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As countries around the world overcome the first wave of coronavirus infections, one thing is becoming apparent: Remote working will almost certainly become a permanent fixture of modern life for many. Going forward, governments and companies may periodically require or encourage employees to work from home. And even when they do not, both employees and employers are more comfortable with work-from-home arrangements than ever before.
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Continue Reading Maintaining an Effective Compliance Program When Working Remotely

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.

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

Factory shop. Abstract industrial background, motion blur effect
Factory shop, view from the top point. Abstract industrial background, motion blur effect.

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…

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…

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.

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

By Joe Bailey, Teri A. Lindquist, Wendy L. Moore, Andrew (Andy) Smetana and Sean M. Apfelbaum

After putting much emphasis on eligibility requirements for PPP loans, the SBA has now turned its attention to the requirements for loan forgiveness.  On Friday night, the SBA released a PPP loan forgiveness application. The application…

The SBA and Treasury Department issued a new FAQ #46 this morning (May 13) that should give clarity and comfort to many PPP borrowers. First, Borrowers with PPP loans of less than $2 million will be deemed to have made the necessity certification in good faith. The $2 million amount includes the applicable company AND all of its affiliates as determined by the SBA’s affiliation rules. For PPP loans in excess of $2 million (including individual companies with a loan of less than $2 million if its affiliated group has PPP loans in excess of $2 million), the FAQ also provides helpful information. The FAQ provides that if the SBA determines that a borrower with a loan of greater than $2 million lacked an adequate basis for the necessity certification, the SBA will seek repayment of the outstanding PPP loan balance and, if the borrower repays the loan after receiving notification from the SBA, the SBA will not refer or pursue enforcement actions with respect to the certification concerning necessity of the loan request.
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Continue Reading SBA Announces New “Necessity” Safe Harbor for Paycheck Protection Program Loans