April 2, 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.
On April 2, 2020, the DOL’s Wage and Hour Division (“WHD”) posted a temporary rule issuing regulations pursuant to the FFCRA (see the temporary rule here). In this temporary rule, the WHD provided clarification on the applicability of the small business exemption. The temporary rule codifies the circumstances outlined in the DOL FAQ released March 28, 2020 (see here) and provides additional guidance on its operation.
Consistent with the FAQ, the temporary rule provides that a small business, with less than 50 employees, 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.
To apply the exemption, a business must document that a determination has been made that one or more of the circumstances provided above applies. This documentation must be kept internally in the company’s files for a period of four years. There is no requirement that an application or documentation be sent to the DOL; in fact, the DOL requests that businesses not send any such documents. The temporary rule does require a business to post the required notice FFCRA notice regardless of whether they apply the exemption to their employees. For notice requirements and the notice poster see here.
Conroy Baran remains committed in these trying times to assisting our business clients with their day-to-day corporate needs, as well as their mergers, acquisitions, sales, reorganizations (including Chapter 11), succession planning, corporate and securities needs, and can accommodate safe client contact through video conferencing and screen sharing, as well as the usual talk, text, and email.
Kyle Conroy: 816-388-9686
Robert Baran: 816-616-5009
Larry Pittman: 816-210-9680
Christopher Stewart: 816-522-1582
Andrew Potter: 719-359-2701
Bob Reynolds: 417-496-2467