Understanding the Small Business Exemption under the Families First Coronavirus Response Act

On April 6, 2020, the United States Department of Labor released final regulations interpreting the Families First Coronavirus Response Act (FFCRA). While the regulations cover a multitude of issues, they provide much-needed interpretations of the small business exemption (fewer than 50 employees) under the FFCRA.

Under the regulations, employers with 49 or fewer employees are exempt from providing FFCRA leave for child-care purposes when allowing such leave would jeopardize the viability of the business as a going concern. It is important to note that the exemption only applies to leave for child-care purposes, and none of the other FFCRA-leave purposes. As a best practice, employers should address exemption decisions with specific reference to individual employee leave requests and avoid making a blanket decision that the employer is exempt from providing FFCRA child-care leave.

To use the small business exemption, an authorized officer of the employer must determine that:

1. The leave requested 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 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 no 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.

The employer must document that an authorized officer made this determination, and the Department of Labor advises that employers should retain records substantiating the determination. Even if an employer exempts one or more employees, it must still display the FFCRA poster.

Please contact Dvorak Law Group to discuss specific questions and recommendations regarding your business.

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