Category: Uncategorized

By Christine Malafi

Over the weekend, Governor Cuomo gave us all a glimmer of hope that New York may be ready to start expanding the definition of essential business and to consider reduction of work from home and isolation mandates. Easing back into “normalcy” post-mandated COVID-19 isolation requires individualized planning. Businesses must develop and implement workplace safety policies and procedures customized to their own business model and needs. Social distancing, use of protective equipment, temperature checks, cleanliness, and use and disinfection of common and high-traffic areas must all be personalized for your unique business.

Work sites must be clean and disinfecting supplies should be on hand (i.e., sanitizing wipes available throughout the office). Businesses should encourage, and even require, employees to clean their workspaces and personal items daily and should limit the number of employees congregating in restrooms and common areas of the office.

Best practice would allow small groups of selected employees to return to work at a time. Consider continuation of alternating remote workdays where possible, perhaps permitting those employees who cannot work from home to return first. Employees must keep a safe social distance from one another while doing their jobs effectively. Limiting the number of employees will ease everyone into the new “normal.” It may be necessary to revamp shared workspaces.

Although many of us are anxious to return to the “outside” world, some employees may be apprehensive or even afraid to venture out of the safety of their homes, and some may be feeling emotional trauma from the loss of a relative, isolation, or loss of income. Employers should not ignore the anxiety which may be felt by some. Making sure that employees understand the seriousness of maintaining social distancing in the workplace may help ease the tension.

Employers must decide whether to implement a clearance procedure before allowing employees to return (or upon hiring new employees), such as checking for COVID-19 symptoms, taking temperatures, and providing personal protective equipment (PPE), all while making sure to keep their employees’ information confidential. Be ready to send employees home, if necessary, to maintain workplace health and safety. Create COVID-19 related written guidelines if you haven’t already. It is important to communicate operational or policy changes to employees and visitors to your business. Consider having employees acknowledge the new polices and procedures in writing to emphasize the importance of following these procedures and guidelines.

It may be necessary for employers to require employees showing any symptoms of a cold or any type of illness to take sick/personal days. Make sure employees understand the importance of not coming to the workplace if they don’t feel well. It may be the time to implement a formal “work from home” policy that may be followed in such situations.

Don’t ignore implementation of special accommodations for workers who are considered vulnerable (i.e., those with serious underlying health conditions, such as diabetes, asthma, or compromised immune systems, and the elderly).

The CDC has recommended facial coverings/masks be worn in public, and New York State has mandated same if social distancing is not maintained. Permit, or even mandate, all employees to wear coverings/masks, unless there are specific safety reasons prohibiting same. Remember that if PPE is required by a business, the business must pay for PPE for its employees.

For those areas of your business that the public comes into contact with, such as a reception area, counter area, cashier area, etc., businesses should minimize appointments or restrict mass access. These considerations are very business-specific, and what is right for one business may not be right for another. Additionally, these procedures will need to evolve as life gets back to “normal.”

Please review the additional guidance below that may be helpful, and contact us to discuss how to adapt these suggestions to your business. We look forward to helping you and your business get back to work! Stay safe and healthy.

Additional Guidance:
OSHA
New York State Department of Labor
CDC

By Christine Malafi

Now that many small businesses have received or are waiting for funding of their Paycheck Protection Program (“PPP”) loans, focus should now turn to the Loan Forgiveness phase of the PPP Loan program. While applying for loan forgiveness does not start until after June 30, 2020, what you do during the 8-week “Covered Period,” which begins on the date of loan origination, can impact the amount of loan forgiveness received. For this reason, now is the time for businesses to make sure that procedures are in place to comply with the strict loan forgiveness requirements set forth in the CARES Act. Businesses that meet these requirements will have the greatest likelihood of maximizing loan forgiveness.

Gettry Marcus CPA, P.C. and CMM hosted a complimentary webinar on April 23, 2020 that addressed the specific loan forgiveness provisions and what you should be doing during the critical 8-week Covered Period. The webinar included examples and planning tools that can be used to help achieve maximum loan forgiveness.

