Small Businesses – Are You Exempt from the Families First Coronavirus Response Act?
The Department of Labor (“DOL”) has the authority to exempt small businesses from providing paid leave benefits under the Families First Coronavirus Response Act if it “would jeopardize the viability of the business as a going concern.” This simple three-step guide will break down whether or not you qualify for the exemption.
1. Are You a Small Business?
An employer, including a religious or nonprofit organization, with fewer than 50 employees is a small business.
2. What is the Reason Your Employee is Taking Leave?
If your employee is seeking paid leave for one of the two following situations:
- paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons or
- expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19-related reasons, please proceed to Step 3.
If your employee is not seeking paid leave for these TWO situations, then, as of now, your business will not be exempt.
3. Can You Prove Your Business Would be in Jeopardy?
An authorized officer of the business must determine that at least one of the following three conditions are met.
- 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;
- The absence of the employee or employees who are 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
- 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.
If you deny an employee’s request for paid leave pursuant to the small business exemption, you must document your authorized officer’s determination that the criteria for that exemption (as stated above) are satisfied and retain such documentation for four years. You should not send any materials to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family medical leave, but rather should retain such records for your own files.
Disclaimer: Laws, regulations, and guidance on matters related to COVID-19 change rapidly. Please contact your Payne & Fears attorney for current guidance.