MONTANA REOPENS GRADUALLY
Verbatim from Crowley Fleck's Employment Practice Group's newsletter:
Employers should be advised Montana will soon begin a phased reopening after a month-long shutdown in response to the novel coronavirus COVID-19 (“COVID-19”) pandemic. On April 22, 2020, Governor Steve Bullock issued a directive providing Montanans with new guidance for this phased reopening of Montana (the “Directive”). Under Phase One of the Directive, Montana’s stay-at-home order will expire, local schools may choose to reopen, and most non-essential businesses will be allowed to resume operations. The Directive can be found here, and additional guidance interpreting the Directive can be found here.
According to Governor Bullock, the phased reopening of Montana is justified by the underlying public health data. Specifically, “Montana now has one of the lowest per capita rates of infection in the United States.”
Accordingly, the Directive provides all Montanans—including employers—with guidance on how to safely reopen, and maintain, business operations during various phases of the COVID-19 pandemic.
Under Governor Bullock’s phased approach, Montana’s stay-at-home directive expires on April 26, 2020. However, “all vulnerable individuals” are directed to continue to follow [Montana’s] stay at home guidance” during the COVID-19 pandemic. Vulnerable individuals include all “people over 65 years of age, people with serious underlying health conditions, including high blood pressure, chronic lung disease, diabetes, obesity, or asthma, and people whose immune system is compromised[.]”
Most non-essential businesses will be permitted to reopen on Monday, April 27, 2020 “with reduced capacity and where strict physical distancing protocols can be maintained.” Restaurants, bars, breweries, distilleries and casinos cannot resume operations until May 4, 2020, however. Gyms, pools, and places of assembly such as movie theaters and concert venues will not be permitted to reopen for the duration of the COVID-19 public health emergency.
In particular, the Directive instructs Montana employers to adopt certain policies to create and maintain a healthy workplace environment for employees during the COVID-19 pandemic. Under Phase One of the Directive, which is set to begin on April 27, employers should:
“Continue to encourage telework whenever possible and feasible with business operations.”
If telework is not feasible, employers should “accommodate alternative work schedules such as shift work or staggered schedules” to “adhere to social distancing guidelines.”
“Close common areas where personnel are likely to congregate.”
“Enforce strict social distancing protocols.”
“Minimize non-essential business travel.”
“Make special accommodations for members of a vulnerable population or those with vulnerable household members.”
The Directive also states that businesses that reopen on April 27 “must adhere to the reopening guidelines for Phase One provided in Appendix A” of the Directive. Appendix A provides employers with more specific reopening and operating guidelines for each phase of the Directive, including guidelines specific to certain industries. For general business operations during Phase One, Appendix A requires in part that:
“Health assessments must be conducted for all employees at the beginning of each shift.”
“Waiting areas where adequate physical distancing cannot be maintained must be closed.”
“Non-household customers should remain physically distanced.”
Customers should be encouraged to call in advance for an appointment, and businesses should consider using “an online wait listing application.”
“Physical distancing of 6 feet must be maintained between non-congregate customers,” which may require a “reduction in capacity,” a “reduction of seating in service and waiting areas,” and “systems that reduce the amount of contact time between customers and staff.”
For all phases of the COVID-19 public health emergency, the Directive instructs employers to develop and implement policies that conform with “federal, state, and local regulations and guidance” on a variety of topics, including:
“Social distancing and protective equipment.”
“Temperature checks and/or symptom screening.”
“Testing, isolating, and contact tracing, in collaboration with public health authorities.”
“Use and disinfection of common and high-traffic areas.”
In particular, the Directive directs employers to monitor their workforce for COVID-19 symptoms, and to “not allow people with symptoms of COVID-19 to work.” Additional public health information on COVID-19 can be found on websites maintained by the Montana DPHHS and the CDC.
