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Guidance for Small Businesses on the CARES Act

The COVID-19 crisis challenges the lives and health of us all. As we cope with stress, fear and heartache, as businesses, we also have obligations to our companies and our employees. The array of new issues and laws is staggering. Here are a few highlights to get businesses started on the work ahead.

Coronavirus Aid, Relief and Economic Security (CARES) created programs to assist certain businesses with COVID-19. These include forgivable loans.

The Paycheck Protection Program (PPP) under CARES is a new forgivable loan helping businesses with less than 500 workers. The program provides low-interest loans of up to 250% of the employer’s average 2019 monthly payroll costs, with a cap of $10 million. These loans can be used for salaries, group health benefits, rent, utilities, and other specified expenses. These loans can be forgiven if the employer meets specific employee retention/reinstatement parameters. 

Hospitality, food services and franchised employers may also qualify under specified requirements and per location employee caps, even if they have more than 500 employees. 

PPP and other new loan programs can provide critical help during this crisis, but there are many hurdles that must be cleared to complete the qualification and application process. If your company wants more information or needs help, please e-mail apetisco@chartwelllaw.com.

There are new mandated Emergency Paid Sick Leave and FMLA with pay laws, and many workers’ compensation and unemployment compensation considerations.

New laws and, nearly daily guidance, updates deeply impact an employer’s obligations and options during this crisis. Recently enacted provisions include whole new programs or sweeping changes to existing FMLA, sick leave, wage and hour, workers’ compensation and unemployment law. Chartwell Law has a team in place to assist your company in navigating all workers’ compensation, new sick leave, new FMLA with pay, and other personnel issues under the new laws.

The Families First Coronavirus Response Act (FFCRA) applies to private employers with fewer than 500 employees. FFCRA created new programs to provide Emergency Paid Sick Leave (EPSL) and FMLA leave with pay (FMLA Plus) for employees who cannot work because of COVID-19. In many cases, employers can take tax credits of up to 100% of amounts that employers must pay under EPSL and FMLA Plus. 

Emergency Paid Sick Leave (EPSL) Provides:

- Two weeks of paid sick time

  • When an employee is unable to work or telework because of a government quarantine or self-quarantine directed by a doctor
  • When the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis
  • When an employee is caring for an individual who is in quarantine or caring for a child whose school or childcare is closed due to COVID-19.

- There are caps. The caps are $511 per day and $5,110 in the aggregate for the first two bullet points. The caps are $200 per day and $2,000 in the aggregate for the third bullet point.

- Generally, when the employee takes the Emergency Sick Leave due to the employee’s health condition, the leave is paid at the employee’s regular rate or the minimum wage (whichever is higher). If the employee takes leave to care for another individual or due to the closing of the school or place of care of a child, then the leave is paid at 2/3rds of the regular or minimum wage rate.

Family and Medical Leave Act Plus

- Applies to employees who have been on the payroll for 30 calendar days.

- Employers must provide up to 12 weeks of job-protected FMLA leave when an employee is unable to work or telework because of a need to care for a child (under 18) if the child’s school or childcare has been closed due to COVID-19.

- FFCRA emergency family leave provisions do not change the overall amount of FMLA leave employees can take during an applicable 12-month period.

Under the Family and Medical Leave Act Plus the first two weeks can be unpaid leave. The remaining 10 weeks are paid leave. The employee may elect (most do) to exhaust all their PTO/Sick time during these first two weeks. Thereafter, the paid leave portion is generally at a rate of 2/3rds of regular pay. There are caps. The caps are $200 per day and $10,000 in the aggregate.