RESOURCES FOR SIGNATORY CONTRACTORS
(updated as of June 3, 2020):
This report includes:
Comparison Table of Federal and NYS Paid Leave Programs
US Small Business Administration (SBA) Economic Injury Disaster Loan
Fact Sheet about program (via Rep. Grace Meng)
NYSSBDC Fact Sheet/How-to Guide about program
Description of benefit:
Working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. All of NYS has been declared a disaster zone due to COVID-19 (meaning that all NYS-based employers who meet eligibility requirements are covered under this program).
Which employers qualify:
- Business must be experiencing a business loss due to COVID-19
- Applicants who have not complied with the terms of previous SBA loans may not be eligible. This includes borrowers who did not maintain required flood insurance and/or hazard insurance on previous SBA loans.
- Credit History – Applicants must have a credit history acceptable to SBA.
- Repayment – Applicants must show the ability to repay the loan.
- Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.
Information about benefit:
These loans are intended to assist through the disaster recovery period. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. Loans are NOT intended to replace lost sales or profits or for expansion.
- Max loan amount per entity $2,000,000
- Max unsecured loan $25,000 (collateral required for any loan amount >$25K)
- Actual amount of each loan is limited to economic injury determined by SBA, less insurance and other recovers
- Max interest rate 3.75%
- Max term 30 years
How to apply:
Guide to SBA portal: NYSSBDC Guide to SBA Disaster Loan Application Portal. The main reason applications are rejected is due to incomplete information. If you need help, contact SBA’s Office of Disaster Assistance at 800-659‐2955.
Apply here (need to create account with SBA loan application portal): https://disasterloan.sba.gov/ela/Account/Login
Documents required to apply:
- Completed SBA loan application (SBA form 5)
(for sole proprietors/home-based businesses, fill out Form 5c)
- IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include parent company, subsidiaries, and/or businesses with common ownership or management).
- Completed copies of the most recent Business Federal Income Tax return – all pages
- Schedule of Liabilities (SBA form 2202)
- Personal Financial Statement (SBA form 413D) – each principal owning 20% or more of the applicant business, each general partner or managing member.
SBA Paycheck Protection Program
The Paycheck Protection Program (PPP) is part of the Federal Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2 trillion federal stimulus package passed on March 27. The PPP provides loans of up to $10 million to support small businesses and other eligible entities to pay workers, interest on mortgage obligations, rent, insurance, paid sick or medical leave, utilities, and payroll related costs incurred from Feb. 15, 2020 – June 30, 2020.
Federal Families First Act Corona Response Act (FFCRA)
DOL Wage & Hour Employer Requirements Fact Sheet
Description of Program:
The Families First Act has two main components: (1) Federal paid sick leave, and (2) an expansion of the Family and Medical Leave Act.
Paid Sick Leave
Employer receives 100% reimbursement for paid leave pursuant to the act, including health insurance costs. Employers face no payroll tax liability. Self-employed individuals received an equivalent credit.
The Act provides that full-time employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave, and part-time employees of eligible employers can receive the number of hours of leave that the employee works on average over a two-week period, at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. Employee’s regular rate of pay is capped at $511/day and $5,110 total.
An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive up to two weeks (full-time employees receive 80 hours, part-time employees receive the number of hours of leave that the employee works on average over a two-week period) of paid sick leave at 2/3 the employee’s pay. Pay is capped at $200/day and $2,000 total.
Employers may not discharge, discipline, or otherwise discriminate against any employee who takes expanded family and medical leave or and files a complaint or institutes a proceeding under or related to this act.
Paid Family and Medical Leave
Employees who have expended their first ten days of emergency leave due to a need to care for a child whose school is closed, or whose child care provider is unavailable for reasons related to COVID-19 and are unable to work beyond those ten days for the same reason, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay. Pay is capped at $200/day and $10,000 total.
Employees who utilize the sick leave to which they are entitled under the Families First Act are entitled to reinstatement to the same position or equivalent, unless the employer employs fewer than 25 employees. In that case, the employer must make reasonable efforts to provide the employee with a position or an equivalent position for 1 year after the “public health emergency concludes” or 12 weeks after commencement of the leave, whichever is earlier.
Which employers are subject to the Act?
Employers with fewer than 500 employees are subject to the Act.
Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened. As of March 24, 2020, to elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.
As an employer, how do I know if my business is under the 500-employee threshold and therefore must provide paid sick leave or expanded family and medical leave?
