CARES Act to Provide Business Loans, Expanded Unemployment

Late on March 26th, the Senate passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, which would allow small to medium-sized businesses to receive federal loans (some forgivable) to cover payroll and other expenses. It also expands unemployment benefits for workers impacted by the outbreak, while extending unemployment eligibility to many who are otherwise not regularly entitled to receive such benefits.  This Bill is not yet law; and the House is expected to vote on it Friday, March 27th.  If passed, it would then have to be signed by President Trump before it would become law.

Small Business Loan Parameters

  • Loans will cover payroll and other expenses from February 15th through June 30th;
  • Generally, businesses with less than 500 employees will be eligible (although there will likely be some limited exceptions for hospitals);
  • The loans may be used for payroll costs, healthcare, rent, utilities, and other debts incurred by the business;
  • Loan amounts will be available based on a formula.  The amounts available will be the lesser of: Average monthly payroll costs during the prior year x 2.5; or $10 million;
  • The federal government will forgive the loans in an amount equal to the amount of qualifying costs spent during an eight-week period after the origination of the loan. These qualifying costs include payroll costs (except of wages above $100,000 per employee), interest on secured debt obligations, and rent and utilities in place prior to February 2020.
  • The amount of the forgiveness for the loans will be reduced if the employer: reduces its workforce during the eight-week period compared to prior periods; or reduces the salary or wages paid to an employee by more than 25% during the 8-week period after loan origination(compared to the most recent quarter).

Additional Loans to Mid-Size Businesses

While not eligible for paycheck protection loans, mid-size businesses – those with 500 to 10,000 employees – are also eligible for direct loans under the Emergency Relief and Taxpayer protections portion of the CARES Act. For a business to receive this type of loan under the Act, it must make a “good-faith certification” that it will comply with certain requirements listed in the CARES Act. This certification will likely occur on a form provided as part of the application for the loan and the failure to comply with the certifications could result in the rescission of the loan.

Unemployment Insurance Provisions

The CARES Act also expands unemployment assistance by creating a Pandemic Unemployment Assistance program through December 31, 2020. For weeks of unemployment, partial unemployment, or inability to work caused by COVID-19 between January 27th and December 31st, the Act provides covered individuals with unemployment benefit assistance when they are not entitled to any other unemployment compensation or waiting period credit. For this, the weekly benefit amount is generally the amount determined under state law plus an additional $600 for up to 39 weeks (which is notably longer than the typical 26 weeks in most states).

The Act also expands unemployment to also cover those who traditionally are not eligible to receive such benefits. Specifically, this provision also covers those who are self-employed (like independent contractors), who are seeking part-time employment, who do not have enough work history, or otherwise would not qualify for regular unemployment or extended benefits if they meet a qualifying reason.

Stay Tuned for further updates on this legislation as it winds its way towards becoming law.

DC Unveils Small Business Recovery Microgrants

D.C. Mayor Bowser and the city Council are investing $25 million in the DC Small Business Recovery Microgrants Program, which will be housed in the Office of the Deputy Mayor for Planning and Economic Development.  Pursuant to the “COVID-19 Response Emergency Amendment Act of 2020” effective March 17, 2020 (D.C. Act 23-247), the DC Small Business Recovery Microgrants Program will offer grants to small, local businesses, independent contractors, self-employed individuals, and nonprofits to meet their short-term financial needs. The grant can cover employee wages and benefits (including fringe benefits associated with employment, such as health insurance), accounts payable, fixed costs, inventory, rent, and utilities.

Applications should be completed online.  Small businesses, independent contractors, and the self-employed should apply here.  Non-profit organizations may apply here.  As of now, the application window closes at 6:00pm on Tuesday, March 31st

COVID-19 Financial Assistance for Virginia Employers

Virginia Governor Ralph Northam recently announced the release of Workforce Innovation and Opportunity Act (WIOA) Rapid Response funding to support Northern Virginia employers to remain open during the COVID-19 pandemic. The funds are designed to assist local employers to avert layoffs and support other operational needs. 

How the Process Works

  • A business with employees located in Northern Virginia (Fairfax, Loudoun, and Prince William counties and the cities of Fairfax, Falls Church, Manassas and Manassas Park) that has 250 or fewer employees is eligible.
  • Fill out the COVID-19 Rapid Response funding application and budget spreadsheet.
  • Submit your completed application to Seema Jain, VP of Operations, at seema.jain@vcwnorthern.com. Application requests shall not exceed $25,000. Smaller requests are encouraged.
  • Decisions for funding approval for applications will be made within two (2) business days of submission. Approved employers are required to enter into an agreement with the SkillSource Group, Inc. that will outline the project deliverables and outcomes.
  • For all grant contracts, SkillSource will reimburse the company for expenses, up to the approved contract amount.

Acceptable Uses of the Funding

  • a cleaning/sanitization service.
  • the purchase of software/programs that employees would need to use from home to support their work.
  • the purchase of remote access supplies, including laptop computers and/or smart phones, which the employees would need to use from home to support their work.
  • other innovative methods that keep businesses open and workers employed.

NOTE:  as of now, the funding cannot be used for employer payroll or fringe benefit obligations.

