DAILY UPDATES REGARDING THE IMPACT OF COVID-19 ON CONSTRUCTION LAW ISSUES

MONDAY, MAY 18, 2020

The Small Business Administration and Department of Treasury released the Paycheck Protection Program (PPP) loan forgiveness application late on Friday night. The application includes step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.  The application defines an “Alternative Payroll Covered Period,” which permits borrowers with a biweekly payroll schedule to calculate payroll costs using the eight-week (56-day) period that begins on the first day of their first pay  period following their PPP loan disbursement date.  This corrects the apparent inequity on a borrower who received their PPP loan immediately after a payroll date.  The application also includes a place to enter “rent or lease payments” for “real or personal property” during the 8-week covered period as long as the payment was made pursuant to a lease agreement that was in force prior to February 15, 2020.  This language certainly suggests that PPP payments on equipment leases can be forgiven.  The application reiterates that non-payroll costs cannot exceed 25% of the total forgiveness amount.

THURSDAY, MAY 14, 2020

SBA Extends Safe Harbor Deadline

As a follow-up to yesterday’s update, the SBA has extended the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider FAQ Number 46 that was discussed yesterday.  Borrowers do not need to apply for this extension.

WEDNESDAY, MAY 13, 2020

SBA Issues Additional Guidelines for PPP Loan Necessity Certification

On May 13, 2020 the SBA provided additional guidelines regarding Paycheck Protection Program loans.  Importantly, FAQ No. 46 provides additional guidance on how to evaluate a PPP borrower’s good faith certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”  For borrowers below the $2 million threshold, the SBA has established a “safe harbor,” and will assume that this necessity certification was made in good faith.  This safe harbor applies only to the necessity certification. Borrowers who have other concerns about their application should consider taking corrective action, up to and including repaying the loan in full before tomorrow’s May 14 safe harbor deadline.  For borrowers at or above the $2 million threshold, however, the SBA will review whether there was “an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance.”  If the SBA disagrees with a borrower’s basis for its certification, the penalty is denial of forgiveness and mandatory repayment of the entire PPP loan (without any other enforcement activity if the loan is repaid).  For those contractors taking loans in excess of $2 million, you should be sure to document your file with information regarding recent downturns in the construction market and the uncertainty of the market moving forward (the AGC packet of economic information we posted about last week would be a good starting point). 

MONDAY, MAY 11, 2020

EEOC Updates Guidance

The Equal Employment Opportunity Commission (“EEOC”) had updated its guidance document regarding COVID-19, which now states that employers can only exclude employees who have underlying medical conditions that put them at a “higher risk for severe illness” if they contract COVID-19 (as recognized by the Centers for Disease Control (“CDC”)) if the employer can establish that the underlying medical condition poses a “direct threat to self” that the employer cannot mitigate or eliminate with a reasonable accommodation.  The new portions of the EEOC guidance begin at Section G.3 of the guidance document. 

 

PennDOT Cancels/Postpones Numerous Projects

Due to funding shortfalls caused by COVID-19, PennDOT has cancelled or postponed several projects.  Specifically, seven projects that were bid but not yet awarded have been cancelled.  In addition, nineteen other advertised project are being removed from the letting schedule and will be returned to bidding if and when a federal stimulus package including highway construction is passed.  This news is just another reminder of the uncertainty of the construction market as we work through the COVID-19 crisis. 

TUESDAY, MAY 5, 2020

AGC Summarizes Construction Market Conditions

The Associated General Contractors Association (“AGC”) has prepared a packet of economic information to document current market conditions that may help contractors satisfy the PPP loan/grant program requirement that they make a good faith certification that “economic uncertainty make this loan request necessary to support ongoing operations.” 

MONDAY, MAY 4, 2020

SBA Offers Additional Guidance related to the Paycheck Protection Program

The SBA answered some additional common questions arising from the Paycheck Protection Program this past weekend.  In question number 40, the May 3, 2020 FAQs addressed an issue that many contractors are struggling with right now regarding employees that decline the offer to return to work and how this may impact the PPP loan forgiveness amount.  The SBA has stated there are exemptions to the loan forgiveness amount that will exclude laid-off employees whom the borrower offered to rehire for the same salary/wages and same number of hours.  To qualify for the exemption, the borrower must have made a good faith effort to rehire and the employee’s rejection must be documented by the borrower.

 

Pennsylvania Department of Labor & Industry Issues FAQs

The Pennsylvania Department of Labor and Industry (“DLI”) recently issued a helpful set of Frequently Asked Questions regarding the Construction Industry Guidance as the industry gets back to work on many projects (click “Expand All” in the right-hand corner to see all answers).  DLI indicated that a Pandemic Safety Officer is not required to be on site at all times, which permits a contractor to have a single Pandemic Safety Officer who travels between different job sites.

SUNDAY, APRIL 26, 2020

SBA to Resume Accepting PPP Loan Applications Monday, April 27th

With an additional $310 Billion in funding provided by an amendment to the CARES Act, the SBA will resume accepting applications for the Paycheck Protection Program (PPP) and borrowers who have already applied will be back in contention to receive PPP funds.  Note, that the SBA has updated its Frequently Asked Questions to indicate (in Question 31) that applicants must be able to make a “good faith” certification that “[c]urrent economic uncertainty makes this loan request necessary to support [their] ongoing operations” to be eligible for the loan. This Answer goes on to state, “Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.”  We would expect that most closely-held construction companies that have had at least one project shut down by COVID-19 would be able to make the required certification. 

