All right, good morning, good afternoon to those of you on the East Coast. Welcome to this morning's virtual town hall. I'm Daniel Fisher, AED's Vice President of Government Affairs. Our speakers today, I guess our panelists more than anything, answering your tough questions, our questions are Tori Hammer, Ken Irwin, and Sarah McKnight of Moss Adams, Carl Lindgren, and Samantha Montes of Fisher Phillips. Before I turn it over to Tori, I'd like to let those of you who are live with us know that you may submit questions during the webinar via the chat box on the lower left side of your screen. If you submitted questions to Liz McCabe before this, we have that, and we will ask those questions. But you can also submit more questions via the chat box on the lower left side of your screen. The slide deck from today's presentation is available as a PDF in the handouts tab of the webinar homepage. The webinar will also be recorded so that you may watch or re-watch on demand at your convenience. So with that, I will turn it over to Tori to get the conversation started. Yeah, thanks, Daniel, and thanks, everybody, for joining us, and thanks for AED for setting this up and the opportunity to answer some questions. As Daniel mentioned, this is really designed as a town hall. We do have a short presentation, which we'll go through just to tee things up and talk about some changes that have come about just in the last couple days. We understand AED put on a webinar on Monday, which walked through the main provisions of the CARES Act and the FFCRA Act, so we won't repeat a lot of that, but we will just highlight a few of the changes. But mostly, we're just here to answer questions. As Daniel mentioned, my name is Tori Hammer, so I'm a partner at Moss Adams. I'm joined by Sarah McKnight and Ken Irwin, as well as some attorneys from Fisher Phillips, Samantha and Carl. So kind of just jumping right into it, what we'll be talking about today is the $2 trillion stimulus package, which resulted in the Families First Coronavirus Response Act, as well as the CARES Act. Those two acts resulted in a number of changes in the SBA in terms of new programs and loans available, also some changes to tax law and tax filing changes, as well as some changes to family medical leave and then employee leave changes. So just diving right into it, we'll start with the Paycheck Protection Program, which is a new program under the SBA. We've seen changes as late as last night to this program. If you look back about a week ago, this program was initially advertised as a loan to small businesses under 500 employees. The loans were originally advertised as 10 years at 4%. That had changed, I think, last Friday to the loans became two years at 0.5%. And now, as late as last night, the loans are still two years and now they're at 1%. It looks like we're going to settle at 1%, at least that's where we're at right now. Some other things that have come out recently, just within the last couple days and this week, they said it's expected that when you get the loan proceeds that not more than 25% of the proceeds will be spent for non-payroll costs. Again, they're really just encouraging folks to spend these loan proceeds mainly on keeping folks on the payroll. There are some provisions, as probably everybody knows by now, you can spend. There are some allowable expenses on mortgage interest, rent, and utilities. Apply now. So today is the first day that you can apply for these Payroll Protection Program loans. I put a question mark there to be kind of funny on that bullet point because, frankly, what we're hearing is that the banks aren't ready. Last night, there was some communication that came out from JPMorgan Chase, which is the largest lender in the U.S., that said that they're not ready to accept applications today. Some of the other lenders are saying the same thing. We are hearing that some banks are ready, but it's really kind of a case-by-case situation. This thing is just so new. The regulations and rules and instructions on the application are still just coming out, and everyone's just having a hard time, including the banks, keeping up with all of it. I've included a link here in terms of an example application that the SBA has put out. It's a pretty easy application. If you guys have seen it yet, it's two to three pages. It does not ask for a lot of information. It seems pretty basic to fill out, but like most things, the devil's in the details. Again, we're a little bit light on details right now, so I imagine we'll get some questions on this. With that, I'll turn it over to Samantha to talk about some of the shelter-in-place changes. Thanks. This is Samantha Monsees. I'm an attorney with Fisher Phillips out of our Kansas City office. As many of you, I'm sure, have been asking, the Families First Coronavirus Response Act was signed into law on March 18th. There were a lot of questions about this qualifying reason number one, which enables someone to get emergency paid sick leave. That qualifying reason is that the employee who's unable to work or telework would be entitled to sick leave if the employee was subject to a federal, state, or local quarantine or isolation order. Of course, this is ever-evolving. We've had governors shut down nonessential businesses. We've had stay-in-place orders across the nation. Of course, they're all inconsistent across the board. The Department of Labor, on April 1st, we thought maybe it was an April Fool's joke because some of the guidance seemed to be a little bit contrary to the letter of the law. This is our best guidance that we can go from to help interpret how you can qualify these reasons for leave and how you can administer this law effectively within your organization. They clarified that the shelter-in-place order, if the shelter-in-place order forces the business to close, that's either as a direct result of the order or due to lack of business because the customers are staying home. The employee is not eligible for emergency paid sick leave because the employee is unable to work because the employer was subject to the order, not because the employee was subject