fbpx
Search

Hoge Fenton Resources

07.07.2020 | Speaking Engagements & Firm Events


Meet Our Trusted Advisors

Sarju Naran is a zealous advocate for his clients, and approaches litigation with creativity and strategy. Chair of Hoge Fenton’s Employment Law Group, Sarju’s experience spans from representing middle-market and family-owned closely held businesses to large multi-national companies. He regularly litigates and provides advice and counsel to companies on wage and hour issues, trade secret misappropriation, employee mobility, wrongful termination, performance management, and leaves of absence.
Timothy Perotti is the partner in charge of the Assurance and Advisory Practice at Frank, Rimerman + Co. LLP. Working primarily out of the San Francisco and Palo Alto offices. TIm’s expertise includes revenue recognition, equity accounting, and mergers and acquisition transactions. He has over 20 years of experience providing technical accounting, financial reporting, and advisory services to businesses in the professional service, manufacturing, distribution, software, and high-technology industries.
Hon. Catharine Baker  is currently Special Counsel at Hoge Fenton in Pleasanton, California. Catharine was a Member of the California State Assembly for the 16th District from 2014 – 2018. During her legislative tenure, Catharine developed a reputation as an independent, bipartisan voice in the CA Legislature, fostering collaboration that led to breakthroughs in significant legislation, particularly on transportation, the environment, and government accountability.
Danny Bozzuto has been a broker at Bozzuto & Associates Insurance Services since 2010. Danny developed Bozzuto’s Human Resources Services and Technology programs in the Bay Area and Southern California. He has served on advisory committees, participated as a panelist for risk management, and developed exclusive programs for Bozzuto. Danny has also taken on an additional role of maintaining Bozzuto’s carrier relations.

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


07.02.2020 | Firm Post

Thank you to everyone who attended our Reopening California webinar on June 30, 2020 with Hoge Fenton Employment Law Chair Sarju Naran, Frank, Rimerman + Co. LLP Audit Partner Tim Perotti, and President of Kabateck Strategies and California State Director of the National Federation of Independent Business, John Kabateck. Please click below to watch the recorded webinar.

We hope you found the discussion with our panel helpful. Please do not hesitate to reach out to webinars@hogefenton.com if you need more guidance and visit our Reopening California Resources page for additional support.

Shareholder, Chair
Employment Law
Hoge Fenton
+1.408.947.2456
Partner
Assurance & Advisory
Frank Rimerman + Co. LLP
+1.415.439.1147
President
Kabateck Strategies
CA State Director – NFIB
+1.916.647.5592

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


06.19.2020 | Speaking Engagements & Firm Events

If you are a school administrator with 50+ employees, please join this roundtable discussion on returning employees to the workplace with Hoge Fenton Employment Law Chair Sarju Naran, Nathalie McManamon from Filice Insurance Agency, and Jennifer Anderson from Bozzuto & Associates Insurance Services on June 25th.


06.19.2020 | Firm Post

On June 16, 2020, the U.S. Small Business Administration (“SBA”) released:

  • an updated Loan Forgiveness Application, and
  • an Alternative Loan Forgiveness Application for certain borrowers to implement the PPP Flexibility Act (“PPP Flex”), and
  • a revised interim final rule (the “IFR”) on June 17, 2020 implementing changes from the PPP Flex.

The updated Loan Forgiveness Application covers the following changes:

  • Alternative Payroll Covered Period applies to the 24-week (168-day) covered period; provided the Alternative Payroll Covered Period does not extend beyond December 31, 2020. Note: if a Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) covered period.
  • Clarifies one of the Full Time Employee (FTEs) reduction exceptions: A position will not be included in the calculation if the Borrower made a good-faith, written offer to rehire an employee who was employee on February 15, 2020 AND the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020.
  • Changes the documentation required for FTEs from the average number of FTEs per month to the average number of FTEs per week.
  • Employer health insurance and retirement contributions for business owners: employer health insurance and employer retirement contributions on behalf of a self-employed individual, general partners, or owner-employees of an S-corporation should not be included in the health insurance expenditures calculation or retirement expenditures calculation, respectively.

A copy of the updated application is here and the instructions are here.

A shortened version of the forgiveness application is available for the following borrowers:

  • Self-employed, independent contractors, or sole proprietors with no employees;
  • Borrowers who did not reduce salaries by more than 25% during the covered period and did not reduce the number of employees or the average paid hours of employees from January 1, 2020 to the end of the Covered Period (ignoring reductions from the safe harbor related to an inability to hire qualified employees, and reductions due to an employee refusing to accept a restoration of hours); and
  • Borrowers who did not reduce salaries by more than 25% during the covered period and were unable to operate during the covered period at the same level of business activity due to COVID-19 related safety requirements promulgated by the CDC, HHS, or OSHA.

The Alternative Loan Forgiveness Application is here and the instructions are here.

The SBA also released a revised interim final rule (the “IFR”) on June 17, 2020 implementing changes from the PPP Flex. The IFR provides the following:

Increases the cap on individual employees’ salaries from $15,385 during the 8-week covered period to $46,154 during the 24-week covered period.

Increases the cap on owner compensation from $15,835 during the 8-week covered period, to $20,833 for a 24-week covered period.

For sole proprietors: business mortgage payments, business rent payments, and business utility payments, as listed on Form 1040 Schedule C, are now included as amounts eligible for forgiveness.

Loan forgiveness amount cap: the amount of loan forgiveness is capped by the full principal amount of the loan plus accrued interest.

A copy of the IFR can be found here.

Our experienced team of attorneys are available to further assist you with any more questions or concerns you may having regarding PPP Forgiveness and PPP Flex.

Of Counsel
Corporate & Bus Law
+1.925.460.3367
Shareholder/Chair
Estates & Trusts
+1.408.947.2437
Attorney
Corporate & Bus Law
+1.925.460.3370
Shareholder, Chair
Employment Law
+1.408.947.2456
Shareholder
Real Estate & Commercial
+1.925.460.3365

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


06.17.2020 | Speaking Engagements & Firm Events

As California businesses reopen, they are faced with many challenges. This webinar will address two key issues for businesses:

  • PPP Forgiveness Update: PPP guidance continues to evolve, and the PPP Flexibility Act has created new options. Our trusted advisors will cover what business owners need to know to maximize the use and forgiveness of PPP funds.
  • Return to Work Guidance: The process of returning to the workplace raises several questions around continuing remote work, creating a safe work environment, avoiding liability, and employer obligations to employees who are caregivers, among other considerations. Our trusted advisors will provide guidance on these issues and discuss best practices.

