On March 18, 2020, President Trump signed emergency relief legislation known as the Families First Coronavirus Response Act (FFCRA).
The FFCRA requires many employers to provide paid sick leave to their employees for qualifying reasons related to COVID-19.
Coverage and Eligibility
Employers with fewer than 500 employees will be required to provide full-time employees with an additional 80 hours of paid sick leave, or, for part-time employees, the number of hours equal to the hours worked during an average two-week period. For part-time employees with varying schedules, employees can base their calculation on the average number of hours the employee was scheduled per day over a six month period, or, if they haven’t worked that long, the reasonable expectation of the average hours the employee is expected to be scheduled to work.
Reasons for Leave
Employers must provide this emergency paid sick time when the employee is unable to work (or telework) because the employee is:
- Subject to a federal, state or local quarantine or isolation order related to COVID-19;
- Advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- Experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- Caring for an individual who is subject to a government quarantine or a self-quarantine advised by a health care provider (reasons 1 and 2 above);
- Caring for their child if the child’s school or place of care has been closed, or the childcare provider is unavailable due to COVID-19 precautions; or
- Experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services.
Rate of Pay
Employees must be paid at their regular rate for reasons No. 1 through No. 3 above, except that pay cannot exceed $511 per day and $5,110 total. When employees take paid sick leave to care for someone else, or the employee is experiencing any other “substantially similar condition,” i.e., reasons No. 4 through No. 6 above, then employers can pay employees two-thirds their regular rate, except that pay cannot exceed $200 per day and $2,000 in the aggregate in those circumstances.2
The new regulation specifies that employers must pay employees the higher of the employee’s “average regular rate,” the federal minimum wage, or any state or local minimum wage the employee is entitled to. For most employers, this is going to require calculating the average regular rate.
To determine the “average regular rate,” employers must compute the “regular rate for each full workweek” in which the employee has been employed over the six months preceding leave, or if employed for less than six months, the entire period of employment. Employers must then compute the average of the weekly rates, weighted by the number of hours worked for each workweek.3
Additionally, an employee’s commissions, tips and piece rates are incorporated into the calculation of the regular rate under this law in the same way they are under the Fair Labor Standards Act (FLSA).
If, over the six-month period, an employee is paid exclusively through fixed hourly wage or salary, the average regular rate would equal the hourly wage or hourly equivalent of their salary.
But, if an employee is paid through different arrangements, such as piece rate, commissions or tips, the regular rate may fluctuate from week to week. In that case, for each full workweek in the six-month period, employers will calculate all remuneration not excluded from the regular rate under the Fair Labor Standards Act. Then, employers will compute the number of hours worked for each full workweek. (Note: This does not count hours when the employee took leave.) Finally, divide the total pay over the six-month period by all hours worked. The result is the average regular rate.
For example, if there are 26 full workweeks in the six-month period, and an employee worked 1,150 total hours over those weeks and received $23,000 in non-excludable remuneration, then the average regular rate is $20.00 ($23,000 divided by 1,150 hours).
