The FFCRA requires certain employers to provide paid sick leave and expanded FMLA benefits due to COVID-19 but provides that businesses with fewer than 50 employees may be exempt if the obligation would jeopardize the viability of the business as a going concern. On April 1, the U.S. Department of Labor provided guidance on how businesses may be exempt and the necessary steps to take in support of the exemption.

There are 3 ways an employer may be exempt. In order to be entitled to this exemption an authorized officer of the business must determine one of the following applies:

(i) Leave Jeopardizes Revenue

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;

(ii) Employee has Specialized Skills

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

(iii) Lack of Sufficient Workers

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 leave, and these labor or services are needed for the small business to operate at a minimal capacity.

Recordkeeping

There is no need to apply or seek approval from the DOL and the business should not send any documentation to the Department. The business is simply required to retain the records in its files. Those records should include financial records, customer or client information, schedules and calculations demonstrating the reasoning in support of the determination. A written statement by the officer making the determination is also recommended.

A word of caution

Even if the employer chooses to exempt one or more employees, the employer must still post (or provide to employees if they are not going to see the posting) the required notice pursuant to the Act.

We will continue to monitor the situation and provide updates as they become available. If you have questions on how COVID-19 could impact your company, please reach out to Peter Callaghan or a member of our Employment Law Group.