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COVID-19: Small-Business Survival Guide

(7-9 minute read)


Coronavirus (COVID-19) is significantly affecting small businesses, many of which have temporarily closed or had their operations substantially disrupted.

As a small employer, this is unnerving news. However, Federal and State governments have quickly mobilized to provide resources to small businesses impacted by COVID-19. Newly passed resources and regulations designed to help small businesses include paid sick leave amendments, financial assistance, tax deadline extensions, and industry-specific guidance for how businesses determine if they are considered essential services. This guide addresses each of the areas listed above and provides actionable strategies for providing telecommuting and work from home policies.

Paid sick leave: The “Families First” Act

On March 18, 2020, President Donald Trump signed the Families First Coronavirus Response Act (FFCRA), which provides over $100 billion in aid for free coronavirus testing, paid sick leave, unemployment, nutrition programs, Medicaid, and protections for healthcare workers.

For small businesses, the paid leave sections are most significant. If you have fewer than 500 employees, you must comply with these 2 paid leave provisions:

  1. The Emergency Family and Medical Leave Expansion Act (EFMLEA)
  2. The Emergency Paid Sick Leave Act (EPSLA)

The EFMLEA temporarily amends and expands on the Family and Medical Leave Act (FMLA). Under the EFMLEA, workers employed for at least 30 days can take up to 12 weeks of job-protected FMLA leave for a “qualifying need” caused by a public health emergency, meaning COVID-19. “Qualifying need” includes:

  • The employee cannot work or telework because they need to care for their child (under the age of 18) because the child’s school or place of care is closed.
  • The employee must care for their child because their child care provider isn’t available.

The first 10 days of leave may be unpaid; however, the employee can choose to substitute their accrued paid time off for those 10 days. After the initial 10 days, you must provide the employee with paid leave for each additional day of leave, up to 10 weeks. The paid leave must be compensated at no less than two-thirds of the employee’s regular rate of pay, up to $200 per day ($10,000 for 10 weeks).

The EPSLA requires you to provide up to 2 weeks of paid sick leave to full-time employees who cannot work because of reasons related to the coronavirus, such as:

  • The employee is diagnosed with COVID-19 or quarantined because of it.
  • The employee is caring for a quarantined person.


  • Part-time employees are entitled to paid sick leave, but the amount is based on how many hours they work over a 2-week period.
  • An employee’s paid sick leave compensation cannot exceed $511 per day ($5,110 for 10 days) or $200 ($2,000 for 10 days), depending on the reason for the sick leave.
  • Employees cannot be forced to use their accrued paid time off before taking EPSLA-mandated sick leave.
  • All employees are eligible for paid sick leave, regardless of how long they’ve worked for your business.

The FFRCA takes effect April 2, 2020 and is set to expire Dec. 31, 2020.

Securing financial assistance

As the coronavirus forces business closures across the the US, many small businesses are in need of financial help.

The Small Business Association (SBA) is offering up to $2 million in loan assistance to each small business impacted by the coronavirus. Per the SBA, the loan can “be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.”

To qualify for the loan, you cannot be eligible for credit elsewhere.

For small businesses, the interest rate is 3.75%; for nonprofits, it’s 2.75%.

To apply for the loan, your geographic location must be approved (by the SBA) for an Economic Injury Disaster Loan (EIDL) declaration. Note that Michigan’s governor, Gretchen Whitmer, recently announced that the SBA has approved her request for EIDL declaration, which means small businesses in Michigan can apply for a COVID-19 disaster loan.

Repayment plans can be up to 30 years, depending on your ability to repay. The waiting time to receive a decision on your application is 2-3 weeks. If your application is approved, you will receive an initial disbursement within 5 days of submitting your signed Loan Closing Documents.

Note that the SBA can also connect you to other types of loan programs, offered by SBA-approved lenders. Your state, as well, might have financial assistance programs. For example, the Michigan Small Business Relief Program is offering up to $20 million to support small businesses impacted by COVID-19. Moreover, Governor Whitmer has issued an order eliminating certain unemployment costs for Michigan employers whose “employees become unemployed because of an executive order requiring them to close or limit operations.”

Loan Resources

Application for SBA COVID-19 Disaster Relief Loan

Areas Eligible for SBA COVID-19 Disaster Relief Loan

SBA-Approved Lenders

Financial Support for Michigan Businesses


Going remote

Per the Governor’s recent “shelter-in-place” order, all non-essential service businesses are implementing work-from-home solutions. Government agencies, as well, including the Centers for Disease Control and Prevention (CDC), are urging all employers to implement work-from-home programs in order to minimize spread of the disease.

Once the decision has been made to have some (or all) of your people work from home, you’ll need to create a formal telecommuting policy.

Policy Creation

Typically, a telecommuting policy includes the following elements:

  • Objective — what you hope to achieve by offering telecommuting arrangements.
  • Eligibility — employee suitability, job responsibilities, workspace and equipment criteria, and approval process.
  • Procedures — performance monitoring and evaluations, plus duration and discontinuation of the program.
  • Security — expectations for protecting company information.
  • Safety — expectations regarding employee safety.
  • Work hours — timekeeping, overtime, and payroll instructions.

