Alerts & Newsletters

Under the Bipartisan Budget Act of 2015 (“BBA”), all entities classified as partnerships, including limited liability companies and limited partnerships, became subject to the centralized partnership audit regime for taxable years beginning January 1, 2018, unless otherwise elected (the “BBA Rules”). Whether or not the parties choose to revise their partnership agreements to provide for the application of the BBA Rules, buyers and sellers should negotiate and include in the Membership Interest Purchase Agreement (“MIPA”), or any equivalent sale agreement, express provisions related to the BBA Rules, the push out election and indemnification from any future tax liability arising from a BBA audit.

Through the recently issued Paycheck Protection Program (PPP) Loan Forgiveness Application and Interim Final Rule on Loan Forgiveness, the Small Business Association (SBA) has once again demonstrated that the contours and requirements of the PPP program are constantly evolving. The SBA’s recent Interim Final Rule on SBA Loan Review Procedures provides some insights on how the SBA will enforce PPP qualification and forgiveness requirements. More agencies are getting involved in enforcement, as shown by the Securities and Exchange Commission (SEC) now reviewing quarterly disclosures to see if they align with representations made in applying for PPP loans. These ever-evolving standards, plus the possibility of Congress extending the time frame in which the PPP funds must be spent, all underscore the importance of effective PPP compliance programs. Given the increased risk of whistleblower complaints related to COVID-19, especially those alleging an improper PPP necessity certification, now is the time for companies to review and, where necessary, reinforce their compliance programs and anti-retaliation policies.

In a move that will improve the time for obtaining application approvals, the U.S. Citizenship and Immigration Service (USCIS) announced today it plans on resuming premium processing for Form I-129 (non-immigrant worker) and Form I-140 (immigrant worker) petitions in phases throughout June.

The SBA, in consultation with the U.S. Department of Treasury, issued the Paycheck Protection Program Loan Forgiveness Application and related instructions on May 15, 2020. While the application and instructions answer many of our questions about PPP loan forgiveness, it leaves many others open. Treasury has promised that the SBA also will soon issue regulations and guidance that we hope will address these questions. The following is a list of our key observations based upon the application and instructions released on May 15, 2020.

On May 13, 2020, the Department of the Treasury and the Internal Revenue Service (“IRS”) issued final regulations under Section 385 of the Internal Revenue Code (“Final Regulations”), which address the classification of certain related party debt as stock or equity for U.S. Federal income tax purposes. The Final Regulations adopt, without any substantive changes, the 2016 proposed regulations, while leaving open issues related to distribution regulations to be addressed in future IRS guidance.

The 2020 appeal season is moving and changing quickly, so be sure to not miss any filing deadlines. The deadline for filing petitions with the Michigan Tax Tribunal is set by statute as May 31. On May 14, 2020, Michigan Governor Gretchen Whitmer issued Executive Order 2020-87 (the “Order”), to extend the deadline to protest 2020 property tax assessments to grant some amount of relief to individuals and businesses amid the coronavirus/COVID-19 crisis.

Dykema’s Labor & Employment Practice Group created a Q&A overview addressing best practices for employers to consider when businesses return to work. The document discusses frequently asked questions concerning employer recalls, pay and benefits, medical documentation, personal protective equipment (PPE) requirements, and more.

The USCIS on Friday, May 15, sent a request to Congress for $1.2 billion in emergency funding, proposing to pay it back with a 10% surcharge on application filing fees. This surcharge, if adopted, will entail greater expense for employers and applicants along with the expectation of further-decreased processing times.

With Executive Order No. 2020-92, Governor Whitmer continues reopening Michigan’s economy, with phased reopening of retail, restaurants, and offices in the Upper Peninsula and certain counties in the Northern Lower Peninsula. As part of this trend, Governor Whitmer has issued Executive Order No. 2020-91, which details the compliance measures that businesses must follow as they reopen. She also issued Executive Directive No. 2020-6, which is aimed at fostering compliance with the requirements set out in EO 2020-91 by directing state departments and agencies to monitor for compliance with the requirements in Executive Order No. 2020-91 and to bring enforcement actions as necessary. Executive Directive No. 2020-6 also provides that a Director of COVID-19 Workplace Safety will be appointed to coordinate the state’s efforts to monitor and enforce workplace safeguards. Is your business compliant with EO 2020-91?

Following Governor Whitmer’s issuance of Executive Order 2020-77, additional sectors of Michigan’s economy may reopen in-person operations, including all manufacturing businesses. Business, however, will not be as usual. There are important changes and requirements that all businesses will be required to put in place before reopening not only to comply with the relevant executive orders but also to limit potential liability. Is your business ready to comply with all of the new regulatory requirements amid COVID-19?

As Michigan employers begin to think about how many employees to bring back to work, one option to consider is Michigan’s Work Share program, whereby total work hours are spread across a large group of employees as opposed to having fewer employees return to work on a full-time basis. But what are the benefits and drawbacks of work share? And how can employers set a plan up?

On April 29, 2020, the Internal Revenue Service issued updated guidance in the form of 94 Frequently Asked Questions (“FAQs”) in connection with the employee retention credits (“ERC” or “credits”) which are available to eligible employers pursuant to Section 2301 of the Coronavirus Aid, Relief and Economic Recovery Act (“CARES Act”). Although the FAQs do not constitute binding legal authority for purposes of claiming the credits, they help clarify the Internal Revenue Service’s position in interpreting and implementing the ERC program under the CARES Act and provide further guidance for businesses exploring ERCs in unique employment situations.

With the 2020 tax appeal season in process, we are prepared to file clients' tax appeals in both Michigan and Illinois. We can assist with analyzing your assessment (no fee for this preliminary work), preparing your appeal, meeting filing requirements and deadlines, and obtaining the best possible tax relief with a fair and equitable assessment. Dykema also happily offers flexible fee arrangements for tax assessment work, including hourly and contingency fee arrangements.

As borrowers use their loan proceeds from the Paycheck Protection Program (PPP) to continue or restore payroll and call back laid-off employees, they may encounter reluctance or refusal by employees to return to work, which could impede borrower’s ability to obtain full forgiveness on their PPP loan. Borrowers looking toward full forgiveness of the loan amount must maintain a staffing level during the eight-week period following the funding of the loan at the level maintained during a comparative period preceding the loan, as described in Section 1106(d)(2) of the CARES Act.

