The Department of Labor (DOL) has issued guidance on many aspects of the Families First Coronavirus Response Act (FFCRA) since it was passed. One area that has remained unclear was how FFCRA would impact companies that operate under the Davis-Bacon Act (DBA) and McNamara-O’Hara Service Contract Act (SCA).
On August 3, however, the DOL released “ COVID-19 and the Service Contract Act: Questions and Answers.” This brief FAQ looks at what employers covered under DBA or SCA must pay employees that take leave under FFCRA when they use Emergency Paid Sick Leave (EPSL) or Emergency Family and Medical Leave (EFML).
- If an employee is using EPSL or EFML under the FFCRA, employers are not required to include the fringe benefit cash equivalent in their rate of pay. But, if an employer provides health insurance rather than the cash equivalent, they DO have to continue providing the employee with insurance while they are on a paid leave through FFCRA.
- If an employee is using FFCRA leave but also using paid sick leave, vacation, or holiday hours provided by the SCA or under the terms of Executive Order 13706, employers have to continue providing SCA health and welfare payments to the employee. The same applies to any qualifying
health and welfare benefit, DBA fringe benefits, or cash equivalent required by the executive order for qualifying hours.
What should you do?
If you’re a company that works on federal projects under DBA and SCA, you’ll want to become familiar with the DOL guidance and make sure your pay and fringe policies for employees on FFCRA leave are in compliance.
You can start by identifying employees that took EPSL or EFML leave under FFCRA. Next, examine the pay rates those employees and ask the following questions:
1. Do you pay fringe benefits in cash? If so, you did not have to include that amount into their rate of pay during their leave.
2. Do you provide health insurance instead of cash for fringe benefits? If so, you should have continued paying this during their leave.
If you had employees that took FFCRA leave PLUS other paid time off as provided by SCA or Executive Order 13706, you should have continued providing the pay and benefits required by SCA , up to the maximum of 40 hours a week and 2,080 hours per year on each contract. This extends to any benefits and pay, or monetary equivalent, required under DBA.
At the moment, there has not been any guidance issued on what companies should do if they find that they did not follow these guidelines, which were issued months after the FFCRA was signed into law. We’re watching closely for updated information and will provide additional coverage of this topic as it evolves.
Additional resources:
Read the DOL full answers here.
Explore COVID-19 Resources for small business
Laws government contractors should know
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.
