SBA Disaster Area – Illinois
On Tuesday, March 17, 2020, Illinois Governor JB Pritzker requested that the US Small Business Administration (SBA) declare the entire state of Illinois a disaster zone to qualify for SBA assistance. This request was accepted, and SBA Administrator Jovita Carranza declared on Thursday, March 19, 2020, that Illinois was a disaster zone. As a result of the declaration, small Illinois businesses may qualify for Economic Injury Disaster Loans up to $2 million, with interest rates at 3.75% for small businesses and 2.75% for private non-profit organizations, to help meet financial obligations and operating expenses which could have been met had the disaster not occurred. These loans can be used to pay fixed debt, payroll, accounts payable, or other bills that can’t be paid because of the disaster’s impact.
Read the SBA’s full press release for additional information.
Families First Coronavirus Response Act
The Families First Coronavirus Response Act signed into law March 18, 2020 by the President. It is effective 15 days previous to being signed into law.
- Employers with 500 and fewer employees are required to offer sick and family leave to your employees for the rest of 2020. The government will then offer payroll tax credits to offset the cost of those programs.
- The only exceptions are for employers with less than 50 employees, business would need to cease if the programs are enacted.
- Sick leave up 80 hours is required to be offered.
- 12 weeks of family leave is required to be offered.
- Sick leave has $511 credit per day limit for those employees who are quarantined, self-quarantined or have the virus, $200 per day for other sick leave reasons.
- Family Leave is credited at the $200 per day for any virus-related reason and is capped at $10,000 for the year. Virus-related reasons are to take care of any person due to the virus, take care of children that have been forced out of school and any other reason the employee may need to be off for the virus related to taking care of their family.
- The credits apply to Sec. 3111(a) OASDI taxes (Social Security Taxes) or Sec. 3221(a) Tier 1 Railroad Retirement Act excise taxes in both cases.
Relief would come through payroll tax returns, so you will need to work with your payroll provider. Further guidance is coming on how to calculate the credits fully prior to April 2, 2020.
In the meantime, the Department of Labor posted Employer Paid Leave Requirements and some guidance in the form of questions and answers with regards to the Families First Coronavirus Response Act.