ALERT: Supreme Court ruling impacts property and title rights across large portion of Oklahoma

SCOTUS Ruling graphicToday, the Supreme Court ruled nearly half of the State of Oklahoma is an Indian Reservation.

From a New York Times article:

  • The 5-to-4 decision, potentially one of the most consequential legal victories for Native Americans in decades, could have far-reaching implications for the 1.8 million people who live across what is now deemed “Indian Country” by the high court.
  • Justice Neil M. Gorsuch said that Congress had granted the Creek a reservation, and that the United States needed to abide by its promises.

The outcome could have far-reaching implications for the State of Oklahoma and its citizens as it relates to property rights and land titles, taxation, and other matters involving tribal affairs.


To discuss how this may affect your business, contact Zac Bradt at the contact information below:

Zachary K. Bradt, Director
Phillips Murrah P.C.
EMAIL: zkbradt@phillipsmurrah.com
PHONE: 405.552.2447

Phillips Murrah

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Texas Lawyer: Mid-Market Strategy to Achieve Cost Reductions that Clients Seek

On June 14, 2020, Mark E. Golman a Director in Phillips Murrah’s Dallas office, wrote the following article that was published in the Analysis section of ALM/Law.com’s publication, Texas Lawyer:

Logo Texas LawyerMid-Market Strategy to Achieve Cost Reductions that Clients Seek

Legal industry surveys demonstrate the complexity of defining “value” in the legal industry. The exact meaning depends on who you ask, when you ask, and the nature of the circumstances. Fundamentally, the quality of provided services represents one significant indicator of value. However, clients view the cost of those services as an important component of value, which has specific and increasing importance during our current challenging economic times.

Mark Golman portrait image

Mark E. Golman helps clients achieve their strategic objectives and reduce risk in the areas of corporate law, finance and bankruptcy. Mark represents clients in the purchase and sale of businesses and assets, including purchases out of bankruptcy proceedings, financings and contract negotiations.

Informed by strategies that date back to the Great Recession of the previous decade, clients are understandably focusing on lowering their legal expenses and looking to mid-market law firms to achieve it. Simply put, it is a win-win – clients find more attractive billing rates by shifting Big Law work to mid-market firms, and mid-market firms are increasingly in a strong competitive position.

Prior to the pandemic crisis, our firm devised a strategy whereby major-market clients can achieve desired cost reductions while retaining the quality of a top-tier firm: location, location, location. Phillips Murrah is a 34-year-old firm headquartered in Oklahoma City. Two years ago, the firm opened its Dallas office to not only expand its footprint, but to also pass along substantial cost savings opportunities to clients as a result of lower comparative overhead costs.

As a result of this model, clients in Texas and across the country receive services from experienced shareholders whose billing rates are usually lower than those of first-year associates at large firms. Providing more experience at a lower billing rate improves efficiency and enhances value for our clients.

Of our more than 75 attorneys, six practice full-time from the Dallas office. Additionally, several of our Oklahoma City attorneys who previously practiced in Texas bring additional relationships and synergies to the firm. With Dallas as a prime example, we deliver a breadth and depth of service offerings as well as experienced attorneys at what amounts to bargain rates.

Since Phillips Murrah opened our Dallas office, more than half of our Oklahoma lawyers have worked on relationships managed by a Texas lawyer while each member of our Dallas office has worked on relationships managed from Oklahoma City. The collaborative opportunities provided by this low-overhead geography is accentuated by Oklahoma City being as close or closer to Dallas as Austin and Houston.

This strategy allows us to offer the best of both worlds to clients in Texas and beyond: top-tier legal services at a reasonable cost.

Mark E. Golman, a Phillips Murrah Shareholder, helps clients achieve their strategic objectives and reduce risk in the areas of corporate law, finance and bankruptcy. Mark represents clients in the purchase and sale of businesses and assets, including purchases out of bankruptcy proceedings, financings and contract negotiations.


Learn more HERE.

To contact Mark E. Golman, you can EMAIL or call 214.434.1919.

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Reprinted with permission from the June 14, 2020 edition of the Texas Lawyer © 2020 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.

Supreme Court Rules Title VII Protects Gay and Transgender Employees

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

Earlier this morning, the United States Supreme Court issued a landmark ruling that an employer who fires or otherwise discriminates against an employee for being gay or transgender violates Title VII of the Civil Rights Act of 1964.

In Bostock v. Clayton County, Georgia, the Supreme Court heard three cases in which employers had fired long-term employees simply for being gay or transgender.  A Georgia county employee was fired for “conduct unbecoming” an employee after he joined a gay recreational softball league.  A funeral home terminated an employee who presented as a male when she was hired, after the employee advised her manager that she planned to “live and work full-time as a woman.”  A skydiving company fired a skydiving instructor days after he advised a customer that he was gay.

In a 6-3 decision, the Supreme Court held that Title VII’s prohibition against discrimination “because of sex” prevents an employer from taking any adverse actions against employees on the basis of gender, sexual identity, or sexual expression.  Justice Gorsuch, author of the majority opinion, unequivocally declared that “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex.  Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.”

The Bostock opinion considers an employer with two employees, both of whom are attracted to men.  The employees are materially identical in all respects, except that one is a man and the other is a woman.  If the employer fires the male employee because he is attracted to men, the employer necessarily is discriminating against him for the traits or actions it tolerates in the female employee.  Similarly, if an employer fires a transgender person because she was identified as male at birth but now identifies as a female, the employer is firing the individual for displaying traits or actions it would otherwise tolerate in an employee identified as female at birth.  Employers cannot discipline employees for being “insufficiently feminine” or “insufficiently masculine” without violating Title VII.

Title VII of the Civil Rights Act outlawed discrimination in the workplace on the basis of race, color, religion, sex, or national origin.  The Supreme Court noted that the legislators who adopted the Act in 1964 may not have anticipated this particular outcome, but that those same legislators may also not have anticipated that the Act would ultimately prohibit discrimination on the basis of motherhood, prohibit sexual harassment of female employees, and—eventually–prohibit sexual harassment of male employees to the same extent as female employees.  But, as Justice Gorsuch noted, the phrase “because of…sex” is clear and unambiguous; thus, the “limits of the drafters’ imagination supply no reason to ignore the law’s demands.”

Today, the Supreme Court clarified that “[a]n individual’s homosexuality or transgender status is not relevant to employment decisions” and that “[a]n employer who fires an individual merely for being gay or transgender defies the law.”

See the United States Supreme Court opinion HERE.


Phillips Murrah stands ready to assist employers in ensuring that employee handbooks and hiring and disciplinary practices are fully compliant with Title VII and all relevant employment laws.

Contact us by EMAIL or call 405.235.4100.

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Phillips Murrah PPE donation to OU Medicine follow-up

As part of Phillips Murrah’s efforts to assist in the Oklahoma City community’s response to the COVID-19 pandemic, our Firm once again partnered with NPR radio station KGOU. In addition to supporting KGOU’s ongoing work, Phillips Murrah raised $3000 for OU Medicine to assist in acquiring personal protective equipment (PPE) for front-line medical workers, as part of May’s #GivingTuesdayNow pledge drive.

On Wednesday, our Firm presented the donation to Anne Clouse, Chief Development Officer for OU Medicine. Due to COVID-19-related restrictions, Phillips Murrah Director Catherine L. Campbell and Healthcare practice leader Mary Holloway Richard presented a six-foot-wide check, designed with appropriate social distancing in mind.

Phillips Murrah OU Medicine PPF Check Presentation

Phillips Murrah Director Catherine L. Campbell (l) and Healthcare practice leader Mary Holloway Richard (r) presented a six-foot check to OU Medicine, designed with appropriate social distancing in mind.

“We are deeply grateful to Phillips Murrah for their generous gift to support OU Medicine’s COVID-19 response,” said Clouse. “Their donation will help support our healthcare workers taking care of patients on the frontline. What a kind a thoughtful gesture.”

“Phillips Murrah has long had a strong relationship with healthcare facilities and providers throughout our state,” said Richard, who represents institutional and non-institutional providers of health services. “We are proud to support the heroic efforts of OU Medicine and those on the front line ministering to all Oklahomans.”

“There is a certain element of good humor related to this giant, social-distancing presentation check, which Cathy and Mary safely presented to Anne in a parking lot on the downtown OU Medicine complex.” said Dave Rhea, Phillips Murrah Marketing Director. “However, supporting OU Medicine as they battle this virus is a very serious matter, and we are grateful to be able to help.”

#GivingTuesdayNow was a global day of giving and unity as an emergency response to the unprecedented need caused by COVID-19.

Promotional graphic for KGOU GivingTuesNow 2

RELATED LINKS:

#GivingTuesdayNow: Phillips Murrah partners with KGOU to support OU Medicine PPE
Phillips Murrah partners with KGOU and Regional Food Bank to provide 20,000 meals

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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SB 1928: Key changes to ABLE laws make curbside sales and delivery of alcohol permanent

By Phillips Murrah Attorneys Ellen K. Spiropoulos and Justin G. Bates

In response to the outbreak of the novel coronavirus, and in keeping with the sweeping changes to modernize Oklahoma’s liquor laws effective in October 2018, the ABLE Commission temporarily authorized curbside and delivery of beer, wine and spirits by liquor stores, beer and wine by grocery and convenience stores, and by restaurants holding the appropriate licenses.

Phillips Murrah attorney Ellen SpiropoulosLauren Hanna

Ellen assists local and national businesses in the restaurant, entertainment and hospitality industries with obtaining applicable operating licenses and permits for food and alcoholic beverage service, as well as any related compliance or enforcement issues.

The passage of Senate Bill 1928 in the last days of the session, which became law this week, effectively made the ABLE Commission’s previous directives about curbside sales and delivery of alcohol permanent. The key changes to the alcohol laws now expand sales for ABLE licensees effective immediately under the following conditions:

  • Liquor stores can sell beer, wine and spirits in sealed, original containers via curbside and delivery.
  • Grocery and convenience stores can sell beer and wine (up to 15% alcohol by volume) in sealed, original containers via curbside and delivery.
  • Restaurants, bars and clubs can sell beer and wine in closed packages via curbside and delivery.
  • Small brewers and small farm wineries may sell curbside-only alcoholic beverages produced by the brewery or winery in sealed, original containers.
  • Payment can be made by cash, check, transportable credit card devices and advance online payment methods.
  • Curbside sales and all deliveries must be made by ABLE-licensed and trained employees of the business.
  • No third-party services can be used for any deliveries.

Some states already permit third-party delivery sales from liquor stores, as well as drive-thru and to-go sales of alcoholic beverages from restaurants. As a result of restaurant dining closures and the need for social distancing, several more states are, at least temporarily, expanding alcohol delivery options and sales of cocktails to-go. The Oklahoma legislature was not willing to go that far.

Nevertheless, the actions taken by the ABLE Commission since March, and the bills passed with overwhelming majorities by the Oklahoma House and Senate this session, are continuing advances in the modernization of Oklahoma’s liquor laws.

It is hard to believe that less than two years ago, Oklahoma still had dry counties and only 3.2 beer in grocery and convenience stores. We have come a long way and there is no telling where the trail will end. Cheers!


