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Legal Strategies for Your Firm During the Coronavirus Pandemic
In this webinar, legal experts share best practices and answer questions about federal aid, employment and contracts
Annie Thornton
April 10, 2020
Houzz Editorial Staff
Update: Note that as of April 16, 2020, the SBA announced that due to funding constraints, it is no longer accepting new PPP applications or EIDL applications. If you find a lender, bank or credit union that is still accepting PPP applications, you may still want to apply, pending additional funding appropriations that Congress is expected to pass.
During these challenging times, you probably have many questions about the federal assistance available to you. You may also be wondering how the current crisis affects your legal obligations as a business owner.
As part of our ongoing Resilience series, three legal experts — David Adler of Adler Law in Illinois and Thomas C. Jardim and Scott Salmon of Jardim, Meisner & Susser in New Jersey — recently shared advice for design and remodeling businesses in a live webinar with Reisa Elden of Houzz. In case you missed it, read some of the highlights below or click the link at the end to watch the full webinar.
During these challenging times, you probably have many questions about the federal assistance available to you. You may also be wondering how the current crisis affects your legal obligations as a business owner.
As part of our ongoing Resilience series, three legal experts — David Adler of Adler Law in Illinois and Thomas C. Jardim and Scott Salmon of Jardim, Meisner & Susser in New Jersey — recently shared advice for design and remodeling businesses in a live webinar with Reisa Elden of Houzz. In case you missed it, read some of the highlights below or click the link at the end to watch the full webinar.
The webinar panelists covered the following topics:
- New and expanded government relief programs for small businesses
- Legal requirements related to operations and employment
- Contract fulfillment and force majeure
- Communication strategies for clients and vendors
- Insurance coverage and limitations
The CARES Act and Other Federal Stimulus
The federal government has allocated $377 billion to help small businesses as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program are two key elements of the stimulus that can help small businesses stay open and keep their workers employed through emergency funds, low-interest loans and forgivable loans.
Salmon highlighted the key points of the stimulus package and offered tips on how to navigate the various loans and grants available, including how to apply for them and what business expenses they can be used for. He urged business owners to take advantage of these programs. “There are very, very few scenarios where you should not apply at least for the paycheck protection money,” he says. “There are lots of situations where you would also want the loans under the EIDL program.”
The Families First Coronavirus Response Act (FFCRA) requires that group health plans cover free COVID-19 testing and that small businesses provide employees with two weeks of paid sick leave and emergency family care leave. “Fortunately, anything you pay to the employee who takes leave under this law will be reimbursed to you dollar for dollar in federal tax credits,” Jardim says. Compliance with any local and state paid sick days and family medical leave programs is also required.
How the CARES Act and other federal stimulus can help your firm
The federal government has allocated $377 billion to help small businesses as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program are two key elements of the stimulus that can help small businesses stay open and keep their workers employed through emergency funds, low-interest loans and forgivable loans.
Salmon highlighted the key points of the stimulus package and offered tips on how to navigate the various loans and grants available, including how to apply for them and what business expenses they can be used for. He urged business owners to take advantage of these programs. “There are very, very few scenarios where you should not apply at least for the paycheck protection money,” he says. “There are lots of situations where you would also want the loans under the EIDL program.”
The Families First Coronavirus Response Act (FFCRA) requires that group health plans cover free COVID-19 testing and that small businesses provide employees with two weeks of paid sick leave and emergency family care leave. “Fortunately, anything you pay to the employee who takes leave under this law will be reimbursed to you dollar for dollar in federal tax credits,” Jardim says. Compliance with any local and state paid sick days and family medical leave programs is also required.
How the CARES Act and other federal stimulus can help your firm
What to Know About Contracts During the Pandemic
Since many professionals haven’t been able to perform major portions of their work due to the pandemic, questions surrounding existing contract obligations have come to the forefront, particularly the legal issues of force majeure. “Force majeure is a concept that allows a party to seek to be excused from performing their obligations under contract,” Adler says.
Force majeure can be claimed in situations that are beyond someone’s reasonable control, meaning that performance of the contractual obligations is either impractical or impossible. Though states differ on what satisfies force majeure, right now Adler advises resolving disputes through mediation rather than litigation.
“I think with everything going on, people are looking for opportunities to meet in the middle,” he says. “Use this as an opportunity to look at these relationships with an eye toward resolution as opposed to opposition.”
Since many professionals haven’t been able to perform major portions of their work due to the pandemic, questions surrounding existing contract obligations have come to the forefront, particularly the legal issues of force majeure. “Force majeure is a concept that allows a party to seek to be excused from performing their obligations under contract,” Adler says.
Force majeure can be claimed in situations that are beyond someone’s reasonable control, meaning that performance of the contractual obligations is either impractical or impossible. Though states differ on what satisfies force majeure, right now Adler advises resolving disputes through mediation rather than litigation.
“I think with everything going on, people are looking for opportunities to meet in the middle,” he says. “Use this as an opportunity to look at these relationships with an eye toward resolution as opposed to opposition.”
Here are some of the key takeaways from the legal experts:
- If you decide to apply for help through the CARES Act, get in touch with your bank or lending institution as soon as possible to get your paperwork in order, as many of these federal programs are offered on a first-come, first-served basis.
- The up-to-$10 million PPP loan is forgivable if you use it to keep workers employed or to quickly rehire them.
- You can apply for and receive both a PPP loan and an EIDL loan.
- You can get a $10,000 grant as part of the EIDL program even if your loan application is not approved.
- The Families First Coronavirus Response Act (FFCRA) requires that businesses offer up to two weeks of emergency paid sick leave and emergency family care leave. However, this is fully reimbursable through federal tax credits.
- Use this time to review your contracts and overall business strategy.
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