COVID-19 Pandemic: Tax Relief Affecting Nonprofits

Nonprofits, like individuals and for-profit businesses, are facing significant hardships due to the COVID-19 pandemic. Recent legislation and administrative pronouncements include a number of targeted tax provisions and enhancements to government-sponsored loan programs designed to allow nonprofits and other businesses affected by COVID-19 to maintain operations and keep their workforce in place through the crisis. Because nonprofits play an important role in society and in particular for relief efforts during this pandemic, nonprofits should evaluate each of these opportunities, loans, grants and available tax credits, to determine how best to reduce the stress COVID-19 may impose on their finances.

Below are additional details relating to the provisions of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), along with other administrative guidance issued in the past few weeks, relevant to nonprofits.

Paycheck Protection Program

The CARES Act established a new Paycheck Protection Loan Program making available up to $349 billion of loans by banks and other lending institutions to nonprofits, small businesses and others. These loans are intended to cover the cost of maintaining payroll, insurance and other expenses arising from maintaining pre-COVID-19 employment and compensation levels for eight weeks after funding of each such loan, and will be 100 percent guaranteed by the Small Business Administration (SBA). The loans will be subject to cancellation/forgiveness of all or a portion of the principal amount thereof if the applicable borrower satisfies the full-time equivalent employment and compensation requirements described below. Paycheck Protection Loans will be processed by banks and other financial institutions, and not by direct application to the SBA.

Nonprofits should consider all of the options that are described in this alert before participating in the Paycheck Protection Program, because this program affects the nonprofit’s ability to participate in the other programs described below, including the employee retention tax credit and employer tax deferral.

Qualified Entities. Which Nonprofit Organizations Are Eligible? Organizations that (i) were in existence on Feb. 15, 2020; (ii) had employees for whom the nonprofit paid salaries, or paid independent contractors; and (iii) are described in Section 501(c)(3) or 501(c)(19) of the Internal Revenue Code that are exempt from taxation under Code Section 501(a). The SBA published FAQs related to the ability of faith-based organizations to participate in these loans. Maximum Number of Employees. During the covered period, each eligible nonprofit must have employed 500 or fewer employees (including those employed on a full-time, part-time or other basis), subject to analysis under the Affiliation Rules (which includes affiliation factors based on shared management or a management agreement with respect to organizations’ boards of directors or officers). This includes employees obtained from a temporary employee agency, professional employee organization or leasing concern.Certification. Each applicant for a Paycheck Protection Loan must certify in good faith that (1) the loan request is necessitated by current economic conditions to support ongoing operation of the nonprofit; (2) funds will be used to retain workers and maintain payroll or make mortgage interest, lease and/or utility payments; and (3) it does not have an application pending for, and has not and will not receive between Feb. 15, 2020, and Dec. 31, 2020, a duplicative Paycheck Protection Loan.
Which Nonprofit Organizations Are Eligible? Organizations that (i) were in existence on Feb. 15, 2020; (ii) had employees for whom the nonprofit paid salaries, or paid independent contractors; and (iii) are described in Section 501(c)(3) or 501(c)(19) of the Internal Revenue Code that are exempt from taxation under Code Section 501(a). The SBA published FAQs related to the ability of faith-based organizations to participate in these loans.
Maximum Number of Employees. During the covered period, each eligible nonprofit must have employed 500 or fewer employees (including those employed on a full-time, part-time or other basis), subject to analysis under the Affiliation Rules (which includes affiliation factors based on shared management or a management agreement with respect to organizations’ boards of directors or officers). This includes employees obtained from a temporary employee agency, professional employee organization or leasing concern.
Certification. Each applicant for a Paycheck Protection Loan must certify in good faith that (1) the loan request is necessitated by current economic conditions to support ongoing operation of the nonprofit; (2) funds will be used to retain workers and maintain payroll or make mortgage interest, lease and/or utility payments; and (3) it does not have an application pending for, and has not and will not receive between Feb. 15, 2020, and Dec. 31, 2020, a duplicative Paycheck Protection Loan.

