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In March of this year, all non-essential businesses in New York State were closed in an effort to slow the spread of coronavirus disease 2019 (“COVID-19”). New York State has now begun to reopen in phases under the New York Forward Plan (“NY Forward”), and the State has placed requirements and obligations on businesses that are resuming in-person operations. All regions in New York have now begun reopening. Five regions (North Country, Finger Lakes, Central NY, Mohawk Valley, and Southern Tier) entered Phase Three on or about June 12, 2020.
In order for a business to resume (or for essential businesses, continue) in-person services, the State has placed specific obligations on employers. Under NY Forward employers must: 1) read and affirm the guidelines specific to their industry, and 2) prepare a written Business Safety Plan. Failure to comply with the State’s requirements may expose business owners to liability, fines, or investigations. Business owners should familiarize themselves with the NY Forward guidelines specific to their industry, and understand the obligations imposed on them, in order to avoid adverse effects and keep employees and visitors safe.
The State has released guidelines for industries in Phases 1 through 3, and “State Wide Guidelines” for miscellaneous industries. Guidelines for Phase 4 industries, which will include Arts/Entertainment/Recreation and Education, have not yet been released. Thus far, the State has released guidelines for the following industries:
Phase 1 – Construction; Agriculture, Forestry, Fishing, and Hunting; Retail Trade; Manufacturing; Wholesale Trade; and Higher Education Research
Phase 2 – Offices; Real Estate; Essential and Phase 2 In-Store Retail; Vehicle Sales, Leases, and Rentals; Retail Rental, Repair, and Cleaning; Commercial Building Management; Hair Salons and Barbershops; Outdoor and Take-Out/Delivery Food Services
Phase 3 – Food Services (In-Person); Personal Care
State Wide Guidelines – Child Care and Day Camps; Lake and Ocean Beaches; Religious and Funeral Services; Racing Activities; Dentistry; Auto Racing; Professional Sports Training Facilities; and Public Transportation
Business owners should read the State guidelines for their industry, and are required to affirm that they have read them. The affirmation can be found at https://forms.ny.gov/s3/ny-forward-affirmation. The guidelines vary by industry, and include requirements, guidance, and suggestions for business owners. A common requirement across industries is the requirement to screen employees and, in some instances visitors/clients, for symptoms of COVID-19. The “Office” industry guidance specifically requires that business owners screen employees daily to determine if they are or have experienced symptoms, have been tested and/or diagnosed, and/or have been in close contact with someone who has experienced symptoms or been diagnosed. Business owners may also elect to conduct temperature checks on employees and/or visitors/clients/customers, but may not keep health data (i.e., the result of temperature screenings). Employers should also encourage employees to notify the employer right away if the employee begins experiencing symptoms. Further, employers should be prepared to isolate employees who begin experiencing symptoms and cannot be immediately removed from the work place.
The NY Forward guidelines for all industries require that employers notify the local health department if any employee tests positive for COVID-19, and work with the health department in contact tracing efforts. To that end, the State further recommends that employers track employee contacts with other employees, customers, visitors, etc., in order to better assist in contact tracing efforts. The NY Forward guidelines also require, among other things, that employers to maintain a social distance of at least 6 ft. between all people, require masks at all times when social distancing is not possible, decrease in person interactions wherever possible, minimize or eliminate shared equipment and items, and clean high touch surfaces frequently.
Ensuring a proper supply of personal protective equipment (PPE), is imperative to employer operations. Employers must provide employees (and customers or clients if necessary) with masks and proper hand sanitizing materials. In certain industries and for certain tasks the employer may also be required to provide gloves and other PPE such as a face shield. Under current State Orders businesses have a right to refuse service to customers who refuse to wear a mask.
Two federal agencies, the US Centers for Disease Control (CDC) and Occupational Safety and Health Administration (OSHA), have also released recommendations for reopening and operating businesses. Employers may mitigate potential liability by following the guidance of these federal agencies. Further, the NY Forward guidelines largely incorporate, and in some instances adopt, the CDC and OSHA guidelines. Unlike CDC and OSHA recommendations however, many of the State guidelines under NY Forward are required. Businesses who fail to comply with the NY Forward guidelines may be subject to fines, investigations, and potential civil liability. Local municipalities will reportedly be responsible for enforcing the guidelines, and the State has encouraged employees to report violations to the Department of Labor.
Additionally, businesses are required to prepare a Business Safety Plan. The State’s Business Safety Plan template can be found at: https://ocfs.ny.gov/main/news/2020/COVID-2020Jun08-Guidance-Reopening-Plan-Template.pdf. Alternatively, business owners may elect to prepare their own Business Safety Plan, using the State template for guidance. The Safety Plan need not be submitted to a State agency directly, but should be conspicuously posted in the workplace, and made available upon request (i.e., during an investigation). The Business Safety Plan template includes, but is not limited to, the following provisions:
People – ensure appropriate social distancing and minimize in-person capacity to the extent possible;
Places – ensure adequate supplies of and proper use of PPE and hygiene materials (i.e., hand washing or hand sanitizer stations), and make plans for communication (i.e., maintain a log of persons who have had close contact in the workplace for contact tracing purposes); and
Processes – ensure proper screening of employees, and a plan for contact tracing assistance and cleaning/disinfecting in the event someone who has access to the workplace tests positive.
As with much of the guidance regarding COVID-19, this is a rapidly evolving area of law and policy. This article is intended to be for informational and discussion purposes only and is not to be construed as legal advice or as a legal opinion on which certain actions should or should not be taken. If you have specific questions regarding reopening, compliance with State guidelines, or preparing a Business Safety Plan, we would be happy to assist you. For further information regarding your particular circumstances, or if you need legal assistance, reach out to your normal contact at the firm, or contact Melissa Green (firstname.lastname@example.org).
On Friday, June 5, 2020, the President signed into law H.R. 7010 – The Paycheck Protection Program Flexibility Act (PPPFA). The PPPFA eases some of the requirements of the Paycheck Protection Program (PPA), which was included in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed earlier this year. The PPPFA lowers the threshold for spending required on payroll expenses, increases the covered loan period, provides exceptions for businesses who are unable to rehire employees to qualify for full loan forgiveness, and sets a minimum term of 5 years for new borrowers. The changes to the PPP are summarized below.
|· Covered Period – February 15, 2020 through June 30, 2020||· Covered Period – February 15, 2020 through December 31, 2020|
|· Qualified expenses – must spend 75% on payroll, 25% on other qualified expenses, or be subject to a decrease in loan forgiveness||· Qualified expenses – must spend at least 60% on payroll, 40% on other expenses, or no loan forgiveness|
|· Term – maximum of 10 years||· Term – (for new borrowers) minimum of 5 years|
|· Payroll Tax Delay – deferment of social security taxes available only until loan is forgiven||· Payroll Tax Delay – deferment of social security taxes through December 31, 2020 (even if loan is forgiven before that date)|
|· Maintenance of Employment Levels – must maintain full-time employment and salary levels, or risk proportionate reduction of forgiveness||· Maintenance of Employment Level – creates hardship exceptions if there is an inability to rehire, hire, or return to pre-COVID-19 employment levels|
|· Payment Deferral Period – payments of principal/interest delayed for 6 months||· Payment Deferral Period – payments deferred until lender receives forgiveness funds from the government, or, if no forgiveness application is submitted, deferred for 10 months following the end of the Covered Period|
Under the CARES Act the Covered Period for a PPP loan begins on the date of origination, and ends 8 weeks later. This meant businesses had just 8 weeks to spend all of the loan funds and qualify for forgiveness. Under the PPPFA the Covered Period spans 24 weeks after the origination date, or through December 31, 2020 (whichever is earlier). There is nothing in the PPPFA which prevents a borrower from applying for forgiveness if they meet the requirements (i.e., spend the loan funds) sooner than 24 weeks.
The CARES Act required borrowers to spend 75% of loan funds on payroll expenses, and 25% on other qualified expenses in order to qualify for loan forgiveness. Borrowers who did not meet these requirements were subject to a reduction of the loan forgiveness amount. Under the PPPFA borrowers must spend 60% on payroll expenses and 40% on other qualified expenses, or the loan will not be forgiven. It has been pointed out that this new “cliff” scenario may cause hardship to borrowers, and Congress has indicated that the U.S. Small Business Association (SBA) will release additional guidelines that specify the proportional reduction of loan forgiveness still applies. However, the law as written does not allow for a proportional reduction.
The PPPFA establishes a minimum maturity time period of 5 years for new borrowers. Under the CARES Act the maximum maturity time period is 10 years. While the new 5 year minimum does not automatically apply to those who have already received PPP funds, the PPPFA specifies that borrowers and lenders may renegotiate the maturity date in light of the PPPFA.
PPP borrowers are eligible to defer payment of social security taxes for 2020, and repay such taxes at the end of 2021 and 2022 (paying 50% each year). Under the CARES Act the deferment period ends when the borrower’s loan is forgiven. The PPPFA extends the deferral period through December 31, 2020, for all borrowers, even if the loan is forgiven before that date.
Borrowers were required to maintain pre-COVID-19 employment and salary levels in order to qualify for forgiveness under the CARES Act. Specifically, the CARES Act required that any employees who were terminated after February 15, 2020, be rehired such that the borrower retained employment levels through the Covered Period. Later guidance on the CARES Act allowed employers to instead hire similarly situated individuals for the same position if they were unable to rehire certain employees. Similar rules are in place for the maintenance of employee pay rates. The PPPFA creates exceptions to the employment maintenance and salary requirement if the borrower can provide evidence that: 1) the borrower is unable to rehire individuals who were employees, and the borrower is unable to hire similarly qualified individuals; or 2) the borrower is unable to return to the same level of business activity due to compliance with requirements by various government agencies (i.e., Health and Human Services, Centers for Disease Control, and Occupational Safety and Health Administration) from March 1, 2020, through December 31, 2020, regarding standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. This is great news for businesses such as restaurants and retailers who are unable to rehire at previous staff levels due to regulations that resulted in a decrease to the business’s customer base.
