On April 3, 2020, the Small Business Administration (SBA) released its second Interim Final Rule in as many days addressing the affiliation rules that apply to the Paycheck Protection Program (PPP). A copy of the second Interim Final Rule can be found here. Those in the Venture Capital and Private Equity industries are hoping that additional guidance will be issued to ease the applicability of the affiliation rules to their portfolio companies under the PPP.  That did not happen with the second Interim Final Rule and accompanying guidance issued on April 3, which accompanying guidance can be found here. No new exclusions were added and the exclusions still apply only to:

  • Any business concern with not more than 500 employees[1] that, as of the date on which the loan is disbursed, has been assigned a NAICS code beginning with 72;
  • Any business concern operating as a franchise that is assigned a franchise identifier code by the SBA; and
  • Any business concern that receives financial assistance from an SBIC.

This is an evolving area, and it is possible that additional guidance will be released in the coming week on the PPP.  As of April 4, 2020, here is what potential applicants need to know. Continue Reading SBA Releases New Guidance on Affiliation

Authored by Alexander Canizares, Paul Korol, and Richard Oehler

The Department of Defense (DoD) has identified a way to speed the procurement of supplies and services to combat the coronavirus (COVID-19): Designate them as commercial items under the Federal Acquisition Regulation (FAR).

On March 30, 2020, the Defense Contract Management Agency (DCMA) issued a class Commercial Item Determination (CID) designating the following supplies and services as meeting the definition of “commercial item” to the extent they are procured in response to COVID-19:

  • Efforts associated with R&D or procurement of FDA-approved vaccines and antiviral medications that inoculate against or treat COVID-19. These are deemed “commercial” because they are being “developed by private institutions for the use and procurement by private entities (Hospitals).”
  • Efforts associated with establishing and setting up temporary booths, testing stations, or hospitals. This includes procurement of temporary tents or booths, and the services associated with manning such stations, but does not include procurement of real property.
  • Emergency medical supplies, such as personal protective equipment and ventilators, and services for COVID-19 relief efforts.
  • Facility-related services, such as efforts to “mothball” a building for long-term or permanent closure, or deep cleaning and remediation services.

Continue Reading DoD Issues Commercial Item Determination for COVID-19 Supplies and Services

Employers throughout the United States are rightfully concerned about what they should be doing in light of the continued spread of the novel coronavirus (COVID-19). They need to keep in mind the current status of applicable employment laws when responding to the pandemic, as employer actions may implicate several areas of employment law, including occupational health and safety regulations, anti-discrimination laws, immigration regulations, wage and hour laws, employee leave laws, and employee privacy considerations.

We address frequently asked questions (FAQs) from U.S. employers relating to COVID-19 and developments in employment law here. We will update these FAQs as the legal landscape continues to evolve.

This is general information based on the current understanding of COVID-19 and federal law. Different conclusions may be reached based on different circumstances, changes to the pandemic, and/or variations in state or local law. Employers should contact experienced counsel for guidance specific to their business.

In an effort to support healthcare workers on the front lines of the coronavirus pandemic, Perkins Coie has donated 4,000 N95 respirator masks to hospitals in Seattle, San Francisco, Chicago, and New York. The firm had the masks on hand as part of its firmwide emergency preparedness initiatives, and in particular, following the 2009 H1N1 crisis.

The idea to donate the masks to hospitals in the United States originated with one of the firm’s Chicago-based paralegals. “In a time when each of us feels utterly powerless to help, I knew there was something Perkins Coie could do. In my mind, each one of those masks represents a life that could be saved, or a healthcare provider who can safely save many other lives with proper protection,” said Rachel Leibowitz.

Hospitals receiving the donated masks include UW Medicine in Seattle, the University of Chicago’s Knapp Center for Biomedical Discovery, Zuckerberg San Francisco General Hospital and Trauma Center, and Columbia University Irving Medical Center in New York.

Authored by Mike Avent, Joe Bailey, and Andy Smetana

On Thursday, April 2, 2020, the Small Business Administration (SBA) issued an interim final rule that became effective immediately, implementing provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) regarding Paycheck Protection Program (PPP) Loans . In addition, the SBA released an updated application form for PPP Loans (Form 2483), a copy of which can be found here. These materials clarify, and in some instances change, the requirements and terms of the PPP Loans. Because the SBA has announced that loan applications will start being accepted today (April 3, 2020), anyone in the process of applying for a PPP Loan should pay close attention to the changes.

Below is a summary of key points in the interim final rule and the updated application form that may be of interest to companies that are considering a PPP Loan. These updates supplement prior summaries posted on our blog providing guidance for businesses regarding coronavirus (COVID-19).

Continue Reading Updated Guidance and New Application Form Released for Paycheck Protection Program Loans

On March 27, 2020, the Los Angeles City Council adopted the COVID-19 Supplemental Paid Sick Leave Ordinance.  The ordinance provides that an employee working in the City of Los Angeles for an employer with 500 or more employees nationally is entitled to supplemental paid sick leave through December 31, 2020.  The ordinance was sent to Mayor Eric Garcetti on March 28, 2020, and must be signed by the Mayor no later than April 7, 2020.  Perkins Coie attorneys will provide an update on whether this ordinance is signed.

Authored by KoKo Huang, Asasia Pierce

Companies affected by COVID-19 must carefully consider immigration implications for all foreign national and expat employees, including issues of immigration compliance. Those businesses with employees working in the United States with temporary work authorization or with employees working abroad should evaluate the rapidly evolving restrictions on international travel and the potential impact on employees’ immigration status. Furthermore, businesses must consider the effects of lockdowns, closures, and remote work on document verification and case processing, as well as other procedures. If employers intend on conducting layoffs, furloughs, or hours reductions, they should take caution with their H-1B, E-3, and H-1B1 classified employees. Companies must also carefully consider the ramifications of employment termination for their employees’ immigration status. Continue Reading Business Immigration Considerations During the COVID-19 Pandemic

The CARES Act makes changes to several tax provisions. Generally, these changes allow eligible businesses to obtain or preserve liquidity by applying for income tax refunds and reducing current income taxes payable.

Employers may also defer certain payroll tax payments, apply for additional payroll tax credits, and receive tax incentives for helping their employees and their community.

This update summarizes the key provisions that are intended to benefit businesses. Read More

Authored by Mike O’Brien

On April 1, 2020 the National Labor Relations Board (NLRB) issued a press release stating the following:

The National Labor Relations Board will not extend its temporary suspension of Board-conducted elections past April 3, 2020 and will instead resume conducting elections beginning Monday, April 6, 2020.

Previously, the NLRB had paused all elections from March 19, 2020 until April 3, 2020 due to the coronavirus (COVID-19) pandemic. The agency’s General Counsel, who is responsible for supervising regional NLRB offices, has now decided that “appropriate measures are available to permit elections to resume in a safe and effective manner, which will be determined by the Regional Directors.”

Continue Reading National Labor Relations Board Changes Direction; Will Resume Holding Union Representation Elections