Governor Cuomo recently signed into law the Emergency or Disaster Treatment Protection Act (“EDTPA”).[1] While the EDTPA grants healthcare professionals and facilities “immunity” from most civil and criminal liability if the health care facility or professional was arranging for, or providing health care services, pursuant to a COVID-19 emergency rule or as required by law, what are professionals and facilities actually immune from? The EDTPA provides that immunity applies if (1) the facility or health care professional is acting in good faith, and (2) the health care professional or facility did not act willfully, intentionally or in a manner that constitutes criminal misconduct, gross negligence, reckless misconduct or intentional infliction of harm. However, other than referencing defined terms like “gross negligence” and “reckless disregard,” the statute largely does not address what is meant by them. Nor does it provide guidance on how those standards should be applied to any future claims against medical professionals and facilities for actions taken and decisions made during the current pandemic. What is “gross negligence” and “reckless disregard”? It has become painfully clear that COVID-19 has had a disproportional impact on nursing homes and other medical facilities. While the immunities contained in the EDTPA are potentially significant, they are not absolute. Predictably, there is already a debate between advocates for health care professionals and facilities who contend that the protections do not go far enough, and plaintiff’s attorneys and resident advocates who allege that the statute will lead to the cutting of corners, and leave affected residents and their families without any recourse. Both sides are already preparing for a wave of new lawsuits when the pandemic abates to probe and define the scope of these immunities. Given that this crisis is unfolding in real time, we do not yet have any firm direction or insight from the courts how they will define and apply “gross negligence” or “reckless misconduct” against the backdrop of COVID-19. However, the concepts of both gross negligence and reckless misconduct have long been employed by courts in a variety of other situations. These historical precedents provide at least some guidance how courts are likely to apply these standards vis-à-vis the EDTPA. New York’s highest court, the Court of Appeals, has held that gross negligence is “conduct that evinces reckless disregard for the rights of others or ‘smacks’ of intentional wrongdoing.”[2] Courts look to both the gravity of a person’s deviation from a reasonable standard of care, as well as his or her subjective state of mind. To that end, gross negligence may be found either “where there is a reckless indifference . . . or an intentional failure to perform a manifest duty to the public, in the performance of which the public and the party injured have interests.”[3] Put another way, in order to rise to the level of reckless disregard, a person’s conduct must show actions that lack “even slight care” or are “so careless as to show complete disregard for the rights and safety of others. Application to the EDTPA Clearly, in order to demonstrate gross negligence or reckless disregard under the EDTPA, more than just a mistake, error or oversight will need to be shown. For example, the statute specifically states that actions or decisions that result from shortages in staffing or resources will not be considered gross negligence or reckless disregard. Unfortunately, beyond staffing, the statute does not provide specific examples or guidance on the types of actions or deviations – even in a pandemic – that rise to the level of gross negligence or reckless disregard. Is it grossly negligent for a nursing home employee to not wear a mask, and subsequently infect a resident (albeit unintentionally)? Ostensibly, that employee and his supervisor would be aware of the risk of not wearing a mask, and the danger it poses to others (especially to high-risk nursing home residents). As such, it is not hard to envision that conduct being considered intentional or showing a complete disregard for the safety of others. Conversely, what if the facility ran out of masks or other Personal Protective Equipment (PPE) due to the supply shortages faced throughout the nation (and the world)? Would an unmasked employee in that scenario constitute gross negligence or reckless disregard? It probably depends on whether the absence of PPE results solely from the unanticipated worldwide shortages and supply issues, and not from internal economic driven considerations. What if the facility has sufficient masks and other PPE, but an employee uses it improperly? To the extent the facility has training processes and protocols in place addressing the proper use of PPE, an error by an employee(s) in donning the PPE probably lacks the intentional or indifference elements to meet the heightened threshold. However, what if the training is haphazard and inconsistent, and employees are largely left to figure it out themselves? At some point, a lack of emphasis on the proper use of PPE probably does become “gross negligence” or “reckless disregard.” Another question beyond the scope of this article, is whether insurance companies will attempt to deny coverage for gross negligence based upon exclusions in the policy. Sufficed to say, facilities and providers should be well-versed in what is (and is not) covered in their respective insurance policies to avoid surprises when making an insurance claim. Bottom line, there is simply not going to be an easy reference guide with a list of actions and/or deviations that constitute gross negligence or reckless disregard, and those that do not. However, professionals and facilities must realize that the immunities provided for by the EDTPA are not unlimited. As always, the goal should be to provide the highest level of care possible – recognizing that immunity may very well not exist for significant deviations from the standard of care. Underberg & Kessler stands ready to assist both health care providers and facilities in navigating these uncharted waters in implementing best practices to avoid future claims, as well as addressing and defending claims that are made. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here. [1] On April 23, Margaret Somerset, Esq. wrote an article entitled “How Does the New Immunity Law in NY Apply to Health Care Providers During the COVID-19 Emergency?” discussing the EDTPA [2] Colnaghi, U.S.A., Inc. v. Jewelers Protection Services, 81 N.Y.2d 821 (1993) [3] Int’l Mining Corp. v. Aerovias Nacionales de Colombia, S.A., 57 A.D.2d 64 (1st Dept. 1977)

