This is just a quick note to remind you that the Emergency Paid Leave Sick Act and Family Relief Act goes into law tomorrow. If you're not familiar with the ins and outs, this law requires employers to pay employees up to 12 weeks of leave for the following reasons.
- An employee cannot work because of local, state, or national stay-at-home measures
- An employee's child's school or daycare is closed due to COVID-19
- An employee is quarantine or awaiting diagnosis
- Or an employee is caring for a family member with Coronavirus
Although these payments are addressed via a government credit, they cannot be overlapped with a PPP loan, and are "earned back" in payroll credits through the course of 2020.
Scenario: If you keep staff on, and get a PPP loan on April 15th, but your city is put under shelter at home measures on April 16th, you fall under the Families First Coronavirus Response Act, which means some amount of payroll will be required and it's eligible for credits rather than loan forgiveness. Functionally speaking this could mean more money out of pocket rather than having the flexibility to furlough employees to help cash outflows until you are ready to open for business.
My very non-legal advice is this: If you are considering laying off staff to keep your practice financially viable during this crisis, call your employment attorney as ask if you should do so as of today.
Want to understand the ins and out? You can find a very detailed FAQ HERE. Also, if your practice is open for any level of care, employers are required to post THIS NOTICE.
The PPP loan is forgivable so long as you hire your staff back at full head count and close to full pay BY June 30th, so there's time to figure the details out along the way.
A quick note: I'm not sure about other states, but Georgia is requiring employers to file for unemployment on behalf of their employees. Be sure to check your state's updated requirements.
Also, when PPP loans do come out, I saw a great suggestion to open a separate bank account for loan proceeds and ONLY use said account for allowable expenses so that you have a clear paper trail for forgiveness.
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