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Small Business Exemption – Families First Coronavirus Response Act

Can small business owners claim an exemption under the Families First Coronavirus Response Act (“FFCRA”)?  Yes, if the business meets certain criteria.

Under the Families First Coronavirus Response Act (“FFCRA”), all private employers that employ fewer than 500 employees at the time an employee requests to take leave must comply with the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”). Of note, the EPSLA requires employers to provide up to 80 hours of paid sick leave to employees who need to take leave for specified COVID-19 related reasons; whereas the EFMLEA requires that employers provide up to 10 weeks of paid and 2 weeks of unpaid emergency family and medical leave to employees who are caring for their children whose schools or places of care are closed (or whose child care providers are unavailable) for COVID-19 related reasons. Certain employers may claim a small business exemption, which exempts them from the requirement to provide leave under the EPSLA and the EFMLEA.

Which Employers Can Claim An Exemption?

An employer with fewer than 50 employees (i.e. a small business) may claim an exemption from the paid sick leave requirements under the EPSLA and EFMLEA when “the imposition of such requirements would jeopardize the viability of the business as a going concern.” See, 29 C.F.R. § 826.40(b)(1).

What Criteria is Required to Claim the Small Business Exemption?

An authorized officer of the business must determine:

  1. The leave requested under the EFMLEA or section 5102(a)(5) of the EPSLA 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(s) requesting leave under the EFMLEA or section 5102(a)(5) of the EPSLA would entail substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge, or 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(s) requesting leave under either the EFMLEA or section 5102(a)(5) of the EPSLA, and these labor or services are needed for the small business to operate at a minimal capacity. See, 29 C.F.R. § 826.40(b)(1)(i)-(iii).

Once the determination is made, the employer must document that a determination has been made of the employer’s eligibility to claim the exemption pursuant to one of the three above-mentioned reasons. This documentation does not need to be sent to the Department of Labor (“DOL”) but should be retained in the employer’s records. See, 29 C.F.R.§ 826.40(b)(2).

What Does This Mean For Employers?

Any employer that fits the criteria for the small business exemption does not have to provide leave under the EFMLEA or section 5102(a)(5) of the EPSLA. Even if an employer elects to claim the small business exemption, the employer must still post a FFCRA notice as required by law. See, 29 C.F.R. § 826.40(b)(3). Please visit the following link for the DOL’s FFCRA Notice: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf.

For more information on the FFCRA and whether your business qualifies for the small business exemption, please contact the attorneys at York Bowman Law, LLC.

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