ABC-VA Blog

REMINDER -- ABC Requests PPP Stories:

 

As ABC continues to work on providing clear guidance on PPP,  we are also urging members to send any personal stories they are comfortable sharing on their experience with the loan program and any issues they have run into while seeking to provide critical pay and benefits for their employees. If ABC members have any information they would be willing to share, please email PPPreply@abc.org to provide information.

 

Senate Attempts to Move First on PPP Fix Bill:

 

While yesterday’s update noted the House’s efforts to pass fixes to PPP H.R. 6886, the Paycheck Protection Flexibility Act, today, the Senate is attempting to pass a bill authored by Small Business Committee Chairman Marco Rubio (R-Fla.) that, as currently drafted, would extend the deadline to apply for PPP until the end of the year and allow borrowers 16 weeks to use their loan funds, instead of the current 8 week requirement. The bill would also allow employers to use the loan for purchases of PPE for employers and pay for adaptive investments needed to reopen safely.

 

The Senate is attempting to hotline this bill through today ahead of the Memorial Day holiday, however, it would require an agreement by all 100 Senators to move forward. ABC has advocated for an extension of the 8 week period for the loans and will continue to provide updates on the progress of legislative fixes to this issue.  

 

Senate Banking Hearing with Powell and Mnuchin Addresses Main Street Lending Program:

 

On Tuesday, the Senate Banking, Housing and Urban Affairs Committee held a hearing on the Quarterly CARES Act Report to Congress. At issue were questions about the Federal Reserve’s plans to launch its lending facilities, including the Main Street Lending Program.

 

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin agreed that the facilities should be operational by the end of the month:

 

• Powell: "We expect all of them to be stood up and ready to go by the end of this month… People are working literally around the clock and have been for weeks."

 

• Mnuchin: “We fully expect [the Main Street and Municipal Lending] facilities to be up and running by the end of the month.”

 

Secretary Mnuchin further indicated that Treasury expects to fully exhaust the $454 billion in stabilization funds provided in the CARES Act: “I have allocated about half of that—and let me be clear: I am prepared to allocate the rest of that. The only reason I have not allocated it fully is we are just starting to get these facilities up and running. We want to have a better idea of which one of the facilities needs more capital, as well as the potential for adding additional facilities. So I expect to allocate all the capital, as needed, as was given to us.”

 

In the same exchange with Senate Banking Committee Chairman Mike Crapo (R-ID), Secretary Mnuchin addressed questions regarding Treasury’s appetite for risk: “For any facility that the Fed believes puts them at risk, I put up capital, so by definition that capital is at risk, and we are fully prepared to take losses in certain scenarios on that capital.” He later called the absorption of these losses his “base case scenario.”

 

This is a significant departure from previous public comments in which Secretary Mnuchin indicated he intended to fully recover the money used to seed the Federal Reserve programs, and an indication of Treasury’s willingness to take on more risk.

 

New from CDC: What Construction Workers Need to Know about COVID-19:
 

Topics include:

• As a construction worker, how can I protect myself and slow the spread?

• What steps should my employer take?
• Reducing transmission among workers
• Maintaining a healthy work environment
• Maintaining healthy business operations

 

Learn more here.

 

Also, see ABC’s Emergency Preparedness and Safety Resources.

REMINDER -- ABC Requests PPP Stories:

 

As ABC continues to work on providing clear guidance on PPP,  we are also urging members to send any personal stories they are comfortable sharing on their experience with the loan program and any issues they have run into while seeking to provide critical pay and benefits for their employees. If ABC members have any information they would be willing to share, please email PPPreply@abc.org to provide information.

 

Bipartisan Bill to Fix PPP Concerns Gains Traction in House:

 

Earlier this month, Reps. Chip Roy (R-Texas) and Dean Phillips (D-Minn.) introduced H.R. 6886, the Paycheck Protection Flexibility Act, which would make urgently needed changes to the Paycheck Protection Program (PPP), addressing many of the concerns ABC has expressed to Congress to make the program more effective in providing businesses the resources needed to continue operations. Yesterday, Speaker Pelosi and House leaders agreed to hold a vote on this bipartisan legislation, and ABC will continue to provide updates on its progression through Congress. See here and below for additional information on this bill:

1. Allow forgiveness for expenses beyond the 8-week covered period.  The 8-week timeline does not work for local businesses that are prohibited from opening their doors, or those that will only be allowed to open with restrictions. Businesses need the flexibility to spread the loan proceeds over the full course of the crisis until demand returns. Otherwise, employees could simply be furloughed at the expiration of the 8 weeks.
2. Eliminate restrictions limiting non-payroll expenses to 25% of loan proceeds.  Currently, the PPP loans require that 75% of the loan go to payroll, but for many businesses, payroll simply does not represent 75% of their monthly expenses and 25% does not leave enough to cover mortgage, rent, and utilities. 
3. Eliminate restrictions that limit loan terms to 2 years.  Full recovery for many industries could take more than two full years and it will take many businesses more than two years to achieve sufficient revenue to pay back the loan, if they are not granted full loan forgiveness.
4. Ensure full access to payroll tax deferment for businesses that take PPP loans.  
5. Extend the rehiring deadline to offset the effect of enhanced Unemployment Insurance. To receive loan forgiveness under PPP, a business must rehire employees by a deadline of June 30, 2020.  However, the enhanced Unemployment Insurance created through the CARES Act is higher than the median wage in 44 states.  Many businesses have reported an inability to rehire employees because they are making more on Unemployment than they made working, and the deadline to rehire employees under PPP should be extended to align with the expiration of enhanced Unemployment Insurance.

Bipartisan Support Builds for Expansion of Employee Retention Tax Credit:

While the HEROES Act was a largely partisan wish list for Democrats in Congress, it did contain one area of emerging bipartisan agreement to expand the CARES Act Employee Retention Tax Credit for COVID-impacted employers that retained their workers. The Heroes language was pulled from a bipartisan bill introduced by Rep. Stephanie Murphy (D-Fla.), that would make the credit significantly more generous, phase in eligibility for a broader range of companies, and clarify the credit’s interaction with PPP loans. Ways and Means Ranking Member Kevin Brady (R-Texas) told reporters last week “we are willing to discuss, in a bipartisan way, how to make the credit work better and to expand it.” ABC will continue to monitor these discussions and provide updates.

President Trump Signs Executive Order to Provide Regulatory Relief:

On May 19, President Trump signed an Executive Order on Regulatory Relief to Support Economic Recovery, which will cut red tape to help to jumpstart the economy and get Americans back to work.

The EO does the following:

• Directs agencies to use all emergency authorities to swiftly identify regulations that can be rescinded or temporarily waived to promote job creation and economic growth. 
• Asks agencies to speed up the rulemaking process by moving proposed rulemakings to interim final rules with immediate effect. 

• Directs agencies not to over-enforce when a business is working in good faith to follow the law. 

• Establishes a “Regulatory Bill of Rights,” a set of 10 basic principles of fairness to govern the administrative enforcement and adjudication process.

Currently, the Trump administration has taken over 600 regulatory actions to combat the coronavirus, including suspensions, waivers, enforcement discretion, and more.

ABC National will be submitting to the Trump administration a list of regulations to rescind in order to help small businesses create jobs and revitalize the economy.

 

Cornyn-McConnell Continue Crafting Liability Legislation:

 

While the $3 trillion HEROES Act passed by House Democrats last week neglected the liability issue for America’s employers, Senator John Cornyn (R-TX) and Majority Leader Mitch McConnell (R-KY) are working to introduce legislation that would establish liability protection for businesses, universities, nonprofits, and more from COVID-19 lawsuits as more states start to reopen businesses and essential work continues throughout the country.

 

While a final bill has not yet been released, it will likely contain the following elements:

• Medical malpractice protection for hospitals and healthcare workers, including an increase in the liability threshold for COVID related malpractice lawsuits.
• A new legal safe harbor for businesses, raising the standard to prove a business is at fault.
• Additional legal protections for manufacturers. Leader McConnell said the bill would “find ways to expand existing protections for the manufacturers of therapeutics, diagnostics, and potential vaccines.”
• The bill would not provide immunity from lawsuits, as Leader McConnell put it, legislation would safeguard employers who follow “public health guidelines to the best of their ability…We are not talking about immunity from lawsuits… There will be accountability for actual gross negligence and intentional misconduct." Businesses might have to show they required mask wearing, provided PPE, provided hand sanitizer, conducted tests, etc.
• Business groups have also advocated for making any liability changes temporary, tying protections to the duration of the national emergency.

