Navigating Layoffs, Furloughs and the CARES act as a Construction Company

When Governor Andrew Cuomo declared that all nonessential construction would be shut down in New York state during the ongoing coronavirus pandemic. That announcement completely shifted the original position that all construction was deemed essential.

All of a sudden, thousands of Owners, contractors, builders and developers were left to figure out how to navigate and implement this closure quickly and safely. Certainly one of the major issues that followed was how to navigate business overhead and staffing given the sudden loss of business. 10 Million Americans lost jobs between 3/16-3/28 with 800,000 unemployment claims in the state of New York over the last month. NYSDOL is receiving over 1.3 Million calls per day!

With that said, as a means to support our community as best as we can, we've compiled helpful information below related to navigating layoffs, furloughs, and the CARES act as a construction business.

1) Information around the Paycheck Protection and Loan Forgiveness Program

  • Businesses are eligible if they have less than 500 paid employees or independent contractors.

  • Also the business needs to certify that the current economic conditions will make the loan necessary to support ongoing business operations, and have not received any other loans from SBA for the same purpose.

What can the money be used for?

  • Payroll costs

  • continuation of group health care benefits

  • Employee salaries (with caps)

  • Payments of interest on mortgage obligations

  • Rent

  • Utilities

  • Interest on other debt obligations incurred before February 15th 2020 through June 30th 2020

Loan Forgiveness

Loan forgiveness is limited to the lesser of...

  1. The principle amount of the loan

  2. The total eligible costs incurred for an 8-week period starting from the PPP loan origination date

2) Information around Enhanced Unemployment Benefits

  • If eligible to receive state benefits, there will be an additional $600/ week in federal benefits available through July 26th, 2020

  • Employees need not apply separately for the federal benefit, and this will not affect employees eligibility to receive other federal benefits like Medicare, Children's Health Insurance, etc

Extended Time to Receive Enhanced Benefits

13 weeks of additional federal benefits $600/week for up to 39 weeks total for:

  • Fully or partially unemployed employees

  • Or unable to work due to a COVID-19 qualifying reason (defined in the act)

  • Employees who have exhausted their 26 weeks eligibility under state law and are actively seeking week between now and December 27th, 2020

  • NOTE: New York has waived its 7-day waiting requirement for those out of work due to COVID-19 closures of quarantines

Expanded Eligibility for COVID-19 Related Reasons

  • Employee diagnosed with COVID-19 or experiencing symptoms and seeking a diagnosis

  • Member of employee's household has been diagnosed

  • Employee is providing care for a household member or family member with COVID-19

  • Employee has primary caregiving responsibility for a child or other who is unable to attend school or another facility due to the facility's closure for the COVID-19 emergency

  • Employee's place of employment is closed due to the COVID-19 public health emergency

  • Employee meets any additional criteria established for unemployment assistance

  • NOTE: Employees who meet one of these criteria but would not otherwise be eligible for benefits must self-certify. Also employees who can work from home or are receiving paid sick leave or paid family leave are not eligible for benefits

3) Information around the Waiver of 7-day waiting period

  • Many states including NY have a 7-day waiting period

  • Federal government will provide full funding for benefits if states waive funding

  • The time period of this will be though end of this year, December 31st 2020

Partial Unemployment Benefits

NYC allows individuals to receive partial unemployment benefits if they

  • Work less than 4 days AND earn less than $504 total a week

  • Enhanced unemployment is available to anyone who receives at least $1 of benefits from their state

4) Shared Work Arrangements:

  • Employers can enter into a shared-work arrangement with the NYS Department of Labor

  • Shared work arrangements will allow employees with hours reduced 20-60% to receive pro-rated unemployment benefits

  • For example - a 20% reduction in hours entitles them to 20% of their unemployment benefits

  • Additional requirements apply to participating employers

5) Information around Reductions in Salary:

  • For salaried employees, employers can generally reduce salary dude to exigent economic circumstances

  • However reductions in salary should, as a best practice, be made once. If reductions occur multiple times it could be flagged.

  • If a reduction in salary occurs, a business must ensure that that salaried individual is not dropped below the white collar exemption threshold ($684/week in update New York)

  • Must provide 7 days advanced notice before a salary or wage reduction

Disclaimer: This compiled information is meant to be a helpful resource navigating these tough times. LABER does our best to compile and provide important information however we also recommend you check the NYS DOL website, and other important local regulatory resources to ensure information is still accurate and has not changed.

More information can be found in the following sources: