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California Officials Rolling Back Reopening As Coronavirus Surge Creates New Crisis

20 Jul

Tracking Closures

Los Angeles Times, By Rong-Gong Lin IIAlex Wigglesworth July 13, 2020

With the coronavirus death toll in California jumping past 7,000 and cases continuing to surge, more parts of the state are rolling back reopening plans as they try desperately to slow outbreaks and prevent more hospitals from hitting capacity.

California has seen coronavirus cases and hospitalizations skyrocket in the last month as the economy has reopened and residents have gone back to summer socializing. Although the state clamped down by shutting bars and banning indoor dining in many areas, officials described the conditions as critical.

The rate at which COVID-19 tests are coming back positive in California over the previous seven days hit 8.3% on Sunday. That’s the highest percentage since April — a continuing sign that the coronavirus is spreading throughout the state, according to a Los Angeles Times analysis conducted over the weekend.

A week ago, on July 5, the so-called positivity rate over the previous seven days was 6.8%; and the Sunday before that, on June 28, it was 5.9%. The positivity rate in Los Angeles County is even worse than the statewide figure. On Friday, the seven-day positivity rate was 10% in L.A. County; in late May, that rate fell to a low of 4.6%.

Alarmed at the metrics, some Bay Area counties are scaling back.

Officials in Alameda County said they had been informed by the state that outdoor restaurant dining there was no longer allowed and restaurants could only be open for drive-through, pickup or delivery service. Indoor restaurant dining has never reopened in Alameda and several other Bay Area counties.

In Contra Costa County, officials issued an order Saturday prohibiting indoor religious services beginning Monday morning. Outdoor gatherings, including worship services and political protests, will still be allowed as long as rules on face coverings and physical distancing are followed.

Contra Costa County officials said in a statement that more than 8% of its COVID-19 tests were now coming back positive over the previous seven days, “a sign that the virus is spreading rapidly in the county and that the community must take immediate steps to reduce the spread of the coronavirus and prevent our healthcare system from becoming overwhelmed.”

“Contra Costa is especially concerned about the risk of COVID-19 transmission in indoor gatherings, and in gatherings that involve removing face coverings for eating and drinking,” officials said in a statement. Health authorities say they are now “concerned that the number of patients needing intensive care could quickly exceed capacity.”

In Santa Clara County, officials were rescinding part of the region’s relaxation orders that were scheduled to take effect Monday. The county had initially planned to allow indoor gatherings of up to 20 people. But officials now say they will not move forward.

“Our county is at a critical moment,” Dr. Sara Cody, the county’s health officer, said in a message posted Saturday on social media. “Right now, the numbers we are seeing aren’t going in the right direction. … The number of people hospitalized with COVID-19 is growing every day.”

The county is, however, allowing hair and nail salons, massage parlors and gyms to reopen starting Monday, with some strict new requirements not seen in other counties, such as prohibiting the indoor use of cardio machines, such as treadmills, elliptical machines, exercise bikes and other equipment that induces heavy breathing or an elevated heart rate. Officials said there were no plans to reopen bars or indoor dining rooms at restaurants for the foreseeable future.

Over the weekend, state health officials ordered Sonoma and Placer counties to prohibit many indoor businesses, including indoor dining, indoor winery tasting rooms and movie theaters.

Los Angeles County tallied more than 3,200 new cases of the virus Sunday and 14 related deaths, according to the Los Angeles Times’ coronavirus tracker.

With that, the county has now recorded more than 133,000 confirmed cases and more than 3,800 deaths. That means L.A. County residents account for 54% of the state’s coronavirus-related deaths, despite making up about one-quarter of the state’s population.

Hospitalizations also continue to climb, both statewide and in L.A. County.

As of Saturday, there were 6,322 people with confirmed coronavirus infections in hospitals statewide, a decrease of less than 1% from Friday’s total of 6,357. Saturday’s figure was the second-highest number of hospitalized patients with confirmed viral infections so far in this pandemic.

There were 1,806 people with confirmed viral infections in California’s intensive care units Saturday — tying the record set Friday for the highest such number.

Los Angeles County also recorded a new high in hospitalizations on Friday, with 2,093 people reported hospitalized with confirmed coronavirus infections; that number dropped less than 2% on Saturday, when 2,056 people were confirmed to be in the hospital.

In June, there were an average of about 1,500 patients with confirmed coronavirus infections in L.A. County hospitals.

“We have been battling this virus for several months and I know that ‘COVID fatigue’ is a very real thing,” Barbara Ferrer, the county health director, said in a statement. “I want to encourage everyone to remain vigilant and continue to use all the tools we have to prevent further transmission of the virus.”

Officials said the increase in transmission probably started around the week of Memorial Day and attributed it to more people being in contact with one another due to more workplaces reopening and more social gatherings taking place.

In an attempt to limit the increase, the county partially rolled back its economic reopening on orders from the state. Bars in a number of counties, including Los Angeles, were made to shut down again June 28, and restaurants were also told to stop in-person dining in many counties on July 1.

Of California’s 58 counties, 31 have now been required to close bars and indoor operations of certain businesses, which not only include dine-in restaurants, but also movie theaters, bowling alleys, arcades and museums. The orders affected more than 33 million Californians, or more than 85% of the state’s population.

Meanwhile, L.A. Mayor Eric Garcetti warned that the city could reimpose a mandatory stay-at-home order if conditions continued to worsen.

Vacation Policy Factors to Consider During COVID-19 Pandemic

Vacation Policies

Matthew J. Roberts, Esq.  July 13, 2020 -CalChamber\

A consequence of the prolonged shelter-in-place and stay-at-home orders issued as a result of the COVID-19 pandemic is dramatically reduced travel. As a result, during this time many employees are not taking earned vacation time and may not do so for months resulting in the following question from employers: Can we change our vacation policies as a result of the employees not using their time?

This is a tricky question. Generally, however, employers do have control over their vacation policies subject to certain rules. Below are some common ways in which an employer may address its vacation policies while staying within compliance.

Accrual Caps

California law allows employers to set reasonable caps on vacation accruals. Accrual caps mean that the employee no longer accrues vacation time while they’re at the cap.

Although there’s no set standard on what a reasonable cap may be, commonly caps meet this requirement when they are no less than 1.5 to 2 times the annual rate for employees. This is because employees need to be provided a reasonable opportunity to take all the vacation that they earn within a year.

So, for example, an employee who accrues 40 hours of vacation a year should have a cap of no less than 60 hours before they stop accruing vacation.

Some employers who have already instituted caps want to temporarily increase the cap as a benefit to the employee since there’s little incentive to use vacation during a shelter-in-place order.

