We are now at the tail end of July. While there have been no big changes to the PPP or paid sick leave recently, there are important things to remember as we move into August.

Expanded Family Medical Leave

School is starting again soon. However, many schools are not bringing kids back into the schools and are opting for an online learning model. So, how can that impact you? Under the Expanded Family Medical Leave Act, individuals who are “caring for his or her child whose school or place of care is closed due to COVID-19” is eligible for paid time off of up to 12 weeks total, 10 of which are paid at 2/3 the rate their normal pay (capped at $200 daily and $12,000 total).

With school-age kids staying home, many employees likely will qualify for this paid leave. Per the Department of Labor FAQs on the Expanded Family Medical Leave, it is suggested that an employer ask an employee who requests leave under this provision for the following: 1) the name of the child being cared for, 2) the name of the school that is unavailable, and 3) a statement that no other suitable person is available to care for the child. There are certain exemptions available to this law for companies who have less than 50 employees or whose employees are considered emergency responders or health care providers. 

For many companies, it is time to start doing an analysis of their workforces to see how many employees may need to take Expanded Family Medical Leave and how that would impact the company over the next couple of months. 

Tax Credits

There are at least three tax credits that business owners should be aware of at this time. The first is the tax credit employers can take when an employee uses qualifying Federal Paid Sick Leave. The second is the tax credit employers can take when an employee uses qualifying Expanded Family Medical Leave. The third is the “Employee Retention Credit” that provides a credit to employers of any size that, due to COVID-19, have been fully or partially suspended or had a significant decline in gross receipts in a calendar quarter as compared to 2019 and retained their employees. For more information on this, you can visit this IRS webpage.

PPP Loan Forgiveness

There is a current lull in PPP loan forgiveness action due to the ability of PPP fund recipients to use these funds in 24 weeks, rather than the original eight weeks. In the meantime, many payroll services and banks have created more robust features that can help run calculations to make sure you are on track for forgiveness, but they cannot help you fill out the actual applications nor give advice as to whether you meet any of the exemptions/safe harbor provisions afforded under the law. 

The Beginning of the PPP Investigations

The Department of Justice dedicated some resources to investigating and prosecuting individuals/businesses who fraudulently received PPP funds. In particular, the DOJ will focus on “outright cases of fraud around false payroll numbers.” I have heard concerns from many companies that they received funding when it turned out they performed fine over the last several months. As you will recall, the SBA provided guidance for entities that received less than $2 million and are deemed as having requested the funds in good faith. The DOJ appears to be focused on individuals/entities that actually falsified payroll records. For more information on this, you can read this MarketWatch article.

Contact Counxel Legal Firm

Don’t hesitate to contact us at 480-536-6122 or at intake@wordpress-457010-3165254.cloudwaysapps.com if you have any questions.  

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 intake@wordpress-457010-3165254.cloudwaysapps.com or 480-536-6122 to request specific information for your situation.

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