Finally, the PPPFA extends the payment deferral period. Under the CARES Act borrowers’ payments were deferred for 6 months. The PPPFA requires that payments be deferred until the lender receives forgiveness funds from the government. In the event that the borrower does not apply for loan forgiveness, then the deferral period is 10 months following the end of the Covered Period. As the government is unlikely to quickly process forgiveness applications and disburse funds to lenders, experts agree that most deferral periods will likely extend well beyond 6 months.
As discussed, the SBA is expected to release additional guidance regarding the PPP that is intended to provide clarity on the PPPFA. Businesses should continue to monitor the situation as legislation and agency guidance are rapidly evolving. This article is intended to be for informational and discussion purposes only and is not to be construed as legal advice or as a legal opinion on which certain actions should or should not be taken. If you have specific questions regarding a PPP loan, application, or forgiveness, we would be happy to assist you. For further information regarding your particular circumstances, or if you need legal assistance, reach out to your normal contact at the firm, or contact Melissa Green (email@example.com).
On April 3, 2020, Governor Cuomo signed New York’s Fiscal Year 2021 Budget into law. The budget contains provisions that will impact businesses, including mandated paid sick leave. The law also provides the Governor and State Budget Director with the authority to revise the state’s fiscal plan throughout the coming fiscal year, as much remains uncertain in this volatile economic time. Notable tax provisions contained in the budget include: a new category for the Excelsior Tax Credit Program, prolonging the Hire-A-Vet Tax Credit Program, and a departure from recently enacted federal tax benefits. The budget also includes provisions which impact individual tax payers.
Paid Sick Leave
New York employers will soon be required to provide sick leave to employees. The temporary sick leave policies enacted in response to the COVID-19 pandemic were modified and made permanent. Employees begin accruing sick leave (at a rate of one hour per thirty hours worked) on September 30, 2020, but employers are not required to begin paying leave until January 1, 2021. Employer requirements are based on size and net income as follows:
|Less than 4 employees with net income less than $1 million||40 hours of unpaid sick leave|
|Less than 4 employees with net income greater than $1 million;|
or greater than 4 but less than 100 Employees
|40 hours of paid sick leave|
|100 or more employees||56 hours of paid sick leave|
Employers should refresh their policies and procedures to determine how they will comply with the law. Where an employer is already providing paid sick leave that meets the requirements, such policies may and should continue. Under the new law, employers are not required to pay unused sick leave upon termination of employment. However, employers should remember that New York State common law requires payment of sick leave upon termination, if it is the company’s existing policy to do so. Employers should notify employees of changes to sick leave policies, including how and when employees will accrue leave (annually or an on hourly basis) and pay upon termination. Employee policies regarding notice of sick leave and the minimum hours used should also be reviewed to ensure compliance with the new law.
Business Tax Credits
The Excelsior Tax Credit and Hire-A-Vet Programs were extended in the budget. Under the new category provided for in the Excelsior Tax Credit Program, employers with qualified “Green Projects” may be entitled to: a refundable Jobs Credit of 7.5% for new jobs, 5% for new capital investments, and 8% for qualifying research and development expenses. The Hire-A-Vet Tax Credit, which provides credit to employers equal to 10% of wages paid to a qualified veteran (up to $5,000) and 15% of wages paid to a disabled veteran (up to $15,000), was extended to include both the 2020 and 2021 hiring periods.
Recent federal legislation contained in the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, included provisions for business interest deductions (increase to 50%) and net operating loss (allowing net operating losses to be carried back from 2018, 2019, and 2020 for a period of five years, and eliminating the 80% utilization limit prior to 2021). The New York State Budget decouples from the CARES Act relief, preventing full realization of these benefits for New York State taxpayers.
Individual Income Taxes
In 2016, New York State began a phased rollout of decreasing middle class income taxes, which the Governor’s office projects will result in a “$4.2 billion in annual savings for six million filers by 2025.” Under the 2020 provisions individual income tax rates will be 6.09% for taxpayers in the $43,000-$161,550 income bracket, and 6.41% percent in the $161,550-$323,200 income bracket.
Several other provisions impact individual tax payers. First, the Long-Term Care Insurance credit was decreased to $1,500 (available for those with an adjusted gross income of less than $250,000). New York State also automated the process of electing the higher deduction allowing for the use of the standard deduction automatically where it is greater than allowable itemized deductions. Similarly, where the State has the information to calculate eligibility, entitled taxpayers will automatically receive the Earned Income Tax Credit.
New York State’s Fiscal Year 2021 Budget reflects the uncertainty of economic impact as New Yorkers continue to deal with the effects of COVID-19. The budget provides room to pivot as economic impacts continue to be realized and areas of continuing need are assessed. The mandated sick leave policies will benefit employees, but should be reviewed closely by employers to ensure compliance.
Unfortunately, proposed benefits for small businesses were not included in the final budget. Likewise decision to decouple from the CARES Act tax benefits will negatively impact New York taxpayers. However, some tax benefits continued or expanded including the availability of state tax credits for qualified “Green Projects” and certain jobs, and the multi-year rollout for middle income tax cuts. The new law also continued the phased rollout of decreasing income taxes for middle class New Yorkers.
Estate planning . . . It is one of those “to-dos” in life that is so easy to put off, even when the world isn’t turned upside down. We all want “a plan,” but it never seems like the right time to tackle estate planning. And, let’s be honest, no one wants to think about their own death and what/who we will leave behind. As trying as these times are with this current pandemic, the mortality rate from COVID-19 is low. That being said, between the scare of COVID-19 and how the world has slowed down, it may be a good time to address your estate planning. In fact, despite the stay-at-home order, it is easier than ever to facilitate the signing of important estate planning documents. Governor Cuomo has issued an Executive Order permitting video execution of Wills, remote witnesses, as well as remote/video execution of powers of attorney, health care proxies, and other legal documents. The Governor’s prior Executive Order 202.7 permitted notarization by video at this time in our state. This means that clients can create, sign and update important estate planning documents without leaving the safety of their home. In addition, the remote witnessing makes it so you do not have to let other people, who could be potential risks, into your home. There are, of course, specific guidelines to follow in accordance with these executive orders. While it’s not ideal, it does make safe and effective estate planning possible for those clients that would like to proceed at this time, rather than wait any longer. In reviewing your “estate plan,” remember that it’s more than just a will. You should be reviewing and updating your health care powers of attorney, your legal or financial powers of attorney, as well a living will. If you have these documents already, ensure that your appointed agents are up to date. If you do not have these documents in place, please consider doing so. If you have questions on any of these documents please let us know. Finally, remember that many of your assets may not pass under your will and despite what your will may say, these “non-probate” assets would be distributed pursuant to beneficiary designations or by nature of how you own the asset. These include your life insurance policies, retirement accounts as well as annuities – all of these pass by beneficiary designations which should be reviewed and updated as well.
If we can be of assistance to you in starting an estate plan or updating your present estate plan, please contact us. We would be happy to meet with you ~ even if it is “remotely”.
Many farms, especially those involved in hand-picked and other vegetable and fruit operations regularly employ migrant farm workers to assist with planting, harvesting, and other agricultural needs. The world is responding to an outbreak of respiratory disease caused by a novel (new) coronavirus that has been named “SARS-CoV-2” and the disease it causes has been named coronavirus disease 2019 (“COVID-19”). This article addresses consideration for farm’s who employ workers that are not U.S. citizens, and that are housed onsite by the farm while employed.
1. H2-A visas – availability and changes to current protocol
Migrant farm workers working under H2-A Visas may still enter the U.S. in some circumstances, but their travel depends on current restrictions from both the U.S. and their home country. The U.S. is not presently issuing new H2-A Visas.
U.S. Citizenship and Immigration Services (“USCIS”) is temporarily allowing reproduced original signatures on benefit forms and documents. The reproduction must be a copy of the original and may include a scan, photocopy, fax, or similarly reproduced document. The State Department has further advised that it is reviewing these policies and others related to Migrant Farm workers and will update regularly.
The U.S. Department of Agriculture (“USDA”) is attempting to connect available workers (those whose current contracts are expiring) with farmers in need. Additional information can be found at: https://www.farmers.gov/manage/h2a.
Effective March 20, 2002, through April 20, 2020, the U.S. has issued temporary travel restrictions which prohibit non-essential travel between the United States and Mexico. Individuals traveling to and from work, including those in the farming and agricultural industries are exempt from these restrictions. Mexican migrant farm workers who interviewed in person, and were approved for an H2-A Visa last year, may apply for a renewal this year without the need for an in person interview.
2. Safety concerns for employing and housing migrant farm workers
The United States Center for Disease Control (“CDC”), the United States Occupational Safety and Health Administration (OSHA), and other federal and state agencies have already begun issuing guidance on how to keep employees safe during the COVID-19 pandemic. The farm should take special precautions for workspaces and living quarters for workers as recommended by OSHA and other agencies.
a. CDC workplace guidance
The CDC recommends employers take steps to warn employees about the dangers of COVID-19, and to prevent the spread of illness. The CDC provides a variety of print resources to assist with these recommendations, which can be found here: https://www.cdc.gov/coronavirus/2019-ncov/communication/factsheets.html. Special recommendations include informing employees of the symptoms so that they can immediately report to their employer if they become ill, and informing employees of known ways to prevent the spread of illness (i.e., maintain a safe distance, wear personal protective equipment (“PPE”) such as face masks where appropriate, and encourage employees to wash hands).
b. OSHA workplace guidance
OSHA has released guidelines for employers based on the employee’s likelihood to contract COVID-19 at work. Many farms operate a number of agricultural operations that may require employees to have close contact with each other, or the public. Under the current OSHA guidelines, this would put a farm’s employees in the medium risk category of contracting COVID-19 while on the job.