VIEW WEBINAR HERE

VIEW POWERPOINT PRESENTATION

Speakers:

Lee Ferber, CPA, Partner at Gettry Marcus
Christine Malafi, Esq., Senior Partner at CMM
Nicholas Backmann, CPA, Supervisor at Gettry Marcus

Topics:
• The tests that have to be met during the 8-week Covered Period:
-Use of loan proceeds
-Full time equivalent employee (“FTE”) test
-Compensation reduction test
• An approach to use to calculate FTE headcount
• How re-hiring employees during the Covered Period can impact loan forgiveness
• The payroll and accounting records, as well as supporting documentation, that needs to be maintained during the Covered Period

By Christine Malafi

Whether your business is applying for a Paycheck Protection Program loan, navigating sick leave requirements, managing your cash flow day by day, or – most likely – doing all these things at once, you must be clear regarding which workers are employees and which are independent contractors. While the distinction between the two is always important, the COVID-19 pandemic has added another layer to the issue. Here’s a brief review of the differences, and please call us at (631) 738-6781 to review your particular situation.

A Federal and State Issue: The determination of whether a worker is an employee or independent contractor is both a federal and state issue. The U.S Department of Labor (DOL) views misclassification as denying access to critical benefits and protections to employees to which they are entitled by law. Employee misclassification also reduces taxes paid to federal and state governments, and lowers contributions to state unemployment insurance and workers’ compensation funds.

Federal Guidance: In general, an independent contractor is an individual engaged in a business of his or her own, while an employee is dependent on the business he or she serves. The DOL’s Wage and Hour Division applies a six-factor balancing test, based on Supreme Court precedent, to determine a worker’s classification. These include: (1) the nature and degree of the potential employer’s control; (2) the permanency of the worker’s relationship with the potential employer; (3) the amount of the worker’s investment in facilities, equipment, or helpers; (4) the amount of skill, initiative, judgment, or foresight required for the worker’s services; (5) the worker’s opportunities for profit or loss; and (6) the extent of integration of the worker’s services into the potential employer’s business.

New York State Guidance: According to the New York State Department of Labor, independent contractors must be free from supervision, direction, and control in the performance of their duties. Furthermore, New York State is more stringent in determining whether an employer-employee relationship exists. An employer-employee relationship may exist (rather than an independent contractor relationship) if the employer: (1) chooses when, where, and how workers perform services; (2) provides facilities, equipment, tools, and supplies; (3) directly supervises the services; (4) sets the hours of work; (5) requires exclusive services; (6) sets the rate of pay; (7) requires attendance at meetings and/or training sessions; (8) asks for oral or written reports; (9) reserves the right to review and approve the work product; (10) evaluates job performance; (11) requires prior permission for absences; and (12) has the right to hire and fire.

If a business is discovered to have improperly treated an employee as an independent contractor, the business will be held accountable for employment taxes for that worker, as well as unemployment insurance and workers’ compensation contributions, with associated fines and penalties. As the business community navigates the economic fallout of the coronavirus crisis, these distinctions continue to matter as they may impact PPP loan entitlement, unemployment and sick leave eligibility, health insurance coverage, and more.

CMM is here for you as we weather this storm. Please don’t hesitate to call on us for guidance on this or any other issue on your mind.

View updated information on this topic here.

The COVID-19 crisis and the measures implemented in response, including states of emergency, social distancing, and mandatory closures, have created extreme challenges for businesses, especially those that are unable to fulfill their contractual obligations due to shutdowns, layoffs, and delays. Whether your own business can’t perform or you’re frustrated by another party’s inability to perform, the degree of relief on the horizon depends on the force majeure language in your contract.

By either excusing or deferring performance, force majeure clauses are designed to protect businesses or individuals when they are unable to perform their contractual obligations due to events beyond their control. The clause is typically triggered only if an event occurs beyond the parties’ control, such as a fire, terrorist attack, war, an “act of God,” and even governmental action that prevents the parties from being able to perform.