Employers may increase or decrease their caps; however, California prohibits “use it or lose it” vacation policies. For example, if an employee has a 200-hour cap, and the employer decided to temporarily increase that cap to 240 for the rest of year, the employer cannot take away any vacation hours in excess of 200 once the employer decides to return the cap to that level.

Cash-Out Policies

California law considers vacation hours to be vested wages. This is why vacation hours must be paid out along with final wages. California law allows employers to cash-out vacation hours; however, the cash-out must be paid at the employee’s current rate of pay.

Unlimited Vacation

Some employers have moved to a new type of vacation benefit where the employee has unlimited hours and the employer no longer tracks accrued hours or pays out any vested vacation wages upon termination.

Employers who have an accrual method may switch to an unlimited one, but again, any hours the employee accrued under the old policy cannot be forfeited.

Also, the law regarding this type of policy is unsettled. Any employer considering switching to an unlimited policy should consult with legal counsel to evaluate the risks.

Required Usage

Employers may require employees to take vacation at certain times of the year. However, internal Labor Commissioner guidance requires that employers provide reasonable advance notice of the requirement. The Labor Commissioner determined that 90 days would constitute reasonable advance notice.

In general, the Labor Commissioner will handle any vacation claims based on the principles of equity and fairness. So, where an employer wants to change its vacation policy, it should keep those principles in mind along with the rules under California law.

Matthew J. Roberts, Employment Law Counsel/Subject Matter Expert

More Time to Apply for Paycheck Protection Program Loans

PPP Loan

By CalChamber  July 16, 2020

Protection Program (PPP) loans to August 8, 2020.

An estimated $130 billion in funding remains for the program, which offers loans to help small businesses with fewer than 500 employees stay in business and keep workers employed.

Employers in need of assistance and who have not yet obtained a loan are encouraged to speak with a lender as soon as possible.

The PPP Extension Act signed on July 4 extends only the loan application deadline and does not expand the program.

Legislation signed on June 5 amended the original PPP and aimed to clarify matters such as how and when the funds should be spent and how to handle re-staffing problems.

The key aspect of the PPP is that the loans provided can be fully forgiven without repayment if the employer meets certain conditions, including spending the funds only on certain costs.

A summary of the June 5 revisions appeared in the June 12 Alert.

Information about the PPP loan, including links to an EZ application requiring fewer calculations and less documentation for eligible borrowers, and the full forgiveness application—both released on June 16—is available on the U.S. Small Business Administration web page about the program, located here.

 

California Governor Re-Closes Numerous Businesses Effective Immediately

14 Jul

Closed to Coronavirus

By: Robin E. Largent Carothers DiSante & Freudenberger LLP © 2020

Citing concerns about COVID cases being on the rise in California, today Governor Newsom announced a number of businesses that are being required to close again, effective immediately.  Statewide, the following businesses are required to close indoor operations:

  • Dine-in restaurants
  • Wineries and tasting rooms
  • Movie theaters
  • Family entertainment centers (for example: bowling alleys, miniature golf, batting cages and arcades)
  • Zoos and museums
  • Cardrooms

Additionally, bars, brewpubs, breweries, and pubs must close all operations, both indoor and outdoor, statewide.

On top of these statewide closures, there are additional closures of indoor facilities in 31 different counties for the following services/activities:

  • Fitness centers and gyms
  • Worship services
  • Protests
  • Offices for non-essential sectors
  • Personal care services, like nail salons, body waxing and tattoo parlors
  • Hair salons and barbershops
  • Malls

Here are the counties affected by these additional closures (additional counties may be added to the list in the coming days):

  • Colusa
  • Contra Costa
  • Fresno
  • Glenn
  • Imperial
  • Kings
  • Los Angeles
  • Madera
  • Marin
  • Merced
  • Monterey
  • Napa
  • Orange
  • Placer
  • Riverside
  • Sacramento
  • San Benito
  • San Bernardino
  • San Diego
  • San Joaquin
  • Santa Barbara
  • Solano
  • Sonoma
  • Stanislaus
  • Sutter
  • Tulare
  • Yolo
  • Yuba
  • Ventura

There is no end date specified for today’s new closures.  This is very unfortunate news for California businesses, many of which have already been hit hard by the first round of closures. Today’s Order is available here https://covid19.ca.gov/roadmap-counties/.  Affected employers will need to re-evaluate which operations they need to close and which employees can still be permitted to report to work.  The importance of ensuring that safety protocols are in place and are followed at worksites that remain open cannot be understated.  The same is true of the need for employers to comply with all applicable paid leave laws and to avoid retaliation against employees who raise good faith safety-related concerns.  The flood gates have opened on the COVID-19-related lawsuits already and they are expected to keep coming.

CalWorkSafety & HR, LLC is here to help you evaluate and respond to these orders as they apply to your operations.  Call your consultant or Don Dressler at 949-533-3742

What To Do When an Employee Tests Positive for COVID-19

13 Jul

COVID 19 what to do

By: Robin E. Largent  July 3, 2020 Carothers DiSante & Freudenberger LLP © 2020

We have been getting more and more questions from employers about what to do if they have an employee who reports that they have tested positive for COVID-19.  Cal-OSHA likely has been getting similar inquiries and, as a result, recently issued guidance for employers on the specific topic of handling outbreaks in the workplace.  That guidance is here.  Importantly, Cal-OSHA cautions that even a single positive case may quickly turn into an outbreak among employees.  Furthermore, because workplace circumstances and settings vary greatly, Cal-OSHA recommends that employers contact and consult with their local health department to plan and coordinate a response.

In addition to working with the local health department on specific responses protocols, the employer also must keep in mind Cal-OSHA reporting requirements.  Employers must report serious injuries, illnesses or deaths in the workplace immediately.  Cal-OSHA instructs that for COVID-19 purposes, this means COVID-19 related inpatient hospitalizations or deaths, and employers should report these events even if work-relatedness is uncertain.

Employers must also keep in mind Governor Newsom’s May 6, 2020 Executive Order providing, for workers’ compensation coverage purposes, that any case of COVID-19 contracted between March 19, 2020 and July 5, 2020 by an employee who works outside the home, is presumed to have occurred in the course of employment.  This presumption is rebuttable (e.g. the employee lives with a non-employee who had COVID-19), but the employer does not get to decide whether or not the virus was contracted at work.  The employer should give the employee a work comp form and let the carrier determine coverage.

