SUNDAY, APRIL 5, 2020
AGC Lobbies Against SBA Annual Receipts Qualification Requirement for Paycheck Protection Program
As we noted on in our updates from Friday, April 3 the Small Business Administration (“SBA”) issued its Interim Final Rule to implement the Paycheck Protection Program issued as part of the CARES Act. A number of construction companies have run into problems in qualifying for a PPP loan/grant. In a press release issued today, the Associated General Contractors (“AGC”) has indicated that thousands of construction firms that clearly would meet the CARES Act threshold of 500 employers or less because the SBA appears to have added a secondary qualification requirement tied to the average annual receipts size standard used for construction. The AGC has published a summary of this problem, and also written a letter to the SBA requesting that the SBA immediately revise the Interim Final Rule to correct this problem.
THURSDAY, APRIL 2, 2020
Update on Paycheck Protection Program Under the CARES Act
The Small Business Administration issued an Interim Final Rule for the Paycheck Protection Program (“PPP”) which offers forgivable loans to small businesses. Burns White has published a helpful overview of the Interim Final Rule. The interim final rule sets forth additional guidelines and clarifications on several issues and changes the interest rate on loans made under the program from 0.5% to 1%. PPP loans will be available through June 30 or until the funds run out. Due to expected high demand, the Treasury Department recommends that applications be submitted as soon as possible. Note that the PPP Borrower Application Form was updated on April 2, 2020. All applicants must use this form. The Treasury Department has a helpful resource page for small businesses interested in the program.
COVID-19 Exposure Prevention, Preparedness and Response Plan
The Construction Industry Safety Coalition (CISC) had developed a template for a COVID-19 Exposure Prevention, Preparedness and Response Plan (available to download in both English and Spanish) to assist construction industry employers with measures to prevent worker exposure to Coronavirus, including protective measure for the jobsite, personal protective equipment and work practice controls.
Tracking the Status of Construction Projects
ConstructConnect has developed a map to track the impact of COVID-19 and which states have placed restrictions on construction work. ConstructConnect is also tracking delayed projects and providing timely updates on projects that have pushed the bid dates, put on hold or canceled due to the economic crisis related to COVID-19.
WEDNESDAY, APRIL 1, 2020
Loan/Grant Options Available to PA Companies
Burns White has published a helpful article summarizing the current funding options for businesses available through the CARES Act and Pennsylvania COVID-19 economic relief efforts.
Paycheck Protection Program Update
The U.S. Department of Treasury published a PPP Information Sheet regarding the Payroll Protection Program. Beginning on Friday, April 3, 2020, small businesses can apply for a loan under this program in the amount of 2.5 times the company’s average monthly payroll over the past year. The original legislation provided for a loan term of up to ten (10) years at an interest rate up to 4%. The Department of Treasury, however, has provided that the loan period will now be two (2) years (following up to a six (6) month deferral period), with a fixed interest rate of 0.5%. As highlighted in prior posts, the loan can be forgiven if the borrower uses the loan proceeds to pay qualifying expenses during the first eight (8) weeks after the loan, which include payroll costs (including benefits), most mortgage interest, rent, and utility costs. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount can be used for non-payroll costs.
U.S. DOL Rule re Families First Coronavirus Response Act
The U.S. Department of Labor today released a temporary rule (effective April 1, 2020) guiding how American workers and employers can use the new Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, which were included in the Families First Coronavirus Response Act.
PA Deadline for Waiver Requests and Refusal to Adopt New Federal Essential Infrastructure List
Late this afternoon Governor Wolf updated the Pennsylvania Stop Work Order FAQ’s. The deadline to apply for a waiver is Friday, April 3. In addition, Pennsylvania now specifically says that they only recognize the Federal CISA essential infrastructure list from March 23, even though that list was updated on March 28 to include greatly expanded construction categories, including residential construction. It certainly appears that no waivers will be granted for residential construction and that only “emergency repairs” on residential construction can continue.
School Construction in Pennsylvania
The following was recently added to the Department of Education questions and answers website addressing whether school construction projects may continue forward:
Question: Must school districts seek a formal exemption through the Pennsylvania Department of Community and Economic Development (DCED) to continue construction projects?
