By Andy Smetana, Joe Bailey, Wendy Moore and Teri Lindquist

The U.S. Senate, on June 3, 2020, approved H.R. 7010, referred to as the “Paycheck Protection Program Flexibility Act of 2020.” This advances to the president legislation that was previously approved with nearly unanimous support in the U.S. House of Representatives. If signed into law, this legislation would extend the so-called “covered period” for borrowers to spend loan proceeds received under the Paycheck Protection Program (PPP) and qualify for forgiveness. This legislation would also make other significant changes to the terms of PPP loans, many of which are now at the end of their original eight-week covered period. Some initial questions and answers based on this legislation are provided below:

  1. Does the new legislation automatically extend the covered period for all PPP borrowers?

No, the legislation provides that borrowers who received their PPP loan before the new legislation is enacted will be able to elect between their original eight-week covered period or the new covered period that ends on the earlier of 24 weeks after their loan was originated or December 31, 2020. New PPP loan borrowers would automatically have the extended covered period. Note, however, that the legislation does not increase the per person cap on permitted payroll costs, meaning that no more than $15,385 in direct cash compensation paid per employee will qualify for forgiveness.

It is unclear how this legislation would affect the “alternative payroll covered period” authorized by the Small Business Administration (SBA) in recent rulemaking and the PPP loan forgiveness application form. For more information on these topics, see our earlier update.

Continue Reading Legislation Approved to Extend the Covered Period for PPP Loan Forgiveness and Make Other Significant Changes

By Thomas Abbott and Kristine Kruger

On March 27, 2020, the president signed into law the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, in response to the national emergency arising from the COVID-19 pandemic. Four key provisions of the CARES Act are likely to affect mortgage loan servicers: (1) credit protection; (2) a moratorium on foreclosures; (3) forbearance on mortgage payments; and (4) a moratorium on eviction filings. Compliance with the CARES Act may be straightforward for moratoriums but more challenging for credit reporting and regulatory compliance. This post provides an updated summary of salient portions of the CARES Act and identifies potential regulatory compliance pitfalls.

Summary of the CARES Act

  • Amendment to the Fair Credit Reporting Act
    The CARES Act amends the Fair Credit Reporting Act (FCRA) to require furnishers of credit information who make an accommodation that the consumer satisfies to report the credit obligation or account as current unless the account was delinquent before the accommodation. See 15 U.S.C. § 1681s-2(a)(1)(F)(ii)(I)-(II). The amendment is potentially retroactive, defining the covered period from January 31, 2020, to the later of July 25, 2020, or 120 days after the termination of the national emergency. See 15 U.S.C. § 1681s-2(a)(1)(F)(i)(II). Accommodations are defined broadly to include forbearances under the CARES Act in addition to a loan servicer’s deferment of payments, loan modifications, or other assistance or relief granted to a consumer affected by the COVID-19 pandemic during the covered period. See 15 U.S.C. § 1681s-2(a)(1)(F)(i)(I).

Continue Reading CARES Act Regulatory Considerations for Mortgage Servicers

In the latest episode of the podcast series Insurance Considerations Amid COVID-19, Jim Davis and Bradley Dlatt are joined by Perkins Coie Partner David Neff, among the most experienced hotel bankruptcy and restructuring lawyers in the country. We discuss the ways COVID-19 causes financial distress to businesses, the parties involved, and why it may take some time before companies become distressed. We also will address new rules that streamline the bankruptcy process for smaller businesses to help them survive, and insurance coverage issues arising in these distressed situations. Listen Here


DOL has finalized a Notice and Access safe harbor for certain required disclosures to participants and beneficiaries of retirement plans. Employers may effectively rely on this safe harbor immediately. The safe harbor allows employers to provide more disclosures to more participants and beneficiaries via electronic means that was previously permissible. In addition to other requirements, certain required disclosures may be provided via continuous access websites or email.

Click here to read the full update.

In light of states beginning to reopen and more employees returning to the workplace, the CDC has created a webpage called “COVID-19 Employer Information for Office Buildings,” which provides guidance to employers, building owners and managers, and building operations specialists on how to safely reopen office buildings. The CDC recommends that employers do the following:

  • Check the building to see if it is ready for occupancy.
  • Identify where and how workers might be exposed to COVID-19 at work.
  • Develop hazard controls using the hierarchy of controls to reduce transmission among workers, including engineering controls to isolate workers from the hazard and administrative controls to change the way people work.
  • Educate employees about the steps they can take to protect themselves at work.
  • Take actions to maintain a healthy work environment for employees and clients.

This page is in addition to CDC webpages designed for employers, such as the CDC Interim Guidance for Businesses and Employers and the Resuming Business Toolkit, which provides a Restart Readiness Checklist designed to help employers think through health and safety when resuming business operations.