For more information on this alert and its impact on your business, please contact:

Ellen Keough Spiropoulos is an Of Counsel attorney at Phillips Murrah who assists local and national businesses in the restaurant, entertainment and hospitality industries with obtaining applicable operating licenses and permits for food and alcoholic beverage service, as well as any related compliance or enforcement issues. Contact her by phone, 405.552.2422 or by email.

Justin G. Bates is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters. Contact him by phone, 405.552.2471 or by email.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Returning to Work – A Post-Pandemic Workplace Safety Guide

By Phillips Murrah Attorneys Janet Hendrick and Phoebe Mitchell

As stay-at-home orders have begun to expire in recent weeks, more than half of the states – including Oklahoma and Texas – have lifted restrictions on businesses. With many Americans returning to work after months at home due to the COVID-19 virus pandemic, employers should be aware of claims relating to workplace reentry. Employers can anticipate novel causes of action, including lawsuits alleging a failure to provide a safe workplace.

Phillips Murrah Director Janet Hendrick portrait

Janet Hendrick is an experienced employment litigator who tackles each of her client’s problems with a tailored, results-oriented approach.

For example, in New York, nurses’ unions have filed multiple lawsuits against the state, claiming “grossly inadequate” protections against the virus in the workplace. These suits likely mark a trend, as employees may attempt to hold their employers liable for lost work, hospitalizations, and even deaths caused by COVID-19, especially where employees may have contracted the virus in the workplace.

The Occupational Safety and Health Administration (OSHA), the federal agency charged with regulating workplace safety, has not issued new guidance relating to airborne diseases in response to the coronavirus pandemic. Instead, the agency has relied on its “general duty” clause, which mandates that employers provide a place of employment “free from recognized hazards that are causing or likely to cause death or serious physical harm” to their employees.  This simply means that employers have a general duty to provide a safe working environment for their employees.

On April 10, 2020, OSHA did issue new guidance regarding recording cases of COVID-19 in the workplace. Under the Occupational Safety and Health Act, employers must record instances of illnesses contracted in the workplace, or “occupational illnesses.” OSHA’s new guidance provides that COVID-19 is a recordable illness, and employers will be responsible for recording cases of COVID-19 in the workplace if three criteria are met:  (1) the case is a “confirmed case” of COVID-19 as defined by the CDC; (2) the case is “work-related” as defined by 29 C.F.R. § 1904.5; and (3) the case involves one or more of the general recording criteria set forth in 29 C.F.R. § 1904.7.

Phillips Murrah attorney Phoebe B. Mitchell portrait

Phoebe B. Mitchell is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

(1) “Confirmed case”

The CDC defines a confirmed case of COVID-19 as “an individual with at least one respiratory specimen that tested positive for SARS-CoV-2, the virus that causes COVID-19.”

(2) “Work-related”

As defined by OSHA regulations, a case is “work-related” if “an event or exposure in the work environment either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness.”

(3) General recording criteria

As defined by OSHA regulations, a case meets one or more of the general recording criteria if it results in any of the following: “death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, or loss of consciousness.” Further, the case also meets the general recording criteria if it “involves a significant injury or illness diagnosed by a physician or other licensed health care professional, even if it does not result in death, days away from work, restricted work or job transfer, medical treatment beyond first aid, or loss of consciousness.”

Because of community transmission of COVID-19, the guidance states that the only employers who must make the above work-relatedness determinations with relation to cases of COVID-19 in the workplace are the healthcare industry, emergency response organizations (which includes emergency medical, firefighting and law enforcement services), and correctional institutions. OSHA will not require other employers to make these same work-relatedness determinations, unless there is objective evidence that a COVID-19 case may be work-related, and the evidence was readily available to the employer. The guidance is intended to help employers focus on implementation of good hygiene practices and mitigation of COVID-19’s effects in the workplace, rather than forcing employers to make difficult work-relatedness decisions where there has been community spread.

Based on this OSHA guidance and the inevitable surge of litigation in the post-pandemic US, employers should act now to both protect their employees and minimize potential liability.

Before employees return to the workplace, employers should:

1) Create and implement concrete polices and guidelines regarding workplace hygiene, social distancing, face covering usage and reporting of symptoms

2) Monitor employees to ensure compliance with new COVID-19 policies

3) Encourage employees to stay home if they are sick

4) Allow at-risk employees to work from home where possible

5) Allow employees to return to work in phases where possible

6) Close off common areas in the workplace, such as break rooms, in an effort to encourage social distancing

 


For more information on this alert and its impact on your business, please call:

Janet Hendrick is a Shareholder in the Dallas office of Phillips Murrah who specializes in advising and representing employers. (click name for profile page) Contact her by phone, 214.615.6391 or by email.

Phoebe Mitchell is an Associate in the Oklahoma City office of the firm. (click name for profile page) Contact her by phone, 405.606.4711, or by email.

Phillips Murrah’s labor and employment attorneys continue to monitor developments to provide up-to-date advice to our clients during the current COVID-19 pandemic. Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Affidavit of Support Implications in Divorce in Marriage-Based Immigration

By Cassity B. Gies &  Sajani “Ann” Zachariah
This article originally appeared in the FEB 2020 Oklahoma Bar Journal.

Being the spouse of a United States citizen is the most common way to attain lawful permanent resident status, informally referred to as “getting a green card.” Each year, the United States Citizen and Immigration Services (USCIS) admits more lawful permanent resident statuses through marriage than any other major type of admission. (1) In a country where nearly half of all marriages end in divorce, (2) couples using marriage as grounds for obtaining a green card face special issues during their divorce and even after. Because Oklahoma has one of the highest divorce rates in the country, with as many as two out of every three marriages ending in dissolution, (3) family lawyers should be especially aware of the implications that come through marriage-based immigration.

Phillips Murrah family law attorney Cassity Giles

Cassity practices family law including divorce and separation, custody, and child support issues.

When a principal applicant for lawful permanent resident status seeks to immigrate using their spouse as a sponsor, the sponsoring spouse must submit, amongst a host of other things, an Affidavit of Support. (4) The affidavit is required to show that the immigrant will have adequate means of financial support and will not become a public charge. (5) Form I-864, an Affidavit of Support, is a legally enforceable contract between the federal government and the sponsoring spouse. (6) A sponsoring spouse accepts legal responsibility for financially supporting their alien spouse until they either become a United States citizen, die or are credited with 40 quarters of work (approximately 10 years). Divorce does not end that financial obligation. (7)

Three obligations arise for an I-864 sponsor:

1) the sponsor must reimburse the government for means-tested benefits received by the beneficiary over the obligatory 10-year period;

2) the sponsor must maintain the immigrant spouse at 125% above the federal poverty or at 100% of the federal poverty level for the household if the sponsor is an active military member; and

3) the sponsor must report any change in address to the attorney general and the state in which the sponsored alien lives during the period that the affidavit is enforceable. (8)

Signing an Affidavit of Support puts a sponsor in privity with both the beneficiary spouse and also with the federal government. If at any point before citizenship is granted or the 10 years pass, the beneficiary spouse receives means-tested public assistance from a federal, state or local agency, that agency can legally sue the sponsor and require him to repay the money that the agency provided to the beneficiary. (9) The term “means-tested public benefits” include food stamps, Medicaid, Supplemental Social Security Income (SSI), Temporary Assistance for Needy Families (TANF) and the State Child Health Insurance Program. (10) This area of immigration practice has seen a lot of discussion lately, with recent memorandums released by the Trump Administration criticizing governmental agencies for not properly enforcing reimbursement. (11)

In addition to the privity between the United States and the sponsor, the signor of an Affidavit of Support also obliges themself to the beneficiary and pledges to maintain the spouse at 125% above the federal poverty line. The current federal poverty line for a single household is $12,490, (12) and 125% of that amount results in a promise to maintain the beneficiary at an annual income of $15,612.50.

Several interesting arguments can be crafted by an attorney who is aware of the implications of an Affidavit of Support. Oklahoma courts, albeit in unreported case law, recognize the Affidavit of Support as a cause of action, independent of divorce that can be brought by the beneficiary ex-spouse. (13) Oklahoma case law presently offers no precedent utilizing the Affidavit of Support as a consideration for spousal support awards in divorce proceedings, how-ever, divorce attorneys in other states successfully argue it as both grounds for spousal support or, alternatively, as a separate support obligation apart from the divorce itself.

In Erler v. Erler, a California court order granted separate enforcement of the I-864 pledge of support despite the divorce judgment not recognizing it due to a premarital contract. There, the Turkish ex-wife succeeded in an appellate action to enforce the I-864 obligation. (14)

Thus, under federal law, neither a divorce judgment nor a premarital agreement may terminate an obligation of support. Rather, as the Seventh Circuit has recognized, “[t] he right of support conferred by federal law exists apart from what-ever rights [a sponsored immigrant] might or might not have under [state] divorce law.” We therefore hold that the district court correctly determined that Yashar has a continuing obligation to support Ayla. (15)

Enforcing the obligation as part of an award for spousal support was recognized in Motlagh v. Motlagh. (16) During a divorce, initiated by the sponsoring spouse, the lower court concluded that the I-864 affidavit was not an obligation to pay defendant 125% of the federal poverty line and that the husband was only obliged to act as a “safety net.” This decision was reversed by the court of appeals, holding that the husband was required to satisfy his support obligation by paying whatever amount was necessary for the beneficiary spouse to reach the 125% mark, permitting consideration of all income sources that the beneficiary receives. The court explained that this could be achieved either through a spousal support order arising from the divorce proceedings or a separate I-864 support obligation enforcement action.

Other courts, however, go the opposite direction, finding the I-864 inadequate as grounds for spousal support. In 2014, an Intermediate Washington State Appeals Court shot down the Motlagh argument reasoning that the state’s statutory factors listed for consideration in awards of spousal support do not include an I-864 obligation. (17)

Creative lawyering in this area could help forge a new argument for Oklahoma clients seeking spousal support as more attorneys become aware of the ongoing obligations that the I-864 creates. The argument could also be used to defend against spousal support by pointing out that the obliging spouse will continue to face liability from federal agencies on behalf of any assistance his ex-spouse receives during whatever time remains under the 10-year pledge.

As the Oklahoma immigrant community continues growing, these family law arguments are likely to develop and grow as well, highlighting how many hats a divorce lawyer wears every day as we answer questions ranging from immigration policies to tax concerns. Knowing all these legal issues while balancing a client’s emotional stress during one of the hardest times of their lives makes for a well-rounded and well-in-formed family law practice.

ABOUT THE AUTHORS

Cassity B. Gies, associate attorney at Phillips Murrah, is passionate about family law. Her practice focuses on family law including divorce and separation, custody and child support issues. Her experience in immigration, domestic abuse, and employment law provide a comprehensive understanding of collateral matters relating to family law. She graduated summa cum laude from the OCU School of Law in 2019 as a Hatton W. Sumners scholar and represented her graduating class as the William Conger Distinguished Student.

