Jul 13, 2020

Restrictions on Use of Communications Products from Chinese Companies

Restrictive Communication

Companies working for or with the United States Government face new restrictions on the use of communications and electronic equipment produced by companies with ties to China.  Effective August 13, 2020, no executive agency of the United States Government may “enter into a contract (or extend or renew a contract) with an entity that uses any equipment, system or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as part of any system.”  (Section 889(a)(1)(B), National Defense Authorization Act for Fiscal Year 2019). While the implementing regulations… Read more

Jul 9, 2020

The U.S. Supreme Court Upholds Employers’ Religious Exemptions from the ACA Contraceptive Mandate

New ACA Bill

In a 7-2 decision, the U.S Supreme Court upheld a Trump administration rule allowing employers to opt out of providing contraceptive coverage in their group health plans on moral or religious grounds. This rule, most recently issued in November 2018, expanded the types of employers who can claim this exemption, including for the first time, publicly traded companies and employers who opt-out on general moral grounds. Justices Stephen Breyer and Elena Kagan joined the court’s five conservatives in the majority.  Justice Clarence Thomas, writing for the majority, stated that the Affordable Care Act (ACA) gives the Department of Health and… Read more

Jul 8, 2020

Main Street Lending Program Update 07/06/20: Boston Fed Announces Main Street Lending Program is Fully Operational, Open for Purchases of 95% Participations in Main Street Program Loans

Federal Reserve Lending

The Federal Reserve Bank of Boston on Monday, announced on July 6, 2020 that the Main Street Lending Program (MSLP) is now fully operational and ready to purchase participations in eligible loans that are submitted to the program by registered lenders. Institutions participating in the MSLP may now submit qualifying loans for the Fed to purchase. The Fed will buy up to 95% of each loan submitted. The Federal Reserve encourages lenders to begin submitting qualifying loans. “This is an important milestone for the Main Street program,” said Eric Rosengren, president of the Boston Federal Reserve Bank, which is administering… Read more

Jul 7, 2020

July 2020 Update on the Paycheck Protection Program under the CARES Act

This is an update on recent happenings regarding the Paycheck Protection Program (P3): June 5, 2020 – Paycheck Protection Program Flexibility Act of 2020, Public Law No: 116-142 (Flexibility Act) was passed, amending portion of P3 to make it more flexible for borrowers, including: Extends the loan forgiveness use period of PPP loan proceeds from 8 weeks following funding to 24 weeks following funding or December 31, 2020, whichever is earlier. Rehire and restoration of salary date in order to avoid proportional reduction of loan forgiveness extended from June 20, 2020 to December 31, 2020, with new safe harbors provided… Read more

Jul 7, 2020

HHS Provides Guidance On Provider Relief ACT Quarterly Report Form

Healthcare mask

Most healthcare providers have received one or two “Provider Relief” payments from the U.S. Department of Health and Human Services (“HHS”) pursuant to the CARES Act. Providers were required to sign an attestation regarding the Terms and Conditions, which included a statement that providers would be required to make a report on their uses of the funds no later than 10 days after the end of each calendar quarter; however, no information was given at that time on what the required format of that report would be other than that it would be “in such form, with such content, as… Read more

Jun 29, 2020

IRS Issues Limited 401(k) Safe Harbor Plan Relief for COVID-19

Safe Harbor 401k

On June 29, 2020, the IRS created a limited window during which plan sponsors will have some additional opportunities to make changes to their safe harbor 401(k) plans.  Following is a summary of the specific relief: Reduction or Elimination of Safe Harbor Contributions.  In general, safe harbor contributions may be reduced or eliminated during a plan year only if (i) the plan’s safe harbor notice includes a statement about this possibility, or (ii) the plan sponsor is operating at an economic loss.  However, if a plan is amended to reduce or eliminate safe harbor contributions between March 13, 2020, and August 31,… Read more

Jun 26, 2020

Investments in Environmental, Social and Governance (ESG) Funds – The DOL Tightens the Fiduciary Standards

Social Investing

Background.  On June 23, 2020, the Department of Labor (DOL) issued proposed regulations clarifying its position on the fiduciary rules that apply to environmental, social and governance (ESG) investments.  The DOL issued the proposed regulations in response to (i) an accelerating trend of plan investments in ESG funds, and (ii) a proliferation of ESG metrics and ratings that are offered by third-party providers but that may not be consistent with ERISA considerations.  The DOL believes that the increased use and offering of these funds results from overly liberal interpretations of the DOL’s previously published guidance dealing with this topic. Setting… Read more

Jun 25, 2020

President Trump’s Nonimmigrant Travel Ban for H-1B, H-2B, L-1 and J-1 Visa Holders Effective June 24, 2020 Through December 31, 2020

Immigration Travel Ban

On June 22, 2020, President Trump signed a proclamation suspending and limiting the entry of H-1B, H-2B, L-1 and certain J-1 nonimmigrants effective June 24, 2020 and lasting through December 31, 2020.  The ban also includes the H-4, L-2 and J-2 family members of those impacted. In addition, the proclamation extends the existing ban on certain immigrants seeking to enter the United States permanently through the end of year. This proclamation is the latest in the President’s efforts to tighten US immigration policies, which continues to include the ongoing COVID-19 travel bans for certain persons who have been in China,… Read more

Jun 24, 2020

IRS Issues Guidance on CARES Act Retirement Plan Relief

CARES Act Retirement Relief

On June 19, 2020, the IRS issued guidance on the CARES Act’s coronavirus-related distribution and loan provisions in Notice 2020-50.  This Notice provides some helpful administrative detail and expands coronavirus-related distributions in several important ways. Background on the CARES Act.  As discussed in our March 30, 2020 Client Alert, the CARES Act permits plan sponsors to allow “qualified individuals” to: Take coronavirus-related distributions of up to $100,000 during 2020, with (i) no early withdrawal 10% additional income tax, (ii) income tax spread over 3 years, and (iii) all tax liability on the coronavirus-related distribution avoided if the distribution is repaid… Read more

Jun 16, 2020

Consider the Benefits of Restructuring a Business Facing Liquidity Shortfalls under the U.S. Bankruptcy Laws

bankruptcy court

During these turbulent times of global pandemic and widespread lockdowns, many businesses are suffering severe economic distress.  For example, many businesses in sectors such as hospitality, travel, entertainment and retail, have been forced to shut their doors to customers due to various lockdown orders, so they have not been able to generate revenue during the shutdown, even though they may still have continuing obligations for fixed costs such as rent and payroll.  Even as lockdowns end, it may take some time for revenue to reach pre-crisis levels, and business with significant long-term contractual obligations such as rent may find landlords… Read more