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FDA Provides Guidance on “Small Business” Designation

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Stakeholders familiar with the Food and Drug Administration’s (FDA) Food Safety Modernization Act (FSMA) may have noted the Agency’s efforts to minimize the financial and time-consumption burdens placed on smaller regulated establishments who may not possess the vast resources of larger firms.

Companies designated as “Small Businesses” are granted more time to reach compliance with certain stipulations of FSMA. In other cases, a “Small Business” designation renders them exempt from a FSMA mandate required for larger firms, so it is paramount for companies to determine under which classification they fall.

To assist companies in determining their size classification and whether they are considered a “Small Business,” the FDA released a “Guidance for Industry: Determining the Number of Employees for Purposes of the “Small Business” Definition in Parts 117 and 507.”

Establishments’ determine their size classification based on the number of full-time employees, but the extent to which affiliates or subsidiaries count toward that final number can serve as a source of confusion. Initially released for comment as a Draft Guidance in March 2018, this Final Guidance provides instructions and definitions for determining the correct employee number.

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