to the order. So the distinction there is the federal, state, or local quarantine or isolation order, that really relates to the employee specifically. So if there is an instance where a state or local government issues a quarantine or isolation order to specific individuals, so perhaps high-risk individuals, that would be a qualifying reason under number one of emergency paid sick leave. So we'll go to the next slide. So here are basic takeaways. So if the shelter-in-place or stay-at-home order forces the business to close, the employee is not eligible for emergency paid sick leave because the employee isn't able to work because the employer was subject to the order, not because the employee was subject to the order. So as I said before, the only reason under number one would be if there was a quarantine or isolation order that makes the employee eligible for leave. So that's only if the reason the employee is unable to work and the employer is otherwise open or has work available for them. So an easy way to remember that is, do I have work available for my employees? Have I been deemed essential? Is there work available for my employees? If the answer to that is yes and there's not some specific quarantine or isolation order in place, then your employees are not going to be entitled to the emergency paid sick leave. And you have to remember that the availability of telework may be significant in some of these situations. Depending on your business, it may just not be practical for some of your workforce to work from home. So let's go to the next slide. This is how the Department of Labor has actually defined the rule subject to quarantine or isolation order. I'm not going to read that to you all. These slides will be available after the program. So that helps provide some clarity about what exactly a quarantine or isolation order is. We'll go to the next slide. So we've got a couple examples. Hopefully all of you have had some time to enjoy the magic that is the tiger documentary on Netflix. So right there is Joe Exotic with one of his tigers. You did see last night that Joe has been moved from the jail that he was in or the prison he was in to another one due to coronavirus. So I've been keeping up to date on what Joe Exotic is up to. But here's an example to help you figure out how these shelter-in-place works, shelter-in-place orders work. So Oklahoma, where the GW Zoo is located, issues a shelter-in-place order that requires certain businesses, including animal parks, to close. Joe Exotic works the ticket counter at GW Zoo. Telework is not available for this type of work. Joe Exotic would not be eligible for emergency paid sick leave because the GW Zoo is closed as a result of the order, not because Joe was subject to the order. So we'll take a look at the second example. All right, so here we have Carol and Howard Baskin. So illustrative example number two would be Oklahoma issues a shelter-in-place order that requires those aged 65 or older to stay home. So this is the example that the Department of Labor has contemplated where a shelter-in-place slash isolation order is specific to certain individuals. So Howard is 67 years old. He works as a zookeeper at Big Cat Rescue. For our purposes in this example, Big Cat Rescue has been deemed an essential service and remains open. So telework is not available for Howard's position as a zookeeper. So Howard is eligible for emergency paid sick leave, but for the shelter-in-place order that applies to Howard due to his age, due to his age, the typo there, he would otherwise be able to perform work that is allowed by the employer. Here, since the isolation order applies specifically to Howard because he is over 65, then he would be eligible for emergency paid sick leave. And we'll do the final example. And here we have John. John is one of our groundskeepers for the GW Zoo. So Oklahoma issues a shelter-in-place order that requires those aged 65 or older to stay home. So we're changing the facts a bit here because John, who is 30 years old and works as a groundskeeper at the GW Zoo, which again has been deemed an essential service for purposes of this example, telework is not available for John. So John would not be eligible for emergency paid sick leave because he is otherwise able to perform work that's available by the employer. So GW Zoo is open, there's hours for John to work, and he is not subject to the 65 or older stay-at-home order. So he would not be entitled to emergency paid sick leave under the FFCRA. Is there another slide after this? Yeah, there's all of our beautiful faces. Yeah, that's all we have for slides. Again, this is a town hall format. I think there were a few questions that were submitted in advance. We're also available to answer some questions through the chat function. So, Daniel, maybe I'll turn it back to you. Yeah, why don't this should be on? Yeah, I'm inclined just to end this now. I don't know how we can top the Tiger King references. It looks like there is a question about whether the blue shirts at the Big Cat Rescue would be subject to the shelter order, and the answer to that question would be whether or not the blue shirts were 65 or older, because I think the blue shirts would definitely be essential to Big Cat Rescue. So I'll go through some of the questions that were submitted earlier. Yeah, there was a comment in the chat box which said that Bank of America was accepting loan applications today, so they seem to have their situation together there at Bank of America. Maybe I'll just comment on that real quick, Daniel. Yeah, I think it's a case-by-case scenario. What we are hearing is that some of the banks, and I think this includes Bank of America, are actually taking those applications from their current customers. I think that's right. Yeah, so I think that's pretty telling. A lot of these banks are just expecting huge volumes out of this program. A couple other comments. We are being told, and it says this in the CARES Act or under these FDA loans, that they will be served on a first-come, first-served basis, and the funds are expected to run out. So we're really encouraging