COVID-19 Small Business Resource

The rapid, worldwide spread of COVID-19 has created a global pandemic that has affected the entire world, including small businesses.  Mazanec, Raskin & Ryder Co., L.P.A. (MR&R) has put together this reference to help your small business survive the crisis.

SBA Disaster Loans

  • The U.S. Small Business Administration (SBA) has declared Ohio an eligible disaster area.
  • Low-interest “disaster loans” are available to eligible small businesses.
  • Offers up to $2 million to assist businesses with loss of revenue due to the COVID-19 pandemic.
  • SBA disaster loans can be used to:
    • Pay fixed debts;
    • Maintain payroll;
    • Maintain accounts payable; and
    • Pay other bills that are not able to be paid
  • Loan interest rate: 3.75%.
  • Long term repayment plans are available – maximum of 30 years.
    • Loan terms are determined on a case-by-case basis.
  • The loan application is available for download to print in paper form or can be submitted online at the SBA website.
  • For further information:

The CARES Act

  • On March 25, 2020, the U.S. Senate passed a COVID-19 stimulus bill which will:
  • Inject approximately $2 trillion into the U.S. economy.
  • While not yet passed through the House, leaders have indicated they are interested and will approve the plan quickly.
  • President Donald Trump has indicated that he would “absolutely” sign the bill once it passes through the House.
    • Available assistance to businesses with 500 or fewer employees:
      • $350 billion dedicated to the prevention of layoffs and closures of businesses.
      • Businesses that maintain a payroll during the COVID-19 crisis are able to receive cash flow assistance for a period of up to 8 weeks.
        • Able to utilize the loan for payroll, mortgages/rent, and utilities.
        • The loan amount would be forgiven under certain circumstances.
  • MR&R’s website will continue to provide updates on this bill as they are announced.

The Families First Coronavirus Response Act (FFCRA)

  • Businesses of 500 or fewer employees:
    • Paid Sick Leave (Division E):
      • Full time employees – 2 weeks or 80 hours of paid sick leave.
      • Part time employees – an equivalent of the number of hours worked over an average two-week period.
      • Pay:
        • Employee’s regular pay rate or $511.00 per day, whichever is the lesser amount, if:
          • A government quarantine order has been enacted;
          • The employee has been advised by a medical professional to “self-quarantine”; or
          • The employee is experiencing any symptoms of COVID-19 and is also actively seeking a medical diagnosis.
      • Employers cannot:
        • Require employees to find replacement work to cover the missed time; or
        • Require the use of other paid leave that may or may not be already provided as a benefit by the employer.
      • This benefit is only to be used when an employee cannot work, including working remotely/virtually, due to any circumstances related to COVID-19.
      • This benefit is in effect only until December 31, 2020, unless otherwise amended by future legislation.
    • Expansion of Family Medical Leave (FMLA) benefits (Division E):
      • Qualifications:
        • Employees who cannot work due to:
          • Need to care for an individual subject to a quarantine order;
          • Need to care for a child whose school or child care center has closed; or
          • Experience a similar condition as described by the Secretary of Health and Human Services.
      • Leave is a paid benefit (traditional FMLA is not).
        • Benefits are not paid for the first 10 days:
          • Employees may opt to utilize other paid leave provided as a benefit from the employer.
        • Pay:
          • No less than two-thirds of the employee’s regular rate of pay or $200.00 per day, whichever is less.
    • If any of these benefits are paid out by an employer, the employer is eligible for a 100% quarterly tax credit in the total amount of the benefits that are paid out.
      • Health insurance costs are included toward the credit.
    • If the business is owed a refund, it will be issued as soon as possible.
    • Each business with 500 or fewer employees must post this notice.

Ohio COVID-19 Resources

  • Unemployment benefits:
    • Employees are eligible if:
      • They have been employed for at least 20 weeks; and
      • Earned an average weekly wage of $269 during that period.
    • The state of Ohio is asking that employers distribute this form to their employees who are laid off for any reason due to COVID-19 in order to expedite their claims.
    • All WARNS notices and inquiries are to be emailed to rapdresp@jfs.ohio.gov until further notice.
    • Unemployment taxes:
      • During the emergency declaration period, a business’ unemployment tax charges will be mutualized.
        • Reimbursement to employers will follow the existing charging requirements as set forth in ORC 4141.
    • Unemployment benefits paid to an employee can be charged to a mutual account.
    • Any penalties for late reporting and payments will be waived.
    • Former employees can be paid a Supplemental Unemployment Benefit.
      • Requirements:
        • The arrangement being made must be documented on letterhead containing the businesses contact information.
        • An email address for the contact person must be provided.
        • There must be a citation of legal authority to verify the benefits are not subject to the unemployment tax.
      • Submit this information to UCTech@jfs.ohio.gov.
        • Subject line: SUB Plan.

