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Updated Client Alert – The Paycheck Protection Program Loan Program Extended and Loan Data Released
Updated Client Alert – The Paycheck Protection Program Loan Program Extended and Loan Data Released 150 150 walsh.law

This memorandum updates our previously published Client Alerts concerning relief for small businesses impacted by the COVID-19 pandemic (available here and available here).  On June 3, 2020, the Senate approved the House-passed Paycheck Protection Program Flexibility Act of 2020 (the “Act”),[i] which the President signed into law on June 5, 2020.  The Act, discussed further below, dramatically alters some of the key provisions of the U.S. Small Business Administration’s (“SBA”) recently-enacted Paycheck Protection Plan (“PPP”).  On July 4, 2020, the President signed a new law extending the deadline for applying for a PPP loan from June 30 to August 8, 2020, after both houses of Congress approved the extension unanimously earlier in the week.

By way of background, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)[ii] became law on March 27, 2020, affording small businesses an opportunity to borrow an amount equal to two and one-half times its monthly payroll.  The PPP provided that the borrowed sum may be forgivable if certain employee retention and other criteria are met.  Due to overwhelming demand, PPP funding was exhausted around mid-April of 2020.  On April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act (the “Enhancement Act”),[iii] a second round of emergency economic stimulus funding, became law.  The Enhancement Act, a $484 billion economic relief package, included replenishment funds for the PPP, the Economic Injury Disaster Loan (“EIDL”), emergency grant programs, and also earmarked funding for healthcare providers to assist in treating and testing for COVID-19.

The Paycheck Protection Program Flexibility Act provides new flexibility to borrowers.  Some of the Act’s key provisions include:

  • Extension of Deadline to Use Loan Proceeds: The Act changes the “covered period” which borrowers are able to use PPP loans to qualify for loan forgiveness from 8 weeks after the loan is disbursed to 24 weeks from loan disbursement, or December 31, 2020, whichever comes earlier.
  • Uses of Loan Proceeds: The Act provides that 60% of loan proceeds must be used for payroll costs to qualify for loan forgiveness, thereby raising the cap on the amount of forgivable loan proceeds that borrowers may use on non-payroll expenses from 25% to 40%.
  • Additional Time to Replace Full Time Employees/Restore Salaries: Loan forgiveness remains subject to reduction with respect to reduction of employees or salary cuts.  However, the Act will extend the CARES Act’s June 30, 2020 deadline to rehire employees and reverse salary cuts of greater than 25% to December 31, 2020.
  • Loan Maturity: The Act extends the minimum loan term for any portion of the loan that is not forgiven, from 2 to 5 years.  The change applies to any PPP loans disbursed after the Act’s enactment; however, nothing in the Act prohibits lenders and borrowers from mutually agreeing to modify the maturity terms to match the permitted 5-year period.
  • Payroll Tax Deferral: PPP fund recipients are allowed to defer 2020 Social Security payroll taxes obligations into 2021 and 2022, even if the loan is forgiven on or before December 31, 2020.

 

While the Act aims to address certain borrower frustrations, it is expected that further guidance on the Act will be provided by the Department of the Treasury and the SBA.  Indeed, since enactment of the Paycheck Protection Program Flexibility Act, the SBA issued a number of Interim Final Rules addressing, among other things, loan forgiveness.[iv]

On July 6, 2020, the SBA and the Treasury Department released the complete database of all PPP loans issued to date.  In a July 6 press release issued by the SBA, Treasury Secretary Steven T. Mnuchin stated, “The average loan size is approximately $100,000, demonstrating that the program is serving the smallest of businesses.”[v]

For more information regarding options for your business during this unprecedented time, please contact Hector D. Ruiz at hruiz@walsh.law or (973) 757-1019, Christopher Hemrick at chemrick@walsh.law or (973) 757-1033, Sydney Darling at sdarling@walsh.law or (973) 757-1034, or Joseph L. Linares at jlinares@walsh.law or (973) 757-1025.

 

  • [i] Paycheck Protection Program Flexibility Act of 2020, H.R. 7010, 116th Cong. (2020).
  • [ii] Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, 116th Cong. (2020).
  • [iii] Paycheck Protection Program and Health Care Enhancement Act, H.R. 266, 116th Cong. (2020).
  • [iv] Interim Final Rule on Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule (posted June 22, 2020).
  • [v] Press Release, SBA and Treasury Announce Release of Paycheck Protection Program Loan Data (July 6, 2020).

 

 

Walsh Pizzi O’Reilly Falanga LLP has prepared the content of this alert for general informational purposes. The content should not be considered advice, recommendations, or an offer to perform services. You should not act upon any information provided in this alert without seeking professional legal counsel from an attorney licensed to practice law in your jurisdiction. No representations are being made as to the completeness or accuracy of the information contained herein.

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Caitlin P. Cascino Named New Leader of the Bar-New Jersey Law Journal Announces Winners
Caitlin P. Cascino Named New Leader of the Bar-New Jersey Law Journal Announces Winners 150 150 walsh.law

Newark, NJ, June 3, 2020 – The New Jersey Law Journal (NJLJ) has named Walsh Attorney Caitlin P. Cascino one of the New Leaders of the Bar in their Professional Excellence 2020 Awards. For the award, the NJLJ considers attorneys yet to reach the age of 40 who have brought both notable achievements and outstanding potential to the table. NJLJ awards honor those who have left an indelible mark on the legal community in New Jersey and beyond through their unwavering dedication to the profession.

“Congratulations to Caitlin for this well-deserved recognition,” said Walsh Managing Partner Liza M. Walsh. “As a young lawyer she is unafraid to take on big challenges, and her leadership qualities are evident. She often takes the lead in mentoring younger associates, cheerleading and assisting them in developing their careers. She uses her employment expertise to benefit the firm and believes strongly in giving back. I have no doubt Caitlin will continue to uphold and further the best practices of the profession.”

