We reported on March 30th that under the CARES Act, resorts with fewer than 500 employees are eligible for a Small Business Administration (SBA) guaranteed loan. Repayment will be forgiven to the extent that the loan proceeds are used for payroll (wages, salaries, healthcare costs, retirement costs, taxes, and related costs), commissions, interest on mortgage loan obligations and other debts, rents, and utilities. For details, see the Blog post “Resorts can borrow under CARES ACT” by W. John Funk.
If you prefer not to borrow, however, different relief provisions are available under the Families First Coronavirus Response Act (FFCRA). Here are the basic provisions:
Employees who can’t work because they are quarantined or have COVID-19 symptoms and are awaiting a diagnosis can receive their full regular pay for up to 80 hours of paid sick leave.
Employees who are caring for someone under quarantine can receive two-thirds of their regular wages for up to 80 hours of paid sick leave. If they are caring for a child whose school is closed, they can receive up to 10 additional weeks of paid sick leave at two-thirds of their regular wages.
To help employers provide this paid sick leave, employers can receive a full refund of an employee’s regular wages up to $511 a day for up to 10 days. For the child-care extension, employers can receive two-thirds of an employee’s regular rate of pay up to $200 a day for 10 days, plus an additional $200 a day for 10 additional weeks, up to a total of $10,000.
Three government agencies have a role in administering FFCRA: the Department of Labor, the Department of Health and Human Services, and the Internal Revenue Service. That means the devil will be in the details, some of which had yet to be finalized as this was written on April 2nd.
If you plan to pursue these FFCRA rebates, see the websites listed below, check back for updates at frequent intervals, and get professional guidance from your tax attorney and/or accountant. If you don’t have a relationship with such professionals, this is the time to establish one.
https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave
https://www.irs.gov/coronavirus
https://www.bipc.com/faqs-for-employers-families-first-coronavirus-response-act
Photo by Green Chameleon on Unsplash