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Updated Guidance for Small Businesses and New Leave Laws

April 1, 2020

The U.S. Department of Labor (“DOL”) continues to publish additional guidance for employers regarding the emergency paid sick leave (“EPSL”) and Expanded Family and Medical Leave Act (“EMFLA”) Congress passed almost two weeks ago as part of the Families First Coronavirus Response Act (“FFCRA”).  Although the DOL has yet to promulgate regulations, the new guidance – in the form of FAQs – may be helpful to employers that are subject to the new laws, especially for small businesses seeking to claim an exemption from them.

As we have reported before here and here, the FFCRA created a right for full-time employees to use up to 80 hours of emergency paid sick leave for certain specific COVID-19 related reasons.  Additionally, the FFCRA created an expanded paid leave benefit under the Family and Medical Leave Act for eligible employees who are unable to work or telework because their minor child’s school is closed or child care provider is unavailable due to COVID-19.  The new laws apply to employers with fewer than 500 employees, although the law created the possibility for an exemption for small businesses.

Details Emerge regarding the Small Business Exemption

The FFCRA provided for the possibility for small businesses with fewer than 50 employees to receive a “good cause” waiver from the new paid requirements, leaving it up to the DOL to set forth the procedure for obtaining such an exemption.  In its updated FAQs, the DOL guidance states that a small business may claim this exemption on its own, without any action by the DOL, with respect to providing paid sick leave due to a school or place of care closure.  To claim the exemption, an authorized officer of the business must determine 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.

This self-certifying “good cause” waiver should provide relief to small businesses that cannot accommodate paid employees absence due to a school or child care closure issue.  It remains to be seen how small businesses can seek an exemption regarding other paid leave conditions.  Small businesses should contact their relationship attorney or a member of Honigman’s Labor and Employment department for guidance in properly documenting the basis for claiming this small business exemption.

The Impact of Furloughs, Closures, and Reduced Schedules on New COVID-19 Leave Laws

The DOL’s guidance also addresses the impact of furloughs, facility closures, and reductions in work hours on an employer’s obligation to pay employees for their use of the new COVID-19 leave benefits.  The DOL clarified that the new leave benefits are unavailable where employees are not working or teleworking because they have been furloughed, their work site has closed, or their work hours have been reduced.  If an employee was on either EPSL or EFMLA when an employer decided to furlough the employee or close the work site, the employee must be paid for EPSL or EFMLA used before the work site closed, but the employee is not eligible for additional EPSL or EFMLA for the duration of the furlough or while the work site is closed.

If you have questions about the application of the paid leave benefits, clients should contact their relationship attorney or a member of Honigman’s Labor and Employment department.