By Andy Smetana and Teri Lindquist

The Small Business Administration (SBA) recently released a flurry of new materials implementing changes to the Paycheck Protection Program (PPP). These materials provide clarifications and updates, but also introduce new changes that borrowers should note when applying for loan forgiveness, a loan increase, or a “second draw” PPP loan.

New Forgiveness Applications and Forgiveness Guidance

  • There are three new forgiveness application forms. The simplest form, found here, is only one page long and is for loans of $150,000 or less. The updated “EZ” form for eligible borrowers is here, and the updated full forgiveness application form is here. Any borrower preparing to apply for forgiveness should contact their lender about use of these new forms.
  • Borrowers can now choose a “covered period” of any length between 8 weeks and 24 weeks, measured from the date their PPP loan was disbursed. This applies for new and existing PPP loans and may be helpful for borrowers seeking to avoid a reduction in forgiveness based on the FTE reduction quotient. See the new forgiveness guidance here.
  • The prior option of using the “alternative payroll covered period” has been eliminated.
  • As noted in our summary of the Economic Aid Act, the permitted uses for new and existing PPP loans have been expanded, and this is reflected in the new guidance and application forms.
  • Borrowers are required to apply for forgiveness for their initial PPP loan prior to or simultaneously with their application for forgiveness for the “second draw” loan, but the applications cannot be submitted on the same form.

New Guidance for PPP Re-Borrowing and Loan Increases

  • Borrowers who returned or repaid all or a portion of their PPP loan before December 27, 2020, or who received a PPP loan in an amount that was less than the amount they were approved to receive, may be eligible to re-borrow the amounts previously returned or repaid or obtain a loan increase, as long as they have not previously received forgiveness as to the remainder of their original PPP loan. Guidance for these borrowers can be found here (as to eligibility requirements) and here (as to calculating the maximum loan amount).

New “Second Draw” PPP Loan Guidance

  • New guidance on “second draw” loans may be found here. This includes elaboration on (1) the calculation of a borrower’s decline in “gross receipts,” which must exceed 25% in a quarter of 2020 compared to the same quarter of 2019 for a borrower to be eligible for a “second draw” loan, and (2) the supporting documentation that borrowers must provide to their SBA lender to demonstrate their revenue decline. A borrower who applies for a “second draw” loan of $150,000 or less will not need to provide supporting documentation regarding their revenue decline until they apply for forgiveness.

Businesses interested in taking advantage of new PPP opportunities should contact their SBA lender to determine next steps. Experienced counsel can also assist as needed.

By Kathleen (Katie) Allare

The latest COVID-19 relief legislation provided some additional aid and clarity for a select group of debtors and left many other questions unanswered. While most of the attention was directed to restarting the PPP payments and other benefits to individuals, the law makes changes to the Bankruptcy Code as well. Small business debtors (plus family farmers and Chapter 13 debtors) can now obtain PPP loans while in bankruptcy while other Chapter 11 debtors cannot. Landlords and suppliers that provided deferred payment agreements will have limited protection from preference actions. For more, read original article here.

By Jill Ripke

On December 28, 2020, the Los Angeles County of Public Health issued a news release stating “For those who traveled outside of L.A. County and recently returned, you may have had an exposure to COVID-19. The virus can take up to 14 days to incubate, and for many people the virus causes no illness or symptoms. If you go back to work, go shopping or go to any gatherings at any point over the next 10 days, you could easily pass on the virus to others. All it takes is one unfortunate encounter with an individual with COVID-19 for you to become infected, and sadly, for you to go on and infect others. Because of the likelihood of exposure to COVID-19 while traveling outside of L.A County, for everyone that traveled or are planning to travel back into L.A. County, you must quarantine for 10 days.” Continue Reading Los Angeles County: Public Health Officials Require Travelers to Quarantine Upon Return to Los Angeles County; Updated Targeted at Home Health Officer Order

By Jill Ripke, Lauren Kulpa, and Brittany Sachs

In response to the COVID-19 pandemic, Congress passed the Families First Coronavirus Response Act (FFCRA), which among other things, required private employers with fewer than 500 full-time and part-time employees as well as most public employers to provide paid leave for COVID-19 related absences beginning on April 1, 2020. The FFCRA also provided tax credits to help offset the paid leave wages required to be paid under the FFCRA. The paid leave provisions (and tax credits) of the FFCRA were set to expire on December 31, 2020. Continue Reading Paid Leave Under the Families First Coronavirus Response Act Ends on December 31, 2020, but Tax Credits Extend Through March 31, 2021

