Small Business Exemption to FFCRA

Q: Do you qualify for the small employer exemption?
A: The new guidance provides additional details on this exception for employers with fewer than 50 employees. The exemption applies only to leave taken due to the need to care for a child whose school or place of care is closed due to COVID-19 – not to other reasons covered by the emergency sick leave provisions. The exemption is available only if an “authorized officer of the business” determines that one or more of the following three conditions applies to the business:

  1. The provision of paid sick leave or expanded FMLA leave would result in a situation where the small business’s expenses and financial obligations would exceed the available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of the employee(s) requesting paid sick leave or expanded FMLA 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, or 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 FMLA leave, and these labor or services are needed for the small business to operate at a minimal capacity.

It does not appear at this time that employers will have to submit any documentation to the DOL to claim the exemption. Thus, it is recommended that any small business that wants to rely on the exemption should be sure to document which authorized representative of the business made this determination and the specific factual reasons for doing so.