Liquor buyback

  • Initiated by the Ohio Department of Commerce’s Division of Liquor Control to provide economic assistance to bar and restaurant owners during the COVID-19 pandemic.
  • This program will allow a bar or restaurant to:
    • Return unopened high proof liquor products purchased within the past 30 days
  • Also applies to those businesses that may have obtained a temporary permit (F2) for an event if:
    • The event was scheduled between March 12, 2020 and April 6, 2020; and
    • The event is now cancelled.
  • Questions regarding this buyback program can be directed to the Liquor Enterprise Service Center at:

 Goods Haulers

Ohio Workers’ Compensation Premiums

  • The Ohio Bureau of Workers’ Compensation (BWC) is allowing:
    • Employers to defer premium payments for the months of:
      • March;
      • April; and
      • May.
    • This deferment will last until June 1, 2020.
    • Please visit bwc.ohio.gov for further information.

Health Insurance Premiums

 Small Business Banking

 Additional information

  • Ohio’s resources regarding COVID-19:
  • Also check with your local Chamber of Commerce and Trade Associations for additional resources specific to your locale or industry.

COVID-19 has thrown the whole world a curveball.  With the help of MR&R, your business can weather the storm.  Please contact us at any time with any questions!

This document is not intended to provide legal advice, and is merely intended to be informational.  If you have specific questions, please contact legal counsel.

FFCRA Flow Chart

MRR received numerous questions concerning employers’ implementation of the FFCRA that becomes effective this Wednesday, April 1st. MRR prepared the following “flow chart” to assist employers in their understanding of the new laws, including when employees become eligible for FMLA and/or emergency sick leave pay. Please contact us at info@mrrlaw.com if you have any questions about the FFCRA or other COVID-19 issues.

 

Click here to download FFCRA Flow Chart (PDF)

Click here to download FFCRA Flow Chart PowerPoint (PPT)

 

This update is not intended to constitute legal advice or form an attorney-client relationship.  If you have any questions, we encourage you to contact an attorney at Mazanec, Raskin & Ryder to help address your specific circumstances.

Department of Labor Sheds Some Light on Employers’ Obligations Under the FFCRA

Last week, the US Department of Labor released responses to 59 frequently asked questions relating to employer responsibilities under the Families First Coronavirus Response Act (FFCRA).  The FFCRA requires most employers with less than 500 employees, as well as most public employers, to provide eligible employees with emergency paid sick leave and paid family leave beginning April 1, 2020.  The following is a summary of highlights from the March 26, 2020 release:

Determining whether an employer is over the 500-employee threshold: In determining whether an employer “employs” over 500 employees, one should count all full and part-time employees within the United States, the District of Columbia, or any US territory.  This includes employees on leave, temporary employees (even if on another employer’s payroll), and day laborers. It does not include those who are considered independent contractors under the Fair Labor Standards Act (FLSA). If two or more entities meet the integrated employer test under the FMLA, employees of all entities making up the integrated employer will count toward the total.

Who is an emergency responder? An emergency responder is an employee who is necessary for the provision of transport, care, health care, comfort, and nutrition of COVID-19 patients, or whose services are otherwise needed to limit the spread of COVID-19.

Some examples include, but are not limited to, law enforcement, correctional institution personnel, fire fighters, EMS personnel, physicians, nurses, public health personnel, paramedics, 911 operators, and public works personnel.

Definition of “unable to work”: An employee is “unable to work” if his or her employer has work for him or her to do and one of the COVID-19 qualifying reasons set forth in the FFCRA prevents him or her from being able to perform that work, either under normal circumstances or by means of telework.  All telework must be paid normal wages and is not compensated under the paid leave provisions of the FFCRA.