At present, the Directive establishes a baseline that applies uniformly across the State of Montana. County health officials are permitted to adopt more restrictive guidelines, however. The Directive also identifies what public health factors Governor Bullock will review when considering moving between phases, and contemplates that it may become necessary to “re-implement certain restrictions or take other protective measures” in response to increased COVID-19 activity in Montana.
At both the federal and state level, the regulatory and legislative responses to the COVID-19 pandemic continue to rapidly evolve. Crowley Fleck PLLP recommends employers closely monitor all such changes.
Report the impact the COVID-19 has had on your business. Complete an Economic Injury Worksheet and email to email@example.com.
We at Snowy Mountain Development Corporation are working hard to encourage our Congressional Delegation to make emergency grants available to business owners. As a member of the Montana Economic Developers Association, we submitted this Letter to our Congressionals. We followed up with this Letter. We remain in frequent contact with them so please continue to provide information to us via email about the specific challenges you are facing to keep your business open.
The U.S. Chamber of Commerce requested relief via this Letter to Congress.
DECLARATIONS & DIRECTIVES
Montana Department of Labor and Industry
Montana Disaster and Emergency Services
State and Local Government POLICY TRACKER
ECONOMIC INJURY DISASTER LOANS AND LOAN ADVANCE
Low interest, long term Economic Injury Disaster Loans for up to $2 million: The first payment is deferred for 12 months. The application has been simplified and can be completed 100% online at https://covid19relief.sba.gov/#/
These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
PAYCHECK PROTECTION PROGRAM
When Congress passed the stimulus package on March 27, the $2 trillion aid package included a new Paycheck Protection Program to be administered by the U.S. Small Business Administration (SBA). The objective of the program is to provide small businesses with the capital they need to continue making payroll for an eight-week period occurring between February 15, 2020 and June 30, 2020.
Small businesses who have less than 500 employees are eligible to apply. In addition, independent contractors and gig economy workers may also be eligible. For most communities, this means that the majority of businesses who have been negatively impacted by COVID-19 qualify. By applying for this forgivable loan and using the money to keep employees on the payroll, the impact on our local economies will be reduced.
Even though the program is designed to cover payroll for an eight-week period, businesses can actually borrow up to 2.5 times their average monthly payroll cost. As a result, businesses could get up to 10 weeks of payroll covered by the loan, up to $10 million. This loan can cover the entire payroll cost including salaries, wages, paid time off, tips, taxes and healthcare benefits. In addition to covering payroll costs, the loan can also help to pay for operational costs that could include rent and utility payments.
The Paycheck Protection Program Offers Forgivable Loans
The loan is forgivable as long as businesses meet certain criteria that includes:
The employer maintains its payroll during the period of February 15, 2020 through June 30, 2020
The employer retains its employees and maintains wages relative to the previous year
If an employer does not meet all the criteria they may still qualify for partial loan forgiveness. Anything not forgiven can be repaid over a period of up to 10 years at an interest rate up to 4%.
How to Apply
Businesses can apply with any SBA-certified lender, including local banks and credit unions. Businesses are encouraged to contact the bank they have a relationship with or to find a lender here.
In addition to the loan application, businesses will need to provide the following information:
1. Documentation verifying the number of full-time employees on the payroll and their rates of pay; payroll tax fillings reported to the IRS; and state income, payroll, and unemployment insurance filings
2. Documents verifying payments on mortgage or rent obligations and utility payments
3. A certification from an authorized representative that the documents are true and correct, and the loan forgiveness request reflects retaining employees and making the necessary operational payments.
The Paycheck Protection Program resumed accepting applications July 6, 2020, at 9:00 AM EDT in response to President signing the program's extension legislation. The new deadline to apply for a Paycheck Protection Program loan is August 8, 2020.
How to Apply for Forgiveness
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).
PPP loans have an interest rate of 1%.
Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
Loan payments will be deferred for six months.
No collateral or personal guarantees are required.
