What is the Small Business Exemption from the paid leave provisions of the FFCRA?

Small employers (less than 50 employees) may be eligible for a “Small Business Exemption” from the Emergency Paid Sick Leave and Emergency Family and Medical Leave provisions of the FFCRA.

The rules governing this exemption are quite specific. Here is the current US Department of Labor (DOL) definition of the “Small Business Exemption”:

—
A small business is exempt from certain paid sick leave and expanded family and medical leave requirements if providing an employee such leave would jeopardize the viability of the business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if the:

• employer employs fewer than 50 employees;
• leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
• an authorized officer of the business has determined that at least one of these three conditions satisfied:
  • The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  • The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
  • There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

The Department encourages employers and employees to collaborate to reach the best solution for maintaining the business and ensuring employee safety.
—

Helpful Resources

US Department of Labor (DOL)
Comprehensive Covid-19 resource page providing employers with information on –among other issues –the paid sick leave and expanded family and medical leave provisions of the FFCRA, including:

Claremont Partner Mammoth HR (with ThinkHR)
COVID-19 Crisis Response Center. Essential employer resources such as a COVID-19 HR Guidance and Best Practices recorded webinar, a summary of the new Families First Coronavirus Response Act, and sample HR policies that employers can adopt.

Claremont Partner HR Service, Inc.
COVID-19 Employer Toolkit. Helps employers navigate the Coronavirus challenges. Resources include a Families First Coronavirus Response Act Q&A, advice on remote working and telecommuting, information on all aspects of reductions in force, and more.

Helpful FFCRA flow chart
This helpful FFCRA flow chart (courtesy of Filice Insurance Agency) provides a visual step-by-step guide to assessing if an employer and employee are subject to the FFCRA provisions.

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

What are the paid leave provisions of the Families First Coronavirus Response Act (FFCRA)?

The paid leave provisions of the Families First Coronavirus Response Act (FFCRA) went into effect on April 1, 2020.

Under the paid leave provisions of the law, covered employers must provide to employees who are unable to work due to qualified Covid-19 reasons:

Emergency Paid Sick Leave (EPSL): up to two weeks (or a part-time employee’s two-week equivalent) of paid sick leave, paid at rates of pay based on the reason for the leave (illness, quarantine or school closures).

Emergency Paid Family and Medical Leave (EFMLA): up to twelve week of paid expanded family and medical leave to employees that are unable to work due to school closures.

The FFCRA provides employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing this leave.

Small Business Exemption. Small businesses with fewer than 50 employees may qualify for an exemption to provide leave for the school closure reason if the leave requirements would jeopardize the viability of the business. The rules governing this exemption are quite specific.

Helpful Resources

US Department of Labor (DOL)
Comprehensive Covid-19 resource page providing employers with information on –among other issues –the paid sick leave and expanded family and medical leave provisions of the FFCRA, including:

Claremont Partner Mammoth HR (with ThinkHR)
COVID-19 Crisis Response Center. Essential employer resources such as a COVID-19 HR Guidance and Best Practices recorded webinar, a summary of the new Families First Coronavirus Response Act, and sample HR policies that employers can adopt.

Claremont Partner HR Service, Inc.
COVID-19 Employer Toolkit. Helps employers navigate the Coronavirus challenges. Resources include a Families First Coronavirus Response Act Q&A, advice on remote working and telecommuting, information on all aspects of reductions in force, and more.

Helpful FFCRA flow chart
This helpful FFCRA flow chart (courtesy of Filice Insurance Agency) provides a visual step-by-step guide to assessing if an employer and employee are subject to the FFCRA provisions.

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

What is the Families First Coronavirus Response Act (FFCRA)?

The Families First Coronavirus Response Act (FFCRA) was passed into law on March 18, 2020. The new law assists working families impacted by the Coronavirus, and includes several provisions to protect workers while helping employers provide emergency paid sick leave and paid family leave in the case of school closures.

Of particular importance to employers and their advisors are the:

• emergency paid sick leave and emergency paid family leave provisions
• refundable tax credits available to employers to reimburse them for the cost of the paid leave
• exemptions available for small employers with less than 50 employees

The leave provisions of the law went into effect on April 1, 2020.