Michigan Governor Whitmer signed Executive Order 2020-77 today, permitting manufacturing workers to resume work as part of the MI Safe Start Plan. Manufacturing workers, including workers in the automotive industry, are allowed to resume work on May 11, 2020, one week ahead of the planned restart date of certain Michigan automakers. However, this resumption of work is subject to stringent precautionary measures and safeguards identified in the Order.

On April 30, 2020, in response to public input, the Federal Reserve Board announced it was expanding the loan options available to businesses under the Main Street Lending Program and published a related FAQ. This announcement, which follows the Federal Reserve’s initial April 9, 2020, announcement, increased the maximum size of eligible businesses, created a new third loan option, lowered the minimum loan size for certain loans to $500,000, and expanded the pool of eligible businesses.

On April 30, 2020, the Internal Revenue Service issued a Notice providing guidance on the deductibility of certain expenses incurred pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief and Economic Security Act. The IRS held that if a taxpayer receives a PPP loan, uses the loan proceeds to pay for qualified trade or business expenses, and a portion of the loan is subsequently forgiven, no deduction would be allowed for such otherwise deductible expenses paid with the forgiven portion of the covered loan.

The fight against COVID-19 has had a serious impact on businesses across Michigan and the nation, and the construction industry is no exception. May 1, 2020, marked a step toward a new normal as Michigan Governor Gretchen Whitmer signed Executive Order 2020-70 easing restrictions on construction projects. The Governor’s office also issued a press release explaining how the Order applies to work on construction projects. Although these guidelines require increased diligence at construction sites, re-engaging the economy, particularly in the construction sector, marks a step forward on the road to recovery.

The Coronavirus Aid, Relief, and Economic Security Act amended Section 172 of the Internal Revenue Code of 1986 with respect to net operating losses (“NOL”) arising in 2018, 2019 and 2020 by restoring some of the favorable provisions applicable to NOLs prior to the enactment of the Tax Cuts and Jobs Act of 2017. The modified rules were designed to assist struggling taxpayers in the wake of the COVID-19 pandemic and provide them with liquidity in the form of tax refunds and reduced income tax liability in current and future years. The Internal Revenue Service issued additional guidance implementing and clarifying some of the NOL provisions of the CARES Act.

Dykema would like to remind U.S. employers that they must use the October 21, 2019, version of the I-9 Employment Eligibility Verification form beginning May 1, 2020. Since January 31, 2020, employers were allowed to use either the July 17, 2017, or October 21, 2019, version of the form. The Form I-9 is used to confirm the identity and employment authorization of people hired as employees by U.S. employers.

As the need for consumer protections amidst the COVID-19 pandemic continues to grow, the Illinois Supreme Court is helping to provide those protections. In its latest move, the high court has ordered limits to freezes on personal bank accounts. The Order applies to garnishment and citation proceedings arising out of a money judgment where a summons or citation directed to a bank was served after March 8, 2020, or had an original return date between March 8, 2020, and the date of termination of the Governor’s disaster proclamations.

On April 13, 2020, the Internal Revenue Service issued Revenue Procedure 2020-26 (the “Revenue Procedure”) providing guidance to lenders and loan servicers offering relief to borrowers with federally-backed residential and multifamily mortgage loans, including relief mandated under the Coronavirus Aid, Relief, and Economic Security Act, as well as similar state programs. The Revenue Procedure also applies to non-federally backed mortgage loans, provided that the borrower is suffering financial hardship as a result of COVID-19 and the relief is sought between March 27, 2020, and December 31, 2020.

The United States Supreme Court recently held that a plaintiff need not show that a defendant willfully infringed the plaintiff's trademark as a requirement for recovering the defendant’s profits. Though the Court’s decision appears to lower the burden for claimants seeking to recover the defendant’s profits attributable to the infringement, the claimant seeking an infringer’s profits must still prove the infringer’s culpable intent or callous disregard of the trademark owner’s rights. Thus, trademark claimants must develop proof of the infringer’s culpable “state of mind,” which amounts to more than just an “innocent’ infringement.

With an additional $310 billion in funding for the Paycheck Protection Program (PPP) signed into law, energy companies should consider applying for PPP loans in order to maintain daily operations during the COVID-19 crisis. PPP loans are especially attractive to struggling businesses because such loans may be forgiven up to the entire principal borrowed, including interest. There are, however, elements of the CARES Act regarding loan forgiveness that energy companies should assess prior to applying.

On April 24, 2020, Governor Whitmer reaffirmed the stay-at-home measures set forth in Executive Order 2020-42, amended the scope of that order, and extended the duration of such measures through May 15, 2020 (unless modified earlier). While many of the restrictions from her prior executive orders remain in place, Executive Order 2020-59 includes some easing of in-person operation restrictions as well as some corresponding requirements for those operations. What does this mean for your business?

In a turn of events, likely in response to the headlines relating to companies returning PPP loan proceeds, on April 23, 2020, the Small Business Administration (SBA) and Department of the Treasury updated the Paycheck Protection Program Loans Frequently Asked Questions to include Question 31, which has been seen by many as a change in eligibility. While the FAQ specifically calls out large and public companies, Question 31 should make all applicants pause and evaluate their eligibility. Whether you have already received your PPP loan proceeds or are preparing to apply in the second round of funding, it is critical that you carefully review and confirm all certifications in the PPP application, including this one.

As all lenders know by now, the Coronavirus Aid, Relief, and Economic Security Act’s (“CARES Act”) guaranteed Paycheck Protection Program (“PPP”) loans are the key piece of economic relief for small businesses during the COVID-19 crisis. Yet, in the rush to get those loans flowing into the economy, the Small Business Administration (“SBA”) issued an interim regulation that raises substantial unanswered questions about participating lenders’ compliance policies. Business Loan Program Temporary Changes; Paycheck Protection Program (proposed Apr. 2, 2010) (to be codified at 13 C.F.R. pt. 120). Those questions are starkly different yet similarly important for banks and other traditional lending institutions accustomed to operating under the Bank Secrecy Act (“BSA”) and those nonbank lenders who have never been under the BSA’s purview.

