We hope that you are safe and healthy in these unprecedented times.
We know that many of you are experiencing business circumstances unlike any you have had to address including disruption and economic harm as a consequence of the COVID-19 health crisis. We are committed to keeping you informed of the federal government programs that will provide short and long term assistance.
New Programs
Small Business Loans
On March 11, President Trump directed the Small Business Administration (SBA) to offer Economic Injury Disaster Loans (EIDLs) to small businesses and private non-profits impacted by COVID-19 under the authority of H.R. 6074 that allows SBA to provide an expected $7 billion in EIDLs. The low-interest loans are designed to provide economic support by aiding small businesses in overcoming temporary losses of revenue due to COVID-19.
Eligibility for the program is contingent upon requests for an EIDL declaration from state and territory governors. SBA has loosened its criteria for issuing state declarations that are required for states to unlock program loans. Several state governments have begun soliciting information from small businesses to support their declaration requests.
The SBA’s Office of Disaster Assistance will coordinate with state governors that submit relief requests. Once a state or territory is approved, these affected businesses will receive more information. You can find a regularly updated list of states where disaster assistance is being offered here.
Even if your state is not yet offering disaster assistance you can begin to prepare to apply by gathering the information required now. Many of the requirements are set forth here.
Federal : Low-interest loans up to $2 million through the Small Business Administration for states impacted by COVID-19. Applicants are encouraged to apply online for a disaster loan.City of New York : Zero-interest loans of up to $75,000 for businesses with less than 100 employees. 40% of payroll costs covered for businesses with less than 5 employees.State of Florida : Up to $50,000 per eligible small business. Loans of up to $100,000 may be made in special cases. Interest-free for the first year and 12% per annum thereafter. Applications will be accepted by qualified Florida small businesses under this program through May 8, 2020 , contingent on the availability of funds. Apply here.
The deadline to apply for an Economic Injury Disaster Loan is December 18, 2020 .
Emergency Paid Sick Leave
President Trump has signed the Families First Coronavirus Response Act (Act), which includes provisions for emergency paid sick leave and emergency paid family and medical leave for eligible employees who work for employers with 500 or fewer employees. The Act, which will become effective on April 2, will remain in effect through December 31, 2020.
The Act’s paid sick leave component provides for up to 80 hours of paid sick leave if the employee:
is subject to a federal, state or local quarantine or isolation order;
has been advised by a health care provider to self-quarantine;
is experiencing symptoms of COVID-19 and is seeking a diagnosis;
is caring for an individual covered by (1) or (2) above;
is caring for a son or daughter whose school or place of care has been closed or whose child care provider is unavailable due to COVID-19 precautions; or
is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Full-time employees are entitled to 80 hours of paid sick leave paid at their regular rate of pay, capped at $511 per day; part-time employees are also entitled to leave based upon their average hours worked in a two-week period. If employees are taking the leave to care for family members, they are entitled to only two-thirds of their regular rate of pay, capped at $200 per day.
It is important to note that all employees are immediately eligible for this leave, regardless of how long they have been employed. The paid sick leave does not carry over from one year to the next.
As with the original House version of the bill, sick leave under the Act is in addition to any other paid leave available to employees, and they may choose to use this emergency paid sick leave before using any other types of leave. Employers may require notice of the use of leave after the first workday (or portion thereof) that an employee receives paid sick time under the Act.
Regulatory Relief for Transportation to Assist Emergency Relief
On March 18, 2020, the Federal Motor Carrier Safety Administration (FMCSA) issued an Expanded Emergency Declaration suspending enforcement of its hours-of-service, driver qualification, and other regulations set forth at 49 C.F.R. Parts 390-399 for commercial motor carriers and drivers providing direct assistance to emergency relief efforts related to coronavirus disease 2019 (COVID-19). The FMCSA’s hours-of service rules limit the hours a driver can drive and impose minimum rest periods. By suspending these and other rules, the FMCSA intends to “help . . . get [] critical goods to impacted areas faster and more efficiently.”[1] The relief is designed to help retailers, manufacturers, healthcare providers, and government agencies address shortages of critical goods and supplies and position them in areas directly impacted by COVID-19.