FRIDAY, APRIL 24, 2020

Pennsylvania Issues Guidance for Restart of Construction Industry

Last night, Governor Wolf’s Administration issued its Guidance Document that outlines that requirements that must be adhered to in restarting construction projects in Pennsylvania.  (Note that these requirements also apply to healthcare construction projects and projects that were granted an exemption to continue operations during the business shut-down.)  Among other requirements, all construction projects must adhere to the following requirements:

  • Follow all applicable provisions of the Order of the Secretary of Health providing for business safety measures, issued April 15, 2020, including but not limited to provisions requiring that every person present at a work site wear masks/face coverings, and provisions requiring the establishment of protocols for execution upon discovery that the business has been exposed to a person who is a probable or confirmed case of COVID-19.

  • Follow all applicable provisions of the Order of the Secretary of Health providing for building safety measures, issued April 5, 2020.

  • Require social distancing (6-feet minimum distance between workers) unless the safety of the public or workers require deviation (e.g. drywalling, team lifting).  (Note – OSHA requirements must continue to be met.)

  • Provide hand wash stations at appropriate locations on the site such as building entrances, break areas, food truck areas, offices, trailers, and job site egress areas.  (To the extent feasible, we recommend foot-activated wash stations.)

  • Implement cleaning or sanitizing protocols at all construction sites and projects. Identify and regularly clean and disinfect areas that are at high risk for transmission (requirements to clean common areas and regularly trafficked spaces periodically).

  • Ensure all gatherings are limited to no more than 10 people, maintaining 6-foot social distancing, when required to meet, even when conducted outside.

  • Use virtual meetings, and disseminate information electronically to the extent feasible.

  • Stagger shifts, breaks, work areas and/or stacking of trades where feasible to minimize workers on site.

  • Limit tool sharing and sanitize tools if they must be shared.

  • Employ jobsite screening based on CDC guidance to determine if employees should work. Prohibit from working any employees with any symptoms of COVID-19. Encourage sick employees to stay home.

  • Ensure workers are traveling to and from the job site separately. Wherever possible employees should not share a vehicle.

  • Identify a “Pandemic Safety Officer” for each project or work site, or, if a large-scale construction project, then for each contractor at the site. The primary responsibility of the Pandemic Safety Officer will be to convey, implement, and enforce the social distancing and other requirements of this guidance for the protection of employees, suppliers, and other personnel at the site.

 

In addition to the above requirements, residential construction is limited to a total (general and subcontractors) of four workers on the site at the same time.  Commercial construction is limited to four workers on job sites up to 2,000 square feet, with an additional worker for each 500 additional square feet of enclosed area.  “Large-scale construction projects” should also consider drafting a written safety plan to be implemented and enforced by a Pandemic Safety Officer.


Significantly, for public construction projects, the Guidance Document states, “Notwithstanding any general authorization to resume construction activities, contractors should not resume work on public construction projects until directed to do so by the applicable governmental unit.”

THURSDAY, APRIL 23, 2020

Pennsylvania Moves Up Restart of Construction to Friday, May 1

During a press conference late in the day yesterday, Governor Wolf  moved up the timeline for allowing construction to restart state-wide construction to Friday, May 1, one week sooner than previously announced.  This announcement was part of a larger plan (updated as of 8:00 a.m. this morning) for a Phased Reopening of Pennsylvania.  The Plan includes three “traffic light” phases – red, yellow, and green. The entire state is currently in the Red Phase with Stay-at-Home Orders in place, schools closed and work limited mostly to life-sustaining businesses.  The Yellow Phase will allow some restrictions on work and social interaction to be lifted, with safety orders for businesses with in-person operations.  Lastly, the Green Phase will ease most restrictions by lifting the stay at home and business closure orders to allow the economy to reopen while closely monitoring public health in light of the COVID-19 outbreak.  For a region to move from one Phase to the next Phase, Governor Wolf outlined specific medical metrics that must be attained.  For example, to move from Red to Yellow, a region must report an average of fewer than 50 cases per 100,000 individuals over the course of 14 days.  In evaluating these metrics, the Commonwealth will use a modeling dashboard under development and evaluation by Carnegie Mellon University to take a regional and sector-based approach to re-openings, the easing of restrictions, and response. 

TUESDAY, APRIL 21, 2020

Additional Funding Expected for the PPP Loan/Grant Portion of the CARES Act

The United States Senate voted to approve legislation expanding amounts allocable under the Paycheck Protection Program (the “PPP”) portion of the CARES Act. The expansion allows for an additional $310 billion in available funds, increasing the total amount under the PPP from $349 billion to $659 billion.  Additional details, including the expected passage of this legislation by the House of Representatives on Thursday, April 23, can be found in this National Law Review article

 

Pennsylvania Prepares for Expanded Construction Work

As we predicted, Governor Wolf vetoed Senate Bill 613, which would have ended Pennsylvania’s shut-down of non-essential businesses.  Despite this veto, Pennsylvania begins to prepare for the modified return of construction beginning on Friday, May 8, 2020.  While we are still waiting for the Administration to release guidance regarding exactly what construction job-site limitations will be imposed, we have learned through Jon O’Brien of the Keystone Contractor’s Association that, at a minimum, the following limitations are expected:

 

  • For residential construction, only four workers will be allowed to be on the jobsite at one time.

