June 29, 2020
June 22, 2020
- PPP Loan Forgiveness Application Forms Updated and Streamlined
- Nevada Division of Insurance to Disallow Policy Exclusions Related to COVID-19
- CDI Announces New Order Regarding Workers’ Compensation Premium Savings for CA Businesses Affected by COVID-19
june 15, 2020
june 10, 2020
- Note to the SBA: Debtors in Bankruptcy Are Eligible for PPP Loans
- California Modifies the Tolling of Statutes of Limitations in Civil Cases
june 8, 2020
- CCPA Enforcement Date Fast Approaching Regardless of COVID-19
- Hotels in California May Be Days Away From Reopening: What Hoteliers Need to Know
June 4, 2020
may 29, 2020
may 28, 2020
- House Introduces Pandemic Risk Insurance Act of 2020 in the Wake of COVID-19 Business Interruption Claims
may 27, 2020
- Hoteliers Beware: a Return to Business Post-Pandemic Brings With It Potential Legal Liability
- House Contemplates Revisions to the Paycheck Protection Program
may 15, 2020
may 14, 2020
- U.S. House Democrats Introduce HEROES Act, a New $3T Stimulus Package
- SAFE Banking Act for Cannabis-Related Businesses Included in the HEROES Act
may 12, 2020
may 8, 2020
- Treasury and the SBA Issue Guidance Regarding the Employee Retention Credit
- Businesses Reopen in Los Angeles County as Stage 2 of California’s Statewide Plan Begins
- Update: Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. County Ordinance
may 6, 2020
- SBA Extends PPP Certification Safe Harbor to May 14
- A 2008 Redux: IRS Provides Temporary Cash/Stock Dividend Relief for Publicly Offered REITs and RICs
- EPLI Insurance and Employee Benefits in the Age of the Coronavirus
may 5, 2020
- Update: PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
- NAIC Issues Business Interruption Data Call in the Wake of COVID-19
may 4, 2020
- PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
may 1, 2020
april 29, 2020
- Planning for Your Employees' Return to the Workplace
- Los Angeles Hospitality Workers Among Those Thrown a Potential Lifeline
april 24, 2020
- Attention Cannabis Businesses: Hope May Be on the Horizon for Federal COVID-19-Related Relief
- California Department of Insurance Issues Notice Granting Tax-Filing Extension in Response to COVID-19
- SEC Approves Amendments to Nasdaq and NYSE Continued Listing Requirements Due to the COVID-19 Pandemic
April 23, 2020
april 21, 2020
- Additional Funding Is on the Way to Resurrect the PPP
- Certifying Your PPP Loan: Proceed With Caution
april 17, 2020
april 16, 2020
- Employment in the Wake of Coronavirus: EEOC and OSHA Guidance Allows Employers to Go Where They Could Not Go Before
- New Yorkers Ordered to Stay at Home Even Longer Amid the COVID-19 Crisis
- Paycheck Protection Program Funds Exhausted
april 15, 2020
- Attention Insurers: the CDI Has Ordered You to Fairly Investigate All Business Interruption Insurance Claims Caused By the COVID-19 Outbreak
April 14, 2020
- Insurance Companies Have Been Ordered to Provide COVID-19-Related Premium Relief to Businesses and Drivers in California
- What to Do If Your New York Business Has Been Deemed Non-Essential
APRIL 13, 2020
- IP Deadlines and Fees Extended Under the CARES Act
- Employment in the Wake of Coronavirus: Reintegrating Your Workforce in the New Normal
APRIL 10, 2020
- You Successfully Applied for and Received a PPP Loan Under the CARES Act: Now What?
- Safer at Home Order in L.A. Extended to May 15
- Maintaining Your Trade Secrets During the Coronavirus Crisis
APRIL 9, 2020
april 8, 2020
- Congress Looks to Bolster the PPP With Another $250B in Funding
- U.S. Treasury Provides Further Guidance to PPP Borrowers and Lenders
- L.A. Mayor Amends COVID-19-Related Paid Sick Leave Ordinance
april 7, 2020
- Clarifying the Paycheck Protection Program: Payment of Insurance Premiums and Loan Forgiveness under the CARES Act
April 3, 2020
april 2, 2020
april 1, 2020
March 31, 2020
march 30, 2020
- Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. Ordinance
- Insurance Coverage Potentially Triggered by COVID-19
- Attention Insurers: CDI Orders Mandatory Call for Business Interruption Coverage Information in the Wake of COVID-19
- DOL Is Requiring Employers to Post Families First Employee Rights Notice
March 27, 2020
- A Comprehensive Guide to Understanding Coronavirus-Related State Assistance Programs: Who is Giving What to Whom (Part II)
- IRS Releases “People First Initiative” Temporarily Adjusting and Suspending Key Compliance Actions
- HHS Relaxing Enforcement of HIPAA to Facilitate Sharing of Information During the COVID-19 Crisis
March 26, 2020
march 25, 2020
march 24, 2020
- Navigating the Coronavirus Pandemic: a Critical Business Review Checklist
- SBA Loans for Companies Impacted by Coronavirus
- SEC Relaxes Federal Proxy Rules for Annual Meetings
march 23, 2020
- Federal Reserve Responds Boldly to Coronavirus-Related Economic Downturn
- The Number of Jurisdictions Implementing Stay-at-Home Orders Is Increasing Exponentially
- Michelman & Robinson’s Guide to Coronavirus-Related Paid Sick Leave and Unemployment Insurance Laws in the Tri-State Area
MARCH 21, 2020
- New Jersey Orders Its Residents to Stay Home
- “Essential Businesses”— What if I am Stopped?