Answer: School districts should use best judgment in exercising their authority to continue critical construction projects, and should not seek a formal exemption through DCED. All school district construction decisions should appropriately balance public health and safety while ensuring the continued safety of critical infrastructure. School districts and the contractors must ensure continuance of and compliance with the social distancing and other mitigation measures to protect employees and the public, including virtual and telework operations (e.g. work from home) as the primary option when available, as have been or will be established by the Department of Health and the Centers for Disease Control and Prevention. In-person work is only to be performed on the most limited basis possible.
All of Pennsylvania Now under Stay-At-Home Order
Governor Wolf has placed all of Pennsylvania under a stay-at-home order meaning that residents of all 67 of Pennsylvania’s counties must now stay home as much as possible through April 30, 2020 to help slow the spread of COVID-19.
TUESDAY, MARCH 31, 2020
AGC Updates CARES Act Analysis
The Associated General Contractors of America (AGC) has updated its CARES Act Analysis as it applies to small business eligibility for the new Small Business Administration (SBA) loan program. Notably, a business is eligible for such a loan if it employs 500 employees or fewer, or if the business is in an industry that has an employee-based size standard through SBA that is higher than 500 employees. Under SBA size standards, construction contractor firms are generally defined as a small business according to their gross receipts, not their number of employees. As such, AGC assumes and has asked the SBA to make clear in guidance that construction contractor firms whose small business size standard is determined by gross receipts should simply determine if it has 500 employees or fewer to qualify for these loans. Construction supplies and manufacturers have small business size standards that are generally defined by the number of employees the firms employ.
AGC Issues Contractor Safety Kit
AGC of America has released a new coronavirus safety kit. The kit includes safety tips and a host of other resources firms can use to help protect workers, and the public, from the spread of the coronavirus. We recommend that all contractors review and analyze these materials and specifically modify and implement them for any jobs where you are continuing to work.
Resources for Employers
The Department of Labor Wage and Hour Division is updating its website multiple times a day to provide up to date information to employers and employees on multiple issues related to COVID-19.
PA Governor Wolf Expands and Extends Stay-At-Home Order
Governor Tom Wolf revised the Pennsylvania Stay at Home order to include Carbon, Cumberland, Dauphin and Schuylkill counties, bringing the state total to 26 counties under a stay-at-home order. This order went into effect at 8 p.m., Monday, March 30, 2020, and will continue until April 30. All stay-at-home orders are now extended through April 30. The order now includes these 26 counties: Allegheny, Beaver, Berks, Bucks, Butler, Carbon, Centre, Chester, Cumberland, Dauphin, Delaware, Erie, Lackawanna, Lancaster, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Philadelphia, Pike, Schuylkill, Washington, Wayne, Westmoreland and York counties.
MONDAY, MARCH 30, 2020
COVID-19 Loan/Grant Applications Must Wait for SBA Guidance
The SBA has not yet issued its guidance for implementing the loans/grants provided for under the CARES Act (see the Friday, March 27 update below). This guidance is expected to come out later this week or next. While awaiting that guidance, the U.S. Chamber of Commerce has published a helpful overview of how this loan/grant program with work. These loans will be issued through private banks (not directly though the government) and banks will be looking for borrowers to make a good faith certification that (1) the uncertainty of current economic conditions makes the loan request necessary to support ongoing operations, and (2) the borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments.
President Trump Extends Social Distancing Guidelines Through April
In recognition of sobering projections of the death and infection rate from the Coronavirus, President Trump extended federal social distancing guidelines through April 30th and indicated that it may be necessary to do so again.
New York Construction on Hospitals, Infrastructure and Affordable Housing Still Allowed
Under the new directive from Governor Cuomo’s office, most residential and commercial construction is now deemed “non-essential” and is suspended, but infrastructure, hospital, affordable housing, and emergency repair construction projects are deemed “essential” and can continue.