  • For commercial construction, for a project of 2,000 square feet or less, only four workers will be allowed on the jobsite at one time.  For every additional 500 square feet an additional worker can be added.  For example: a 5,000 square foot construction project would be allowed to have ten workers on site (four workers for the first 2,000 square feet and an additional six workers for the additional 3,000 square feet). This restriction may apply to all construction, even the currently-permitted healthcare and waiver-approved projects.

 

In preparation for this expanded (yet limited) construction in Pennsylvania, the Master Builders Association  of Western Pennsylvania has partnered with Tri-State Reprographics, Inc. to offer social distancing job-site banners featuring your company’s specific logo.  Utilizing the MBA template, Tri-State will work with local construction firms to prepare a 60” high by 84” wide banner for $96. 

MONDAY, APRIL 20, 2020

Pennsylvania to Permit Limited Construction Activities beginning Friday, May 8

Today Governor Wolf announced, “Public and private residential and non-residential construction may resume statewide starting Friday, May 8, in accordance with safety guidance that will be issued by the administration shortly.  Construction projects already deemed life-sustaining may continue while adhering to social distancing, personnel limits and other guidance as announced by the administration.”  The Governor’s announcement included links to the following documents that impact the construction industry:

 

 

We will provide an additional update as soon as the additional construction project guidance is issued. 

 

Pennsylvania Plan for Relief, Reopening and Recovery from COVID-19

Governor Wolf has unveiled a three-phase plan for (1) relief, (2) reopening, and (3) recovery from COVID-19. 

THURSDAY, APRIL 16, 2020

Update on PA Legislation to Re-Open Businesses

Senate Bill 613 would allow ALL businesses to return to work in Pennsylvania as long as they comply with CDC Guidelines.   The Bill would require “the Governor to develop and implement a plan to mitigate the spread of COVID-19 for businesses.”  SB 613 passed the House of Representatives based on a Republican majority with a party-line vote of 107-95.  This legislation also passed the Senate with a vote of  29-21.  Governor Wolf has indicated that he plans to veto the bill and instead remain focused on participating in a regional Governor Task Force with neighboring states to businesses open in coordinated fashion.  The House and Senate likely do not have enough votes to override the Governor’s anticipated veto.

 

PA Department of Health Public Safety Measures

The Pennsylvania Department of Health Secretary Levine recently signed an Order directing public health safety measures for businesses permitted to maintain in-person operations. The Order takes effect immediately and will be enforceable as of 8:00 p.m. on April 19, 2020.  Below is a summary of the most important changes to all businesses (except for health care providers) that are permitted to maintain in-person operations:

  •  Establish protocols to be implemented upon discovery that the business has been exposed to a person who is a probable or confirmed case of  COVID19, including:

    • Implement temperature screening before an employee enters the business, prior to the start of each shift or, for employees who do not work shifts, before the employee starts work, and send employees home that have an elevated temperature or fever of 100.4 degrees Fahrenheit or higher.


  •  Provide employees access to regular handwashing with soap, hand sanitizer, and disinfectant wipes and ensure that common areas (including but not limited to break rooms, locker rooms, dining facilities, rest rooms, conference or training rooms) are cleaned on a regular basis, including between any shifts.


  •  Provide masks for employees to wear during their time at the business, and make it a mandatory requirement to wear masks while on the work site, except to the extent an employee is using break time to eat or drink, in accordance with the guidance from the Department of Health and the CDC. Employers may approve masks obtained or made by employees in accordance with Department of Health guidance.
TUESDAY, APRIL 14, 2020

OSHA Issues Guidance on Recordkeeping Requirements / Employee COVID-19 Cases

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) recently issued interim guidance for enforcing OSHA’s recordkeeping requirements (29 CFR Part 1904) as it relates to recording cases of COVID-19. Under OSHA’s recordkeeping requirements, COVID-19 is a recordable illness, and employers are responsible for recording cases of COVID-19, if: (1) the case is a confirmed case of COVID-19, as defined by Centers for Disease Control and Prevention (CDC); (2) the case is work-related as defined by 29 CFR § 1904.5; and (3) the case involves one or more of the general recording criteria set forth in 29 CFR § 1904.7.

 

Multi-State Council to Work to Get People Back to Work

Pennsylvania Governor Tom Wolf, New York Governor Andrew M. Cuomo, New Jersey Governor Phil Murphy, Connecticut Governor Ned Lamont, Delaware Governor John Carney, Rhode Island Governor Gina Raimondo, and Massachusetts Governor Charlie Baker announced the creation of a multi-state council to work towards restoring the economy and getting people back to work. The coordinating group – comprised of one health expert, one economic development expert and the respective Chief of Staff from each state – will work together to develop a fully-integrated regional framework to gradually lift the states’ stay at home orders while minimizing the risk of increased spread of the virus.  The council will create this framework using a variety of tools available to accomplish the goal of easing social isolation without triggering renewed spread – including testing, contact tracing, treatment and social distancing – and will rely on available scientific, statistical, social and economic information to manage and evaluate the performance of those tools.

TUESDAY, APRIL 7, 2020

Expanded Eligibility for PPP Loan/Grant Under the CARES Act

In what will be great news to many construction companies, the Department of Treasury released a set of Frequently Asked Questions (FAQs) on the loans/grants being issued by SBA lenders under the Paycheck Protection Program (PPP) portion of the CARES Act.  Question number three makes it clear that companies with 500 or fewer employees are eligible for a PPP loan/grant, regardless of their gross annual receipts.  This is consistent with the language of the CARES Act, and removes the gross annual receipts limitation that the SBA was imposing.  In addition, the FAQs make it clear that a business with over 500 employees can also qualify for a PPP loan/grant if it is below the gross annual receipts limitation.  The FAQs also make it clear that lenders are permitted to rely on the borrowers self-certification regarding whether the borrower and its affiliates are eligible for a PPP loan/grant. 

