CORONAVIRUS (COVID-19)
Reopening Massachusetts
Information for Business Owners on When and How to Get Back to Work
PPP Loan Forgiveness Application Released
On May 15, 2020, the U.S. Small Business Administration (SBA) released its form of Loan Forgiveness Application for the Paycheck Protection Program. The key takeaways from the application are as follows: 
Eligible Payroll Costs

  • Payroll costs are eligible for forgiveness provided they were paid or incurred during the borrower’s choice of the “Covered Period” or the “Alternative Payroll Covered Period.”
  • The “Covered Period” is the 8-week (56-day) period beginning on the date the borrower’s PPP loan was disbursed.
  • Instead of using the Covered Period to calculate eligible payroll costs, the borrower may elect to use the Alternative Payroll Covered Period. The Alternative Payroll Covered Period is the 8-week (56-day) period beginning on the start date of the borrower’s first regular employee pay period following the date the borrower’s PPP Loan was disbursed.
  • Payroll costs incurred but not paid during the borrower’s last pay period of the Covered Period or Alternative Payroll Covered Period (as applicable) are eligible for forgiveness if paid on or before the next regular payroll date.
  • The maximum payroll cost for an individual employee is $15,385 (based on the $100,000 annualized cap for each employee that applied to the borrower’s PPP application).
  • The maximum amount of compensation eligible for forgiveness for business owners who are not paid as employees of the borrower is the 8-week equivalent of the owner’s applicable compensation in 2019 or $15,385, whichever is lower.
  • Employer contributions (but not employee contributions, whether pre-tax or post-tax) to the following are eligible for forgiveness:
  • Health insurance, including employer contributions to a self-insured, employer-sponsored group health plan.
  • Retirement plan contributions.
  • Amounts paid by the borrower for employer state and local taxes assessed on employee compensation (e.g., state unemployment insurance tax).
Average Full-Time Equivalent (“FTE”) Reduction

  • For purposes of this loan forgiveness reduction, calculating FTE employees is based on a 40-hour work week. Borrowers will need to a calculate the average each employee worked during the Covered Period or Alternative Payroll Covered Period (whichever period the employer chose for the eligible payroll cost calculation) and divide that number by 40, rounded to the nearest tenth.

Salary/Hourly Wage Reduction

  • For purposes of this loan forgiveness reduction, wages paid to each employee during the Covered Period or Alternative Payroll Covered Period will be compared to the period beginning on January 1, 2020 an ending March 31, 2020.

Eligible Non-Payroll Costs

  • Non-payroll costs must be paid or incurred during the Covered Period (the Alternative Payroll Covered Period does not apply here) to be eligible for forgiveness. If incurred during the Covered Period, the non-payroll cost must be paid on or before the next regular billing date, even if the billing date is after the Covered Period.
  • Eligible mortgage interest payments includes payments made on loans secured by real or personal property (such as equipment) owned by the borrower.
  • Eligible rent/lease payments include both real and personal property leased by the borrower.
  • Eligible “utilities” are electricity, gas, water, transportation, telephone, or internet access supplied to the borrower.

We anticipate that the SBA will release further rules and FAQ Answers regarding loan forgiveness in the coming weeks. 

PPP FAQ Updates

Recently the SBA released two noteworthy FAQ Answers regarding the PPP. Analysis of these answers is below:

  • No Penalty for Employees Who Refuse an Offer to be Rehired (FAQ Answer 40). As many business owners are aware, employees that were laid off between February 15, 2020 and April 26, 2020 and are rehired prior to June 30, 2020, will not count in a borrower’s FTE reduction calculation. However, employers will not be penalized for such laid off employees who refuse an offer for rehiring provided:
  • The offer to rehire was in writing;
  • The offer to rehire was made in good faith;
  • The offer to rehire was for the same salary/wages and number of hours as the employee worked previously; and
  • The employer documents the employee’s rejection of the offer.

Please note that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation from the Massachusetts Department of Unemployment Assistance.

  • Certification Safe Harbor for Loans of $2M or Less (FAQ Answer 46). Borrowers who received a PPP loan of $2,000,000 or less “will be deemed to have made the required certification concerning the necessity of the loan request in good faith.” In other words, certifications made by borrowers on applications for such loans that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” will be assumed to be true by the SBA (unless the SBA becomes aware of evidence to the contrary). The SBA based its reasoning for this on the assumption that borrowers with loans below $2M generally have less access to adequate liquidity and also to conserve the SBA’s audit resources to focus its review on larger loans. This position by the SBA will help alleviate the anxiety surrounding the ambiguity of the term “necessary” in the application certification for many borrowers.