everyone to apply as soon as you can, whether that's today or sometime early next week. The funds aren't going to be around, or they're not expected to be around through June 30th. All right. On the PPP loans, if an employee is making over $100,000, does their full salary get excluded? No. Well, I guess you guys can answer that. Go ahead. No, yeah, Samantha's right, no. Just the amount that is over $100,000 gets excluded. So if you have someone who's making $120,000, you would only include the amount up to $100,000 in that calculation of payroll costs. All right. If I've already let some employees go, can I still be eligible for a PPP loan to be forgiven? Yes, you can. You have the option to rehire some of your employees before June 30th. So, again, the point of these loans is they want you to keep people on the payroll or bring them back on the payroll very quickly and then use the funds to pay payroll. So you can still be eligible for the loans, and you can still be eligible for loan forgiveness if you are rehiring those people back right away. How can I request loan forgiveness on the PPP loans? Yeah, so information is still coming out on the forgiveness piece of the loans, and so we're expecting kind of more instructions and more guidance to come out on that. Right now you apply for these loans through your bank, you know, through your 7A lender, and then you will also request forgiveness through your 7A lender. So part of the act requires that the bank has to respond on the forgiveness piece within 60 days of the request. So, you know, once you get the loan proceeds, there's an eight-week measurement period, and then after that is when you can start the forgiveness request from your bank. But, again, more information is still coming out on that. And if I already received an EIDL loan, which I believe is that emergency? Economic Injury Disaster Relief. Can I also get a PPP loan as well? Yes, you can. If you've applied for an Economic Injury Disaster Relief loan, you can still get a PPP loan. If your EIDL loan is used to pay for payroll, you can still get the PPP loan, but the EIDL loan will get refinanced into that PPP loan and kind of refinanced together, and so you'll have just one loan under the PPP loan. All right. Are there any benefits in either law available to commission employees who are still showing up to work but are basically earning nothing because nobody is buying new machinery? Can you – so are there benefits to – can you read the first part of that again? Yes. So I guess as a commission – like if you're a commission – an employee that is paid based on commission, many of them are still showing up to work because they're a central business, but they're not obviously making any money because they're not selling any equipment at this point. Are there any – are there provisions in the law that would benefit those type of employees in either law? So do they qualify for – Yes, I guess I can – I'll turn it to Samantha to talk about the paid leave piece, but just real quick on the PPP loans, your loan proceeds are calculated based on an average of your payroll costs over the last 12 months, which would include commissions. So that employee, their commissions that they've earned over the last 12 months would be included in the loan proceeds. Now, if they're not getting commissions or if their wages are reduced during the eight-week measurement period, it's possible that not all of your loan will be forgiven because you're not paying out those proceeds towards payroll. Okay, and I do see there's – Do you want me to speak on the FFERA about commissions? Yeah, so under the paid sick leave, that's considered – you have to pay either the regular rate or the federal, state, or local minimum wage, whatever is higher. Most likely your commission salespeople are going to be at the regular rate. So you figure that by taking their average weekly pay over the prior six months, and that includes all remuneration, which includes wages, tips, and commissions. So that's going to be how you determine what their regular rate is going to be for purposes of both emergency paid sick leave and for emergency family medical leave. All right, great. And I do see questions are coming in on the chat box. We will get to those, just going through the questions that people submitted in advance. Keep submitting. This is Carl, real quick. Just on benefits for commissioned people, too, in some states they may qualify for some supplemental pay through unemployment, just as a side, so it wouldn't be under either law necessarily. And, Samantha, I don't know if you've looked at this specifically, but just like an employee who doesn't have any work to do, I think you can probably pay the commissioned people anyway and count that as pay, couldn't you, Samantha? Say that again? In other words, pay their average wage to them that they'd been earning if you got the loan and count that as pay, or is that something you can't do? I think that's right. I think that essentially when you're calculating a payroll cost, you're talking about for the loan? Yeah. Yeah, so I think, and maybe, Tori, you can speak to this, but I believe that when you're calculating your payroll cost, you're going to take all of those commissions are going to be included in your average monthly payroll cost. So I think in terms of determining how much to pay your employees, it would be dependent on the pay plan in place for your folks, but you could, you know, in theory, I think, pay based on a historical average of what that individual salesperson had been earning. Tori, do you disagree with that? Yes, I think that's right. You know, like you said, the commissions would be included in the total payroll cost to calculate the loan proceeds. And then, you know, after you get the loan, if that employee is not earning commissions, but you choose to pay him kind of what he had historically or he or she had historically been making anyway, sort of outside the pay plan or create a new pay plan, then yeah, theoretically, those payroll costs that you pay that employee could be forgiven. All right. In regards to the CARES Act and specifically