PPP Forgiveness Terms Substantially Relaxed

The terms of the usage of PPP loans were just substantially relaxed by the Paycheck Protection Program Flexibility Act of 2020 – H.R. 7010.  PPP recipients now have 24 weeks (the “covered period”), to use the loan proceeds instead of the original eight weeks and still receive forgiveness of the loan amounts.  However, recipients of already issued loans can elect to still use the original 8 week period for purposes of their forgiveness application calculations if that is more favorable.

The PPP Flexibility Act also provides significant relief involving the provisions that reduce loan forgiveness amounts where staffing levels have declined.  It adds additional time to cure cuts in staffing or compensation levels that reduce forgiveness amounts, extending the deadline from June 30 to December 31, 2020. It also adds a provision that allows two exceptions to the forgiveness penalties for staffing reduction.  Where the loan recipient can document that it was unable to rehire staff because their prior employees, and similarly qualified employees, were not available, the forgiveness reduction will not apply.  It also will not apply where the recipient is unable to return to the same level of business activity as before February 15, 2020 due to sanitation, social distancing or any other customer or worker safety requirements related to federal COVID-19 requirements or guidance.

It also eases the prior restriction developed through the regulatory process that 75% of PPP loan funds were required to be spent on payroll costs.  The new PPP Flexibility Act provision requires only 60% of funds be used on payroll costs, allowing 40% to be spent on other specifically allowed costs of mortgage interest, rent and utility payments.

Further, it substantially extends the original PPP loan payment deferral terms. Originally, no payments of principal, interest or fees were required for six months. Now, no payments are required at all until a forgiveness determination is made, so long as the forgiveness application is filed within 10 months of the end of the “covered period.” That works out to a total of more than 15 months from when the loan is originated without any payments – the 10 months begin to run after the end of the extended 24 week period for using the funds. If the forgiveness application is not filed by the 10 month deadline, payments on the loans begin.

Finally, the PPP Flexibility Act removes a restriction on those that receive PPP loan forgiveness from also taking advantage of a delayed payment of employer payroll taxes.  Now, PPP loan recipients who seek loan forgiveness will also be able to use the deferred payroll tax payment provisions of Section 2302 of the CARES Act.  Those provisions allow for payment of 50 percent of specifically defined applicable employment taxes for 2020 to be paid by December 31, 2021, and the remainder by December 31, 2022.

Updated PPP Guidance Deems Smaller Loans ‘Necessary’

Today, May 13, 2020, the Treasury Department issued a major revision to its interpretation of the Payroll Protection Program’s requirement that loans under the program be “necessary.”  On April 24, it had issued proposed rules regarding the required certification that the “current economic uncertainty makes this loan request necessary,” and provided a safe harbor for entities that may have certified this under a misapprehension of the standard to return funds that were obtained previously.  It emphasized that borrowers must “certify in good faith that their PPP loan request is necessary,” under the threat of potential criminal prosecution for certifications made without sufficient need.

In a near-complete reversal, it has now said, effectively, never mind.  With a newly provided FAQ answer, Treasury now says that all PPP loan recipients of amounts of less than $2 million “will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”  While this gives additional comfort to those that accepted and retained loans in the past, it is too late and highly disappointing for those that, in good faith, considered the prior interpretation and decided to return their loans out of fear of the risk it could later be found to be unnecessary.

The potential risk for those with loans above the $2 million threshold has also been substantially pared back.  The updated guidance tempers the potential consequences to repaying the funds: “If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request.”

Potential Penalty Relief for Late Property Tax Payments Related to COVID-19

Property owners who missed the April deadline for paying the second installment of real property taxes because of the COVID-19 pandemic may be eligible for relief from late payment penalties.  But to get this relief, you may need to act soon.

ALERT: On May 6, 2020, Governor Newsom issued Executive Order N-61-20, directing county tax collectors to waive, until May 6, 2021, all penalties, costs, and interest for late payment of the second installment of property taxes under the following conditions:

  1. The real property is owner-occupied residential property or owner-occupied “small business” property (this includes wineries with up to 1,000 employees);
  2. The taxes owed were not delinquent on March 4, 2020;
  3. The taxpayer timely files a claim for relief on a form prescribed by the county tax collector; and
  4. “The taxpayer demonstrates to the satisfaction of the tax collector that the taxpayer has suffered economic hardship, or was otherwise unable to tender payment of taxes in a timely fashion, due to the COVID-19 pandemic, or any local, state, or federal government response to COVID-19.”

As a result of Executive Order N-61-20, county tax collectors may revise the application forms, deadlines, and review process referenced below, so taxpayers should check the website of their county tax collectors for more information.  A link to a list of all county tax collectors and their websites is below.

The second installment of real property taxes was due April 10, 2020. Missing that deadline normally results in a penalty of 10% of any unpaid taxes, and monthly interest of 1.5% also starts accruing on July 1.  But, in light of the global COVID-19 pandemic, county tax collectors have indicated a willingness to cancel penalties where the failure to pay by the deadline “is due to reasonable cause and circumstances beyond the taxpayer’s control, and occurred notwithstanding the exercise of ordinary care in the absence of willful neglect.” This authority arises under Revenue and Taxation Code Section 4985.2(a), which allows tax collectors to cancel penalties, costs, and charges resulting from tax delinquency under certain circumstances.

While this is welcome news, tax payers should be aware that the grounds for relief are narrow, the current deadlines are tight (with Napa County’s application for penalty relief due on May 15, 2020), and all delinquent taxes will need to be paid to be eligible for penalty relief.

For example, Sonoma County’s tax collector had, before the governor’s executive order, issued guidelines providing that potential penalty relief requires that the property owner (“Owner”) sign a declaration under penalty of perjury that:

(a) Failure to make a timely payment is due to Owner’s experience of at least one of the following circumstances:

(i) A medical condition directly related to the COVID-19 disease;

(ii) The County Health Officer’s COVID-19 Shelter-in-Place Order No. C19-03, as amended by Order No. C19-05, (“Order”) precluded Owner from working or generating sufficient revenue/income, resulting in severe economic hardship;

(iii) Other reasonable cause or circumstance directly related to COVID-19 and/or the Order;

(b) The circumstance was beyond Owner’s control;

(c) Failure to make a timely payment occurred despite Owner’s exercise of ordinary care and without willful neglect.

Under the latest executive order, all counties will be able to use the same standard of impacts from COVID-19. Applicants will need to provide documents supporting their claim for relief.

Currently, deadlines to request relief are approaching, though those deadlines may change with the governor’s executive order. Napa County requires COVID-19-related penalty relief applications be filed by May 15, 2020, while Sonoma County property owners have until June 10, 2020 to file applications. Napa County does not require payment with the application, but if relief is granted, requires payment by June 10, 2020. In contrast, Sonoma County requires payment with the application. It is important to note that relief only applies to late payment of the second installment of property taxes; payment in full of any prior tax delinquencies plus applicable penalties and interest is required with the application in order to be eligible for relief.

Below are links, from prior to the governor’s order, to information and application forms for COVID-19-related late payment penalty relief, listed in order of the application deadlines.

  • Napa County (Filing Deadline: May 15, 2020)
    • Tax collector webpage on COVID-19, with links to FAQs and COVID-19 penalty relief application form.
    • Payment deadline: June 10, 2020
  • Sonoma County (Filing Deadline: June 10, 2020)
    • Tax collector webpage on COVID-19, with links to COVID-19 penalty relief guidelines and application form.
    • Payment required with application filing.
  • Lake County (Filing Deadline: June 30, 2020)
    • Tax collector webpage with links to COVID-19 FAQs and COVID-19 penalty relief application form.
    • Payment required with application filing.
  • Mendocino County (Filing Deadline: June 30, 2020)
    • Tax collector webpage with link to COVID-19 penalty relief application form.
    • Payment required with application filing.

For counties not listed above, a list of the websites for all California county tax collectors can be found here.

For additional information on potential COVID-19-related relief of penalties for late payment of property taxes, please contact Carol Kingery Ritter or Owen Dallmeyer.

COVID-19 Employment Update Emails By Date

Sample Notice Throughout the COVID-19 crisis our employment department has kept clients informed.  Below are the emails by date with the newest at the top.  As we send each new update we will update this resource page so that people can review as needed.

Note: These posts are made available for general informational purposes only and none of the information provided should be considered to constitute legal advice.

08.27.2020 – Clarifying CDC Confusion on Testing and Exposure Guidelines

08.21.2020 – Wildfires, Smoke and Power Outages

07.24.2020 – COVID-19 Updates and Reminders

07.13.2020 – New Statewide COVID-19 Restrictions

07.09.2020 – Local Counties on State Watch List

06.19.2020 – Mandatory Face Coverings, SoCo Covid-19 Check App Update and Tips

06.08.2020 – Things Employers Should Keep in Mind with New Orders

06.01.2020 – Status on SoCo COVID-19 Check App

05.29.2020 – Clarification for Sonoma County Dine In Businesses

05.29.2020  – Sonoma County Drama with Practical Takeaways for All

05.27.2020 – COVID-19 Exposure Protocol

05.26.2020 – Checklists for Reopening in Napa and Marin Counties

05.26.2020 – Sonoma County’s Expanded Stage 2 – There’s an app for that

05.18.2020 – PPP Loan Forgiveness Guidance

05.12.2020 – The Map and Other Resources to Help Plan Your Reopening

05.07.2020 – Highlights of Napa County’s Updated Shelter in Place Order Including Cloth Face Covering Requirement for the Workplace

05.05.2020 -Issues for Onsite Employees During Mid-COVID

04.22.2020 – Napa and Marin County Updates to Shelter in Place Orders

04.08.2020 – Finally! Specific Guidance For Potential Workplace COVID Exposure

04.06.2020 – Napa Order, Employee Work Pass and DOL Regulation Updates

04.01.2020 – Stricter Shelter in Place Orders and Required Posting of Social Distancing Protocol

03.31.2020 – IRS FAQs on FFCRA and CARES

03.29.2020 – DOL Answers Key FFCRA Paid Leave Questions

03.27.2020 – Spanish DOL FFRCA Poster

03.27.2020 – Employer Focused CARES Summary

03.25.2020 – FFCRA DOL Poster and Guidance

03.25.2020 – DOL FAQ re Coverage

03.23.2020 – DOL’s Summary of Key FFCRA Components

03.21.2020 – Clarification of Essential Workers

03.19.2020 – Guidance on the Essential Critical Infrastructure

03.19.2020 – Governor Issues Stay at Home Order

03.19.2020 – Families First Coronavirus Response Act Summary

03.17.2020 – A Small Slice of Clarity

03.16.2020 – COVID 19

03.10.2020 – COVID 19 Sample Notice

Highlights of Napa County’s Updated Shelter in Place Order Including Cloth Face Covering Requirement

On May 7, 2020, Napa County issued an Order modifying the prior Shelter in Place Order that was issued on April 22, 2020. The full text of the Order can be found here, and the updated FAQs are here.

