Later today, the New York State Legislature is set to approve, and Governor Cuomo is expected to sign, various bills that will enact the State’s FY2020-2021 budget, including the “Emergency or Disaster Treatment Protection Act” (EDTPA). As soon as the Governor signs the legislation, the EDTPA will take immediate effect, retroactive to the March 7, 2020 COVID-19 Emergency Declaration.

The EDTPA specifically states that, until the expiration of the COVID-19 emergency declaration, any health care facility or health care professional (which includes providers as well as administrators, executives, supervisors, board members, and trustees) shall have immunity from any liability, civil or criminal, for any harm or damages alleged to have been sustained as a result of an act or omission in the course of arranging for or providing “health care services,” so long as the criteria discussed below are met. Health care services include services to COVID-19 patients as well as any other individual who presents for treatment during the period of the COVID-19 emergency declaration.

In order to be covered by the immunity in the EDTPA, the following must be met.

  1. “the health care facility or health care professional is arranging for or providing health care services pursuant to a COVID-19 emergency rule or otherwise in accordance with applicable law;
  2. the act or omission occurs in the course of arranging for or providing health care services and the treatment of the individual is impacted by the health care facility’s or health care professional’s decisions or activities in response to or as a result of the COVID-19 outbreak and in support of the state’s directives; and
  3. the health care facility or health care professional is arranging for or providing health care services in good faith.” [Emphasis added]

This immunity does not apply if the harm or damages were caused by an act or omission constituting willful or intentional criminal misconduct, gross negligence, reckless misconduct, or intentional infliction of harm. Decisions resulting from a resource or staffing shortage are explicitly exempted from this classification.

Lastly, the EDTPA extends comprehensive liability protections to any volunteer organization that has made its facilities available to support any response or activities made by the State during the COVID-19 emergency. Any volunteer organization acting in good faith will not be subject to criminal or civil liability for any harm or damages, regardless of the cause. This protections similarly do not apply if the harm or damages were caused by an act or omission constituting willful or intentional criminal misconduct, gross negligence, reckless misconduct, or intentional infliction of harm.

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Should you have any questions regarding this Alert, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.  

Click Here to download the Legal Alert.
Make sure to check Garfunkel Wild’s event page for all upcoming webinars that may address your present concerns.

 

The SBA has published its Interim Final Rule on Section 1102 and 1106 of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) regarding the Paycheck Protection Program (“PPP”).

Key Points in the Interim Final Rule:

  1. Applications should be submitted to your Lender ASAP since it is first come first serve until money runs out. The total amount appropriated for the PPP is  $349,000,000,000. The last day to apply for a PPP loan is June 30, 2020 provided funds are still available.
  2. Currently the Affiliation Rules have not been waived but more guidance from SBA is imminent.
  3. Amounts not forgiven will accrue interest at a rate of one percent payable over two (2) years.  The first payment is deferred for 6 months but interest still accrues.
  4. The regulations provide no guidance on whether the first $100,000 of an employees salary can be included in forgiveness, though it can be included in calculating the amount of the loan.
  5. Independent Contractors are NOT included in the definition of Payroll Costs.
  6. Qualified sick and family leave wages for which a credit is allowed under CARES Act may not be included in loan amount.
  7. If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you will be subject to additional liability such as charges for fraud.

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If you need any assistance in completing the Application, please contact the Garfunkel Wild attorney with whom you regularly work.

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On April 2, 2020, HRSA extended the calendar year 2021 FTCA deeming application deadline from May 14 to July 13 due to the ongoing COVID-19 pandemic. This is extremely significant given the COVID-19 concerns being faced by FQHCs.

HRSA is encouraging health centers to submit applications earlier than July 13 and will conduct an expedited review for those that submit applications earlier. The EHBs will begin accepting applications on April 13. Supplemental deeming applications for VHPs who were not included on the redeeming application will be accepted as of July 31.