Meet Our Trusted Advisors

Sarju Naran is a zealous advocate for his clients, and approaches litigation with creativity and strategy. Chair of Hoge Fenton’s Employment Law Group, Sarju’s experience spans from representing middle-market and family-owned closely held businesses to large multi-national companies. He regularly litigates and provides advice and counsel to companies on wage and hour issues, trade secret misappropriation, employee mobility, wrongful termination, performance management, and leaves of absence.
Timothy Perotti is the partner in charge of the Assurance and Advisory Practice at Frank, Rimerman + Co. LLP. Working primarily out of the San Francisco and Palo Alto offices, TIm’s expertise includes revenue recognition, equity accounting, and mergers and acquisition transactions. He has over 20 years of experience providing technical accounting, financial reporting, and advisory services to businesses in the professional service, manufacturing, distribution, software, and high-technology industries.
John Kabateck is the owner and president of Kabateck Strategies, a full scale public affairs firm specializing in strategic position, coalition development and engagement and issue advocacy campaigns to help clients achieve their goals. John has been raising the relevance of people, associations, and causes with the California policymakers who shape their future for more than a quarter of a century. He was recruited by America’s voice of small business, the National Federation of Independent Business, as its California state director.

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


06.08.2020 | Firm Post

A breath of fresh air for PPP borrowers! The Senate unanimously passed the “Paycheck Protection Program Flexibility Act of 2020” (H.R. 7010) (the “PPP Flex”) on Wednesday (6/3) evening and the President signed it into law today. The PPP Flex addresses many concerns with the PPP loan program and relaxes some of the requirements in the original PPP program. We expect the Treasury and the SBA to issue more guidance on the PPP Flex in the near future. Although the PPP Flex offers some relief and clarity, there are new considerations. Borrowers who already plan on using the PPP funds within the original 8 week covered period can choose to do so and may decide to request loan forgiveness as soon as possible. Below is a list of major changes covered in the PPP Flex bill:

Update PPP / Initial SBA Guidance  PPP Flex
1) Extended Loan Forgiveness Covered Period
8 weeks (56 days) from receipt of loan proceeds, or from first date of payroll period after receipt of loan proceeds for those eligible to apply “Alternative Payroll Covered Period”.
Earlier of 24 weeks or December 31, 2020. Borrowers who received a PPP loan before the date of the enactment of PPP Flex may retain the 8 week covered period.
2) Lower Payroll Cost Percentage Requirement At least 75% of loan proceeds must be spent on eligible payroll costs, otherwise the loan forgiveness amount will be proportionally reduced.
At least 60% of loan proceeds must be spent on eligible payroll costs. This now appears to be a cliff. (i.e., a Borrower who spends only 59% on eligible payroll costs will receive no forgiveness)*
[* Note: Subject to SBA regulation to determine if it is a cliff, but the current statutory language suggests it is a cliff ] 
3) Extended Reduction in Work Force Safe Harbor Rehire Date June 30th deadline to rehire employees separated between February 15, 2020 and April 26, 2020, to avoid a reduction in loan forgiveness. December 31, 2020 deadline to rehire employees separated between February 15, 2020 and April 26, 2020, to avoid a reduction in loan forgiveness.
4) New Exceptions for Borrowers who do not hire/rehire workers before the Rehire Date No reduction in loan forgiveness if the Borrower offers reemployment and workers reject the offer to return to work.
New exceptions (in addition to the prior exception) if the Borrower:
  • Could not rehire employees who were employed as of February 15, 2020; or
  • Could not find qualified employees to hire by December 31, 2020; or
  • Could not restore business to pre-February 15, 2020 level of activity because of social distancing or other federal health guidance/requirements
5) Longer Repayment Period 2 years  5 years (for loans after the enactment of PPP Flex; existing PPP borrowers might ask lenders to extend the loan.
6) Deferral of Employer Share of Payroll Taxes Not available for a Borrower who had the PPP loan forgiven.  Available for all PPP borrowers regardless of forgiveness status; allows Borrowers to defer payment of 50% of payroll taxes until 2021, with the remaining 50% due in 2022.  

Our experienced team of attorneys are available to further assist you with any more questions or concerns you may having regarding the Paycheck Protection Program Flexibility Act of 2020.

Of Counsel
Corporate & Bus Law
+1.925.460.3367
Shareholder/Chair
Estates & Trusts
+1.408.947.2437
Attorney
Corporate & Bus Law
+1.925.460.3370
Shareholder, Chair
Employment Law
+1.408.947.2456
Shareholder
Real Estate & Commercial
+1.925.460.3365

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


06.04.2020 | Firm Post

We are Here to Help

Hoge Fenton understands that our clients, employers, and organizations may have numerous questions and concerns about reopening their business. As you begin to face the business and legal implications of the COVID-19 crisis, our attorneys remain committed to assisting you overcome these obstacles.

To provide some guidance on some of the issues that have affected or will be affecting businesses, we have created a Reopening California resources page to support you in the following areas:


This information is provided as an educational service by Hoge Fenton for clients & friends of the firm. This communique is an overview only, & should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


05.27.2020 | Firm Post

Thank you to everyone who joined us for our “Returning to Work During the COVID-19 Pandemic” webinar. Please click below to watch the recorded webinar.

We hope you found the discussion with Employment Law Chair, Sarju Naran helpful during this unprecedented time. Please reach out to our advisors below if you need more guidance and visit our COVID-19 Resources page for additional support.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


05.26.2020 | Firm Post

This paper is provided as an educational service. It is an overview only, and should not be construed as legal advice or advice to take any specific action. If you have questions regarding any of the content contained in this presentation, we recommend you seek the assistance of a knowledgeable legal professional.

California employers’ concerns regarding the coronavirus pandemic have come in waves:

  • initial concerns over health and safety
  • the impact of county and state shelter-in-place orders
  • whether each business was an essential business
  • whether and how to furlough or lay off employees
  • compliance with the FFCRA
  • whether businesses qualify for a PPP loan and how to maximize forgiveness

Employers are now shifting their focus to how, when, and if to bring employees back to work.

In considering these issues, employers should be mindful to protect themselves against lawsuits, including what we anticipate will be a flood of class action lawsuits by employees.

Working From Home

Where feasible, employers will likely have some employees continue to work from home, if only to enable social distancing at the worksite.

Managing a remote workforce comes with its challenges, regardless of the circumstances. When the shelter-in-place orders went into effect, employers moved quickly to shift to working from home. Most employers did not have time to consider the risks and to put safeguards in place. However, as remote working becomes an ongoing and potentially long-term option, employers should ask remote employees to enter into a Work From Home Agreement, which can address issues such as:

  • protecting the security of your company’s confidential property and information,
  • managing employee availability and work hours
  • designating a worksite to mitigate workers’ compensation exposure
  • other relevant issues

Recommendation:

Employers should ask remote employees to enter into a Work From Home Agreement.

