News & Insights

Daily DigestMarch 31, 2020by Stanton LawDaily Digest 3/31/2020

Navigating the FLSA Tip Credit: Who and What Qualifies, Valid Tip Pools, and Other Things You Need to Know

Today’s daily digest starts with an announcement: Todd Stanton joins bankers and other subject matter experts at a virtual roundtable tomorrow, April 1 at 2 p.m. to share their insights on the impact that the Payroll Protection Program provision of the Coronavirus Aid, Relief, and Economic Security Act will have on commerce. To participate in this real-time discussion on the ways the COVID-19 outbreak may affect your business, register here!

• Stanton Law’s FFCRA Compliance Package is now ready and includes Emergency Paid Sick Leave (EPSL) and Emergency Family and Medical Leave Act (EFMLA) policies (for companies with 1-49 and more than 50 employees), leave request forms, and talking points to help promulgate and explain the new FFCRA policies and everyone’s new rights and obligations. Please email [email protected] for details on how to secure your package and implementation assistance.

o The Families First Coronavirus Response Act (FFCRA) goes into effect tomorrow, April 1. Whether your employees are working or furloughed, at the office or dialing in, we recommend you make sure you help them understand their rights and obligations. And that you understand your rights and obligations, too.

• As we mentioned yesterday, the U.S. Department of Labor (DOL) released an updated FFCRA Q&A that answered a lot of the questions business owners, employees, and lawyers were asking. This Q&A is pretty extensive, and we only hit some of the highlights yesterday. We will continue doing that today.

o Questions 4, 58, and 59 of the Q&A address one of the most frequent questions we’re getting at Stanton Law: “How do small businesses with fewer than 50 employees take advantage of the small business exemption in FFCRA?”

o The exemption ostensibly allows any business with fewer than 50 employees to avoid offering paid leave if doing so would jeopardize the viability of the business as a going concern.

o Important note: the exemption applies only to situations in which an employee wishes to take EPSL or EFML due to school or place-of-care closures for COVID-19-related reasons and providing paid leave would jeopardize the business as a going concern. The exemption, then, is really narrow and doesn’t cover the other reasons for sick leave.

o Nevertheless, a business may claim this exemption under EPSLA and EFMLA if an officer of the business has determined:

o The paid sick leave would result in the business’s expenses and financial obligations exceeding available business revenue and cause the business to cease operating at a minimal capacity,

o The absence of the employee or employees requesting paid sick leave would entail substantial risk to the financial health and operational capabilities of the small business due to their specialized skills, knowledge of the business, or responsibilities, or

o There are not enough workers who are able, willing, and qualified, and who will be available when needed to perform the labor or services of the employee or employees requesting paid sick leave, and these labor or services are needed for the small business to operate at a minimal capacity.

o The DOL provides that in order for businesses to elect this exemption, they need to document why their business meets the criteria for this exemption, but need not send any materials to the DOL.

o Frankly, we anticipate that this exception will only apply to such a narrow set of circumstances as to render it practically useless. It shouldn’t be relied upon lightly, and businesses invoking it face the proposition of having to defend their decision at some point – that may cost more in time and disruption than would be saved in avoiding paid leave.

• Lastly, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed and signed into law last Friday, March 27. One provision of the CARES Act, known as the Paycheck Protection Program (PPP), supplies $350 billion in small business loans to help small businesses pay their workers. The U.S. Chamber of Commerce’s Small Business Guide and Checklist is one of the clearest explanations of the program. If you have any questions regarding the PPP, please contact (and be patient with) your banker.

o Seriously, this week, bankers and CPAs are in a spot very similar to where employment lawyers were the week before last as we tried to answer FFCRA questions. Their phones are ringing off the hook, and their email is blowing up, and they can’t make the time to read up and think on the law they’re supposed to explain and implement. Take advantage of the free resources and ask them to give you a call when they can take a breath and help.

In response to this crisis, Stanton Law now offers to potential new clients interim, short-term engagements to answer your legal questions. We’re happy to arrange for a ½-hour phone/video consultation with an attorney. We may be able to come up with a plan during that conversation and exchange, and it may be all the direction you need, at least for the short term. But when you need us to take on additional work, we’ll put in place a formal engagement letter and assign the work to the particular attorney who will be handling the specifics.

To set up our conversation, please call 404.881.1288, ext. 0 to speak with our administrator. She’s really cool, but please recognize that she obviously can’t provide legal advice.

If you’re more of a do-it-yourself fan:

• Review the Firm Policies & Procedures. By setting up an appointment, you’re agreeing to what we’ve set forth.

• Schedule a convenient time to talk by clicking this link: There are 1/2-hour appointments available around the clock – please schedule what works for you.

• We’ll send you a calendar invite to lock-in our appointment.

• Send over any materials at which you’d like us to look and we’ll be ready to discuss your several courses of action.

In addition to receiving one-on-one advice specific to your business by scheduling a consultation, you can take advantage of helpful general information discussions by accessing one of our recent webinars: Helping Employers and Employees Understand New Rights and Obligations Related to Coronavirus and What Employers Need to Consider with Coronavirus.

At Stanton Law, we are glad to be one of your resources for daily updates on COVID-19’s effect on your business. If you have any questions regarding this or any other legal matter, please do not hesitate to contact our experienced Atlanta employment attorneys at 404-531-2341 or online.