Author Archives: BCGL Law

On Friday, March 22, 2020, at 9:00 a.m., BCGL will host a webinar titled "Getting Back to Work: Employment Issues in the Yellow Phase."  Theresa Mongiovi, Chair of BCGL’s Employment & Labor Law Department, and Angela Sanders, will discuss new requirements governing employers including state and federal worker safety requirements, interplay of the Paycheck Protection Program with layoff and furlough considerations, recall strategies, required exposure protocols, new benefits, and managing employee issues related to COVID-19.  

 

TO JOIN THE WEBINAR
Join us Friday at 9:00 a.m. at the following link:  Return to Work Webinar

You can also dial in using your phone at the following toll free number:  1-866-899-4679
The access code for the webinar is 770-564-397.

 
On May 12, our own Bob Pontz, along with a panel of legal practitioners from a variety of law firms, conducted a webinar titled, "Navigating Uncertain Finances: Non-Bankruptcy and Pre-Bankruptcy Alternatives for Small Businesses". The panelists provided insight and advice for the business community regarding the world of bankruptcy, insolvency and debt compromises.
 
During these challenging times, many businesses are or will be navigating hard choices and contemplating non-bankruptcy debt compromises and pre-bankruptcy planning.  The recorded webinar is available below.  
 
 
 

DEPARTMENT OF HEALTH ISSUES NEW ORDER DIRECTING
PUBLIC HEALTH SAFETY MEASURES FOR BUSINESSES
PERMITTED TO MAINTAIN IN-PERSON OPERATIONS

On April 15, 2020, the Pennsylvania Department of Health issued a Public Health Order directing safety measures by businesses that are permitted to maintain in-person operations under the Governor’s Closure Order.  Compliance will be enforced beginning Sunday, April 19th at 8:00 p.m.  The Order directs operating businesses to immediately implement specific social distancing, mitigation and cleaning protocols, which mirror the recommendations issued by the CDC.

 

Businesses permitted to maintain in-person operations are required to do the following:

     -Maintain pre-existing cleaning protocols.
     -Routinely clean and disinfect high-touch areas in spaces that are accessible to customers,   
      tenants or other individuals.
     -Establish protocols to execute if the business is exposed to a person who is probable or
      confirmed case of COVID-19.
     -Stagger start and stop times for employee work shifts.
     -Stagger employee break times and provide sufficient space for employees to social distance
      while on break.
     -Limit the number of persons in common areas.
     -Conduct meetings and trainings virtually.
     -Provide employees access to regular handwashing, hand sanitizer and disinfectant wipes.
     -Provide masks for employees to wear and make it mandatory to wear masks at the work
      site.
     -Ensure a sufficient number of employees to perform all measures required under the
      Order, to control access, maintain order and enforce social distancing of at least 6 feet.
     -Prohibit non-essential visitors.
     -Ensure that employees are made aware of all required procedures under the Order, orally
      or in writing in their native or preferred language as well as English.

 

Businesses that serve the public within a building or defined area such as grocery stores and other essential retail stores, must do the following:

     -Where feasible, conduct business by appointment only. When this is not possible, limit
      occupancy to no greater than 50% of the number stated on the certificate of occupancy.
     -Alter hours of operation to permit sufficient time to clean and restock.
     -Install shields or other barriers at registers and check-out areas.
     -Encourage use of online ordering by providing pick-up or delivery.
     -Designate a specific time for high risk and elderly person to use the business at least once per
      week.
     -Require all customers to wear masks on the premise, and deny entry to those not wearing
      masks.
     -In businesses with multiple check out lines, use every other register or fewer. Rotate registers
      every hour.
     -Scheduling handwashing breaks for employees at least every hour.
     -Where carts and handbaskets are available for customers, assign an employee to wipe down
      carts and handbaskets before they are available to customers.

 

OSHA ISSUES UPDATED GUIDANCE

ON RECORDKEEPING AND ENFORCEMENT

 

OSHA recently issued two enforcement memos outlining guidance for businesses during the pending COVID-19 outbreak.

 

Enforcement Guidance for Recording of Cases of COVID-19

 

Under OSHA’s normal recordkeeping requirements, COVID-19 is a recordable illness which employers must record on their OSHA logs if the occurrence is work-related.  In an Enforcement Memo issued on April 10, 2020, OSHA acknowledged that employers may have difficulty determining whether employees who contracted COVID-19 were exposed at work.  In light of this difficulty, OSHA is exercising its enforcement discretion as follows:

-Employers of workers in the healthcare industry, emergency response organizations and
 correctional institutions must continue to make work-relatedness determinations as usual under
 OSHA’s recording standard.

-For all other employers, OSHA will not enforce its recording standard to require employers to make
work-relatedness determinations, except where:
     -There is objective evidence that a COVID-19 case may be work-related (for example, a number
      of COVID-19 cases developing among a group of employees that work closely together); and
     -The evidence was reasonably available to the employer (for example, information provided to or
      learned by an employer).

 

Interim Enforcement Response Plan for COVID-19

 

On April 13, 2020, OSHA issued an Interim Memorandum to its Area Offices and compliance safety and health officers (CSHOs) providing guidance and instructions for handling COVID-19-related complaints, referrals and severe illness reports.  The Memorandum indicates that, in conducting site inspections, CSHO’s should take into account current CDC guidance when evaluating workplace hazards and the adequacy of an employer’s protective measures for workers. 

