With everything happening with the coronavirus pandemic, we at BenitoLink want to provide a roundup of recent articles, as well as closures and cancellations happening in San Benito County.
As of 4:40 p.m. on June 9, 109 people have tested positive for the coronavirus in San Benito County since February. Twelve are active, 95 have recovered and two have died. For the most updated information, visit the San Benito County COVID-19 Dashboard.
Recent Articles
SBC Public Health Officer approves listed Stage Three sectors to open—County said businesses can open on June 12 and no sooner, and will need to self-certify that they are in compliance with state guidelines.
Schools
From San Benito High School art teacher Christina Ross:
“With the year ending so distantly we weren’t able to have our art shows or awareness campaign event. So, Luisa Toste and I put together a virtual art show to share the talents of our artists as they adapted to distance learning during the pandemic.”
SBHS is also offering internet service guidance for parents and students. Follow the link to read about Internet options for families, including discounts or free plans offered by service providers.
Government
At the San Benito County Board of Supervisors meeting on June 9, interim Public Health Officer David Ghilarducci approved for the sectors listed in Stage Three below to open on June 12 and no sooner. According to a recent release, the county is also asking all businesses and activities to self-certify they are complying with the state guidance by posting the SBC Self-Certification Window Placard in public view—placard link here.
San Benito County will not require an inspection prior to a business reopening.
A complete list including Stage 3 Guidance can be found at COVID19.ca.gov
- Day Camps
- Schools and School Based Programs
- Updated Child Care Programs and Providers
- Family Friendly Practices for Employers
- Support for Working Families
- Campgrounds, RV Parks, and Outdoor Recreation
- Hotels for tourism and individual travel
- Card rooms and Racetracks
- Movie Theaters and Family Entertainment Centers
- Restaurants, Bars, and Wineries
- Gyms and Fitness Centers
- Museums, Galleries, Zoos, and Aquariums
- Casinos
The following sectors, businesses, establishments, or activities are not permitted to operate in the State of California at this time:
- Personal services such as nail salons, tattoo parlors, body waxing
- Indoor playgrounds such as bounce centers, ball pits and laser tag
- Live theater
- Saunas and steam rooms
- Nightclubs
- Concert venues
- Festivals
- Theme parks
- Higher education
Business
In a June 9 press release, the Economic Development Corporation of San Benito County gave the following updated information about the Paycheck Protection Act made possible by the new legislation the Paycheck Protection Program Flexibility Act (PPPFA):
1. PPPFA changes amount of loan needed for payroll to 60%
The biggest complaint around the PPP loan program was that it required businesses to spend 75% of the loan on payroll. For those businesses shut down due to COVID-19, this meant playing the role of unemployment office, paying their workers to stay home and do no work. The PPPFA reduces the amount of the loan needed to be spent on payroll from 75% to 60%, thus increasing the amount of funds available for other expenses from 25% to 40%.
While this new breakdown was less than the 50-50 split business groups advocated for, it is still an improvement. However, the law does not change the list of expenses eligible for forgiveness. It still includes rent, mortgage payments, utilities, and interest on loans. Again, this is quite a restriction on businesses that need funds for inventory, personal protection equipment, expenses around remote working, and other needs. Business groups will continue to lobby to expand eligible expenses.
- PPPFA extends time period to use funds from 8 to 24 weeks
The second biggest issue around PPP was that it required businesses to spend the funds in the eight-week period from the date funds were received. For a business shut down by government mandate, this amounted to spending funds when, perhaps, conserving them was in order. Business owners clamored to have the flexibility to spend the loan after reopening, especially on payroll when workers returned to work and were not sitting idle.
The PPPFA fixed this by extending the time period to spend the loans to 24 weeks. While businesses will still need to spend the money on payroll and authorized expenses, they now have until the end of 2020 to do so. Presumably, this will make receiving complete loan forgiveness more likely since the loan amount was based on one month of 2019 payroll multiplied by 2.5, which equals approximately 10 weeks. Businesses should now have the flexibility to spend the PPP funds when they like for the remainder of the year. And, another positive caveat: the PPPFA also does not require businesses to wait for 24 weeks to apply for forgiveness and can still do so after eight weeks if they prefer.
- PPPFA pushes back a June 30 deadline to rehire workers to December 31, 2020
Small businesses took issue with the PPP requirement that all workers had to be rehired by June 30, 2020, in order for their salaries to count towards forgiveness. Many businesses were concerned they might not be open, or certainly not at full capacity by this date, and would once again, be required to pay employees for not working. Under the new law, businesses now have until December 31, 2020, to rehire workers in order for their salaries to count towards forgiveness.
It is important to note, however, that the law did not change how salaries are calculated towards forgiveness. The payroll calculation used in the loan application still applies to the forgivable amount. So, employee compensation eligible for forgiveness is still capped at $100,000, and until further guidance, employer owners and contractors are still capped at $15,385. Presumably with the new law, however, having an extra six months of expenses eligible for forgiveness will make up for any gaps and ensure 100% forgiveness of the loan.
- PPPFA eases rehire requirements
As the intent of PPP was to keep the same number of employees on the payroll as was used to calculate the loan, it required a business to rehire the same number of full-time employees or full-time equivalents by June 30, 2020. The only exception to this rule was if an employer could document in writing an attempt to rehire an employee who rejected this offer.
