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Thursday, April 16, 2020

The “Small Business Exemption” to the Families First Coronavirus Response Act (FFCRA)

In my previous blog post I provided a comprehensive overview of an employer’s responsibilities under the Families First Coronavirus Response Act (FFCRA) (a copy of which can be found here).  In this post I will explore the small business exemption to the FFCRA including what it entails, when a small business qualifies for it, and how a business can go about claiming said exemption.

WHAT THE EXEMPTION ENTAILS

When the FFCRA was passed by Congress it provided a limited exemption to small businesses from the requirement that they provide their employees with paid sick leave or expanded family and medical leave due to a child’s school closing or because a child care provider is unavailable as a result of the COVID-19 virus.  It is important to note that the exemption is limited to just this one category or circumstance of leave.  The FFCRA sets out five other categories of leave which the small business exemption does not apply (for a list of those categories click here).  Although this exemption seems limited in nature, it is nevertheless extremely important to small businesses and their employees as the issue of child care will most likely remain a problem well after New York State permits businesses and their employees to return to their place of work.  This is especially true if the State elects to keep schools closed for the remainder of the school year or if private daycare facilities close permanently due to the economic impact of the COVID-19 virus.  If an employee has children whose school or daycare facility is closed, they will be unable to return to work when the stay at home restrictions imposed by the State are lifted.

QUALIFYING FOR THE SMALL BUSINESS EXEMPTION

When the FFCRA was enacted it failed to elaborate or otherwise provide any insight as to how a small business can determine if qualifies for the exemption.  It simply stated that a small business with fewer than fifty (50) employees could claim the exemption to the childcare related paid leave requirement if it “would jeopardize the viability of the business as a going concern.”  Since its enactment, however, the United States Department of Labor (“DOL”) has published regulations to provide clarity as to how a business can determine if it qualifies for the small business exemption.

In accordance with the FFCRA and the DOL’s recently published regulations, an employer is exempt from providing mandated paid leave to an employee if:

  1. The business has fewer than 50 employees; and
  2. The employee is requesting leave because their child’s school or place of care is closed or child care provider is unavailable due to COVID-19 related reasons; and
  3. An authorized officer of the business has documented that he or she has determined that providing paid leave to care for a child would jeopardize the viability of the business as a going concern because:
    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; OR
    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.

A complete copy of the DOL’s regulations can be found here.

HOW TO CLAIM THE SMALL BUSINESS EXEMPTION

Conspicuously missing from the DOL’s regulations are instructions on how a small business can go about claiming or applying for the exemption.  They do, however, make it clear that businesses “should not send any materials to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family and medical leave.”

This was presumably added to avoid the DOL from becoming flooded with requests from small businesses seeking the exemption.

How then can a small business go about claiming an exemption?  First, it should be noted that based upon the language contained in the DOL’s regulation, the business must determine if the exemption applies on a case-by-case basis.  It should not use the criteria set out in the regulations to make a broad company policy that all requests for paid leave due to childcare issues will be denied.  Doing so will clearly result in the DOL finding the business to be in violation of the FFCRA.  Instead, when an employer receives a request for FFCRA mandated paid leave due to childcare issues it should have an authorized officer of the company determine if based on one or more of the three qualifying reasons set forth in the DOL’s regulations they are exempt from having to provide said leave.  They should also document how they made their determination and keep a copy of that record in case the employee whose request for leave was denied files a complaint with the DOL.

LEGAL ASSISTANCE WITH COMPLIANCE & VIOLATIONS

Please keep in mind that the FFCRA is a complex piece of legislation and the above is just a summary of one of its key provisions.  Our office is here to assist businesses with making sure that their current practices and procedures are in compliance with all the requirements of the FFCRA and other Federal and New York State laws.  We are also here to help any individual whose employer has unlawfully denied their request for leave or otherwise believe that their employer is intentionally failing to comply with the mandates of the law.






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