Novel Coronavirus (COVID-19) Checklist: Key Considerations For Your Business


April 8, 2020

The profound impact of the novel coronavirus (COVID-19) has created a disruptive and ever-changing business and economic climate that presents a host of issues and considerations for businesses. As the legal, regulatory and commercial landscapes surrounding COVID-19 continue to evolve, our COVID-19 Response Team at McGrath North has prepared this overview checklist to identify some of the key considerations that many businesses should evaluate during these challenging and unpredictable times.

Obviously, each business is unique, and the circumstances, challenges and opportunities for each business will necessitate custom tailored responses and solutions. Further, we do not presume that this overview checklist covers all of the key considerations that your business will face in the wake of COVID-19. However, we hope this serves as a valuable resource to your business and your leadership team as you navigate through these unprecedented times.


Financial Relief, Assistance & Incentives

  • Consider your eligibility for a forgivable loan under the Paycheck Protection Program, which authorizes up to $349 billion in assistance to small businesses to keep workers employed and sustain operations.
  • Evaluate your options for a low-interest Economic Injury Disaster Loan (up to $2 million per small business) from the SBA. These Economic Injury Disaster Loans may be in addition to assistance under the Paycheck Protection Program.
  • For those businesses with current SBA loans outstanding, some lenders are offering loan deferment, loan extensions and other accommodations and flexibility to businesses impacted by COVID-19.

Commercial Operations

  • If you, your customers or your suppliers are unable to perform under a contract, carefully review your contracts for force majeure provisions. If no contractual provision, consider common law and UCC defenses. LEARN MORE
  • Document everything. Consider daily reports detailing all impacts of COVID-19 outbreak on your business. Make sure all required notices are timely given.
  • Check state and local public health orders issued in the areas where you operate to determine if your business constitutes an “essential” business which can remain open even during a “stay at home” or “shelter in  place” order, provided social distancing and enhanced sanitation activities are enforced.
  • Prepare for the possible issuance of a “stay at home” or “shelter in place” order if one has not already been issued in your area. Note that while DHS publishes the federal “essential business” list, each state and/or country may have a different list so it is important to check local orders. LEARN MORE

Labor and Employment

    • Review your workplace policies and practices and implement health and safety protocols and restrictions to control and mitigate the spread of COVID-19 consistent with guidance issued by the Centers for Disease Control (CDC) and OSHA. LEARN MORE for more information on communications with employees regarding COVID-19 and employee reporting.
    • Ensure compliance with the Families First Coronavirus Response Act (FFCRA) which applies to private employers with less than 500 employees and certain public-sector employers and provides employees with Emergency Paid Sick Leave benefits and/or paid Emergency Family and Medical Leave benefits for reasons related to COVID-19. Employers must provide employees proper notice of their rights and utilize proper forms to document paid leave in order to obtain a payroll tax credit under the FFCRA. For information regarding the FFCRA and guidance issued by the Department of Labor, see these McGrath North Alerts: Congress Enacts A Sweeping Leave Bill In Response To COVID-19, DOL Sheds Light On Some FFCRA Open Issues, and DOL Issues Additional Guidance On The FFCRA. LEARN MORE for FCRA posting and notice requirements.
    • Ensure compliance with federal and state laws for layoffs, furloughs and hours reductions due to the COVID-19 pandemic, including compliance with the federal Worker Adjustment and Retraining Notification Act and state requirements. Employers need to confirm that cost-reduction measures comply with wage and hour rules for non-exempt and exempt employees and any existing contractual arrangements. Notices should advise employees where they can apply for unemployment benefits.
    • Do not overlook an employer’s obligations under the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) when addressing medical leave, medical inquiries and accommodations arising from the COVID-19 pandemic.

Tax Matters

  • Consider delaying income tax payments and filings until July 15th. Both the Internal Revenue Service and the State of Nebraska, along with other states, have allowed taxpayers to delay filing income tax returns and income tax payments until July 15th. LEARN MORE
  • Claim payroll tax credits for paid leave given to employees who are quarantined or ill as a result of COVID-19, caring for someone who is ill, or who is unable to work due to school closures. LEARN MORE
  • If the operations of your business have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings, or your business has experienced a greater than 50% reduction in quarterly receipts, evaluate whether to claim a refundable employee payroll tax credit of up to $5,000 per employee.
  • Before applying for any tax credits or COVID-19 incentives, ensure that you have considered which incentives or credits are most beneficial for your business. Multiple credits or incentives may not be allowed. For example, if your company is applying for a loan under the Paycheck Protection Program, you may not be eligible for the refundable employee payroll tax credit of up to $5,000 per employee.

