Employers who have had to implement mass layoffs and facility closures in response to the ongoing COVID-19 pandemic must ensure that they comply with the requirements of the federal Worker Adjustment and Retraining Notification Act (WARN Act).  A failure to comply can result in significant potential liability in the form of class-based litigation.

The U.S. Department of Labor (DOL) recently issued a series of Frequently Asked Questions regarding the WARN Act in the context of the COVID-19 pandemic.  While the DOL’s guidance is not binding on courts, it provides useful compliance assistance for employers during these unprecedented times.

As background, the WARN Act requires employers with 100 or more full-time employees (not counting workers with fewer than six months on the job) to provide at least 60 calendar days of advance written notice of a worksite closing affecting 50 or more employees or a mass layoff affecting at least 50 employees and 1/3 of the worksite’s total workforce or 500 or more employees at the single site of employment during any 90-day period.  The WARN Act contains exceptions to its notice requirements when employers can show that mass layoffs or worksite closings occurred due to faltering companies, unforeseen business circumstances, and natural disasters.  In such instances, the WARN Act requires employers to provide as much notice to their employees as possible.  An employer who violates the provisions of the WARN Act may be liable for an amount equal to the amount of wages and benefits for each affected employee for each day of the period of violation, up to 60 days, and the affected employees’ costs and attorneys’ fees.

The DOL’s FAQs begin by addressing the issue of temporary layoffs and furloughs.  WARN Act notices must be given when there is a triggering “employment loss,” as defined under the Act.  Any temporary layoff or furlough that lasts less than six months is not considered an employment loss.

However, the FAQs explain that a temporary layoff or furlough without notice that initially is expected to last six months or less, but later is extended beyond six months, may violate the WARN Act unless:

  1. The extension is due to business circumstances (including unforeseeable changes in price or cost) not reasonably foreseeable at the time of the initial layoff; and
  2. Notice is given when it becomes reasonably foreseeable that the extension is required.

In other words, an employer who previously announced and carried out a short-term layoff or furlough (i.e., six months or less) and later extends the layoff or furlough beyond six months due to business circumstances not reasonably foreseeable at the time of the initial layoff is required to give notice at the time it becomes reasonably foreseeable that the extension is required.

The FAQs also discuss the unforeseeable business circumstances exception to the WARN Act’s 60-day advance notice requirement.  The DOL makes clear that, when invoking an exception to the 60-day notice requirement, a covered employer still must provide as much notice as practicable and include in that notice a brief statement of the reason(s) for giving less than 60 days of notice (along with the other required elements of a WARN Act notice).  Also, in the event of a legal challenge, the employer will bear the burden of proving that the requirements of the unforeseeable business circumstances exception are met.

For situations where the employer has email addresses for affected employees, the FAQs confirm that WARN Act notices may be sent via email, so long as the notices are specific to the individual employee and comply with all requirements of the WARN Act and its regulations regarding written notifications.

As we begin to enter the third month of large-scale disruptions caused by COVID-19, employers must remain vigilant to ensure WARN Act compliance.  Covered employers in Pennsylvania who temporarily laid off or furloughed employees at or near the time of the Governor’s business closure order in March should determine whether it is possible that such layoffs/furloughs may extend for more than six months and, if so, whether these actions may require WARN Act notices.  With the situation continuing to evolve and an unclear future ahead, the DOL’s FAQs are a timely reminder of the need to remember the WARN Act and its requirements.

For more information regarding the potential impact of the WARN Act and other related employment law issues, contact a member of our Labor and Employment Group.

On April 30, 2020, the Internal Revenue Service and the Department of Labor extended certain time frames for special enrollment in a health plan, COBRA coverage, claims procedures, and external reviews for all welfare and pension plans.  Under the Rule, all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Internal Revenue Code must disregard the time period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency (or such other date that the IRS or DOL may announce), in determining the following deadlines:

  • The 30-day period (or 60-day period, if applicable) to request special enrollment;
  • The 60-day election period for COBRA continuation coverage;
  • The date for making COBRA premium payments;
  • The date for individuals to notify the plan of a qualifying event or determination of disability;
  • The date within which individuals may file a benefit claim under the plan’s claims procedure;
  • The date within which individuals may file an appeal of an adverse benefit determination under the plan’s claims procedure; and
  • The date within which a group health plan must provide a COBRA election notice.