A reminder that ABC National recently signed on to a letter drafted by the US Chamber asking Congress for a COVID-19 specific, limited liability safe harbor for companies and other organizations that follow government guidance and operate during the health crisis. If your organization is willing to add its name to the list of signatories, Please respond to Roger Gibboni here at U.S. Chamber Institute for Legal Reform at rgibboni@uschamber.com or (202) 538-9767. The Chamber is asking for responses by COB TODAY, May 20, 2020.

SBA Releases Updated Data on Paycheck Protection Program:

Last night, SBA released a summary of PPP lending. Importantly, a significant amount of the $650 billion allocated to the program is still available for eligible companies in need. ABC is also working to urge additional guidance on the program from SBA and Treasury.
 

First Report of the Congressional Oversight Commission & Main Street Lending Program:

The “First Report of the Congressional Oversight Commission” was issued yesterday and the report summarizes the federal government’s economic response to COVID-19 and the various programs implemented to help businesses of all sizes survive the pandemic with their employment base intact. The report also raises important questions that can and should be raised regarding the CARES Act Emergency Economic Stabilization Funds, including a better sense of timing as to when these programs will be dispensing actual funds to businesses.  ABC has raised concerns over the report’s findings, including the following, and will continue to monitor any response from our federal agencies:

 

• Of the $500 billion provided to the Treasury Department on March 27^th to fund to businesses and state and local governments to help them stabilize the economy, why has the Treasury only dispersed $37.5 billion, and all of those funds have been used to purchase the corporate debt of large public companies. 

 

• The Main Street Lending facilities were established to help businesses of all sizes access credit at this difficult time.  The Federal Reserve initially announced it would purchase stakes in qualifying loans initiated prior to April 8^th.  Term sheets released on April 9^th included a number of limitations to the program and asked for comments.  Further announcements on April 30^th adjusted many of the terms of the programs, yet none of the $75 billion of announced funding has been dispersed.
   

Sen. Mike Lee (R-Utah) on Federal Permitting and Approval Process:

 

The Unlock American Investment coalition, of which ABC is a member, is hosting a discussion tonight at 5:00 pm with Senator Mike Lee on the need to modernize the federal permitting and approval process under the National Environmental Policy Act (NEPA). Senator Lee will discuss his legislative efforts to update NEPA in his role as chair of the Senate Joint Economic Committee and the chair of the Public Lands, Forests, and Mining Subcommittee on the Senate Committee on Energy and Natural Resources. You may register for the event here.

PPP Loan Forgiveness Application and Additional Guidance:

As noted on Friday, the Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions for the application. While this application provides answers to some administrative questions, it leaves other issues unresolved, including flexibility for small businesses on when the eight-week loan forgiveness period should start, or extending the covered period more than eight weeks. ABC continues to push for critical additional guidance on loan forgiveness to ensure that borrowers have clear and consistent guidance on applying for PPP loan forgiveness.

A reminder that ABC also submitted comments to the U.S. Small Business Administration on Friday. In the letter, ABC highlights some concerns with the current guidance and suggested changes to the operation of the PPP loans in order to better serve construction small businesses. You may view the full letter here.

 Today, the SBA also released an Interim Final Rule on Treatment of Entities with Foreign Affiliates, and last week released Requirements for Loan Increases for Partnerships or Seasonal Employers.

 

ABC Urges Action on PPP Stories:

 

As ABC continues to work on providing clear guidance on PPP,  we are also urging members to send any personal stories they are comfortable sharing on their experience with the loan program and any issues they have run into while seeking to provide critical pay and benefits for their employees. If ABC members have any information they would be willing to share, please email PPPreply@abc.org to provide information.

 

Construction Included in First Phase of Massachusetts Reopening:

 

Today, Massachusetts Gov. Charlie Baker announced that construction, along with a select group of other industries such as manufacturing, may resume operations immediately as part of the first phase of the state’s reopening. The administration released sector-specific protocols and best practices which can be found here. For more information on the full four-phase reopening you can visit this page.

 

DOL Posters – Families First Coronavirus Response Act:

 

• Quick Tip:  How Much Paid Leave Can Employees Take? (Spanish)
• Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave under The Families First Coronavirus Response Act (FFCRA)  (Spanish)
  • Families First Coronavirus Response Act Notice – Frequently Asked Questions

More information on the FFCRA is available here.

