When Can a Small Business Avoid COVID-19 Leave Requirements? DOL Provides More Answers

As the federal government has continued to roll out its response to the coronavirus (COVID-19) pandemic, the Department of Labor (DOL) has continued to update its “questions and answers” document to provide employers and employees with information to help them comply with the new leave requirements. The document is available here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions. The most recent Q&As deal with provisions of the new laws that permit “small employers” (those with 50 or fewer employees) to exempt themselves from some of the leave requirements under certain circumstances. This Employer Advisor deals with those limited exceptions and how the DOL has interpreted them.

Small Business Exemptions Under the FFCRA

Where an employee seeks either expanded family and medical leave or paid sick leave because the employee’s child’s school, place of care or caregiver is closed or unavailable, the FFCRA permits the DOL to exempt small businesses from the requirement to provide such leave “where the imposition of such requirements would jeopardize the viability of the business as a going concern.”

DOL’s Questions and Answers Regarding the Small Business Exemptions

In questions 58 and 59 and the answers to them—as of this writing, the last two questions on the document linked above—the DOL makes its first attempt to clarify those issues left open by Congress in the FFCRA.

The two questions and answers are easiest to understand read in reverse order. In response to question 59, “If I am a small business with fewer than 50 employees, am I exempt from the requirements to provide paid sick leave or expanded family and medical leave?,” the DOL responds that the employer is exempt only if the following three conditions are met:

• the employer employs fewer than 50 employees;
• the leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
• an authorized officer of the business has determined that at least one of the three conditions described in Question 58 is satisfied.

The answer to question 58, “When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?,” clarifies that the “authorized officer of the business” must determine that one of the following three conditions is met:

1. The provision of paid sick leave or expanded family and medical 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;
2. The absence of the employee or employees requesting paid sick leave or expanded family and medical 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, 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 paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

Among the key takeaways from the DOL’s responses here is how the determination is to be made (by “an authorized officer of the business”) and the types of considerations for determining whether the employee’s absence poses a threat to the viability of the business.

The exemption can apply only where the leave is sought because the employee’s child requires care that is made unavailable due to COVID-19—there is no provision permitting a business to exempt itself from the other reasons paid sick leave can be available (such as where the employee or a family member is subject to a federal, state or local quarantine or isolation order, or has been recommended by a healthcare provider to isolate or self-quarantine).

What To Do If You Think Your Business Is Exempt

If you believe your small business meets the small business exemption, the DOL questions and answers linked above (at question 4) state that you must “document why your business with fewer than 50 employees meets the criteria set forth by the [DOL, at question 58].” The DOL specifies that you should not send this documentation or any other materials to the DOL while seeking a small business exemption; rather, just keep the documentation on file in case of a future audit or dispute.

Determining whether requested leave can or should be denied under the potential small business exemption is a difficult task requiring consideration of numerous different factors. Accordingly, the DOL (at question 59) reiterates that it “encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.”

This remains an extremely fluid situation, and we will continue to inform you of changes as they occur. If you have questions regarding employee family and medical leave or paid sick leave under the FFCRA, other governmental responses to the COVID-19 pandemic, or strategies for employers responding to the pandemic, please contact William Parker (952-921-4602 or wparker@pklaborlaw.com), or any other attorney at Peters, Revnew, Kappenman & Anderson, P.A.