On March 28, 2020, the U.S. Department of Labor (“DOL”) provided additional and much-needed guidance on the exemption for small businesses under the Families First Coronavirus Response Act. Prior to this update there was uncertainty on this exemption. Further, the DOL provided notable revisions and clarifications to previously issued guidance. The interpretation and implementation of the FFCRA is changing quickly. The DOL anticipates publishing proposed regulations for the FFCRA in early April.
The Small Business Exemption:
An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing (a) paid sick leave and (b) expanded family and medical leave when either or both is due to school or place of care closures or childcare provider unavailability for COVID-19 related reasons if doing so would jeopardize the viability of the small business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements if:
- The employer employs fewer than 50 employees;
- Leave is requested because the child’s school or place of care is closed, or childcare provider is unavailable, due to COVID-19 related reasons; and
- An authorized officer of the business has determined that at least one of the three conditions described below is satisfied.
A small business may claim this exemption if an authorized officer of the business has determined 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.
The DOL indicates that school closures/childcare reasons for FFCRA leave are the only reasons for which this exemption is available (if one of the above criteria is met).
Definition of “Health Care Provider:”
The term “health care provider,” as used to determine individuals whose advice to self-quarantine due to concerns related to COVID-19 can be relied on as a qualifying reason for paid sick leave, means a licensed doctor of medicine, nurse practitioner, or other health care provider permitted to issue a certification for purposes of the FMLA.
“Health Care Provider” Exemption:
For the purposes of employees who may be excluded from paid sick leave or expanded family and medical leave by their employer under the FFCRA, a health care provider is anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.
This definition also includes any individual employed by an entity that contracts with any of the above employers to provide services or to maintain the operation of the facility. Further, anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments is within this definition. Any individual that the highest official of a state or territory, including the District of Columbia, determines is a health care provider necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19 is also included.
“Emergency Responder” Exemption:
For the purposes of employees who may be excluded from paid sick leave or expanded family and medical leave by their employer under the FFCRA, an emergency responder is an employee who is necessary for the provision of transport, care, health care, comfort, and nutrition of such patients, or whose services are otherwise needed to limit the spread of COVID-19. This includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency as well as individuals who works for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility. This also includes any individual that the highest official of a state or territory, including the District of Columbia, determines is an emergency responder necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19.
To help minimize the spread of COVID-19, the DOL encourages employers to be cautious when applying its new definitions for those who qualify as a health care provider or emergency responder employee for whom they are electing not to provide emergency leave.
Total FMLA Leave:
The DOL clarifies FFCRA emergency family leave provisions do not change the overall amount of FMLA leave employees can take during an applicable FMLA 12-month period. For example, if during an applicable FMLA 12-month period an employee takes 12 weeks of classic FMLA leave, during that same FMLA 12-month period, the expanded leave is unavailable because the employee has exhausted 12 weeks of FMLA leave (though the DOL notes these employees could use emergency paid sick leave for child care leave). Similarly, during a single FMLA 12-month period, an employee can use a combination of classic and expanded FMLA and max out at 12 weeks.
However, an employee might be able to use 14 weeks of FFCRA leave. First, an employee can use 80 hours of paid sick leave for non-childcare purposes (2 weeks). Assuming the employee has not used any FMLA leave during the applicable FMLA 12-month period, the employee can then take up to 12 weeks of leave. Further, during the initial unpaid 10-day period of expanded family medical leave, an employee can use pre-existing, non-FFCRA employer-provided benefits instead of paid sick leave benefits (2 weeks). The employee gets up to another 10 weeks of expanded family medical leave. After that, assuming no paid sick leave was used to date, the employee could use the childcare leave for an additional two weeks.
State or Local Leave:
The DOL has made clear that any leave taken under FFCRA is in addition to any other forms of sick/personal leave the employee has earned from state and local laws and ordinances offering similar protections.
“Full-Time” Defined
: The amount of paid sick leave employees receive under the FFCRA depends on whether they are full-time; however, the law does not define the term. The DOL makes clear that full-time employees for paid sick leave purposes are those who normally are scheduled 40 or more hours per week. The expanded family and medical leave does not distinguish between full- and part-time employees, but the number of hours an employee normally works each week will affect the amount of pay the employee is eligible to receive.
Job Restoration:
The DOL says that job restoration rights will be available to employees who take paid sick leave. Specifically, if applicable, employers must provide employees using paid sick leave or expanded family and medical leave the same or equivalent job they held before taking leave. The DOL reinforces, however, that if an employer lays off an employee for a legitimate business reason during leave, the employee does not have such a right to reinstatement.
Additionally, the DOL clarifies employers can deny reinstatement to the same or equivalent position to an individual who qualifies as an FMLA “key” employee (salaried employee who is among the highest-paid 10% of all the employer’s employees within 75 miles of the employee’s worksite), or who works for an employer with 24 or fewer employees and takes school closure/childcare leave, and all four of the following hardship conditions exist:
1) The position no longer exists due to economic or operating conditions that affect employment and are due to COVID-19-related reasons during the leave period;
2) The employer made reasonable efforts to restore the employee to the same or an equivalent position;
3) The employer makes reasonable efforts to contact the employee if an equivalent position becomes available; and
4) The employer continues to make reasonable efforts to contact the employee for one year, beginning on the date COVID-19 leave ends or the date 12 weeks after leave began (whichever is earlier).
Definition of Child:
Under the FFCRA, employees can take leave to care for a child whose school or place of childcare closes, or whose childcare provider is unavailable, due to COVID-19. The DOL clarifies that, for both leaves, the definition of
child
under the FFCRA will also include a child 18 years of age or older with a mental or physical disability who is incapable of self-care due to the disability.
Emergency Leave and Health Coverage:
The DOL clarifies that, for employees completing an eligibility period before they can receive employer-provided group health coverage, the time they take FFCRA leave instead of actively working nevertheless counts towards satisfying the eligibility period requirements.
Business Size Requires a “Live” Calculation:
The FFCRA’s emergency leave provisions apply to private employers with fewer than 500 employees. The DOL says employers should use the number of employees on the day the employee’s leave would start.
Tax Credits:
The DOL adds text that makes clear that tax relief will be unavailable for emergency paid sick and/or family leave that exceeds the FFCRA limits.
