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Employment Law Blog

DOL Explains Small Business Exemption from Federal Leave

April 7, 2020

The U.S. Department of Labor has published “temporary regulations” to explain how small businesses (fewer than 50 employees) may exercise the exemption from certain leave obligations under the Families First Coronavirus Response Act (“Families First Act”).

As previously reported, the Families First Act has two leave components: paid leave under the Emergency Paid Sick Leave Act (“PSLA”), and paid and unpaid leave under the Emergency Family and Medical Leave Expansion Act (“EFMLA”).

A small employer (less than 50 employees) is exempt from the PLSA’s and EFMLA’s leave requirements if the requested leave would jeopardize the viability of the business as a going-concern.  Importantly, the exemption applies only to child-care related leave, where an employee is unable to work or telework due to the need to care for his/her minor child whose school/daycare has been closed or whose childcare provider is unavailable as a result of COVID-19. (PSLA qualifying reason #5, and EFMLA’s only qualifying reason).

A small employer may invoke the carve-out if an authorized officer of the business determines that:

  • The leave would result in the business’s expenses and financial obligations exceeding available revenues such that the small business would cease to operate at minimal capacity;
  • The employee’s absence would entail a substantial risk to the small business’s financial health or operational capability because of the employee’s unique skill, knowledge of the business operation or responsibilities; or
  • There are not sufficient workers who are able, willing and qualified (and available at the time and place needed) to perform the employee’s services which are needed for the small business to operate at minimal capacity.

The DOL’s regulations require a small employer seeking to invoke the exemption to document its determination, including which of the above criteria it relied on.  At this time, employers need not send the documentation to the DOL but must retain it, presumably in the event of a future DOL inquiry or audit.

Finally, all employers, including small employers exercising this exemption with respect to one or more employees, must post (or deliver via email) the DOL’s poster informing employees of these new laws which can be found here

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment

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