Mounting consumer and political pressure mean the U.S. will likely reopen for business in the coming weeks and months. As we know, South Carolina has already begun scaling back its emergency directives, but the path back to business-as-usual means employers should be taking steps now to best position themselves for compliance with the White House’s new guidelines on reopening the country in the wake of COVID-19.
The White House recently released its proposal for “Opening Up America Again,” which can be found at whitehouse.gov/openingamerica. The proposal sets forth guidelines for states to safely reopen themselves for business in a phased approach.
First, the Administration sets out a threshold “Gating Criteria” for states considering reopening for business. These criteria include downward trends in COVID-19 symptoms and cases, and hospital preparedness. Once the state has satisfied the threshold criteria, it is recommended they proceed to “Phase 1.” Generally, in Phase 1 employers are recommended to:
- Continue to encourage teleworking “whenever possible and feasible with business operations”
- “Return to work in phases” where and when possible
- Close common areas where employees “are likely to congregate and interact, or enforce strict social distancing protocols”
- “Minimize non-essential travel and adhere to CDC guidelines regarding isolation following travel”
- “Strongly consider special accommodations” for employees “who are members of a vulnerable population”
Phase 1 recommendations also speak specifically to certain employers, and set forth guidelines for those particular employers, namely schools and youth sports, large venues, gyms, and bars.
States and regions with no evidence of a COVID-19 rebound and that satisfy the gating criteria again are recommended to proceed to Phase 2. Phase 2 is less restrictive than Phase 1, in eliminating the recommendation to return to work in phases and minimizing non-essential travel, though the other recommendations to work from home, close common areas, and consider special accommodations for vulnerable populations remain.
States and regions with no evidence of a COVID-19 rebound and that satisfy the gating criteria for a third and final time are recommended to proceed to Phase 3. During this Phase, the administration advises employers to resume unrestricted worksites. However, guidelines for specific employers, namely large venues, gyms, and bars, retain notions of social distancing and standard sanitation.
US Senate Expected to Close the Deal Today
The SC Chamber of Commerce has released a statement informing business owners that US Senate Democrats and Republicans are close to a deal for additional funding for the Paycheck Protection Program (PPP). The package, expected to be passed today in the Senate by unanimous consent, will likely allocate close to $400 billion total including funding for:
- Economic Injury Disaster Loans (EIDL)
- Hospital assistance
- COVID-19 testing
- Approval of 1,661,367 loans
- Approval of $342.3 billion in loans (does not reflect the amount required for reimbursement to lenders per statute within the CARES Act.
- 4,975 lenders have processed approved loans
- Overall average loan size is $206,000
Top five sectors receiving loans:
- Construction (13.12%)
- Professional, Scientific, and Technical Services (12.65%)
- Manufacturing (11.96%)
- Health Care and Social Assistance (11.65%)
- Accommodation and Food Services (8.91%)
In South Carolina:
- Approval of 22,933 loans have been approved
- Approval of $3.81 billion in loans
We understand many of you are trying to figure out how to best protect your family and business during this difficult time. Many of you are now eligible for relief. We stand by our clients and are here to help you determine your best strategy.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) is the largest federal relief package in history and provides financial support and tax incentives for small businesses.
What types of loans are available?
There is a forgiveness structure that can effectively turn a portion of the PPP loan into a grant and you may be eligible for a $10,000 emergency grant by applying for the EIDL.
It is important to determine which loan is right for your business. We can guide you through the process to help you achieve the best outcome.
We offer a consultation service that covers the following:
- Business Assessment
- Loan Strategy Discussion
- Review Required Document Checklist
- Business Documentation Review
- Loan Application ReviewSBA Emergency Loan Comparison-Final
Email Attorney Jason Rosen for more information: firstname.lastname@example.org.
- A small business with fewer than 500 employees
- A small business that otherwise meets the SBA’s size standard
- A 501(c)(3) with fewer than 500 employees
- An individual who operates as a sole proprietor
- An individual who operates as an independent contractor
- An individual who is self-employed who regularly carries on any trade or business
- A Tribal business concern that meets the SBA size standard
- A 501(c)(19) Veterans Organization that meets the SBA size standard
In addition, some special rules may make you eligible:
- If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis
- If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply
REMEMBER: The 500-employee threshold includes all employees: full-time, part-time, and any other status.
What documentation may you need?
While our firm is awaiting further guidance from the federal government regarding the loan application process, collecting the documents below is a good place to start. Insufficient documentation could delay the loan application. This list may change as more information becomes available.
- 2019 IRS Quarterly 940, 941 or 944 payroll tax reports
- Payroll reports for a twelve-month period (ending on your most recent payroll date), which will show the following information:
Gross wages for each employee, including officer(s) if paid W-2 wages.
Paid time off for each employee
Vacation pay for each employee
Family medical leave pay for each employee
State and local taxes assessed on an employee’s compensation
- 1099s for independent contractors for 2019
- Documentation showing total of all health insurance premiums paid by the company owner(s) under a group health plan. Include all employees and the company owners.
- Document the sum of all retirement plan funding that was paid by the company owner(s) (do not include funding that came from employees out of their paycheck deferrals). Include all employees and the company owners. Also include 401K plans, Simple IRA, SEP IRA’s.
- Company bylaws or operating agreement
Temporary and permanent layoff and termination decisions are a difficult reality for many in the business community now. State agencies and the federal government are adjusting employment laws in response to the COVID-19 pandemic. If layoffs and terminations are your next moves, be sure to consider new laws that might affect those decisions.
Employers Allowed to File Unemployment Claims
The SC Department of Employment and Workforce is allowing employers who have to temporarily lay off workers to file claims for unemployment insurance benefits on their workers’ behalves, for up to six weeks. Doing this serves two purposes: (1) it exempts your employees from SCDEW’s typical work search requirement during the six weeks; and (2) your workers will be ready to get right back to work once you reopen for business. The claim must be submitted after the week of layoff is over, but within 14 days of the claim week ending date. Applications are available on SCDEW’s website.
New Federal Leave Laws In Effect
The “Families First Coronavirus Response Act” (FFCRA”) went into effect April 1, 2020, and effects many employees’ rights to leave. At bottom, the FFCRA requires covered employers to grant two weeks of paid sick leave to qualifying employees, and potentially an additional ten weeks of paid leave (the first ten days of which is unpaid) for employees caring for minor children whose schools or childcare facilities/ caregivers are closed or unavailable due to COVID-19. Whether your business qualifies as a “covered employer,” and whether specific employees qualify for the Act’s relief are fact-specific. As such, you should consult with an employment attorney about how the FFCRA may be implicated in your termination/ lay-off decisions.
We’re happy to help ease your burden during this difficult time. If you have questions about how these new laws may affect your business and your decisions about employees, please contact Attorney Casey Martens at email@example.com.