Under New York State Law, to be enforceable, a force majeure clause must specifically state what type of event triggers the protection. If the specific event is not listed in the clause, or there is no broad catch-all, the force majeure clause will not excuse or delay performance under the agreement.

To be covered during the COVID-19 pandemic, the force majeure clause must include language about illness, plague, outbreak, and the like, or acts of government (which would apply to a non-essential business’s inability to perform due to Governor Cuomo’s Executive Orders), and/or a catch-all provision, such as “a cause beyond the control of such party for any reason.”

Because the enforceability and applicability of force majeure clauses are so dependent on the language, such clauses may help a business during this time – or be useless depending on how the clause was drafted and what was expected by the parties at the time of negotiation. The shutdown brought about by the coronavirus pandemic almost seems like fiction, and was thus likely not considered by most parties at the time they negotiated contracts calling for performance during this unprecedented time.

However, even in the absence of an applicable force majeure clause, or if the clause does not list a qualifying event, the non-performing party may still be protected under New York law. New York State courts have found that if performance is impossible in certain situations, the parties may not have to perform their obligations under the contract. The Courts have also held that one party cannot keep payment received in exchange for something it is unable to perform for the second party. For example, a resort whose kitchen burned down was required to return the down payment to a patron who had reserved the resort’s kitchen facilities for an event. The Court held that the resort would be unjustly enriched if it could keep the deposit while the patron was unable to use the kitchen facilities as agreed.[1]

If you have a contract that you or the other party is unable to perform and you have questions about what to do next, please reach out to us. We’ll review your agreement and let you know your options so you can move forward in the most productive way possible.

[1] Leisure Time Travel, Inc. v. Villa Roma Resort & Conference Ctr., Inc., 55 Misc. 3d 780, 782 (N.Y. Sup. Ct. 2017)

By Christine Malafi

The U.S. Equal Employment Opportunity Commission (EEOC) enforces workplace anti-discrimination laws, including rules about medical examinations of employees. As the COVID-19 pandemic wreaks havoc across the globe, many questions that were unthinkable even a few weeks ago have now become routine for employers. Based on EEOC guidance, below are answers to some now-common questions from employers regarding the health of their employees.

• How much information may an employer request from an employee who calls in sick?

During a pandemic, employers covered by the ADA (Americans with Disabilities Act) may ask such employees if they are experiencing symptoms of the virus. These include symptoms such as fever, chills, cough, shortness of breath, or sore throat. Employers must maintain all information about employee illness as a confidential medical record in compliance with the ADA.

• When may an ADA-covered employer take the body temperature of employees during the COVID-19 pandemic?

Generally, measuring an employee’s body temperature is a medical examination. But because the CDC and state/local health authorities have acknowledged community spread of COVID-19 and issued attendant precautions, employers may measure employees’ body temperature. However, employers should be aware that some people with COVID-19 do not have a fever.

• Does the ADA allow employers to require employees with symptoms of COVID-19 to stay home?

Yes. The CDC states that employees who become ill with symptoms of COVID-19 should leave the workplace. The ADA does not interfere with employers following this advice.

• When employees return to work, does the ADA allow employers to require doctors’ notes certifying their fitness to work? 

Yes. Such inquiries are permitted under the ADA either because they would not be disability-related or, if the pandemic influenza were truly severe (as is COVID-19), they would be justified under the ADA standards for disability-related inquiries of employees. As a practical matter, however, healthcare professionals may be too busy right now to provide fitness-for-duty documentation. Therefore, new approaches may be necessary, such as reliance on local clinics to provide a form, a stamp, or an email to certify that an individual does not have the virus.

• If an employer is hiring, may it screen applicants for symptoms of COVID-19?

Yes. An employer may screen job applicants for symptoms of COVID-19 after making a conditional job offer, as long as it does so for all entering employees in the same type of job.  This ADA rule applies whether or not the applicant has a disability.  

• May an employer take an applicant’s temperature as part of a post-offer, pre-employment medical exam?