Policy Communication

Make sure you properly communicate your telecommuting program to your employees. For instance, to notify employees about temporary telecommuting arrangements, you can send them a memo explaining:

  • That the program is ideal for employees who do not usually telecommute but whose job duties can be carried out from home.
  • The positions that require physical presence at work versus those that can be temporarily worked from home.

You might also say that although the arrangements are currently temporary, you will require all employees to work from home if the health crisis calls for it.

Policy Enforcement

How do you properly manage people who are used to working from the office and are suddenly propelled into telecommuting? And, how can you get them to abide by company rules?

Enforcing the policy will come down to clearly communicating policies, procedures, expectations, and responsibilities to employees at all levels of your business, and being consistent with established protocols. You’ll also need to ensure everyone has the tools they need to succeed.

Best Practices

  • Collaborate with the entire team when developing your telecommuting policy.
  • Create a virtual presence, such as instant messaging, “water cooler” chat, shared calendars, and video conferencing.
  • Train your leaders and employees on the essentials of telecommuting. The training for leaders will differ from the training for rank-and-file employees.
  • Work with your team members and IT staff to supply a positive customer experience.
  • Safeguard the privacy of employees with COVID-19.
  • Remember that employees have the right to engage in protected “concerted activity,” under the National Labor Relations Act (NLRA).
  • Consider legal implications regarding health and safety, wages, work hours, employee benefits, labor law posters, disability accommodation, workers’ compensation, discrimination, and classification of employees and independent contractors.

If you will be working with independent contractors as well as employees, you should know the difference between the two groups, especially now that your employees will be working from home. For details on worker classifications, read the article “W-2 vs. 1099: Making the Transition.”

Telecommuting Tools for Small Employers

Document Management and Storage: Google Drive, DropBox, and Box

Video Conferencing: Skype for Business, GoToMeeting, and

Team Chat: Google Hangouts, Slack, and Microsoft Teams

Productivity/Project Management: Trello, Zoho, and Basecamp

Most of these apps — along with many others on the market — come with free trials, so you can do test-runs beforehand.

Keeping your employee family safe

The effects of COVID-19 have been devastating so far, making safety imperative for reducing the risk of infection. While you cannot control what your employees do while away from work, you can take certain steps to increase workplace safety.

Besides implementing telecommuting arrangements where possible, consult:

There’s also a flurry of activity by state and local governments, with many introducing legislations designed to combat COVID-19. States such as Alabama, Louisiana, and Michigan have been very busy in that regard.) You can track state and local action via the National Conference of States Legislatures website.

Your state/local Chamber of Commerce and your regional OSHA office (if your state has one) can be a major help as well. For instance, the Michigan Occupational Safety and Health Administration (MIOSHA) provides health/safety news and resources for employers in Michigan.

State/Local Links

Directory of State/Local Chambers of Commerce

Regional OSHA Offices


Managing wages and PTO for quarantined employees

The coronavirus is hitting certain industries harder than others. Among the hardest-hit are restaurants, bars, night clubs, theaters, performing arts venues, airlines, and hotels. According to an article published by MarketWatch, “small businesses in areas where large public gatherings have been cancelled or postponed,” are going to experience layoffs. Further, as the virus circulates, many employees are quarantining.

If you have quarantined employees, you will need to adhere to the “Families First” paid leave provisions discussed earlier, along with other applicable leave laws and policies. You likely must also comply with the Fair Labor Standards Act (FLSA) and state wage-and-hour laws.

FLSA rules for paying nonexempt and exempt employees vary. For instance, nonexempt employees are paid according to hours worked, so you don’t need to pay them if they do not work while quarantined — though you can if you want to.

Under the FLSA, exempt, salaried employees must receive their full weekly salary for any workweek in which they do any work, whether or not they’re quarantined. If they don’t perform any work during the weeks in which they’re quarantined, you do not have to pay them for those weeks.

For further details, read the DOL’s “Wages and the Fair Labor Standards Act.”

Small employers in Michigan can visit the Michigan Department of Labor and Economic Opportunity website for state wage-and-hour rules.

General FLSA Guidelines for COVID-19

The U.S. Department of Labor (DOL) has updated its website to address FLSA requirements, as they relate to COVID-19 and other public health emergencies. The FAQs cover:

  • Staff shortages and the use of volunteers
  • Final paychecks for laid-off employees
  • Compensation for hourly employees who work a partial week due to business closure
  • Paid and unpaid leave for exempt employees
  • Workers on government-imposed quarantine
  • Daily or weekly work hours
  • Telework considerations
  • Using staffing agencies for temporary help
  • Costs incurred by employees while working from home
  • Working outside the job description

For responses to these topics and more, review the DOL’s “COVID-19 of Other Public Health Emergencies and the Fair Labor Standards Act Questions and Answers.”

Consult your state labor department for COVID-19 updates at the state level.

Lastly, reach out to the team at Axios HR for expert assistance, including risk assessments to help you understand where your small business stands amidst this global pandemic.



April 1, 2020


Axios HR


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