April 1, 2020

By: Anne E. Baggott

On April 1, 2020, the U.S. Department of Labor (DOL) issued a temporary rule that provides guidance to small businesses that want to opt out of the coronavirus-related paid leave benefits for employees under the Families First Coronavirus Response Act (FFCRA).

The FFCRA requires employers with fewer than 500 employees to provide workers with additional paid leave benefits for COVID-19-related reasons. Our March 19 update, Emergency Paid Leave Law for Employers Effective April 1, 2020, provides additional details.

The FFCRA carves out an exemption for businesses with fewer than 50 employees. Previously, the DOL had stated employers would need to apply for the exemption. The temporary rule clarifies that no application is necessary. Instead, small employers may determine for themselves whether they are exempt if providing the paid leave benefits would “jeopardize the viability of the business as a going concern.”

An “authorized representative” of the business must make the decision based on any of the following reasons:

  1. Paying the leave benefits would cause the business’s expenses to exceed available business revenues.
  2. The absence of the employees who are taking the leave would cause a substantial risk to the financial health or operational capacity of the business because of the employees’ specialized skills, knowledge of the business, or responsibilities.
  3. The number of employees taking the leave would cause the business to not have enough employees to operate at a minimal capacity.

Once the business has made this determination, it must document the decision in writing and maintain that documentation for four years.

Contact Anne E. Baggott at 816-714-3022 or abaggott@dysarttaylor.com for assistance with coronavirus-related employment issues.