Small Business Exemption under FFCRA

Small Business Exemption under FFCRA

The Department of Labor issued additional guidance on the Families First COVID-19 Response Act (FFCRA) to clarify definitions. You can find the new guidance here.

Many of you are asking one question in particular: Is my small business exempt?

Let’s be clear, while a small business exemption does exist under the statute, I strongly encourage employers to be as judicious in their use of this exemption as possible. Under the statute, a small business with fewer than 50 employees would be exempt (not required) from the requirement to provide paid sick leave or to provide expanded FMLA if one of the following three conditions is certified by the owner (or authoritative officer) of the business:

  1. If paying the leave would use up the cash resources of the business (i.e. no cash flow or no cash reserves available);
  2. if the employee is a key person in the business, so much that the loss of their knowledge, skills, abilities would negatively impact the operation of the business (i.e. a lead forklift operator in a major food supplier); or
  3. if there are no other employees who are able, willing, ready, and trained and available to work immediately to allow the business to operate.

Remember that the federal paid sick leave is in addition to any state regulation on sick leave.

Two caveats:

  1. Be very judicious. If you can find a way to make it happen, then make it happen.
  2. Be very careful about how you choose to exempt employees. These are still subject to anti-discrimination laws. Everybody is part of a protected class, so if you make decisions on factors such as whether someone has children, whether someone has older adult family, whether they are full or part-time, etc.

To be safe, consult with counsel. If you’d like to schedule a consultation with us, you can do so here.