Under what circumstances may a small employer who employs fewer than 50 employees be exempt from the leave provisions under the FFCRA?
As you likely know now, the Families First Coronavirus Response Act (FFCRA) applies to all private employers with fewer than 500 employees. Therefore, even if you employ only a few employees, the FFCRA applies.
The FFCRA, however, gives authority to the Department of Labor (DOL) under both the Emergency Paid Sick Leave Act (EPSLA) and the Emergency FMLA Expansion Act (expanded FMLA) to exempt employers with fewer than 50 employees (small employers) from the paid leave requirements. Since the FFCRA’s enactment on Wednesday, March 18, 2020 (seems like a year ago!), we have been waiting to hear the DOL’s position as to a potential small employer exemption.
On April 1, 2020, the effective date of the FFCRA, the DOL published its regulations relating to the Act. The regulations provide that small employers can indeed claim an exemption from the paid sick leave and expanded FMLA leave requirements, but only when the leave requested is due to school or child care closures, or when child care is otherwise unavailable, due to COVID-19 reasons.
Significantly, small employers are not exempt from the other potential grounds for paid sick leave under the EPLSA. For example, small employers will still need to provide paid sick leave to an employee who is subject to any quarantine or isolation order related to COVID-19, who has been advised by a health care provider to self-quarantine due to COVID-19 concerns, who is experiencing COVID-19 symptoms and seeking a medical diagnosis, or who is caring for someone else in one of these situations.
To qualify for this limited small employer exemption, employers essentially need to show that providing the leave would jeopardize the viability of the company as a going concern. More specifically, an authorized officer of the business must determine that one of the following conditions applies:
- Providing the 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”;
- Absence of the employee(s) requesting leave would “entail 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 leave … and these labor or services are needed for the small business to operate at a minimal capacity.”
Importantly, this is not a “blanket” exemption to all employees. Even if an employer meets one of these three criteria, it may deny paid sick leave or expanded FMLA leave only to those specific employees whose absence would cause the small employer’s expenses and financial obligations to exceed available business revenue, pose a substantial risk, or prevent the small employer from operating at minimum capacity.
Finally, if a small employer denies leave under the FFCRA to an employee under this exemption, it must document the facts and circumstances that meet the criteria described above to justify the denial and retain those records for its own files for four years. And regardless of whether a small employer chooses to exempt one or more employees, the employer is still required to post a notice of the law’s requirements.
The DOL “encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.” We agree with this common-sense approach.
We understand that navigating the FFCRA provisions, as well as the other options for employers (especially smaller ones) that are struggling as a result of the COVID-19 pandemic, is complicated. Please do not hesitate to ask for assistance from any of us at Fredrikson and Byron, P.A. with these matters.