As everyone “returns” to the office and opens up their new calendars, we wanted to advise you of some new changes that have occurred during the holiday break as the Consolidated Appropriations Act (“CAA”) was passed bringing in a new round of funding for the Paycheck Protection Loan. In addition, with the emergency sick leave and extended family medical leave benefits now expired, New York State employers should be aware that New York State’s Emergency COVID sick leave law remains in effect and, in many instances, is no longer superseded by the federal leave law.
PPP ROUND 2
As part of the much debated and anticipated stimulus bill, $284 billion dollars has been set aside for the Small Business Administration’s popular Paycheck Protection Loans. In addition to opening up this forgivable loan program to qualifying businesses who may not have applied during the initial rounds, the loan program has been expanded to other 501(c) businesses, such as 501(c)(6).
Additionally, if your business already received a Paycheck Protection Loan (“PPP”), then the business may apply for a second PPP loan if:
- The business has 300 or fewer employees;
- The business has used or will used the first round of PPP loans; and
- The business can demonstrate a 25% decline in gross receipts in any quarter of 2020 compared to the same quarter in 2019.
Second time qualifying borrowers may apply for a loan equal to 2.5 times either: (a) their average monthly payroll costs from the 12 months prior to the loan application; or (b) the average monthly payroll costs in 2019. Additionally, second time borrowers in the restaurant and hotel industry (NAICS code 72) may apply for a loan 3.5 times their average monthly payroll costs. All second time borrowers, regardless of their NAICS code, have their loans capped at $2 million.
Additionally, expenses that are eligible for forgiveness for both new and existing loans have been expanded. In addition to the payroll costs, rent, covered mortgage interest and utilities, PPP loan funds may be used for:
- group life insurance, disability, vision or dental insurance;
- payment for any business software or cloud computing service that facilitates business operations;
- costs related to property damage from vandalism or looting due to public disturbances in 2020, which expenses were not covered by insurance;
- supplier costs which are essential to operations or made pursuant to a contract in effect at the time of the PPP loan; and
- operating or capital expenditures made to comply with requirements or guidance published by the Department of Health and Human Services, the Centers for Disease Control, Occupational Safety and Health Administration, or any state equivalent from March 1, 2020 until the President ends the national emergency related to COVID-19 (such as drive-through windows, air or filtration units, physical barriers, PPE, or expansions of outdoor space).
Additionally, not only is any portion of the loan that is forgiven not accounted as income, but businesses may also deduct any of the qualifying expenses that were paid using the loan proceeds. Businesses wishing to apply for a PPP loan or a second round of funding have until March 31, 2021 to apply. Although, as the first rounds of funding saw the appropriated funds go quickly, businesses are urged to apply as soon as possible if they wish to take advantage of this new round of funding. Any businesses who may have questions as to whether they are eligible either for an initial or second PPP loan, or who have questions about applying for forgiveness can reach out to our attorneys to discuss.
Expiration of the FFCRA
In late-March 2020, as part of the Families First Coronavirus Response Ace (“FFCRA”) employers with 500 or less employees were required to provide their employees with up to 80 hours of emergency sick leave and up to 12 weeks of expanded family medical leave to employees who had fallen sick, subject to a mandatory or precautionary order of quarantine, caring for a sick family member, or having to care for their children whose school or child care facility was closed due to COVID-19. The FFCRA leave provisions expired on December 31, 2020. In the CAA, the federal government now makes these leave provisions voluntary. Any employer who voluntarily wishes to provide employee with leave permitted under the FFCRA may do so and apply for a tax credit through March 31, 2021. However, employees are no longer entitled to FFCRA leave and any leave provided by employers is solely on a voluntary basis. As with any workplace policy, if an employer does voluntarily choose to extend the FFCRA leave entitlements, they must do so uniformly, or face a potential discrimination suit. Additionally, employers must still pay for any FFCRA leave used through December 31, 2020. The Department of Labor has clarified that they will be seeking enforcement against any employers who denied their employees FFCRA leave before the leave entitlements expired, and employees have up to 2 years to either file a complaint with the Department of Labor or file a private right of action if they were denied their FFCRA leave entitlement.