Sajani “Ann” Zachariah immigrated to the United States in 1984 at 5 years old. She graduated from the OCU School of Law in 2011, joining Mazaheri Law Firm in 2012. She practices family law and immigration law, two areas in which she has personal experience.

 


ENDNOTES

    1. Persons Obtaining Lawful Permanent Resident Status By Type And Major Class Of Admission: Fiscal Year, U.S. Dept. Homeland Sec., 2014 to 2016, www.dhs.gov/immigration-statistics/yearbook/2016/table6, (last visited Sept. 16, 2019).
    2. Joshua A Krisch, “Mapping Americans’ Divorce Risk By State Paints an Unnerving Picture,” Fatherly, (June 7, 2018), www.fatherly. com/health-science/american-divorce-rate-state/.
    3. Id.
    4. I-485, Application to Register Permanent Residence or Adjust Status, U.S. Citizenship & Immigration Serv., www.uscis.gov/i-485, (last visited Sept. 16, 2019).
    5. Affidavit of Support, U.S. Citizenship & Immigration Serv., www.uscis.gov/greencard/affidavit-support (last visited Sept. 16, 2019).
    6. Id.
    7. Id.
    8. 8 U.S.C. §1183(a) (2009).
    9. Form I-864P, 2019 HHS Poverty Guidelines for Affidavit of Support, U.S. Citizenship & Immigration Serv., www.uscis.gov/i-864p (last visited Sept. 17, 2019).
    10. Id.
    11. Memorandum on Enforcing the Legal Responsibilities of Sponsors of Aliens, 2019 Daily Comp. Pres. Doc 201900334 (May 23, 2019).
    12. Poverty Guidelines, U.S. Dep’t Health & Human Serv., aspe.hhs.gov/poverty-guidelines (last visited Sept. 18, 2019).
    13. See Schwartz v. Schwartz, No. 04-CV-00770, 2005 WL 1242171.
    14. Erler v. Erler, 824 F.3d 1173, 1177 (9th Cir. 2016).
    15. Id.
    16. 100 N.E. 3d 937, 944 (Ohio App. 2d Dist.2017).
    17. In re Marriage of Khan, 332 P.3d 1016,

 

 

 

 

 

 

[UPDATE] SBA, Treasury extended the safe harbor repayment date for PPP loans

In its most recent update to the list of frequently asked questions (FAQs), the Small Business Administration (SBA) and Treasury Department extended the safe harbor repayment date for loans under the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The PPP application form requires borrowers to certify that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” In an effort to address this vague requirement, the SBA and Treasury issued guidance on April 23, 2020 specifying that, while the CARES Act suspends the requirement that borrowers be unable to obtain credit elsewhere, applicants must still certify in good faith that their PPP loan request is necessary. Specifically, FAQ 31 directs borrowers to consider current business activity and the ability to access other sources of liquidity.

The guidance initially provided a safe harbor provision that a borrower who applied for a loan prior to April 24, 2020 and repays the loan in full by May 7, 2020 will be deemed to have made the certification in good faith. The update issued on May 5, 2020 extends the repayment date for the safe harbor to May 14, 2020. According to FAQ 43, borrowers are not required to apply for the extension. FAQ 43 also states that the SBA will provide additional guidance on how it will review the certification.

Link to FAQs:  https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf


Phillips Murrah attorney Kara Laster

Kara K. Laster represents individuals and businesses in a broad range of transactional matters including real estate and mergers and acquisitions.

For more information on this alert and its impact on your business, please call 405.606.4762 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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SBA, Treasury update PPP reg guidance for laid-off employee forgiveness exclusion

The Small Business Administration and Treasury continue to issue guidance regarding the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The most recent update to the list of frequently asked questions (FAQs) addresses whether a borrower’s loan forgiveness amount will be reduced if one of the borrower’s employees turns down an offer to be rehired.

According FAQ 40, laid-off employees will be excluded from the forgiveness reduction calculation so long as the borrower made a good faith, written offer of rehire and the employee’s rejection of the offer is documented. The FAQ specifies that the offer must have been for the same salary/wages and the same number of hours. It also notes that employees who reject offers of re-employment may forfeit eligibility for unemployment compensation.

Link to FAQs:  https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf


Phillips Murrah attorney Kara Laster

Kara K. Laster represents individuals and businesses in a broad range of transactional matters including real estate and mergers and acquisitions.

For more information on this alert and its impact on your business, please call 405.606.4762 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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PM Director Kathy Terry featured in article about liability related to workplace reopening

Phillips Murrah Director Kathy Terry is featured as a source in a Journal Record article regarding liability that companies may face as Oklahoma begins to re-open as directed by Governor Stitt.

Kathryn Terry portrait

The emphasis of Kathryn D. Terry’s litigation practice is in the areas of insurance coverage, labor and employment law and civil rights defense. She also represents corporations in complex litigation matters.

From the story:

As thousands of businesses reopen their doors amid the COVID-19 crisis, they’ll be facing a new type of risk that could be even more devastating to them than a pandemic.

Oklahoma businesses could face lawsuits filed by customers claiming they contracted COVID-19 while in their restaurants, bars or showrooms, forcing court cases that could cost tens of thousands of dollars in legal fees.

“We’re going to see the lawsuits. Lots of lawsuits,” said Kathryn Terry, an attorney with Oklahoma City law firm Phillips Murrah.

The issue may be the latest tragic tranche to unfold in the coronavirus saga that has seen more than 60,000 U.S. deaths and millions of people out of work. Some say the legal fallout could continue long after the disease is a distant memory.

Terry said COVID-19 tort claims against businesses are not likely to be successful. Plaintiffs would have to clear a high bar to prove they contracted the virus from a specific business or from a specific person.

For businesses that are following government guidelines and operating safely, an unfavorable judgment is not necessarily the biggest risk. Their main concern is the legal fees they could face trying to defend themselves. For small businesses, the cost could be devastating.

Terry estimates fees in a COVID-19 liability case could range from $35,000 to $50,000.

You may contact Kathy at 405.552.2452 or by email at kdterry@phillipsmurrah.com.

Read the full story here: https://journalrecord.com/2020/04/30/legal-protection-lots-of-lawsuits-loom-as-oklahoma-businesses-prepare-to-reopen/

Business risk related to independent contractor unemployment claims under CARES Act

COVID-19 Contractor benefits header
In response to the COVID-19 national emergency, Congress has taken the extraordinary measure to allow independent contractors, gig-workers, and self-employed individuals access to unemployment insurance benefits for which they are generally ineligible. This article is geared towards businesses that regularly use independent contractors who may file claims for unemployment insurance benefits—discussing the risks involved and how businesses can mitigate those risks.

Martin J. Lopez portrait

Martin J. Lopez III is a litigation attorney who represents individuals and both privately-held and public companies in a wide range of civil litigation matters.

Background Regarding Relevant CARES Act Provisions

On March 27, 2020 President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Among other provisions, the CARES Act significantly expands the availability of unemployment insurance benefits to include workers affected by the COVID-19 national public health emergency who would not otherwise qualify for such benefits—including independent contractors. This increased accessibility to unemployment insurance benefits theoretically provides an avenue for a state unemployment agency to find an independent contractor applicant to be an employee. Such a finding introduces the risk of the state unemployment agency assessing unpaid employment and payroll taxes for those a business previously treated as independent contractors. Tangentially, such a finding could serve to establish or bolster independent contractors’ claims in wage and hour litigation.

To qualify as a “covered individual” under the Pandemic Unemployment Assistance (“PUA”) provisions of the CARES Act, a self-employed individual must self-certify that she is self-employed, is seeking part-time employment, and does not have sufficient work history or otherwise would not qualify for unemployment benefits under another state unemployment program. Further, the self-employed individual must certify that she is otherwise able to work and is available for work within the meaning of applicable state law, but is “unemployed, partially unemployed or unable or unavailable to work” because of one of the following COVID-19 related reasons:

  • The individual has been diagnosed with COVID-19 and is seeking a medical diagnosis;
  • A member of the individual’s household has been diagnosed with COVID-19;
  • The individual is providing care for a family member or member of the individual’s household who has been diagnosed with COVID-19;
  • A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work;
  • The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency;
  • The individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The individual was scheduled to commence employment and does not have a job as a direct result of the COVID-19 public health emergency;
  • The individual has become the breadwinner or major support for a household has died as a direct result of COVID-19;
  • The individual has to quit his or her job as a direct result of the COVID-19 public health emergency;
  • The individual’s place of employment is closed as a direct result of the COVID-19 public health emergency.

If the individual meets the above criterion, she is a “covered individual” and is eligible for unemployment assistance authorized by the PUA provisions of the CARES Act. Such assistance was available beginning January 27, 2020 and provides for up to thirty-nine (39) weeks of unemployment benefits extending through December 31, 2020. Covered individuals’ unemployment benefits are calculated state-by-state, according to each state’s conventional unemployment compensation system. In addition, under the PUA provisions of the CARES Act, covered individuals may receive an additional $600 for each week of unemployment until July 31, 2020.

What Businesses Can Do to Protect Themselves

To counteract the risks discussed above, I recommend a business implement the following best practices when responding to a claim of unemployment by an independent contractor:

  • respond proactively to unemployment claim notices for independent contractors;
  • state clearly in the response that the relevant individual-claimants were independent contractors and not employees of the business;
  • affirmatively state that each independent contractor claimant was an independent contractor to whom the business occasionally (or routinely) provided work, but that it is unable to provide the same volume (or any) work to the individual at present because of the COVID-19 national emergency;
  • specify in the response that the individual’s eligibility for unemployment benefits must be entirely predicated on the PUA provisions of the CARES Act allowing for independent contractor participation in the program; and
  • provide the claimant’s independent contractor agreement to the state unemployment agency.

In providing this information and documentation to the state unemployment agency, the business will be able to demonstrate its independent contractor relationship with the individual. Together with the fact that these individuals’ eligibility to receive unemployment income rests exclusively on relevant CARES Act provisions, the business should be well-positioned to avoid the typical risks that can result from a successful unemployment claim by an independent contractor.


For more information on this alert and its impact on your business, please call 405.552.2418 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Horse Management Facilities: Mitigating risk during COVID-19

On March 25, 2020, Governor Stitt amended the Fourth Amended Executive Order 2020-07 (EO 2020-07) via a memorandum designating horse management facilities as critical infrastructure businesses.   With the critical infrastructure designation, it is imperative that horse management facilities now work to mitigate risks associated with operating during the COVID-19 pandemic.  Facilities must balance public health order compliance, horse owner expectations with safety while taking care of the horses stabled on their property.  The following outlines several proactive steps horse management facilities can take to manage risk while operating during the COVID-19 pandemic.

Mary Westman portrait

Mary Westman is an attorney with Phillips Murrah. She also has an MBA, is a Morgan horse breeder and a registered nurse.  A native of West Virginia, she now lives with her husband, David, in Norman, Oklahoma. Click photo to visit Mary’s profile page.