NJLJ will publish profiles and Q&As about the award winners and their accomplishments this summer and will hold a celebration of all award winners on September 23, 2020. “[G]ood legal work remains compelling even in strange times,” NJLJ wrote in announcing the awards. “In a time where public interest and social justice are foremost in our minds, a number of these honorees have pushed hard toward those goals. Others have notched impressive victories for clients in all sorts of disputes, advancing the law in the process.”

Caitlin concentrates her practice on employment litigation and counseling, passionately representing her clients in evolving areas of law such as sexual harassment and age discrimination. She represents employers of all sizes and from varying industries in state and federal court and before administrative agencies. She represents management against single- and multi-employee allegations of workplace discrimination, harassment, whistleblower retaliation, and breach of contract. She also litigates matters involving breaches of post-employment restrictive covenants. In addition, she is active in the legal community, helping organizations succeed with her time and talents.

 

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Walsh Helps Defeat New Jersey Department of Education’s Motion to Dismiss in Special Education Case
Walsh Helps Defeat New Jersey Department of Education’s Motion to Dismiss in Special Education Case 150 150 walsh.law

A U.S. District Judge denied the New Jersey Department of Education’s (NJDOE) motion to dismiss the claims of parents of students seeking educational assistance under federal law in C.P. et al. v. NJDOE.  The complaint seeks injunctive relief to correct systemic flaws in the NJDOE’s handling of special education cases brought by parents and their children with disabilities.  Specifically, the plaintiffs seek to enforce their federal rights to a timely resolution of their claims under the 45-Day Rule set out in 34 C.F.R. 300.515.

In a written opinion, the Hon. Noel L. Hillman, U.S.D.J. resoundingly rejected each of the NJDOE’s arguments.  In a well-stated conclusion, the Judge explained that: “We are reminded of how precious time is, and how, once lost, it can never be recovered. And so philosophers, mental health professionals, pundits and politicians alike, all of various stripes, have asked us to reflect on what our priorities as individuals, families, and as a society as a whole ought to be. There should be no controversy in this case or otherwise that the education of a child – indeed all children – should be at the top of that list….[T]hese Plaintiffs have made out plausible claims that the system for the adjudication of IDEA disputes by the administrative state in New Jersey is profoundly broken and routinely violates the federal laws designed to ensure that our most vulnerable children remain the priority we all agree they are, not only in these times, but at all times.”

Currently pending before the Court is Plaintiffs’ motion for a preliminary injunction compelling the NJDOE to reform its dispute resolution system for adjudicating special education disputes to comply with the 45-Day Rule. Judge Hillman stated he will decide the application in a separate opinion and order. Judge Hillman’s opinion can be read here.

The case was brought by Walsh attorneys Thomas J. O’Leary and Zahire D. Estrella-Chambers, together with four other law firms. O’Leary’s special education law practice focuses on the representation of students with special needs and their families in the protection and enforcement  of their legal rights under the New Jersey Constitution, the Individuals with Disabilities Education Act, the American with Disabilities Act, and other applicable law.  When disputes arise, parents rely on O’Leary for representation in mediation, as well as litigation before the New Jersey Office of Administrative Law and in federal and state courts. Estrella-Chambers also is a member of the Walsh Special Education team.

The case is C.P. et al. v. New Jersey Department of Education, case number 1:19-cv-12807, in the U.S. District Court for the District of New Jersey.

For more information, please contact Thomas J. O’Leary at (973) 757-1045 or toleary@walsh.law.

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Updated Client Alert – The Paycheck Protection Program and Health Care Enhancement and Loan Forgiveness
Updated Client Alert – The Paycheck Protection Program and Health Care Enhancement and Loan Forgiveness 150 150 walsh.law

This memorandum updates our previously published Client Alert concerning relief for small businesses impacted by the COVID-19 pandemic (available here).  The Paycheck Protection Program and Health Care Enhancement Act (the “Enhancement Act”)[i] is a second round of emergency economic stimulus funding that became law on April 24, 2020.  The Enhancement Act is a $484 billion economic relief package which includes funding to replenish the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”); the Economic Injury Disaster Loan (“EIDL”); emergency grant programs; and also earmarks funding for healthcare providers to assist in treating and testing for COVID-19. On May 15, 2020, the SBA released the Loan Forgiveness Application and accompanying instructions for the forgiveness of loans under the PPP.

Background
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)[ii] became law on March 27, 2020, and offered small business entities an opportunity to borrow an amount equal to two and one-half times monthly payrolls and obtain forgiveness of that loan amount provided certain employee retention and other criteria are met under the newly-announced Paycheck Protection Program.  Due to overwhelming demand, funding was exhausted and on April 15, 2020, U.S. Treasury Secretary Steven T. Mnuchin and SBA Administrator Jovita Carranza issued a statement that the SBA was not able to issue new loan approvals once appropriations for the program lapsed.  The Enhancement Act replenished funding for the PPP and EIDL.

Paycheck Protection Program and EIDL Program
The Enhancement Act does not change the framework of the PPP or EIDL programs (discussed here).  For example, PPP applications are funded on a first-come, first-served basis, borrowers are still required to use at least 75% of the loan proceeds for payroll costs for loan forgiveness purposes, and borrowers must use the funds within the eight-week period from the disbursement date of the loan.  The latest guidance includes an interim final rule issued on April 24, 2020 (found here), and the most recent Frequently Asked Questions on the Paycheck Protection Program (found here).

The Enhancement Act provides a second round of roughly $310 billion in funding to replenish the PPP, of which $60 billion are earmarked for small and medium lenders, and lenders in minority, underserved and rural communities.  The Act also allocates an additional $60 billion for the EIDL Program and SBA’s emergency grant program.

