April 6, 2020

COVID-19 Update

By: Clement Abrams
A women using hand sanitizer

The impact of the COVID-19 pandemic continues to shutter our nation, challenge established government protocols, strain our economic markets, encumber small and large businesses, close academic institutions, and alter our way of life. Now is the time to strategically evaluate every aspect of your business structure and respond to this changing environment with greater confidence.

Davis Law PLC is here to assist you in navigating these unchartered waters as a business owner and employer.  Our focus is to provide you with timely information that will assist you in making informed decisions about your business structure, employment matters, and how to respond to the changing legislative environment that can have legal ramifications for your business. Contact us here.

Our current administration, in cooperation with congressional leadership, is tirelessly working to assist businesses like yours that are adversely impacted by the decisions necessary to reduce the impact of COVID-19 on business commerce and our nation in general. As a business owner, there are legal requirements on the horizon that may apply to you plus available funding resources that you should be aware of right now:

Legislative Enactments:

Families First Coronavirus Response Act, H.R. 6201

President Trump signed H.R. 6201 on March 18, 2020 and its provisions will become effective on April 2, 2020. The bill addresses guaranteed sick time for workers and their families affected by COVID-19 and applies to private sector employees with fewer than 500 workers. Following is a highlight of some, but not all, of the key provisions that you should be aware of:

(1) Emergency Sick Leave.
i. Paid sick time off for employees who cannot work or telework if (a) subject to a coronavirus or isolation order; (b) an employee has been advised by a health care provide to self-quarantine due to coronavirus concerns; (c) an employee who is experiencing symptoms of coronavirus and is seeking a medical diagnosis; (d) an employee caring for an individual described in (a) and (b) above; and (e) an employee caring for a child whose school or place of care is closed, or the child care provided of the child is unavailable, due to coronavirus precautions;
ii. Full-time employees to receive 80 hours of sick leave, and part-time workers are granted leave equivalent to their average hours worked in a two-week period, regardless of tenure;
iii. Paid sick time will not carry over from year to year;
iv. No wage adjustments if employee is taking leave for themselves and is full-time. Workers taking off to care for family members must be paid 2/3 of their normal wage with specified caps on sick time pay.
v. Wages paid under the emergency sick leave provisions will not be subject to the 6.2 percent social security payroll tax typically paid by employers on employees’ wages.
vi. The Department of Labor will be authorized to issue regulations to (a) exclude certain health care providers and emergency responders from paid leave benefits, and (b) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of the requirement would jeopardize the viability of the business as a going concern.
vii. Employers will have to post a notice containing information regarding the emergency sick leave provisions; the Labor Department is to create a model notice no later than 7 days after the Act is enacted.
viii. The emergency sick leave provisions will expire on December 31, 2020.

(2) Emergency Family Leave
i. Up to 12 weeks of Family Medical Leave for employees who have been on the job for at least 30 days, and who are unable to work or telework because they have to care for a minor child if the child’s school or place of care has been closed, or if the child care provider of the child is unavailable due to a coronavirus emergency;
ii. The first 10 days of leave can be unpaid. For subsequent days of leave, workers will receive a benefit from their employers equal to at least two-thirds of their normal pay rate, capped at $200 per day and $10,000 in the aggregate.
iii. Employees to be restored to their prior position, with the exception of employers with fewer than 25 employees if the position no longer exists due to economic conditions or changes in the employer’s operating conditions caused by the coronavirus pandemic.
iv. Wages will not be subject to the 6.2 percent social security payroll tax.
v. Provisions to expire on December 31, 2020.

(3) Employer Tax Credits
i. Refundable credits for the employer portion (but not the employee portion) of the social security component of payroll taxes to be provided to employers to cover wages paid to employees for time off under the sick leave and family leave programs.
ii. The sick leave credit for each employee will be for wages (including qualified health plan expenses relating to those wages) of up to $511 per day while the employee is receiving paid sick leave for him/herself or $200 if caring for a family member or child whose school has closed. Credit limited to 10 days per employee per quarter.
iii. An employer can elect to not take the credit for a given quarter.
iv. Tax credits will take effect on a date selected by the Treasury Secretary with the 15 days following the Act’s enactment and end on December 31, 2020.

Coronavirus Stimulus Package:

A landmark $2 trillion relief package is in process of being approved to include direct payments to many Americans; $150 billion to help the healthcare industry; $500 billion for state and local governments and companies; and $360 billion in loans and assistance for small businesses. The allocation to help small businesses will be targeted to pay workers, mortgage interest, and rent. Businesses of up to 500 employees will be eligible for this assistance.
Internal Revenue Service:

In response to the COVID-19 outbreak, on March 21, 2020, the Treasury Department and Internal Revenue Service announced that the federal income tax filing due date is automatically extended from April 15, 2020 to July 15, 2020.

Taxpayers can also defer federal income tax payments due on April 15, 2020 to July 15, 2020, without penalties and interest, regardless of the amount owed. The deferment applies to all taxpayers, including corporations. No additional forms need to be filed.
U.S. Small Business Administration:

COVID-19 Disaster Loans

In response to the COVID-19 outbreak, the U.S. Small Business Association (SBA), in cooperation with numerous states, has developed paths towards economic relief for small businesses through low-interest federal disaster loans ranging up to $2 million dollars. Proceeds from these loans can be targeted to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact and provide vital economic support to small businesses to help overcome the temporary loss in revenue. The link below will assist you in determining whether you qualify, and if so, the steps necessary to access funding during this crucial time period:
https://www.sba.gov/size-standards/

The attorneys at Davis Law, PLC are closely monitoring the various developments addressed in this news release and will update our clients as additional information regarding these issues become available. To learn more, please look forward to visiting the soon to be released Davis Law, PLC COVID-19 resource page.