Last week, Congress approved additional funding for many COVID19 stimulus programs. There are many types of stimulus relief available to business owners, nonprofits, sole proprietors, and independent contractors. Below is a summary of some of the programs:

The Paycheck Protection Program

The Paycheck Protection Program provides a loan of up to 2.5 month's worth of a small business's or nonprofit's average 2019 payroll. This loan can be used for payroll costs, interest on mortgages, rent obligations, and utility payments. It can be entirely forgivable if an employer maintains its number of full-time equivalent employees and does not reduce the pay of its employees earning less than $100,000 more than 25 percent. For the loan to be forgiven, an employer must use 75 percent of the loan proceeds on payroll costs during the 8-weeks following the funding of the loan. The remaining 25 percent may be used on mortgage, rent and utility payments during the same 8-week period. 

Sole proprietors and independent contractors can also apply for paycheck protection program loans. The amount these individuals can borrow is an amount equal to the net profit, as shown on their 2019 Schedule C, divided by twelve, and then multiplied by 2.5. Compensation for a sole proprietor or independent contractor is capped at $100,000, so the maximum amount someone netting more than $100,000 will be able to borrow is $20,833. The maximum amount that will be forgiven for sole proprietors and independent contractors is 8/52 of their net profit on their schedule C or $15,385 if they make more than $100,000.

Loan applications are made through lenders approved by the SBA, and all application fees are paid for by the SBA. Forgiveness is not automatic and must be applied for with your lender. Any amount not forgiven has a term of two years at 1 percent interest, and the first payment is not due until six months after the loan is made. There are no prepayment fees if you decide to pay any amount off early.

Many businesses, nonprofits, and individuals that have had trouble finding a local bank to process a PPP loan should check with fintech companies such as Kabbage, Lendio, Quickbooks to see if they qualify to apply with these companies. Many payment processors, such as Paypal and Square, are also taking PPP applications from their customers.

Businesses and individuals who want a PPP loan should not wait to apply. The PPP received an additional $310 billion in funding, but it is likely to be depleted in a matter of weeks. 

The Economic Injury Disaster Loan Program and Advance

Although the EIDL program received additional funding last week, the SBA is currently not taking new applications for EIDL loans. The SBA is currently working through applications it had already received. 

Small businesses, nonprofits, sole proprietors, and independent contractors who had already applied should have or should expect to see an advance of $1,000 per employee, up to $10,000, deposited to their bank account. The advance is a grant that is not repaid. 

Small businesses, nonprofits, sole proprietors, and independent contractors who have not applied should check the SBA's website (www.sba.gov) regularly to see if the SBA has resumed taking applications.

Relief for Small Businesses with Existing SBA Loans

There is good news for small businesses with existing SBA loans. Companies with existing relationships with an SBA Express Lender may be able to access up to $25,000 as an SBA Express Disaster Bridge Loan while waiting for an SBA Economic Injury Disaster Loan (EIDL). The Bridge Loan will then be repaid in full or part by the proceeds of the EIDL.

For businesses with existing SBA 7(a), 504, and microloans, the SBA is paying six months of principal, interest, and fees for their loans. Businesses do not need to apply for this assistance; it is automatically provided.  

Payroll Tax Credits and Deferrals

The Employee Retention Credit is a refundable tax credit of 50 percent of up to $10,000 in qualifying wages paid by an eligible employer whose business has been financially impacted by COVID-19. The credit is available to all employers regardless of size, including tax-exempt organizations. 

To qualify for the credit, one of the following must be true:

• The employer's business is wholly or partially suspended by a government order due to COVID-19 during the calendar quarter.

           OR

• The employer's gross receipts are 50 percent less than the same calendar quarter in 2019.

Any employer will qualify each calendar quarter of 2020 that one of the above is true until its gross receipts are above 80 percent of its gross receipts in the same calendar quarter in 2019. 

The credit is 50 percent of $10,000 of "qualifying wages" for each employee. "Qualifying wages" are:

• Wages paid after March 12, 2020, and before January 1, 2021;
• Based on the average number of a business's employees in 2019; and
• For employers with less than 100 employees on average in 2019, qualifying wages are wages paid to all employees, regardless of whether they worked or not;
• For employers with more than 100 employees on average in 2019, qualifying wages are only those wages paid to employees who did not work during the calendar quarter.

For employers with more than 100 employees on average in 2019, qualifying wages are only those wages paid to employees who did not work during the calendar quarter.An employer can immediately take the credit by reducing its required deposits of payroll taxes that have been withheld from employees' wages by the amount of the credit due. If the employer's employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

The credit is not available for wages paid with a PPP or EIDL loan.

By Stacey Cormican

Beginning Friday, April 24, 2020, non-essential retail businesses in Texas ordered to shut down during the COVID-19 may reopen to provide "retail-to-go" under the governor's latest order. These retail businesses may offer their products through pick-up, delivery, and by mail. However, they must comply with specific DSHS rules to do so. 

The rules non-essential businesses must follow in providing "retail-to-go" are:

For Employees:

• Train all employees on environmental cleaning and disinfection, hand hygiene, and respiratory etiquette. 
• Screen all employees before they come in the business for
  • new or worsening cough,
  • shortness of breath,
  • sore throat,
  • loss of taste or smell,
  • feverish feeling or temp 100.0 F or above, or
  • close contact with any person lab-confirmed as COVID-19 positive. 

          Employees who meet any of these criteria must be sent home.

• Require all employees to wash or sanitize hands upon entering the business and wear face coverings and remain six feet apart.

