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Making Sense of the Families First Act and Federal Stimulus Bill for Home Services

Making Sense of the Families First Act and Federal Stimulus Bill for Home Services

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Posted by EJ Brown

March 26, 2020

Get a summarized one-pager of the Families First Coronavirus Response Act:

UPDATED: Thursday March 26th, 2:19 PM PST

What Home Service Businesses Need to Know

Here’s the gist of what pros need to know about the two federal relief acts currently working their way through congress. You’ll find more details about both bills in the rest of this post.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes forgivable loans (Paycheck Protection Program — PPP) covering two months of employee wages, mortgage or rent payments and utilities to help keep workers employed. 

However, because PPP loans will only cover your minimum expenses, if you’re not bringing in enough revenue to stay afloat, you’ll have to look for other loans or credit options. 

This is where some of the other stimulus perks come in. The act extends SBA’s disaster relief loans (Economic Injury Disaster Loans — EIDL) so that more businesses can apply. And even if you’re not approved for a loan, you may be eligible for a 10,000 emergency advance that does not have to be repaid. The stimulus package includes other debt relief strategies detailed below.

Many of these benefits extend to sole proprietors, as well. 

The Families First Response Act will require small businesses to pay for up to two weeks of sick leave and ten weeks of family and medical leave for full-time and part-time employees for situations related to COVID-19. Businesses with under 50 employees will be able to apply for exemptions to this requirement, but details of who can apply and how are still forthcoming.

When Paid Leave Applies

What Is Required

Tax Credits


Who Is Eligible

What You Can Borrow

How Loan Forgiveness Works

Paid Leave Requirements (Families First Coronavirus Response Act)

The Families First Coronavirus Response Act requires businesses under 500 employees to offer their staff up to two weeks paid sick leave or expanded family and medical leave for COVID-19 related circumstances.

When Paid Leave Applies

The Act goes into effect on April 1, 2020, and applies to leave taken between April 1, 2020, and December 31, 2020.

What Is Required

2 Weeks Paid Sick Leave

Per the law, employees would receive sick leave with full pay (capped at $511 per day) for up to 80 hours if they are unable to work due to medical quarantine. 

If an employee is staying home to care for someone with COVID-19 or is unable to find childcare due to the outbreak, they would receive sick pay for up to two-thirds of their salary (capped at $200 per day).

Part-time employees can receive a portion of their paycheck based on their normal hours, as well.

10 Weeks Additional Family and Medical Leave (FMLA) Pay

In addition, businesses will be responsible to pay two-thirds of an employees’ salary for up to ten weeks of extended family and medical leave if they are unable to work due to a need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

Tax Credits

Per the Act, employers can receive 100% of the wages they paid in sick leave or FMLA related to the crisis back as a tax credit. 


Businesses with under 50 employees can file for an exemption if it would provide hardship for the business. The Department of Labor is still working on the eligibility requirements for this exemption and how to file.

Learn more from the Department of Labor:

Paycheck Loans

Part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program or PPP, makes federally guaranteed loans available to businesses that commit to retaining employees during the crisis. 

Employees that are able to maintain their workforce can seek forgiveness of the loan.

The loans cover eight weeks of cash-flow assistance and can be used for payroll, including paid sick leave and health insurance premiums, mortgage payments or rent, and utility payments. 

Who Is Eligible

Businesses with 500 employees or less, including sole proprietors and other self-employed individuals are eligible to apply.

To be eligible for the loan, businesses need to maintain the average size and salaries of its workforce, including independent contractors, throughout the eight-week period they are requesting help with.

If you’ve already let staff go, you can rehire them and still be eligible.

Eligibility is not determined by whether a business will be able to repay the loan. Instead, lenders will be looking at whether the business was operating on February 15, 2020 and had employees or paid independent contractors.

Businesses that have already received an economic injury disaster loan (EIDL) through the SBA can also apply for PPP loans. You are not eligible if you have a pending 7(a) loan application for the same purpose.

What You Can Borrow

Businesses can receive loans that equal to 250 percent of their average monthly payroll (up to $10 million).

How Loan Forgiveness Works

If you receive a PPP loan, lenders will forgive the amount spent on payroll, mortgage interest, rent, and specific utilities during the 8-week period. You will be responsible for any loan amount over this sum, as well as accrued interest.

To be eligible for loan forgiveness, you’ll need to submit paperwork documenting the number of employees and their pay along with proof of your other payments.

You must maintain the same number of employees and their salary throughout the eight week period.

If you are not able to maintain this number of employees or salaries, you’ll be responsible for the difference. Loan payments will be deferred for six to twelve months with a term of up to 10 years and interest rates up to 4%.

Debt Relief for SBA Borrowers

The SBA is required to make all payments for six months on existing SBA loans — including 7(a), 504, or micro-loans — and any SBA loans made throughout the next six months. This includes the principal, interest, and fees. 

Disaster Grants

The CARES Act creates an emergency rant that allows a business that applies for an economic disaster loan through the SBA an immediate advance of up to $10,000.  The SBA must distribute the funds within three days of applying.

This advance does not need to be repaid, even if you are not approved for the disaster loan.

Small businesses under 500 employees and sole proprietors and independent contractors can apply. 

Tax Credits

Businesses will be eligible for a 50% refundable payroll tax credit on worker wages if they retain employees and cover 50% of their paychecks throughout the crisis. You’ll also be able to defer payment of the Social Security payroll tax.

Other tax credits are available through the Act.

Increased Unemployment Benefits

Much of the CARES Act aims at keeping businesses going and workers employed. However, for worst-case scenarios, the Act also expands unemployment benefits. If you must lay off your workers, learn more about how to assist them through the process.

Get a summarized one-pager of the Families First Coronavirus Response Act:

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