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DOL Issues Regulation on Small Business Exemption from COVID-19 Emergency Paid Sick Leave and FMLA Leave

April 02, 2020

By: Morey Raiskin & Rachel D. Gebaide

Yesterday, the U.S. Department of Labor published temporary regulations describing how businesses employing less than 50 employees can take advantage of the carve-out included in the Families First Coronavirus Response Act requirement that employers provide paid sick leave and paid FMLA leave.

The regulations provide that an employer with less than 50 employees (a small employer) is exempt from providing Emergency Paid Sick Leave (but only for one of the six enumerated reasons) and FMLA leave (either the paid or unpaid portion) when doing so would jeopardize the viability of the business as a going-concern.  The exemption applies only to the requirement that a small business provide paid sick leave and FMLA leave to an employee who is unable to work or telework due to a need for leave because the employee is caring for a son or daughter whose school/day care is closed, or whose is child care provider is unavailable, because of COVID-19.

The regulations provide that a small employer is entitled to the carve-out if an authorized officer of the business determines that: 

  • The requested sick or FMLA leave would result in the small business’s expenses and financial obligations exceeding available revenues which would cause the small business to cease to operate at minimal capacity;

  • The absence of an employee or employees seeking paid sick or FMLA leave would lead to substantial risk to the financial health or operational capability of the business because of the “absence” of their unique skill, knowledge of the business operation or responsibilities; or

  • There are not sufficient workers who are able, willing and qualified (and available at the time and place needed) to perform the work of the employee or employees seeking leave, and those services are needed for the small business to operate at minimal capacity.

Importantly, according to the DOL regulations, the employer seeking this exemption must document that the employer made the determination that it is exempt pursuant to these enumerated requirements. Once the determination is made and documented, the small employer retains the documentation in its possession but does not send it to the DOL. At this time, it appears that the employer must retain the documentation in the event the employer must respond to a DOL inquiry or investigation into, or an employee’s claim of, an employer’s alleged non-compliance with these leave laws.

Finally, regardless of whether a small employer seeks to exempt one or more employees from receiving paid sick and/or paid FMLA leave, all employers, including small employers must post (or deliver via email) the DOL’s required poster informing employees of the new law’s requirements. This is because a small employer must still provide paid sick leave to employees who need leave for the other enumerated reasons in the Families First Coronavirus Response Act.

For up-to-date news please follow our Coronavirus (COVID-19) Response Team page.

This article is informational only. You should consult an attorney before acting or failing to act. The law may change rapidly and no warranty is given. LOWNDES DISCLAIMS ALL IMPLIED WARRANTIES AND WITHOUT LIMITATION, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. ALL ARTICLES ARE PROVIDED AS IS AND WITH ALL FAULTS. Consult a Lowndes attorney if you wish to establish an attorney/client relationship.

A Florida Supreme Court Certified Circuit Civil Mediator, Morey Raiskin works in the firm’s Labor & Employment Group.

Over the past 38 years, Morey has represented management of both large and small employers. He has successfully litigated cases in state and federal courts and represented clients in administrative proceedings involving the EEOC, DOL and FCHR. Morey also serves as an advisor to his clients, counseling them on virtually any workplace issue they may confront.

Morey develops non-compete and employment agreements, personnel policies, employment application forms, employee handbooks, and counsels clients on wage and hour, discrimination, WARN Act planning and union avoidance strategies. He litigates these same issues in state and federal courts or in administrative proceedings before the EEOC, U.S. Department of Labor or the Florida Commission on Human Relations.

Morey began practicing law in Las Vegas, Nevada, before moving to Orlando in 1984. In 1986, he accepted an in-house opportunity with a diversified publisher, Harcourt Brace Jovanovich, eventually becoming Lead Labor and Employment Counsel and Administrative Vice President of its wholly-owned subsidiary, Sea World. In 1990, Morey returned to private practice and has served in a myriad of roles, including as a shareholder and chair of the Labor and Employment Law Group at Lowndes from 1990—2012.


Rachel D. Gebaide is a member of the firm’s Executive Committee and chair of the Labor and Employment Law Group. She is an experienced employment litigator and adviser, counseling companies in the management of their human resources issues.

Rachel regularly represents employers in federal and state courts and before administrative agencies in defending against claims involving allegations of employment discrimination and violations of the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), and other employment laws. She also defends discrimination claims arising under the Fair Housing Act.  

In addition to her litigation practice, Rachel drafts and reviews employee handbooks, employment agreements, non-competition agreements, separation agreements, and other personnel documents. She regularly advises clients regarding workplace issues and compliance with the FMLA, FLSA, WARN Act, the Affordable Care Act, and other employment laws. Rachel also has extensive experience in conducting independent investigations. 

A frequent speaker, Rachel often writes articles on developing issues in labor and employment law for client-focused publications, legal industry news outlets, and the firm’s employment law blog

Rachel is a member of the Labor and Employment Law Sections of the American Bar Association and the Federal Bar Association. She is also a member of the Orange County Bar Association, having served as Chair of the Labor and Employment Law Committee. Rachel is active in the Litigation and Employment Law Group of Meritas, a global alliance of independent law firms. 

She also serves as Executive Vice President of Congregation Ohev Shalom and Vice President, Legal of TOP Jewish Foundation. 

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