Working from home does not eliminate employers’ wage and hour obligations to provide timely, compliant meal periods, adequate rest breaks, and pay for all hours worked. It may be even more tempting for employees to not record their time. For instance, an employee could easily check their email off-hours and not record their time because they are trying to work while also caring for and homeschooling their children. Wage and hour claims are frequently the source of class actions and Private Attorney General Act claims.

Recommendation:

To the extent possible, employers should communicate clearly with non-exempt employees regarding timekeeping practices, meal periods and rest breaks, and off the clock work. Employers should also continue to monitor employee time records to manage these issues.

Employers should also determine whether any municipal ordinances in cities where remote employees live (and therefore work) require that you modify your sick leave accruals and balances, minimum wages, or grant employees additional leaves of absence or benefits. San Francisco, for example, has a Family Friendly Workplace Ordinance, which gives eligible employees the right to request a flexible or predictable work arrangement to assist with care for elderly parents, persons with serious health conditions, and children under the age of 18.

Recommendation:

  1. Create a list of cities where employees live.
  2. Check the cities’ municipal ordinances to determine if modifications are necessary to your policies, including, for example, sick leave accruals and balances, minimum wages, or leaves of absence or benefits.

Employers also have an obligation to reimburse employees for all necessary and reasonable business expenses. If employees are working from home for the employer’s benefit, employees may have a right to reimbursement of all sorts of expenses, including their home internet costs, increased utility fees, and possibly even light bulbs, batteries, and toilet paper!

Recommendation:

  1. Determine whether employees are working from home for your company’s benefit.
  2. For those employees working from home for your company’s benefit, contact an employment attorney to determine what expenses may be reimbursable.

If employers do have to separate employees who are remote, employers should prepare in advance to ensure they can timely pay final wages. California requires final wages be paid within 24 hours of the separation (essentially, the same day) when the employer terminates the employment relationship. That’s more challenging when you cannot simply hand your employee a check and walk them out the door.

Returning to Work

The most pressing concern for employers who are working to bring employees back to work once state and county orders permit is do follow all guidance and requirements for social distancing protocols (Bay Area counties, for instance, require employers to post a “Social Distancing Protocol” at each facility substantially in the form of Appendix A to the Shelter-in-Place Order), provide proper protective equipment, ramp up disinfecting practices, screen employees for symptoms, and otherwise provide for the health and safety of their employees (and customers, if permitted by county and state orders). The state has issued guidance by industry. California Governor Gavin Newsom signed an executive order creating a rebuttable presumption that employees who contract COVID-19 are entitled to workers’ compensation benefits if the employee tested positive for or was diagnosed with COVID-19 within 14 days after a day (on or after March 19, 2020) that the employee performed labor or services at the employee’s place of employment (and not the employee’s home or residence) at the employer’s direction.

Employers who are screening employees’ symptoms and temperatures should be careful to avoid retaining and disclosing medical information so as not to run afoul of privacy rights. Taking employee temperatures is, in “normal” times, an impermissible medical examination, but the EEOC has permitted taking employee temperatures during the current pandemic.

Even with all the precautions, some employees may be unwilling to return to work. While ordinarily employers have the right to discipline and/or terminate employees who refuse to work, employers may not do so if employees have a good faith believe that there is a real danger of death or serious injury and meet various conditions, including asking the employer to eliminate the danger. Even if such fear is not credible, employees may have a mental disability, such as anxiety, which employers may need to accommodate.

Recommendation:

  1. Follow all guidance and requirements for social distancing protocols (Bay Area counties, for instance, require employers to post a “Social Distancing Protocol” at each facility substantially in the form of Appendix A to the Shelter-in-Place Order).
  2. Provide proper protective equipment.
  3. Ramp up disinfecting practices.
  4. Create a procedure to screen employees for symptoms that preserves employees’ privacy rights
  5. Otherwise provide for the health and safety of your employees (and customers, if permitted by county and state orders).
  6. Review the state’s guidance by industry for additional clarification for your industry.
  7. Consider your response to employees want to continue to work from home and not return to the workplace.

Other Potential Legal Landmines

Employers face other threats of litigation:

  • Harassment, Discrimination, and Retaliation. Reports of mistreatment or harassment of Asian-Americans is on the rise and may lead to an increase in harassment and discrimination claims on the basis of race. Further, layoffs, furloughs, reductions in pay, and hiring/re-hiring employees give rise to risks of harassment, discrimination, and retaliation claims where decisions have a disparate impact on employees of a protected class or where employees are treated differently on the basis of protected class (e.g., treating high-risk employees, such as those with disabilities or older employees, differently than other employees).
  • WARN/CalWARN. Furloughs and layoffs may also trigger WARN and CalWARN, statutes that require employers provide advance notice to employees of terminations.
  • Exempt Employees. As employers shuffle duties around to address having fewer people working, employers may jeopardize exempt employees’ classifications if they are no longer performing exempt tasks at least 50% of their time worked. Similarly, reducing exempt employee pay below the minimum salary threshold will result in a loss of the exemption.
  • FFCRA and other leave statutes. Employers with fewer than 500 employees also have new obligations with respect to paid sick leave and expanded family and medical leave requirements under the Families First Coronavirus Response Act (FFCRA). And some jurisdictions have imposed additional temporary obligations on employers, even if they are not subject to the FFCRA.

Phew! With all that and more to consider, even the most well-intentioned employers can trip up, especially as they struggle to navigate this new territory we’re all facing. While you cannot eliminate all risk, relying on your employment law attorneys will help you mitigate risk as you move forward.

Please reach out to our advisors below if you need more guidance or visit Hoge Fenton’s COVID-19 Resources page.

Shareholder, Attorney
+1.408.947.2435
Shareholder, Chair
+1.408.947.2456

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


05.22.2020 | Firm Post

Thank you to everyone who joined us for our “Managing a Remote Workforce” webinar last Wednesday.

Please find the recording of the webinar below.

We hope you found the discussion helpful. Please reach out to our advisors below if you need more guidance and visit our COVID-19 Resources page for additional support.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


05.19.2020 | Firm Post

On the evening of Friday, May 15, the SBA released long-awaited guidance for borrowers looking to claim forgiveness of their Paycheck Protection Program (“PPP”) loans.

The PPP Loan Forgiveness Application provides detailed instructions for borrowers to calculate the amount of their PPP loan forgiveness. The application has four parts:

  1. the PPP Loan Forgiveness Calculation Form;
  2. PPP Schedule A;
  3. the PPP Schedule A Worksheet; and
  4. an optional PPP Borrower Demographic Information Form.

Borrowers are required to submit the Calculation Form and PPP Schedule A to their lender.

What Costs are Eligible for Forgiveness?