MONDAY, APRIL 6, 2020

SBA Supplement Interim Final Rule with Guidance on Affiliation Rules

The SBA recently issued a Supplemental Interim Final Rule in an attempt to clarify how the SBA’s affiliation rules will apply to businesses applying for loans under the Paycheck Protection Program.  The SBA also issued Guidance on its Affiliation Rules Applicable to U.S. Small Business Administration Paycheck Protection Program.  In most cases, borrowers will be considered together with their affiliates for purposes of determining eligibility. 

 

No Update to SBA Small Business Definition re Paycheck Protection Program Loans/Grants Under the CARES Act

As we noted yesterday, a number of construction companies have not been able to get a PPP loan/grant under the CARES Act because they exceed the SBA definition of “small business” based on gross annual receipts.  We raised this issue in our Tuesday, March 31 post where we stated:  “Under SBA size standards, construction contractor firms are generally defined as a small business according to their gross annual receipts, not their number of employees.”  (Note that the gross receipts limit is typically $39.5 million per year for general contractors and $16.5 million per year for specialty trade contractors.)  While the AGC assumed that the SBA would only consider whether a construction company had 500 or fewer employees to qualify for PPP loans/grants, the SBA is currently also evaluating gross annual receipts to determine eligibility, despite the fact that the CARES Act itself does not impose any such requirement.  We will continue to look for updates from the SBA on this issue. 


Workers Walking off Unsafe Construction Sites

The North Atlantic States Regional Counsel of Carpenters directed all of its members in Massachusetts to stay away from jobsites and cease working until it is safe to do so.  In a letter to its members, the executive secretary-treasurer of the union stated that “it has become apparent that working on construction sites in Massachusetts is abnormally dangerous, and that continuing to work on construction sites poses an immediate threat of harm to the health and safety” of the union members.  In Chicago, workers are walking off the job and others are complaining of co-workers not following social distancing guidelines.  Unsafe conditions such as workers shoulder-to-shoulder are being photographed by concerned citizens.  As the number of COVID-19 cases increases it is more important than ever that project owners and contractors take all reasonable measures to ensure the safety of workers on the job site.  The AGC’s Safety Kit and CISC’s Prevention, Preparedness and Response Plan template provide guidance on how to maintain safe worksites during the COVID-19 pandemic.

SUNDAY, APRIL 5, 2020

AGC Lobbies Against SBA Annual Receipts Qualification Requirement for Paycheck Protection Program

As we noted on in our updates from Friday, April 3 the Small Business Administration (“SBA”) issued its Interim Final Rule to implement the Paycheck Protection Program issued as part of the CARES Act.  A number of construction companies have run into problems in qualifying for a PPP loan/grant.  In a press release issued today, the Associated General Contractors (“AGC”) has indicated that thousands of construction firms that clearly would meet the CARES Act threshold of 500 employers or less because the SBA appears to have added a secondary qualification requirement tied to the average annual receipts size standard used for construction.  The AGC has published a summary of this problem, and also written a letter to the SBA requesting that the SBA immediately revise the Interim Final Rule to correct this problem.

THURSDAY, APRIL 2, 2020

Update on Paycheck Protection Program Under the CARES Act

The Small Business Administration issued an Interim Final Rule for the Paycheck Protection Program (“PPP”) which offers forgivable loans to small businesses.  Burns White has published a helpful overview of the Interim Final Rule.  The interim final rule sets forth additional guidelines and clarifications on several issues and changes the interest rate on loans made under the program from 0.5% to 1%.  PPP loans will be available through June 30 or until the funds run out.  Due to expected high demand, the Treasury Department  recommends that applications be submitted as soon as possible.   Note that the PPP Borrower Application Form was updated on April 2, 2020. All applicants must use this form.  The Treasury Department has a helpful resource page for small businesses interested in the program. 

 

COVID-19 Exposure Prevention, Preparedness and Response Plan

 The Construction Industry Safety Coalition (CISC) had developed a template for a COVID-19 Exposure Prevention, Preparedness and Response Plan (available to download in both English and Spanish) to assist construction industry employers with measures to prevent worker exposure to Coronavirus, including protective measure for the jobsite, personal protective equipment and work practice controls.   

 

Tracking the Status of Construction Projects

ConstructConnect has developed a map to track the impact of COVID-19 and which states have placed restrictions on construction work.  ConstructConnect is also tracking delayed projects and providing timely updates on projects that have pushed the bid dates, put on hold or canceled due to the economic crisis related to COVID-19.

WEDNESDAY, APRIL 1, 2020

Loan/Grant Options Available to PA Companies

Burns White has published a helpful article summarizing the current funding options for businesses available through the CARES Act and Pennsylvania COVID-19 economic relief efforts.

 

Paycheck Protection Program Update

The U.S. Department of Treasury published a PPP Information Sheet regarding the Payroll Protection Program.  Beginning on Friday, April 3, 2020, small businesses can apply for a loan under this program in the amount of 2.5 times the company’s average monthly payroll over the past year.  The original legislation provided for a loan term of up to ten (10) years at an interest rate up to 4%.  The Department of Treasury, however, has provided that the loan period will now be two (2) years (following up to a six (6) month deferral period), with a fixed interest rate of 0.5%.  As highlighted in prior posts, the loan can be forgiven if the borrower uses the loan proceeds to pay qualifying expenses during the first eight (8) weeks after the loan, which include payroll costs (including benefits), most mortgage interest, rent, and utility costs.  Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount can be used for non-payroll costs.

