July 31, 2020: Can the HEALS Act Actually Heal Small Businesses?

Gusto Editors

July 31, 2020

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On the HEALS of the CARES Act

Last week’s newsletter highlighted the need for Congress to pass a new relief package to expand on the CARES Act as the COVID-19 pandemic continues. While the details will probably change as Congress continues to negotiate, let’s take a look at how the HEALS Act compares to the CARES Act—and how HEALS could change your world: 

CARES Act (signed into law in March 2020) HEALS Act (TBD – not yet signed into law) 
Stimulus check $1200 for single filers who earn less than $75K/year$2400 for joint filers who earn less than $125K/year $500 for dependents under 17 years old(*already distributed)An additional stimulus:$1200 for single filers who earn less than $75K/year$2400 for joint filers who earn less than $125K/year $500 for dependents—no age limit
Enhanced unemployment$600/week added to state benefits; expires July 31, 2020$200/week added to state benefits; expires September 30, 2020
Starting in October, an amount that equals 70% of lost wages when added to state benefits (capped at $500); expires December 31, 2020
Employee tax creditCredit on 50% of up to $10KCredit on 65% of up to $30K
PPP: Basics$659B in forgivable loans for small businesses; expires August 8, 2020An additional $190B added to the fund; no expiration date stated yet
PPP: Spending requirements to qualify for full forgiveness 60/40 cost allocation for payroll/non-payroll costs 60/40 cost allocation for payroll/non-payroll costs 
PPP: Lending allocations$6.8B allocated for loans made by community lenders$25B allocated for businesses with 10 or fewer employees
Additional $10B allocated for loans made by community lenders
PPP: Second-draw loansNot permittedPermitted for businesses that: Meet the applicable revenue size standardHave no more than 300 employees Demonstrate a least 50% reduction in revenue
PPP: Forgivable expensesPayroll, mortgage interest, rent, utilitiesPayroll, mortgage interest, rent, utilities, covered supplier costs, covered worker protection expenditures, covered operation expenditures 

Financial relief resources for BIPOC-owned businesses

Despite government economic relief efforts, many POC business owners haven’t been able to secure funding with the PPP or the EIDL. In a Senate hearing held last week, Ron Busby, the President of the U.S. Black Chambers (USBC), stated that Black business owners are having difficulty accessing the PPP. According to Busby, 70% of USBC members who applied for loans were denied—and many of those approved received less than requested.

If you haven’t been able to take advantage of federal financial relief resources, explore these grants, loans, and networking opportunities for POC business owners. This list will be continually updated, so check back frequently. 

Updated guidance from DOL

The Department of Labor (DOL) released new guidance to address employer and employee questions about the Family and Medical Leave Act (FMLA), the Families First Coronavirus Response Act (FFCRA), and the Fair Labor Standards Act (FLSA).

Here are some highlights: 

  • Telemedicine: Telemedicine visits now count equally to an in-person visit to establish a serious health condition under FMLA (but there are conditions: the telemedicine visit must include an “examination, evaluation, or treatment by a healthcare provider”). 
  • Returning to work: Typically, an employee returning from a FFCRA leave must be reinstated to the same position (or one that’s equal), but new guidance makes an exception for employees who took leave to care for a loved one with COVID-19. If an employer is reasonably concerned that a returning employee may have been infected, the employer may temporarily require that employee to telework, or temporarily place the employee in “an equivalent position requiring less interaction with co-workers.”
  • Furloughs: If a workplace has been shut down due to a statewide quarantine order and all employees have been furloughed, an employer may not—after reopening and recalling employees—extend furlough for an employee who may need to take leave under FFCRA. Using an employee’s need to take leave as the basis for furlough is a violation of FFCRA.
  • Compensation: When it comes to determining hours of compensable work for remote employees, the same rules apply to telework that apply to onsite work; including overtime. 
  • Hazard Pay: Under federal law, employers are not required to provide hazard pay to employees working during the COVID-19. Employers should check local laws to determine whether hazard pay is required in the region. 
  • Paid Sick Leave: Taking FFCRA paid sick leave or expanded FMLA leave does not affect an employee’s status as an exempt employee (even if the leave is taken intermittently).

Helping your business recover and rebuild

Small businesses across America are being put through the wringer. Join Gusto and Bench on August 12 for an information-packed webinar that will help you develop an action plan for your business. We’ll walk you through how you can leverage tools and resources to implement strategies that will propel your business from surviving to thriving.

Register for the webinar.

Want more small business news and resources? Check out past editions in our archive.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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