- The IRS and States Provide Tax Relief in the Wake of the Coronavirus Pandemic
MARCH 20, 2020
- New York Governor’s PAUSE Order
- Illinois Governor’s Statewide Stay-at-Home Order
- Force Majeure Clauses in Commercial Real Estate Contracts
MARCH 19, 2020
- SEC Provides Regulatory Relief for Public Reporting Companies
- Student Loan Borrowers Can Breathe a Sigh of Relief, At Least Temporarily
- California Governor's Statewide Stay-At-Home Order
MARCH 18, 2020
- "Shelter in Place" Orders
- Telecommuting in the Age of Coronavirus
- Families First Coronavirus Response Act Just Passed by the Senate and Signed Into Law by the President
MARCH 17, 2020
- M&R Coronavirus Risk Mitigation Team: A Multi-Disciplinary Legal Team Ready To Immediately Address A Host Of Coronavirus-Related Issues for Businesses, Quickly And Holistically
MARCH 16, 2020
MARCH 5, 2020
U.S. Treasury Provides Further Guidance to PPP Borrowers and Lenders
APRIL 8, 2020
The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act has been active for less than a week, and already the consensus among borrowers and lenders alike is that the program is confusing and lacks clarity and certainty. Having apparently heard the rumblings, the U.S. Treasury, which is administering the PPP with the SBA, has issued additional guidance to address borrower and lender concerns.
The Treasury’s FAQs—released on April 7—are available here. Michelman & Robinson summarizes the most relevant clarifications.
Q: The CARES Act excludes from the definition of payroll costs any employee compensation in excess of $100,000. Does that $100,000 cap include all employee benefits of monetary value?
A: No, the $100,000 cap contemplates cash compensation only. Non-cash compensation (e.g., employer contributions to retirement plans, health insurance premiums, and payment of state and local taxes on employee compensation) does not count against the $100,000 cap.
Q: May borrowers contract with third-party payers, such as a payroll provider or Professional Employer Organization (PEO), to process payroll and report payroll taxes?
A: Yes, they can. The SBA recognizes that borrowers using PEOs or similar payroll providers may be required under state registration laws to report wage and other data on the Employer Identification Number (EIN) of the PEO. In these cases, such information can be submitted by borrowers for purposes of PPP loan payroll documentation. If relevant information from a borrower’s Schedule R (Form 941) and Employer’s Quarterly Federal Tax Return is unavailable, the borrower should obtain a statement from the payroll provider documenting the amount of wages and payroll taxes.
Note, a borrower’s employees will not be considered employees of the borrower’s payroll provider or PEO.
Q: May lenders use their own online portals and electronic forms to collect the same information and certifications as in the PPP’s Borrower Application Form?
A: Yes, lenders may use their own online portals and electronic forms for purposes of information gathering and borrower certifications; however, they are still required to send the collected data to the SBA using the SBA’s interface.
Q: When determining their payroll costs and number of employees to calculate maximum loan amounts, what time periods should borrowers use?
A: Generally, borrowers should use data either from (i) the previous 12 months or (ii) from calendar year 2019. Seasonal businesses may use average monthly payroll for the period between February 15, 2019, or March 15, 2019, and June 30, 2019. Applicants that were not in business between February 15, 2019 to June 30, 2019 may use the average monthly payroll costs from the period between January 1, 2020 to February 29, 2020.
Borrowers may use the same time periods to determine their number of employees. Alternatively, they can elect to use the SBA’s usual calculation: “the average number of employees per pay period in the 12 completed calendar months prior to the date of the loan application (or the average number of employees for each of the pay periods that the business has been operational, if it has not been operational for 12 months).”
Q: Are payments made by a borrower to an independent contractor or sole proprietor included in calculations of the borrower’s payroll costs?
A: No, these payments should be excluded from the borrower’s payroll costs. Parenthetically, independent contractors and sole proprietors may themselves be eligible for loans under the PPP.
Q: When determining its payroll cost for purposes of obtaining the maximum loan amount, allowable uses of PPP loan proceeds, and the amount of loan forgiveness, how should a borrower account for federal taxes?
A: Under the CARES Act, payroll costs are calculated on a gross basis, without regard to federal taxes imposed or withheld. Therefore, payroll costs are not reduced by taxes imposed on an employee and required to be withheld by the employer. That being said, payroll costs do not include the employer’s share of payroll taxes.
The Treasury provides an example: where an employee earned $4,000 per month in gross wages, from which $500 in federal taxes was withheld, $4,000 would be counted in payroll costs. The employee would receive $3,500 and $500 would be paid to the federal government; however, the employer-side federal payroll taxes imposed on the $4,000 in wages are excluded from payroll costs under the CARES Act.
We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.