The Michigan Department of Treasury recently issued two departmental notices; a Notice of Automatic Extension of State and Income Tax Filing Deadlines (the “Notice of Automatic Extension”) and a Notice Regarding Electronic Requests for Informal Conferences. The Notice of Automatic Extension provides taxpayers additional extensions to file Michigan income tax returns and remit tax and waive penalties previously provided under the guidance of Executive Order 2020-26 and U.S. Department of Treasury Notice 2020-23. The Notice Regarding Electronic Requests for Informal Conferences provides taxpayers who have been denied a claimed refund or had a claimed refund adjusted the opportunity to request an informal conference via email.

After stating he planned on issuing an Executive Order earlier this week, President Trump yesterday issued a proclamation barring intending immigrants from the United States for 60 days beginning at 11:50 p.m. on April 23, 2020. It states it is intended to help U.S. workers facing high levels of unemployment due to the Coronavirus. This alert highlights those covered by the proclamation, as well as those exempted from it.

Now that covered employers are providing paid leaves under the Families First Coronavirus Act (the “FFCRA”), more questions about the FFCRA’s nuances are surfacing. In an effort to further guide employers who are trying to navigate the new law, the Department of Labor has added to its growing list of FAQs about the FFCRA, which includes clarification of some of its earlier answers. The substantive changes are contained in FAQs 80 through 88, in which the DOL focuses on the calculation of available leave time and regular rates of pay to be used for FFCRA paid leaves. This alert highlight these new guidance topics.

A recent decision by the Supreme Court of Pennsylvania concerning a challenge to Governor Tom Wolf’s executive order relating to COVID-19 could impact disputes nationwide that arise out of the pandemic and involve a determination of whether COVID-19 constitutes a “natural disaster” or other like term within the context of force majeure clauses. The case serves as a preview of an issue courts across the country will face when interpreting whether the language of a force majeure clause includes the COVID-19 crises.

Following up on his recent tweet to temporarily halt all immigration to the United States due to the coronavirus pandemic, President Trump announced his upcoming Executive Order would be limited to those people seeking permanent resident status in the United States (“green cards”) and would last for 60 days. It is unclear at this point how the 60-day halt will affect the current situation.

On April 20, 2020, President Trump stated he would sign an Executive Order temporarily suspending immigration into the United States. He did not make any other statements or provide details on this plan or how his Order might affect foreign nationals already in the U.S. or applications pending with the US Citizenship and Immigration Service.

The U.S. Chamber of Commerce Foundation is sponsoring the Save Small Business Fund—a grantmaking initiative offering short-term relief for small employers who are struggling during the COVID-19 outbreak. The fund will provide $5,000 grants to small employers in the United States and its territories that must be applied toward business expenses. The application is expected to be short, taking about 10 minutes to complete.

The Michigan Economic Development Corporation has announced the Tech Startup Stabilization Fund—a $3 million fund that will provide capital and support for Michigan tech startups impacted by the COVID-19 pandemic. ID Ventures is administering the fund and accepting applications from tech startups across the state at TSSFund.com. The fund will provide loans and investments ranging from $20,000-$200,000 based on the startup’s sector, stage, estimated runway, and demonstration of need. There is currently no application deadline. Applications will be accepted on a rolling basis and the fund is expected to remain open for application over the next 12 months.

The Coronavirus Aid, Relief, and Economic Security Act (the “Act”) provides emergency assistance for individuals, families, and businesses affected by the coronavirus pandemic by temporarily permitting the Small Business Administration (“SBA”) to guarantee certain loans under a Paycheck Protection Program (“PPP”) to qualified organizations, including certain small business concerns and nonprofit organizations. A business concern or nonprofit organization is generally eligible for the PPP if it, combined with its affiliates, has 500 or fewer employees. The current affiliation rules have been revised to exempt certain relationships of faith-based organizations from the SBA’s general principles of affiliation.

The COVID-19 crisis has triggered an unprecedented response of federal and state relief programs to provide health care resources and economic relief. Once the country moves past the immediate crisis, the government will take a hard look at emergency payments. Along with $2 trillion in relief, the CARES Act established a new law enforcement authority within the Treasury Department: the Special Inspector General for Pandemic Recovery (the SIGPR). Congress conveyed broad authority to the SIGPR, including the power to administer oaths and take testimony without seeking approval from the Secretary of the Treasury; and to apply for arrest and search warrants without authorization from the Attorney General.

The United States Department of Justice (DOJ) and the Federal Trade Commission (FTC) have made it clear that they will act to protect employees on the front lines of the battle against COVID-19. Given the government’s prior focus on antitrust issues in the labor market, including their prior indication that they will pursue criminal remedies where appropriate, employers must be more careful than ever to ensure that they do not run afoul of antitrust laws in this area.

In the face of the COVID-19 pandemic, Governor J.B. Pritzker has provided relief to Illinois consumers’ pocketbooks. On April 14, 2020, the Governor issued Executive Order in Response to COVID-19 No. 23 (“Executive Order 23”). The stated purpose of Executive Order 23 highlights the Governor’s concern for ensuring Illinois residents have funds for essential items such as food, medicine, housing, and transportation. The COVID-19 pandemic and social distancing requirements are likely to interfere with a consumer debtor’s ability to contest debt collection including traveling to court hearings or financial institutions to seek relief from consumer debt collection activity.

On April 10, 2020, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2020-22 to provide guidance related to business interest expense limitations and elections available for certain real property trade and farming businesses under Section 163(j)(7) of the Internal Revenue Code (the “Code”). Pursuant to this Revenue Procedure, electing property trade and farming businesses are allowed to withdraw an election, or to make a late election on an amended Federal income tax return, in order to take advantage of the benefits available under the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136 (the “CARES Act”).

On April 9, 2020, the Federal Reserve announced that it was taking additional actions to provide up to $2.3 trillion in loans to support the U.S. economy, which includes the creation of two new facilities to support lending to small mid-sized businesses; the Main Street New Loan Facility and the Main Street Expanded Loan Facility. This alert provides some details regarding the eligibility, terms, requirements and conditions for these two Main Street Lending Programs.

