Kang Haggerty News
On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (“PPP Flex”) was signed into law. PPP Flex was designed to limit some of the restrictions and provide clarification for the original Paycheck Protection Program (“PPP”).
Notably, PPP Flex grants borrowers additional time to incur costs that count towards PPP loan forgiveness, reduces the portion of cost that must be allocated to payroll cost, and provides additional exemption from the Coronavirus Aid Relief, and Economic Security Act (the CARES Act”), the legislation that authorized PPP.
The CARES Act provides that some or all of the borrower’s PPP loan maybe forgiven based on the cost and payments made during what is called the “Cover Period.” The Cover Period begins when the PPP loan is disbursed or, if the borrower elects, from the start of the first regular payroll after the PPP loan is first disbursed. The Cover Period was originally set to be eight (8) weeks; however, under the PPP Flex, the Cover Period may be extended to the earlier of twenty-four (24) weeks after the loan origination or December 31, 2020. Nothing precludes an existing PPP loan borrower from using the original 8-week Cover Period. Under PPP Flex, the percentage that the borrower must use for payroll costs to be eligible for forgiveness was reduced. With the SBA’s final interim rule setting the percentage at 75%, legislators have reduced the amount to 60%, such that now 40% of the loan may be used (during the Cover Period) for certain permitted non-payroll costs such as mortgage interest, rent and utilities. PPP Flex also extends the original 6-month deferral period to up to 10 months after the applicable Covered Period, and extends the maturity date of unforgiven portions of the loans to five (5) years from the date of the forgiveness application.
On May 28th, New Jersey Governor Phil Murphy signed legislation A4157, which temporarily extends the deadline for filing property tax appeals and processing decisions in those cases. The legislature believed that, due to the current pandemic, many people were unable to file the appeals by usual April 1 or May 1, 2020 deadlines. As such, the deadline to file an appeal of the assessment of real property is extended to July 1, 2020. The deadline for county boards of taxation to render decisions in tax appeal cases has also been extended, to September 30, 2020. This bill does not apply to certain tax appeals, such as in counties participating in the Demonstration Program or operating under Property Tax Assessment Reform Act. This bill will go into effective immediately and will be applied retroactively to April 1, 2020.
Given the pandemic and its effect on financial markets coupled with the loss of contribution hours in certain industries, such a construction, many defined benefit pension plans have become underfunded once again. What may come as a surprise to contributing employers of multi-employer pension plans is the impact an underfunded pension plan can have on their business upon withdrawal from the plan. Employers should be aware of withdrawal liability and how to minimize its financial consequences. 
On May 15, 2020 Governor Phil Murphy issued Executive Order 145, allowing elective surgeries and elective invasive procedures to resume. 
Many businesses have now turned to the force majeure clauses present in their contracts—invoking the idea that the COVID-19 pandemic is an unforeseeable “act of God” that has hindered the ability of parties to perform their duties as agreed.