For those in the medium risk category OSHA recommends using physical barriers to prevent contact between employees. Physical barriers include face/sneeze guards where appropriate. In the instance of agricultural work masks may be useful where sneeze guards or physical barriers between employees are not practical. OSHA also recommends minimizing face-to-face contact, removing those known to be ill where possible, and providing masks to those known to be ill in order to prevent the spread of illness. This means, at a minimum, anyone known to be ill should be wearing a mask if they will be exposed to other employees, but should be separated from other employees entirely as soon as possible.
c. Migrant farm worker housing
OSHA and the CDC have not provided guidance specifically on housing for migrant farm workers. However, farms should consider the following controls on housing in order to comply with other applicable recommendations from the CDC and OSHA. If all workers are housed in the same building an out building should be constructed to accommodate the potentially ill. Sick and well workers should not share restrooms, or other facilities, such as dining areas. If no separate space is available sick workers must be moved offsite to prevent infecting others. Sick workers should seek medical care, and should be encouraged follow the advice of their medical provider with regard to further treatment.
Many farms may encounter road blocks in obtaining assistance from migrant farm workers this season due to current national and international travel restrictions. If possible, farms should consider utilizing Mexican workers who were issued H2-A visas last year, and should seek additional advice about available workers from the USDA. Also, farms should be mindful of recommendations from OSHA, the CDC, and other agencies, in order to keep migrant farm workers safe and prevent the spread of COVID-19.
This article is intended to be for informational and discussion purposes only and is not to be construed as legal advice or as a legal opinion on which certain actions should or should not be taken. For additional legal assistance specific to your farm or business reach out to your usual contact at the firm, or contact Melissa Green (firstname.lastname@example.org).
In this unprecedented time, we want to discuss a few other changes that come with the passing of the CARES Act, in addition to the changes discussed in our previous newsletters Coronavirus, Aid, Relief, and Economic Security (CARES) Act and Retirement Plan Update – Modified Distribution Rules under the CARES Act. We hope these changes will provide valuable information to you, our clients, in addition to your families, friends, and employees.
1) Direct Rebate Payments (“Where’s my check?”).
The most popular CARES Act topic is undoubtedly the direct rebate payment checks expected to be distributed to eligible individuals in coming weeks.
Eligible individuals may receive a credit, in the form of a direct rebate payment, up to $1,200.00 ($2,400.00 for taxpayers filing jointly), in addition to $500.00 for each qualifying child of such taxpayer. Eligible individual taxpayers who had an adjusted gross income (“AGI”) of $75,000.00 or less ($150,000.00 for joint filers; $112,500.00 for head of households) in the 2019 taxable year (2018 for eligible individuals who have not filed their 2019 tax return) will generally receive full direct rebate payments. However, for those taxpayers that exceeded the aforementioned limits, the credit is reduced by 5% of the exceeded amount.
For instance, a single taxpayer who is otherwise eligible to receive up to $1,200.00, but who’s AGI for the 2019 taxable year was $100,000.00, would be ineligible to receive a direct rebate payment, as the credit would be reduced by 5% of the exceeded AGI, totaling $1,250 ($1,200 max – $1,250 = $0 payment). However, a single taxpayer, who has not yet filed his 2019 tax return and who’s AGI in 2018 was $82,000.00, would receive a direct rebate payment of $900.00 ($1,200 max – $300 = $900.00 payment).
Nonresident aliens, individuals who qualify for a deduction on another taxpayer’s taxable return (i.e., a college student whose parents claimed her as a dependent on their joint tax return filing), and trusts and estates do not qualify for a direct rebate payment.
Otherwise eligible individuals will not receive a direct rebate payment unless such taxpayer, his/her spouse (if filing jointly), and child’s (if eligible for a child credit) valid social security number is included on the taxpayer’s 2019 (or 2018 if applicable) tax return.
The Internal Revenue Service (“IRS”) has released additional information on payments in the last few days.
2) Charitable Deductions/Limits.
The CARES Act provides a new above-the-line deduction for charitable contributions and temporarily modifies charitable deduction limits.
To qualify for the new above-the-line deduction, the charitable contribution must be made in cash by taxpayers who elect not to itemize. If the taxpayer qualifies, a deduction of up to $300.00 may be made to a qualified charity (not including a donor-advised fund). Eligible taxpayers may take this deduction in taxable years beginning after December 31, 2019.
The CARES Act also temporarily suspends and replaces the charitable deduction limits with more generous limitations on certain cash charitable contributions made in the 2020 taxable year. To qualify for these modified limits, charitable contributions must be made in cash during the 2020 calendar year to a qualified charitable organization (not including a donor-advised fund) and the taxpayer must elect, or in other words opt-in, to use the modified limitations. For individuals, the CARES Act now allows a deduction up to 100% of the individual’s AGI. For corporations, the CARES Act removes the 10% AGI limit and replaces it with a 25% AGI limit.
