COVID-19 – Maryland Response – PGAMA FAQ & Resources March 24th, 2020 _____________________________________________________________________
1. If someone is showing mild symptoms of illness and you’ve asked them not to work out of an abundance of caution, what benefits are available to help them maintain their income?
Federal Law: Emergency legislation, entitled H.R. 6201; entitled, Families First Coronavirus Response Act was signed into law today (3.19.20). The new law provides paid sick leave, free coronavirus testing, expands food assistance and unemployment benefits, and requires employers to provide additional protections for health care workers.
• Emergency paid sick leave: Small businesses will be required to provide two (2) weeks of paid sick leave to an employee that: o Has a current diagnosis of COVID–19, or is under quarantine at the instruction of a health care provider, employer, or a local, State, or Federal official. o Is engaged in caregiving for an individual who has a current diagnosis of COVID–19 or is under quarantine. o Is engaged in caregiving, because of the COVID–19-related closing of a school or other care facility or care program, for a child or other individual unable to provide self-care. o This does not apply to businesses with over 500 people and small businesses with under 50 employees may avoid the requirements if they “would jeopardize the viability of the business as a going concern”. o These provisions would expire at the end of calendar year 2020. • Family medical leave: The bill expands the Family and Medical Leave Act to include leave needed to care for an employee’s child whose school or care provider is closed due to COVID-19. o This leave can be used by employees who have been employed by their current employer for at least 30 days. This applies to any private sector employers under 500 employees.
o The first 10 days of FMLA leave may be unpaid — beyond that time employers must compensate employees for the remainder of FMLA-leave taken (up to 10 work weeks) at 2/3 of their regular rate of pay. o FMLA paid leave is capped at $200 per day and $10,000 per employee total. • Tax credits for paid family and medical leave: The legislation has a refundable tax credit equal to 100% of paid family or medical leave wages paid by the small business each quarter. o The credit can be used against the employer’s social security taxes and applies to amounts paid to employees who are sick or quarantined. A smaller credit applies to amounts paid to employees caring for a family member or for a child whose school or place of care has been closed. o Individuals who are self-employed also qualify for refundable credits. The tax credits would offset not just the 6.2% Social Security portion of payroll taxes on affected wages, but also the separate 1.45% Medicare tax. Limits apply. • Emergency unemployment stabilization o Provides $1 billion for emergency grants to states for activities related to processing and paying unemployment insurance benefits. o $500 million will be used to provide immediate additional funding to all states for staffing, technology, systems, and other administrative costs, so long as they met basic requirements about ensuring access to earned benefits for eligible workers. Those requirements are: ▪ Require employers to provide notification of potential unemployment insurance eligibility to laid-off workers. ▪ Ensure that workers have at least two ways (for example, online and phone) to apply for benefits. ▪ Notify applicants when an application is received and being processed and if the application cannot be processed, provide information to the applicant about how to ensure successful processing. o $500 million will be reserved for emergency grants to states which experienced at least a 10% increase in unemployment. o States that experience an increase of 10% or more in their unemployment rate (over the previous year) and comply with all the beneficiary access provisions will qualify for 100% funding for Extended Benefits. o Extended benefits are triggered when unemployment is high in a state and provide up to an additional 26 weeks after regular unemployment insurance
benefits exhausted. This section also suspends the financial penalty for states that waive the usual one-week waiting period for benefits. Maryland Law: Governor Larry Hogan signed emergency legislation (HB1663) passed by state lawmakers during the final days of the 2020 Legislative Session. The legislation ensures protections and assistance for Marylanders affected by COVID-19. The COVID-19 Public Health Emergency Protection Act allows the governor to prohibit cost-sharing by insurance carriers for COVID-19 testing, establish or waive telehealth protocols and require insurers to cover a COVID-19 vaccine when one is available. Other provisions of the law provide: • The Sec. of Labor may authorize employment benefits for employees, who need not leave the employ of their company, if: o (1) the business temporarily ceases operations, o (2) the individual is in temporary quarantine, or o (3) the individual leaves employment due to risk of exposure or to care for a family member. 2. If your business has remained open but you have people in a high-risk group that have decided to shelter at home to protect themselves or high risk loved ones, are there benefits available to help them maintain their income? See above.
