Resources

Small business exemptions from requirements of the Families First Coronavirus Response Act

published in McAfee & Taft LINC | March 30, 2020

The U.S. Department of Labor continues to update their guidance on the FFCRA on a regular basis.  Most recently, the DOL has provided more explanation about the small business exemption, which would exclude a small business from the requirements of the Emergency Family and Medical Leave Expansion Act and from part of the requirements of the Emergency Paid Sick Leave Act.

To be eligible for the exemption, an employer must be a small business, meaning one with fewer than 50 employees.

An eligible small business would be exempt from providing two types of leave:

(a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19related reasons; and
(b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19related reasons.

At this time, it does not appear that a small business would be exempt from providing paid sick leave for all other qualifying reasons.

A small business would be eligible for the 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.

Only one of the above three conditions must be met for the exemption to apply.  To elect this small business exemption, employers should document why their business meets the criteria set forth by the DOL.  Employers should not send any materials to the DOL when seeking the exemption, but rather, retain the documentation for their records.

Businesses with fewer than 25 employees that do not otherwise qualify for the above small business exemption may qualify for an exemption from the requirement to provide restoration to the same or equivalent position upon return from paid sick leave or expanded family and medical leave.  In general, employees are not protected from employment actions, such as layoffs, reductions, or furloughs that would have affected their employment regardless of whether they took leave.  For example, an employee would have no right to restoration if an employer had a legitimate business reason to close the employee’s worksite.  These rules apply to employers of any size.  Employers with less than 25 employees may also refuse to return employees to work in the same or equivalent position if all four of the following hardship conditions exist:

  • The employee’s position no longer exists due to economic or operating conditions that affect employment and due to COVID-19related reasons during the period of the employee’s leave;
  • The employer made reasonable efforts to restore the employee to the same or an equivalent position;
  • The employer makes reasonable efforts to contact the employee if an equivalent position becomes available; and
  • The employer continues to make reasonable efforts to contact the employee for one year beginning either on the date the leave related to COVID-19 reasons concludes or the date 12 weeks after the leave began, whichever is earlier.