March 31, 2020
This briefing is not intended to and does not constitute legal or medical advice. Questions concerning how the law applies to your specific factual circumstance should be directed to one of our attorneys at the firm.
On March 18, 2020, the federal Families First Coronavirus Response Act (“FFCRA”) was signed into law. The FFCRA contains two separate acts that provide paid leave for absences resulting from coronavirus (“COVID-19”): the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act. The FFCRA authorized the Department of Labor (“DOL”) to produce emergency regulation providing an exemption from paid leave requirements for employers with fewer than 50 employees when doing so would jeopardize the viability of the small business as a going concern.
The DOL has yet to release such a regulation for the small business exemption; however, on Saturday March 28, 2020, the DOL did release latest round of guidance in the form of an FAQ addressing critical issues including the scope of the small business exemption, which can be found at https://www.dol.gov/agencies/whd/pandemic/ffcra-questions.
We recommend that all companies thoroughly review the latest release from DOL in its entirety but we have summarized a few notable parts of the FAQ within this post. Specifically, the FAQ indicates that a small business may claim this exemption if an authorized officer of the business has determined that:
- (1) 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;
- (2) 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
- (3) 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.
We recommend that all companies seeking to apply for the small business exemption, prepare documentation to support one or more of the listed circumstances provided above in anticipation of the DOL releasing regulation providing for the exemption.