Archives: News Items

McElroy’s Inc. Intern Receives MCAA Internship Grant

McElroy’s Inc., an MCA of Kansas City member, presented Parker Beal with an MCAA Internship Grant at the start of his 2020 summer internship. The grant is funded by the John R. Gentille Foundation. Parker said, “This grant will help me continue to fund my college degree and expenses. I see this not only as a great learning opportunity, but also as a motivation to tell other interns in the future about what I have learned and experienced in the mechanical industry.”

This is Parker’s third consecutive internship with McElroy’s Inc. The Architectural Engineering student has a particular interest in MEP. After he graduates from the University of Kansas in the spring of 2022, he intends to pursue a master’s degree in Business Administration.

This summer, Parker is using BIM software and other programs to aid in design and load calculations for the mechanical, electrical and plumbing (MEP) systems in both commercial and industrial buildings. He will be shadowing Vice President Wade Jueneman, head of commercial construction for McElroy’s Inc.

“McElroy’s has given me valuable opportunities to help further my understanding and knowledge in the mechanical industry,” Parker said of his experiences. “I’m looking forward to developing my skills to transform ideas into design solutions and then see my work in action.”

About the MCAA Internship Grants

Having MCAA interns working at member companies is a win-win for the mechanical contracting industry. Employers get top talent and build a pipeline of future employees. Students gain experience, create connections, develop skills and further their interest in mechanical contracting. In paying the student instead of the employer, MCAA’s goal is to increase the overall number of interns and drive the overall number of talented employees accepting full-time positions with MCAA members after graduation.

How the Grant Application Process Works

The MCAA member company will first ensure a prospective intern is in good standing at an accredited two- or four-year college, university or technical school. While MCAA encourages its members to give priority to students from the MCAA Student Chapter Program, this is not a requirement to receive a grant.

Each MCAA member company can submit up to two internship grant applications per year. Once an application is reviewed and accepted, MCAA will send a $500 gift card to the member company so it can present the Gift Card to the student at the start of their internship.

MCAA will follow-up with each company and intern to ensure the process and overall internship was successful.

Start Your Search for Top Talent Today

MCAAGreatFutures.org gives members access to student profiles and resumes. The profiles are searchable by university, desired location, and even a specific skill set, like BIM or AutoCAD. A keyword filter allows users to zero in on students who fit the bill.

Not finding a match? Try reaching out to our 60 MCAA Student Chapters. The chapter advisors are a great resource to help find the right person. And, MCAA members have exclusive access to post job openings on our job board.

Help build our industry’s GreatFuture – apply for a grant!

A PAC Update from MCAA Government Affairs Committee Chairman, Jim Gaffney

In March, as a majority of the country slowed down, the MCAA Government Affairs Committee continued to work tirelessly meeting with countless Congressional and Senate office’s remotely to push our agenda forward. The committee has been working on COVID-19 cost increases on Federal projects, change orders in the NDAA, pension issues, and the PBGC just to mention a few.

What has helped the committee through this period has been PAC donations. The reality we face during today’s political time is the need for donations. MCAA’s PAC fund has been hit hard as many political fundraisers have been cancelled and political leaders have requested help.

Today, we ask for your help.

I, Jim Gaffney, am making a donation to the MCAA PAC fund, and have asked the M&SCA of Eastern PA to match my donation. If each association and member contractor could make a donation to the PAC we can continue to fight for the political needs of our association. I know times are hard for many, but please realize the organizations against our issues are not letting up and many have deep pockets. For those who have and continue to support the PAC, I want to personally thank you for your help. The PAC makes a difference for all of us and our industry.

MCAA’s 2020 advocacy efforts need your help. Donate to the MCAA PAC, a critical factor to our success in moving forward legislation that positively affects your business.

(Note: In order to comply with campaign finance laws, you will need to complete a solicitation authorization form before making a contribution. Find additional details and both the solicitation authorization and contribution forms via the button below.)

Contribute

Withum COVID-19 Bill Update – 7/7/2020

Main Street Lending Program is Now Open:  The MSLP has been “baking” for over 3 months and is finally ready for primetime.  Withum has a new article with more details on terms and eligibility here.  The program has garnered some controversy as some have taken the view that it was overly restrictive and not borrower friendly.  Some banks have also indicated they will not participate in the program.  That said, it is now available to borrowers and can be a new source of working capital. 