Updated Guidance On Governor Wolf’s Determination of “Life Sustaining Businesses”
As we advised in our below post of March 28, the federal Cybersecurity and Infrastructure Security Agency (under the Department of Homeland Security (“DHS”)) issued a new opinion expanding its “Essential Critical Infrastructure Workforce” advisory list to include certain construction and related activities, including residential construction. As recently as March 26, Governor Wolf’s website suggested that those working in the areas deemed “essential critical infrastructure” by the DHS may be able to operate without a waiver from the Pennsylvania Department of Community and Economic Development (“DCED”) even if not specifically identified as permitted to operate under Governor Wolf’s list of life-sustaining businesses. Governor Wolf’s website, however, has clarified in an updated FAQs section, that any business not specifically permitted to operate on the current Industry Operation Guidance Matrix must obtain a waiver from the DCED. In reviewing waiver applications, the DCED is supposed to look at the DHS “Essential Infrastructure” list in considering whether or not to grant a waiver. As of March 27, Pennsylvania’s position on residential construction was that the only work that could continue was emergency repairs and completion of pending projects if they were “substantially complete” – meaning that a Certificate of Occupancy had already been issued. Based on this new designation, the DCED may start to grant waivers for residential construction. Residential builders who want to work should apply for a waiver with this new ruling by the DHS as the justification.
SATURDAY, MARCH 28, 2020
New Guidance re Federal “Essential Critical Infrastructure Workforce”
Today the Cybersecurity and Infrastructure Security Agency (CISA) (under the Secretary of Homeland Security) updated its “Essential Critical Infrastructure Workforce” advisory list. This list is intended to help state and local officials as they work to protect their communities from COVID-19, while ensuring continuity of functions critical to public health and safety, as well as economic and national security. As updated, the list now identifies construction and related activities, including the manufacture and delivery of construction supplies and safety equipment and the permitting & inspection of projects, in 25 different parts of its guidelines, compared to four times in its original version. As we noted in our March 24 updates (see below), Pennsylvania is not requiring waivers for those construction projects identified in this list, so these updates appear to dramatically expand the construction work that can now proceed in Pennsylvania.
Pennsylvania GCAP COVID-19 Plan for Construction
The Pennsylvania General Contractors Association (with a lead role played by the Master Builders Association of Western Pennsylvania) has published a helpful guide to assist contractors with dealing with the risk of COVID-19 on their jobsites. We recommend that all contractors review and analyze this guide, and then consider and document project-specific rules that you will implement for each project.
FRIDAY, MARCH 27, 2020
The Coronavirus Aid, Relief, and Economic Security (CARES) Act
The U.S. House of Representatives passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the President signed the Act into law on March 27. The AGC has published a helpful analysis of how the Act impacts the construction industry. Most importantly, the Act provides for an SBA “Paycheck Protection” loan program for businesses with fewer than 500 employees that includes loan forgiveness, so this money will actually be more like a grant than a loan. The forgiveness program will only cover either weeks of covered expenses (everything from payroll, mortgage interest, rent, and utilities). Additional information on these loans can be found in this National Law Review article.
DOL Issues Additional Guidance re Emergency Paid Leave
The U.S. Department of Labor’s Wage and Hour Division added to its published guidance to provide information to employers about meeting their requirements to offer emergency paid sick leave and paid family medical leave offered by the Families First Coronavirus Response Act (FFCRA) when it takes effect on April 1, 2020. Specifically, the Division added to its original Questions and Answers document (first noted below on March 24). The new questions (numbers 15-37) address important issues, such as recordkeeping, documentation requirements, when an employee is unable to telework, intermittent leave, worksite closures, furloughs, unemployment interaction, health coverage requirements, and multiemployer collective bargaining agreement implications.
DOL Required Families First Coronavirus Response Act (FFCRA) Poster
Employers are required to “post” notice of the Employee’s Rights under the Act. The DOL was asked, “Where do I post this notice? Since most of my workforce is teleworking, where do I electronically ‘post’ this notice?” The DOL responded, “Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.” Here is the required poster for non-Federal government employees.