In addition to Paul Keneally, this post was authored with input from Alina Nadir and Jennifer Shoemaker. New EEOC COVID-19 Guidance The Equal Employment Opportunity Commission (“EEOC”) has revised its coronavirus guidance regarding disability accommodation requests/harassment issues for those employees working now and for those who may soon return to work. Among other points, the EEOC confirmed that employers may ask questions/seek documents regarding the existence of a disability, the ongoing nature of the reasonable accommodation duty, and the continuation of the prohibition against disability harassment. The EEOC also explicitly recognized that the financial impact of COVID-19 may mean employers cannot afford accommodations that might have previously been required. Also, this week the U.S. Supreme Court left intact a relatively pro-employer lower court ruling requiring employees to show that disability discrimination was the “but for” reason for the adverse job action. However, that ruling is of less value for New York employers who are subject to the stricter New York State Human Rights Law disability discrimination standard of “a motivating factor”. NYS Streamlines Benefit Application Process The New York State Department of Labor Unemployment Division has streamlined its process so that applicants that are ineligible for standard benefits will automatically be considered for benefits under the Federal Pandemic Unemployment Assistance program. This federal program applies to those who are self-employed or independent contractors, but also to gig workers, those with COVID-19 or caring for someone with COVID-19 and others. New COVID-19 Stimulus Bills In the evening hours of April 21st, the U.S. Senate has passed another COVID-19 stimulus bill, adding $320 Billion more into the Paycheck Protection Program. The House of Representatives is expected to pass the bill as early as Thursday April 23rd and the President has indicated he will sign it. Those employers who have not considered or applied for these loans, forgivable if staffing levels are retained for 8 weeks, are encouraged to do so quickly by contacting their banker, attorney and/or accountant. Another COVID-19 stimulus package is already being considered, potentially to include “hazard” pay for COVID-19 caregivers, grocery/drugstore workers, and others providing needed goods and services during the pandemic. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

In addition to Jennifer Shoemaker, this post was authored with input from Paul Keneally and Alina Nadir. Tonight, April 15, 2020, at 8:00 P.M., a new obligation under Governor Cuomo’s Executive Order 202.16 takes effect requiring that essential businesses still operating on site during this time of NYS PAUSE must provide employees with face coverings and require employees to use them when those employees are in direct contact (generally six feet or less) with customers or members of the public. Employers are required to provide a mask or face covering at the employer’s expense, but employees may use their own face covering at their sole option. Face coverings include cloth, surgical masks, N-95 respirators and face shields, though the latter of those are prioritized for health care workers and first responders. The Governor’s office has indicated that employers who are unable to supply the face coverings should contact their local county office of emergency management, but that this does not remove the employer’s obligation to provide the face coverings. The Rochester Chamber of Commerce has information on the acquisition of masks for those who need them. Some employees may be exempted from this requirement should it inhibit or impair their health, and for those of that group who are over 70, or who have compromised immune systems or underlying illnesses (i.e., Matilda’s Law categories), reasonable accommodations should be provided to them. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

Paul F. Keneally presented on a webinar hosted by the Genesee Valley Chapter Society for Human Resource Management. The webinar was regarding selected issues under the NYS & federal COVID laws as well as the CARES Act. You can find the presentation below. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

As most businesses focus on the SBA Economic Injury Disaster Loans and Paycheck Protection Program Loans CARES Act, many overlook the advantages provided by the CARES Act tax provisions. The CARES Act provided several changes to the tax law as well as the Employee Retention Credit which may provide much needed additional financial relief to businesses. Businesses who are ineligible for the SBA Economic Injury Disaster Loans or Paycheck Protection Program Loans should consider utilizing the CARES Act tax provisions and the Employee Retention Credit to the maximum extent possible. Below are descriptions of the CARES Act tax-related provisions that will provide relief for businesses during the COVID-19 pandemic. Employee Retention Credit The CARES Act provides eligible employers with a refundable tax credit against the employer portion of social security taxes, equal to 50% of qualified wages paid to an employee between March 12, 2020 and January 1, 2021. The maximum qualified wages includable for any employee is $10,000, resulting in total credits of up to $5,000 per employee for the 2020 year. “Eligible employers” are employers who carry on a trade or business during the 2020 calendar year, including tax-exempt organizations, that: fully or partially suspend operations during any calendar quarter of 2020 due to orders from an appropriate government authority due to COVID-19, or experience a significant decline in gross receipts due to COVID-19. An employer experiences a significant decline