Business man on phone

Small business owners may be exempt from providing paid leave for certain reasons under the Families First Coronavirus Response Act (FFCRA) as explained by James Venable, Esq., SPHR and Sue Woods, Esq.

Transcript:

James: Welcome to our Podcast. I’m your host, James Venable, and I’m the Vice President of Compliance and Employment Law for Reed Group, a Guardian company. Joining me on the podcast is Sue Woods, Senior Compliance Counsel at Reed Group.

These podcasts are designed to provide a quick, easy to understand information about COVID-19 and how it is affecting employers. On today’s podcast, we’ll discuss how small businesses can seek an exemption from the requirements to provide paid leave, under the recently enacted Families First Coronavirus Response Act, known as the FFCRA.

As a brief recap, the FFCRA applies to private employers with 499 or fewer employees as well as certain public employers of any size. Under this law, covered employers are required to provide two new types of leave for COVID-19 related events, including up to 80 hours of paid sick leave and up to 12 weeks of Extended FMLA leave to care for a child whose school has been closed or their childcare provider is no longer available.

This has been a new and difficult leave law for smaller employers to grapple with. As you likely know, the “classic” FMLA applies to private employers who have 50 or more employees.  So this may be the first time that employers with fewer than 50 employees have dealt with FMLA issues or expansive paid sick leave obligations. What you may NOT know is that the FFCRA offers an exemption for employers with fewer than 50 employees who meet certain criteria. Today, we are going to discuss how to determine if you may be exempt.

James: So thanks for joining us Sue.

 Sue: Thanks I’m happy to be here.

James: Sue, which employers may qualify for the small business exemption under the FFCRA?

Sue: Well the exemption may apply to employers who have 49 or fewer employees. This can include religious and nonprofit organizations as well as private employers. But once employers hit the 50-employee threshold, then the exemption will not be available.

James: OK, so we know the size of the employer that may qualify for the exemption, but are there other criteria that an employer must meet? So in other words, are all employers with fewer than 50 employees exempt or is something else required?

Sue: That’s a good question, James. There are definitely additional criteria that must be met in order for the exemption to apply. In general, complying with the FFCRA requirements must jeopardize the viability of the business as a going concern. And the regulations specify three types of situations that one of one must be met in order for that criteria to be met to qualify for the exemption:

One, Providing FFCRA leave would result in the small business’s expenses and financial obligation to exceed their business revenues and thereby  cause the small business to cease operating at a minimal capacity;

The second of those scarios is when the absence of a particular employee or group of employees would cause the business to suffer a substantial risk to the financial health or operational capabilities because the employee or the group of employees have specialized skills, have knowledge specific to the business, or responsibilities. Essentially, if the business cannot do without that employee or those employees; and the third scenario that may justify this sort of exemption is if the business simply does not have enough other workers who are qualified and available to perform the work performed by an employee or group of employees requesting FFCRA leave, that would leave that small business unable to operate at a minimal capacity.

So if one or more of these scenarios applies to a small business, the business may be exempt from providing certain FFCRA leaves. But employers must realize that the exemption need not apply for ALL employees of the small business, and could exempt just certain employees, such as those who have specialized skills or responsibilities.

James: Great thanks for that very helpful summary of the criteria for the exemption. I understand that the determination of whether these criteria applies is done by the business itself, not a governmental agency? Or is it some other party? Right who does that?

Sue: That’s right, James. It’s actually the business who makes that determination. And as the regulations specify an “authorized officer of the business” is the person who makes the determination if one or more of these criteria applies.

James: So, let’s say the president or general manager of a small business determines that the business qualifies for an exemption. What’s next? Do they need to file documents with the Department of Labor, or is there some official approval for the exemption that they have to wait for from some agency or government body?

Sue: No. They really do not need to do any of those things. It is basically a self-identified exemption. The small business must document for itself that it has made a determination and it meets one of the exemption criteria and then the business retains that documentation in its records, but it does not need to send the documentation to the DOL or wait for anyone to approve the exemption. In essence, the business needs to keep its decision-making records to justify the exemption should anyone question why they denied offering the FFCRA leave benefits to its employees.

James: Interesting. So, an employer decides that it meets this small business exemption criteria, does that mean it is exempt from ALL the FFCRA requirements and they have no obligations at all?

Sue: No, not quite. The employer would be exempt from having to provide the 12 weeks of expanded FMLA under the FFCRA – and remember that expanded FMLA reason is for when an employee is unable to work because they need to care for his or her child whose school or place of care has been closed due to a public health emergency. And the exemption would also apply to the paid sick leave portion of FCRA but only for the same reason, namely to care for a son or daughter whose school or place of childcare is closed or unavailable. The employer will NOT be exempt from providing the 80 hours of paid sick leave for the  other authorized reasons, such as when the employee is under a quarantine or isolation order, is experiencing symptoms of COVID-19 and seeking a medical diagnosis, or if the employee is taking care of an individual who is subject to a quarantine or isolation order.

In addition, even if a small business chooses to exempt one or more employees from these FFCRA requirements, it is still required to provide the FFCRA notice to its employees.

James: It’s important for small businesses to realize, then, that this is not a complete exemption of all FFCRA obligations, just those related to providing leave when an employee must care for a child whose school or childcare is closed due to COVID-19.

Fantastic, thanks so much Sue. This is really helpful information. I’m sure a lot of small business listeners will find it helpful. Employers of all sizes should continue to monitor the latest developments related to COVID-19 on both the Guardian and ReedGroup websites, as well as information provided by the CDC, DOL, and other applicable resources.

Thank you for tuning in and we hope you’ll join us for our next podcast.

ReedGroup, a wholly owned subsidiary of The Guardian Life Insurance Company of America®. GUARDIAN ® is a registered trademark of The Guardian Life Insurance Company of America ®; ©Copyright 2020 The Guardian Life Insurance Company of America 2020-101159 (5/21)

 

Information provided on this podcast is intended for general educational use. It is not intended to provide legal advice. ReedGroup does not provide legal services. Consult an attorney for legal advice on this or any other topic.