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Beginning April 1, 2020, many employers must provide eligible employees with paid leave for specified reasons related to COVID-19. However, small businesses may qualify for an exemption to certain leave requirements. Here are the highlights from the DOL:
Small employers should review the DOL’s guidance to determine whether they would qualify for an exemption for the paid leave requirements.
We will continue to share information as it becomes available and keep you informed. If you have questions, please do not hesitate to reach out to us.
The U.S. Department of Labor (DOL) has now published materials to aid employers in ensuring compliance with this new law, including questions and answers, and the required workplace poster.
Updated DOL FFCRA Notice/Poster
The Department of Labor has issued the Families First Coronavirus Response Act notice/poster. Unfortunately, the first version the DOL issued had a slight error, so the DOL issued a corrected poster to clear up the confusion. You can download the correct version here. The DOL also issued FAQs regarding the notice, which can be found here. Covered employers should post this notice at their workplaces no later than April 1 (the effective date of FFCRA). Additionally, for employers who have employees working remotely, the notice should be sent out by email or regular mail, or by posting it on the company intranet or website.
DOL Issues Additional FAQ on FFCRA
The DOL expanded its existing FAQ on the FFCRA — adding nearly 10 pages of content regarding the new requirements for paid sick leave (E-PSLA) and paid family medical leave (E-FMLA). You can download the Q&A here.
Gulfshore Insurance is focused on supporting and addressing client concerns. Visit our Coronavirus Resource Center for guidance on risk management measures and resources to help manage ongoing operations.
The Coronavirus (COVID-19) pandemic has put a major strain on every aspect of daily life around the world, including the United States. As spread of the disease shows no sign of slowing down, there is a steadily increasing concern in the United States regarding the health and wellness of not only our citizens, but the economy as well. In response, the United States Congress has been negotiating a historic stimulus package to address the havoc caused by the pandemic.
It appears Congress’ hard work has paid off, as they just passed a $2 trillion package to provide a jolt to the economy reeling from the deadly virus. All Americans would do well to understand the package’s provisions, as it will offer direct relief to businesses and individuals alike.
WHAT IS IN THE STIMULUS PACKAGE?
The $2 trillion stimulus package, negotiated by Republican and Democratic leaders, is the largest economic stimulus measure in modern history. The bill is a $2 trillion combination of tax provisions and other stimulus measures, including emergency business lending. The measure promises to provide help for struggling American families and businesses, as well as health care workers on the front lines of the coronavirus outbreak.
Significant Provisions Affecting Businesses
The tax package itself is broad, with tax payment relief and significant business tax incentives. Here is a list of the most significant provisions affecting businesses:
Significant Provisions Affecting Individuals
The major piece of the individual tax changes will offer rebate checks based on a new tax credit of $1,200 per filing adult and $500 for each qualifying child. Additionally, unemployed individuals will receive an unprecedented expansion of benefits and payments.
Here is a list of the most significant provisions affecting individuals, many of which will be discussed in detail later in this piece:
As you can see, the package will have a far-reaching impact as it drives money toward workers, small businesses and industries that have been impacted by the economic downturn due to the pandemic.
OVERVIEW OF MAJOR BILL PROVISIONS
Now that you’re aware of the major implications for both businesses and individuals, let’s take a more in-depth look at the most important provisions.
Loans and Tax Credit Available to Small Businesses
Keeping businesses afloat and workers under the wing of their employers is critical for ensuring the economy can quickly restart after the pandemic subsides. To this end, the stimulus package creates a $367 billion federally guaranteed loan program for small businesses that employ 500 or fewer people who must pledge not to lay off their workers. The loans will be available during an emergency period ending June 30, and would be forgiven if the business uses the loan funds for approved purposes and maintains the average size of its full-time workforce, based on when it received the loan.
Additionally, small businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year, will be eligible for a tax credit worth up to 50% of wages paid during the crisis, so long as they keep their workers employed through the crisis. Wages remain eligible until business is no longer suspended or gross receipts for a quarter reach 80% of the prior year. The credit could be applied to all wages for employers with fewer than 100 employees, while the benefit is capped at $10,000 in wages per employee for larger employers.
