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Posts Tagged ‘CARES Act’

CARES in California: New Unemployment Benefits Available Under Federal Law

Posted on: May 8th, 2020

By: Anastasia Osbrink

With over 3.5 million unemployment claims in California since mid-March, the state is facing an historic level of payments that need to be made. In fact, the state has paid out approximately $4.5 billion, which is entirely unprecedented. Every state will be stretched thin, but at least for four months, unemployed Californians will see a significant increase in their unemployment payments thanks to the new federal Coronavirus Aid, Relief, and Economic Security Act, or the “CARES” Act. Section 2104 of the CARES Act provides that those who qualify for unemployment benefits in participating states, which now includes California, will receive their normal weekly benefit amount, plus an additional $600 per week. This additional $600 is a federal supplement, known as Pandemic Emergency Unemployment Compensation (“PEUC”). In California, the average weekly unemployment benefit is $340. As a result of the PEUC, the average unemployment benefit check in California will increase to $940. The maximum benefit in California of $450 per week will also increase to $1050. These payments will be made through the Employment Development Department’s (“EDD”) debit cards as usual.

These benefits are not retroactive, and in California, they began on Sunday, April 12, 2020. The usual one-week waiting period for benefits is eliminated under section 2105 of the CARES Act. The additional $600 is only available while the individual would normally be eligible for benefits in that state. In California, this means benefits are available for 26 weeks. However, the additional $600 will cease on July 31, 2020 pursuant to the CARES Act and after that, the employee will receive their normal unemployment payment for the remainder of the 26-week period. Once the 26-week period is over, individuals will receive their normal benefit amount (though not the additional $600 after July 31, 2020) for a 13-week period pursuant to section 2107 of the CARES Act. That benefit and the waiver of the one-week waiting period will expire on December 31, 2020.

These benefits are obviously welcome aid for unemployed Californians. However, there are many issues the State continues to face. First, the CARES Act provides benefits for the first time to contract and furloughed workers and those in the gig economy. This means a whole new category of claims to process. That, coupled with business closures and layoffs, has resulted in a huge increase in claims. The extent of delays for individuals seeking benefits remains to be seen. Many applicants are unable to reach the EDD by phone because the EDD’s phone lines are open just four hours per day. Now that millions are trying to access the EDD, many are calling on the State to expand those hours. However, those administrative costs are paid for by employers through a federal tax, and federal funding was significantly reduced over the past several years due to the boom economy. As a result, EDD staffing was cut in half in California. Thus, half the amount of EDD staff is now struggling to process millions of claims. Federal law requires 90% of claims to be processed within 21 days. California came close to that in February and has appeared to largely keep up with it in March and April thanks to a more streamlined temporary process that has been implemented. This includes waiving some verification requirements until after payments are issued, no longer requiring claimants to recertify their claims every two weeks, and processing more claims through an automated system. However, significant delays have been reported for employees who were misclassified as independent contractors by employers and did not have their wages reported to the EDD, which is doing a wage audit. Many of these claimants have reported waiting six weeks or more before receiving benefits.

Additionally, it appears likely that it will be a long time before life returns to normal (though it will certainly be a new “normal” and not the normal we used to know), and the economy will take even longer to recover. This means months, and likely years of high unemployment in the State. How that unemployment will be paid for in the long run will be a significant challenge. In an effort to address this challenge, California became the first state in the country to take out a federal loan. As of April 30th, California has borrowed $348 million from the federal government and has been approved to borrow up to $10 billion. This is not the first time the state has taken out such a loan. California borrowed $10.7 billion from the federal government during the Great Recession that it just finished paying back in 2018, including hundreds of millions of dollars in interest. As of now, this appears to be California’s best option to stay afloat during what has become the highest period of unemployment since the Great Depression. Regardless, we can appreciate the reprieve and aid offered by the CARES Act.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include real estate issues, business interruption losses, and more. Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

CARES Section 18006 Encourages Schools to Retain Staff to the “Greatest Extent Practicable”

Posted on: April 27th, 2020

By: Tia Combs

As many schools around the country make the final decision to remain closed for the school year, it may be tempting to cut back on staff to save money for what is predicted to be a historic budget shortfall next year. However, the wisdom of that move may be lost when districts consider legislation recently passed by Congress.

