Kramer, Elkins & Watt

Paid Leave and Expanded Unemployment Benefits: Guidance from DOL and DWD

Paid Leave and Expanded Unemployment Benefits: Guidance from DOL and DWD

By enacting the Families First Coronavirus Response Act (“FFCRA”) (you can find our summary of this legislation here) and the Coronavirus Aid, Relief, and Economic Security Act  (“the CARES Act”) (you can find our summary of this legislation here), the federal government provided a rapid response to address the coronavirus pandemic in the United States. The United States Department of Labor (“DOL”) has since issued guidance for some parts of the FFCRA. Meanwhile, the Wisconsin Department of Workforce Development (“DWD”), the agency tasked with implementing the unemployment benefits programs provided under the CARES Act is developing procedures for adhering to the new laws.  Below is a summary of the DOL guidance and the DWD procedures.

DOL Guidance Pertaining to the FFCRA

  • The FFCRA calls for paid leave when an employee is “unable to work or telework.” What does that mean?
    • “Telework” means “no less work than if it were performed at an employer’s worksite.” However, that work need not be performed during traditional hours, or all in one, continuous block.
      • The DOL is incentivizing flexibility in allowing teleworking arrangements that recognize that many employees can work from home but for childcare responsibilities.
      • The DOL has explicitly approved agreements wherein an employee would work 7-9am, 12:30-3pm, and 7-9 pm, for example. This type of arrangement may allow employees to teach or care for children while school is closed. In these sorts of arrangements, employers would only pay employees for hours worked, as opposed to having to pay from 7am to 9pm. The DOL has specifically stated that it will not apply the “continuous workday” rule to this type of agreement, so employers do not run the risk of accidentally owing overtime.
    • The employee, if eligible for overtime, would still be owed overtime for actually working more than 40 hours per week. Thus, it is important that non-exempt employees who may work intermittent hours at home closely track and report their hours so that the employer can accurately compensate the employees for hours worked.
  • The FFCRA provides for paid sick leave for employees subject to a “quarantine” or “isolation” order. The DOL has now defined what constitutes a quarantine or isolation order.
    • Coverage extends to employees unable to get to work due to “stay at home” or “shelter in place” orders.
    • However, an employee is not eligible for the paid sick leave if the employer is shut down due to a quarantine order.
    • The employee also may not take the sick leave where an employer does not have work for an employee.
      • This is true even if the closure of a business was substantially caused by a quarantine order. For example, if a coffee shop closes because its customers are unable to go to the shop due to a stay at home order, the employee is not eligible for paid sick leave.
      • The question is whether the employee would be able to work or telework “but for” being required to comply with a quarantine or isolation order.
      • We at KEW do not envision too many situations where a “shelter in place” type order would actually entitle an employee to sick pay under the FFCRA. In the vast majority of these scenarios, either the business will be closed pursuant to the order, and so there would not be any work for the employee, as described in the coffee shop examples above. Or, the business is essential, and therefore open, so there is no order preventing the employee from working.
  • The guidelines clarify who is and isn’t a “health care provider” for the exemption available for employers of health care providers:
    • Doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution
    • This includes administrative staff in a doctor’s office as well as the actual doctors and nurses.
    • Note the definition of healthcare provider is not nearly as broad/comprehensive as it is under Wisconsin’s Safer at Home Order.
  • Recordkeeping: Employers must document requests for time off under the FFCRA – whether granted or not – and must keep supporting documents such as doctor’s notes for 4 years. In fact, being able to provide adequate documentation will be critical for an employer to receive refunds reimbursing them for the paid leave. However, the DOL is not requiring any specific form/format of such records at this time.
  • Intermittent leave is allowed if the employer and employee agree. If the employee is taking emergency paid sick leave to provide childcare for a child whose school/daycare closed, or is taking expanded FMLA leave, the employer has discretion to allow the employee to take leave intermittently. For example, if Employee Jim’s children’s school closes, but Jim is able to have his parents watch the children on Mondays and Tuesdays, then an employer may allow Jim to work Monday and Tuesday and take emergency leave on Wednesday-Friday. Intermittent leave could also apply to partial days or varying schedules
  • Businesses that employ fewer than 50 employees may be exempt from paying for leave to an employee needing to provide childcare under FFCRA if the employer determines that compliance would jeopardize the ongoing viability of the business in one of the below ways. Employers must document such a determination and basis thereof but need not send that documentation to the Department of Labor. A business can show that compliance would “jeopardize the ongoing viability” by showing that:
    • paying the emergency paid sick leave or expanded FMLA would result in the business’s expenses exceeding total revenues and cause the business to cease operations; or
    • the absence of the employee requesting leave would carry a substantial risk to the financial health or operational capabilities of the business due to the employee’s specialized knowledge or skills; or
    • there are not sufficient workers who are able, willing, qualified, and available to perform the labor provided by the employee requesting leave, and that labor is needed for the business to continue minimal operations
  • Finally, employers should be aware the while the DOL had declared a 1-month grace period in terms of enforcement of the FFCRA, that month has elapsed and the DOL will be expecting full compliance with the paid leave provisions going forward.

Wisconsin DWD’s Implementation of Unemployment Benefits Under the CARES Act

  • There is now an online application for the Pandemic Unemployment Assistance (“PUA”) portion of the CARES Act, which expands unemployment coverage to many individuals, like independent contractors or employees who had to quit their jobs due to COVID, who would not traditionally receive unemployment. This is a separate application than the “traditional” unemployment, and there is a separate page for it at the DWD’s website: https://dwd.wisconsin.gov/uiben/pua/.
  • The DWD has clarified that applicants under PUA will need to reapply weekly in order to receive benefits
  • If an individual worked for an employer who pays into UI within the previous 18 months, they must apply under traditional UI (and wait for an eligibility determination) before applying under PUA.
  • Recipients will receive payment via direct deposit or debit card.
  • The additional $600 Pandemic Unemployment Compensation (“PUC”) payment, for those already receiving/eligible for regular unemployment benefits, does not require an additional application, but will be added to benefit payments automatically, and will be disbursed to the recipient in the same manner the recipient receives their unemployment payment.
  • The Pandemic Emergency Unemployment Compensation (“PEUC”) provides an additional 13 weeks of unemployment benefits to those who have exhausted regular unemployment insurance benefits. It does not apply to those receiving PUA. This benefit is retroactive to the week ending April 4, 2020. Unfortunately, DWD is still waiting on guidance from the DOL on proper administration of the program. It does not have an application process in place as of April 27.

KEW can help employers understand their obligations under both the FFCRA and CARES Act. Contact us if you have questions about your business’ rights and responsibilities, and check back regularly, as we expect more guidance in the future.