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Paycheck Protection Program Application Deadline in the Process of Being Extended

01 Jul 2020 00:00:00 -0800

With just a few hours remaining before the June 30th deadline to submit loan applications under the Paycheck Protection Program (“PPP”), the U.S. Senate moved quickly by unanimous consent to extend the loan application deadline until August 8, 2020. The U.S. House of Representatives approved the extension today. President Trump must sign the legislation before it becomes effective, but most observers believe that will happen quickly. There remains approximately $130 billion uncommitted in the PPP’s $659 billion appropriation.

Congress is already considering other relief program for small businesses, including the Prioritized Paycheck Protection Program (P4) (basically, PPP-Season 2), which, in its current form, would be available to businesses with less than 100 employees, and would be funded with any untapped PPP funding. With the latest PPP extension, Congress may have to consider additional funding for P4, which may make its passage much more contentious.

Additional legislation introduced is the Real Economic Support that Acknowledges Unique Restaurant Assistance Needed to Survive Act of 2020 (i.e., “RESTAURANTS Act”), a $120 billion grant program aimed at assisting workers and food producers for independent restaurants.

Undoubtedly, Congress will be considering many more relief bills as the economic realities of the COVID crisis unfold. Stay tuned.

Oil and Gas Pipelines are Clogged, at Least for Now

22 Jun 2020 00:00:00 -0800

A recent ruling by a single federal district judge in Montana has sent a shockwave through the oil and gas industry. By vacating the U.S. Army Corps of Engineers’ (USACE’s) Nationwide Permit (NWP) 12 and then issuing a nationwide injunction against its use for constructing oil and gas pipelines, the judge has effectively halted new construction of those pipelines and sparked a renewed discussion about the propriety of issuing such injunctions.

The ruling arises out of litigation related to the Keystone XL pipeline, an 882-mile pipeline running from Canada to Nebraska. The construction has been mired in controversy from its inception, mainly due to the need for a “presidential permit” to construct a transnational pipeline and criticisms of the sufficiency of the environmental impact statement. The plaintiffs claimed that, in reissuing NWP 12 in 2017, the USACE did not engage in “formal programmatic consultation” with other agencies, as required under the Endangered Species Act (ESA). As a result, any approval of the Keystone XL pipeline under NWP 12 was in violation of law and must be set aside.

General permits, such as NWP 12, are issued by the USACE to streamline the permitting process. NWP 12 applies to the “construction, maintenance, repair, and removal of utility lines and associated facilities” and defines “utility line” broadly to include oil and gas pipelines. Versions of NWP 12 have been in effect since 1977. The USACE specifically consulted with the appropriate federal agencies prior to the reissuance of NWP 12 in 2007 and 2012, but did not in 2017 based on its position that the ESA did not require such consultation because issuing the permit itself has no effect on listed species or critical habitat. Additionally, the permit requires a pre-construction notice from the applicant of any activity that “might affect” a listed species or critical habitat, which prompts an activity-specific determination by the USACE.

In April, the federal judge ruled that the plaintiffs had provided “resounding evidence” that the USACE’s reissuance of NWP 12 may affect listed species and their habitats, and the pre-construction notice essentially delegated the USACE’s duties under the ESA to prospective permittees. Surprisingly, as no party had yet asked for such broad relief, the judge also vacated NWP 12 in its entirety and enjoined the USACE from authorizing any further activities under NWP 12. The judge then modified his initial ruling, limiting it to the construction of new oil and gas pipelines, but allowing nonpipeline construction activities such as electrical utility lines. Several major oil and gas pipeline projects were to be permitted under NWP 12.

The USACE appealed the ruling to the 9th U.S. Circuit Court of Appeals and asked for a stay, which was denied. The USACE has requested a stay from the Supreme Court. If granted, the appeal may proceed, and the USACE may continue to authorize activities under NWP 12. If denied, the use of NWP 12 for authorization of oil and gas pipelines will be prohibited until the appeal is resolved.

