In follow-up to our prior summary of the recently issued “Temporary Rule” by the Department of Labor, we are providing this outline of the Small Employer Exemption criteria. The FFCRA provided authority to the DOL to exempt small private businesses with fewer than 50 employees from having to provide employees with paid leave to care for his or her child whose school or place of care is closed, or child care provider is unavailable, when such leave would “jeopardize the viability of the business as a going concern.” As this can be broadly interpreted, the Temporary Rule set forth objective criteria for when a small business with fewer than 50 employees can deny an employee paid sick leave or expanded family and medical leave to care for the employee’s son or daughter whose school or place of care is closed, or child care provider is unavailable, for COVID-19 related reasons.

To that end, a small employer is exempt from the requirement to provide such leave when:

(1) such leave would cause the small employer’s expenses and financial obligations to exceed available business revenue and cause the small employer to cease operating at a minimal capacity;

(2) the absence of the employee or employees requesting such leave would pose a substantial risk to the financial health or operational capacity of the small employer because of their specialized skills, knowledge of the business, or responsibilities; or

(3) the small employer cannot find enough other workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services the employee or employees requesting leave provide, and these labor or services are needed for the small employer to operate at a minimal capacity.   

If a small employer decides to deny paid sick leave or expanded family and medical leave to an employee or employees whose child’s school or place of care is closed, or whose child care provider is unavailable, the small employer must document the facts and circumstances that meet the criteria set forth in § 826.40(b)(1) to justify such denial. The employer should not send such material or documentation to the DOL, but rather should retain such records for its own files.