UPDATE ON PHASE 2-THE FAMILY LEAVE EXPANSION PASSED LAST WEDNESDAY:  We have read numerous articles, conferenced with colleagues all over the country, consulted attorneys and other specialists and one thing is certain…the provisions of the bill are unclear.   All of that to say, we are providing this information because we know you’re hungry for it, but please understand it is only our best understanding at the moment.  That understanding may change drastically when the DOL issues formal regulations interpreting the emergency leave provisions, which are said to be “forthcoming.”  We are giving you our best information; but no one yet really knows exactly what the provisions mean—to dentists specifically—and that includes us. 

WHEN IT GOES INTO EFFECT. 
The thought has been that the law goes into effect on 4/2/20.  Actually it goes into effect no-later-than 4/2/20 which means you can put it into place immediately if you choose. 

WHICH BUSINESSES MUST COMPLY. 
Employers with fewer than 500 employees.  This means you. 

WHAT LEAVE IT COVERS. 
Well it specifically covers your employee who has COVID-19, who might have COVID-19 or might have been exposed to it, or who is caring for someone who has COVID-19.  So far we haven’t heard from any of you with this situation.  So let’s move to the most likely reason—an employee who must stay home to care for a minor child whose facility (day care, school, etc) has closed due to COVID-19.  (There are conditions for the staff member to be considered an “eligible employee” but the preceding was a simplistic explanation and your average employee is going to be eligible.) 

NOTE:  This means it does not cover the employee who is home sick with any other kind of illness.  And it does not cover the employee you sent home due to lack of work.

WHAT YOU MUST PROVIDE. 
* The first 10 days may be unpaid, but an employee may elect to use paid vacation, personal leave or sick leave for the unpaid 10 day period.

* The next 10 weeks shall be paid at 2/3 the employee’s regular rate, for their usual hours scheduled, up to a maximum of $200/day or $10,000 total per employee.  (This rule/amount is specifically for the employee at home caring for a school age child.  The calculation is different for a staff member who is sick with COVID-19, etc.)

* An example.  Your staff member earns $39K per year and generally works 2000 hours.  That makes their daily rate $156.  2/3 of that is $104.  You must then pay them $104/day or $520/week for up to 10 weeks, for a possible total of $5,200 for this employee assuming they are out an entire 12 week period for the same COVID-19 lack-of-childcare reason.

* An example.  Your staff member makes $15/hour and generally works 40 hours per week.  That makes their daily rate $120.  2/3 of that is $80.  You must pay them $80/day or $400/week for up to 10 weeks, for a possible total of $4,000 for this employee assuming they are out an entire 12 week period for the same COVID-19 lack-of-childcare reason

HOW YOU WILL BE REIMBURSED. 
Yes, you get this money back.  Unfortunately you have to pay it out in advance, which is where your lines of credit become essential, but you do get reimbursed.  The reimbursement process has not been clarified but here is the latest.

* You will receive a tax credit reimbursement against your payroll taxes.  To the extent the credit exceeds the amount of taxes paid, you will receive a refund.

* You can begin skipping your current payroll tax deposits as an immediate way to use the coming credit.

* There will be a way to seek an expedited advance from the IRS by submitting a claim form. 

POSSIBLE EXCLUSIONS FROM THE PROVISIONS. 
* There is a potential exception for “healthcare providers” meaning they would not be covered under this act and the leave would not have to be provided.  Though this point is still up for debate, we do not believe your nonprofessional staff would be considered a healthcare provider for this purpose, and so they would be covered—meaning you would be required to provide the leave.  If you employ associate dentists, they might qualify for the exclusion but that has not been determined.

* There is an exclusion for businesses with fewer than 50 employees whose viability would be effected as a result of providing the required sick leave.  There has been no process yet given regarding how to obtain the waiver or what the exact qualifications will be.

TAKE AWAYS.
* If you have the cash reserves or LOCs in place to temporarily absorb the leave requirements, you are likely subject to its provisions.

* This is a way, if a viable option for you, to care for any staff that qualify.  And remember—you will get it back.  Your employees will appreciate your loyalty and you will be able to retain your already-trained and, therefore, valuable staff who will be eager to return and put in the extra hours that will be required to work in all these cancelled patients.  Please remember that although this is a very painful time, it is expected to be of a fixed duration.  Some decisions need to be made with a longer term vision in mind.

* This does not mean you have to pay every employee you send home because of lack of work.  Those who do not have a child at home do not qualify and so their recourse would be unemployment.  But if you do have staff that qualify, and your practice is healthy enough to comply with the law, the pay your employee would receive under this provision would likely be more than that under unemployment; plus you get it back.  So it’s a win-win.

* There is more legislation in the works that will likely be passed sometime this week that may offer some serious payroll relief.  If you can support your employees until then, this may all be a moot point, since you may be in for some much needed substantive relief.

Don’t forget…this is all murky and our advice could change based on new understanding, new information or new laws.  But we want to keep you as informed as we can and provide you the support you need to navigate these tumultuous times.