Federal judges have issued similar nationwide injunctions in other cases, a practice which has been questioned by several Supreme Court justices in the past few years. The sweeping injunction issued in this case is questionable at best and the modification more so, as exempting nonpipeline activities from the injunction is somewhat illogical if both pipeline and nonpipeline activities may impact listed species and critical habitats. Regardless, until there is a ruling on the stay or a decision on the appeal, the authorization of oil and gas pipelines under NWP 12 is on hold.

Supreme Court Rules Title VII Prohibits Discrimination Based Upon Sexual Orientation and Transgender Status - Part II

18 Jun 2020 00:00:00 -0800

On Monday I sent out an update that the U.S. Supreme Court had ruled that an employer who fires an employee for being gay or transgender violates Title VII. There are a few key aspects about this ruling that I want to point out.

This is not new law. Unlike a new statute, this ruling is actually the Supreme Court telling us how Title VII should have been interpreted all along. And, many courts have been ruling that Title VII prohibits discrimination based upon sexual orientation and transgender status for years. However, the Fifth Circuit (covering Louisiana, Mississippi and Texas) has traditionally not construed Title VII in this manner. So, although this ruling is not technically “new law”, it will change the way the courts in the Fifth Circuit construe these types of cases in the future.
This is effective immediately. When a statute is passed, it takes effect on a specific date in the future. Unlike a statute, the Supreme Court’s ruling is effective immediately.
Change your policies now. The employee handbooks and manuals used by some employers contain a list of the types of characteristics that the employer will not discriminate against (age, race, sex, color, religion….). Although the Supreme Court ruling means that sexual orientation and transgender status are subsumed in “sex” employers should consider specifically listing sexual orientation and transgender status as protected characteristics in their handbooks and employee manuals.
Train! We are all familiar with the fact that we must periodically train our employees on the application of our policies and procedures, and especially on our harassment/discrimination policies. Employers need to ensure that they revise their training to include sexual orientation and transgender status as protected classes when it comes to harassment and discrimination. We are going to see an increase in these types of cases, and our ability to prove that we provided adequate training will be a key element of our defense.
As odd as it sounds, treating men and women the same can be discriminatory. The Supreme Court stated it this way: “An employer cannot escape liability by demonstrating that it treats males and females comparably as groups….An employer who intentionally fires an individual homosexual or transgender employee in part because of that individual’s sex violates the law even if the employer is willing to subject all male and female homosexual or transgender employees to the same rule.” The fact that you don’t hire either gay females or gay males is not a defense; it still amounts to discrimination based upon sex.

EEOC Updates COVID-19 Technical Assistance Q&A

15 Jun 2020 00:00:00 -0800

In its updated Q&As, the EEOC addresses some significant and current issues such as reasonable accommodation, hiring and onboarding, pandemic-related harassment, return to work, age discrimination, pregnancy discrimination, and sex discrimination regarding employees with caretaking/family responsibilities. I would recommend that you read the entirety of the Q&As. You can find them here: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term

Addressing an issue that has been presented to me several times in the past few weeks, the EEOC specifically addresses whether an accommodation is required for an employee who is not disabled, but whose family member may be at high risk for contracting COVID-19 due to underlying health or condition. Q&A D.13 states:

D. 13 Q: Is an employee entitled to an accommodation under the ADA in order to avoid exposing a family member who is at higher risk of severe illness from COVID-19 due to an underlying medical condition?

D. 13 A.: No. Although the ADA prohibits discrimination based on association with an individual with a disability, that protection is limited to disparate treatment or harassment. The ADA does not require that an employer accommodate an employee without a disability based on the disability-related needs of a family member or other person with whom she is associated.

For example, an employee without a disability is not entitled under the ADA to telework as accommodation in order to protect a family member with a disability from potential COVID-19 exposure.

Of course, an employer is free to provide such flexibilities if it chooses to do so. An employer choosing to offer additional flexibilities beyond what the law requires should be careful not to engage in disparate treatment on a protected EEO basis.