On Thursday, April 9, 2020, the U.S. Department of the Treasury issued Notice 2020-23 updating and expanding the relief granted by Notices 2020-18 and 2020-20. Notice 2020-23 postpones tax filing and payment deadlines until July 15, 2020, for many taxpayers in order to grant some amount of relief to individuals, businesses, non-profit organizations and trusts/estates amid the coronavirus/COVID-19 crisis. In contrast to the preceding Treasury Notices issued in 2020 postponing tax deadlines, Notice 2020-23 does not limit the relief granted to Federal tax payments and filings otherwise due April 15, 2020, but instead expands the class of postponed deadlines to include specified filings, payments, and time-sensitive actions due between April 1, 2020, and July 14, 2020.

On April 8, 2020, the Internal Revenue Service issued Revenue Procedure 2020-23, which allows eligible partnerships to file amended partnership returns for taxable years beginning in 2018 and 2019 in order to take advantage of the various tax incentives provided under the Coronavirus Aid, Relief, and Economic Security Act.

On Wednesday, April 8, 2020, Michigan Governor Gretchen Whitmer issued Executive Order 2020-41, which relaxes the witness and notary requirements for documents that would otherwise require in-person witnessing and/or notarization, such as Michigan estate planning documents, executed during the Coronavirus/COVID-19 pandemic. In particular, if certain requirements are met, documents may be witnessed or notarized using two-way, real-time audiovisual technology.

The Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 (the “CARES Act”), signed into law by President Trump on March 27, 2020, provides considerable relief for individuals and businesses in the form of financial assistance and tax-related benefits. This alert contains short descriptions of the tax benefits available for businesses, including employers and self-employed individuals under the CARES Act.

On Saturday, April 4, 2020, the Antitrust Division of the U.S. Department of Justice (“DOJ”) issued a business review letter to a number of providers of Personal Protective Equipment (“PPE”) and pharmaceutical products, stating that the DOJ “presently does not intend to challenge” their efforts to expedite and increase manufacturing, sourcing, and distribution of PPE and medications in connection with Project Airbridge. The DOJ issued this Business Review Letter pursuant to the expedited review process (discussed in a recent COVID-19 alert) it implemented to evaluate responses to the COVID-19 pandemic.

The Coronavirus Aid, Relief, and Economic Security Act (the “Act”) provides significant relief for employee benefit plan participants and includes both required and discretionary changes. Plan sponsors should immediately review their benefit plans to ensure that amendments are properly and timely implemented to ensure that their plans continue to operate in accordance with applicable law.

Nursing homes have been on the front lines throughout the COVID-19 pandemic as they care for the persons most at risk. In an effort to improve safety and curb the spread of COVID-19, federal and state authorities are relaxing certain compliance obligations. Despite this regulatory latitude, nursing facilities should remain aware that federal and state agencies continue to closely monitor nursing home compliance.

Even though the COVID-19 crisis has shuttered many government and commercial activities, the nation’s antitrust regulators are still very much open for business. As we discussed at the onset of the crisis, the Antitrust Division of the Department of Justice and Bureau of Competition of the Federal Trade Commission will continue to aggressively prosecute “hard core” antitrust violations, particularly those involving companies and individuals who attempt to restrain competition in critical markets such as personal protection equipment. But businesses, even competing businesses, may still collaborate in response to this emergency in ways that promote competition as opposed to restraining it.

In an apparent attempt to further reduce the spread of COVID-19 in Michigan, on Friday, April 3, Michigan Governor Gretchen Whitmer issued Executive Order 2020-36, which provides protection to all employees who stay home when they are at “particular risk” of infecting others with COVID-19. While this latest Order is well-intentioned, as implemented it may create significant impediments for employers who are attempting to staff positions in critical industries, and particularly for private sector employers with fewer than 500 employees who are required to provide benefits under the recent federal paid leave laws.

As employers try to comply with the new Families First Coronavirus Response Act’s (FFCRA) paid sick leave and expanded family and medical leave requirements, the Department of Labor has thrown them a curveball by quietly changing the answers to some of its Guidance about the FFCRA as well as adding 19 more FAQs to its prior compendium. These changes and additions focus on a) how an employer’s existing PTO policy may interact with the FFCRA, b) the definition of first responder, and c) the treatment of employees currently on non-FFCRA leaves of absence.

On March 27, 2020, the U.S. Court of Appeals for the District of Columbia addressed the question of discovery costs in a long-running False Claims Act case, U.S. ex rel. Barko v. Halliburton (No. 19-7064, March 2020) (“Barko”). In Barko, a former employee claimed that an affiliate of Halliburton, Kellogg Brown & Root Services, inflated costs and received kickbacks from subcontractors during the Iraq war during the early to mid-2000s. After a contentious, lengthy litigation, including 64 document requests and more than 2.4 million pages of potentially responsive documents, the District Court granted summary judgment which was upheld by the Court of Appeals in 2017. But that decision did not completely end the matter.

On April 2, 2020, the U.S. Small Business Administration (SBA) issued an interim final rule, providing additional guidance on the Paycheck Protection Program (PPP). Here are some of the highlights of new and/or clarified information from the previous guidance issued by Treasury and SBA and the text of the CARES Act

On April 1, the DOL provided employers with further clarity on the FFCRA by publishing temporary regulations. These regulations will be effective from April 1, 2020, until December 31, 2020—the same effective period of the FFCRA. Also relevant to employers, the IRS issued guidance regarding the FFCRA tax credit. As with our other alerts on the FFCRA, the following highlights key aspects of the new regulations.

The State of California and the City of Los Angeles are providing emergency assistance for California small businesses. These grants and loans are separate from incentives and programs being offered by the U.S. Small Business Administration. The State is also reminding businesses of existing small business loan programs that affected businesses can utilize. Information about the programs and how to apply are highlighted in this alert.

The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) provides for various loans, loan guaranties and other forms of financial assistance to U.S. businesses both small and large and in specific industries and sectors. This alert provides some details regarding the eligibility, terms, requirements and conditions for the programs.

Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the USPTO Director may modify certain patent and trademark-related deadlines where the COVID-19 outbreak has either prejudiced applicants’ rights or interfered with the filing of a document or fee payment. The USPTO provided guidance for extending the time to submit documents or fees which otherwise would have been due on or after March 27, 2020. This relief provides a 30-day deadline extension from the initial due date for certain filings and fees required in patent and trademark applications, patent reexamination proceedings, and Patent Trial and Appeal Board and Trademark Trial and Appeal Board proceedings due between March 27, 2020, and April 30, 2020.

On April 2, 2020, the U.S. Department of the Treasury issued a final borrower application and provided lenders with the required data the federal government will collect electronically to guarantee the loans. The lender application form requires the lender to certify they have gathered the requisite information from the applicant, as outlined in the updated borrower application form. The updated borrower application reflects several changes in information the applicant will be required to provide to lenders.

The USCIS announced that its proposed rule that would have authorized up to 35,000 new H-2B visas has been placed on hold and no new visas will be issued due to the economic effects of the COVID-19 pandemic. This is most likely a result of the high unemployment rates we are seeing due to the virus.

The coronavirus pandemic has impacted the food industry, just as it has many others. The good news is that food-to-person transmission of the disease does not seem to be a risk. The challenge remains keeping workers safe from airborne and surface transmission. However, the FDA and the USDA have provided guidance and recommendations to food producers to deal with COVID-19. The guidance focuses on stopping the person-to-person spread of the disease. There are also supply chain concerns addressed in the guidance and waivers for some in-person requirements.

On March 31, 2020, the U.S. Department of the Treasury, which is supporting the U.S. Small Business Administration (SBA) in administering the Paycheck Protection Program (PPP), and SBA issued preliminary guidance on the program and made available the form of application. Further guidance, such as additional modifications of the existing SBA affiliation rules for the program relating to whether employees of a related party are counted in the employee count, may be subsequently released.

The USCIS has announced it will extend its suspension of in-person services at its field offices, asylum offices, and application support centers (ASCs) until May 4, 2020. It has also indicated it may extend these closures beyond that date if needed. USCIS will continue to provide limited emergency services during these closures.

On Friday, March 27, 2020, the U.S. Department of the Treasury issued Notice 2020-20, which postpones the filing and payment deadline for any taxpayer who is required to file Form 709 (U.S. Gift and Generation-Skipping Transfer Tax Return) or who has Federal gift or generation-skipping transfer tax payments due on April 15, 2020. Similar to the automatic extension provided in Notice 2020-18, Notice 2020-20 automatically postpones the due date for filing Form 709 and for making payments of Federal gift and generation-skipping transfer tax for any such taxpayer until July 15, 2020.

On March 26, 2020, the The Wage and Hour Division of the U.S. Department of Labor issued three opinion letters offering interpretations of the Department’s final rule on the Fair Labor Standard’s Act (FLSA) regular rate requirements. All three involved different types of income and whether or not they must be included in the regular rate of pay for the purpose of calculating overtime pay.

It seems the DOL has stopped sleeping these days, but that means more guidance for employers. In its Qs&As 38-59 interpreting the Families First Coronavirus Relief Act (FFCRA), the DOL shed light on the small business exemption, employees who can be exempted for the FFCRA leave provisions, and the interplay of the FFCRA and the Family and Medical Leave Act (FMLA). The FFCRA takes effect on April 1, 2020, so this guidance is, in a word, timely. Here are some highlights.

The CARES Act has now been passed by both the House and the Senate and signed into law by the President on March 27, 2020. One of the highlights of the CARES Act for small businesses is the establishment of the Paycheck Protection Program (PPP). The PPP is an expansion of the existing SBA 7(a) loan program in an effort to provide eligible participants with access to up to $10 million (covered loans) for the period from February 15, 2020, through June 30, 2020, (covered period) as a way to keep their employees on the payroll to get through the COVID-19 crisis.

On Friday, March 27, 2020, Michigan Governor Gretchen Whitmer issued Executive Order 2020-26 (the “Order”), postponing tax filing and payment deadlines for Michigan taxpayers in order to grant some amount of relief to individuals and businesses amid the Coronavirus/COVID-19 crisis. The Order provides Michigan taxpayers with the ability to defer Michigan state and city income tax payments otherwise due by April 15, 2020 or April 30, 2020, and also postpones the filing deadline for those same income tax returns. The Order does not, however, postpone or alter the deadline for estimated quarterly payments due in June of 2020.

The Illinois Department of Commerce and Economic Opportunity and the City of Chicago are providing emergency assistance for Illinois small businesses. These grants and loans are separate from incentives and programs being offered by the U.S. Small Business Administration. Information about the programs and how to apply is set forth in the following alert.

Much like the Spring tornadoes that tear through the Midwest each year leaving damage in their wake, COVID-19 is silently tearing through the entire United States leaving a wake of destruction that has and will continue to affect state and local governmental entities for months, if not years, to come. On March 13, 2020, the President declared a historic national emergency related to the COVID-19 pandemic which in turn triggered eligibility for public assistance under FEMA Public Assistance—Category “B”—Emergency Protective Measures. The deadline to apply for Public Assistance is April 12, 2020. The following will provide some guidance and insight on the application process which is likely new to many who have never had to navigate this complicated regime.

On March 25, 2020, the U.S. Senate voted to approve the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, an economic stimulus package addressing the impact of the COVID-19 pandemic. The U.S. House of Representatives is expected to approve the Act in its current form, with the President signing it into law shortly thereafter. It is estimated the Act will infuse the economy with over $2 trillion of relief through a wide variety of provisions for individuals and businesses impacted by the COVID-19 pandemic. A key tax-related provision of the Act is the Employee Retention Credit for Employers Subject to Closure Due to COVID-19.

In Michigan, additional coronavirus relief resources are available through the Michigan Small Business Relief Program (Program) established by the Michigan Strategic Fund (MSF) and administered by the Michigan Economic Development Corporation (MEDC) as either loans or grants. Separately from relief offered by the U.S. Small Business Administration, the MSF authorized the Program, providing up to $20 million in grants and loans to support business workforce continuity and reductions in cash flow. The MEDC anticipates that at least 1,100 businesses across the state will benefit from this Program, with funds being available no later than April 1, 2020.