Reminder Section:  (what should I be doing):

  • Talk to your payroll company about claiming the employer payroll tax deferral and employee retention credits (ERC) that were made available in the CARES Act.
  • Talk to your payroll company about claiming the qualified sick/family leave refundable tax credits (from FFCRA, passed prior to the CARES Act).
  • Consider speaking with your lender to discuss changes to terms of existing debt facilities.
  • If you have already received a PPP loan, start forecasting how you intend to spend the funds and how you can qualify for the highest amount of loan forgiveness possible.  If you are not forecasting 100% loan forgiveness, then most likely you should seek assistance regarding your particular situation.  Withum believes the vast majority of borrowers should expect and plan to receive 100% loan forgiveness.

Webinar #25: Harassment & Respect in the Workplace – Jon Landesman & Dan Fierstein

All contractors must know how to respond to harassment allegations and how to ensure a safe and inclusive environment for all employees. In this fast-paced and interactive webinar, Cohen Seglias Labor & Employment co-chair Jonathan Landesman shares advice on handling harassment issues in the workplace utilizing real-life examples. Landesman also reviews how to encourage and enforce appropriate workplace culture, establish a confidential, multichannel complaint procedure, and respond to and investigate complaints. Jon is joined by his colleague, Dan Fierstein, who is an associate in the Cohen Seglias Construction practice group.

Additional Resources:

This webinar was previously recorded July 21, 2020.

Register for Coffee with Koontz Episode 6: Leading Growth – Pioneering Expansion in Pawtucket

Episode 6: Leading Growth – Pioneering Expansion in Pawtucket
Friday, July 10 at 2:00 p.m. EDT

As CEO and President of Arden Building Companies, LLC, Robert Bolton wears many hats. Or perhaps it would be more accurate to say he oversees many hats; Arden Building Companies is the parent company of several New England contracting and engineering firms that collectively offer mechanical construction, design, and service in higher education, healthcare, manufacturing, industrial, and power markets… not to mention electrical design/construction and co-generation ‘green’ energy services! And Bob’s leadership doesn’t stop at the regional level – as a National Board member and MCAA’s Senior Vice President/Treasurer, he provides association guidance and oversight, and is dedicated to developing alliances with UA partners that help us grow the industry together. Join us as Bob shares insights borne of a career based on collaborations, both within and beyond the traditional scope of mechanical contracting.

REGISTER TODAY

7/6 Alston & Bird Coronavirus Flash Update

Alston & Bird have released their July 6 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.

Withum COVID-19 Bill Update – 7/2/2020

New PPP Bill Passed by House and Senate:  The Bill that was introduced and passed by the Senate on Tuesday, June 30 has now been passed by the House and is headed to the President’s desk for signature.  This Bill extends the application deadline for the PPP an additional 5 weeks (recall that the deadline was June 30, 2020 and they still had about $130 billion in available funds).  It is unclear how valuable this additional time will be since most businesses that wanted funds have already received them.

New Stimulus Package in the Works:  Treasury Secretary Steven Mnuchin told a House panel that the administration would support a new stimulus package if it was put forward. He also indicated that he is in discussions with the Senate about revising the PPP to provide additional support to hard hit industries such as restaurants, hotels, etc.  We are not sure yet how the P4 Bill that was passed by the House (which allows businesses to obtain a second PPP loan under certain circumstances) will fare if the Senate decides to take it up, but there appears to be bipartisan support to find a solution.

Reminder Section:  (what should I be doing):

  • Talk to your payroll company about claiming the payroll tax deferrals and employee retention credits that were made available in the CARES Act.
  • Talk to your payroll company about claiming the qualified sick/family leave refundable tax credits (from FFCRA, passed prior to the CAREs Act).
  • Consider speaking with your lender to discuss changes to terms of existing debt facilities.
  • If you have already received a PPP loan, start forecasting how you intend to spend the funds and how you can qualify for the highest amount of loan forgiveness possible. If you are not forecasting 100% loan forgiveness, then most likely you should seek assistance regarding your particular situation. Withum believes the vast majority of borrowers should expect and plan to receive 100% loan forgiveness.

