Breazeale, Sachse & Wilson, L.L.P. RSS Feedhttps://www.bswllp.com/?t=39&anc=285&format=xml&stylesheet=rss&directive=0&records=20en-us03 Apr 2020 00:00:00 -0800firmwisehttp://blogs.law.harvard.edu/tech/rssPaycheck Protection Program Rules Released03 Apr 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107680&format=xml <p>Last evening (4/2/20), the U.S. Treasury Department and SBA issued interim rules regarding implementation of the Paycheck Protection Program (PPP) under the recently-enacted CARES Act (i.e., Phase III Stimulus). The rules are effective immediately, which should allow SBA financial institutions to begin accepting PPP loan applications on Friday, April 3, 2020.</p> <p>We have been closely tracking the CARES Act, particularly the Paycheck Protection Program. Already, we have answered many questions from business owners and managers regarding the details of the PPP. We believe that filing your loan application promptly may be critical in order to ensure program funds are available.</p> <p>If you need any assistance navigating the SBA emergency loan process, including help understanding the requirements and parameters of the PPP or other SBA emergency programs, completion of the application, compilation of supporting documents, or dealing with a lender, we can assist your business and, with respect to any PPP loan, we may be able to provide that assistance at no cost to you. The PPP provides that no attorney&rsquo;s or other agent&rsquo;s fee may be paid by the borrower or paid from PPP loan proceeds, but will be paid from the fee the SBA pays to participating lenders for making each PPP loan. We suggest that clients first work with their existing banking relationship, first to see if they are participating in the PPP loan program and second, whether they will pay the agent fees you incur in representing you, as provided by the PPP rules,. If they do, we can work with you and your lender to expedite the loan process and make sure you are maximizing the benefits offered by this complicated and evolving loan program.</p> <p>Let us know if you want to discuss and we can set up a call.</p> https://www.bswllp.com/?t=40&anc=285&an=107680&format=xml During Mandated Social Distancing, in Louisiana, "The pen [stroked before a Notary and Two Witnesses, still appears to be] Mightier than the Sword"03 Apr 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107685&format=xml <p><em>A cursory review of the Remote Online Notarization Procedures included in Emergency Proclamation 37-JBE-2020; what they authorize, and more importantly, what they don&rsquo;t.</em></p> <p>With the latest announcements of extended Stay at Home and Social Distancing Orders, it appears that we will need to continue to adapt to life with little or no personal contact. Of course, some of life&rsquo;s necessary activities such as doctors&rsquo; appointments/examinations, and certain business/legal transactions still require a minimum amount of face-to-face contact with others. In Louisiana, these include the execution of certain types of testamentary instruments and transactions involving immovable (real) property, where the operative documents are required to be in a certain form, and executed <b>in the presence of</b> witnesses and/or a Notary Public.</p> <p>This article is not intended to comprehensively address all of the laws surrounding electronic signatures in Louisiana (as may be temporarily modified by the Governor through his various Emergency Proclamations and Executive Orders), but instead is written to serve as a practitioner&rsquo;s guide, a band aid of sorts, to assist with the continued practice of law during the current pandemic.</p> <p>The statutory framework authorizing electronic or &ldquo;e-signatures&rdquo; in Louisiana is found in the Uniform Electronic Transactions Act (UETA), codified in <b>La. Rev. Stat. Ann. &sect;&sect;9:2601, et seq.</b>, which was enacted in 2001. UETA is based on the <b>Uniform Electronic Transactions Act (1999) by the National Conference of Commissioners on Uniform State Laws</b>, which has been adopted by forty-seven states. UETA also follows the Electronic Signatures in Global and National Commerce Act, also known as the &ldquo;E-Sign Act,&rdquo; which is the federal corollary passed by Congress in June, 2000 and codified at <b>15 U.S.C. &sect;7001, et seq.</b></p> <p style="margin-left: 40px;"><b>La. Rev. Stat. 9:2607 </b>states:</p> <p style="margin-left: 80px;">(A) a &ldquo;record or signature may not be denied legal effect or enforceability solely because it is in electronic form.&rdquo;</p> <p style="margin-left: 80px;">(B)&nbsp;a &ldquo;contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.&rdquo;</p> <p style="margin-left: 80px;">(C)&nbsp;&ldquo;[i]f a law requires a record to be in writing, an electronic record satisfies the law.&rdquo;</p> <p style="margin-left: 80px;">(D)&ldquo;[i]f a law requires a signature, an electronic signature satisfies the law.&rdquo;</p> <p style="margin-left: 40px;"><b>La. Rev. Stat. 9:2603</b> makes UETA applicable to all electronic records and electronic signatures relating to a transaction, <b><u>EXCEPT</u>:</b></p> <p style="margin-left: 120px;">(B)(1) A transaction to the extent it is governed by a law governing the <b>creation and execution of wills, codicils, or testamentary trusts</b>.</p> <p style="margin-left: 120px;">(2) A transaction to the extent it is governed by the provisions of Title 10 of the Louisiana Revised Statutes of 1950, other than R.S. 10:1-107.</p> <p style="margin-left: 120px;">(3) (Reserved).</p> <p style="margin-left: 160px;">(4)(a) A law governing <b>adoption, divorce, or other matters of family law</b>, with the exception of a temporary restraining order issued pursuant to Domestic Abuse Assistance, R.S. 46:2131 et seq., or Protection from Dating Violence Act, R.S. 46:2151.</p> <p style="margin-left: 160px;">(b) Any notice of any of the following:</p> <p style="margin-left: 200px;">(i) The <b>cancellation or termination of utility services</b>, including water, heat, and power.</p> <p style="margin-left: 200px;">(ii) <b>Default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement [/lease] for, a primary residence of an individual.</b></p> <p style="margin-left: 200px;">(iii) The <b>cancellation or termination of health insurance or benefits or life insurance benefits</b>, excluding annuities.</p> <p style="margin-left: 200px;">(iv) <b>Recall of a product, or material failure of a product</b>, that risks endangering health or safety.</p> <p style="margin-left: 160px;">(c) Any <b>document required to accompany any transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials</b>.</p> <p style="margin-left: 160px;">(d) <b>Publications required by law to be published in the official journals</b> provided for in Chapter 2, 4, or 5 of Title 43 of the Louisiana Revised Statutes of 1950.</p> <p style="margin-left: 80px;">(C) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Chapter applies to an electronic record or electronic signature otherwise excluded from the application of this Chapter under Subsection B of this Section to the extent it is governed by a law other than those specified by Subsection B of this Section.</p> <p style="margin-left: 80px;">(D) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>A transaction subject to this Chapter is also subject to other applicable substantive law.</b></p> <p><b>La. Rev. Stat. 9:2611 </b>reiterates one of the major exceptions set forth in <b>&sect;2603(B)</b>, by restating that:</p> <p style="margin-left: 40px;">&ldquo;[i]f a law requires a signature or record to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by other applicable law, is attached to or logically associated with the signature or record.&rdquo;</p> <p>So what does this mean? What is an example of &ldquo;other applicable substantive law?&rdquo; What exactly constitutes the universe of &ldquo;all other information required to be included by the other applicable law&rdquo; that is required to be &ldquo;attached to or logically associated with the signature or record?