Neither the government nor lenders will charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
• Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
• Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the 24-week period after receiving their PPP loan
• Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
• Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
• Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined
*NEW* Montana Loan Deferment Program, Montana Board of Investments and Department of Revenue. The Montana Loan Deferment Program is facilitated by Montana banks, credit unions, and lending institutions in partnership with the State of Montana. The Governor is directing $125 million to the program with $25 million specifically dedicated to hotels and restaurants and the remaining $100 million dedicated to other eligible borrowers. Coronavirus Relief Funds (CRF) will be used to provide payments to participating lenders to convert existing commercial loans to interest only status, with the result being an existing borrower will be able to defer principal and interest payments on existing loans for a period of 6 to 12 months, thereby freeing up a significant amount of otherwise-dedicated capital for the borrower on a monthly basis. Upon approval, the State of Montana will provide a lump sum CRF payment to the lender in an amount equal to the following:
For borrower obligations with interest rates less than 6%, an amount equal to the full interest payments for the eligible term will be funded; or
For borrower obligations with interest rates of 6% or higher, an amount equal to 6% interest will be funded.
For the duration of the eligible term, the lender will lower the interest rate to 6% for the modified deferral period.
For variable rate loans, the interest rate used in the calculation will be the interest rate applicable to the loan at the time the application is submitted and will be fixed at that interest rate for the term of the deferment.
The maximum amount of Loan Deferment Program funding per Borrower is $300,000. [Updated: 6/26/2020]
Entities and individuals with multiple loans for one or several businesses will be allowed to apply for each individual loan
Borrower is defined as an individual, corporation, limited liability company, partnership, association or any combination of these if there is common ownership. Including Holding and Operating Companies. [Updated: July 1, 2020]
It is the responsibility of the Lender and the Borrower to agree on a reasonable term for the deferment which will be no less than 6 months and no more than 12 months.
The Lender must be an Approved Lender with Montana Board of Investments (MBOI).
The Borrower must be a Montana-based business. Borrower is defined as an individual, corporation, limited liability company, partnership, association or any combination of these if there is common ownership. Including Holding and Operating Companies. [Updated: July 1, 2020]
This program is extended on a per note basis, i.e. Lender’s may fill out an application for each current loan the Borrower would like deferred.
To be eligible, businesses/Borrowers must have:
a physical presence in Montana;
Been no more than 30 days past due as of December 31, 2019;
Been current on all other state financial obligations (i.e. income tax, property tax, payroll tax, worker’s comp, child support, etc.) as of March 12, 2020;
Good standing with the Montana Secretary of State; and
No reasonable access to 12 months of working capital from any other sources.
Receipt of Payroll Protection Program, Economic Injury Disaster Loans, or other state grants or assistance programs does not affect eligibility. [Updated: July 1, 2020]
Experienced a reduction of gross revenue of 25% or greater attributable to the direct or indirect impacts from COVID-19;
Montana businesses should contact their lender to access the program.
*NEW* Montana Department of Commerce, Montana Business Stabilization Program
The Montana Business Stabilization Grant program will provide working capital for small businesses to support payroll, rent, accounts payable, debt service and expenses related to shifts in operations in order to retain existing businesses, retain current employees or retain business viability for future re-employment. Eligible small business must be Montana-based, employ 50 or less, have sustained a loss of revenue since Feb. 15 due to COVID 19, and be in good standing with the Secretary of State or local tribal government. Nonprofit entities are not eligible. Total funding available is $50 million, the maximum award amount per business is $10,000.
*NEW* Governor’s Office of Economic Development, Montana Innovation Grant Program
The Montana Innovation Grant program is intended to help companies scale up, improve capabilities, or drive expanded distribution of products or services developed in response to COVID-19. Projects should demonstrate significant impact in improving public health, safety, and economic impact. Eligible companies include non-profit and for-profit businesses of less than 150 employees that have created an innovative product or service intended to directly confront the COVID-19 emergency. Applicants must have primary operations based in Montana, be in good standing with the Montana Secretary of State and must not be debarred from receiving federal or state funds. Total funding available is $5 million with a maximum award amount of $25,000.