First, implement best practice strategies designed to assist horse management facilities to continue to care and keep horses during a public health emergency and at the same time, protect the health of horse owners and barn workers.  Horse facilities are accustomed to biosecurity measures implemented to prevent the spread of contagious diseases among the horses on their property, but the COVID-19 outbreak presents unique challenges.  Biosecurity strategies designed to protect horses may not be enough to protect the humans who come onto the property.  To provide much needed direction to address this gap, on March 24, 2020, the Kentucky Department of Agriculture published guidelines for “Farm, Veterinary and Other Equine Activities.”

These guidelines incorporate the White House “Coronavirus Guidelines for America” and urge that the CDC website be monitored frequently for updates on best practices in mitigating the spread of the coronavirus among humans. In addition, the guidance includes best practice strategies for managing the daily care and keep of horses, cleaning equipment and surfaces, as well as managing communication, employees and medical procedures. Lastly, horse facilities should implement a schedule for horse owners to visit the facility with the aim of decreasing the number of people on the property so that proper social distancing can be accomplished.

Second, incorporate best practices for COVID-19 mitigation into barn rules and disseminate them to your clients, vendors and employees.  Utilizing email, social media and other forms of electronic communication will support social distancing efforts and model best practice.  Posting barn rules in prominent locations throughout the facility will also serve to disseminate important health and safety rules.

Next, review and revise your stable liability waiver to include illnesses contracted from communicable disease.  To begin, if you are an equine professional or own an equine facility, it is important to understand that “Oklahoma Livestock Activities Liability Limitation Act” (the Act) does not provide unlimited protection from liability.  The Act can be broken down into three parts.  First, the Act provides liability protection from “injuries” resulting from the “inherent risks of livestock activities.”  Second, the Act provides protection when the equine professional is acting in good faith, and third, the Act provides protection when the equine professional acts consistent with recognized industry standards.  You should understand the Act provides liability protection from “injuries” but does not reference “illness.”  Moreover, the Act specifically does not limit liability from death resulting from the “inherent risks of livestock activities.”

Additionally, reliance on liability insurance policies is a risky approach.  Most homeowner policies will not cover equine related operations absent a care, custody and control rider (CCC rider).  Unfortunately, even a with a CCC rider, or even a separate commercial general liability policy, may be of no use during pandemics.  In fact, such insurance policies generally exclude illnesses contracted from communicable disease. To determine if your liability insurance policy covers illness contracted from communicable disease, contact your insurance agent.

Since we have established the Act does not provide unlimited liability protection and most liability insurance policies exclude illness contracted from communicable disease, do you need a written liability release?  Simply put, yes.  As mentioned above, liability protection is limited, and the Act specifically carves out certain events that would not be protected by the statute.  According to Oklahoma law, parties can agree, in writing, to extend the limitation of liability.

Most equine facilities utilize written liability releases, but will these releases achieve complete protection particularly in the context of a communicable disease such as COVID-19?  Well, it depends.  In a 2012 Oklahoma case, Brown v. Beets, a trial court dismissed a personal injury negligence claim related to an injury from a horse kick because the riding participant had signed a liability release.  However, on appeal, Oklahoma Court of Civil Appeals reversed the trial court decision.  The appeals court found a dispute as to whether or not the trail ride leader had used reasonable effort to determine the ability of the riders and whether or not the trail ride leader had followed industry standards. This case would seem to imply that if an equine professional fails to determine the ability of the potential rider/participant, fails to match to the right horse based on the rider/participant’s ability, and fails to adhere to industry standards, a liability release may not be effective in limiting liability.  In light of this Court decision and with regard to operating during the COVID-19 outbreak, it is critical that horse management facilities implement and adhere to best practices (such as the COVID-19 guidelines referenced above) to ensure that properly drafted stable liability waivers will give maximum liability protection.

Also, because a liability release or waiver is a contract, principles of contract law apply.  Liability releases should be clear and definite.  We also know that Oklahoma law requires the liability release to be in writing, and of course, a minor cannot sign a liability release form.  A parent, ideally both parents, or guardian(s) must sign a liability release when a minor engages in an equine activity.  The question of whether the release should include a helmet requirement is a topic for another article.

The take-a-way here is a stable liability release or waiver is necessary to fill in gaps related to the Act but may not completely release you from liability if you are otherwise negligent or fail to follow industry standards to include the standards related to combating COVID-19.  Liability releases could also prove to be ineffective for other reasons for example lack of specificity or clarity.

In conclusion, as of March 25, 2020, Oklahoma designated horse management facilities as critical infrastructure businesses.  With this designation comes the responsibility to continue to care and keep horses during a public health emergency and at the same time, protect the health of horse owners and barn workers.  Horse management facilities can proactively take steps to manage risk while operating during the COVID-19 pandemic such as implementing best practice guidelines for preventing the spread of COVID-19; communicating barn rules; and implementing stable liability waivers that include a waiver of liability for illnesses contracted from communicable diseases. We will get through this current crisis, but we must learn, adapt and implement best practices for future situations.


For more information on this alert and its impact on your business, please call 405.237.8737 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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FAQs: Impact of Covid-19 On Commercial Real Estate

2020 Coronavirus Guidance header 2

By Phillips Murrah Directors Sally A. Hasenfratz and Bobby Dolatabadi, and the Real Estate Practice Group 

The impact of COVID-19 on the commercial real estate industry is unprecedented. We have been asked a broad range of questions as a result of the pandemic, some of which include:

What if a tenant cannot pay rent?

Many landlords and tenants are seeking counsel about what happens if a commercial tenant cannot pay rent. Some considerations include:

Are commercial transactions being closed?

  • Many commercial purchase and sale transactions have reached a screeching halt, with buyers terminating agreements and lenders having underwriting concerns. Often buyers are terminating during an inspection period where they are entitled to a return of earnest money. In instances where an inspection period is not available or has expired, buyers are looking for conditions precedent to closing, such as a material adverse change, which would excuse performance. Otherwise, on a unilateral termination, buyers may face a loss of earnest money or trigger a default under the agreement.
  • For some transactions that appear to be moving forward, there remains uncertainty as to whether the County recording offices will be open at the time of closing for the filing of deeds, loan instruments, and other closing documents. Accordingly, parties should consult with their title companies and underwriters in order to determine if and how the title company will facilitate a closing in the event of a shutdown of the recording office.  Also paramount will be issues relating to “gap coverage” as a result of potential delays between closing and recording documents, as well as use of online remote notaries and other logistics for closings.
  • Most purchase and sale agreements contemplate a specific list of closing deliveries for each party, together with a “catch-all” requiring such other documents as are reasonably requested by the other party and/or title company. In light of the uncertainties regarding whether a recording office will be open or shut-down on the closing date, title companies may require new, additional indemnities and covenants from the parties at closing in order to achieve closing, which documents may prohibit, for instance, a seller (whom still may appear in the real estate records as the fee owner) from executing any other conveyances concerning the property. Parties should consider expanding the “catch-all” clause accordingly.
  • For transactions that are teetering, sellers and buyers should consider agreeing to extend the inspection period or the time to close to let the pandemic subside prior to any such closing. Any such extensions should be in writing.
  • In lieu of closing or extending, buyers may move to the sidelines, waiting for values to decline and proceeding after the pandemic is resolved.

How are lenders and borrowers handling the consequences of the pandemic?

  • Bank regulators have provided guidance encouraging financial institutions to cooperate with customers dealing with the adverse economic effects of COVID-19.
  • For borrowers unable to make debt service, we are seeing short-term accommodations, such as interest only or reduced payments for 3 months, with full payments continuing after that time.
  • Should the pandemic prove to have more long-term effects, we would expect to see forbearance agreements, workouts and bankruptcies. Time will tell whether these more drastic measures will be necessary. If so, the tax consequences of these arrangements should not be ignored.
  • Prior to exploring any of these options, it is prudent to thoroughly review all loan documents, with emphasis on restrictions on transfer, default, notice and cure and force majeure provisions.
  • For non-recourse loans, documents should be thoroughly reviewed so as not to inadvertently trigger recourse liability. For example some non-recourse loans have “bad boy” carve-outs which trigger full or partial recourse liability to borrowers and guarantors where a borrower (i) admits in writing the inability to pay its debts as they come due; or (ii) makes a “transfer” which is not permitted by the loan documents. A “transfer” is often broadly defined as including making amendments to lease agreements without the lender’s consent. Accordingly, borrowers should exercise caution in taking actions to renegotiate loan documents or compromise lease obligations, which in certain circumstances, could trigger recourse liability.

Are Force Majeure clauses available to delay or terminate performance obligations?

  • Force Majeure clauses are contractual clauses that extend or in some instances terminate performance obligations when “acts of god” or other named events prevent or delay a party’s ability to perform their obligations. Force Majeure clauses appear in many, but not all, types of real estate contracts and such clauses are limited to the exact language, which may not be standard from agreement-to-agreement and in most cases don’t appear broad enough to include the current pandemic situation. For example, Force Majeure clauses are typically not in short-term agreements such as purchase and sale agreements, but may be included in loan agreements, leases, construction agreements and the like.
  • Each Force Majeure clause should be carefully reviewed to determine whether it applies in this situation and if so, whether any notices need to be given to the parties under the agreement.
  • Use of Force Majeure clauses in the future should be considered, with expressly including references to epidemics, pandemics or other health related crises beyond the control of the parties.

What else should be considered in light of the pandemic?

  • Business interruption insurance policies should be reviewed to determine whether there may be coverage.
  • For property management, responsibility should be evaluated to identify whether there are special duties to maintain health and cleanliness.

For more information on how the COVID-19 pandemic may affect your business, please contact:

Portrait of Sally A. Hasenfratz

 

Sally A. Hasenfratz
Director
405.552.2431
EMAIL

 

 

Portrait of Bobby Dolatabadi

 

Bobby Dolatabadi
Director
405.606.4742
EMAIL

 

 


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Q&A about SBA Loans related to the newly passed CARES Act

2020 Coronavirus Guidance header 2

By Attorneys Alison J. Cross & Kara K. Laster

CARES Act: SBA Loans Q&A

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Small business owners, in particular, are anxious to receive relief under the Act. The Small Business Administration (SBA) is implementing regulations regarding the historic legislation. Even though the program is to kick off April 3, some details reportedly remain to be worked out and finalized. Below is a summary of what we know, currently:

What types of SBA loans are available to businesses related to COVID-19?

The CARES Act expanded both the SBA’s existing loan program under Section 7(a) of the Small Business Act, referred to as the Paycheck Protection Program (“PPP Loans”), as well as its Economic Injury Disaster Loan Program (“EIDL Loans”).

Can a business apply for both types of loans?

Yes, but only under very limited circumstances:

  • A recipient of an EIDL Loan made between January 31, 2020 and June 30, 2020 is eligible for a PPP loan during the covered period.
  • The funds from a PPP Loan cannot be used for the same purpose as another SBA loan.

What other relief can a business get under the CARES Act?

Businesses may also receive an Emergency Economic Injury Grant of $10,000 provided within three days of application for an EIDL Loan and no requirement to repay the advance even if the EIDL Loan is ultimately declined.

Paycheck Protection Program

When can I apply for a PPP Loan?

