Legal Updates

FFCRA Small Employer Exemption: DOL Guidance

Effective April 1, 2020, the Families First Coronavirus Response Act (FFCRA), requires all private employers that have fewer than 500 employees to provide their employees with paid sick leave and expanded family and medical leave (paid leave) for specified reasons related to the coronavirus (COVID-19) pandemic. However, the FFCRA includes a provision under which certain small employers may qualify for an exemption from two of the FFCRA’s paid leave requirements.

Specifically, employers with fewer than 50 employees (small employers) may qualify for an exemption from the FFCRA’s requirements to provide paid leave due to an employee’s loss of child care resulting from COVID-19. This exemption is not available for the FFCRA’s requirements to provide paid leave for other COVID-19 related reasons.

The U.S. Department of Labor has provided guidance regarding the FFCRA’s small employer exemption in a set of questions and answers about the FFCRA and in a temporary regulation issued on April 1, 2020. This Compliance Bulletin provides a general summary of that guidance and outlines the criteria an employer must meet in order to qualify for the small employer exemption.   

Eligible Small Employers

An employer, including a religious or nonprofit organization, may qualify for the FFCRA’s exemption for small employers only if:

  • It employs fewer than 50 employees;

  • Leave is requested because a child’s school or place of care is closed, or because a child care provider is unavailable, due to COVID-19 related reasons; and

  • Providing the child care-related leave would jeopardize the viability of the small business as a going concern.

Determining Whether an Employer has Fewer than 50 Employees 

Under the DOL’s regulation, the number of employees an employer has is determined by counting all full-time and part-time employees employed within the United States at the time an employee would take leave. For this purpose, every part-time employee must be counted as if he or she were a full-time employee, and the term “within the United States” includes any state, the District of Columbia, and any territory or possession of the United States.

In addition, an employer’s count must include:

  • All employees who are currently employed, regardless of how long they have worked for the employer;

  • Any employees who are on leave of any kind;

  • Employees of temporary placement agencies who are jointly employed under the Fair Labor Standards Act (FLSA), regardless of which employer’s payroll the employees appear on; and 

  • Day laborers supplied by a temporary placement agency, regardless of whether the employer is the temporary placement agency or the client firm.

Also, all common employees of joint employers under the FLSA or integrated employers under the Family and Medical Leave Act (FMLA) must be counted together.

The number of employees does not include workers who:

  • Are independent contractors, rather than employees, under the FLSA; or

  • Have been laid off or furloughed and have not subsequently been reemployed.

Determining Whether the Requested Leave Qualifies for Denial under the Exemption

An employer that meets all the other criteria for the FFCRA’s small business exemption may deny paid leave to an employee only if the employee has requested the leave to care for his or her son or daughter whose:

  • School or place of care has been closed for COVID-19 related reasons; or

  • Child care provider is unavailable for COVID-19 related reasons.  

An employee’s “son or daughter” includes the employee’s children who are under 18 years of age and those who are age 18 or older but incapable of self-care because of a mental or physical disability.  The term “child care provider” means a provider who receives compensation for providing child care services on a regular basis.

The FFCRA’s small employer exemption does not allow an employer to deny leave to an employee who needs it because he or she:

  • Is subject to, or is caring for an individual who is subject to, a federal, state, or local quarantine or isolation order related to COVID-19;

  • Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or

  • Is experiencing symptoms of COVID-19 and seeking a medical diagnosis.

How to Show the Leave Would Jeopardize Viability of the Business as a Going Concern

An employer may show that its business’s viability as a going concern would be jeopardized if an authorized officer of the business has determined that:

  • Providing the paid leave for child care reasons would result in the small business’s expenses and financial obligations exceeding available business revenues and cause it to cease operating at a minimal capacity; 

  • The absence of the employee or employees requesting paid leave for child care reasons 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 

  • There is an insufficient number of 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 leave for child care reasons, and this labor or these services are needed for the small business to operate at a minimal capacity.

However, meeting one of these standards does not necessarily allow a small employer to deny child care-related leave to all of its employees who request it. Instead, the employer may deny that leave only to those otherwise eligible employees whose absence would cause its expenses and financial obligations to exceed available business revenue, pose a substantial risk, or prevent the small employer from operating at minimum capacity.

How to Elect the Small Business Exemption

If a small employer decides to deny paid leave to an employee who requests it for child care-related reasons, the employer must document the facts and circumstances that meet the criteria listed above to justify the denial. The employer should not send such material or documentation to the DOL, but should instead retain these records for its own files.

Regardless of whether a small employer chooses to elect the FFCRA exemption, the employer is still required to post a notice about the FFCRA in its employees’ workplaces.

Separate Exemption for Employers with Fewer than 25 Employees 

In most cases where an employer provides paid leave for child care purposes under the FFCRA, the employee who takes the paid leave will be entitled to be restored to the same or an equivalent position upon his or her return to work. However, the FFCRA allows certain small employers to claim an exemption from this job-restoration requirement.

Specifically, an employer with fewer than 25 employees may be exempt from the requirement to restore an employee’s job after taking FFCRA leave for child care purposes if the following conditions are met:

  • The employee’s position no longer exists due to economic or operating conditions that affect employment and are due to COVID-19-related reasons during the period of the employee’s leave;

  • The employer made reasonable efforts to restore the employee to the same or an equivalent position; and

  • If the employer’s reasonable efforts to restore the employee fail, the employer makes reasonable efforts for one year (beginning either on the date the leave related to COVID-19 reasons concludes or the date 12 weeks after the employee’s leave began, whichever is earlier) to contact the employee if an equivalent position becomes available.

