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Families First Coronavirus Response Act: DOL Guidance on Exemption

March 31, 2020

Families First Coronavirus Response Act

Phase 2 of the Congressional response to coronavirus resulted in the Families First Coronavirus Response Act (FFCRA), which goes into effect on April 1st. The U.S. Department of Labor published another round of guidance to its growing questions and answers list, which includes additional information on the small business hardship exemption. However, these answers still don’t provide insight about the actual process for applying for the exemption. We expect more guidance before the effective date. Click here for the full DOL Question and Answer section.  Click here for the National Restaurant Association’s recap of the FFCRA.  

Earlier guidance this week stated “to elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.”  This leads us to believe the Department is going to make us wait until the regulations are published for the answer to the process question. Read below for two Q&A'a addressing the hardship exemption for businesses with fewer than 50 employees.

Question:  When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?

Answer: An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing paid sick leave and expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. 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.

Question:  If I am a small business with fewer than 50 employees, am I exempt from the requirements to provide paid sick leave or expanded family and medical leave?

Answer: A small business is exempt from certain paid sick leave and expanded family and medical leave requirements if providing an employee such leave would jeopardize the viability of the business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if the:

  • employer employs fewer than 50 employees;

  • leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and

  • an authorized officer of the business has determined that at least one of the three conditions described in Question 58 is satisfied.