The Department of Labor updated the Families First Coronavirus Response Act FAQs providing guidance on the small employer exemption to the Emergency Paid Sick Leave Act, as well as the Emergency Family Medical Leave Expansion Act. Both leave provisions are effective on April 1, 2020 and expire on Dec. 31, 2020.
The small business exemption applies to the following:
- Businesses with less than 50 employees
- If providing childcare related paid sick leave and expanded FMLA would jeopardize the viability of the business
- ONLY applies to providing paid sick leave due to school or place of care closures or childcare provider unavailable for COVID-19 related reasons, and expanded FMLA due to the school or place of care closures or childcare provider unavailability for COVID-19 related reasons
The Emergency Paid Sick Leave Act remains in place for small businesses for all other reasons in the provision. For example, if an employee shows symptoms of COVID-19 and has been instructed by a healthcare provider to self-quarantine, the employer would be required to follow the paid sick leave provision, and pay the employee for up to 80 hours of sick leave.
To determine if the provision would jeopardize the viability of the business, an authorized officer of the business must make a self-determination that the small business meets one of the following three criteria:
- 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 case 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 performance 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.
To elect the small business exemption, employers should document why their business meets the exemption; however, employers should not send any materials to the Department of Labor. Further guidance is expected.
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.