Maximum Loan Amount. The maximum principal amount of any Paycheck Protection Loan for each borrower will equal the lesser of: $10 million; orThe sum of the average monthly payments for payroll costs of such borrower for the one-year period before the loan date (subject to alternative calculations for seasonal businesses or otherwise eligible recipients who were not in business during the period Feb. 15 – June 30, 2019, and adjustments for any employee compensation in excess of an annual salary of $100,000 or any amounts paid to an independent contractor in excess of $100,000 per year) times 2.5 (although amounts paid to independent contractors do not count for purposes of the calculation of the available loan amount); plusthe outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid). The SBA issued interim guidance with additional details to determine payroll costs.
$10 million; or
The sum of the average monthly payments for payroll costs of such borrower for the one-year period before the loan date (subject to alternative calculations for seasonal businesses or otherwise eligible recipients who were not in business during the period Feb. 15 – June 30, 2019, and adjustments for any employee compensation in excess of an annual salary of $100,000 or any amounts paid to an independent contractor in excess of $100,000 per year) times 2.5 (although amounts paid to independent contractors do not count for purposes of the calculation of the available loan amount); plusthe outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid). The SBA issued interim guidance with additional details to determine payroll costs.
the average monthly payments for payroll costs of such borrower for the one-year period before the loan date (subject to alternative calculations for seasonal businesses or otherwise eligible recipients who were not in business during the period Feb. 15 – June 30, 2019, and adjustments for any employee compensation in excess of an annual salary of $100,000 or any amounts paid to an independent contractor in excess of $100,000 per year) times 2.5 (although amounts paid to independent contractors do not count for purposes of the calculation of the available loan amount); plus
the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid). The SBA issued interim guidance with additional details to determine payroll costs.
Interest Rate. The SBA announced that the interest rate on these loans will be 1 percent.
Use of Loan Proceeds. The proceeds may be used for any of the following limited purposes: payroll costs, group healthcare benefit costs during paid sick/medical/family leave, insurance premiums, employee salaries and commissions, mortgage interest payments, rent, utilities and interest on existing debt. However, to be eligible to take advantage of the loan forgiveness option, see the limitations below on use of loan proceeds.
Loan Payment Deferral. The CARES Act requires all lenders to provide complete payment deferment for all principal and interest for a period of at least six months. However, interest will continue to accrue during this deferral.
Refinancing COVID-19 Emergency Loans. An applicant that already obtained a COVID-19 emergency loan before the date a Paycheck Protection Loan is made available to it may refinance the outstanding amount of the COVID-19 emergency loan as part of the Paycheck Protection Loan to obtain the latter’s more favorable terms.
Other COVID-19 Emergency Loans. If an applicant obtained a COVID-19 emergency loan between Jan. 31, 2020, and the date a Paycheck Protection Loan is made available to it, but the COVID-19 emergency loan is for a different purpose than the Paycheck Protection Loan, the CARES Act does not prohibit the borrower obtaining both loans.
Loan Forgiveness. Amount of Forgiveness. All or a portion of the principal amount and any accrued interest equal to the amount of payroll costs, mortgage interest, rent obligations and utility payments — in each case paid during the eight-week period following the making of a Paycheck Protection Loan — is intended to be canceled and forgiven for each borrower that satisfies the forgiveness requirements. The SBA recently announced that at least 75 percent of the forgiven portion must have been used for payroll.Forgiveness Reductions. Subject to the additional guidance to be provided by the SBA, the amount to be forgiven will be reduced as follows. Any reduction in the average number of full-time equivalent employees employed by the borrower during the eight-week measurement period beginning upon origination of the loan, as compared to one of the following (at the borrower’s election): the average number of full-time equivalent employees per month employed between Feb. 15, 2019, and June 30, 2019; orthe average number of full-time equivalent employees per month employed between Jan. 1, 2020, and Feb. 29, 2020.Compensation reductions per employee of more than 25 percent, versus compensation during the most recent full quarter for which the employee was employed before the eight-week measurement period, subject to the following exceptions and adjustments: Employees who received compensation of more than $100,000 per annum during 2019 are excluded from this calculation.Additional forgiveness is provided for additional wages to tipped workers and allowances are available for seasonal employers.The loan forgiveness calculation is made without regard for reductions in full-time equivalent employees or individual employee compensation between Feb. 15, 2020 (as compared to the number of full-time employees and full-time employee compensation as of Feb. 15, 2020), and 30 days after the date of enactment of the CARES Act, so long as such position elimination or compensation reduction is reversed by June 30, 2020.Not Taxable Income for Federal Income Tax Purposes. The portions forgiven in accordance with the CARES Act are excluded from gross income for federal taxation purposes of each applicable borrower.
