The U.S. Department of Labor (“DOL”) has provided additional and much-needed guidance on the exemption for small businesses under the Families First Coronavirus Response Act.

The U.S. Department of Labor (“DOL”) has provided additional and much-needed guidance on the exemption for small businesses under the Families First Coronavirus Response Act. Prior to this update there was uncertainty on this exemption. Further, the DOL provided notable revisions and clarifications to previously issued guidance. The interpretation and implementation of the FFCRA is changing quickly. The DOL anticipates publishing proposed regulations for the FFCRA in early April.

The Small Business Exemption: An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing (a) paid sick leave and (b) expanded family and medical leave when either or both is due to school or place of care closures or childcare provider unavailability for COVID-19 related reasons if doing so would jeopardize the viability of the small business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements if:

• The employer employs fewer than 50 employees;

• Leave is requested because the child’s school or place of care is closed, or childcare 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 below is satisfied.

A small business may claim this exemption if an authorized officer of the business has determined that:

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.

The DOL indicates that school closures/childcare reasons for FFCRA leave are the only reasons for which this exemption is available (if one of the above criteria is met).