Here are the key changes in the new Order:

  • The Order requires wearing cloth face coverings when inside places of business and in workplaces when interacting with any person where six feet of physical distancing cannot be maintained.
    • A Face Covering is Not Required When: at home; in your car alone or solely with members of your household; exercising outdoors provided you are staying at least six feet apart from anyone who is not a member of your household (but it is recommended that you have a face covering with you and readily accessible); when eating or drinking.
    • Who Should Not Wear a Face Covering: Children 6 years old or younger may not need a face covering and children under 2 should not wear one;  anyone who has trouble breathing or is unable to easily remove a face covering without assistance; anyone who has been advised by a medical professional not to wear a face covering.
    • Essential businesses must require their employees wear a face covering in any area where others may be present, even if there are no customers or members of the public present at the time. Essential businesses should inform customers about the requirement of wearing a face covering, including posting signs at the entrance to the store or facility.
    • All workers operating public transportation, or operating other types of shared transportation are required to wear a face covering when at work in most settings.
    • Workers doing minimum basic operations, like security or payroll, essential infrastructure work, or government functions should wear a face covering when six feet of physical distance cannot be maintained.
    • For more information on cloth face coverings, including links to guidance on how to make your own mask, see the Napa County requirement here.
  • The Order states that businesses will be permitted to reopen within the State of California’s framework that identifies four-stages to reopening.
    • Non-essential businesses will be permitted to reopen according to the State’s four-stage framework. It is anticipated that Early Stage 2 non-essential businesses may be able to open as early as Friday, May 8, 2020. The list of those businesses, and how they will be allowed to operate, will be provided by the State.
    • Counties may be able to move into Deep Stage 2, but only after the State Public Health Officer provides criteria and procedures for doing so, as well as the template for submitting a “readiness plan” that requires self-certification by the Public Health Officer and approval by the Board of Supervisors.
    • Stage 3 non-essential businesses will not be able to reopen until the Governor determines, on a statewide basis, that counties can move into Stage 3. The Governor has also said this stage is months away.
  • The Order allows drive-in activities that can comply with physical distancing requirements.
  • All construction is now allowed but it must comply with Construction Site Requirements to maintain social distancing and sanitation (see Appendix B to the Order).
  • The Order allows outdoor recreation sports that can comply with physical distancing requirements; however, person-to-person contact sports are still prohibited.
    • The list of approved outdoor recreation activities can be found here.
    • Golfing, use of tennis courts, and use of swimming pools (public and semi-private) are permitted as long as they are used in compliance with social distancing protocols. (The specific, detailed requirements for golf courses remain the same – see Appendix C of the Order).
    • You can exercise outdoors if you will not be in close contact with other people or using equipment that other people outside your household have touched. Fitness centers, gyms, recreational centers, fitness equipment at parks, climbing walls, basketball courts, and other shared sports facilities remain closed.
  • Comment on the Short-Term Lodging Industry
    • The Napa County Public Health Officer has advised the lodging industry that reservations beginning on and after June 1, 2020 may be accepted. However, this is not a guarantee that the reservations can be honored, and short-term lodging businesses should inform customers that their reservations will be cancelled if the local and/or state Shelter-At-Home orders continue to prohibit short-term lodging at that time. Further, lodging businesses should consider how they will provide appropriate sanitation and enforce physical distancing protocols when they are allowed to reopen.
    • The Compliance Task Force will not engage in enforcement activities for lodging businesses that are currently accepting reservations for dates beginning June 1, 2020 and beyond, but making new reservations for dates in May is still prohibited and subject to enforcement.

For more information please contact Marissa Buck.

Managing Onsite Employees During COVID

Many of you have continued to have employees work at your facility and others are preparing to re-open and/or have employees return to the workplace.  There are many key issues to consider in having onsite employees and we have attempted to address the majority of them below. Note that the specific requirements will vary depending on your work environment (i.e. an office setting versus a warehouse or production facility) and if you have specific questions you should contact us directly to discuss.

  • Essential Workers Only
    • You should continue to limit employees in the workplace to those who are essential to the onsite business needs. If you have employees returning to the workplace, make sure you know who is returning and when – if you have too many employees coming back on the same day it could be unsafe. It may be helpful to stagger shifts so you have less employees coming and going at the same time.
    • If possible, you can phase in the return of employees but make sure to use non-discriminatory factors in determining who comes back when, such as seniority.
    • To the extent you are able to keep all or part of your workforce remote you should continue to allow employees to work remotely. It is also possible to alternate work from home weeks or days so that you have less employees at the workplace at one time.
    • Continue to stress to employees that they should not come to work if they are sick and to notify the appropriate person if they have been exposed to someone with COVID-19.
  • Refusal or Inability to Return to Work
    • Determine how to handle employees who are either unable or unwilling to return to work, whether it is because of fear, health concerns, family obligations, or employees that remain quarantined due to COVID-19 exposure.
    • These will need to be handled on a case-by-case basis. It may be helpful to create a company policy beforehand on how to handle employees who are not in a protected category, but only if you are able to consistently follow that policy.  At the very least designate one person to address these concerns so that consistency is more likely to be obtained.
    • For employees in high risk groups, consider allowing them to stay remote or on leave and if they are able to return to work consider if additional PPE or other protections are available (i.e. a separate workstation away from other employees, fewer days in the workplace, etc.). 
  • Workplace Safety
    • Social Distancing Protocol: As we provided in an earlier update, all of the Bay Area counties have issued required Social Distancing Protocols that need to be posted at the worksite. A copy of the sample protocol is attached to all relevant County Shelter in Place Orders and they are available in Spanish.  If you don’t already have one, you need to create a protocol and post it where employees can see it when they return to the workplace. It is also helpful to circulate the protocol and any other updated safety policies and procedures to employees before the return to the workplace so employees know what to expect. (If you need us to resend the April 1 email let us know).
    • PPE: Depending on the work environment and the Shelter in Place Order for your County, you may need to provide PPE for your employees, such as gloves, masks, face shields, or goggles. Employers are required by OSHA to provide and pay for PPE. Increasing the availability of hand sanitizer throughout the workplace and sinks with soap is also helpful.
    • Additional Resources: CDC guidance on cleaning and disinfecting facilities can be found here: https://www.cdc.gov/coronavirus/2019-ncov/community/disinfecting-building-facility.html, as well as additional guidance from OSHA on protecting workers during a pandemic: https://www.osha.gov/Publications/OSHAFS-3747.pdf.
  • Symptom Checks Including Temperature Readings
    • The EEOC has stated that doing employee symptom checks, including taking employee temperatures, before they enter the workplace is allowable under the ADA because COVID-19 presents a direct threat to other employees, customers, and the general public. Employers can also ask employees if they have COVID-19 related symptoms. The CDC recently updated the list of COVID-19 symptoms, stating that people with the following symptoms may have COVID-19:
      • cough
      • shortness of breath, or difficulty breathing; OR
      • at least two of the following symptoms: fever, headache, chills, sore throat, repeated shaking with chills, new loss of taste or smell, and muscle pain.
    • All information collected about employee illness is considered confidential medical information and must be treated as such by the employer.
    • Particular Issues Regarding Temperature Checks:
      • While temperature checks are permitted, the EEOC notes in their guidance that employers should be aware that some people with COVID-19 do not have a fever. Temperature checks should be done in conjunction with other symptom checks and/or questions related to high-risk factors such as being in close quarters with a person who has COVID-19 or traveling to a high risk area in the last 14 days.
      • If you send an employee home because they have a temperature they should be paid for reporting to work that day to limit potential liability. Additionally, you should have a policy for what to do if an employee refuses to have their temperature taken.
      • It is not required that you have a medical professional take temperatures, however, the person doing it should be trained, have proper PPE (mask, gloves, face shield or goggles, and a gown), use a no-touch thermometer (and know how to use it), and understand the confidentiality considerations.
      • An employee’s temperature is confidential medical information, thus the temperature check needs to be done as privately as possible to keep the information confidential. Employees should not line up and wait to have their temperature taken, both for privacy reasons and for social distancing purposes.
    • Although you are allowed to take temperatures, you should consider this step carefully to determine if you want to start this process.  For now, you are not required to take temperatures and unless or until it is required, you may want to hold off given the logistical issues and the confidentiality concerns.
    • For more information on symptom checks and other issues regarding return to work procedures, the EEOC’s Question and Answer page can be found here: https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm.
  • Potential or Actual COVID-19 Exposure in the Workplace
    • Create a plan for how to respond if an employee becomes sick at work including sending the employee home, cleaning and disinfecting the workplace, and identifying all employees who had contact with the sick employee starting 2 days before the employee showed symptoms.
    • The CDC provided guidelines for permitting essential employees to continue working following potential exposure to COVID-19 if they remain asymptomatic and additional precautions are implemented (see below). Potential exposure means living with or having close contact (w/in 6 ft.) of an individual with confirmed or suspected COVID-19 beginning 48 hours before the individual showed symptoms.
      • Pre-screen the employee before they enter the workplace by taking their temperature and assessing symptoms
      • As long as no temperature or symptoms, the employee should self-monitor under the supervision of the employer’s occupational health program
      • The employee should wear a face mask at all times in the workplace for 14 days after the last exposure (face mask provided by employer)
      • The employee should maintain 6 ft. and practice social distancing whenever possible in the workplace
      • Clean and disinfect all areas such as offices, bathrooms, common areas, shared electronic equipment routinely
      • If the employee becomes sick during the day they should be sent home immediately and their workplace should be cleaned and disinfected
      • Compile information on all persons who had contact with the ill employee during the time the employee had symptoms and 2 days prior, including anyone who was w/in 6 ft. of the employee during this time period
    • Determining when an employee can return to the workplace after having COVID-19 should be an interactive process between the employer and the employee and their healthcare provider. For more information on when an individual with COVID-19 can discontinue home isolation see the CDC’s guidance here: https://www.cdc.gov/coronavirus/2019-ncov/hcp/disposition-in-home-patients.html.
    • Additional resources for employers in planning and responding to COVID-19 can be found here: https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html.

Governmental guidance on this crisis evolves constantly.  We will continue to do our best in keeping you informed.  For specific questions please reach out to Jennifer Douglas or Marissa Buck.