Amount of Forgiveness. All or a portion of the principal amount and any accrued interest equal to the amount of payroll costs, mortgage interest, rent obligations and utility payments — in each case paid during the eight-week period following the making of a Paycheck Protection Loan — is intended to be canceled and forgiven for each borrower that satisfies the forgiveness requirements. The SBA recently announced that at least 75 percent of the forgiven portion must have been used for payroll.
Forgiveness Reductions. Subject to the additional guidance to be provided by the SBA, the amount to be forgiven will be reduced as follows. Any reduction in the average number of full-time equivalent employees employed by the borrower during the eight-week measurement period beginning upon origination of the loan, as compared to one of the following (at the borrower’s election): the average number of full-time equivalent employees per month employed between Feb. 15, 2019, and June 30, 2019; orthe average number of full-time equivalent employees per month employed between Jan. 1, 2020, and Feb. 29, 2020.Compensation reductions per employee of more than 25 percent, versus compensation during the most recent full quarter for which the employee was employed before the eight-week measurement period, subject to the following exceptions and adjustments: Employees who received compensation of more than $100,000 per annum during 2019 are excluded from this calculation.Additional forgiveness is provided for additional wages to tipped workers and allowances are available for seasonal employers.The loan forgiveness calculation is made without regard for reductions in full-time equivalent employees or individual employee compensation between Feb. 15, 2020 (as compared to the number of full-time employees and full-time employee compensation as of Feb. 15, 2020), and 30 days after the date of enactment of the CARES Act, so long as such position elimination or compensation reduction is reversed by June 30, 2020.
Any reduction in the average number of full-time equivalent employees employed by the borrower during the eight-week measurement period beginning upon origination of the loan, as compared to one of the following (at the borrower’s election): the average number of full-time equivalent employees per month employed between Feb. 15, 2019, and June 30, 2019; orthe average number of full-time equivalent employees per month employed between Jan. 1, 2020, and Feb. 29, 2020.
the average number of full-time equivalent employees per month employed between Feb. 15, 2019, and June 30, 2019; or
the average number of full-time equivalent employees per month employed between Jan. 1, 2020, and Feb. 29, 2020.
Compensation reductions per employee of more than 25 percent, versus compensation during the most recent full quarter for which the employee was employed before the eight-week measurement period, subject to the following exceptions and adjustments: Employees who received compensation of more than $100,000 per annum during 2019 are excluded from this calculation.Additional forgiveness is provided for additional wages to tipped workers and allowances are available for seasonal employers.
Employees who received compensation of more than $100,000 per annum during 2019 are excluded from this calculation.
Additional forgiveness is provided for additional wages to tipped workers and allowances are available for seasonal employers.
The loan forgiveness calculation is made without regard for reductions in full-time equivalent employees or individual employee compensation between Feb. 15, 2020 (as compared to the number of full-time employees and full-time employee compensation as of Feb. 15, 2020), and 30 days after the date of enactment of the CARES Act, so long as such position elimination or compensation reduction is reversed by June 30, 2020.
Not Taxable Income for Federal Income Tax Purposes. The portions forgiven in accordance with the CARES Act are excluded from gross income for federal taxation purposes of each applicable borrower.
Waiver of Collateral Requirements. During the covered period, the collateral requirements of the Small Business Act are waived.
Maturity. The principal amount that is not forgiven in accordance with the CARES Act will continue as a loan guaranteed by the SBA with a maturity to be agreed with the applicable lender, not to exceed 10 years. The SBA recently announced that the unforgiven portion of the loans will have a maturity of two years.
Fee Waivers. The CARES Act waives guarantee fees and annual fees typically payable to the SBA under the Business Interruption Loan Program during the covered period. In addition, prepayment penalties are waived.

