These last few weeks have been a whirlwind for small business owners! And it does not appear to be slowing down. Below are some important updates for you to know. Please contact us at (480) 744-6621 or at request@counxel.com. Don’t forget to check out the good things that others are saying about the services they received from Timothy Coons on Google.
Emergency Paid Leave Notice Must Be Posted In Your Workplace
The Secretary of Labor issued Notices that you must post for your employees to see (click here). You must place this notice in a conspicuous place. If your workforce is remote, then you must send this to them via email or physical mail.
Emergency Paid Leave Exemption For Business Owners With Less Than 50 Employees – No New Guidance Yet
The Emergency Paid Sick and FMLA Leave Laws state that an employer with less than 50 employees can be exempt from the Emergency Paid Sick Leave Laws “if the leave requirements would jeopardize the viability of the business as a going concern.”
Unfortunately, there has been no further guidance on how that will be measured or how that should be done. We do know for now that the Department of Labor stated that “you 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.” We will update you with any new guidance that comes from the Department of Labor for this exemption.
Small Business Loan (Proposed Legislation) – Who Qualifies and How to Apply
The Senate passed a bill yesterday called the Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”). It has more than $300 billion dollars earmarked for small businesses. From all indications, the House of Representatives is likely to pass the bill, and the President will sign it into law. The bill is 880 pages long. A brief breakdown is here:
• SBA, through currently authorized lenders, can offer 100% federally backed loans under the Business Loan Program for eligible businesses to pay operational costs like rent, health insurance, payroll, utilities, etc.
• No collateral or personal guarantee is required for the loan.
• The interest rate on the loan will not exceed 4%.
• Sole proprietors, independent contractors, and eligible self-employed individuals qualify along with small businesses.
• The loan amount can be up to 2.5 times one month’s payroll cost, calculated based on the average monthly payroll costs last year (or for businesses that did not exist last year, by calculating the average monthly payroll costs for the beginning of this year, or for businesses with seasonal workers, by calculating payroll costs for a 12-week period that is defined by law) along with any outstanding loan made under the SBA’s Disaster Loan Program. This is capped at $10 million.
• To qualify for the loan, a borrower must provide a good faith certification that: 1) The loan is needed to continue operations during the COVID-19 emergency; 2) Funds will be used to retain workers and maintain payroll or make mortgage, lease, and utility payments; 3) The applicant does not have any other application pending under this program for the same purpose; and 4) From February 15, 2020, until December 31, 2020, the applicant has not received duplicative amounts under this program.
• Small businesses cannot use the loan funds for: 1) individual compensation above $100,000 per year; 2) certain federal taxes; 3) compensation to employees whose principal residences are outside the US; or 4) Emergency Paid Sick and FMLA Leave wages (since you will already be getting a tax credit for those wages).
• Loans can be forgiven (principal, not interest) in the amount incurred for payments during the covered period for: 1) payroll costs; 2) interest payments on mortgages; 3) rent payments; and 4) utility payments.
• In order to receive loan forgiveness, a borrower must submit the following to their lender: 1) Documentation verifying FTEE on payroll and their pay rates; 2) Documentation on covered costs/payments (e.g., documents verifying mortgage, rent, and utility payments); 3) Certification from a business representative that the documentation is true and correct and that forgiveness amounts requested were used to retain employees and make other forgiveness-eligible payments; and 4) Any other documentation the Administrator may require.
• Loan forgiveness will be reduced by any employee layoffs or reduction in wages (there is a formula for this).
Once this Care Act is signed into law, we are happy to help you through the process of applying for the loan or with ensuring that you are in compliance with the New Emergency Paid Sick and FMLA Leave laws.
Here is other helpful information we have prepared that you may have missed:
• March 13, 2020 – Coronavirus Disease (COVID-19) – Arizona (click here)
• March 19, 2020 – New Coronavirus Paid Leave Law (click here)
• March 22, 2020 – Common Coronavirus Legal Questions – Arizona (click here)
• March 25, 2020 – Coronavirus Arizona Legal Updates and Corrections (click here)
Contact us at (480) 744-6621 or at request@counxel.com. Don’t forget to check out the good things that others are saying about the services they received from Timothy Coons on Google.
This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact request@counxel.com or (480) 744-6621 to request specific information for your situation.
*Conveniently located off the 101 Freeway and the US 60 in the middle of Phoenix, Scottsdale, Tempe, Chandler, Gilbert, Mesa, and Queen Creek!
