questions 80-88 – illustrate common issues in computing employee hour and pay entitlements under the FFCRA, among others.

Computing employee sick leave hours:

The FFCRA entitles employees to 2 weeks of paid sick leave (up to 80 hours) based on the number of hours they are regularly scheduled to work.  While regular full-time employees don’t require a calculation, what about employees with variable schedules?

  1. Estimate the number of hours based on the 6-month period immediately prior to the beginning of sick leave.
  2. Use the average number of hours per calendar day, not work day.
  3. The average must include all scheduled hours, i.e., “hours actually worked and hours for which the employee took leave.”
  4. If an employee began work less than 6 months before FFCRA sick leave, the employer should use the entirety of the employee’s tenure to estimate their hours.

The same 6-month lookback principle applies to calculating an employee’s hourly entitlement to Emergency Family and Medical Leave Expansion Act (EFMLEA) leave, under which an employee is entitled to 2/3 pay of their estimated hours per day.

Computing employee average regular rate:

FFCRA paid leave is based on the employee’s average regular rate.  Again, for employees with consistent hours and salary or wage, the average rate is either the employee’s “hourly wage or the hourly-equivalent of their salary.”  Complications arise with tips, commissions, and overtime premiums.  The DOL advises the following steps.

  1. Calculate “the employee’s non-excludable remuneration for each full workweek during the six-month period.” Commissions, piece-rate pay, and tips (to the extent they count towards minimum wage obligations) are included.  Tips above minimum wage obligations and overtime premiums are excluded.  Unlike the hours calculation above, leave time payments are excluded for the regular rate calculation.
  2. Compute all hours actually worked over the 6-month lookback period (again, exclusive of compensated leave time).
  3. To get the average regular rate, divide all non-excludable income by all hours actually worked.

For employees who are paid fixed salaries with variable hours, the regular rate would depend on the hours worked each week.  Where hourly records are unavailable, employers should use a “reasonable estimate.”

Rounding hours is permissible, so long as it is done so consistently.

The 6-month lookback period is always the 6 months immediately preceding sick leave regardless of any prior PTO, FMLA, or EFMLEA leave taken during that time frame.

When employers may require utilization of preexisting, accrued paid time off:

  • Employers cannot require the use of accrued paid time off available under their policies during FFCRA paid sick leave.
  • Employers may require that an employee take accrued paid time off “available to an employee under the employer’s policies” concurrently with paid EFMLEA leave. Subject to employer requirement or employee election, the employee is entitled to the full amount of pay provided for under a paid leave policy predating April 1, 2020.  However, the employer can only receive tax credits equal to the EFMLEA pay entitlement (i.e., 2/3 of the employee’s regular pay up to $200/day).
  • Employers and employees may agree to supplement EFMLEA pay with accrued paid time off.
  • If an employee exhausts accrued paid leave, but has more EFMLEA time available, then the employee will receive EFMLEA pay subject to the maximum limits permitted for such leave.

Paid leave subject to stay-at-home, shelter-in-place, quarantine, and isolation orders:

For purposes of the FFCRA, all of the above orders are effectively the same.  But,

  1. The order must be the reason the employee cannot work, or telework, and
  2. If the employer has no work for the employee to perform, paid leave is unavailable.

Please contact the Murtha labor and employment team for assistance with implementing the DOL’s rolling FFCRA guidance.