To provide customer pick-ups:

• Accept payments by phone or the internet, if possible. If not possible, minimize contact with customers during payment.
• Deliver items to the backseat or trunk of a customer's vehicle whenever possible.
• Have employees wash or sanitize hands after each pick-up and, whenever possible, disinfect any item that came into contact with a customer. (Such as payment devices, etc.)

To provide delivery:

• Accept payments by phone or the internet, if possible. If not possible, minimize contact with customers during payment.
• Deliver items to the customer's doorstep and do not enter the customer's home or business.

To provide items by mail:

• Accept payments by phone or the internet.
• Deliver packages in a manner that doesn't require customer contact (i.e., don't require a signature for delivery).

The most difficult rule for most employers may be that employees must remain six feet apart while working. Practically, this may mean employers will only be able to bring back portions of their regular staff to work.

Read the Governor's executive order here.
Download the DSHS guidance below.

​Under the Families First Coronavirus Response Act, parents may be able to take up to 12 weeks of paid leave to care for children whose school or child care provider is closed or unavailable for reasons related to COVID-19.  
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To qualify to take the full 12 weeks of leave, a parent must work for a business with fewer than 500 employees and have worked there for at least 30 days. Parents who have worked for less than 30 days for their company may still be able to take two weeks of paid leave.  Businesses with fewer than 50 employees may not have to give parents leave if giving the paid leave would "jeopardize the viability of the business as a going concern."

Paid leave is available from April 1, when the law goes into effect, until the end of the year. A parent can take paid leave only if they cannot work at their regular worksite or telework because they need to care for a child who is home from school or child care. If a parent's employer lets them do their work outside their regular hours, such as early in the morning or late at night, then they can work and won't qualify for paid leave.

Employers can require a parent to provide proof that their child's school or child care is closed due to COVID-19. Examples of documentation are closure or unavailability notices from a school, daycare, or babysitter that are posted on a website, published in a newspaper, or emailed to a parent. 

Parents working both full- and part-time may take leave. Parents working part-time may take leave for the average number of hours each day that they would typically work during a two-week period. 

Parents working on-site or teleworking may be able to take leave in small chunks instead of all at once if their employer agrees. For example, if an employer agrees, a parent could take leave on Mondays, Wednesdays, and Fridays or from 8:00 to noon each day.  

Parents taking leave to care for a child home from school or child care will not get paid at their full rate. Instead, a parent on leave will receive the greater of either two-thirds of their regular pay or two-thirds of the federal or their state or local minimum wage. 

There is also a cap on the total pay parents can receive while on this type of leave. Parents will get no more than $200 per day or $1000 each week they are on leave.

Eligible parents who are denied leave should contact a knowledgable attorney or the Department of Labor. 

States (and not the federal government) can use their police powers to protect the welfare, health, and safety of their citizens. The scope of these powers varies from state to state and are found in the state's constitution and any state statutes allowing officials from the state or political subdivisions to issue orders declaring a disaster emergency.

The declaration of a public emergency removes much of the red-tape that a state or local government would need to navigate to prohibit a public gathering. However, even after a public emergency is declared, state and local governments must follow specific rules when taking actions that impact constitutional interests, like the First Amendment rights to assemble peaceably and to the free exercise of religion.

The government may prohibit people from assembling if the restrictions are reasonable, not content-based, and narrowly tailored to meet legitimate public safety concerns. The limits must restrict constitutional rights as little as possible. 

Concerning the free exercise of religion, limits must be neutral and generally applicable to all organizations or must involve a compelling governmental interest and be exercised in the least intrusive manner possible. 

As far as churches are concerned, if a state or local government has issued an emergency order that is neutral in its applicability and doesn't target churches in a discriminatory manner, it is probably legal. 

Police Powers in Texas

Numerous state and local officers are permitted to declare disaster emergencies in Texas. Texas law allows the commissioner of the department of state health services, the governor, mayor, and county judges to declare disasters. The commissioner may declare a public health disaster and institute "control measures" for up to 60 days. Control measures can include detention, restriction, isolation, and quarantine, among other measures. The governor may declare states of disaster and to issue executive orders suspending procedures for state business or rules of state agencies. Mayors and county judges may declare local states of disaster. 

On March 19 in Texas, Commissioner Hellerrstedt declared a public health emergency, and Texas Governor Abbot issued an Executive Order, directing that "every person in Texas shall avoid social gatherings in groups of more than 10 people" until at least April 3. On March 23, Bexar County and San Antonio issued executive orders directing all individuals living in the area to stay at home and prohibiting all public or private gatherings occurring outside a single household or single-family living unit until 11:59 p.m. on April 9. People may leave their homes to engage in exempted activities and work in exempted businesses, including "worship services." However, "religious and worship services may only be provided by video, teleconference or other remote measures."

Because the Bexar County and San Antonio orders prohibit  don't target churches or religious organizations in a discriminatory matter, the orders prohibiting gatherings for religious or worship services are likely constitutional. 

What If My Church Still Meets?
Some churches may be wondering what will happen if they meet in-person, especially if the disaster orders extend until after Easter Sunday. While the State of Texas orders are recommendations, the orders issued by the City of San Antonio and Bexar County are prohibitions. Violation of the City and County orders are punishable by civil penalties of up to $3,000. 

City and County law enforcement have said they will focus on businesses that should be closed and would prefer to issue warnings rather than fines. However, the churches themselves and all "non-working" attendees could subject themselves to fines of up to $3,000. 

Churches that have questions about in-person meeting and who is considered to be "working" at their religious or worship services should contact their attorney.