the PPP, how are rents going to be handled in the forgiveness equation if the owners of the dealership are also majority owners of the real estate entity? Yeah, that's a good question, and I suspect that's going to be a pretty common scenario with this group. And there's nothing in the standard that we're seeing that prohibits payments to related parties. And so as long as your rental agreement or your lease agreement was in place before February 15th of 2020, that's a key date, if your agreement is in place before that, then those rent payments should be included in the calculation of your loan forgiveness. All right. This next question is actually one that we were – oh, sorry, go ahead. I was going to say, Tori, isn't it also right that for purposes of rent, you're prohibited from paying advanced rent, which I think that 25% cap on those ancillary payroll costs of rents and utilities would probably fix that problem. But is that your understanding that you truly need to pay rent that is due and owing during the eight-week period that you – after you get the loan? Yeah, that's a great point. You can't – it would prohibit you from prepaying six months' worth of rent to your owners or something like that. You would have to pay rent that's kind of become due during that eight-week period. There's also that cap that you mentioned, which is they don't want you to use more than 25% of the loan proceeds on non-payroll expenses. All right. And then this next question is one that actually we were struggling with internally at AED for a while trying to figure this one out. In completing the application for the PPP, what date is used to determine the number of jobs? So if you're – at what point do you have to be under 500 employees or 500 or less employees? Yeah, that's a good question. I don't think there's – what I'm imagining that question is coming from is if you look at the application and you said number of jobs, the new application that was released just last night, it used to say number of jobs. Now it says number of employees, which is a box right on the application. There's not instructions to this form. So we – frankly, it's pretty unclear right now if that's – if you're supposed to use your average FTEs or, you know, the average number of employees that's used to calculate your average payroll expense, which is kind of an area that it is in on the application, or if it's just the number of employees at the date of application. That piece seems a little unclear right now. I don't know if, Samantha, you have comments on this, but what I would suggest is make sure you're talking to your bank. They're really going to be the ones that are kind of policing these applications and verifying the information on the application. So talk to the bank about that one in particular. Yeah, I think that's right. And kind of along those same lines, there's been some questions about when the appropriate time period is for counting how many employees you have to determine if you are eligible for the loan. And the regulations are – they're not even regulations technically yet, but the guidance that's been issued thus far somewhat, in my opinion, conflicts with the language of the law. But since that's the best guidance we have to go by, I think it's probably the safer approach. So we were of the opinion at Fisher Phillips that the covered period, as it was defined in the Act, meant that you count the number of employees as of the date you apply for a loan. But because that probably could incentivize companies to lay off employees to become eligible, the Paycheck Protection Loan Borrower Fact Sheet that was released on April 1st references the Small Business Administration's website for employee-based size standards. So based on that, those standards say that you're to use the average – the count of average employees over the prior 12-month period. So I think there were a couple of questions in there about that. I don't know, Tory, if you had any additional guidance related to how to count employees for purposes of eligibility for the Paycheck Protection Loan. No. I think you said it. There's not a lot of clarity on that piece. You know, I think that the average over the 12-month period is probably the – I don't know. It seems to be kind of the best information we know right now. But again, I'd make sure we're just confirming that with your bankers and making sure that they're on board. And that's kind of consistent with their understanding as well. All right. So this one, next question here kind of is like a law school type fact pattern here. State is under a stay-at-home order from the governor. The company is essential but operating with a skeleton crew because not everyone is essential every day. Not everyone can telework. Some employers are working a few hours from home every day. You know, others are just hanging out at home it seems like. Right now the company is paying everyone as normal. So that's the fact pattern. Here's the question. When emergency paid sick leave kicks in, obviously on a couple days ago, does the governor's order qualify as a quarantine or isolation order identified in the first – as item one in the FFCRA emergency paid sick leave? So I think you may have touched – someone may have touched on this in the slide. But that's the first question. Yeah. So the answer to that is no. And I think probably some people came in a little late and missed my fabulous Joe Exotic references. But the best way to analyze how these shelter-in-place or stay-at-home orders work is to determine whether or not the stay-at-home order applies to the employer or applies to the employee. So for your example, the stay-at-home order does not apply to essential businesses. And for those employees who are deemed essential as a part of that business, there is work available for them. And there's nothing prohibiting the employer from operating. So if you change the facts a little bit, if perhaps those essential employees are in some sort of protected group, like, you know, have preexisting conditions or are of a certain age, and there's a quarantine or isolation order issued based on that