By Jill Ripke and Matt Goldberg

On December 14, 2020, California Governor Gavin Newsom issued an Executive Order N-84-20 addressing the COVID-19 pandemic including, but not limited, to updating the California Division of Occupational Safety and Health’s (Cal/OSHA) emergency regulations, which went into effect November 30, 2020. The Executive Order modified the emergency regulations so that they incorporate the new California Department of Public Health’s (CDPH) COVID-19 Quarantine Guidance, specifically stating that the exclusion periods in Sections 3205(c)(10) and (11) are suspended to the extent that they exceed the longer of the applicable quarantine or isolation period recommended by CDPH. Continue Reading California’s New Executive Order and COVID-19 Quarantine Guidance

By Jill Ripke and Brittany Sachs

 

On December 16, 2020, the U.S. Equal Employment Opportunity Commission (EEOC) updated its What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws with nine questions and answers designed to address how various equal employment opportunity (EEO) laws, including the ADA, the Rehabilitation Act, GINA, and Title VII, including the Pregnancy Discrimination Act, apply to COVID-19 vaccinations in the workplace. For example, the Q&A addresses issues related to whether the ADA and/or Title VII are implicated by potential employer mandatory vaccination policies and prevaccination medical screening questions. The EEOC also answers questions related to an employer’s obligation when employees indicate they are unable to receive a mandatory COVID-19 vaccination because of a disability or sincerely held religious belief or practice. The new questions and answers are included as Section K, “Vaccinations,” at the end of the existing materials. Companies with questions about COVID-19 vaccination policies for their employees should contact experienced counsel.

 

By Maggie Hayes and Cris Jones

The IRS has issued its annual employee benefit plan limitations for 2021. Key changes, also highlighted in the chart below, include the following:

  • Code Section 415(c) maximum annual additions increased from $57,000 to $58,000.
  • Compensation limit under Code Section 401(a)(17) increased from $285,00 to $290,000.
  • HDHP Out of Pocket Maximum increased from $6,900 to $7,000 for self-only coverage and from $13,800 to $14,000 for family coverage.
  • HSA Maximum Contribution Limit increased from $3,550 to $3,600 for self-only coverage and from $7,100 to $7,200 for family coverage.
  • All adoption assistance limits and thresholds have increased.
  • All QSEHRA and Archer MSA limits increased.

Continue Reading 2021 IRS Annual Employee Benefit Plan Limit Updates

By Gary Gansle and Jill Ripke

Governor Gavin Newsom has updated California’s limited Stay at Home order with additional restrictions on a regional basis (the “Regional Stay at Home Order”).  The Regional Stay at Home Order, announced December 3, 2020, will go into effect within 48 hours in regions in California (defined below) with less than 15%  intensive care unit availability. As described in the Regional Stay Home Order FAQ, it “prohibits private gatherings of any size, closes sector operations except for critical infrastructure and retail, and requires 100% masking and physical distancing in all others.” The Regional Stay at Home Order will remain in effect for at least three weeks and will be lifted when a region’s projected ICU capacity meets or exceeds 15%. This will be assessed on a weekly basis after the initial three-week period.

The five regions and the counties making up those regions are as follows:

    • Northern California: Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Shasta, Siskiyou, Tehama, Trinity
    • Bay Area: Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma
    • Greater Sacramento: Alpine, Amador, Butte, Colusa, El Dorado, Nevada, Placer, Plumas, Sacramento, Sierra, Sutter, Yolo, Yuba
    • San Joaquin Valley: Calaveras, Fresno, Kern, Kings, Madera, Mariposa, Merced, San Benito, San Joaquin, Stanislaus, Tulare, Tuolumne
    • Southern California: Imperial, Inyo, Los Angeles, Mono, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Ventura

In regions where the order is triggered, the following businesses will be required to close: Restaurants for all on-site dining (but not take-out or delivery), wineries and breweries, playgrounds, indoor recreational facilities, hair salons, personal care services, museums, movie theaters, cardrooms, and family entertainment centers. Other sectors will have additional modifications; for example, retail stores and shopping centers can stay open indoors at a cap of 20% capacity. Hotels may remain open for critical infrastructure support, as can offices. Places of worship can hold outdoor services only. In what will likely be perceived as good news by parents, schools serving K-12 students will not be affected by the order. Those open for classroom instruction now can remain so. Further detail is provided in the Regional Stay at Home Order.