Minnesota Issues Stay at Home Order

On March 25th, Minnesota Governor Walz issues an Order that beginning on Friday, March 27, 2020 at 11:59 pm through Friday, April 10, 2020 at 5:00 pm, all persons currently living within the State of Minnesota are ordered to stay at home or in their place of residence except to engage in essential work activities and Critical Sector work.  Places of residence can include your home, hotels, motels, lodging houses, etc.

 

State Residents May Leave Their Home to Perform the Following:

  • Health and safety activities – such as obtaining emergency services or medical supplies;
  • Outdoor activities – such as walking, hiking, running, biking, hunting, or fishing;
  • Necessary supplies and services – such as getting groceries, gasoline, or carry-out;
  • Essential and interstate travel – such as returning to a home from outside this state;
  • Care of others – such as caring for a family member, friend, or pet in another household;
  • Displacement – such as moving between emergency shelters if you are without a home;
  • Relocation to ensure safety – such as relocating to a different location if your home has been unsafe due to domestic violence, sanitation, or essential operations reasons; and
  • Tribal activities and lands – such as activities by members within the boundaries of their tribal reservation.

 

Some Workers are Exempt from the Stay at Home Order:

Workers who work in critical sectors are exempt from the stay at home order. This includes, but is not limited to, jobs in:

  • Healthcare and public health;
  • Law enforcement, public safety, and first responders;
  • Emergency shelters congregate living facilities, drop-in centers;
  • Child care;
  • Food and agriculture;
  • News media;
  • Energy;
  • Water and wastewater; and
  • Critical manufacturing.

For more information about this announcement, please click here to review the full text of the Governor’s Order.

Recognizing Scams Amid the COVID-19 Outbreak

It will come as no surprise that criminals are opportunistic, and sadly the COVID-19 pandemic has provided an environment ripe for criminals and, in particular, cyber criminals.  Several new cyber threats have emerged that are clearly trying to capitalize on the fear on uncertainty people feel as they soldier through business closures, quarantines, and various “stay at home” directives.  Below are just some of the text, social media, phone, and e-mail scams IT professionals have identified as being related to the pandemic:

  • Treatment scams:  Scammers are trying to sell fake cures, vaccines, and advice on unproven treatments for COVID-19.
  • Supply scams:  Scammers are creating fake shops, websites, social media accounts, and email addresses claiming to sell medical supplies currently in high demand, such as surgical masks. When consumers attempt to purchase supplies through these channels, fraudsters pocket the money and never provide the promised supplies.
  • Provider scams: Scammers are also contacting people by phone and email, pretending to be doctors and hospitals that have treated a friend or relative for COVID-19, and demanding payment for that treatment.
  • Charity scams: Scammers are soliciting donations for individuals, groups, and areas affected by COVID-19.
  • Phishing scams: Scammers posing as national and global health authorities, including the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC), are sending phishing emails designed to trick recipients into downloading malware or providing personal identifying and financial information.
  • App scams: Scammers are also creating and manipulating mobile apps designed to track the spread of COVID-19 to insert malware that will compromise users’ devices and personal information.
  • Investment scams: Scammers are offering online promotions on various platforms, including social media, claiming that the products or services of publicly traded companies can prevent, detect, or cure COVID-19, and that the stock of these companies will dramatically increase in value as a result. These promotions are often styled as “research reports,” make predictions of a specific “target price,” and relate to microcap stocks, or low-priced stocks issued by the smallest of companies with limited publicly available information.

Wisconsin Shuts Non-Essential Businesses, Issues Stay at Home Directive

On March 24, 2020, Wisconsin Governor Evers issued the “Safer at Home” Order closing all Nonessential Wisconsin businesses until 8:00 a.m., Friday, April 24, 2020.  In addition, the order instructs citizens to stay at home, unless they need to leave to work at essential businesses, engage in essential travel, and a few other limited exceptions.

While businesses defined in the Governor’s Order as Essential Businesses and Operations are encouraged to remain open, Nonessential for-profit and non-profit businesses in Wisconsin have been instructed to cease all activities, except for minimal basic operations (e.g., maintaining inventory, preserving the business’s physical plant and equipment, processing payroll and employee benefits, etc.).

Businesses, including home-based businesses, may continue operations consisting exclusively of employees or contractors performing activities at their own home or residences (i.e., working from home).

Businesses and operations defined as essential by the Governor’s Order shall comply with social distancing requirements.  The following categories of businesses can continue limited operations, according to the Governor’s Order:

  • Healthcare and Public Health Operations
  • Human Service Operations
  • Essential Infrastructure
  • Essential Governmental Functions
  • CISA List
  • Stores That Sell Groceries and Medicine
  • Food and Beverage Production and Agriculture
  • Restaurants
  • Bars
  • Childcare Settings
  • Organizations That Provide Charitable and Social Services
  • Weddings, Funerals and Religious Entities
  • Funeral Establishments
  • Media
  • Gas Stations and Businesses Needed for Transportation
  • Financial Institutions and Services
  • Hardware and Supplies Stores
  • Critical Trades
  • Mail, Post, Shipping, Logistics, Delivery and Pick-up Services
  • Laundry Services
  • Businesses offering supplies to work from home
  • Supplies for Essential Businesses and Operations and Essential Governmental Functions
  • Transportation
  • Home-Based Care and Services
  • Professional Services
  • Manufacture, Distribution and Supply Chain for Critical Products and Industries
  • Critical Labor Union Functions
  • Hotels and Motels
  • Higher Educational Institutions