CA ABC and TTB Provide Guidance to Wineries on Virtual Tastings

In light of the wide-spread shut-downs and disruptions resulting from the Covid-19 pandemic, both the California Department of Alcoholic Beverage Control and the Alcohol and Tobacco Tax and Trade Bureau have recently provided guidance to wineries that are now venturing into the new world of “virtual” wine tastings that occur online.

ABC’s latest Notice of Regulatory Relief on Virtual Wine Tastings, issued on Friday April 24, provided certain guidelines for wineries conducting such virtual tastings while their licensed wine premises or tasting rooms are closed:

  • Samples or tastes for wine tastings cannot be given for free to consumers.  Such samples or tastes must either be sold to the consumer, or included as part of a sale of wine or other products to the consumer.
  • Any wine shipped to consumers, including small tasting samples, must be sent in a manufacturer sealed container.
  • While there are no limits on the size of the tasting sample, any containers in which the tasting samples are sent must meet the federal regulatory guidelines for both labeling and standards of fill and any applicable state labeling regulations.
    • Acceptable standards for fill for wine under federal law include the following: 3 Liters, 1.5 Liters, 1 Liter, 750ml, 50ml, 375ml, 187ml, 100ml (3.4 fl. oz.) and 50ml (1.7 fl. oz).
    • Importantly, this means that shipping “tastes” to consumers in small vials that do not meet the above criteria would not be legal under federal or state law.
  • Such shipments are subject to sales and/or other applicable taxes, just as typical direct to consumer sales would be.
  • In accordance with ABC’s previous regulatory guidance, ABC is temporarily allowing the free shipment of wine to consumers, including samples for virtual wine tastings, during the Covid-19 emergency.
  • Finally, it should be noted that the ABC’s latest Notice of Regulatory Relief specifically applies to the sale and shipping of wine and tasting samples within California.  Any sales and shipments of wines, including tasting samples, to consumers outside of California will need to comply with the laws of the applicable state to which the wines will be shipped.

The full text of the Third Notice of Regulatory Relief can be found here.

In response to an inquiry by Wine Institute, TTB provided guidance regarding virtual tasting samples being provided by wineries to consumers.   (see – https://wineinstitute.org/news-alerts/tasting-samples-for-virtual-winery-experiences-approved-by-ttb/ )

Per Wine Institute, TTB has stated that it will treat these wines just like any other taxable removals, subject to standard production and labeling requirements, payment of excise tax and applicable reporting. TTB’s guidance included the following:

  • As noted above, samples must be provided in an approved standard of fill.
  • Wine tasting containers must be properly labeled.
  1. If the tasting sample is a wine that already has an approved Certificate of Label Approval (“COLA”), the winery is permitted to change the net contents on the wine as an allowable revision without having to submit a new COLA. If no COLA was previously obtained, the winery must apply for and obtain COLA approval prior to labeling of the wine tasting sample.
  2. As a reminder, domestic wines must include the following information on the brand or back label as required under the regulations:  Brand name, Class and type designation, Appellation of origin (if required), Alcohol content, Bottler’s name and address statement, Government health warning statement, Net contents and Sulfite declaration. Assuming that the tasting samples being sent to consumers are in containers smaller than 187ml, please note that the minimum type size for all of the foregoing under federal regulations is 1mm.
  • As noted above, wines use for tasting samples are treated just like any other removals for sales or consumption – the wines must be tax paid, all required records must be kept and all required reports must be filed.  Shipments of these containers must be treated the same as other types of removals from bond – for example, the wine must be tax-determined, and wineries must maintain the required removal from bond records.

For additional information on conducting virtual wine tastings, please contact Bahaneh Hobel or John Trinidad.

Additional Paycheck Protection Program Funding Approved; Disaster Loan Program Expanded To Farmers

On April 24, H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act, was signed into law. In addition to providing significant funding for health care providers ($75 billion) and testing ($25 billion), the stimulus package revives the CARES Act’s Paycheck Protection Program (PPP) with an additional $310 billion in funding for forgivable loans.  This expanded stimulus and relief package sets aside a portion of that funding for smaller lenders.  The additional funding does not change the limits on the availability of the PPP’s forgivable loans, nor change the priority of borrowers in obtaining those loans.

However, in reaction to various reports on public companies obtaining PPP loans, the Treasury Department updated its PPP FAQs and this morning, April 24, issued additional proposed rules regarding the required certification that the “current economic uncertainty makes this loan request necessary,” and provided a safe harbor for entities that may have certified this under a misapprehension of the standard to return funds that were obtained previously.  Borrowers must “certify in good faith that their PPP loan request is necessary.”

The legislation also makes one significant change to the CARES Act, by now allowing agricultural enterprises (i.e., farmers) to seek Economic Injury Disaster Loans.  The SBA’s EIDL Program is typically not available to agricultural enterprises, which would normally turn to the USDA’s FSA Emergency Farm Loan program in a natural disaster.  However, that program covers actual damages to crops.  With the change to the provision made in H.R. 266, agricultural enterprises can now seek EIDLs from the SBA for economic losses, including a $10,000 advance that does not need to be repaid.  However, even with the additional funding whether new applicants will be able to obtain EIDLs is unclear.  Applications are processed on a “first come, first served” basis, and reports indicate a very large volume of applications that have not been funded already.  The SBA had paused accepting applications for EIDLs pending additional funding.  Details on the EIDL program are available on the SBA’s website here.

CA ABC Provides Additional Coronavirus Regulatory Relief; CA ABC and TTB Postpone Due Dates for Certain Payments and Filings

Over the past forty-eight hours, the California Department of Alcoholic Beverage Control (“CA ABC”) has provided additional regulatory relief to licensees, including information relevant to industry members engaged in fundraising in connection with Coronavirus-related charities.  In addition, CA ABC and the Alcohol Tobacco Tax and Trade Bureau (”TTB”) announced that industry members will be permitted to delay certain payments and filings.  We have summarized each of these notices below, but the full text of these notices can be accessed through the links below:

  1. CA ABC Second Notice of Regulatory Relief
  2. CA ABC Notice re Renewal Fees
  3. TTB Industry Circular re Postponement of Payments and Filings 

1. CA ABC Second Notice of Regulatory Relief

CA ABC issued a Second Notice of Regulatory Relief on April 1, 2020 (the “Second Notice”) temporarily loosening  it’s enforcement of certain regulations during the period that shelter-in-place restrictions are in place..  CA ABC had previously announced certain regulatory relief measures in its first Notice of Regulatory Relief (“First Notice”) on March 19, 2020 and we summarized that notice in this blog post.

Below is a summary of ABC’s Second April Notice.

FREE DELIVERY OF ALCOHOLIC BEVERAGES TEMPORARILY ALLOWED: ABC has temporarily provided licensees that can ship or deliver alcoholic beverages, whether pursuant to  the ABC Act or pursuant to the First Notice, the right to deliver or ship to consumers for free, without violating  Business and Professions Code Section 25600, which prohibits licensees from providing any “premium, gift, or free goods” in connection with the sale or marketing of alcoholic beverages.

DELIVERY HOURS OF ALCOHOL TO RETAILERS EXTENDED TO MIDNIGHT: Licensees (including manufacturers, winegrowers, and wholesalers) may now deliver alcoholic beverages to retailers between 12 AM and 8 PM (rather than starting at 3AM). The prohibition against Sunday deliveries remains in effect.  Note that if a retail licensee has a condition on its license limiting the hours during which it may allow deliveries, such condition shall remain in full effect.

CERTAIN CHARITABLE PROMOTIONS RELATED TO SALES OF ALCOHOL:  The CA ABC is relaxing its enforcement of restrictions on charitable promotions during this challenging time. Manufacturers, wholesalers, or other supplier-type licensees may advertise that a portion of the purchase price of the alcoholic beverages will be donated to a specified charitable organization related to Coronavirus-related relief, subject to the following limitations:

  1. The donation and promotion involve a bona fide charitable organization providing relief related to the COVID-19 pandemic;
  2. The promotion is in connection with the sale of sealed containers and does not encourage or promote the consumption of alcoholic beverages; and
  3. The donation and promotion do not identify, advertise, or otherwise promote or involve any retail licensee.

Any promotions under this provision must conclude no later than June 30, 2020. ABC has stated it will reassess this measure at that time and determine if it should be extended further.

ABC previously stated in its FAQs that donations to nonprofits benefiting restaurant and hospitality workers in general are permissible, so long as it is just a donation to an organization and does not identify or involve any quid pro quo with specific retailers. In addition, gifts or donations (such as meals or gift cards) may not be made directly to retailer employees.

DISTILLED SPIRITS MANUFACTURERS PROVIDING HIGH-PROOF SPIRITS FOR DISINFECTION PURPOSES: Licensed distilled spirits manufacturers (Type 04) and craft distillers (Type 74) may produce denatured high proof spirits if such distilled spirits are produced for use in accordance with guidance from the Food and Drug Administration, which may be found in the FDA’s Policy (PDF). Undenatured distilled spirits are not included in this relief as they are considered alcoholic beverages. Licensees may provide such distilled spirits for free to any person, including retail licensees, if they are not used to promote the manufacturer’s alcoholic beverage products and are not provided in exchange for an agreement to purchase anything produced or distributed by the manufacturer.

***

Licensees should note that all of the above changes are only temporary and ABC will provide the industry 10 days’ notice before these guidelines terminate.  And although these provisions relax ABC’s enforcement of certain provisions of the ABC Act, the ABC did remind industry members that “[a]ll provisions of the Alcoholic Beverage Control Act, including …tied-house and trade practice restrictions, remain in effect and subject to enforcement unless the Department has provided express notice that specific provisions will not be enforced.”

As we noted in our earlier post, local regulations and restrictions may restrict the ability of licensees to engage in these activities, so you should always confirm that any activity in which you engage is permitted by local zoning or use permits.

2. CA ABC Grants 30 Day Grace Period for License Renewal Fees and Penalties

The CA ABC is providing licensees a 30 day grace-period for paying their annual renewal fees.

For Licensees who have previously missed their license renewal deadline and owe penalties as a result of failing to pay their renewal fee in a timely manner, the ABC is also granting a 30 day grace period.

The ABC has provided helpful tables in its notice that lay out the exact deadlines that have been extended and new due dates for license renewals.

3. TTB Postpones Tax Payment and Filing Deadlines

To help ease the burden on the alcohol beverage industry dealing with the impact of COVID-19 the TTB is postponing several filing and payment due dates for 90days where the original due date falls on or after March 1, 2020, through July 1, 2020. The TTB’s relief actions include:

  1. Postponing tax payment due dates for wine, beer, distilled spirits, tobacco products, cigarette papers and tubes, firearms, and ammunition excise taxes.
  2. Postponing filing due dates for excise tax returns.
  3. Postponing filing due dates for submission of operational reports.
  4. Postponing filing due dates for claims for credit or refund by producers.
  5. Postponing filing due dates for claims by manufacturers of non-beverage products.
  6. Postponing due dates for submission of export documentation.
  7. Considering emergency variations from regulatory requirements for affected businesses on a case-by-case basis.
  8. Reviewing requests for relief from penalties based on reasonable cause.