For example, if a participant had a special enrollment event on February 29, 2020 and the end of the National Emergency is June 1, 2020, then the participant has thirty days after July 31, 2020 to request special enrollment.

The DOL also posted a  separate notice relaxing the time frames for plans to  furnish notices, disclosures, and documents, including black out notices, that must be furnished between March 1, 2020 and 60 days after the announced end of the National Emergency, if the plan acts in good faith and furnishes the document as soon as administratively practicable under the circumstances.

The DOL is also relaxing retirement plan loan and distribution procedural requirements during the National Emergency.  If an employee retirement plan fails to follow procedural requirements for plan loans or distributions imposed by the plan, the DOL will not treat it as a failure if the failure to follow procedures is solely attributable to the COVID-19 outbreak; there was a good-faith diligent effort under the circumstances to comply with the requirements; and there is a reasonable attempt to correct any procedural deficiencies as soon as administratively practicable.

The DOL emphasized that plans must “act reasonably, prudently, and in the interest” of the participants and should make “reasonable accommodations” to prevent the loss of benefits.

Lastly, on May 1, 2020, revised COBRA notices to be used by health care plans and employers were published by the DOL.  The revised notices provide additional information for employees who are eligible for Medicare.

For more information on these changes and other employee benefit law changes, contact a member of our Labor and Employment or Employee Benefits Group.

The Equal Employment Opportunity Commission (EEOC) updated the guidance document titled “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act and Other EEO Lawson April 23, 2020 to address employer testing for COVID-19 in the workplace.  The EEOC’s guidance document is a series of technical questions and answers geared towards assisting employers with implementing various COVID-19 protection measures in the workplace without violating the Americans with Disabilities Act (ADA) or other EEO laws.  This is the latest in a series of informal updates relating to COVID-19 issued by the EEOC since mid-March.

As part of the guidance, the EEOC reminds employers that while EEO laws, such as the ADA and the Rehabilitation Act, are still applicable during the COVID-19 pandemic, the laws should not interfere with or prevent employers from following the guidelines issued by the Centers for Disease Control and Prevention (CDC) and other state and local public health agencies relating to COVID-19.

The question addressed by the most recent EEOC guidance is whether an employer can administer a COVID-19 test before permitting their employees to enter the workplace.  The EEOC reminds us that the ADA requires that any mandatory medical test of employees must be “job related and consistent with business necessity.”  When an employer applies this standard to the workplace during a pandemic such as COVID-19, an employer may take certain precautionary steps, such as testing for the virus, to prevent employees with COVID-19 from entering the workplace because an individual with the virus will pose a direct threat to the health of other employees.

The guidance further states that to comply with the ADA standards, employers who test their employees for COIVD-19 must ensure that the tests are accurate and reliable.  Employers are encouraged to regularly review guidance from various authorities, such as the US Food and Drug Administration, the CDC and other public health agencies, with regard to what is considered to be safe and reliable testing.  The EEOC also cautions employers on the possibility of false positives and false negatives and that an employee who tests negative at one point, could acquire the virus at a later date which means that testing, unless it is conducted on a daily basis, may not be an effective tool for employers. Additionally, employers who decide to implement COVID-19 testing should be prepared to address potential objections by employees to the testing based upon various reasons, such as religious beliefs, and employees who refuse testing.

In order to comply with the requirements of the ADA, employers will have to store all medical information relating to employees separately from the employee’s personnel file and such information must remain confidential.  Medical information includes not only test results but also any notes or questionnaires an employer uses when screening an employee about possible exposure and symptoms.

Finally, the EEOC reminds employers that it should continue to follow the practical guidance from public health authorities and the CDC with regard to infection control and prevention practices, such as social distancing, regular handwashing and regular cleaning and disinfection practices in the workplace.

The EEOC’s most recent update only addresses the ADA but there are many other state and local laws that employers need to be aware of as it relates to COVID-19 in the workplace.  If you have any questions regarding the EEOC’s guidance on COVID-19 testing for employers or other issues relating to COVID-19 in the workplace, please contact any member of the McNees Labor and Employment Group.

Governor Wolf announced that Pennsylvania construction companies will be permitted to resume operations beginning May 1, one week ahead of schedule, provided they adhere to the Administration’s guidance.

