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                  March 30, 2020
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TRUMP SIGNS CARES ACT!!
On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The $2 trillion economic stimulus package is designed to alleviate and/or mitigate the economic damage caused by COVID-19 and provide economic aid to individuals as well as businesses who may lose income due to this unprecedented health and economic crisis. While most of the act pertains to direct payments and loans, there are some sections that affect employers.

Providing Alternatives to Closure and Layoffs

The CARES Act gives employers the following options and benefits, which may allow them to stay open and keep more people employed:
  • Small businesses may be eligible for emergency grants of up to $10,000 to cover immediate operating costs.
  • The SBA may provide loans of up to $10 million per business.  A portion of that spent to pay employees, keep workers on payroll, or pay for rent, mortgages, or existing debt could be forgiven, provided workers remain employed through the end of June.
  • Small businesses with existing SBA loans may have up to six months of payments waived.
  • Employers who have experienced a decline in gross receipts of 50% as compared to the same quarter of 2019 or who have been fully or partially shutdown by order may be eligible to receive a refundable tax credit for 50% of qualified employee wages up to $10,000 per employee. This is unrelated to the dollar-for-dollar payroll tax credit that can be taken for FFCRA emergency leaves.
  • Employers may defer payment of employer payroll taxes imposed between the enactment of this law and December 31, 2020 with half of the deferred taxes due by December 31, 2021 and the rest due by December 31, 2022. This is unrelated to the dollar-for-dollar payroll tax credit that can be taken for FFCRA leaves.



Impact on Unemployment Insurance

The act expands unemployment benefits by 13 weeks and adds $600 to the weekly amount an individual would usually receive. While these unemployment benefits are generous, employers should still consider their options and incentives under the CARES Act mentioned above before making decisions about reduced hours, furloughs, or layoffs.  We recommend that employers visit their state's unemployment insurance department websites as well as share this information with their displaced employees.  State unemployment offices are updating their websites and rules to aid the unemployed.
DOL ISSUES SOME GUIDANCE ON FAMILIES FIRST CORONAVIRUS ACT  
While we are continuing to await the regulations promulgated by the Secretary of Labor in response to the new law, Families First Coronavirus Response Act ("Act"), the Department of Labor (DOL) has released posters, fact sheets and frequently asked questions.  

Furthermore, as outlined in the Field Assistance Bulletin released by the DOL/WHD there will be a non enforcement period t o enable public and private employers who are covered by the Act to come into compliance with the new statute.  The non enforcement period is:  March 18 through April 17, 2020. Click HERE for the entire Field Assistance Bulletin on this topic.  

Additionally there had been some questions and concerns as related to joint employers and the integrated employer test under the FMLA.  This question is answered by the DOL as follows: 

As an employer, how do I know if my business is under the 500-employee threshold and therefore must provide paid sick leave or expanded family and medical leave?

You have fewer than 500 employees if, at the time your employee's leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the  jointly-employed employees are maintained on only your or another employer's payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than  employees, are not considered employees for purposes of the 500-employee threshold.

Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are  joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.

In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of paid sick leave under the Emergency Paid Sick Leave Act and expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.

Another area of concern was the possible small business exemption (businesses with fewer than 50 employees) under the Act related to providing child care paid sick leave and expanded family and medical leave.   As many employers know, there is a potential for these employers to be exempted from such requirements if it would jeopardize the viability of the business.  A big question right now is how do these employers take advantage of that possible exemption?  The DOL has affirmatively stated the following on this topic: 

To elect this small business exemption, the employer with fewer than 50 employees should document why the business meets the exemption need, i.e. why it would jeopardize the viability of the business.  Additional criteria on this topic is forthcoming with the Secretary of Labor's regulations (due to be released sometime in April).  At this time, Employers should not send any materials to the Department of Labor when seeking a small business exemption for paid sick leave and expanded family and medical leave.


Helpful Links

Poster for the Workplace- English (private employers)

Poster for the Workplace- Spanish (private employers)


SPOGNARDI BAIOCCHI LLP is  a law firm dedicated to partnering with companies of all sizes to address the full spectrum of legal concerns for its business.  Our commitment is to find common sense solutions that fit each clients' unique situation to labor, employment, human resources and general business needs. 

With over 50 combined years of experience among its 2 founding partners in these areas, we can assist businesses in developing custom solutions to today's tough issues.  And as litigators, who combined have over thousands of trials  "under their belts" before state and federal courts as well as administrative agencies (such as the NLRB) you will find no better advocate and partner. 
 
For more information on the firm, please go to our website at www.psb-attorneys.com or Lisa at lab@psb-attorneys.com
 
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DISCLAIMER: All content in this Client Alert is intended for general information only and is current as of the date and time of circulation.  Nothing contained herein should not be construed as legal advice applicable to your particular situation.  No attorney-client relationship is created. Before taking any action based on the information contained herein, you should consider your personal situation and secure the necessary legal and/or professional advice.