Loan Forgiveness
The recently issued Loan Forgiveness Application provides detailed guidance for borrowers concerning the calculation of PPP loan forgiveness.  The application consists of the following: (1) the PPP Loan Forgiveness Calculation Form; (2) PPP Schedule A; (3) the PPP Schedule A Worksheet; and (4) an PPP Borrower Demographic Information Form.  In sum, the Loan Application and instructions provide guidance on the determination of costs eligible for forgiveness, addressing issues including eligible payroll and non-payroll costs, calculating full-time equivalency (FTE) employees, forgiveness standard, FTE and salary reduction, and employer contribution to benefits, among other things.  Further guidance from the SBA on loan forgiveness may be forthcoming.

For more information regarding options for your business during this unprecedented time, please contact Hector D. Ruiz at hruiz@walsh.law or (973) 757-1019, Christopher Hemrick at chemrick@walsh.law or (973) 757-1033, or Sydney Darling at sdarling@walsh.law or (973) 757-1034.

  • [i] Paycheck Protection Program and Health Care Enhancement Act, H.R. 266, 116th Cong. (2020).
  • [ii] Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, 116th Cong. (2020).

 

Walsh Pizzi O’Reilly Falanga LLP has prepared the content of this alert for general informational purposes. The content should not be considered advice, recommendations, or an offer to perform services. You should not act upon any information provided in this alert without seeking professional legal counsel from an attorney licensed to practice law in your jurisdiction. No representations are being made as to the completeness or accuracy of the information contained herein.

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Joseph L. Linares Sworn In as New Jersey State Bar Association Trustee
Joseph L. Linares Sworn In as New Jersey State Bar Association Trustee 150 150 walsh.law

NEWARK, NJ, May 15, 2020 –Joseph L. Linares has been selected to serve as an At-large Trustee for the
New Jersey State Bar Association (NJSBA), New Jersey’s largest lawyers group dedicated to educating lawyers and the public and improving the legal system. Joseph was sworn in by Chief Justice Stuart Rabner in a virtual ceremony on May 15.

The ceremony was held as a live-stream event during the NJSBA’s first-ever virtual convention and Joseph took the oath from his home via the Zoom platform. More than 2,200 attendees from across New Jersey and around the world tuned in for the premiere annual event of the New Jersey legal community. Attendees also bid farewell to NJSBA 2019-2020 President Evelyn Padin and witnessed Chief Justice Rabner swear in NJSBA 2020-2021 President Kimberly A. Yonta and all other officers and trustees of the Association.

“I am honored to be chosen and I look forward to serving alongside a distinguished group of colleagues, providing leadership on the future of the legal profession,” Joseph said. “I’m excited to step into this new role to help further the NJSBA’s mission.”

Joseph concentrates his practice on litigation, contract drafting and complex negotiations, and handles a multitude of dispute types including contract claims, intellectual property, employment, construction and torts as well corporate/business law and transactional work. In addition to servicing established corporate clients, he also provides counsel for non-profits, small businesses and start-up ventures. He is an active member of the NJSBA and serves on the NJSBA Pro Bono and Diversity Committees. He earned his J.D. cum laude from Rutgers University School of Law, a B.A. from Villanova University and a dual M.B.A. from Seton Hall University, with highest honors.

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Client Alert – New Jersey Governor Signs Executive Order Permitting the Resumption of Non-Essential Construction
Client Alert – New Jersey Governor Signs Executive Order Permitting the Resumption of Non-Essential Construction 150 150 walsh.law

This memorandum updates our previously published Client Alert concerning guidance for construction companies relating to the COVID-19 pandemic (available here).  On May 12, 2020, New Jersey Governor Phil Murphy signed Executive Order No. 142 (2020), permitting the resumption of non-essential construction effective 6:00 a.m. on May 18, 2020, among other things.  All construction projects must comply with the social distancing, safety, and sanitization requirements that are outlined in detail in the Executive Order.

Noting that “construction sites are generally limited to workers, rather than customers and other members of the public, and so involve less risk of significant transmission of COVID-19 in the community,”[i] Executive Order 142 directs businesses engaged in construction projects, notwithstanding whether the projects were deemed as essential under Executive Order 122 (2020), to comply with the following requirements:[ii]

  1. Prohibit non-essential visitors from entering the worksite;
  2. Engage in appropriate social distancing measures when picking up or delivering equipment or materials;
  3. Limit worksite meetings, inductions, and workgroups to groups of fewer than 10 individuals;
  4. Require individuals to maintain six feet or more distance between them wherever possible;
  5. Stagger work start and stop times where practicable to limit the number of individuals entering and leaving the worksite concurrently;
  6. Identify congested and “high-risk areas,” including but not limited to lunchrooms, breakrooms, portable rest rooms, and elevators, and limit the number of individuals at those sites concurrently where practicable;
  7. Stagger lunch breaks and work times where practicable to enable operations to safely continue while utilizing the least number of individuals possible at the site;
  8. Require workers and visitors to wear cloth face coverings, in accordance with CDC recommendations, while on the premises, except where doing so would inhibit the individual’s health or the individual is under two years of age, and require workers to wear gloves while on the premises. Businesses must provide, at their expense, such face coverings and gloves for their employees. If a visitor refuses to wear a cloth face covering for non-medical reasons and if such covering cannot be provided to the individual by the business at the point of entry, then the business must decline entry to the individual. Nothing in the stated policy should prevent workers or visitors from wearing a surgical-grade mask or other more protective face covering if the individual is already in possession of such equipment, or if the businesses is otherwise required to provide such worker with more protective equipment due to the nature of the work involved. Where an individual declines to wear a face covering on the premises due to a medical condition that inhibits such usage, neither the business nor its staff shall require the individual to produce medical documentation verifying the stated condition;
  9. Require infection control practices, such as regular hand washing, coughing and sneezing etiquette, and proper tissue usage and disposal;
  10. Limit sharing of tools, equipment, and machinery;
  11. Where running water is not available, provide portable washing stations with soap and/or alcohol-based hand sanitizers that have greater than 60% ethanol or 70% isopropanol;
  12. Require frequent sanitization of high-touch areas like restrooms, breakrooms, equipment, and machinery;
  13. When the worksite is an occupied residence, require workers to sanitize work areas and keep a distance of at least six feet from the occupants; and Place conspicuous signage at entrances and throughout the worksite detailing the above mandates.