criteria, so it would apply to the employee. And if you still had work available for that person, but they are not able to work or telework because they're in that protected class identified by the isolation order, then they would be entitled to emergency paid sick leave. Okay. This is Carl. I might just add real quickly to that. The one other thing we're seeing in that is where you have work available and an employee doesn't want to accept the work. Some of them are trying to go apply for unemployment. And on that piece of it, they would not be eligible for unemployment because there's actually work available as opposed to a business that was shut down and was nonessential. All right. As per the FFCRA, employers must provide employees up to 80 hours paid sick leave at two-thirds the employee's regular rate of pay if they meet the proper criteria. Given that, what is the responsibility of the employer in this regard if the employee is hourly, non-exempt, and exhausts the 80 hours, but is not ready or able to return the work? So that's a good question. That would be dependent really on your policies. So if you have some other type of accrued paid leave or other type of maybe unpaid leave that you could offer that employee, that would be an option. You could also, you know, temporarily furlough that person if they didn't have work available to them. You want to make sure that if the reason that that person needs off work and it's no longer paid because they've exhausted their emergency paid sick leave, if for some reason that individual had a true serious health condition under traditional FMLA and your business is covered by traditional FMLA, so for example, I had COVID-related symptoms and my doctor ordered me to quarantine for 14 days. So I did that and I got paid at 100% my wage for those 80 hours. And then I went back to work. Everything is fine. And then perhaps I'm starting to exhibit symptoms again. Maybe I really didn't have COVID the first time I had the flu. Well, I've already exhausted that 80 hours. So under that scenario, if they still had accrued paid time off and it's consistent with your policies, they could exercise that paid time off to cover any leave. Alternatively, if you are subject to the FMLA, traditional FMLA, which is the 50 or more employees within a 75-mile radius and the employee meets the other criterion of the 1250 hours over the prior 12-month period, then that employee would have, so long as they have a certification from their healthcare provider, they would be eligible for traditional FMLA for their own serious health conditions. And that would be unpaid for up to 12 weeks. All right. Two questions here, and you may have touched on these before, but pre-existing condition, employee has to shelter in place due to doctor's orders. We are an essential business. Effective April 1, is he or she eligible for EPSL? Most likely, yes. So that would fall under qualifying reason number two, which states that an employee has been ordered by a healthcare provider to quarantine or shelter in place, however you want to call it. So in that scenario, the analysis is the employee is unable to work or telework for one of the covered reasons. So you're an essential business, you have work available for that person, but for the fact that they have to stay in place based on their doctor's orders, they would be working. So they would be entitled to emergency paid sick leave, and that's one of the three reasons that relates directly to the employee, which is paid at 100% their regular rate, up to a maximum of $511 per day. We've been getting a lot of questions, so I'll just go ahead and touch on it because I'm sure others are going to ask about it. To what extent can we ask for certification on whether or not these folks really are exhibiting symptoms, whether or not they really need to shelter in place based on something physically going on with them. And the DOL issued some additional guidance on that, and if you go to fisherphillips.com, there's a whole host of free forms and templates that you all can use, and we've uploaded a template model form that is essentially a request for leave under either of these emergency paid sick leave or emergency family medical leave. And it requires the employee to state the reason for leave, requires them to provide certain documentation such as the doctor's name and phone number, and then we've also required a self-certification. So in the event you have an employee that unfortunately abuses this policy and said, yeah, my doctor said that I can stay in place for 14 days, I can't come to work, I'm going to get two weeks of pay, for watching Joe Exotic, then you could, once things slow down, you could follow up with that healthcare provider and confirm whether or not what the employee had represented to you is true. And if it was not, then you could terminate that employee or exercise discipline under your policy. All right. Kind of related, employee became sick prior to the 1st of April, and was ordered to stay home with the flu, now released to return to work next week. Is he or she eligible for EPSL from April 1st going forward? Sorry, you cut out there for just a second. Eligible from when? Oh, sorry. Is he or she eligible for EPSL from April 1st going forward? So he'd been sick prior to April 1st, was ordered to stay home, now released to return to work next week. Is he or she eligible for EPSL from April 1st going forward? So from April 1st going forward, the person would be eligible for emergency paid sick leave because if they have the flu, they're most likely experiencing COVID-like symptoms would be probably the proper analysis. If the employee got infected, they would be eligible for emergency paid sick leave. If the employee got a diagnosis that it's actually flu and not COVID, that most likely would not be covered. But I think what we're finding, unfortunately, is that a lot of these healthcare providers don't have testing, and based on your individual criterion, they may just instruct you to stay home and kind of give you a vague, yeah, you probably have it, we don't know for sure, stay home, call 911 if things get