In response to the coronavirus disease pandemic, the USCIS today announced it will exercise some flexibility regarding responding to requests for evidence (RFEs) and notices of intent to deny (NOIDs) dated between March 1 and May 1, 2020.

The U.S. Department of Labor seems to be working around the clock these days, and late on March 26 it added to its Q&As regarding the Families First Coronavirus Relief Act (“FFCRA”). In its responses to questions 15-37, the DOL examined issues such as teleworking, intermittent leave, and furloughs. The FFCRA goes into effect on April 1, 2020, so this additional guidance is welcome and just in the nick-of-time. We highlight some of the additional guidance in this alert.

The COVID-19 pandemic is having a wide-ranging impact on the U.S. real estate industry, particularly on the relationship between landlords and tenants. In order to better understand impending risks, both landlords and tenants should review their leases and insurance policies and consult real estate counsel before taking action. A sampling of leasing issues arising during the COVID-19 pandemic is set forth in this alert.

On March 25, 2020, the SEC issued an order granting temporary relief from the filing deadlines for certain SEC filings due between March 1, 2020, and July 1, 2020. This order supersedes the SEC’s March 4 order. Under the order, public companies that can’t meet the filing deadlines for certain documents as a result of COVID-19 will be given an additional 45 days from the original due date. Relief is contingent upon a series of factors and requirements.

The CARES Act will establish the Paycheck Protection Program (PPP). This alert contains several pieces of information and highlights of the PPP, including who will be eligible, who will lend the money, what the maximum loan amount and interest rate are, what permitted uses of the loan are, and what the loan forgiveness programs really mean for businesses.

Late in the day on March 24, the DOL provided its first round of guidance regarding the Families First Coronavirus Response Act (FFCRA). While the guidance provides some clarity for employers, many important questions are left unanswered.

Coronavirus Disease (COVID-19) is affecting companies across the nation and around the world in a variety of ways. Dykema is closely monitoring the legal ramifications of the crisis and evaluating the potential impact on businesses in a wide variety of industries. The federal government has released its CISA guidelines, and many governors throughout the country have adopted executive orders directing residents to remain at home or in their place of residence to the maximum extent possible in order to limit the spread of COVID-19. Of those states, each has provided similar, but not identical, exemptions for certain businesses deemed “Essential Services.” Sorting through the federal, state and local guidelines and requirements is complicated and requires a fact-based analysis weighing essentiality against the need to sustain and protect life. To assist you in this process, Dykema has prepared and will continue to update COVID-19 Quick Reference Guides. The first of these is entitled “State Level Shelter-in-Place Orders and Essential Services Provisions.”

Households and businesses across the country continue to take safety precautions in response to the COVID-19 pandemic. At the same time, the federal government is preparing an unprecedented federal response to the health, safety and economic challenges. In the coming weeks, we expect a wide variety of private businesses to partner with federal agencies and receive funds to address the health crisis. Federal funds will flow to businesses involved in the manufacture and delivery of medical equipment, the construction of temporary health care facilities, the provision of household goods to overcome supply chain interruptions, and the manufacture of sanitizers, soaps, and masks, to name just a few. As businesses consider opportunities to partner with the federal government in its relief efforts, they should be mindful of the importance to provide accurate information. There are potentially serious consequences for making a false statement to obtain a government contract or to obtain payment under a federal program.

Federal authorities have recently issued a large number of new policies, guidance, etc., in response to the coronavirus pandemic, including flexibility in submitting required signatures on applications, USCIS office closings, LCA postings for H-1Bs, the DOL extending deadlines for responses and initial filings, the suspension of routine visa services and flexibility in I-9 compliance requirements.

Dykema has launched a COVID-19 Resource Center to keep our clients up to date on the most recent legal, business and health guidance surrounding the novel coronavirus and how to navigate their businesses through uncertain times. Various firm practitioners are providing timely content that aims at providing guidance for employer’s current issues as well as those unforeseen items that have yet to arise. The site is continually being updated, as state and federal authorities provide guidance on a rolling basis.

On March 22, 2020, the Federal Reserve Board, the FDIC, the National Credit Union Administration, the Office of the Comptroller of Currency, the Consumer Financial Protection Bureau and state banking regulators (collectively, the “agencies”) published an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19.

On Friday, March 20, 2020, the Department of the Treasury issued Notice 2020-18 (which supersedes Notice 2020-17 issued two days prior), postponing tax filing and payment deadlines for many taxpayers in order to grant some amount of relief to individuals and businesses amid the Coronavirus/COVID-19 crisis. In contrast to Notice 2020-17, Notice 2020-18 not only provides many taxpayers with the ability to defer Federal income tax payments otherwise due by April 15, 2020, but also postpones the April 15 filing deadline for Federal income tax returns. Notice 2020-18 does not, however, postpone or alter the deadline for estimated quarterly payments due June 15, 2020.

On March 23, 2020, in order to curb the spread of COVID-19 in Michigan, Governor Whitmer issued Executive Order 2020-21 (“EO 2020-21”), which orders all Michigan residents to stay at home or in their place of residence unless exempted until April 13, 2020, at 11:59 p.m. To this end, EO 2020-21 also orders that no person or entity may conduct a business or conduct operations that require workers to leave their homes or residences unless that entity qualifies for an exemption. The issuance of EO 2020-21 poses several questions, such as what activities are prohibited, how long it will be in effect, what businesses are exempted from its restrictions, and much more.

On March 23, 2020, in order to curb the spread of COVID-19 in Michigan, Governor Whitmer issued Executive Order 2020-21 (“EO 2020-21”), which orders all Michigan residents to stay at home or in their place of residence unless exempted until April 13, 2020, at 11:59 p.m. To this end, EO 2020-21 also orders that no person or entity may conduct a business or conduct operations that require workers to leave their homes or residences unless that entity qualifies for an exemption. The issuance of EO 2020-21 poses several questions, such as what activities are prohibited, how long it will be in effect, how it restricts companies in the energy industry, and much more.

