April 3, 2020
COVID-19 – FFCRA & CARES What it Means for Employers and Your People April 3, 2020
Hi High ghli ligh ghts o s of F FFCRA CRA • Effective: ~ April 1, 2020 . Expires: December 31, 2020 . • Emergency Paid Sick Leave • Expanded paid FMLA leave for parents • Covers employers with fewer than 500 employees • Payroll tax credits available • Exemptions available for small employers 3
Emergency Paid Sick Leave April 3, 2020
Emergency Paid Sick Leave • Paid Sick Leave • Covers Employees unable to work– or telework– for specific reasons related to COVID-19 • Requires Employers to Pay Two Weeks • FTE: 80 hours total • PTE: Ave. # hours worked in 2 weeks • Can be used Intermittently with employer’s permission 5
COVID-19-Related Reasons for Paid Sick Leave A governmental quarantine or isolation order related to 1. COVID-19. Advice from a health care provider to self-quarantine due 2. to concerns related to COVID-19. Experiencing symptoms of coronavirus and seeking a 3. medical diagnosis. ______ Caring for an individual under 4. • A quarantine or isolation order OR • Has been advised by a health care provider to self-quarantine. Caring for a son or daughter if school or child care has 5. been closed or is unavailable.* Another substantially similar condition specified by HHS.** 6. 6
Limits on Required Paid Sick Leave • For Reasons #1 to #3, • Entitled to full pay • Not required to exceed $511 per day (or $5,110 total) • For Reasons #4 and #5 (care of others) • Entitled to 2/3 of their regular rate of pay • Not required to exceed $200 per day (or $2,000 total) 7
Emergency Paid Sick Leave • Special Notes • Does Reason #1 (quarantine or isolation order) include the state Stay-at-Home or Shelter in Place Orders? • Reason #5 (Child school and care) overlaps with the expansion of FMLA leave • Employers may exclude health care providers or emergency responders 8
Use of Leave & Employee Notice • Available to all employees • May not require employees to use other PTO first • Must Notify Employees • Must document requests for leave • Written or oral requests are acceptable 9
Amendment to FMLA April 3, 2020
Emergency Family Medical Leave Expansion • Temporarily amends FMLA • Includes employers with 1-499 employees • Eligible employees need only have worked 30 days • Requires employers to provide 12 weeks • 10 weeks PAID • 2 weeks unpaid (overlap with paid sick leave) • Employees “ unable to work (or telework) due to a need for leave to care for” a child whose school or daycare is closed for COVID-19-related reasons. 11
Reinstatement Rights for Employees • Restoration to Prior Position • Normal Rules Apply • No protection from actions that would have taken place regardless of the leave • “Key” employees have fewer protections • Highest paid 10% • Can deny, if restoration would cause “substantial and grievous injury” to operations • Additional Conditions for Small Employers (<25 employees) • Employee took FMLA to care for child • Position no longer exists because of conditions during leave • Employer made reasonable efforts to restore employee • Employer made reasonable efforts for 1 year to contact employee if equivalent position becomes available 12
Small Business Exceptions • Exemption for Employers with < 50 employees if the requirement to provide leave would jeopardize the viability of the business . • DOL Regulation 29 CFR § 836.40(b) • Employer is EXEMPT if an authorized officer of the business has determined that paid leave • Would result excessive financial obligations, causing it to cease operating at minimal capacity; • Employees’ absence would entail a “substantial risk to financial health or operational capabilities” • Not sufficient available employees to perform the work performed by those requesting leave • Enforcement Limitations § 826.251(b) • An employee may not sue an employer under the eFMLA if the employer is not otherwise subject to the FMLA. • Employers may still be investigated, fined and sued by the DOL. 13
Payroll Tax Credits for Employers • Full Amount of Paid Leave (Sick Leave and FMLA leave) • Credited against employer’s portion of Social Security and Medicare taxes • Maximum of $511/day for employee’s own conditions • Maximum of $200/ day for an employee’s care for another • (includes paid sick leave and paid FMLA leave) • Credit also available to offset a portion of health insurance plan costs offered during the paid leave • IRS has issued preliminary guidance to allow expedited tax credits 14
