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DOL Gives Small Businesses Wide Virus Paid Leave Exclusion (1)

March 29, 2020, 12:57 AMUpdated: March 29, 2020, 3:42 PM

The Labor Department has established what appears to be a simple path for businesses with fewer than 50 workers to limit new paid sick and family leave obligations to some workers affected by coronavirus.

Small businesses can claim an exemption to the new virus relief law’s (Public Law 116-127) requirement that employers offer paid and partially paid leave for coronavirus-related childcare by determining that it would jeopardize the business’s viability. Those businesses are still required to provide up to two weeks of sick leave for employees subject to a quarantine or experiencing symptoms associated with Covid-19, the disease caused by the coronavirus.

Companies can prove the childcare leave requirements put the business in jeopardy in one of three ways, the department said in guidance published Saturday. An employer must conclude that providing the leave would cost more than the company’s available revenue, causing the company to “cease operating at a minimal capacity"; that the loss of workers on leave would be a “substantial risk” to the company’s finances or operations; or that there aren’t enough available and qualified workers to replace employees who are out on leave, DOL said.

The department also explained a separate exemption shielding health-care providers from the both child care leave and employee sick leave obligations under the relief law. It said the exemption applies to any type of employee at multiple forms of health-care facilities, including home health agencies and nursing and retirement facilities.

The new paid leave requirements are set to take effect April 1. Generally, the law requires businesses with fewer than 500 employees nationwide to give some workers two weeks of virus-related paid sick and childcare leave, along with 10 weeks of partially paid family leave to care for a child whose school or daycare is closed due to the pandemic.

Small businesses seeking a childcare leave exemption should document why they believe they satisfy that criteria, the agency wrote in the guidance. DOL representatives didn’t immediately provide a response as to whether employers would need to submit this documentation as evidence before claiming an exemption.

By interpreting the emergency law to excuse a wide range of companies from requirements to pay leave to workers impacted by the global pandemic, the administration likely will please industry groups and frustrate worker advocates, all of whom have been flooding the department with requests on which workers should receive the new benefits.

Small-business representatives already strained by stay-at-home orders and an economic downturn have said they can’t afford new paid leave requirements, while healthcare providers say they can’t risk staffing shortages during the pandemic. Workers have pressed for expansive coverage out of concern of being infected and of balancing the needs to care for children home from school.

The Labor Department first posted question-and-answer guidance on Tuesday and Friday to address pressing compliance issues in advance of publishing rules to implement the law. The regulations are expected to be released by April 1, but DOL has said it won’t start enforcing the rules for companies acting in good faith until April 18.

Companies across the country have been looking for the department to offer more details on the upcoming rules to help them make time-sensitive decisions on whether and how to reduce their workforces in response to the sharp economic downturn triggered by the novel coronavirus spread.

Addressing another source of ambiguity surrounding the law, the agency defined an exempted health-care provider as anyone employed at a doctor’s office, hospital, health-care center, clinic, post-secondary educational institution offering health-care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health-care provider, and more settings.

(Updated with additional reporting on leave requirements.)

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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