Charitable deduction limits have also been temporarily increased for food contributions to qualified charitable organizations.
3) Single-Employer Defined Benefit Plan Minimum Funding Rules.
Good news for Plan Sponsors of single-employer defined benefit plans with minimum funding requirements. The due date for minimum required contributions (including quarterly contributions) otherwise due during the 2020 calendar year has been extended to January 1, 2021. However, payment at such time will be adjusted to include interest (using the effective rate under the Plan) accrued from the original due date to the payment date.
Plan Sponsors may also elect to treat the Plan’s Adjusted Funding Target Attainment Percentage (“AFTAP”) for the last Plan Year ending before January 1, 2020, as the AFTAP for Plan Years which include calendar year 2020.
4) Foreclosure Moratoriums and Mortgage Payment Relief.
Borrowers experiencing a financial hardship due to the COVID-19 emergency may request forbearance on federally backed mortgage loans (regardless of delinquency status) by submitting a request to their servicer and attesting they are experiencing a financial hardship during the COVID-19 emergency. This applies to mortgages loans secured on residential real property (including individual units of condominiums and cooperatives; and properties comprising of up to 4 dwelling units). Forbearance shall be granted up to 6 months, and can be extended an additional 6 months at the borrower’s request. The servicer may not require additional documentation other than the borrower’s attestation of financial hardship due to COVID-19 and may not charge additional fees, penalties, or interest beyond the amounts scheduled or calculated as if the mortgage was paid timely and full under the terms of the mortgage contract.
In addition, servicers of a federally backed mortgage loan may not initiate foreclosure (judicial, non-judicial, judgement, or order of sale) or execute a foreclosure-related eviction or sale until at least May 17, 2020.
Multifamily borrowers (borrowers of a residential mortgage loan secured by a property comprising of 5+ dwelling units) with a federally backed multifamily mortgage loan may also request forbearance, so long as the borrower was current on its payments as of February 1, 2020, submits an oral or written request to its servicer, and affirms he/she/it is experiencing financial hardship during the COVID-19 emergency. The forbearance period for multifamily borrows is up to 30 days, which can be extended up to 2 additional 30-day periods upon request at least 15 days prior to the end of the original 30-day forbearance period. During the period of forbearance, multifamily borrowers may not evict a tenant or issue a notice to vacate solely for missed rent or other fees and charges, or charge tenants any late fees, penalties, or other charges for late rent payments.
Finally, the CARES Act places a 120-day nationwide eviction moratorium for renters for nonpayment of rent to landlords who have federally backed mortgages, regardless of whether the borrower requests forbearance as described above. During this time period landlords are forbidden to charge any late fees or penalties for delinquent rent payments.
5) REAL ID Extended Enforcement Deadline.
The CARES Act includes some relief for those of you who have not yet obtained your REAL Identification Card (“REAL ID”). The CARES Act directs the Department of Homeland Security (“DHS”) to extend the enforcement date to at least September 30, 2021. DHS has since announced the new enforcement deadline is October 1, 2021.
As the effects of the novel coronavirus (COVID-19) continue to escalate, many small businesses are looking to push forward. Relief and significant aid have been provided, and laws are changing at a rapid pace to help protect employees, families, and the public. Employers who are fortunate to continue their businesses should be aware of evolving recommendations regarding workplace standards and the availability of relief. Employers who have been forced to reduce or cease operations, or who fear they will be in the near future, should be aware of important federal and state laws that require providing notification to affected employees, as well as benefits that may be available to those who must be laid off.
Small business owners, who are still in operation, have a variety of new regulations to keep up with and relief available to assist in this uncertain economic time. Employers should monitor and follow the recommendations and regulations being issued by the U.S. Centers for Disease Control and Prevention (CDC) and Department of Labor (DOL). For example, the CDC recommends educating employees about COVID-19, and provides a variety of resources to employers to properly protect and inform their workforce. Additionally, businesses operating with employees onsite should review the Occupational Safety and Health Administration’s (OSHA’s) guidance on preparing the workplace for COVID-19. Importantly, OSHA recommends businesses create a disaster plan in anticipation of a reduction in workforce due to illness, or the need to care for others who are ill.
Small businesses with continuing operations should ensure several housekeeping measures to ensure longevity of operations given current obstacles. Employers should review or establish succession plans, determine essential functions, and cross train where possible. Further, small business owners should review any applicable insurance policies to determine in what instances the business or employees qualify for benefits (i.e., business disruption, worker’s compensation, and disability). Most importantly, employers should establish policies and procedures to protect workers and stop the spread of illness. Employees should be informed of protocols once established.
Recent federal and state legislation has provided small businesses with relief, and heightened obligations. The Coronavirus Aid Relief and Economic Security (CARES) Act provides low interest loans (a portion of which may be forgivable), grants, and tax benefits to small businesses. Applications for programs under the CARES Act and additional information are available from the Small Business Association (SBA). New York State and the federal government have also recently enacted legislation that requires employers of a certain size to provide employees with paid or unpaid leave to self-isolate or quarantine, or to care for themselves or family members who have contracted COVID-19. Employers should review state and federal resources for additional information regarding new paid time off requirements.
