This is the first of several articles in which Larkin Hoffman attorneys will be discussing various topics covered in the Temporary Rule.
On April 1, 2020 the Department of Labor (“DOL”) implemented and published a 124-page rule covering all aspects of the Families First Coronavirus Response Act (“FFCRA”). According to the Small Business Reports, there are 5,755,307 private businesses in the United States with less than 50 employees, representing 96% of all impacted businesses potentially covered under the FFCRA (businesses with fewer than 500 employees). These millions of small businesses have been waiting to receive some explanation of their obligations, and the possibility of some exemptions from this Act.
As a reminder, under the FFCRA, small businesses may be exempted from the requirement to provide paid sick and family and medical extended leave to employees for certain COVID-19 related reasons under the following conditions:
- An employer, including a religious or non-profit organization, with fewer than 50 employees (small business) is exempt from providing paid sick leave under the EPSLA and expanded family and medical leave under the EFMLEA when the imposition of such requirements would jeopardize the viability of the business as a going concern. A small business under this section is entitled to this exemption if an authorized officer of the business has determined that:
- 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;
- 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
- 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.
- To elect the small business exemption, the employer must document that a determination has been made to the criteria set forth above. The employer should NOT send such documentation to the Department, but rather retain the records in its files.
- Regardless of whether a small employer chooses to exempt one or more employees, the employer is still required to post a notice pursuant to Section 826.80. When the above listed reasons exist, the employer may deny paid sick leave or Expanded Family and Medical Leave only to those otherwise eligible employees whose absence would cause the small employer’s expenses and financial obligations to exceed available business revenue, pose a substantial risk, or prevent the small employer from operating at a minimum capacity, respectively. Under those existing circumstances the small employer must document the facts and circumstances that meet those criteria to justify such a denial.
In general, under the FFCRA’s leave provisions, employees have a right to be restored to their previous position or and equivalent one upon return from the leave in the same manner that an employee would be returned to work under the FMLA. However, businesses with fewer than 25 employees are not required to reinstate employees if all four of the following conditions are met:
- The employee took leave to care for his or her son or daughter whose school or place of care was closed or whose childcare provider was unavailable;
- The employee’s position no longer exists due to economic or operating conditions that (i) affect employment and (ii)) are caused by a public health emergency (i.e. due to COVID-19 related reasons) during the period of the employee’s leave;
- The employer made reasonable efforts to restore the employee to the same or an equivalent position; and
- If the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts for a period of time to contact the employee if an equivalent position becomes available. The period of time specified to be one year beginning either on the date the leave related to COVID-19 reasons concludes or the date twelve weeks after the employee’s leave began whichever is earlier.
In exercising its authority to exempt certain employers with fewer than 50 employees, the DOL balanced two potentially competing objectives of the FFCRA. On the one hand, the leave afforded by the Act was designed to be widely available to employees to assist them with navigating the social and economic impacts of COVID-19, as well as public and private efforts to contain and slow the spread of the virus. On the other hand, the DOL recognized that FFCRA leave entitlements have little value if they cause an employer to go out of business and, in so doing, deny employees not only leave but also their jobs. The DOL attempted to extend the leave benefits as broadly as practicable, but not in circumstances that would significantly increase the likelihood that small businesses would be forced to close.
The Employment, Labor and Benefits team at Larkin Hoffman is available to help. Please reach out for additional guidance.