Economic Injury Disaster Loans

The SBA’s existing Economic Injury Disaster Loans (EIDL) program provides loans of up to $2 million at an interest rate of 2.75 percent to qualifying entities. Generally, the loans terms are for up to 30 years, and principal and interest may be deferred for up to four years. Importantly for all of 2020, the CARES Act expands the availability of EIDLs to private nonprofit organizations regardless of size.

Qualified Entities: “Private nonprofit organizations” in operation on Jan. 31, 2020. However, this term is not defined for purposes of EIDLs in the CARES Act. Under the Paycheck Protection Program (see above), “nonprofit organization” is limited to Code Section 501(c)(3) tax-exempt organizations and Code Section 501(c)(19) war veterans’ organizations. The current SBA loan application website provides an applicant the option to select that it is “a private non-profit organization that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization.” However, uncertainty remains whether other types of nonprofit organizations qualify, such as Code Section 501(c)(4) social welfare organizations, and Code Section 501(c)(6) trade associations. The SBA published FAQs related to the ability of faith-based organizations to participate in these loans.
Maximum Loan Amount: $2 million.
Interest Rate: 2.75 percent for qualified private nonprofit organizations.
Use of Loan Proceeds: These loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact.
Loan Payment Deferral: Generally, principal and interest may be deferred for up to four years.
Waiver of Collateral and Other Requirements: The CARES Act eliminated both the EIDL’s creditworthiness requirements and the requirement that the eligible nonprofit be in operation for one year before the disaster. The loan may be approved based solely on the applicant’s credit score (no tax return required) or the SBA may approve the loan using alternative methods.
Maturity: Generally, the loan terms are up to 30 years.
Emergency Grant: Most importantly to nonprofit organizations, the CARES Act appropriates an additional $10 billion to the EIDL program so eligible nonprofits with 500 or fewer employees can get emergency advances under this program of $10,000 within three days of applying. Due to high demand, one SBA district office announced that it will provide emergency grants of $1,000 per employee, up to 10 employees. Emergency advance funds can be used for providing sick leave to those employees unable to work due to direct effects of COVID-19, payroll costs, increased material costs, rent or mortgage payments, or repayment obligations that cannot be met because of revenue losses. If the application is denied, the applicant is not required to repay the $10,000 advance.
Coordination With Paycheck Protection Program. In addition, entities organized under Code Section 501(c)(3) or 501(c)(19) may apply for an EIDL grant in addition to a loan under the Paycheck Protection Program, provided the loans are not used for the same purpose.

Nonprofits can apply for these loans on the SBA website.

Self-Funded Nonprofits and Unemployment

For nonprofits that are reimbursable employers under a state unemployment benefit program (i.e., reimburse a state for unemployment benefits paid to a former employee), the CARES Act provides that such nonprofits may be reimbursed for one-half of the amounts paid into a state unemployment trust fund between March 13, 2020, and Dec. 31, 2020.

For example, if a “reimbursable employer” nonprofit organization’s former employee receives $5,000 in unemployment benefits from the state, the organization would normally be required to reimburse the state for the $5,000. However, the CARES Act provides that the federal government may reimburse the nonprofit organization for one-half of this amount, i.e., $2,500.

Industry Stabilization Fund

The CARES Act also calls for the creation of a loan and loan guarantee program through a new Industry Stabilization Fund specifically targeting “mid-size” organizations, defined as having between 500 and 10,000 employees. Mid-sized businesses, including nonprofits, that have between 500 and 10,000 employees are expressly eligible for loans under this provision. Notably, the term “nonprofit organizations” is not defined for purposes of the fund, so it is unclear whether nonprofits other than those exempt from tax under Code Section 501(c)(3) are eligible. These loans from the fund may prove beneficial to large nonprofit employers, including hospitals and universities.