in gross receipts when, during a calendar quarter of 2020, gross receipts are less than 50% of gross receipts for the same calendar quarter of 2019, until gross receipts are greater than 80% of gross receipts for the same calendar quarter of the prior year or the period for the credit expires. This means that an employer who has more than a 50% decline in gross receipts for a 2020 calendar quarter is eligible for this credit from that time until gross receipts are back to 80% of that for the corresponding 2019 quarter. “Qualified Wages” are wages and compensation, including qualified health plan expenses properly allocable to wages. However, for employers with an average of more than 100 full-time employees during 2019, the term “qualified wages” includes only wages paid to employees who did not work during the relevant quarter due to fully or partially suspended operations or a significant decline in gross receipts. Wages paid to any employee are included in “qualified wages” if the employer had an average of 100 or less employees in 2019. This credit is claimed on the employer’s federal employment tax returns, usually Form 941, beginning with the second quarter of 2020. Employers can immediately benefit from this credit by applying it against their payroll tax deposits or, if payroll tax deposits are not sufficient, by requesting an advance payment from the IRS by submitting Form 7200. This credit is not compatible with the Paycheck Protection Program (“PPP”) loans, therefore, an employer who receives a PPP loan should not claim this credit. The incompatibility of the credit with the PPP loan makes it ideal for businesses with more than 500 employees or that otherwise don’t qualify for the PPP loan. Read more about PPP loans here. Net Operating Losses The CARES Act allows the carryback of net operating losses (NOLs) arising in taxable years beginning after 12/31/2017 and before 1/1/2021. Losses arising in tax years beginning in 2018 through 2020 may be carried back for the 5 years immediately preceding the taxable year of such loss. The Act does not impact the provisions related to the carryforward of NOLs for those years. Additionally, the Act removes the 80% taxable income limitation on NOLs that the 2017 Tax Cuts and Jobs Act (TCJA) imposed, allowing NOLs to fully offset taxable income for years beginning before January 1, 2021. In order to utilize these losses, companies should amend prior year returns. Business Interest Limitations For 2019 and 2020, the amount of interest expenses businesses are allowed to deduct is increased from 30% to 50% of adjusted taxable income (ATI). For these years, taxpayers may deduct the sum of (i) business interest income, (ii) 50% of ATI, and (iii) floorplan financing interest expense. Taxpayers may elect not to use the increased limitation. Additionally, since many taxpayers will have significantly less income during 2020 as a result of COVID-19, they may elect to use 2019 adjusted taxable income for 2020 instead. For partnerships, the increase to ATI only applies to 2020, allowing partners to treat 50% of the 2019 allocable excess business interest expense from the partnership as fully deductible for the 2020 tax year. The other 50% of the excess business interest expense is subject to the normal rules, which suspends use of the excess business interest expense until a later year, when the partnership allocates excess taxable income or excess business interest income to the partner. Partnerships may also elect to substitute their 2019 ATI for 2020 ATI. The election must be made at the partnership level. Limitation on Losses (Non-Corporate Taxpayers) For pass-through businesses and sole proprietors, the CARES Act removes the limitation on excess business losses for tax years beginning after December 31, 2017, and before January 1, 2021. This provision allows pass-through businesses to apply their excess business losses to tax years beginning in 2018 through 2020 and utilize the resulting cash-flow for operating expenses. For years after 2021, the excess business loss deduction available to non-corporate taxpayers remains subject to the limitations imposed by the TCJA and must be carried forward as NOLs. Excess losses for 2018 can be utilized by filing an amended return. Corporate Alternative Minimum Tax Credit The corporate alternative minimum tax (AMT) was repealed by the TCJA for tax years beginning on or after January 1, 2018, and any corporate AMT credits from prior were refundable in the 2018 through 2021 tax years. The CARES Act permits companies to claim a refund for any remaining amounts in 2019. Alternatively, corporations may elect to claim the full refund in 2018. Again, this is accomplished by filing an amended return for the 2018 tax year. Delay of Payment of Employer Payroll Taxes The CARES Act allows employers and self-employer individuals to defer payment of the employer portion of social security tax. The tax is equal 6.2% of wages. The Act permits employers and self-employer individuals to pay the deferred social security taxes over the following two years. Half of the deferred tax is due by December 31, 2021 and the remaining half is due by December 31, 2022. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

We are currently facing challenges that we have never faced before due to the Coronavirus and COVID-19 pandemic. Our society is under a tremendous amount of stress. For clients going through a divorce or family law case when the pandemic hit, the stress may seem unbearable. How do parents and litigants navigate through this “new normal” during the pandemic? How are court appearances being handled? What should parents in separate households do to keep consistency for their children? Here are some points to keep in mind answering our most commonly asked questions from this past month. Status of Court Appearances Until April 7, 2020, the New York State Court System was open but only hearing essential matters specifically defined by the Courts. Notably, matrimonial cases, custody and child support matters in Supreme and Family Courts were not defined as “essential.” All essential cases are being heard remotely when possible. Appearances and proceedings that were previously scheduled