So, it is the EEOC’s position that you do not have to accommodate an employee’s concerns about returning to work because they have a family member who is at an elevated risk of a negative outcome from a COVID-19 infection. Regardless of how you respond to such a request, you should consider your previous responses to similar requests and make sure that you do not inadvertently discriminate against an employee with a disabled family member.

OSHA Issues First COVID-19 Related Citation to Nursing Home in Georgia

05 Jun 2020 00:00:00 -0800

The Occupational Safety and Health Administration (OSHA) has issued its first COVID-19 related citations to a nursing home. OSHA claims that six nursing home employees in Georgia were hospitalized as a result of COVID-19 that they allegedly contracted while at work, and that the nursing home failed to report the hospitalizations to OSHA within the statutorily mandated time period. (Employees were hospitalized around April 19, but report was not made to OSHA until May 5.) OSHA has proposed a $6,500 fine for the “other than serious” citation.

Generally, employers must report incidents to OSHA within twenty four hours when an employee suffers a work-related in-patient hospitalization. This includes instances in which an employee is hospitalized because of COVID-19 if the employee contracted COVID-19 while at work and the hospitalization occurs within 24 hours of the employee contracting the virus. (Refer to 29 CFR 1904.39(b)(6)).

When several cases develop among workers who work closely together;
If it is contracted after lengthy, close exposure to a customer or coworker who has a confirmed case of COVID-19; or
If an employee’s job duties include having frequent, close exposure to the general public in a locality with widespread transmission.

You can find OSHA’s May 19, 2020 guidance on COVID-19 infection record keeping here: https://www.osha.gov/memos/2020-05-19/revised-enforcement-guidance-recording-cases-coronavirus-disease-2019-covid- 19#:~:text=Under%20OSHA's%20recordkeeping%20requirements%2C%20COVID,Prevention%20(CDC)%3B%5B2%5D

In the case of the Georgia nursing home, OSHA stressed that the widespread transmission of COVID-19 in nursing homes in general, and the fact that six employees in this particular nursing home tested positive for COVID-19 should have been an indication to the employer that the virus was work-related.

Bottom line: Employers must make themselves aware of OSHA’s reporting and recording obligations, and consider them each time an employee tests positive for COVID-19.

U.S. DOL Issues New FFCRA Q&A's

05 Jun 2020 00:00:00 -0800

The U.S. Department of Labor recently issued yet more FFCRA Questions and Answers. You can find the new Q&A’s here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions Numbers 89 to 93 are new.

I have summarized the new Q&A’s below, but I would encourage you to read the full, original Q&As.

89: I hire workers to perform certain domestic tasks, such as landscaping, cleaning, and child care, at my home. Do I have to provide my domestic service workers paid sick leave or expanded family and medical leave?

Yes if they are your employees, as opposed to independent contractors. This will generally hinge on whether or not the workers are economically dependent upon you for the opportunity to work.

90. If I am employed by a temporary placement agency that has over 500 employees and am placed at a second business that has fewer than 500 employees, how does the leave requirement work? Are one or both entities required to provide me leave?

The temporary staffing agency is not covered by the FFRCA because it has more than 500 employees. The second business may be required to provide you with FFCRA leave, depending upon whether or not it is your joint employer.

91. My employees have been teleworking productively since mid-March without any issues. Now, several employees claim they need to take paid sick leave and expanded family and medical leave to care for their children, whose school is closed because of COVID-19, even though these employees have been teleworking with their children at home for four weeks. Can I ask my employees why they are now unable to work or if they have pursued alternative child care arrangements?

You can ask the employees about any changed circumstances, explaining why they are now unable to work, but “you should exercise caution in doing so, lest it increase the likelihood that any decision denying leave based on that information is a prohibited act.” The employees may be entitled to FFCRA leave now if, for example, they have made the decision to take paid sick leave or expanded family and medical leave to care for their children so that their spouse could work or telework.

