"COVID-19: Response Tips for Small Businesses," Mark B. Goddard and Reginald W. Belcher
Posted On March 19, 2020
The past month has seen uncharted waters for small businesses across South Carolina and the United States. With the ever-evolving COVID-19 virus, small businesses are being forced to adjust their planning almost hour-by-hour. In the past week, businesses have had to adjust from “business as usual” to remote work environments, government mandated shutdowns, and the now very familiar term “social distancing.”
With this ever-changing environment, small businesses are suddenly faced with unanticipated financial and employment scenarios, that until this week, were likely not in anyone’s worst case scenario contingency plans. However, there are resources available to small businesses and their employees that are being introduced on a daily basis.
The Federal Government is attacking the COVID-19 virus on multiple fronts, including economic stimulus packages aimed to directly assist small businesses and their employees through these uncharted waters.
RESOURCES FOR YOUR EMPLOYEES WHO NEED EMERGENCY LEAVE
The first phase of the federal legislation signed into law by President Trump includes the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) and the Emergency Paid Sick Leave Act (“EPSLA”).
The EFMLEA offers significant expansion to the FMLA for situations directly related to COVID-19. The EFMLEA applies to all employers with fewer than 500 employees (does not require 50 or more employees like FMLA), and is available to all employees who have been working for at least 30 days (not 12 months like FMLA). This leave is available to employees who are unable to work or telework due to caring for a child under the age of 18 because of the child’s school closure. The first 10 days of EFMLEA leave is unpaid, but then the remainder of the leave is paid. However, the employee can request its PTO to run concurrently with the 10 day unpaid period. This leave can last up to 12 weeks and offer up to $10,000 in maximum benefits. At the conclusion of the employees’ leave, just like under FMLA, under most circumstances, the employer will be required to allow the employee to return to work.
The EPSLA offers additional resources for your employees. It again applies to all businesses with fewer than 500 employees and ALL full-time and part-time employees are immediately eligible. To qualify, your employee must: (a) be subject to a government quarantine or isolation order, (b) have been advised by a health care provider to self-quarantine, (c) be experiencing or taking care of someone with COVID-19 symptoms, or (d) be caring for a child who is out of school due to school closures. If a person qualifies under both the EFMLEA and EPSLA, then the employee can use the emergency sick leave to cover the 10 days of leave that would otherwise be unpaid under the EFMLEA.
Importantly, small businesses will receive a refundable
tax credit equal to 100% of the qualified paid sick leave paid by the employer for each calendar quarter paid under the EPSLA and EFMLEA, subject to certain restrictions. These credits can also be applied self-employed individuals.
If you need assistance guiding your businesses through these uncharted waters and constantly changing legal environments, please contact our Turner Padget
lawyers who are here and available to meet your small business needs.
RESOURCES FOR SMALL BUSINESSES THAT NEED EMERGENCY LOANS
These unexpected times have created a financial crisis for many small businesses. Business owners need to be in constant communications with its bankers and other lenders about expanding its relationships during these times. However, there are additional resources that are likely to be available to South Carolina businesses soon.
In the near future, I expect South Carolina to be among the growing number of states approved by the U.S. Small Business Administration for South Carolina businesses to be eligible for Economic Injury Disaster Loans that will create low-interest federal disaster loans. Governor McMaster has already submitted his initial request and this request is currently being processed. These loans provide working capital to small businesses suffering significant economic injury due to COVID-19. These loans will ultimately assist South Carolina small businesses without other credit availability to pay fixed debts, payroll, accounts payable, and other bills at a rate of 3.75% with long-term repayment schedules up to a maximum of 30 years.
If you need assistance with discussions with your current lenders or with navigating these new SBA loan options, Turner Paget’s lawyers are here to discuss your businesses’ best options to find additional funding to keep your business viable.
RESOURCES FOR SMALL BUSINESS WHO HAVE HAD TO LAY OFF OR REDUCE HOURS OF ITS STAFF DUE TO COVID-19
If you are a business that had to reduce your employees’ hours or were forced to lay off your employees due to actions related to COVID-19, your employees ARE eligible for South Carolina unemployment benefits. These benefits are available to individuals who are unemployed or who had their hours reduced through no fault of their own. Importantly, the small business owner will not be charged for the payment of these unemployment benefits due to the state of emergency declared by Governor McMaster and President Trump. For more information, please visit the South Carolina Department of Employment and Workforce