in March or April 2020 have been moved to May or June 2020 and beyond. The Chief Administrative Judge issued a Memorandum on April 7, 2020, stating that the Courts will begin allowing remote access to the courts for pending non-essential matters starting April 13, 2020. As of that date, Judges can begin to schedule settlement conferences in pending cases on their own or on request of the attorneys. The conferences would be held remotely by Skype or telephone. While the plan has not been fully rolled out, it appears that Judges on pending cases will be going through their case loads and reaching out to schedule conferences as needed to move cases forward. It is unclear whether cases already re-scheduled for conferences in May and June 2020 will be moved up unless the attorneys specifically make a request to do so. If there is an emergency regarding a divorce matter in Supreme Court or a custody/child support matter in Family Court, an Order to Show Cause emergency motion can be filed by a party or his or her attorney, and a Judge would be available to review the emergency motion and grant relief in his or her discretion. Following Court Orders During this Pandemic Any temporary or permanent Orders or Judgments previously issued by the Court remain in full force and effect. Child custody orders continue to be valid and enforceable and parties must follow them. If children are court-ordered to be exchanged for residency with parents on a specific schedule, the schedule remains “as is” despite social distancing and voluntary quarantines. Judges have made it clear that Court Orders are to be followed with the general exceptions being (1) if one or both of the parents are diagnosed with Coronavirus or COVID-19, (2) a child is diagnosed with Coronavirus or COVID-19, or (3) a member of a parent’s household is diagnosed with Coronavirus or COVID-19. If one of those events occur, the parents need to contact the child’s pediatrician and follow any recommendations of the pediatrician or other relevant medical professional regarding quarantine and medical safety for the child or children in question. If a pediatrician’s medical advice does not allow a child to follow the schedule in a court order for medical reasons in circumstances where a parent, child, or household member have been diagnosed with Coronavirus or COVID-19, then the parents have to be on the same page and follow the recommendations. Compromises need to happen. If a child cannot visit the other parent for a period of time, then they should have liberal telephone and electronic communication with the other parent. The parent missing out on visitation would receive make-up time for the residency time missed when the child and parents are medically cleared to do so. The more reasonable the parents can be, the better result for the children and the less likely they will need a Court to intervene on the issue. Co-Parenting During the Coronavirus and COVID -19 Pandemic Now, more than ever before, parties need to work together to co-parent their children as much as possible. In most cases, court orders will allow for changes to a residency schedule as long as both parties discuss and mutually agree on the changes. Parents may use common sense and can fashion their own temporary schedule, whether or not someone has been diagnosed with the virus. The health of the children in question is paramount. For example, the court order may have a child exchanged every two days from one home to the other. The parents may decide to space the exchanges further apart, so the child is not having as many transitions and opportunities for exposure. If the parents can discuss a new schedule and mutually agree to it, most court orders offer them the freedom to do so. Parents should try to cooperate as much as possible while continuing to follow the state mandates for social distancing. Keep in mind- if the parents cannot agree to changes to a child’s schedule in a court order, then the court ordered schedule remains as written unless one of the exceptions above applies. If all else fails, parties can file an emergency Order to Show Cause application at court. It is highly recommended that the parties make a diligent effort to reach resolution outside of court prior to resorting to such an extreme remedy, either between themselves or through their attorneys. If there is an emergency, the courts will be there to assist. All courts around the state have begun virtual appearances in essential cases, so parties and counsel could appear electronically rather than in person for emergency applications. How can families with parents in two households assist their children during this time? Parents in separate households can provide comfort and security for their children during this stressful time by trying to be as consistent as possible between households. Parents need to communicate about their household schedules and try to keep the same routine at both homes. This includes the time of day and the curriculum for homeschooling children, the general amount of screen time allowed at each home, and keeping mealtimes, nap times, and bedtimes consistent. Parents should discuss how they want to communicate with their children about the pandemic to avoid anxiety. Parents should try to be on the same page about their own “household rules” for social distancing as much as possible so children know what to expect at both homes. None of this is perfect. Parents can only do their best. However, now is the time for parties to make extra efforts to be consistent between households in the best interests of their children. How can I begin a divorce or family law case if I can’t file papers? The County Clerk’s Offices and Family Court Clerks are not accepting paper or E-filing in non-essential matters. For example, you can’t file a new divorce matter now. However, parties who would like to begin a divorce action can still take steps to begin the case without an official filing. Research the attorney you may want to work with and contact them. Underberg & Kessler is fully operational, and our attorneys are ready to conduct telephone and video consultations with new clients to discuss new divorce or Family Court filings. Once you retain counsel, your attorney can reach out to the other party or his or her attorney to discuss preparation of pleadings (even if they can’t be filed at this time). The parties can begin gathering financial documents and completing Statement of Net Worth packets to exchange. How can I move my pending case forward now? There are a lot of things that parties and their attorneys can do outside of court to move cases forward. If there are financial documents that need to be exchanged, the parties can compile those documents and exchange them between counsel. Proposal letters for settlement can continue to be discussed, drafted, and exchanged. Separation agreements can be drafted and reviewed by all parties. Separation agreements and consent orders can be reviewed, signed by parties, and notarized without meeting in person. Once agreements have been signed, attorneys can draft and submit final divorce documents to the other attorney for review and approval. Attorneys and parties can engage in video conferencing as a group to discuss settlement in a collaborative setting if the case is the right fit for that and all parties feel comfortable doing so. In many of the scenarios above, the time of social distancing can allow for parties and their attorneys to really take stock of pending cases and see whether settlement is possible. Even if settlement is not possible, attorneys and clients can continue to follow all of the necessary steps in the case as the case moves toward trial in the future. It is important that you have consistent contact with your attorney. As noted, we are working remotely and continue to move pending cases forward. Even if you don’t have a current case pending, reach out to your former attorney with questions or consult with a new attorney with questions on these issues. We are all in this together and working to make this transition as seamless as possible. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

Looking beyond the current Coronavirus crisis for a minute, several provisions of the Fiscal Year 2020-2021 New York State Budget proposed by Governor Cuomo and passed by the State Legislature last week will have implications for New York employers for many years down the road. First, most New York employers will be required as of January 1, 2021 to provide paid sick leave to their employees (earned at the rate of at least one hour for every thirty hours worked): Employers of 100 or more employees: 7 paid sick days (56 hours) per year Employers of between 5 and 99 employees or net income $1M or more: 5 paid sick days (40 hours) per year Employers of 4 employees or less and net income less than $1M: 5 unpaid sick days per year with job protection The leave will be able to be taken for the employee’s own mental or physical illness, injury or health condition, or of the employee’s family member (broadly defined), and the unused leave may be carried over into the following calendar year. Employers may set reasonable minimal increments not to exceed four hours, and can the use of sick leave per year to the 40 or 56 hours required to be provided. Employees are entitled to a summary of their sick leave accrual upon request, and records must be kept for six years. For many employers, they will want to convert 5 or 7 of the PTO days they provide into paid sick days in order to comply with the law. Second, beginning on January 1, 2022, private construction projects of $5M or more which receive 30% of their funding from public sources will need to pay prevailing wage rates to the workers on those projects. Affordable housing, historic preservation, brownfield redevelopment, sewage treatment, union agreement and renewable energy projects will be exempt from the new requirement. Third, the new law from last year providing up to three hours of paid time off to employees to vote has been changed to remove that right for employees who have their polls open for four hours or more before or after work, and to limit it to the up-to-two-hours amount contained in the pre-2019 law. Finally, the new budget will expand possible criminal liability for employers who commit wage theft by improperly paying their employees. For example, details known so far include charges of a B Misdemeanor for theft less than $1K and a B Felony for theft or $50K or more. Employees will also be provided with enhanced lien rights for wage theft judgments that are unpaid. We will continue to monitor these and other developments for you, and we are available to discuss them anytime. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

If you are considering whether you can update your New York estate planning documents during the COVID-19 pandemic, there are now options available for a short time in which make it possible to do so without leaving your home. Pursuant to the current law put into effect by Governor Andrew Cuomo, estate planning documents such as Wills, Powers of Attorney, Healthcare Proxies, Trusts, and Affidavits are able to be witnessed and notarized remotely until May 7, 2020, provided certain conditions are met. Regarding any estate planning documents that are required to be notarized, the conditions include, but are not limited to the individual being physically situated in New York State, being able to have a live video conference, presenting a valid photo ID to the Notary during the conference, and transmitting a legible copy of the document to the Notary the same day it was signed via fax or electronic means. If the estate planning documents are required to be executed in the presence of two (2) witnesses, the witnesses are subject to many of the same requirements including but not limited to having a live video conference and presenting valid photo identification during the conference. This means that through May 7, 2020 individuals have the ability to update and execute their estate planning documents remotely from the safety and comfort of their own homes, while continuing to adhere to New York's social distancing laws currently in effect. If you desire to update your estate planning documents during the COVID-19 pandemic, the attorneys at Underberg & Kessler LLP have instituted our business continuity plan to ensure that we are fully operational and that