 

Finally, Executive Order 142 expressly supersedes the provisions of Executive Order 122 which halted operations of non-essential construction projects and it also applies safety provisions of Executive Order 122 to non-essential construction.[iii]  New Jersey Office of Emergency Management (NJOEM) Administrative Order No. 2020-11 (permitting construction of religious facilities and deeming these projects essential construction projects) is also hereby superseded in full.[iv]

For more information regarding contractor rights and remedies during this unprecedented time, please contact Thomas J. O’Leary, at toleary@walsh.law or (973) 757-1045, or Hector D. Ruiz, at hruiz@walsh.law or (973) 757-1019.

  • [i] Executive Order 142 (2020), at page 3.
  • [ii] Executive Order 142 (2020), at ¶ 2.
  • [iii] Id., at ¶ 3.
  • [iv] Id.

 

Walsh Pizzi O’Reilly Falanga LLP has prepared the content of this alert for general informational purposes. The content should not be considered advice, recommendations, or an offer to perform services. You should not act upon any information provided in this alert without seeking professional legal counsel from an attorney licensed to practice law in your jurisdiction. No representations are being made as to the completeness or accuracy of the information contained herein.

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Client Alert – New Title IX Sexual Harassment Regulations Mandate Significant Changes to the Way Colleges and Universities Respond to Sexual Misconduct
Client Alert – New Title IX Sexual Harassment Regulations Mandate Significant Changes to the Way Colleges and Universities Respond to Sexual Misconduct 150 150 walsh.law

By: Mariel Belanger

On Wednesday May 6, 2020, the U.S. Department of Education (“DOE”) issued its long awaited final Title IX regulations regarding sexual misconduct in education. The new regulations, for the first time, impose legally binding rules regarding the manner in which recipients of federal financial assistance must comply with Title IX and respond to allegations sexual harassment. As a result, the new regulations replace prior non-binding guidance issued by the DOE and differ in many important ways from the earlier guidance.

The new regulations take effect on August 14, 2020, which means colleges and universities must immediately take action to ensure their sexual harassment/sexual misconduct policies and procedures comport with the new regulatory requirements and make any necessary changes.

New Definition of “Sexual Harassment”

Most notably, the regulations define actionable “sexual harassment” to delineate what conduct triggers an institution’s Title IX obligations. Departing from its earlier guidance, the DOE declined to adopt the Title VII definition of actionable “sexual harassment’ for Title IX matters. It explained that it did not believe it appropriate to equate educational environments with workplaces because it may “chill and infringe upon the First Amendment freedoms of students, teachers, and faculty by broadening the scope of prohibited speech and expression.” Instead, the DOE chose to codify the United States Supreme Court’s narrower definition of “sexual harassment” set forth in Davis v. Monroe County Board of Education, 526 U.S. 629 (1999), an early Title IX case.

Adopting the language from Davis, the new regulations define actionable “sexual harassment” as conduct on the basis of sex that is “[u]nwelcome conduct determined by a reasonable person to be so severe, pervasive, and objectively offensive that it effectively denies a person equal access to the recipient’s education program or activity.” 34 CFR § 106.30 (emphasis added). In addition, the definition of sexual harassment expressly includes quid pro quo harassment and sexual assault, dating violence, domestic violence, and stalking, as defined in the Clery Act and the Violence Against Women Act. See id.  In light of this departure from Title VII jurisprudence, the definition of sexual harassment currently used by many institutions may be overly broad and in violation of the regulations. All definitions of sexual harassment and sexual misconduct contained in Title IX policies should be carefully vetted to ensure they comport with the new regulatory mandates.

New “Actual Knowledge” Requirement

The regulations also specify when and how an institution must respond to allegations of sexual harassment. The regulations clarify that an institution has an obligation to respond to allegations of sexual harassment only when it has “actual knowledge” of the alleged conduct. “Actual knowledge” is a defined term. An institution is deemed to possess actual knowledge only when an allegation of sexual harassment is reported to a Title IX Coordinator or to “any official of the recipient who has authority to institute corrective measures on behalf of the recipient.” 34 CFR § 106.30. Institutions should determine which employees to designate as officials with authority and subsequent Title IX reporting obligations. In light of this change, institutions may now determine which employees to designate as officials with authority and subsequent Title IX reporting obligations. They no longer have to designate virtually all employees as mandatory reporters, but can instead decide who to designate as an official with authority based upon factors such as their culture, internal structure and applicable state law concerns.

New Mandatory, Uniform Requirements for the Title IX Grievance Procedure

Once an institution has actual knowledge of an allegation of sexual harassment, the regulations require Title IX Coordinators to promptly inform complainants of supportive measures available, with or without filing a formal complaint, and to explain the process for filing a formal complaint. 34 CFR § 106.44. Where a formal complaint is filed, institutions must initiate a formal grievance process that complies with the detailed requirements set forth in the regulations. Moreover, the new grievance process requirements are uniformly applicable to all colleges and universities receiving federal financial assistance, regardless of size or whether the institution is public or private. The regulations do, however, maintain a religious organization’s ability to seek an exemption from provisions of the regulations that conflict with a specific tenet of the religious organization.

