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How to Qualify for an Exemption from the Families First Coronavirus Response Act

Nina Renee Nina Renee

The Department of Labor (DOL) has issued rules that exempt employers with fewer than 50 employees (“small business”) from its requirements if compliance would jeopardize “the viability of the employer’s business as a going concern.”

The ruling states that an “authorized officer of the business” must determine whether the business meets the criteria for an exemption and must document the facts and circumstances that allow for the exemption.

A business may be exempt from providing mandated paid sick leave or expanded family and medical leave requirements if they meet three conditions:

  • 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;
  • 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
  • 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.

Requirements imposed by local and state shelter-in-place orders might also support an employer’s argument that it may not be able to operate or would be forced to close entirely if its existing workforce is on leave.

If you qualify for an exemption, an “authorized officer” of your company should retain records, for at least four years, to substantiate the exemption.  It is important to document the qualifying reason(s) for the exemption, as well as documenting revenue and existing payroll costs, including the additional costs the FFCRA may impose in the short term.  It may also help to compare revenue from the past year. 

DO NOT send any materials to the Department of Labor when seeking an exemption.  You are essentially self-certifying on an individual basis and you should retain these records for your own files in the event of an audit. 

Note that if an employee has been advised by a health care provider to self-quarantine related to COVID-19, or if an employee requests leave to care for an individual who is self-quarantining, there is no exemption and you must still provide the appropriate paid leave.

The DOL urges employers to “be judicious” in exempting workers apparently based on its concern that employees could spread COVID-19 if leave is not available.

As we are learning to navigate through these times of uncertainty and adjusting to our new normal, we here are at The Foresight Companies want to be your go-to source for all topics related to your business operations.

Please visit our COVID-19 new Business Operations Resource Center frequently as we continue to update as changes are occurring.

If you have any questions or concerns please do not hesitate to pick up the phone and give one of us a call at 1-800-426-0165.  

*Please note that as information is updated and modified, terms and conditions are subject to change.

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