SimplyHR | Employment & Labor Blog 

Subscribe

Blog Editors

Topics

Archives

DOL gives additional FFCRA guidance on calculating paid leave, hours worked and rate of pay
By Daniel Ritter on May 11, 2020 at 12:00 PM

With its latest Q&A set, the U.S. Department of Labor issued additional guidance on calculating paid leave and computing employees’ regular rate of compensation, and it also clarified issues arising from prior Q&As. It is a particularly good time to review the guidance, as the DOL announced the end of its non-enforcement period of the paid leave provisions under the Emergency Family and Medical Leave Expansion Act (EFMLEA) and the Emergency Paid Sick Leave Act (EPSLA).

The DOL’s Q&As can be found here in their entirety. Highlights from the fifth set include:

Calculating the number of hours of emergency paid sick leave available to employees with irregular hours (DOL Q&A #80). When it is impossible to determine the hours an employee would normally work over a two-week period, employers must make an estimate. To estimate the number of hours the employee would normally work, employers should:

  1. Determine the applicable six-month period. This six-month period ends on the first day of paid sick leave.
  2. Determine the total calendar days during the applicable six-month period.
  3. Determine the total scheduled hours worked – including hours worked and hours on leave.
  4. Calculate the average number of hours the employee was scheduled to work per calendar day. Divide the total scheduled hours by the total calendar days during the applicable six-month period.
  5. Calculate the number of hours of paid sick leave. Multiply the average hours the employee was scheduled to work per calendar day by 14.
  • Example: Irregular hour employee takes leave beginning on April 13, 2020. The six-month period used for estimating average hours begins on Oct. 14, 2019, and ends on April 13, 2020 – a total of 183 calendar days. During this period, the employee worked 1,150 hours and took 50 hours of leave – a total of 1,200 scheduled hours. To calculate the number of hours per calendar day, divide 1,200 hours by 183 calendar days, which averages out to 6.557 hours per calendar day. To calculate the two-week average, multiply the per-calendar-day average by 14, which is 91.8 hours. Since employers are required to only provide a maximum of 80 hours of paid sick leave over the two-week period, the employee is entitled to 80 hours of paid sick leave.
  • NOTE: For each hour of paid sick leave taken, you are required to pay the employee an amount equal to at least that employee’s regular rate.

Calculating the number of hours to pay employees with irregular hours for each day of expanded family and medical leave (DOL Q&A #81). Expanded family and medical leave benefits for employees with irregular hours and employed for at least six months must be calculated based on the average workday hours. To calculate, employers should:

  1. Determine the applicable six-month period. The six-month period must end on the first day of paid sick leave.
  2. Determine the total workdays during the applicable six-month period.
  3. Determine the total scheduled hours worked, including hours worked and hours on leave.
  4. Calculate the average number of hours per workday. Divide the total scheduled hours by the total workdays during the applicable six-month period.
  • Example: Irregular hour employee takes leave beginning on April 13, 2020. The six-month period used for estimating average hours is from Oct. 14, 2019, to April 13, 2020 – a total of 183 calendar days. Of the 183 calendar days, the employee worked 1,150 hours over 130 workdays and took 50 hours of leave – a total of 1,200 scheduled hours. To calculate the number of hours per workday, the employer would divide 1,200 hours by 130 workdays, which averages out to 9.2 hours per workday. 9.2 hours is the number of hours to pay this employee for each day of expanded family and medical leave.
  • NOTE: To calculate the amount to pay an employee with irregular hours for each day of expanded family and medical leave taken, multiply the average hours per workday as calculated above by 2/3 the employee’s regular rate. Remember there is a $200-per-day cap and a $10,000 maximum.

Be consistent when rounding to calculate the number of hours (DOL Q&A #84). Employers can continue their regular rounding practice when calculating the number of hours of paid sick leave or the number of hours to pay employees with irregular schedules for each day of expanded family and medical leave taken. The key is to be consistent both in the hourly increment customarily used and when applying the rounding practice to employees.

  • Example: After calculating the number of hours of paid sick leave to 91.803 hours, employers tracking time in half-hour increments would round to 92 hours. Employers tracking time in quarter-hour increments would round to 91.75 hours. Employers tracking time in tenth-hour increments would round to 91.8 hours.