The SBA’s guidance provides for four broad categories of costs that are eligible for forgiveness:

  1. payroll costs;
  2. business mortgage interest payments;
  3. business rent or lease payments; and
  4. business utility payments.

In accordance with prior guidance, the SBA requires that at least 75% of the forgiven amount be attributable to payroll costs.

Calculation of Eligible Payroll Costs for Forgiveness

The SBA’s guidance allows a PPP borrower to deduct payroll costs paid or incurred during the borrower’s eight-week (56 day) “Covered Period,” which is defined as the eight-week period that begins on the date the PPP loan was disbursed, or an Alternative Payroll Covered Period.

Alternative Covered Period

The strict eight-week Covered Period may not align with a borrower’s actual pay period. In these cases, the Alternative Covered Period may be used. The Alternative Payroll Covered Period allows Borrowers with a biweekly (or more frequent) payroll schedule to choose a 56 day period that begins on the first day of their first pay period following their PPP Loan Disbursement Date.

  • Example: Borrower received its PPP loan proceeds on Monday, April 20. The first day of its first pay period following its PPP loan disbursement is Sunday, April 26. Therefore, the first day of the Alternative Payroll Covered Period is April 26 and the last day of the Alternative Payroll Covered Period is June 20 (a Saturday).

Borrowers who elect to use the Alternative Payroll Covered Period must apply the Alternative Payroll Covered Period wherever there is a reference in this application to “the Covered Period or the Alternative Payroll Covered Period.”

Note: The Alternative Payroll Covered Period applies to Payroll expenses only! Borrowers must apply the Covered Period (not the Alternative Payroll Covered Period) for other costs!

Date when Payroll Costs are Considered to be Paid

Payroll costs are considered paid on the day that paychecks are distributed or the day that the borrower originates an ACH credit transaction. Payroll costs are considered incurred on the day that the employee earned the pay. This distinction allows employers some flexibility in timing their use of PPP funds.

If a payroll cost is incurred but not paid during the borrower’s last pay period of the Covered Period or the Alternative Payroll Covered Period, that payroll cost is still eligible for forgiveness if the borrower pays it by its next regular payroll date. Otherwise, all payroll costs must be paid during the Covered Period or the Alternative Payroll Covered Period.

Calculation of Eligible Non-Payroll Costs for Forgiveness

Non-payroll costs eligible for forgiveness consist of the following three categories:

  • Covered mortgage obligations: Payments of interest (any prepayment or payment of principal is excluded) on any business mortgage obligation on real or personal property incurred before February 15, 2020.
  • Covered rent obligations: Business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020.
  • Covered utility payments: Business utility payments during the Covered Period for business utilities for which service began before February 15, 2020. Allowable business utility payments include payments for electricity, gas, water, transportation, telephone, or internet access.

An eligible non-payroll cost must be either:

  • paid during the Covered Period, or
  • incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period.

Eligible non-payroll costs cannot exceed 25% of the total forgiveness amount. Borrowers are to count non-payroll costs that were both paid and incurred only once.

Determining Full-Time Equivalency of Employees

The CARES Act, which created the PPP, provided that a borrower’s forgiveness amount is limited if there is a reduction in the average number of full-time equivalent employees during the Covered Period as compared to a past reference period.

The SBA’s guidance provides rules for calculating the average full-time equivalency (“FTE”).

  • Borrowers calculate the average number of hours paid per week for each employee during the Covered Period or the Alternative Payroll Covered Period.
  • This number is divided by 40, and rounded the total to the nearest tenth an hour. The maximum for each employee, however, is capped at 1.0. Alternatively, borrowers can use a simplified method that assigns a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours may be used at the borrower’s election.

Borrowers should be relieved to learn that the SBA’s guidance provides several exemptions to the FTE reduction rules that would otherwise limit the borrower’s forgiveness. For example, a borrower will not be penalized for FTE reductions that result from either of the following circumstances:

  • Reductions related to any positions for which the borrower made a good-faith, written offer to rehire an employee during the Covered Period or the Alternative Payroll Covered Period that was rejected by the employee.
  • Reductions related to any employees who during the Covered Period or the Alternative Payroll Covered Period (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours

Overall, the PPP Loan Forgiveness Application and associated guidance provides some much needed clarity for borrowers. Please note there is more information provided in the guidance than is covered by this communication. Please reach out to any of our Hoge Fenton attorneys below for further information.

 

Of Counsel
Corporate & Bus Law
+1.925.460.3367
Attorney
Corporate & Bus Law
+1.925.460.3370
Jenn Protas
Shareholder
Employment Law
+1.408.947.2435
email here
Sarju Naran
Shareholder/Chair
Employment Law
+1.408.947.2456
email here

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


5.13.2020 | Speaking Engagements & Firm Events

Get More Information and Register for these Valuable Webinars:

As the situation with the COVID-19 pandemic and resulting shelter-in-place orders continues to shift, employers are evaluating when, how, and if they should return their employees back to the workplace. With that decision, employers must evaluate a number of issues to ensure their employees’ safety and limit employer liability, whether employees return to work or work from home.

Managing a remote workforce comes with its own challenges. With the unexpected shift to working from home when the shelter-in-place orders went into effect, most employers did not have time to consider the risks and to put safeguards in place. However, as remote working becomes an ongoing and potentially long-term option, employers should take the time to consider the following:

  • Have you taken sufficient security measures to protect the company’s confidential information and other private information? How do your employees ensure that their new “coworkers” (e.g., roommates, spouses, children) do not have access to your confidential information?
  • How are you tracking and paying non-exempt employees for their time? Are non-exempt employees taking meal and rest breaks, working overtime, working off-the-clock? And if employees take breaks in the middle of the day to home school their children, do you owe a split shift premium?
  • What are necessary and reasonable business expenses for which you must reimburse your employees? Are you required to reimburse your employees for home internet and cell phones? What about home office space, increased utility costs, light bulbs, soap, and toilet paper?
  • Have you complied with municipal ordinances (e.g., paid sick leave, minimum wage) in effect where your employees are working?
  • If your employee slips and falls in their kitchen while making their lunch, is that covered by workers’ compensation?
  • If you have to terminate the employment relationship, how do you ensure you pay final wages timely?

With respect to returning to work, employers must consider a different host of issues, including:

  • How do you determine who must come back to work and avoid discrimination claims? Can you prohibit high-risk employees from returning to work?
  •  Can and should you test employees and/or take their temperature and monitor their symptoms?
  • How do you ensure employee safety?
  • Must you accommodate employees who cannot return to work because their childcare providers are not available?
  • Can you require employees to return to work or terminate them for refusing to return to work if they are scared, nervous, or anxious about contracting COVID-19?
  • What are your obligations if an employee contracts COVID-19 at work? Is this covered by workers’ compensation?