Although the employer should confer with the local health department on specific protocols for handling a workplace outbreak involving one or more employees, some things that employers will need to consider are the following:

  • Informing coworkers who may have come into contact with the infected employee that an employee (maintain confidentiality of the employee’s identity to the extent practicable) has tested positive;
  • Consider providing COVID-19 testing for other employees.  Remember that if testing is required by the employer, the expense must be paid for by the employer, and the employees must be paid for the time they spend undergoing testing.  Also remember that employees cannot be required to undergo COVID-19 antibody testing, but only testing for active infection.
  • Where testing is not feasible, try to utilize contact tracing to identify those who have had close contact with the infected employee, and advise those close contacts to quarantine at home for 14 days from their last known contact with the infected employee.  If the outbreak involves numerous employees with close contacts with the infected employee, consider closing the worksite temporarily and advising all employees to quarantine.  “Close contact” means spending 15 minutes or more within 6 feet of a COVID-19 positive employee during their infectious period, which includes 48 hours before they became symptomatic.
  • While at home, quarantined employees should monitor for any potential symptoms of COVID-19 (fever, shortness of breath, cough, loss of taste/smell, congestion/runny nose, sore throat, fatigue, chills, nausea/vomiting, diarrhea) and should be encouraged to get a COVID-19 test if they develop symptoms.
  • The work area used by the infected employee(s) must be cleaned and disinfected (and such cleaning and disinfecting of the workplace should be done regularly).
  • Employees who are still reporting to work should not share equipment (particularly equipment that comes into contact with the face or mouth, such as telephones and headsets), and employees must be reminded to follow safety protocols established by the CDF and local guidance (including wearing face coverings and social distancing).  Of course, all employees should be reminded not to report to work with symptoms.

Employers must also follow current guidance on when it is safe to allow an employee who has tested positive for COVID-19 to return to work.  The answer varies depending on whether the employee has symptoms or is asymptomatic.  The answer also varies depending on whether COVID-19 testing is available and utilized.  According to the CDC guidance, if an employee tests positive and has symptoms, the employee may return to the workplace either:  (1) 72 hours after the employee is fever-free (without the use of fever-reducing medicine), AND respiratory symptoms (cough, shortness of breath) have improved, AND at least 10 days have passed since symptoms first appeared; OR (2) after the employee has tested negative for COVID-19 two consecutive times, at least 24 hours apart, and employee is fever-free (without use of fever reducing medicine) and any respiratory symptoms have improved.

If an employee tests positive but is asymptomatic, the employee may return to the workplace (1) after at least 10 days have passed since they tested positive if they still have not developed any symptoms; or (2) after the employee has two consecutive negative COVID-19 tests, at least 24 hours apart.  Cal-OSHA advises that employers defer to their local health department on specific return to work criteria that they should follow.

Of course, any time an employee cannot work due to COVID-19 (testing positive, being ill with symptoms, or being quarantined due to close contact with an infected individual), the employer needs to be sure the employee is informed of paid time off rights and provided with applicable paid time off.  This may include paid sick leave under the federal Families First Coronavirus Response Act (FFCRA) and/or state and local paid sick leave laws.  The cities of San Francisco, Oakland, San Jose, Los Angeles, and Long Beach all have COVID-19 sick leave ordinances that supplement pre-existing paid sick leave and/or apply to employers who are not covered by the FFCRA.  By way of reminder, the FFCRA provides up to 80 hours of paid sick leave to employees who work for private sector employers with less than 500 employees (or who work for a public employer).

If you are an employer with 50 or more employees and you have an employee who becomes seriously ill with COVID-19 (e.g. the employee is hospitalized), keep in mind that this could also trigger a lengthier entitlement to up to twelve weeks of unpaid leave under the FMLA/CFRA.

CA Court Grants TRO in Fast Food Covid-19 Case

On June 16, 2020, several employees at a McDonald’s franchise in Oakland, California filed a lawsuit against their employer, in a matter entitled Hernandez v. VES McDonald’s (No. RG20064825, Superior Court of California, County of Alameda). The lawsuit consists of five plaintiffs, three of whom are employees who allege that they became sick with COVID-19 while working at the restaurant and “unknowingly” spread the disease to family and other members in their communities. The fourth is the infant son of one of the plaintiffs who allegedly contracted COVID-19 from his mother. The final plaintiff is an employee who worked in the same restaurant. At the time the complaint was filed, he had not yet tested positive for COVID-19 but “fears becoming infected and spreading the disease to others.”

The plaintiffs allege causes of action for public nuisance, unfair and unlawful business practices, and violations of Oakland’s Emergency Paid Sick Leave Ordinance. The Oakland lawsuit comes approximately one month after employees at a Chicago-area McDonald’s filed suit alleging that their employer failed to take measures to keep them safe during the COVID-19 pandemic.

COVID-19 as a “public nuisance” is a novel theory being explored by a number of aggressive plaintiffs’ counsel in California. California Civil Code Section 3480 provides: “A public nuisance is one which affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal.”

On June 22, 2020, Judge Patrick R. McKinney of the Superior Court of California, County of Alameda issued a temporary restraining order (TRO). Pursuant to the TRO, the Oakland franchise will remain closed until July 2, 2020, at which point the court will determine whether a preliminary injunction should be issued. The court ordered that the franchise may reopen and resume operations before July 2, pending approval from the Alameda County Department of Environmental Health.

Judge_gavel

Addressing Race Discrimination Complaints in the Workplace

July 6, 2020

Following recent events, employers may experience an increase in the number of race discrimination complaints in the workplace. Many organisations in the United Kingdom, in the United States, and globally have made public statements to reinforce their commitment to racial equality.

General Complaints of Race Discrimination

Not all race discrimination complaints raised in the workplace are from existing or former employees; complaints may be made from individuals outside the organisation relating to the culture of the workplace and may not be specific. Such complaints could be from a member of the public, an external social media platform, or could even be anonymous. It is important that organisations take such complaints seriously. Employers may want to address such complaints promptly and take appropriate action where necessary. Although a complaint may not be specific, employers still may want to investigate it.

A first step may be to explore the allegation with the complainant—if the complainant is known—in more detail to enable a full investigation to be carried out. If that is not possible, a more general cultural investigation may be worthwhile in order to determine if there is any truth behind the allegations. Employers may consider appointing an investigator to speak to a small group of employees about their experiences working for the company and follow up on any issues that may become known. The group of employees could be identified through asking people to volunteer, chosen at random, or individually selected to represent a cross-section of the organisation. The investigator could be someone internal (seen as neutral), or alternatively, an external investigator could be appointed.

Anonymous Complaints

Dealing with anonymous complaints can be difficult for employers, especially when it is not clear as to where the complaints originated. This however, does not mean that complaints should be ignored. Where it is not known if a complainant is external, employers may want to be cautious when sharing details about an investigation or the findings unless the complainant reveals his or her identity. In a situation where contact can be made with the complainant despite his or her anonymity—for example, the organisation receives an email that does not identify the sender—then the complainant may be willing to speak, provided it is on an anonymous basis. In this situation, an employer may want to appoint an impartial person to investigate the allegations, such as an external investigator. Employers may want to assure the complainant that his or her anonymity will be protected and any victimisation will not be tolerated.