 

House Passes $3 Trillion Spending Bill:

 

On Friday, the House passed a $3 trillion coronavirus relief bill by a vote of 209-199. Only one Republican (Rep. Peter King, NY) voted for the largely messaging bill that has not been negotiated with the Senate or White House, while 14 Democrats opposed the legislation.

 

Looking ahead, the House will not be back in Washington until after Memorial Day, while congressional leaders are not negotiating at this time, and Republicans continue to message on the need to see the impact of the first $2 trillion relief bill before enacting additional legislation to address the ongoing crisis.

ABC Signs Letter on Limited Liability Safe Harbor for Companies:
 

ABC National recently signed on to a letter drafted by the US Chamber asking Congress for a COVID-19 specific, limited liability safe harbor for companies and other organizations that follow government guidance and operate during the health crisis. If your organization is willing to add its name to the list of signatories, Please respond to Roger Gibboni here at U.S. Chamber Institute for Legal Reform at rgibboni@uschamber.com or (202) 538-9767. The Chamber is asking for responses by COB on May 20, 2020. 
 

ABC Submits Comments to SBA on Paycheck Protection Program:

 

This afternoon, ABC submitted comments to the U.S. Small Business Administration in response to the administration’s interim final rule. In the letter, ABC highlights some concerns with the current guidance and suggested changes to the operation of the PPP loans in order to better serve construction small businesses. You may view the full letter here.

 

House Dems Move Forward with $3 Trillion Spending Bill & Proxy Voting:

 

Democratic leadership in the House is pushing for a vote today on their $3 trillion coronavirus relief bill, which is largely a messaging bill that has not been negotiated with the Senate or White House. The proxy voting system would only be temporary and one lawmaker could only vote for up to 10 members. The House GOP whip team is formally urging a “no” vote on both the proxy voting plan and the relief bill. Democratic leaders are confident they have the votes for the measure — but there will likely be defections on both sides of the aisle. Rep. Peter King (R-N.Y.) said he and several other Republicans are expected to support the package, while both the moderate and progressive wings of the Democratic party have expressed serious concerns with the bill.

 

Construction Reopening in Five New York Regions Today:

 

In New York, construction resumed today in five regions of the state cleared to begin reopening, provided that appropriate social-distancing and cleaning measures are in place. Owners and operators of construction projects are required to follow, at a minimum, the interim guidance issued by the New York Department of Health, which can be found here. The guidance also encourages employers to put in place additional restrictions and safety measures to increase jobsite safety.

 

The areas opening for construction are the Finger Lakes, including Rochester; Central New York, a five-county area including Syracuse; the Southern Tier, which borders Pennsylvania; the Mohawk Valley, west of Albany; and the rural North County, which includes the Adirondack Mountains. Five regions in New York State, including the New York City area, remain under the state’s extended stay at home order.

 

Helpful Tip of the Day -- ABC’s Coronavirus Update Webpage:

 

ABC is committed to providing its members with the latest health, safety, economic and policy information regarding the coronavirus pandemic. To better manage the growing number of resources, ABC updated its Coronavirus Update webpage to simplify and improve navigation, with topics and resources organized in four different categories: Employer Resources, Employee Resources, National Markets and State & Local Markets.

 

Today’s spotlight is State & Local Markets—visit it today!

Helpful Tip of the Day -- ABC’s Coronavirus Update Webpage:

 

ABC is committed to providing its members with the latest health, safety, economic and policy information regarding the coronavirus pandemic. To better manage the growing number of resources, ABC updated its Coronavirus Update webpage to simplify and improve navigation, with topics and resources organized in four different categories: Employer Resources, Employee Resources, National Markets and State & Local Markets.

 

Today’s spotlight is Employer Resources—visit it today!

 

PPP Safe Harbor Date Extension & ABC Guidance Provides Additional Clarification on Good-faith Certification:

 

Late last night, the SBA extended the safe harbor date for returning PPP loans until Monday, May 18, through a new PPP FAQ. This followed an FAQ released on the good-faith certification, which clarifies that borrowers with loans of less than $2 million are deemed to have made the certification in good faith, and provides additional guidance on SBA reviews for borrowers with loans of more than $2 million. Full FAQ is also below.