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES” Act”). The lengthy piece of legislation gives financial benefits to seven primary groups: 1) individuals, 2) small businesses, 3) mid-size and larger companies, 4) hospitals and public health facilities, 5) children and families, through federal safety net programs, 6) state and local governments, and 7) providers of educational services.

Of particular interest to educational institutions is the Education Stabilization Fund. The fund provides over $30 billion dollars to educational institutions. Roughly $16.5 billion of the fund is allocated for distribution to elementary and secondary schools through the Elementary and Secondary School Emergency Relief Fund and the Governor’s Emergency Education Relief Fund. Distribution of these funds are contingent on the educational institutions fulfilling certain labor and employment related requirements. 

In particular, pursuant to Section 18006 of the Act states:

A local educational agency, State, institution of higher education, or other entity that receives funds under “Education Stabilization Fund,” shall to the greatest extent practicable, continue to pay its employees and contractors during the period of any disruptions or closures related to Coronavirus.

For K-12 educational institutions, this means that they must continue to pay employees and see that contractors (and their employees) are paid to the greatest extent possible and be prepared to explain any failure to do so.  Many state educational agencies have given advised local districts to do what they can to retain workers. For example, the Indiana Department of Education has advised districts: 

In the application for the CARES Act funding, the LEA must attest that it has been paying all employees and contractors during the closure or disruptions related to the coronavirus, or that it will begin doing so immediately. If LEAs are not able to attest to this fact, then it must provide a reasonable explanation beyond reasons related to cash flow (as tuition support has not been reduced) in order to be eligible for the CARES Act funding. IDOE considers the employees and contractors to include, but is not limited to, the following positions: teachers, administrators, counselors, social workers, nurses, paraprofessionals, bus drivers, custodians, food service, and administrative staff.

In light of Section 18006, districts considering staffing reductions should make those decisions in consultation with legal counsel so that the district’s ability to receive these federal funds is preserved.

If you have any questions or would like more information, please contact Tia Combs at [email protected].

Los Angeles Mayor Issues Executive Order Requiring Employers To Provide COVID-19 Supplemental Paid Sick Leave For Employees

Posted on: April 14th, 2020

By: Michelle Harrington

What Does The Executive Order Require: The COVID-19 crisis has employers scrambling to stay on top of legal obligations imposed by recent federal legislation, including the federal Families First Coronavirus Response Act and the CARES Act, and various state law initiatives aimed at providing leave or unemployment benefits to employees affected by COVID-19.   Now, Los Angeles has entered the mix and, effective April 7, 2020, employers that have either 500 or more employees in the City or 2,000 or more employees nationally must provide supplemental paid sick leave of up to two weeks (80 hours) for COVID-19 related reasons to employees living within the City of Los Angeles.  The paid sick leave required to be provided under this Order is in addition to the paid sick leave employers are currently obligated to provide under California’s Healthy Workplaces Healthy Families Act and the Los Angeles paid sick leave ordinance. 

The complete supplemental paid sick leave Order may be viewed here, and sets forth the following:

Employees Covered by the Order: All Employees who have been employed by the same employer from February 3, 2020 through March 4, 2020 who have performed work within the geographic boundaries of the City of Los Angeles are entitled to supplemental paid sick leave. 

Employers Covered by the Order: An employer is a person (as defined in Section 18 of the California Labor Code) including a corporate officer or executive, who directly or through an agent or any other person, including through a temporary service or staffing agency or similar entity, employs or exercises control over the wages, hours or working conditions of any Employee.  The Order applies to Employers that have either 500 or more employees in the City of Los Angeles or 2,000 or more employees within the United States.

Supplemental Paid Sick Leave Employers Must Provide: An employee who works at least 40 hours a week or is classified as full-time by the employer is entitled to 80 hours of supplemental paid sick leave.  This leave is calculated based upon an employee’s average two-week pay over the period of February 3, 2020 through March 4, 2020.  Employees who work less than forty hours per week and are not classified as full-time are entitled to supplemental paid sick leave in an amount no greater than the employee’s average two-week pay over the period of February 3, 2020 through March 4, 2020.

