Coping with COVID-19: What You Need to Know. Presented to Advance Auto Parts Thursday, April 9, 2020

37  Download (0)

Full text


Coping with COVID-19: What You Need to Know

Presented to Advance Auto Parts | Thursday, April 9, 2020



Aaron Lowe

Senior Vice President, Regulatory and Government Affairs

301-654-6664, ext. 1021

Tom Tucker

Director, State Affairs

301-654-6664, ext. 1042

Brielle Hopkins

Vice President, Federal Affairs

301-654-6664, ext. 1042


Aaron Lowe

Senior Vice President,

Regulatory and Government Affairs

Introduction and Overview


 Introduction

 Essential Services

 Federal

 State

 Best Practices

 COVID-19 Relief Efforts

 Q & A



Essential Services and Best Practices

Aaron Lowe, Senior Vice President, Regulatory and Government Affairs

Tom Tucker, Director, State Affairs


CISA Guidance issued on March 19 and then revised on March 29.

CISA Guidance included vehicle repair supply chain:

 Automotive repair, maintenance, and transportation equipment manufacturing and distribution facilities (including those who repair and maintain electric vehicle

charging stations).

 Employees who repair and maintain vehicles, aircraft, rail equipment, marine vessels, bicycles, and the equipment and infrastructure that enables operations that encompass movement of cargo and passengers.

 Many states are referring to this guidance in determining what will be considered essential for the purposes of shut down orders.

Federal Perspective: CISA Guidance


Get the Latest Updates on State Orders


State Tracker

 Visit

 Click On Your Behalf

 Click State Tracker




 Language in orders is intentionally vague.

 Process is moving faster than usual – mistakes can happen.

 Exceptions?

 Appeal process:

 What are the steps?

 Where and who?

Executive Orders and Exceptions


 Shelter in place orders.

 Essential employees need to open shops.

 What happens if they are pulled over?

 Employee name and phone number

 Employee number

 Facility address

 Statement saying they are essential employees

 Reference the Executive Order

 Contact information someone in management to verify info

Essential Services: Employees


If your business is essential – pay attention to details.

 Follow social distancing guidelines.

 Follow guidance on number of employees in facilities.

 Disinfect counters, doors, credit card machines, etc.

 Protect yourself, your customers and employees.

 Utilize technology tools.

Essential Services


Simple Tips to Protect People During COVID-19


Practice no-touch shop operations.

Perform as many services as possible, including payment transactions, with the customer remaining in their vehicle.

Provide and wear protective gear, including a hygienic mask and gloves, at all times during the day.

Do not touch your face.

Wash hands frequently with soap, lathering the backs of hands, between fingers and under nails, for at least 20 seconds. Rinse well under clean running water and dry thoroughly. If necessary, use an at least 60% alcohol-based hand sanitizer, rubbing hands together for a minimum of 20

seconds, until it’s dry.

Frequently use disinfecting wipes or cleaner on all surfaces in and around the shop, including all door and drawer handles, cash registers, tablets, computers and phones, tables and chairs, counters, on all equipment, in customers’ vehicles and on all restroom surfaces.

SOURCE: Portions excerpted/adapted from the Centers for Disease Control (CDC);


Simple Tips to Protect People During COVID-19


Keep customers in their cars for as many services as possible, including payment.

Make designated marks on the floor of the shop that are six feet apart so customers can adequately socially distance inside and outside the shop.

Provide hand sanitizer that is at least 60% alcohol on counters and in waiting areas for your customers and encourage its appropriate and effective use.

Offer outdoor seating options with chairs spaced at least six feet apart for recommended social distancing for your customers. If this is not an option, spread out or designate appropriately spaced seats within your waiting room.

Reassure your customers with signage or messaging in and around your location, and on all your online customer communications, that especially during this uncertain time, the health and safety of your customers, your employees and their families, and all members of your community, are your top priorities.

SOURCE: Portions excerpted/adapted from the Centers for Disease Control (CDC);


Brielle Hopkins

Vice President, Federal Affairs

COVID-19 Relief Efforts


Today we will cover:

1. An overview of the three COVID-19 relief bills that are now law.

2. Family Medical Leave Act (FMLA) and sick leave requirements for small businesses as related to COVID-19.

3. Small Business Administration (SBA) loan programs aimed at responding to the COVID-19 pandemic.

4. Other provisions aimed at supporting businesses of all sizes during this crisis.

5. What Congress may do next.

6. Resources for your business.

Please consult your legal and financial advisors for detailed information and confirmation of eligibility.

Federal COVID-19 Relief Provisions


Phase One

Provide Immediate Funding to Health-Related Agencies to Respond to COVID-19

 The Coronavirus Preparedness and Response Supplemental Appropriations Act

Phase Two

Expand Unemployment Insurance and Ensure Employees Affected by the Virus Can Take Paid Leave

 Families First Coronavirus Response Act

Phase Three

Provide Loans and Benefits to Individuals, Small Businesses and Certain Distressed Industries to Help Them During the Shutdown

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

COVID-19 Relief Laws


 In general: 500 or fewer employees

 However, businesses with multiple locations

should be aware that each federal agency has an

“affiliate” definition that will dictate which employees you include in that calculation.

 Loans administered by the SBA follow the SBA’s definition.

 The CARES Act modified its definition for the Payroll Protection Program.

 Labor requirements administered by the

Department of Labor follow the Department of Labor’s definition.

 Tax credits and benefits follow the Internal Revenue Service’s definition.

Note: What is a Small Business?


Family Medical Leave Act and Sick Leave Requirements

(Department of Labor)


 Applies only to small businesses.