The Governor’s guidelines include, among other things, strict social distancing measures (unless employee or public safety requires a deviation); requirements to provide handwashing stations at building entrances, break areas, food truck areas, offices, trailers, and exits; implementation of cleaning or sanitizing protocols; limiting gatherings of workers to no more than 10 people (while maintaining social distance); staggering shifts and break times; limiting tool sharing; prohibiting unnecessary visitors and carpooling; and designating a Pandemic Safety Officer.

According to the Administration’s guidance, in-person activities will be permitted if businesses follow all applicable provisions of the worker safety and building safety orders issued by the Secretary of Health, as well as all applicable Department of Health and CDC guidance. In addition, local public entities may impose stricter guidelines that may apply in those jurisdictions.

The Administration’s guidance distinguishes between residential and commercial construction projects. Residential construction projects are limited to only four persons on a job site at one time (exclusive of delivery persons, code inspectors, or similar persons not directly engaged in the project who may require temporary access).

On the other hand, for non-residential or commercial construction, the four-person limit applies only on enclosed or portions of enclosed projects on job sites of 2000 square feet or less. One additional person is permitted for each additional 500 square feet of enclosed area over 2000 square feet.

Notably, for both residential and non-residential or commercial construction projects, the four-person limit relates to workers regardless of their employer.

Commercial construction firms are also encouraged to establish written “Safety Plans” for each work location. These should contain site-specific details for implementing the Administration’s guidance to be shared with all employees and to be enforced by the company’s Pandemic Safety Officer.

Under the guidance, local political subdivisions and municipalities are encouraged to balance public health and safety while ensuring the continued safety of public infrastructure, and are encouraged to follow the Governor’s guidance on public construction projects.

It is important to remember that this guidance put forth by the Commonwealth is subject to change as the situation continues to evolve.

For any questions or concerns about implementing policies or procedures to maintain operations beginning May 1, contact any member of the McNees Labor & Employment or Construction Law groups.

I-9 Form

With all the changes to business operations due to COVID-19, it is still important that we pay attention to the non-COVID-related changes that continue to occur in the employment world.  The new I-9 form has been around since January 31, 2020, and its use has been voluntary until now.  As you know, however, the use of the new I-9 form will be mandatory as of May 1, 2020.  The new form is available in electronic format like previous I-9s.  The forms may be maintained in electronic and paper formats.  The date on the new version of the form is 10/21/2019 and is located in the lower left corner of the form.  A revised Spanish version of the form is available but may only be used in Puerto Rico.

Some of the changes on the new form include changes to the country of issuance field in Section 1.  The issuing authority field in Section 2, which is used when selecting a foreign passport, now includes Eswatini and Macedonia North, reflecting recent name changes to those countries.  Those changes are only visible when using the electronic form.  The instructions for completing the I-9 form have also been revised.  They now reflect clarification on who can be the authorized representative for employers, an updated web address for USCIS, clarifications on acceptable I-9 documents, and updated process for requesting paper forms, and an updated DHS privacy notice.  We strongly recommend that employers use electronic I-9s where possible.  The e-form greatly reduces the chances of errors on the form and totally eliminates some of the minor issues, like date formats that have plagued employers for years.

Temporary Flexibility in Verifying Documents Under Section 2

You likely know by now that, due to the precautions implemented regarding COVID-19, employers are not required to review the employee’s documents in the presence of the employee.  Documents are reviewed remotely by video, fax, e-mail or other methods.  Employers must obtain a copy of the documents within 3 business days.  When completing Section 2 using this method, answer “COVID-19” as the reason for not physically reviewing the documents into the additional information field. Once the documents are physically inspected, the employer should add “physical inspection” with a date in the same field.  This change will remain in effect until May 18th, or 3 days after the termination of the National Emergency, whichever comes first.  Employers may only use this method where employees are working remotely. If the employer has employees physically present on site, this process is not available.  Once normal work resumes, the employee must present himself to the employer within 3 business days for physical inspection and verification of the documents.  Employers will be responsible to maintain written procedures for telework and onboarding for each employee.

Contact McNees Labor & Employment Group for all of your questions regarding I-9s.

Governor Wolf has unveiled further details about his administration’s plan to reopen the Pennsylvania economy, as hopes persist that the pandemic is losing steam. The administration will use a “three-phase matrix” to determine when counties and/or regions around the Commonwealth are ready to begin easing restrictions on work, congregate settings, and social interactions.

