LONG ISLAND BEGINS PHASE 1 REOPENING WITH NEW SAFETY PLAN AND OSHA REQUIREMENTS AND A NEW “FORWARD” LOAN PROGRAM FOR SMALL BUSINESSES – 22

I. Long Island Begins Reopening

            During his daily press conference on May 26, 2020, Governor Cuomo had some much welcome news; Today, Wednesday, May 27, 2020, the Long Island Region is permitted to start Phase I of its reopening. (New York City is not there yet.). In Phase 1, the following businesses may resume operations: (a) Construction; (b) Agriculture, Forestry, Fishing, Hunting; (c) Retail, limited to curbside pickup or drop off; (d) Manufacturing; and (e) Wholesale Trade. If health metrics remain stable, in two weeks the region may begin Phase 2, which consists of: (a) Professional Services; (b) Retail; (c) Administrative Support; and (d) Real Estate/Rental & Leasing.  Phase 3, which would occur two weeks thereafter, consists of restaurant and food services.  Finally, Phase 4 will consist of: (a) Arts/Entertainment/Recreation; and (b) Education.  Any business that was deemed essential may continue to operate. If you are unsure about your business’ operational status, New York State has prepared this convenient lookup tool.  Further, there are hints that this time table may be accelerated.

As each industry opens, New York State provides specific guidelines that a business must adhere to. Industry specific guidance for Phase 1 businesses may be found here. As a reminder, under Governor Cuomo’s executive order, all employees must be provided with masks and other appropriate personal protective equipment, at the employer’s expense.

Also, before opening each business must have a Business Safety Plan. Although the Business’ Safety Plan does not have to be approved by the State before it may reopen, each business must have this written plan in place and make this plan available for inspection by the New York State Department of Health. A template Business Safety Plan may be found here.

As businesses begin to reopen and begin to resume operations, they should be mindful of their leave law obligations under the Families First Coronavirus Response Act and New York Emergency Sick Leave Act, which remain in effect until December 31, 2020. Broadly, these laws provide paid leave for employees who are sick with COVID-19 or caring for someone with COVID-19, are subject to an order or self-quarantine, or are the primary caregiver for a child whose school or care facility is closed due to COVID-19.  As there are many nuances to these laws, business owners are urged to review our prior alerts or to give us a call should they have questions about these obligations, or about any other issues that may arise as their employees and customers return to the workplace.

 

II. OSHA Reporting Requirements

             Additionally, on May 26, 2020, OSHA issued updated reporting requirements, which apply to all businesses with 11 or more employees. Reversing the position taken in April, OSHA now requires businesses to report cases of COVID-19 if:

  1. The case is a confirmed case of COVID-19, as defined by the Centers for Disease Control and Prevention (CDC);
  2. The case is work-related as defined by 29 CFR § 1904.5; and
  3. The case involves one or more of the general recording criteria set forth in 29 CFR § 1904.7.

OSHA understands that it is not always easy to determine if a case of COVID-19 is a work-related illness.  In its guidance, OSHA advises that an employer should consider the following when determining whether it is more likely than not that a case COVID-19 is a work-related illness:

  • The reasonableness of the employer’s investigation into work-relatedness. Employers, especially small employers, should not be expected to undertake extensive medical inquiries, given employee privacy concerns and most employers’ lack of expertise in this area. It is sufficient in most circumstances for the employer, when it learns of an employee’s COVID-19 illness, (1) to ask the employee how he believes he contracted the COVID-19 illness; (2) while respecting employee privacy, discuss with the employee his work and out-of-work activities that may have led to the COVID-19 illness; and (3) review the employee’s work environment for potential SARS-CoV-2 exposure. The review in (3) should be informed by any other instances of workers in that environment contracting COVID-19 illness.
  • The evidence available to the employer. The evidence that a COVID-19 illness was work-related should be considered based on the information reasonably available to the employer at the time it made its work-relatedness determination. If the employer later learns more information related to an employee’s COVID-19 illness, then that information should be taken into account as well in determining whether an employer made a reasonable work-relatedness determination.
  • The evidence that a COVID-19 illness was contracted at work. Businesses should take into account all reasonably available evidence, in the manner described above, to determine whether an employer has complied with its recording obligation. This cannot be reduced to a ready formula, but certain types of evidence may weigh in favor of or against work-relatedness. For instance:
    • COVID-19 illnesses are likely work-related when several cases develop among workers who work closely together and there is no alternative explanation.
    • An employee’s COVID-19 illness is likely work-related if it is contracted shortly after lengthy, close exposure to a particular customer or coworker who has a confirmed case of COVID-19 and there is no alternative explanation.
    • An employee’s COVID-19 illness is likely work-related if his job duties include having frequent, close exposure to the general public in a locality with ongoing community transmission and there is no alternative explanation.
    • An employee’s COVID-19 illness is likely not work-related if she is the only worker to contract COVID-19 in her vicinity and her job duties do not include having frequent contact with the general public, regardless of the rate of community spread.
    • An employee’s COVID-19 illness is likely not work-related if he, outside the workplace, closely and frequently associates with someone (e.g., a family member, significant other, or close friend) who (1) has COVID-19; (2) is not a coworker, and (3) exposes the employee during the period in which the individual is likely infectious.
    • Businesses should give due weight to any evidence of causation, pertaining to the employee illness, at issue provided by medical providers, public health authorities, or the employee herself.

If, after the reasonable and good faith inquiry described above, the employer cannot determine whether it is more likely than not that exposure in the workplace played a causal role with respect to a particular case of COVID-19, the employer does not need to record that COVID-19 illness. In all events, it is important as a matter of worker health and safety, as well as public health, for an employer to examine COVID-19 cases among workers and respond appropriately to protect workers, regardless of whether a case is ultimately determined to be work-related.

Note: contagious diseases such as tuberculosis, brucellosis, hepatitis A, or plague are considered work-related if the employee is infected at work.

 

III. New York Forward Loan Program

             New York State is launching a new loan program called New York Forward (NYFLF), which is aimed to help small businesses with 20 or fewer full-time equivalent employees, non-profits and landlords who did not have an opportunity to benefit from the Small Business Administration’s Paycheck Protection Program or Economic Injury Disaster Loan.  Applications for this program are accepted on a rolling basis and are reviewed as industries and regions reopen, and can be found here. The loan fund that is currently set to $100 million allows qualifying businesses, non-profits and residential landlords apply for working capital loans of up to $100,000 that must be repaid in 5 years.

Small Business Eligibility:

  • Employ 20 or fewer full-time equivalent (FTE) employees for both small businesses;
  • Have gross revenues of less than $3 million per year;
  • Have not received a loan from either SBA Paycheck Protection Program (PPP) or SBA Economic Injury Disaster Loan (EIDL) for COVID-19  in 2020;
  • Have suffered a direct economic hardship as a result of COVID-19 related social distancing policies and stay-at-home order that have materially impacted their operations;
  • Been in business for at least 1 year as of the date of loan application; and
  • Located in the State of New York.

Ineligible Businesses

Businesses that are NOT eligible include, but may not be limited to: • Corporate-owned franchises; • Not-for-profit social clubs; • Branch banks; • Payday loan stores; • Pawn shops; • Astrology, palm reading; • Liquor stores, night clubs; • Adult bookstores, massage parlors, strip clubs; • Track waging facilities; • Trailer-storage yards; and • Marijuana dispensaries.

Non-Profit Eligibility:

  • Organized as 501(c)(3) or faith-based organization (cannot be for support of religious worship or activities);
  • Employ 20 or fewer full-time equivalent (FTE) employees for nonprofit;
  • Provide direct services to New Yorkers for example daycare services, legal aid, food banks, soup kitchens, after school programs, senior services, educational programs, clothing banks;
  • Have an annual operating budget of less than $3 million per year;
  • Have not received a loan from either SBA Paycheck Protection Program (PPP) or SBA Economic Injury Disaster Loan (EIDL) for COVID-19 in 2020;
  • Have suffered a direct economic hardship as a result of COVID-19 related social distancing policies and stay-at-home order that have materially impacted their operations;
  • Been in operation for at least 1 year as of the date of loan application; and
  • Located in the State of New York.

