Coronavirus (COVID-19) Information for Employers and Small Business Clients

Many employers and small business owners have contacted us for advice and assistance during this unprecedented and unnerving time. Coronavirus (“COVID-19”) has presented many questions for small businesses across Massachusetts and the world. This newsletter will update companies on the federal legislation that is pending approval by the Senate. In addition, it will address the Commonwealth’s response to the pandemic as it relates to small business assistance and employee relief.

Families First Coronavirus Response Act

In response to the COVID-19 pandemic, the federal government has taken several actions in recent days that impact small and mid-size businesses. As it relates to employers, the House has passed the Families First Coronavirus Response Act. The Senate is expected to take up the legislation within the coming days, however, some of the provisions may change as this situation is evolving rapidly. In the event the final legislation is passed and signed into law by President Trump, we will update our clients and colleagues.   Below are a few important components of the legislation that impact employers:

Paid Sick Leave: Employers will be required to provide employees two (2) weeks of paid sick leave, paid at the employee’s regular rate, to quarantine or seek diagnosis or preventative care for COVID-19 . Employers must provide employees two (2) weeks of paid sick leave, paid at two-thirds the employee’s regular rate, to care for a family member for such purposes or to care for a child whose school has closed or child care provider is unavailable due to the COVID-19.  The current version of the legislation states that the paid sick leave must be provided in addition to any other sick leave offered by an employer, and employers may not change such paid leave on or after such date of enactment in order to avoid the two weeks of paid leave. Covered employers are those who employ fewer than 500 employees, as a result, this legislation will impact our small and mid-size business clients. Tax Credits for Sick and Family Leave: The legislation establishes tax credits for paid sick and paid family and medical leave taken for coronavirus reasons. This section of the legislation provides a refundable tax credit equal to 100% of qualified paid sick leave wages or qualified family leave wages paid by an employer for each calendar quarter.    Expansion of the Family and Medical Leave Act (FMLA): The legislation provides for the expansion of FMLA to allow eligible workers (employed at least 30 days) to take up to twelve (12) weeks of job protected leave for COVID-19 reasons through December 31, 2020. This shall apply to businesses with 500 employees and under, which is different from the typical 50 and up definition under FMLA. The legislation does allow for the Secretary of Labor to exempt businesses with fewer than 50 employees from the requirements if it would jeopardize the viability of the businesses as an ongoing concern. We do not currently know what the exemption process will entail as regulations related to that must be promulgated by the Secretary of Labor. The first fourteen (14) days for which an employee takes leave may consist of unpaid leave (as they would receive pay as specified above). An employee may elect to substitute any accrued vacation, person or medical or sick leave during the first two weeks, but the employer may not force exhaustion of the leave. The remainder of the leave, up to ten (10) weeks as needed, must be paid at an amount not less than 2/3 the employee’s regular rate of pay. Leave will be allowed for the following reasons: To comply with a recommendation or order by a public health official. To care for a family member due to exposure to COVID-19 or the exhibition of symptoms of COVID-19. To care for a son or daughter under 18 years of age of such employee if school or place of care has been closed due to a public health emergency.

Click Here for the Full Legislation of the Families First Coronavirus Response Act

Commonwealth of Massachusetts Government Response

The Commonwealth has already announced some changes to the unemployment compensation system and is providing loans to small businesses to provide some relief to employers and employees.  Unemployment Benefits : The Baker Administration has waived the one-week waiting period for unemployment benefits and expanded eligibility for those affected to receive faster financial relief. The Executive Office of Labor and Workforce Development is expected to file emergency regulations allowing workers impacted by COVID-19 to collect unemployment if their workplaces shut down, but plan to reopen within four (4) weeks.  The following conditions apply: Workers must remain in contact with their employer during the shutdown. Workers must be available for any work their employer may have for them that they are able to do. An employer may request to extend the period of the covered shut-down to eight weeks, and workers will remain eligible for the longer period under the same conditions described above. If necessary, DUA may extend these time periods for workers and employers.   Loan Fund: The Baker Administration announced economic support for small businesses with a $10 million loan fund to provide financial relief to those that have been affected by COVID-19. The $10 million Small Business Recovery Loan Fund will provide emergency capital up to $75,000 to Massachusetts-based businesses impacted by COVID-19 with under 50 full and part-time employees, including nonprofits (negative impact must be verifiable). Loans are immediately available to eligible businesses with no payments due for the first 6 months. This fund is being offered with no payments due for the first 6 months, then 30-months of principal and interest payments and no prepayment penalties. The interest rate will be 3%.

Additional Information on the Small Business Recovery Loan Fund

Many of our clients have raised questions about remote work arrangements, essential employees reporting to work, layoffs, health insurance continuance, medical inquiries and employee privacy. We are here to help in this time of need. In the event that you need assistance with messaging to employees, customers or any other legal advice, feel free to reach out. We will continue to give updates and guidance as more information is released and after the Senate votes on the Families First Coronavirus Response Act.

Phifer Pinkham, LLC is a full service law firm representing businesses, their owners, and individuals in connection with their legal needs in the areas of business and corporate law, litigation, estate planning and administration, employment law, taxation, intellectual property, and non profit representation. We provide premium legal services without the Boston premium. Please contact us at (617) 409-7409 to set up an in-person or phone consultation, or please feel free to contact any of our attorneys directly at the email address links provided below.

J. Keith Phifer Jenifer M. Pinkham Robert F. Lynch, Jr. Diane M. Kildea ‌