We are in an unprecedented time where businesses closures are mandated, people are quarantined, and the demand for some goods and services has plummeted. There are some important temporary measures for small business owners and employees you should know about.
Families First Coronavirus Act (FFCA)
In addition to extending sick leave benefits, coronavirus testing, and food aid, this act also amends the Family Medical Leave Act (FMLA). The FMLA temporarily applies to employers with less than 500 employees (formerly covering employees working at a business with 50+ employees). Two major changes that effect small business are:
- Sick Days – Ten sick days are provided for full-time workers (prorated for part-time employees) at two thirds pay.
- Paid Leave of Absence – Employers will have to pay employees at least two-thirds pay for up to 12 weeks following the first 14 days of absence from work.
Employer Unemployment Tax
Unemployment benefits for workers have been modified to include individuals who are required to quarantine by a medical professional or authority, or who has been laid off due to the coronavirus.
If your small business is contributory employer for the purposes of unemployment tax, your unemployment tax will not increase during this crisis. As of now, reimbursing employers remain liable for payments in lieu if contributions.
Small Business Resources
In addition to addressing the change in demand for your product or service, you need to figure out how to operate your small business with limited staff and additional costs associated COVID-19. There is help available to assist you:
The Small Business Administration (SBA) if offering low-interest loans to small businesses that have been severely impacted by the coronavirus. Loans of up to $2 million to assist with lost revenue are available. You can read more, or apply, at https://www.sba.gov.
Employer Tax Relief
The FFCA provides extended benefits to workers; however, for a small business owner these additional costs can be a challenge. To assist with the additional expense, small business owners can claim a quarterly tax credit against payroll taxes for sick days and Family Medical Leave payments.
Business Interruption Insurance
Inquire with your insurance agent to see if you can recover losses related to COVID-19 through your commercial insurance policy.
Cash Flow Analysis & Management
If there is ever a time to look at your cash flow it is now. Understanding your cash flow position will be critical to getting you through the COVID-19 crisis. Knowing how much cash you have and what expenses are coming up will let you know if you need to borrow funds or change strategies to stay afloat.
Let us help!
We have a talented staff that can help you with your bookkeeping needs, prepare a cash flow analysis, or even assist you in setting up a virtual office.
We take learning seriously. We are constantly testing and learning new technologies and applications for times such as these. Visit us at www.budgetease.biz for more information on how we can help you and your small business.