3. What is the criteria for getting back to normal? We really don’t know the true number of people affected because so many experience mild to no symptoms and we’re only testing those we meet very specific criteria. I read an article that we’ve shut everything down without using data, so how do the authorities know when it’s safe to reopen?
The State of Maryland is using a combination of data gathered by the CDC and the Maryland Department of Health to determine public risks and safety. As indicated by the health experts and elected leaders, the numbers are projected to be at its peak this week. Due to the uncertainties, it is difficult for anyone to predict when it will be considered “safe” for nonessential businesses to re-open.
4. We’ve told our folks that they are considered essential and we plan to remain open, they’re asking for some type of letter they can show if they’re stopped by police on the way to work. (I told them he has not ordered shelter in place but they’re still concerned.)
At this time, Governor Hogan has not issued an Executive Order for statewide shelter. However, as expressed in today’s press conference (on 3.23.20) and his recent Executive
Order, all businesses that are considered “non-essential” to the COVID-19 response are mandated to close at 5 pm, Monday, March 23rd.
The Office of Legal Counsel issued a letter of interpretation for guidance listing sectors (and industries) that are considered “essential” and therefore remain open. The list does not fully list all these types of businesses and it’s advised to review the guidelines produced by the Department of Homeland Security.
For more information, visit: https://governor.maryland.gov/2020/03/23/governorhogan-announces-closure-of-all-non-essential-businesses-175-million-reliefpackage-for-workers-and-small-businesses-affected-by-covid-19/
5. Will there be any funding available to assist us with payroll?
Yes. The Secretaries of Commerce and Labor announced small business and labor relief efforts. Details can be found at https://businessexpress.maryland.gov/ Relief programs include grants, unemployment funding, and zero and low-interest small business loans.
o If you are a Maryland-based business impacted by the Coronavirus with under 50 full- and part-time employees, or a Maryland manufacturer, check out the programs below to see if you qualify for assistance.
▪ Maryland Small Business COVID-19 Emergency Relief Loan Fund - This $75 million loan fund (for for-profit businesses only) offers no interest or principal payments due for the first 12 months, then converts to a 36-month term loan of principal and interest payments, with an interest rate at 2% per annum.
▪ Maryland Small Business COVID-19 Emergency Relief Grant Fund - This $50 million grant program for businesses and non-profits offers grant amounts up to $10,000, not to exceed 3 months of demonstrated cash operating expenses for the first quarter of 2020.
Small Business Administration – Economic Injury Disaster Loan Program: The State of Maryland has received official designation from the U.S. Small Business Administration (SBA) for its Economic Injury Disaster Loan (EIDL) program, which provides low-interest federal disaster loans for small businesses impacted by the COVID-19 pandemic.
o According to the SBA, the loans will help alleviate financial strain and allow businesses to: o pay bills, o payroll, and o accounts payable, with long-term payments stretching up to 30 years.
o The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support
to small businesses to help overcome the temporary loss of revenue they are experiencing. For more information, visit: https://www.sba.gov/funding-programs/disasterassistance
6. We will be laying off some of our staff. What resources are available for us to assist our employees? Yes.
• Workforce Development and Adult Learning COVID-19 Layoff Aversion Fund: The State has launched the new COVID-19 Layoff Aversion Fund, which is designed to support businesses undergoing economic stresses due to the pandemic by preventing or minimizing the duration of unemployment resulting from layoffs.
o The award (up to $50,000 per applicant), will be a quick deployable benefit and customizable to the specific needs of your business to minimize the need for layoffs.
o Labor is accepting grant applications from small businesses for awards from now through 30 days after the State of Emergency ends (subject to funding availability).