 

U.S. DOL Rule re Families First Coronavirus Response Act

The U.S. Department of Labor today released a temporary rule (effective April 1, 2020) guiding how American workers and employers can use the new Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, which were included in the Families First Coronavirus Response Act.  

 

PA Deadline for Waiver Requests and Refusal to Adopt New Federal Essential Infrastructure List

Late this afternoon Governor Wolf updated the Pennsylvania Stop Work Order FAQ’s.  The deadline to apply for a waiver is Friday, April 3.  In addition, Pennsylvania now specifically says that they only recognize the Federal CISA essential infrastructure list from March 23, even though that list was updated on March 28 to include greatly expanded construction categories, including residential construction.  It certainly appears that no waivers will be granted for residential construction and that only “emergency repairs” on residential construction can continue.

 

School Construction in Pennsylvania

The following was recently added to the Department of Education questions and answers website addressing whether school construction projects may continue forward:

Question: Must school districts seek a formal exemption through the Pennsylvania Department of Community and Economic Development (DCED) to continue construction projects?

Answer: School districts should use best judgment in exercising their authority to continue critical construction projects, and should not seek a formal exemption through DCED. All school district construction decisions should appropriately balance public health and safety while ensuring the continued safety of critical infrastructure. School districts and the contractors must ensure continuance of and compliance with the social distancing and other mitigation measures to protect employees and the public, including virtual and telework operations (e.g. work from home) as the primary option when available, as have been or will be established by the Department of Health and the Centers for Disease Control and Prevention. In-person work is only to be performed on the most limited basis possible.

 

All of Pennsylvania Now under Stay-At-Home Order

Governor Wolf has placed all of Pennsylvania under a stay-at-home order meaning that residents of all 67 of Pennsylvania’s counties must now stay home as much as possible through April 30, 2020 to help slow the spread of COVID-19.

TUESDAY, MARCH 31, 2020

AGC Updates CARES Act Analysis 

The Associated General Contractors of America (AGC) has updated its CARES Act Analysis  as it applies to small business eligibility for the new Small Business Administration (SBA) loan program. Notably, a business is eligible for such a loan if it employs 500 employees or fewer, or if the business is in an industry that has an employee-based size standard through SBA that is higher than 500 employees. Under SBA size standards, construction contractor firms are generally defined as a small business according to their gross receipts, not their number of employees. As such, AGC assumes and has asked the SBA to make clear in guidance that construction contractor firms whose small business size standard is determined by gross receipts should simply determine if it has 500 employees or fewer to qualify for these loans. Construction supplies and manufacturers have small business size standards that are generally defined by the number of employees the firms employ.

 

AGC Issues Contractor Safety Kit 

AGC of America has released a new coronavirus safety kit. The kit includes safety tips and a host of other resources firms can use to help protect workers, and the public, from the spread of the coronavirus.  We recommend that all contractors review and analyze these materials and specifically modify and implement them for any jobs where you are continuing to work. 

 

Resources for Employers

The Department of Labor Wage and Hour Division is updating its website multiple times a day to provide up to date information to employers and employees on multiple issues related to COVID-19. 

 

PA Governor Wolf Expands and Extends Stay-At-Home Order

Governor Tom Wolf revised the Pennsylvania Stay at Home order to include Carbon, Cumberland, Dauphin and Schuylkill counties, bringing the state total to 26 counties under a stay-at-home order. This order went into effect at 8 p.m., Monday, March 30, 2020, and will continue until April 30. All stay-at-home orders are now extended through April 30. The order now includes these 26 counties: Allegheny, Beaver, Berks, Bucks, Butler, Carbon, Centre, Chester, Cumberland, Dauphin, Delaware, Erie, Lackawanna, Lancaster, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Philadelphia, Pike, Schuylkill, Washington, Wayne, Westmoreland and York counties

MONDAY, MARCH 30, 2020

COVID-19 Loan/Grant Applications Must Wait for SBA Guidance

The SBA has not yet issued its guidance for implementing the loans/grants provided for under the CARES Act (see the Friday, March 27 update below).  This guidance is expected to come out later this week or next.  While awaiting that guidance, the U.S. Chamber of Commerce has published a helpful overview of how this loan/grant program with work.  These loans will be issued through private banks (not directly though the government) and banks will be looking for borrowers to make a good faith certification that (1) the uncertainty of current economic conditions makes the loan request necessary to support ongoing operations, and (2) the borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments.

 

President Trump Extends Social Distancing Guidelines Through April

In recognition of sobering projections of the death and infection rate from the Coronavirus, President Trump extended federal social distancing guidelines through April 30th and indicated that it may be necessary to do so again.

 

New York Construction on Hospitals, Infrastructure and Affordable Housing Still Allowed

Under the new directive from Governor Cuomo’s office, most residential and commercial construction is now deemed “non-essential” and is suspended, but infrastructure, hospital, affordable housing, and emergency repair construction projects are deemed “essential” and can continue.