&rdquo; More problematic, although technically not part of the law, is the somewhat gratuitous official comment following &sect;9:2611 which states<b> &ldquo;[t]his Section does not provide any guidance for how electronic notarization can be achieved.&rdquo; </b>Okay, so if we can&rsquo;t look to this provision in UETA, where should we look?</p> <p>For those attorneys whose practice does not include the regular transfer of immovable (real) property, you may recall from your initial Civil Code Course during your first semester of law school that &ldquo;[a]n <b>authentic act</b> is a writing executed before a notary public and two witnesses, and signed by each part who executed it, by each witness, and by each notary public before whom it was executed.&rdquo; <i>See <b>Louisiana Civil Code art. 1833.</b></i> The &ldquo;authentic act&rdquo; is the preferred form of conveyance for real estate practitioners.</p> <p>When reading La. R.S. 9:2611 in conjunction with La. Civil Code art. 1833, at a minimum, I believe it&rsquo;s safe to say that the signatures of two (2) qualified witnesses and a duly commissioned Notary Public who personally witnessed the appearer sign the document are examples of &ldquo;other information required to be included by the other applicable law (here, La. Civil Code art. 1833) would have to be &ldquo;attached to or logically associated with the signature or record.&rdquo;</p> <p>This conclusion appears to have been confirmed by the Louisiana First Circuit in <i>Eschete v. Eschete</i>, 2010-2059 (La. App. 1 Cir. 2/27/14) 142 So.2d 985 (2014), where that appeals court affirmed the trial court&rsquo;s invalidation of an <i>inter vivos</i> donation of an immovable property<a href="file:///C:/Users/Bill%20Martin/Downloads/4.3.2020%20Final%20Article%20on%20Electronic%20Signatures.docx#_ftn1" name="_ftnref1" title="">[1]</a> interest when the donor, did not actually sign the act of donation in the physical presence of both witnesses, although one of the witnesses was merely twelve (12&rsquo;) feet away in the copy room making copies and came back into the signing room immediately after the donor had signed.</p> <p>Accordingly, under normal conditions, under the facts in <i>Eschete</i>, the UETA, by itself, would not grant any relief to this failed authentic act even under these times of mandated physical separation.</p> <p>Notwithstanding the noted exceptions in Subsection (B) of &sect;2603 of UETA excluding certain transactions or writings from its applicability, and the substantive law regarding authentic acts that the <i>Eschete </i>court acknowledged, recognizing that the state and local mandated home isolation orders would present significant barriers to the continuation of commerce, like many other governors around the country, and with the intent of keeping businesses running as best of possible under the present conditions, Governor John Bel Edwards signed <b>Emergency Proclamation No. 37-JBE-2020</b>, which, in addition to addressing other measures in response to the threats posed by COVID-19, declared in part:</p> <p><b>&ldquo;SECTION 6:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br /> </b></p> <p style="margin-left: 40px;">A)&nbsp;&nbsp;&nbsp;&nbsp;During this emergency, a regularly commissioned notary public who holds a valid notarial commission in the state of Louisiana, including a person who is licensed to practice law and commissioned by the Secretary of State, may perform notarization for an individual not in the physical presence of the notary public if:</p> <p style="margin-left: 80px;">1) the individual, any witnesses and the notary public can communicate simultaneously by sight and sound through an electronic device or process at the time of the notarization;</p> <p style="margin-left: 80px;">2) the notary public&mdash;</p> <p style="margin-left: 120px;">a) has reasonably identified the individual; and</p> <p style="margin-left: 120px;">b) either directly or through an agent:</p> <p style="margin-left: 160px;">i)&nbsp; creates an audio and visual recording of the performance of the notarization, and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p style="margin-left: 160px;">ii) retains such recording as a notarial record for at least 10 years from the date of execution unless a law of the State requires a different period of retention, and if any laws of the State govern the content, retention, security, use, effect, and disclosure of such recording and any information contained therein such recording shall be subject thereto.</p> <p style="margin-left: 120px;">c) The person appearing, all witnesses and the Notary Public can affix their digital signatures to the act in a manner that renders any subsequent change or modification of the remote online notarial act to be evident.</p> <p style="margin-left: 40px;">B) If a State law requires an individual to appear personally before or be in the physical presence of a notary public at the time of a notarization that requirement shall be satisfied if the individual and the notary public are not in the physical presence of each other but can communicate simultaneously by sight and sound through an electronic device or process at the time of the notarization; except for the laws pertaining to testaments, trust instruments, donations <i>inter vivos</i>, matrimonial agreements, acts modifying, waiving or extinguishing an obligation of final spousal support and authentic acts.</p> <p style="margin-left: 40px;">C) During this emergency, the recorder (as used in La. C.C. Art 3344) shall not refuse to record a tangible copy of an electronic record on the ground that it does not bear the original signature of a person if anotary public or other officer before whom it was executed certifies that the tangible copy is an accurate copy of the electronic record.&rdquo;</p> <p><b>Section 8</b> of Emergency Proclamation No. 37-JBE-2020 further states &ldquo;these provisions are effective retroactively to the beginning of this emergency on Wednesday, March 11, 2020 to Monday, April 13, 2020, or extended by any subsequent Proclamation, unless terminated sooner,&rdquo; although this April 13 expiration date will almost certainly be extended to April 30, 2020.</p> <p>So, for the time being, until at least April 13, 2020, and most likely the month of April, it appears that Emergency Proclamation No. 37-JBE-2020 will provide some relief to the execution of notarized documents where the substantive law requires be executed before a Notary Public (with or without witnesses), <b>EXCEPT</b> for those documents specifically excluded in <b>Section 6 (B) of 37-JBE-2020</b> namely <b>&ldquo;testaments, trust instruments, donations <i>inter vivos</i>, matrimonial agreements, acts modifying, waiving or extinguishing an obligation of final spousal support and authentic acts,&rdquo; </b>including authentic acts purporting to convey immovable (real) property.</p> <p>Now, at the risk of sounding like &ldquo;Captain Obvious,&rdquo; as a real estate attorney, I must admit that at first blush, Emergency Proclamation No. 37-JBE-2020 doesn&rsquo;t appear to be the silver bullet that I hoped it would be. It clearly and unequivocally excludes <b>&ldquo;authentic acts,</b>&rdquo; which is the form I use for the majority of the real estate conveyances passed before me, meaning during these extraordinary times, I&rsquo;m back to conducting real estate closings only after thoroughly sanitizing a conference room, slathering up with hand sanitizer, distributing a new ink pen right out of the box to all of the appearers and their respective witnesses, while at the same time, making sure that each person in the room maintains the recommended six-feet of separation from everyone else, and that the actual sheets of paper that have to be signed by multiple individuals are touched as little as possible. Or am I?</p> <p style="margin-left: 40px;"><b>Louisiana Civil Code Art. 1</b><b>839 - Transfer of immovable property</b> states:</p> <p style="margin-left: 40px;">&ldquo;[a] transfer of immovable property must be made by authentic act <b><u>OR</u> </b>by act under private signature [emphasis added]. Nevertheless, an oral transfer is valid between the parties when the property has been actually delivered and the transferor recognizes the transfer when interrogated on oath.