Some of the more pertinent grievance process requirements are summarized below and warrant careful assessment and consideration when revising current policies and procedures.

  • Institutions must “promptly” respond to allegations of sexual harassment and “[i]nclude reasonably prompt time frames for conclusion of the grievance process,” but the regulations are silent on what time frame will be deemed compliant.
  • When a formal complaint is filed and the grievance process initiated, an institution must provide a formal written notice to both the complainant and the respondent prior to any interview. The written notice must include “the identities of the parties involved in the incident, if known, the conduct allegedly constituting sexual harassment [], and the date and location of the alleged incident, if known.” The written notice must also “include a statement that the respondent is presumed not responsible for the alleged conduct and that a determination regarding responsibility is made at the conclusion of the grievance process.” The notice must also advise the parties that they may be assisted by an advisor of their choice during the process.
  • Institutions must provide both parties an opportunity to review and inspect “any evidence obtained as part of the investigation that is directly related to the allegations raised in a formal complaint, including the evidence upon which the recipient does not intend to rely” and “inculpatory or exculpatory evidence whether obtained from a party or other source.” Further, prior to preparing any investigative report, an institution must provide each party with such evidence and provide the party 10 days to review it and submit a written response to be considered by the investigator in preparing a final investigation report.
  • Institutions must now provide both parties with copies of the final investigation report and provide an opportunity for each party to submit a written response.
  • Post-secondary institutions are required to provide a live hearing at the conclusion of the investigation. As a result, institutions will no longer be permitted to use the common single-investigator model, where an investigator writes a report and recommends a finding, but no hearing takes place.
  • During hearings, both the complainant and respondent must have an advisor. If a student has not selected an advisor of choice, the institution must appoint an advisor for the live hearing.
  • During the hearing an advisor must be permitted to pose questions to, and essentially cross-examine, the other party and any relevant witnesses. All questions must be submitted to the decision-maker(s) in advance for a determination as to whether they are relevant. No student is permitted to represent himself/herself, however, making clear that the parties are not permitted to personally confront one another during a hearing.
  • While hearings must be live and cross-examination must occur in real time, the parties may request to participate in the hearing in separate rooms, enabled by technology to hear one another, and institutions must grant such a request if made.
  • In assessing whether an allegation of sexual harassment violates Title IX and campus policy, colleges and universities may now decide whether they wish to apply a “preponderance of the evidence standard” or a more stringent “clear and convincing evidence” standard.
  • Institutions may hold Title IX hearings via video conference. As a result, once the regulations go into effect, institutions will not be permitted to untimely delay holding an in-person hearing, for example, due to the present global pandemic. Instead, they may be required to proceed with hearings via teleconference or risk violating the new regulations.
  • At the conclusion of a hearing, institutions must now offer an appeal opportunity to both parties. The regulations set forth three potential grounds for appeal: (1) procedural irregularity that affected the outcome, (2) newly discovered evidence that could affect the outcome, or (3) bias or a conflict of interest that affected the outcome.
  • The regulations include a broad anti-retaliation provision applicable to any participant in a Title IX investigation, proceeding or hearing.
  • There are specific training requirements for Title IX Coordinators, investigators, decision-makers, and any person that facilities any informal resolution process. Moreover, institutions are required to maintain records of all training materials for a period of seven years and make such materials publicly available on their websites.

 

The new regulations are poised to change the landscape of sexual misconduct investigations and proceedings at institutions across the Country and pose some serious challenges for administrators attempting to implement the new regulatory requirements by the August 14, 2020 deadline. The need to update existing Title IX policies and to provide training on the new requirements by early August should become an immediate priority for federal funding recipients.

For more information, please contact Tricia B. O’Reilly at (973)757-1104 or toreilly@walsh.law, M. Trevor Lyons at (973)757-1014 or mlyons@walsh.law, or Mariel Belanger at (973)757-1039 or mbelanger@walsh.law.

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Updated Client Alert – Guidance for Construction Companies and Contractors in Light of COVID-19
Updated Client Alert – Guidance for Construction Companies and Contractors in Light of COVID-19 150 150 walsh.law

In order to limit the spread of COVID-19 in New Jersey, on April 8, 2020, Governor Murphy issued Executive Order 122, which, among other things, ceased all non-essential construction projects effective April 10, 2020.  As discussed more fully below, the Executive Order provides contractors with guidance on what type of projects are considered “essential construction projects” and permitted to operate, and it outlines safety policies surrounding workers exposed to COVID-19.   On May 2, 2020, Governor Murphy and State Police Superintendent Patrick Callahan announced Administrative Order 2020-11, which permits construction of religious facilities and deems these projects “essential construction projects” within the meaning of Executive Order 122.

Executive Order 122 defines “essential construction projects” to include the following:

  • Projects necessary for the delivery of health care services, including but not limited to hospitals, other health care facilities, and pharmaceutical manufacturing facilities.
  • Transportation projects, including roads, bridges, and mass transit facilities or physical infrastructure, including work done at airports or seaports.
  • Utility projects, including those necessary for energy and electricity production and transmission, and any decommissioning of facilities used for electricity generation.
  • Residential projects that are exclusively designated as affordable housing.
  • Projects involving pre-K-12 schools, including but not limited to projects in Schools Development Authority districts, and projects involving higher education facilities.
  • Projects already underway involving individual single-family homes, or an individual apartment unit where an individual already resides, with a construction crew of 5 or fewer individuals. This includes additions to single-family homes such as solar panels.
  • Projects already underway involving a residential unit for which a tenant or buyer has already entered into a legally binding agreement to occupy the unit by a certain date, and construction is necessary to ensure the unit’s availability by that date.
  • Projects involving facilities at which any one or more of the following takes place: the manufacture, distribution, storage, or servicing of goods or products that are sold by online retail businesses or essential retail businesses, as defined by Executive Order 107 (2020) and subsequent Administrative Orders adopted pursuant to that Order.
  • Projects involving data centers or facilities that are critical to a business’s ability to function.
  • Projects necessary for the delivery of essential social services, including homeless shelters.
  • Any project necessary to support law enforcement agencies or first responder units in their response to the COVID-19 emergency.
  • Any project that is ordered or contracted for by Federal, State, county, or municipal government, or any project that must be completed to meet a deadline established by the Federal government.
  • Any work on a non-essential construction project that is required to physically secure the site of the project, ensure the structural integrity of any buildings on the site, abate any hazards that would exist on the site if the construction were to remain in its current condition, remediate a site, or otherwise ensure that the site and any buildings therein are appropriately protected and safe during the suspension of the project.
  • Any emergency repairs necessary to ensure the health and safety of residents.

 

To protect workers, Executive Order 122 mandates that contractors on essential construction projects adopt policies surrounding workers exposed to COVID-19, and that they also abide with numerous requirements, including, among other things:

  • Prohibiting non-essential visitors from entering the worksite;
  • Limiting worksite meetings, inductions, and workgroups to groups of fewer than ten individuals;
  • Requiring individuals to maintain six feet or more distance between them wherever possible;
  • Staggering work start and stop times where practicable;
  • Staggering lunch breaks and work times where practicable;
  • Restricting the number of individuals who can access common areas, such as restrooms and breakrooms, concurrently;
  • Requiring workers and visitors to wear cloth face coverings, in accordance with CDC recommendations,
  • Requiring infection control practices;
  • Limiting sharing of tools, equipment, and machinery;
  • Providing sanitization materials; and
  • Requiring frequent sanitization of high-touch areas like restrooms, breakrooms, equipment, and machinery.

 

Previously, Governor Murphy issued Executive Order 107, which allowed for work to continue at job sites but directs construction contractors “to reduce staff on site to the minimal number necessary to ensure that essential operations can continue.”  COVID-19 and the extraordinary actions taken by authorities to contain its spread will pose great challenges to contractors.  Some measures that contractors can take to mitigate any financial losses include:

  1. Review your contracts to determine if they permit adjustments to schedule milestone dates or delivery schedules due to causes beyond your control. While construction contracts do not typically entitle contractors to additional compensation, force majeure type clauses which excuse performance are common.
  2. If specialty materials required by project specifications are not available in light of COVID-19 shutdowns, submit a request for a time extension. To mitigate any potential schedule impact, inquire about obtaining approval for a material substitution.
  3. If your business is interrupted, review your insurance policies for potential coverage. Time matters, and your policy may have a deadline for reporting claims. Standard property insurance policies usually include two types of coverage for disruptions like COVID-19: (1) business interruption coverage typically insures against losses when the policyholder’s operations are directly affected, and (2) contingent business interruption coverage insures against indirect losses such as when suppliers or customers are affected. Keep track of your costs as documentation will be required to substantiate any business losses.

 

For more information regarding contractor rights and remedies during this unprecedented time, please contact Thomas J. O’Leary, at toleary@walsh.law or (973) 757-1045.

 

Walsh Pizzi O’Reilly Falanga LLP has prepared the content of this alert for general informational purposes. The content should not be considered advice, recommendations, or an offer to perform services. You should not act upon any information provided in this alert without seeking professional legal counsel from an attorney licensed to practice law in your jurisdiction. No representations are being made as to the completeness or accuracy of the information contained herein.

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Updated Client Alert – The CARES Act Provides Relief for Small Businesses
Updated Client Alert – The CARES Act Provides Relief for Small Businesses 150 150 walsh.law

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or the “Act”)[i] became law on March 27, 2020, following approval by the House lawmakers earlier in the day.  The Act presents small business entities an opportunity to borrow an amount equal to two and one-half times monthly payrolls and obtain forgiveness of that loan amount provided certain employee retention and other criteria are met. It is an extraordinary piece of legislation.  As of this update, funding has been exhausted for the “Paycheck Protection” Plan, and on April 15, 2020, U.S. Treasury Secretary Steven T. Mnuchin and U.S. Small Business Administration (SBA) Administrator Jovita Carranza issued a statement that the SBA will not be able to issue new loan approvals once appropriations for the program lapses.  Congressional Republicans and Democrats are currently in discussions to the replenish the fund.

The nearly 900-page CARES Act aims to provide relief to individuals and businesses impacted by the COVID-19 pandemic.  The main provisions of the legislation for small businesses expand access to the SBA loan program in the form of emergency grants and forgivable loans for companies with 500 or fewer employees.  The Act also increases access to bankruptcy relief for small businesses.

On March 30, 2020, Treasury Secretary Steven Mnuchin announced that he anticipated that details will be released on Monday, March 30, 2020, instructing small businesses on how they can apply for the SBA loans. [ii]  The Treasury Secretary added that he expected loans to be available starting Friday, April 3, 2020, “which will be at lightning speed.”[iii]  On March 31, 2020, the U.S. Department of the Treasury and the SBA released a sample application form for businesses to apply for and obtain loans under the newly-announced “Paycheck Protection” Program as well as an Information Sheet for Borrowers.[iv] On April 2, 2020, the SBA issued an interim final rule concerning the “Paycheck Protection” Plan, and on April 14, 2020, the SBA issued a second interim final rule.  The SBA has also published a final loan application form.  The interim final rule can be found here, the second interim final rule can be found here, the final application form can be found here, and the Information Sheet for Borrowers can be found here.

Overview of the Small Business “Paycheck Protection” Program

As part of the CARES Act, the SBA will administer $349 billion in loan commitments through the “Paycheck Protection” Program, which includes small business loans, loan forgiveness, relief for existing SBA borrowers, as well as an expansion of the SBA’s Economic Injury Disaster Loan (“EIDL”) program.  Additional guidance has recently been provided about the “Paycheck Protection” Program.[v]  All loans under this program will have the following features:

  • Loans will be made on a first come, first served basis
  • Interest rate of 1.0%
  • Maturity of 2 years
  • First payment deferred for six months
  • 100% guarantee by SBA
  • No collateral
  • No personal guarantees
  • No borrower or lender fees payable to SBA

 

Loan Eligibility and Terms

For a short window of time, the CARES Act greatly expands the category of business eligible for loans through the SBA.[vi]  Specifically, from February 15, 2020 through June 30, 2020 (the “Covered Period”), eligible loan recipients under the Act are expanded to include (i) small business concerns –  a defined term under legislation creating the SBA – as well as (ii) business concerns, nonprofit organizations, veterans organizations, or Tribal business concerns that employ not more than the greater of 500 employees, or the standard number of employees established by the SBA for the industry in which the business operates.  Eligible loan recipients also include individuals who operate under a sole proprietorship or as an independent contractor and eligible self-employed individuals, as well as businesses in the accommodation and food services industry if such business employs no more than 500 employees per location.[vii]  Both full-time and part-time employees are considered “employees” for purposes of this eligibility determination, and no threshold appears in the statute for part-time status.

No collateral or personal guarantee is required for a covered loan, and interest rates cannot exceed four percent.[viii]  The CARES Act also contains a waiver of SBA existing affiliate rules, under which the SBA may ordinarily deem a loan applicant to be affiliated with another concern, a condition which could prove disqualifying due to size limitations.

Permitted uses of “Covered Loans” include payroll costs, rent, mortgage payments, utility costs, and preexisting debt.[ix]  The maximum loan amount is the lesser of:

  • 5 times the average monthly payroll costs incurred during the one-year period before the loan is made;
  • For a business not in existence from February 15, 2019 to June 30, 2019, 2.5 times the average total monthly payroll payments from January 1, 2020 to February 29, 2020; or
  • $10,000,000.

The term “Payroll costs” is defined as follows: [x]

  • Includes: employee salary, wages and commissions; payment of cash tips; payment of vacation; parental, family, medical or sick-leave; allowance for dismissal or separation; payment required for group health benefits (including insurance premiums); payment of retirement benefits; or payment of state or local tax assessed on employee compensation; and sole proprietor income or independent contractor compensation not in excess of $100,000 (prorated for the Covered Period).
  • Excludes: compensation of an individual person in excess of $100,000 (prorated for the period); federal employment taxes imposed or withheld taxes; compensation to an employee whose principal residence is outside of the U.S.; qualified sick leave for which a credit is allowed under Section 7001 of the Act; and qualified family leave wages for which a credit is allowed under Section 7001 of the Act.


Loan Forgiveness

Another key feature of the “Paycheck Protection” Program is the forgiveness of a Covered Loan if the borrower meets certain criteria.[xi]  For income tax purposes, the loan forgiveness amount is excluded from taxable income.[xii]  Generally, indebtedness is forgiven for a Covered Loan in an amount equal to the following costs incurred during the Covered Period:[xiii]

  • Payroll costs (excluding compensation above $100,000 annually as prorated for the Covered Period);
  • Payment of interest on mortgages (not principal) incurred before February 15, 2020;
  • Payment on rent obligated by a leasing agreement in force prior to February 15, 2020; and
  • Any utility payment for which the utility service began before February 15, 2020.

To encourage employers to retain employees at existing salaries, however, the forgiveness amount is subject to reduction.[xiv]  The Act provides for a reduction of the borrower’s loan forgiveness as follows:

  • The amount attributable to any reduction will be equal to any workforce reduction in the average number of full-time equivalent employees per month employed by the eligible recipient during, at the recipient’s election, either the period between February 15 and June 30, 2019 (if the business was operational during this time) or, if not, the period between January 1 and February 29, 2020; and
  • The total amount attributable to salary or wage reductions of employees in excess of 25 percent of the employees’ total salary or wages during the most recent full quarter each such employee was employed before the eight-week period following the origination date of the loan. The calculation only applies to employees who did not receive wages or salary at an annualized rate of pay of more than $100,000.

To motivate employers to rehire employees and undo salary reductions, reductions in workforce, salaries and wages that occur from February 15, 2020 to April 26, 2020 will be disregarded for purposes of reducing the forgiveness amount so long as the reductions are eliminated by June 30, 2020.[xv]

Borrowers must apply for forgiveness with the lender servicing the loan.[xvi]  Required documentation under the Act includes evidence verifying the number of full-time equivalent employees on payroll and pay rates for the relevant periods.[xvii]  The lender must issue a decision within 60 days of receipt of the application for loan forgiveness.[xviii]

SBA Economic Injury Disaster Loans

In addition to expanding the SBA’s general loan program, the CARES Act expands the SBA’s Economic Injury Disaster Loan Program (EIDL or Program).[xix]  Generally speaking, the EIDL provides financial assistance to small businesses or private, non-profit organizations that suffer substantial economic injury as a result of a declared disaster.  The changes to the Program include:

  • EIDLs are now also available to Tribal businesses, cooperatives, and ESOPs with fewer than 500 employees. They are also available to all non-profit organizations, including 501(c)(6)s, and to individuals operating as sole proprietors or independent contractors.
  • No personal guarantee requirement on all loans up to $200,000.
  • EIDLs can be approved by the SBA based solely on an applicant’s credit score.
  • Waives requirement that an applicant be unable to find credit elsewhere.
  • Borrowers can receive a $10,000 emergency grant cash advance within three days of the SBA’s receipt of the application, which can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.