Coronavirus Disease - FAQs on laws enforced by the California Labor Commissioner's Office

  • Can an employee use California Paid Sick Leave due to COVID-19 illness?

    Yes. If the employee has paid sick leave available, the employer must provide such leave and compensate the employee under California paid sick leave laws.

    Paid sick leave can be used for absences due to illness, the diagnosis, care or treatment of an existing health condition or preventative care for the employee or the employee’s family member.

    Preventative care may include self-quarantine as a result of potential exposure to COVID-19 if quarantine is recommended by civil authorities. In addition, there may be other situations where an employee may exercise their right to take paid sick leave, or an employer may allow paid sick leave for preventative care. For example, where there has been exposure to COVID-19 or where the worker has traveled to a high risk area.

  • If an employee exhausts sick leave, can other paid leave be used?

    Yes, if an employee does not qualify to use paid sick leave, or has exhausted sick leave, other leave may be available. If there is a vacation or paid time off policy, an employee may choose to take such leave and be compensated provided that the terms of the vacation or paid time off policy allows for leave in this circumstance.

  • Can an employer require a worker who is quarantined to exhaust paid sick leave?

    The employer cannot require that the worker use paid sick leave; that is the worker’s choice. If the worker decides to use paid sick leave, the employer can require they take a minimum of two hours of paid sick leave. The determination of how much paid sick leave will be used is up to the employee.

  • What options do I have if my child's school or day care closes for reasons related to COVID-19?

    Employees should discuss their options with their employers. There may be paid sick leave or other paid leave that is available to employees. Employees at worksites with 25 or more employees may also be provided up to 40 hours of leave per year for specific school-related emergencies, such as the closure of a child's school or day care by civil authorities (see Labor Code section 230.8). Whether that leave is paid or unpaid depends on the employer’s paid leave, vacation or other paid time off policies. Employers may require employees use their vacation or paid time off benefits before they are allowed to take unpaid leave, but cannot mandate that employees use paid sick leave. However, a parent may choose to use any available paid sick leave to be with their child as preventative care.

  • Can an employer require a worker to provide information about recent travel to countries considered to be high-risk for exposure to the coronavirus?

    Yes. Employers can request that employees inform them if they are planning or have traveled to countries considered by the Centers for Disease Control and Prevention to be high-risk areas for exposure to the coronavirus. However, employees have a right to medical privacy, so the employer cannot inquire into areas of medical privacy.

  • Is an employee entitled to compensation for reporting to work and being sent home?

    Generally, if an employee reports for their regularly scheduled shift but is required to work fewer hours or is sent home, the employee must be compensated for at least two hours, or no more than four hours, of reporting time pay.

    For example, a worker who reports to work for an eight-hour shift and only works for one hour must receive four hours of pay, one for the hour worked and three as reporting time pay so that the worker receives pay for at least half of the expected eight-hour shift.

    Additional information on reporting time pay is posted online.

  • If a state of emergency is declared, does reporting time apply?

    Reporting time pay does not apply when operations cannot commence or continue when recommended by civil authorities. This means that reporting time pay does apply under a state of emergency, unless the state of emergency includes a recommendation to cease operations.

  • If an employee is exempt, are they entitled to a full week’s salary for work interruptions due to a shutdown of operations?

    An employee is exempt if they are paid at least the minimum required salary and meet the other qualifications for exemption. Federal regulations require that employers pay an exempt employee performing any work during a week their full weekly salary if they do not work the full week because the employer failed to make work available.

    An exempt employee who performs no work at all during a week may have their weekly salary reduced.

    Deductions from salary for absences of less than a full day for personal reasons or for sickness are not permitted. If an exempt employee works any portion of a day, there can be no deduction from salary for a partial day absence for personal or medical reasons.

    Federal regulations allow partial day deductions from an employee's sick leave bank so that the employee is paid for their sick time by using their accrued sick leave. If an exempt employee has not yet accrued any sick leave or has exhausted all of their sick leave balance, there can be no salary deduction for a partial day absence.

    Deductions from salary may also be made if the exempt employee is absent from work for a full day or more for personal reasons other than sickness and accident, so long as work was available for the employee, had they chosen to work.

  • What protections does an employee have if they suffer retaliation for using their paid sick leave?

    The Labor Commissioner’s Office enforces several laws that protect workers from retaliation if they suffer adverse action for exercising their labor rights, such as using paid sick leave or time off related a specified school activity as outlined in question 4. Additional information on how to file a retaliation or discrimination complaint is posted online.

    Given the evolving nature of this unprecedented health emergency, if you choose not to use available paid sick leave, or have no other paid leave available, employees and employers should discuss what unpaid or paid leave options may be available.

    Making immigration-related threats against employees who exercise their rights under these laws is unlawful retaliation.

  • If I am a party in an action filed with the Labor Commissioner’s Office, can I seek an accommodation to participate remotely due to the coronavirus?

    Yes. Requests to participate remotely should be emailed to the district office in which the claim has been filed. These requests will be evaluated on a case-by-case basis. A full listing of Labor Commissioner’s Office locations including email addresses is posted online.