There is some good, and some bad, information making its way around the internet and our community related to new legislation passed in response to the Coronavirus. We strongly recommend all small business employers review the resources & information available through the buttons above, additional information published on authoritative government websites (follow links below) and look for additional updates to come:
Authoritative Links regarding new legislation:
Internal Revenue Service (Extended tax deadline, stimilus, etc.)
Department of Labor (Emergency Paid Sick Leave and Emergency Family Medical Leave Act Expansion information)
Department of Treasury (Press releases from Secretary Mnuchin and links)
Small Business Administration (Small business guidance & loan application resources, etc.
Azgovernor.gov (Arizona specific news)
Arizonatogether.org (Arizona specific information, links to unemployment, financial assistance, business assistance, etc.)
Many of our small business cilents are beginning to work through the Small Business Administration (SBA) loan application process. The loans available have low interest rates, extended repayment schedules and potential loan forgiveness for qualified use. Please see the Small Business Administration link above for more information. These loans are available for qualified borrowers on a first come first serve basis until the budgeted funds are fully depleted. We suggest anyone considering this option proceed quickly before the funds are gone.
UPDATE: 3/25/20: The Department of Labor has updated their website to include additional information related to the Families First Coronavirus Response Act here. All businesses with less than 500 employees must make this information public by hanging the poster available below somewhere employees can will see it. Please print the poster, post it along with other required workplace posters, and review the frequently asked questions and additional information available on the website,
Poster: Please see Employee Rights under Families First Coronavirus Response Act Poster at the top of this page.
UPDATE: 3/20/20: The IRS issued Notice 2020-57 today that provides significant relief to the stress felt by small business owners regarding the Families First Coronavirus Response Act. Please review it here.
It includes great news about the ability to help offset the cost of paying required paid time off under the recent legislation (see update 3/18/20 below for information regarding the legislation).
1. Employers are able to reduce payroll tax payments otherwise required (941 deposits).
2. If these offsets don't fully cover the cost of the paid leave it states there will be an accelerated payment process to recoup additional costs within two weeks. Details, forms, instructions, etc. are yet to come, but are expected next week.
3. Small Business Exemption: "Labor will provide emergency guidance and rulemaking to clearly articulate" the small business exemption to the law available for employers with fewer than 50 employees for whom compliance would jeopardize the viability of the business as a going concern.
4. Labor will be issuing a temporary non-enforcement policy for employers that violate the new law, but who were acting reasonably and in good faith. This is meant to give businesses time to become familiar and implement systems to comply with the new legislation.
More details are sure to follow in the coming days/weeks.
UPDATE: 3/18/20 *NEW LAW* Families First Coronavirus Response Act (HR6021):
As part of the response to the Coronavirus President Trump signed the above into law on 3/18/2020. The bill takes effect no later than 15 days after enactment (4/1/2020). The bill includes multiple provisions that all employers should be aware of. Please consider reading some articles to make yourself familiar and don't hesitate to contact us to schedule a time to discuss it in detail. The bill includes the following items we believe will impact all small business employers:
1. Division E - Emergency Paid Sick Leave Act: Employees are eligible for up to 80 hours of emergency paid sick leave (part-time employees up to average hours worked over 2-week period). The paid sick leave is to be paid out depending on qualifying purpose for the leave as follows:
a) The employee is subject to federal, state or local quarantine/isolation due to COVID-19; a health care provider advised them to self-quarantine; or the employee is experiencing symptoms and seeking a medical diagnosis. This category qualifies for sick pay at their normal rate of pay, up to $511 per day/$5,110 aggregate.
b) The employee is caring for an individual who is subject to quarantine, advised by a health care provider to self-quarantine, or is their child whose school or place of care is unavailable due to COVID-19 precautions. This category qualifies for sick pay at their two-thirds (2/3) of their normal rate of pay, up to $200 per day/$2,000 aggregate.
2. Division C - Emergency Family and Medical Leave Expansion Act: Employees who have worked at least 30 calendar days for employers with fewer than 500 employees are eligible for up to an additional 12 weeks of leave at a rate of two-thirds (2/3) of their normal rate of pay, up to $200 per day/$10,000 aggregate.
The Act also provides for dollar-for-dollar tax credits equal to 100% of the wages paid out for the above paid time off provisions. The credits are capped at the rates above for each section. The credits will be available to claim when filing quarterly payroll tax report Form 941. The purpose of the credit is to fully reimburse small businesses impacted by the expanded paid time off orders. While the credits will help mitigate the impact of the new law on small business owners there is sure to be discomfort experienced due to the immediate cash flow concerns of paying wages out first. Also, the additional tracking necessary to claim the credits and loss of employees during this time will be challenging to say the least.