HOW TO QUALIFY FOR SMALL BUSINESS EXEMPTION TO RECENT COVID19 LAWS: DOL ISSUES GUIDANCE ON FFCRA EXEMPTION

By Ravi S. Nagi on April 6, 2020

The U.S. Department of Labor recently issued guidance on the exemption for small businesses which excludes them from the provisions of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act within the Families First Coronavirus Response Act (“FFCRA”). The FFCRA applies to all employers with less than 500 employees, except for certain small businesses with fewer than 50 employees if complying with the FFCRA would jeopardize the viability of the small business as a going concern. The Dept. of Labor stated it would issue further guidance clarifying said exemption in April. The recently issued guidance states as follows:

An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that one of the three conditions below is present:

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;
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
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.
The Department encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.

If you are interested in reviewing your business’s ability to qualify for this FFCRA small business exemption, please contact Attorney Ravi Nagi at 340-774-2944 or rnagi@vilaw.com.

Ravinder S. Nagi is Assistant Managing Attorney and Chair of the Labor and Employment Practice Group at BoltNagi PC, a full-service business law firm on St. Thomas, U.S. Virgin Islands.