Hoge Fenton’s Employment Law team will host a two-part webinar series to cover these issues:

Click below to register for each webinar:

 

 

Please reach out to our advisors below if you need more guidance or visit our COVID-19 Resources page.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


05.05.2020 | Firm Post

A Glimpse of Guidance on PPP Loan Forgiveness

For those employers fortunate enough to secure PPP loans, the big question remains how to ensure full loan forgiveness. With lingering questions, such as how to count “FTEs,” and will headcount be considered “reduced” if an employee takes a leave of absence or quits during the 8-week covered period, the Department of Treasury has offered little by way of clarity on the loan forgiveness component of the PPP thus far, but promises that guidance is on the way. That said, on Sunday night, May 3, 2020, the Small Business Administration (SBA), in consultation with the Treasury, added guidance to its PPP FAQs on the issue of whether employers’ loan forgiveness will be reduced if a laid-off employee declines an offer of re-employment. Specifically, FAQ #40 provides:

Question: Will a borrower’s PPP loan forgiveness amount (pursuant to section 1106 of the CARES Act and SBA’s implementing rules and guidance) be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer?

Answer: No. As an exercise of the Administrator’s and the Secretary’s authority under Section 1106(d)(6) of the CARES Act to prescribe regulations granting de minimis exemptions from the Act’s limits on loan forgiveness, SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation. The interim final rule will specify that, to qualify for this exception, the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.

In an unprecedented era where many employers are competing against increased unemployment insurance benefits (employees are eligible for $600 per week more than normal), the SBA’s guidance is positive news for employers because it means two things: (1) if employees decline to return to work, it will not reduce the employer’s loan forgiveness under the PPP, and (2) employees are incentivized to return to work because declining work will likely render them ineligible for unemployment insurance benefits.

We look forward to further guidance on PPP loan forgiveness and will continue to keep our clients and friends of the firm informed. For now, click here for the SBA’s most recent set of FAQs (from May 3, 2020) on the Paycheck Protection Program.

If you have any additional questions, please contact Sarju Naran.

Shareholder/Chair
Employment Law
+1.408.947.2456

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


05.01.2020 | Speaking Engagements & Firm Events

Free Webinar: Employment Issues Relating to COVID-19

 


04.24.2020 | Firm Post

Thank you to everyone who joined us for our “Your COVID-19 Funding and Employment Questions Answered!” webinar yesterday.
Please find the recording of the webinar below.
We hope you found the discussion helpful. Please reach out to our advisors below if you need more guidance and visit our COVID-19 Resources page for additional support.
Sarju Naran
Hoge Fenton
Shareholder/Chair
Employment Law
+1.408.947.2456
email here
Steve Tessler
California Bank of Commerce
Executive VP
+1.510.499.9509
email here
Jenn Protas
Hoge Fenton
Shareholder
Employment Law
+1.408.947.2435
email here
Ray Scheaffer, CPA
Abbott, Stringham & Lynch
Principal
+1.408.377.8700
email here
Darlene Chiang
Hoge Fenton
Of Counsel
Corporate & Bus Law
+1.925.460.3367
email here

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton

04.24.2020 | Firm Post

COVID-19 Federal Aid Alternatives to PPP and EIDL

Although Congress passed another round of funding this week for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs), due to unprecedented need these programs will likely reach their capacity within a few weeks, if not days. There are, however, alternatives to the PPP and EIDL that are important to highlight.

Main Street Lending Program

The Federal Reserve (the “Fed”) established the Main Street Lending Program (the “Program”) to support lending to small and medium-sized businesses that were in good financial standing before the COVID-19 pandemic. The program operates through two arms: the Main Street New Loan Facility and the Main Street Expanded Loan Facility. While the Main Street Lending Facility process remains undefined, the following information is known about it :

  • This program is offering loans of as little as $1 million and as much as $150 million to businesses with up to 10,000 employees or $2.5 billion in 2019 revenue.
  • This is a $600 billion program.
  • The Fed is expected to release additional guidance on the loan application and bank underwriting requirements shortly.
  • Banks are not yet able to take applications.

Other Alternatives to the PPP and EIDL:

Here are two alternatives to the PPP and EIDL that may provide some assistance:

  • The Employee Retention Credit (“ERC”)
    • The ERC provides a refundable payroll tax credit for 50% of the wages paid by employers during the COVID-19 pandemic up to $5,000 per employee per quarter. This credit is applied to the employer’s quarterly tax liability reported on Form 941.
      • An employer who receives a loan under the Paycheck Protection Program is ineligible for the ERC.
      • Eligible employers must fall into one of two categories:
        • The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter (a “COVID-19 Related Closure”).
        • The employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the employer’s gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter (a “COVID-19 Impact”).
  • The tax credit is provided for the first $10,000 of compensation paid to an employee and is based on qualified wages paid.
  • For employers with more than 100 employees, “qualified wages” are all wages paid to only those employees who are being paid not to work. If employers with 100 or fewer employees, the credit is based on wages paid to all employees, regardless if they worked or not. If the employees worked full time and were paid for full time work, the employer still receives the credit.
  • “Qualified wages” also include the employer’s contribution to health-insurance costs (subject to the cap of $10,000) but exclude any amounts already received as tax credit.
  • No application is required for the ERC. Eligible employers simply claim a payroll credit against its 6.2% of Social Security tax equal to 50% of the qualified wages it paid during the applicable quarter.
  • The refundable ERC is reported on the eligible employer’s return beginning in the second quarter for reporting its liability for Federal Insurance Contributions Act (“FICA”) and Railroad Retirement Tax Act, as applicable. For FICA tax purposes, the quarterly Form 941 is used for reporting for most employers.
  • The Internal Revenue Service (“IRS”) does not require a business to wait until it files its payroll tax return to claim the ERC. Instead, eligible employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees’ wages by the amount of the credit. If the eligible employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.
  • The credit is claimed on a quarterly basis and is applicable to wages paid between March 13, 2020, and December 31, 2020, for any quarter the business suffered a COVID-19 Related Closure or a COVID-19 Impact.
  • Employer Payroll Tax Deferral
    • Employers can defer without penalty the deposit and payment of applicable employment taxes due for the rest of year.
    • Fifty percent (50%) of the deferred taxes must be repaid by December 31, 2021, with the remaining due by December 31, 2022.
    • “Applicable employment taxes” include the employer’s portion of the social security tax that would otherwise be required to be made from March 27 until December 31, 2020.
    • Employers who receive a loan under the Paycheck Protection Program are not eligible for this payroll tax deferral once their loan is forgiven.
    • Except for the limitation for employers who receive a loan under the Paycheck Protection Program, all employers are eligible for the payroll tax deferral.