Calculating employees’ average regular rate for the purpose of the Families First Coronavirus Response Act (FFCRA) (DOL Q&As #82-83, 85). Under the FFCRA, employers must pay employees based on their average regular rate for each hour of paid sick leave or expanded family and medical leave taken. For employees on a fixed hourly wage, the regular rate is the hourly wage or the hourly-equivalent of the salary. For employees receiving piece-rate, commissions or tips, the regular rate may fluctuate week to week. To calculate the regular rate for employees with fluctuating income, employers should:

  1. Determine the applicable six-month period. The six-month period must end on the first day of paid sick leave.
  2. Determine the total full workweeks in that period. The DOL assumes in their example a Monday to Sunday workweek.
  3. Total the number of hours worked, not including leave hours.
  4. Total the amount received in non-excludable remuneration for each full workweek during the six-month period.
  • NOTE: Commissions and piece-rate pay count, but tips only count to the extent employers apply them toward minimum wage obligations. Also, payments for taking leave should not count toward this calculation.

    5.  Determine the average regular rate by dividing the non-excludable remuneration (#4 above) by the total number of hours worked (#3 above).

  • NOTE: Calculating the average regular rate of employees paid on a fixed salary depends on whether the employee is compensated for a specific number of hours during each workweek or the fixed salary compensates the employee regardless of the number of hours during each workweek. The former would simply be the hourly equivalent of the salary, but the latter involves adding up the salary paid over all full workweeks in the past six months and dividing the sum by the total number of hours worked in the workweeks. Employers can use a reasonable estimate if they lack records for the number of hours the employee worked.
  • NOTE: Employers only need to identify the six-month period once when calculating the regular rate under the FFCRA. Instead of determining and reviewing a new six-month period every time an employee takes leave, the six-month period is based on the first day the employee takes paid sick leave or expanded family and medical leave. For workers with less than six months of employment, employers may calculate the regular rate over the entire period of employment.

Clarification on when employers may require employees to use their existing paid leave under company policy for paid expanded family medical leave and paid sick leave (DOL Q&A #86). Employers may not require paid leave under company policy (e.g. PTO or paid vacation) to run concurrently with paid sick leave under the EPSLA. However, employers may require that any paid leave provided under company policy run concurrently with paid expanded family and medical leave. To do this, an employer must pay the employee’s full pay during the leave until the employee has exhausted available paid leave under the company policy. Employers are only eligible for tax credits for wages paid at two-thirds of employees’ regular rate of pay (up to $200 per day and $10,000 total). Employees who exhaust available paid leave under the company policy will still receive any remaining paid expanded and medical family available subject to the limits in the EFMLA.

Employees are not required, but may elect, to take paid sick leave under the EPSLA or paid leave under a company policy for the first two weeks of unpaid expanded family and medical leave, but not both. However, employees with partial or no paid sick leave available under the EPSLA may choose to use paid leave under the company policy to cover the portion of the employee’s first two unpaid weeks of expanded family and medical leave.

Clarification on eligibility for paid sick leave when prevented from working in response to stay-at-home, shelter-in-place, quarantine or isolation orders (DOL Q&A #87). Previously, in DOL Q&A #60, the department explained employees may be entitled to paid sick leave if they are prevented from performing work (including telework) by one of the above orders. However, employees are not entitled to paid sick leave if their employers close or do not have work available due to a shelter-in-place order. DOL’s Q&A #87 further notes that employees are not entitled to paid sick leave if employers do not have work available due to a quarantine or isolation order or for other reasons.

  • Example: An employee may take paid leave under the FFCRA when he or she is prohibited from leaving a containment zone and the employer is outside the zone, open and the work available can only be done at the employee’s place of business (no telework).
  • Example: An employee is not entitled to paid leave under the FFCRA and should seek unemployment compensation when his or her employer closes one or more locations because of a quarantine order and there is no work for the employee to perform.

Clarification on the recovery for employees when the DOL brings an enforcement action against employers refusing to compensate employees for taking paid sick leave (DOL Q&A #88). Refusing to compensate employees for taking paid sick leave constitutes a failure to pay minimum wage, and employers will be subject to the enforcement provisions of the Fair Labor Standards Act. Under the enforcement provisions, employers will be liable to affected employees for the full amount due to them under the FFCRA, which is the employee’s regular rate or applicable minimum wage, whichever is greater (and subject to the applicable FFCRA caps).

  • NOTE: There are additional consequences for employers that refuse to provide paid sick leave. Employers could be responsible for fines up to $10,000 and six months in jail. For repeat offenders, employers face growing fines of $1,100 for each subsequent violation.

Our Employment & Labor Practice Group attorneys are continuously monitoring developments and are available to answer your questions regarding these high-level updates as well as specific situations that your business may encounter related to COVID-19.

* This post assumes the reader’s familiarity of the basics of the FFCRA and is intended to be a synopsis of top takeaways for employers.

Link to COVID-19 Resources page

Facebook Twitter LinkedIn Google+ Email

This website uses cookies to improve functionality and performance. If you choose to continue browsing this website, you consent to the use of cookies. Read our Privacy Policy here for details.