How Can Employers Foster Non-discriminatory Workplaces?

Organisations may want to review their non-discrimination and anti-harassment policies (which may be included within a respectful workplace policy) to ensure they include specific examples of conduct that would amount to racial harassment, making sure it is clear that such conduct will not be tolerated. Employers also may want to reiterate that any employee who breaches the organisation’s non-discrimination and anti-harassment policies may be subject to disciplinary action, which could include termination of employment.

Employers also may want to train managers on the policies so that they are competent to handle discriminatory or harassing behaviour that may arise in the workplace.

Employers may want to consider developing a focus group or employee forum to deal with diversity and inclusion issues in the workplace. The purpose of the group/forum would be to form a bridge between employees and senior management to report diversity issues, and a resource to whom employees can address complaints (including anonymous complaints) in addition to human resources.

Employers that take the time to consider the above action points may find they will encourage diverse and inclusive workplaces where all employees feel valued and supported.

Daniella McGuigan is a partner is the London office of Ogletree Deakins.

Addressing Race Discrimination

LA County Changes COVID-19 Guidance

7 Jul

Corona

July 1, 2020 – Jackson Lewis LLP.

NEW- requirement to report if 3 or more employees in a workplace are identified with COVID-19

Los Angeles County has been the epicenter of COVID-19 in California, and it is only getting worse. The Los Angeles County Department of Public Health (LA Department of Public Health) recently announced that daily hospitalizations have been significantly higher than in past weeks. Accordingly, LA County released new and updated guidance to help stop the spread of COVID-19 within the workplace. The guidance includes more stringent employee screenings, requirements to report a cluster of confirmed COVID-19 cases, updates to LA County Reopening Protocols, and requirements that all employees who have regular contact with others wear a face covering or an alternative, regardless of medical conditions.

More Stringent Employee Screenings

LA Department of Public Health has released an Employee Screening form. The form requires employees who have experienced COVID-19 symptoms (defined as fever, chills, cough, shortnerss of breath, or difficulty breathing) within the past 10 days to be sent home immediately. The form otherwise follows CDC guidance in that employees should also be sent home immediately if they: (1) have an elevated body temperature greater than or equal to 100.4ºF or 38ºC or (2) have had any contact with a person with COVID-19 in the previous 14 days.

Employers Required to Report Clusters of Confirmed Cases

LA Department of Public Health has also updated the Protocol for Social Distancing. In the event that three or more COVID-19 cases are identified within the workplace within a span of 14 days, the employer should report the cluster to the LA Department of Public Health at (888) 397-3993 or (213) 240-7821. A case manager will then be assigned to guide the facility response and provide technical support, implement infection control guidances, and provide site-specific control measures. LA Department of Public Health has released a poster containing this information.

LA County Protocols Updated

LA County Reopening Protocols have also been updated to reflect the changes in the Protocol for Social Distancing. For example, the Office Workspaces guidance addresses the more stringent health screenings, the reporting of clusters of COVID-19 cases and information of face coverings, including that employees be instructed to wash their face coverings daily.

Please keep in mind that the changes in LA County protocols directly impact businesses located in the City of Los Angeles as Mayor Eric Garcetti’s “Safer L.A.” Emergency Order relies upon LA County protocols. Thus, it is very important that businesses located in LA County and the City of Los Angeles continue to monitor LA County Reopening Protocols as they are continuously updated. For example, cardrooms, satellite wagering facilities, and racetracks with onsite wagering are prohibited from allowing the consumption of food and/or beverages at gaming tables, and beaches are closed from July 3 – July 6, 2020.

Face Coverings and Medical Conditions

LA Department of Public Health also has released guidance for individuals with medical conditions who are unable to wear a face covering. In the Guidance for Cloth Face Covering, it was explained that “[i]ndividuals who are exempt from wearing a face covering due to a medical condition and who are employed in a job involving regular contact with others must wear an alternative such as a face shield with a drape on the bottom edge.”

What Employers Should Know Now

Many California localities have released guidance and provisions with the intention to reduce the spread of COVID-19. Currently, the risk of spreading the disease is exemplified in Los Angeles County and more stringent standards have been put into place.

California’s Face Mask Requirements Can Help Keep Businesses Open

Face Mask Required

Katie Culliton  June 30, 2020

It’s been almost two weeks since the California Department of Public Health (CDPH) required Californians to wear a cloth face mask when outside the home, with limited exceptions. As cases of COVID-19 rise, it’s becoming increasingly more important to wear a mask to slow the disease’s spread — and ultimately, the face mask requirement helps businesses to stay open during these uncertain times.

In response to California seeing a surge of COVID-19 cases in some counties, the CDPH required seven counties to close their bars immediately and recommended eight other counties do the same. Bars were targeted specifically because these environments lead to reduced compliance of personal protective measures, including use of face coverings, and they require raised voices, which leads to greater projection of potentially infected droplets.

The Centers for Disease Control and Prevention (CDC) reminds us that cloth face coverings help protect people around you and most likely reduce the spread of COVID-19 when they are widely used in public settings. Requiring employees and customers wear face coverings helps prevent the spread of COVID-19, which in turn keeps businesses open.

Remember, California’s June 18 Guidance for the Use of Face Coverings included that Californians must wear a face covering when engaged in work, whether at the workplace or performing work off-site, when:

  • Interacting in-person with any member of the public;
  • Working in any space visited by members of the public, regardless of whether anyone from the public is present at the time;
  • Working in any space where food is prepared or packaged for sale or distribution to others;
  • Working in or walking through common areas, such as hallways, stairways, elevators, and parking facilities; and
  • In any room or enclosed area where other people (except for members of the person’s own household or residence) are present when unable to physically distance.

Individuals are exempt from these guidelines in limited circumstances. California also has industry-specific guidance on reducing the risk of COVID-19, which includes childcare, day camps, delivery services, office workspaces and real estate transactions.

Keep an eye out for updated requirements as the COVID-19 pandemic evolves.

Additional $600 Unemployment Payment Expiration Date Looms Near

Covid 19 Unemployment

By John J. Porta, Hadley M. Simonett, Keerthi Sugumaran and Carolyn A. Trotta

  • June 26, 2020 -Jackson Lewis, PC.

As businesses begin to reopen and many workers return to work, one of the main provisions of the CARES Act, signed into law on March 27, 2020, is set to expire next month. Section 2104 of the CARES Act created the federal Pandemic Unemployment Compensation (FPUC) program, which provides all individuals who receive state unemployment benefits an additional $600 per week for up to four months funded by the federal government. Created as a short-term benefit, the additional $600 FPUC benefit will expire “on or before July 31, 2020.”