We had presented a webinar on the FTCA application on Tuesday, March 31. For those of you who were not able to attend, CLICK HERE to view the recording and CLICK HERE to view the slides.

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Should you have any questions regarding this Alert, please contact the Garfunkel Wild attorney with whom you regularly work.

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PAYCHECK PROTECTION PROGRAM ENACTED AS PART OF THE CORONAVIRUS, AID, RELIEF AND ECONOMIC SECURITY ACT TO SUPPORT CONTINUATION OF ELIGIBLE BORROWERS’ BUSINESSES

On March 27, 2020, the federal Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act“) was signed into law, which aims to provide nationwide relief to individuals and businesses that have been negatively impacted by the coronavirus outbreak. A critical element of the CARES Act is the Paycheck Protection Program (“PPP“), which will provide small businesses with up to $349 billion in relief through low interest, forgivable loans intended to prevent layoffs and business closures. Lenders approved by the U.S. Small Business Administration (“SBA“) will provide loans under the PPP (“Covered Loan(s)“). The PPP covers the period beginning February 15, 2020, and ending on June 30, 2020 (the “Covered Period“). The SBA has indicated new updates to the existing Cares Act provisions, which are in italics below.

Eligible Borrowers: In addition to businesses that qualify as “small business concerns”, which are independently owned and operated, not dominant in its field of operation, and meet size standards approved by the SBA Administrator, the PPP is generally available to businesses, nonprofits, and other certain organizations who employ fewer than 500 employees (or more depending upon the SBA’s employee size standard for the relevant industry) (each, an “Eligible Borrower” or “Borrower“). Self-employed individuals, independent contractors, and sole-proprietors are also eligible. All businesses applying for a loan under the PPP must have been in operation as of February 15, 2020.

Terms: Eligible Borrowers under the PPP may receive up to the lesser of (a) 2.5x the average total monthly payroll costs incurred in the preceding one-year period before the loan is made, or (b) $10,000,000 to cover payroll costs and certain other expenses. Interest shall accrue on a Covered Loan at a maximum interest rate of 4%.  Note that, while the CARES Act states Covered Loans, to the extent not forgiven, will be repaid over a ten (10) year period, the SBA website indicates that Covered Loans will be repaid over a two (2) year period with interest accruing at a rate equal to one-half percent (.5%). The SBA also may revise the loan terms in the future.

No Personal Guarantees or Collateral: No personal guarantee or collateral shall be required from any Eligible Borrower to secure a Covered Loan.

Permissible Use of Loan Proceeds: Eligible Borrowers who have been approved for a Covered Loan may use the loan proceeds for the following purposes:

  • Payroll Costs;
  • Salary, wage, commission or similar compensation (excluding compensation of an individual employee in excess of an annual salary over $100,000);
  • Payment or cash tip equivalent;
  • Payment for vacation, parental, family, medical or sick leave (does not include emergency paid sick leave and emergency paid family and medical leave under the Families First Coronavirus Response Act (“FCCRA“);
  • Allowance for dismissal or separation;
  • Payment required for the provisions of group health care benefits, including insurance premiums;
  • Payment of any retirement benefit; and
  • Payment of state or local tax assessed on the compensation of employees.
  • Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave and insurance premiums;
  • Employee salaries, commissions or similar compensations;
  • Payments of interest on any mortgage obligations (which does not include any prepayment of or payment of principal on a mortgage obligation);
  • Rent;
  • Utilities; and
  • Interest on other debt obligations incurred before Covered Period.

Loan Forgiveness: Eligible Borrowers may also be eligible for forgiveness and cancellation of indebtedness up to the full principal amount of the Covered Loan (note, however, that while not part of the CARES Act, the SBA website indicates that “due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs”). The amount eligible for forgiveness equals the (a) payroll costs, (b) mortgage interest payments, (c) rent, and (d) covered utility payment costs (collectively, the “Costs“) incurred during the 8-week period after the origination of the Covered Loan (the “Forgiveness Period“). Any Covered Loan that has a remaining principal balance due after any applicable loan forgiveness must have a maturity date no later than 10 years from the date on which the Borrower applied for loan forgiveness.