 

Updated Guidance On Governor Wolf’s Determination of “Life Sustaining Businesses”

As we advised in our below post of March 28, the federal Cybersecurity and Infrastructure Security Agency (under the Department of Homeland Security (“DHS”)) issued a new opinion expanding its “Essential Critical Infrastructure Workforce” advisory list to include certain construction and related activities, including residential construction.  As recently as March 26, Governor Wolf’s website suggested that those working in the areas deemed “essential critical infrastructure” by the DHS may be able to operate without a waiver from the Pennsylvania Department of Community and Economic Development (“DCED”) even if not specifically identified as permitted to operate under Governor Wolf’s list of life-sustaining businesses.  Governor Wolf’s website, however, has clarified in an updated FAQs section, that any business not specifically permitted to operate on the current Industry Operation Guidance Matrix must obtain a waiver from the DCED.  In reviewing waiver applications, the DCED is supposed to look at the DHS “Essential Infrastructure” list in considering whether or not to grant a waiver.  As of March 27, Pennsylvania’s position on residential construction was that the only work that could continue was emergency repairs and completion of pending projects if they were “substantially complete” – meaning that a Certificate of Occupancy had already been issued.  Based on this new designation, the DCED may start to grant waivers for residential construction.  Residential builders who want to work should apply for a waiver with this new ruling by the DHS as the justification.

SATURDAY, MARCH 28, 2020

New Guidance re Federal “Essential Critical Infrastructure Workforce”

Today the Cybersecurity and Infrastructure Security Agency (CISA) (under the Secretary of Homeland Security) updated its “Essential Critical Infrastructure Workforce” advisory list.  This list is intended to help state and  local officials as they work to protect their communities from COVID-19, while ensuring continuity of functions critical to public health and safety, as well as economic and national security.  As updated, the list now identifies construction and related activities, including the manufacture and delivery of construction supplies and safety equipment and the permitting & inspection of projects, in 25 different parts of its guidelines, compared to four times in its original version.  As we noted in our March 24 updates (see below), Pennsylvania is not requiring waivers for those construction projects identified in this list, so these updates appear to dramatically expand the construction work that can now proceed in Pennsylvania.

 

Pennsylvania GCAP COVID-19 Plan for Construction

The Pennsylvania General Contractors Association (with a lead role played by the Master Builders Association of Western Pennsylvania) has published a helpful guide to assist contractors with dealing with the risk of COVID-19 on their jobsites.  We recommend that all contractors review and analyze this guide, and then consider and document project-specific rules that you will implement for each project.

FRIDAY, MARCH 27, 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act

The U.S. House of Representatives passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the President signed the Act into law on March 27.  The AGC has published a helpful analysis of how the Act impacts the construction industry.  Most importantly, the Act provides for an SBA “Paycheck Protection” loan program for businesses with fewer than 500 employees that includes loan forgiveness, so this money will actually be more like a grant than a loan.  The forgiveness program will only cover either weeks of covered expenses (everything from payroll, mortgage interest, rent, and utilities).  Additional information on these loans can be found in this National Law Review article.

 

DOL Issues Additional Guidance re Emergency Paid Leave

The U.S. Department of Labor’s Wage and Hour Division added to its published guidance to provide information to employers about meeting their requirements to offer emergency paid sick leave and paid family medical leave offered by the Families First Coronavirus Response Act (FFCRA) when it takes effect on April 1, 2020.  Specifically, the Division added to its original Questions and Answers document (first noted below on March 24). The new questions (numbers 15-37) address important issues, such as recordkeeping, documentation requirements, when an employee is unable to telework, intermittent leave, worksite closures, furloughs, unemployment interaction, health coverage requirements, and multiemployer collective bargaining agreement implications.

 

DOL Required Families First Coronavirus Response Act (FFCRA) Poster

Employers are required to “post” notice of the Employee’s Rights under the Act. The DOL was asked, “Where do I post this notice? Since most of my workforce is teleworking, where do I electronically ‘post’ this notice?”  The DOL responded, “Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.”  Here is the required poster for non-Federal government employees.

 

Governor Wolf Extends Pennsylvania Stay-At-Home Order

On Friday afternoon Pennsylvania Governor Tom Wolf extended his Stay-At-Home Order to include additional counties.  The Order now applies to Allegheny County, Berks County, Bucks County, Butler County, Chester County, Delaware County, Erie County, Lackawanna County, Lancaster County, Lehigh County, Luzerne County, Monroe County, Montgomery County, Northampton County, Philadelphia County, Pike County, Wayne County, Westmoreland County, and York County.  Enforcement of the Order with respect to Berks, Butler, Lackawanna, Lancaster, Luzerne, Pike, Wayne, Westmoreland, and York Counties will commence at 8:00 PM on March 27.

THURSDAY, MARCH 26, 2020

U.S. Senate Passes the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)

 The Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  The complete 880 pages of the Act can be found here.  The top ten takeaways and a good summary of the CARES Act are set forth in this National Law Review article.  The House is expected to promptly vote to pass the CARES Act (depending on whether an in-person vote is required), and the President may sign this Act into law as early as March 27. 

 

AGC Issues Proactive Safety Recommendations:

 The Associated General Contractions association (“AGC”) issued a helpful guidance document to assist contractors in addressing COVID-19 issues while operating their construction jobsites.  In addition, the AGC has made public the PowerPoint slides from the webinar that we attended yesterday regarding “Protecting Your People and Your Projects.”  On this topic, we are recommending that contractors be sure to (1) specifically evaluate the COVID-19 risks associated with your jobsite, (2) implement site-specific rules that can make your jobsite as safe as reasonably possible, and (3) document the steps that are you implementing.  Options to consider include: requiring social distancing of at least six-feet during all breaks; prohibition on sharing food; foot-operated hand-washing stations independent of port-o-johns; and potentially recording body temperature of employees.  There are numerous concerns with the body temperature issue, including ensuring the health and safety of the person who would take the temperature and the privacy of the employees.  For these reasons, some contractors are requiring that employees take their own temperature at home and self-report their temperature when they arrive at work. 