This provision, unlike the emergency SBA loan program discussed above, does not provide loan forgiveness, but does mandate an interest rate of no higher than 2 percent and no accrual of interest or requirement of repayment for the first six months. Nonprofits accepting the mid-size business loans must retain or rehire at least 90 percent of their staff at full compensation through Sept. 30, 2020, and attest that the uncertainty of economic conditions makes the loan request necessary to support ongoing operations.

Employee Retention Tax Credit

The CARES Act also provides certain nonprofit employers with a refundable payroll tax credit in an amount that is 50 percent of qualified wages paid to employees during each calendar-year quarter for the period from March 13, 2020, through Dec. 31, 2020. Eligible nonprofit employers are those whose (1) operations were fully or partially suspended as a result of a COVID-19 related shutdown order, or (2) gross receipts declined by more than 50 percent during a calendar-year quarter in 2020 when compared to the same quarter in 2019. Note that the nonprofit entity’s whole operation must be taken into account when determining the decline in revenues.

The credit is a maximum of $5,000 per employee, computed based on the first $10,000 of qualified wages (including compensation and health benefits) paid to each eligible employee during the specified period. For employers with 100 or more full-time employees, qualified wages include those paid to employees only when they are not providing any services due to COVID-19-related circumstances. Based on IRS guidance, the eligible employee cannot provide services to the nonprofit even on a limited basis. For employers with fewer than 100 full-time employees, all employee wages are qualified wages, regardless of whether the employer is open for business or subject to a shutdown order. Aggregation rules apply for purposes of determining whether entities under common control are treated as a single employer.

Employers may offset the employee retention credits against payroll taxes, including employee income tax withholding. However, if the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Notably, employers receiving Paycheck Protection Loans are not eligible for these credits.

The IRS has published FAQs on its website for this retention credit.

Employer Payroll Tax Deferral

Nonprofit employers may defer payment of the employer share of the employment tax with respect to their employees during the remainder of the 2020 calendar year. The amount of the tax is generally 6.2 percent of employee wages subject to a wage ceiling. The deferral provisions do not apply to the 1.45 percent for the Medicare hospital insurance tax or to any amounts withheld from employees’ wages for employment taxes.

The new law permits any deferred tax to be paid over a two-year period, with 50 percent of the deferred amount due Dec. 31, 2021, and the other 50 percent due Dec. 31, 2022. The provision will treat employers as having made all required deposits during the interim period.

By delaying the deposit of these taxes until 2021 and 2022, nonprofits will have more cash on hand to fund operations and support employees during the pandemic.

The deferral is not permitted for those businesses that received a small business loan under the Paycheck Protection Program and subsequently had the debt forgiven.

Filing and Payment Deadlines for Tax Returns

The filing of federal tax returns that are due on or after April 1, 2020 and before July 15, 2020, and the payment of any tax due during that same time period will be considered timely if it is filed or paid by July 15, 2020. This relief includes the filing of Form 990 series, Form 990-T, Form 990-PF, and Form 4720, and the payment of taxes associated with these forms if applicable, regardless of whether it is the original due date or an extended due date.

Employer-Provided Educational Assistance

The definition of tax-free employer-provided educational assistance is expanded to include up to $5,250 in student loan payments made by an employer between March 27, 2020, and the end of 2020.

This provision enables employers, including nonprofits, to provide a student loan repayment benefit to employees on a tax-free basis. Under the provision, an employer may contribute up to $5,250 annually toward an employee’s student loans, and such payment would be excluded from the employee’s income.

The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (e.g., tuition, fees, books) provided by the employer under current law. The provision applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before Jan. 1, 2021.

Emergency Paid Sick Leave and Paid Family and Medical Leave

The FFCRA, as modified by the CARES Act, included new requirements that affect nonprofits (including religious organizations) with fewer than 500 employees.

Emergency Paid Sick Leave (EPSL)

Employee coverage: All current part-time and full-time employees of a covered employer (no matter how long employed). However, employers of defined healthcare providers and emergency responders may elect to exclude some or all such individuals from coverage.
Leave use: Unable to work (or telework) due to a need for leave for one of the following.

