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Getting Back to Work in New York: An Employer’s Guide

Posted: April 28th, 2020

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

WEBINAR RECAP: PPP Loan Forgiveness

Posted: April 23rd, 2020

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

WEBINAR: Loan Forgiveness Under the CARES Act Paycheck Protection Program

Posted: April 20th, 2020

Event Date: April 23rd, 2020

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 for in the CARES Act. Businesses that meet these requirements will have the greatest likelihood of maximizing loan forgiveness.

Join Gettry Marcus CPA, P.C. and CMM for a complimentary webinar that will address the specific loan forgiveness provisions and what you should be doing during the critical 8-week Covered Period. The webinar will include examples that will help you to better understand specific CARES Act’s loan forgiveness provisions and provide planning tools that can be used to help achieve maximum loan forgiveness.

Thursday, April 23, 2020 at 10:00 a.m.

REGISTER HERE

Speakers:

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

CMM Continues to Move Economy Forward by Closing Another M&A Deal Remotely

Posted: April 20th, 2020

Nonstop headlines about the economic damage caused by COVID-19 can challenge even the strongest business leaders to stay positive during this pandemic. With positive economic news in short supply, CMM is happy to announce that we have closed yet another deal, unhampered by the challenges of doing business remotely.

Vincent Costa handled the transaction for a longtime CMM client. The deal involved the asset sale of a business that specializes in power coating, sand blasting, and metal polishing. The parties were anxious to push the deal across the finish line given the current economic situation, and CMM delivered, closing a deal entirely online and without any delays.

“We’re just trying to do our part to adapt to the circumstances and keep deals moving,” said Costa. “With every deal closed, we get closer to our economy’s recovery from this pandemic.”

Learn more about our Mergers & Acquisitions practice here.

Governor Issues Executive Order Regarding Masks for Essential Workers

Posted: April 14th, 2020

Tags: coronavirus, labor & employment

Governor Cuomo issued Executive Order 202.16 on April 12 requiring that as of Wednesday, April 15 at 8 p.m., any employees present in the workplace of all essential businesses shall be provided and shall wear face coverings when in direct contact with customers or members of the public. Businesses must provide these face coverings at their own expense for their employees. Local governments and local law enforcement shall enforce the requirement.

Read the full Executive Order, which also addresses antibody testing, the Multiple Dwelling Law, and others, here.

Please call us with any questions regarding how this Executive Order affects your business.

Virtual Communication, Real Contract: Creating Binding Contracts by Email During the Coronavirus Crisis

Posted: April 10th, 2020

Tags: coronavirus

By Patrick McCormick

Can an email exchange create a binding contract? In short, yes.

With more people working from home and transacting virtually than ever before due to the coronavirus pandemic, it’s imperative for business owners to understand how email communications can rise to the level of binding agreements. (There will be enough to clean up as things get back to normal, and the last thing you want to worry about is whether your business unwittingly became party to a contract while your conference room sat empty.)

Even before the current health crisis, courts have been called on with increasing frequency to address claims alleging the creation of a binding contract based upon an email exchange. As a preliminary matter, emails alone are indeed sufficient to create a binding contract. Consider Law Offs. of Ira H. Leibowitz v. Landmark Ventures, Inc., 131 A.D.3d 583, 15 N.Y.S.3d 814 (2d Dep’t 2015), which involved breach of contract claims related to services provided by the plaintiff. In examining emails exchanged by the parties, the Court found “[b]y the plain language employed” in the emails, it was clear that the plaintiff made an offer to provide services for a certain fee and that the defendant accepted the offer, creating a binding contract.

Bolstering the premise that a court won’t find the absence of the contract simply because all communications are in email form is In re Estate of Wyman, 128 A.D.3d 1157, 8 N.Y.S.3d 493 (3d Dep’t 2015). In that case, the decedent and the respondent purchased a parcel of real property. After the decedent’s death, her executor commenced a proceeding against the respondent to turn over ownership of the parcel to the estate, claiming that a series of emails between the decedent and respondent had created an enforceable contract to transfer ownership. The Appellate Division found that there was no contract, but not because the evidence was comprised solely of emails; rather, the emails did not include a price to be paid for the transfer of the property, a necessary term. The decision suggests that if the emails had included a price, the Court would have found a binding and enforceable contract in the exchange.

More recent cases echo the notion that so long as all the elements of an otherwise valid contract are met, the fact that the communications are emails won’t render the agreement unenforceable. Consider Schaffer v. View at Dobbs, LLC, 65 Misc.3d 133(A) (2019), in which the Court held that the parties created a binding contract through emails where the plaintiff wrote that upon the defendant’s approval of design drawings, the defendant was to pay him $10,000.00. The defendant responded via email, “Ok you have a deal.”

Similarly, in Kataldo v. Atlantic Chevrolet Cadillac, 161 A.D.3d 1059 (2d Dep’t 2018), the Court held that “an email message may be considered ‘subscribed’ as required by CPLR 2104, and, therefore, capable of enforcement, where it ‘contains all material terms of a settlement and a manifestation of mutual accord, and the party to be charged, or his or her agent, types his or her name under circumstances manifesting an intent that the name be treated as a signature’” (citing Forcelli v. Gelco Corp., 109 A.D.3d at 251 (2d Dep’t 2013)).