 

Pennsylvania Offers Small Business Working Capital Loans

Governor Tom Wolf announced that new funding is available to help small businesses impacted by COVID-19, through a new program under the Pennsylvania Industrial Development Authority’s (“PIDA”) Small Business First Fund, the COVID-19 Working Capital Access Program.  PIDA authorized making $60 million available to provide zero percent loans of $100,000 or less to for-profit businesses with 100 or fewer full-time employees. Funds are expected to become available as early as next week.  More information is available here.

WEDNESDAY, MARCH 25, 2020

Pennsylvania Expansion of Permitted Businesses

At 2:30 p.m. on March 24, Governor Wolf issued another modified Matrix of businesses that are permitted to continue to operate. As it relates to the construction industry, the following businesses are now permitted to continue to operate: Wood Product Manufacturing (including Sawmills and Wood Preservation; Veneer, Plywood, and Engineered Wood Product Manufacturing; and Other Wood Product Manufacturing); Merchant Wholesalers, Durable Goods (including Lumber and Other Construction Materials Merchant Wholesalers); Glass and Glass Product Manufacturing; and Lime and Gypsum Product Manufacturing. In addition to these published revisions, we are hearing a lot of rumors that PennDOT may be permitted to get certain projects restarted as early as Monday, March 30.  We expect to have another update on this topic tomorrow.

$2 Trillion Economic Stimulus Deal

The full details have yet to be voted on, but an agreement in principle has been reached on a $2 Trillium economic stimulus deal. The deal is believed to include $250 billion set aside for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies. Some in Washington say the package will help replace the salary of furloughed workers for four months, rather than the three months first proposed. Furloughed workers would get whatever amount a state usually provides for unemployment, plus a $600 per week add-on. Also said to be in the bill  is inclusion of an “employee retention” tax credit that’s estimated to provide $50 billion to companies who retain employees on payroll and cover 50% of workers’ paychecks. Companies would also be able to defer payment of the 6.2% Social Security payroll tax. While a vote was expected today, this did not occur.  The major hang-up remains whether the unemployment benefits under consideration creates an incentive for people to remain on unemployment rather than returning to work as soon as possible. If and when final legislation will be voted on remains unknown.

Financial Assistance for Small Business Impacted by COVID-19

The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).

TUESDAY, MARCH 24, 2020

U.S. Department of Labor Guidance

The U.S. Department of Labor’s Wage and Hour Division (WHD) announced its first set of published guidance to provide information to employers about meeting their requirements to offer emergency paid sick leave and paid family medical leave offered by the Families First Coronavirus Response Act (FFCRA) when it takes effect on April 1, 2020. The guidance includes a Fact Sheet for Employees, a Fact Sheet for Employers and a Questions and Answers document. 

 OSHA Poster

The Occupational Safety and Health Administration published a poster on how to prevent worker exposure to COVID-19. In addition to these procedures, the EEOC has recently issued guidance that in light of the COVID-19 pandemic, employers are entitled to take employees’ body temperature without violating the Americans with Disabilities Act (ADA). 

Pennsylvania Waiver Application

As noted in our earlier updates, construction is not permitted to take place in Pennsylvania with the notable exceptions of “emergency repairs and construction of healthcare facilities.” In addition, Pennsylvania is not requiring waivers for those construction projects associated with any of the sixteen Federal Critical Infrastructure Sectors. The Governor’s office recently published a helpful set of Life-Sustaining Business Frequently Asked Questions (PDF) to assist companies in determining whether and how to apply for a Waiver from the Pennsylvania Department of Community and Economic Development.

Pittsburgh Guidelines

Pittsburgh’s department of Permits, Licenses, and Inspections have issued guidelines that will help contractors determine if their projects are “emergency repairs” under Governor Wolf’ COVID-19 stop-work Order

ConsensusDocs

The ConsensusDocs Executive Director published a short article discussing how the ConsensusDocs contract documents explicitly address delays that are reasonably due to epidemics. The American Institute of Architects (AIA) A201 General Conditions document has a catch-all provision that allows for an extension of time for “other causes that the Contractor asserts, and the Architect determines justify delay,” but it does not specifically address epidemics. 

MONDAY, MARCH 23, 2020

Delaware Stay-At-Home Order

On March 22 Governor Carney of Delaware issued a Stay-At-Home Order. The Order goes into effect at 8:00 a.m. Tuesday, March 24, 2020 and will remain in effect until May 15 or until the public threat from COVID-19 is eliminated. According to the list of essential and non-essential businesses posted on the Governor’s website, virtually the entire construction industry, including residential, commercial, heavy and civil engineering, and specialty trade construction, are permitted to remain open and operating at this time.

Ohio Stay-At-Home Order

Last night, the Ohio Governor issued a Stay at Home Order.  The Order goes went into effect last night at 11:59 pm and will stay in effect until April 6, 2020. The Order is mandatory and applies to all non-essential businesses, with an exception for minimum basic operations. The list of “essential” businesses, however, is much more broad than Pennsylvania’s Oder.  With respect to construction, individuals may leave their residence to provide any services to perform any work necessary to offer, provision, operate, maintain and repair "Essential Infrastructure,” which “includes, but is not limited to...construction (including, but not limited to, construction required in response to this public health emergency, hospital construction, construction of long-term care facilities, public works construction, school construction, essential business construction, and housing construction); building management and maintenance; airport operations; operation and maintenance of utilities, including water, sewer, and gas; electrical (including power generation, distribution, and production of raw materials)….."  The Order also states, "Essential Infrastructure shall be construed broadly to avoid any impacts to essential infrastructure broadly defined."