Small businesses and sole proprietorships may apply beginning April 3, 2020, while independent contractors and self-employed individuals may apply beginning April 10, 2020. Businesses should apply as soon as possible because there is a funding cap. The deadline to apply for a loan is June 30, 2020.

Where can I apply?

Any SBA-certified lender can make a loan. Additionally, any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating can make a loan.

Who is eligible for a PPP Loan?

Businesses (a) with no more than 500 employees per physical location, (b) that were operational prior to February 15, 2020, and (c) that had employees on payroll and paid wages and payroll taxes are eligible.

How is the loan amount determined?

Businesses may receive the lesser of (a) 2.5 times the average monthly payroll costs during the prior year or (b) $10,000,000.

What line item expenses are included in monthly payroll costs?

Each of the following is a line item expense included in the calculation of payroll:

  • Salaries, wages, commissions, vacation and sick pay (not to exceed $100,000 per employee) and exclusive of qualified sick or family leave
  • Group health insurance
  • Retirement benefit costs
  • State/local taxes on employee compensation
  • Self-employed income (and subcontractors) not to exceed $100,000 per year

How can PPP loan funds be used?

Businesses may use the loans for payroll costs, health care, interest on mortgage payments, rent, utilities, and interest on any other debt.

What do I need to show when I apply?

Businesses must certify that (a) the uncertain economic conditions make the loan necessary to support ongoing operations, (b) the funds will be used to retain workers and maintain payroll, or make mortgage payments, lease payments, and utility payments, (c) the business does not have an application pending for a loan under Section 7(a) for the same purpose, and (d) that the business has not received funds under Section 7(a) between February 15, 2020 and December 31, 2020 that would be duplicative.

What do I need to apply?

Businesses will need to submit a Paycheck Protection Program loan application along with payroll documentation to an approved lender.  The application can be accessed HERE.

 What are the terms of the loan?

  • There are no personal or collateral guarantee requirements, as well as no prepayment penalty. Payment obligations are deferred for six months to one year.
  • There is no requirement that a business try to obtain funds from other sources.
  • Maximum interest rate and term loan to be finalized.

 Can the loans be forgiven?

Yes, but only certain payments made during the first eight weeks of the loan are eligible for forgiveness. The funds must be used for payroll costs, excluding employees who have an annual salary over $100,000. Additionally, funds used for interest on debt obligations and rent and utilities in place before February 15, 2020 may be forgiven. The amount forgiven will decrease in proportion to a reduction in the number of employees as well as a reduction in compensation in excess of 25% for employees making less than $100,000 annually. Lenders must respond to a request for forgiveness within 60 days.

Am I still eligible for forgiveness if I already laid off my employees?

If a business rehires employees who were laid off by June 30, 2020, it still qualifies for forgiveness.

Can a business receive both an employee retention tax credit and a PPP loan? 

No.

Economic Injury Disaster Loan Program

Who is eligible for an EIDL loan? 

Businesses with no more than 500 employees in existence as of January 31, 2020 who have suffered substantial economic injury from COVID-19 are eligible.

How is the loan amount determined?

Businesses may receive up to $2,000,000 with interest rates of 3.75% for small businesses and 2.75% for nonprofits. Loan amounts are based on actual economic injury.

How can EIDL loan funds be used?

Businesses may use the loans for working capital.

Who makes the loans?

Applications for EIDL Loans should be submitted directly to the SBA.

Will someone need to guarantee the loan? 

No, so long as it is made before December 31, 2020 and loan is $200,000 or less.

Mid-Sized Businesses

What if my business has more than 500 employees?

The CARES Act also provides relief to businesses with between 500 and 10,000 employees. These mid-sized businesses are eligible for direct loans under the Emergency Relief and Taxpayer protections part of the CARES Act.

What do I need to show to receive this type of loan?

Businesses must certify that (a) the uncertain economic conditions make the loan necessary to support ongoing operations, (b) the funds will be used to retain at least 90% of the workforce at full compensation and benefits until September 30, 2020, (c) the business will restore not less than 90% of the workforce that existed as of February 1, 2020 with compensation and benefits no later than four months after the termination of the public health emergency, (d) the business has significant operations and employees in the United States, (e) the business is not a debtor in a bankruptcy proceeding, (f) the business is incorporated in the United States, (g) the business will not pay dividends or repurchase any equity security while the loan is outstanding, (h) the business will not outsource jobs for the term of the loan and for two years after repaying the loan, (i) the business will not abrogate existing collective bargaining agreements for the term of the loan and for two years after repaying the loan, and, finally, that (j) the business will remain neutral in any union organizing effort for the term of the loan.

What are the terms of the loan?

The maximum interest rate is 2%. No payments due for at least six months after a direct loan is made.

Can the loans be forgiven?

No. Unlike PPP loans, direct loans under this program may not be forgiven.


For more information on how to navigate the process of obtaining an SBA loan, please contact:

IN DALLAS

Phillips Murrah attorney Alison Cross

 

Alison J. Cross
Director
214.613.0585
ajcross@phillipsmurrah.com

 

IN OKLAHOMA CITY

Phillips Murrah attorney Kara Laster

 

Kara K. Laster
Attorney
405.606.4762
kklaster@phillipsmurrah.com

 


Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Employer Essentials Resource Package

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ALERT: On April 1, 2020, the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family Medical Leave Expansion Act (EMFLA), both part of the Families First Coronavirus Response Act, went into effect.


At Phillips Murrah, we understand the importance of prompt employer compliance with new requirements provided by the U.S. Department of Labor in reaction to the COVID-19 pandemic. We are also conscious of the added pressures during these extraordinarily difficult times. To meet the challenges of expediency and affordability, we offer the Employer Essentials Resource Package.

Attorneys in our Labor & Employment Practice Group have prepared a package of fundamental items and legal guidance for employers of all sizes. Included are template policies that can be revised to meet a specific employer’s needs, as well as additional documents that address the most relevant issues for covered employers of all sizes.

The package includes:

  • TEMPLATE POLICIES – Our Template Policies help bring employers into compliance with the EPSLA and EFMLA and can be tailored to meet specific needs.
  • FACT SHEETS – Our Fact Sheets provide Employers with a summary of the new law to assist in implementation of the policies in compliance with EPSLA and EFMLA, as well as a list of Dos and Don’ts for employers.
  • NOTICES – We provide Notices that employers are required to give employees under the EFMLA.
  • CERTIFICATIONS – We provide Certifications that employers are required to give employees under the EFMLA.
  • FAQs – We provide a collection of up-to-date answers to some of the more pressing questions regarding enforcement of the EPSLA and the EFMLA.

Attorneys on Phillips Murrah’s Labor and Employment team stand ready to assist employers with compliance regarding these new leave laws. Contact us to find out how we can help your company through this unprecedented time.

For more information, please contact us at 405.235.4100 or employmentlaw@phillipsmurrah.com.

Senate Approves CARES Act: Key Tax Changes

Late Wednesday evening, the Senate passed a third stimulus bill in the wake of the public health crisis and economic fallout stemming from the COVID-19 outbreak.  The new bill, the Coronavirus Aid, Relief, and Economic Security (or “CARES”) Act has not yet been voted on by the House, although a vote is expected by Friday.

As it currently stands, the bill provides both individuals and businesses with robust economic support, including through changes to the federal tax code.

Phillips Murrah attorney Jessica Cory

Jessica N. Cory represents businesses and individuals in a wide range of transactional matters, with an emphasis on tax planning.

Two of the key tax changes include:

  • Recovery Rebates for Individual Taxpayers.  The CARES Act would provide a $1,200 refundable tax credit for individuals (or $2,400 for joint taxpayers), plus an additional $500/child for taxpayers with children.  Taxpayers would not have to include these rebates in taxable income on their 2020 tax returns and the rebate would be refundable for taxpayers with no offsetting tax liability.  To be eligible, an individual must have earned qualifying income on a 2018 or 2019 tax return, which includes both earned income and certain retirement benefits, including Social Security payments.  The credit begins to phase out for individuals with adjusted gross income of at least $75,000 (or $150,000 for joint taxpayers, or $112,500 for heads of household), with the credit reduced by 5% for each additional dollar of income over that amount.  Currently, the credit is intended to be a one-time rebate, although lawmakers may consider additional rebates in the event of a prolonged downturn.
  • Employee Retention Credit for Employers.  Under the CARES Act, employers would be eligible to take a 50% refundable payroll tax credit on up to $10,000 of wages paid during the crisis, for a credit of up to $5,000/employee.  This credit would be available to employers whose business is forced to close, or partially close, due to virus-related shutdown orders, or which has a significant decline in gross receipts, meaning a decrease of 50% or more when compared to the same quarter in the prior year.  Employers with more than 100 employees would qualify for the credit for wages paid to employees retained but not currently working due to the crisis.  Smaller employers would qualify for the credit for all employee wages paid.

The CARES Act also includes a number of other helpful provisions for both individuals and businesses.  For example, certain individuals affected by COVID-19 could take up to $100,000 of early distributions from qualified retirement plans without the normal 10% penalty, with the ability to repay these amounts within three years of withdrawal, or recognize the distribution in taxable income over a three-year period.  In addition, the CARES ACT would also create a new above-the-line charitable contribution for individuals who do not itemize, allow individuals who do itemize to take increased charitable contribution deductions, and permit individuals to exclude up to $5,250 of employer-provided student loan repayment from income.  For businesses, the CARES Act would modify the limits on net operating losses for corporations (and the limitation on losses for taxpayers other than corporations) enacted as part of the 2017 Tax Cuts and Jobs Act (the “TCJA”), modify the TCJA’s limitation on business interest expense deductions, and make other technical amendments.  Finally, both individuals and businesses would be able to delay certain tax payments, including employer-side Social Security taxes and 50% for self-employed individuals’ Social Security tax.


For more information on this alert and its impact on your business, please call 405.552.2472 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Senate Approves CARES Act: Important SBA Loan Information

By Phillips Murrah Attorney Kara K. Laster

Late last night, the Senate unanimously approved the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which is set for a House vote on Friday. The legislation authorizes $349 billion for loans to be distributed under Small Business Administration’s 7(a) program. Some of the important information for small businesses is highlighted below:

Phillips Murrah attorney Kara Laster

Kara K. Laster represents individuals and businesses in a broad range of transactional matters including real estate and mergers and acquisitions.

  • Eligible businesses are those with 500 or fewer employees.
    • To be eligible, businesses must have been operational as of February 15, 2020.
    • Sole proprietors, independent contractors and self-employed individuals are also eligible to apply for the loans.
    • Exceptions apply for industries in which the SBA size standard allows more than 500 employees.
  • Small businesses may receive loans of up to $10 million under the new maximum loan amount.
    • Lenders will determine the proper loan amount by using a formula that takes into account past payroll expenses.
  • In addition to existing allowable uses, businesses may use the money from loans for payroll; paid sick, medical, or family leave; continuation of group health care benefits; mortgage, rent, and utility payments; and other debt.
  • Loan forgiveness is available to businesses that retain workers or rehire workers who were laid off.
    • Businesses will not have to repay loans used for payroll costs, interest payments on mortgages incurred before February 15, 2020, rent under a lease in force before February 15, 2020, and utilities for which service began prior to February 15, 2020.
    • Only payments made during the 8-week period beginning on the date of the origination of the loan will be forgiven.
    • The amount forgiven will decrease in proportion to a reduction in the number of employees.
  • Small businesses will be able to apply through banks, credit unions and other lenders.
    • Approximately 1,800 private lenders are already approved to issue 7(a) loans, and Treasury Secretary Steven Mnuchin stated that new regulations will make it possible for almost all FDIC-insured banks to make SBA loans.
  • Special terms include a maximum interest rate of 4%, no prepayment penalty, no personal or collateral guarantee requirement, and the ability to defer payments for six months to a year. The maximum term of the loan is 10 years.