92. My employee claims to have tiredness or other symptoms of COVID-19 and is taking leave to seek a medical diagnosis. What documentation may I require from the employee to document efforts to obtain a diagnosis? When can it be required?

You can require the employee to identify his or her symptoms and a date for a test or doctor’s appointment.

93. I took paid sick leave and am now taking expanded family and medical leave to care for my children whose school is closed for a COVID-19 related reason. After completing distance learning, the children’s school closed for summer vacation. May I take paid sick leave or expanded family and medical leave to care for my children because their school is closed for summer vacation?

Not unless the child’s care provider is closed or unavailable for a COVID-19 related reason.

As always, don’t hesitate to call me if you have any questions and stay safe.

Jay

PPP Update: Paycheck Protection Program Flexibility Act Enacted by Congress

04 Jun 2020 00:00:00 -0800

Laws and regulations are changing rapidly. After the publication of this article they are subject to change. Check back regularly for updates.

Late Wednesday evening (June 3, 2020), the U.S. Senate approved, by unanimous consent, major changes to the Paycheck Protection Program through the Paycheck Protection Program Flexibility Act, which was introduced and approved by the House of Representatives last week. President Trump is expected to sign the legislation immediately.

Highlights of the Paycheck Protection Program Flexibility Act:

Covered Period - Extends borrowers’ “covered period”, the time period it has to spend the PPP loan proceeds, from the original 8 weeks (56 days) from loan origination to the earlier of 24 weeks (168 days) from loan origination or December 31, 2020. For PPP loans dated prior to the effective date of the Flexibility Act, borrower may elect to keep the 8-week covered period.
Payroll Costs Percentage - Eases the requirements of how borrowers spend PPP proceeds by providing that at least 60% of the PPP loan amount must be used for payroll costs in order to receive forgiveness, and up to 40% of the PPP loan amount may be used for non-payroll costs. This expressly modifies the SBA’s guidance that at least 75% of the loan proceeds actually spent must be for payroll costs. So, the Act lowers the payroll costs percentage and frees up more PPP loan proceeds for non-payroll expenses (i.e., rent, utilities, mortgage interest), but it requires borrowers to actually spend at least 60% of the total loan amount on payroll costs, and the consequence for not doing so seems to be the forfeiture of forgiveness all together.
Rehiring Deadline - Extends until December 31, 2020 the time period for employers to rehire anyone laid off or furloughed after February 15, 2020, in order to avoid reduction in their loan forgiveness. The original CARES Act provided for a June 30, 2020 deadline.
FTE Calculation for inability to rehire - Statutorily adopts SBA guidance with respect to the full-time-equivalency (FTE) calculation in the forgiveness process by providing employers do not need to take into account in their FTE calculation during the covered period, employees that they were unable to rehire or replace, and are able to document those instances.
Maturity Date extension - Extends the maturity date for any unforgiven portion of a PPP loan from 2 years to a minimum of 5 years, but makes this provision only mandatory to loans applied for after the effective date of the Act. Existing PPP loans with a 2-year maturity date remain unchanged unless the lender and borrower mutually agree otherwise.
Interest Rate - Statutorily adopts the SBA’s determination that PPP loans accrue interest at a 1% annual rate.
Time frame to file forgiveness application - Extends the period for borrowers to seek forgiveness up to 10-months from the end of the borrower’s covered period.

While extending the covered period to 24-weeks and lowering the threshold of loan proceeds that must be spend on payroll costs to 60% should allow many participants in the program to “optimize” the amount of potential loan forgiveness, the changes do present some new challenges that borrowers should thoughtfully consider. We will continue to closely monitor how SBA guidance responds to the Paycheck Protection Program Flexibility Act and offer our analysis.

Management Update Newsletter Volume 9, Issue 6

01 Jun 2020 00:00:00 -0800

OSHA Changes Its April Guidance Regarding the Duty to Record Positive COVID-19 Screens

28 May 2020 00:00:00 -0800

On May 19 OSHA issued yet another Guidance regarding an employer’s duty to record positive COVID-19 screens. This Guidance, effective May 26, walks back some of the more lenient language of OSHA’s Guidance issued just last month.

Under OSHA’s prior Guidance, most employers only had to record a positive COVID-19 screen if objective evidence indicated that the infection occurred at work.

Effective May 26, OSHA;s new Guidance indicates that all employers covered by the record keeping regulations must investigate a positive COVID-19 screen and treat the case as work-related if it is “more likely than not” the result of workplace exposure. OSHA says it will still use discretion when investigating a failure to record or report, which implies that it will be reticent to issue a citation if an employer can prove that it conducted a reasonable investigation after learning of the positive screen.

The Guidance indicates that in most cases when an employer learns that an employee is infected, an investigation will be sufficient if the employer:

Asks the employee how she believes she became infected;
Discusses with the employee her work and out-of-work activities that may have led to the infection;
Reviews the employee's work environment for potential COVID-19 exposure, taking into special consideration any other workers who have been infected.

Although the Guidance does not specifically require it, employers should consider documenting their investigation. I would recommend that employers quickly develop a standardized form to use for such investigations.

You can find the new Guidance here: https://www.osha.gov/memos/2020-05-19/revised-enforcement-guidance-recording-cases-coronavirus-disease-2019-covid-19

DOL Issues Sixth Set of Families First Coronavirus Response Act FAQs and It's a Mixed Bag for Employers

13 May 2020 00:00:00 -0800

Laws and regulations are changing rapidly. After articles are published, they are subject to change. Check back regularly for updates.

On May 11, the Department of Labor issued its sixth set of FAQs related to the FFCRA. You can find the FAQs here https://www.dol.gov/agencies/whd/pandemic/ffcra-questions#91

The new FAQs are a mixed bag, with a little bit of good and a little bit of not-so-good for employers.

FAQ No. 91 makes it clear that even if an employee has been successfully teleworking while staying at home to care for children whose schools have closed due to COVID-19, the employer must be very careful when asking the employee why they can no longer telework. In addition to requiring the employee to provide the previously known-basic information (name and age of child, name of school, that no other suitable person is available to care for the child…) an employer in this situation may only ask:

“…the employee to note any changed circumstances in his or her statement as part of explaining why the employee is unable to work, you should exercise caution in doing so, lest it increase the likelihood that any decision denying leave based on that information is a prohibited act. The fact that your employee has been teleworking despite having his or her children at home does not mean that the employee cannot now take leave to care for his or her children whose schools are closed for a COVID-19 related reason.”

FAQ No. 2 explains an employer is limited in the documentation that it may require of an employee seeking FFCRA leave because the employee is suffering symptoms of COVID-19 and seeking a diagnosis.

“In order for your employee to take leave under the FFCRA, you may require the employee to identify his or her symptoms and a date for a test or doctor’s appointment. You may not, however, require the employee to provide further documentation or similar certification that he or she sought a diagnosis or treatment from a health care provider in order for the employee to use paid sick leave for COVID-19 related symptoms.”

It is not clear how the DOL intends to apply this standard in conjunction with the IRS’s requirement that an employer obtain a written request for such leave from the employee. (Refer to FAQ No. 44 of the IRS’s COVID-19 Related Tax Credit FAQs.)

FAQ No. 93 gives some guidance on how summer vacation is going to impact child-care leave under the FFCRA. The DOL very clearly states that an employee may not take FFCRA leave to care for a child whose school has closed for summer vacation.

No. Paid sick leave and emergency family and medical leave are not available for this qualifying reason if the school or child care provider is closed for summer vacation, or any other reason that is not related to COVID-19.

Unfortunately, the full answer is not so cut-and-dried.

However, the employee may be able to take leave if his or her child’s care provider during the summer—a camp or other programs in which the employee’s child is enrolled—is closed or unavailable for a COVID-19 related reason.

Thus, whether or not an employee is eligible for FFCRA leave to care for a child during the summer vacation will need to be determined on a case-by-case basis.