we are available to assist you in updating or creating estate planning documents, while ensuring all the conditions per Governor Cuomo’s Executive Order are met. If you have any questions or would like to speak with an attorney in this regard, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act, signed in to law on March 27, 2020, provides multiple relief programs for small businesses, including various loans and other financial assistance. We believe that many, if not most, of our small business clients are eligible for several of the programs under the CARES Act. Below are explanations of the aspects of the programs that are important to our clients. SBA Economic Injury Disaster Loans (EIDL) Prior to the CARES Act, the Small Business Administration (SBA) began offering EIDLs of up to $2 million to small businesses and private non-profits injured by COVID-19, with interest rates of 3.75% and 2.75%, respectively. The CARES Act relaxes certain conditions and requirements under the existing EIDL program for the period from January 31, 2020 through December 31, 2020, making these loans available to more businesses. In addition to small businesses, as defined in the Small Business Act, and private non-profits, the CARES Act extends EIDLs to businesses and ESOPs with up to 500 employees, individuals operating as sole proprietors, with or without employees, and independent contractors. The Act waives the requirement of collateral for loans of $200,000 or less. Previously, collateral was required for loans over $25,000. Similarly, no personal guarantee is required for a loan below $200,000. Applicants should be prepared to establish that they have incurred economic injury by providing financial information from the current and prior year for comparison. These loans are made directly by the SBA. The EIDL application may be found here. Emergency Economic Injury Disaster Loan Grants The Emergency Economic Injury Disaster Loan Grants program provides small businesses and private non-profits that are eligible for EIDLs with grants of up to $10,000. In order to receive the emergency grant, applicants must first apply for an EIDL and then request an advance as part of the EIDL application process. These grants are intended to provide businesses with immediate funds while their EIDL application is processed, therefore grant funds must be disbursed to the applicant within 3 days after the SBA receives the applicant’s request. Applicants are required to self-certify, under penalty of perjury, that the applicant is an eligible entity. Grants do not have to be repaid, even if a recipient is subsequently denied the EIDL. If you applied for an EIDL prior to March 27, 2020, you must submit a new, streamlined EIDL application to receive the advance, but this new application will not affect your existing EIDL application. The new EIDL application may be found here. If an applicant receives a Paycheck Protection Program (PPP) loan (discussed below), the amount of loan forgiveness will be reduced by the grant. Paycheck Protection Program (PPP) The PPP provides loans of up to $10 million to small businesses and other eligible entities described above. PPP loans amounts are forgivable as long as (i) the business maintains its employee and compensation levels and (ii) the loan proceeds are used to pay qualifying expenses, including employee salaries, commissions and similar compensation, payroll costs, mortgage interest payments, interest on other debts incurred prior to the covered period, costs related to certain group health care benefits, and utilities for 8 weeks after receiving the loan. Additionally, payments on PPP loans will be deferred for 6 months. The loan amount an applicant may receive is 250% of the applicant’s average monthly payroll costs for the prior 12 months. Payroll costs are the sum of compensation payments to employees and independent contractors. Employee compensation include any of the following: Salaries, wages, commission; Cash tips; Payments for vacation, family, medical or sick leave; Allowances for dismissal or separation; Payments for group health care benefits, including insurance premiums; Payments of retirement benefits; Payment of state and local taxes assed on employee compensation For individuals who are self-employed, operating as sole proprietors or independent contractors, payroll costs include any income such as wages, commission, net earnings from self-employment or similar compensation and which does not exceed $100,000 in one year, as pro-rated for the covered period. Payroll does not include payroll and income taxes (for example, FICA taxes), compensation to an individual employee in excess of $100,000, as pro-rated for the period from February 15 through June 30, 2020, or qualified sick or family leave wages for which the employer receives a credit under the Families First Coronavirus Response Act. The loan will be fully forgiven if the proceeds are used for the previously listed qualifying expenses, as long as the borrower maintains its pre-COVID employee and compensation levels. If the borrower laid off employees, decreased their hours, or decreased their pay, the borrower can still qualify for forgiveness by rehiring employees or restoring their hours or amount of compensation before June 30, 2020. This loan has a maturity of 2 years and an interest rate of 1%. However, any amounts not forgiven may be converted into a long-term loan of up to 10 years and with a maximum interest rate of 4%. Borrowers may apply for PPP loans in addition to other SBA loans, however, the loans may not be used for the same purposes. Additionally, as noted above, any emergency EIDL grant amount will decrease the amount forgiven. PPP loans are made through existing SBA lenders and any federally insured depository institution or credit union. PPP Loan applications opened on April 3, 2020, and we urge you to contact your bank lender as soon as possible to begin the PPP loan application process. Please note that several banks have delayed the availability of this loan program until the Department of Treasury publishes final rules. Debt Relief Program Under the SBA Debt Relief Program, the SBA will pay principal, interest and other fees on SBA