The CARES Act also includes assistance for mid-sized businesses with between 500 and 10,000 employees. The Secretary of the Treasury will implement a program that provides financing to banks and other lenders that make direct loans to mid-sized businesses. The annual interest rate for these loans will not exceed 2% and no interest payments will be due for at least 6 months after a loan is made. The funds must be used to retain at least 90% of the workforce with full compensation and benefits until September 30, 2020. In addition, businesses seeking loans must not outsource or offshore jobs for the term of the loan plus 2 years after repayment, and may not issue dividends for up to a year after repayment.


For more information on this alert and its impact on your business, please call 405.606.4762 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Oklahoma Department of Commerce to host teleconference series on SBA Economic Injury Disaster Loans

By Phillips Murrah Attorney Kendra M. Norman

For Oklahoma businesses interested in more information about the U.S. Small Business Administration (SBA) Economic Injury Disaster Loan Program, The Oklahoma Department of Commerce is hosting three teleconferences that will cover the application process.

Also, according to their website, Commerce Director of Business Retention and Expansion, Ray Little, and SBA Office of Disaster Assistance Public Information Officer, Susheel Kumar, will be on the calls to provide information and answer questions.

Upcoming Calls will occur on the following three days:

  1. Thursday, March 26 from 2 to 3 p.m.
  2. Tuesday, March 31 from 2 to 3 p.m.
  3. Thursday, April 2 from 2 to 3 p.m.

To register, go to this website: https://www.okcommerce.gov/oklahoma-small-business-teleconference-sba-economic-injury-disaster-loan-application-and-program/

@OKcommerce on Twitter

@OKcommerce on Facebook


Kendra Norman Web

Kendra M. Norman represents individuals and businesses in a broad range of transactional matters.

For more information on this alert and its impact on your business, please call 405.606.4726 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Cybersecurity during COVID-19 transition to remote work policies

By Phillips Murrah Director Cody J. Cooper

Cody Cooper online photo

Cody Cooper is a Director in the Intellectual Property Practice Group and represents individuals and companies in a wide range of intellectual property matters, including patent, trademark and copyright matters. His practice also includes commercial litigation.

The pandemic spread of the COVID-19 virus brings with it threats to the physical health of employees and the financial health of employers. It also brings an increased data security risk for both individuals and companies.

If you are like me, you have received countless emails from every store, restaurant or business you have ever visited, passed by or looked at (I still can’t figure out how some of these companies have my email address) explaining how they are address the pandemic situation.

Add in the communications regarding the 2020 census, and there are countless opportunities for ill-intending individuals to try to steal your personal information. It is important to be especially vigilant at these times and not click on emails or links in emails or texts unless you are absolutely certain they are legitimate. The best practice is to err on the side of caution and assume anything remotely questionable should not be opened.

For companies, responding to the pandemic situation means having to rethink traditional work settings and moving employees out of the office and enabling them to work from home. With this comes the obvious preparation to allow employees access to company information outside of the company’s network. But, it is incredibly important to recognize that this comes with an increased risk of data security issues.

Allowing employees access to information outside of a company’s traditional network ultimately means that the company has had to store company information on a medium that is accessible through the Internet. Companies should revisit security policies to make certain that they have in place the appropriate measures to prevent unwanted third-parties from accessing this information or employees’ inadvertent misuse of sensitive information.

Companies can take several steps to put themselves in the best position to allow employees to work remotely and while also putting themselves in the best place to continue to secure the company’s sensitive data.

The easiest and most important steps a company can and should take are:

(1) limit access to only employees that need it and only the data they need to perform their job;

(2) set security settings to require password logins (whether through a company device or personal device);

(3) where possible, turn on multi‑factor authentication to ensure a high level of security over the most sensitive data;

(4) decrease the time before device lock out the user and require re-entry of their password.

For companies with the financial and technology capability, they can also deploy data loss prevention (DLP) products such as mobile device management systems or cloud access security broker to add extra layers of data protection. Companies can also run security tests, i.e. fake phishing attempts, during this time to test which employees are practicing safe data security practices and remind those that are not of their responsibilities. It is always good practice to regularly circulate a newsletter with security updates and reminders, and that practice should continue – or or even increase – while employees are working remotely.

Unfortunately, there may be layoffs of employees during this crisis. While employers hope to avoid this at all costs, it is also important to remember to have a plan in place to protect and recoup company devices and data in the even that remotely working employees are terminated. During that time, it is important to terminate access to company data and to recover any outstanding devices. Hopefully these measures will not be necessary, but it is important to have a plan in the event they do occur.

Companies and individuals are in a state of triage trying to address the most pressing needs as they arise. It is especially important at this time for everyone to remain vigilant about their cybersecurity and data security practices, to be proactive, and put plans in place to address potential developments.


For more information on this alert and its impact on your business, please call 405.552.2405 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Senate reaches bipartisan deal on CARES Act

By Phillips Murrah attorney Lauren Barghols Hanna

Early this morning, the Senate reportedly reached a bipartisan deal to finalize and pass the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a $2 trillion stimulus package seeking to address the widespread economic damage caused by the ongoing coronavirus pandemic.  In addition to directly sending $1,200 checks to many Americans, the legislation reportedly creates a $367 billion loan program for small businesses, supplements state unemployment insurance benefits, directs $150 billion to state and local stimulus funds, and forms a $500 billion fund for industries, cities and states.

The Senate is expected to vote on the CARES Act on Wednesday afternoon.

Phillips Murrah will keep you advised as the CARES Act advances through Congress. Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.


Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna is an attorney in the Labor & Employment Practice Group. As a part of her employment practice, Lauren counsels and represents management in all phases of the employment relationship, including litigation matters involving discrimination, retaliation, harassment and wrongful discharge claims, whistleblower claims, claims related to employment agreements and theft of trade secrets, and other disputes arising from the workplace.

For more information on this alert and its impact on your business, please call 405.606.4732 or email me.

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State-by-State breakdown of COVID-19 tax relief to taxpayers

By Phillips Murrah Director Dawn M. Rahme

Over thirty states and municipalities are offering tax relief to taxpayers in connection with the COVID-19 outbreak. Attached (click HERE) is a summary of the various state and local actions as of March 24, 2020 that was prepared by Thompson Reuters Checkpoint.  So far, Oklahoma has provided two relief measures.

First, Oklahoma is following the federal deadlines and will be extending the due date from April 15 to July 15  for filing your Oklahoma income tax return and payment of any Oklahoma income taxes.

Second, for transportation carries of materials, equipment and supplies that are used for direct assistance in support of emergency relief efforts for COVID-19, Oklahoma is temporarily suspending any costs and fees for oversize or overweight permits.

More relief efforts are underway, and as they become available, we will share them with you.


Dawn Rahme Oklahoma City tax law

Dawn M. Rahme is a Director and a member of the Firm’s Executive Committee. She represents individuals and businesses in an array of transactional matters with a focus on assisting corporations, partnerships and individuals in general tax planning.

For more information on this alert and its impact on your business, please call 405.606.4770 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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Understanding Paid Sick Leave Tax Credits for Employers

By Phillips Murrah Director Dawn M. Rahme

The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020 and includes both the Emergency Paid Sick Leave Act, which provides for paid sick leave, as well as the Emergency Family and Medical Leave Expansion Act, which provides for expanded paid leave.  The Act provides employers relief in the form of tax credits to offset the cost of wages.

Employer Procedure

Guidance for claiming the tax credits will come from the Internal Revenue Service (IRS) in the next 2 weeks. However, we already know a key component of how the tax credits will work. Employers will be allowed to retain payroll tax payments equal to the amount of qualifying paid sick and child care leave that the employer pays, as laid out below.

The tax payments the employer may retain include both the employee and employer shares of social security and Medicare taxes for ALL employees whether or not those employees were paid qualifying sick and child care leave. If the paid sick and child care leave exceed the amount of payroll taxes due, the employer can request a payment from the IRS.

Qualifying employers include all American businesses with fewer than 500 employees. According to the IRS, “The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.”

Dawn Rahme Oklahoma City tax law

Dawn M. Rahme is a Director and a member of the Firm’s Executive Committee. She represents individuals and businesses in an array of transactional matters with a focus on assisting corporations, partnerships and individuals in general tax planning.

Scenario A: Paid Sick Leave 

Employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.

Employee Benefit:

100% pay for 10 days (up to 80 hours)

Employer Paid Sick Leave Tax Credit:

Eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days

Scenario B: Emergency Paid Sick Leave 

Employee is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services.

Employee Benefit:

2/3 pay for 10 days (up to 80 hours)

Employer Paid Sick Leave Tax Credit:

Eligible employers will receive a payroll tax credit for 100% of employee’s qualified sick leave, capped at $200 per day for 10 days ($2,000 total); plus eligible employers may receive a tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Self-Employed:

Equivalent income tax credit amounts are available to self-employed individuals under similar circumstances.

Scenario C: Emergency FMLA Expansion 

Employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19.

Employee Benefit:

2/3 pay for up to an additional 10 weeks

Employer Child Care Leave Tax Credit:

Eligible employers may receive a payroll tax credit of 100% of eligible wages paid, capped at $200 per day up to $10,000 per employee in total. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit.

Self-Employed:

Equivalent income tax credit amounts are available to self-employed individuals under similar circumstances.


For more information on this alert and its impact on your business, please call 405.606.4770 or email me.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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DOL seeks public input on Family First Coronavirus Response Act

Wage and Hour release graphicThe U.S. Department of Labor (DOL) Wage and Hour Division (WHD) reached out on Monday seeking pubic input on how to implement The Families First Coronavirus Response Act (FFCRA). The feedback will be used to “assist employers and employees in understanding their responsibilities and rights under the FFCRA,” according to the release from the DOL’s Wage and Hour division.

Message from the U.S. Department of Labor Wage and Hour Division release:

The U.S. Department of Labor will be hosting a national online dialogue to provide employers and employees with an innovative opportunity to offer their perspective as the Department develops compliance assistance materials and outreach strategies related to the implementation of the Families First Coronavirus Response Act (FFCRA).

The ideas and comments gathered from this dialogue will inform compliance assistance guidance, resources, and tools, as well as outreach approaches, that assist employers and employees in understanding their responsibilities and rights under the FFCRA.

We need your input by March 29, 2020. Anybody who is interested can participate online at https://ffcra.ideascale.com from March 23 through March 29, 2020 or can join a Twitter chat hosted by @ePolicyWorks on March 25, 2020 at 2 p.m. using the hashtag #EPWChat.