If you have any questions about how these provisions of the CARES Act may apply to your business, please contact Hoge Fenton’s COVID-19 Rapid Response Team.

Embert Madison, Jr.

Attorney

Corporate & Bus Law

+1.925.460.3370

email here

Darlene Chiang

Of Counsel

Corporate & Bus Law

+1.925.460.3367

email here

Sarju Naran

Shareholder/Chair

Employment Law

+1.408.947.2456

email here


This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


04.16.2020 | Speaking Engagements & Firm Events


Join our trusted advisors at California Bank of Commerce, Abbott Stringham & Lynch CPAs, and Hoge Fenton as they provide a “Situation Room” update and answer your questions about COVID-19 funding and employment law issues.
In this exclusive complimentary webinar, our panel will discuss:

  • The current status of PPP, EIDL, and other government loan programs
  • Updates on federal, state, and local guidance for managing employee furloughs, FFCRA paid leave, and unemployment insurance benefits
  • Tax strategies and implications of government programs

Meet our Trusted Advisors:

Sarju Naran
Hoge Fenton
Shareholder/Chair
Employment Law
+1.408.947.2456
email here
Steve Tessler
California Bank of Commerce
Executive VP
+1.510.499.9509
email here
Jenn Protas
Hoge Fenton
Shareholder
Employment Law
+1.408.947.2435
email here
Ray Scheaffer, CPA
Abbott, Stringham & Lynch
Principal
+1.408.377.8700
email here
Darlene Chiang
Hoge Fenton
Of Counsel
Corporate & Bus Law
+1.925.460.3367
email here

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


04.10.2020 | Firm Post


On April 7, 2020, the San Jose City Council enacted the “COVID-19 Paid Sick Leave Ordinance” (the “Ordinance”). The Ordinance, which takes effect immediately, is meant to fill the gaps left by the federal Families First Coronavirus Response Act (“FFCRA”). The Ordinance requires employers that are not subject to the FFCRA’s Emergency Paid Sick Leave to provide employees who have worked at least 2 hours within the city with paid sick leave benefits if the employee cannot work for any of the following reasons:

  • The employee is subject to quarantine or isolation by federal, state, or local order due to COVID-19, or is caring for someone who is quarantined or isolated due to COVID-19;
  • The employee is advised by a health care provider to self-quarantine due to COVID-19 or is caring for someone who is so advised;
  • The employee experiences symptoms of COVID-19 and is seeking a medical diagnosis;
  • The employee is caring for a minor child because a school or daycare is closed due to COVID-19.

Sick Leave Details:

  • Full-time employees are entitled to 80 hours of paid sick leave.
  • Part-time employees are entitled to sick leave hours equal to the number of hours worked on average over a two-week period (using the average number of hours the employee worked per day between November 8, 2019 and April 7, 2020).
  • If an employee uses paid sick leave for themselves, they shall be paid their regular rate of pay up to $511.00 per day, not to exceed an aggregate of $5,110.00.
  • If the employee is using sick time to care for another person, they may be paid at two-thirds of their regular rate of pay up to $200.00 per day, not to exceed an aggregate of $2,000.00.
  • Paid sick leave benefits are available for an employee to use immediately.

The Ordinance does contain a few notable exemptions:

  • First, the Ordinance does not apply to employees who can work from home.
  • Second, if an employer already provides employees with paid personal leave equivalent to the paid sick time required by the Ordinance, they need not provide additional paid sick leave. To the extent that there is a differential between what the employer provides and what is required by the Ordinance, the employer need only provide paid sick leave in the amount of that differential.
  • Finally, the Ordinance gives employers that are hospitals two weeks from the Ordinance’s effective date (April 7, 2020) to comply with its requirements.

The FFCRA’s Emergency Paid Sick Leave exempts employers with more than 500 employees, authorizes the Department of Labor to exempt businesses with less than 50 employees if doing so would jeopardize the viability of the business, and authorizes an employer to elect not to provide the benefit to employees who are health care providers or emergency first responders. Such exemptions do not exist in the Ordinance.

Unlike the FFCRA’s Emergency Paid Sick Leave, the Ordinance does not mention tax credits. Thus, although small businesses with less than 50 employees may claim an exemption from the FFCRA, businesses should reconsider doing so because, pursuant to the Ordinance, small businesses will still be required to provide paid sick leave but may be deprived of claiming any tax credits.

The Ordinance is in effect until December 31, 2020.

For additional legal information regarding COVID-19, please visit our COVID-19 Resources website .

Hoge Fenton’s Employment Law team is here to provide you with additional support throughout the COVID-19 pandemic. Please contact any of us below.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


04.09.2020 | Firm Post


Thank you to everyone who joined us for our Families First Coronavirus Response Act (“FFCRA”) Leave and the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) Webinar last Tuesday.
Please find the recording of the webinar below.
We hope you found the discussion helpful. Please reach out to our advisors below if you need more guidance and visit our COVID-19 Resources page for additional support.

Our Trusted Silicon Valley Advisors

Chair/Shareholder
Employment Law
+1.408.947.2456
Shareholder
Employment Law
+1.408.947.2435
Of Counsel
Corporate & Business Law
+1.925.460.3367

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


04.03.2020 | Speaking Engagement & Firm Events

We are hosting a complimentary webinar on these laws
Tuesday, April 7 at 12:00pm
Register here

As discussed in our recent articles the federal government has passed two monumental acts of legislation to address the COVID-19 pandemic: the Families First Coronavirus Response Act (“ FFCRA ”) and the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act ”). The federal departments have now issued regulations and guidance on both the FFCRA and the CARES Act to assist employers in interpreting and applying the new laws to their workplace.

Please join Hoge Fenton’s team for a complimentary webinar on Tuesday, April 7, 2020 at 12:00pm, where we will discuss and answer questions regarding these new laws, regulations, and guidance.

Hoge Fenton’s team is standing by to help you retain your employees and serve your customers during the COVID-19 pandemic. Please do not hesitate to contact any of us below, and click here to join us for Tuesday’s webinar.

Chair/Shareholder
Employment Law
+1.408.947.2456
Shareholder
Employment Law
+1.408.947.2435
Of Counsel
Corporate & Business Law
+1.925.460.3367

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


04.02.2020 | Firm Post

DOL Issues Temporary Regulations for the Families First Coronavirus Response Act

On April 1, the day the Families First Coronavirus Response Act (“FFCRA” or the “Act”) went into effect, the U.S. Department of Labor (“DOL”) issued temporary regulations for the Act. The regulations answer a number of questions regarding the interpretation of the FFCRA.