 

ABC recently released a statement calling for additional clarification and consistent guidance from the SBA to provide certainty for employers. While the new guidance alleviates some concerns, particularly for those businesses with loans under $2 million, ABC would welcome additional clarification on “access to liquidity” as referenced in the previous FAQs and IFR, and will be submitting comments to SBA to address these concerns. Further, ABC continues to push for clear guidance on the forgiveness of PPP loans to provide additional clarity for employers and will continue to provide updates on these efforts.

 

House Dems Move Forward with $3 Trillion Spending Bill & Proxy Voting:

 

Speaker Nancy Pelosi reiterated on a caucus call with House Democrats yesterday that the House will vote Friday on both the proxy voting plan and their $3 trillion coronavirus relief bill, which is largely a messaging bill that has not been negotiated with the Senate or White House. The proxy voting system would only be temporary and one lawmaker could only vote for up to 10 members. The House GOP whip team is formally urging a “no” vote on both the proxy voting plan and the relief bill. Some moderate democrats may oppose the bill, but it is expected to pass with mainly Democratic support in the House.

 

Republicans Win Special Elections Amid Pandemic:

 

On May 12, two special elections were held in Wisconsin’s 7^th and California’s 25^th congressional districts, each won by the respective Republican candidate. Early in the vote tallying process, the election for Wisconsin’s 7^th district was called for state Sen. Tom Tiffany over Democrat Tricia Zunker by the vote of 57% to 42%; replacing former Rep. Sean Duffy (R). Although the seat was expected to remain firmly in Republican hands, the large margin of victory was encouraging for Wisconsin Republicans, as both ABC PAC and the ABC Wisconsin chapter endorsed now-Rep-elect Tiffany earlier this year before the northern-Wisconsin based seat’s primary election. Upon Rep-elect Tiffany’s election, ABC Wisconsin released the following statement:

 

“On behalf of the nearly 900 hard-working ABC of Wisconsin member companies literally building Wisconsin, congratulations to State Senator Tom Tiffany for his election to Congress,” Mielke said. “His willingness in the state legislature to champion reforms like prevailing wage repeal, project labor agreement neutrality, and right to work will be a great addition to Wisconsin’s congressional delegation.”

 

In what was expected to be a much closer race for Southern California’s 25^th congressional district, Republican candidate Mike Garcia scored an impressive victory over Democrat Kristy Smith by an unofficial 56% to 44% margin. Despite thousands of ballots still to be received and counted in the California election, Smith, a Democratic state Assemblywoman, conceded defeat to Garcia, a retired Navy fighter pilot. Rep-elect Garcia will head to Washington to fill the seat that scandal-ridden Rep. Katie Hill (D) resigned from late last year.  Rep-elect Garcia was endorsed by ABC PAC and the ABC Southern and Central California Chapters, and even headlined the first virtual ABC PAC virtual meet and greet ahead of the election.

 

The Garcia win is big for the national Republican Party at a time when it needed to score a victory.  Winning a seat in California, where President Trump is extremely unpopular (in CA-25, Hillary Clinton’s winning margin was 50-44%, after Republicans at the congressional level had carried the seat consecutively from 1992 until 2018) is a boost for them nationally and should help with fundraising and candidate enthusiasm. Garcia’s success also dispels theories of relative performance disparity favoring Democrats in mail-in ballot elections, which will bolster Republican’s confidence heading into an uncertain summer and fall.

 

With the conclusion of these two special election races, three US House vacancies remain, two of which will likely stay without representation for the remainder of the current Congress.  New York’s 27th CD will be filled in a special general election on June 23rd.

 

New York Issues Interim Guidance For Construction:

 

New York issued interim guidance for construction activities during the COVID-19 public health emergency to provide owners/operators of construction projects and their employees and contractors with precautions to help protect against the spread of COVID-19 as indoor and outdoor construction sites reopen. You may view the guidance here.

 

Coping with COVID-19 Webinar: SBA Updates on CARES Act Programs to Help Small Businesses and Private Non-Profits:

Get answers to questions like these...Which SBA programs do I qualify for through the CARES Act and how can they help me sustain my operations? What are my options if I'm a sole proprietor or an independent contractor? What is the status of the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) / EIDL Advance program? Who can help me develop, adjust, or rework my business plan?

 

When

Friday, May 15, from 2:00 pm to 3:00 pm (EDT)

STEP 1: Dial into the conference.