The administration will base its decision to move a county or region from one phase of reopening to the next based a variety of economic and public health data. These will include the incidence rate of COVID-19 per capita; the adequacy of testing in the region; the region’s capacity to contact-trace, identify cluster outbreaks, and issue proper isolation and quarantine orders; and identification of “high risk settings” in the region, such as correctional institutions and skilled nursing facilities, and ensuring such facilities have necessary safeguards in place to support continued operations while still implementing mitigation measures.

The administration will also examine the business and industry sectors within a region to evaluate the risks and benefits of reopening, such as worker exposure and spread risks, health care capacity, and supply chain impact.

The three phases – aptly labeled Red, Yellow, and Green – are comprised of progressively loosening restrictions until a semblance of relative normalcy is reached.

The Red Phase is the current status quo in the entire state. This, of course, involves the closure of all non-life-sustaining businesses, closure of schools for in-person instruction, and the closure of most childcare facilities. The Red Phase also includes the statewide Stay-at-Home Order, prohibition on large gatherings, dine-in restaurants, and non-essential travel.

The Yellow Phase will involve slowly easing work restrictions and social interactions. Businesses with in-person operations will be required to follow strict guidelines for density and safety procedures, in addition to implementing the Worker Safety and Building Safety orders that were previously issued. Telework must also continue where it is feasible.

The Yellow Phase will also involve the lifting of the Stay-at-Home Order (replaced by “aggressive mitigation”), but large gatherings of more than 25 people will be prohibited. In-person retail will be permitted, with curbside and delivery preferable, while gyms, spas, casinos, theaters, and the like will remain closed. Bars and restaurants will continue to be limited to carry out or delivery.

Then, finally, the Green Phase. According to the administration, this will involve an easing of “most restrictions” by lifting the stay at home and business closure orders to “strategically reopen” the economy while continuing to prioritize public health. Even during this phase, however, all individuals must follow CDC and Department of Health guidelines.

The administration indicates it will develop guidance for businesses and local governments to follow as the reopening process unfolds. In addition to other requirements, like businesses ensuring adequate personal protective equipment (PPE) and naming a Pandemic Safety Officer to ensure company compliance with COVID-19 related safety procedures, employers will be required to display a Commonwealth-created “COVID-19 Safety Procedures for Businesses” flyer, along with its other posters.

This regulatory landscape is sure to continue to rapidly develop as businesses and the Commonwealth move toward reopening. The McNees Labor & Employment Group remains available to provide assistance.

Over the past several weeks, human resources and employee benefits professionals (and their attorneys) have been scrambling to assemble staffing plans, telework arrangements and strategies for complying with the paid leave provisions in the Families First Coronavirus Response Act (“Response Act”).  However, amidst the flurry of new laws, guidance and blog articles landing in your in-box, it’s important to keep in mind how longstanding compliance requirements apply to the current situation.  This article briefly addresses some of the fundamental benefits questions that employers are asking as they navigate these challenging times.

Must we continue health coverage for employees who have been subject to a temporary layoff or a reduction in hours?  Apart from COBRA and Pennsylvania’s “Mini-COBRA” law, no federal or Pennsylvania law requires employers to continue group health coverage during a period of layoff or reduced hours that would otherwise render the employee ineligible for coverage under the plan.  However, employers that use the “look back measurement period” approach for determining full-time status of employees under the Affordable Care Act (ACA), could be subject to a penalty if they terminate coverage for existing full-time employees (including those laid off or subject to a reduction of hours) while those employees are in a “stability period”.  On the other hand, employers that wish to continue coverage for employees during a period of layoff or reduced work hours may run into trouble with their insurer (or reinsurer) if their plan does not allow for continuing coverage in these circumstances.  These are complex issues that are beyond the scope of a brief article.  However, there are ways to manage these competing compliance concerns.  Employers considering a layoff or a broad reduction in hours should sort through these issues before proceeding.

Must we continue health coverage for employees who take a leave of absence during the pandemic?  It depends.  If the absence is covered by the FMLA (including the new paid leave available under the Response Act), then coverage must be continued unless the employee elects not to do so.  Likewise, some states (not PA) have passed laws requiring continued coverage in other circumstances.  Employees who take other types of leave that are not protected by law may or may not be entitled to continue coverage depending on their employer’s leave policy and terms of their health plan.

