COVID-19: Updates From The State and Counties of California, CDC, DOL (FFCRA) and SBA/Treasury CARES Act and PPP Loans)

COVID-19: Updates From The State and Counties of California, CDC, DOL (FFCRA) and SBA/Treasury CARES Act and PPP Loans)
Posted June 1, 2020

Our federal, state and county governments continue to release additional information regarding a myriad of issues related to COVID-19. Fortunately, we are beginning to see the proverbial “light at the end of the tunnel," as available guidance finally focuses on reopening businesses rather than shutting them down. Nevertheless, employers must remain vigilant on health and safety practices, as well as maintaining ongoing compliance with federal, state and local laws.

We have listed below a variety of updated resources and information about California’s expanded Stage 2 reopening procedures, county variances to the state’s Resilience Roadmap, newly-issued “reopening” guidance from Centers for Disease Control and Prevention, updates to the Department of Labor’s Frequently Asked Questions on the FFCRA, and access to new CARES Act guidance from the SBA and Treasury on PPP loans and loan forgiveness.

California’s Resilience Roadmap: "Expanded Stage 2" Reopening Guidance and County Variances

California is now in "Expanded Stage 2" of the Resilience Roadmap. Stage 2 addresses the reopening of "low risk" businesses. The expanded reopening guidance now includes retail, related logistics and manufacturing, office workplaces, limited personal services, outdoor museums, child care, and essential businesses, all of whom can now open with modifications. The state has issued guidance to help these workplaces reopen safely; this guidance can be found here.

On May 8, 2020, Governor Newsom outlined a process by which individual counties meeting specific readiness criteria could move more quickly through Stage 2. The list of counties that have filed the necessary Attestation Form with the State, indicating that they have met the readiness criteria, can be found here. Once approved by the state, the individual counties may then amend their local orders and move to a more expanded Stage 2 reopening.

Local county orders are available on the applicable county website, or find the state's summary of the various county orders here.

Updated CDC Guidance

The Centers for Disease Control and Prevention (“CDC”) recently updated its guidance regarding considerations for reopening during the COVID-19 pandemic; this guidance can be found here. Specific guidance includes the following (among others):

Interim guidance for schools, camps, and employers with workers at high risk: click here.
Industry-specific guidance for reopening clinics: click here.
Industry-specific guidance on long-term care facilities: click here.
Industry-specific guidance on restaurants and bars: click here.

The CDC continually releases new information regarding COVID-19. To access the CDC website, click here. To see "What's New" from the CDC, click here. You can also sign up to receive CDC email updates on the “What’s New” page.

In addition to CDC guidance, be sure to review the state and local orders for specific information and regulations regarding reopening in your geographical location, as noted above.

DOL FFCRA Updated Questions and Answers

The Department of Labor (DOL) has also issued regular updates to its guidance on FFCRA benefits. The most recent update has once again expanded the FFCRA "Questions and Answers" guidance (currently 93 separate questions and answers). Updates to the DOL guidance are contained within the original guidance document and appended at the end of that document; employers should review the DOL guidance on a regular basis for ongoing updates. The full DOL FFCRA guidance can be accessed here.

Key excerpts from the most recent FFCRA guidance updates include the following topics:

