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Morris Manning & Martin, LLP

FFCRA: Small Business Exemptions

04.06.2020

On March 28, 2020, the U.S. Department of Labor (DOL) published an additional round of official guidance to help employers and employees navigate the paid leave provisions of the new Families First Coronavirus Response Act (FFCRA), as amended by the CARES Act. The new guidance provides information for employers on how to seek the small business exemption under the Emergency Family and Medical Leave Act and the Emergency Paid Sick Leave Act.

As detailed in our prior legal updates, the FFCRA was signed into law on March 18, 2020, and requires businesses with fewer than 500 employees to provide emergency paid leave to employees for certain reasons related to COVID-19. However, employers with fewer than 50 employees (including religious or non-profit organizations) may be exempt if complying with the paid leave requirements would jeopardize the viability of the business. The DOL’s most recent guidance answers questions about how employers may take advantage of this exemption. The following are highlights from this new guidance:

  • Who Can Claim the Exemption? The guidance clarifies that the exemption may be claimed only if (1) an employer has fewer than 50 employees, (2) an employee requests leave because a child’s school or place of care is closed or child care provider is unavailable due to COVID-19-related reasons, and (3) an authorized officer of the business has determined that certain condition(s) (set forth below) are satisfied.
  • When Does the Exemption Apply? For purposes of determining when the exemption applies, the DOL’s guidance clarifies that a small business may claim the exemption if an authorized officer of the business has determined that at least one of the following conditions is satisfied:

◊   The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;

◊   The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or

◊   There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

  • How Does a Business Claim the Exemption? To claim the exemption, a business should document why the business meets the criteria set forth by the DOL. However, the guidance is clear that a business should not send any materials to the DOL when seeking the exemption. In addition, note that a small business who may qualify for the exemption is still required to have provided a copy of the FFCRA notice poster to all employees by April 1, 2020. The notice posters can be found here (for non-federal employers) and here (for federal employers).

Importantly, the DOL’s guidance demonstrates that the small business exemption is limited to exempting employers from providing leave due to school closures and child care unavailability. Accordingly, absent further guidance from the DOL, the small business exemption does not exempt small employers from providing paid leave for other qualifying reasons under the FFCRA, such as emergency paid sick leave for an employee who is experiencing COVID-19 symptoms. Overall, when addressing issues related to the new paid leave obligations, the DOL’s guidance encourages employers and employees to work together to reach the best solution for maintaining the business and ensuring employee safety.

For questions about the DOL guidance and how it could specifically impact your company, contact the MMM Employment Team.