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Legislation

Legislation impacting private clubs during the COVID-19 crisis

March 27 Update

The National Club Association (NCA) is working to ensure clubs receive relief funding during the COVID-19 crisis.

Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows private clubs to take a credit against their payroll tax for 50% of employee wages if they were partially or fully shut down due to COVID-19.

As referenced in the March 25 COVID-19 Update for Clubs, while 501(c)7 organizations were not included in the low-interest SBA loans in the CARES Act, low-interest SBA loans may be available for private clubs that are in states that have declared a disaster by the governor of that state.

We are continuing to advocate to Congress to provide critical relief for our industry and will update you on future developments. For additional guidance on this urgent issue, please contact NCA Vice President of Government Relations Joe Trauger at trauger@nationalclub.org.

RECENT LEGISLATION

FAMILY FIRST CORONAVIRUS RESPONSE ACT

The Family First Coronavirus Response Act rapidly moved through Congress to provide relief to businesses impacted by COVID-19. Here is a User’s Guide to Implementation.

See Guidance from the IRS on implementing the Families First Act.

Provisions Most Likely to Impact Clubs

Coronavirus testing is made cost-free for the uninsured and insurance companies are required to provide the test and related services such as office visits with no co-payment or prior-authorization.

Coronavirus Emergency Leave is provided in the bill for employees of businesses with fewer than 500 workers.

  • Employers would have to provide as many as 12 weeks of job-protected Family and Medical Leave for employees who have to:
    • Comply with a requirement or recommendation to quarantine because of exposure to or symptoms of the virus.
    • Provide care to a family member who’s complying with such a requirement or recommendation.
    • Provide care for a child younger than 18 who school or day care has closed due to the virus.
  • The first 14 days of the leave could be unpaid, though a worker could choose to use accrued vacation days, personal leave or other paid time off.
  • Following the 14 day period, workers would receive a benefit from their employers that would be at least two-thirds of their normal pay rate.
  • FMLA is also amended so employees could use unpaid leave if they are diagnosed with the virus, caring for a family member or child due to closures.
  • Department of Labor is authorized to issue regulations that would exempt small businesses with fewer than 50 employees and exclude certain health care providers and emergency responders from paid leave benefits.

 

Emergency Sick Leave

Emergency sick leave for employees of businesses with fewer than 500 employees would be a total of 80 hours for full-time employees and the equivalent of the normal number of hours a part-time employee would work over a two-week period.

Sick leave would be made available for those who:

  • Self-quarantine.
  • Obtain a medical diagnosis or care for coronavirus.
  • Provide care for a family member who has been diagnosed or is in quarantine or for a child who school or day care has closed due to coronavirus.

Employers with similar existing paid leave policies would be required to provide workers with the emergency paid sick time and cannot require a worker to use any other available paid leave before using the sick time:

  • Employers would be prohibited from requiring a worker to find a replacement to cover their hours during time off.
  • Discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer.

This is the provision that had a significant error that requires the House to pass the legislation again. It has to do with the pay caps that are set at $511 per day to care for themselves or $200 a day to care for a family member or child.

An employer could be subject to civil penalties for a violation of paid sick leave requirements.

 

Employer Tax Credits

Employment Tax Credit is Now Available for Businesses subject to mandated paid leave under the Family First Coronavirus Response Act. The legislation provides payroll tax credits to employers to cover wages paid to employees while they are taking time off under the bill’s sick leave and family leave programs. The credit is refundable if it exceeds the amount the employer owed in payroll taxes and would be in effect for wages through the end of 2020.

Treasury Department would have to issue regulations and/or guidance to get these provisions into effect so the mechanics have yet to be fleshed out. The bill goes into effect 15 days after passage.

The bill also contains additional unemployment benefits.