</p> <p style="margin-left: 40px;">An instrument involving immovable property shall have effect against third persons only from the time it is filed for registry in the parish where the property is located.</p> <p style="margin-left: 40px;">&nbsp;Acts 1984, No. 331, &sect;1, eff. Jan. 1, 1985.&rdquo;</p> <p style="margin-left: 40px;"><b>Louisiana Civil Code Art. 1836 - Act under private signature duly acknowledged</b> states:</p> <p style="margin-left: 40px;">&ldquo;[a]n act under private signature is regarded prima facie as the true and genuine act of a party executing it when his signature has been acknowledged, and the act shall be admitted in evidence without further proof.</p> <p style="margin-left: 40px;">An act under private signature may be acknowledged by a party to that act by recognizing the signature as his own before a court, or before a notary public, or other officer authorized to perform that function, in the presence of two witnesses. An act under private signature may be acknowledged also in any other manner authorized by law.</p> <p style="margin-left: 40px;">Nevertheless, an act under private signature, though acknowledged, cannot substitute for an authentic act when the law prescribes such an act.</p> <p style="margin-left: 40px;">Acts 1984, No. 331, &sect;1, eff. Jan. 1, 1985.&rdquo;</p> <p>Ah ha!!! There it is. Because <b>Civil Code Article 1839</b> allows for the transfer of immovable (real) property by &ldquo;authentic act <b><u>OR </u></b>by an act under private signature&rdquo; [emphasis added], and Section 6 (B) Emergency Proclamation No. 37-JBE-2020 only excludes &ldquo;authentic acts&rdquo; and is otherwise silent as to acts passed under private signature it appears that Section 6 (A) of Emergency Proclamation No. 37-JBE-2020 at least temporarily facilitates Remote Online Notarization (&ldquo;ROL&rdquo;), where all of the parties to the act, including the appearers, the witnesses and the Notary Public, need not be physically in the presence of one another, so long as:</p> <p style="margin-left: 40px;">1. &ldquo;the appearers (individuals), any witnesses and the notary public can communicate simultaneously by sight and sound through an electronic device or process at the time of the notarization;&rdquo;</p> <p style="margin-left: 40px;">2. &ldquo;the notary public has reasonably identified the [parties executing the document];&rdquo; and</p> <p style="margin-left: 40px;">3. the notary public either directly or through an agent a) &ldquo;creates an audio and visual recording of the performance of the notarization,&rdquo; and b) &ldquo;retains such recording as a notarial record for at least 10 years from the date of execution unless a law of the State requires a different period of retention, and if any laws of the State govern the content, retention, security, use, effect, and disclosure of such recording and any information contained therein such recording shall be subject thereto.&rdquo; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;</p> <p>So, with respect to the transfer of immovable (real) property, it appears that even though Civil Code Art. 1836 stipulates that &ldquo;acts under private signature may be acknowledged by a party to that act by recognizing the signature as his own before a court, or before a notary public, or other officer authorized to perform that function, <b>in the presence of two witnesses</b> [emphasis added], Section 6 (A) of Emergency Proclamation No. 37-JBE-2020 clearly disposes of the requirement of a &ldquo;physical presence&rdquo; for acts under private signature, which is not later clawed-back or excluded in Section 6 (B) of the cited emergency proclamation.</p> <p>Okay, problem solved. Life goes on and real estate closings and other transfers of immovable property may proceed while observing the state and locally mandated Stay at Home and Social Distancing Orders. Or does it?</p> <p>Although Emergency Proclamation No. 37-JBE-2020 may provide a work-around to the strict requirements of authentic acts through the use of an act under private signature when handling the transfer of immovable property, it does not address the practical reality that in majority of transfers of immovable property, the sale of immovable property, be it vacant land, or land with a home or commercial building on it, typically also includes some type of financing where a mortgage is granted to secure the financing used for the acquisition, such as a purchase money mortgage.</p> <p style="margin-left: 40px;"><b>Louisiana Civil Code Art. 3287 - Conventional mortgage</b> states:</p> <p style="margin-left: 40px;">&ldquo;A conventional mortgage may be established only by written contract. No special words are necessary to establish a conventional mortgage&rdquo; while <b>Civil Code Art. 3288 </b>sets forth the requirements of a contract of mortgage, specifically, that:</p> <p style="margin-left: 40px;">&ldquo;a contract of mortgage must state precisely the nature and situation of each of the immovables or other property over which it is granted; state the amount of the obligation, or the maximum amount of the obligations that may be outstanding at any time and from time to time that the mortgage secures; and be signed by the mortgagor.</p> <p>These two code articles and the subsequent articles in this chapter of the Civil Code are silent as to the &ldquo;form&rdquo; of a mortgage and do not require that a mortgage be in the &ldquo;authentic&rdquo; form required of La. Civil Code Art. 1833.</p> <p>However, although many lenders, especially those issuing second mortgages or home equity lines of credit (HELOC) secured by a mortgage on their borrower&rsquo;s principal residence have dispensed with the practice of requiring that the mortgage granting the lander security for its loan be in the form of an authentic act in order to compete with other nontraditional lenders entering the market, lenders/mortgagees should remember that in order to avail themselves of Executory Process, the security instrument must be in authentic form.</p> <p style="margin-left: 40px;"><b>Louisiana Code of Civil Procedure Art. 2631- Use of executory proceedings</b> states:</p> <p style="margin-left: 40px;">&ldquo;[e]xecutory proceedings are those which are used to effect the seizure and sale of property, without previous citation and judgment, to enforce a mortgage or privilege thereon <b><u>evidenced by an authentic act</u></b> importing a confession of judgment, and in other cases allowed by law&rdquo; [emphasis added].</p> <p style="margin-left: 40px;">Personally, this does not bother me, as it has been my observation over the past twenty (20) years of representing lenders engaged in mortgage lending that courts routinely look for ways to find some fault with the security instrument that would preclude an executory proceeding, especially when dealing with the foreclosure on a single-family home used as a primary residence. But that&rsquo;s just me personally, whether you agree or not, you should at least know the implications of accepting a mortgage that is not in authentic form and explain the same to the lender so that the lender can conduct the standard cost benefit analysis weighing the benefits of getting a mortgage that is not in authentic form quickly and efficiently, with the down-side risk of not being able to avail the lender with a fast-track foreclosure through the use of executory process.</p> <p>In closing, I think it is important to point out to those individuals who take advantage of these relaxed signing procedures during this current state of emergency that Emergency Proclamation No. 37-JBE-2020 does place a few &ldquo;elephants in the closing room.&rdquo;</p> <p>First and foremost, <b>Section 6 (A) (2) (a) (ii)</b> of <b>Emergency Proc. No. 37-JBE-2020</b> requires the notary public conducting the Remote Online Notarization retain the video recordings of the remote signing &ldquo;as a notarial record for <b><u>at least 10 years</u></b> from the date of execution unless a law of the State requires a different period of retention, and if any laws of the State govern the content, retention, security, use, effect, and disclosure of such recording and any information contained therein such recording shall be subject thereto.