Updates for Small Businesses on the Families First Coronavirus Response Act (FFCRA)
Updated: Apr 7, 2020
How the COVID-19 Pandemic is Affecting Small Businesses and their Employees
With the emergence of the COVID-19 pandemic, it is important to note the unprecedented changes affecting small businesses and employees all over the United States. The effects of the pandemic seems to have hit the United States in the span of one week, starting with the postponement of all NBA games and the ban of travel from Europe into the United States. Quickly, the President along with State Representatives created further restrictions. First, it was the ban of gatherings of 100 people or more, school closings until the end of March, and social distancing of at least six feet. As of March 23, 2020, the Governor of North Carolina, Roy Cooper, through executive order, cracked down on these restrictions and banned gatherings of 50 people or more, expanded school closures to May 15, 2020, and required the closing of retail facilities without a retail or dining component. Now, Mecklenburg County has issued a ‘Stay at Home’ order that will require County residents to remain in their homes for the next 21 days starting on Thursday, March 26th. As a small business owner or employee, what does all this mean? With the mandatory closures of many small businesses and the closings of schools, employees and business owners are now trying to solve the ongoing issues of staying in business, making a liveable wage, and caring for their children during the time they would otherwise be at work. As many questions and concerns arise during this unprecedented and difficult time, Vennum Law is here to help clarify your options and provide you with the answers you seek.
1. What does the new expanded medical leave law mean for small business owners?
The Families First Coronavirus Response Act (FFCRA), enacted on March 18, 2020, requires certain employers to provide employees with expanded family and medical leave for specified reasons related to COVID-19. Under the FFCRA, an employee qualifies for expanded family and medical leave if the employee is unable to work (or unable to telework) because the employee:
is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
has been advised by a health care provider to self-quarantine related to COVID-19;
is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
If the employee is unable to work due to COVID-19 or due to the need to care for a child whose school or child care facility is closed as a result of COVID-19, the employee is entitled to leave under FFCRA if the employee was employed for at least 30 days by the employer. Overall, if you are a covered employer under the Act, you will be required to pay your employees if your employees need leave based on any of these foregoing reasons resulting from COVID-19.
2. Do the new paid leave laws apply to your small business?
The expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees. Small businesses with fewer than 50 employees may qualify for an exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
3. As a small business owner, am I required to pay my employees if my business closes?
No, but if your business is still operating and the employee cannot work due to a mandatory quarantine or another COVID-19 reason, you may be obligated to provide paid leave pursuant to the FFCRA. However, it is highly appreciated to provide compensation to employees if at all financially possible.
4. Can small business owners get unemployment if their business shuts down?
It depends. A business owner who paid unemployment insurance taxes for him/herself would be eligible. For example, an employer who also paid himself/herself a wage from the business would generally be entitled to unemployment benefits. Unfortunately, it is not the same for business owners who did not receive wages from the business.
5. Can an employee receive unemployment benefits if his/hours are reduced?
Yes. Governor Cooper’s Executive Order allows for employees to receive unemployment benefits for individuals who are separated from employment AND for individuals who have had their work hours reduced. It also provides unemployment benefits to individuals who are prevented from working due to a medical condition or under direct quarantine orders as a result of COVID-19.
6. What are the changes to unemployment benefits under Executive Order 118?
Executive Order 118 waives certain requirements in order for employees to obtain unemployment benefits faster and easier. For example, the one-week waiting period and ability/availability to work requirements are now waived. In addition, proof of seeking employment is not required. The Executive Order helps employees who have recently been laid off from their position the opportunity to gain access to unemployment benefits as efficiently as possible under these circumstances. Unfortunately, for small business owners unable to receive unemployment benefits, the Government has yet to establish similarly helpful benefits.
As of March 24, 2020, the information provided above is current. Due to the overwhelming updates regarding COVID-19, we suspect to receive ongoing information and guidance regarding small businesses and hope to have responses to these updates as quickly as humanly possible. If you have questions or concerns about your business or if you are an employee looking for guidance in this trying time, do not hesitate to contact the team here at Vennum Law. We are practicing social distancing ourselves and will be conducting business through cyberspace for the time being. As an essential business pursuant to the Mecklenburg ‘Stay at Home’ order, we will remain open and will be happy to assist you in any way possible.