• Small Business FAQs on COVID-19

  • Small Business FAQs on COVID-19

    At this time we are receiving many calls from concerned small business owners throughout the country facing unprecedented challenges during the COVID-19 pandemic. We’ve done our best to address the most common questions in this FAQ. We cover the following:

    Public Health Questions

    • Am I required to shut-down operations?
    • Should I require my employees to work remotely?
    • Can I send employees home from work if they are showing symptoms?
    • Can I ask an employee if they are experiencing symptoms?
    • Can I take my employees temperature?
    • Can I send employees home even if they are not experiencing symptoms?

    Wage & Hour Questions: 

    • Do I have to pay employees if they are not working?
    • Under what circumstances does an employee receive emergency paid sick leave?
    • How many hours of emergency paid sick leave do I need to provide?
    • At what rate must I pay an employee taking emergency paid sick leave?
    • Can I require an employee to exhaust accrued PTO time and sate/local paid sick leave before providing federal emergency paid sick leave?
    • Do I have to give emergency paid sick leave if I already provide PTO or if I am already required to provide paid sick leave by state/local law?
    • Can I require my employees to use PTO?
    • Am I required to pay for an employee out on leave after they have exhausted federal emergency paid sick leave?
    • When does an employee qualify for paid FMLA leave?
    • How long must I provide paid FMLA for employees caring for children home from school or daycare as a result of COVID-19?
    • Is there a small business exemption for federal emergency paid sick leave or paid FMLA leave?
    • Can I reduce an exempt employee’s salary to cope with cash-flow issues?

    Other Employment Law Questions:

    • When can I lay-off an employee?
    • Do I have to accommodate employees who are unable to work?
    • Will employees qualify for unemployment insurance?
    • How long will an employee be allowed to remain on my health insurance if they are no longer working?
    • Where can I find additional guidance on employment issues?

    Financial Questions:

    • Can I receive unemployment if I’m self-employed?
    • Where can I turn if I am having cash-flow problems?
    • Will there be tax relief?

    PUBLIC HEALTH QUESTIONS 

    • Am I required to shut-down operations?

      State and local officials may invoke public health codes requiring closure of certain businesses. When requiring closure or restrictions of business operations, public health orders may define the specific types of businesses affected. For example, several states are currently requiring closure of bars, gyms and or imposing restrictions like limiting restaurants to providing take-out service.

      Alternatively, a “shelter in place” order will require closure of all “non-essential businesses.” The order will then define what businesses are deemed “essential” and exempt from the general closure order. Most jurisdictions exempt:

    1. Grocery stores, agricultural, food processing, cultivation and distribution companies;
    2. Gas stations, banks, hardware stores, automotive repair, laundromats;
    3. Health care facilities, pharmacies, veterinary clinics, home-based care providers;
    4. Public works, construction or maintenance of housing, utilities;
    5. Plumbers, electricians, and other service providers essential for health and sanitation;
    6. Businesses that provide shelter and other necessities of life;
    7. Insurance offices and legal practices;
    8. Businesses supplying essential businesses with vital support and supplies.

    NOTE: Exempt and non-exempt businesses vary in different states and localities. Contact state or local health officials if you are uncertain as to whether you are affected. You might also look to guidance from the U.S. Department of Homeland Security as to what constitutes essential critical infrastructure workforce.

    • Should I require my employees to work remotely?

      Public health officials are strongly encouraging employers to allow telework to the extent possible. Of course, this is not possible for many workers.
    • Can I send employees home from work if they are showing symptoms?

      Yes. Employees should be sent home if they are showing COVID-19 symptoms even if the employee is not self-reporting.

    • Can I ask an employee if they are experiencing symptoms?

      The federal government has issued guidance directing that employers may ask about COVID-19 symptoms at this time.

    • Can I take my employees temperature?

      This is permissible only because COVID-19 has been declared a pandamic.

    • Can I send employees home even if they are not experiencing symptoms?

      Employees may be required to stay home if they have been in close contact with someone with COVID-19, or if they have traveled from an area with widespread transmission.

      Employers may also choose to layoff employees for any non-discriminatory reason.

    WAGE & HOUR QUESTIONS: 

    • Do I have to pay employees if they are not working?

