Governor DeWine expanded Ohio’s responsible restart program and added several categories of businesses to the list of businesses that may reopen beginning June 10th:

  • Aquariums
  • Art galleries
  • Country clubs
  • Ice skating rinks
  • Indoor family entertainment centers
  • Indoor sports facilities
  • Laser tag facilities
  • Movie theaters (indoor)
  • Museums
  • Playgrounds (outdoor)
  • Public recreation centers
  • Roller skating rinks
  • Social clubs
  • Trampoline parks
  • Zoos

Sector specific operating requirements are available here.

The following remain closed:

  • K-12 schools
  • Certain spectator sports, sports tournaments, and organized recreational sports leagues
  • Recreational sports leagues involving contact sports
  • Parades, fairs, festivals, and carnivals
  • Auditoriums, stadiums, arenas
  • Gambling facilities (except horse racing without spectators
  • Older adult day care services and senior centers
  • Adult day support or vocational habilitation services in congregate settings
  • Rooming and boarding houses, and workers’ camps

Businesses that took PPP loans now have more flexibility to spend the money than the original CARES Act and the IRS and SBA regulations permitted. More information and regulations on this new expansion should be forthcoming. The law is the Paycheck Protection Program Flexibility Act of 2020 (HR 7010).

Among the changes:

  • Extends the covered period to spend the PPP funds from 8 to 24 weeks (or 12/31/20), whichever is first;
  • Extends the date from 6/30/20 to 12/31/20 that businesses have to rehire employees and restore salaries to 2/15/20 levels and still qualify for loan forgiveness ;
  • Extends the loan period (for funds not forgiven) from 2 to 5 years;
  • Extends the payment deferral period (for funds not forgiven) from 6 months to 1 year;
  • Reduces the proportion of funds that must be used on payroll from 75% to 60% to qualify for forgiveness;
  • Allows employers more exemptions to rehiring employees who were laid off due to the pandemic (inability to hire qualified employees and an inability to safely operate due to due to social distancing, sanitation requirements, or customer safety needs); and
  • Allows employers to defer 2020 payroll taxes under the CARES Act, even if the employer received PPP funds (defer 50% of the employer’s share of payroll taxes until 2021 and the remaining 50% until 2022).

For funds already disbursed, it is up to mutual agreement of the lender and the borrower as to whether existing loans are modified in the term of the loan.

While this legislation fixed many of the PPP loan issues encountered by businesses struggling to recover from the COVID-19 pandemic, it leaves some questions:

  1. When can a borrower can apply for forgiveness? Can it be before the 8 (or now 24) week period?

  2. Will lenders continue to take applications for loans after June 30th with the expanded covered period?

  3. Will borrowers be required to amend their promissory notes and other loan documents to reflect the above changes? This may be up the SBA and the lenders.
  4. Will future legislation reverse the IRS’s position that payroll and other permitted expenses that were forgiven are not deductible expenses on the borrower’s 2020 tax returns? This was a frequent complaint because it effectively reduces the advantage of the PPP loan forgiveness by the rate of taxation. Everyone expected this issue to be addressed in the legislation, but it was not.

The CDC issued updated guidance for employers, including a user-friendly checklist for employers to prepare workplaces for return to work. Among the recommendations:

  1. Encourage employees to stay home when sick; provide flexible sick leave
  2. Physically ensure separation among employees
  3. Promote hygiene – frequent hand washing and sanitizing
    1. Post CDC posters on hand hygiene and coughing and sneezing etiquette
  4. Encourage employees to wear cloth face coverings when social distancing is difficult to maintain
  5. Consider daily in-person health screenings
  6. Increase cleaning, especially frequently touched surfaces
  7. Provide incentives for employees to use other forms of public transportation that allow for single-occupancy rides
  8. Allow workers to request new hours to commute when it is less busy
  9. Support and encourage telework for employees who have serious underlying medical conditions making them high-risk for severe illness from COVID-19
  10. Make plans to continue operations in the event of a spike in absenteeism due to COVID-19, including cross training and identifying essential functions
  11. Social distancing
    1. Flexible worksites and hours
    2. Increase physical space between employees and employees and customers through moving work stations or physical barriers
    3. Close or limit access to common areas
    4. Prohibit handshaking
    5. Limit the number of people on elevators
  12. Implement flexible meeting and travel options
    1. Minimize work-related travel
    2. Encourage telework following travel
    3. Use video and teleconferencing when possible for meetings and travel
    4. Hold essential meetings in open, well-ventilated meeting spaces and follow social distancing and/or have employees wear face coverings
  13. Improve ventilation

OUTDATED: Congress passed the Flexibility Act that changed many of the rules below. See this post.


The SBA issued new rules for PPP loans–most of which I already gleaned from the PPP loan forgiveness application form in my post on May 19th. Congress also is considering various proposals that would loosen many of the restrictions on the use of PPP loan amounts, relative to loan forgiveness.

Recall that PPP loans are authorized by the CARES Act and provide for forgiveness of up to 100% of the principal amount spent for permitted uses during an 8-week forgiveness period. The rules for that loan forgiveness are complicated. Unfortunately for many early borrowers, they are already most of way through their 8-week period and cannot change their course of action for the weeks already passed.

The new rules, available here, clarify the following:

  • Eligibility for the PPP program and “Necessary”: Loans under $2 million will not be individually reviewed as a matter of course; applicants for forgiveness will be required to certify the need for the loan under penalty for civil and criminal fraud
    • Borrowers are required to retain their records for 6 years in the event of a review by SBA
  • “Payroll costs” include regular pay, furlough pay, commissions, tips (based on records of past tips or reasonable, good faith estimate), vacation pay, parental leave pay, family leave pay, sick pay, bonuses, hazard pay, healthcare insurance premiums, retirement contributions, and state and local taxes on employee compensation
    • The $100,000 per employee compensation limit will be pro-rated to $15,385 for compensation to any one employee during the 8-week covered period
    • Timing
      • Payroll costs must be paid in the covered period, except that costs during the last pay period in the covered period (or alternative payroll covered period) are eligible for forgiveness if paid on or before the next regular pay date
      • Payroll costs are paid the day checks are distributed or the ACH transaction is initiated
      • “Alternative Payroll Covered Period”: Businesses may use their normal payroll period, as opposed to the loan funding date to measure the 8-week loan forgiveness period; the period must begin on the first payroll date after loan funding
        • E.g., a borrower funded on Thursday, April 9 could instead start the 8-week period on its regular bi-weekly payroll date of Friday, April 17
        • However, the non-payroll expenses are still subject to the 8-week covered period beginning on the loan funding date
