Dear Trusted Counsel Client or Friend,
We know you are being bombarded with a multitude of information on Covid-19 and what businesses should do now being pushed at you. We aren’t trying to increase that load – we just want to reach out and let you know we are here – and want to provide you with a few thoughts as you mobilize your teams and evaluate how to ensure the longevity of your businesses:
1. Low Interest Loans. If you require loans due to the impact of COVID-19 on your business, most States are now up on the SBA disaster loan assistance site. You need to set up an account and start filling out forms! CLICK HERE TO ACCESS.
2. Reductions in Compensation. If you will be reducing compensation of salaried or hourly employees, please remember to do this with consistency and preferably based on objective criteria. Also remember the employees must be “at will” in order to put this in place – if under written employment agreements, you will need to have a provision that permits this – or consent from the individual involved. We recommend that you reach out to us to walk through the process and confirm before you make announcements, implement, etc.
3. Reduction in Staff. If you must layoff/furlough employees or terminate the employment of some employees, please call or email us. We understand the importance of this in order to continue business – and will support you – but we should discuss the process for the choices made, process, etc.
4. Obligations Under Families First Corona virus Response Act. You are probably already aware of the adoption of this Act by the President this week which goes into effect on April 2nd. The components requiring emergency paid leave and extended FMLA leave apply to all employers who have fewer than 500 employees, with exceptions for first responders or healthcare workers or employers with fewer than 50 employees if compliance would “jeopardize the viability of the business as a growing concern”.
EMERGENCY PAID SICK LEAVE ACT (“EPSLA”). Regardless of an employee’s tenure with a covered employer, full-time employees who themselves are seeking medical attention for COVID-19 symptoms, are quarantined or have been advised to be quarantined by a healthcare provider must be paid their regular rate of pay up to $511 per day for the first ten days of leave. If they need leave to care for others for COVID-19 related problems, they are entitled to payments of 2/3rds of their regular rate up to $200 per day for the first ten days. Part-time employees may also be entitled to paid leave based on average hours or anticipated scheduled hours.
EXPANSION OF COVERAGE UNDER THE FAMILY MEDICAL LEAVE ACT (“EFMLA”). In addition to Emergency Sick Pay, covered employers will have to provide up to 12 weeks of partially-paid leave to any employee who has worked for at least 30 days, is unable to telework, and needs to care for a child under the age of 18 if their school or daycare has been closed for COVID-19 related reasons. After 10 days of unpaid leave (which the employee may elect to be paid under the EPSLA), the employer must pay 2/3rds of the employee’s regular wage up to a maximum of $200 per day and a total cap of $10,000. Unpaid leave for other reasons under the existing FMLA law that are not COVID-related also remains available.
OTHER PROVISIONS. While the new leave provisions will impose major new administrative and operational burdens on employers with fewer than 500 employees, employers will be able to recoup their paid leave expenses with refundable tax credits applied against the employer portion of Social Security Taxes. The FFCRA also provides for emergency grants to states for unemployment benefits and mandates free COVID-19 testing. If you have any questions on the applicability of the Act to your business, please reach out to us.
5. Insurance. Most agents and carriers are telling insureds that they have no coverage for issues arising as a result of pandemic. This is in their best interests. You must pull together your policies and review them carefully, particularly general liability, property damage (if your landlord has shut down your building for work or you have been ordered by a government authority to cease work other than remotely (or exceptions for certain businesses), any business continuity coverage, directors and officers, and event cancellation insurances. Depending on your coverage, you may have certain losses covered under your policies – however, you must notify insurers of your intent to claim in writing. It is expected there will be massive litigation over insurance coverage for the pandemic.
6. Companies with Investors. C-level executives are reminded of their fiduciary obligations to act in the best interests of all shareholders, members and owners – you must act now to preserve your businesses: via salary reductions, layoffs, reduction in operating expenses, focus on client deliveries, etc.
7. Keep Your Systems Secure. Unless you have always had a remote workforce, your business may be at increased risk during this time due to a variety of issues, including increased piracy emails and attacks during the pandemic. Michael Jones will be participating in a complimentary webinar on Tuesday, March 24th at 10 am with Lockstep Technology and Smith Howard CPA’s to discuss how you can reduce your exposure. CLICK HERE TO REGISTER FOR THE WEBINAR.
We will do our best to provide you with short updates to assist you as we all make our way through this new world of business and life. We are here to assist you (albeit remote!) and answer your questions.
Stay calm, healthy and positive – we will make it to the other side of this!
With best regards,
Your Trusted Counsel Team