Bankruptcy Protections for Small Business

The CARES Act makes some important changes to various provisions of the United States Bankruptcy Code by increasing access to Bankruptcy relief for small businesses.[xx]  For instance, the debt limit eligibility threshold is increased for small business reorganization from $2,725,625 to $7,500,000; thereby, enabling more businesses to elect the “small business case process” in Chapter 11 bankruptcy.[xxi]  The Act also clarifies that payments made in connection with the COVID-19 emergency excluded from definitions of current monthly income and disposable income.[xxii]  The bankruptcy relief is only effective for one year after the enactment of the CARES Act.

For more information regarding options for your business during this unprecedented time, please contact Hector Ruiz at hruiz@walsh.law or (973) 757-1019, Christopher Hemrick at chemrick@walsh.law or (973) 757-1033, or Sydney Darling at sdarling@walsh.law or (973) 757-1034.

 

  • [i]Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, 116th Cong. (2020).
  • [ii]Interview of Treasury Secretary Steven Mnuchin, March 30, 2020, Fox News Network.
  • [iii]Id.
  • [iv]Press Release, With $349 Billion in Emergency Small Business Capital Cleared, SBA and Treasury Begin Unprecedented Public-Private Mobilization Effort to Distribute Funds (March 31, 2020).
  • [v]Id.
  • [vi]H.R. 748, § 1102.
  • [vii]H.R. 748, § 1102(a)(2).
  • [viii]Id.
  • [ix]Id.
  • [x]Id.
  • [xi]H.R. 748, § 1106.
  • [xii]H.R. 748, § 1106(i).
  • [xiii]H.R. 748, § 1106(b).
  • [xiv]H.R. 748, § 1106(d).
  • [xv]Id.
  • [xvi]H.R. 748, § 1106(e).
  • [xvii]Id.
  • [xviii]H.R. 748, § 1106(g).
  • [xix]H.R. 748, § 1110.
  • [xx]H.R. 748, § 1113.
  • [xxi]H.R. 748, § 1113(a).
  • [xxii]H.R. 748, § 1113(b).

 

Walsh Pizzi O’Reilly Falanga LLP has prepared the content of this alert for general informational purposes. The content should not be considered advice, recommendations, or an offer to perform services. You should not act upon any information provided in this alert without seeking professional legal counsel from an attorney licensed to practice law in your jurisdiction. No representations are being made as to the completeness or accuracy of the information contained herein.

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Client Alert – New Jersey Governor Signs Additional Bills Into Law Related to Coronavirus/COVID-19 Crisis
Client Alert – New Jersey Governor Signs Additional Bills Into Law Related to Coronavirus/COVID-19 Crisis 150 150 walsh.law

On April 14, 2020, New Jersey Governor Phil Murphy signed several bills into law aimed at further assisting New Jersey residents and businesses in dealing with the Coronavirus/COVID-19 crisis.  Before reaching Governor Murphy’s desk, the bills were voted on in the Senate’s first-ever remote voting session on April 13th.  The new laws approved by the Governor include, among other things, measures to expand the state’s paid family leave program, legislation permitting leaders of not-for-profit organizations to hold virtual meetings during a declared state of emergency, a law permitting a notary public to perform certain notarial work remotely during the COVID-19 public health emergency, legislation protecting health care facilities and professionals treating patients during the COVID-19 state of emergency from malpractice claims, and permission to use virtual or remote instruction to meet minimum 180-day school year requirement.

S2374 – On April 14, 2020, Governor Murphy signed new legislation again expanding the New Jersey Family Leave Act to address COVID-19 related circumstances.  Under S2374, family leave now includes time off for employees who need to care for a child when the child’s school or childcare is closed due to the epidemic, to care for a family member as a result of measures to prevent the spread of a communicable disease, or to care for a family member who is advised to self-quarantine by a healthcare provider.  Under the Family Leave Act, employees are permitted to take up to 12 weeks of family leave during a 24-month period.  The law imposes certification requirements for taking this leave, and intermittent leave is available in certain circumstances.  This new law takes effect immediately and is retroactive to March 25, 2020.

S2353 – Under S2353, which Governor Murphy signed into law on April 14, 2020, the NJ WARN Act (Worker Adjustment and Retraining Notification Act) has been amended.  The NJ WARN Act was scheduled to have amendments take effect on July 19, 2020. The effective date of those amendments is now pushed back to 90 days after the governor’s stay-at-home executive order is terminated.  Further, the definition of “mass layoff” was amended to exclude layoffs that occur due to a “national emergency,” meaning mass layoffs occurring as a result of the COVID-19 crisis do not trigger NJ WARN Act applicability.  This change is effective as of March 9, 2020.

S2333 – This legislation provides immunity to certain health care professionals and health care facilities from certain medical malpractice claims alleging injury or death incurred during the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103 of 2020.   This legislation also facilitates the issuance of certain temporary licenses and certifications during the state of emergency.

S2342 – Permits not-for-profit corporations to hold virtual meetings to allow members to participate in meetings by means of remote communication and allows nonprofit corporations to hold meetings in part or solely by means of remote communication during state of emergency.

S2336 – Allows remote notarial acts during the current state of emergency, by way of communication technology permitting the notary public and a remotely located individual to communicate with each other simultaneously by sight and sound.

S2337 – Permits use of virtual or remote instruction to meet minimum 180-day school year requirement under certain circumstances, with respect to public schools and approved private schools for students with disabilities.

For more information about the Governor’s newest legislation, please contact Hector D. Ruiz at hruiz@walsh.law or (973) 757-1019, or Caitlin Cascino at ccascino@walsh.law or (973) 757-1024.

 

Walsh Pizzi O’Reilly Falanga LLP has prepared the content of this alert for general informational purposes. The content should not be considered advice, recommendations, or an offer to perform services. You should not act upon any information provided in this alert without seeking professional legal counsel from an attorney licensed to practice law in your jurisdiction. No representations are being made as to the completeness or accuracy of the information contained herein.

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