Labor Department Issues Rule on Exemptions from Federal Paid Sick Leave Law

The Families First Coronavirus Response Act (FFCRA), which became law on March 18, 2020, creates a temporary system of paid sick leave for workers in New York City and around the country. It also temporarily expands the unpaid leave provisions of the Family and Medical Leave Act (FMLA). The purpose of these measures is to provide support for workers affected by the COVID-19 pandemic. The law makes multiple exceptions, however, for both large and small employers. Businesses with five hundred or more employees, which comprise a sizable plurality of employers in the country, are not covered by these provisions at all. Employers with fewer than fifty employees may have an exemption under the FFCRA. A new temporary rule published by the U.S. Department of Labor (DOL) explains how small employers can claim this exemption.

Paid Sick Leave and Expanded Family and Medical Leave

Division C of the FFCRA, the Emergency Family and Medical Leave Expansion Act (EFMLEA), provides an expansion of the right to unpaid leave under the FMLA. Division E, the Emergency Paid Sick Leave Act (EPSLA), provides paid sick leave at the national level. These two sections provide combinations of paid and unpaid leave with job protection for eligible employees. The provisions will remain in effect until December 31, 2020.

Exemptions from the EPSLA and the EFMLEA

Both laws give the DOL authority to exempt employers with fewer than fifty employees from these requirements if they “would jeopardize the viability of the business as a going concern.” See Pub. L. 116-127 §§ 3102(b), 5111(2). In its discussion of the new rule, the DOL notes that, according to the U.S. Census Bureau’s 2017 Statistics of U.S. Businesses, only 221,454 private businesses, those with fifty or more but fewer than five hundred employees, would not have been eligible for the “viability” exemption. This comprises about four percent of all private employers covered by the EPSLA and EFMLEA.

New Department of Labor Rule

The new DOL rule, published in the Federal Register on April 6, 2020, amends Title 29, Chapter V of the Code of Federal Regulations by adding a new Part 826. Section 826.40(b)(1) states that the viability exemption is available to private employers with fewer than fifty employees when “an authorized officer of the business has determined that”:
– The expenses associated with providing leave would exceed the employer’s available revenue and prevent it from “operating at a minimal capacity”;
– The employer would not be able to do without the employee because of “specialized skills, knowledge of the business, or responsibilities”; or
– The employer cannot find enough workers to replace the ones going on leave, and their absence would prevent the employer from operating “at a minimal capacity.”

If an employer denies paid sick leave or expanded family and medical leave to an employee, § 826.40(b)(2) states that it must “document that a determination has been made pursuant to” the above criteria. It does not need to send this documentation to the DOL or anywhere else. The DOL states that the employer should simply retain it in its files.

The employment attorneys at Phillips & Associates represent New York City in claims for unlawful workplace practices. To schedule a free and confidential consultation with a member of our knowledgeable and experienced team, please contact us today online or at (212) 248-7431.

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