*NEW* Montana Department of Agriculture, Montana Food and Agriculture Adaptability Program
Grants are available to food and agriculture businesses to help increase community resilience amid the COVID 19 pandemic and other economic disruptions. Grants are intended to create additional economic activity and bolster food security. Examples of eligible projects include, but are not limited to, those focused on accessing new markets, projects which strengthen and expand local food systems, and other business adaptations that decrease food and agricultural waste. The need for such innovations must be driven by the COVID 19 pandemic. Total funding available is $500,000, with a maximum application amount of $10,000.
The COVID-19 emergency is now impacting the work and personal lives of Montanans throughout our state. The Montana Department of Labor & Industry is closely following the changing dynamics and policies at the state and federal level. Check this page often.
If you are new to MontanaWorks, create an account.
File a claim and click on the File for Unemployment button. (Make sure to indicate that the claim is related to COVID-19.)
To estimate the amount you will receive, go to the UI Benefits Estimator. (Estimate your quarterly pay or enter payroll information from the 4th quarter, 2018 through the 4th quarter, 2019.)
If you are going to have a reduction hours, use the Partial Benefits Calculator. (Enter the weekly benefit that the UI Benefits Estimator calculated and then enter how much you will earn with reduced hours.)
Employees, printout the Claimant Handbook.
Employers, read Section 7 of the Employer Handbook.
Tips to Help Businesses Navigate Through the Response to COVID-19
Businesses are struggling financially as the response to COVID-19 has led to a reduction in consumer spending, business closures, contract and payment delays. Business will eventually get back to normal. In the meantime, here is a list of suggestions.
1. Seek Financial Assistance
Now is the right time to seek financial assistance in the form of loans and grants. Even if you are unsure how much capital you will need, applying for it before the emergency is always wise. If you are in an emergency financial situation already, do not hesitate to apply immediately. Financial resources include the SBA Disaster Relief loan. This lending program is designed for businesses who do not qualify for a traditional bank loan, so you need to apply with a local lender first. Once denied, you can apply for the Disaster Relief loan. If approved, rates are low and the loan can be repaid over thirty years. The money can be used to pay bills, payroll, other loan payments and working capital needs. At the local and state level grants may also be available. Contact us for information since things are changing rapidly. In the meantime, here is a checklist for managing in times of financial difficulty.
2. Support Employees
Unemployment assistance is available for employees who are temporarily laid off due to the coronavirus. Help employees to get the financial support they need so that they are ready to come back to work once the virus is contained. Employers who do not need to lay off workers, but need to send them home to telecommute, should be prepared to support them with virtual meeting and project management tools.
Everyone has been impacted by the coronavirus on some level. Be proactive and negotiate with suppliers and even your landlord. They may be willing to delay payments. In the case of a landlord, ask if they can add the rent to the end of the lease or work out a separate repayment plan for when you can’t pay due to business disruptions caused by the virus. It is best to be proactive and work together, than to wait until you are in a bad spot financially.
4. Be Creative
See if there are creative ways to continue serving customers. Can services be provided virtually using email and video calls? Can deliveries be made without contact? Identify everything that you currently do for customers to see what can be moved to a virtual or non-contact delivery system in order to keep as much of your business running as possible. If you are still serving customers from your location, look for ways to incorporate social distancing such as setting appointments or using more areas of the building.
5. Work with your Insurance Company
Your policy may include provisions for emergency situations such as this. Call your agent to discuss your benefits and use what’s available.
6. Stay in Communication
Communicate with everyone - your customers, employees, bank, vendors, and us! Keep everyone informed of how your business is being impacted and ask for help when needed. Our community is coming together and it is important to communicate, and then support each other.
7. Hold on! More Relief is Coming.
Congress has passed three stimulus packages, totaling over 2 trillion dollars. A fourth stimulus will be needed and our legislators are working on it. Here's where things stand.
SMDC Is Here to Help You!
We are ready and available to provide support. Reach out and let us know what your business is experiencing so that we can connect you with the right resources and assistance.
We will make it through this together!