On April 6, 2020, when the Department of Labor (DOL) published temporary regulations for the Families First Coronavirus Response Act (FFCRA), it clarified a significant detail for employers with fewer than 50 employees. According to the DOL, the small employer exemption applies only when leave is needed to care for a son or daughter whose school is closed or whose childcare is closed or unavailable for COVID-19 related reasons. The exemption generally does not apply to other paid leave requirements in the FFCRA.
The DOL rule provides, “An Employer, including a religious or nonprofit organization, with fewer than 50 Employees (small business) is exempt from providing [Emergency] Paid Sick Leave under the EPSLA and Expanded Family and Medical Leave under the EFMLEA when the imposition of such requirements would jeopardize the viability of the business as a going concern.” 29 CFR § 826.40(b)(1). The DOL defined the test as whether: (1) Such leave would cause the small employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity; (2) the absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or (3) the small employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor or services are needed for the small employer to operate at a minimal capacity.” 29 CFR §826.40(b)(1)(i-iii).
If an employer decides to deny paid sick leave or expanded family and medical leave to an employee under the small business exemption, the employer must document the facts and circumstances that meet the criteria to justify the denial. The employer should not send the documentation to the DOL, but rather retain the records in its files.