loans for 6 months. SBA loans eligible for the Debt Relief Program include 7(a) loans, 504 loans and microloans issued at any time prior to September 27, 2020, but not PPP loans or EIDLs. Applicants may apply for this program as well as a PPP loan and/or EIDL, but this program will not apply to such loans issued under disaster relief programs. Those clients with existing SBA loans should contact their bank loan officer for more information. SBA Express Bridge Loans The SBA Express Bridge Loan Program provides interim loans of up to $25,000 to small business in disaster areas, such as New York State, on an accelerated basis. These loans can provide much needed capital to small businesses while their EIDL is pending. Express Bridge Loans are only available to small businesses that had existing banking relationships with a lender who was already participating in the SBA Express program prior to February 15, 2020, and the loan application is made through that bank lender. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

For those of you who have been ordered to stay home from work, and are trying to continue working from home, I thought it might be helpful to share some of the best practices that I have developed to work from home over the past 12 years. Being surrounded by family, laundry, dishes and phone calls from friends can be extremely distracting and make it very difficult to stay productive. Here’s a few tips that have worked for me. Have a Dedicated Workspace for Work Carve out a dedicated space at home that you ONLY use for work. This is really important. Don’t do anything else in your workspace. No bills. No recipes. No Facebook. No laundry folding. No snack preparations. No phone calls with your family. You can help your mind to focus on your work by physically teaching your brain that if you are sitting in a certain place, you are JUST doing work, nothing else. Having a dedicated workspace also helps you to keep track of the time you are really spending on work. For those of you that bill for your services in increments of an hour, it is easier to calculate those increments of time when you are physically in your dedicated workspace. If you mix personal activities like phone calls with your family or Facebook time while you are in your workspace, you will feel like you have spent a lot of time working, but be dejected by the apparent lack of productivity. Subconsciously, you will begin to get resentful of work because you feel like you’ve been at your desk for a long time, but you haven’t accomplished as much as you think you should. Keep Your Workspace Distraction & Clutter-Free Try to keep your workspace quiet so you can focus on work. The TV, the doorbell and home phone can interrupt so often that you become unproductive. Shut the door to the room, or leave it only slightly ajar, as a message to the rest of your family that this is the time you need to focus on work. Try to keep your workspace organized. You can line up the projects on the bed or floor next to you with the title of each project on Post-it notes at the top of each pile. Remove all your coffee cups and bottles of water so that you have a clean workstation for the next morning. Before you turn off your work light, organize your piles so that the project that needs your attention first in the morning is ready to go. Set Yourself Up for Productivity & Reward Productivity If you are part of a team, set up calls every day where you can report to each other how far you have moved the client’s projects and you can assign tasks to each other. Work is more rewarding when you feel like you are supporting your colleagues and you are more likely to complete something when you know that your teammates are relying on you. When you interact with your work colleagues, remember that they are all trying to stay productive too. Use the opportunity to provide comfort and counsel to each other and inspire each other to continue moving forward. Try to stay at your workstation for at least 1 ½ - 2 hours at a time. As you think of things around the house that might need your attention, resist the temptation to get up. Instead, jot them down on a list. Every couple of hours, get up for a break. Try to solve something difficult right before you take a break. Use the break as your reward for solving the difficult problem. Leave your workspace and bring your personal list with you. Interact with your spouse or kids or a friend on Facebook and have a few laughs; check off a few things on your list. Go for a walk. Then make a cup of coffee and sit back down at your workstation. When you return to your workstation, pick something that feels rewarding right away- e.g. call the office or a colleague to discuss something about a client that needs noodling. If you reward yourself with this kind of action each time that you return to your workstation, you’ll teach your brain to look forward to the productivity you feel when you return to work. Try to finish one project before you pick up the next. If you have to go back to a project over the course of several days, you can jot notes on the Post-it notes about the time intervals you have spent on the project so that you don’t lose track of the time. At the end of the day, go back through your emails to make sure you captured the time that you spent on various clients’ projects. Send out a few email responses or inquiries to colleagues and clients. This will start your next morning with activity in your in-box to trigger productivity right away. Give Your Brain a Break If you’re not used to working from home, the line between when your work life ends and personal life begins can be blurred. Don’t get stuck in the rabbit-hole of endlessly chasing the completion of work projects. Having the dedicated work space helps maintain the division of your work life and personal life. Earlier, I mentioned that you shouldn’t bring the distractions of your personal life into your dedicated workspace. The reverse holds as well. After the workday is over, resist the temptation to watch the news or fold your laundry in your work room at night. Give you brain a rest so that you can recharge for the next morning. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here.

