COVID-19 Small Business Legislative Updates (Phase 1) – Apex Benefits

COVID-19 Small Business Legislative Updates (Phase 1)

March 16, 2020 Updates

What Congress has passed to help small businesses:

Loan Subsidies: H.R. 6047— the first Coronavirus bill— allowed $1 billion in loan subsidies to be made available to help small businesses, small agricultural cooperatives, small aquaculture producers, and nonprofit organizations which have been impacted by financial losses as a result of the coronavirus outbreak. This funding could enable the Small Business Administration to provide an estimated $7 billion in loans to these entities. In addition, provides $20 million to administer these loans.

What Congress is working on:

Sick Leave: H.R. 6201— the second Coronavirus bill signed into law — includes a refundable payroll tax credit to reimburse—dollar-for-dollar—local businesses for paid sick leave and family and medical leave wages paid to employees that are affected by COVID-19. Click here for an explanation of who is eligible and for what amounts.

Cash Flow: H.R. 6201 provides significant relief to businesses that otherwise may not be able to afford the employee costs associated with coronavirus-related paid leave.  Treasury has broad regulatory authority to advance funds to employers to protect businesses concerned about cash flow.  In a March 14th press release, Treasury stated that “employers will be able to use cash deposited with the IRS to pay sick leave wages.  Additionally, for businesses that would not have sufficient taxes to draw from, Treasury will use its regulatory authority to make advances to small businesses to cover such costs.”

Paid Leave: The benefits under H.R. 6201 are not an expense for the business, rather it operates as a benefit to both the worker and the employer.  The legislation will ensure that every dollar of leave that an employer is required to pay is reimbursed—dollar-for-dollar—by the federal government.  It will allow workers to care for themselves and loved ones impacted by coronavirus.  Additionally, the credit will help businesses to stay up and running.  After all, workers who knowingly show up sick jeopardize the health of coworkers and business operations.

Nearly 90% of businesses with more than 500 employees offer paid sick leave to their full-time workers.  To facilitate more universal coverage of paid sick leave, H.R. 6201 provides temporary federal coverage for paid sick and family leave to all employers with fewer than 500 employees.

FMLA Exemption: H.R. 6201 as passed by the House permits the Secretary of Labor to exempt businesses with fewer than 50 employees from the longer-term mandate where it creates significant hardship.

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