As the U.S. continues to report an increasing number of COVID-19 cases, it's important that small businesses continue to monitor the situation and be as prepared as possible to protect the wellbeing of their business. I'm reaching out to all my clients with some information and resources to assist you in making decisions regarding these times.
Reduced Hours/Offices Closures: Non-exempt hourly employees are generally only entitled to pay for the actual hours worked in a workweek. Salaried employees, on the other hand, are generally entitled to be paid for the entire pay period they perform work, with limited exceptions. The US Department of Labor has issued Guidance (https://www.dol.gov/agencies/whd/flsa/pandemic) reminding employers, among other things, that all of the Fair Labor Standards Act requirements apply during a pandemic. Most likely, employers will have a sick leave or paid time off policy that will be available for employees to draw down to provide income protection during a period of absence due to COVID-19. For a workplace shutdown, unemployment benefits may be available.
Unemployment Benefits: The U.S Dept. of Labor announced new guidance outlining flexibilities that States have in administering unemployment programs - specifically that states can pay benefits if an employer temporarily closes, an individual is quarantined with the expectation of returning to work, or an individual leaves work for fear of exposure. Employees are not required to quit to receive benefits. The governor sent a letter to state legislatures to loosen the rules surrounding unemployment insurance in the state which recommends waiving the one week waiting period for applying for unemployment benefits and allowing small business owners to apply for unemployment. Under the plan, any benefits charged to the trust fund would not have an impact on individual business tax rates. No legislature has been passed yet, but I will keep you posted.
Leaves of Absence: Your internal policies may extend protection for employees to take leave, such as sick leave or paid time off policy. In addition, there is nothing preventing an employer from adopting a special right for an employee to take leave in the face of this pandemic. However, employers should document any modifications to leave policies in writing, and have employees acknowledge receipt of same.
Business Interruption Insurance: Business interruption insurance is typically not a stand alone policy but part of an overall comprehensive insurance or casualty policy. Depending on the type of policy your business holds, coverage may be limited. You may wish to contact your insurance carrier to determine your benefits.
Small Business Loans/Lines of Credit: The U.S. Small Business Administration announced that Disaster Assistance Loans are available for small businesses impacted by the virus. This loan is only available if credit is not available elsewhere. I encourage small business owners to contact their local bank to secure a line of credit to help protect their business in the event of unforeseen financial circumstances.
Please don't hesitate to reach out to me if you are concerned about how this virus may impact your business. I'll continue to provide additional updates as more information becomes available.