USDOL ISSUES CLARIFYING GUIDANCE REGARDING SMALL BUSINESS EXEMPTION UNDER THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT

By: Christian P. Jones

The USDOL has issued guidance clarifying when the small business exemption applies to exclude a small business from the leave provisions of the Families First Coronavirus Response Act (FCCRA), including both the Emergency Paid Sick Leave Act (EPSL) and Emergency Family and Medical Leave Expansion Act (EFMLA).

By way of reminder, the EPSL provides for up to 80 hours of paid sick leave time for the following reasons:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
  5. The employee is caring for their son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of the son or daughter is unavailable, due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor.

The EFMLA provides for paid FMLA leave for an employee due to a need to care for the employee’s child under 18 years of age if the child’s elementary or secondary school or place of care has been closed, or the childcare provider is unavailable due to a “public health emergency.”

When initially signed into law, both provisions permitted the USDOL to exempt small businesses with fewer than 50 employees under circumstances to be later set forth.  The new guidance addresses these circumstances.

Pursuant to the recently released guidance, the exemption is available to employers with fewer than 50 employees, including religious or nonprofit organizations, if an authorized officer of the employer determines one of the following conditions applies:

  • Providing EFMLA and/or EPSL childcare leave (school closures and childcare unavailability) would cause the business’s expenses and financial obligations to exceed its revenues and cause the business to cease operating at a minimal capacity; or
  • The employee’s absence would entail a substantial risk to the business’s financial health or operational capabilities because of specialized skills, knowledge of the business, or responsibilities the employee possess; or
  • There are insufficient workers who are able, willing, and qualified to perform the labor or services provided by the employee requesting childcare leave, and these labor or services are needed for the business to operate at a minimal capacity.

Notably, the USDOL guidance provides that school closures/child care reasons for FFCRA leave (reason #5 for EPSL leave and the only reason EFMLA is available) are the only reasons for which this exemption is available (provided one of the above criteria is met). Thus, even if a smaller employer with fewer than 50 employees meets the criteria for this exemption, the small employer is not exempt from providing EPSL for reasons #1, 2, 3, 4 and 6 (i.e., the medical/family care related reasons for EPSL).