Yes.  Any medical exams are permitted after an employer has made a conditional offer of employment.  However, employers should be aware that some people with COVID-19 do not have a fever.

• May an employer delay the start date of an applicant to has COVID-19 or associated symptoms?

Yes.  According to current CDC guidance, an individual who has COVID-19 or symptoms associated with it should not be in the workplace. 

• Can an employer withdraw a job offer if it needs the applicant to start immediately, but the applicant has COVID-19 or associated symptoms?

Yes. Based on current CDC guidance, this individual cannot safely enter the workplace, and therefore the employer may withdraw the job offer.

Please contact us to discuss your questions so we can assist you in moving forward. View our Labor and Employment legal department page for more on our services.

In a reflection of its relentless determination to pull the business community through this unprecedented period, Campolo, Middleton & McCormick is leading the way with the launch of a first-of-its-kind coronavirus hotline.

Members of the business community, regardless of whether they are CMM clients, can call (631) 738-6781 or email coronarelief@cmmllp.com with questions relating to the impact of the COVID-19 pandemic on their business. Messages will be constantly monitored and routed to the appropriate CMM attorney, who will promptly follow up with guidance at no charge.

The complimentary hotline is in addition to CMM’s Coronavirus Resource Hub on our website, accessible at cmmllp.com/coronavirus. There businesses can find up-to-the-minute resources including articles about new legislation impacting them, disaster loan relief, grant opportunities, and other critical guidance for businesses to move forward, empowered by access to the information they need.

This situation has escalated extraordinarily quickly, and the last thing business owners should be worried about as they try to navigate their way to the other side is having to pay for answers to their critical questions. As in good times, CMM is here to help businesses become as strong and resilient as possible. Do not go it alone – CMM will help you get through this. Contact us today.

The federal Families First Coronavirus Response Act (FFCRA), signed into law on Wednesday, March 18, goes into effect on April 2 and focuses on emergency paid sick leave and expansion of the Family and Medical Leave Act.

The Emergency Paid Sick Leave provisions affect employers with fewer than 500 employees. All such employees, regardless of their tenure with their employer, are eligible for paid sick leave if they cannot work (including remotely) because they are subject to a federal, state, or local quarantine or isolation due to COVID-19; their healthcare provider advised self-quarantine; they are seeking a diagnosis after experiencing COVID-19 symptoms; they are caring for someone subject to quarantine; they are caring for their child for whom school or caregiving locations are closed; and a sort of “catchall” provision to be clarified by the Secretary of Health and Human Services.

Full-time employees receive 80 hours of paid sick leave; part-time employees receive the equivalent of the number of hours they would ordinarily work during a two-week period. For leave due to the above reasons regarding the employee’s own health, eligible employees would receive paid sick leave at their usual rate, capped at $511 per day and $5,110 total. For the other qualifying reasons, the rate is two-thirds their regular rate of pay, capped at $200 per day and $2,000 total.

Additional guidance from the Secretary of Labor is anticipated soon regarding guidelines for calculating leave benefits as well as employee posting requirements.

The FMLA Expansion Act, included in the legislation, addresses employees whose children’s school or childcare location has closed due to the pandemic. The emergency FMLA expansion temporarily does away with some of the FMLA’s limitations. In general, FMLA applies only to those employers with 50 or more employees and only to those employees who worked for at least a year and 1,250 hours (and only for specific reasons). Under this expansion, the FMLA temporarily now includes all employers with fewer than 500 employees, and the employee needs to have worked for only 30 days prior.

Employees may take up to 12 weeks of leave if they cannot work, including remotely, due to having to care for their children whose schools/childcare locations are closed due to the pandemic. The initial 10 days are unpaid, but employees may use accrued PTO time at their election. After the 10 days, employees are entitled to receive two-thirds of their normal wages for the number of hours they would ordinarily be working, up to $200 per day and $10,000 total.