Withum COVID-19 Bill Update – 7/1/2020

New PPP Bill Introduced in the Senate:  On Tuesday, June 30th, the Senate passed a bill which extends the application deadline for the PPP an additional 5 weeks (recall that the deadline was June 30th and they still had about $130 billion in available funds).  The bill still needs to go through the House and would need to be signed by the President to be passed into law.  It is unclear how valuable this additional time will be as most believe that those businesses who wanted funds have already received them.

When Will Banks Accept Applications?:  Many have inquired regarding when they can apply for forgiveness and when banks will accept applications.  Withum has heard that one bank has reached out to its clients to inform them that if they received their PPP loan in April, the bank will accept a forgiveness application in August.  If the loan was received after April, the date the bank will accept the application is TBD.  This is of course just one bank, but they have generally seen that banks are not in a position to accept applications currently and few have been explicit in how they will manage the process.  They also have not seen any mechanism for a borrower to “declare” that they want to keep their eight-week covered period if they want to.  At this point, borrowers will just have to be patient, they do not believe that there are any proactive steps required on the borrowers side right now other than being in consistent contact with their lender on the process.

Status of the P4 Bill:  The P4 bill that was introduced by the House two weeks ago has not moved since it first came into play.  This bill would allow certain borrowers to obtain a second PPP loan if they meet certain criteria (less than 100 employees, 50%+ reduction in revenue).  There is not much information on the probability of this passing or how it will interplay with the PPP extension bill noted above. 

Main Street Lending Programs:  Withum reported on the general parameters of the MSLPs previously, at this point the program is still not available to the public.  Anecdotally there have been mixed reviews from banks, many of which have indicated that they do not intend to participate in the program. 

New FAQs:  It has been rumored for several weeks that a multitude of new FAQs are coming out in the near future to cover current open questions and to provide clarification.  Withum believes this is correct but do not have insight as to when they are coming, it could be as soon as this week. 

Reminder Section:  (what should I be doing):

  • Talk to your payroll company about claiming the payroll tax deferrals and employee retention credits that were made available in the CARES Act.
  • Talk to your payroll company about claiming the qualified sick/family leave refundable tax credits (from FFCRA, passed prior to the CAREs Act).
  • Consider speaking with your lender to discuss changes to terms of existing debt facilities.
  • If you have already received a PPP loan, start forecasting how you intend to spend the funds and how you can qualify for the highest amount of loan forgiveness possible. If you are not forecasting 100% loan forgiveness, then most likely you should seek assistance regarding your particular situation. Withum believes the vast majority of borrowers should expect and plan to receive 100% loan forgiveness.

Beyond the Classroom: Let’s Get Down to Business

In this month’s Beyond the Classroom, meet University of Nebraska senior, Ali Brown. She is an MCAA Student Chapter member and current intern for The Waldinger Corporation. Ali is the 2020 Women in the Mechanical Industry – Ferguson Scholarship recipient. You can read Ali’s profile HERE.

Ali is earning her degree in Business Administration & Human Resources. In this video, Ali shares her perspective on entering the mechanical contracting industry and emphasizes the importance of business and human resources.

Upcoming Beyond the Classroom videos will showcase how MCAA student chapter members and MCAA members alike are benefiting from the program. They will also share the opportunities available to students who choose careers in the mechanical industry.

IRS Announces Additional Guidance for Coronavirus-Related Distributions and Loans

The IRS has released Notice 2020-50, which offers added guidance and relief for retirement plan participants taking pandemic-related distributions and loans under the CARES Act. Notice 2020-50 expands the definition of qualified individuals under the Act and provides guidance regarding coronavirus-related distributions and loans. Lindabury, McCormick, Estabrook & Cooper, P.C. have prepared a summary outlining the details, including the criteria for eligibility.

Marelich Mechanical Company, Inc. Offers Career Opportunities for Chico State Student Chapter Members

Marelich Mechanical Company, Inc. employs summer interns and new-hire project engineers from Northern California MCA student chapter programs. Chad Johnston, VP of Operations said, “Even with the circumstances we were still able to bring aboard seven summer intern and new-hire project engineers. We provide them a job opportunity, and most importantly give them experience in the plumbing and mechanical sector of the construction industry.”