The exact expiration date depends on how the state defines the unemployment benefit week. The majority of states follow a Saturday-to-Saturday or Sunday-to-Sunday benefit week for purposes of unemployment compensation. For states whose benefit week ends on a Saturday, the final week FPUC is payable is the week ending July 25, 2020. For states whose benefit week ends on a Sunday, the final payable week is the week ending July 26, 2020.

While the House of Representatives passed an extension of the FPUC benefit in the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, the bill has faced strong opposition in the Senate.

Although the FPUC benefit expires next month, the expanded benefits under the Pandemic Unemployment Assistance (PUA) program are in effect until December 31, 2020. The PUA provides workers who are ineligible for regular state benefits (such as independent contractors) unemployment benefits funded by the federal government. For more information on the PUA program and other benefits under the CARES Act, see our article, President Trump Signs Coronavirus Aid, Relief, and Economic Security Act (CARES).

Heat Illness – A Real Menace

30 Jun

Heat Illness

Workplace Safety Measures and Heat Illness Tools

Now approaching the summer season heat and as employers begin to return to work (RTW) after months of COVID-19 quarantine, they may be out of shape, out of practice on workplace safety procedures, and will be required to re-breathe hot air through face coverings.
As employers focus on COVID-19 RTW efforts, it is vital that they remain aware of risks of safety rule violations, injuries, and heat illness.
Prepare Employers & Employees for a Hot Summer:
  1. Have a Written Heat Illness Plan and a post a copy where outdoor employees are working. If you have not updated your plan in the past three years, it will not be compliant with Cal/OSHA’s current rules. Our CalWorkSafety & HR, LLC team can help you quickly update.
  2. Memorize these three words: Water – Rest – Shade. Ideally, workers require cool water as often as possible, but they may need sports beverages containing balanced electrolytes if they are sweating for several hours at a time. Employers should ensure workers can access shaded or air-conditioned rest areas to cool down as needed.
  3. New and temporary workers are most at risk. The body takes time to build a tolerance to heat (more than 70% of outdoor heat fatalities occur during a worker’s first week of working in warm or hot environments); building tolerance is called “acclimatization.” Our Heat Safety experts help companies create a Heat Illness Prevention Plan to ensure all employees are fully trained and acclimatized in the 1st work week.
  4. Indoor workers also suffer from heat illness. Kitchens, laundries, warehouses, foundries, boiler rooms and many other indoor work environments can become dangerously hot. Click below to view Cal OSHA’s workers High-Risk occupation list.
  5. Use engineering controls or modify work practices to protect employees. By increasing ventilation using cooling fans; scheduling work at a cooler time of the day; rotate job functions among workers to minimize heat exposure. Refer to the Best Practices OSHA resource.
  6. Familiarize everyone at your workplace with the Signs and Symptoms of Heat Ilness from CDC (Centers for Disease Control & Prevention): and ensure everyone knows what to do in an emergency. This includes:
  7. Common heat exhaustion signs present: dizziness, headaches, cramps, sweaty skin, nausea and vomiting, weakness, and a fast heartbeat. Heat stroke symptoms may include red, hot, dry skin; convulsions; fainting; very high temperature and confusion. Also: Pair workers with a buddy to observe each other for early signs and symptoms of heat illness … as well as Employees should call a supervisor for help if they believe someone is ill – and 911 if a supervisor is not available, or if someone shows signs of heat stroke. CalWorkSafety & HR offers training materials to help you!
  8. To help calculate the heat index at your worksite download the iPhone or Android device application – which provides specific recommendations for planning work activities and preventing heat illness based on the estimated risk level where employees are working.
  9. Ensure workers and supervisors know the location where they are working and how to direct emergency responders to your work site if needed.
  10. On high heat days, keep extra watch on workers health and stress need to drink water frequently and use cooling off breaks if needed – When the temperature equals or exceeds 95 degrees Fahrenheit.
The OSHA-NIOSH Heat Safety Tool Features offers a visual indicator of the current heat index and associated risk levels specific to your current geographical location; Precautionary recommendations specific to heat index-associated risk levels; An interactive, hourly forecast of heat index values, risk level, and recommendations for planning outdoor work activities in advance; Editable location, temperature, and humidity controls for calculation of variable conditions and Signs and symptoms and first aid information for heat-related illnesses.
The Bottom Line
As Workers continue to Return to Work After a Prolonged
Absence Due to COVID-19
Employers should be more vigilant in refreshing employee training, especially as it relates to heat illness prevention and other safety requirements. Return to work may necessitate generalized retraining on core safety rules. We know that you will face challenging decisions during this national crisis. Please be assured that we are here to help you meet your evolving needs and thrive.

Enforce Face Covering at Work

23 Jun

Masks Required

Enforce Face Covering at Work

Our clients are now reporting new instances every day where their employees are testing positive for COVID-19. On June 19th, California Governor Gavin Newsom ordered Californians to wear face coverings in most indoor settings – including offices and clients calls – and many outdoor settings. New guidance from the California Department of Public Health outlines when masks or cloth face coverings are required to assist in limiting the spread of the Coronavirus which is continuing to increase currently in California.

Do This Now! Encourage Those in Contact with Someone
Testing Positive to Get Tested – CVS Has Many Locations Where Free
Testing is Provided in LA/Orange County & Other Metro Areas
CDPH Guidance: People in CA must wear face coverings when they are in the high-risk situations below:
  • Inside of, or in line to enter, any indoor public space
  • Obtaining services from the healthcare sector in settings including, but not limited to, a hospital, pharmacy, medical clinic, laboratory, physician or dental office, veterinary clinic, or blood bank.
  • Waiting for or riding on public transportation or para transit or while
  • Masks Now Required Everywhere in a taxi, private car service, or ride-sharing vehicle
  • Engaged in work, whether at the workplace or performing work off-site, when:
    • Interacting in-person with any member of the public
    • Working in any space visited by members of the public regardless of whether anyone from the public is present at the time
    • Working in any space where food is prepared or packaged for sale or distribution to others
    • Working in or walking through common areas, such as hallways, stairways, elevators, and parking facilities
    • In any room or enclosed area where other people (except for members of the person’s own household or residence) are present when unable to physically distance.
Additionally, masks are required when operating a public transportation or paratransit vehicle, taxi, or ride-share vehicle when passengers are present and CDPH recommends then even when driving solo. Masks are also required in outdoor public spaces if six feet of physical separation is not possible.