Maximum Compensation Employers Must Pay for Leave: The supplemental paid sick leave amount paid to an employee shall not exceed $511 per day and $5,110 in the aggregate.

Qualifying Reasons for Supplemental Paid Sick Leave: Employees are entitled to take supplemental paid sick leave if they are unable to work or telework for any of the following reasons:

  1. the employee takes time off due to COVID-19 infection or because a public official or healthcare provider requires or recommends the employee self-isolate or quarantine to prevent the spread of COVID-19;
  2. the employee takes time off work because the employee is 65 years old or older or has a health condition such as heart, lung or kidney disease, asthma, diabetes or a weakened immune system;
  3. the employee takes time off to care for a family member who is not sick but who public health officials or healthcare providers have required or recommended isolation or self-quarantine; or
  4. the employee takes time off to provide care for a family member who requires care due to the temporary closure of a senior care facility, school or child care provider caring for a child under the age of 18 where such employee is unable to secure a reasonable alternative caregiver.

Employers May Not Require Doctor’s Note as Condition of Leave: An employer may not require a doctor’s note or other documentation for the use of supplemental paid sick leave.  The employee can request the leave verbally or in writing. 

Offset for Prior Allowance of Paid Sick Leave: The obligation to provide 80 hours of supplemental paid sick leave under the Order can be reduced for every hour that the employer allowed an employee to take other paid leave in an amount equal to or greater than such 80 hour requirement (not including previously accrued hours) on or after March 4, 2020 for any of the reasons listed in 1-4, above or in response to an employee’s inability to work due to COVID-19.

Exemptions for Certain Employers: The following employers are exempt from providing supplemental paid sick leave:

  1. Employers of Emergency and Health Services Personnel.  Employers of an employee who is either Emergency Personnel or a health care worker.  Emergency Personnel refers to individuals specified in the April 1, 2020 City of Los Angeles Safer at Home emergency order Paragraph 5(vi), including all first responders, gang and crisis intervention workers, public health workers, emergency management personnel, emergency dispatchers, law enforcement personnel and related contractors and others working for emergency services providers.  A health care worker includes those individuals described in California Government Code Section 12945.2(c)(6) or individuals, including contract workers, working at a health facility licensed under California Health and Safety Code Section 1250;
  2. Employers of Critical Parcel Delivery.  Employers that provide global parcel delivery services;
  3. Employers with Generous Leave.  Employers that have a paid leave or paid time off policy that provides a minimum of 160 hours of paid leave annually do not have to provide supplemental paid leave to any employee that received the more generous leave;
  4. Employers of New Businesses.  Employers that started businesses in the City of Los Angeles on or after September 4, 2019 through March 4, 2020 (not including construction businesses as defined by Los Angeles Municipal Code (“LAMC”) section 21.30 b.1 or film producers as defined by LAMC 21.109).  To qualify, an employer could not have been in business in the City of Los Angeles in the 2018 tax year;
  5. Government Employers.  Government agencies; or
  6. Employers of Closed Businesses and Organizations.  Employers that were closed or not operating for a period of 14 or more days due to a city official’s emergency order because of the COVID-19 or provided at least 14 days of leave.

Employee Enforcement of Order: The Order allows an employee who claims a violation of the Order to bring a civil action in the Superior Court of California.  The employee can seek civil remedies, including reinstatement, back pay, supplemental paid sick leave at the rate of the employee’s average rate of pay, other legal or equitable relief, and reasonable attorney’s fees and costs of suit.

Retaliation and Discrimination Prohibited: The Order prohibits retaliating or discriminating against an employee for opposing any practice proscribed by the Order, for requesting to use or actually using supplemental paid sick leave, for participating in proceedings related to the Order, for seeking to enforce the employee’s rights under the Order by lawful means, or otherwise asserting rights under the Order. 

No Waiver of Employee Rights Under the Order: Any waiver by an employee of any or all of the provision of the Order shall be deemed contrary to public policy and void and unenforceable.

Relationship to Other State and Federal Laws: With the exception of rights and remedies provided to employees under the FFCRA, the Order provides rights and remedies in addition to or independent of any other rights, remedies or procedures available under any other laws and do not diminish, alter, or negate any other legal rights, remedies, or procedures available to an employee. Nothing in the Order should be interpreted or applied to create any power or duty in conflict with any federal or state law. 