Chad Johnston shares an overview of Marelich Mechanical’s onboarding process for interns and full-time hires:

New hires get the chance to spend a day in the main office meeting different department staff: Human Resources, IT, Safety, Purchasing, Estimating, Detailing, Design and Operations.  The following days are typically spent riding around with the plumbing, piping, and sheet metal superintendents walking through various projects and fabrication shops to experience all aspects of Marelich operations beyond their specific project assignment.

This summer, due to the impacts of COVID-19, the onboarding process was drastically modified. All new hires were brought into a mostly vacant office, meeting only a few essential individuals allowed in the office, with face masks used and social distancing maintained. No welcome aboard handshakes, no superintendent ride-along, no touring of multiple jobsites, and no group Marelich camping and rafting trip that have been done in past years.  

Chad says, “Yes, things are different this year. For any new hire to any company right now, the empty offices, teams working remotely, and the mandated social distancing makes our organizations feel different than they did just a few months ago. Fortunately, we were able to continue our process of giving students of our Nor Cal MCA Student Chapters schools the opportunity for a career and experience in the industry.”

Below are just a few of the tasks interns and new-hires will be performing this summer:

  • Reading and understanding project plans and specifications
  • Writing, submitting, tracking, and resolving RFI’s 
  • Shop drawing submittals and tracking
  • Processing equipment and material submittals and structural anchorage packages       
  • Managing equipment and material procurement and their releases to meet the project schedule
  • Attending, documenting, and follow up for on-site meetings
  • Developing labor loaded schedules; Tracking installed quantities and labor tracking 
  • Estimating, tracking and managing change orders 
  • Coordinating design changes with subcontractors & vendors 
  • QA/QC process follow-up

Chico State Interns

Marelich currently has three MCAA Student Chapter members of California State University, Chico interning this summer including, mechanical engineering major, Jimmie Whitton and construction management majors, Erich Anderson and Wyatt Hattich.

Wyatt Hattich is the retuning MCAA Student Chapter Vice President at Chico State. This summer, Wyatt is working on the HVAC in a luxury 19-story apartment building, Trinity Phase IV, in San Francisco. The largest Whole Foods in San Francisco is being built in the basement below the lobby of the apartments. Below the Whole Foods are five-floors of parking that will connect to the Trinity Phase III building next door.

Wyatt reflects on his experience so far as an intern, “What I really like about Marelich is that they all have made me feel very welcome in their company. They are all so open to help me succeed and learn new things about the mechanical industry. I am very grateful that Marelich allowed me to intern this summer and have given me such a positive experience.”

Full-time Chico State Hire

Ryan Smith graduated Chico State May 2020 with a Construction Management degree and just started full-time as a Project Manager with Marelich.

He is helping to manage the pipe fitters and sheet metal unions, focusing on HVAC work. During his experiences so far, Ryan has learned, “what truly make a great project manager is how you fix your mistakes when they arise.”

His current project is a San Francisco high end hotel and residential condo project. There are over 500 units between the hotel and condos, each has a fan coil unit which is connected to a VRF, and over five miles of refrigerant line.

“Since it is San Francisco we get to use cool tools like zoom lock which is like pro press. I process the submittals, RFI’s, IOM’s, and fix problems on the daily basis. San Francisco is a high stress environment but has some of the smartest individuals I have ever worked with. I thank MCAA for giving me such a great opportunity and for connecting me with such a great employer, Marelich Mechanical. Thank you for all you have done and for pointing me in the right direction.”

Start Your Search for Top Talent Today

Find student chapter members like Wyatt and Ryan by visiting MCAAGreatFutures.org, where members have access to student profiles and resumes. The profiles are searchable by university, desired location, and even a specific skill set, like BIM or AutoCAD. A keyword filter allows users to zero in on students who fit the bill.

Find the Latest from Jay R. Smith Mfg. Co® and Marking Services, Inc. in MCAA’s Virtual Trade Show

MCAA’s Virtual Trade Show connects our contractor members with the members of MCAA’s Manufacturer/Supplier Council.

Participating companies highlight and link to new products, product lines, services, solutions or web pages of particular interest. Here are just a few of the recent additions:

Jay R. Smith Mfg. Co.® a Member of Morris Group International
Our branch-style distribution units are a part of our new Smith Fluid Controls ™ line. You can simply and effectively prime up to four floor drain traps with one trap primer. The branches are flexible for ease of connection and are engineered so that water leaving the trap primer is divided evenly between branches. And of course, a variety of connection types are available.