Governor Wolf Extends Pennsylvania Stay-At-Home Order
On Friday afternoon Pennsylvania Governor Tom Wolf extended his Stay-At-Home Order to include additional counties. The Order now applies to Allegheny County, Berks County, Bucks County, Butler County, Chester County, Delaware County, Erie County, Lackawanna County, Lancaster County, Lehigh County, Luzerne County, Monroe County, Montgomery County, Northampton County, Philadelphia County, Pike County, Wayne County, Westmoreland County, and York County. Enforcement of the Order with respect to Berks, Butler, Lackawanna, Lancaster, Luzerne, Pike, Wayne, Westmoreland, and York Counties will commence at 8:00 PM on March 27.
THURSDAY, MARCH 26, 2020
U.S. Senate Passes the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)
The Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The complete 880 pages of the Act can be found here. The top ten takeaways and a good summary of the CARES Act are set forth in this National Law Review article. The House is expected to promptly vote to pass the CARES Act (depending on whether an in-person vote is required), and the President may sign this Act into law as early as March 27.
AGC Issues Proactive Safety Recommendations:
The Associated General Contractions association (“AGC”) issued a helpful guidance document to assist contractors in addressing COVID-19 issues while operating their construction jobsites. In addition, the AGC has made public the PowerPoint slides from the webinar that we attended yesterday regarding “Protecting Your People and Your Projects.” On this topic, we are recommending that contractors be sure to (1) specifically evaluate the COVID-19 risks associated with your jobsite, (2) implement site-specific rules that can make your jobsite as safe as reasonably possible, and (3) document the steps that are you implementing. Options to consider include: requiring social distancing of at least six-feet during all breaks; prohibition on sharing food; foot-operated hand-washing stations independent of port-o-johns; and potentially recording body temperature of employees. There are numerous concerns with the body temperature issue, including ensuring the health and safety of the person who would take the temperature and the privacy of the employees. For these reasons, some contractors are requiring that employees take their own temperature at home and self-report their temperature when they arrive at work.
Pennsylvania Offers Small Business Working Capital Loans
Governor Tom Wolf announced that new funding is available to help small businesses impacted by COVID-19, through a new program under the Pennsylvania Industrial Development Authority’s (“PIDA”) Small Business First Fund, the COVID-19 Working Capital Access Program. PIDA authorized making $60 million available to provide zero percent loans of $100,000 or less to for-profit businesses with 100 or fewer full-time employees. Funds are expected to become available as early as next week.
WEDNESDAY, MARCH 25, 2020
Pennsylvania Expansion of Permitted Businesses
At 2:30 p.m. on March 24, Governor Wolf issued another modified Matrix of businesses that are permitted to continue to operate. As it relates to the construction industry, the following businesses are now permitted to continue to operate: Wood Product Manufacturing (including Sawmills and Wood Preservation; Veneer, Plywood, and Engineered Wood Product Manufacturing; and Other Wood Product Manufacturing); Merchant Wholesalers, Durable Goods (including Lumber and Other Construction Materials Merchant Wholesalers); Glass and Glass Product Manufacturing; and Lime and Gypsum Product Manufacturing. In addition to these published revisions, we are hearing a lot of rumors that PennDOT may be permitted to get certain projects restarted as early as Monday, March 30. We expect to have another update on this topic tomorrow.
$2 Trillion Economic Stimulus Deal
The full details have yet to be voted on, but an agreement in principle has been reached on a $2 Trillium economic stimulus deal. The deal is believed to include $250 billion set aside for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies. Some in Washington say the package will help replace the salary of furloughed workers for four months, rather than the three months first proposed. Furloughed workers would get whatever amount a state usually provides for unemployment, plus a $600 per week add-on. Also said to be in the bill is inclusion of an “employee retention” tax credit that’s estimated to provide $50 billion to companies who retain employees on payroll and cover 50% of workers’ paychecks. Companies would also be able to defer payment of the 6.2% Social Security payroll tax. While a vote was expected today, this did not occur. The major hang-up remains whether the unemployment benefits under consideration creates an incentive for people to remain on unemployment rather than returning to work as soon as possible. If and when final legislation will be voted on remains unknown.
