On Sunday, December 27, 2020, President Trump signed a bill providing a long-awaited second COVID-19 relief package (“Relief Package”). The Relief Package contains a number of key provisions impacting employers as of January 1, 2021:

1. It offers a new round of forgivable PPP loans of up to $2 million to employers with less than 300 employees whose gross receipts have declined by 25% or more in any quarter of 2020 compared to 2019. Employers who took a loan in the first round of PPP lending are eligible for a second PPP loan, as long as they used (or will use) all of their previous PPP loan. If you received PPP funds in the first round, it clarifies that expenses used for PPP forgiveness are tax deductible, and if your PPP loan was for $150,000 or less, it offers a new, simple one-page form to apply for forgiveness.

2. It does not extend the mandates of the Emergency Family and Medical Leave Expansion Act (“EFMLEA”) or the Emergency Paid Sick Leave Act (“EPSLA”) under the Families First Coronavirus Response Act (“FFCRA”), which expire December 31, 2020, but does allow tax credits to employers for “FFCRA like” paid leave benefits paid to employees through March 31, 2021.

3. It provides for continued federal assistance to unemployed workers with supplemental weekly benefit payments of $300 and an 11 week extension of the maximum benefit period (now reduced to 10 weeks due to the President’s delay in signing), through March 14, 2021.

The Details:
1. New Round of Forgivable PPP Loans

The new Relief Package sets aside $284 billion in new PPP loan funding, which is available to employers whether they participated in the first round of lending or not.

Eligibility

To be eligible, employers must:

  • Have experienced a decline of 25% or more in gross receipts (income) in any quarter of 2020 compared to 2019. Gross receipts will likely exclude funds from PPP loans or other loans/grants.
  • Have been in business prior to February 15, 2020.
  • Have used (or will use) all previous PPP loan amounts, if received.
  • Have fewer than 300 employees.

Amounts Available

The maximum loan amount per employer is $2 million. As with the first round of PPP, most employers can take a loan amount up to 2.5 times their average 2019 monthly payroll costs. Employers in certain industries that have been particularly hard hit by the pandemic, including hotels and restaurants, can take up to 3.5 times their average 2019 monthly payroll costs.

The Relief Package includes set-asides for small businesses (those with less than 10 employees) and those located in low- and moderate-income areas, which were disproportionately shut out of the first round of PPP lending. It also allocates $15 billion in grants (not loans) for cultural and entertainment providers like performing arts venues, movie theaters and museums.

The Relief Package also allocates funds for a new round of EIDL (Economic Injury Disaster Loan) grants for businesses in low-income communities. Additionally, employers who receive both an EIDL advance grant and a PPP loan are no longer required to deduct the EIDL advance amount from their PPP forgiveness amount.

Forgiveness

The new Relief Package clarifies that expenses used for PPP forgiveness are now tax deductible (reversing a prior Treasury Department decision), and for PPP loans of $150,000 or less, lenders will be provided a new, simple one-page form for borrowers to use to apply for forgiveness. These changes apply to the new round of PPP loans as well as the previous round.

Additionally, while borrowers are still required to use at least 60% of PPP funds on payroll expenses, the categories of non-payroll expenses that are forgivable are now much broader, including payment for software, cloud services, accounting and human resources expenses, as well as the cost of goods and services ordered or contracted before or during the loan period.

What Employers Should Do Now

To secure a PPP loan before this new round of funding gives out, employers should be prepared to apply on the first day the applications open by:

  • Figuring out your income by quarters in 2020 and 2019.
  • Contacting potential lenders to find out whether they will be participating in this round of PPP. Have a couple of lending sources lined up and ready to go.
  • Pay attention to application opening dates and deadlines, and apply on day one for everything you believe you may qualify for.