Learn More


Marking Services, Inc.
MSI’s AIM Mobile Technology delivers on-demand 24/7 access to critical asset information. Our QR coded tags provide instant access to critical documents in the field. AIM will greatly increase productivity and efficiency in the field providing Asset and Document Management (O&M, Commissioning, Startup, Warranty, Submittals, etc.) to meet your turnover package needs.

Learn More

Need Something Else?

Find many more smart solutions in MCAA’s Virtual Trade Show!

Visit the Virtual Trade Show

Speaking of Smart Solutions

Visit the Smart Solutions Case Studies area of our website to learn how other mechanical contractors found their win-win with cost-saving and productivity-enhancing applications from members of MCAA’s Manufacturer/Supplier Council.

This section of our website also includes tips and ideas to help your company save money and enhance your productivity. Don’t miss it!

VISIT SMART SOLUTIONS

6/29 Alston & Bird Coronavirus Flash Update

Alston & Bird have released their June 29 COVID-19 update, including the latest news on emergency funding, administrative and regulatory actions, workplace and home issues, and many other topics, as well as to links to all their past updates.

Webinar #24: Permanent Tech Solutions from the Pandemic – Tauhira Ali & Sean McGuire

As the old proverb goes, Necessity is the Mother of Invention. The COVID-19 crisis has forced contractors to fundamentally change the way they operate. Innovative solutions have been rapidly adopted to meet the needs of limited job sites, distributed workforce and enhanced safety demands. Some quick fixes have crashed and burned or been discarded quickly for better solutions. However, some practices, software and tools have met with success and become a permanent part of operations. In this webinar, MCAA’s Director of Innovative Technologies, Sean McGuire will co-host the presentation with Milwaukee Tool’s Group Manager of Construction Technology, Tauhira Ali to cover some of the best ideas while trying to forget the worst.

Additional Resources:

This webinar was recorded Tuesday, July 14, 2020

Paul Battaglia Joins Arden Building Companies Executive Team

Arden Building Companies, an MCAA member, announced recently that Paul Battaglia has joined the executive team as President of Corporate Mechanical of New England in Woburn, MA. “Paul brings strength, leadership, and passion for the industry to this role,” said Robert M. Bolton, Chief Executive Officer of Arden Building Companies. “His wealth of experience and deep knowledge of the Boston market will prove invaluable to the Arden Building Companies and Corporate Mechanical of New England team as we begin the next chapter of growing our Boston operations.”

Paul brings over fifteen years of industry and leadership experience in the Boston market to the role.

He is also a member of MCAA’s Project Managers Education Committee, the group responsible for facilitating and executing MCAA’s Institute for Project Management (IPM) and Advanced Institute for Project Management (AIPM).

Bassett Mechanical Announces Executive Leadership Advancements

MCAA member Bassett Mechanical recently announced four strategic promotions on its executive leadership team. Kim Bassett, President & CEO, said, “These executive advancements are not only well deserved, but also the next step in creating a strong future for our business and our customers who trust us to provide customized solutions for their unique needs.”

Jerod Steigenberger, Chief Operating Officer

Jerod has been serving in a dual role as both Chief Financial Officer (CFO) and Chief Operating Officer (COO) throughout the past year. He has been engaged with Bassett Mechanical’s HVAC, Plumbing, and Industrial Refrigeration teams and has gained advanced knowledge about the industry. Prior to joining Bassett Mechanical, Jerod worked in a variety of financial roles within Oshkosh Corporation’s Defense Segment, allowing him to bring broad experiences and skillsets to his roles at Bassett. His new role of full-time COO will allow him to make an even greater impact on the company’s sales and operations.

Craig Lamers, Chief Financial Officer

Craig joined Bassett Mechanical one year ago as the Senior Director of Finance. He came to the company with a background in construction and quickly expanded his role, providing valuable insights to his team and the company’s overall initiatives. In his role as CFO, Craig will be responsible for directing the financial management of the company including strategy development, budgeting, forecasting, reporting and analysis, treasury, tax, and risk management. He will also oversee the company’s procurement and IT teams.