Exemptions

Under the guidance, a face covering is not required for:
  • Persons age two years or under
  • Persons with a medical condition, mental health condition, or disability that prevents wearing a face covering. This includes persons with a medical condition for whom wearing a face covering could obstruct breathing or who are unconscious, incapacitated, or otherwise unable to remove a face covering without assistance.
  • Persons who are hearing impaired, or communicating with a person who is hearing impaired, where the ability to see the mouth is essential for communication.
  • Persons for whom wearing a face covering would create a risk to the person related to their work, as determined by local, state, or federal regulators or workplace safety guidelines.
  • Persons who are obtaining a service involving the nose or face for which temporary removal of the face covering is necessary to perform the service.
  • Persons who are seated at a restaurant or other establishment that offers food or beverage service, while they are eating or drinking, provided that they are able to maintain a distance of at least six feet away from persons who are not members of the same household or residence.
  • Persons who are engaged in outdoor work or recreation such as swimming, walking, hiking, bicycling, or running, when alone or with household members, and when they can maintain a distance of at least six feet from others.
  • Persons who are incarcerated.

The Bottom Line

Existing guidelines about social distancing and frequent hand washing remain in effect.

COVID-19 continues to speed up its spreading of infection and the most important step is to have the cooperation and compliance of ALL PERSONS to limit spread by wearing face covering. Unless you stay home or are always more than six feet away from others, face covering is required and works to protect EVERYONE’s health.
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California Law Requires Face Masks

22 Jun

Wear Mask

CalWorkSafety clients are currently reporting new instances every day that their employees are testing positive for COVID-19.  It is now critical to enforce face coverings at work, and to encourage those who have been in contact with someone who tests positive, to get tested themselves.  Free testing is now available at many CVS locations in Los Angeles, Orange, San Diego and Inland Empire counties.

California Governor, Gavin Newsom, has ordered Californians to wear face coverings in most indoor settings, including offices and many outdoor venues.

New guidance from the California Department of Public Health (CDPH) outlines when masks or cloth face coverings are required, to assist in limiting the spread of Covid-19 that is now continuing to increase currently in California.

As reported instances of Covid-19 are currently on the rise, the most important step to take is to have the cooperation and compliance of all persons to limit the spread by wearing face coverings.  Unless staying at home or maintaining at least a distance of six feet away from others at ALL times, face coverings are required to protect everyone’s health.

CDPH guidance holds that people in California must wear face coverings when they are in the high-risk situations listed below:

  • Inside, or in line to enter, any indoor public space
  • Obtaining services from the healthcare sector in settings including, but not limited to, a hospital, pharmacy, medical clinic, laboratory, physician or dental office, veterinary clinic, or blood bank
  • Waiting for or riding on public transportation or paratransit or while in a taxi, private car service, or ride-sharing vehicle
  • Engaged in work, whether at the workplace or performing work off-site, when these situations exist:
    • Interacting in-person with any member of the public
    • Working in any space visited by members of the public, regardless of whether anyone from the public is present at the time
    • Working in any space where food is prepared or packaged for sale or distribution to other
    • Working in or walking through common areas, such as hallways, stairways, elevators, and parking facilities
    • In any room or enclosed area where other people (except for members of the person’s own household or residence) are present and when one is unable to physically distance

Additionally, masks are required when operating a public transportation or paratransit vehicle, taxi, or ride-share vehicle when passengers are present, and the CDPH recommends even when driving solo. Masks are also required in outdoor public spaces, if six feet of physical separation is not possible.

Exemptions

Under the guidance, a face covering is not required for the following persons:

  • Persons age two years or under
  • Persons with a medical condition, mental health condition, or disability that prevents wearing a face covering
    • This includes persons with a medical condition for whom wearing a face covering could obstruct breathing or who are unconscious, incapacitated, or otherwise unable to remove a face covering without assistance
  • Persons who are hearing impaired, or communicating with a person who is hearing impaired, where the ability to see the mouth is essential for communication
  • Persons for whom wearing a face covering would create a risk to the person related to their work, as determined by local, state, or federal regulators or workplace safety guidelines
  • Persons who are obtaining a service involving the nose or face for which temporary removal of the face covering is necessary to perform the service
  • Persons who are seated at a restaurant or other establishment that offers food or beverage service, while they are eating or drinking, provided that they are able to maintain a distance of at least six feet away from persons who are not members of the same household or residence
  • Persons who are engaged in outdoor work or recreation such as swimming, walking, hiking, bicycling, or running, when alone or with household members, and when they are able to maintain a distance of at least six feet from others
  • Persons who are incarcerated

Existing guidelines regarding social distancing and frequent hand-washing remain in effect.

To ensure your business operation remains in compliance with these new California requirements, please contact us at (949) 533-3742 and one of our experienced safety and HR experts will be in touch with you right away.

COVID-19 Workers’ Comp Claim Presumption Flowchart

15 Jun

Jessica Mulholland  June 9, 2020 6  HR Watchdog – Cal Chamber

Workers Comp

In early May, Governor Gavin Newsom signed an executive order extending workers’ compensation benefits to California employees who contract COVID-19 while working outside of their homes during the state’s stay-at-home order. This workers’ compensation benefits extension is causing some confusion, but a Sacramento-based law firm recently created a flowchart to help employers.

As previously reported, the order prompted many questions about its scope, criteria and implementation — and created a “rebuttable presumption” that workers meeting certain criteria who contract COVID-19 did so during employment (which means the law automatically assumes workers’ compensation covers their claims and shifts the burden to employers, who may then present evidence to rebut the presumption).

The California Department of Industrial Relations answered some questions in its Question and Answer page, but Sacramento-based law firm Mullen & Filippi went a step further, creating a COVID Claim Presumption Flowchart to further simplify how employers can determine whether a presumption applies.

Start at the top of the chart. If you answer yes to the first seven questions — which include whether the worker received a COVID-19 diagnosis or tested positive for the virus, whether the diagnosis was from a medical doctor holding a license from the California Medical Board and whether the diagnosis was confirmed with a positive virus or antibody test within 30 days, to name a few — COVID-19 is presumed as an industrial injury. This means that, unless you can rebut the presumption by providing evidence of an alternate cause, you must provide workers’ compensation benefits. If, however, you answer no to any of the questions, no presumption exists, and the normal evidentiary rules apply.

Assuming the claim is compensable, employers can use page two of the flow chart to help determine apportionment, compensable consequences, death benefits and temporary total disability benefits.

This executive order is retroactive to March 19, 2020, and extends through July 5, 2020.

Jessica Mulholland, Managing Editor, CalChamber

For more COVID-19-related federal, state and local resources, visit the CalChamber Coronavirus (COVID-19) webpage and access additional COVID-19-related HRWatchdog blogs.

Can an employee refuse to return to work?