The new law makes two significant changes to these requirements. First, it extends the rehire date to December 31, 2020, and second, it adds additional exceptions for a reduced head count. The law states a business can still receive forgiveness on payroll amounts if it:
Is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;
Is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or
Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.
It remains unclear how to “demonstrate the inability to rehire similarly qualified employees” or what the standard “to demonstrate the inability to return to previous levels of business activity” would be, but hopefully forthcoming guidance will elaborate. The good news appears to be that even with a reduced head count based on these exceptions, if 60% of the loan is still used on payroll throughout the remainder of 2020, it will be forgiven. Certainly, a business will need to document in writing as thoroughly as possible its efforts to rehire employees through December 31, 2020.
- PPPFA extends the repayment term from 2 years to 5
The new law also eases repayment terms in the event loans or portions of them are not forgiven. A business now will have five years at 1% interest to repay the loan. Further, the first payment will be deferred for six months after the SBA makes a determination on forgiveness. Since under current regulations your bank has 60 days to make a forgiveness determination and the SBA an additional 90 days, this means you could have up until May of 2021 to make the first payment on the loan.
In addition, the PPPFA also allows borrowers to take advantage of the CARES Act provision allowing deferment of the employer’s payroll taxes for Social Security. Previously, PPP did not permit deferment of these taxes on the forgivable portion of the loan.
Treasury guidelines still provide for SBA loan audits
While this new law certainly addresses many concerns and should ease the requirements for full forgiveness of PPP loans, it is not a complete fix. Namely, it does not address the issues around SBA audits of loans as outlined in the Treasury Department “Interim Final Rules” on PPP loans issued late on May 22.
According to PPP Loans FAQs, the SBA could audit any loan at its discretion to determine if “the borrower may be ineligible for a PPP loan, or may be ineligible to receive the loan amount or loan forgiveness amount claimed by the borrower.” This includes loans under $2 million, which have a “safe harbor” on the issue of whether economic uncertainty made the loan necessary.
So, despite the changes to PPP, the SBA can still look at how a business calculated the original loan amount and review whether it had “access to credit elsewhere” when determining if all or a portion of the loan should be forgiven. All businesses, especially those with loans in excess of $2 million, should prepare to explain why the funds were financially necessary at the date of application.
This comes down to the issue of liquidity. Did a business have large cash reserves or lines of credit it could have tapped to stay afloat during the shutdown? If so, the SBA may determine the borrower was ineligible for the PPP loan. While borrowers should not worry about criminal penalties if such a determination is made, outright fraud excepted, they could be required to repay the loan in full.
It remains doubtful that the SBA will conduct many audits of PPP loans, as almost 4.5 million have been doled out, and it simply does not have the capacity to review many. That being said, thorough documentation of the financial health of the business at the time of the loan application and detailed tracking of how the loan is expended will prevent any issues down the road. It is important to note that the responsibility for accurately calculating the loan amount and the forgiveness amount rests with the borrower.
Other
A Feeding the Frontlines food distribution event is scheduled for Saturday, June 13 in San Juan Bautista at San Juan School from 4-6 p.m.
Resources
-The State has several hotlines for residents to call for suicide prevention, abuse, and mental health.
-The Division of Occupational Safety and Health, better known as Cal/OSHA, helps protect workers from health and safety hazards in almost every workplace in California.
Visit Cal/OSHA for information about workplace safety and health.
File a confidential workplace safety complaint.
File a whistleblower complaint if you suffer retaliation for reporting a workplace safety hazard
Obtain free consultation services
Contact Cal/OSHA at (844) 522-6734.
State and federal elected officials’ COVID-19 web pages:
- Jimmy Panetta
- Anna Caballero
- Robert Rivas
- Kamala Harris
- Diane Feinstein
- State of California: https://covid19.ca.gov/ https://covid19.ca.gov/es/
San Benito County Health and Human Services Agency/Coronavirus
Food Distribution Community Food Bank www.communityfoodbankofsbc.org
Drive-thru service at the marketplace Fridays and Saturdays, 9 a.m. to 12 p.m. at 1133 San Felipe Rd. Hollister.
Sign-ups for supplemental food are done by phone 831-637-0340
Food Distribution Salvation Army hollister.salvationarmy.org
Drive-thru service Tuesdays at 11 a.m. at 910 Buena Vista Rd. Hollister
Sign-ups not required
To schedule delivery call 310-753-6520
Public Assistance CalFresh/Medi-Cal/Cash Aid/GA
apply online at www.c4yourself.com
831-636-4180
Unemployment Insurance Benefits Employment Development Department
apply online at www.edd.ca.gov/ui_online
831-638-3306
Senior Services Delivery of essential items and food city of Hollister and Jovenes de Antano
831-636-4390
Disability/Paid Family Leave Employment Development Department
apply online at www.edd.ca.gov/sdi_online
831-638-3306
United Way of San Benito County 2-1-1 Text your Zip Code to 831-898-211 or call 211 Text COVID2019 to 211211
Tips for avoiding COVID-19
- Wash your hands often with soap and water for at least 20 seconds. Use an alcohol-based hand sanitizer that contains at least 60% alcohol if soap and water are not available.
- Avoid touching your face with unwashed hands.
- Keep a minimum of a six feet physical distance from others.
- Avoid people who are sick.
- Stay at home. Only leave to take care of essential errands.
- Cover your cough and sneeze.
- Cover your face (mouth and nose) with protective covering when in public
- Disinfect frequently touched objects.
- If you think you might be infected call your health care professional and follow their directions
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