&rdquo; No doubt this requirement has compliance officers, managing partners and firm administrators cringing, for obvious reasons.</p> <p>Second, while many other states around the country have passed legislation adopting remote online notarization (&ldquo;RON&rdquo;) in similar form and condition to those set forth in Emergency Proc. No. 37-JBE-2020, to date, the Louisiana Legislature has been slow (and possibly reluctant) to adopt RON on a permanent basis.</p> <p>Although there are currently two (2) bills addressing remote online notarization currently pending in the Louisiana Legislature (<b>House Bill No. 122</b> by Representative Gregory Miller and <b>House Bill No. 274</b> by Representative Raymond E. Garofolo, Jr.), I have heard from reliable sources that the Louisiana Notarial Association is up in arms against the revised notarial procedures contained in Emergency Proclamation No. 37-JBE-2020, while the Louisiana Bankers Association has likewise been critical of 37-JBE-2020 because it wanted to have the provisions of 37-JBE-2020 to be expanded to include authentic acts, which as discussed above, are excluded in Section 6 (B) of the emergency proclamation. Given that we are looking at another thirty (30) days of Stay-at-Home isolation, and perhaps longer, the debate on the merits of remote online notarization given the strong influence that both of these lobbying groups wield, should prove interesting for spectators during this when all organized sports competitions are temporarily suspended.<hr align="left" size="1" width="33%" /> <div id="ftn1"> <p><a href="file:///C:/Users/Bill%20Martin/Downloads/4.3.2020%20Final%20Article%20on%20Electronic%20Signatures.docx#_ftnref1" name="_ftn1" title="">[1]</a> Louisiana Civil Code art. 1541 mandates that a &ldquo;donation inter vivos shall be made by authentic act under penalty of absolute nullity, unless otherwise expressly permitted by law.&rdquo;&nbsp;</p> </div> </p> https://www.bswllp.com/?t=40&anc=285&an=107685&format=xml Management Update Newsletter Volume 9, Issue 403 Apr 2020 00:00:00 -0800https://myemail.constantcontact.com/Management-Update.html?soid=1103655070116&aid=TZ2o_XqKc1ohttps://myemail.constantcontact.com/Management-Update.html?soid=1103655070116&aid=TZ2o_XqKc1oRead This--It Is Important!03 Apr 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107716&format=xml <p>Those you who are getting and, hopefully, reading my updates know that for the past couple of weeks I have been trying to keep you up-to-speed on everything that the federal agencies are putting out regarding the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. You also know that the feds have been putting out a lot. Well, yesterday afternoon the Department of Labor (DOL) did it again when it published its temporary regulations, all 124 pages worth. You can read the regulations here <a href="https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-07237.pdf">https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-07237.pdf</a></p> <p>As you will see, these regulations contain some significant changes to the way that we thought the FFCRA should be interpreted. I have summarized some of the key regulatory points below, but these are only some of the key points. You need to study the entire set of regulations, or rely upon your friendly neighborhood employment lawyer.</p> <p><u>What does &ldquo;subject to a quarantine or isolation order&rdquo; actually mean?</u></p> <p>The regulation provides that:</p> <p style="margin-left: 40px;"><i>Subject to a quarantine or isolation order</i>. For the purposes of the EPSLA, a quarantine or isolation order includes quarantine, isolation, containment, shelter-in-place, <u>or stay-at-home orders</u> issued by any Federal, State, or local government authority that cause the employee to be unable to work even though his or her employer has work that the employee could perform but for the order. This also includes when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or certain medical conditions) to shelter-in-place, stay-at-home, isolate, or quarantine, causing those categories of employees to be unable to work even though their Employers have work for them.</p> <p>Sounds a lot like Governor John Bel Edward&rsquo;s stay-at-home Order of March ____, doesn&rsquo;t it? Keep in mind that this will not apply if you do not have work for the employee or have otherwise laid off, furloughed or terminated their employment. This will probably also not apply to employees of essential businesses who are expressly allowed to travel to and from work under the Executive Order.</p> <p><u>How do you apply &ldquo;a<i>dvised by a health care provider to self-quarantine</i></u>&rdquo;</p> <p>Employees can take paid leave under the EPSLA if they have been advised by a health care provider as defined in 29 CFR 825.102, to self-quarantine. This means that &mdash;</p> <p style="margin-left: 40px;">1.&nbsp; A health care provider advises the employee to self-quarantine based on a belief that:</p> <p style="margin-left: 80px;">a.&nbsp; the employee has coronavirus;</p> <p style="margin-left: 80px;">b.&nbsp; the employee may have coronavirus; or</p> <p style="margin-left: 80px;">c.&nbsp; the employee is particularly vulnerable to coronavirus; and</p> <p style="margin-left: 40px;">2.&nbsp; following the advice of a health care provider to self-quarantine prevents the employee from being able to work, either at the employee&rsquo;s normal workplace or by telework.</p> <p><u>What does &ldquo;caring for an individual&rdquo; mean?</u></p> <p>The EPSLA allows a worker to take paid sick leave to &ldquo;care for an individual&rdquo; who is subject to an order to quarantine or isolate. The regulation tells us that &ldquo;individual&rdquo; means:</p> <p style="margin-left: 40px;">&ldquo;an Employee&rsquo;s immediate family member, a person who regularly resides in the Employee&rsquo;s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined. For this purpose, &lsquo;individual&rsquo; does not include persons with whom the Employee has no personal relationship.&rdquo;</p> <p><u>Can both parents be &ldquo;caring for a son or daughter&rdquo;?</u></p> <p>The short answer is, probably not.</p> <p>The new regulations provide that leave to care for a son or daughter whose school is closed or child care provider is unavailable <u>cannot be taken if another suitable person is available who can care for the son or daughter during the period of leave</u>.</p> <p><u>Child Care Provider</u></p> <p>The CCFRA indicated that one could only be a &ldquo;child care provider&rdquo; if he or she was compensated for the task. This meant that if Memaw could not care for her grandson, let&rsquo;s call him Jay, because she was instructed by her doctor to stay home due to COVID-19, this would not entitled Jay&rsquo;s parents to take paid leave under the FFCRA. The regulations make clear that this was not the actual intent of the drafters of the Act. The regulations provide that if the child care provider is a family member, friend, or neighbor who regularly cares for the employee&rsquo;s child, he or she need not be compensated or licensed. (Yes, I called my maternal grandmother Memaw. Please withhold all Big Bang Theory-Young Sheldon jokes.)</p> <p><u>When can employees take intermittent leave</u>?</p> <p>It depends;</p> <p style="margin-left: 40px;">1.&nbsp; If the employee is working at your office:</p> <p style="margin-left: 80px;">a.&nbsp; If you and the employee agree, the employee may take 100% of her EPSLA and EFMLA leave intermittently to care for the Employee&rsquo;s son or daughter whose school or place of care is closed, or child care provider is unavailable, because of reasons related to COVID-19. In this situation, leave may be taken in any increment of time agreed to by the Employer and Employee.</p> <p style="margin-left: 80px;">b.