You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold.
Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act.
In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave under the Emergency Family and Medical Leave Expansion Act.
How it works.
When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
A. If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
B. If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
Penalties and Enforcement
Employers in violation of FFCRA can face penalties under the Fair Labor Standards Act and Family Medical Leave Act, as applicable. The Department of Labor will observe a temporary period of non-enforcement for the first 30 days after the Act takes effect, so long as the employer has acted reasonably and in good faith to comply with the Act. For purposes of this non-enforcement position, “good faith” exists when violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and the Department receives a written commitment from the employer to comply with the Act in the future.
NYC Small Business Continuity Fund (Loan)
*** Applications not yet available, but pre-applications can be submitted ***
Description of benefit:
Businesses with fewer than 100 employees who have seen sales decreases of 25% or more will be eligible for zero interest loans of up to $75,000 to help mitigate losses in profit. The site is collecting interest forms before the applications become available. As part of the applications, businesses are required to demonstrate a revenue decrease by providing documentation such as: point-of-sales reports, bank statements, quarterly sales tax filings, 2019 tax returns, or CPA-certified profit & loss statements. You can begin to gather these documents in preparation.
Which employers will qualify:
Businesses with 1-99 employees who have seen sales decreases of 25% or more
Amount of benefit (if loan/financial relief):
0% interest loan up to $75,000
Duration of benefit (if applicable):
Information about applying:
As of March 26, 2020 applications are not yet available. Pre-application available here for contractors to review eligibility for the program.
NYC Employee Retention Grant Program
Description of benefit: This program is available to New York City businesses with one to four employees that can demonstrate at least a 25% decrease in revenue as a result of COVID-19. Eligible businesses will receive a grant covering up to 40% of their payroll for two months. Businesses can access up to $27,000.
Which employers qualify:
- Are located within the five boroughs of New York City
- Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue
- Employ 1-4 employees in total across all locations
- Have been in operation for at least 6 months
- Have no outstanding tax liens or legal judgements
Amount of benefit (if loan/financial relief):
- Grant covering up to 40% of payroll for two months, up to $27,000
Information about applying:
To verify the loss of revenue, you will need to upload:
- Financial documents for two months in 2020 demonstrating revenue decrease due to COVID-19
- Financial documents showing your revenue for the same two months in 2019 (unless you were not in business at that time)
- Financial documents showing your revenue for the full 2019 calendar year
(“Financial documents” can include: point-of-sales reports, bank statements, quarterly sales tax filings, 2019 tax returns, or CPA-certified profit & loss statements.)
To determine your grant amount, you will need to upload:
- Your most recent two months of payroll records
To process your grant, you will need to upload:
- A signed Participation Affidavit verifying that you are eligible for the program and that you are applying in order to retain your employees
- Your bank account information
SBS help page (for application difficulties): https://sbsconnect.nyc.gov/contact/
New York Forward Loan Fund
What it is:
Governor Cuomo announced $100 million to provide flexible and affordable loans to help small businesses, focusing on minority and women owned, that did not receive federal COVID-19 assistance. The NYFLF is specifically timed to support businesses and organizations as they proceed to reopen under the New York Forward Plan.
Who is eligible:
- Small businesses and nonprofits must employ 20 or fewer full-time equivalent (FTE) employees;
- Small businesses must have gross revenues of less than $3 million per year;
- Nonprofits must provide direct services and have an annual operating budget of less than $3 million per year; and
- Have not received a loan from either SBA Paycheck Protection Program (PPP) or SBA Economic Injury Disaster Loan (EIDL) for COVID-19 in 2020.
- Access to loans for small landlords will be targeted to owners with residential buildings of 50 units or less, and will prioritize loans for landlords whose properties are in low and moderate income census tracts or who serve low to moderate income tenants.
Information about benefit:
These working capital loans are not forgivable in part or whole. The loans will need to be paid back over a 5-year term with interest. Priority will be given to industries and regions that have been reopened. This is not a first-come, first-served loan program. Applications will be reviewed on a rolling basis as regions and industries reopen.
How to Apply:
Applicants may fill out a pre-application and match with a participating lender. Community Development Financial Institutions (CDFIs) will begin processing pre-applications on June 1, 2020, but please do not apply to the participating CDFI lender directly. Pre applications will open here at 12pm EST on May 26th: https://www.connect2capital.com/partners/new-york-forward-loan-fund/