really bad. So in that situation, and perhaps that's not the situation you're referring to, but in that situation, I think yes, it would be covered beginning April 1 for that up to 80 hours if it was a true COVID-related reason. But if it's some other type of illness that wouldn't properly fall within either of those qualified reasons, then I think the answer would be no, and you can elect under your policies whether they can use their other accrued time off. If they don't have any other accrued time off, you may simply grant them unpaid leave so they can come back to work, but perhaps they won't be paid for the time that they work on. Some of that's going to be business by business, but do caution employers that if you're going to allow employees to take unpaid leave for different scenarios, because either they don't qualify under one of the policies or they don't have any extra time to use, to make sure that you're applying any discretionary unpaid leave uniformly across the board. So in other words, you don't want to offer Carl a week and a half of unpaid leave and he can return to work where normally that would be attendance points or things like that under your policies, but then not offer it to Samantha. All right. For health insurance premiums included in total payroll costs, gross or net of employee contributions? Yeah, this is a good question. Health insurance premiums are included in the calculation of payroll costs, and it sounds like the question is what about the employee portion, the portion of it that the employee pays? There's not clear guidance on that. I guess I would think that's a no. I think that's a net, but again, I haven't seen anything definitive on that. I guess I'd ask Sarah or Ken or Samantha or Carl what they've seen. I guess Ken, yeah, I haven't seen anything in particular, but my thought just by reading the guidance or the lay of the law is that it should be net and it would just be the employer piece, not the employee. Yeah. All right. Can federal unemployment tax and or state unemployment tax be included in total payroll costs? Yeah, this one's kind of a weird question. And so included in total payroll costs, it specifically says payments for state and local taxes can be included. So state unemployment tax, yes. Federal unemployment tax is not allowable. So federal taxes and federal employee taxes, such as federal unemployment tax, are excluded. So kind of a weird answer where the state unemployment tax is included, federal unemployment tax is excluded. All right. What about an employee home due to child care but only has part-time work at home that can be done over the Internet, so not putting in full day, only about four hours? Yeah. So the DOL issued guidance on this just a few days ago. I mean, essentially the answer is that so long as the employer and the employee agree, the employee can take the leave for taking care of the child intermittently. So the DOL is strongly encouraging employers to work with the employee to find out some sort of, you know, part-time schedule so that they can still work a few hours a day and then perhaps use their emergency family medical leave benefit for other portions of the day at the two-thirds pay. All right. So are these items included in payroll costs? And I think we kind of touched on it, but I'll read it. Employee withholding state income tax withheld. Employee withheld portion of benefit premiums. Employee withheld 401K contributions. Yes, I believe those things are included in the gross calculation of payroll costs. Okay. With PPP, does it have to be the same people on your payroll, or can you fire and then rehire new people if, for example, telework shows some people are just coasting along? Too much Joe Exotic. No, we're not seeing anything in the guidance or the rules that say it has to be the same people. It just is do an account of the employees and a calculation of your payroll costs. So it doesn't necessarily have to be the same folks. All right. And then this is emergency paid sick leave only applies to companies with less than 500 employees. The question is, does emergency paid sick leave only apply to companies with less than 500 employees? And same question on the PPL loan. I think the answer is yes, but as we talked about yesterday, there could be different ways to calculate that in a different way, I guess, right? Yeah. This is Carl. That's right. The only caveat I would say, stay tuned. Some of the cities we know, or counties like Los Angeles County, are actually trying to fill a gap and are looking at requiring employers with 500 or more employees to provide the same benefits that are required under the Families First Act. So stay tuned. Can a loan be used for a wholly owned subsidiary or does the subsidiary need to apply separately? Yeah, that's a good question. I guess there are affiliation rules. And so first, in order to you want to make sure you're eligible for the loan, and so you would apply these affiliation rules. And so you would look at the number of employees that are at the subsidiary as well as, you know, the holding company, I suppose, in this case. And if you are still under and if you're under that 500 employee cap, my understanding right now, and I'm curious to see what the rest of the panelists have to say, is that as long as you're under that cap and the subsidiary would apply for a loan and the holding company or the parent company in this case could also apply for a loan as long as you're under that cap. That's my read of it right now. And, again, I'm curious to see what the other panelists say. Tori, this is Sarah. I think the way there's still a little guidance we're looking for on that. I know that in the guidance that we received yesterday, it said that you can only apply for one loan. The way I look at it is kind of who's filing the 941 and looking at it from that perspective because that's kind of where your calculation is coming from for payroll and applying at that level. But, again, I think that's a great question for the bank. Yeah, that's a good question. And I think you're kind of seeing part of the issue with this is a lot of this information is