The corona virus pandemic has brought about some legal changes and challenges that small businesses need to know about and pay attention to.
Last week the Georgia Department of Labor issued a new emergency rule concerning partial claim reporting for unemployment insurance. This new rule, which is Rule 300-2-4- .02 provides that, for weeks beginning on or after March 15, 2020, an employer shall file partial claims online with the Georgia department of labor with respect to any week during which an employee works less than full-time due to a partial or total company shutdown caused by the COVID-10 public health emergency. The rule also states that any employer found to be in violation of this rule shall pay to the commissioner for the unemployment fund the full amount of benefits paid to the employee.
So, under this new rule, employers must file partial claims on behalf of their employees whenever it is necessary to temporarily reduce work hours or if there is no work available for a short period, due to the COVID-19 public health emergency. You can find more information about this, including the emergency rule, at the Georgia department of labor’s website.
Also, on March 18th, President Trump signed legislation into law that was passed by the house and senate this week that deals with responding to the COVID-19 health emergency. Among other things, there is a requirement, that will go into effect on April 2, 2020, for employers to pay emergency sick leave to covered employees in certain situations relating to the COVID-19 pandemic, including those ordered into quarantine or recommended to be in self-quarantine, or caring for an individual with the virus or caring for children.
This legislation does not exempt small businesses with limited employees, rather, it applies to all employers with fewer than 500 employees. The paid leave will be at either 100% of the full time employee’s regular rate, or at 2/3 of the regular rate, depending on the reason for the leave. Regular part-time employees and those who work irregular schedules have their leave rates calculated based on the average number of hours he or she would normally be scheduled to work during a two week period, and that is calculated differently based on whether the employee has worked for the business for more than six months or less than six months.
In this same legislation, Congress expanded the FMLA – the family and medical leave act – on an emergency basis. Now, many more employers will be subject to the FMLA act on an emergency and non-permanent basis, but only with respect to a situation where a covered employee is unable to work or telework, to care for that employee’s child (under 18) if that child’s school has been closed, or his or her childcare provider un unavailable due to the COVID-19 health emergency.
There are refundable tax credits offered and as I understand it so far, are supposed to reimburse 100% of the qualified sick leave wages and 100% of the qualified family leave wages actually paid by an employer, provided that the wages were paid in accordance with the legislation. This is something we will continue to follow, and I expect that covered businesses may need to work closely with their business lawyers and tax advisors to navigate through these new laws and their obligations. The Department of Labor, together with the IRS and Treasury Department recently issued some guidance on this, and more guidance will be forthcoming.
Let me also briefly address another important business law need that I believe many businesses have, but may not be aware of – and that is having a properly developed and documented emergency plan in place. Here’s what I’m talking about – you’ve got a small business, owned by one person, or really operated by one key owner or manager. That one person manages the operations – pays the bills, handles payroll, signs the contracts and the like. What happens if that one person is unable to work, due to the corona virus or something else – what if they are incapacitated or worse? Who is going to have the authority and ability to carry on the operations of the business?
If your business does not have a plan in place, it should. And that plan should ensure that there are proper corporate or LLC minutes in place that provide for someone to be able to step in on an emergency basis and given legal authority to manage the business. You might also need to add someone to the signature card on the business bank account as well. We need to make sure that the right person or people have authority to keep the business going if something happens to the company owner or key manager.
The good news is that this type of problem is rather easy to solve if you have identified the right person or people who can step in and steer the ship. Putting together the corporate or LLC records is usually pretty straightforward and can be done with your business lawyer relatively inexpensively. Planning ahead for this type of problem is certainly less expensive than emergency planning after there is already a problem, and can generally avoid a situation where someone may have to seek court orders to put an emergency plan in place.
Finally, I know pandemic is having an impact on our business community, including lots of small businesses and their employees. This pandemic is going to present a lot of problems and challenges, and I fear it may also do real damage to many small businesses and employees. I am praying that our business community, our employees, and our community are protected and that we can all survive through this crisis and then thrive.
If I can be of help, let me know. My firm remains open and ready to serve our business law and estate planning clients. We’re using technology to keep us, and you safe, holding most meetings via video conference or telephone, and are able to get things done in spite of the world seemingly closing around us. If we can help you, contact us at 678-344-5342, or visit us online at thebeckfirm.com.
– Joel Beck