COVID-19: Response Tips for Small BusinessesMar 24, 2020 03:37PM ● By David Dykes
By Mark Goddard and Reggie Belcher
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 percent 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.
The United States Small Business Association (“SBA”) has now approved Governor McMaster’s request for South Carolina small businesses to be eligible for the SBA’s Economic Disaster Loans. These Economic Disaster Loans are aimed to provide direct economic support to small businesses to overcome the temporary loss of revenue caused by the COVID-19 virus.
These loans can assist small businesses and non-profits in paying fixed debts, payroll, accounts payable and other bills that cannot be paid by a company due to the COVID-19 virus’ impact. The interest rate for these Economic Disaster Loans is 3.75 percent for small businesses and 2.75 percent for nonprofits; and these loans offer long-term repayment plans of up to 30 years to allow the payments to be affordable for the businesses. The specific terms of each loan are determined on a case-by-case basis by the SBA, based upon each company’s ability to repay. The deadline to apply for these loans is December 21, 2020.
RESOURCES FOR SMALL BUSINESS WHO HAVE HAD TO LAY OFF OR REDUCE STAFF HOURS 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, go to the South Carolina Department of Employment and Workforce.
Mark Goddard (pictured above to the right) is a shareholder at law firm Turner Padget. He serves as the Business Team’s Practice Group Leader and on the firm’s Executive Committee. He can be reached at [email protected].
Reggie Belcher (Main image pictured above) is shareholder at law firm Turner Padget. He is certified as a Specialist in Employment and Labor Law by the South Carolina Supreme Court and is the firm’s Practice Group Manager for its Workplace Litigation Team. He can be reached at [email protected].