For a list of Coronavirus related resources, please see our Resources Page.  

If you have any questions regarding alcohol beverage licensing, please contact John Trinidad or Bahaneh Hobel.

 

Additional Information on Paycheck Protection Program and SBA Disaster Loan Programs

The U.S. Department of the Treasury announced today, March 31, that the SBA and the Treasury expect the CARES Act programs to be up and running by this Friday, April 3, 2020. You can find resources related to the CARES Act programs on Treasury’s website here, which is updated often and currently includes an application for borrowers for the Paycheck Protection Program (PPP). Additionally, the SBA has a resource page for small business that can be accessed here.

Significantly, the SBA is now indicating that 75% of PPP loan amounts will need to be spent on payroll as opposed to other allowed uses in order to qualify for loan forgiveness.  It has also provided details on the loans, which will have relatively short, two year terms for the balance that is not forgiven, but with very low interest rates of 1%.

The Treasury and the IRS also have posted resources regarding the Employee Retention Tax Credit.  But note that you cannot receive the payroll tax credit if you receive a PPP loan.  Additional information on the tax credit is now on Treasury’s Frequently Asked Questions page here, and on the IRS FAQ page here. The IRS has created a new tax form for advance credits and is currently in the process of finalizing the instructions for the form.

Here are some additional details on the available loan programs:

The Paycheck Protection Program (PPP) in the CARES Act will be administered under the U.S. Small Business Administration’s loan provisions.  The SBA and Treasury Department will be releasing additional regulations and guidance to lenders on the program.  The loans will be obtained directly from banks, so you should contact your bank to learn if and how it plans to participate in the program.

Eligible employers can borrow 2.5 times their monthly payroll costs  and other specific costs as described below.  Loan amounts can be up to $10 million.  An employer must either already meet the list of eligibility by number of employees maintained by the SBA, or have up to 500 employees, whichever is greater.  Wineries can have up to 1,000 employees; other employers can check their industry size limit at https://www.sba.gov/size-standards/.

The PPP loans have significant benefits, most notably that 8 weeks of payroll costs and other specific expenses will be forgiven as long as the employer maintains its prior headcount, with some ability to reduce salary levels (discussed below).  Employers that have already reduced headcount can rehire employees and still obtain the full forgiveness amount.  The loans are capped at 4% interest, and have deferred payments for at least six months, and up to one year.  The interest on the loans will not be forgiven, so some payments on the loans need to be made.  The loans can have up to 10 year terms; have no recourse to a businesses’ shareholders, partners or members; and require no collateral or personal guarantee.

The PPP is a separate program from the SBA’s existing Economic Injury Disaster Loan (EIDL) program.  Businesses apply directly to the SBA for these loans, at https://covid19relief.sba.gov.  The EIDL program provides loans of up to $2 million to cover economic injuries incurred in a disaster.  The CARES Act has broadened the eligibility for those loans as well, similar to the Paycheck Protection Program.  For now, a borrower can apply for an EIDL loan and also be eligible for a Paycheck Protection Loan, and can refinance the EIDL loan into a future paycheck protection loan.  However, the EIDL loan is still a loan, and needs to be paid back.  It will not be forgiven, and the proceeds of an EIDL cannot go to cover payroll or other costs that a business would seek to borrow and have forgiven under the PPP.  Note that once the PPP loans become available, business will no longer be eligible for both programs, and there is thus a narrow window to obtain an EIDL and still participate in the PPP.  Also, participants in the PPP loan forgiveness will not be able to use the employment tax credit or payroll tax deferrals in section 2301 and 2302 of the CARES Act.

As for the PPP loans, the loan amount can include 2.5 times the prior year’s average total monthly payroll costs (modified for seasonal employers or new businesses), subject to important limits below.  Payroll costs include:

(aa) the sum of payments of any compensation with respect to employees that is a—

(AA) salary, wage, commission, or similar compensation;

(BB) payment of cash tip or equivalent;

(CC) payment for vacation, parental, family, medical, or sick leave;

(DD) allowance for dismissal or separation;

(EE) payment required for the provisions of group health care benefits, including insurance premiums;

(FF) payment of any retirement benefit; or

(GG) payment of State or local tax assessed on the compensation of employees; and

(bb) the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period…

Importantly, in calculating the payroll costs, the total does not include:

(aa) the compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the covered period;

(bb) taxes imposed or withheld under chapters 21, 22, or 24 of the Internal Revenue Code of 1986 during the covered period;

(cc) any compensation of an employee whose principal place of residence is outside of the United States;

(dd) qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–127); or

(ee) qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act (Public Law 116–127)….

Thus, in determining eligible loan amounts, the pro rata monthly portion of salary for an employee earning over $100,000 per year is not included (but the amount under $100K annualized is included.)

The loan proceeds can be spent on a variety of business costs and expenses set out in the SBA Act; however only a narrow category of costs can be forgiven under the CARES Act.  These are the amounts incurred and payments made over the 8 weeks after the loan is obtained (not to exceed the principal amount of the loan) for:

(1) Payroll costs.

(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).

(3) Any payment on any covered rent obligation.

(4) Any covered utility payment.

PPP loan proceeds used for any other purpose will not be forgiven.  The lender will require documentation to prove that the funds to be forgiven were spent on allowed items.  The Treasury Department will be providing regulations as to how the loan forgiveness program is to be implemented.

The amount of forgiveness will be reduced if the business reduces its employee headcount below its previous average full-time employee level, based on the average number of full-time equivalent employees for each pay period within a month, either during the period from February 15, 2019 to June 30, 2019; or from January 1, 2020 to February 29, 2020, at the business’s election.  Seasonal employers are required to use the February to June period.  Employers have the opportunity to re-hire employees that have been released as a result of the current crisis and still take advantage of the full loan forgiveness amount, as long as employee full-time equivalent returns to their prior levels by June 30, 2020.

There is more flexibility as regards to salary reductions without losing the full forgiveness amount.  The amount of forgiveness will be reduced by the amount of any reduction in salary that exceeds 25%, but only for each employee that did not make more than $100,000 on an annualized basis during any single pay period in 2019.  In other words, salaries for those making less than $100,000 per year can be reduced by up to 25% without impacting the loan forgiveness amount.  This also means employees who earned more than $100,000 on an annualized basis in any pay period in 2019 (even those that received a raise to $100,000 annualized only in the last pay period of 2019) could have their salaries reduced by more than 25% without decreasing the available loan forgiveness.  Employers also have the opportunity to remedy any reductions in salary by June 30, 2020 as well.

For a list of Coronavirus related resources, please see our Resources Page.  

Employer Focused CARES Act Summary

While numerous summaries and reports on the stimulus bill enacted on Friday are circulating, the following are the key provisions in the CARES Act that will impact employers, and small employers in particular.  “Small” under the CARES Act includes all business of up to 500 employees in addition to the existing definition of small business maintained by the U.S. Small Business Administration.  For wineries, that limit is 1,000 employees.  Other employers can check their industry limits at https://www.sba.gov/size-standards/.

Important Changes to Families First Coronavirus Response Act (“FFCRA”):

  • Allows an employee who was laid off by an employer on March 1, 2020 or later to have access to paid leave under the EFMLA if they are rehired by the employer and they worked for the employer for at least 30 of the last 60 calendar days prior to being laid off.
  • Allows employers to receive an advance of the payroll tax credit provided under the FFCRA for qualified wages paid for EMLA and EPS leave. Forms and instructions for this process are to be provided by the Secretary of the Treasury.

Unemployment Benefits:

  • Emergency increase in unemployment compensation benefits:
    • Provides an additional $600/week recipients of UI benefits or Pandemic Unemployment Assistance from the date the State enters into the agreement with the Secretary of Labor through July 31, 2020.
    • Payments will be processed through each State along with regular state UI benefits and can be provided in the same check or a separate check, but must be provided on a weekly basis.
  • Federal Funding For First Week of Unemployment Period with No Waiting Period:
    • Provides 100% reimbursement to States for benefits paid during the first week of unemployment if States waive the one week waiting period for UI benefits. California has already waived the 1 week waiting period.
  • Pandemic Unemployment Assistance Program:
    • Creates a new Pandemic Unemployment Assistance program (through December 31, 2020) to help those not traditionally eligible for unemployment insurance (UI) benefits, including self-employed individuals, independent contractors, those with limited work history and those who are unable to work as a result of the coronavirus public health emergency.
  • Pandemic Emergency Unemployment Compensation:
    • Provides an additional 13 weeks of UI benefits to those who remain unemployed after all weeks of state unemployment are no longer available.
    • The amount provided is the same as above – the regular amount provided by the State plus an additional $600/week.

SBA Loan and Loan Forgiveness Provisions

  • Creates a loan program for employers with fewer than 500 employees and other SBA defined small businesses to borrow up to 2.5x their monthly payroll (with a maximum loan amount of $10 million).  Sole proprietors and independent contractors are also eligible.
  • Loans can be used to cover payroll and other specified compensation including: healthcare costs, mortgage interest (but not principal), rent, utilities, and interest (but not principal) on other preexisting debt obligations.
    • Payroll costs means any compensation given to employees that is a salary, wage, commission, payment of cash tip or equivalent, payment for vacation, family, medical, or sick leave (but not wages paid under the FFCRA), allowance for dismissal or separation, health care benefits including premiums, retirement benefits, and state or local tax assessed on compensation.
    • Payroll costs cannot exceed $100,000 annually for an individual employee (prorated).
    • Payroll costs do not include qualified sick and family leave wages under the FFCRA for which a credit is already allowed, among other specified exclusions.
  • Interest rates cannot exceed 4%, and all payments must be deferred for at least 6 months and up to 1 year. Note that interest on the loans will not be forgiven.
  • Loans do not require a personal guarantee or collateral, and are nonrecourse to businesses’ shareholders, partners and members. Employers are also not required to show that they were unable to obtain credit elsewhere.
  • The principal amount that is used to cover payroll, mortgage interest, rent and utilities (but not the other allowed uses) for the 8 weeks following the loan approval will be forgiven as long as employee numbers and payrolls are maintained
    • Allows forgiveness for extra wages provided to tipped employees.
  • The forgiveness amount is reduced proportionately by any decrease in the number of employees as compared to the prior year. Forgiveness is also reduced if any employee who earns under $100K on an annualized basis has their wages reduced by more than 25%. There may be de minimis exceptions to these restrictions described in forthcoming regulations.
    • Exemption for Re-Hires: To encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period. This applies to a reduction in force or reduction in salary for 1 or more employees during the period beginning on February 15, 2020 and ending 30 days after the enactment of the Act. Employers must re-hire employees (or eliminate the reduction in wages) no later than June 30, 2020.
  • The remaining balance after forgiveness can have a maturity up to 10 years.  Prepayment penalties are not allowed.

