Alston & Bird have released their August 10 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.
MCAA member Murphy Company recently promoted Rick Reams to Vice President – Safety and Quality. Tom Skaggs, Executive Vice President, made the announcement, saying, “Rick’s work ethic, professionalism and genuine concern for our workforce are assets to the organization. We are confident that under Rick’s leadership we will further strengthen our safety and quality programs.”
Tom commended Rick’s work, noting, “Since rejoining Murphy Company as our Corporate Safety Director, Rick has demonstrated exceptional leadership and has contributed significantly to our improved safety performance.”
Rick has over 25 years of experience as a safety professional and consultant in a variety of industries. His work has focused primarily on heavy industrial and large commercial projects in both the public and private sectors.
In addition to serving as President of the American Society of Safety Professionals (ASSP), Rick is an active member of several other local and national safety and construction boards, including the MCA of Eastern Missouri’s Safety Committee, the Associated General Contractors of America (AGC), the American Subcontractors Association (ASA), the St. Louis Council of Construction Consumers (SLCCC), the National Demolition Association (NDA) and the American Allied Safety Council (AASC).
Second Round of PPP Loans: There has been a lot of news swirling online that new legislation will open the door for borrowers to get a second PPP loan. Also there is more chatter that automatic forgiveness for certain loans is on the horizon. It appears as though early August may be the target for new legislation if it comes. Details on this are fluid to say the least, but it looks like both Republicans and Democrats are on the same page that the PPP is an effective tool that they want to use as part of upcoming stimulus programs.
SBA Issues Procedural Notice on Forgiveness Process: The SBA released a notice that provides clarification to lenders on how they should submit applications to the SBA for “final approval” after the lender has reviewed and approved a borrower’s forgiveness application. The highlight in this document is that the SBA indicated it will be using a third party software vendor to develop its portal, which will not be up and running until August 10th, so lenders will need to hold any applications until that time.
The SBA further clarified that it may delay the opening of its portal further if any new legislation impacts the forgiveness process. Withum has long believed Congress or the SBA would choose a loan threshold (e.g., loans of $250,000 or less) and grant “automatic” forgiveness to those borrowers, requiring only a signed certification that the funds were used properly. This would drastically reduce the amount of applications that the SBA and lenders would need to review.
Withum does not have any official guidance or information on the legislative proposals reported in the press in past day or two (as noted above), but they think it may be prudent to wait to submit your application to your lender until a legislative consensus emerges. As a reminder, lenders have 60 days to process your loan forgiveness application and submit their decision to the SBA, and the SBA has 90 days to authorize the forgiveness amount.
PPP and M&A: Withum often gets questions regarding how the sale of a business or the acquisition of another entity may impact a borrowers PPP loan and ability to obtain forgiveness. Withum put together an article addressing some of the complexity that may arise from these transactions, as well as how they impact the employee retention tax credit.
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In a joint letter to the Congress, the national labor/management coalition responded to the Western Council of Teamsters rebuttal of the Groom Law Group paper of Composite Plans. Coalition partners include the Associated General Contractors of America, FCA International, International Council of Employers of Bricklayers and Allied Craftworkers, International Union of Operating Engineers, Laborers’ International Union of North America (LiUNA!), Mechanical Contractors Association of America, National Electrical Contractors Association, Sheet Metal and Air Conditioning Contractors’ National Association, The Association of Union Constructors, The International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, The Signatory Wall and Ceiling Contractors Alliance, United Association of Plumbers and Fitters, and United Brotherhood of Carpenters and Joiners of America. This July 31, 2020 version of the letter contains update analysis of the 5500 filings of the median critical and declining status plans.
Alston & Bird have released their July 27 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.