Please note that the above FAQ Answers may be subject to further revision by the subsequent interim final rules that the SBA is anticipated to release in the coming weeks. 
Phases of Reopening Massachusetts

Today the Baker administration released a 28-page plan to reopen Massachusetts in four (4) phases. The Governor has not released dates for Phases 2-4, however, he did state that each phase will last a minimum of three (3) weeks, depending upon public health data. If public health data shows negative trends, the Commonwealth will return to an earlier phase. Phase 1 is broken up into three (3) key dates: May 18, May 25, and June 1.
Phase 1 Business Re-openings

May 18, 2020
  • Essential businesses
  • Manufacturing
  • Construction

May 25, 2020
  • Laboratory and life science facilities
  • Office space (not including offices in Boston)
  • Highly encouraged to continue remote work
  • Workforce presence should be restricted to less than 25% of maximum capacity
  • Personal services limited to:
  • Hair salons and barbershops by appointment only
  • Pet grooming by appointment only
  • Car washes for exterior car washing
  • Retail limited to:
  • Remote fulfillment and
  • Curbside pick-up
June 1, 2020
  • Office space in Boston (see office space restrictions above)
At this time, gatherings should still be limited to fewer than 10 people. Additionally, the stay at home advisory has been reduced to a safer at home advisory, meaning persons should only leave home for healthcare reasons, permitted work, shopping, and outdoor activities. It is still recommended to use remote modes of communication, including phone or video chat.
Phase 2 Business Re-openings
(restriction and capacity limitations TBD)
  • Retail
  • Restaurants
  • Lodging
  • Personal services including:
  • Nail salons and
  • Day spas
Phase 3 Business Re-openings
(restriction and capacity limitations TBD)
  • Bars
  • Arts and entertainment including:
  • Casinos
  • Fitness and gyms
  • Museums
  • All other business activities excluding:
  • Nightclubs and
  • Large venues

Phase 4 Business Re-openings
  • Full resumption of all activities
Safety Requirements to Reopen Massachusetts
The Baker administration has developed specific guidelines for each industry as it reopens. Any businesses that were deemed to provide essential services in the Governor’s March 23, 2020 Executive Order, updated March 31, April 28, and May 15, are permitted to remain open and will be given until May 25, 2020 to comply with their industry sector specific protocols.

At this time, only specific guidelines for Phase 1 businesses are available. Specific guidelines for businesses in other phases will be provided prior to their opening. Although specifics for all industries are not known at this time, it has been advised that all employers in Massachusetts must meet the following minimum safety standards as their businesses reopen:
Social distancing
  1. All persons (employees, customers, vendors, etc.) should remain at least six (6) feet apart, both inside and outside workplaces (to the extent possible)
  2. Implement protocols that ensure employees can adequately practice social distancing
  3. Provide signage for safe social distancing
  4. Require face coverings/masks for all employees

Hygiene protocols
  1. Provide hand washing capabilities throughout the workplace
  2. Ensure adequate supplies for frequent hand washing or alcohol-based hand sanitizers with at least 60% alcohol
  3. Regularly sanitize areas of high contact, including workstations, equipment, screens, doorknobs, and restrooms throughout the worksite
Staffing and operations
  1. Train employees regarding the above social distancing and hygiene protocols
  2. Employees who display symptoms of COVID-19 should not report to work
  3. Implement a plan to deal with employees contracting COVID-19 at work, and a return-to-work plan

Cleaning and disinfecting
  1. Establish and maintain cleaning protocols specific to the business
  2. If an active employee is diagnosed with COVID-19, clean and disinfect the workplace
  3. Disinfect all common surfaces in the workplace at appropriate intervals for said workplace
Businesses are also required to post the “Employer Guidance” poster and the “Rules to Keep You Safe at Work” poster. Both of these posters illustrate the workplace requirements of maintaining social distancing, hygiene protocols, cleaning, and disinfecting.
Additionally, all businesses in Massachusetts must develop a written plan outlining how it will comply with the mandatory safety standards for operation during the reopening period and prevent the spread of COVID-19. The Commonwealth has provided a template to assist with development of business compliance plans. These compliance plans do not need to be submitted to the Commonwealth; however, plans must be kept on the premise and be made available in the case of an inspection or outbreak.

Further, businesses are required to sign a compliance attestation poster attesting they have completed their compliance plan. This poster must be posted in an area that is within the business premises and is visible to employees and visitors.
Hygienic and Protective Supplies

The Baker administration has created a portal to connect businesses with manufacturers and distributors of necessary supplies to be able to return to work. Review your industry specific sector-specific protocols and best practices for guidance on required supplies.
We Are Here to Help in This Time of Need
Many of our clients have raised questions about remote work arrangements, essential employees reporting to work, layoffs, health insurance continuation, medical inquiries and employee privacy. 

Phifer Pinkham, LLC will remain open, subject to any additional government orders, during normal business hours to assist you with any questions you may have.

We will continue providing updates and guidance as more information becomes available.
Phifer Pinkham, LLC is a full service law firm representing businesses, their owners, and individuals in connection with their legal needs in the areas of business and corporate law, litigation, estate planning and administration, employment law, taxation, intellectual property, and non profit representation. We provide premium legal services without the Boston premium. Please contact us at (617) 409-7409 to set up an in-person or phone consultation, or please feel free to contact any of our attorneys directly at the email address links provided below.
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