Of particular note, the regulations interpret “quarantine or isolation orders” to include “a broad range of governmental orders, including orders that advise some or all citizens to shelter in place, stay at home, quarantine, or otherwise restrict their own mobility.” That being said, if a business closes because of a shelter in place order, either because its customers are required to stay at home or because the order forced the business to close, and the employee cannot telework, the employee is not eligible for paid sick leave under the Act (because the reason the employee cannot work is because the business was subject to the order, not because the employee was subject to the order).

The regulations also provide clarifications and interpretations of the Act, including:

  • The definition of “son or daughter” under both the paid sick leave and expanded FMLA leave includes adult children who are incapable of self-care due to a mental or physical disability. (This represents a change of the language of the FFCRA to effectuate consistency between the provisions.)
  • Employers are not required to compensate for unreported hours worked while teleworking unless they knew or should have known the hours were worked.
  • FFCRA sick leave may be taken if the employee is advised by a health care provider to self-quarantine because the employee has, may have, or is “particularly vulnerable” to COVID-19.
  • If the employee is taking FFCRA sick leave because the employee is experiencing symptoms and awaiting a diagnosis, the leave may be taken only for the time spent making, waiting for, and attending the appointment for diagnosis. If the employee is unable to telework, the time may also be taken while awaiting results.
  • The unpaid portion of the expanded FMLA leave applies to two weeks, not 10 days.
  • Employees are only qualified to take FFCRA leave to care for a child whose school or place of care has closed, or whose childcare provider is unavailable, if there is no other suitable person available to care for the child.
  • Intermittent leave may be agreed to by the employee and employer, including the increments of time the leave may be taken. Intermittent leave is available for all qualifying sick leave and expanded FMLA purposes if an employee is teleworking. If an employee is working at the worksite, intermittent leave may only be agreed to if the leave is to care for a child whose school or childcare is unavailable.
  • Employees must provide their employer documentation in support of the need for FFCRA leave, including a signed statement with the following information: (1) the employee’s name; (2) the date(s) for which leave is requested; (3) the COVID-19 qualifying reason for leave; and (4) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. The employee must provide additional documentation depending on the qualifying reason for leave:
    • If based on an quarantine or isolation order, the employee must provide the name of the government entity that issued the order.
    • If based on a health care provider’s advice for the employee or a family member to self-quarantine, the employee must provide the name of the health care provider.
    • If based on caring for a child without school or childcare, the employee must provide:
      • The name of the child being cared for
      • The name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19 reasons
      • A statement representing that no other suitable person is available to care for the child during the period of requested leave

For additional legal information regarding COVID-19, please visit our COVID-19 Resources website.

Hoge Fenton’s Employment Law team is here to provide you with additional support throughout the COVID-19 pandemic. Please feel free to contact any of us below.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


03.31.2020 | Firm Post

More DOL Guidance for Employers Regarding FFCRA Paid Leave Benefits for COVID-19

As described in Hoge Fenton’s recent article and webinar, Congress has created two new forms of paid leave benefits that will go into effect on April 1, 2020 for employees who need time off for qualifying reasons due to COVID-19. The U.S. Department of Labor has now issued its third round of guidance on the new law, including the much-anticipated small employer exemption (see the question and answer below):

When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?
An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:

  1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
  3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

The FAQ also provides additional guidance regarding:

  • Exemptions for healthcare providers and emergency responders
  • Definitions, including “employee,” “son or daughter,” and “health care provider” for purposes of determining individuals whose advice to self-quarantine can be relied upon for paid sick leave
  • Confirming that the employee count for purposes of determining employer eligibility is determined on the day the employee’s leave would start
  • Confirming that expanded FMLA leave does not entitle an employee to take more than 12 workweeks of FMLA leave within a 12-month period
  • Reinstatement rights
  • Rights of public sector employees
  • Documentation employers should maintain to see FFCRA refundable tax credits
  • Advice to employees regarding enforcement measures

For additional legal information regarding COVID-19, please visit our COVID-19 Resources website .
Hoge Fenton’s Employment Law team is here to provide you with additional support throughout the COVID-19 pandemic. Please feel free to contact any of us below.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


03.27.2020 | Firm Post

COVID-19 Coping Strategies and Insights for Small & Medium-Sized Businesses

COVID-19 poses evolving challenges for all employers, especially start-ups, small, and medium-sized businesses so vital to our Tri-Valley ecosystem. We have assembled a panel of our trusted regional advisors to provide guidance and answer your questions. This complementary webinar is presented by Hoge Fenton and Sensiba San Filippo, in partnership with iGATE and Innovation Tri-Valley Leadership Group.

Tri-Valley advisors will take your questions and address urgent issues including:

  • What are the best strategies for helping my business survive a big pause in revenue while treating my employees well, especially the ones we might have to let go?
  • How can I take advantage of unemployment benefits and other government programs?
  • Could we restructure our small businesses to make sure employees have unemployment benefits if we have to lay people off?
  • Are options like moving to an employee-owned business a bad idea because it removes benefits for the employees?
  • Are there creative business solutions to keep our talent even if business drops off?

Please share this webinar information with any business leaders who may find this information helpful.

For more information please call:
Lynn Naylor
Innovation Tri-Valley Leadership Group
925.989.0188

Meet our Trusted Tri-Valley Advisors:

Speaker
EMP Law Attorney
+1.408.947.2435
Moderator
Executive Director
+1.925.231.2333
Speaker
Corporate Attorney
+1.925.460.3367
Speaker
Managing Partner
+1.925.271.8700

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


03.27.2020 | Firm Post

DOL Issues Second Round of Guidance for Employers Regarding the Families First Coronavirus Response Act

As described in Hoge Fenton’s recent article and webinar, Congress has created two new forms of paid leave benefits that will go into effect on April 1, 2020 for employees who need time off for qualifying reasons due to COVID-19. The U.S. Department of Labor has now issued further guidance on the new law, including:

  • Intermittent use of FFCRA paid leave
  • Confirming that “shelter in place” orders are not a qualifying reason to use FFCRA paid leave
  • Documentation employers should obtain from employees in order to secure tax credits when employees use FFCRA leave
  • Calculating “regular rate of pay” for employees with fluctuating compensation
  • Employees’ ineligibility to use FFCRA paid leave during office closures or furloughs, or for reduced hours
  • Employers ability to allow employees to coordinate other paid leave benefits with FFCRA paid leave in order to receive full pay while on FFCRA leave

Click here to see the DOL’s full list of FAQs and guidance. The DOL has also issued a model notice that employers are required to post, along with FAQs regarding the posting requirements.

For additional legal information regarding COVID-19, please visit our COVID-19 Resources website .

