5 Exemptions for Small Business Owners Under the CARES Act

Graphic for 5 Exemptions for Small Business Owners Under the CARES Act

I cannot afford to give my employee the paid sick leave required under the Families First Coronavirus Response Act, are there any exemptions?

The Families First Coronavirus Response Act requires employers with fewer than 500 employees to give employees up to 80 hours of emergency paid sick leave and/or up to 12 weeks of paid emergency family medical leave if the employee qualifies under the law for either type of leave. (See  Johnson May March 30, 2020 video webinar posted on the law and rules of these two types of paid sick leave: www.johnsonmaylaw.com)

On April 1, 2020, the US Department of Labor Wage and Hour Division published a temporary rule allowing employers with fewer than 50 employees to deny an employee requesting either type of paid sick leave such leave if certain qualifications are met.

An employer may deny an employee’s request for either emergency paid sick leave or emergency family medical leave if:

  1. For situations where Employee needs leave to care for a child under 18 whose school/daycare has closed due to COVID 19, or the Employee needs leave due to Employee is subject to government or health care provider quarantine/isolation order because he has COVID 19, or symptoms of such, or he must care for an immediate family member with such:
    1. The Employer has fewer than 50 employees, and
    2. 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; Or
    3. 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;
    4. 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.
    5. And the small employer must document the facts and circumstances that meet the above criteria to justify such denial.

See 29 CFR 826.40(b).

The Labor Department’s logic for this rule is that if granting the leave would force the employer to go out of business and make the employee lose his job altogether, that would not make sense.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings, and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it do not constitute a lawyer-client relationship.

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