COVID-19
Federal Relief – Congressional leaders finally reached a deal to provide additional stimulus before the end of the year. The nearly $900 billion package includes major provisions that will help the entry-level employer community. However, President Trump signaled his displeasure with the package, indicating that he wanted larger stimulus payments among other provisions. Congressional leaders are prepared to return to the Capitol for an override vote if necessary; however, it’s unclear if there are enough votes in the U.S. Senate for an override. Despite the political posturing, the bill includes a number of provisions critical to the industry, including important modifications to the existing Paycheck Protection Program (PPP), an additional round of the PPP for the most affected businesses (with additional support within the PPP for the hospitality industry), enhancements to the SBA 7A program and an expanded Employee Retention Tax Credit (ERTC). Some of the most important provisions in the bill are:
- PPP Tax Deductibility – The legislation contains a provision that will allow for full deductibility of business expenses on forgiven PPP loans for both “first” and “second draw” loans.
- Second Round of PPP Loan for Most Impacted Businesses – The bill includes an additional $284 billion for PPP loans. Eligibility would be limited to small businesses with 300 or fewer employees that have sustained a 25 percent revenue loss in any quarter of 2020. This is a significant departure from earlier proposals that pegged the decline at 50 percent revenue decline. Loan size will be 2.5 times average monthly payroll, except businesses in NAICS Code 72 will be eligible for PPP loans at 3.5 times average monthly payroll. Loan sizes are capped at $2 million per corporate entity.
- Enhanced PPP Forgivable Expenses – Additional forgivable expenses related to COVID include software, cloud computing & other human resources and accounting needs; property damage due to public disturbances in 2020 not covered by insurance, covered supplier costs and PPE.
- Streamlined PPP Forgiveness – For borrowers under $150,000, the law creates a simplified forgiveness application whereby the borrower signs and submits a one-page certification that requires the borrower to list the loan amount, the number of employees retained, and the estimated loan amount spent on payroll costs.
- Extension of Troubled Debt Restructuring (TDR) – TDR relief encourages lenders to work with COVID-impacted borrowers to modify loans without having to classify the modification as “troubled debt” under their accounting rules. Bank regulators provided interagency guidance in March 2020 on TDRs. This TDR relief allows lenders and borrowers to work together to see loans through the end of the pandemic.
- Enhancements to SBA 7A Program – The enhancements include an increase to 90 percent loan guarantees for the 7A Program, SBA 7A loan increases up to $10 million, and fee waivers.
- Repeal of EIDL Advance Deduction – Previously, borrowers who took a PPP and an EIDL advance grant ($10,000) had to deduct the EIDL amount from their PPP loan when applying for forgiveness, thus negating the full benefit of the PPP. This provision eliminates that deduction and restores the full impact of the PPP.
- Employee Retention Tax Credit (ERTC) – Expected six month extension.
- Work Opportunity Tax Credit (WOTC) – Extension for 5 years.
The bill also includes aid for workers, including $166 billion in direct payments. Individuals making up to $75,000 a year will receive a payment of $600, while couples making up to $150,000 will receive $1,200, in addition to $600 per child. The deal also makes the stimulus checks more accessible to immigrant families. The bill includes $120 billion in extra unemployment aid and jobless workers will get an extra $300 per week in federal cash through March 14. The legislation also extends employment benefits to self-employed individuals, gig workers and those who’ve exhausted their state benefits. Funds for a number of other priorities are included, such as transportation aid, farmer assistance, rental aid, school funding, broadband funding, vaccine costs as well as testing and tracing monies.
CDC – The Centers for Disease Control and Prevention (CDC) Advisory Group determined that restaurant workers are essential workers and should be included in the third round of vaccinations (Group 1C). Grocery workers along with first responders were included in the second round of vaccinations (Group 1B). Ultimately, states and localities are likely to make the final determination. More details.
EEOC – The EEOC determined that employers can require mandatory vaccines. The agency stipulated that the vaccine must be provided by a third party that does not have a contract with the employer and allow for reasonable accommodations under the ADA and Title VII. More details.
SEIU – The Service Employees International Union (SEIU) has released a position statement on vaccines. The union wants employers to provide the vaccine free of charge, give priority to workers “hardest hit” and not use vaccination as a substitute for worker safety.
California – The National Federation of Independent Business, the National Retail Federation and three small business owners sued to block California’s new Covid-19 workplace safety rules, “accusing state regulators of failing to comply with required legal procedures and overstepping their authority.”To Access Align's Analysis: Log In or Subscribe
Wages
Labor Department – The Trump administration released their final tip rule that will allow companies to pay tipped workers the lower hourly minimum wage for their entire shift – including time when they aren’t doing tipped work – and expand the use of tip pools.To Access Align's Analysis: Log In or Subscribe
Labor Policy
Alabama – After three days of hearings, an agreement was reached between Amazon and the Retail, Wholesale and Department Store Union regarding the classification of workers that will be eligible to vote in a pending unionization vote, likely to occur next spring.To Access Align's Analysis: Log In or Subscribe
Delivery
Minneapolis, MN – The mayor signed an executive order capping third-party delivery fees at 15 percent.To Access Align's Analysis: Log In or Subscribe
Alcohol
North Carolina – The governor signed an executive order permitting the delivery or carry-out of mixed beverages as an alternative to on-site consumption.To Access Align's Analysis: Log In or Subscribe
Oregon – Legislation is on its way to the governor’s desk for her expected signature that would allow cocktails to go as well as home delivery of alcohol.To Access Align's Analysis: Log In or Subscribe