On Wednesday, March 18, 2020, the Department of the Treasury issued Notice 2020-17, postponing payment deadlines for many taxpayers in order to grant some amount of relief to businesses and individuals amid the Coronavirus/COVID-19 crisis. The Notice provides many taxpayers with the ability to defer federal income tax payments otherwise due by April 15, 2020, but does not postpone or alter the April 15 filing deadline or estimated payments due June 15, 2020.

On March 18, 2020, Governor Gretchen Whitmer issued Executive Order 2020-15 which permits all public bodies in the State of Michigan, with the exception of the State Legislature, to meet during the COVID-19 state of emergency (“COVID-19 Emergency”) by electronic means until April 15, 2020. The issuance of Executive Order 2020-15 poses several questions, such as who it applies to, how long it will be in effect, what provisions to the Open Meetings Act are suspended, and much more.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (“FFCRA”) a few hours after the Senate approved the bill. Among other things, the new law, with which all employers must comply by April 2, 2020, requires employers with fewer than 500 employees to provide two weeks’ paid leave to employees who need to take time off because of an actual or potential illness related to COVID-19, to care for family members who are home ill or quarantined because of COVID-19 exposure or to care for children who are home because of school or care provider closures linked to the ongoing global pandemic. The new law also requires employers to provide employees up to 12 weeks' leave, with 10 weeks paid, for employees who have to take time off to care for children who are home because of school or daycare closure. Notably, in a substantial change from the bill passed by the House of Representatives on March 14, 2020 (discussed here), the law does NOT require paid leave for a longer period for employees home sick or self-quarantining because of potential COVID-19 exposure.

As the coronavirus disease (COVID-19) continues to spread rapidly throughout the United States—and the world—commercial relationships are being thrown into disarray, resulting in the disruption of supply chains, cancellations of events, and closures of restaurants and other businesses. Several states have declared a state of emergency (including banning large group gatherings and mandating that certain business shutter for the time being). Many companies are requiring that their employees work remotely. As a result of the substantial impact on “business as usual” operations, companies are facing decisions about what to do when COVID-19 circumstances make it difficult (if not impossible) to comply with certain contractual obligations. Will COVID-19 provide your company with a legal defense excusing performance?

On March 14, 2020, the U.S. House of Representatives passed the Families First Coronavirus Response Act (“FFCRA”). While the bill has not yet been passed by the Senate, the White House has indicated that it supports and intends to sign the bill into law once the Senate has an opportunity to address its provisions, which will likely be sometime early this week. For employers, the bill imposes a number of requirements related to employees who are being impacted by the global coronavirus pandemic, either because of illness, self-quarantine, or additional child-care obligations triggered by widespread school cancellations.

With many companies facing increased teleworking, supply chain issues, or health uncertainties because of COVID-19, your corporate documents and policies must be ready to address potential issues that arise. For example, can your board meet remotely? Can you or your suppliers avoid contractual obligations? Do your current employee handbooks provide the necessary flexibility for teleworking and employee accountability? Here is a brief checklist of items to review with your legal counsel in preparation of any extended teleworking or closures.

On March 15, 2020, Governor Whitmer issued an Executive Order, effective 9 a.m. today imposing two restrictions aimed at preventing price gouging during the COVID-19 emergency. These restrictions, issued pursuant to her powers after declaring a State of Emergency on March 10, 2020, apply to offers or sales of products in Michigan.

Due to the COVID-19 outbreak and concern over the implementation of preventative measures, including more companies asking or requiring employees to work remotely, financial institutions should consider which customers may need to update, amend or supplement the ways that its customers can make payments, whether this be through adding authorized users or implementing alternative methods to send payment orders.

The supply chain effects from the global spread of the novel coronavirus have been building for nearly two months, and are expected to reach a peak in the near future. The effects have centered on China to date, but the epidemic has spread to other centers of production. Supply chain participants thus face the risk of widespread and compounding supply pinches, disputes and even breakdowns.

The coronavirus disease continues to cause headaches for businesses all over the globe. Travel restrictions are leading to cancellations of small meetings and large-scale conferences; factory shutdowns are causing massive supply shortages; employees are being told to stay home from work. Whatever challenges you face in these uncertain times, it is important to remember that your business is not immune from government scrutiny. There are things keep in mind as you strategize to keep your business running smoothly.

The price of oil—already hammered by market conditions—took another stumble in the wake of the COVID-19 outbreak with no immediate relief in sight. The decrease in prices is likely to make contract performance uneconomical in many cases. Accordingly, the Oil & Gas Industry must prepare for the looming wave of oncoming legal issues, which will affect every sector of the market. Proper preparation will enable prudent companies to navigate the downturn in the market. This alert contains recommended actions for industry stakeholders.

As the world’s information about the Coronavirus (“COVID-19”) continues to quickly update, employers must remain aware of the many potential legal risks that can rapidly arise when grappling with COVID-19 in U.S.-based workplaces and workforces. In the first alert of a multipart series, the following legal perils await any employer who is unprepared or ill-informed.

As the world’s information about the Coronavirus (“COVID-19”) continues to quickly update, employers must remain aware of the many potential legal risks that can rapidly arise when grappling with COVID-19 in U.S.-based workplaces and workforces. In the first alert of a multipart series, the following legal perils await any employer who is unprepared or ill-informed.

On March 3, 2020, Attorney General William Barr announced the National Nursing Home Initiative—a new U.S. Department of Justice (“DOJ”) taskforce organized to push criminal and civil enforcement action against nursing homes across the country. The initiative will help coordinate DOJ enforcement actions against nursing homes that provide “grossly substandard care.” The National Nursing Home Initiative has already begun investigating approximately 30 nursing facilities across nine states.

The extent of disruption caused by COVID-19 is unknowable at this time. However, it is likely that there will be suppliers unable to economically weather the storm. One thing is certain: even the most sophisticated entities make costly mistakes in addressing distressed suppliers without realizing they paid more than was necessary. But preparing to successfully address distressed supplier situations can not only maintain the continuity of supply but also reduce costs.

