Additional Guidance from the Department of Labor Including the Frequently Asked Question: “What is the ‘small business exemption’ under the Families First Coronavirus Response Act?
This is a partial article from UMA Member Parsons Behle & Latimer. You can read the full article
All articles in this COVID-19 Response Resource issue are effective as of March 30, 2020.
On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the “Response Act”) into law. As we’ve previously written, the Response Act generally requires employers with less than 500 employees to provide paid leave to their employees in certain circumstances related to the COVID-19 pandemic.
What does that mean for small businesses who may not be able to afford to give paid leave to their employees? Recently, the Department of Labor (“DOL”) issued new guidance explaining when the small business exemption will be available and to which businesses. The DOL also noted that it “encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.”
Further, under the DOL guidance, the time that an employee is on paid sick leave counts towards any waiting periods for health-care eligibility. In addition, the DOL has issued guidance regarding the potential exemption for “health care providers.”
Response Act’s Small Business Exemption
Of note is that the small business exemption appears to only apply if an employee is trying to take leave to care for a child whose school or daycare has closed due to COVID-19 reasons. The exemption will not apply when an employee is seeking to take paid sick leave for any other qualifying reason under the Paid Sick Leave provision of the Response Act.
Does an employee’s time on paid sick leave count towards any time periods required for health insurance coverage?
Yes. The DOL has issued new guidance clarifying that an employee’s eligibility for group health coverage is unchanged while he or she is on paid sick leave under the Families First Coronavirus Response Act (the “Response Act”). The Response Act does not alter any timeline (or other requirement) for eligibility for health coverage and the requirements apply the same as if the employee continued to work. Specifically, the days the employee is on paid sick leave count toward completion of any waiting period. Bottom line: if an employee can elect health coverage that takes effect after completing a waiting period, the health coverage must take effect once the waiting period is complete.