What the Families First Coronavirus Response Act Means for Home StagersMar 20, 2020
Updated 4/01/2020 Written by Debbie Boggs, Co-Founder of Staging Studio
There has been a lot of confusion over what the recent legislation will actually mean for small businesses like yours. We have done some research and, although we are certainly not lawyers, we are owners of a home staging business and we can tell you what we think it means for us.
The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just passed by Congress are intended to assist business owners with whatever needs they have right now. If you need capital to cover the cost of retaining employees, the Paycheck Protection Program can provide a low-interest, tax-free, forgivable loan.
For a quick infusion of a smaller amount of cash to cover you right now, look into the Emergency Economic Injury Grant.
As of March 19, the Families First Coronavirus Response Act was signed into law. It is important to note that this relief applies to those who are self-employed as well. There are a number of provisions addressing other issues, but we want to discuss two major parts, the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Act (EFMLA). Those sound very similar, but they are separate things. Here are the highlights:
Emergency Paid Sick Leave
Employers with 1-499 employees must provide emergency paid sick leave. If the employee is sick, full-time employees receive 80 hours. Part-time employees are eligible for the average number of hours per week they have worked for the past 6 months. Employers must provide paid sick time “to the extent the employee is unable to work (or telework)” due to a need for leave.
Qualifying reasons for an employee to be eligible for sick leave will include:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
- The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis,
- The employee is caring for an individual who is subject to an order to self-quarantine as described above.
- The employee is caring for a son or daughter if school or child care is closed/unavailable.
- The employee is experiencing “any other substantially similar condition” specified by Health and Human Services (HHS).
Compensation is calculated at the highest of the employee's regular rate, federal minimum wage, or local minimum wage, for the above reasons 1, 2, or 3. It will be ⅔ of that for the above reasons 4, 5, or 6.
There are exemptions for small businesses with fewer than 50 employees from leave to care for a son or daughter if such care is closed/unavailable, when the imposition of such a requirement would jeopardize the viability of the business as a going concern. In other words, if you employ fewer than 50 people, as most of us do, and if providing this paid leave would put you out of business, you might be exempted. There is also the possibility of getting a low-interest SBA loan to cover your cash flow needs if your area has been designated as a disaster area.
Additional General Rules
- Sick leave does not carry over.
- Employer may not require employee as a condition of paid leave to find a replacement to cover scheduled hours.
- Employee may first use this paid sick time under this law before other paid leave.
- Employer may not require employee to use other paid leave provided by the employer before using this paid sick leave.
Emergency Family and Medical Leave Act
This provides 12 weeks of job-protected leave when the employee is caring for a son or daughter if school or child care is closed/unavailable due to the public health emergency. The first 10 days of EFMLA may be unpaid by this act but are paid under the Emergency Paid Sick Leave Act. The employee can elect to use any accrued PTO, vacation, or sick leave during this time, but the employer cannot require them to do so.
After the initial 10 days, the employee is compensated at ⅔ their regular wages, capped at $200 per person per day and $10,000 per person in aggregate.
- Employers subject to the requirements are entitled to a refundable tax credit equal to the amount of the qualified paid sick leave requirements paid by the employer per quarter.
- The tax credits for qualified paid sick leave are capped at $511 per day per person for qualifying reasons 1-3 above and $200 per day per person for reasons 4-6 above.
- The tax credits are applied against employer Social Security taxes, but employers are reimbursed if their costs for qualified leaves exceed the taxes they would owe.
We are not lawyers
We cannot advise you on exactly all of the ramifications of the Families First Coronavirus Response Act for your particular business. We still have a lot of questions ourselves. This is only intended to give you a heads-up on what is going on. From what we understand, though, we created the following example.
Say Sam Stager has been your full-time employee for 6 months and makes more than minimum wage. He has accrued 2 days of PTO under your company policy. His daughter’s school is closed until the end of April and he needs to care for her.
What benefits is Sam Stager entitled to during this time?
- Emergency Paid Sick Leave - 80 hours at his regular pay
- Emergency Family and Medical Leave Act - up to 12 weeks of job-protected leave
- The first 10 days are unpaid (but paid under the Emergency Paid Sick Leave)
- After 10 days, Sam is paid at ⅔ his regular pay
- After the initial 10 days, Sam may use his 2 days of PTO to receive full pay, although he cannot be required to do so.
While we don’t have a crystal ball, and things are changing at warp speed, we do have some bits of information to help you through this. There are a number of positive things to report and we will update our Coronavirus Resources page as we learn more.
First, you have some extra time to pay your income taxes. The IRS has moved the due date from April 15 to July 15. You still need to either file your return or request an extension by the original date, but there will be no interest or fees until July, as long as you owe less than $1million - not a problem for most of us. At the same time, if you expect a refund, you will want to go ahead and file right away.
Not that you are going anywhere, but gas prices are being pushed low because of reduced demand and dropped oil prices.
Interest rates were already ridiculously low and are now even lower, meaning great terms if you are buying or refinancing your loan. If you have credit card debt, you may be able to negotiate a lower interest rate.
The US government is working on stimulus ideas. One of those would be to send checks out to Americans very soon. One suggestion was $1000 each. TBD if or when that will come to fruition, and who will qualify.
For those of you who are in Canada, you can find information about some programs and assistance through the BDC.
Many organizations and companies are also offering various grants and support. For example, Facebook is offering $100M in cash grants and ad credits for up to 30,000 eligible small businesses in over 30 countries.
We are here for you.
During this difficult time, we will be doing all we can to support you and your business. So, we have done something we have NEVER done before– discounted our courses! For the next 2 weeks (until April 2), you can take 30% off all our online courses with the code WORKFROMHOME. If you have employees who are stuck at home, this is the perfect time to get them trained with our Pro level online course. We also offer a Master Color Consultant™ certification, as well as our Staging Design Professional™ course for entrepreneurs like you. We are also hosting weekly (if not more!) morning coffee chats in our Facebook Group or via Zoom. And we will be updating our Coronavirus Resources page often.
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