Continuation of health insurance: An employer who provides group health coverage must continue to provide such coverage to employees while they are on paid sick leave or expanded family and medical leave.

Paid sick leave or expanded family medical leave in the event that an employer closes a worksite or after employee furlough: If an employer closes a work site either because it was required to close pursuant to federal, state, or local directive, or because of lack of business, it is not required to provide paid sick leave or expanded family medical leave. An employee is not entitled to paid sick leave or expanded family medical leave in the event that he or she is furloughed.

Intermittent leave: An employee may take intermittent leave while teleworking, if the employer allows teleworking. While teleworking, an employee may take leave in any increment upon which the employee and employer can agree.

If an employee is not teleworking, paid sick leave taken for qualifying reasons related to COVID-19 (with the exception of caring for a child out of school or without child care) must be taken in full-day increments and cannot be taken intermittently under certain circumstances.

What if an employee has already taken FMLA leave this year? If an employee has already taken FMLA leave in the past 12 months, that amount of leave taken counts against the amount of leave available under the Emergency Paid Sick Leave Act for COVID-19 related reasons. In other words, employees are not entitled to 12 weeks of FMLA under this new law in addition to the 12 weeks of FMLA leave available for the other FMLA qualifying events.

Exception for small businesses with fewer than 50 employees: An employer with fewer than 50 employees is exempt from child-care related paid sick leave and expanded family medical leave requirements if an authorized officer of the business has determined that:

  • Provision of sick pay or leave would result in the business’ expenses and financial obligations exceeding available business revenues and cause the business to cease operating at minimal capacity.
  • The absence of the employees requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of the person’s specialized skills, knowledge, or responsibilities.
  • There are not sufficient workers available to perform the labor or services provided by the employee requesting leave and the labor or services are needed for the business to operate at minimum capacity.

A small business must document why an authorized officer has determined that the business fits one or more of the above criteria, though the documentation only need be supplied to the Department of Labor if the Department requests it.

In addition, The DOL issued a Field Assistance Bulletin on March 24, 2020 confirming that the DOL will not bring enforcement actions against employers for violations of the FFCRA that occur through April 17, 2020, provided that the employer has made a reasonable, good faith effort to comply with the FFCRA.

A full list of the Department of Labor’s March 26, 2020 FAQs can be found at the following web address:  https://www.dol.gov/agencies/whd/pandemic/ffcra-questions. Should you have any questions relating to the FFCRA or need any other employment law assistance, one of our attorneys would be happy to assist.

 

This document is not intended to provide legal advice, and is merely intended to be informational. If you have specific questions, please contact legal counsel.

RIGHT TO INDEMNIFICATION UNDER R.C. 2744.07(A)(2) MAY BE ASSERTED ONLY BY AN EMPLOYEE OF A POLITICAL SUBDIVISION

Recently, the Ohio Supreme Court determined in Ayers v. The City of Cleveland, 2020-Ohio-1047, that the right to indemnification under R.C. 2744.07(A)(2) may only be asserted by an employee of a political subdivision.

This is an important decision because it thwarts the plaintiff bar’s recent tactic to seek indemnification directly from a political subdivision to satisfy jury awards by effectively circumventing established immunity.  The Supreme Court made clear that the legislature did not intend to protect plaintiffs/judgment creditors or create an exception to political subdivision immunity that is not expressly in the Political Subdivision Tort Liability Act.

David Ayers was released from prison after prevailing on a federal habeas corpus claim.  He then filed a civil rights violation claim against the City of Cleveland and two police detectives.  The trial court dismissed all claims against the City of Cleveland.  Ayers obtained a large judgment against the detectives.  The detectives offered to assign any indemnification claim to Ayers in exchange for an agreement by Ayers to forgo collection efforts against the detectives personally.  Ayers rejected each offer.

Ayers brought a claim in state court against the City of Cleveland and the attorney who represented both Cleveland and the detectives for statutory indemnification pursuant to R.C. 2744.07(A)(2) among other claims.  The trial court granted summary judgment in favor of Ayers concluding that R.C. 2744.07(A)(2) required Cleveland to indemnify the officers and pay the judgment.  The Eighth District Court of Appeals reversed by concluding that Ayers, as a judgement creditor, did not have standing to bring a private cause of action against the city to enforce the city’s obligations to its employees.