WHD is initiating and inviting public engagement for one week via ePolicyWorks Online Dialogue Communities, which helps policymakers collect feedback through online crowdsourcing and social media platforms.

President Trump signed FFCRA into law on Wednesday, Mar 18. It requires certain employers to provide employees with expanded family and medical leave for specified reasons related to COVID-19. WHD is tasked with administering and enforcing these provisions, which will apply from their effective date through the end of the year.

For more information on this alert and its impact on your business and employees, please call 405.235.4100 or email us.

Keep up with our ongoing COVID-19 resources, guidance and updates at our RESOURCE CENTER.

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COVID-19 Resource Center

Oklahoma Governor Announcement: Healthcare occupational licenses extended during the emergency

By Phillips Murrah attorney Mary Holloway Richard

Announcement for all Licensed Healthcare Providers regarding Expiration of Licenses

Oklahoma Opioid Decision by Phillips Murrah healthcare attorney Mary Holloway

Mary Richard is recognized as a pioneer in healthcare law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

On March 17, 2020, Governor Stitt issued Amended Executive Order 220-7 which provided additional responses to the current pandemic.  The Order applies to all 77 counties and positions state agencies and departments to respond to the emergency with new hires and purchases as necessary.  One portion of the order focuses on the providers in the front lines—physicians and nurses.  While there is much for health care providers to worry about—office closings, staff, patient access to providers, and safety—providers will likely not be thinking about the status of license applications or the need to renew them.  This executive order offers a grace period by providing the following guidance to providers with those state licensure issues:

Any medical professional who holds a license, certificate, or other permit issued by any state that is a party to the Emergency Management Compact evidencing the meeting of qualifications for the practice of certain medical services, as more particularly described below, shall be deemed licensed to practice in Oklahoma so long as this Order shall be in effect, subject to the following conditions:

    1. This shall only apply to Medical (MD) and Allied Licenses issued by the Board of Medical Licensure and Supervision, Licenses issued by State Board of Osteopathic Examiners, and Licenses and Certificates issued by the Board of Nursing, all three shall collectively be referred to as “Boards”;
    2. Any medical professional intending to practice in Oklahoma pursuant to this Order, hereinafter referred to as “Applicant,” shall first apply with and receive approval from appropriate Board;
    3. It is the responsibility of each Board to verify the license status of any applicant and, upon verification of good standing, shall issue a temporary license to practice within this State; and
    4. Any applicant licensed under this Order shall be subject to the oversight and jurisdiction of the licensing Board, which includes the ability of the Board to revoke said license and to initiate any administrative or civil proceeding related to any alleged misconduct of applicant.

All occupational licensed of this type shall be extended during the emergency and shall expire fourteen (14) days following the withdrawal or termination of Amended Executive Order 2002-07.

In addition, this Executive Order, supports The Centers for Medicare and Medicaid Services’ (CMS) Section 1135 Waiver in eliminating the current requirement that a preexisting patient relationship exist in order for treatment to continue via telehealth.

(UPDATE Mar19) Emergency Coronavirus Response Bill: Employers Must Provide Paid Leave To Employees Impacted by COVID-19

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

On March 18, President Trump signed the Families First Coronavirus Response Act into law. It applies to all private employers with fewer than 500 employers.  Paid sick time will be permitted to employees regardless of tenure, while employees with at least 30 days on the job will be eligible for the amended FMLA leave connected to the coronavirus.

We expect the effective date for compliance will be April 2, 2020. We will continue to advise as regulations are released.

As of publication, there are more than 240,000+ confirmed cases of COVID-19, the respiratory disease caused by the novel coronavirus, in 135 countries around the world, with the United States currently confirming more than 11,500+ cases.  On Friday, March 13, 2020, President Trump declared a national state of emergency in response to this pandemic.  In response, the Department of Labor, CDC, OSHA, and the EEOC have issued helpful guidance for employers seeking to clarify permitted/required office safety measures and leave obligations applicable to employers and offices affected by the coronavirus.

In addition to ensuring free coronavirus testing regardless of insurance coverage and food assistance for needy families, the Coronavirus Response Act provides for expansive and unprecedented employment protections for eligible individuals impacted by COVID-19 who work for employers that employ fewer than 500 employees, including:

  • Paid sick time (up to 80 hours or two weeks of wages)
  • Family and Medical Leave (up to 12 weeks—10 of which shall be paid by the employer)

The below-described employee leave programs and protections must be implemented by covered employers (those who employ fewer than 500 employees) soon after enactment—so employers should begin drafting policies and procedures for full implementation now.

Paid Sick Time

The Act provides that all public employers and all private employers that employ fewer than 500 employees must immediately provide eligible full-time and part-time employees who are unable to work or telework due to the coronavirus up to 80 hours of paid sick time (full-time employees) or 2 weeks of wages (part-time employees), regardless of how long the employee has been employed by an employer.

Although all employers with fewer than 500 employees are covered by the current version of the Act, the Secretary of Labor will have the option of exempting certain small businesses with fewer than 50 employees.  Employers have the authority to exempt certain health care providers and emergency responders from the definition of “eligible employees” under the Act.

Paid sick time may be used by an employee if:

  • Employee must self-isolate after diagnosis with coronavirus or to obtain diagnosis or care for the symptoms of coronavirus,
  • Employee’s presence in the community may jeopardize the health of others because they have been exposed to or have the symptoms of the coronavirus,
  • Employee must care for an individual who must self-isolate after diagnosis with coronavirus or who must obtain medical diagnosis or care related to the coronavirus.
  • Employee must care for their child(ren) if their school or childcare is closed due to the coronavirus or they have been exposed to the coronavirus

All paid sick time must be paid at 100% of the employer’s regular wages for absences related to the employee’s need to self-isolate or seek medical care related to their own exposure to coronavirus.  However, any sick time provided for an employee to care for a family member in connection with exposure to the coronavirus or school/childcare closings must be paid at two-thirds of the employee’s regular wages.

Paid sick time will be capped at $511/day and up to $5,110 total for absences associated with an employee’s own diagnosis or need to quarantine, with caps of $200/day and up to $2,000 total for all other paid sick time.

An affected employee may first use this paid sick time for eligible purposes related to the coronavirus pandemic.  Employers may not require an employee to use otherwise accrued sick time or other paid leave before using the paid sick time granted by the Act.  Further, an employer may not require that an employee search for or find a replacement to cover the hours taken by the employee as paid sick time.

Employers are prohibited from taking any disciplinary action or discriminating in any manner against an employee who takes leave in accordance with the Act and has filed a complaint or instituted any proceeding under or related to this Act or has testified or is about to testify in any such proceeding.

Information regarding employee eligibility for paid leave under the Act must be posted where employee notices are customarily posted. The Secretary of Labor will make available a compliant model notice no later than 7 days after the date of enactment of the Act.

An employer who does not permit its eligible employees to take sick leave time under the Act will be deemed to be in violation of the Fair Labor Standards Act and be subject to penalties for that violation.

Emergency Paid Leave—Amendment to the Family and Medical Leave Act

The Act also amends the federal Family and Medical Leave Act and creates a new subsection of paid medical leave under the FMLA to provide up to 12 weeks of family and medical sick leave during a public health emergency related to the coronavirus to all eligible employees, 10 weeks of which must be paid by the employer at a rate of no less than two-thirds of the employee’s usual pay.  This extended paid leave is available only to employees who work for companies employing fewer than 500 employees.

Although all employers with fewer than 500 employees are covered by the current version of the Act, the Secretary of Labor will have the option of exempting certain small businesses with fewer than 50 employees, if it determines that providing paid leave under the Act “would jeopardize the viability of the business as a going concern.”  Additionally, employers with fewer than 50 employees would not be subject to private lawsuits filed by employees for violations of this Act–only actions brought directly by the Department of Labor.

The first 10 days for which an eligible employee impacted by the coronavirus takes the public health emergency FMLA leave related to the coronavirus may be unpaid.  Alternatively, an employee may elect to substitute any accrued vacation leave, personal leave, or medical or accrued sick leave or the above-described paid sick time for the unpaid leave.  However, an employer may not require an employee to substitute paid leave for unpaid public health emergency FMLA leave related to the coronavirus under the Act.

An employee will be eligible for this public health emergency FMLA leave related to the coronavirus if they have been on the job for at least 30 days and the employee needs to stay at home because their child(ren)’s school or childcare facility has closed unexpectedly due to the coronavirus.

Employers have the authority to exempt certain health care providers and emergency responders from the definition of “eligible employees” under the Act.

Examples

Scenario 1:  A long-time employee of a private company with fewer than 500 employees receives news that their elderly parent must self-isolate due to potential exposure to the coronavirus at a doctor appointment.  Employee’s parent is worried that they will not be able to perform all self-care or prepare meals if their friends and home aide must stay away during the incubation period.  Employee decides to move in with their elderly parent for the two-week incubation period to take care of their parent’s daily needs and potentially help if they become symptomatic.  Employee is absent for the duration of their parent’s two week incubation period and then Employee promptly returns to work.

Wages:  Employee would be paid 2/3 of their typical wages (subject to the above-described caps) for the 2 weeks that Employee was caring for their parent as a Paid Sick Time benefit.

 

Scenario 2:  Long-time Employee of a private company with fewer than 500 employees travels to Washington for spring break, returns home, and then learns of a positive test in the area they stayed on spring break.  Based on news reports and a health department press release, Employee believes they may have been in close proximity to one or more persons with a positive COVID-19 test.  Employee and family self-isolate and wait to take the COVID-19 test.  Employee eventually tests negative, but employee’s 17 year old child tests positive.  Employee is absent a total of two weeks for their own self-isolation and another one week caring for their child until the child makes a full recovery.

Wages:  Employee would be paid 100% of their regular wages for the first 80 hours they were absent from work (subject to the above-described caps) due to self-isolation due to their own exposure.  Employee will not be eligible for extended FMLA leave caring for the Employee’s child beyond that two weeks, unless the child’s school is also closed during that period.

 

Scenario 3:     Employee hired sixty days ago has three children and all three children have a school closure from March 13, 2020 through April 15, 2020.  There has been no known exposure to the coronavirus or positive diagnoses of COVID-19 at the children’s school.

Wages: Employee would be eligible for payment of 2/3 of their wages during from March 13, 2020 to March 29, 2020 as paid sick time and 2/3 of their wages (all subject to the above-described caps) from March 30, 2020 to April 15, 2020 under the amended Family and Medical Leave Act.

 

Scenario 4:  Employee hired 5 days ago recently traveled through a major airport and begins to develop symptoms of a respiratory infection.  Employee decides to stay at home until they can obtain testing for coronavirus.  Employee ends up testing positive for COVID-19 and must be absent from work for a total of five weeks.

Wages:  Employee would be eligible for payment of 100% of their wages (subject to the above-described caps) for the first two weeks of absences.  After that time, Employee is not eligible for any further paid leave or job protection under the amended Family and Medical Leave Act because they were not employed by the company for at least 30 days prior to their absence.  Before immediately terminating employment, however, the Company must consider whether the Employee may be eligible for other paid/unpaid leave benefits through established company policies, state or local paid leave laws or the ADA (and state equivalents).

