Companies and organizations worldwide are facing a difficult question: As the fight against the COVID-19 pandemic shifts gears from emergency to maintenance, how can we reopen and run our businesses — from Day One and beyond — in a manner that preserves jobs and generates revenue without risking the health and safety of our employees and customers? The answers to this question are not simple, nor is there a one-size-fits-all solution.
On May 15, 2020, the Mississippi Gaming Commission issued its Order Authorizing Reopening (authorizing the reopening of Mississippi casino properties at 8:00 a.m., on Thursday, May 21, 2020) under the limitations described in Industry Letter 2020-01.
In a press release from Washington, DC, on April 17, 2020, US Secretary of Agriculture Sonny Perdue announced the existence of the Coronavirus Food Assistance Program (CFAP). This new US Department of Agriculture (USDA) program will take a number of actions to render direct aid to American farmers, ranchers, and consumers in response to the COVID-19 pandemic. President Trump directed the USDA to craft this immediate relief program to provide critical support to US farmers and ranchers, to maintain the integrity of the food supply chain, and to ensure Americans continue to have access to the food they need. The CFAP will receive $19 billion in funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First Coronavirus Response Act (FFCRA), as well as from other USDA-related entities such as the Commodity Credit Corporation (CCC) and the Farm Service Agency (FSA).
In a significant, and overall welcome, development, on May 13, 2020, the Small Business Administration (SBA) issued additional guidance regarding the required certification by applicants for a Paycheck Protection Program (PPP) loan that the “current economic uncertainty makes th[e] loan request necessary to support the ongoing operations of the Applicant.”
Borrowers applying for a PPP loan are required to make the certification in good faith, and the SBA had previously issued guidance stating that all PPP loans of more than $2 million would be subject to audit to determine whether the borrower had an adequate basis for making the certification. This prior guidance also established that any borrower that repaid the PPP loan in full on or prior to May 7, 2020 (subsequently extended to May 14, 2020, and now further extended to May 18, 2020), would be deemed to have made the certification in good faith (see FAQ 31, FAQ 37, Interim Final Rule on Extension of Limited Safe Harbor with Respect to Certification Concerning Need for PPP Loan Requested dated May 8, 2020, and FAQ 47).
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for, among other things, an “employee retention tax credit” for employers that are forced to suspend operations or experience a financial downturn. The CARES Act disqualified employers that received Paycheck Protection Program (PPP) loans from taking the employee retention tax credit. Some employers that received PPP loans are now contemplating repaying the loans based on recently released guidance clarifying the scope of employers that are eligible for the PPP. The guidance allows employers that received PPP funds to repay the funds by May 14 without penalty.
On Thursday, May 7, 2020, the US Equal Employment Opportunity Commission (EEOC) announced it will not collect EEO-1 data from private sector employers this year due to the coronavirus pandemic. Ordinarily, all private sector employers with at least 100 employees, plus those with 50 or more employees and that also have at least one federal contract or subcontract worth at least $50,000, must respond to the EEO-1 survey annually by March 31. In the EEO-1 survey, covered employers are required to report the number of employees by race and gender in each of 10 job categories, ranging from service workers to their top executives, who were employed in a pay period of the employer’s choosing between October 1 and December 31 of the previous calendar year. This does not mean covered employers will get a complete pass on having to report their 2019 EEO-1 data. In the same announcement, the EEOC said it now plans to open the EEO-1 survey for both 2019 and 2020 EEO-1 data in March 2021. Thus, if you are required to respond to the EEO-1 survey, be sure to hold on to your 2019 EEO-1 data and be prepared to report it along with your 2020 EEO-1 data when the survey reopens in March 2021.
Earlier this year, the EEOC had announced an indefinite postponement of the March 31, 2020, deadline for reporting 2019 EEO-1 data. The earlier postponement was due to the EEOC’s decision last year to discontinue the EEO-1 Component 2 pay data collection report and to seek approval from the Office of Management and Budget (OMB) for a new EEO-1 report form for Component 1 basic information. As of the EEOC’s May 7 announcement, the new EEO-1 report form had not been released. Presumably, the new report form will receive final approval from the OMB before the 2019 and 2020 EEO-1 survey opens in March 2021.
On May 4, 2020, the Securities and Exchange Commission (“SEC”) issued four frequently asked questions and related responses (“FAQs”) regarding the COVID-19 Order (the SEC’s Order issued on March 25, 2020 (Release No. 34-88465 available here), which as we previously reported here, gave public companies a 45-day extension to file certain periodic reports otherwise due between March 1 and July 1, 2020, subject to specified conditions). The FAQs address the impact of the COVID-19 Order in certain situations, specifically the disclosure required in order to take advantage of the extended filing deadline relief and the use of Form S-3 when taking advantage of such relief.
The FAQs provided by the SEC can be found here.
On May 4, 2020, the Securities and Exchange Commission (SEC) approved the Nasdaq Stock Market’s (NASDAQ) request to temporarily modify certain shareholder approval requirements during the COVID-19 pandemic to make it easier for NASDAQ-listed companies to access capital.
As we previously reported here, in April, the New York Stock Exchange similarly adopted temporary modifications to certain of its shareholder approval requirements.
To address the capital needs of its listed companies, NASDAQ has adopted a temporary exception to the shareholder approval requirements for 20% issuances.
Recognizing the profound impact COVID-19 is having on the way businesses operate, the Department of Homeland Security (DHS) has implemented temporary employment verification procedures to address some of these issues.
Form I-9 Inspection of Documents
Now and in the near future, employers taking physical proximity precautions due to COVID-19 will not be required to review an employee’s identity and employment authorization documents in person. Section 2, however, should still be completed within three business days of hire. Here’s how it will work:
- The employer may inspect the Section 2 documents remotely (i.e., via video link, fax, or email, etc.). As always, we recommend (and it may be required due to participation in E-Verify) retaining copies of the documents presented.
- Once physical inspection takes place, employers will enter “COVID-19” as the reason for the physical inspection delay in the field titled “Additional Information” in Section 2.
- Once normal operations resume, employees who were hired using remote verification must report to the employer within three business days for in-person verification of identity and employment eligibility documentation.
- Once the original documents have been physically inspected, the employer should add “documents physically examined” with the date of inspection to the Section 2 Additional Information field or to Section 3 (if documents presented remotely have since expired).
- These provisions may be implemented by employers through May 19 (which could be extended) or within three business days after the termination of the National Emergency, whichever comes first.
- Employers who utilize these procedures must provide written documentation of their remote onboarding and telework policy for each employee.
Both the state of Louisiana and the city of New Orleans have provided additional information for businesses planning to reopen or expand operations once the current stay-at-home orders are lifted or modified. The state of Louisiana has launched a new Open Safely online platform, where businesses can register to receive up-to-the-minute information on what phase of the state’s reopening plan their businesses are considered to be in, what phase the state is in as Louisiana moves through phases of reopening, and what social distancing and sanitation guidelines apply to their specific operation in each phase.