Labor Department Clarifies Virus-Related Paid Leave in Guidance

Businesses won’t be able to count independent contractors toward the 500-employee minimum needed to avoid having to pay workers emergency leave under the coronavirus relief law, but they can include some temporary workers provided by staffing firms in the headcount, the Labor Department said.

In question-and-answer guidance posted Tuesday, the DOL’s Wage and Hour Division also said small businesses with fewer than 50 workers can qualify for an exemption from the law by documenting that their viability would be jeopardized by providing the required paid sick and other leave to workers affected by the pandemic. The department said it will detail the criteria for that exemption, a top area of confusion in the business community, in “forthcoming regulations.”

The department didn’t address which types of healthcare providers and emergency responders may qualify for a separate exemption.

The guidance gives employers a clearer picture of their obligations under the new law, which was signed by President Donald Trump last week and excludes companies with 500 or more workers. The DOL is slated to roll out new regulations, effective April 1, implementing requirements to give some workers two weeks of virus-related paid sick leave, along with 10 weeks of partially paid family leave to care for a child whose school or daycare is closed due to the pandemic.

“Providing information to the American workforce is a top priority for the Wage and Hour Division,” said WHD Administrator Cheryl Stanton in a statement. “With so many workers and so many employers struggling to find their way in these trying conditions, providing guidance on a rolling basis will allow workers and businesses to prepare for the law to go into effect on April 1, 2020. We remain committed, and are working around the clock to provide the information and tools for employees and employers alike.”

The agency said on Friday that there will be a 30-day non-enforcement period for good-faith employers.

The Wage and Hour Division also said employers that start providing paid leave connected to coronavirus before the law takes effect will still need to provide additional leave starting April 1.

Part-time employees will be entitled to paid sick leave and expanded FMLA coverage for their average number of work hours over a two-week period. If workers’ hours fluctuate or are unknown, employers should use a six-month average, the agency said.

Getting to 500

The 500-employee threshold for excluding companies from the requirements will be counted based solely on workers in the United States or any U.S territory. Employees who are already on leave should be counted in this total, as well as day laborers supplied by a temporary agency, the WHD stated.

Although independent contractors aren’t included in the headcount, the agency provided more leeway for other types of affiliated businesses.

“Temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll)" will be included in the 500-worker count, it said.