Quarantine – to comply with a federal, state or local quarantine or isolation order related to COVID-19.
Self-Quarantine – to self-quarantine, if the employee has been advised to do so by a local healthcare provider.
Diagnosis – to obtain a medical diagnosis if the employee is experiencing symptoms of COVID-19.
Care for a Quarantined Individual – to care for an individual required to be quarantined or advised to be self-quarantined and with whom an employee has a personal relationship that “creates an expectation that the employee would care for the person if he or she is self-quarantined or was quarantined” (e.g., immediate family, roommate, etc.).
Child Care – to care for an employee’s son or daughter if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, because of COVID-19 precautions.
Substantially Similar Care – to care for an employee’s substantially similar condition, as specified by the Secretary of Health and Human Services.

Full-time employee leave allowance: Up to 80 hours of EPSL for full-time employees.
Part-time employee leave allowance: A total number of EPSL hours equal to the number of hours the part-time employee works, on average, over a two-week period. Or, put another way, the equivalent of two weeks of hours for part-time employees.
Pay rate: The employee’s regular rate of pay (as defined by the Fair Labor Standards Act) or the applicable federal FLSA minimum wage or state or local minimum wage, whichever is greater.
Pay amount/cap: For Items 1, 2 and 3 above – full pay at the rate described above, up to $511 per day and $5,110 in the aggregate (per employee).For Items 4 and 6 above – two-thirds of pay at the rate described above, up to $200 per day and $2,000 in the aggregate (per employee).For Item 5 – two-thirds of pay at the rate described above, up to $200 per day and $2,000 in the aggregate (per employee), which can be combined with Emergency Paid Family and Medical Leave as described below.
For Items 1, 2 and 3 above – full pay at the rate described above, up to $511 per day and $5,110 in the aggregate (per employee).
For Items 4 and 6 above – two-thirds of pay at the rate described above, up to $200 per day and $2,000 in the aggregate (per employee).
For Item 5 – two-thirds of pay at the rate described above, up to $200 per day and $2,000 in the aggregate (per employee), which can be combined with Emergency Paid Family and Medical Leave as described below.

Emergency Paid Family and Medical Leave (EFMLA)

Employee coverage: Full-time and part-time employees who have been employed for 30 calendar days or more – except employers of defined healthcare providers and emergency responders may elect to exclude some or all such individuals from coverage. Thirty calendar days includes the following.
Time “on the payroll” for the 30 calendar days immediately before the day leave begins.
Time spent in employment with a temporary agency assigned to an employer, if subsequently hired by the employer.
Time if an employee (a) was laid off or otherwise terminated on or after March 1, 2020, and rehired on or before Dec. 31, 2020, and (b) was on the employer’s payroll for at least 30 of the last 60 calendar days before layoff/termination.

Leave use: Leave allowance:Pay rate:orgreaterPay amount/cap:

EPSL and EFMLA Tax Credits

There is dollar-for-dollar reimbursement through tax credits for all qualifying wages paid, plus the amount of the allocable qualified health plan expenses and the employer’s share of Medicare tax, under FFCRA, up to the applicable per diem and aggregate payment caps. Tax credits are administered by the Internal Revenue Service, taken on payroll tax remittance (IRS Form 941) and potentially refundable where the credit exceeds employment taxes owed. If an employer is entitled to credits in excess of its employment tax deposits, the employer can submit IRS Form 7200 to request advanced credits.

Other EPSL and EFMLA Issues of Note

Effective date: April 1, 2020, expiring Dec. 31, 2020.
Notice: Covered employers are required to post a notice informing employees of their right to EPSL and EFMLA. A model notice can be found on the Department of Labor’s website.
Small business exemption: An exemption may apply for nonprofit organizations with fewer than 50 employees, where FFCRA’s requirements would “jeopardize the viability of the business as a going concern.” However, to qualify, employers must meet at least one component of a three-component test set forth in FFCRA regulations. Further, even if applicable, the exemption applies only to EPLS or EFMLA leave for child care reasons (that is, EPSL reason No. 5 plus EFMLA). The small business exemption is not available for EPLS reason Nos. 1-4 and 6 (that is, non-child care).

McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial COVID-19-related business and legal issues.