Surviving the Pandemic Financially

by John P. Flannery

Across the nation, there are persons hurting, isolated.

We have employers anxious to keep their business a going concern.

They want to treat their work force fairly and to be able to launch again when they receive the all clear. The best of them do.

There are employees out of work. They require work because that’s what they do, and for subsistence.

The hardest hit work forces so far may be restaurants, hotels, and the various forms of travel.

Many are home on sick leave, others at home taking care of someone who is ill.

Congress recently passed a Families-First Coronavirus Response Act.

Soon afterwards, they passed a stimulus bill that divided the nation between a bailout for Wall Street and Main Street.

There may be legislation in the work that may help those businesses who have “business loss” insurance.

There are some answers, some possible solutions, drawn from the recent legislation, and more to come, for those who are quite stressed about the virus and their work.

The new legislation is critical because it may mean the difference between shuttering a business and surviving financially.

I’m most concerned, however, about the small businesses and their workers.

The pertinent provisions that concern small businesses involve sick leave, family and medical leave policies, Unemployment insurance, and Tax credits.

There are also provisions in the stimulus bill that may be as important.

There are a couple of caveats about “business loss” insurance — and that some policies don’t cover a virus or a pandemic; but, there may be a solution for that.

This brief monograph is timely because the law became effective today, April 2, 2020, and will sunset New Year’s Eve.

Consider this outline of the provisions passed by Congress and approved by the President:


1. Every employee is eligible for paid sick leave, but only if,

2. The employee is unable to work (not even able to telecommute), and

3. Falls into one of these categories:

a. The employee is subject to a federal, state, or local quarantine or isolation due to COVID-19;

b. A health care provider advised the employee to self-quarantine due to concerns related to COVID-19 (self-imposed quarantine without medical advice does not qualify under the Act);

c. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;

d. The employee is caring for an individual (not limited to family members, although there is a stray reference to family members elsewhere in the Act, so stay tuned) who is either subject to a federal, state, or local quarantine or isolation due to COVID-19 or has been advised to self-quarantine due to concerns related to COVID-19;

e. The employee is caring for the employee’s child whose school has been closed or place of care is unavailable due to COVID-19 precautions; or

f. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor. The precise meaning of this sixth reason will be clarified by the Secretary of Health and Human Services.

4. Hours of paid sick leave:

a. 80 hours if a full time employee,

b. The hours worked if a part time employee,

5. Compensation:

a. For categories 3. a-c above, paid at the regular rate, but not in excess of $511/day and not to exceed $5,110 in total compensation.

b. For categories 3. d-f above, paid at 2/3rd their regular rate, but not in excess of $200 a day, and $2,000 in total compensation.

6. When: This act takes effect beginning April 2nd.

7. Prohibitions: Employers may not require eligible employees to first use other paid leave.

8. Notice: Employers must give notice to employees of their rights — and Secretary of Labor is formulating that notice (expected March 25).

II. Family and Medical Leave

It is important to take note of the fact that the Act makes revisions to the Emergency Family and Medical Leave Expansion Act making some employees eligible if a child’s school or place of care has been closed because of the Coronavirus.

  1. Caution: You should be aware that normally Family and Medical Leave does not apply to employers with 50 or fewer employees, but this expanded act covers employers with 500 or fewer employees including employers with fewer than 50 employees.

III. Emergency Unemployment Insurance

1. Section 903 of the Social Security Act is amended as follows.

2. To share 1 Trillion Dollars in emergency grants among the several states in the proportion elsewhere provided in the Code.

3. Not later than 60 days after the enactment of the Act, that is, after April 2, 2020.

4. 50% of the total assigned to each state shall be transferred.

5. Provided, that the state has suffered an increase in applicants more than 10% over the same quarter in the previous year.

6. Employers must notify employees that this insurance is available when the employees separate from the employer.

7. The State must make the applications for unemployment accessible, in person, by phone, or online.

8. The State must keep the applicant informed of the progress of his case.

9. The State must take steps to make the process accessible by waiving work search requirements, and the waiting week, and not charging employers directly impacted by COVID-19 due to an illness in the work place or direction from a public health official to isolate or quarantine workers.

IV. Tax Credits for Paid Sick & Paid Family & Medical Leave.

  1. Sick Leave

V. The Stimulus Bill

The U.S. Senate late Wednesday evening voted in favor of a $2 trillion stimulus package to blunt the harm done by the COVID-19 pandemic.

