PPP Loans Less Than $2 Million Deemed Good-Faith Certified

As this relentlessly awful year mercifully draws to a close, a light at the end of our pandemic tunnel is rapidly approaching. COVID-19 vaccines are poised for approval, and it is expected that distribution will begin in earnest shortly. But no matter how much and how confidently the FDA and other health experts proclaim these vaccines to be safe and effective, there are large numbers of Americans who say they won’t get the shot when it becomes available. The most recent Gallup poll found that only 63 percent of Americans say they are willing to be inoculated against the disease. Many of those who don’t want to get vaccinated will soon find out that they work for an employer who feels differently. Those employers may also tell them that they either need to get the vaccine or need to find a new job. And, in most cases, employers may be well within their rights to terminate employees who refuse to take the COVID-19 vaccine. Mandatory Vaccinations Are Not New Companies that have spent the better part of the year – and lots of money - trying to keep their workplaces COVID-free see the vaccine as the apex of those efforts. With a fully vaccinated workforce, business owners can operate without disruption and provide employees, customers, clients, and patients with confidence and peace of mind. But all of those benefits of the vaccine only accrue to fully vaccinated workforces. So, many companies may mandate that employees get their shot as a condition of continued employment. By doing so, they are following a legally sound path that predates the current pandemic. Well before anyone had heard of coronavirus, plenty of employers, primarily in the health care sector, required employees to get the flu vaccine and vaccinations against other infectious diseases. Most public school districts also require proof of vaccinations before a student can enroll and attend classes. Since most employees in Illinois work on an “at-will” basis, they can face termination for almost any reason not expressly prohibited by federal, state, or local laws. Generally, no law stands in the way of an employer requiring the COVID-19 vaccine for its workers. ADA and Religious Exceptions However, employers who make vaccines mandatory need to be mindful that employees with legitimate health or religious concerns about the vaccine may be protected from termination and other adverse employment actions if they refuse the shot. But these exceptions don’t necessarily apply just because someone doesn’t believe in vaccines generally (“anti-vaxers”) or thinks that forcing them to get vaccination is an infringement on their liberties. Employees who have a disability recognized under the Americans with Disabilities Act (ADA) that prevents them from taking the coronavirus vaccine cannot be forced to get the vaccine, so long as their exemption does not impose an “undue hardship” on the employer. Such disabilities in this context may include a compromised immune system or an allergy to an ingredient in the vaccine. While there has been no definitive guidance on the subject, one could credibly argue that an employee’s refusal to get vaccinated is an “undue hardship” if it places the health and safety of other employees and visitors at increase risk of infection. Even in such cases, however, an employer may need to make a “reasonable accommodation” for the employee, such as allowing them to work from home. Similarly, the anti-discrimination provisions of Title VII of the Civil Rights Act of 1964 may protect a worker if their “sincerely-held religious beliefs” preclude them from getting a vaccination. Such beliefs do not include political or personal views. The burden is on the employee to demonstrate the legitimacy of their religious objections to the vaccine. More Than Legal Issues To Consider Even when an employer is within their legal rights to require employees to get the COVID-19 vaccine, other considerations may weigh against such a mandate. For example, they may need protection against an employee who has an adverse reaction, even if they signed a waiver upon receiving the shot. A vaccination requirement may also get an adverse reaction from employees generally as well as the general public if it seems heavy-handed and overreaching. Of course, those that decide against a mandate face risks if someone does contract the coronavirus in the workplace and sues. Please Contact Grogan Hesse & Uditsky With All Of Your COVID-Related Employment Questions If you have questions or concerns about how to handle vaccinations or other employment issues related to COVID-19, please call us at (630) 833-5533 or contact us online to arrange for a consultation.

On Wednesday, the Senate passed an historic $2 trillion economic stimulus package that is expected to come out of the House this weekend and be signed by the President. While much of the stimulus is providing support to big business and directly to taxpayers, there are also substantial benefits for small businesses. Called the “Paycheck Protection Program” (the “PPP”), it is part of the “The Coronavirus Aid, Relief, and Economic Security Act” (the “CARES Act”), because it’s meant to ensure that businesses have the funds to pay their employees and to prevent layoffs. Loans offered through the program may be forgiven under certain circumstances. However, employers will need to pay back the interest accrued, effectively making the principal a grant. What is the purpose of PPP? The PPP provides short-term cash flow assistance to small businesses to assist them and their employees with the economic impact of the COVID-19 pandemic. Funds under PPP will be made available during the period prior to June 30th by lenders certified by the SBA and guaranteed by the federal government. Who is eligible for PPP? Benefits under PPP are generally available to small businesses with 500 or fewer employees (full and part-time). Eligible small businesses also include sole-proprietors, independent contractors, and other self- employed individuals, including even “gig economy” workers. Note that the SBA publishes guidelines that may prohibit certain businesses larger than average in their industry, and you should consult your individual counsel to ensure compliance prior to applying. What are the permitted uses of PPP funds? Small businesses that receive loans under the PPP must use loan funds to pay payroll costs (i.e., salaries, wages, vacation, parental, family, medical, or sick leave, severance, retirement benefits, and state or local taxes assessed on compensation), costs related to group health care benefits (i.e., insurance premiums), employee commissions, interest on mortgage obligations, rent, utilities or interest on other debt, incurred prior to obtaining the loan. Note that loan funds under PPP may not be used by employers to pay salaries in excess of $100,000. What are the terms of PPP loans? Loans under PPP may be as large as 2.5 times a business’s average monthly payroll costs over the last 12 months, not to exceed $10 million. Salaries over $100,000 will not be included purposes of determining payroll costs. PPP loans have a maximum interest rate of 4% and may carry maturity dates up to 10 years. Eligible borrowers under PPP may also defer payment of non-forgivable principal and interest for at least 6 months but not more than a year. No collateral is required to be pledged and the normal personal guarantee requirement for SBA loans appears to be waived. Thus, the loan will be nonrecourse to the employer’s owners. How will the PPP Loans be forgiven? If the business uses the loan funds for the approved purposes and maintain the average size of its full-time workforce based on when it received the loan, the principal of the loan will be forgiven, meaning the company will only need to pay back the interest accrued. The loan forgiveness may be reduced pro-rata if the average number of full-time employees during the forgiveness period fails to satisfy the applicable requirements. How should a business apply for a loan under PPP? To apply for forgiveness, businesses must submit documentation regarding the eligible uses of loan funds, a certification that such documents are true and correct, as well the amount to be forgiven, and any other documentation the SBA deems necessary. The SBA will purchase any loan forgiveness amounts from its certified lenders and this canceled indebtedness will not result in taxable income to the business. While further regulations are on the way, it is clear that the government is serious about getting help to small businesses in an expedited manner. Our team is keeping up to date on the developments and will be sure to advise you accordingly. Should you have any questions, don’t hesitate to call or email us.