Helpful Resources

Kaiser Family Foundation
The Families First Coronavirus Response Act: Summary of Key Provisions

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Are tax credits available to small businesses through the FFCRA?

Yes, The FFCRA provides employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to the Coronavirus.

The IRS has published a very detailed overview of how the refundable tax credits work along with answers to frequently asked questions.

Note: these tax credits are unrelated to the employee retention tax credits available through the CARES Act.

Helpful Resources

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including information of the refundable tax credits available under the FFCRA.

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

What is the Employee Retention Tax Credit?

The CARES Act created a new Employee Retention Tax Credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of the Coronavirus. The goal of the tax credits is to keep employees employed, to incentivize hiring back of employees, or to put employees on a paid furlough to make sure they have jobs to return to when the crises passes.

Note: These tax credits are unrelated to the tax credits available through the FFCRA.

Helpful Resources

US Chamber of Commerce
Guide to the Employee Retention Tax Credit

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including information of the Employee Retention Tax Credit

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Are tax credits available to small businesses through the CARES Act?

Yes. The CARES Act created a new Employee Retention Tax Credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of the Coronavirus. The goal of the tax credits is to keep employees employed, to incentivize hiring back of employees, or to put employees on a paid furlough to make sure they have jobs to return to when the crises passes.

Note: These tax credits are unrelated to the tax credits available through the FFCRA.

Helpful Resources

US Chamber of Commerce
Guide to the Employee Retention Tax Credit

US Internal Revenue Service (IRS)
Coronavirus Tax Relief web page, including information of the Employee Retention Tax Credit

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Are there $10,000 grants available to small businesses through the CARES Act?

Yes. Small business applicants for an SBA Economic Injury Disaster Loan (EIDL) can receive a $10,000 emergency grant within three days of application (through Dec. 31, 2020). There is no obligation to repay the grant. To receive the $10,000 emergency grant, it is not necessary to have an approved EIDL loan. However, if the PPP loan is secured, the $10,000 grant will be subtracted from the forgiveness amount.

Helpful Resources

US Chamber of Commerce
Guide to SBA’s Economic Injury Disaster Loans

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

What are Economic Injury Disaster Loans (EIDL)?

The CARES Act expands the Small Business Administration (SBA)’s long-standing Economic Injury Disaster Loan Program (EIDL). The EIDL program assist businesses, renters, and homeowners located in regions affected by declared disasters.

Helpful Resources

US Chamber of Commerce
Guide to SBA’s Economic Injury Disaster Loans

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Are small business loans available through the CARES Act?

Yes. The CARES Act created a Paycheck Protection Program administered by the US Small Business Administration (SBA) that provides low cost forgivable loans to small businesses.

What is the “Paycheck Protection Program”?

The CARES Act created a Paycheck Protection Program administered by the US Small Business Administration (SBA) that provides low cost forgivable loans to small businesses in order that they can continue to fund employee payroll and benefits. The loans are forgiven as long as payroll costs are maintained equal to what they were before the Coronavirus impacted the business. Many financial experts are explaining that in essence, the loans become grants if the business maintains its payroll costs.

Funding amount. Payroll costs for up to 8 weeks plus an additional 25%, capped at $10 million.

Funds can be used for:

• Payroll.
• Employer health insurance premium contributions and other benefits costs.
• Rent, mortgages and utilities.

Fully Forgiven. Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities, provided the employer maintains their payroll at a level equal to what it was before the Coronavirus impacted the business.

Loan Payments/Interest. If the loan must be repaid, payments will be deferred for six months. The loan has a 0.50% fixed interest rate.

Collateral/ Fees. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

All Small Business Eligible. Small businesses with 500 or fewer employees—including: nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees are eligible in certain industries.

Resources

The US Chamber of Commerce has created a very helpful guide to help small businesses understand the Paycheck Protection Program and help them prepare to file for a loan.

The US Department of the Treasury has a Paycheck Protection Program web page that includes several helpful resources, including a Paycheck Protection Program Factsheet for Borrowers that provides even more detail.

The US Small Business Administration (SBA) has a Paycheck Protection Program web page that provides information on the program, who can apply, how to apply, loan details and forgiveness, and more.

Claremont Insurance Services and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.