    • Owner compensation: If an owner or self-employed individual is paying himself as part of the loan, he is limited to the lesser of (a) 8/52 of 2019 compensation; or (b) $15,385
      • There are additional, very complicated limits applicable to owner employees on healthcare and retirement plan contributions that depend on the type of entity
  • Non-Payroll Costs (eligible for loan forgiveness)
    • “Interest” includes interest payments on business mortgages on personal or real property (in place prior to 2/15/20), but not any payment of principal or any prepayment of interest
      • However, payment of past interest obligations are eligible for forgiveness if they are paid during the covered period
      • Interest accrued during the covered period that is paid on or before the next billing cycle is eligible
    • “Rent” includes business rent obligations on real and personal property under a lease (in place before 2/15/20)
      • May be deferred rent that accrued before the covered period that was paid during the covered period
    • “Utilities” includes electricity, gas, water, transportation, telephone, and internet access and any expenses paid during the covered period, regardless of when the costs were incurred (service must have been in place prior to 2/15/20)
    • Timing: Non-payroll expense must be paid during the covered period or incurred in the covered period and paid on or before the next billing date (even if that date falls outside the covered period)
  • Reductions in loan forgiveness
    • The 75/25 Rule: If a business uses more than 25% of the loan proceeds for non-payroll expenses, only the portion that exceeded the 25% limit will be excluded from forgiveness, not the entire loan or the entire non-payroll amount
    • Reduction – generally:
      • FTE Reductions: Loan forgiveness is reduced proportionally by the percentage reduction in FTEs, comparing the covered period (or alternative payroll covered period) to the selected reference period
        • E.g., a reduction from 10.0 to 8.0 FTES will reduce loan forgiveness by 20%, barring an exception, see below
      • Salary Reductions: Salary reductions greater than 25% will reduce loan forgiveness by the dollar amount of the salary or wage reduction
        • Salary reductions are judged against the annualized equivalent of the employee’s pay from 1/1/20-3/31/20
        • Restoring pay by June 30th eliminates the loan forgiveness reduction
        • E.g., reducing an employee’s weekly salary from $1000 per week (from 1/1/20-3/31/20) to $700 per week during the covered period (or alternative payroll covered period) would reduce loan forgiveness by $400 ($50 each week for 8 weeks) because the first $250 weekly reduction is exempted
        • No double counting: Reductions in hours will reduce loan forgiveness as a reduction in FTEs, but not as a salary reduction (because the hourly rate remains the same)
    • “Full-time equivalent employee” means an employee working 40 hours or more per week, on average
      • Employers may calculate the average number of hours for part-time employees and determine an FTE equivalent number by dividing by 40 or use 1.0 for employees working 40+ hours and 0.5 for all other employees
    • Reluctant re-hires: If an employee refuses a good faith offer to return to work, loan forgiveness is not affected, provided that the employer reports the employee to the applicable state unemployment agency
      • To qualify for the exception:
        • The offer must be a good faith, written offer for the same salary or wages and hours (as the last pay period prior to layoff);
        • The offer must be rejected;
        • There must be records documenting the offer and rejection; and
        • The employer must notify unemployment of the rejected offer (for Ohio, ODJFS) – additional information is forthcoming from SBA regarding how employers are to notify the State.
    • Terminated employees: Employees who are terminated for cause, voluntarily resign or reduce their hours, die, or are incapacitated will not affect loan forgiveness as an FTE reduction