By contrast, the Second Department declined to hold an email exchange in which the plaintiff’s counsel had written “consider it settled” but then continued a discussion of further occurrences necessary to finalize the agreement. Teixeira v. Woodhaven Ctr. of Care, 173 A.D.3d 1108 (2d Dep’t 2019). This outcome echoes that of Weg v. Kaufman, 159 A.D.3d 774, 72 N.Y.S.3d 135 (2d Dep’t 2018), in which anesthesiologists disputed whether they were business partners or had an independent contractor relationship. Despite the existence of an independent contractor agreement stating that it comprised the entire agreement between the parties, the would-be business partner introduced an email that referenced splitting income as evidence that he was a 50-50 partner in the practice. But the Second Department found that “The parties’ relationship was governed by written agreements. The 2005 email… is not sufficient to draw” an inference of partnership because “it fails to set forth the material terms of a partnership agreement.” Id. at 777. (1)

While communicating by email may seem informal compared to the time-honored images of mahogany tables covered with legal treatises and lengthy documents, these cases make clear that parties to an email exchange must exercise care to avoid unintentionally creating a binding contract. An otherwise valid contract cannot be undone simply by concluding with “Sent from my iPhone.”

Please contact us with any questions about how to protect your business during this unprecedented time.

Footnotes

(1) See also Kolchins v. Evolution Mkts., 31 N.Y.3d 100, 73 N.Y.S.3d 519 (2018) (holding that a reasonable factfinder could determine that a binding contract was formed by the exchange of emails stating that “[t]he terms of our offer are the same [as the] terms of your existing contract” and outlined the core terms that were included in the prior written agreement. The plaintiff replied “I accept. pls [sic] send contract,” to which the defendant replied, “Mazel. Looking forward to another great run.” The Court found that the offer and acceptance language, “coupled with a forward-looking statement about the next stage of the parties’ continuing relationship,” evidenced the intent to be bound for purposes of surviving a motion to dismiss. Id. at 107).

Coronavirus-Related Suspension of NYS Laws – UPDATED April 7, 2020

Posted: April 7th, 2020

Tags: coronavirus

On April 7, 2020, Governor Cuomo signed Executive Order 202.14 to continue the modification and suspension of certain New York State laws relating to the COVID-19 disaster.

In relevant part, the Executive Order extends the provisions tolling the statute of limitations until May 7, 2020 (tolling previously went through April 19, 2020).

Further, the statewide restriction on all non-essential businesses and functions, including the operation of schools, has been extended an additional two weeks to April 29, 2020.

The Executive Order also clarifies the requirements for remote signing of documents such as deeds, wills, powers of attorney, and healthcare proxies. The law authorizes the use of audio-visual technology for witnessing if:

• The person requesting that his or her signature be witnessed, if not personally known to the witness, must present valid photo ID to the witness during the video conference (not before or after);
• The video conference must allow for direct interaction between the person and the witness (and the supervising attorney, if applicable);
• The witness must receive a legible copy of the signature page, which may be transmitted via fax or electronically, on the same date that the pages are signed by the person;
• The witness may sign the transmitted copy of the signature page and transmit the same back to the person; and
• The witness may repeat the witnessing of the original signature page as of the date of execution provided the witness receive such original signature pages together with the electronically witnessed copies within thirty days after the date of execution.

The text of the full Executive Order is available here.

Revisiting the Distinction between Employees and Independent Contractors in the COVID-19 Era

Posted: April 7th, 2020

Published In: The Suffolk Lawyer

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.

Mediation Is Having Its Moment

Posted: April 6th, 2020

By: Scott Middleton, Esq. email

Tags: commercial litigation, coronavirus, negligence

Back in normal times – loosely defined as early March 2020 and before – mediation could be either a great tool to move beyond an impasse or – if the parties were too far apart and unrealistic – a colossal waste of time and money. Now that the court system has effectively shut down due to the COVID-19 pandemic, however, mediation has emerged as a critical tool to resolve disputes that keep marching on even as the world around us has stopped.

Alternative dispute resolution (known as “ADR”) is the settling of disputes outside the courtroom. Non-binding mediation is a voluntary form of ADR in which a neutral third party, the mediator, works to help the parties come to a mutually acceptable resolution to their dispute. (Unlike arbitration, mediation is not binding and mediators are not empowered to make or enforce decisions.)

In general, without the proper approach and preparation to mediation, the parties may be pushed further apart. Consider this example: a couple of years ago, my client was amenable to settling but the plaintiff, in the lead-up to the mediation, was less than forthcoming. He led me to believe that he was looking to settle for less than six figures. Based upon this understanding, my client agreed to mediation. We prepared our submission for the mediator and attended the mediation with the goal of resolving the case. At the mediation table, however, the plaintiff’s counsel increased his prior settlement demand and then acted indignantly when the offer presented was, in his mind, inadequate. While the mediator sided with us when it came to valuation, there was no reasoning with the plaintiff and needless to say, the case did not settle and we all moved forward to trial more frustrated than before.

Considering situations like that one, our office generally moves a case into mediation only when there is a glimmer of hope for a resolution. But remember, mediation is a tool to avoid trial in an effort to resolve matters reasonably. Well, regardless of how badly we may want to go to trial on a matter, for the foreseeable future in New York, that’s an impossibility. But the disputes that led litigations to be filed in the first place have not gone on hiatus. Therefore, in just a few [long] weeks, mediation has emerged as a vital tool to resolve disputes that were previously headed for trial before the coronavirus upended life as we know it.

In normal times, if the parties are reasonable and amenable to settling, mediation can be an economical way to resolve a matter before fully preparing for a long and costly trial. When we are prepared and the parties are close enough to make it worthwhile, mediation is almost always a success. Now that litigation is temporarily off the table, mediation is a more important tool than ever to achieve a final resolution when the parties need it. Please contact us to discuss whether the time is right to mediate.