Expansion of Unemployment Benefits
The stimulus package includes a significant expansion of unemployment benefits that will extend unemployment insurance by 13 weeks and include a four-month enhancement of benefits (for reference, many states already provide 26 weeks of unemployment benefits, and thus participants in such states would be eligible for a total of 39 weeks when adding the 13 weeks of federal relief). The enhanced benefits will provide an additional $600 per week on top of what state unemployment programs pay.
Note that many individuals who typically do not qualify for unemployment insurance will qualify under the package, including independent contractors and self-employed individuals. In sum, those who are unemployed, partially unemployed or who cannot work for a wide variety of coronavirus-related reasons will be more likely to receive benefits.
Individual Checks to Taxpayers
As noted earlier, the package will provide direct payments to taxpayers based on the adjusted gross income found on their 2019 federal tax return. All U.S. residents with adjusted gross incomes up to $75,000 ($150,000 for married couples) will get a $1,200 ($2,400 for couples) payment. Families will receive an additional $500 per child, as a way to create a safety net for those whose jobs and businesses are affected by the pandemic. However, the payments will start to phase out for individuals with adjusted gross incomes greater than $75,000. Those with incomes higher than $99,000 will not qualify for payments under the stimulus package.
It is unclear how long it will take the IRS to process every payment. The Trump administration has indicated that Americans could be seeing direct payments as soon as April 6.
HOW CAN I TAKE ADVANTAGE OF THE STIMULUS?
Now that you’re acquainted with the impact of the stimulus package, let’s discuss how you might take advantage of these benefits:
How can I obtain a small business loan from the government?
The U.S. Small Business Administration (SBA) is offering loans for qualifying small businesses. These are low-interest (3.75% for small businesses and 2.75% for nonprofits) loans with terms potentially as long as 30 years. You can apply for an SBA loan through its website. Be prepared to provide the following information:
You may also need to provide profit and loss statements, recent tax returns and balance sheets.
After you apply, the SBA will review your credit before conducting its own inspection to verify your losses. The SBA says its goal is to arrive at a decision on any disaster loans within two to three weeks. If it determines you are eligible, it will send you a loan closing document for your signature.
How can employees collect unemployment assistance?
If your business is closed because of COVID-19 and your employees cannot work from home, or your employees are unable to work due to the disease or need to take care of someone who has it, they can likely collect unemployment. As each state administers a separate unemployment insurance program, employees should be told to visit their state’s unemployment insurance website, which will provide the relevant details regarding their individual programs. The information employees will need includes their Social Security number and driver’s license or state ID.
CONCLUSION
If there’s anything that is certain, it is that the full economic impact of this unprecedented pandemic is yet to be understood. Despite the unpredictability, Congress’ historic economic stimulus package is a sight for sore eyes for struggling businesses and individuals alike.
As the pandemic develops and the stimulus package is rolled out, look for more relevant guidance from Gulfshore Insurance in the near future, and continue to stay abreast of the latest state and federal developments.
As the situation surrounding COVID-19 keeps changing, Gulfshore Insurance is working hard to keep you updated on how it may impact your business. Here are five important updates that business owners need to know.
The situation surrounding COVID-19 is changing every day, but Gulfshore Insurance is working hard to keep you updated on how it impacts your business. If you have any questions, please let us know.
As the number of reported cases of the novel coronavirus continues to rise, employers are increasingly confronted with the possibility of an outbreak in the workplace.
Employers are obligated to maintain a safe and healthy work environment for their employees, but are also subject to a number of legal requirements protecting workers. For example, employers must comply with the Occupational Safety and Health Act (OSH Act), Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA) and Worker Adjustment and Retraining Notification (WARN) Act in their approach to dealing with COVID19.
This Compliance Bulletin provides a summary of the compliance issues facing employers in this type of situation.
Download the Compliance Bulletin
We will continue to share information as it becomes available and keep you informed. If you have questions, please reach out to us.