Notably, Congress has proposed changes to the Paycheck Protect Program (PPP), among them:

  • Extending the 8-week period to use loan proceeds and qualify for forgiveness to 16 or 24 weeks;
  • Permitting employers to slowly bring back workers by as late as December 31st (presently, the safe harbor date to bring back furloughed workers is June 30th);
  • Extending the loan term for amounts not forgiven to 5 years (from 2 years);
  • Eliminating the 25% limit on non-payroll expenses;
  • Expanding the list of eligible expenses for loan forgiveness; and
  • Clarifying that business expenses are tax deductible, even if the loan amount is forgiven (undoing an IRS interpretation of the PPP loan program and CARES Act).

Without advance notice or request for comment, OSHA issued a revised enforcement memo stating that it will enforce record keeping requirements as they apply to confirmed, work-related COVID-19 illness.

A COVID-19 case must be recorded on the OSHA 300 log if:

  1. It is a confirmed COVID-19 diagnosis;
  2. It is work-related; and
  3. It involves one or more of the general recording criteria in 29 CFR 1904.7 (death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, loss of consciousness, or a diagnosis of a significant illness by a healthcare provider).

OSHA recognized in its memo that it is difficult to determine if the COVID-19 illness is work-related, especially when employees have exposure inside and outside of the workplace. OSHA defined the following criteria for determining whether the illness is work-related:

  1. Conduct a reasonable investigation, using all reasonably available evidence (at the time of the investigation):
    1. Ask the employee how he/she believes he/she contracted COVID-19;
    2. Discuss with the employee work and outside work activities that might have resulted in exposure; and
    3. Review the work environment for possible exposure (e.g., other incidents of employees contracting COVID-19).
  2. Weigh the evidence, considering the following:
    1. COVID-19 is likely work-related when several cases develop among workers in close proximity, with no alternative explanation.
    2. COVID-19 is likely work-related if the diagnosis follows shortly after a lengthy, close exposure to a co-worker with confirmed COVID-19, with no alternative explanation.
    3. COVID-19 is likely work-related if the employee’s job duties involve frequent, close exposure to the general public in a locality with ongoing community spread, with no alternative explanation.
    4. COVID-19 is likely NOT work-related if the employee, outside the workplace, closely associates with someone who is not a co-worker (e.g., a family member, significant other, or close friend) who has COVID-19 and exposed the employee during the period in which the individual was infectious.
    5. COVID-19 is likely NOT work-related if the employee is the only employee to contract COVID-19 in his/her vicinity and his/her job duties do not include having frequent contact with the general public.
    6. The employer should give weight to any evidence of causation from medical providers, public health authorities, and the employee.

If the cause is neither likely or not likely work-related (i.e., a tie on causation), the employer does not need to record the illness. Upon employee request, the employer can omit the employee’s name from the OSHA 300 log.

Keep in mind that employers with 10 or fewer employees and in certain low hazard industries have no recording obligations and only need to report fatalities, in-patient hospitalizations, amputations, or loss of an eye. In addition, this guidance is time-limited and will expire when the COVID-19 pandemic ends.

OUTDATED: Congress passed the Flexibility Act that changed many of the rules below. See this post.


On May 15, 2020, the SBA released the Paycheck Protection Program (PPP) loan forgiveness application form, available here. Borrowers should use this form upon completion of the eight-week period covered by the loan forgiveness.

Some previously open questions that were answered by the new form:

  • FTEs are based on 40 hours per week, rather than 30 hours per week, as originally predicted
    • To calculate FTEs, the employer must, for each employee, enter the average hours per week and divide by 40 and round to the nearest tenth and then add up all decimal amounts for all employees
    • Alternatively, employers can assign a value of 1 FTE to employees who work 40 or more hours and 0.5 FTE to employees who work less than 40 hours per week
  • Borrowers must check a box to indicate if the original loan was in excess of $2 million, triggering an audit of the need for the loan
  • Borrowers must certify, under penalty of civil and criminal fraud charges, that they used the funds for authorized purposes–even if the loan amount is less than $2 million
  • Borrowers may change the eight-week forgiveness period to match their payroll schedule–rather than using the exact date of the disbursement
    • The alternative eight-week period begins on the first day of the first pay period following the loan disbursement date
  • Payroll costs are “paid” for purposes of falling within the forgiveness period if paychecks are distributed to employees or direct deposited during the eight-week covered forgiveness period OR if they are incurred during the eight-week period and paid on the next payroll date (even if the next payroll date is outside the covered period)
  • Payroll costs are limited to $15,385 for any one employee during the eight-week period (the equivalent of an annual salary of $100,000)
  • Forgiveness will not be reduced by any of the following:
    • An FTE lost where the employer made a good faith offer of rehire, and the employee rejected
    • An FTE fired for cause
    • An FTE who voluntarily requested and received a reduction in hours
    • If average FTEs were reduced but the following are met:
      • The employer reduced FTEs from 2/15/20-4/6/20 due to the COVID-19 pandemic AND
      • The employer restored its FTEs before 6/30/20 to the level that existed in the pay period prior to 2/15/20
  • The 25% of funds used for other (non-payroll) covered costs must be paid during the eight-week period or incurred and paid before the next billing date (even if outside the eight-week covered period)
    • An alternative eight-week forgiveness period is not available for these costs

Governor Mike DeWine announced a new list of business openings to come. The current timeline for the phased reopening of Ohio is as follows:

  • 5/15: Barbershops, salons, nail salons, tattoo parlors, and other personal care services (protocols are available here and for licensed massage therapy, cosmetic therapy, and acupuncture here)
  • 5/15: Restaurant patio dining (protocols are available here)
  • 5/21: Restaurant inside dining (protocols are available here)
  • 5/21: Campgrounds (protocols are available here)
  • 5/22: Horse racing
  • 5/26: Pools (available here)
  • 5/26: Gyms and health clubs (available here)
  • 5/31: Daycare centers (with reduced child to staff ratios; protocols are available here)
  • 5/31: Day camps (available here)

The State created an editable download for businesses to use as a sign alerting customers and visitors not to enter if they have symptoms of coronavirus/COVID-19, available here.

Impact on Paid FMLA under the FFCRA:

The reopening of daycare centers and day camps on Monday, June 1 means that any employee who had utilized paid FMLA under the FFCRA for a school closure or daycare closure will no longer be able to take that leave once their daycare, day camp, or normal childcare facility re-opens. Some employees may continue to have “unavailable” childcare, as some parents may be left out due to reduced staffing to child ratios and limited capacity requirements.

What remains closed:

The following types of businesses remain closed: contact sports leagues, casinos, racinos, water parks, amusement parks, indoor recreation centers, theaters, zoos, museums, spectator sports, residential camps, schools, and like businesses

OUTDATED: Congress passed the Flexibility Act that changed many of the rules below. See this post.


UPDATED 5/14/20:

Borrowers receiving PPP loan funds under the CARES Act have until May 14, 2020 to return those funds, without penalty, if they no longer qualify for the funds or no longer want them. How might a previously qualifying small business no longer qualify? Why would a small business want to return PPP money subject to loan forgiveness?

  1. If the business cannot certify and demonstrate that the “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”
    • Borrowers must now making this necessary showing, taking into account current business activity and access to other sources of liquidity sufficient to support ongoing business operations in a manner that is not significantly detrimental to the business.
    • SBA intends to review existing loans for this purpose upon submission for loan forgiveness, but only loans in excess of $2 million. Loans for less than $2 million will be presumed to have been necessary (UPDATED 5/14/20).
  2. Disallowance of tax deductions for expenses paid with PPP loan funds. 
    • The IRS is not allowing expenses to be deducted from the gross income of a business, if the expenses were subject to PPP forgiveness. The CARES Act intent was to allow a double tax benefit, but the text of the CARES Act neither supports nor contradicts the IRS’s interpretation. This interpretation reduces the tax benefits of a PPP loan by subjecting loan forgiveness expenses to taxes of approximately 30-40% of the forgiven loan proceeds, depending on the business’s tax bracket.
  3. Disallowance of CARES Act employee retention credit and PPP loan forgiveness for the same employee costs.
    • Under the CARES Act, employers can receive a fully refundable tax credit for 50% of wages and qualified health plan expenses paid to employees retained during the COVID-19 pandemic (3/12/20 – 12/31/20). The total allowed credit per employee is $5,000 (on $10,000 in wages and qualifying health plan expenses). This credit is only allowed if the employer: (a) fully or partially suspended operation during any quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19; or (b) experienced a “significant decline” in gross receipts during a quarter.
    • If the employee expenses forgiven during the 8-week PPP loan forgiveness period are not expected to be greater than the CARES Act retention credit, the retention credit may be a better option.
    • Additionally, if an employer is denied forgiveness under the PPP loan program, the employer will not be permitted to rely on the CARES Act employee retention credit as a back up.

Employers should work with their tax and legal advisors quickly over the next three days to make decisions regarding PPP loan funds.

Many employers are busy worrying about declining revenue, stay-at-home government mandates, and keeping employees safe. Most have not considered the impact that changes imposed by the COVID-19 pandemic might have on their employee benefits.