 An employee who needs to take leave because their child’s school is closed is entitled to up to 12 weeks of Family Medical Leave Act (FMLA). The first 10 days may be unpaid. Afterwards the employer must pay at least 2/3 of their regular rate of pay NTE $200/day or $10K aggregate.

 Employers with 50 or fewer employees may petition the Secretary of Labor for an exemption if they can show that compliance would jeopardize the viability of their business.

Family Medical Leave Act COVID-19 Requirements


 Applies only to small businesses.

 Employers must provide up to 80 hours of paid sick leave to full time employees and whatever a two-week equivalent is for part-time employees. Sick leave is paid to

employees who are:

1) The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19.

2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.

3) The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.

4) The employee is caring for an individual who is subject to a quarantine.

5) The employee is caring for a son or daughter whose school or day care is closed due to COVID-19.

 Paid sick leave is not to exceed $511/day and $5,110 in the aggregate under scenarios 1-3 and $200/day and $2,000 in the aggregate in scenarios 4-5.

Sick Leave Requirements


Employers with 50 or fewer employees may petition the

secretary for an exemption from this provision if they can show that compliance would

jeopardize the viability of the company.

See the Department of Labor’s guidance at:

Families First Coronavirus Response Act: Questions and Answers

Sick Leave Requirements


Employers can receive a 100% payroll tax credit for each calendar quarter an amount equal to the paid sick leave wages paid that quarter and the paid Family Medical Leave Act wages paid that quarter as required by the Families First Coronavirus Response Act.

Employers can get an “advance” on these tax credits. See IRS Form 7200, “Advance

Payment of Employer Tax Credits Due to COVID-19,” where they can get immediate cash flow by reducing their federal

employment tax deposits as they become due.

See the IRS’ guidance at:

COVID-19 Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs

Related Tax Credits


 Paycheck Protection Program

 Economic Injury Disaster Loan

COVID-19 Small Business Loans


 Qualifying entities are eligible for a loan of up to 250% of their average monthly

payroll costs. These loans are used to cover the following critical expenses incurred between February 15, 2020 and June 30, 2020:

 Employee compensation

 Annual or sick leave

 Payment of retirement benefits

 Payroll taxes

 Payment of interest on mortgage obligations

 Rent

 Utilities

 Interest on pre-existing debt obligations

Paycheck Protection Program


 Eight weeks of these expenses may be forgiven by the government; however, the amount that will be forgiven will be reduced if there is a reduction in staff or if you’ve reduced salaries by more than 25%. You can re-hire those employees before June 30 to prevent a reduction.

 For any amount not forgiven, the maximum loan term is 10 years and the maximum interest rate is 4%.

 The loan amount is capped at $10M.

 Apply for this loan through an SBA-approved lender.

Note: These loans are very in-demand, you may experience some road-blocks but we hope that this will improve, and that Congress will appropriate more funds.

Payroll Protection Program


 This is an existing loan program; however, Congress has now included coronavirus as a qualifying “disaster” for loan eligibility purposes.

 This loan pre-dates the Paycheck Protection Program and was expanded to include coronavirus in the Phase One bill.

 These are low interest loans of up to $2M that are available to pay expenses that could have been met had the disaster not incurred.

 Within this program, there is an immediate $10K advance that is issued within three days of SBA receiving the application and does not have to be repaid.

 You may apply for this loan directly with the SBA.

 Most analysts suggest that if you are eligible for PPP, that you should opt for that loan to cover your expenses incurred between Feb. 15 and June 30 and not the EIDL.

Economic Injury Disaster Loans


Other Provisions for Businesses


Delay of Payment of Employer Payroll Taxes (§2302)

Employers are allowed to defer their 6.2% share of the social security tax that they are otherwise responsible for paying. This deferred tax will instead be paid in two parts: the first half will be due Dec. 31, 2021 and the second half will be due Dec. 31, 2022.

Modifications for Net Operating Losses (§2303)

Allows a net operating loss arising in 2018, 2019 or 2020 to be carried back five years. This provision also temporarily removes the taxable income limitation to allow a net operating loss to fully offset income. These provisions are aimed at providing cash flow and liquidity.

Other Provisions for Businesses


Modification of Credit for Prior Year Minimum Tax Liability of Corporations (§2305)

Accelerates the ability of companies to recover alternative minimum tax credits.

Modification of Limitation on Business Interest (§2306)

The amount of interest expense businesses are allowed to deduct on their tax returns is increased from 30% to 50% of taxable income (with adjustments) for 2019 and 2020.

Other Provisions for Businesses


Employee Retention Credit (§2301)

For employers who either do not, or cannot, participate in the Payroll Protection Program, one alternative is the employee retention credit. Qualified employers are allowed a credit against applicable payroll taxes for each calendar quarter in the amount equal to 50% of the qualified wages paid to each employee, not to exceed

$10,000. Qualified employers must have either had their operations fully or partially suspended due to COVID-19, or their gross receipts declined by 50 percent or more compared to the same calendar quarter the prior year. If your business has more than 100 full time employees, qualified wages are those paid to employees when they are not able to work. If your business has fewer than 100 full-time employees, then

employee wages qualify for the credit irrespective of whether the employee is working.

Other Provisions for Businesses


 Phases Four and Five?

 Add more funding for the Paycheck Protection Program

 More support for mid-sized and large-sized companies

What’s Next?



Auto Care Association has a COVID-19 resources page for businesses.

Small Businesses may also reach out to their local small business development centers.




Aaron Lowe | Tom Tucker | Brielle Hopkins

Thank You. | |




Related subjects :