Guidance from DOL to Interpret FFCRA: Small Business Exemption

March 30, 2020

The DOL has issued guidance in the format of questions and answers regarding several provisions of the FFCRA. We are going to talk about these in increments. The first issue is when the small business exemption applies to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act.

The Act states that an employer, including a religious or nonprofit organization, with fewer than 50 employees is exempt from providing

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

The DOL guidance specifies 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.

The guidance says the Department “encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.”
The process for electing this small business exemption is still not clear. The guidance says the employer should document the above, but also says the employer should not send any materials to the Department of Labor. We will, of course, keep you updated.

This information is accurate as of March 30, 2020, and is subject to change based on any new legislation.

Anne-Marie L. Storey, Attorney at Law, Rudman Winchell
Anne-Marie Storey, Esq
Rudman Winchell
207-947-4501