Automatic Forgiveness?: Treasury Secretary Mnuchin recently suggested publicly that the SBA should consider forgiving all PPP loans and forgoing the process of the forgiveness application. This would, of course, be a stunning change in direction with respect to the mechanics of loan forgiveness. There has been chatter for a while that the SBA may seek to forgo applications on “small” loans as a vast majority of the loans issued were below $150k. This would substantially reduce the workload of the lenders and SBA when it comes to processing applications, and is appearing more and more likely as the days roll on, though the actual dollar threshold is a moving target.
EIDL Loans: As we all know, the EIDL loan program was funded and gained a lot of traction/interest at the same time as the PPP roll out. Many companies clamored to gain access to the loan product as a result of its favorable terms (30 year repayment, 4% max rate, no personal guarantee for small loans). Withum is starting to see clients identify onerous covenants and reporting requirements (e.g., quarterly financial reports and year-end reviewed financials). There does not appear to be uniformity among all EIDL loan agreements, if you received an EIDL loan, it is important to review your agreement to ensure you have clearly identified all reporting requirements that are connected with the loan.
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WASHINGTON, DC – On Monday, July 20, the U.S. Department of Labor published additional guidance for workers and employers on how the protections and requirements of the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Families First Coronavirus Response Act (FFCRA) affect the workplace as workplaces reopen amid the coronavirus pandemic. The guidance from the Department’s Wage and Hour Division (WHD) includes commonly asked questions and answers that address critical issues in all three laws.
“The U.S. Department of Labor understands how critically American workers and employers need this information as they return to work. Continuing to provide it remains a top priority for the Wage and Hour Division,” said Wage and Hour Division Administrator Cheryl Stanton. “With so many workers and employers committed to the greatest comeback the American workforce has ever seen, we are providing ongoing guidance to help them better understand their rights and responsibilities to protect workers and help ensure a level playing field for employers as our economy recovers.”
Today’s guidance is the latest addition to compliance assistance materials the WHD has published. These materials include a Fact Sheet for Employees, a Fact Sheet for Employers and a Questions and Answers resource about paid sick and expanded family and medical leave under the FFCRA. WHD has also produced two guidance posters, one for federal workers and one for all other employees, that fulfill notice requirements for employers obligated to inform employees of their FFCRA rights; Questions and Answers about posting requirements; and simple Quick Benefits Tips to determine how much paid leave the FFCRA allows workers to take.
FFCRA will help the U.S. combat and defeat the coronavirus by reimbursing, through tax credits, American businesses with fewer than 500 employees for the cost of providing employees with paid leave taken for specified reasons related to the coronavirus. The legislation enables employers to provide such paid leave, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.
WHD provides additional information on common issues employers and employees face when responding to the coronavirus and its effects on wages and hours worked under the Fair Labor Standards Act and job-protected leave under the Family and Medical Leave Act at https://www.dol.gov/agencies/whd/pandemic
For more information about the laws enforced by the WHD, call 866-4US-WAGE, or visit www.dol.gov/agencies/whd
Alston & Bird have released their July 20 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.
DeWALT is committed to supporting MCAA members in the fight against COVID-19. They have supplied a COVID-19 Response with tool cleaning guides, safety product listings, service procedures, on-going training, and several featured stories. DeWALT has you covered with informative materials to help us through these rapidly evolving times.
The mechanical contracting industry provides many career paths, and that includes the opportunity to work for an MCA local affiliated association. This summer, MCA of Chicago has two interns, Judie Prophete and Ervin Prophete. They are learning about how an association is managed and how the MCA of Chicago provides resources and education to its members.
MCA of Chicago Director of Communications Abby Baughan said, “It’s been great having Judie and Ervin working with us this summer. They’re bright, hard-working and make great additions to our team. When I was in college, I knew very little about association work and mechanical contracting. Like most people, I sort of fell into it. I think it’s great that, as college students, Judie and Ervin are being introduced to this world filled with so much opportunity. I hope this internship opens their eyes to all of the possible career paths that are available to them.”
Judie is an incoming senior at DePaul University, studying accounting and business management.
