By Shagun Parekh
As the US starts to consider life after the coronavirus (COVID-19) pandemic, many businesses face a long, arduous path to recovery. In this article, we address some of the most important aspects of your business recovery journey, like workplace safety, Small Business Administration (SBA) loans, immigration changes, and safeguarding your confidential information
Workplace Safety during the Pandemic
The United States federal government has recommended that COVID-19 restrictions be lifted in phases instead of all at once. For every action plan and during each phase, company guidelines should include (i) workplace safety, (ii) monitoring the health of the workforce, and (iii) developing strong compliance policies for COVID-19 precautions, detection, tests, and contact tracing.
During the initial stages of reopening operations, it is recommended that companies follow certain guidelines:
- Companies should encourage remote work arrangements as much as possible, where feasible.
- Employers should continue to strictly adhere to state and local health directives.
- Where required, companies should assess the operational impact of bringing employees back to work in a safe work environment.
- If your employees are returning to work, have them return to work gradually and in phases.
- Inform your employees about what safety measures are in place at the workplace and why. This reduces the risk of employees perceiving the workplace as unsafe or risky.
- Common areas where your employees are likely to interact should be closed or subject to strict social distancing rules.
- Minimize non-essential travel for business operations and follow related government guidelines.
- Promote healthcare and hygiene practices at the workplace based on recent guidelines. Consider spacing out workplace seating arrangements and train your workforce to comply with these practices.
- If your employees are required to work at a third-party worksite, ask the worksite to confirm in writing that they are following the Centers for Disease Control and Prevention (CDC) and Occupational Safety and Health Administration (OSHA) COVID-19 guidelines prior to allowing the employee to return to work there.
Small Business Administration (SBA) Loans Available to COVID-19 Impacted Businesses
SBA loans are designed to support small businesses with low interest rates and long loan repayment terms. These loans are funded by lending partners across the country and partially guaranteed by the federal government. As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the SBA has launched two kinds of loans to help small businesses maintain operations during the pandemic:
- Paycheck Protection Program (PPP)
- Economic Injury Disaster Loans Program (EIDL)
Paycheck Protection Program (PPP)
PPP loans help small- and medium-sized businesses impacted by COVID-19 to cover costs related to payroll, mortgage interest, rent, leases, utilities, and interest on existing debt. At least 75% of each PPP loan amount must be used to cover payroll costs.
PPP loans feature attractive loan terms, including:
- A fixed interest rate of one percent
- A maximum loan amount of 2.5 times average monthly payroll costs, not exceeding $10 million in total
- No fees, prepayment penalties, business collateral, or personal guarantees required
- Loan forgiveness on certain PPP loans, during the covered eight-week period after origination (beginning on the date that the lender makes the first loan disbursement to the borrower)
- Loan payment deferral for up to six months
Due to high demand, the US government released a second round of PPP funding after the first round ran out in mid-April. More than $3.5 million total in PPP loans have been approved so far in both rounds.
Employers should reach out to their trusted attorneys and accounting professionals as soon as possible to determine whether they are eligible for the PPP loan and to understand under which circumstances it can be forgiven.
Economic Injury Disaster Loan (EIDL)
The EIDL is designed to provide economic relief for COVID-19 impacted businesses that are experiencing revenue loss:
- EIDL loans are available up to $2 million.
- These loans feature an additional $10,000 cash advance for immediate relief as borrowers wait for the entire loan amount to be approved.
- Businesses can use EIDL loans for working capital to cover expenses like payroll costs and fixed debt.
- The interest rate is 3.75% and the loan term can be up to 30 years.
- EIDL loans include an automatic one-year deferral on repayment. Interest will begin to accrue when the loan is disbursed.
- Your entire loan advance of up to $10,000 can be forgiven if you use the money for paid leave, maintaining payroll, mortgage, or lease payments.
Immigration Concerns during the COVID-19 Pandemic
The pandemic can pose major challenges to employers related to employee immigration status and employment eligibility verification.
Remote Form I-9 Verification for New Employees
Normally, it is mandatory for employers to physically examine the original identification documents of a new employee, while with them in person, as a part of the Form I-9 employment eligibility verification procedure. This rule has been relaxed for a period of 60 days from the date of the announcement (March 20, 2020), and an additional extension may be granted. Employers may examine eligibility documentation remotely, without the employee’s physical presence. However, the employee must submit their original Form I-9 documentation in person within three days of when normal business operations resume.
Foreign national employees holding temporary work visas may face particular difficulties during the pandemic, due to complex and strict rules for maintaining visa status. Due to the pandemic, many work situations have changed or employees are running out of their allocated visa authorization period.
Categories such as H-1B, E-1, E-3, TN, L-1, O-1 have a grace period so that employees do not automatically lose their legal immigration status when they lose their job or when their status expires. Usually, an employee of one of the above visa categories can find a new job, petition for a transfer, or status renewal during this grace period. However, this is a big challenge with hiring freezes, suspension of United States Citizenship and Immigration Services (USCIS) operations, and international travel restrictions.
Employers should work with their immigration attorneys to ensure that their employees maintain their immigration status.
All employers are encouraged to minimize international travel for their employees until the pandemic is under control. Restrictions for non-essential travel will vary from country to country depending upon the prevailing circumstances.
Employers who have employees currently in foreign countries should be prepared to support them remotely until the US Consulates in those countries open and resume operations. It would also be prudent to reach out to your immigration lawyer and ensure that the paperwork for your employees is up to date.
Vulnerability of Confidential Information
Employers need to consider that their confidential information that they have shared with employees may be vulnerable during the pandemic. The important aspects to note are:
- Desperate times: It is likely that former employees are looking to be placed and they may have a ticking clock due to their visa status limitations. They may be tempted to take risks and accept job offers that are against their non-compete or non-solicitation covenants.
- Court capacity: Currently, courts are operating at reduced capacity which impacts the ability to get injunctive relief in the case of employee breaches.
- Workspace limitations: Due to remote working limitations, companies that are laying off or furloughing employees remotely may not have an opportunity to conduct exit interviews to ensure that company property is appropriately turned over. It is advisable to consider modifying the exit procedures your company follows. Additionally, companies may face an increased risk of information exposure as employees take items out of the workplace and into their home.
- Applicable for incoming as well as outgoing workforce: It is prudent for employers to think not only about the outgoing workforce and the confidential information that may leave with them, but also about the incoming workforce and the confidential information obligations that they may be in breach of with their previous employers. It is advisable to consider modifying hiring procedures to ensure incoming employees are aware of such a possibility and they discard potential confidential information.
It is necessary to have an action plan in place if a lawsuit is filed against your company during the pandemic:
- Create a legal action plan prior to any lawsuit being filed against your company. Your aim should be to defend the claim in a manner which does not drain your resources.
- Always keep your guard up by following government notifications, rules, and policies. Minutely document your legal compliance.
- If a claim is filed against your company, take immediate steps to defend the claim by notifying your lawyers and all insurers who may provide coverage.
- Try to strategize with your lawyers to discuss the possibility of an early dismissal of the lawsuit or potential settlement options available to you.
- If the lawsuit proceeds, compile documents and records to demonstrate the company’s COVID-19 response plan and measures for employee safety during the pandemic.
To learn more about actions you can take to protect your business operations after the pandemic, send us an email at firstname.lastname@example.org. We also encourage you to forward this alert to others who might benefit.