New York State COVID Sick Leave Law
While the FFCRA leave law expired on December 31, 2020, the New York State COVID Sick Leave Law that was passed in March remains in full force and effect.
As a reminder, New York State’s COVID Sick Leave Law passed on March 18, 2020, provides paid leave to employees who are unable to work remotely and who cannot go to work because they are subject to a mandatory or precautionary order of quarantine or isolation for COVD-19, or whose child is subject to such an order. The exact amount of the leave, and whether the leave is paid or unpaid depends on the number of employees and net income of the business. To assist employer with navigating this new regulation, we have prepared the following chart:
|Number of Employees||COVID-19 Quarantine Benefit|
|10 or less||Unpaid leave provided for the duration of the mandatory or precautionary period of isolation or quarantine (up to 14 days).|
|10 or less, with annual net income in excess of $1 million||5 days of paid leave, and unpaid leave for the remaining period of the mandatory or precautionary period of isolation or quarantine (up to 14 days). Employees may apply through the employer’s New York Paid Family Leave or disability insurer to receive payment for the remaining 14 days.|
|11 to 99||5 days of paid leave, and unpaid leave for the remaining period of the mandatory or precautionary period of isolation or quarantine (up to 14 days). Employees may apply through the employer’s New York Paid Family Leave or disability insurer for to receive payment for the remaining 14 days.|
|100 or more||14 days of paid leave, paid by the employer.|
|Public Employers||14 days of paid leave, paid by the employer.|
The state law does not apply if the employee voluntarily travels out of state (domestically or internationally), resulting in the employee having to quarantine under New York State’s mandatory travel quarantine. Additionally, any employee who is asymptomatic and who has not yet been diagnosed with any medical condition and who is able to work while under the mandatory or precautionary order of quarantine or isolation, whether through remote access or other similar means, may not use this benefit.
This leave will be provided in addition to any existing paid leave an employer may provide, and the employee may not lose their accrued sick leave while on COVID-19 quarantine. Employees using this leave are guaranteed job protection, and must be restored to their position, or a similar position with the same pay and benefits once the leave ends. Employers may not discriminate or retaliate against any employee who uses this benefit.
New York State Mandatory Paid Sick Leave
Additionally, starting on January 1, 2021, New York State now has a mandatory sick leave policy that applies to all employees (full time, part-time and per diem) in the state. Under the new laws, employers in New York State must provide the following benefits:
|Employer Type||Employee Leave Entitlement|
|4 or fewer employees in any calendar year and a net income of less than $1 million in the previous tax year||At least 40 hours of unpaid sick leave in each calendar year|
|4 or fewer employees in any calendar year and a net income of greater than $1 million in the previous tax year||At least 40 hours of paid sick leave in each calendar year|
|Between 5 and 99 employees in any calendar year||At least 40 hours of paid sick leave in each calendar year|
|100 or more employees in any calendar year||At least 56 hours of paid sick leave in each calendar year|
Sick Leave may be used for:
- Employee’s mental or physical illness, or injury, or diagnosis, care, treatment, or preventive care for employee’s mental or physical illness or injury;
- Covered family member’s mental or physical illness or injury or diagnosis, care, treatment, or preventive care for a covered family member’s mental or physical illness or injury;
- Absences related to employee’s status as a victim of domestic violence, family offense, sexual offense, stalking, or human trafficking; or
- Absences related to a covered family member’s status as a victim of domestic violence, family offense, sexual offense, stalking, or human trafficking.
For purposes of the legislation, a “family member” is defined as the employee’s child, spouse, domestic partner, parent, sibling, grandchild or grandparent, and the child or parent of an employee’s spouse or domestic.
Minimum Wage Increases in Nassau, Suffolk and Westchester Counties
Employers are reminded that the minimum wage in Nassau, Suffolk and Westchester County has increased to $14.00 per hour effective December 31, 2020. Minimum wage for fast food industry workers is $14.50, and will be increased to $15.00 as of July 1, 2021.
Minimum wage for all workers in New York City is $15.00. Minimum wage in the remainder of the state (not NYC, Nassau, Suffolk or Westchester) is $12.50.
Employers who have question about this article or any other workplace compliance issue should reach out to the attorneys in Forchelli Deegan Terrana LLP’s Labor and Employment Department.