Reduction to Loan Forgiveness: The dollar amount eligible to be forgiven under the PPP shall be reduced if the Borrower terminates any employees or reduces the salary and wages of its employees during the Forgiveness Period.

There is relief from the loan forgiveness reductions described above if a Borrower eliminates the reduction in FTE employees or restores the salary and wage reductions by June 30, 2020. Note: Borrowers will need to keep detailed records on the number of FTEs on payroll along with their pay rates, documentation related to payment receipts, and all other documents verifying payment of the Costs during the Forgiveness Period.

Deferment Relief:  Lenders will be required to provide Borrowers with Covered Loans complete payment deferment relief of principal, interest and fees for a period not less than 6 months but no longer than 1 year.

Emergency Economic Injury Disaster Loan Grants: Businesses with fewer than 500 employees, along with sole proprietorships, independent contractors, and other certain organizations may also be eligible to apply for Emergency Economic Injury Disaster Loan (“EIDL“) grants under the CARES Act. Such businesses seeking an immediate influx of funds may receive a $10,000 emergency advance within three days of applying for an EDIL grant, which can be used to cover payroll costs, increased materials costs, rent or mortgage payments, or for repaying obligations that otherwise cannot be met due to revenue losses. Eligible businesses whose applications for EIDLs are denied will not be required to pay back the $10,000 grant.

Future Guidance: We will keep you informed of any future guidance, since it is anticipated that the SBA will soon promulgate additional regulations on the foregoing issues. Given the foregoing, small businesses, non-profit organizations and generally other businesses with fewer than 500 employees should review potential business funding initiatives supported by state and federal law, such as the CARES Act, and speak to their lenders to learn more on how to support the continuation of their business during and after the COVID-19 pandemic.

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Should you have any questions regarding this Alert, please contact the Garfunkel Wild attorney with whom you regularly work.

Click Here to download the Legal Alert.

 

On March 18, 2020, FFCRA was signed into law and is effective April 1, 2020 through December 31, 2020. Amongst other things, FFCRA requires certain employers to provide their employees with emergency paid sick leave and emergency paid family and medical leave for specified reasons related to COVID-19. Employers will be made whole by the federal government for providing employees with such leave under FFCRA through a combination of tax credits and refunds.

Emergency Paid Sick Leave: Under FFCRA, “covered employers” (i.e., employers employing fewer than 500 employees) must provide to all covered employees:

  • Up to eighty (80) hours of paid sick leave at the employee’s regular rate of pay (capped at $511 per day, and $5,111 in the aggregate per employee) where the employee (i) is unable to work or telework because the employee is quarantined pursuant to Federal, State, or local government order or advice of a health care provider, (ii) has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 and/or (iii) is experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Up to eighty (80) hours of paid sick leave at two-thirds (2/3) the employee’s regular rate of pay (capped at $200 per day, and $2,000 in aggregate per employee) because the employee (i) is unable to work or telework because of a need to care for an individual subject to quarantine pursuant to Federal, State, or local government order or upon advice of a health care provider, (ii) must care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or (iii) is dealing with substantially similar conditions to be more specifically identified in future regulations.

Emergency Paid Family and Medical Leave: Covered employers must also provide up to an additional ten (10) weeks of emergency paid family and medical leave at two-thirds (2/3) the employee’s regular rate of pay (capped at $200 per day, $10,000 in aggregate per employee) when an employee is unable to work due to a need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. The first ten (10) days an employee takes such leave may be unpaid but an employee may elect to substitute any accrued vacation leave, personal leave, or medical or sick leave for the unpaid ten (10) day leave period, such as the emergency paid sick leave available under FFCRA .

