Families First Coronavirus Response Act

Prepared by Michael Thomas

We have had a number of clients and other members of the community who are employers reach out to us about their obligations to employees during this time when business is halting or stagnating due to concerns over the spread of COVID-19. In an effort to keep people employed and paid while handling treatment and safety precautions, Congress has enacted the Families First Coronavirus Response Act (the “FFCRA”).

The highlights of the FFCRA are as follows:

The provisions go into effect on April 1, 2020 . It is scheduled to last until December 31, 2020.
Employers will receive tax credits to offset the cost of providing the paid leave required under the FFCRA.
Every employer with fewer than 500 employees is required to comply with these emergency leave requirements.
There is an exception available for employers of healthcare providers or emergency responders to exempt such employees from leave at their election.
Also, the Secretary of Labor can exempt small businesses with fewer than 50 employees if compliance with the requirements would jeopardize the viability of the business as a going concern.
Employers must notify employees of their rights under the FFCRA. The Department of Labor has prepared a standard form notice . Each covered employer must post a notice in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.

SICK & QUARANTINED EMPLOYEES

Employers must provide Emergency Paid Sick Leave to an employee who is unable to work or telework because the employee is:

subject to quarantine or isolation order;
has been advised by a health care provider to self-quarantine due to coronavirus concerns; or
is experiencing symptoms of coronavirus.

Employers must provide pay for up to 80 hours of paid sick leave for these people. Wages are limited to $511 per day up to $5,110 total per employee for their own use.

Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking paid sick leave.

Employees who have worked for less than six months prior to leave are entitled to the average number of hours the employee would normally be scheduled to work over a two-week period.

Sick leave benefits are also available to employees who are:

caring for an individual subject to a federal, state or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns;
caring for the employee’s child if the child’s school or place of care is closed or the child’s care provider is unavailable due to public health emergency; or
experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

For these situations, the payment requirement is less: two-thirds the employee’s regular rate with a cap of $200 per day, up to $2,000 total per employee.

PARENT EMPLOYEES

An employee must be offered leave if he or she is unable to work due to a need to care for their child because the school or daycare has been closed or the child care provider is unavailable due to a public health emergency.
·An employer must pay at least two-thirds of the employee’s regular pay, up to $200/day and $10,000 over the benefit period.
The first 10 days taken may be unpaid, but the employee may use other paid leave during that period, if available.
Employees are covered if they have worked for an employer for at least 30 days.
If employers have 25 or more employees, they must return an employee who takes emergency FMLA leave to the same or equivalent position when the employee returns. If the company has fewer than 25 employees, and the position is eliminated during the leave, that requirement does not apply.

LAYOFFS

Unfortunately, some employers are being forced to consider furloughs (mandatory, temporary unpaid leave) and layoffs.

The express language of the FFCRA is unclear on whether employees are still eligible for benefits if they are furloughed or laid off before April 1, 2020.
At minimum, employers should take care not to base lay off or furlough decisions on which employees are likely to need leave—or risk claims for retaliation/interference.
The WARN Act may apply, requiring advance notice of a mass layoff.
This memo covers the most commonly asked questions about the FFCRA. If you have questions about a specific situation and would like legal advice, please reach out to Michael Thomas at Michael.Thomas@freemanlovell.com to schedule a time for further discussion.

This memo is provided for your reference and information and does not constitute legal advice. Giving legal advice requires us to establish an attorney-client relationship, including a review for conflicts of interest. This summary is current as of the date above.

Click here for a copy of the United States Department of Labor Mandatory Workplace Poster

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Beneficial Ownership Rules

December 28, 2023

Starting January 1, 2024, a new rule took effect requiring all registered legal entities, including limited liability companies and corporations, to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). We wanted to give you a heads up about the rule and give you as much information about what it means to you. What is the rule? The rule, which is called the Beneficial Ownership Information Reporting Requirements (BOI Rule) , comes from the Corporate Transparency Act, which was passed by Congress in 2021. This law created the BOI Rule with FinCEN as part of the U.S. government’s efforts to make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other deceitful ownership structures. Under this new law, FinCEN will permit Federal, State, and local officials to obtain ownership information for authorized activities related to national security, law enforcement, and intelligence. When does the rule take effect? And when do I have to submit a report? The BOI Rule took effect on January 1, 2024 . If your company existed before January 1, 2024, you must file its initial beneficial ownership information report by January 1, 2025 . If your company is formed or registered after January 1, 2024, you must file its initial beneficial ownership information report within 90 days after receiving actual or public notice that its creation or registration is effective. If any beneficial ownership information changes, you will have 90 days from the day of the change to file an updated or corrected report with FinCEN. What if I don’t file a Report? According to FinCEN: “The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in a civil or criminal penalties, including civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.” What do I need to include in the report? The BOI Rule requires that all entities report information about the company, each individual with substantial control over the entity, and each beneficial owner. What information is required to report about the entity? Full legal name of your company and any DBAs names; Complete current street address for your company's principal place of business (P.O. boxes will not be accepted); The jurisdiction of formation or registration; and Tax identification: IRS tax identification number (TIN) and employer identification number (EIN). What information is required to report about the controlling individuals and beneficial owners? The individual's legal name; Individual's date of birth; Individual's residential address; and A unique identifying number from an acceptable identification document (such as an unexpired driver's license, passport, identification document issued by a State or local government or Indian tribe) and the name of the issuing state or jurisdiction. Who is considered to have substantial control of the entity? Examples of an individual that exercises substantial control over the entity are: An individual is a senior officer (President, CEO, CFO, COO, Manager, or other office who performs a similar function); An individual has the authority to appoint or remove certain officers or a majority of directors of the reporting company; An individual is an important decision-maker for the company; or An individual has any other form of substantial control over the company. Who is considered a beneficial owner? A beneficial owner is an individual that owns or controls at least 25% of the entity’s ownership interests. This includes individuals that indirectly own or control 25% of the ownership interest. For example, if Joe is a 50% owner of Parent LLC, which in turn owns 50% of Subsidiary Corp, then Joe beneficially owns 25% of Subsidiary Corp (50% of 50% = 25%). What type of entities will be required to file a report with FinCEN? All domestically formed entities and foreign registered entities in the USA are required to file a report. Types of entities include corporations, limited liability companies, limited partnerships, general partnerships, and any other entity registered with a state Secretary of State or Division of Corporations or other similar office. There are some types of companies that are exempt from the reporting rule, and in general they are companies that already have to report beneficial ownership to another federal agency. The 23 exemptions listed by FinCEN are: Securities reporting issuer, Governmental authority, Bank, Credit union, Depository institution holding company, Money services business, Broker or dealer in securities, Securities exchange or clearing agency, Securities exchange or clearing agency, Other Exchange Act registered entity, Investment company or investment adviser, Venture capital fund adviser, Insurance company, State-licensed insurance producer, Commodity Exchange Act registered entity, Accounting firm, Public utility, Financial market utility, Pooled investment vehicle, Tax-exempt entity, Entity assisting a tax-exempt entity, Large operating company, Subsidiary of certain exempt entities, and Inactive entity. Can you help me with my company’s report? Yes! We are happy to help prepare and file your company’s BOI Rule report with FinCEN before the December 31, 2024 deadline. We offer a flat-fee service that is discounted based on how early you pay and submit your information. Sign up for our BOI Rule report service HERE. We also know that some situations can be complicated, so please feel free to ask us any questions regarding compliance with the beneficial ownership interest reporting requirements for your company by emailing teamjosh@freemanlovell.com .