Pennsylvania Stay-At-Home Order

Effective 8:00 p.m. on Monday, March 23, 2020 through April 6, 2020, the following counties are under a Stay at Home Order: Allegheny County, Bucks County, Chester County, Delaware County, Monroe County, Montgomery County, and Philadelphia County. All individuals in counties subject to this policy must stay at home except for certain essential activities and work to provide life-sustaining business and government services. Note that this Order does not prohibit employees from working on construction projects that have been granted a waiver to continue or are subject to the “health care facility” exception. The Governor’s office issued some guidance regarding what is permitted under this Order. 

Pennsylvania PA One Call remains operational

For those contractors that are continuing to work, it is important to note that Pennsylvania One Call System, Inc. remains fully operational through both its call center and online services, to receive underground utility locate requests and to provide those notices to its member utilities.

West Virginia Stay-At-Home Order

On March 23 the Governor of West Virginia issued a Stay at Home Order. All construction activities, however, are exempted under the Order, as well as manufacturing, distribution, and supply to the construction, energy, and other related industries.

SUNDAY, MARCH 22, 2020

It is our understanding that many contractors are receiving exemptions to perform construction work on infrastructure projects, especially in rural areas. We understand that the Governor and others are concerned that if an individual gets the virus, they will be confined to their home and the Commonwealth wants to make sure that essential services (e.g. – water, gas, sewage, electrical, etc.) are not negatively affected by stopping ongoing construction projects. So if you’re working on a project that involves these types of activities, such as a waterline or sewage project – especially in rural areas – you may have a good chance at qualifying for an waiver by submitting a waiver application to the Pennsylvania Department of Community and Economic Development (“DCED”).  In addition, per this letter there is a tremendous lobbying effort taking place on behalf of the construction industry to reclassify the industry group “Highway, Street, and Bridge Construction” as a group that may continue physical operations, consistent with the exceptions made in California, Illinois and New York.

SATURDAY, MARCH 21, 2020

Last evening Governor Wolf updated the original matrix of businesses that must shut down. Notably for the construction industry, a number of exceptions were added, including the construction of health care facilities and emergency repairs.  Additionally, mining and quarrying activities have been included as exceptions, which would arguably include necessary construction related to those activities. The deadline to shut down non-essential businesses was also extended until March 23. Due to pressure being exerted by the construction industry, we also understand that additional exceptions related to construction may be issued in the upcoming days. We will keep you informed as developments occur.

FRIDAY, MARCH 20, 2020

In this article, the Burns White Construction Law Practice Group analyzes the impact to the construction industry of Governor Wolf’s March 19, 2020 Order directing the immediate shut-down of all non-essential business.

THURSDAY, MARCH 19, 2020

New Jersey became the first state to introduce a Bill that would require insurers to pay COVID-19 business interruption claims. This article discusses the serious constitutional questions raised by this bill regarding whether a statute can expand insurance coverage that was freely negotiated between parties in the contract of insurance. 

WEDNESDAY, MARCH 18, 2020

The Associated General Contractors of America (“ACG”) published a helpful summary of the paid leave mandates under the Families First Coronavirus Response Act, the entire text of which can be viewed here.

TUESDAY, MARCH 17, 2020

In this article, the Burns White Employment Practices Liability Practice Group presents a useful set of FAQ’s on the employment law issues associated with COVID-19.

MONDAY, MARCH 16, 2020

As everyone knows, the World Health Organization (WHO) has officially declared the coronavirus outbreak a pandemic. While the health and safety of our clients and friends remain are top priority, we also recognize that your businesses are being significantly impacted. We are being proactive with our clients to help them most effectively manage the disruption and detrimental economic impacts to your businesses.

The spread of the coronavirus is impacting the world but is also presenting some unique challenges for the construction industry. We already are hearing about delays and potential suspensions to ongoing construction projects, as well as decisions to postpone the advertising, letting and awarding of future contracts. Clients are also dealing with unusual employment and HR issues because of the coronavirus outbreak. Here are a few examples of the inquiries we recently received from clients:

  • If my project gets suspended because of the coronavirus, can I recover my delay and idle equipment damages from the project owner?

  • Is the coronavirus covered under my contract’s force majeure provision?

  • Should I be sending a written notice of the delays and impacts being caused by the coronavirus?

  • Should I be doing anything different regarding jobsite safety as a result of the coronavirus?

  • Should we be revising our subcontracts to address coronavirus issues?

  • What if my supplier increases its costs because of shortages in materials resulting from the coronavirus – can I pass those increases onto the project owner?

  • If we decide to temporarily allow our employees to stay at home (or we are forced to do this), are we required to pay the employees?

  • What if one of my employees refuses to come to work because of fears involving contracting the coronavirus – what are my rights and duties?

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Read more about the Burns White Construction Law Practice Group here.

CONTACT
If you have any questions, please contact:
 
Andrew J. Fuga, Esq.
Co-Chair, Construction Law Practice Group
ajfuga@burnswhite.com
 
D. Matthew Jameson III, Esq.
Co-Chair, Construction Law Practice Group
dmjameson@burnswhite.com

CONTACT US

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info@burnswhite.com

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