Financial Assistance for Small Business Impacted by COVID-19
The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
TUESDAY, MARCH 24, 2020
U.S. Department of Labor Guidance
The U.S. Department of Labor’s Wage and Hour Division (WHD) announced its first set of published guidance to provide information to employers about meeting their requirements to offer emergency paid sick leave and paid family medical leave offered by the Families First Coronavirus Response Act (FFCRA) when it takes effect on April 1, 2020. The guidance includes a Fact Sheet for Employees, a Fact Sheet for Employers and a Questions and Answers document.
OSHA Poster
The Occupational Safety and Health Administration published a poster on how to prevent worker exposure to COVID-19. In addition to these procedures, the EEOC has recently issued guidance that in light of the COVID-19 pandemic, employers are entitled to take employees’ body temperature without violating the Americans with Disabilities Act (ADA).
Pennsylvania Waiver Application
As noted in our earlier updates, construction is not permitted to take place in Pennsylvania with the notable exceptions of “emergency repairs and construction of healthcare facilities.” In addition, Pennsylvania is not requiring waivers for those construction projects associated with any of the sixteen Federal Critical Infrastructure Sectors. The Governor’s office recently published a helpful set of Life-Sustaining Business Frequently Asked Questions (PDF) to assist companies in determining whether and how to apply for a Waiver from the Pennsylvania Department of Community and Economic Development.
Pittsburgh Guidelines
Pittsburgh’s department of Permits, Licenses, and Inspections have issued guidelines that will help contractors determine if their projects are “emergency repairs” under Governor Wolf’ COVID-19 stop-work Order.
ConsensusDocs
The ConsensusDocs Executive Director published a short article discussing how the ConsensusDocs contract documents explicitly address delays that are reasonably due to epidemics. The American Institute of Architects (AIA) A201 General Conditions document has a catch-all provision that allows for an extension of time for “other causes that the Contractor asserts, and the Architect determines justify delay,” but it does not specifically address epidemics.
MONDAY, MARCH 23, 2020
Delaware Stay-At-Home Order
On March 22 Governor Carney of Delaware issued a Stay-At-Home Order. The Order goes into effect at 8:00 a.m. Tuesday, March 24, 2020 and will remain in effect until May 15 or until the public threat from COVID-19 is eliminated. According to the list of essential and non-essential businesses posted on the Governor’s website, virtually the entire construction industry, including residential, commercial, heavy and civil engineering, and specialty trade construction, are permitted to remain open and operating at this time.
Ohio Stay-At-Home Order
Last night, the Ohio Governor issued a Stay at Home Order. The Order goes went into effect last night at 11:59 pm and will stay in effect until April 6, 2020. The Order is mandatory and applies to all non-essential businesses, with an exception for minimum basic operations. The list of “essential” businesses, however, is much more broad than Pennsylvania’s Oder. With respect to construction, individuals may leave their residence to provide any services to perform any work necessary to offer, provision, operate, maintain and repair “Essential Infrastructure,” which “includes, but is not limited to…construction (including, but not limited to, construction required in response to this public health emergency, hospital construction, construction of long-term care facilities, public works construction, school construction, essential business construction, and housing construction); building management and maintenance; airport operations; operation and maintenance of utilities, including water, sewer, and gas; electrical (including power generation, distribution, and production of raw materials)…..” The Order also states, “Essential Infrastructure shall be construed broadly to avoid any impacts to essential infrastructure broadly defined.”
Pennsylvania Stay-At-Home Order
Effective 8:00 p.m. on Monday, March 23, 2020 through April 6, 2020, the following counties are under a Stay at Home Order: Allegheny County, Bucks County, Chester County, Delaware County, Monroe County, Montgomery County, and Philadelphia County. All individuals in counties subject to this policy must stay at home except for certain essential activities and work to provide life-sustaining business and government services. Note that this Order does not prohibit employees from working on construction projects that have been granted a waiver to continue or are subject to the “health care facility” exception. The Governor’s office issued some guidance regarding what is permitted under this Order.
