Do you have to pay your employees paid leave for a COVID-19 event?
Signed by President Trump on March 18, 2020, The Families First Coronavirus Response Act (“FFCRA”), requires employers to provide their employees with paid sick leave and expanded family and medical leave for reasons related to COVID-19.

At first blush, it appears the FFCRA picks up where the FMLA leaves off and requires businesses with fewer than 500 employees to pay sick and family medical leave. Indeed, DOL’s FFCRA pamphlets, posters and summary sheets indicate employers with fewer than 500 employees are on the hook.  But, are all employers with fewer than 500 employees really on the hook?  

A more though review of the Final Rule as submitted by the DOL provides an exemption for small private employers with fewer than 50 employees. Specifically, if the leave payment would jeopardize the viability of your business “as a going concern”, the employer is exempt.
Small Business Exemptions to the FFCRA:
  • Section 826.40(b)(1) of the FFCRA explains that a small employer (under 50 employees) is exempt from the requirement to provide such leave when:

  • 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;

  • 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

  • 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.

  • Section 826.40(b)(2) of the FFCRA explains that 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.

As an aside, for those of you who are not exempt, please remember; employers' FFCRA payments to their employees qualify for reimbursement through refundable tax credits as administered by the Department of the Treasury.



Let me know if you have any questions.

All my best,

Seth

Seth A. Robbins, Esq.
Robbins Law Group, PLLC
(703) 224-4436