Below is a non-exhaustive list of options that an employer may wish to explore to make the best decision for the business and its employees.

As we’ve written about before, the newly passed Families First Coronavirus Response Act (“FFCRA”) provides employees with up to 80 hours of paid sick leave for full-time employees if the employee is sick or quarantined because of COVID-19, is taking care of a family member who is sick or quarantined, or is caring for a child who is home because of school or daycare closures.  The daily amount of paid sick leave that employers are required to pay is capped depending on the reason the employee is absent from work.  Employees can access this leave without exhausting other leave offered by the employer first.

The FFCRA also extends the Family Medical Leave Act (“FMLA”) to cover employees who are not able to work (or telework) because he or she must care for a child if the child’s school or daycare is closed. Employers are required to pay the employee 2/3 of the employee’s regular rate for 10 weeks, though the amount is capped at $200 per day per employee.

Both of these provisions under the FFCRA apply to employers with 500 employees or fewer and all employer financial obligations under the FFCRA will be covered by a refundable tax credit to employers of 100% of the leave paid.

In response to business downturns, employers may also be considering temporary or permanent workforce reductions as a means to keep a business operational. Some options include but are not limited to: layoffs; furloughs; reductions in pay or work hours; business closures; and paid or unpaid leave.

State and federal law can affect some of the options an employer has, as well as the size, nature, and culture of a business.

Employers may also consider emergency lines of credit or low-interest federal disaster loans from the SBA to meet short term financial obligations. In addition, some states are offering grants or emergency loans with favorable terms for small business owners.  To provide further relief, the federal tax return filing deadline for businesses and individuals is now July 15, 2020. Some states have also extended the state return deadline but dates vary by state.

Exploring any of these options is business-specific and must be analyzed with a complete understanding of the implications it will have on a business and its employees.  All of these options necessitate conversations with legal, accounting, and HR professionals to ensure as smooth of a transition as possible for all parties involved.

The COVID-19 pandemic is causing severe turmoil for business owners and their employees, yet thoughtful considerations to all options will help everyone weather the storm.

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