The attorneys at Murphy, Taylor, Siemens & Elliott, P.C. are working diligently to provide up-to-date information and guidance for businesses as they navigate through the COVID-19 legislation and economic realities caused by COVID-19. Our law firm’s Corporate Section is available to assist businesses to ensure compliance with the new legislation and to maximize the tax credits and other assistance available to businesses.
On March 18, 2020, Congress overwhelmingly passed into law the Families First Coronavirus Response Act (FFCRA), which goes into effect on April 1. This law affects almost all Americans in one way or another. There are two important sections within the FFCRA that directly impact small businesses and their employees. The questions on everyone’s mind are: (1) what are these laws, and (2) how do they affect my business? In short, if you employ fewer than 500 employees and do not fall within its limited exemptions, you are subject to the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family Medical Leave Expansion Act (E-FMLA) which require certain actions but also provide certain benefits. Below is a short summary designed to provide an overview of the new legislation.
The EPSLA requires that businesses provide paid sick leave to eligible employees. Full-time eligible employees are entitled to 80 hours of paid sick leave, while part-time eligible employees are entitled to the number of hours they would normally work. Under the EPSLA, an employee is eligible for paid sick leave if they are (1) unable to work or telework, and (2) fall into any one of the following categories:
1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
4. The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
5. The employee is caring for their son or daughter under 18 years of age because their school or place of care has been closed, or because their child care provider is unavailable due to COVID-19 precautions.
6. The employee is experiencing a substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Employees who fall into categories 1 through 3 are entitled to 100% of their regular rate of pay for each hour of sick leave they take with a cap of $511 per day, or $5,110 in the aggregate. Employees who fall into categories 4 through 6 are entitled to two-thirds their regular rate of pay. If an employee takes leave for reasons 4 through 6, the employee’s paid sick leave is 2/3 their regular rate and subject to a cap of $200 per day or $2,000 in the aggregate.
Businesses must also pay eligible employees under E-FMLA. Employees who have (1) worked for 30 calendar days, (2) are unable to work or telework, and (3) fall into category number 5 above are entitled to paid E-FMLA leave. Employees taking E-FMLA leave are entitled to 2/3 their regular rate of pay for each day of E-FMLA leave taken subject to a cap of $200 per day or $10,000 in the aggregate. Keep in mind, however, that the regular FMLA rules will still apply.
If you have fewer than 50 employees, you have previously been exempt from FMLA requirements. The FMLA is a complex and difficult law to understand and apply. With the current rates of infection, it is likely some or all of your employees will request paid sick and family leave. Additionally, the Department of Labor has issued a notice that all employers subject to the EPSLA and E-FMLA must post at their place of business. This notice will inform your employees of their rights to take paid sick and family leave.
There is an exemption for small businesses with less than 50 employees that can demonstrate that the law’s requirements would jeopardize the viability of their business. However, the requirements to meet this exemption have not been released and there is expected to be an application process to receive exemption. We expect more guidance from the Department of Labor on this exemption in the coming days.
Tax Credits and Small Business Loan relief
To offset the financial burden imposed on small business, the FFCRA contains a provision that allows businesses who provide paid sick and family leave to their employees under the FFCRA with a 1 for 1 refund through tax credits. Additionally, it is expected that as soon as Friday, President Trump will sign a law providing small businesses with access to low interest or forgivable loans if employers keep their employees on payroll through the COVID-19 pandemic.
All of these considerations are difficult to process during this crisis. There are numerous factors at play when deciding how best to navigate through the current situation.
Our firm represents hundreds of business clients. We are working non-stop to stay current with this fluid set of requirements and regulations and provide insight to our clients on how the new laws will impact them so they can comply with the new laws and take advantage of the benefits offered. We have read every word of these laws so our clients don’t have to, and are constantly monitoring Department of Labor interpretations to provide our clients the most up-to-date and relevant advice. Our community matters to us. We’re from here and care what happens to our local businesses.
Due to the Shelter-In-Place Order issued by the City of St. Joseph, MTSE attorneys are working remotely from their homes in order to continue providing sound, affordable legal advice to their clients. If you have any questions about the application of these laws to your business, please call us at (816) 364-6677 and leave a message or email an attorney in our corporate section, whose names and emails are below. One of our attorneys monitoring COVID-19 will respond you.
Kenneth E. Siemens, email@example.com
Nancy Potter Lyle, firstname.lastname@example.org
Seth W. Slayden, email@example.com
Lindsey B. Holcumbrink, firstname.lastname@example.org