Additional Business Provisions

  • Payroll Tax Credit for Employee Retention:
    • The provision provides a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose: (1) operations were fully or partially suspended, due to a COVID-19-related shutdown order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year.
    • The credit is based on qualified wages paid to the employee.
      • For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related shutdown order.
      • For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shutdown order.
    • The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. This does not include any wages paid to employees under the FFCRA for EFMLA or EPS leave.
    • The credit applies to wages paid after March 12, 2020, and before January 1, 2021.
    • The credit is reduced by any amounts credited under the FFCRA for wages paid under EMFLA or EPS leave.
    • Employers who receive a covered loan from the SBA (see above) are not eligible for the credit under this section.
  • Delay of payment of payroll taxes:
    • Allows employers to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees.
    • The deferred employment tax is required to be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.
    • The payroll tax deferral period runs from the date of enactment of the Act until December 31, 2020.
    • This section does not apply if an employer had their indebtedness forgiven under the provisions of this Act for a covered SBA loan.
  • Modification of Net Operating Losses (“NOL”):
    • An NOL arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. It also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
  • Modification of Limitation on Business Interest:
    • Temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30-percent limitation to 50 percent of taxable income (with adjustments) for 2019 and 2020.
  • Amendment Regarding Qualified Improvement Property:

Enables businesses, especially in the hospitality industry, to write off costs associated with improving facilities immediately, instead of having to depreciate those improvements over the 39-year life of the building.

For a list of Coronavirus related resources, please see our Resources Page.  

Coronavirus (COVID-19) Resources

Updated July 24, 2020

In addition to our periodic blog posts on Coronavirus related news, DPF has compiled a list of Coronavirus resources, including those specifically aimed at the alcohol beverage and hospitality industries,  that may be of interest to our clients. 

CALIFORNIA STATE RESOURCES       

CA Coronavirus Roadmap – Counties: https://covid19.ca.gov/roadmap-counties/

CA Coronavirus Roadmap Reopening Guidance: https://covid19.ca.gov/roadmap/#guidance

CA Coronavirus Industry Reopening Guidance: https://covid19.ca.gov/industry-guidance/

CA Coronavirus Portal:  https://covid19.ca.gov/

CA Dept. of Public Health Resource Page:  https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/COVID-19/Guidance-for-Face-Coverings_06-18-2020.pdf

https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/Immunization/ncov2019.aspx

03/19/2020 Governor’s Executive Order re Shelter in Place Order:  https://covid19.ca.gov/img/N-33-20.pdf

03/20/2020 List of Designated Essential Workforce under Executive Order:  https://covid19.ca.gov/img/EssentialCriticalInfrastructureWorkers.pdf

COUNTY RESOURCES

Napa County

COVID-19 Exposure Guidance:  https://www.countyofnapa.org/DocumentCenter/View/18019/Guidance-for-Employers-and-the-Community_Positive-or-Exposed-Employees

Social Distancing Protocol: https://www.countyofnapa.org/DocumentCenter/View/17123/Appendix-A-Social-Distancing-Protocol?bidId=

Industry Guidance: https://www.countyofnapa.org/2840/Industry-Guidance

Dine In:  https://www.countyofnapa.org/DocumentCenter/View/17584/Restaurant-Sector-Reopening-Guidelines

Retail: https://www.countyofnapa.org/DocumentCenter/View/17585/Retail-Sector-Reopening-Guidelines-

Professional Services (offices):  https://www.countyofnapa.org/DocumentCenter/View/17586/Professional-Services-Sector-Reopening-Guidelines

Restaurant Specific Facts: https://www.countyofnapa.org/DocumentCenter/View/17712/Restaurant-Specific-FAQs-ENG

Health Notice for Public Pool and Spa Operation:  https://www.countyofnapa.org/DocumentCenter/View/17696/Health-Notice-for-Public-Pools-and-Spas-in-Napa-County-5-19-2020

Social Distancing and Sanitation Protocol – Public Swimming Pools:https://www.countyofnapa.org/DocumentCenter/View/17695/Swimming-Pool-Social-Distancing-and-Sanitizing-in-Napa-County-5-19-202

County Coronavirus site: https://www.countyofnapa.org/2739/Coronavirus

Updates to Napa County Shelter at Home Orders (Updated May 6, 2020):  https://www.countyofnapa.org/2813/Shelter-at-Home-Order

04/02/2020 Shelter at Home Order Extension:  https://www.countyofnapa.org/DocumentCenter/View/17112/Shelter-at-Home-Order-4-3-2020–?bidId=

03/20/2020 Shelter at Home Order (Updated 03/22/2020): https://www.countyofnapa.org/DocumentCenter/View/16684/Shelter-at-Home-FAQ_ENGLISH

Sonoma County

                    Santa Rosa City Temporary Sick Leave Ordinance for COVID-19:       https://srcity.org/3348/Temporary-Sick-Leave-Ordinance

Outdoor Dining Guidance: https://socoemergency.org/wp-   content/uploads/2020/05/COVID-19-Guidance-Outdoor- Dining-ENG-05232020.pdf

                    Covid-19 Check App FAQs:

https://sonomacounty.ca.gov/Health/Disease-Control/Coronavirus/FAQ-COVID-app/

https://sonomacounty.ca.gov/Health/Disease-Control/Coronavirus/SoCo-COVID19-Check- App/

Economic Development Board – COVID – 19 App/Strategies to Help Reopen Local Businesses:http://sonomaedb.org/Business-Assistance/Coronavirus/Business-Management-Plans/

County Coronavirus site: https://socoemergency.org/emergency/novel-coronavirus/

                     https://socoemergency.org/emergency/novel-coronavirus/soco-covid-19-check/

04/01/20 Extension of Shelter in Place Order:  https://socoemergency.org/order-of-the-health-officer-shelter-in-place-extended/

Original Shelter in Place Order: https://socoemergency.org/order-of-the-health-officer-shelter-in-place/

Marin County

         Specific Protection Plan: https://storage.googleapis.com/proudcity/marinrecoversca/uploads/2020/05/COVID-19-Site-Specific-Protection-Plan-SPP-Fillable-accessible.pdf

         Guidelines for Businesses:  https://marinrecovers.com/agencies/guidelines-for-businesses/

         Golf Courses and Racket Clubs: https://marinrecovers.com/parks-outdoor-recreation/

         Outdoor Recreational Activity Businesses:  https://marinrecovers.com/parks-outdoor-recreation/

         Recreational Equipment Rentals: https://marinrecovers.com/parks-outdoor-recreation/

         Pet Groomers: https://marinrecovers.com/personal-services/

         Summer/Sports Camps and Child Care:  https://marinrecovers.com/summer-camps-youth-activities/

         Shelter in Place Order: https://coronavirus.marinhhs.org/marin-public-health-order-may-15-2020

Other County Shelter in Place Orders and county-specific COVID-19 sites Information:

https://covid19.ca.gov/state-local-resources/#top

https://www.counties.org/sites/main/files/file-attachments/2020-mar20-ca-map-shelter_in_place-19-final.pdf

ALCOHOL BEVERAGE INDUSTRY RESOURCES

U.S. Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) Coronavirus Specific Information (updated 3/30/2020): https://www.ttb.gov/coronavirus

03/31/2020 TTB Industry Circular re Postponement of Tax Payment and Filing Due Dates:  https://www.ttb.gov/industry-circulars/ttb-industry-circulars-2020-2

California Department of Alcoholic Beverage Control COVID-19 Updates:  https://www.abc.ca.gov/law-and-policy/coronavirus19/

05/20/2020 Fifth Notice re Regulatory Relief: https://www.abc.ca.gov/fifth-notice-of-regulatory-relief/

05/15/2020 Fourth Notice re Regulatory Relief: https://www.abc.ca.gov/fourth-notice-of-regulatory-relief/

04/21/2020 Third Notice re Regulatory Relief: https://www.abc.ca.gov/third-notice-of-regulatory-relief/

04/01/2020 Second Notice re Regulatory Relief: https://www.abc.ca.gov/second-notice-of-regulatory-relief/

03/19/2020 First Notice re Regulatory Relief: https://www.abc.ca.gov/notice-of-regulatory-relief/

03/21/2020 FAQ re Regulatory Relief: https://www.abc.ca.gov/law-and-policy/coronavirus19/frequently-asked-questions/

California Wine Institute COVID-19 Resources Page:  https://wineinstitute.org/news-alerts/coronavirus-covid-19-update

California Wine Institute “Winery Tasting Rooms Reopening Protocols” (posted 5/13/2020):

https://wineinstitute.org/our-work/compliance/covid-19-updates/tasting-room-guidance/

California Craft Breweries COVID-19 Resources Page:  http://californiacraftbeer.com/covid-19-resources-for-craft-breweries-ongoing-list/

Brewers Association Coronavirus Resource Center:  https://www.brewersassociation.org/brewing-industry-updates/coronavirus-resource-center/

Distilled Spirits Council of the U.S. COVID-19 Page:  https://www.distilledspirits.org/news/discus-monitoring-covid-19-industry-news/

California Artisanal Distillers Guild Updates:  https://twitter.com/CADISTILLERS

Note that regional trade associations are also providing their members with significant helpful information regarding the Coronavirus outbreak and regulatory response.