HR CAlif. 6/11/2020

Yes. Although you can’t force a furloughed employee to return to work, their refusal to return may disqualify them from receiving unemployment benefits.

The California Employment Development Department (EDD) has released general guidance on COVID-19-related unemployment benefits.

For example, if a business has abided by local and state guidelines and is providing adequate employee protections, an employee who refuses to return to work out of a general fear of contracting COVID-19 wouldn’t qualify to receive unemployment benefits.

If, however, the business doesn’t have proper protective measures in place, an employee can use the lack of protective measures as a valid reason for not returning to work and will thus be able to claim unemployment benefits.

An employee who earns more money on unemployment cannot use the higher pay as a valid reason for refusing to return to work; their refusal would disqualify them from receiving unemployment benefits.

If an employee doesn’t have suitable childcare and cannot return work, it would likely be good cause for not returning to work and the employee would likely be able to keep their unemployment benefits.

Read more about Unemployment Insurance in the HR Library and HRCalifornia Extra’s Unemployment Insurance: A Guide for Employers with Newly Displaced Workers.

Q&As

OSHA Issues FAQ on Face Coverings

The new guidance outlines the differences between cloth face coverings, surgical masks and respirators.

JUN 10, 2020

WASHINGTON, DC – The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has published a series of frequently asked questions and answers regarding the use of masks in the workplace.

“As our economy reopens for business, millions of Americans will be wearing masks in their workplace for the first time,” said Principal Deputy Assistant Secretary for Occupational Safety and Health Loren Sweatt. “OSHA is ready to help workers and employers understand how to properly use masks so they can stay safe and healthy in the workplace.”

The new guidance outlines the differences between cloth face coverings, surgical masks and respirators. It further reminds employers not to use surgical masks or cloth face coverings when respirators are needed. In addition, the guidance notes the need for social distancing measures, even when workers are wearing cloth face coverings, and recommends following the Centers for Disease Control and Prevention’s guidance on washing face coverings.

These frequently asked questions and answers mark the latest guidance from OSHA addressing protective measures for workplaces during the coronavirus pandemic. Previously, OSHA published numerous guidance documents for workers and employers, available at https://www.osha.gov/SLTC/covid-19/, including five guidance documents aimed at expanding the availability of respirators.

For further information and resources about the coronavirus disease, please visit OSHA’s coronavirus webpage.

 

Employers Learn How To Help Employees Who Test Positive to COVID-19

10 Jun

June 2020

JOIN OUR   

JUNE 18th  BROADCAST  

Remember …  

Many people have heard this … but like the flight attendant’s warning … we tend to ignore the information unless our plane begins losing altitude. Your goal and ours is to AVOID THE CRASH!

Pat Haley

PAT HALEY

Her effective communication style and problem-solving abilities enable Pat to partner with diverse businesses where emphasis on employee relations matters and both management and employee training helps resolve problems.

WE LOOK

FORWARD TO

YOU JOINING
US …

Pandemic Support

Please Attend Our Broadcast

When: Thursday, June 18   

Time: 10:00 AM pst  

Speaker: Pat Haley

 PHR, CPCU, 

HR & Employee Conflict Trainer 

Topic: Employers Learn How To

Help Employees Who Test Positive to COVID-19
Everyone is back to work and our business is almost back to normal … Or so we thought. Then 3 Weeks Later … when a manager gets a call on a Monday morning – from a customer service employee:

   “I guess I won’t be in for a while…the voice said.

   “I was tested on Saturday afternoon and just got the report”

   “I tested Positive for Covid-19 …What should I do?”

Learn 8 Steps: What to Expect & What to Do

    1. Communication with the Employee – Specific
    2. HR & Recordkeeping – Sample forms
    3. Communication with Close Contacts
    4. Communication with Managers & Supervisors
    5. Communication with Employees
    6. Reactions to the Announcement
    7. Responses to Employees’ Reactions
    8. When the Employee Returns

To Participate Join Zoom Meeting Now:

Meeting ID: 868 8469 7055

https://us02web.zoom.us/j/86884697055 

One tap mobile: Find your local number: 

https://us02web.zoom.us/u/kfIULvaz9

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Local Minimum Wage Increases Coming July 1

8 Jun

Bianca Saad  June 2, 2020 HR Watchdog – Cal Chamber

Minimum Wage

July is just around the corner, and with it comes several local minimum wage increases throughout California. Here’s a list of localities that will have minimum wage increases effective July 1, 2020:

  • Alameda: $15/hour.
  • Berkeley: $16.07/hour.
  • Emeryville: $16.84/hour;
  • Fremont: $15/hour for employers with 26 or more employees; $13.50/hour for employers with 25 or fewer employees.
  • Los Angeles City: $15/hour for employers with 26 or more employees; $14.25 for employers with 25 or fewer employees.
  • Los Angeles County (unincorporated areas): $15/hour for employers with 26 or more employees; $14.25 for employers with 25 or fewer employees.
  • Malibu: $15/hour for employers with 26 or more employees; $14.25 for employers with 25 or fewer employees.
  • Milpitas: $15.40/hour.
  • Novato: $15/hour for employers with 100 or more employees; $14/hour for employers with 26-99 employees; $13/hour for employers with 25 or fewer employees.
  • Pasadena: $15/hour for employers with 26 or more employees; $14.25 for employers with 25 or fewer employees.
  • San Francisco: $16.07/hour.
  • San Leandro: $15/hour.
  • Santa Monica: $15/hour for employers with 26 or more employees; $14.25 for employers with 25 or fewer employees.
  • (NEW) Santa Rosa: $15/hour for employers with 26 or more employees; $14/hour for employers with fewer than 25 employees.

Note: Eligibility rules may vary based on different locations

Santa Rosa’s City Council recently considered whether to delay the implementation of the city’s minimum wage ordinance due to businesses’ struggles amid the COVID-19 pandemic but, ultimately, decided to proceed as planned. Santa Rosa’s minimum wage rates will increase again on January 1, 2021, and will be $15/hour plus annual adjustments based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for both large and small businesses.

Minimum Wage Delays

Due to the economic burdens imposed on businesses due to COVID-19, two city councils did decide to delay implementation of their recently adopted minimum wage ordinances: Hayward and San Carlos. Initially slated to take effect on July 1, 2020, both localities’ minimum wage rates will increase beginning January 1, 2021.

San Francisco Paid Parental Leave Ordinance Expansion

San Francisco’s Paid Parental Leave Ordinance, which requires employers to provide supplemental compensation to employees collecting California Paid Family Leave wage replacement benefits, will increase paid supplementation from six weeks to eight weeks on July 1, 2020. This aligns the ordinance with the state’s expansion of Paid Family Leave benefits for all claim effective dates beginning on or after July 1, 2020. A new poster is anticipated.