o The fund can provide: ▪ Strategies to reduce or eliminate the need for layoffs in the small business community. ▪ Training or professional development opportunities for employees to avoid layoffs; ▪ Paying for liability insurance for restaurants that convert to delivery while under emergency circumstances; ▪ Cover the costs of cleaning/sanitization services so that small businesses are able to keep employees at work on site, but only if a frequent deep cleaning to prevent exposure occurred; ▪ Supporting businesses that take advantage of the Unemployment Insurance Work Sharing Program by supplementing the employee’s income and benefits; ▪ Purchasing software or programs that an employee would need to use from home; and ▪ Purchasing remote access (ex. computers, printers, etc.) equipment to allow employees to work remotely from home versus being laid off.
o For more information, visit: http://www.labor.maryland.gov/employment/covidlafund.shtml
7. Would they benefit in just applying for unemployment benefits right away on their own?
An employee would have to file for unemployment benefits individually – no other person or entity are permitted to do it for them. In Maryland, unemployment benefits are made immediately upon employee filing an application. Employees laid off will be paid that same day.
8. Operating capital: Will there be any funding to assist us in paying leases or purchasing raw materials (paper, consumables, etc.)?
Maryland Small Business COVID-19 Emergency Relief Loan Fund: This COVID-19 Emergency Relief $75M Loan Fund offers working capital to assist Maryland for-profit small businesses disrupted operations due to COVID-19. Loan assistance is intended to provide interim relief complementing actions with its bank, business interruption insurance, and financial partners.
GENERAL TERMS AND CONDITIONS o Loans up to $50,000 (not to exceed three months of cash operating expenses) open to Maryland businesses impacted by the COVID-19 with fewer than 50 employees. o 0% for the first 12 months, and 2% for the remaining 36 months. o Deferral of any payments for the first 12 months, and straight amortization beginning in the 13th month through the 36th month. o Business must be established prior to March 9, 2020 and in good standing. o Applicants must have employees on their payroll for whom they have had payroll taxes withheld (i.e. W-2 employees). o Two years of historical financial statements and most recent interim statement to benchmark revenue against (if available). o Six month pro forma of estimated lost revenue or other documented loss evidence. o Minimum personal credit score of 575. o No collateral requirements. o Eligible uses include: working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations.
The business must demonstrate financial stress or disrupted operations, which may include but are not limited to: o Notices from tenants closing operations and not paying rent caused by loss of income. o Notice of inability to pay rent or make loan payments due to reduced sales, suspended operations. o Increased cost related to COVID-19 prevention measures. o Notice of disrupted supply network leading to a shortage of critical inventory or materials. o Other circumstances subject to review on a case by case basis.
Maryland Small Business COVID-19 Emergency Relief Grant Fund: This COVID-19 Emergency Relief $50M Grant Fund offers working capital to assist Maryland small businesses and nonprofits with disrupted operations due to COVID-19. Grant assistance is
intended to provide interim relief complementing actions with its bank, business interruption insurance, and financial partners.
GENERAL TERMS AND CONDITIONS o Grants up to $10,000 not to exceed 3 months of cash operating expenses for Maryland businesses and nonprofits impacted by the COVID-19 with 50 or fewer employees. o Must be established prior to March 9, 2020. o Business must be in good standing. o Applicants must have employees on their payroll for whom they have had payroll taxes withheld (i.e. W-2 employees). o Annual Revenues of the business or nonprofit not to exceed $5 million as evidenced by Financial Statement or other financial documentation. o Business or nonprofit is expected to seek longer term funding through its bank, SBA, or other source. o Eligible uses include: working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations.
The business or nonprofit must demonstrate financial stress or disrupted operations, which may include but are not limited to:
o Notices from tenants closing operations and not paying rent caused by loss of income. o Notice of inability to make loan payments due to reduced sales, suspended operations. o Increased cost related to COVID-19 prevention measures. o Notice of disrupted supply network leading to shortage of critical inventory or materials. o Other circumstances subject to review on a case by case basis.
9. Trying to get an idea on terms and length of any potential funds (loans) available. – See above.
Covid-19: The Maryland Response
COVID-19 – Maryland Response – PGAMA FAQ & Resources March 24th, 2020 _____________________________________________________________________