Small Business Resources – COVID-19 Contracting

Compiled by Elizabeth Sullivan, Madison Services Group
  1. New employer obligations for paid sick and family leave: These changes went into effect for employers on April 1, 2020.
  2. Emergency Paid Sick Leave: Requires private employers with fewer than 500 employees and all public employers to provide 80 hours of paid leave for full-time employees and part time employees/hourly workers are given the typical hours worked in a two-week period without fear of losing their job.
    1. Reasons for this leave can be: 
      1. Comply with a federal, state, or local quarantine or isolation order.
      1. Self-quarantine per a health-care provider’s advice.
      1. Obtain a medical diagnosis for coronavirus.
      1. Care for an individual who is in quarantine or for a child whose school or day care has closed due to coronavirus.
    1. Bill caps per employee costs are $5,110 for an employee who is taking the leave for their own illness or $2,000 for employees caring for another individual or child.  
    1. Leave mandate sunsets on December 31, 2020
  3. Businesses with fewer than 50 employees may be exempt from the paid leave requirement if it would jeopardize the viability of the business.
  • Emergency Paid Family Leave:  Requires all employers with fewer than 500 employees to provide to up to 12-weeks of job-protected leave under FMLA for employees who are unable to work or telework because they have to care for a child younger than 18 whose school or day care has closed because of the coronavirus.
    • First 10 days of leave can be unpaid, though a worker could choose to use accrued vacation days, personal leave, or other available paid leave for unpaid time off.
    • Following the first 10 days, workers would receive a benefit from their employers that will be at least two-thirds of their normal pay rate.
    • Per employee cap on costs for the leave are set at $200 per day or $10,000 total. 
    • Leave mandate sunsets on December 31, 2020
    • Employers with less than 25 employees may be exempt from requirements to restore an employee’s original position if it no longer exists due to changes in either economic conditions or a change in operations as a result of this public health emergency.
    • Businesses with fewer than 50 employees may be exempt from the paid leave requirement if it would jeopardize the viability of the business. 
  • For more information on paid sick/family leave, you can find DOL FAQ here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

How will this all be paid back to employers? Through employer tax credits

  • Employers offering this emergency sick leave and family leave will be able to get 100% payroll tax credit for these additional costs on a quarterly basis. 
    • Emergency sick leave credit: For each employee the credit would be for wages of as much as $511 per day while the employee is receiving paid sick leave because they are quarantined, or $200 if they are caring for someone else who is quarantined or their child’s school is closed.
    • Emergency family leave credit: As much as $200 per day while the employee is receiving paid leave, or a total of $10,000.
  • The credit would be in effect for wages through the end of 2020.
  • For self-employed, there is a similar credit applied against the self-employment tax.
  • More information on these credits can be found on IRS website here: https://www.irs.gov/coronavirus/new-employer-tax-credits
  • Financial relief options for small businesses
  • Paycheck Protection Program (PPP)
    **    The SBA will resume accepting Paycheck Protection Program applications from participating lenders on Monday, April 27, 2020 at 10:30am EST: Additional $310 billion just passed for program**
    • Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
    • SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
    • You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
  • Economic Injury Disaster Loan (EIDL) & EIDL Emergency Advance
    **$50 billion more was allocated to the loan program and $10 billion to the emergency advances
    • Businesses that are currently experiencing a temporary loss of revenue are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000 – this loan advance will not have to be repaid.
    • SBA’s Economic Injury Disaster Loan  is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19
    • Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries
  • Express Bridge Loans
    • Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly
    • Loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan
  • Debt Relief
    • SBA will pay 6 months of principal, interest, and any associated fees that borrowers owe for all current 7(a), 504, and Microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to September 27, 2020.
    • Borrowers do not need to apply for this assistance, it will be automatically provided