Lee Schmidt, Vice President of HVAC & Plumbing Solutions

Lee has been with Bassett Mechanical for 15 years, most recently serving as Senior Director of HVAC & Plumbing Solutions. With more than 20 years of business development and operational leadership experience, Lee has excelled in a number of roles including General Manager and Director of Operations. He has become a vital leader in all aspects of the HVAC and Plumbing segment from controls and engineering to field execution. As Vice President of HVAC & Plumbing Solutions, his role will include management of the HVAC & Plumbing segment with a focus on providing industry-leading solutions for customers’ unique needs.

Wade Uhlenbrauck, Vice President of Sales & Marketing

Wade has held numerous business development roles within Bassett Mechanical over his 14-year career including: sales professional, sales manager, and most recently Senior Director of Business Development. He has earned several awards and obtained numerous sales training certificates through industry networks. As Vice President of Sales and Marketing, Wade will oversee new sales growth opportunities including strategic account management of the HVAC, Plumbing, and Industrial Refrigeration customer base, and lead new strategic initiatives to ensure Bassett Mechanical continues to carry out its vision of Creating Customers for Life™.

“My goal is to make sure our company is providing individualized, safe, full-service solutions for our customers,” Kim states. “That means surrounding our company with great leaders who care as much about our associates and our customers as I do. These are leaders who want to ensure our customers get the best solution and best experience with us. I want to thank Jerod, Craig, Lee, and Wade for their continued drive and passion for making our company the best it can be.”

Help Avoid and Defend Against COVID-19 Lawsuits by Following OSHA, CDC, and Other Guidelines

The nation’s employment attorneys are anticipating an onslaught of lawsuits over workplace exposures to COVID-19. To help avoid these lawsuits, and mount an affirmative defense if they do occur, it is recommended that employers develop a comprehensive COVID-19 exposure control plan. A single document showing that the company is carefully following OSHA, CDC, and health department guidance, to help prevent employees from contracting and spreading the virus, would go a long way towards an affirmative defense, should a lawsuit ensue. A current comprehensive plan establishes a record showing how thoughtful and complete the company’s response to the COVID-19 pandemic has been. If you don’t have a current exposure control plan, see the MCAA Model COVID-19 Return to Work Exposure Control Plan for guidance.

Once you have established your company’s exposure control plan it is critical that you keep it updated. OSHA, CDC, health department, and local critical industries requirements change frequently due to constant COVID-19 research. Carefully monitor MCAA’s COVID-19 Resource Center to help keep your plan updated.

COVID-19 Temperature & Symptoms Screening Toolkit

In the United States, temperature and other symptom checks would normally constitute an overly broad medical exam under the Americans with Disabilities Act, as well as various state non-discrimination laws. However, in light of the COVID-19 pandemic, with CDC and other guidance, the EEOC has provided guidance permitting employers to measure employees’ body temperature and to ask about other COVID-19 symptoms. Employers that choose to measure employee body temperatures and monitor for other symptoms should:

  • Establish a consistent process for conducting such screening and excluding symptomatic individuals to promote workplace safety;
  • Adopt measures to mitigate the risk of claims under laws related to discrimination, wage payment, leaves of absence or medical privacy; and
  • Be mindful of employee relations considerations. 

The Temperature and Symptom Screening Toolkit, which was prepared by Littler Mendelson, P.C., is intended to assist employers to achieve these objectives.

An Important Update Regarding the MSCA Conference

A LETTER FROM THE MSCA CO-CHAIRS:

The coronavirus pandemic has had a dramatic impact on all our lives, our families, our businesses and how we live and work each day. We have all been dealing with challenges unimaginable even four months ago. As an association we have tried to keep you updated on government recommendations, safety issues, new business procedures, best practices and regulatory measures that affect your current business operations. We have presented some important webinars where you have had the opportunity to hear from other contractors and how they are addressing some of these new challenges and opportunities (https://www.mcaa.org/news/mcaa-contingency-series-webinars/). 

This week the decision was made by the MSCA Board of Managers to cancel this year’s annual educational conference in Scottsdale, AZ. Currently there are too many uncertainties regarding how our country and our businesses will look in October to present a live meeting safely and successfully. We then looked at the possibility of offering a virtual on-line event. In the end it was agreed that an on-line event could not provide the type of quality program that MSCA is known for nor could it adequately provide the networking and socialization that is one of the hallmarks of an MSCA conference. In lieu of an on-line event, where all programming is packed into a few short days requiring everyone to sit in front of their computer for a length of time (which, I’m sure you will agree, is getting very tiresome) we will be presenting a number of new focused programs over the next six – twelve months. We are currently working on the list of topics and presenters and will share that with all of you in the coming weeks. 