Many businesses must temporarily or permanently halt operations in light of decreased revenue and other challenges presented by the current pandemic. Federal and state Worker Adjustment and Retraining Notifications (WARN) Acts require many businesses to provide advance notice of layoffs. Although exceptions are made when advanced notice is not possible, which will typically be the case for businesses that must cease operations now, employers must still provide as much notice as possible to employees, and the applicable government agency. Employers should also be prepared to field questions regarding benefits available to terminated employees, payment of paid time off or severance benefits, and the likelihood of rehire.
Employees who are laid off will undoubtedly be looking for information. Employers should review existing company policies regarding payment of vacation time and other paid time off upon termination of employment. Further, individual employment contracts should be reviewed in preparation of termination. Employers should also inform employees about available unemployment benefits. Seasonal employees, who are not being asked to return for the coming season, should apply for benefits even if their current benefits have lapsed, as current legislation allows for a significant expansion of benefits. Further, small business owners, many of whom did not previously qualify for unemployment, may qualify for unemployment under the current, temporary, federal expansion of benefits. It should be noted that the unemployment process is exceptionally slow given the surge in unemployment nationally. Those who apply should be reassured that unemployment benefits are typically retroactive to the last date of employment.
The impacts of COVID-19 are being felt around the world. Small business owners are not alone in their attempts to keep going in the face of adversity, or provide care and compassion in the event of unfortunate, but often necessary, closings. Reducing the spread of illness, and keeping each other safe and well will likely remain top priority for the foreseeable future. Unfortunately, social distancing measures have created physical barriers between us. Fortunately, technological support, ingenuity, and good old-fashioned American grit have allowed us to press on in exciting and heartwarming ways. Laws and regulations are rapidly changing, so it is imperative that employers continue to consult professional resources including legal and financial professionals, and government and agency guidance. Clients who have further questions or specific concerns are encouraged to reach out to their regular contact at the firm (either by phone or email) or to contact Melissa Green (email@example.com).
U.S. Centers for Disease Control and Prevention
Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19) – https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html
Resources for Businesses and Employers – https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/businesses-employers.html
Guidance on Preparing Workplaces for COVID-19 – https://www.osha.gov/Publications/OSHA3990.pdf
U.S. Small Business Association
Small Business Guidance & Loan Resources – https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Paycheck Protection Program (PPP) Sample Application Form – https://www.sba.gov/document/sba-form–paycheck-protection-program-ppp-sample-application-form
Paid Leave Legislation
U.S. Families First Coronavirus Response Act: Employee Paid Leave Rights – https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave
New York State New Paid Leave for COVID-19 – https://paidfamilyleave.ny.gov/COVID19
WARN Act Information
U.S. Department of Labor Employer’s Guide to Advance Notice of Closings and Layoffs – https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/_EmployerWARN2003.pdf
New York State Information Regarding Worker Adjustment and Retraining Notifications – https://labor.ny.gov/workforcenypartners/warn/warnportal.shtm
New York State How to file a claim for Unemployment Insurance Benefits – https://labor.ny.gov/ui/how_to_file_claim.shtm
As America, and the rest of the world, is shocked by the impact of the COVID-19 pandemic numerous small businesses are seeking financial help to weather the inevitable financial storm. While we await additional federal assistance, which is expected to benefit small businesses, those who are impacted by the COVID-19 Pandemic may qualify for small business loans from the U.S. Small Business Association (“SBA”). Further, central New York businesses may qualify for bridge loans, after being approved for an SBA Loan, from Onondaga County or the Syracuse Economic Development Corporation. The following is a brief summary of current options for financial assistance.
1. Federal – SBA
Economic Disaster Injury Loans
Small businesses may qualify for Economic Injury Disaster (“EID”) or 7(a) Loans through the SBA. EID Loans provide up to $2 million dollars at a rate of 3.75% for small businesses impacted by the COVID-19 pandemic. Long-term repayment plans (up to 30 years) are available, but specific terms depend on each applicant. Small businesses may apply online (https://disasterloan.sba.gov/ela/), but it is recommended that they contact their local Small Business Development Center for assistance with their application. The Onondaga Small Business Development Center is operating remotely, and local businesses may contact them at: http://www.nyssbdc.org/selector/ReqForCons/formi.aspx.
The SBA offers 7(a) (up to $5 million) and 7(a) Small (up to $350,000) Loans to small businesses in cooperation with other lenders. Under either program the SBA guarantees funding for a percentage of the loan based on the amount borrowed. The interest is based on lender terms, but may not exceed the SBA maximum (currently 4%). Typical processing time for these loans is 5-10 days. There are collateral requirements for loans in excess of $25,000.00. Borrowers should seek further information from lenders authorized to issue 7(a) and 7(a) Small Loans.