Dial-in: 1-877-369-5243 or 1-617-668-3633

Enter Access Code: 0172365##

STEP 2: Join the conference on your computer.

Entry Link: https://ems8.intellor.com/login/826109

New PPP Guidance Provides Additional Clarification on Good-faith Certification:

 

Ahead of tomorrow’s safe harbor date for returning PPP loan funds, a new PPP FAQ was released on the good-faith certification, which clarifies that borrowers with loans of less than $2 million are deemed to have made the certification in good faith, and provides additional guidance on SBA reviews for borrowers with loans of more than $2 million. Full FAQ is also below. ABC recently released a statement calling for additional clarification and consistent guidance from the SBA to provide certainty for employers.

 

46. Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

 

Answer: When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates,20 received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

 

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

 

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

 

ABC Responds to HEROES Act Tax Hike for Small Construction Businesses:

 

As part of the Parity for Main Street Employers coalition, ABC responded to House Democrat’s proposal that would raise taxes on small construction businesses through the repeal of the bipartisan supported net operating loss carryback and loss limitation provisions previously included in the CARES Act. The CARES Act included a 5-year carryback for losses incurred in 2018, 2019, and 2020, and suspended the loss limitation rules for those years to provide critical relief for pass-through businesses with large losses. ABC previously joined over one hundred national business trade groups in a letter of support for this provision, and calls on Congress to keep this important relief intact as it considers additional responses to COVID-19.

 

While the Democrats 1,815 page bill is largely a messaging bill, ABC will continue to provide updates on its progress through the House and further negotiations on additional relief funding.

 

IRS provides tax relief through increased flexibility for taxpayers in section 125 cafeteria plans:

 

Yesterday, the Internal Revenue Service today released guidance to allow temporary changes to section 125 cafeteria plans. These changes extend the claims period for health flexible spending arrangements (FSAs) and dependent care assistance programs and allow taxpayers to make mid-year changes. The guidance issued addresses unanticipated changes in expenses because of the 2019 Novel Coronavirus (COVID-19) pandemic and provides that previously provided temporary relief for high deductible health plans may be applied retroactively to January 1, 2020, and it also increases for inflation the $500 permitted carryover amount for health FSAs to $550.

 

Reopening Plans Delayed for Northern Virginia as State Moves Forward:

 

Virginia Gov. Ralph Northam announced on Tuesday that northern parts of the state closer to Washington, DC, will remain in “Phase Zero” of the state’s reopening plans, while the rest of the state moves forward with Phase 1 of reopening this Friday, May 15. According to Executive Order 62, Northern Virginia will now be delayed on reopening until midnight of Thursday, May 28. The delay is due to the heightened number of COVID-19 cases in those more populous and dense areas in the DC metro area suburbs.

 

Areas affected include Arlington, Fairfax, Loudoun and Prince William counties; the cities of Alexandria, Fairfax, Falls Church, Manassas and Manassas Park; and the towns of Dumfries, Herndon, Leesburg and Vienna.

 

Washington, DC has also extended its stay at home order until at least June 8.

ABC Pushes for Clear & Consistent PPP Guidance:

 

This morning ABC joined a group of small business advocacy organizations in a statement to the SBA and Treasury urging clear and consistent guidance on the Paycheck Protection Program to ensure that small businesses have the financial resources necessary to keep employees paid while government-mandated stay-at-home orders remain in place, and that applicants are held to the same guidance that was in place at the time the business applied for a loan. You can view a copy of the statement here.

 

ABC is continuing to push for new guidance on PPP to be released prior to the May 14^th safe harbor date to return PPP funds.

 

House Democrats Introduce HEROES Act :

 

House Democrats today rolled out an ambitious and costly proposal to the next phase of emergency relief funding to combat the effects of COVID-19 on Americans, hospitals, and businesses. The 1,815 page bill would provide $3 trillion in federal funding and is set for a Friday floor vote in the House.

 

Democrats acknowledge that their proposal is more of a talking point than legislation that they expect to become law, but Speaker Pelosi is using the bill to push Republicans to the negotiation table on a new round of funding to respond to the ongoing health crisis. President Trump and Senate Republicans have so far objected to the Democratic proposal, saying there hasn’t been enough time since the $2 trillion CARES Act passed to determine whether new legislation is needed or necessary.