Last week, we wrote about state and federal aid opportunities for small businesses whose operations have been disrupted by the COVID-19 pandemic. You can view those posts here: The Cares Act Provides Billions for Health Care & Small Businesses Federal and State Actions Impacting Small Businesses Guidance Issued for Employer Relief Offered by the Families First Coronavirus Response Act Now, Monroe County is offering localized aid. To assist small businesses that are dealing with the economic impacts of the COVID-19 crisis, Monroe County has established an Emergency Small Business Support Program. Zero interest loans of up to $10,000 are available to businesses with less than 50 full-time equivalent employees to support operations and employment. Qualifying business types include retail, healthcare, restaurants, real estate, technology, construction, personal and professional services and small manufacturers. A loan fund of $500,000 for this program is being managed by the Monroe County Industrial Development Corporation (MCIDC). A full set of program instructions and the loan application may be found here. As of the time of this news item, the Monroe County website indicates that applications are being suspended until the initial applications are processed. So, check back at that website regularly for when applications process reopens. The completed application may be submitted by mail to MCIDC, CityPlace, Suite 8100, 50 W. Main Street, Rochester, NY 14614 or by email to mcplanning@monroecounty.gov. The county notes that emailed applications will be processed more quickly. MCIDC will review applications in the order received, and will make its loan decisions within seven business days from submission. All approved loans will require signed loan agreements prior to disbursement. Those Monroe County businesses that desire loans greater than $10,000, or have more than 50 employees, may wish to consider the U.S. Small Business Administration Economic Injury Disaster Loan Program or a Payroll Protection Program Loan. More information on those programs may be found here. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800. Our other COVID-19-related posts can be viewed here.

This post is a further update to our earlier post: Guidance Issued for Employer Relief Offered by the Families First Coronavirus Response Act In addition to Alina Nadir , this post was authored with input from Paul Keneally and Jennifer Shoemaker . On March 30, the U.S. Department of Labor issued guidance regarding two of the exemptions contained within the Act – the small business exemption and the health care provider exemption. The FFCRA provides that small businesses with fewer than 50 employees can claim an exemption to the requirement to provide paid or partial paid leave for employees who have no childcare due to the pandemic. A small business can claim the exemption by showing that being required to provide the leave would jeopardize the viability of the small business. The DOL’s new guidance clarifies that a business can make that showing by establishing one of the following situations: The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity; The absence of the employee or employees requesting paid sick leave or expanded family and medical 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 There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity. Remember, a small business with fewer than 50 employees is only exempt from the FFCRA requirement to provide paid or partial paid leave if the following three conditions are met: The employer employs fewer than 50 employees; The leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and An authorized officer of the business has determined that at least one of the three conditions described above is satisfied. The DOL clarified who exactly is a “health care provider” eligible for paid sick leave under the FFCRA if the individual is told to self-quarantine due to COVID-19 concerns. A health care provider who is eligible includes a licensed doctor of medicine, nurse practitioner or “other health care provider permitted to issue a certification for purposes of the FMLA.” The DOL also clarified that the following “health care providers” are employees who may be exempted by their employer for paid sick or family leave under the FFCRA. The DOL stated: [A]anyone employed at any doctor’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 includes any individual employed by an entity that contracts with any of the above institutions, employers, or entities institutions to provide services or to maintain the operation of the facility. This also includes anyone employed by any entity that 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. This also includes any individual that the highest official of a state or territory, including the District of Columbia, determines is a health care provider necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19. If you have any questions, please contact us here or at 585-258-2800. You can view more COVID-19-related posts in our COVID-19 Resource Area here .