This virus has forced all of us to re-evaluate and re-position our businesses to meet changing demands and address new ways of doing business. Through it all, MSCA promises to continue to provide you with the quality programming you expect and deserve, and we will continue our proud tradition of being the “education” association. 

Thank you for your understanding. Looking forward to us all being together again next year in Austin, TX, October 24 – 27, 2021. 

Be safe and be well. 

Kip Bagley MSCA Co-Chair  Mike Star MSCA Co-Chair

Withum COVID-19 Bill Update – 6/25/2020

New Safe Harbor from the FTE Reduction Rule:  In the latest IFR, the SBA discussed the new safe harbors to the FTE reduction rule in a manner that appears to be very borrower friendly.  As you know, PPP loan forgiveness is reduced if you reduce your FTE count during your covered period (when compared to your reference period).  The second of the two new safe harbors allows companies to ignore any FTE reductions after February 15, 2020 if they relate to an “inability to return to the same level of business activity” before February 15, 2020 as a result of guidance issued by a variety of agencies (including state and local government) that inhibits such business activity. Examples are closing non-essential businesses and reductions in businesses volume due to social distancing or sanitation guidelines, but the safe harbor can apply to a much broader set of circumstances. 

Withum has included below both an excerpt from the IFR as well as an example provided in the IFR.  This safe harbor does not require the business interruption to cover the entire covered period, meaning that borrowers just need to establish that a disruption occurred for some meaningful period of time during the covered period.  It also does not narrowly define a disruption, allowing borrowers to potentially rely on a broad variety of different “disruptions” caused by the requirements established by these agencies. Therefore Withum believes this new safe harbor has broad applicability, including in the auto, restaurant and hospitality industries, for example, as well as in a variety of professional service industries like law and medicine.

Withum believes the safe harbor is extremely broad, and unless it is pared back by the SBA, a large number of borrowers should be able to avail themselves of it.  If you have an FTE reduction during your covered period, Withum recommends that you closely review this safe harbor from the PPP Flexibility Act, as interpreted by the new IFR, to see if you can fall within it.  The forgiveness application requires that you maintain documentation of the business disruption that took place and what requirement or guidance created it.

Excerpt from IFR:

Borrowers are also exempted from the loan forgiveness reduction arising from a reduction in the number of FTE employees during the covered period if the borrower is able to document in good faith an inability to return to the same level of business activity as the borrower was operating at before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19 (COVID Requirements or Guidance). 

The Administrator, in consultation with the Secretary, is interpreting the above statutory exemption to include both direct and indirect compliance with COVID Requirements or Guidance, because a significant amount of the reduction in business activity stemming from COVID Requirements or Guidance is the result of state and local government shutdown orders that are based in part on guidance from the three federal agencies. 

Example provided in the IFR:

A PPP borrower is in the business of selling beauty products both online and at its physical store. During the covered period, the local government where the borrower’s store is located orders all non-essential businesses, including the borrower’s business, to shut down their stores, based in part on COVID-19 guidance issued by the CDC in March 2020. Because the borrower’s business activity during the covered period was reduced compared to its activity before February 15, 2020 due to compliance with COVID Requirements or Guidance, the borrower satisfies the Flexibility Act’s exemption and will not have its forgiveness amount reduced because of a reduction in FTEs during the covered period, if the borrower in good faith maintains records regarding the reduction in business activity and the local government’s shutdown orders that reference a COVID Requirement or Guidance as described above.

Reminder Section:  (what should I be doing):

  • Call your payroll company about claiming the payroll tax deferrals and employee retention credits that were made available in the CARES Act.
  • Talk to your payroll company about the qualified sick/family leave legislation (FFCRA, passed prior to the CAREs Act).
  • Consider speaking with your lender to discuss changes to terms of existing debt facilities. The banking system remains strong.
  • If you have already applied for the PPP, start forecasting how you intend to spend the funds and how to qualify for the highest amount of forgiveness possible.