DOL FFCRA Q&A Updates Raises Questions About Substitution of Paid Leave

On April 20, 2020, the U.S. Department of Labor updated its Questions & Answers website regarding the Families First Coronavirus Act (FFCRA). The update included 8 new questions and answers on various topics, most relating to computing hours of leave and rates of pay for FFCRA leave.

Most significantly, the DOL has added a question clarifying how FFCRA leave interacts with employer-provided paid leave. We already knew that an employer cannot require an employee to exhaust employer-provided paid leave before using emergency paid sick leave under the FFCRA. We also already knew that, if both the employer and employee agree, the employee can use their employer-provided leave to “gross up” their pay during any period of leave for which the employee would receive 2/3 pay under the FFCRA.

The new part: The DOL now clarifies that while an employee is receiving 2/3 pay under the expanded FMLA provisions, an employer may require an employee to use employer-provided paid leave concurrently with the employee’s expanded FMLA leave if the employer-provided leave is typically available to the employee for use when his or her child(ren)’s school or place of care is closed, or the child care provider is unavailable. If an employer does this, the employer must pay the employee for the full day of paid leave under the employer’s policy until the employee has exhausted that leave. The employer can then claim a tax credit for those days in the amount of 2/3 of the employee’s regular rate of pay for each day of leave, subject to the caps of $200 per day and $10,000 in the aggregate over 10 weeks. Once the employee exhausts paid leave available under the employer’s policies, any remaining FFCRA leave would continue to be paid as provided in the FFCRA, i.e., at 2/3 of the employee’s regular rate, subject to the daily and aggregate caps.

If correct, that would mean that employers can effectively reduce the total amount of paid leave available to an employee who uses FFCRA leave by requiring the employee to burn through their employer-provided leave, even during a period when the FFCRA affords pay at 2/3 of an employee’s regular rate of pay.

Notwithstanding the DOL’s guidance on this issue, we offer a couple of words of caution:

1. At least one respected employment law blogger, Eric Meyer of The Employer Handbook, reads the guidance to say that employers who require employees to substitute paid leave must pay not just full pay for the paid leave day, but full pay for the paid leave day plus 2/3 pay under the FFCRA. While that was not our initial impression, the guidance and regulations are far from models of clarity. Hopefully the DOL will provide some additional guidance with examples to explain clearly how this is supposed to work.  
2. The Q&A guidance is not a regulation and does not carry the force of law. While it represents the DOL’s interpretation of an issue, the DOL has also been known to change its guidance, at times daily during this pandemic, and the courts don’t necessarily have to follow the DOL’s guidance if they determine it is contrary to the statute that Congress passed.