HOSPITALITY, TOURISM AND TRAVEL INDUSTRY RESOURCES

California Restaurant Association Coronavirus Resources:  https://www.calrest.org/coronavirus-resources

National Restaurant Association COVID-19 Resources:  https://restaurant.org/covid19

California Hotel & Lodging Association: https://calodging.com/coronavirus-information-resources

U.S. Travel Association: https://www.ustravel.org/toolkit/emergency-preparedness-and-response-coronavirus-covid-19

Napa County Tourism (Visit Napa Valley):  https://www.visitnapavalley.com/

Sonoma County Tourism: https://www.sonomacounty.com/

EMPLOYER RESOURCES:  FEDERAL

EEOC Question and Answer Page (added 05/06/20): https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm

PPP Loan Forgiveness Guidance (added 05/20/20)

The U.S. Department of the Treasury – SBA Form PPP Forgiveness Application: https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf

The U.S Department of the Treasury PPP Loan Resource page: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf

Cares Act Resource (added 04/01/20)

The U.S. Department of the Treasury CARES Act Resource page: https://home.treasury.gov/cares

The SBA CARES Act Resource page: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

IRS – CORONAVIRUS TAX RELIEF:  https://www.irs.gov/coronavirus

The following were added on 04/01/20

The IRS FAQs regarding tax credits for paid leave under the FFCRA: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

The IRS FAQs regarding CARES Act: https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

IRS new tax form, Form 7200, that can be used to request the advance tax credits under both the FFCRA and the CARES Act. The form and the draft instructions (final instructions are expected shortly), can be found here: https://www.irs.gov/forms-pubs/about-form-7200

CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY (CISA) GUIDANCE ON ESSENTIAL CRITICAL INFRASTRUCTURE WORKERS: https://www.cisa.gov/sites/default/files/publications/CISA-Guidance-on-Essential-Critical-Infrastructure-Workers-1-20-508c.pdf

FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION: https://www.fmcsa.dot.gov/newsroom/us-department-transportation-issues-national-emergency-declaration-commercial-vehicles

U.S. SMALL BUSINESS ADMINISTRATION:  https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

U.S. OFFICE OF PERSONNEL MANAGEMENT TELEWORK GUIDANCE: https://www.telework.gov/guidance-legislation/telework-guidance/emergency-telework/

DEPARTMENT OF LABOR RESOURCES (added 05/06/20)

Families First Coronavirus Response Act (FFCRA) requirements and questions:

Poster/notice:

https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf

https://www.dol.gov/sites/dolgov/files/WHD/Pandemic/1422-spanish.pdf

Questions about Coverage and the Poster:

Poster Questions:

https://www.dol.gov/agencies/whd/pandemic/ffcra-poster-questions

Coverage Questions:

https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave

https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

EMPLOYER RESOURCES:  STATE AND COUNTY

STATE OF CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT

COVID-19: https://www.edd.ca.gov/about_edd/coronavirus-2019.htm

COVID-19 FAQ: https://www.edd.ca.gov/about_edd/coronavirus-2019/faqs.htm

Work Sharing Program: https://www.edd.ca.gov/unemployment/Work_Sharing_Program.htm

DEPARTMENT OF INDUSTRIAL RELATIONS (DIR):

Cal/OSHA requirements: https://www.dir.ca.gov/dosh/coronavirus/Health-Care-General-Industry.html

COVID-19 FAQ: https://www.dir.ca.gov/dlse/2019-Novel-Coronavirus.htm

GOVERNOR’S ORDERS:

Exception to Cal WARN Act 60-day notice requirement for layoffs: https://www.gov.ca.gov/wp-content/uploads/2020/03/3.17.20-EO-motor.pdf

Waiver of one-week waiting period for UI benefits and SDI: https://www.gov.ca.gov/wp-content/uploads/2020/03/3.12.20-EO-N-25-20-COVID-19.pdf

The latest orders can be found on the Governor’s website here: https://www.gov.ca.gov/newsroom/#:~:text=

LABOR AND WORKFORCE DEVELOPMENT AGENCY: https://www.labor.ca.gov/coronavirus2019/

CALIFORNIA GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC DEVELOPMENT: https://business.ca.gov/coronavirus-2019/

STATE OF CALIFORNIA FRANCHISE TAX BOARD: https://www.ftb.ca.gov/about-ftb/newsroom/news-releases/2020-2-more-time-to-file-pay-for-california-taxpayers-affected-by-the-covid-19-pandemic.html

NAPA/SONOMA SMALL BUSINESS DEVELOPMENT CENTER (Includes Coronavirus-specific Business Assistance Webinars and Small business “survival guide”):   https://www.napasonomasbdc.org/covid-19

HEALTH SERVICES RESOURCES

For the latest information about the coronavirus in Sonoma County and advice from health experts on prevention and care, call 2-1-1, text your zip code to 898-211 or visit (copy/paste) https://socoemergency.org/

For the latest information about the coronavirus in Napa County visit https://www.countyofnapa.org/2739/Coronavirus. You may also call Napa County’s information line at (707) 253-4540 (Monday – Friday, from 9am to 12pm and 1pm to 5pm).

CDC – CENTERS FOR DISEASE CONTROL & PREVENTION

Coronavirus – How to Protect Yourself/If You Think You Are Sick:

https://www.cdc.gov/coronavirus/2019-ncov/downloads/critical-workers-implementing-safety-practices.pdf

https://www.cdc.gov/coronavirus/2019-ncov/community/disinfecting-building-facility.html

https://www.cdc.gov/coronavirus/2019-ncov/prepare/prevention.html

https://www.cdc.gov/coronavirus/2019-ncov/if-you-are-sick/steps-when-sick.html

EPA EXPANDS COVID-19 DISINFECTANT LIST: https://www.epa.gov/newsreleases/epa-expands-covid-19-disinfectant-list

CAL/OSHA GUIDANCE ON FACE COVERINGS: https://www.dir.ca.gov/dosh/coronavirus/Face-coverings-poster.pdf

CAL/OSHA GUIDANCE ON REQUIREMENTS TO PROTECT WORKERS FROM CORONAVIRUS: https://www.dir.ca.gov/dosh/coronavirus/Health-Care-General-Industry.html

OSHA GUIDANCE ON PROTECTING WORKERS DURING A PANDEMIC (added 05/06/20):  https://www.osha.gov/Publications/OSHAFS-3747.pdf

 

CA ABC Loosens Regulations for Alcohol Beverage Retailers and Delivery

The California Department of Alcoholic Beverage Control issued a notice on March 19, 2020 temporarily loosening certain regulations during the current state of affairs.  While primarily focused on retailers, there are some potentially helpful provisions that impact alcohol beverage producers, too.

A few things to keep in mind.  First, local regulations and restrictions may also govern and restrict the ability of licensees to engage in these activities.  Second, this move by the ABC is temporary.  ABC plans to notify the industry 10 days before these guidelines terminate.

Below is a summary of ABC’s March 19 notice.

3/21/2020 Update:  CA ABC has issued a FAQ for it’s 3/19/2020 Notice of Regulatory Relief

For a full list Coronavirus-related links and resources compiled by DPF attorneys, please click here.  

ON-PREMISE RETAILERS SELLING ALCOHOL “TO GO”

ALCOHOL IN MANUFACTURER PRE-PACKAGED CONTAINERS:  If you hold an on-premise retail license that allows you to sell beer and wine or beer wine and spirits, you can sell that beer and wine to go for off-premise consumption in the original container/bottle (barring any condition on your license).  That was true prior to the ABC notice, and still holds.  However, if you hold an on-premise retail license that allows you to sell beer, wine and spirits, you can now sell all those beverages (beer, wine and spirits) in the original container/bottle.

ALCOHOL IN RETAILER PACKAGED CONTAINER:  Under ABC’s new notice, if you operate a restaurant / “bona fide eating place”, you can now package whatever alcohol your license allows you to sell (beer and wine only for a Type 41; beer, wine, and premixed cocktails/drinks if you are a Type 47) in a container with a “secure lid or cap” so long as that cap does not have a sipping hole or opening for a straw, or could otherwise be consumed without removing the lid/cap.  However, that container must be sold in conjunction with a meal prepared for pick-up or delivery.

Retailers that want engage in this type of activity must have a prominent posting (either on the premise, online, or in any way possible to alert consumers or the person transporting the beverage) that states, “Alcoholic beverages that are packaged by this establishment are open containers and may not be transported in a motor vehicle except in the vehicle’s trunk; or, if there is no trunk, the container may be kept in some other area of the vehicle that is not normally occupied by the driver or passengers (which does not include a utility compartment or glove compartment (Vehicle Code section 23225)).  Further, such beverages may not be consumed in public or in any other area where open containers are prohibited by law.”  UPDATE 3/24/2020:  ABC has created a PDF of that notice so that retailers can easily print and post.

TAKE OUT WINDOWS:  Some licensees have conditions on their license that prohibit the sale / delivery of alcohol to persons in cars or to consumers outside of the licensed premises through a take-out window or slide-out tray.  Those prohibitions are temporarily lifted.

DELIVERY TO CONSUMERS:  Even before the emergency notice, most business that hold a license that permits them to sell alcohol to consumers for off-premise consumption can also deliver those beverages to the consumer, so long as the sales transaction (other than the delivery) takes place at the licensed premise.  In other words, the order must be received at the licensed premise, and payment is processed there.  You can’t just show up at someone’s door and swipe a credit card there.

The temporary notice now allows for the following:

  • If you are allowed to sell to consumers for off-premise consumption, you can accept payment, including cash, at the point of delivery.
  • Although  the CA ABC Act is silent as to whether Craft Distillers have the right to make deliveries away from the premises, the notice now allows Type 74 craft distillers can also deliver to consumers, but must limit sales to 2.25 liters per consumer per day.
  • These delivery privileges are not limited to delivery to a consumer’s residence, but also allow for curbside delivery to consumers immediately outside the licensed premises.

HOURS OF OPERATION:  State law prohibits the retail sale of alcohol between 2:00am and 6:00am.  Some licensees have even more restrictive hours through conditions placed on their license.  However, those license conditions are now lifted for off-premise sales, though the 2am-6am state law is still in place.

RETURNS:  Generally, there are restrictions on the ability of producers and wholesalers from accepting returns from retailers.  Those restrictions are temporarily lifted.  It doesn’t mean that wholesalers and producers are required to accept all returns from retailers, just that they can if they choose to.  However, producers/wholesalers cannot condition the acceptance of a return on a requirement to purchase in the future.  This is consistent with TTB latest guidance on returns as well.

RETAILER-TO-RETAILER SALES:  Under California law, retailers cannot purchase alcohol from other retailers.  Under the temporary guidance, an off-premise retailer (grocery store, bottle shop, etc.) can now buy inventory from on-premise retailers (such as bars and restaurants).

EXTENSION OF CREDIT:  Normally, California law imposes a maximum 30 day credit on the purchase of alcohol by a retailer from a wholesaler or producer.  That 30 day limit is temporarily lifted.  Note, however, once the temporary guidance is revoked, the extended credit term will also terminate (i.e., the retailer will have to pay the amount due at that time).

For a list of Coronavirus related resources, please see our Resources Page.  

If you have any questions regarding alcohol beverage licensing, please contact John Trinidad or Bahaneh Hobel.