Staffing Agency Employee Count (Q. 74 and 90): The DOL clarified that a covered staffing agency (under 500 employees) must provide FFCRA benefits to all of its employees (including both internal and temporary workers) “even if [they] provide or refer such employees to other employers.” A host employer with less than 500 employees and meets the criteria to be considered a “joint employer” (Q. 39), “will generally be required to provide its employees with [FFCRA benefits]”; this will include any temporary employees working for the host employer.
Calculating Benefits for Seasonal Workers with Variable Schedules (Q. 75): The DOL describes a four-step process to be used to calculate the required daily FFCRA benefits for a seasonal employee with an irregular schedule.
Calculation of FFCRA Benefit Amounts for Employees (Irregular Hours, Fixed Salary, Rounding, Etc.) (Q. 80 and 85): The DOL has explained the process for calculating the FFCRA benefit amount for employees with a variety of wage and hour complications.
Are Employees Eligible for FFCRA Benefits While on Workers’ Compensation or Temporary Disability Leave (Q. 76)? The DOL says the answer is no, unless the employee was able to return to light duty before taking leave.
Are Employees Eligible for FFCRA Benefits While on a Leave of Absence (Q. 77)? This depends upon whether the leave is voluntary or mandatory. If the employee is on a voluntary leave, the employee may choose to end the leave and begin FFCRA benefits. If the leave of absence is mandatory and the employee is prevented from working, FFCRA benefits do not apply.
DOL Enforcement Actions (Q. 78, 79, 88): The DOL has confirmed that it will not pursue enforcement actions against employers for the period from March 18, 2020 – April 17, 2020, so long as employers “made reasonable, good faith efforts to comply with the [FFCRA] Act.” Full enforcement began on April 18, 2020. However, the DOL will retroactively enforce violations if employers have not remedied the violations.” The DOL also notes that it will use the higher of local, state or federal minimum wages when calculating damages for violations of FFCRA. Employers are cautioned to audit their compliance with FFCRA requirements now to correct any errors prior to enforcement action.
Forced Use of Employer-Sponsored Benefits Under FFCRA (Q. 86): Employers may not run employer-provided sick leave concurrently with FFCRA sick leave benefits. An employer may, however, require that any employer-provided paid leave for child care purposes run concurrently with FFCRA child care provider/school closure leave for COVID-19 purposes.
In-Home Domestic Workers May Be Eligible for FFCRA Benefits (Q. 89): The DOL applies FFCRA benefits to in-home domestic workers if they are employees of the homeowner and are economically dependent upon the homeowner. The DOL confirmed that if the homeowner is "not required to file Schedule H, Household Employment Taxes, along with your Form 1040, U.S. Individual Income Tax Return, for the amount you pay a domestic service worker because the worker is not your employee for federal tax purposes, then the worker is likely not economically dependent upon you and you are likely not the worker’s employer under the FLSA.”
FFCRA Leave Scenarios (Q. 91-93): Just because an employee has previously teleworked with children at home does not mean that the employee cannot take FFCRA leave for child care purposes when schools are closed or child care providers are unavailable for COVID-19 reasons. The employer is entitled to request documentation of the changed circumstances requiring a need for leave. However, the fact that the school or child care provider has closed for summer vacation, or any other reason unrelated to COVID-19, will not render the employee eligible for FFCRA benefits. When employees request FFCRA sick leave, the employer may require that the employee identify his or her symptoms and a date for a test or doctor’s appointment.

Updated CARES Act Guidance

The SBA and U.S. Treasury have recently released additional guidance related to Paycheck Protection Program (PPP) loans, including important information about loan forgiveness and review of PPP loans by the SBA.

The general process and timeline for PPP loan forgiveness includes the following steps: (1) the borrower submits the PPP Loan Forgiveness Application to its lender; (2) within 60 days from receipt of the Application, the lender will evaluate the borrower’s documentation and issue a decision about loan forgiveness to the SBA; and (3) subject to any SBA review of the loan eligibility or application, the SBA will remit the appropriate forgiveness amount and interest within 90 days after receiving the lender decision. To apply for loan forgiveness, borrowers must submit the PPP Loan Forgiveness Application. The application can be found here.

Employers should regularly review the DOL's Frequently Asked Questions for PPP loans, initially issued on May 19, 2020. Updates may be found here.

For additional guidance on loan forgiveness, click here. Updates currently include:

Alternative eight-week coverage periods;
Caps on loan forgiveness for owner-employees and the self-employed;
Clarification on non-payroll costs eligible for loan forgiveness;
Defining “full-time equivalent” (“FTE”) employees and the method of calculating FTE;
Calculating loan forgiveness when FTE or employee compensation has been reduced by more than 25% in the covered period; and
The impact on loan forgiveness when employees are terminated.

The guidance document also confirms that loan forgiveness is not adversely impacted when an employee refuses an offer of reinstatement, provided that (1) the borrower makes a good faith, written offer to rehire an employee (or restore the previously-reduced hours) during a covered period, (2) the offer is for the same salary or wages and same number of hours earned prior to the separation or reduction, (3) the employee rejects the offer; (4) the borrower maintains records of the offer and its rejection, and (5) the employer informed the state unemployment insurance office of the rejection within 30 days.

Guidance on borrower/lender responsibilities in the SBA review process can be found here. This guidance includes information about the lender’s process in reviewing loan forgiveness applications, required documentation to be submitted by the borrower, document retention requirements and the implementation of an appellate process after the denial of an application for loan forgiveness.

Notably, the issues surrounding loan forgiveness under the PPP continue to evolve. On May 29, 2020, the House of Representatives passed H.R. 7010, the Paycheck Protection Program Flexibility Act, which extended the eight week covered period for forgiveness of any PPP loan to 24-weeks, reduced the required percentage of the PPP loan proceeds to be spent on payroll costs from 75% to 60%, and extended the deadline for the re-hire exception to forgiveness reduction from June 30, 2020, to December 31, 2020. The House bill also extended the covered period for using PPP loan proceeds from June 30, 2020, to December 31, 2020. The text of the Paycheck Protection Program Flexibility Act can be found here. The Act is now awaiting a Senate vote, which may occur as early as this week.

For questions regarding the above information, or to obtain legal assistance regarding COVID-19 issues specific to your company, contact the employment attorneys at LightGabler.For a more detailed outline of reopening considerations, or to obtain legal assistance regarding reopening issues specific to your company, contact the employment attorneys at LightGabler.