From its office in Clayton, Missouri, Danna McKitrick, P.C., delivers legal representation to new and growing businesses, financial institutions, non-profit and government-related entities, business owners, individuals, and families throughout the greater St. Louis region and the Midwest.
Danna McKitrick attorneys practice across many areas of law, both industry- and service-oriented.
OSHA has released new guidelines for reopening to help non-essential businesses ensure the safety and health of their employees and customers from the spread of COVID-19.
The Paycheck Protection Program Flexibility Act (Flexibility Act) makes key changes to the Paycheck Protection Program (PPP) that provide borrowers with more flexibility to obtain loan forgiveness, including extending the time period to spend PPP loan proceeds, reducing the payroll expenditure requirement for PPP loans, and extending the time period to restore employment and wage levels. The following is a summary of the modifications the Flexibility Act makes to the PPP.
1. Extension of Time to Spend Loan Proceeds. The Flexibility Act extends the covered period that a borrower must spend its loan funds from eight weeks after the loan origination date to 24 weeks or until December 31, 2020, whichever is earlier. The Flexibility Act allows borrowers that already received a PPP loan prior to enactment of the Flexibility Act to elect an eight week covered period, which may be beneficial for borrowers who have already spent most of their PPP loan proceeds and are near the end of their original eight week covered period.
2. Payroll Expenditure Requirement. The Flexibility Act reduces the payroll expenditure requirement from 75% to 60%. The remaining 40% of loan funds may still only be used for payments of interest on any covered mortgage obligation, rent and utilities.
In an Interim Final Rule issued on April 3, the SBA established the requirement that at least 75% of the PPP loan proceeds be used for payroll costs. If less than 75% of the of loan funds are spent on payroll costs, the SBA Loan Forgiveness Application requires a borrower to reduce the amount eligible for loan forgiveness. In changing the payroll expenditure requirement to 60%, the Flexibility Act added the following language to the CARES Act: “To receive loan forgiveness”, a borrower “shall use at least 60% of the covered loan amount for payroll costs.” Based on this language it is not clear whether a borrower will still be able to obtain partial loan forgiveness if the 60% threshold is not obtained. Continue reading »
A recent survey of Missouri manufacturers by Missouri Enterprise found that understanding wellness and health guidelines due to Covid-19 is a top challenge for moving forward.
The Small Business Administration (SBA) and the Department of Treasury have released the Paycheck Protection Program (PPP) Loan Forgiveness Application.
The application deadline for the Paycheck Protection Program has been extended to August 8, 2020. Updated loan forgiveness instructions and forms are available here:
On May 13, 2020, the Small Business Administration (SBA), in consultation with the Department of the Treasury, extended the safe harbor deadline to repay Paycheck Protection Program (PPP) loans to May 18, 2020. Previously in its PPP Loans Frequently Asked Questions (FAQs), the SBA reminded borrowers to carefully review the required certification on the PPP loan application that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
In further guidance, the SBA provided that any borrower of a PPP loan that repays the loan in full by the specified safe harbor deadline will be deemed by the SBA to have made the required certification concerning the necessity of the loan request in good faith. According to the newly issued FAQ #47, Continue reading »
So, your furloughed employee[i] is returning to work – Hooray!? Not so fast. Employers and the medical providers who are treating and perhaps testing these employees/patients for COVID-19 need to be wary about who is able to disclose and use testing information and towhom. Both sides must tread carefully and follow strict guidelines in such situations.
For over two decades, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) has governed disclosure of an individual’s protected health information and has prevented a medical provider from unilaterally disclosing sensitive health information to employers. Even faced with a previously unimaginable global pandemic, from its implementation in 2003, the HIPAA Privacy Rule has had procedures in place that address this thorny legal issue.
Take the following hypothetical example: An employer furloughs an employee as a reduction in work force for financial reasons. While on furlough, the rumor mill is active and the employer “hears” that this employee may have been experiencing COVID-19 symptoms while on furlough. May the employer reach out to the employee’s medical provider to obtain medical information specifically related to COVID-19 testing? May the provider release such information if the employer contacts the provider to inquire? Work-arounds exist under the HIPAA Privacy Rule or may exist when the employer pays for COVID-19 testing.
The Federal Reserve announced on April 9, 2020 that it has established a $600 billion lending program focused on aiding small and medium-size businesses who were in good financial standing prior to the onset of the COVID-19 crisis. This program will enable the purchase of qualifying loans from lenders lending to U.S. businesses with up to 10,000 employees or up to $2.5 billion in 2019 annual revenues. Additionally, it looks like firms who have taken advantage of the SBA Paycheck Protection Program will be eligible to participate in this program as well.
The Federal Reserve’s Main Street Lending Program will operate through two facilities: the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF). Eligible lenders may originate new loans (under MSNLF) or increase the size of (“upsize”) existing loan/tranches (under MSELF) made to eligible businesses. The program is not operational at this time, but the comment period just closed on April 16, 2020. Accordingly, we can expect the program to start and have an application available soon.
The MSNLF will purchase participations in eligible loans originated by lenders on or after April 8, 2020. The MSELF will purchase upsized tranches or loans originated by lenders before April 8, 2020 that meet specific eligibility criteria. In either case, the purchases will be on a risk-shared basis with the lender retaining 5% of the loans and the relevant facility purchasing 95% participation in the loans originated by eligible lenders. This 95% purchased participation will be through a single special purpose vehicle on a recourse basis as set up by a Reserve Bank branch.
We will first discuss the borrower, lender, asset, and entity eligibility requirements that are the same across both facilities before delving into the facility-specific issues.
Common Requirements
Eligible lenders include U.S. insured depository institutions, U.S. bank holding companies, and U.S. savings and loan holding companies (“lenders”). While eligible borrowers are businesses with up to 10,000 employees or up to $2.5 billion in 2019 annual revenues. Borrowers must be a business created or organized in the United States or under the laws of the United States with significant operations in, and most of its employees based in, the United States. Borrowers who participate in program may not also participate the Primary Market Corporate Credit Facility as established by the Federal Reserve.
Eligible loans are unsecured term loans made by a lender(s) to a borrower that has: Continue reading »
The United States has seen a staggering rise in claims for unemployment with nearly 3.3 million new jobless claims. With no clear end to the COVID-19 crisis in sight, Congress passed legislation and states have revised policies to ease the growing unemployment burden. This article provides an overview of the unemployment provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and new measures taken by Missouri and Illinois to provide relief.
The CARES Act
The CARES Act provides for $260 billion to dramatically expand unemployment coverage for workers who are unable to work as a result of the pandemic.
In the event a worker becomes unemployed as a result of COVID-19, the worker will be eligible for Federal Pandemic Unemployment Compensation (FPUC) of $600 per week. This payment is in addition to any benefits a worker is entitled to under applicable state law. The supplemental payments will be provided through July 31, 2020.
The CARES Act also provides for 13 weeks of Pandemic Emergency Unemployment Compensation (PEUC), in addition to regular length of time a worker may receive regular state benefits. To receive these extended benefits, a worker must be actively searching for work, though the CARES Act requires states to provide flexibility in applying this requirement when COVID-19 restricts an individual’s ability to look for work.
Workers who usually do not qualify for unemployment benefits, including those who are self-employed, independent contractors and freelancers, among others, will be eligible for Pandemic Unemployment Assistance (PUA). PUA is also available to those who have already exhausted all rights to regular unemployment benefits (including the extended benefits described above). Certain criteria specific to the COVID-19 pandemic apply to individuals seeking PUA. For those who meet the criteria, PUA is available for weeks of unemployment, partial unemployment, or inability to work caused by COVID-19 for up to 39 weeks of the time period of January 27, 2020 through December 31, 2020.
Another portion of the CARES Act expands “work sharing” programs to provide partial benefits to workers with reduced hours. These programs allow employers to put workers on part-time status with partial unemployment benefits. Currently, the cost of these programs, intended to prevent layoffs, is borne by individual states. The CARES Act provides funding to states to promote and utilize these programs.
Missouri’s Response
The recently passed Families First Coronavirus Response Act (FFCRA) goes into effect April 1, 2020. The FFCRA provides states an initial influx of funding to handle the dramatic increase in unemployment benefit applications and allowed flexibility in modifying policies and procedures. Missouri Governor Mike Parson announced changes being made by the Missouri Department of Labor and Industrial Relations:
Just
as we are adapting our daily lives, cyber-criminals have adapted their
nefarious activities to capitalize on people’s fears and potential system
weaknesses during COVID-19. Hackers are targeting connection vulnerabilities
and sending phishing emails with COVID-19-related subject lines or pretending
to be a boss/coworker using a personal account. They have also been sending malware
with fake COVID-19 tracker maps, WHO, or CDC information and making social
media posts or comments with pleas related to COVID-19.
Reasons
systems and data could be particularly vulnerable during COVID-19 include:
Human error;
Unvetted personal
devices;
Devices behind in
patches or updates;
Public Wi-Fi
networks; and
Lack of remote
work ‘protocol’ or training.
As
a result, now more than ever you need to review your company’s data and privacy
policies and ensure your workforce can successfully work from home. To
illustrate just how important this is, consider Privacy Rights Clearinghouse’s
statistic that 11,613,547,443 records have been breached since 2005.