May an employer help an employee pay for COBRA continuation coverage?  It’s not uncommon for employers to assist employees with the cost of COBRA during periods of layoff.  However, if the employer offers a self-insured health plan, COBRA subsidies should not be offered in a manner that discriminates in favor of highly compensated individuals either in terms of the subsidy amount or duration.  Offering subsidies on a discriminatory basis could jeopardize the favorable tax treatment afforded to plan benefits.

What options are available for laid off or terminated employees who can’t afford COBRA?  Individuals in this circumstance should investigate their eligibility for a tax credit to purchase coverage on the ACA Exchange.  In addition, eligible individuals should explore coverage options under a spouse’s or parent’s plan as well as CHIP, Medicare or TRICARE (for veterans).  It would also be advisable to consult with an insurance broker to see if there are other low cost coverage options available.

May employees change benefit elections under a cafeteria plan due to recent events?  If a cafeteria plan allows for mid-year election changes due to qualifying changes in status, the COVID-19 pandemic may trigger a number of permitted changes.  Employees may be permitted to add dependents to their health coverage who have lost other coverage due to layoff.  Employees may be permitted to drop their coverage due to a reduction of hours.  Similarly, elections for dependent care costs may be altered due to a change in the employee’s daycare cost (i.e. parent is now at home and caring for child).  Plans that don’t allow for mid-year changes may need to be amended if an employer wishes to allow for certain adjustments.  However, if a carrier allows for employees to enroll mid-year (due to a spouse losing coverage) any employee contributions for such coverage would need to be on a post-tax basis through the end of the plan year.

Must our health plan cover the cost of COVID-19 testing?  Yes, the Response Act requires all employer-sponsored plans (including high deductible health plans) to cover diagnostic in-vitro testing for COVID-19 and related service costs at no expense to the participant.  This may require a plan amendment and issuance of a summary of material modifications (“SMM”) to participants.

This is not the first pandemic to hit the US.  However, never before have businesses had to balance so many regulatory requirements while navigating the other challenges that a pandemic poses.  We hope this brief overview of some of the health coverage issues to consider is helpful in this regard.  If you need further information regarding this article or any aspect of pandemic preparedness, please contact any member of our Labor and Employment Practice Group.

In the midst of the COVID-19 pandemic, the Occupational Health and Safety Administration (“OSHA”) saw fit to remind employers that it remains illegal to retaliate against workers who report unsafe and unhealthful working conditions, including workplace issues related to COVID-19.

Generally, the whistleblower provision of the Occupational Safety and Health Act, and similar state whistleblower laws, prohibit employers from taking adverse action against employees who engage in protected activity related to the safety of the workplace. The Act provides protections to employees who reasonably and in good faith exercise rights under the Act. This could include, for instance, reporting a work-related illness, requesting access to health and safety records, or expressing safety and health concerns to a manager or supervisor, among other things.

As the public health recommendations and legal requirements surrounding COVID-19 continue to quickly evolve, an employer’s duty to provide a hazard-free workplace is increasingly difficult. In addition to that obligation, employers must also be mindful of the potential consequences of taking adverse action against employees who may speak up in the face of a perceived threat.

Employers should also consider this enforcement provision as they plan reductions in the workforce, furloughs, and other measures to mitigate the economic impact of the COVID-19 pandemic.

For assistance with addressing issues related to workplace safety, managing a retaliation claim, or other related issues, we are here to help.  Please contact any member of our Labor and Employment Group for assistance; we remain available to assist you 24/7 as the need arises.

Special thanks to McNees attorneys Steve Matzura and Errin McCaulley for contributing to this post.

On April 5, 2020, the Pennsylvania Department of Health released an Order requiring businesses with in-person operations during COVID-19 to adopt and implement certain safety measures. Businesses covered by the Order include those with facilities of at least 50,000 square feet used for “commercial, industrial or other enterprises” that are either life-sustaining businesses or have been granted an exemption from the Governor’s March 19, 2020 closure order. The Order went into effect on April 6, 2020.

Businesses covered by the Order must adopt and implement certain cleaning protocols to help mitigate the spread of COVID-19, including routine disinfection of high-touch areas in accordance with guidance from the Centers for Disease Control.  In addition to complying with the Order, businesses should remain aware of the various workplace standards enforced by the Occupational Safety and Health Administration (“OSHA”). Notably, businesses should review their operations for compliance with OSHA’s sanitation standard, such as by ensuring employee access to potable water and washing facilities necessary for personal hygiene.