&nbsp; An employee cannot take intermittent leave for any of the other 5 reasons specified in the EPSLA.</p> <p style="margin-left: 80px;">c.&nbsp; Once an employee begins taking paid leave for any of the other 5 reasons specified in the EPSLA, she must use the permitted days of leave consecutively until the employee no longer has a qualifying reason to take EPSLA leave.</p> <p style="margin-left: 40px;">2.&nbsp; If the employee is teleworking: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p style="margin-left: 80px;">a.&nbsp; The employer and employee may agree that the employee may take any leave available under the Act intermittently, and in any agreed increment of time (but only when the employee is unavailable to telework because of a coronavirus related reason).</p> <p><u>I can&rsquo;t require an employee to USE their PTO, can I</u>?</p> <p>The short answer, maybe.</p> <p>The regulation provides that &ldquo;an employee may elect to use, <u>or an employer may require an employee to use</u>, accrued leave that under the employer&rsquo;s policies would be available to the employee to care for a child, such as vacation or personal leave or paid time off concurrently with the expanded family and medical leave.&rdquo; This is a 180 degree change.</p> <p><u>What notice do employees have to provide?</u></p> <p>While verbal notice of need for leave is initially sufficient, the regulations make clear, as do recent IRS guidance-refer to my update of 4-2, states that employees must still provide certain documentation containing the following information to their employer prior to taking leave under Act:</p> <ul> <li>Employee&rsquo;s name;</li> <li>Date(s) for which leave is requested;</li> <li>Qualifying reason for the leave; and</li> <li>Oral or written statement that the employee is unable to work because of the qualified reason for leave.</li> </ul> <p>For paid sick leave relating to a government quarantine or isolation order, the employee must also provide the name of the government entity that issued the order.</p> <p>For paid sick leave based on the advice of a health care provider to self-quarantine due to concerns related to coronavirus, the employee must also provide the name of the advising health care provider.</p> <p>For paid sick leave relating to the care of an individual who is subject to governmental or self-quarantine order, the employee must also provide the name of the government entity that issued the order or the name of the advising health care provider.</p> <p>For paid sick leave relating to the care of the employee&rsquo;s child because the child&rsquo;s school or child-care provider is closed, the employee must also provide: (i) the name of the child being cared for; (ii) the name of the school, place of care, or child care provider that has closed or become unavailable; and (iii) a representation that no other suitable person will be caring for the child during the period for which the employee takes leave under the Act.</p> <p>If you fail to gather and document this information, you will not be able to take advantage of the tax credit provided in the FFCRA.</p> I realize that this is a lot of new and contradictory information. Don&rsquo;t hesitate to reach out if you need assistance digesting and implementing it all. https://www.bswllp.com/?t=40&anc=285&an=107716&format=xml Hold on to Your Hat! The IRS Gives Us Some Good News02 Apr 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107635&format=xml <p>The IRS has just issued a new set of FAQs that essentially give us an outline of what some of the FFRCA-related forms should look like. This outline is contained in the IRS&rsquo;s new list of Frequently Asked Questions. For those of you who want to wade through the original document, you can find it here <a href="https://email.bswllp.com/owa/redir.aspx?C=EtN9H3wx3Y0Yst6ZKbLY9mpjtrC7yTxIzpkUjfqqOvz0y7hGPNfXCA..&amp;URL=https%3a%2f%2fprotect-us.mimecast.com%2fs%2f6T5XCZ6WKwCMOn3LCzik96%3fdomain%3dirs.gov" target="_blank"><b><i>https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs</i></b></a></p> <p>For those of you with better things to do, I have included the most relevant provisions of the FAQs below.</p> <ul> <li>You need to get a written request from your employees to use paid EPSLA or EFMLA leave and that request needs to contain specific information.</li> <li>An employee must be the only person providing care for a child if they want to use paid EPSLA or EFMLA leave due to a school closure of the unavailability of a child care provider.</li> <li>You are going to have to create and maintain very detailed records of who you paid, why and how much.</li> </ul> <p>I have included the most significant sections below.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p><b>How Should an Employer Substantiate Eligibility for Tax Credits for Qualified Leave Wages?</b></p> <p><i><u>44. What information should an Eligible Employer receive from an employee and maintain to substantiate eligibility for the sick leave or family leave credits?</u></i></p> <p>&nbsp;An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:</p> <ol start="1" type="1"> <li>The employee&rsquo;s name;</li> <li>The date or dates for which leave is requested;</li> <li>A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and</li> <li>A statement that the employee is unable to work, including by means of telework, for such reason.</li> </ol> <p>In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person&rsquo;s name and relation to the employee.</p> <p>In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee&rsquo;s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care. (The IRS takes the position that the employee alone must be providing care to the child, making clear that leave then would be unavailable if both parents or another individual is present to care for the child. Also, in the case of a 15- to 17-year old child, the employee must identify &ldquo;special circumstances&rdquo; requiring the employee to provide care. If the employee cannot do so, they cannot take EPSL or FMLA+.)</p> <p><i><u>45. What additional records should an Eligible Employer maintain to substantiate eligibility for the sick leave or family leave credit?</u></i></p> <p>An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if, in addition to the information set forth in FAQ 44 (&ldquo;What information should an Eligible Employer receive from an employee and maintain to substantiate eligibility for the sick leave or family leave credits?&rdquo;), the employer creates and maintains records that include the following information:</p> <ol start="1" type="1"> <li>Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.</li> <li>Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages. See FAQ 31 (&ldquo;Determining the Amount of Allocable Qualified Health Plan Expenses&rdquo;) for methods to compute this allocation.</li> <li>Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.</li> <li>Copies of the completed Forms 941, Employer&rsquo;s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer&rsquo;s entitlement to the credit claimed on Form 941).</li> <li><u>How long should an Eligible Employer maintain records to substantiate eligibility for the sick leave or family leave credit?</u></li> </ol> <p>An Eligible Employer should keep all records of employment taxes for at least 4 years after the date the tax becomes due or is paid, whichever comes later. These should be available for IRS review.</p> <p>&nbsp;</p> <p>Employers should use this guidance to immediately create their forms and checklists to be used with employees taking leave under the FFCRA. Don&rsquo;t hesitate to contact me if you would like assistance in creating these forms and checklists.</p> https://www.bswllp.com/?t=40&anc=285&an=107635&format=xml Recording Workplace Exposures to COVID-1902 Apr 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107637&format=xml <p>OSHA recordkeeping requirements at <a href="https://email.bswllp.com/owa/redir.aspx?C=rvVVpQOyhI_4tT-huFOSFv_NwZEhvIbVupovnAHKjzcvENrHGtfXCA..&amp;URL=https%3a%2f%2fwww.osha.gov%2flaws-regs%2fregulations%2fstandardnumber%2f1904" title="29 CFR Part 1904" target="_blank" rel="noopener noreferrer">29 CFR Part 1904</a>&nbsp;mandate covered employers record certain work-related injuries and illnesses on their OSHA 300 log.</p> <p>COVID-19 can be a recordable illness if a worker is infected as a result of performing their work-related duties. However, employers are only responsible for recording cases of COVID-19 if all of the following are met:</p> <ol> <li>The case is a confirmed case of COVID-19 (see&nbsp;<a href="https://email.bswllp.com/owa/redir.aspx?C=FsEoyGnm53j6R5524DZLjWZ47qbdMc25jiz3E0j0FQ8vENrHGtfXCA..&amp;URL=https%3a%2f%2fwww.cdc.gov%2fcoronavirus%2f2019-ncov%2fphp%2freporting-pui.html" title="CDC information" target="_blank" rel="noopener noreferrer">CDC information</a>&nbsp;on persons under investigation and presumptive positive and laboratory-confirmed cases of COVID-19);</li> <li>The case is work-related, as defined by&nbsp;<a href="https://email.bswllp.com/owa/redir.aspx?C=j46370IzEGmiK151YC7Kn0Mp7BHV_9rqXob3ysz_UcovENrHGtfXCA..&amp;URL=https%3a%2f%2fwww.osha.gov%2flaws-regs%2fregulations%2fstandardnumber%2f1904%2f1904.5" title="29 CFR 1904.5" target="_blank" rel="noopener noreferrer">29 CFR 1904.5</a>; and</li> <li>The case involves one or more of the general recording criteria set forth in&nbsp;<a href="https://email.bswllp.com/owa/redir.aspx?C=hw7zOGK-00MrvJD7mJsOtWKo43CSDZb5-e9iCPvCzBsvENrHGtfXCA..&amp;URL=https%3a%2f%2fwww.osha.gov%2flaws-regs%2fregulations%2fstandardnumber%2f1904%2f1904.7" title="29 CFR 1904.7" target="_blank" rel="noopener noreferrer">29 CFR 1904.7</a>&nbsp;(e.g. medical treatment beyond first-aid, days away from work).</li> </ol> https://www.bswllp.com/?t=40&anc=285&an=107637&format=xml CARES ACT UPDATE (April 1, 2020): Paycheck Protection Program Application is Released01 Apr 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107589&format=xml <p>Matching the speed exhibited by Congress in introducing and passing the CARES Act, the U.S. Treasury Department and SBA released a first-iteration of the Paycheck Protection Program (PPP) loan application on Monday, March 31<sup>st.</sup>.&nbsp;As we explained in our original web article, the PPP loan is the new, potentially forgivable, loan program from the SBA. You can access the application at <a href="https://www.sba.gov/sites/default/files/2020-03/Borrower%20Paycheck%20Protection%20Program%20Application.pdf"><strong>SBA PPP Loan App</strong></a>.&nbsp;</p> <p>The SBA also issued very basic guidance to both borrowers and lenders. Guidance to borrowers can be viewed at <a href="https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf"><strong>SBA PPP Borrower Overview.&nbsp;</strong></a></p> <p>Here are a few highlights from the SBA&rsquo;s release:</p> <ul> <li>Eligible businesses consisting of small businesses and sole proprietorships can begin applying starting Friday, April 3, 2020, although some lenders may be working with existing customers to pre-file ahead of that date.</li> <li>Independent contractors and self-employed individuals can begin applying one week later, starting Friday, April 10, 2020.</li> <li>PPP loan interest rates will be 0.5%. The CARES Act authorizes rates up to 4%, but the Treasury Department has decided to set the rate much lower.</li> <li>Maturity of PPP loans will be 2 years from origination. The CARES Act authorizes maturities up to 10 years, but, again, the Treasury Department has chosen to shorten the loan periods to 2 years.</li> <li>You can apply for the PPP loan through existing SBA lenders or through any federally insured depository institution, federally insured credit union and Farm Credit System institution participating.</li> <li>Other lenders may be offering PPP loans once they are approved by SBA and enrolled in the program.</li> <li>All loan payments are deferred for 6 months. The CARES Act provides for deferral up to 1 year, so borrowers will have to make request directly to their lenders for a deferral period beyond 6 months.</li> </ul> <p>Additional guidance will, undoubtedly, be issued. We will continue to monitor as new guidance is issued. Please contact us if you have any questions.</p> https://www.bswllp.com/?t=40&anc=285&an=107589&format=xml Department of Labor: Third Round of Guidance on the Families First Coronavirus Response Act31 Mar 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107495&format=xml <p>The Department of Labor issued a third round of guidance on the Families First Coronavirus Response Act, which goes into effect on Wednesday April 1<sup>st</sup>. This new guidance addresses the coverage of employers and employees under the Act, provides key definitions, including &ldquo;health care provider,&rdquo; &ldquo;emergency responder,&rdquo; and &ldquo;part-time employee,&rdquo; and explains when employers with fewer than 50 employees may be exempt under the FFCRA.</p> <p><strong>Coverage of Employers and Employees under the Act</strong></p> <p>The DOL&rsquo;s new guidance first addressed which employers and employees are covered under the FFCRA. As previously discussed in our FFCRA Summary and our previous summaries of prior guidance, public employers are covered under the FFCRA (although Federal employees generally are not eligible for expanded family and medical leave), and private employers with 500 or fewer employees are also covered. While public employees are generally entitled to emergency paid sick leave, only employees of a non-federal public agency, such as those public employees who work for the government of a State, city, municipality, parish, or county, are entitled to expanded family and medical leave. The DOL also explained that the Office of Management and Budget can exclude certain Federal Executive Branch employees from taking certain kinds of paid sick leave and expanded and family medical leave.</p> <p>The FFCRA uses the same broad definition of &ldquo;employee&rdquo; as the Fair Labor Standards Act, which is any individual the employer &ldquo;suffers or permits to work.&rdquo; This includes full-time and part-time employees, as well as &ldquo;joint employees&rdquo; working with the employer and another employer, such as those working on site temporarily and/or through a temp agency. An employee is eligible for emergency paid sick leave regardless of the length of his or her employment. However, an employee must have been employed for 30 calendar days to qualify for expanded family and medical leave.</p> <p><strong>Full-time and Part-time Employee Defined</strong></p> <p>The DOL also defined &ldquo;full-time&rdquo; and &ldquo;part-time&rdquo; employee. For purposes of paid sick leave, a full-time employee is normally scheduled to work 40 or more hours per week, and a part-time employee is normally scheduled to work fewer than 40 hours per week. This is an important clarification because the definition of part-time can vary among employers, so employers should be sure that their definition of &ldquo;part-time employee&rdquo; also satisfies the emergency paid sick leave&rsquo;s definition of &ldquo;part-time employee.&rdquo;</p> <p>Expanded family and medical leave applies to all qualifying employees, who have been employed for 30 calendar days, regardless of their hours worked, but the number of hours the employee normally works each week will affect the amount of pay the employee can receive.</p> <p><strong>Health Care Provider and Emergency Responder Defined</strong></p> <p>The DOL guidance has finally defined two terms that have caused concern for healthcare employers since the FFCRA was enacted, &ldquo;health care provider&rdquo; and &ldquo;emergency responder.&rdquo;</p> <p>There are two definitions for a &ldquo;health care provider,&rdquo; which apply in different circumstances. When considering who is able to advise regarding self-quarantine, which is a reason for emergency paid sick leave, a &ldquo;health care provider&rdquo; is a licensed doctor of medicine, nurse practitioner, or other provider permitted to issue a certification under the FMLA.</p> <p>As to &ldquo;health care providers&rdquo; who may be exempt from paid sick leave and expanded family and medical leave, the DOL broadly defines the term as anyone employed at any doctor&rsquo;s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. This definition also includes any individual who is employed by a company that (1) contracts with any of the above institutions to provide services or to maintain the operation of the facility or (2) provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments. The DOL also clarified that employers should be judicious when using the definition to exempt health care providers. The highest official of a State or territory can also determine other individuals who should be covered by this &ldquo;health care provider&rdquo; definition.</p> <p>This definition is much broader than many commentators were expecting because it includes anyone employed at any of the above listed facilities/institutions, not just those employees directly responsible for providing patient care. It also includes employees at facilities beyond those directly involved in addressing COVID-19. It is also important to note that under the FFCRA, it is the employer who elects to exclude health care providers and emergency responders from the FFCRA. So, this election by the employer could trigger many issues, including possible discrimination and other claims. Therefore, health care provider employers should be cautious when excluding certain employees.</p> <p>An &ldquo;emergency responder&rdquo; is an employee who is necessary for the provision of transport, care, health care, comfort, and nutrition of such patients, or whose services are otherwise needed to limit the spread of COVID-19. This includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency, as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility. The highest official of a State or territory can also determine other individuals who should be covered by this &ldquo;emergency responder&rdquo; definition.</p> <p><strong>Son or Daughter under the FFCRA</strong></p> <p>The DOL also explained that a &ldquo;son or daughter&rdquo; under the FFCRA is defined as the employee&rsquo;s own child, regardless of whether the child is adopted, a foster child, a stepchild, a legal ward, or if the employee is standing in loco parentis, meaning the employee stands in the shoes of the parent for that child. The DOL also clarified that &ldquo;son or daughter&rdquo; includes an adult child who has a mental or physical disability and is incapable of self-care because of that disability.</p> <p><strong>Enforcement Options for Employees</strong></p> <p>The DOL&rsquo;s guidance also explains how employees can enforce the FFCRA if they believe their employer is in violation. The DOL specified that the employee should speak with his or her employer first, but could generally either contact the Wage and Hour Division, the DOL Division responsible for enforcement of the FFCRA, or file a lawsuit directly.</p> <p>The DOL guidance also suggests but does not explicitly state that if an employer with fewer than 50 employees violates the expanded family and medical leave provisions, then an employee generally cannot file a private lawsuit without first contacting the Wage and Hour Division. This stipulation by the DOL suggests that the Wage and Hour Division is placing an additional requirement on certain employees to report an alleged violation of the expanded family and medical leave provisions to the Wage and Hour Division before filing a lawsuit, if the employer is not covered under the FMLA&rsquo;s typical provisions, which apply to employers with 50 or more employees. This statement creates some ambiguity in how the DOL will enforce the expanded family and medical leave provisions for employers not covered by the FMLA&rsquo;s normal provisions.</p> <p><strong>Right to Return to Work</strong></p> <p>The DOL confirmed in the guidance that an employee is entitled to return to the same or a nearly equivalent job once the employee returns from either emergency paid sick leave or expanded family and medical leave. The DOL further clarified that the employee is not protected from employment actions, such as layoffs, that would have affected that employee regardless of whether he or she took leave. The employer must show that the employee on leave would have been laid off even if he or she had not taken the leave.</p> <p>The DOL guidance also suggests that the &ldquo;key&rdquo; employee exception under the general FMLA rules apply to both types of leave. The &ldquo;key&rdquo; employee exception allows an employer to deny a &ldquo;key&rdquo; employee (a salaried, FMLA eligible employee who is among the highest-paid 10 percent of all employees within 75 miles) the right to restoration to his position after returning from leave, if the employer can show a substantial and grievous economic injury as a result of the restoration and sent notice to the employee.</p> <p>The DOL also explained the exception provided in Section 3102 of the FFCRA, which states that if the employer employs fewer than 25 employees and the employee took leave to care for a child whose school or place of care was closed, then the employee is not entitled to restoration in his or her prior position if:</p> <ol> <li>the position no longer exists due to economic or operating conditions due to COVID-19 related reasons during the period of the employee&rsquo;s leave;</li> <li>the employer made reasonable efforts to restore the employee to the same or an equivalent position;</li> <li>the employer makes reasonable efforts to contact the employee if an equivalent position becomes available; and</li> <li>the employer continues to make reasonable efforts to contact the employee for one year beginning on the date the leave concludes or 12 weeks after the leave began, whichever is earlier.</li> </ol> <strong>Expanded Family and Medical Leave in Addition to Normal FMLA Leave</strong><br /> <p>The DOL&rsquo;s guidance explains that an employee is only eligible for expanded family and medical leave if they have not already taken the maximum leave available under the general FMLA provisions. Generally, an employee may take a total of 12 workweeks of FMLA leave during an applicable 12-month period. So, if an employee already has exhausted 12 workweeks of FMLA leave during the 12-month period, then the employee is not allowed to take the additional expanded family and medical leave until after the new 12-month period begins. Additionally, any expanded family and medical leave taken by an employee counts against this 12-week total for general FMLA leave.</p> <p><strong>Small Business Exemption</strong></p> <p>An employer with fewer than 50 employees is exempt from providing (1) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (2) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons, if providing the leave would jeopardize the viability of the small business as a going concern. To claim this exemption, an authorized officer of the business must determine that:</p> <ol> <li>providing either type of leave would result in the business&rsquo;s expenses and financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;</li> <li>the absence of employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business or responsibilities; or</li> <li>there are not sufficient workers who are able, willing, and qualified to perform the labor or services provided by the employee requesting leave, and these labor or services are needed for the small business to operate at a minimal capacity.</li> </ol> <p>Small businesses are not exempt from the requirement to provide paid sick leave for other qualifying reasons.</p> <p>The DOL has not provided guidance yet regarding how employers should request the exemption or document the reasons for the exemption. We are hopeful that further guidance will be issued regarding this before the FFCRA becomes effective on Wednesday April 1<sup>st</sup>.</p> <p><strong>Concluding Remarks</strong></p> <p>This third round of guidance issued by the DOL has provided some crucial clarification regarding the applicability of the FFCRA, including key definitions for &ldquo;health care provider&rdquo; and &ldquo;emergency responder,&rdquo; and the analysis for determining whether an employer with fewer than 50 employees is eligible for the small business exemption under the FFCRA. Employers should carefully review this guidance and should also anticipate additional guidance before the FFCRA goes into effect on Wednesday, April 1<sup>st</sup>.