 

Businesses that have not already done so should immediately review and implement the CDC’s Interim Guidance for Businesses and Employers to Plan and Respond to COVID-19Many of the CDC’s recommendations have been incorporated into the Department of Health’s Order  for Pennsylvania. Failure to comply with these requirements could result in enforcement if OSHA receives an employee complaint.

 

If you have questions about the new Public Health Order or your workplace safety obligations, BCGL’s Employment Team of Theresa Mongiovi and Angela Sanders are available to assist you.

On Friday, March 27th, the President signed the much anticipated $2 Trillion COVID-19 stimulus package, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law. Although the CARES Act is vast in scope, of immediate importance to small business owners, sole proprietors, independent contractors and charitable organizations are the availability of forgivable loans for small businesses, emergency grants and debt relief for businesses with existing SBA loans.

 

I.  SMALL BUSINESS LOANS & LOAN FORGIVENESS - PAYCHECK PROTECTION PROGRAM

 

$350 Billion has been made available via the Paycheck Protection Program (PPP), a 100% federally guaranteed loan program for employers that maintain their payrolls during the COVID-19 crisis.

 

Businesses that maintain their payroll during this crisis will be entitled to the forgiveness of that portion of the loan used to cover payroll expense, mortgage interest, rent and utilities. The PPP is retroactive to February 15, 2020 in order to enable employers to bring employees that have already been laid off back onto their payrolls.

 

Eligible businesses and entities include: 

 

• Businesses with fewer than 500 employees 

• Non-Profits, 501(c)(3) and 501(c)(19)

• Sole Proprietors

• Independent Contractors

• Eligible Self Employed Individuals

 

Loan Amounts

 

If you were in business between February 15, 2019 and June 30, 2019 you may borrow up to 2.5 times your average monthly payroll cost during that period up to a maximum of $10 million.

 

If you were not in business between February 15, 2019 and June 30, 2019 you may borrow up to 2.5 times your average monthly payroll cost between January 1, 2020 and February 29, 2020.


For purposes of this calculation, payroll expense includes employee compensation, payment for vacation and leave, severance benefits, payments for group health care benefits, payment of retirement benefits and payment of state and local taxes assessed on employee compensation.

 

Use of Loan Proceeds

 

Loan proceeds may be used to cover payroll expenses as set forth above, costs related to the continuation of group healthcare benefits during periods of paid leave, salaries, commissions and similar compensation, payment of interest on mortgages obligations (not including pre-payment or payment of principal), rent, utilities and interest on debt incurred before February 15, 2020.

 

Key Features

 

PPP loans differ from typical SBA loans in a number of material ways:

 

• No Personal Guarantees 

• No Collateral

• No Requirement to demonstrate that the business cannot obtain credit from other sources

 

Borrowers will be required to certify that the loan is necessary due to current economic conditions and that the funds will be used to retain employees and cover other approved expenses.

 

Loan Applications

 

Loans will be available through SBA approved banks, credit unions and other qualified lenders. It is expected that the SBA will issue guidance with respect to the application process shortly.

 

Loan Forgiveness & Interest

 

PPP loan recipients may apply for loan forgiveness through their lender. To be eligible for forgiveness, you must be able to provide:

 

• Documentation verifying the number of employees and pay rates including IRS payroll tax filings, State income and payroll tax filings and unemployment insurance filings;

• Documentation verifying payments on covered mortgage obligations, lease obligations and utilities; and

• Certification that the documentation is true and that the amount to be forgiven was used in accordance with PPP guidelines.

 

Loan amounts not forgiven will be treated as an ongoing loan with a maximum term of ten years and a maximum interest rate of 4%. Principal and interest will be deferred for six months to one year after disbursement of the loan.

 

II.  EMERGENCY ECONOMIC INJURY GRANTS

 

These grants provide an emergency advance of up to $10,000 to small business and non-profits impacted by COVID-19. Under this program, funds will be disbursed within three days of the submission of an application for an SBA Economic Injury Disaster Loan (EIDL).

 

To obtain the advance, apply for EIDL and then request the advance. The advance does not need to be repaid and may be used to cover payroll expenses, sick leave pay, meet increased production costs due to supply chain disruptions or pay other debts including rent and mortgage payments.

 

EIDLs and emergency grants are available to businesses with fewer than 500 employees, sole proprietors with or without employees, independent contractors, co-ops and employee owned businesses and charitable organizations with exemptions under 501(c), (d) or (e) of the Internal Revenue Code. Applicants must have been in operation as of January 31, 2020.

 

EIDLs and emergency grants are retroactive to January 31, 2020 and will be available through December 31, 2020. Businesses that apply for an EIDL may also apply for a forgivable PPP loan. If you receive both, you cannot use your EIDL for the same purpose as your Paycheck Protection Program loan.

 

You may apply for an EIDL directly through the SBA by clicking here.

 

III.  SMALL BUSINESS DEBT RELIEF

 

The Small Business Debt Relief Program is intended to provide relief for small businesses with (non-disaster) SBA Loans including 7(a) Loans. Under this program, the SBA will cover all loan payments on SBA loans for six months. This relief will also be available to borrowers who take out (non-disaster) SBA Loans for the next six months.

 

Before you make any decisions with respect to which program or programs are right for your business or if you require assistance with respect to the application process of any component of the CARES Act or other COVID-19 related legislation, please contact a member of our Financial ServicesBusiness or Employment Law practice groups.