While implementing the safety measures in the Order, businesses should be careful not to introduce or create additional workplace hazards. For example, businesses should consider OSHA’s requirements for walking-working surfaces to mitigate the potential slip, trip, and fall hazards created by increased cleaning activities.  Depending on the nature of a business’s operations, additional OSHA standards may be implicated when implementing the safety measures.

For assistance in addressing any environmental, health, and safety issues, please contact any member of our Labor & Employment Group, Steve Matzura, or Errin McCaulley.

This post is brought to you by Tim Finnerty, Nicole Kaylor, David Noll and Ben Ward of the McNees Corporate & Tax Practice Group

With guidance from the Small Business Administration (“SBA”) and the Internal Revenue Service (“IRS”) still forthcoming, and the existing guidance changing, many businesses are struggling to understand their options under the Coronavirus Aid, Relief and Economic Security Act (“Act”).  We previously published guidance on the Payroll Protection Program (“PPP”) and Disaster Relief Loans which can be found here.  In addition to those loan offerings, the Act also created other relief options for businesses, some of which can be used in conjunction with the PPP loans.

Employee Retention Credit

First, the Employee Retention Credit is available to employers (i) for so long as operations have been fully or partially suspended by government order relating to COVID-19 or (ii) if gross receipts are down 50% or more from receipts in the same calendar quarter of last year, in which case the credit will continue until the business’s receipts exceed 80% of the corresponding quarter in the previous year’s receipts.  Special rules apply to tax-exempt organizations.  No business accepting a PPP loan is eligible to take this credit, but those that are eligible will receive a credit equal to 50% of the “qualified wages” with respect to each employee in each applicable calendar quarter, up to a maximum of $10,000 in wages per employee over all eligible quarters.  For purposes of this credit, “qualified wages” means wages and compensation (as defined in the Internal Revenue Code) paid between March 12, 2020 and January 1, 2021 (i) for employers of over 100 employees, wages to employees not providing services as a result of the events qualifying the employer to take the credit, and (ii) for employers of less than 100 people, (a) all wages paid as a result of a complete or partial closure, or (b) wages paid in a calendar quarter in which the employer qualifies due to a reduction in receipts, and such amount, regardless of how arising hereunder, includes the amount paid or incurred by the employer for any group health plans.  If an employer takes this credit and later applies for and receives a PPP loan, the employer will have to recapture the credit taken or utilize other withheld taxes that will be required to be paid to the IRS. The IRS has issued a very helpful FAQ concerning this process which can be found here.

Credits may not be claimed for any increase in wages over those paid in the 30 days prior to eligibility.  The amount of the credit is then reduced by the amount of sick and family leave credits available under the Families First Coronavirus Relief Act (“FFCRA”) and credits would be negated if certain duplications of deductions arise in limited circumstances.  Since passage, the IRS clarified the reduction for FFCRA credits would be only to the extent such wages are counted in duplication, but both credits would be available to the extent the employer has both paid leave wages refunded under the FFCRA and wage credits under the Employee Retention Credit.

Employers are also eligible, in some circumstances, to request an advance payment of their credit.  The credit can first be taken as a reduction against any tax deposits for the applicable quarter, but may then file a Form 7200 to claim the refund in advance.

Delay in Payment of Employer Payroll Taxes

The Act also authorizes the delay in employers paying their social security tax for the period of March 26, 2020 (the date of the Act’s passage) to December 31, 2020.  One half of the deferred taxes would then be due at the end of 2021 and the other half at the end of 2022.  The Act further provides limited relief for self-employment taxes for self-employed individuals, with 50% payable as usual and the remaining 50% payable in 25% increments at the end of each of 2021 and 2022.  The above deferrals are all available without penalty and as immediate offsets to amounts due.  Finally, as with the Employee Retention Credit, this deferral is not available for employers receiving forgiveness of a PPP loan or a related loan arising under Section 1109 of the Act; however, there is no such prohibition for self-employed individuals.  There is an open question as to whether employers are permitted to defer their social security taxes for the period after securing a PPP loan, but before any forgiveness of the loan.  There will likely be future guidance forthcoming on this and many other open issues under the Act.

The McNees Corporate & Tax Practice Group are continuing to follow guidance issued by the IRS on these matters. Please reach out to any member of the Corporate & Tax Practice Group with questions about the tax changes discussed in this article or other elements of the CARES Act.