KingSpry | DOL Clarifies Small Business Exeption First Coronavirus Act

Department of Labor Releases Procedures for the Small Business Exemption to COVID-19 Legal Requirements

Posted on April 3rd, 2020
by Keely J. Collins

On April 1, 2020, the Department of Labor released regulations to clarify the leave entitlements under the Families First Coronavirus Response Act (FFCRA).

Please see our prior blog for answers to common questions.

Under the FFCRA, small businesses, or organizations with fewer than 50 employees, may qualify for an exemption to the FFCRA’s leave entitlements. Depending on the circumstances, a small business may be exempt from leave entitlements as to all employees, or just as to certain employees.

The Department’s regulations provide the following process for claiming an exemption to FFCRA leave entitlements:

  • Determine whether the organization has fewer than 50 employees. Employee is defined, generally speaking, an anyone who receives a W-2. Both full-time and part-time employees are included in the total number of employees, for purposes of the FFCRA.
  • An “authorized representative” of the business must determine that one or more of the following applies:
    1. The leave requests 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; or
    2. The absence of the employee or employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
    3. 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.
  • To elect the exemption, the employer must document that a determination has been made pursuant to the criteria above.
  • The employer should not send the above documentation to the Department and, instead, must retail the records in its files.

To comply with the above, businesses may be best advised to contact legal counsel to assist in drafting a detailed memorandum of record that meets the legal requirements. Although businesses should not send their records to the Department, businesses will be glad they have maintained detailed records in the event of an audit or legal challenge.

We will continue to keep you updated as the law develops.

HR Law Update is a publication of the KingSpry Employment Law Practice Group. Keely Jac Collins is managing editor. HR Law Update is meant to be informational and does not constitute legal advice.