President Trump signed the Families First Coronavirus Response Act (H.R. 6201) on March 18, 2020. It becomes effective on April 2, 2020. The Act contains eight Divisions. This memorandum will address the small business exemption from the EPSL and FMLA Expansion Leave requirement. Other memoranda will address other provisions of the Act.
The Small Business Exemption from EPSL and the Family and Medical Leave Expansion
Overview of FMLA. The FMLA requires an employer of 50 or more employees to provide 12 weeks of unpaid leave to an employee for certain conditions, including a serious health condition or the birth, placement or adoption of a child. To be eligible an employee must have worked at least one year for the employer, providing 1,250 hours of service and be within 75 miles of 49 other employees. This FMLA expansion changes the rules significantly!
Coverage Under FMLA Expansion. A covered employer is a person engaged in commerce who employs fewer than 500 employees. “Engaged in commerce” is a term of art and may exclude very small employers whose business does not affect interstate commerce. Employers with fewer than 50 employees, who have not been covered by the FMLA, are covered by the FMLA Expansion Leave law. Public agencies are also covered by the FMLA Expansion.
Under the FMLA Expansion, a covered employer must provide up to 12 weeks of leave, 10 of which are paid, for employees who are unable to work due to the need to care for a son or daughter under 19 years of age, if the child’s school or daycare has been closed.
EPSL. Emergency Paid Sick Leave is also required of employers of fewer than 500 employees. Under certain conditions, it permits an employee to take up to 80 hours of paid sick leave. One of those conditions is that an employee is unable to work because the school or daycare of the employee’s child has been closed.
Small Business Exemption. The Department of Labor has issued guidelines providing an exemption for small businesses from providing paid sick and FMLA leave. This exception is limited to businesses with fewer than 50 employees. A small business is
only exempt from allowing an employee to take time off under FMLAE if the employee’s absence would jeopardize the viability of the business as a going concern.
The DOL recently articulated the justification for this exemption:
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.
Trinity E. Taylor, [email protected], (559) 256-5000