An SBA Express Loan is a small loan (up to $350,000), with a faster processing time than traditional 7(a) or 7(a) Small Loans. The SBA responds to SBA Express Loan Applications within 36 hours, but guarantees just 50% of the loan (as opposed to 75%-85% for 7(a) Loans). Terms are determined with individual lenders, but rates may not exceed the SBA maximum. There are no collateral requirements for loans up to $25,000; the lender must use its existing collateral policy for loans over $25,000.
2. New York State
New York State works in cooperation with the New York Small Business Development Center (NYSBDC) and the SBA to issue SBA loans. There are no loan programs unique to New York State to assist small business owners with COVID-19 related expenses at this time.
3. Central New York – Onondaga County and the City of Syracuse
Traditional SBA loans are approved in approximately 20 days and funded in approximately 90 days. Given the current financial turmoil being experienced by small businesses around the country, these processing and lending times are only expected to increase. Onondaga County and the City of Syracuse are both offering bridge loans to small businesses who have been approved for, but are waiting to receive, SBA loans. The $500,000 revolving funds will provide 0% interest short-term (180 days) loans of up to $25,000. The Syracuse application can be found at: http://www.syrgov.net/SEDCO_Home.aspx. Those interested in applying through Onondaga County can be assigned an advisor with the Onondaga County Small Business Development Center here: http://www.onondagasbdc.org/covid-19.html.
Additional funding options may be available for small businesses located in other regions. Further, federal, state, and local relief options are in flux in light of the rapid changing of events. This information will be updated as new relief options are released. For additional information or if you need legal assistance, reach out to your normal contact at the firm, or contact Melissa Green (firstname.lastname@example.org).
The State of New York requires a number of personal legal documents be notarized. In light of the current global pandemic, the state of New York has relaxed notary laws to allow notary acts to be performed electronically. Under the relaxed regulations, notaries may witness a signature via a live video feed, notarize an electronic form of the document and return it electronically, and accept and return the original signed document by mail for final execution. The following a summary of the new requirements:
Now more than ever, it is important to ensure that Wills, Powers of Attorney, and other important legal documents are up to date and reflect your wishes. The attorneys and support staff at Scolaro Fetter Grizanti & McGough, P.C. are available to assist with notarial acts, as well as the preparation of important legal and estate planning documents which may require notarization. If you need legal assistance reach out to your normal contact at the firm, or contact Melissa Green (email@example.com) for further assistance.
There is no question we are facing issues unlike any we have seen before. As a result, it is important to ensure not only that your estate planning and power of attorney documents are up to date, but that your bank and other accounts are properly titled for ensuring access to them now and so your family and others have access to them in the event of your death. Banks are open – courts are not. One of the courts closed here in New York is the Surrogate Court – the equivalent of our probate court. Why is this relevant to how your accounts are titled? When someone passes away, any accounts that are titled solely in the account holder’s name are immediately “frozen” under the law. There can be no access to those accounts until a legal representative or executor of the estate has been appointed by the Surrogate Court. Even in the best of times, this is a process that can take a few weeks if not more to get through the paperwork of probating a person’s estate.
In many cases, having accounts titled in one person’s name rather than jointly or in some other form is for estate planning purposes, asset protection or for other personal reasons. But, if the court is closed, these accounts will remain frozen until the estate’s legal representative is appointed and even if the courts reopen soon, the backlog could be significant leading to additional delays in having the legal representative appointed.
If you establish a joint account with right of survivorship (JTWROS) with a co-owner upon your death, the account immediately belongs to the joint account owner – there is immediate access to that account by your co-owner. If an account is established so it is Payable on Death (POD), Transferable on Death (TOD) or “In Trust For” another individual (ITF), there is the immediate ability to have those accounts available to the party named. Again, there is no need to go through the probate process. It is important to remember that although you may have a Power of Attorney or POA for someone, that POA terminates upon the Principal’s death – there is no ability to utilize a POA for someone after their death for any purposes.
If you are operating your business as a sole proprietorship or under a “dba” as opposed to a corporation or limited liability company, the accounts for that business are your individual accounts and if you die, those accounts are also frozen in the same manner as an individual account. You should consider having another trusted person on those accounts who will ensure that the business can continue to operate, bills can be paid, receipts processed, etc. This is one of the many reasons businesses operate as Limited Liability Companies or Corporations. Unlike a person, those entities do not die and if properly structured business operations can continue rather than having all the assets of the business go through probate.
The banks are open now – take advantage of it! You can take these steps now without any legal technicalities. Talk to your banker or brokerage advisor as to how you can best set up your accounts so there can be immediate access to those accounts in the event of your death – especially if you see that there is a need for your family. If you have any questions, please do not hesitate to contact us.
Since 1979, the Syracuse-based law firm of SCOLARO FETTER GRIZANTI & McGOUGH, P.C. has provided sophisticated tax, business, litigation, employee benefits, estate and trust planning and administration services to its individual, business, entrepreneurial and professional clients throughout New York, Pennsylvania, Florida and other states in which its attorneys are admitted to practice.