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WHAT ABOUT SMALL BUSINESSES AND THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT?

March 31, 2020

by Jon Newman

The Department of Labor has provided some guidance on application of FFCRA to small business of less than 50 employees.  

A small business is an employer, including a religious or nonprofit organization, with fewer than 50 employees.

When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?

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 childcare provider unavailability for COVID-19 related reasons and

 (b) expanded family and medical leave due to school or place of care closures or childcare provider unavailability for COVID-19 related reasons 

This is when doing so would jeopardize the viability of the small business as a going concern

A small business may claim this exemption if an authorized officer of the business has determined one of the following:

  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.

If I am a small business with fewer than 50 employees, am I exempt from the requirements to provide paid sick leave or expanded family and medical leave?

A small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if the:

  1. employer employs fewer than 50 employees;
  2. leave is requested because the child’s school or place of care is closed, or childcare provider is unavailable, due to COVID-19 related reasons; and
  3. an authorized officer of the business has determined that at least one of the three conditions described in numbers 1-3 above is satisfied.

The Department encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety. 

The Department of Labor simply says to elect the small business exemption, businesses should document why their business with fewer than 50 employees meets the criteria set forth by the Department.  This process will be addressed in more detail in forthcoming regulations.  However, the Department says not to send any materials them at this point.

Jon Newman

316-269-0214

Newman@hitefanning.com

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