On May 19, 2020, the Long Beach (California) City Council adopted the COVID-19 Paid Supplemental Paid Sick Leave Emergency Ordinance.  The ordinance is effective immediately and applies to businesses with 500 or more employees nationally and was described by the city council as a measure to “fill the gap” left by the federal Families First Coronavirus Act.  The Long Beach City Council also adopted the Worker Recall and Worker Retention Ordinances which apply to commercial property and hotel businesses as described in the ordinances.

Going into what would be a long holiday weekend in any other year, California restaurants have new reopening guidance to consider as restrictions begin to loosen statewide.

This week California Gov. Gavin Newsom loosened the requirements for counties to reopen additional businesses, including dine-in restaurants, as part of Stage 2B of California’s resilience plan.  The Reliance Roadmap is found here and includes statewide industry guidance to reduce risk.  Under the updated guidelines, counties can broaden reopening moving forward if: (1) hospitalization and test positivity rates are stable or declining; (2) they have a significant level of preparedness with testing, contact tracing, PPE, and hospital surge; and (3) they have adequate plans related to county-wide containment.  The original statistical metrics set for each of these conditions have been slightly relaxed, allowing more counties to enter Stage2B, which includes reopening dine-in restaurants with certain precautions.

Continue Reading As Summer Begins, The CA Restaurant Industry Weighs Reopening Its Doors

On May 18, 2020, the Wage and Hour Division of the Department of Labor (DOL) announced a final rule related to the Fair Labor Standards Act (FLSA) to “allow employers in retail and service industries to exempt certain employees paid primarily on a commission basis from overtime.” The final rule addresses the FLSA’s exemption from its overtime compensation requirement for certain commission-based employees employed by a retail or service establishment. Generally, Section 7(i) of the FLSA relieves employers in retail and service industries from paying overtime compensation to certain employees paid primarily on the basis of commissions. As stated in the background to the new final rule:

[i]n order for an employee to come within this exemption, ‘the regular rate of pay of such employee [must be] in excess of one and one-half times the [Act’s minimum wage],’ and ‘more than half [of the employee’s] compensation for a representative period (not less than one month) [must represent] commissions on goods or services.’ 29 USC 207 (i). In addition, the employee must be employed by a retail or service establishment, which had been defined in section 13(a)(2) of the Act as ‘an establishment 75 per centum of whose annual dollar volume of sales of goods or services (or of both) is not for resale and is recognized as retail sales or services in the particular industry.’ (citations omitted).

Continue Reading New DOL Rule Will Expand Which Employers May Qualify as a “Retail” Businesses for Purposes of FLSA Overtime Exemption

On the heels of its May 11, 2020 announcement that it would resume representation case hearings, the National Labor Relations Board announced on Friday that the Division of Judges would resume holding hearings on unfair labor practice complaints effective June 1, 2020. In an announcement posted on the agency’s website, the Board specified that since its earlier suspension of hearings, it has “taken the necessary steps to acquire the licenses and equipment needed to conduct such hearings remotely using online videoconferencing technology.”

According to the announcement:

[E]ffective June 1, the Division of Judges will not sua sponte postpone scheduled hearings due to the COVID-19 pandemic. Rather, prehearing requests for postponement will be considered on a case-by-case basis by the Deputy Chief Administrative Law Judge in Washington, D.C. and Associate Chief ALJs in New York and San Francisco under Sec. 102.24 of the Board’s Rules, subject to the right of the parties to request special permission from the Board to appeal the ruling under Sec. 102.26. Motions or objections with respect to holding an in-person versus an online videoconference hearing, or taking particular witness testimony by videoconference, will be considered and ruled on by the designated trial judge pursuant to Sec. 102.35(a)(6) and (8) of the Board’s Rules, likewise subject to the parties’ special appeal rights under Sec. 102.26.

Parties might look to the Board’s discussions in Morrison Healthcare, 369 NLRB No. 76 (May 11, 2020), a representation case, for a sense of how the Board might view the issues implicated by the various methods of presenting testimony, should the motion practice referenced above be considered.




By KoKo Huang and Asasia Pierce

The U.S. Department of Homeland Security (DHS) has announced that it is extending Form I-9 compliance flexibility. As previously detailed, on March 19, 2020 DHS began allowing certain employers to defer the physical presence requirement of I-9 documentation inspection and temporarily allowed electronic or remote I-9 documentation review. These provisions were originally set to expire on May 19. Presumably, the extension is for the full 30 days or until the national emergency expires, whichever comes first. We are continuing to monitor these policies for updates related to the termination of these extensions or the announcement of additional extensions.