Impact of Collective Bargaining Agreements: The terms of a collective bargaining agreement in effect on April 7, 2020 supersede the Order if such agreement contains COVID-19 related sick leave provisions.  A collective bargaining agreement that expires or becomes open for renegotiation may expressly waive the provisions of the Order.  If an agreement is in place on April 7, 2020 but does not address COVID-19 related sick leave provisions, the employer must comply with the Order until the agreement is amended to expressly waive the provisions of the Order. 

Duration of Supplemental Paid Sick Leave: The Order is in effect from April 7, 2020 up until two weeks after the COVID-19 local emergency period ends.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include COVID-19’s impact on finances and loans, the FFCRA, the CARES Act and more. Click here to view upcoming webinars.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

COVID-19: Protecting Those Who Protect Us

Posted on: April 2nd, 2020

By: Parisa Saleki

The Volunteer Protection Act of 1997 (Public Law 105–19) came into effect over two decades ago with a simple goal: promote volunteerism by limiting, and sometimes eliminating, a volunteer’s risk of tort liability. The recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act) further builds on the goal of encouraging volunteerism.

Specifically, the CARES Act limits liability of health care professional volunteers during the COVID-19 emergency response with respect to the diagnosis, prevention, or treatment of COVID-19 or the assessment or care of a person’s health-related to COVID-19. Section 4216 of the CARES Act states that a volunteer health care professional “shall not be liable under Federal or State law for any harm caused by an act or omission of the professional in the provision of health care services during the public health emergency.”

The CARES Act does not, however, eliminate liability altogether. Volunteers should be cautious of several exceptions to the new rule. For example, the limitation will not apply if a person sustained harm as a result of a volunteer’s willful act or gross negligence, reckless misconduct, or a conscious flagrant indifference to the rights or safety of the harmed individual. Further, liability will not be limited if a health care professional volunteer rendered services and caused a person harm while under the influence of alcohol or an intoxicating drug.

So, who exactly do these new rules apply to? The CARES Act defines the term “volunteer” as a health care professional who, with respect to the health care services rendered, does not receive compensation or any other thing of value in lieu of compensation, which includes a payment under any insurance policy or health plan, or under any Federal or State health benefits program.

For legal professionals handling claims under this section of the CARES Act, it is important to note that the section is not retroactive. The limitation of liability only applies to claims for harm in which the act or omission that caused harm occurred on or after the date the CARES Act was enacted. Lastly, the effect of this section comes to a halt once the COVID-19 public health emergency is declared over.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include COVID-19’s impact on the construction industry, employment issues arising from the virus, the real-world impact of business restrictions, and education claims. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

CARES Act and Paycheck Protection Program

Posted on: April 1st, 2020

All businesses with 500 or fewer employees, including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – can apply for loans that may be forgiven. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries

The Department of Treasury has released the Paycheck Protection Program Application and explanatory information explaining how to complete the application process.  Additional information regarding other programs and assistance can also be found on the Treasury Department’s website.  

You can click on this link for the Application and Instructions.  You can click on this link for the associated Borrowers’ Guide

While most banks and credit unions should be able to process your program Application, you should verify that your existing bank intends to support the program and, if not, potentially seek out another lender willing to meet the program requirements, which for lenders can be found here Lenders’ Guide.

As a reminder, a forgivable loan from this program: 

  • Can reach up to 250% of your average monthly payroll over the last year (up to $10 million)
  • Have a loan term up to 10 years; interest rate at a maximum of 4%; and with a potential 6-month deferral
  • Can be used for employee salaries under $100,000, paid sick or medical leave, insurance premiums, and mortgage, rent and utility payments;
  • May be 100% forgivable, for the principal value of the loan, if used for the above purposes, the employee headcount for the 8-week forgiveness period remains same as compared to 2019, and certain additional conditions are met

**DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. We can only give legal advice to clients. Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest. As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you. We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests. We cannot respond to all unsolicited requests for representation. If you need legal advice, please contact an attorney and enter into a valid, written attorney- client relationship. See also our terms of service for this website.**