Many of these local ordinances contain notice requirements, but, thankfully, the CalChamber store sells required posters that are compliant with various California city and county local ordinances. Check to see if your city or county has any required posters.

Employers should review their hourly wage rates for their employees working in any local jurisdictions listed above and make any necessary adjustments by July 1 to comply. Don’t forget to pay attention to where your remote employees are located, as they could be subject to local minimum wage and other ordinances they may not typically be when reporting to the worksite.

Bianca Saad, Employment Law Subject Matter Expert, CalChamber

Most Counties in California Now Permitted to Move to Accelerated Stage 2 Reopening

By Ellen E. Cohen & Sarah H. Scheinhorn on June 4, 2020 Jackson Lewis PC

covid_reopening_roadmap

At the beginning of May, California implemented a staged reopening for businesses closed due to the shelter in place orders resulting from the COVID-19 pandemic. This plan, referred to as the “Resilience Roadmap” allowed for counties to apply for a variance if certain criteria set by the state public health officer are met. The variances allow counties to proceed with reopening certain businesses not permitted under the overall state plan.

To date, a majority of counties have been granted variances that permit dine-in restaurants, hair salons, and barbershops to reopen pursuant to specific guidance, in particular, pertaining to conducting work at these businesses.

As businesses prepare to reopen, they should remember that the state mandates all facilities that reopen must:

  1. Perform a detailed risk assessment and implement a site-specific protection plan
  2. Train employees on how to limit the spread of COVID-19, including how to screen themselves for symptoms and stay home if they have them
  3. Implement individual control measures and screenings
  4. Implement disinfecting protocols
  5. Implement physical distancing guidelines

In addition to the State requirements, the individual counties have their own health orders which at times include additional requirements along with state mandates. Many counties require businesses to post social distancing protocols at the worksite. For example, the County of Los Angeles has developed several protocols for businesses such as retail stores, hair salons, and restaurants.

Along with social distancing and similar protocols, many counties are including other requirements as businesses bring employees back to work. San Diego County, one of the first more populace counties to be granted a variance, mandates temperature checks for employees in certain industries. Sonoma County has deployed a cell phone application that employers are required to use (unless they can provide the county with the same information by an alternative means) which verifies that employees are symptom and fever-free.

As employers move toward bringing more employees back to work, they should review state and county orders to ensure they are complying with location-specific requirements. Employers will also need to continue to monitor changes as some counties have suggested that reopening may be rolled back as necessary due to COVID-19 spikes.

Congress Approves Paycheck Protection Program Flexibility Act

By Amberly Morgan on  June 4, 2020 Littler law firm.

PPP Loan Faq

Update: The Paycheck Protection Program Flexibility Act was signed into law on June 5, 2020 following the U.S. Senate passage by voice vote the Paycheck Protection Program (PPP) Flexibility Act of 2020 (H.R. 7010). The House of Representatives had approved this bill with near unanimity on May 28. Generally, the PPP provides low-interest, forgivable loans to small businesses affected by the COVID-19 pandemic. The new bill responds to complaints that the strict requirements on how employers spend the PPP funds disqualify them from obtaining the promised loan forgiveness, given the ongoing inability for many businesses to reopen. The bill is expected to be signed into law.

What changes would the bill make to the PPP?

The bill relaxes a number of the program’s requirements. Specifically, the bill:

  • Reduces the percentage of the loan that must be used on payroll expenses. The first Interim Final Rule interpreting the PPP required borrowers to spend at least 75% of loan proceeds on payroll costs. No more than 25% of non-payroll costs would be eligible for loan forgiveness. H.R. 7010 allows borrowers to spend up to 40% on allowable non-payroll costs, such as covered rents, utilities and mortgage interest. This change is especially welcome to borrowers that have been unable to reopen but are still obligated to pay rent, mortgages and utilities.
  • Provides more time for borrowers to spend loan funds and meet forgiveness requirements. The PPP requires borrowers to spend loan proceeds during an eight-week Covered Period. Additionally, subject to certain Safe Harbor provisions, the PPP required borrowers to maintain headcount and wages within the Covered Period relative to specified reference periods in order to obtain full loan forgiveness. Now borrowers have the option to extend the Covered Period until the earlier of 24 weeks after loan origination or the end of the year. This flexibility better meets the needs of borrowers that have been unable to reopen but need the PPP funds in order to do so.
  • Increases the time to repay unforgiven loan amounts. The PPP statutory text provides that any loan balance not forgiven would have a maximum maturity of 10 years. The SBA determined that loans would mature in two years. The bill amends the PPP to provide for a minimum maturity of five years, but also allows lenders and borrowers to mutually agree to modify the maturity terms.
  • Lengthens the term of payment deferral. The PPP provides that borrowers are not required to make loan payments (including principle, interest and fees) for at least six months and up to one year.  Under H.R. 7010, such payments can be deferred until the amount of forgiveness is remitted to the lender by the SBA or until at least 10 months after the last day of the borrower’s Covered Period if the borrower has not yet applied for loan forgiveness. This removes the requirement that borrowers make payments on loan balances while awaiting a decision on loan forgiveness.
  • Extends the Safe Harbor for restoration of headcount and wages. The PPP provides a Safe Harbor that allows borrowers an extended time to restore full-time equivalent (FTE) employees and salary or wages that were reduced between February 15, 2020 and April 26, 2020, while still obtaining loan forgiveness. The bill extends this Safe Harbor from June 30, 2020 until December 31, 2020. This addresses difficulties employers are having related to rehiring workers, finding replacement workers, and continued delays in reopening.
  • Expands protections for borrowers unable to rehire staff or unable to return to pre-COVID business levels due to social distancing measures. Borrowers unable to restore headcount will potentially be able to obtain full loan forgiveness.  Under the terms of the bill, if the borrower can document, in good faith, the inability to re-hire individuals who were the borrower’s employees as of February 15, 2020 and an inability to hire similarly qualified individuals for unfilled positions on or before December 31, 2020, then reductions to FTEs will not impact loan forgiveness. Similarly, reductions to FTEs will not impact loan forgiveness if the borrower is able to document an inability to return to the same level of business activity as prior to February 15, 2020 due to compliance with worker or customer safety requirements related to COVID-19.
  • Permits borrowers to defer payroll taxes. PPP recipients who received any amount of loan forgiveness were previously not able to defer payment of payroll taxes as provided in section 2303 of the CARES Act. The new amendments would remove that restriction.

Next Steps

The bill is now official and its amendments take effect as if they were included in the original CARES Act, the law that created the PPP.  Employers should evaluate their use of PPP funds in light of these new changes and consult with knowledgeable counsel to evaluate the available options for using loan funds and maximizing loan forgiveness.