Hoge Fenton’s Employment Law team is here to provide you with additional support throughout the COVID-19 pandemic. Please feel free to contact any of us below.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


03.25.2020 | Firm Post

New U.S. DOL Guidance for Employers Regarding the Families First Coronavirus Response Act, Which Will Go Into Effect April 1, 2020

As discussed in Hoge Fenton’s article last Thursday, March 20th (click here) and webinar last Friday, March 21 st (click here), Congress has created two new forms of paid leave benefits for employees who need time off for qualifying reasons due to COVID-19. The U.S. Department of Labor has now issued clarifications and guidance on the new law, and further guidance is expected in the coming days.

Click here to see the full list of FAQs and the DOL’s expanded guidance. The DOL has also issued its FFCRA model notice that employers are required to post, along with FAQs regarding the posting requirements.

Here is an abbreviated summary of a few of the questions that have been answered:

What is the effective date of the Families First Coronavirus Response Act (FFCRA)?
The FFCRA will become effective on April 1, 2020, and will apply to leaves taken between April 1, 2020, and December 31, 2020.

How do I know if my business is under the 500-employee threshold and therefore must provide paid sick leave or expanded family and medical leave?
You have fewer than 500 employees if, at the time the employee takes the leave, you employ fewer than 500 full-time and part-time employees within the U.S., including employees on leave, temps who are jointly employed by you and another employer (regardless of whether they are on another employer’s payroll, so including temps through an agency), and day laborers supplied by a temp agency. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers pursuant to the “integrated employer test” under the FLSA.

If I have fewer than 50 employees and complying with the FFCRA would jeopardize the viability of my business, how do I take advantage of the small business exemption?
For now, you should document why your business meets the criteria set forth by the Department of Labor, which will be addressed in more detail in forthcoming regulations. In the meantime, you should not send any materials to the Department of Labor when seeking a small business exemption.

When calculating pay due to employees, must overtime hours be included?
Yes. The Emergency FMLA Expansion Act requires you to pay for hours the employee would have been normally scheduled to work even if that’s more than 40 hours in a week. However, the Emergency Paid Sick Leave Act requires that paid sick leave be paid only up to 80 hours over a two-week period. For example, an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week. In any event, the total number of hours paid under the Emergency Paid Sick Leave Act is capped at 80. Importantly, while all overtime hours must be counted, the pay does not need to include a premium for overtime hours.

Again, please note that this is a summary only. The DOL’s FAQs page answers additional questions and expands on the information provided above.
Hoge Fenton’s Employment Law team is here to provide you with additional support throughout the COVID-19 pandemic. Please feel free to contact any of us below.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton


03.19.2020 | Firm Post


March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“FFCRA”), which will go into effect within the next 14 days. Among other provisions pertaining to food assistance and COVID-19 testing, the FFCRA creates two new forms of paid leave benefits for employees impacted by the COVID-19 pandemic: 1) emergency paid sick leave, and 2) expansion of the Family Medical Leave Act.

All employers with fewer than 500 employees will be required to provide and pay for the cost of these benefits, and employers will be reimbursed through tax credits. Employers’ obligations will be as follows:

Paid Sick Leave
Employers must provide all employees (regardless of tenure) with up to 10 days of paid sick leave if they are unable to work or telework for any of the following reasons:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. The employee is advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. The employee is caring for an individual who is under a federal, state, or local quarantine or isolation order or who has been advised by a health care provider to self-quarantine;
  5. The employee is caring for a child whose school has been closed, or whose child provider is unavailable, due to COVID-19 precautions;
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

This leave entitlement is in addition to any existing paid leave policies employers have in place, and employees are entitled to use FFCRA paid sick leave before using any other paid leave (e.g., vacation, PTO, California paid sick time).

If an employee uses COVID-19 paid sick leave for the first three reasons identified above, the employee must be paid their regular rate of pay, up to a maximum of $511 per day or $5,110 in the aggregate. If an employee uses COVID-19 paid sick leave for reasons 4, 5, or 6 above, they must be paid at least 2/3 of their regular rate of pay, up to a maximum of $200 per day or $2,000 in the aggregate.

The Secretary of Labor has the authority to issue regulations exempting small businesses with fewer than 50 employees when the imposition would jeopardize the viability of the business as a going concern, but no such exemption has been issued as of yet. Employers of health care providers and emergency responders are permitted to exclude employees from this law.

FFCRA paid sick leave is set to expire on December 31, 2020, and unused paid sick leave will not carry over from year to year, nor be paid out upon termination of employment.

The Secretary of Labor is tasked with publishing a model notice regarding this temporary paid sick leave law within 7 days of the FFCRA being enacted, which employers will be required to post in the workplace.
Expansion of Family Medical Leave Act

Also through December 31, 2020, the Family and Medical Leave Act (“FMLA”) will be temporary expanded to allow employees leave of up to 12 weeks to be used for a “qualifying need” related to an emergency with respect to COVID-19, as declared by federal, state, or local authorities.
A “qualifying need” occurs when employees are unable to work or telework due to the need to care for their child whose school has been closed, or whose child provider is unavailable, due to COVID-19 concerns. Employees are eligible for the expanded FMLA leave if they have been employed for at least 30 calendar days.

FMLA leave is generally unpaid. If an employee takes leave under this temporary provision, however, the first 2 weeks of leave may be unpaid, and the employer must provide paid leave for up to 10 weeks thereafter. An employee may (but cannot be required to) use accrued vacation or sick leave during the initial unpaid two weeks, and thereafter, must be paid at least 2/3 of the employee’s regular rate of pay, up to a maximum of $200 per day or $10,000 in the aggregate.

Employees are entitled to reinstatement to the same or equivalent position upon exhausting their FMLA leave under this provision, except no reinstatement is required if the employer has fewer than 25 employees, and the following conditions are met (1) the employee’s no longer exists due to economic conditions or other operating conditions caused by COVID-19, (2) the employer has reasonably attempted to restore the employee to an equivalent position, and (3) if reasonable efforts fail, the employer must make reasonable efforts for one year to contact the employee if an equivalent position becomes available.
The Secretary of Labor has the authority to issue regulations exempting small businesses with fewer than 50 employees when the imposition would jeopardize the viability of the business as a going concern, but no such exemption has been issued as of yet. Employers of health care providers and emergency responders are permitted to exclude employees from this law.

Employers should be mindful that the unique eligibility requirements, and the paid component of, this expanded FMLA provision do not impact the existing provisions of FMLA, and are specific to address the COVID-19 pandemic.

Hoge Fenton’s Employment Law team is standing by to help you retain your employees and serve your customers during the COVID-19 pandemic. Please do not hesitate to contact any of us below.

Chair & Shareholder
+1.408.947.2456
Shareholder
+1.408.947.2435
Attorney
+1.408.947.2457

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton

Mackrell International California Minority Counsel Program Best Places to Work 2019 Bay Area Green Business