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SBA Provides Additional Guidance on "Good Faith Certification" for PPP Loans

by Patrick Hayes and Mahek Bhojani On April 23, 2020, the SBA and Treasury Department clarified that all borrowers of the Paycheck Protection Program loan must certify that “[c]urrent economic uncertainty makes this loan necessary to support the ongoing operations of the Applicant.” Applicants were required to make this certification in good faith, taking into account their current business activity and ability to access other sources of liquidity sufficient to support their ongoing operation in a manner that is not significantly detrimental to the business. The SBA further stated that “[a]ny borrower that applied for the PPP loan prior to the issuance of the guidance and repaid the loan in full by May 14, 2020 will be deemed by the SBA to have made the required certification in good faith.”

Today, the SBA issued further guidance providing a safe harbor for any borrower, together with its affiliates, who received a PPP loan with an original principal amount of less than $2 million. Specifically, borrowers with PPP loan amounts with less than $2 million will be deemed to have made the required certification concerning the necessity of the loan in good faith.

Borrowers with loans greater than $2 million may still have an adequate basis for making the required good-faith certification based on their individual circumstances. However, all PPP loans in excess of $2 million will be subject to review by SBA for compliance with the program requirements. If SBA determines in the course of the review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from the SBA, the SBA will not pursue administrative enforcement or referrals to other agencies with respect to the certification concerning the necessity of the loan.

The full text of the guidance is available here.

EEOC UPDATES

by Tony Stergio The Collection of EEO-1 data for 2019 and 2020 will be delayed until March of 2021 due to the COVID-19 pandemic. All employers with 100 or more employees are required to file EEO-1s. The EEOC, in approving the delay, indicated that employers would be better positioned to provide accurate, valid and reliable data in a timely manner by March 2021.

by Wesley Walker The EEOC also recently issued a guidance regarding the Americans with Disabilities Act (“ADA”) as it relates COVID-19 susceptibility. Specifically, the guidance concerns employees who have pre-existing medical conditions that increase the employee’s risk of serious complications as the result of a COVID-19 infection.

The EEOC established that an employer, in most circumstances, cannot prevent an employee’s return to the workplace simply because that employee has underlying medical conditions which makes them susceptible to a poor COVID-19 outcome. Instead, employers are required to conduct an extensive individualized assessment and threat analysis with respect to employees with underlying conditions. This analysis should include how the risk of COVID-19 exposure can be reduced or eliminated through “reasonable accommodation” at the workplace. The specific COVID-19 assessment must also include an analysis of the severity of the potential harm to the employee, the likelihood of such harm, means of protecting an employee from the virus, the employee’s risk of exposure to the virus in the workplace, and the protective means and measures the employer has implemented to protect employees from contracting COVID-19...Read More.

OSHA UPDATE

by Tony Stergio As expected, OSHA has received numerous reports concerning employers’ alleged failure to adequately protect their employees from the spread of COVID-19. As previously reported, these complaints, in some extreme cases, can result in OSHA inspections for possible violations of the General Duty Clause. OSHA launched such an investigation at an Amazon warehouse in Pennsylvania recently, following a complaint that the company was not doing enough to prevent the spread of COVID-19. Concerns included the employees' inability to maintain adequate social distancing, lack of protective gear, and not providing break times for recommended hand washing.

More and more frequently, OSHA appears to be dealing with these COVID-19 reports via OSHA’s rapid response investigation system. In such situations, once OSHA receives a report, it will send the employer the incident details it has received, then give the employer five (5) working days to respond. The employer’s rapid response to OSHA should contain the results of the employer’s internal investigation, and the actions taken to correct the condition described in the employer’s report. If the employer’s response adequately assures OSHA that no employee hazard exposure has occurred (or that any such hazards had been adequately abated), no further investigation will likely occur. It is, therefore, extremely important that an employer respond timely and properly to any OSHA incident report. Andrews Myers’ employment section is experienced in quickly responding to OSHA rapid response investigations and is ready to assist.

Celebrating 30 Years in 2020

Founded in 1990, with offices in Houston and Austin, Andrews Myers, Attorneys at Law, is a corporate law firm and recognized market leader in Texas construction law. The firm focuses on the concentrated disciplines of commercial litigation, construction, commercial real estate, corporate and business transactions, with additional emphasis on related issues including bankruptcy and insolvency, energy, employment and capital formation. A seasoned team of attorneys provides timely and cost-effective solutions to the most complex problems facing entrepreneurs and middle-market industry leaders throughout the state and the nation. For more information please visit www.andrewsmyers.com.