Pennsylvania PA One Call remains operational
For those contractors that are continuing to work, it is important to note that Pennsylvania One Call System, Inc. remains fully operational through both its call center and online services, to receive underground utility locate requests and to provide those notices to its member utilities.
West Virginia Stay-At-Home Order
On March 23 the Governor of West Virginia issued a Stay at Home Order. All construction activities, however, are exempted under the Order, as well as manufacturing, distribution, and supply to the construction, energy, and other related industries.
SUNDAY, MARCH 22, 2020
It is our understanding that many contractors are receiving exemptions to perform construction work on infrastructure projects, especially in rural areas. We understand that the Governor and others are concerned that if an individual gets the virus, they will be confined to their home and the Commonwealth wants to make sure that essential services (e.g. – water, gas, sewage, electrical, etc.) are not negatively affected by stopping ongoing construction projects. So if you’re working on a project that involves these types of activities, such as a waterline or sewage project – especially in rural areas – you may have a good chance at qualifying for an waiver by submitting a waiver application to the Pennsylvania Department of Community and Economic Development (“DCED”). In addition, per this letter there is a tremendous lobbying effort taking place on behalf of the construction industry to reclassify the industry group “Highway, Street, and Bridge Construction” as a group that may continue physical operations, consistent with the exceptions made in California, Illinois and New York.
SATURDAY, MARCH 21, 2020
Last evening Governor Wolf updated the original matrix of businesses that must shut down. Notably for the construction industry, a number of exceptions were added, including the construction of health care facilities and emergency repairs. Additionally, mining and quarrying activities have been included as exceptions, which would arguably include necessary construction related to those activities. The deadline to shut down non-essential businesses was also extended until March 23. Due to pressure being exerted by the construction industry, we also understand that additional exceptions related to construction may be issued in the upcoming days. We will keep you informed as developments occur.
FRIDAY, MARCH 20, 2020
In this article, the Burns White Construction Law Practice Group analyzes the impact to the construction industry of Governor Wolf’s March 19, 2020 Order directing the immediate shut-down of all non-essential business.
THURSDAY, MARCH 19, 2020
New Jersey became the first state to introduce a Bill that would require insurers to pay COVID-19 business interruption claims. This article discusses the serious constitutional questions raised by this bill regarding whether a statute can expand insurance coverage that was freely negotiated between parties in the contract of insurance.
WEDNESDAY, MARCH 18, 2020
The Associated General Contractors of America (“ACG”) published a helpful summary of the paid leave mandates under the Families First Coronavirus Response Act, the entire text of which can be viewed here.
TUESDAY, MARCH 17, 2020
In this article, the Burns White Employment Practices Liability Practice Group presents a useful set of FAQ’s on the employment law issues associated with COVID-19.
MONDAY, MARCH 16, 2020
As everyone knows, the World Health Organization (WHO) has officially declared the coronavirus outbreak a pandemic. While the health and safety of our clients and friends remain are top priority, we also recognize that your businesses are being significantly impacted. We are being proactive with our clients to help them most effectively manage the disruption and detrimental economic impacts to your businesses.
The spread of the coronavirus is impacting the world but is also presenting some unique challenges for the construction industry. We already are hearing about delays and potential suspensions to ongoing construction projects, as well as decisions to postpone the advertising, letting and awarding of future contracts. Clients are also dealing with unusual employment and HR issues because of the coronavirus outbreak. Here are a few examples of the inquiries we recently received from clients:
- If my project gets suspended because of the coronavirus, can I recover my delay and idle equipment damages from the project owner?
- Is the coronavirus covered under my contract’s force majeure provision?
- Should I be sending a written notice of the delays and impacts being caused by the coronavirus?
- Should I be doing anything different regarding jobsite safety as a result of the coronavirus?
- Should we be revising our subcontracts to address coronavirus issues?
- What if my supplier increases its costs because of shortages in materials resulting from the coronavirus – can I pass those increases onto the project owner?
- If we decide to temporarily allow our employees to stay at home (or we are forced to do this), are we required to pay the employees?
- What if one of my employees refuses to come to work because of fears involving contracting the coronavirus – what are my rights and duties?