The House approved the package and the President signed the legislation.

There still may be some “confusion” about the unemployment provisions.

Here are a few of the highlights from this 880-page bill that affect employers and employees, especially in small businesses, as the direct payment, unemployment and loans and grants:


§ The Stimulus Bill expands unemployment insurance from three to four months, and provides temporary unemployment compensation of $600 per week, which is in addition to and the same time as regular state and federal UI benefits.

  • Gig workers, freelancers and independent contractors are covered.


Establishes a $500 billion lending fund for businesses, cities and states.

  • That specifically includes $25 billion for passenger air carriers, $4 billion for cargo air carriers and $17 billion for businesses that work in national security.


§ Provides a $1,200 direct payment to many Americans and $500 for each dependent child.

  • This is a single payment,


The bill includes housing protections against foreclosures on mortgages and evictions for renters.

The bill states that anyone facing a financial hardship from coronavirus shall be given a forbearance on a federally backed mortgage loan of up to 60 days, which can be extended for four periods of 30 days each.

The legislation says that servicers of federally backed mortgage loans may not begin the foreclosure process for 60 days from March 18.

The bill also does not allow fees, penalties or additional interest to be charged as a result of delayed payments. It includes similar protections for those with multifamily federal mortgage loans, allowing them to receive a 30-day forbearance and up to two 30-day extensions.

Those with federally backed mortgage loans who have tenants would also not be allowed to evict tenants solely for failure to pay rent for a 120-day period, and they may not charge fees or penalties to tenants for failing to pay rent.


Direct Economic Stimulus Funding to States, Territories, Local Tribal Governments

§ Provides $150 billion to states, territories, local and tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines, allocated by population proportions.

  • Distribution is based on population. No state shall receive a payment for fiscal year 2020 that is less than $1.25 billion.

o Funds can be used for costs that:

  • Are necessary expenditures incurred due to COVID-19.


There are businesses that have been crushed by the pandemic, but particularly Restaurants who have to furlough workers, also any travel business, hotels, the entertainment industry, clothing, and more, anything that requires contact in these days when this virus roams so easily from one to another and we’re embracing stay at home defenses — as that appears to be the only sure way to avoid being infected and, perhaps, dying.

The National Restaurant Association wrote the President and congressional leaders to say that their industry’s sales will decline by $225 Billion over the next three months (April — June 2020). They also believe there will be the loss of 5–7 million jobs.

Abercrombie & Fitch expects to lose $60–80 Million in seals this year.

Agilent expects to lose $25–50 Million.

The International Air Transport Association predicted they may lose $113 billion.

There are government sources that say this virus will still be working its will on us through July and August.

Many of these businesses have business loss insurance. But there are also businesses that don’t have insurance.

Or there is some exception or other that bars coverage.

Business loss insurance will pay for the loss of business due to the “suspension” of a business’ “operations” during the “period of restoration.”

The “suspension,” however, must be caused by direct physical loss of or damage to property or premises which are described in the Declarations and for which a business income limit of insurance is shown in the Declarations.

Suspension of operations means the business slows down or stops.

The loss or damage must be caused by or result from a Covered Cause of Loss.

There are nice questions about whether the mere presence of the virus is a physical loss, how about the fear of the presence of the virus?

What if civil authority prohibits access to the premises?

If it is prohibited and the action of the civil authority is in response to dangerous physical conditions.

We have seen in recent days both state and local orders, and “encouragement” from the federal government to go and stay at home and leave the office.

In the City of New York, it said the order relied on the reason that “the virus physically is causing property loss and damage.”

But some policies say they will not pay for loss or damage caused by or resulting from any virus or bacteria or pandemic.

Litigation has and may defeat some exclusions but the real hope is that Congress will decide to back up the cost of these policies given what they will cost the insurance companies, prompting their ability to meet the crisis.

In this edition, the hope is that Insurance companies will agree to waive an exception if the government promises to cover the business loss.

As I’m writing this, that hasn’t happened yet.

— — — — — — — — — — — — — — — — — — — — — — — —

It is hoped that this somewhat detailed outline, but still an outline, clarifies those legislative provisions and the discussion of other issues may be helpful to survive financially.

Otherwise, stay safe.


John P. Flannery, II, Esq.



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  1. This is the text of the Families First Coronavirus Response Act — and it’s searchable — if you want/ need to drill down to answer your question —



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