Dependent care FSAs

Many employees experienced recent closures in their children’s schools and day cares. Employees that enrolled in dependent care FSA programs for 2020 during open enrollment may have a triggering life status change related to the closure of their after-school care program, summer camp, and/or daycare. Generally, the time period for making life status benefits changes is limited to 30 days after the life status change. Employees should be made aware of this option, as they could be losing money if their 2020 dependent care expenses are less than their FSA savings.

Affordable Care Act (ACA) “affordability”

If employee salaries and hours are reduced, W2 income for 2020 will decline. This could result in an “affordable” plan under ACA becoming “unaffordable,” subjecting the employer to penalties.

Breaks in service for benefits

Any employee that worked 0 hours for 13 weeks will have a “break-in-service” under ACA. Under ACA, once an employee is full-time (working 30 or more hours), the employer must offer medical coverage for the length of the subsequent stability period (generally, 12 months), even if work hours drop below 30 hours per week. A break-in-service can halt that requirement and subject the employee to a waiting period and new test of eligibility as full-time–just as the employee would as a new hire.

Retirement loans and distributions

The CARES Act allows employees to withdraw up to $100,000 from their 401k account without incurring an early withdrawal penalty of 10% and facing the mandatory tax withholding of 20%.  This money must be withdrawn in connection with a COVID-19-related economic hardship.

Employees may also take loans of up to $100,000 or 100% of the account balance (whichever is smaller) against their 401k accounts. Employees must repay this amount over the next five years, without the withdrawal being treated as income in those five years. These loans must be taken by September 23, 2020 to qualify for these special rules. Borrowers can forgo payments on these loans during 2020, but the loan will accrue interest during the entire length of the loan.

Notably, each plan’s rules trump the CARES Act offerings. A Plan must elect to provide these CARES Act loans in order for employees to take advantage of them.

With a global pandemic comes wage and hour considerations that may not have been issues for employers pre-pandemic.

(1) Business expenses

With employees working remotely, workers are incurring necessary business expenses related to Internet access, print cartridges, personal cell phones, data plans, paper, and other equipment. In addition, even employee-provided face coverings (when required) and thermometers (when used for pre-shift health screenings) are business expenses. The business expenses born by the employee cannot, in their effect, reduce the hourly rate below minimum wage. So, if the weekly pay minus expenses incurred divided by hours worked is less than minimum wage, the expenses must be reimbursed or the weekly pay increased. In addition, business expenses cannot cut into pay for overtime.

Some states require business expense reimbursement; Ohio does not.

(2) Overtime (non-exempt employees only)

When non-exempt employees are working remotely, employers should clearly explain work hours and break time. Non-exempt employees should be instructed to report all hours worked, including time spent responding to e-mails and answering telephone calls off-hours. If the employer prohibits unauthorized overtime, employers should pay non-exempt employees for working unauthorized overtime and then instruct them not to perform unauthorized overtime in the future (or discipline them for the unauthorized overtime).

If supervisors see work performed outside normal work hours (e.g., an email sent after-hours), the employer could be held liable for knowing about off-the-clock work.

Consider an electronic time clock system or signed time sheets to ensure that there is a verifiable time record.

(3) Exempt employees

Exempt employees must be paid their entire weekly salary for each week in which they perform any work. Employers can reduce the weekly salary for an exempt employee during an economic downturn (subject to the minimum weekly salary for exempt jobs ($684/week)) on a weekly basis, but that salary cannot change each week based on how much work is available. In addition, any furloughed exempt employee cannot be permitted to perform any work (including responding to phone calls, texts, or e-mails, no matter how brief).

Finally, with furloughed non-exempt employees, exempt managers should not be performing large amounts of non-exempt work to make up for short-staffing. Doing so could endanger their exempt status.

(4) Preparing to work and screenings

Employers that screen employees before work for COVID-19 symptoms may be required to pay employees for time spent waiting to report to work and waiting for the pre-shift health assessment.