2. FFCRA Leave Becomes Optional After December 31, 2020

FFCRA required most employers to provide eligible employees who were unable to work for COVID-19-related reasons up to 2 weeks of paid leave under the EPSLA and 10 weeks of paid leave under the EFMLEA. For private employers, the requirement to provide this paid leave was offset by dollar-for-dollar payroll tax credits for wages paid to employees taking paid leave. These FFCRA provisions expire on December 31, 2020 and are not extended by the new Relief Package.

However, the Relief Package allows private employers to continue to offer FFCRA leave on a voluntary basis, and those who do can still claim dollar-for-dollar payroll tax credits on wages paid to employees through March 31, 2021, provided the leave is available and paid as would be required by the FFCRA if it still applied.

What Employers Should Do Now

Employers will need to decide whether extending FFCRA leave on a voluntary basis after December 31, 2020 makes sense from a financial and human resources perspective, and then revise (or eliminate) their existing FFCRA paid leave policies and notify employees of any such policy changes.

3. Enhanced Unemployment Benefits

The CARES Act extended the unemployment benefit period by 13 weeks for individuals receiving unemployment benefits. The New Relief Package extends that benefit period by an additional 11 weeks, making the total extended unemployment eligibility period 24 weeks.
The new Stimulus Package also reinstates the supplemental federal unemployment benefit provided under the CARES Act, albeit at a lower weekly rate than before. The Relief Package provides for additional federal unemployment benefits of $300 per week to eligible unemployed workers until March 14, 2021 (reduced from the previous $600 per week that expired in July). The Relief Package offers no retroactive unemployment benefits.

The Coronavirus vaccine is initially only available under an “emergency use authorization” and is not fully licensed by the FDA. The question of whether employers can require employees to take a vaccine that has not been fully approved is a novel one. The EEOC, the agency that interprets and enforces the ADA and Title VII, may be reluctant about issuing guidance on the topic, leaving employers in legal limbo until the vaccine receives formal approval.

Employers are permitted to require employees to receive the flu shot and other job-related vaccines, which have been fully approved, provided the employer made certain exceptions for workers with qualified disabilities under the ADA or those who objected on religious grounds under Title VII.  The same exceptions may apply to an employer’s mandate related to the Coronavirus vaccine.

Given the short development timeline for the vaccine, and the polarization of the positions on the issue, surveys indicate that a size-able percentage of the country’s population is wary of taking it.  This creates practical barriers to enforcing a vaccine mandate for employers, even if such a mandate were to be legally permissible.  Employers who are not prepared to lose significant segments of their workforce who refuse to take the vaccine may consider:

  • offering incentives such as gift cards or discounts on insurance premiums
  • promoting taking the vaccine as a good health practice and good corporate citizenship, which studies indicate can increase employees’ faith in the vaccine; or
  • creating hurdles for employees who want to opt out of the vaccine by requiring them to complete paperwork explaining their reasoning

Depending on how the legal landscape develops, employers will have to decide whether to adopt a carrot or stick approach, or perhaps a blend of the two.

Sullivan Collins Law Group will continue to keep you updated on the latest pandemic-related developments in workplace law, and we are always available to answer questions and offer advice to our corporate clients as we navigate these unprecedented times together.

Sullivan Collins Law Group congratulates Ann K. Sullivan on her selection as a “Super Lawyer” and Deb Collins on selection as a “Rising Star” for 2021.  Ms. Sullivan has been selected for this honor every year since 2006.  Super Lawyers selects attorneys using a multiphase selection process to include peer nominations and evaluations, combined with independent research.  Each candidate is evaluated on 12 indicators of peer recognition and professional achievement.  No more than 5% of lawyers in the state are named to the Super Lawyers list, and no more than 2.5% of lawyers in the state are named to the Rising Stars list.

CREDIT: By Sarah Kliff, Nov. 13, 2020 – NYTimes.com (https://www.nytimes.com/2020/11/13/upshot/coronavirus-surprise-bills-guide.html)


More Americans are getting tested for coronavirus than ever before — and that could mean more surprise medical bills.

Congress wrote rules in March that aimed to make coronavirus testing free for all Americans. Patients, with or without insurance, have found holes in those new coverage programs. They’ve faced bills that range from a few dollars to over $1,000.

I’ve spent much of the past four months collecting patients’ bills related to coronavirus. As part of that project, I’ve read through more than 100 patient stories about coronavirus tests. Many patients are happy to report no charge at all, while others have been billed large unexpected fees or denied claims related to coronavirus tests.

The surprise bills have hit uninsured Americans as well as those with robust coverage. The health data firm Castlight estimates that 2.4 percent of coronavirus test bills leave some share of the charge to consumers, which means there could be millions of patients facing fees they did not expect.

These are some simple steps you can take to lower your chances of becoming one of them.

If you can, get tested at a public site

Many states, counties and cities/towns now have public testing facilities. Very few patients have reported surprise medical bills from those testing sites (although it’s not impossible). You can typically use your state health department website to find public testing options.

If a public test site isn’t an option where you live, you might consider your primary care doctor or a federally qualified health clinic. The largest surprise coronavirus test bills I’ve reviewed tend to come from patients who are tested in hospitals and free-standing emergency rooms. Those places often bill patients for something called a facility fee, which is the charge for stepping into the room and seeking service.

Patients are finding that these fees can pop up even when they don’t actually set foot in the facility. Multiple patients at one Texas emergency room had $1,684 facility fees tacked onto their drive-through coronavirus tests. A patient in New York faced a $1,394 charge for her test at a tent outside a hospital. The majority of the bill was the facility fee. The investigative news site ProPublica has reported on how facility fees can sometimes cost as much as 10 times the coronavirus test itself.

If you get your test at a primary care provider, or at a public test site, you shouldn’t have to worry about that type of billing. They typically do not charge facility fees for coronavirus tests or any other types of care.

Ask your provider what they’ll bill you for

When patients receive a surprise medical bill related to a coronavirus test, the charges they face often are not for the test itself. Instead, they are for other services that the patient may not have known about.

Some of those services make sense. Many bills for coronavirus tests have fees for the doctor visit that went along with it. Others make less sense, like the ones that include screenings for sexually transmitted diseases that have nothing to do with coronavirus. Those extra fees appear to be a bit more common in emergency rooms, or when health providers send their samples to outside laboratories. But they can happen at public testing sites, too: One Connecticut doctor regularly tested patients for dozens of illnesses at a town drive-through. The patients thought they were simply getting coronavirus tests.

To avoid those extra charges, ask your provider what diseases they will screen for. It can be as simple as saying: “I understand I’m having a coronavirus test. Are there any other services you’ll bill me for?” Having a better understanding of that up front can save you a headache later, and you can make an informed decision about what care is actually needed. If your providers can’t tell you what they’ll bill for, that may be a signal you want to seek care elsewhere.

Uninsured? Ask your doctor to bill the government, not you

Uninsured patients have faced coronavirus bills upward of $1,000, according to billing documents reviewed by The New York Times.

That type of billing is legal: Health care providers are not required to provide free coronavirus tests to Americans who lack health insurance. But they do not necessarily have to bill patients directly. The federal government has set up a provider relief fund: Health providers can seek reimbursement for coronavirus testing and treatment provided to those without coverage. Once again, it pays to ask ahead of time how providers handle uninsured patients and whether they submit to the fund. Unfortunately, they are not required to do so — and could continue to pursue the debt.

You should also be aware that 17 states have authorized their state Medicaid plans to cover coronavirus test costs for uninsured Americans. This means your state government can pay the bill instead of you. You can find out if you live in one of these states here.


CREDIT: By Sarah Kliff, Nov. 13, 2020 – NYTimes.com (https://www.nytimes.com/2020/11/13/upshot/coronavirus-surprise-bills-guide.html)

We are heading into flu season, and this year brings heightened concern due to the COVID-19 pandemic and the possibility that the two viruses will simultaneously hit the workforce over the winter months, with potentially grave health consequences for some. As such, this year employers may find it more important than ever to adopt a mandatory flu vaccination policy. However, recent years have seen a wave of litigation by employees challenging such policies. Although most prevalent in the health care industry, where such policies follow CDC recommendations that workers who have direct contact with patients be vaccinated, employers in other sectors are beginning to adopt flu shot policies in an effort to prevent employee exposure to this sometimes deadly virus.

Legal challenges usually arise when the employer is unwilling to make an exception to its mandatory vaccination policy for pregnant employees, or those who have religious objections, although there have been a few successful challenges based on non-medical or non-religious reasons.

The EEOC has addressed the issue, noting that mandatory flu shots may be permissible, provided that the employer provide reasonable accommodation for religion under Title VII, and for pregnancy or other disability under the ADA. The bottom line for employers: (1) ensure there is a legitimate basis for your flu shot mandate, especially if operating outside the health care industry (this should be easier to do now that we are in the midst of a deadly pandemic); (2) communicate up front that employees may request an exemption, and carefully consider and document all such exemption requests; and (3) if unsure a request is valid, seek legal advice before taking adverse action against any employee who refuses the flu vaccine. Flu season brings enough worries about ending up in the hospital; employers should take precautions to ensure they don’t end up in the courthouse as well.

Sybil Spurgeon claimed another victory for one of our disability clients this month, obtaining a reversal of the denial of his ongoing long term disability claim by Reliance. The client, a veteran of the construction industry who was sidelined by cardiac issues, neuropathy and osteoarthritis, had initially been qualified for benefits. However, after undergoing open heart surgery, his cardiac symptoms began to improve. On this basis, the carrier denied future benefits, claiming the client was no longer disabled and could return to light duty work. Their decision failed to account for his other disabling conditions, which were deteriorating. Our appeal successfully argued that there was ample medical documentation of his other conditions available to the carrier which should have been considered. The carrier’s examining physician stated that ours was the finest appeal package he had seen in his 40 years of practice. We are proud of the work we were able to accomplish for this client!

In a landmark decision, Bostock v. Clayton County, the Supreme Court last week ruled that the ban in Title VII of the Civil Rights Act on sex-based bias includes sexual orientation and gender identity, such that gay and transgender workers are protected by the federal anti-discrimination law. Under this ruling, an employer violates Title VII, which makes it unlawful to discriminate against an individual “because of” their sex, by firing or taking any other adverse employment action against an employee merely for being homosexual or a transgender person.

Of note, at the end of his opinion, Justice Neil Gorsuch recognized an employer’s potential religious concerns with complying with the law, and briefly addressed three Title VII exceptions that will “merit careful consideration” in future cases. Specifically, Title VII includes an express statutory exception for religious organizations that would give churches, religious schools and faith-based employers the right to deny employment to workers of other faiths. The “ministerial exception” prohibits priests, religious teachers and other “ministers” from bringing job discrimination claims against their employers on First Amendment grounds. The Religious Freedom Restoration Act bars the government from infringing a person’s religious rights unless it has a good reason for doing so and does so in the “least restrictive” way. Justice Gorsuch made clear that none of the employers in the Bostock case attempted to argue that compliance with Title VII would infringe on their own religious liberties in any way, leaving the door open to employers to attempt to assert religious defenses to gay and trans workers’ claims in the future. Employers should note, however, that these defenses are narrowly applied and will not apply to or will be very difficult to prove by most private employers, based upon previous decisions that have applied the exceptions.

Employers should review their handbooks and anti-discrimination policies to ensure compliance with the Bostock opinion. Sullivan Collins Law Group is available to assist employers in ensuring that their policies and actions comply with Title VII and other federal and state laws.

On Friday, June 5, the President signed legislation that significantly changes the PPP (Paycheck Protection Program), making it easier for borrowers to qualify for full, or almost full, forgiveness. The key changes are:

  • Borrowers now have 24 weeks to exhaust their loan funds instead of just eight weeks. Borrowers who received their funds prior to June 5 now have the flexibility to extend the covered period to 24 weeks, but the covered period for new and existing borrowers must end by December 31, 2020.
  • Borrowers now have until December 31, 2020 to restore their workforces to the pre-pandemic level required for full forgiveness. Borrowers unable to return to the number of full-time employees they had on February 15, 2020 will still qualify for forgiveness if they can demonstrate the inability to rehire or hire workers is due to reduced business activity.
  • Borrowers are no longer required to put 75% of loan funds toward payroll costs to qualify for full forgiveness. The revised law lowers the threshold to 60%, and guidance from the SBA indicates that borrowers who use less than 60% of their disbursement to cover payroll are still eligible for partial forgiveness.
  • New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree.

We expect the SBA, IRS, and Treasury to issue guidance on these changes shortly, as well as guidance on the forgiveness application process. We strive to keep you abreast of new developments and are happy discuss how to make these changes work for you and your business. As always, please contact us if you have questions or concerns.

Ann K. Sullivan, Esq. (asullivan@asksullivan.com)
Deborah Y. Collins, Esq. (dcollins@asksullivan.com)
Sybil L. Spurgeon, Esq. (sspurgeon@asksullivan.com)
Melissa Morris Picco, Esq. (mpicco@asksullivan.com)

On Friday, May 15th, the SBA issued the Loan Forgiveness Application that PPP borrowers must use to calculate and report how much of their PPP loan will be forgiven. The Application and accompanying instructions address several areas of borrower uncertainty for which the SBA had previously failed to offer specific guidance, including the following:

Aligning your payroll periods with the 8-week loan forgiveness period

In most cases, a borrower’s payroll period will not exactly align with the 8-week forgiveness period that begins on the day the first loan funds are distributed. The CARES Act stated that only “costs incurred and payments made” within the 8-week period would be forgiven, leading borrowers and commentators to worry that payroll costs would need to be both “paid and incurred” – meaning that the employee would actually have to work and be paid for such work – within that time. For most borrowers, this would mean excluding all or a portion of one or more payrolls – an accounting nightmare.

However, the application allows the borrower to choose to use the 8-week forgiveness period, which is referred to as the Covered Period, or to select an Alternative Payroll Covered Period, to line up with the payroll schedule of the borrower, as long as the borrower pays on a bi-weekly basis, or more frequently. The Alternative Payroll Covered Period, if elected, begins on the first day of the borrower’s first pay period following the date of loan disbursement, and ends on the 56th day thereafter. As such, borrowers who pay their employees in full on the last day of each pay period will receive full forgiveness for the entire 8 weeks of payroll.

Borrowers who pay their employees on a delay (days after the last day of the pay period) will need to adjust their payday for their last payroll within the 8 week period, if possible, to coincide with the last day (the 56th day) of the Alternative Payroll Covered Period to avoid losing full forgiveness of that payroll. Employers who pay monthly should adjust their payroll procedures to pay every two weeks so that they can qualify to use the Alternative Payroll Covered Period.

If a borrower elects to use the Alternative Payroll Covered Period, it must also track payments for employee health insurance, retirement plan contributions, and state and local taxes assessed on employee compensation for the same period of time, as those are considered to be “payroll costs,” but should still track rent, interest and utility payments in alignment with the Covered Period (the 8-week period starting with the date of loan disbursement).

Rent, utilities and interest paid on delay are still forgivable

Rent, utilities and interest incurred during the Covered Period will also qualify to be forgiven as long as they are paid during the Covered Period or by the next regular billing date, even if the billing date is after the Covered Period.

The 75% rule is not an “all or nothing” requirement

The SBA has previously indicated that loan forgiveness will be limited if 75% of the loan amount is not spent on payroll, health insurance and pension expenses. The application confirms that eligible nonpayroll costs cannot exceed 25% of the total forgiveness amount. However, this does NOT mean that if a borrower’s non-payroll expenses exceed 25% of the loan amount, there is no forgiveness whatsoever. Rather, there would be instead a proportional reduction in the total loan forgiveness.

To make this calculation, a borrower must first determine its payroll expenses (employee payroll plus payroll-related costs, such as employee health insurance, retirement plan contributions, and state and local taxes associated with payroll), and then the sum of its other forgivable expenses (rent, utilities, and interest). The sum of a borrower’s “other forgivable expenses” cannot exceed 33 1/3% of its “payroll expenses.”

For example, if the loan is $100,000, and only $70,000 is spent on payroll expenses, then 33 1/3rd% of $70,000 is $23,333, and the maximum allowable amount of other forgivable expenses will be $23,333, so that the total loan forgiveness would be $93,333.

The SBA, IRS, and Treasury will most likely continue to issue guidance on PPP loan forgiveness, and we strive to keep you up to date on these important changes. Please reach out to us to discuss how we may help you.

Ann K. Sullivan, Esq. (asullivan@asksullivan.com)
Deborah Y. Collins, Esq. (dcollins@asksullivan.com)
Sybil L. Spurgeon, Esq. (sspurgeon@asksullivan.com)
Melissa Morris Picco, Esq. (mpicco@asksullivan.com)

We Are With You
The EEOC has recently issued updated guidance to employers outlining the action they may or may not take under the Americans with Disabilities Act to keep employees healthy during the current pandemic.

Excluding COVID-19 Positive or Symptomatic Employees

Employees with COVID-19 or symptoms of it, are currently considered a “direct threat” in the workplace. As a result, employees may be excluded from the workplace and are not protected by the non-discrimination provisions of the American with Disabilities Act.

  1. You may screen job applicants for symptoms of COVID-19 after making a conditional job offer, including taking their temperature, as long as you do so for all entering employees in the same type of job.
  2. You may require job applicants to undergo a post-offer medical examination to ensure they do not have COVID-19, or symptoms of it.
  3. You may delay or rescind a job offer made to a job applicant based on the results of a post-offer medical examination if it reveals that the applicant has COVID-19 or symptoms of it.
  4. You may take employee’s temperatures on a regular basis, maintaining confidentiality.
  5. You may ask employees who report feeling ill at work, or who call in sick, questions about their symptoms to determine if they have or may have COVID-19.
  6. You may send home an employee with COVID-19 or symptoms associated with it
  7. You may require employees who have been absent due to COVID-19 illness or symptoms to provide a doctor’s note certifying fitness to return to work.
  8. You may ask employees returning from travel about possible exposure to COVID-19, even if the travel was personal, and you may require travelers to stay at home for several days until it is clear they do not have COVID-19 symptoms.

Identifying Employers at Higher Risk for Severe Illness 

  1. You may not ask employees who do not have COVID-19 symptoms to disclose whether they have a medical condition that the CDC says could make them more vulnerable.
  2. You may not bar an employee from returning to the workplace solely because they are over the age of 65 or have medical conditions that make them more vulnerable to COVID-19 complications.
  3. If an employee voluntarily discloses that they have a specific medical condition or disability that puts them at increased risk of COVID-19 complications, you should ask them to describe the type of assistance they think will be needed, like telework or leave for a medical appointment.
  4. Employees with disabilities that put them at high risk for complications may request telework as a reasonable accommodation to reduce their chances of infection during a pandemic.
  5. You may make inquiries that are designed to identify potential non-medical reasons for absence during a pandemic. The inquiry should be structured so that the employee gives one answer of “yes” or “no” to the question.

Example

ADA Compliant Pandemic Employee Survey

Directions: Answer “yes” to the whole question without specifying the factor that applies to you. During this pandemic, are you unable to come to work because of any of the following reasons:

  • Schools or day-care centers are closed, and you need to care for a child
  • Other services are unavailable, and you need to care for other dependents
  • Public transport is sporadic or unavailable, and you are unable to travel to work
  • You or a member of your household fall into one of the categories identified by the CDC as being at high risk for serious complications from the COVID-19, and you have been advised by public health authorities not to come to work.

Answer: YES_____ NO_____ 

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