Gilda Radner’s character Rosanne Rosannadanna always ended her routines on Saturday Night live by saying, “It’s always something.” She might well have been talking about COVID-19, the effects of which are just beginning to be felt throughout the world. Schools are closed, supply chains may be cracked, travel is slowing and events are being postponed or canceled outright, with more impacts probably to come.

Dykema is closely monitoring the potential threat of legal fallouts in the wake of supply chain disruption caused by the novel Coronavirus (also known as COVID-19). In the last month, companies reliant on the global supply chain have been faced with part shortages and overall supply chain disruption. Production facility shutdowns as well as halted transportation, primarily in China, are the main causes of these issues. As the virus spreads, it is expected that facilities and transportation in other countries will be impacted as they seek to contain the virus. While most companies are focused on mitigating business risks resulting from the Coronavirus, it is important to ensure companies have a team tasked to send or respond to force majeure notices and to assess contracts and insurance policies for opportunities to tender, shift or avoid costs and liability. Without these processes in place, companies risk waiving important legal rights and losing the ability to recover substantial costs.

Continuing its trend of restoring standards to the pre-Obama Board era, the National Labor Relations Board issued its final joint employer rule, returning the Board to its pre-2015 joint employer rules, albeit with a bit more guidance. The rule, published on February 26, 2020, and effective April 27, 2020, takes the Board back to the “substantial direct and immediate control” joint employer test it employed before the 2015 Browning-Ferris decision.

The U.S. Department of Justice (“DOJ”) has resolved false claims against a sector not typically prone to FCA attacks—research institutions. In December 2019, the DOJ reached a $5.5 million settlement agreement with a Michigan non-profit research institute, alleging that it failed to disclose foreign funding upon the application for, and over the term of, a federal grant. This settlement agreement comes amid the DOJ’s heightened concern for foreign influence in domestic business, especially from the Chinese government.

U.S. Citizenship and Immigration Services (USCIS) has implemented the Inadmissibility on Public Charge Grounds final rule on Feb. 24, 2020, except in Illinois, where the rule remains enjoined by a federal court as of Jan. 30, 2020. The final rule will apply only to applications and petitions postmarked (or submitted electronically) on or after Feb. 24, 2020. USCIS also issued several revised and new forms that applicants and petitioners must use.

Whether you are a commercial landlord or tenant, a number of questions arise as you approach the end of a lease term. Some of the more common disputes that arise at the end of a lease term involve arguments over the difference between fixtures and trade fixtures, and what items should remain in the premises after the lease term. The Michigan Court of Appeals (“COA”) recently added some clarity to these issues.

This morning, the USCIS announced the key H-1B registration dates for the upcoming 2021 fiscal year H-1B Cap season. Under the new H-1B electronic registration process, employers or their authorized representatives must electronically submit a separate registration naming each alien for whom they seek to file an H-1B cap-subject petition.

There have been many significant developments in trademark law and practice in 2019, and there will be many more changes to come in 2020. In this summary, we provide an update on those developments and what you can expect in the new year.

In January 2020, the United States Department of Justice (“DOJ”) issued a press release announcing more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government had been collected in the 2019 fiscal year. Health care was, once again, the most adversely affected industry. Among the providers and manufacturers affected were drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.

Dykema closed 15 deals during the fourth quarter, finishing 2019 with a total of 70 closed deals—a firm record and a 39 percent increase from 2018. 

Obtaining approvals like special use permits and variances for real estate projects can be a time-consuming and expensive effort. When a zoning authority denies an application that should rightfully have been approved, timing can be everything when it comes to succeeding on appeal—as highlighted by a recent case from the Michigan Court of Appeals. Even an otherwise successful appeal will not survive if it is filed after the applicable deadline, even if a deadline is missed due to potentially erroneous instruction.

Over the past few weeks, the National Labor Relations Board issued a series of employer-friendly decisions overturning a number of Obama-Board precedent-changing decisions. While not all of these recent decisions totally restored the law to what it was before, they all significantly move the pendulum back to near the center. The Board also issued its final rule regarding representation case procedures, something employers have been anxiously awaiting. With these changes, employers (and unions) will have to rewrite significant parts of their “play-books.”

The SECURE (Setting Every Community Up For Retirement Enhancement) Act (the “Act”) was included and passed as Division O of the Further Consolidated Appropriations Act of 2020. The Act is effective January 1, 2020, and includes many provisions intended to increase retirement savings by making it easier for employers, particularly small employers, to offer retirement savings plans and by increasing the types of employees eligible to contribute to retirement plans.

As in previous years, the California legislature kept busy in 2019. As a result, a number of new and noteworthy employment laws will go into effect on January 1, 2020, and beyond. Some of the significant new laws affecting California employers involve the worker status of independent contractors, various forms of discrimination, harassment and retaliation protections, and increases in minimum wage.

Effective on January 1, 2020, the California Consumer Privacy Act (“CCPA”) represents a fundamental change in privacy law in California and the U.S. because of the Act’s nationwide reach. With limited exceptions, any for-profit company doing business with California residents and collecting personal data, including incidental website traffic via cookies, may be required to comply with the Act’s strict data privacy rights. This alert serves as an overview of the CCPA, how it affects employment law, and what businesses can do to prepare.

On January 1, 2020, a number of new pay rules will become effective. While these changes may not directly impact many employees, they could cause pay compression under many compensation plans. Pay compression issues trigger employee morale issues, and adapting to those issues may mean that more than just those at the bottom of pay scales will need to have their pay adjusted. This ripple effect, of course, could be costly. There are various things employers should be aware of and address in some form.

USCIS has announced implementation of the H-1B electronic registration process for Fiscal Year 2021 Cap Season. Under this new process, employers seeking H-1B workers subject to the annual numerical cap, or their authorized representatives, will be required to complete a registration process that requires only basic information about their company and each requested worker. USCIS will provide guidance on how to use the system and prepare registrations before opening it for the initial registration period.

Before 2019 comes to a close, it may be worthwhile to review the state of your tax, estate, and charitable giving plans. Along with the typical end-of-year considerations, it is important to remain aware of the effects of the 2017 tax act (informally called the “Tax Cuts and Jobs Act of 2017,” and herein the “2017 Tax Act”) that altered many longstanding rules and assumptions.