Employee Benefits

  • Review group health plan eligibility requirements and applicable ACA measurement periods in order to determine how employee leaves of absences, furloughs, changes in hours, or changes in employment status will impact eligibility for health benefits, COBRA eligibility, and whether the plan needs to be amended to enable benefits continuation. LEARN MORE
  • Review cafeteria plan document and mid-year election change rules in anticipation of administering mid-year election change requests by participants, especially as related to mid-year election changes permitted by the IRS but that are not required to be permitted by an employer (e.g. significant changes in cost). LEARN MORE
  • Review new Coronavirus Aid, Relief, And Economic Security Act provisions permitting early withdrawals from retirement plans, higher limits on plan loans, and delayed required minimum distributions and determine whether your company’s retirement plans should be amended to incorporate these new features. LEARN MORE
  • Keep track of how much company money is put towards benefits continuation while employees are on leave or reduced work schedules and calculate how much of that amount could qualify for the tax credit under the FFCRA. LEARN MORE
  • Be wary of how the company discovers an employee’s COVID-19 status, as such information is Protected Health Information governed by HIPAA when it is discovered through the employer’s group health plan. LEARN MORE

Insurance

  • Carefully review your current insurance policies (including all declaration pages and riders for coverages) that may be  triggered by COVID-19 changes to your daily business. This may include reaching out to your insurance agent to insure that you have all relevant documents. LEARN MORE
  • Record all damages and losses as they occur and retain any and all relevant documentation. If a loss or potential loss is identified, consider setting up regular reporting requirements for the individuals closely involved to track the nature and extent of the damage. Quickly identifying the individuals with knowledge and maintaining good records will insure your ability to prepare and submit your claim.
  • Familiarize yourself with all requirements imposed upon you under the policy as part of the claim process. Make timely notice as required under each policy.

Privacy and Cybersecurity

  • If you are faced with increased use of telework, confirm your network and devices being used to remote into work environments are updated with the latest software patches and security configurations. LEARN MORE
  • Be mindful of the increase in phishing and ransomware attempts, and advise employees proactively with respect to response and avoidance of these scenarios.
  • Review your cyber policy to confirm telework safeguards are addressed and what minimum required practices must be maintained during this time to ensure there is no loss in coverage upon the occurrence of a cyber-attack or breach. LEARN MORE

Estate Planning

  • Consider gifts to family, irrevocable trusts, or other strategic planning tools such as grantor retained annuity trusts (“GRATs”).
  • Current declines in the stock market and business valuations may provide a significant opportunity to efficiently use gift tax and generation-skipping tax exemptions, as well as enhance the performance of strategies that take advantage of future growth such as GRATs.
  • If commentators’ prediction of a “V” or a “U” shaped recovery comes to fruition, these strategies should shift significant wealth free of gift and estate taxes.

For additional information, you can visit our COVID-19 Resource Center here (a compilation of updates and alerts that we have provided relating to COVID-19 along with links to useful National, Federal and State Resources). We are here to help, and you can reach out at any time to a member of our COVID-19 Response Team or any of your trusted contacts at McGrath North.

COVID-19 RESPONSE TEAM

Labor, Employment and Benefits:

Aaron Clark
aclark@mcgrathnorth.com
(402) 633-9580

Abbey Moland
amoland@mcgrathnorth.com
(402) 633-9566

Caroline Nelsen
cnelsen@mcgrathnorth.com
(402) 633-9575

Business and Corporate:

Sandra Morar
smorar@mcgrathnorth.com
(402) 341-3070

Rachel Meyer
rmeyer@mcgrathnorth.com
(402) 633-6882

Tom Worthington
tworthington@mcgrathnorth.com
(402) 633-9554

Litigation, Insurance and Risk Management:

Scott Paul
spaul@mcgrathnorth.com
(402) 341-3070

Bill Birkel
wbirkel@mcgrathnorth.com
(402) 341-3070

April Hook
ahook@mcgrathnorth.com
(402) 633-6813

Force Majeure and Commercial Transactions:

Jim Frost
jfrost@mcgrathnorth.com
(402) 341-3070

Sandra Morar
smorar@mcgrathnorth.com
(402) 341-3070

April Hook
ahook@mcgrathnorth.com
(402) 633-6813

Rachel Meyer
rmeyer@mcgrathnorth.com
(402) 633-6882

Privacy and Cybersecurity:

Stacey Shadden
sshadden@mcgrathnorth.com
(402) 633-9591

Tom Kelley
tkelley@mcgrathnorth.com
(402) 633-9549

Tax:

Jon Grob
jgrob@mcgrathnorth.com
(402) 633-9560

Courtney Foltz
cfoltz@mcgrathnorth.com
(402) 633-9572

Financial Services and Incentives:

Lauren Goodman
lgoodman@mcgrathnorth.com
(402) 341-3070

Nick Niemann
nniemann@mcgrathnorth.com
(402) 633-1489

Matt Ottemann
mottemann@mcgrathnorth.com
(402) 633-9571

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