March 26 - FFCRA poster, CARES Act Loans
Updated: 6 days ago
We have some new resources for you and some new information. We will start with a new required posting: Effective April 1, 2020, you must post this poster in a conspicuous place in your office or any place you regularly post federal legislation postings.
In essence, this posting lists the type of benefits provided by the FFCRA, who is eligible, and what reasons they can claim FFCRA benefits. There’s nothing really new in this information, but this is the front line of information which will be conveyed to your employees so be prepared to discuss it.
Next, we have a COVID-19 Construction Impact Notice Letter Template you can use communicate anticipated deviations from schedules on your projects. This is word doc you will be able to edit and customize, but which contains the backbones of the necessary notice required to enact certain provisions of many contracts you might have with customers.
What are these new loans we can get under the CARES Act?
A lot of folks are distributing information on the Small Business Loans portion of the bill currently in the house. There’s quite a bit we are fairly certain about, however I’m going to refrain from issuing anything until I have more that’s certain. Here’s some fairly strong suppositions based on existing SBA procedures however:
The new “Paycheck Protection Program”:
-Allows any business or private or public nonprofit with 500 or fewer employees to access the SBA 7(a) loan guaranty program.
-This is a guaranty of a private lender’s loan, so the lender files with the SBA for the guaranty
- Establishes that the borrower shall be eligible for loan forgiveness equal to the amount spent by the borrower during an 8-week period after the origination date of the loan on payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.
- Loan forgiveness will depend on the number of employees an employer retains compared to the prior year - details on this are not yet known.
- Eligible payroll costs do not include compensation above $100,000 in wages. Forgiveness on a covered loan is equal to the sum of payroll costs incurred during the covered 8 week period compared to the previous year or time period, proportionate to maintaining employees and wages.
- First possible period eligible for payroll forgiveness is the 8 week period following origination of the loan by the lender.
-Any loan amount not forgiven at the end of one year is carried forward as an ongoing loan with terms of a max of 10 years, at max 4% interest. The 100% loan guarantee to the lender remains intact.
The NECA Government Affairs team held a webinar today; here are a few points they made and FAQs they answered:
- If you expect to receive a tax refund, you urged to file ASAP; the IRS wants to issue as many refunds as possible by July 15
- Economic stimulus checks (part of the stimulus bill passed by the Senate and expected to pass the House): The amount of personal checks will be based on 2019 income (2018 if 2019 not available to IRS). People may get more or less than that for which they qualify since it is ultimately based on 2020 income. This will get squared up with 2020 tax filings (next year) as it will increase or decrease tax liability to net the appropriate amount afforded based on 2020 income.
- This question was asked of the Gov't Affairs team: should we keep as many electricians as possible so we can get the payroll protection loan? The stated there is no clear answer yet, and they are waiting for guidance on this. We will keep you posted.
- A question was asked whether state-issued stay-at-home orders count as quarantine for determining leave eligibility. The answer was it depends on how the state's order was written. We will look into this further.
- NECA has joined other organizations in sending letters to all state governors asking them to declare construction as critical infrastructure work. While the federal government has already established that it is, each state has the ability to supersede this with their own determination of what work is critical. As we’ve already posted previously, in Indiana and Illinois, construction of all types has been deemed essential.
- The NECA Government Affairs team will be sending out a full summary of CARES act soon. If you are not subscribed to their email newsletter, now would be a good time to sign up (subscribe form found on the right side of the page).