Employer’s Summary of Families First Coronavirus Response Act

The Families First Coronavirus Response Act (“FFCRA” or “Act”) was signed into law by the President on Wednesday. Prior to the Senate’s vote to pass the law, the House made additional changes to the bill limiting some of the provisions related to paid leave that were required in the original version of the bill. The expanded FMLA provisions are notably less than originally expected. The Act will officially go into effect within 15 days and will remain in place until December 31, 2020. The following is a summary of the key portions of the Act that are relevant for employers. If you have more specific questions please feel free to reach out to us.

  • Expansion of FMLA leave (“Emergency Family and Medical Leave Expansion Act” or “EFMLA”):
    • Qualifying Reason: The EFMLA provides up to 12-weeks of protected leave for employees who are unable to work entirely (including working remotely) due to the need to care for the employee’s son or daughter (under 18) because their son or daughter’s school or child care service is closed due to coronavirus.
    • Employers: The EFMLA applies to all employers with less than 500 employees. The Secretary of Labor has the authority to provide an exemption for employers with less than 50 employees when the imposition of such requirements would jeopardize the viability of the business. (Currently, it is unclear if this will be considered an automatic exemption or how an employer would obtain it.)
    • Employee Eligibility: Workers who have been on payroll for at least 30 calendar days are eligible for EFMLA benefits.
    • Paid/Unpaid: The first 10 days of leave are unpaid, but employees may elect to use accrued sick or vacation time to cover these days (employers cannot require them to use accrued vacation or sick leave). After the first 10 days, the remaining leave must be paid by the employer in an amount not less than 2/3rds of the employee’s regular rate of pay. However, the amount of paid leave is capped at $200 per day per employee or $10,000 total per employee.
    • Reinstatement: Just as with any other FMLA leave, an employee who uses this EFMLA leave is entitled to reinstatement to the same or equivalent position.
      • For employers with less than 25 employees, reinstatement is not required if the following conditions are met: the position held by the employee at the time the leave started no longer exists due to economic conditions or other operating conditions caused by coronavirus; the employer has tried to restore the employee to an equivalent position but no position is available; and the employer makes a reasonable effort to contact the employee if an equivalent position becomes available within a year.
  • Emergency Paid Sick (“EPS”) Leave Act:
    • For COVID Purposes Only: The EPS Leave Act provides additional paid sick leave for all employees for various coronavirus related issues listed below.
    • Available Immediately: The EPS leave is granted (not accrued) so it is available for immediate use by all employees (once the FFCRA is in effect).
    • New and Separate Entitlement: The EPS leave is provided in addition to any sick leave or PTO already provided by the employer. Thus, the EPS leave under the FFCRA should be tracked separately and employers cannot require employees to use up other accrued paid sick leave or PTO prior to using the emergency sick leave.
    • Employers: The EPS Leave Act applies to all employers with less than 500 employees. The Secretary of Labor has the authority to provide an exemption for employers with less than 50 employees when the imposition of such requirements would jeopardize the viability of the business. (Again, it is unclear how the exemption will be obtained)
    • Amount of Paid Sick Leave: The EPS Leave Act provides 80 hours of EPS leave for full-time employees and part-time employees are eligible for EPS leave equivalent to the average number of hours they work over a two-week period.
    • Reasons for EPS Leave and Caps on Amount Paid: EPS leave must be provided to all employees who are unable to work entirely (including working remotely) due to any of the reasons listed below. The amount of paid leave is capped at certain amounts depending on the reason for the leave.
      • EPS leave related to the employee’s own health – Paid at the employee’s regular rate of pay (or the applicable minimum wage rate, whichever is greater) capped at $511 per day or $5,110 total.
        • The employee is subject to a federal, state, or local quarantine or isolation order for COVID-19;
        • The employee is advised by a health care provider to self-quarantine due to COVID-19 concerns; or
        • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
      • EPS Leave related to the employee’s need to care for others – Paid at 2/3rds of the employee’s regular rate of pay (or the applicable minimum wage rate, whichever is greater) and capped at $200 per day or $2,000 total
        • The employee is caring for an individual who is under a quarantine or isolation order or has been advised to self-quarantine;
        • The employee is caring for their son or daughter whose school or child care has been closed due to COVID-19; or
        • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
    • The sick leave under the Act does not carry over to the next year and is not payable upon termination.
    • Employers may not require an employee to search for or find a replacement employee to cover the hours during which the employee is using paid sick time as a condition of using sick time provided under the Act.
    • Employers may require employees on sick leave to follow reasonable notice procedures in order to continue receiving such paid sick time.
    • Employers are required to post a notice informing employees of their expanded sick leave rights. A model notice is to be provided by the Secretary of Labor within 7 days.
  • Other Provisions:
    • Payroll Tax Credits are available to employers that provide either the EPS leave or paid FMLA to employees for the specific Coronavirus-related purposes defined by the Act. Employers will be entitled to a payroll tax credit for each calendar quarter equal to 100% of the qualified EPS leave wages or EFMLA paid by the employer in the quarter, however, it is capped at the same limits as the wages above (i.e. $511 per day for EPS leave related to the employee’s health or $200 per day for leave related to the care of an individual or child; or $200 per day or $10,000 total for paid leave for school purposes).
    • The Act also provides for $1 billion in 2020 for emergency grants to states for activities related to unemployment insurance benefits. There are no direct federal unemployment benefits provided to employees.

If you would like further information about this contact Jennifer Douglas or Marissa Buck.

For a list of Coronavirus related resources, please see our Resources Page.  

Resources for Addressing Economic Losses due to the Public Health Emergency

The ongoing COVID-19 public health emergency, including the directive to close winery tasting rooms, is causing significant disruption to California’s businesses.  Businesses that have, or are unsure whether they may have, insurance coverage for losses caused by this situation should contact their carriers promptly to inquire into their potential claims.

In addition, because there is a declared disaster including many counties in the San Francisco Bay area and other wine regions, affected wineries and other businesses typically are eligible to borrow up to $2 million under the U.S. Small Business Administration (SBA) Economic Injury Disaster Loans (EIDLs) program.  Major employers may be able to borrow more than the typical $2 million limit.

These low-interest loans can provide working capital to cover ordinary and necessary financial obligations that cannot be met due to the ongoing public health emergency.  Rates are set by a formula that is capped at 4%. Loans can be obtained to cover the actual economic injury, as determined by the SBA.  The loans are intended to help businesses through the disaster and recovery period.

The approval of a loan is not guaranteed and loans must go through an underwriting process.  Approved loans generally require collateral. The available amounts may be reduced or offset by the availability of business interruption or other insurance that covers the same losses.  The SBA also assesses ability to repay as well as other potential contributions to cover the losses from business owners and affiliates in considering whether to approve the loans. To learn more or apply for a loan, go to https://disasterloan.sba.gov/ela.

Whether or not you are interested in an SBA loan, be sure to contact your insurer to confirm whether you may already have coverage for the ongoing interruption.  For more information on the current declared disaster allowing for SBA EIDLs in California, including eligible counties and other terms, a fact sheet is available at https://disasterloan.sba.gov/ela/Declarations/ViewDisasterDocument/3429.  Those in other states can visit https://disasterloan.sba.gov/ela/Declarations/Index to determine if they are in an eligible location.

For a list of Coronavirus related resources, please see our Resources Page.  

Additional Guidance For Wineries in Light of Recent Government Actions

Since the Governor’s announcement on Sunday recommending the temporary suspension of on-premise alcoholic beverage businesses, including winery tasting rooms, certain cities and counties have instituted “Shelter-in-Place” ordinances, and both the California ABC and the California Wine Institute have issued additional guidance on the operation of alcohol beverage licensed premises, including wineries.

Given the various orders and guidance currently in place, we have provided below a brief summary of the current state of play for wineries. Please note that things are rapidly changing and while we will do our best to issue updates, we highly recommend that all licensees sign up for the California ABC email updates, and also keep an eye on orders from their local governments.

GOVERNOR’S DIRECTIVE – Statewide Recommendations

  • On Sunday, March 15, 2020, Governor Gavin Newsom announced that he was directing the closure of “all bars, nightclubs, wineries, brewpubs, and the like.”
    1. The California ABC has since clarified that the directive is aimed at suspending on-premise retail privileges (that is, the service of alcohol for consumption at the licensed premises).  For wineries, the directive applies to their tasting room and event operations in pouring wine and serving customers for on-premise consumption.  It has no impact on their production operations, and wineries can continue to have consumers purchase and pick up wine for off-premise consumption, subject to any further local restrictions such as the shelter-in-place orders discussed below.
    2. After discussing the directive with the Governor’s office, Wine Institute has recommended that wineries take the following steps:
      • Ensure visitor and employee safety by intensify cleaning and sanitation procedures;
      • Operate the facility in compliance with social distancing guidance (such as instituting procedures to keep individuals 6 feet apart);
      • Implement recommendations from the CDC and California Department of Public Health re washing hands, avoiding close interpersonal contact, encouraging employees to remain at home when sick, and instituting additional precautions for older employees and customers.

For other operational recommendations, please see our Employer Guide to Navigating COVID-19 from earlier this week.

LOCAL GOVERNMENT “SHELTER-IN-PLACE” ORDERS – Enforceable Restrictions

  • As of March 18, 2020, a number of counties in Northern California (including Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, and Sonoma) have issued shelter-in-place orders.
  • Wineries that have operations in any jurisdiction that have implemented such an order have legal obligations to alter their current operations to comply with their specific county’s order.
    1. In its recent guidance, issued prior to the Sonoma County order, Wine Institute concluded that winery businesses meet the definition of “essential businesses” because they constitute “businesses that supply other essential businesses (grocery stores and other food outlets) with the support or supplies necessary to operate.”  According to Wine Institute, wineries can engage in the following activities in those Shelter in Place jurisdictions:  “vineyard management, wine production operations, bottling, warehousing, sales, delivery and shipping.”  However, this “does not include wine tasting and events ….”
    2. The Sonoma County order includes a provision that more directly addresses winery operations.  Specifically, the following activities are deemed “essential” under the Sonoma County Ordinance:  “Agriculture, food, and beverage cultivation, processing, and distribution, including but not limited to, farming, ranching, fishing, dairies, creameries, wineries and breweries in order to preserve inventory and production (not for retail business).”  It is unclear whether, by excluding “retail business,” Sonoma County is restricting wineries and tasting rooms from engaging in the sale of wine in sealed containers for off-premise consumption, or whether the language is only meant to address retail sales for on-premise consumption.
    3. Napa County’s order goes into effect at 12:01am on Friday March 20.  It includes a provision that deems the following businesses as “essential”:  “Any form of cultivation of products for personal consumption or use, including farming, ranching, livestock, and fishing, and associated activities including but not limited to activities or businesses associated with planting, growing, harvesting, processing, cooling, storing, packaging, and transporting such products, or the wholesale or retail sale of such products, provided that, to the extent possible, such businesses comply with Social Distancing Requirements set forth in subsection (j) of this Section 10 and otherwise provide for the health and safety of their employees.”

