COVID-19 & Your Business: Frequent Questions

How do small businesses (i.e., employers with less than 50 employees) claim an exemption from the EPSLA or EFMLEA? (29 CFR 826.40(b))

Employers with fewer than 500 employees are subject to the EPSLA and the EFMLEA. Unlike the pre-existing, traditional FMLA, employers with less than 50 employees are covered by both the EPSLA and EFMLEA.

However, an employer, including a religious or nonprofit organization, with fewer than 50 employees (i.e., a small business) is exempt from providing paid sick leave under the EPSLA and paid family leave under the EFMLEA when the imposition of such requirements would jeopardize the viability of the business as a going concern.

This exemption applies only to paid EPSLA and EFMLEA leave for “child care leave”—i.e., where leave is sought by an employee who is caring for a son or daughter if the school or place of care of the son or daughter has been closed. In other words, even with this exemption, a small employer must comply with those provisions of EPSLA requiring paid sick leave for employees who are subject to a quarantine or isolation order or recommendation, or who have COVID-19 symptoms, as well as an employee caring for such individuals.

To assert the exemption, an authorized officer of the small business (e.g., the chief financial officer or the owner) must determine one of the following:

(i) 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;

(ii) The absence of the employee or employees requesting child care 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

(iii) 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 employees requesting child care leave, and these labor or services are needed for the small business to operate at a minimal capacity.

To elect this small business exemption, the employer must document in writing that a determination has been made pursuant to the criteria set forth above. The Department of Labor emphasizes that the documentation should not be sent to the DOL.

The regulations also note that, regardless of whether a small employer chooses to exempt one or more employees, the employer is still required to post the notice of rights published by the DOL to its employees.

Before claiming the exemption, employers should consider consulting counsel because misapplication of the exemption may result in future liability, whether by the DOL or by an employee bringing a private cause of action.

Last updated April 9

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