During this crisis, I’ll provide a daily briefing of news relating to small businesses and the self-employed, with particular emphasis on financial assistance available and government actions.
And every day I’ll hold a Facebook Live get-together at 1pm EDT/10am Pacific at www.facebook.com/RhondaAbramsSmallBusiness. Please join me with your questions, advice.
Here’s the news for the morning of 3/19:
PAID SICK AND FAMILY LEAVE APPROVED!
Small businesses—those with 500 or fewer employees—will be required to give employees two weeks paid sick leave (if they are sick or isolated because of the coronavirus health emergency or they have to watch a family member due to a school or child care closing) and up to 10 weeks paid family leave—but the government will reimburse businesses for the cost of that leave. The Families First Coronavirus Response Act was passed Wednesday by the Senate on a 90-8 vote. The bill—previously passed in the House—has now been signed by President Trump.
Here are the details as far as I can tell at this point:
- An employee must have been employed for at least 30 days
- Sick leave: Full-time employees are entitled to up to two weeks pay and part-time employees up to the average hours they work in a 2-week period at 100% of their wages: up to $511 per day if they are sick or quarantined or must self-isolate, or 67% of their wages, up to $200 per day, if they have to care for a family member or child due to a school closing or a child care provider is closed due to a public health emergency. (I will try to clarify whether business owners who are on their own payroll would also qualify.)
- Family leave: Additionally, employees are entitled to 10 weeks paid leave at 67% of their wages, up to $200 per day, if they have to care for a family member or child due to a school closing or a child care provider is closed due to a public health emergency, up to a maximum of $10,000. Businesses with fewer than 50 employees could apply for a waiver of the family leave requirement if it would endanger the viability of the business itself.
- Employers who already provide paid sick leave must provide this IN ADDITION TO any sick leave already provided.
- Self-employed individuals are entitled to the same sick leave and family leave benefits and would be reimbursed by a tax credit against their self-employment tax.
THE GOVERNMENT PAYS: Employers would get quarterly tax credits through 2020 to reimburse them for this expense. These would be in the form of credits against their quarterly federal payroll taxes—however, if the credit exceeds the amount the employer owes, the business would receive a check from the government.
This is great news for those businesses that can manage the cash flow of paying employees now who must be out sick, quarantined, or take care of children or family members. Of course, many businesses don’t have the cash to front that payroll expense if their business is closed or dramatically reduced. To take advantage of these funds, they’ll have to find the money to stay afloat.
In tomorrow’s edition of this newsletter—and in my Facebook Live event at 1pm EDT/10am Pacific—I’ll discuss ways to access funding to help manage this cash flow.
Another, bigger, stimulus package is expected within the week with an estimated $300 billion in small business assistance. I’m keeping my eye on that and will keep you posted…
Join me tomorrow www.facebook.com/RhondaAbramsSmallBusiness
Wishing you well – from Rhonda and the PlanningShop team
For much more detailed information:
Copyright Rhonda Abrams, 2020