 

Pelosi and other top Democrats also plan to push through a House rules change that will allow proxy voting for U.S. Representatives and remote hearings for House committees. 

 

As currently written, the main focus of the House bill is funding to states and local governments, which have requested billions more to address budget shortfalls due to the coronavirus. The bill contains $500 billion for states, $375 billion for local governments, $20 billion for tribal communities, and another $20 billion for territories like Puerto Rico, Guam, and the US Virgin Islands. The bill would also allocate $755 million to Washington in coronavirus aid. 

 

The bill would include another round of $1,200 payments to individuals, but would include an additional $1,200 per dependent, capped at three dependents, and would extend the expanded unemployment benefits authorized under the CARES Act through January 31, 2021.

 

While this is clearly a messaging bill, ABC is reviewing the legislation and will continue to monitor any progress and provide updates on its movement through the House and further negotiations between the House, Senate and White House.

 

CDC Updates Interim Guidance for Businesses and Employers Responding to Coronavirus Disease 2019 (COVID-19), May 2020:

Summary of changes to the Guidance includes:

• Updated strategies and recommendations for employers responding to COVID-19, including those seeking to resume normal or phased business operations:
  • Conducting daily health checks
  • Conducting a hazard assessment of the workplace
  • Encouraging employees to wear cloth face coverings in the workplace, if appropriate
  • Implementing policies and practices for social distancing in the workplace
  • Improving the building ventilation system
• A table outlining the engineering controls, administrative controls, and personal protective equipment (PPE) that employers may use to help prevent the spread of COVID-19 in the workplace

Helpful Tip of the Day – Recent USDOL Action:

 

The U.S. Department of Labor’s Wage and Hour Division has added new frequently asked questions connected to the Families First Coronavirus Response Act. The list now includes 93 questions and answers. Learn more about recent DOL actions here.

 

House Democrats Pushing Forward with CARES 2:

 

While it remains unclear when the House will return to Washington, Democrats continue to put together their legislative wish list for a coronavirus relief bill, or “CARES 2,” with Speaker Nancy Pelosi (D-Calif.) seeking to lay down a marker for Democrats and turn up pressure on Republicans as Congress works to pass additional relief funding. However, House Majority Leader Steny Hoyer told representatives that the House will not vote on its next coronavirus relief plan before Friday. Last week, White House economic advisor Larry Kudlow also said he did not expect formal talks between the Trump administration and Congress on a new relief package to restart until late May or early June. 

 

Reports indicate that the Democrat’s bill will likely contain roughly $1 trillion for state and local governments who have been struggling with budget shortfalls due to the lockdowns imposed by the pandemic, more money for hospitals and COVID-19 testing, approximately $25 billion to keep the U.S. Postal Service afloat, expanded nutritional benefits for Americans, Medicaid funding and unemployment insurance, and potentially another round of direct payments to Americans.

 

PPP Slowdown:

 

While the first round of Paycheck Protection Program loans were quickly gobbled up by businesses in need within the first 14 days, the second round of funding has not seen the same fervor as day 14 (today) there still remains approximately $120 billion left in the program. While the reasons behind this cool down are speculative, the Wall Street Journal had some insight into the issue last week in an article that highlights the recent guidance from SBA and concern about loan forgiveness from businesses.

 

Concerns from businesses could also increase, as House Speaker Nancy Pelosi’s select committee to oversee the federal response to COVID-19 has focused on naming and shaming larger companies that applied for and received PPP loans. Republicans quickly indicated they opposed the move and expressed concern it would have a chilling effect on struggling companies.

 

"This action by Democrats represents dangerous government intimidation that could cause more widespread layoffs at a time when we should be trying to keep American workers on the payroll," said House Minority Whip Steve Scalise (R-La.), the top Republican on the committee.

 

ABC continues to work to address these critical issues and urge the SBA and Treasury to issue clear, concise guidance on this critical program for the nation’s small businesses. We will be sure to provide updates this week on these continued efforts.

 

Vermont Eases Jobsite Restrictions

 

After construction jobsites were limited to “no more than 10 total workers” as Vermont began reopening their economy, the state is now allowing jobsites to return to full workers capacity beginning today. The state says that jobsites should be limited to “as few employees as necessary to permit full operations” but does not place a restriction on the number of workers as was previously in place. The state’s Agency of Commerce and Community Development has released updated guidance here that contractors are required to follow.