Resources

Keeping American Workers Paid and Employed Act: A Section-by-Section Review

Employment Tax Credit is Now Available for Businesses Subject to Mandated Paid Leave Under the Family First Coronavirus Response Act, AALRR Alert

Tax Relief – Business Law Journal

Employer’s Quick Guide to the Families First Coronavirus Response Act, Nelson Mullins

Restaurants and Bars: Current and Temporary Restrictions 

Coronavirus and School Closures

CARES Act

The U.S. Department of Labor will be hosting a national online dialogue to provide employers and employees with an innovative opportunity to offer their perspective as the Department develops compliance assistance materials and outreach strategies related to the implementation of the Families First Coronavirus Response Act (FFCRA). The ideas and comments gathered from this dialogue will inform compliance assistance guidance, resources, and tools, as well as outreach approaches, that assist employers and employees in understanding their responsibilities and rights under the FFCRA.  Anybody who is interested can participate online from March 23 through March 29, 2020.

State Level

National Governor’s Association regarding COVID-19 includes State Action Tracking Chart and State/Territorial Resource Page.

National Conference of State Legislatures State Action on Coronavirus

Restaurant Industry: California, Illinois and New York.

State bills related to the COVID-19

Frequently Asked Questions

Questions and answers are for informational purposes and not for the purposes of providing legal advice. Viewers should not rely upon the information shared as legal advice.

This is the second coronavirus response bill so far and there will be additional bills. The situation is very volatile and fluid right now, but NCA is trying to stay on top of everything. NCA sent a letter on March 13 urging the inclusion of associations and nonprofit entities in any legislation ahead.

Coronavirus testing is made cost-free for the uninsured and insurance companies are required to provide the test and related services such as office visits with no co-payment or prior authorization.

Coronavirus Emergency Leave is provided in the bill for employees of businesses with fewer than 500 workers.

Employers would have to provide as many as 12 weeks of job-protected Family and Medical Leave for employees who have to:

  • Comply with a requirement or recommendation to quarantine because of exposure to or symptoms of the virus
  • Provide care to a family member who’s complying with such a requirement or recommendation
  • Provide care for a child younger than 18 who school or day care has closed due to the virus

The first 14 days of the leave could be unpaid, though a worker could choose to use accrued vacation days, personal leave or other paid time off.

Following the 14 day period, workers would receive a benefit from their employers that would be at least two-thirds of their normal pay rate

FMLA is also amended so employees could use unpaid leave if they are diagnosed with the virus, caring for a family member or child due to closures.

  • Department of Labor is authorized to issue regulations that would exempt small businesses with fewer than 50 employees and exclude certain health care providers and emergency responders from paid leave benefits

Emergency sick leave for employees of businesses with fewer than 500 employees would be a total of 80 hours for full-time employees and the equivalent of the normal number of hours a part-time employee would work over a two-week period.

– Sick leave would be made available for those who:

  • Self-quarantine
  • Obtain a medical diagnosis or care for coronavirus
  • Provide care for a family member who has been diagnosed or is in quarantine or for a child who school or day care has closed due to coronavirus.

Employers with similar existing paid leave policies would be required to provide workers with the emergency paid sick time and cannot require a worker to use any other available paid leave before using the sick time

  • Employers would be prohibited from requiring a worker to find a replacement to cover their hours during time off and;
  • Discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer

This is the provision that had a significant error that requires the House to pass the legislation again. It has to do with the pay caps that are set at $511 per day to care for themselves or $200 a day to care for a family member or child.

An employer could be subject to civil penalties for a violation of paid sick leave requirements.

The legislation provides payroll tax credits to employers to cover wages paid to employees while they are taking time off under the bill’s sick leave and family leave programs. The credit is refundable if it exceeds the amount the employer owed in payroll taxes and would be in effect for wages through the end of 2020.

Treasury Department would have to issue regulations and/or guidance to get these provisions into effect so the mechanics have yet to be fleshed out. The bill goes into effect 15 days after passage.

The bill also contains additional unemployment benefits.

Clubs can apply for disaster assistance for economic injury on the SBA Website. Economic Injury Disaster Loans offer up to $2 million in assistance. The loans can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses and 2.75% for nonprofits. Terms are determined on a case-by-case basis, but can last up to a maximum of 30 years.