brand new and we're all just trying to digest this information like everybody else is. And, frankly, so are the banks. And like Sarah mentioned and we've mentioned a couple times, they're going to be kind of the ones, the banks are going to be the ones policing this and ultimately approving the loan. So just make sure you're talking to your banker about exactly how this works and in terms of everything on your application to make sure they're in agreement with you. All right. What about compensation and ancillary provisions other than salary and wages? So this is for total. Are these included in the payroll cost? So compensation and ancillary provisions other than salary and wages that are provided for in a CBA or employment agreement. For example, our CBA requires us to provide uniforms. Would uniform costs be included? Same thing for salesmen auto allowances. They get a monthly stipend written in their employment agreements. Yeah, that's a good question. Again, there's just not a lot of clarity in the rules or the guidance that has been issued. The rules do say specifically payroll costs in the form of salary, wages, and commissions. It doesn't say anything about benefits through your CBA or employee allowances. So the way we're reading this is that those would not be included as payroll costs. All right. Any idea how long it will take to get the economic impact disaster loan? Is that the right? Is it EIDL or PPP funds from an approval? Yeah. So what I've been hearing from the banks, and I guess if you listen to the Treasury Secretary, he's indicated that the expectation is that the PPP loans are supposed to be paid out within a few days, is what he said. Now, when talking to bankers, they thought that was just pretty crazy and sort of thought it was funny that it was so fast and are, frankly, concerned about that type of speed. But he said a few days. I would expect it to be longer than that. On the EIDL loans, you can apply for a $10,000 grant, and that is directly through the SBA, and that is paid out within three days. Okay. We switched from fully insured to self-insured on January 1st. How do you capture employer benefit costs for the PPP since there's very little claims history? Yeah. I guess on that question, I would just follow what the rules say. I guess if you're looking at the average monthly payroll, maybe I'll turn that. Unless, Sarah, have you encountered that one at all? I guess I'm not quite sure if they've had a program change. Yeah, no, I haven't seen that one. Yeah, with the average rolling, I would think that because it's supposed to be the rolling 12 months that you're looking at your payroll cost. So from starting in January, yeah, I haven't encountered that. That's a good question. I don't necessarily know the answer to that. Yeah, that is a tough one. I mean, the rules say you calculate your total payroll cost based on this kind of rolling 12-month average. I would probably just use that to be safe. But, yeah, that's a little bit of a different scenario. All right. What if you paid a draw or gave the sales rep an emergency commission for just working for the eight weeks? So I take it this is in the calculation of loan forgiveness. So if you paid your employee an emergency commission during that eight-week period, I'd probably break that up into two parts. If it's a draw, meaning if it's a loan to your employee, you know, that's not wages if that employee has to pay it back. So I would not include that. Again, there's not a lot of guidance on this. If it's an emergency commission and, you know, you're compensating your employees because volumes are down, then that would be wages and that would be included in the calculation of the loan forgiveness. At least that's my interpretation. Tori, this is Sarah. Again, I agree with that. I think the point of the CPP is to keep people, you know, employed and getting wages during that period of time, whether there's work or not. So I think there was kind of a question, similar question earlier about basically if I'm paying my employees during that eight-week period, even though they're not working, does that count towards the loan forgiveness? And I think the answer to that is yes. That's the idea of the program. Great. One other qualifier there, too, is almost like the rent that we talked about earlier, is to make sure that if you're giving somebody an emergency commission during that eight-week period, that it's for that eight-week period and doesn't bleed into time period after that. And so you'd have to just look at the piece that's for that eight-week period. Yeah, good point. All right. This is an interesting question. Our company is wholly owned by a foreign-based company. On a standalone, the U.S. company operates exclusively in the U.S. market and has less than 500 employees. However, on the aggregate, considering other foreign companies owned by the same foreign parent, the number of employees exceeds the 500 threshold. Is the U.S.-based company eligible for the small business loan under the Paycheck Protection Program? Gosh, I haven't had that question yet. That's a tough question. There's some – I suppose I would go back to the affiliation rules that the SBA has put out, and, Daniel, we can send these to you afterwards to shoot to, you know, whoever asked this question or your members. The rules are – it's a pretty thick document. The rules are pretty robust around this. I'm not sure exactly on that one. Samantha or Carl, what do you guys know? I don't have a direct answer. I do know that there are some general SBA rules, and I think – so there was some additional guidance issued last night on the Paycheck Protection Loans pretty late in the day that I haven't had a chance to fully digest. But I know that there's a traditional SBA rule about whether or not any of the borrowers are owned, you know, at least in part by more than 20% by a non-resident or a non-legal resident. That may come into play if the – because not only do you have the affiliation rules in terms of counting employees, but then also whether or not there's an ownership component, and that owner is not a resident or domiciled