Employee Retention Tax Credit Revised Guidance and New Legislation Introduced:

 

The IRS recently reversed its previous guidance and will now allow employers to treat qualified health expenses as qualified wages under the COVID Employee Retention Credit. You can view more on the IRS FAQs here.

 

Also today, U.S. Representatives Stephanie Murphy (D-Fla.), John Katko (R-N.Y.), Suzan DelBene (D-Wash.), Brian Fitzpatrick (R-Pa.), and Chris Pappas (D-N.H.), introduced legislation to enhance the employee retention tax credit (ERTC), and are pushing for the proposal to be included in the next COVID-19 relief legislation. The full text of the bill can be found here. A one-page fact sheet on the bill can be found here. The Jumpstarting Our Businesses’ Success Credit (JOBS Credit) Act of 2020, would make a number of targeted improvements to the ERTC to better fulfill its goal of keeping workers connected to their jobs during this crisis. The changes include:

 

• Increasing the credit percentage from 50 percent to 80 percent of qualified wages;
• Increasing the per-employee limitation from $10,000 for all calendar quarters to $15,000 per calendar quarter (and an aggregate of $45,000 for all calendar quarters);
• Changing the threshold for treatment as a large employer from employers having more than 100 employees to employers having more than 1,500 employees (based on the average number of full-time employees in 2019) or having gross receipts above $41.5 million in 2019;
• Making it easier for employers to qualify for the credit by phasing in the credit, so that employers who have experienced more than a 20 percent decline in gross receipts can claim a portion of the credit;
• Clarifying that “qualified wages” include qualified health benefits and that employers who continue providing such benefits to their employees qualify for the ERTC even if they do not continue paying other qualifying wages; 
• Allowing state, territory, and tribal governmental employers (and any political subdivision, agency, or instrumentality of these entities) to claim the credit if these employers retain employees notwithstanding the closure of their operations; and
• Improving coordination between the ERTC and the Paycheck Protection Program so employers can be eligible for both programs, but with guardrails in place to prevent “double dipping.” 

 

Lawmakers Push for Expansion of PPP for 501(c)(6)s:

 

The Local Chamber, Tourism, and 501(c)(6) Protection Act, introduced by Reps. Chris Pappas (D-N.H.), Brian Fitzpatrick (R-Pa.), Greg Steube (R-Fla.) and Gil Cisneros (D-Calif.) on Wednesday, would allow chambers to receive forgivable loans authorized under the CARES Act Paycheck Protection Program (PPP). ABC has advocated for expansion of PPP for 501(c)(6)s.

Earlier this week, Speaker Pelosi discussed Democrats plans to push for a variety of reforms to the P3 program in the next round of emergency coronavirus legislation. Among the changes, Pelosi said, would be a shift to include 501(c)(6) trade groups.

A bipartisan group of lawmakers is also working to include additional modifications to the program, including lengthening the time that small businesses can spend the money; allowing them to use less of the aid on trying to retain employees and more for expenses like rent; and expanding the relief to larger companies. ABC will continue to monitor these issues and provide updates on critical information.

Boston Provides Timeline for Construction Reopening

Boston Mayor Marty Walsh announced that essential construction projects, which meet a three criteria outlined by the city, will be allowed to resume work on May 18. Companies who wish to return to work must submit a safety plan and signed affidavit to city officials. The order also reads that no construction will be permitted beyond what the State of Massachusetts has deemed an essential construction projects. Nearly all construction projects in the City of Boston have been closed since March 23 per an executive order by the Mayor. The full announcement including timelines for reopening and paperwork submission procedures can be found here.

 

EEOC: What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws:

 

The EEOC has issued a technical assistance publication to address questions arising under the Federal Equal Employment Opportunity Laws related to the COVID-19 pandemic.  

• Disability-Related Inquiries and Medical Exams-see Part A
• Confidentiality of Medical Information-see Part B
• Hiring and Onboarding-see Part C
• Reasonable Accommodation-see Part D
• Pandemic-Related Harassment Due to National Origin, Race, or Other Protected Characteristics-see Part E
• Furloughs and Layoffs-see Part F
• Return to Work-see Part G

New at the CDC:

 

• COVID-19 Critical Infrastructure Sector Response Planning