</p> https://www.bswllp.com/?t=40&anc=285&an=107495&format=xml Gross Negligence or Willful Misconduct Must Be Shown to Establish Liability Against Health Care Providers in Louisiana During a Declared Public Health Emergency31 Mar 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107503&format=xml <p>On March 11, 2020 Governor Edwards invoked the Louisiana Health Emergency Powers Act, La. R.S. 29:760 et seq., and declared a Public Health Emergency. Part of the Act (La. R.S. 29:771(2)(c)) provides:</p> <p style="margin-left: 40px;">&ldquo;During a state of public health emergency, <b><u>any health care providers</u></b> shall not be civilly liable for causing the death of, or, injury to, any person or damage to any property except in the event of gross negligence or willful misconduct.&rdquo;</p> <p><i><u>Are hospitals included?</u></i><b> &ndash; </b>Yes. &ldquo;Health care providers&rdquo; is defined very broadly in the Act as: &ldquo;a clinic, person, corporation, facility, or institution which provides health care or professional services by a physician, dentist, registered or licensed practical nurse, pharmacist, optometrist, podiatrist, chiropractor, physical therapist, psychologist, or psychiatrist, and any officer, employee, or agent thereof acting in the course and scope of his service or employment.&rdquo; La. R.S. 9:762(4). This language is certainly broad enough so as to include hospitals.</p> <p><i><u>Is the statute&rsquo;s protection limited to healthcare related to the emergency?</u></i><b> &ndash; </b>No. While this provision has not been interpreted by the Louisiana Supreme Court, a Louisiana appellate court applied it very broadly to a claim against a surgeon alleged to have left a sponge in the patient during a laminectomy during the declared Public Health Emergency following Hurricane Katrina. The court held that R.S. 29:771 &ldquo;does not provide for a limited set of health care providers, nor does it limit its application to only those medical personnel rendering emergency assistance voluntarily due to the emergency in the area.&rdquo; <i>Lejeune v. Steck</i>, 138 So.3d 1280 (La. App. 5<sup>th</sup> Cir. 2014). In fact, though no court has addressed this issue, the wording of the statute does not even limit its application to the providing of healthcare.</p> <p><i><u>What is gross negligence or willful misconduct?</u></i><b> &ndash; </b>The term gross negligence is different than ordinary negligence and has been defined as the &ldquo;want of even slight care and diligence&rdquo; and the &ldquo;want of that diligence which even careless men are accustomed to exercise.&rdquo; It denotes &ldquo;the entire absence of care and the utter disregard of the dictates of prudence, amounting to complete neglect of the rights of others.&rdquo; It represents &ldquo;an extreme departure from ordinary care or the want of even scant care.&rdquo; <i>Rabalais v. Nash</i>, 952 So.2d 653 (La. 2007).</p> <p><i><u>Are there other similar statutes?</u></i><b> -- </b>Yes. In a declared state of emergency, La. R.S. 13:1731.1 applies a gross negligence/willful misconduct standard to liability claims but only those against a &ldquo;physician, surgeon, or physician assistant ... or a nurse ...&rdquo; This statue applies to the listed class of health care providers who, &ldquo;in good faith and regardless of compensation, render or fail to render emergency care, health care services or first aid during a declared state of emergency when the state of emergency affects the rendering of medical care.&rdquo; Thus, under this provision, these healthcare providers must be rendering medical care affected by the state of emergency. This statute was enacted after Hurricane Katrina and there have been no reported decisions interpreting it.</p> https://www.bswllp.com/?t=40&anc=285&an=107503&format=xml Clinical Research – Government and Industry Team to Provide Hope in the Crisis31 Mar 2020 00:00:00 -0800 https://www.bswllp.com/?t=40&anc=285&an=107506&format=xml <p>Necessity is the mother of invention, and it&rsquo;s hard to remember a time when humanity has been more motivated to resolve a crisis. Times like this, though, generally bring out the best in all of us &ndash; the best in government, the best in industry, and the best in individuals.&nbsp;The COVID-19 research and development response by all partners is helping provide hope during these difficult times.&nbsp;A few of these promising developments are as follows:</p> <p style="margin-left: 40px;"><i><u>Convalescent Plasma Research</u></i> &ndash; researchers and health care providers looking to COVID-19 survivors&rsquo; blood plasma for a possible therapy in the fight against the virus.&nbsp;The FDA is allowing <a href="https://www.fda.gov/vaccines-blood-biologics/investigational-new-drug-ind-or-device-exemption-ide-process-cber/investigational-covid-19-convalescent-plasma-emergency-inds">emergency Investigational New Drug applications</a> for serious or life-threatening COVID-19 infections.&nbsp;The FDA recently published guidance to researchers on <a href="https://www.fda.gov/media/136470/download">COVID-19 Convalescent Plasma</a>.</p> <p style="margin-left: 40px;"><i><u>Diagnostic Testing</u></i> &ndash; the FDA has worked with more than 220 test developers who have indicated they will be submitting emergency use authorizations (EUA) request to FDA for COVID-19 testing.&nbsp;As of March 26, <a href="https://www.fda.gov/medical-devices/emergency-situations-medical-devices/emergency-use-authorizations#covid19ventilators">18 EUA</a> have been approved including one real-time diagnostic test for COVID-19, and more than 100 laboratories have begun testing for the virus.&nbsp;The FDA continues to keep up-to-date the COVID-19 Diagnostics FAQ.</p> <p style="margin-left: 40px;"><i><u>Vaccine Development</u></i> &ndash; the first <a href="https://clinicaltrials.gov/ct2/show/NCT04283461?term=mrna-1273&amp;draw=2&amp;rank=1">phase 1 clinical trial</a> for an investigational vaccine to protect against COVID-19 is underway at Kaiser Permanente.&nbsp;The trial will evaluate the safety and reactogenicity of the vaccine mRNA-1273 in healthy adults.&nbsp;The trial enrolled approximately 45 subjects and will last approximately one year.</p> <p style="margin-left: 40px;"><i><u>3D Printing</u></i> &ndash; as the need for critical medical products outpaces the supply chain, many are using 3D printing to assist in meeting the demand for certain products, such as PPE, ventilators and ventilator component parts.&nbsp;The FDA recently published <a href="https://www.fda.gov/medical-devices/3d-printing-medical-devices/faqs-3d-printing-medical-devices-accessories-components-and-parts-during-covid-19-pandemic">FAQs on 3D Printing of Medical Devices, Accessories, Components, and Parts During the COVID-19 Pandemic</a>, and has authorized an EAU for ventilators, ventilator tubing connectors, and ventilator accessories, which could include items such as 3D-printed tubing connectors for multiplexing ventilator use.&nbsp;The FDA also is <a href="https://www.americamakes.us/statement-on-covid-19/">collaborating with the Department of Veterans Affairs (VA) Innovation Ecosystem, America Makes Public-Private Partnership, and the National Institutes of Health (NIH) 3D Print Exchange</a>, a resource from the National Institute of Allergy and Infectious Diseases at the NIH, to deploy the nation&rsquo;s manufacturing resources to help effectively and safely meet the needs of the health care industry.</p> <p>These are only a handful of the remarkable research and development efforts ongoing across the country.&nbsp;Those interested in following the latest research developments in the fight against COVID-19 can visit the FDA&rsquo;s <a href="https://www.fda.gov/news-events/fda-newsroom/press-announcements">Coronavirus Update: Daily Roundup</a>.&nbsp;</p> https://www.bswllp.com/?t=40&anc=285&an=107506&format=xml