The Ohio Supreme Court accepted jurisdiction over Ayers’s only proposition of law “R.C. 2744.07(A)(2) reflects the legislature’s intent to permit a judgment creditor to proceed directly against an indemnitor.”  Upon the Ohio Supreme Court’s acceptance of this case, Mazanec, Raskin & Ryder was retained by the Ohio Association of Civil Trial Attorneys to write an amicus or “friend of the court” brief in support of the City of Cleveland’s position.  MRR Partner Frank Scialdone wrote the amicus brief.

In its decision and in accord with MRR’s arguments as amicus, the Ohio Supreme Court focused on the issue of whether a judgment creditor may proceed directly against a political subdivision under R.C. 2744.07(A)(2).  R.C. 2744.07(A)(2) provides that a political subdivision “shall indemnify and hold harmless an employee” thus, “the right of indemnification is personal to the employee.  Therefore, the Ohio Supreme Court held that “the unambiguous language of the statute, which serves only to indemnify an employee and does not vest any rights in third parties connected to the employee,” concluding that R.C. 2744.07(A)(2) does not permit a judgment creditor to proceed directly against an indemnitor.

This decision comports with the general shield from liability afforded political subdivisions for the acts of their employees and exceptions to that general rule must be specifically set forth in the statute.  R.C. 2744.02(A)(2) provides for a political subdivision to indemnify only employees of the political subdivision.  Because the statute does not specifically provide for a third party to enforce an employee’s right of indemnification, the Ohio Supreme Court held that under R.C. 2744.07(A)(2), indemnification by a political subdivision is a personal right of a particular employee.  Thus, based on the plain language of that statute, the personal right of indemnification may be asserted only by the employee and it may not be asserted by a judgment creditor.

This update is not intended to constitute legal advice or form an attorney-client relationship.  If you have any questions, we encourage you to contact an attorney at Mazanec, Raskin & Ryder to help address your specific circumstances.

 

Coronavirus Legal Alert – March 27, 2020

Ohio House Introduces Bill to Require Insurance Companies to Cover Business Interruption Losses for Small Businesses

On March 24, 2020, members of the Ohio House of Representatives introduced H.B. No. 589 to require that certain insurance cover pandemic losses.  The Bill is designed to “require insurers offering business interruption insurance to cover losses attributable to viruses and pandemics and to declare an emergency.” The proposed legislation seeks to eliminate any current impediments to coverage, such as exclusions for virus and pandemic related losses, under policies “insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption.”  If passed, it would require insurers to provide such coverage under existing business insurance policies, up to policy limits, for business interruption losses that occur during the entire time of the state of emergency declared by Governor DeWine on March 8, 2020.

The proposed law is focused on providing relief to small businesses suffering from the effects of the coronavirus emergency, because it applies only to businesses operating in Ohio that have 100 or fewer employees.  The Bill also creates a process for insurers that must provide such coverage to later seek reimbursement of loss payouts from the Superintendent of Insurance from a special fund to be created from specific assessments imposed on insurance companies that issue business interruption coverage.

There are still several steps in the legislative process before this proposal could become law.  If passed and signed by Governor DeWine it would become effective immediately.  We will provide updates as they become available.

To best serve our public and private sector clients, Mazanec, Raskin & Ryder Co., LPA established a Coronavirus Legal Team to help all our clients address the wide variety of challenges and issues they face in the current crisis.  For assistance in addressing these concerns or in developing other plans to protect your business, please contact MRR Partners George Pilat or David Smith (Cleveland), or Stacy Pollock (Columbus), and they will involve the appropriate members of the MRR Team.

 

FFCRA Effective 1 Day Earlier Than Anticipated

The Families First Coronavirus Response Act (FFCRA), which provides paid sick leave to many employees and amends the FMLA to provide paid leave related to the COVID-19 public health emergency under certain circumstances, was to take effect no later than 15 days after the date of the enactment of the FFCRA.  While 15 days after the enactment is April 2, 2020, the Department of Labor announced that the law’s effective date is April 1, 2020.  Employers with questions about this law or in need of assistance with policies to implement this law in their workplace should contact David Smith at dsmith@mrrlaw.com or Stacy Pollock at spollock@mrrlaw.com.