Family First Coronavirus Response Act for Small Businesses
The Family First Coronavirus Response Act for small businesses was passed on March 18, 2020 and takes effect on April 1, 2020. This act will include paid leave requirements for employers and employers, as well as loan options for small businesses with fewer than 500 employees.
What are the Paid Leave Requirements?
The Family First Coronavirus Response Act (FFCRA) provides paid leave benefits for employees in three areas: the Emergency Paid Sick Leave Act, the Emergency Family and Medical Leave Expansion Act, in addition to Paid Family Leave and Paid Sick Leave Tax Credits for employers.
Emergency Paid Sick Leave Act
This portion of the FFCRA has emergency funds available to employees who are unable to work or work remotely (telework) due to:
- Federal, state, or local quarantine or isolation orders, including those who care for individuals who are subject to such orders
- Advised by a healthcare worker to self-quarantine, including those who care for individuals advised to self-quarantine
- Experiencing symptoms of COVID-19 and seeking medical diagnosis
- Caring for children due to schools and/or childcare facilities being closed as precautionary measures of COVID-19
The Emergency Paid Sick Leave Act provides full-time employees up to 80 hours of paid sick leave and part-time employees paid sick leave amounting in the average number of hours that were worked over the two-week period prior to the start of leave.
Under this act, employees are protected from employer requirements to use other employer-provided paid leave prior to using these federal benefits. Employees can expect to receive their regular pay rate or the applicable minimum wage amount – whichever is higher – up to $511 per day for a total of $5,110 during the entirety of the sick leave.
Those who are caring for isolated or quarantined individuals due to school and/or childcare closures will be compensated 2/3 the regular rate of pay up to $200 per day for a total of $2,000. Employees who have schedules with varying hours can expect to be paid based upon the average number of hours that were scheduled over the six-month period prior to the start of leave.
Emergency Family & Medical Leave Expansion Act
This Expansion Act amends the previous Family and Medical Leave Act to temporarily require businesses employing less than 500 people to provide all employees with Public Health Emergency Leave (PHEL).
This Expansion Act provides up to 12 weeks of job-protected leave in order to allow for time to care for a child under the age of 18 if their school is closed or the childcare provider becomes unavailable. Employees may be eligible for emergency leave if they have worked for a business with less than 500 employees for more than 30 calendar days prior to the start of leave.
It’s important for employees to expect the possibility of the first 10 days of emergency leave to be unpaid due to federal restrictions. In this situation, employees would be able to substitute any accrued leave, including emergency paid sick leave, to cover for lost wages. Those who are eligible for PHEL can expect no less than 2/3 the regular rate of pay up to $200 per day.
Healthcare providers or emergency responders may be excluded from receiving PHEL. The Department of Labor may also issue regulations exempting employers with less than 50 employees if providing PHEL would jeopardize the viability of the company.
Once PHEL ends, employers are required to guarantee that employees will maintain the same or equivalent position upon return to work.
Paid Family Leave & Paid Sick Leave Tax Credits
The purpose of Family Sick Leave Tax Credits is to reduce the amount of federal employment taxes in order to provide funds for employee sick and family leave benefits. Businesses with less than 500 employees are allowed credits against employer Social Security tax liability equivalent to 100% of qualified sick leave wages paid by the employer.
Small business owners can expect tax credit increases from certain specified health expenses such as employer-paid health plan premiums that are excluded from employee income. These credits are fully refundable for employers and will receive reimbursement of the amount that was paid – subject to caps – even if the tax liability is less than the amount that was paid out in the regular lease.
Emergency paid sick leave and PHEL wages are also exempt from the Social Security taxes imposed on employers.
Who’s Eligible for the Florida Small Business Emergency Bridge Loan Program?
All for-profit, privately-owned small businesses with two to 100 employees that have experienced economic damage due to the COVID-19 pandemic are eligible for the Florida Small Business Emergency Bridge Loan Program. This program provides businesses the opportunity to take out short-term, interest-free loans to “bridge the gap” between the start of the state of emergency to the time when recovery resources are received.
One emergency loan is allowed per business and will be active for up to one year. Loans can be taken out in amounts up to $50,000 for each small business. In special cases based on need, businesses may be able to take out up to $100,000.
Funds from these loans are not meant to be a primary assistance for small businesses, and eligibility is based on various financial sources. Repayment of loans is required from longer-term resources, which can come from sufficient profits from a revived business, insurance claim payments, or federal disaster assistance.
The application for the Florida Small Business Emergency Bridge Loan Program is May 8, 2020 and is contingent on fund availability.
Paycheck Protection Program
Congress recently passed the Paycheck Protection Program (PPP) that allows $350 billion to be allocated towards small businesses under the CARES Act. This program was established in an effort to assist business owners in avoiding layoffs and remaining prepared to reopen when deemed possible.
Each business with 500 or less employees has the opportunity to receive up to $10 million, with funds coming from banks and large credit unions. Congress has declared that funds may take up to 2 weeks from the start of the program to be available and will remain available for three months.
All loans given under the PPP are forgivable as long as small business owners use the funds for employee paychecks up to $100,000 or use funds for monthly rent, mortgage, or utility payments. If the funds from PPP are used for any other expenses, the repayment is set at 4% interest for 10 years.
Small business owners can apply for loans by contacting their bank and asking for the loan officer who handles SBA 7(a) loans and the Paycheck Protection Program.
How Landis Graham French Can Help You
Our attorneys specialize in providing expert legal services to individuals and business owners in Volusia County for Corporate and Business Entities, Employment Law, and more. If you would like to know more about how the attorneys at Landis Graham French can help and advise you through legal matters associated with the Family First Coronavirus Response Act, please contact us today at 386-734-3451.