Truck transportation eligible for relief under the Expanded Emergency Declaration includes transportation to meet immediate needs for:
Medical supplies and equipment related to COVID-19 testing, diagnosis, and treatment;
Supplies and equipment necessary for community safety, sanitation, and prevention of COVID-19, such as masks, gloves, hand sanitizer, soap, and disinfectants
Food, paper products, and other groceries for emergency restocking of distribution centers or stores;
Immediate precursor raw materials—such as paper, plastic, or alcohol—required and to be used for the manufacture of items 1, 2, or 3, above.
Fuel
Equipment, supplies, and persons necessary to establish and manage temporary housing, quarantine, and isolation facilities related to COVID-19;
Persons designated by federal, state, or local authorities for medical, isolation or quarantine purposes; and
Persons necessary to provide other medical or emergency services that may be affected by the COVID-19 response.
The relief that that the Expanded Emergency Declaration provides is subject to limitations, including:
It does not apply to routine commercial deliveries and transportation of mixed loads with a small quantity of emergency relief items added to obtain the benefits of the Expanded Emergency Declaration.
It does not apply to a driver or vehicle upon termination of direct assistance to emergency relief efforts. Direct assistance terminates when a driver or vehicle is used to transport cargo or provide services that are not in support of emergency relief efforts related to COVID-19 outbreaks or when a carrier dispatches a driver or vehicle to a location to begin operations that are not in support of those emergency relief efforts.
If a driver requests immediate rest, the carrier must allow the driver at least 10 consecutive hours off duty if the driver transports property; 8 hours if transporting passengers.
The Expanded Emergency Declaration is effective until 11:59 Eastern Time on April 12, 2020 or the COVID-19 emergency ends, whichever is earlier.
Tax Filing Deadline Pushed Back
Treasury Secretary Steven Mnuchin announced that his department is pushing back the April 15 deadline to pay taxes owed for many individuals and businesses, giving them 90 extra days to send checks to the government. Individuals can defer up to $1 million of tax liability and corporations get an extension on up to $10 million. Mnuchin said the delay will free $300 billion of liquidity in the economy as individuals and businesses have more time to pay their taxes.
Delaying payment requirements will give businesses and individuals nearly three more months to meet their IRS obligations, potentially lessening cash-flow issues that some businesses are facing as many people stay home and spend less money on dining out, entertainment and transportation.
On March 20, the IRS announced that the deadline to file your returns has been pushed back to July 15 .
Fannie and Freddie Foreclosure Suspensions; FHA 60-day Moratorium
Mortgage lenders Fannie Mae and Freddie Mac will suspend foreclosures and evictions for at least 60 days as federal and business leaders respond to the growing COVID-19 crisis. All Fannie Mae and Freddie Mac foreclosure sales will be postponed until after May 17, 2020. The suspension applies to home owners with a single-family mortgage, backed by either company however, the suspension does not apply to properties that are vacant or deemed abandoned.
The foreclosure and eviction suspension allows homeowners with an Enterprise-backed mortgage to stay in their homes during this national emergency. The agency announced earlier this month Fannie Mae and Freddie Mac would offer payment forbearance – the option to suspend mortgage payments – because of hardship related to the pandemic.
Separately, the Federal Housing Administration is putting a sixty-day moratorium on foreclosures and evictions of single family homeowners, starting March 18, 2020. Properties secured by FHA-insured Single Family mortgages and Home Equity Conversion Mortgage (HECM) programs are subject to the moratorium.
Insurance Coverage for Losses and Claims Associated with the Coronavirus Alert provided by our partners at Pasich LLP.
If we can help you make sense of these policies and efforts, please don’t hesitate to reach out to your Greenspoon Marder attorney, or email us at [email protected]