      Ordinarily the rule is that Hourly employees are paid only for the time they actually work. But the newly enacted Family First Coronavirus Response Act (FFCRA) may require small employers to provide two weeks (10 days) of emergency paid sick leave. In addition, FFCRA may require paid FMLA leave to take care of a child when their school or daycare has been closed. 

      Salaried exempt employees must still be paid their normal salary as long as they performed any work within the workweek. The only exception is if the employee chooses to stop working for personal reasons, including for a self-imposed quarantine; however, they may then qualify for emergency paid sick leave or paid leave to care for a child under the FFCRA. 

      NOTE: If an exempt employee is required to quarantine under public health codes or because the employee is sent home from work by the employer, they must be paid their usual salary if they have performed any work within the workweek. We await guidance from DOL, but such payments probably will not be counted as paid emergency sick leave or FMLA.

    • Under what circumstances does an employee receive emergency paid sick leave?

      Beginning no later than April 2, 2020 (possibly sooner) and throughout the rest of the year, covered employers must provide paid emergency sick leave to any employee—regardless of how long they have worked—who is unable to work for any one of the following reasons:

      1. The employee is subject to a federal, state, or local quarantine or an isolation order related to COVID-19.

      2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.

      3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.

      4. The employee is caring for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19.

      5. The employee is caring for an individual who has been advised by a health care provider to self-quarantine due to the concerns related to COVID-19.

      6. The employee is caring for his/her child in the event of school or daycare closure due to COVID-19, or if the childcare provider of the son or daughter is unavailable due to COVID-19 precautions.

      7. The employee “is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.”

    • How many hours of emergency paid sick leave do I need to provide?

      Fulltime employees are entitled to a total of 80 hours (i.e., two weeks) of paid emergency paid sick leave. Part-time employees are entitled to paid sick leave to cover their average hours worked in a typical two-week period. If hours vary from week to week, employers should look to the average of hours worked over the prior six months as a guide. For new hires, emergency paid sick leave should be granted based on a reasonable estimate of weekly hours.

    • At what rate must I pay an employee taking emergency paid sick leave?

      The amount of emergency paid sick leave depends on the reason for which leave is taken:

      School closures. If the employee is unable to work because they must care for their child due to closure of schools or daycares, they are entitled to 2/3rd their usual rate of pay or salary. But federal emergency paid sick leave is capped at $200 per day and $2,000 over ten days.

      Care for an Individual subject to mandatory quarantine. If the employee is unable to work because they must care for an individual who is subject to a federal, state or local quarantine or isolation order, they are entitled to 2/3rd their usual rate of pay or salary. But federal emergency paid sick leave is capped at $200 per day and $2,000 over ten days.

      Employee is subject to a mandatory quarantine. If the employee is unable to work because they are subject to a federal, state or local quarantine or isolation order, they are entitled to their usual wage or salary subject to a cap of $511 per day or $5,110 over ten days.

      Employee is advised to quarantine by a health care provider. If the employee is unable to work because their health care provider has advised that they self-isolate, they are entitled to their usual wage or salary subject to a cap of $511 per day or $5,110 over ten days. 

      Employee is experiencing symptoms and seeking diagnosis. If the employee is unable to work because they are experiencing symptoms and seeking diagnosis of a suspected COVID-19 case, they are entitled to their usual wage or salary subject to a cap of $511 per day or $5,110 over ten days. 

    • Can I require an employee to exhaust accrued PTO time and sate/local paid sick leave before providing federal emergency paid sick leave?

      No. The FFCRA prohibits employers from requiring an employee to exhaust accrued PTO or state/local paid sick leave.

    • Do I have to give emergency paid sick leave if I already provide PTO or if I am already required to provide paid sick leave by state/local law?

      Employees are entitled to utilize federal emergency paid sick leave before using state or local paid sick leave, or accrued PTO.

    • Can I require my employees to use PTO?

      It depends on state law. But, generally employers may require exempt or non-exempt employees to use accrued PTO if they are taking leave for personal reasons, as in the case of a self-imposed quarantine. In any event, employers are prohibited from requiring an employee to use PTO before using federal emergency paid sick leave time.

    • Am I required to pay for an employee out on leave after they have exhausted federal emergency paid sick leave?

      Yes, if the employee has unused state or local paid sick leave, or if the employee has unused PTO.