“As the accounting intern and administrative assistant for the MCA of Chicago, I spend the majority of my time helping our Director of Finance, Susan Rocque, with various tasks and projects. The other part of my time is spent doing administrative work around the office and helping where I am needed. I am learning a lot about accounting and finance, gaining a lot of new experience and learning a lot about what it is like to work in an office setting.”
During her internship, Judie hopes to continue learning more about the professional workplace and about programs and tools that are specific to her field of study. She also hopes to gain more confidence so she is prepared to enter the business world.
“From what I have seen in the month that I have been interning here, there are a lot of aspects of the professional workplace that school cannot prepare you for. The only way to truly learn these things and succeed is to actually be put in those situations and just do the best you can with what you have. I am fortunate enough to be learning those things surrounded by welcoming, forgiving and patient co-workers in a friendly and positive work environment.”
Ervin Prophete is a senior at DePaul University in Chicago, studying public relations and advertising.
Ervin is a marketing intern. His responsibilities include creating and posting graphics on social media, helping Director of Communications Abby Baughan with compiling the weekly emails, scheduling events on the MCA of Chicago Facebook page and updating the MCA website with future events and classes.
Ervin talked about what he hopes to get out of this internship. “I have learned a lot so far in this internship and feel that every day I step in the office is a day I gain more knowledge about the marketing world. I am hoping to just learn as much as I can and become proficient in the tools I have been introduced to in my time here so far. By the end, I would like to be able to use the knowledge I will have gained to do some freelance work while I finish school.”
MCA of Chicago members are also focused on getting talented students into the mechanical contracting industry, even if they do not follow the typical academic path.
Brandon Hubner of Premier Mechanical, Inc., shared his company’s unique insight about hiring the right talent:
“The way the Premier has looked at hiring is that a person’s major focus of study or background is less important than the skills that they bring to the table and how well they can help round out our team and add value with other talents that they have. Construction, and mechanical contracting even more so, is a unique industry and every system we install is different. Rarely are two buildings built identically, or with the same team of general contractors and subcontractors. If systems and teams are rarely the same, then why always hire from within the same field of study? In our experience, we can better tackle unique projects with unique individuals. Given the number of variables there are to construction, we would be passing over a lot of really good candidates if we focused just on construction management and mechanical engineering majors.”
Alston & Bird have released their July 13 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.
Alston & Bird have released their July 6 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.
New PPP Bill Passed by House and Senate: The Bill that was introduced and passed by the Senate on Tuesday, June 30 has now been passed by the House and is headed to the President’s desk for signature. This Bill extends the application deadline for the PPP an additional 5 weeks (recall that the deadline was June 30, 2020 and they still had about $130 billion in available funds). It is unclear how valuable this additional time will be since most businesses that wanted funds have already received them.
New Stimulus Package in the Works: Treasury Secretary Steven Mnuchin told a House panel that the administration would support a new stimulus package if it was put forward. He also indicated that he is in discussions with the Senate about revising the PPP to provide additional support to hard hit industries such as restaurants, hotels, etc. We are not sure yet how the P4 Bill that was passed by the House (which allows businesses to obtain a second PPP loan under certain circumstances) will fare if the Senate decides to take it up, but there appears to be bipartisan support to find a solution.
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New PPP Bill Introduced in the Senate: On Tuesday, June 30th, the Senate passed a bill which extends the application deadline for the PPP an additional 5 weeks (recall that the deadline was June 30th and they still had about $130 billion in available funds). The bill still needs to go through the House and would need to be signed by the President to be passed into law. It is unclear how valuable this additional time will be as most believe that those businesses who wanted funds have already received them.
When Will Banks Accept Applications?: Many have inquired regarding when they can apply for forgiveness and when banks will accept applications. Withum has heard that one bank has reached out to its clients to inform them that if they received their PPP loan in April, the bank will accept a forgiveness application in August. If the loan was received after April, the date the bank will accept the application is TBD. This is of course just one bank, but they have generally seen that banks are not in a position to accept applications currently and few have been explicit in how they will manage the process. They also have not seen any mechanism for a borrower to “declare” that they want to keep their eight-week covered period if they want to. At this point, borrowers will just have to be patient, they do not believe that there are any proactive steps required on the borrowers side right now other than being in consistent contact with their lender on the process.
Status of the P4 Bill: The P4 bill that was introduced by the House two weeks ago has not moved since it first came into play. This bill would allow certain borrowers to obtain a second PPP loan if they meet certain criteria (less than 100 employees, 50%+ reduction in revenue). There is not much information on the probability of this passing or how it will interplay with the PPP extension bill noted above.
Main Street Lending Programs: Withum reported on the general parameters of the MSLPs previously, at this point the program is still not available to the public. Anecdotally there have been mixed reviews from banks, many of which have indicated that they do not intend to participate in the program.
New FAQs: It has been rumored for several weeks that a multitude of new FAQs are coming out in the near future to cover current open questions and to provide clarification. Withum believes this is correct but do not have insight as to when they are coming, it could be as soon as this week.
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The IRS has released Notice 2020-50, which offers added guidance and relief for retirement plan participants taking pandemic-related distributions and loans under the CARES Act. Notice 2020-50 expands the definition of qualified individuals under the Act and provides guidance regarding coronavirus-related distributions and loans. Lindabury, McCormick, Estabrook & Cooper, P.C. have prepared a summary outlining the details, including the criteria for eligibility.
Alston & Bird have released their June 29 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.
New Safe Harbor from the FTE Reduction Rule: In the latest IFR, the SBA discussed the new safe harbors to the FTE reduction rule in a manner that appears to be very borrower friendly. As you know, PPP loan forgiveness is reduced if you reduce your FTE count during your covered period (when compared to your reference period). The second of the two new safe harbors allows companies to ignore any FTE reductions after February 15, 2020 if they relate to an “inability to return to the same level of business activity” before February 15, 2020 as a result of guidance issued by a variety of agencies (including state and local government) that inhibits such business activity. Examples are closing non-essential businesses and reductions in businesses volume due to social distancing or sanitation guidelines, but the safe harbor can apply to a much broader set of circumstances.
Withum has included below both an excerpt from the IFR as well as an example provided in the IFR. This safe harbor does not require the business interruption to cover the entire covered period, meaning that borrowers just need to establish that a disruption occurred for some meaningful period of time during the covered period. It also does not narrowly define a disruption, allowing borrowers to potentially rely on a broad variety of different “disruptions” caused by the requirements established by these agencies. Therefore Withum believes this new safe harbor has broad applicability, including in the auto, restaurant and hospitality industries, for example, as well as in a variety of professional service industries like law and medicine.
Withum believes the safe harbor is extremely broad, and unless it is pared back by the SBA, a large number of borrowers should be able to avail themselves of it. If you have an FTE reduction during your covered period, Withum recommends that you closely review this safe harbor from the PPP Flexibility Act, as interpreted by the new IFR, to see if you can fall within it. The forgiveness application requires that you maintain documentation of the business disruption that took place and what requirement or guidance created it.
Excerpt from IFR:
Borrowers are also exempted from the loan forgiveness reduction arising from a reduction in the number of FTE employees during the covered period if the borrower is able to document in good faith an inability to return to the same level of business activity as the borrower was operating at before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19 (COVID Requirements or Guidance).
The Administrator, in consultation with the Secretary, is interpreting the above statutory exemption to include both direct and indirect compliance with COVID Requirements or Guidance, because a significant amount of the reduction in business activity stemming from COVID Requirements or Guidance is the result of state and local government shutdown orders that are based in part on guidance from the three federal agencies.
Example provided in the IFR:
A PPP borrower is in the business of selling beauty products both online and at its physical store. During the covered period, the local government where the borrower’s store is located orders all non-essential businesses, including the borrower’s business, to shut down their stores, based in part on COVID-19 guidance issued by the CDC in March 2020. Because the borrower’s business activity during the covered period was reduced compared to its activity before February 15, 2020 due to compliance with COVID Requirements or Guidance, the borrower satisfies the Flexibility Act’s exemption and will not have its forgiveness amount reduced because of a reduction in FTEs during the covered period, if the borrower in good faith maintains records regarding the reduction in business activity and the local government’s shutdown orders that reference a COVID Requirement or Guidance as described above.
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Alston & Bird have released their June 25 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.
Masen Dinklage, a member of the MCAA Student Chapter at the University of Nebraska, is spending his third consecutive summer as a Project Management intern with The Waldinger Corporation. Through a variety of activities, he is gaining industry knowledge and building relationships that will help him succeed in his great future.
During his internship, Masen is learning about the process of submittals, RFIs, purchasing, commissioning and scheduling. “I have learned a lot about what goes on behind the scenes over the course of a construction project,” he said.
“I have learned during my internship that it is important to develop relationships with co-workers, vendors and contractors,” he said, adding “These relationships can help build technical knowledge, create a more open means of communication and provide an overall better environment for work.”
Masen, a Mechanical Engineering major, plans to graduate in December 2021. He has been a member of his MCAA Student Chapter, which is sponsored by the MCA of Omaha, Inc., since January 2018.
“The MCA-Omaha student chapter has provided excellent resources to help me grow and cultivate my leadership, communication and organization skills. The chapter has helped me develop valuable relationships with industry professionals, some of such relationships helping me earn my internship.”
Masen is building on those relationships by serving as this year’s fundraising chair for the MCA of Omaha, Inc. Wine Tasting Event, which is scheduled for November. His role involves collaborating with the MCA of Omaha, Inc. team to coordinate the event.
“I look forward to building a career in this industry and am excited to build relationships and also my technical knowledge in mechanical systems,” he said.
Find student chapter members like Masen by visiting MCAAGreatFutures.org, where members have access to student profiles and resumes. The profiles are searchable by university, desired location, and even a specific skill set, like BIM or AutoCAD. A keyword filter allows users to zero in on students who fit the bill.
Change to Forgiveness Process: As we all know, the Covered Period was recently changed to be either 8 weeks or 24 weeks, at the borrower’s election if the loan was issued before June 5th. This has opened the door to many companies obtaining full forgiveness of their loan. An issue that has often come up is that many borrowers are able to incur enough expenses to obtain full forgiveness within a period that is longer than 8 weeks but perhaps far shorter than 24 weeks. This has led to the question: Do I need to wait the full 24 weeks before we apply for forgiveness?
Up until now the answer was yes, however the IFR release has clarified that a borrower can apply for forgiveness at any time after or DURING their covered period. This will allow borrowers to get the process rolling and perhaps allow them to wrap up the forgiveness process prior to the end of the year.
Update on Salary and Wage Reduction Rule: The IFR also indicates “If the borrower applies for forgiveness before the end of the covered period and has reduced any employee’s salaries or wages in excess of 25 percent, the borrower must account for the excess salary reduction for the full 8-week or 24-week covered period.”
This is meaningful because it indicates that you will need to account for salary reductions through your full covered period even if you apply for forgiveness early. As an example, if you reduced an employee’s salary in excess of 25% for the first 12 weeks of your covered period, when applying for forgiveness you need to assume that reduction will have been in place for all 24 weeks for purposes of the forgiveness calculation. No guidance was issued about what to do if there are FTE reductions during the covered period.
The new IFR clarified many other points regarding the loan forgiveness process, and all of the salient ones are included in Withum’s 06/20/2020 webinar on loan forgiveness. It will be posted on Withum’s website afterwards.
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