Stay-at-Home Executive Orders • Impact of State Stay-at-Home Orders • Many prohibit in-person work unless for “essential infrastructure,” an “essential business,” or to conduct “minimum basic operations.” • Some prohibit in-person work “not necessary to sustain or protect life or to conduct minimum basic operations.” • See Cybersecurity & Infrastructure Security Agency Guidance • www.cisa.gov • Evaluate on case-by-case basis • May Need Authorization Letters for Some Employees • Other Measures for Ongoing Operations • Social Distancing and Safety Measures • Encourage sick employees to remain home • Increased cleaning and disinfection 15
CARES ACT April 3, 2020
CARES Act Cononavirus Aid, Relief, and Economic Security Act (CARES Act) • $2 Trillion allocated for businesses, individuals, federal agencies and state and local governments • There are tax credits, deferral payments, and loans available. 17 17
Key Provisions of CARES Act • Small Business Paycheck Protection Program • SBA Loans to business with <500 employees • Goals: Maintain employment and businesses • Exchange Stabilization Fund • Department of Treasury-administered • $50 Billion in loans to businesses important to national security • $450 Billion in emergency loans for general businesses • Expanded Unemployment Insurance Benefits • $600 Supplemental benefit until July 31, 2020 • Access to benefits due to COVID-19 • Access to Retirement Benefits • Allows individuals ability to withdraw up to $100,000 from 401(k) without penalties 18
SBA Loans – Paycheck Protection Program • Paycheck Protection Program (PPP) • Who can apply? • All businesses – including non-profits, veterans organizations, Tribal businesses, sole proprietorships, self-employed individuals, and independent contractors • Less than 500 employees – certain industries can have more • Application done only through SBA approved lenders (not direct) • Consult with legal counsel or advisor for eligibility • Funds can be used for: • Payroll costs, including benefits; • Interest on mortgage obligations incurred before 2/15/20; • Rent, under lease agreements in force before 2/15/20; • Utilities, for which service began before 2/15/20 • Loan Amount: up to two months of average payroll costs (defined on next slide) from the last year plus an additional 25% of that amount (250%), capped at $10 million. • Loan payments deferred for six months • Term: 2 years on any portion not forgiven • Interest Rate: 1.00% • Unsecured – no collateral requirement • 100% SBA guarantee 19
SBA Loans – PPP cont. Payroll Costs Includes: • Salary, wages, commissions, or similar compensation (capped at $100,000 on an annualized basis for each employee) • Payments of cash tips or the equivalent • Payment for vacation, parental, family, medical or sick leave • Allowance for dismissal or separation • Group health care benefits “including insurance premiums” • Payment of retirement benefits • Payment of state or local tax assessed on the employee 20
SBA Loans – Loan Forgiveness • Loan Forgiveness • The loan amounts will be forgiven as long as: • Loan proceeds are used to cover payroll costs, and most mortgage interest, rent and utility costs over the 8 week period after the loan is made; and • Employee and compensation levels are maintained. • Number of Staff: Loan forgiveness will be reduced if you decrease your full- time employee headcount • Level of Payroll: Loan forgiveness will be reduced if you decrease salaries and wages by more than 25% for any employee making less than $100,000 annualized in 2019. • Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020. • Request for loan forgiveness to be provided to lender servicing the loan. Request to include documentation verifying number of full-time employees and pay rates, as well as payments on mortgages, lease, and utility obligations. • Lender must make decision on forgiveness within 60 days. 21
SBA Loans – Economic Injury Disaster Loan • Economic Injury Disaster Loan program (EIDL) was signed into law March 6 th as part of Phase I of CARES Act. • EID Loan program provides up to a $2 million working capital loan for small businesses suffering from substantial economic injury as a result of COVID-19 • Terms of loans: • Interest rate of 3.75% for small businesses and 2.75% for private non-profits • Loans over $25,000 require collateral including real estate – SBA can waive collateral requirement on a case by case basis. • Personal guarantees from owners who own > 20% of the company for loans over $200,000 – SBA may waive • New loan cannot be consolidated with any existing SBA loan 22
Recommend
More recommend