 Landlord Eligibility

  • Have no more than 200 units under ownership, and no single property greater than 50 units;
  • Properties must either be located in a low or moderate income (LMI) census tract or meet a rent test where property rents are affordable to tenants of low and moderate income;
  • Properties must have positive cash flow for a 12-month period prior to NY Forward loan request;
  • Properties must have an active forbearance agreement for their mortgage, or proof that they have not missed a monthly debt service payment in the last 12 months, and/or no active mortgage;
  • Properties must be current on their property taxes through March 2020;
  • Property owners must attest that they will not evict COVID-impacted non-paying tenants;
  • Properties must be in good repair, with no major life and safety violations;
  • Have not received a loan from either SBA Paycheck Protection Program (PPP) or SBA Economic Injury Disaster Loan (EIDL) for COVID-19 in 2020;
  • Have suffered a direct economic hardship as a result of COVID-19 related social distancing policies and stay-at-home order that have materially impacted their operations;
  • Been in business for at least 1 year as of the date of loan application; and
  • Properties must be located in the State of New York.

 Loan Terms

These loans are to be used to provide working capital to facilitate businesses to re-open to provide upfront expenses, such as inventory, marketing and refitting for new social distancing guidelines. These loans are not forgivable in whole or in part and will need to be paid back with a 5-year term.

  • Loan Amount:
    1. Small Businesses: Small businesses can apply for a loan in the amount of the lesser of (a) $100,000 or (b) up to 100% of average monthly revenues in any 3-month period from 2019 or first quarter of 2020.
    2. Nonprofits: Nonprofits can apply for a loan in the amount of the lesser of (a) $100,000 or (b) up to 100% of average monthly expenses in any 3-month from 2019 or first quarter of 2020.
    3. Small Landlords: Small Landlords can apply for a loan in the amount the lesser of (a) $100,000 or (b) projected reduction in 3-months’ net operating income based on actual reductions in net operating income for the month of April or May 2020.
  • Interest Rate:
    1. Small businesses and landlords: The fixed annual interest rate on the loan will be 3%.
    2. Nonprofits: The fixed annual interest rate on the loan will be 2%.
  • Repayment:
    1. For months 1 – 12:  Interest only payments, paid monthly.
    2. For months 13 – 60: interest and principal payments, paid monthly.
  • Term: 5 years (60 months).
  • Proceeds:
    1. Proceeds are required to be used for working capital, inventory, marketing, refitting for new social distancing guidelines, operating and emergency maintenance, property taxes, utilities, rent, supplies, etc.
    2. Refinancing of an existing loan is not permitted.
    3. The loan applicant will be required to detail anticipated use of funds when they apply.
  • Borrower Fees:  No application fees.  Late fee will be assessed for missed payments.
  • Recourse:  No collateral is required.
  • Prepayment:  Borrower may prepay the loan without penalty.

 

How to Apply

These loan funds will be processed through the five local Community Development Financial Institutions (CDFI): Accion East, Community Preservation Corporation (for small landlords), National Development Council Impact Loan Fund, Pursuit and TruFund Financial Services.  Applications will be reviewed by the CDFI starting on June 1, 2020.

The pre-application process for businesses, non-profits and landlords began on May 26, 2020 at noon est. The loan application is available here.

A small business loan applicant must provide the following documentation: • Most recently filed tax returns, if available and required by the lender; if not available, internally generated income statements or other documentation used to determine cash flows; • Schedule of ownership (name, address, Social Security number, phone number, e-mail, percentage ownership, photo ID for any owners with more than 20% ownership); • Executed Attestation Form (will be provided by lender); • Brief description of COVID-19 impacts on jobs and revenues; • Evidence of legal formation of business entity (Articles of Incorporations and/or Bylaws); and • Personal Credit Report (if applicable).

Additional information for this loan is available here.

***

The attorneys in Forchelli Deegan Terrana Employment & Labor practice group will continue to keep you updated on any changes to your requirements as an employer as updates become available. Should you have and questions, do not hesitate to contact me at the below contact information.

Battling the novel Coronavirus is difficult for everyone. We are here if you need us. With best wishes for you and your family’s health and safety.

Gregory S. Lisi, Esq.                                                 Lisa Casa, Esq.
Partner-in-Charge, Employment & Labor                   Associate, Employment & Labor
GLisi@Forchellilaw.com | 516.248.1700                     LCasa@Forchellilaw.com | 516.248.1700

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