      Additionally, the FFCRA has amended the Family Medical Leave Act (FMLA) to require paid leave to qualifying employees who are unable to work because their children are unable to attend school or daycare as a result of COVID-19. Under these new rules the employer must begin providing FMLA for these parents at 2/3rds the employee’s usual rate of pay or salary; however, the benefit is capped to $200 per day and $10,000 in the aggregate.

      NOTE: FMLA usually applies only to companies with 50 or more employees; however, under the FFCRA, paid FMLA leave requirements apply to small employers unless they qualify for an exemption.

    • When does an employee qualify for paid FMLA leave?

      Any employee who has worked for at least 30 days is entitled to take job protect FMLA leave to care for a child when their school or daycare is closed as a result of the COVID-19 pandemic. This applies to any business with fewer than 500 employees.

    • How long must I provide paid FMLA for employees caring for children home from school or daycare as a result of COVID-19?

      FMLA provides job protected leave for up to 12 weeks for qualifying employees. While the FMLA does not usually provide for paid leave, the FFCRA requires employers to begin paying for leave related to child-care after the employee has been out of work for ten days as a result of a school or daycare closure. Required paid FMLA leave is capped at $10,000 over 12 weeks.

    • Is there a small business exemption for federal emergency paid sick leave or paid FMLA leave?

      As enacted, the FFCRA mandates all employers with fewer than 500 employees to provide emergency paid sick leave. But, the FFCRA delegates authority to the Secretary of Labor to allow hardship exemptions for businesses with fewer than 50 employees if providing emergency paid sick leave or paid FMLA “would jeopardize the viability of the business as a going concern.” NFIB is requesting guidance and or rulemaking from the Department of Labor that will provide clarity and relief to small businesses to the extent possible.

      Additionally, health care providers and emergency responders are exempt from paid FMLA requirements.

    • Can I reduce an exempt employee’s salary to cope with cash-flow issues?

      The employee would lose exempt status if you were to reduce his or her salary. In that situation, the employee would have to be converted to an hourly employee and would be entitled to overtime going forward.

    OTHER EMPLOYMENT LAW QUESTIONS:

    • When can I lay-off an employee?

      An employment relationship may generally be terminated for any reason not prohibited by public policy as established by enacted law and regulation. Employers may terminate an employee if they have a legitimate business reason, as in the case of an employer eliminating a position that is no longer needed or if the company must layoff employees to remain financially viable. Employers must avoid any inference of discrimination and or retaliation where an employee has exercised his or her legal rights.

    • Do I have to accommodate employees who are unable to work?

      It depends on whether the employee needs accommodation due to a disability protected by the ADA. In some cases leave related to COVID-19 may implicate FMLA or other state law protections. For example, California requires up to 40 hours of leave for school-related emergencies for certain employers.

    • Will employees qualify for unemployment insurance?

      In the event of a full or partial business closure, affected employees will be entitled to unemployment insurance. An employee will not qualify if they are choosing not to work.

    • How long will an employee be allowed to remain on my health insurance if they are no longer working?

      A group health plan will generally define how long an employee may go without working before their health care coverage expires. It is advisable to consult your insurance carrier for guidance.

    FINANCIAL QUESTIONS:

    • Can I receive unemployment if I’m self-employed?

      Unfortunately unemployment insurance is not usually available to self-employed individuals. But, you might qualify if you have worked as an employee for another company in the past year.

    • Where can I turn if I am having cash-flow problems?

      Its possible that Congress may authorize grants to assist small businesses struggling with the COVID-19 crisis. Proposed legislation would provide for emergency business interruption insurance that may be waivable to the extent used for payroll; however, this is enacted as currently drafted it would bar applicants who have already received SBA disaster assistance loans.

      Additionally, some states and localities are offering small business assistance programs. Also, certain financial institutions are offering assistance to customers dealing with financial hardship as a result of the COVID-19 pandemic.

    • Will there be tax relief?

      There will be tax credits for employers that provide emergency paid sick leave and or paid FMLA. Businesses should consult with a trusted CPA or tax attorney for tax planning advice.

    If you have additional questions, please reach-out to the NFIB Small Business Legal Center at 800-NFIB-NOW. You may also want to check-out our COVID-19 webinars here.

    *The information provided here is intended to be accurate, but should not be construed as legal advice. Please understand that we are awaiting guidance from US DOL and that the answers provided here will be revised once we get further information. The answers provided here are based on our best understanding of the existing legal landscape.

     

     

    Related Content: Legal - Compliance | Healthcare

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