Those employers with 25 or more employees must reinstate the covered employee to the same or equivalent position upon return; for those employers with fewer than 25 employees, the employee must be reinstated unless the position no longer exists due to economic issues caused by the pandemic.

Please contact us to discuss how this law intersects with New York’s new paid sick leave requirements and the next steps to move forward.

UPDATED March 26, 2020 – Each covered employer must post in a conspicuous place on its premises a notice of FFCRA requirements.

See additional information here.

By Christine Malafi

Updated guidance was issued by New York State on January 20, 2021. Learn more here.

New York State has enacted emergency paid sick leave legislation addressing how businesses should respond to employees with COVID-19 or those employees under government-ordered quarantine.

Effective immediately, with respect to employees subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19 by New York State, the Department of Health, a local board of health, or any government entity duly authorized to impose such a quarantine, the new legislation requires that:

• Employers with 10 or fewer employees as of January 1, 2020 and a net income of less than $1 million in the last fiscal year must provide job protection during quarantine. Employees immediately qualify for Paid Family Leave and short-term disability benefits, with New York State insurance covering the cost (capped at benefits coverage equal to annual salaries of $150,000).
• Employers with 11 to 99 employees as of January 1, 2020 (or 10 or fewer employees but a net income greater than $1 million last fiscal year) must provide five days of paid sick leave and job protection during quarantine. After the five days, the employee qualifies for Paid Family Leave and short-term disability, with New York State insurance covering the cost (capped at benefits coverage equal to annual salaries of $150,000).
• Employers with 100 or more employees as of January 1, 2020 (and all public employers) must provide 14 days of paid sick leave and job protection during quarantine.

Please contact us with any questions about how this legislation impacts your business.

Now more than ever, it’s critical to support the Long Island institutions that bring us together as a community. The Stony Brook Staller Center hosts so many events throughout the year, but their biggest point of pride is the annual live performance season. In response to concerns about COVID-19, the Staller Center has been forced to cancel all events through May 15, 2020. Please join us in supporting the Staller Center now to ensure their health and longevity when things settle down and we’ll be returning to them for a sense of normalcy and joy!

As part of our focus on the arts in 2020, CMM Cares is proud to support the Staller Center for the Arts at Stony Brook University. Staller brings outstanding and diverse performances, exhibits, and educational programs to the region in the fields of music, dance, theater, film and fine arts, and their efforts are fundamental to strengthening Long Island communities socially, educationally, and economically. The arts inspire us, bring us joy, help us express ourselves, and connect us, especially in difficult times such as these.

To learn more about ways to help support CMM Cares, Inc. and the Staller Center, please contact vtringone@cmmcares.org.

March 17, 2020 – The governor has implemented changes in an effort to reduce the spread of COVID-19 that directly impact many of our municipal clients, including villages, towns, and cities. Below is an outline of those changes that we feel most directly and significantly impact municipalities.

• Any March village elections are postponed to April 28, 2020.

• Local governments with their own local police departments or emergency services must provide surgical masks to their police officers and emergency responders.

• The governor has asked that local governments identify places within their municipalities that can easily be converted to medical facilities.

• All local governments have been called upon to reduce their workforce by at least 50% and to allow nonessential employees to stay at home. We suggest allowing nonessential employees to work remotely from home and, to the extent practicable, enacting staggered shifts for essential employees, including office staff, Highway Department, or Department of Public Works employees.

• The governor has suspended laws and regulations relating to emergency procurement to the extent necessary to purchase equipment, services, supplies, or materials without following the standard procurement procedures.

• The governor has suspended Article 7 of the Public Officers Law, thus permitting any public body to meet and take such actions authorized by law without permitting public/in-person access to meetings and authorizing such meetings to be held remotely by conference call or other similar service. The public must have the ability to view and listen to such proceedings and the meetings must be recorded and later transcribed.

Hopefully, with these changes, local governments can continue serving their constituents seamlessly and with as little disruption in services as possible. If we can be of any assistance please feel free to contact Scott Middleton at any time at (631) 738-9100, ext. 302, or smiddleton@cmmllp.com.