Small Business Exemption

Details

Created on Friday, 20 March 2020 00:00

The Department of Labor’s guidance now includes more detailed information on the Small Business Exemption for employers with fewer than fifty (50) employees. The DOL first identifies (3) three circumstances which would satisfy the requirement that compliance with the Families First Coronavirus Response Act (“FFCRA”) will jeopardize the viability of the small business as determined by an authorized officer of the business:

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.

As of right now, it appears that the DOL is trusting small businesses to use good faith in determining if they qualify for the exemption. However, the DOL does note that if electing to use the small business exemption, the employer should document why the business meets the criteria set out above.

Additionally, it is important to note that as of right now, the exemption is only for leave taken for childcare related purposes. As a result, small businesses may not be exempt for the Emergency Paid Sick Leave Act if the leave is being taken for a qualifying reason outside of childcare.