within the United States. So Jerry is out on that. It would probably require a little bit more analysis. I don't have a clear answer to that, but we could look into it for sure. Yeah, I agree. That's a tough one. All right. And just for everyone's reference, the website that had those EPSL forms you guys were discussing, that is fisherphillips.com. Is that correct? Yeah. So just go to fisherphillips.com, and our main page has been turned into a COVID-19 resource center. So there's a whole host of free forms and templates that you can access. There's a couple different boxes you can check that lead you to either new guidance, forms, Q&A, pretty much anything you might need to know is going to be found there when it relates to COVID. All right. Thank you for that. Last couple of questions here since we're kind of getting up against the hour. I heard you answer another question, Nick, that employee portions of benefits are going to be included in payroll costs. Shouldn't it just be employer portion for insurance, 401K, et cetera? I think the employee portion is already included in your gross wages, so you wouldn't want to double count that. But I also don't think it gets backed out of the calculation when you look at gross wages. Tory, is that your understanding? Yeah, I was just going to say something similar. Yes, that's how I'd interpret that as well. All right. This is going to be more specific to New York State. I don't know if you guys can answer this or not. But for the New York State emergency paid sick leave, COVID-19 will now be included as a valid PFL claim. Do you have any information on this? I don't know what PFL. I'm not quite sure what that acronym is. Paid family leave, I suppose, that's imposed by New York State. Yeah, I think it's a state issue. Yeah, so I don't have specific information on that, although I do know in terms of the FSCRA how that works in conjunction with other state leave. So if an employee is eligible for emergency paid sick leave or emergency family medical leave, the employer cannot require that the employee exhaust other leave before using those benefits. So any benefits under the FSCRA are in addition to other benefits, which would include state mandated benefits. So I don't know specifically about paid family leave for New York. If you go to FisherPhillips.com, there's resources by state. I'm going to check there first because if there's some sort of mandate that's come down from New York, our New York attorneys would have posted that there. But if that's the case, if there's paid family leave that has been implemented in New York State, then I'd recommend you make sure you know how that works in conjunction with the FSCRA because on its face, the paid sick leave under New York State law, a employee could use that before using the FSCRA leave if they wanted to, and it would most likely be in addition to any state leave benefits. All right. Final two questions here, and this is it. So one overview we received on the PPP said it can be used for other interests on debt obligations other than mortgages. Any idea what that means? Yeah, I think that was a recent change. The days are blending together. I don't know if this was last night or a few days ago, but it does say that you can use these funds to pay for interest on other debt obligations. So, again, I haven't seen a lot of guidance on this or a lot of clarity on this. Again, I would just be aware of the 25% cap on non-payroll expenditures and making sure you're following underneath that. Yeah, and I'll kind of tag onto that. I think that's 100% right. Some of this is just not going to have clear guidance. I do know that some of the trade organizations, like, for example, the National Auto Dealers Association is taking the position that floor plan interest, so that's the interest paid on the inventory of the cars that the auto dealer has, that that could be included. Obviously, that organization wants to take aggressive stances on what can be included for their members. I don't think it's necessarily out of the question, but I do think with that 25% cap, that's in some fashion going to be self-limiting, and also that I would wait for additional guidance before you start counting, you know, any type of interest that you are paying on any of your inventory or equipment. Yeah, I agree with that. And, again, we're being told that more information is still going to come out on the forgiveness piece for these loans and how that calculation is exactly going to work. I think we've talked about a few of the parameters, and I'll just, you know, we're kind of running up here against the end of the hour, and I'll just mention that, you know, right now I think the critical piece is getting your loan applications in, talking to your banker if you can't apply today for whatever reason because your bank isn't accepting them. Just get ready to accept them. Again, this will be on a first-come, first-served basis, and funds are expected to run out, so you want to make sure you can take advantage of this program if you are, in fact, eligible. And then maybe just one last piece. We're here to help, so all of our contact information is up there on the slide. Feel free to reach out to any one of us for other questions or help on any of these issues. Well, great. Thank you so much. This has been very informative. Really appreciate you panelists taking the time to answer all the questions here, and I appreciate everyone participating in the webinar. Once again, this is recorded and will be available. And as everyone mentioned, there's still a lot of questions out there. We do expect more guidance, and stay tuned to AED. As soon as we receive guidance documents and FAQs and stuff like that from the administration, we send them out. So I would just say stay tuned, and there's still many, many questions to be answered. So with that, thank you so much, and I hope everyone has a great day. All right. Bye, everyone. Thank you.

virtual town hall

stimulus package

small businesses

Paycheck Protection Program

PPP loans

eligibility requirements

loan forgiveness

sick leave policies

payroll costs

business owners