The Vita Blog April 2020

On Monday, April 6, the DOL released new regulations with detailed guidelines for Paid Sick Time and Paid Family Leave under the FFCRA. The guidance provides important details for employers on how sick time and leaves are to be administered. The following is a summary of the materials added to our COVID-19 Employer Playbook:

• IRS Form 7200 released for claiming advance tax credit when leave payments are greater than current tax payments.
• Clarification that if an employer has no work available, then neither paid sick time nor paid family leave are available to employees.
• Clarification that if an employee can work from home, then no COVID-19 leave is available based solely on a Shelter in Place order.
• Specific details are provided relative to when COVID-19 leaves are available: self-quarantine, physician ordered quarantine, symptoms vs. no symptoms, waiting for test results, etc.
• Clarification that leave to care for a child requires that another suitable individual, such as a co-parent co-guardian, or the usual childcare provider is not available to provide childcare.
• Guidance that sick time calculation for part time employees with variable schedules is now determined based on 6-month period (not two weeks)
• Clarification is provided that an employee may take a combined 12-weeks maximum FMLA under regular FMLA and COVID-19 paid family leave.
• Employer requirements for an employee’s “reasonable notice” is defined.
• Required documentation of sick time and leaves is outlined.
• Clarification that FFCRA leaves are job protected, but not “layoff protected.”
• Clarification that employers must retain COVID-19 leave documentations for four (4) years.

In addition, we have added a short section outlining the new DHC guidance that temporarily relaxes I-9 documentation requirements for employers with remote work arrangements due to Shelter in Place orders.

One of the main tenants I remember from Finance 101 is, “there is no free lunch.” The approval of the Federal government’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, which includes the Payroll Protection Program (PPP), has provided multiple avenues for small businesses affected by the spread of COVID-19 to “eat for free,” but it’s important that we remember that it’s on our own dime (this is owned by the future American Taxpayers).

A mentor of mine helped me understand that the scale of this program is more than double the inflation adjusted value of FDR’s New Deal; which should help us all realize that we need to engage with this aid responsibly.

With that said, I hope this brief article helps you understand the steps that you can take to provide your business with the aid required to maintain payroll and protect your people.

More detail on all things COVID-19 can be found at our curated landing page.

Who should I lean on to help my company with this program?

We recommend reading the content available from the first two sources and connecting with a qualified SBA lender for further guidance. The document provided by the U.S. Chamber of Commerce is very useful for understanding your business’ eligibility and the steps required to calculate your loan amount.

• U.S. Chamber of Commerce Flyer
• U.S. Department of Treasury
• Find a Qualified SBA Lender

Gray Areas:

The notes below are not intended as legal advice and are anecdotal descriptions of our current understanding of the landscape:

• My firm has less than 500 employees, but we are a venture backed start-up, or formerly private company that changed ownership via private equity, does that change my eligibility?
  • Eligibility will be specific to your ownership details, but in general, companies with this financial structure may be disqualified from the PPP.
• If I am a member of a Professional Employer Organization (PEO) ex. TriNet, TotalSource, Sequoia One, Insperity, etc., am I disqualified?
  • Our understanding, based on our correspondence with multiple vendors, is that PEO clients are not disqualified from applying for relief through the PPP.

Additional regulations are anticipated in the very near future. We will include updates at our COVID-19 Resource Center as they occur.