Importantly, the Governor’s office expressly reminded Californians that counties can have more restrictive criteria. Click here to see the status for a specific county. To go to the state’s website and review the FAQs regarding this latest updated order, click here.

Companies doing business in California should consult with experienced legal counsel about how this Regional Stay at Home Order may impact their business operations.

 

By Jon Daryanani, Jill Ripke, Lindsay Holloman

 On December 2, 2020, the City of Los Angeles issued a Targeted Safer at Home Order (the “Order”).  The Order provides that, “subject only to the exceptions outlined in this Order, all persons living within the City of Los Angeles are hereby ordered to remain in their homes.”  The exceptions include a list of 26 essential activities such as healthcare operations, grocery stores, agricultural, gas stations, banks, etc.  The full details can be found in the Targeted Safer at Home Order.

The Order also prohibits all public and private gatherings of any number of people from more than one household except for outdoor faith-based services described in the order and in-person outdoor protests while wearing a face covering, maintaining social distancing, and observing the Los Angeles County Protocol for Public Demonstrations.

The Order also includes limitations on 15 activities and business sectors including but not limited to beaches, personal care establishments, fitness facilities, libraries, and breweries and wineries.

The Order is similar to the County of Los Angeles Temporary Targeted Safer at Home Heath Officer Order that became effective on November 30, 2020, which is found here.

Companies with questions about either order should contact experienced counsel.

By Heather Sager, Jill Ripke, Lauren Kulpa, Brittany Sachs, and Sara Davey

On December 2, 2020, the CDC updated its guidelines to provide two options to shorten the time frame for which individuals exposed to COVID-19 are to quarantine. The CDC continues to recommend that individuals who are exposed to COVID-19 quarantine for 14 days after exposure. However, the CDC’s new guidelines provide two alternative options to the 14-day period:

  1. Quarantine can end after 10 days so long as the exposed individual did not exhibit symptoms of COVID-19 during the quarantine period.
  2. Assuming diagnostic testing resources are available and sufficient, quarantine can end after 7 days if the exposed individual receives a negative COVID-19 test and did not exhibit symptoms of COVID-19 during the quarantine period. The testing should take place within 48 hours before the time the individual plans to end the quarantine. This means if the individual wishes to stop quarantining after the 7th day, then the individual may take the test 48 hours before the end of quarantine. Note that the individual must still quarantine for the entire 7-day period even if the individual receives a negative test result prior to the end of quarantine. And, if the individual does not receive the test result by the 7th day, the individual must still quarantine until receiving the negative test result.

The CDC also recommends that if the individual meets the criteria of one of the two alternatives above and ends the quarantine before the 14-day period, the individual must:

  • Continue to monitor for symptoms of COVID-19 through the 14th day following exposure;
  • If the individual has symptoms, immediately self-isolate and contact their local public health authority or healthcare provider;
  • Wear a mask, stay at least 6 feet from others, wash their hands, avoid crowds, and take other steps to prevent the spread of COVID-19 until the end of the 14-day period.

The CDC made clear that it “continues to endorse quarantine for 14 days,” and further provided that “Local public health authorities make the final decisions about how long quarantine should last in the communities they serve, based on local conditions and needs. Follow the recommendations of your local public health department if you need to quarantine.”

While the CDC’s quarantine alternatives permit employees to potentially return to work earlier than the 14-day period after exposure to COVID-19, the new guidelines may cause difficulties for employers, particularly multi-state employers. For example, the CDC’s guidance makes clear that local public health authorities can override the alternatives and require a full 14-day quarantine period, making a uniform rule regarding returning to work after exposure difficult for multi-state employers. Additionally, employers will need to consider the availability of testing in the area and determine whether the exposed individual will be able to work in conditions where the individual is able to maintain 6 feet from other employees and avoid crowds for the remainder of the 14-day period. Finally, employers should recognize that, as the CDC indicates, permitting employees to return to work earlier than 14 days after exposure may result in an increased transmission risk.

Employees are likely to have questions for their employers regarding this updated guidance from the CDC. Employers should reach out to a Perkins Coie Labor & Employment attorney to proactively discuss the best strategies for their circumstances.