Exemptions for Certain Employers: Employers of employees who are health care providers (e.g., doctors, podiatrists, dentists, chiropractors, clinical psychologists, nurse practitioners, PAs, clinical social workers, etc.) or emergency responders may elect to exclude such employees from emergency paid sick leave or emergency paid family and medical leave under FFCRA.  Further, the U.S. Department of Labor may exempt in future regulations certain small businesses with fewer than fifty (50) employees if these requirements would jeopardize the viability of the business as a going concern.

Termination Protections: Employers are prohibited from discharging, disciplining, or in any other manner discriminating against any employee who takes leave under FFCRA. However, employers are not required to restore an employee who takes emergency paid family and medical leave to their previous position if (i) the employer employs fewer than twenty-five (25) employees; (ii) the position held by the employee does not exist due to economic conditions or other changes in operating conditions of the employer that affect employment and are caused by a public health emergency; or (iii) the employer makes reasonable efforts to restore the employee to an equivalent position or notifies the employee of any available equivalent position within the earliest of one (1) year when the emergency family and medical leave was taken or when the public health emergency ends.

Employers are Made Whole under FFCRA: Employers will be made whole for 100% of the paid emergency sick leave or paid emergency family and medical leave provided to employees pursuant to FFCRA, as follows:

  • If the employer pays out any emergency paid sick leave or emergency family and medical leave, the employer will first receive a tax credit limited to the amount of payroll taxes paid by the employer (e.g., if salaries are $100,000 and payroll tax paid is $10,000, then the employer will receive a $10,000 tax credit);
  • Then, any amounts paid as emergency paid sick leave or emergency paid family and medical leave that exceeds the payroll taxes paid (i.e., the $90,000 difference between the salaries and the payroll tax paid) will be considered an overpayment that either entitles the employer to a refund or a tax credit issued by the Internal Revenue Service against any federal tax liability that the employer may have.

Further, the U.S. Department of Treasury may allow the advance payment of the credits described above and will provide further guidance and forms related to this issue.

Notice to Employees: Employers are required to post in a conspicuous place on their business premises the notice issued by the U.S. Department of Labor at the following link: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf

Assistance to Employers under the CARES Act: In addition to FFCRA, the federal government also seeks to provide assistance to employers through the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act“) to incentivize the retention of employees. The CARES Act is intended to, in part, provide various forms of relief for employers in the United States through a variety of emergency grants, forgivable small business loans, and refundable tax credits and incentives in order to assist employers fund their business expenses. For instance, the CARES Act will provide small businesses with loans to fund payroll support, paid sick, medical or family leave, health care benefits, interest on mortgage obligations, rent, utilities, and other limited expenses. However, the CARES Act only provides full or partial loan forgiveness for principal amounts used to fund certain categories of expenditures (e.g., payroll costs, utilities, etc.) depending on if the employer qualifies under various criteria, such as the average number of full-time equivalent employees retained or reductions imposed on employees’ salaries. Emergency sick leave and emergency family and medical leave wages provided to employees pursuant to FFCRA are not eligible for loan forgiveness under the CARES Act since the employer will be made whole through the tax credit and refund mechanisms described above. Accordingly, employers will be faced with a timing issue and will need to determine how they will fund their obligations to their employees who have been retained, including those who subsequently seek emergency paid sick leave or emergency paid family and medical leave under FFCRA.

Important Note: Given the foregoing, employers should review their internal policies, all applicable federal, state and local laws (e.g., (i) federal and state WARN Acts, (ii) New York’s March 18, 2020 Paid Sick Leave Law and Paid Family Leave Act, (iii) New Jersey’s Earned Sick Leave Law and Family Leave Act, and (iv) Connecticut’s Paid Sick Leave Law and Family and Medical Leave Act, along with other family, medical and disability related leave laws) related to employee staffing and leave requests, and consult with counsel to determine the steps that they will take to conduct their business during and after the COVID-19 pandemic.

If you have any questions, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.

Click Here to download the Legal Alert.