Please note that this is a rapidly evolving situation, and many more cities and counties may implement Shelter-in-Place measures over the next days and weeks ahead.  It is also possible that the ordinances on which this blog post, and Wine Institute’s guidance are based, may be revised.

ADDITIONAL ABC GUIDANCE

  • ABC has issued additional guidance regarding the Governor’s directive on steps licensees can take to minimize risk.
  • ABC has stated that retail licensees that comply with the Governor’s directive or local government restrictions will not have their licenses suspended.
  • ABC offices in shelter in place jurisdictions are closed to the public.  ABC Staff will be available to answer questions over the phone, and you can still mail applications to those local offices.  Other ABC local office closures will be posted here.
  • ABC is not currently accepting, processing, or approving special event or daily licenses in light of guidance on gatherings.

ADDITIONAL WINE INSTITUTE INFORMATION

Wine Institute has a helpful resource page dedicated to Coronavirus related updates, which can be accessed here.

If you have any questions regarding alcohol beverage licensing, please contact John Trinidad or Bahaneh Hobel.

For a list of Coronavirus related resources, please see our Resources Page.  

Employer Guide to Navigating COVID 19

Below is an outline of topics designed to assist California employers in navigating COVID 19 and the related economic fallout.  Everything is changing quickly and this is based on what is currently known and available.

Communications with Employees:

  • Number one priority in this situation continues to be the safety of your employees.
  • It is crucial to regularly communicate with your employees regarding the status of office closures, layoffs, pay or any other updates that affect your business.
  • Make sure you have cell phone and/or personal email addresses to communicate outside work hours.
  • Consistent with the Governor’s order, all employees older than 65 or those with a chronic illness should not return to work. These employees should work from home if possible, or if they are unable to work from home, let them know who they should contact to discuss their options for taking time off.
  • All other employees should work from home if they are able to do so. If employees still need to come to work, they should follow the CDC’s recommended social distancing requirements and stay at least 6 feet away from others. Advise employees to stay in their office or designated workspace as much as possible, and not to congregate in meal or break areas.
  • Note that if the Bay Area Counties March 16, 2020 “Shelter in Place” Order extends to your county, most employees will be required to stay home and will be unable to come to work. Certain workplaces considered essential are allowed to remain open.  A list of the Essential Businesses can be found in the order linked here.
  • All in person meetings should be cancelled if possible and phone conference or webinars should be used instead.
  • Advise employees to immediately notify you if they develop symptoms of COVID-19 or are exposed to someone who has tested positive for COVID-19.
  • Ensure that you have updated contact information for all employees and you are able to reach them when they are outside the office to provide necessary information.

Reduction in Hours or Pay and Layoffs:

  • If a reduction in force or pay is necessary, let your employees know as soon as possible.
  • Whether a temporary closure results in a furlough (with the idea of employees returning on a certain date) or a layoff (uncertain date of return, if ever) can impact whether accrued vacation/PTO needs to be paid out. With so much uncertainty, our general recommendation is to pay out the accrued time, but financial constraints may make this impracticable.
  • You can reduce hours for non-exempt employees and reduce work schedules as needed. You do not need to pay out any accrued PTO for employees in order to make up the difference in hours.
  • You can also reduce salaries for your exempt employees, as long as the reduction in salary does not result in the employees getting paid less than the minimum threshold required for employees to retain their exempt status. Currently the minimum threshold for exempt employees is $54,080 per year for employers with 26 or more employees and $49,920 for employers with less than 26 employees. This reduction can be made before the beginning of a full workweek.
  • Talk with your insurance broker about continuing health benefits for employees on furlough and or a temporary layoff situation.
  • Make preparations for how you will continue to receive mail at your office or do other essential functions as needed during the period when you have a reduced work force. If your office needs to close temporarily, make sure clients and customers are notified.

Employer Resources:

  • The Employment Development Department (“EDD”) has a helpful website with information about the COVID 19 impacts.
  • Employers might be able to avoid potential layoffs by participating in the Unemployment Insurance Work Sharing Program, which allows you to retain your workers by reducing their hours and wages no more than 60 percent and partially offsetting the wage loss with UI benefits. More information can be found here.
  • There is pending legislation at the Federal level that may expand FMLA leave and paid sick time leave for employees that need to take time off due to the coronavirus. We will keep you updated as soon as the emergency law is finalized.

Employee Resources:

  • Employees who are unable to work due to having or being exposed to COVID-19 can apply for disability insurance through the state. The Governor’s order waived the one-week waiting time period so employees can collect disability insurance during their first work off of work.
  • Employees who are unable to work because they are caring for an ill or quarantined family member with COVID-19 can apply for Paid Family Leave (“PFL”), which provides up to 6-weeks of benefit payments for eligible employees.
  • Employees who have to miss work to care for their children due to school closures caused by the coronavirus outbreak may be qualified to received unemployment insurance benefits. The Governor’s order also waived the one-week waiting time period for unemployment insurance.
  • Employees who have reduced hours or lose their jobs (either permanently or in a temporary layoff) can apply for unemployment insurance as well. The Governor’s order waived the one-week waiting time period for unemployment insurance so employees can collect unemployment in their first week out of work.
  • Employees can access the EDD website for answers to FAQs regarding the various benefits they may be entitled to.

Our goal is to help employers navigate this difficult situation. For more information contact Jennifer Douglas or Marissa Buck.

For a list of Coronavirus related resources, please see our Resources Page.  

TTB Allows Returns of Products Purchased for Events Cancelled due to CORONAVIRUS

Today, TTB announced that it would permit returns of alcoholic beverages that were originally purchased for events that have been canceled due to Coronavirus. As TTB stated:  Given the unexpected and widespread nature of the concerns involving COVID-19, TTB will not consider returns of alcohol beverage products purchased to sell during such cancelled events to violate federal consignment sales rules provided the products were not initially purchased or sold with the privilege of return.”

Federal regulations typically prohibit consignment sales, which they interpret broadly to include the sale or purchase of alcohol beverage products with the privilege of return. (27 CFR 11.21).Typically, returns for ordinary and usual commercial reasons are not permitted, but returns because a product is overstocked or slow-moving does not constitute a return for ordinary and commercial reasons and are prohibited. (27 CFR 11.45.)

Acknowledging that wholesalers and retailers likely had already purchased product for various events such as festivals, concerts and sporting events that have seen widespread cancellations in recent days, TTB has taken the position that returns resulting from these cancellations would be permitted.

Local officials and event organizers have begun announcing cancellations of widely-attended events, such as parades, festivals, fairs, concerts, and sporting events based on concerns about COVID-19. These announcements may be made after wholesalers and retailers purchased large quantities of products to sell during.

Note that returns of alcoholic beverages to retailers would still be considered consignment sales under California law and we are working with California ABC to understand their position on such returns given the mass cancellations of events and gatherings.

For more information about how to address the return of alcoholic beverage products, please contact Bahaneh Hobel.

For a list of Coronavirus related resources, please see our Resources Page.  

Governor Issues Guidance / Directive on Closure of CA Bars, Clubs, Winery Tasting Rooms, On-Premise Retailers

On Sunday, March 15, 2020, Governor Gavin Newsom announced that due to efforts to reduce the potential spread of the novel coronavirus, he was directing the closure of “all bars, nightclubs, wineries, brewpubs, and the like.”  Restaurants, however, are not directed to close at this time, but are subject to reduction of occupancy and social distancing guidelines.  Although the Governor did not explicitly state as much, the closure directive appears aimed at suspending on-premise retail privileges (i.e., the service of alcohol for consumption at the licensed premises), whether those privileges are exercised at stand-alone premises or at locations tied to alcohol beverage production facilities, such as tasting rooms.

The directive is not an order, but has the same force as the Governor’s guidance last week regarding non-essential social functions over 250 attendees.

While the Governor announced that the directive would apply to “wineries,” it appears that this may only apply to a winery’s tasting room operations, and does not impact production operations.  A number of on-premise licensees may also have off-premise retail privileges. It is unclear whether the Governor’s directive allows these licensees to sell sealed bottles for consumption off the licensed premises during the closure period.

We have been in contact with representatives of the California Department of Alcoholic Beverage Control and expect further guidance on Monday, March 16.  We will update this post with any additional information.

If you have any questions regarding alcohol beverage licensing, please contact John Trinidad or Bahaneh Hobel.

For a list of Coronavirus related resources, please see our Resources Page.  

Communicating with Employees about COVID 19

It is important that employers stay on top of their employees’ workplace safety.  We recommend disseminating information to your employees about the COVID 19 outbreak and staying on top of developments. Below is a sample communication, but, of course, you should make sure it accurately reflects your workplace and the steps you are taking.  One of the biggest issues will be how to handle pay if extended absences become necessary. There is no one size fits all answer.  It should be handled consistently within your company and will depend on your current policies, any government assistance that may become available and the extent to which your employees may be out of work.

SAMPLE NOTICE:

Given the spread of coronavirus disease 2019 (COVID-19) in the U.S. in recent weeks, we ask that you please follow these simple guidelines in an effort to keep all employees healthy and safe. While vigilance is asked of all of you, we do not believe there is cause for panic. If you have any questions or concerns, please contact [insert name].

  • Wash your hands often – Use soap and water and wash for at least 30 seconds, or if soap and water are not available use hand sanitizer that is at least 60% alcohol.
  • Do not touch your face.
  • Clean and disinfect surfaces often.
  • Cover your cough or sneeze with a tissue and then throw it in the trash. If a tissue is not available, use your elbow (not your hands) and turn away from any people nearby.  The CDC does not recommend wearing masks.
  • Avoid shaking hands with people if possible, including clients, customers and guests – this is for your own protection and theirs.
  • Health care providers are requesting that anyone with fever, cough, or shortness of breath contact the doctor or hospital in advance of going and follow any procedures they have in place.
  • We are monitoring our workplace safety, and in order to do that it is important that you notify [Human Resources/person’s name] if you will be out of the office due to any illness. If you are feeling sick, stay home from work. Any specific medical information will be kept confidential.
  • Immediately notify [Human Resources/person’s name] if you were exposed to someone who has tested positive for COVID-19, or if you were exposed to someone who has been put in quarantine due to possible contact with someone with COVID-19.

Information is evolving daily and we encourage you to designate a point person to stay on top of the situation so that you can effectively respond to the needs of your workforce.  For further questions contact Jennifer Douglas.

For a list of Coronavirus related resources, please see our Resources Page.