 

Scenario 5:  A part-time Employee hired 15 days ago must stay at home to care for their child who has not been exposed to the coronavirus, but whose childcare facility has closed due to multiple diagnoses of COVID-19 in your community.  Employee advises that they cannot return to work for at least a month, as that is when the childcare facility will re-open.

Wages:  Employee is entitled to 2/3 of their usual wages for all scheduled/typically-worked hours over a two-week time period.  After the two weeks have elapsed, the Employee is not eligible for additional paid leave under the amended Family and Medical Leave Act, as they have not worked for the Company at least 30 days.  Employee also would likely not be eligible for ADA or other state or local sick/disability leave, as their absence was not caused by their own or their immediate family’s illness.  Before terminating employment, however, the Company needs to review whether the Employee may be eligible for unpaid leave through any established Company policy or course of performance or state/local leave entitlement.

Refundable Tax Credits for Employers

The Act provides for refundable tax credits for employers who are required to provide the above-described paid sick time and paid family and medical leave.  These refundable tax credits will be allowed against the employer’s portion of Social Security taxes.

Under the Act, employers will be entitled to a refundable tax credit equal to 100% of the qualified sick leave wages paid by employers for each calendar quarter for paid sick time. Sick leave wages will be capped at $511 per day (or $200 per day if the leave is for caring for a family member or child) for up to 10 days per employee in each calendar quarter.

Similarly, employers will receive a refundable tax credit equal to the qualified family leave wages paid by employers for each calendar quarter in accordance with the amended Family and Medical Leave act. However, the family leave wages will be capped at $200 per day for each individual up to $10,000 total per calendar quarter.

Prepare Now for Implementation Within 15 Days

Employers will have to move quickly to achieve full compliance with their paid leave obligations.  The Department of Labor has promised additional guidance soon after enactment.

As with any national health emergency, this situation is fluid and employer best practices evolve with increased understanding of the spread of the coronavirus, both throughout the United States and within specific communities.   Based on today’s statements from both the Senate Majority Leader and the President, it is highly likely that additional measures affecting employers will be put forward by the Senate this week.

Phillips Murrah’s labor and employment attorneys continue to monitor new developments and stand ready to assist your company timely and efficiently implement these expansive new leave obligations as they are signed into law.

 

To find out more about how this affects your business, please contact:

Lauren Barghols Hanna

Oklahoma City
lbhanna@phillipsmurrah.com
405.606.4732

Janet A. Hendrick

Dallas
jahendrick@phillipsmurrah.com
214.615.6391

Kathryn D. Terry

Oklahoma City
kdterry@phillipsmurrah.com
405.552.2452

Byrona J. Maule

Oklahoma City
bjmaule@phillipsmurrah.com
405.552.2453

Lauren Symcox Voth

Oklahoma City
lsvoth@phillipsmurrah.com
405.606.4740

 

President Signs Amended Coronavirus Response Act Providing Paid Sick Leave to Eligible Employees

By Lauren Barghols Hanna

Phillips Murrah attorney Lauren Hanna

Lauren Barghols Hanna

On March 18, President Trump signed the Families First Coronavirus Response Act into law. It applies to all private employers with fewer than 500 employers.  Paid sick time will be permitted to employees regardless of tenure, while employees with at least 30 days on the job will be eligible for the amended FMLA leave connected to the coronavirus.

We expect the effective date for compliance will be April 2, 2020. We will continue to advise as regulations are released.

The coronavirus relief package provides the following paid leave benefits to eligible employees:

Paid Sick Time (up to 80 hours/2 weeks paid leave)

  • Employees paid full wages for absences related to their own diagnosis/quarantine and 2/3 of wages for absences related to caring for family members or their child’s school closures
  • Caps to paid sick time are $511/day and up to $5,110 for employee’s own illness/quarantine and $200/day and up to $2,000 total for all other qualifying leave
  • Secretary of Labor has the authority to issue regulations exempting small employers (fewer than 50 employees) from providing paid sick leave. DOL regulations are expected within 7 days of enactment
  • Paid leave time available only to workers who are unable to work or telework due to a more-tightly defined coronavirus-related absence
  • Healthcare professionals and emergency responders may be excluded from eligibility
  • New cap for tax credit permitted for self-employed individuals

Paid FMLA Leave (up to 10 additional weeks of paid leave related to coronavirus emergency)

  • Paid FMLA leave available only to employees who are unable to work or telework due to caring for a minor child due to school closing or childcare unavailability
  • Paid leave capped at 2/3 of an employee’s wages, up to $200/day or $10,000 total
  • Secretary of Labor has the authority to issue regulations exempting small employers (fewer than 50 employees) from providing paid FMLA leave. DOL regulations are expected within 7 days of enactment
  • Healthcare professionals and emergency responders may be excluded from eligibility

Senator Mitch McConnell (R-KY), advised in a speech Wednesday morning just prior to voting for this Act, that he does not consider the above employee protections to go far enough to protect either individual employees or small business owners—and that the Senate will not be adjourning until additional legislation is passed to address additional needs.

Please follow this link to a more detailed article providing additional information regarding the Act and helpful scenarios explaining how leave will be paid under the Act.

Phillips Murrah’s labor and employment attorneys continue to monitor new developments and stand ready to assist your company timely and efficiently implement these new paid leave obligations and answer your other pressing employment questions arising from this national public health emergency.


To find out more about how this affects your business, please contact:

Lauren Barghols Hanna

Oklahoma City
lbhanna@phillipsmurrah.com
405.606.4732

Janet A. Hendrick

Dallas
jahendrick@phillipsmurrah.com
214.615.6391

Kathryn D. Terry

Oklahoma City
kdterry@phillipsmurrah.com
405.552.2452

Byrona J. Maule

Oklahoma City
bjmaule@phillipsmurrah.com
405.552.2453

Lauren Symcox Voth

Oklahoma City
lsvoth@phillipsmurrah.com
405.606.4740

 

An update from Phillips Murrah P.C. about health and safety related to COVID-19

ALERT: Coronavirus (COVID-19) Update

03/18/20

Tom Wolfe

Thomas G. Wolfe, Phillips Murrah P.C. Managing Partner

As has become apparent, the COVID-19 pandemic is an unstoppable disruptive influence across almost every aspect of our lives. Like so many of our friends and clients, we have been preparing in earnest.

To that end, starting yesterday, our Firm began transitioning to working remotely. As always, our attorneys are accessible to clients via e-mail and phone. Our office is still open in order to deliver the most critical services. Additionally, please be assured that we are taking all appropriate measures to robustly protect and ensure the health and well-being of our attorneys and staff.

I would like to personally reiterate that our plan is designed to ensure continuity of the top-quality, reliable, and safe legal representation that Phillips Murrah’s clients expect. While the playing field constantly changes, our dedication to seamlessly delivering excellent service does not.

Feel free to reach out to us if you have any questions about our remote working arrangements or any other concerns with which we can assist. We understand that the uncertainty that unfolds in the wake of this pandemic can be unsettling at best, and understandably frightening to many who wonder what the future holds. Please know that we are here to help.

Please be safe and kind to one another. We are grateful for our relationships and look forward to a brighter day together.

Thank you,

Thomas G. Wolfe
Phillips Murrah P.C.
Managing Partner

 

OUR MEASURES:

  • We are following the Oklahoma State Department of Health guidelines regarding how to handle our office operations in the event of an exposure or diagnosis experienced by Phillips Murrah employees and their families.
  • Our Information Technology team has activated our remote access plan to avoid contamination. We are confident in our ability to provide consistent service if total office closure is required.
  • Our Firm is aware of the importance of “social distancing,” and we are practicing these measures. During the pandemic, we are opting for telephone meetings, video depositions and remote closings.
  • If any face-to-face meetings are required, participants are able to remain separated from one another by six feet or more.
  • We have educated and encouraged our employees to implement behavior changes, if necessary, to ensure safety. This includes frequent hand washing, cautious and transparent travel plans and awareness of the value of remaining away from the office during any remote office mandate.

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Can Employers Take an Employee’s Temperature and Other COVID-19 Questions

By Lauren Symcox Voth

Lauren Voth

Lauren Symcox Voth

EEOC Publishes Guidance on Pandemic Preparedness

The World Heath Organization (WHO) has declared COVID-19 an international pandemic and as a result the Federal, Local, and State governments have declared a state of emergency across the country. Employers have received guidance from multiple sources about what to do next.  In light of the advice given by WHO, the Centers for Disease Control and Prevention (CDC), government officials, doctors, and employers should remember that they must still comply with employment laws, including the Americans with Disabilities Act (ADA).

The U.S. Equal Employment Opportunity Commission (EEOC) published its Pandemic Preparedness in the Workplace and the Americans with Disabilities Act in 2009, after the H1N1 outbreak. This guidance applies equally to the current COVID-19 pandemic. The EEOC’s guidance outlines questions and answers to guide employers before, during, and after a pandemic.

Here are highlights from the EEOC’s guidance for employers during a pandemic:

  • Employers may send home employees with COVID-19-like symptoms. If an employer sends an employee home with symptoms, employers may permit the employee to take applicable paid leave for the time off work.  At this time Non-Exempt employees are not required to be paid for any time off work.  Exempt employees must be paid for any week in which the employee performs work.  Please see our story: “House Sends Amended Coronavirus Response Act to Senate with Significantly Reduced Employee Paid Leave Protections – Vote Expected Today” for any changes related to employers’ obligations to pay employees for COVID-19 related absences.
  • Employers should not ask employees if they have COVID-19. However, employers may ask employees if they are experiencing COVID-19-like symptoms such as a fever, sore throat, cough, or shortness of breath.  Employers must maintain all employee provide health information separately with medical records in compliance with the ADA.
  • Employers may take an employee’s temperature. Under normal conditions, an employer is not permitted to take an employee’s temperature because it is considered a medical examination. However, in this pandemic the EEOC agrees that since the CDC has issued precautions to employers, employers may measure an employee’s temperature. Be aware that, according to the EEOC and CDC, some people with COVID-19 do not have a fever.
  • Avoid asking employees to disclose any condition. Employers should not ask employees to disclose any condition that may be vulnerable to COVID-19, as this is still considered a disability-related inquiry. Employees may voluntary disclose conditions that may be vulnerable to COVID-19. Employers may then engage in the interactive reasonable accommodation process and ask the employee if they require any assistance such as telecommuting or other leave as an accommodation.
  • Employers may require employees to provide a doctor’s note certifying the employee’s fitness for duty before returning to work. However, the EEOC states that employers must be flexible and open to other approaches for obtaining a fitness for duty certification.  Doctors will likely be overwhelmed and not able to provide proper documentation immediately or documentation may be on standard return to work forms.

Employers can view the full guidance on Pandemic Preparedness at: https://www.eeoc.gov/facts/pandemic_flu.html#q6.

An EEOC summary on What You Should Know About the ADA, the Rehabilitation Act, and COVID-19 can be found here:  https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm