• Update: Emergency Protections in Place for Tenants and Homeowners in Response to COVID-19 Pandemic

    As we previously reported, in the past two weeks, the federal government, the state of California, and many local governments have taken action to provide tenant and homeowner protections in response to the COVID-19 pandemic.

    Federal Homeowner Protections

    On March 18, President Trump announced a suspension of foreclosures and evictions by the Department of Housing and Urban Development through April 30. The moratorium will apply only to homeowners with mortgages insured by the Federal Housing Administration.  Also on March 18, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days.

    California Homeowner Protections

    At the state level, on March 25, California Governor Gavin Newsom announced that Wells Fargo, US Bank, Citigroup, JP Morgan Chase, and almost 200 state-chartered banks and credit unions will provide mortgage relief to California property owners.  Newsom announced during a news conference that they “have all agreed to 90 day waiver of payments for those that have been impacted by COVID-19.” The waivers will apply to single-family homes and properties with 1-4 units. Californians struggling with the COVID-19 crisis may be eligible for relief upon contacting their financial institution.

    California State and Local Tenant Protections

    On March 27, Governor Newsom issued Executive Order N-37-20 banning the enforcement of evictions statewide against qualified California residential tenants who fail to pay rent between the date of the Order and May 31, 2020. To qualify, residential tenants must give notice to the landlord of inability to pay all or part of their rent as a result of COVID-19 within seven days after the rent is due. The tenant would then have 60 days (instead of the statutory 5 days) to respond to an eviction lawsuit, and law enforcement would be prohibited from enforcing an eviction against such tenant while the Order is in effect. Tenants would remain obligated to repay full rent in a timely manner after the moratorium is lifted.

    The March 27 Order builds on Governor Newsom’s prior Executive Order N-28-20, which authorizes local governments to pass their own stricter bans on residential or commercial evictions. The prior Order also makes it unlawful through May 31 to evict a residential tenant and subsequently rent or offer to rent to another person at a rental price greater than the evicted tenant could be charged.

    Under the authority granted by Executive Order N-28-20, a number of local governments have passed broader eviction moratoriums, including moratoriums that aim to protect commercial tenants. The statewide eviction moratorium does not override stricter measures that local governments have already enacted or may enact going forward.

    Locally, San Francisco Mayor London Breed issued a 30-day moratorium on residential and commercial evictions related to financial impacts caused by the COVID-19 pandemic that is more expansive than the statewide moratorium. Residential tenants will have up to six months after the end of the emergency declaration period to pay the total of their missed rent. The moratorium on commercial tenants is limited to small and medium-sized businesses (those with worldwide gross receipts in 2019 of $25 million or less). Landlords must provide such business tenants at least one month to cure a failure to pay rent. If the business tenant provides documentation of a financial difficulty related to COVID-19, the cure period is automatically extended for successive periods of one month, up to a total of six months. During the applicable cure period, landlords must negotiate a payment plan in good faith. Landlords may proceed with eviction after a tenant fails to pay all outstanding rent within the applicable cure period.

    Legislation passed by other Cities and Counties in California is summarized in the chart to the left. The chart is a summary only, and legislation must be consulted for details. It is illustrative as the situation is fluid and other jurisdictions may have enacted, considered, or are in the process of considering legislation. In some cases the local restrictions are more stringent that the Governor’s Order, and in those cases the more restrictive local provisions apply. A common thread through the various jurisdictions is that tenants are not relieved of their duty to (eventually) pay rent. Click on the image to the left to view the full chart.

    The situation and responses continue to evolve quickly, and other local jurisdictions are considering similar controls. The Governor’s Office may also provide further guidance on these issues. The Coblentz Real Estate team and authors of Unfamiliar Terrain will continue to monitor these developments.

     

  • What Employers Should Know About the New Families First Coronavirus Response Act

    On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (FFCRA), H.R. 6201, an emergency measure that directly imposes upon smaller employers both paid family leave and new paid sick leave obligations. After originating in the House late last week, the bill quickly passed both chambers of Congress and gained the White House’s approval. The measure will have a major impact on employers with fewer than 500 employees. Now that the legislation has been signed into law, its provisions become effective no later than 15 days after the Act is enacted and expire on December 31, 2020. Employers need to act swiftly to amend policies and train employees to ensure that employee leaves are administered in accordance with the new law.

    Qualified Employers

    • The bill applies to employers with 500 or fewer employees.
    • The legislation provides a tax credit to small/medium businesses that provide benefits through the social security tax paid by employers.
    • Companies with 50 or fewer employees must provide required benefits, but can apply for a hardship waiver with respect to Paid Family Medical Leave benefits only.  They must still provide paid sick leave without any waiver.

    Emergency Sick Leave

    The emergency paid sick leave is available for employees who are unable to work (or telework) due to: (1) a governmental quarantine or isolation order related to COVID-19; (2) advice from a health care provider to self-quarantine due to concerns related to COVID-19; (3) the employee experiencing symptoms of coronavirus and seeking a medical diagnosis; (4) a need to care for or assist an individual who is subject to categories (1) or (2) above; (5) a need to care for a child whose school or place of childcare is closed or unavailable due to coronavirus; or (6) the employee is experiencing any other similar condition to be specified by the Secretary of Health and Human Services.

    As to the Emergency Paid Sick Leave, it is important for employers to be aware of the following provisions:

    • Employers of employees who are health care providers or emergency responders may elect to exclude those employees from the emergency sick leave provisions.
    • Full-time employees are to receive 80 hours of sick leave, and part-time workers are granted leave equivalent to their average hours worked in a two-week period, with the sick leave in either instance being available for immediate use regardless of the employee’s tenure at the employer.
    • An employee may, but is not required to, first use any existing paid time off. Also paid sick time will not carry over from year to year.
    • Workers taking leave for themselves will have to be paid at least their normal wage or the applicable federal, state, or local minimum wage, whichever is greater. Workers taking time off to care for family members must be paid at two-thirds of the foregoing rate. Sick leave is capped at $511 per day and $5,110 in the aggregate for leave taken in categories (1) through (3) described above (i.e., on one’s own behalf), and capped at $200 per day and $2,000 in the aggregate for leave taken in categories (4) through (6).
    • Employers will be prohibited from (i) requiring workers to find replacements to cover their hours during time off; or (ii) discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer related to such.
    • Employers will have to post a notice containing information regarding the emergency sick leave provisions; the Labor Department is to create a model notice no later than 7 days after the Act is enacted.
    • The Department of Labor will be authorized to issue regulations to (i) exclude certain health care providers and emergency responders from paid leave benefits, (ii) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern”, and (iii) ensure consistency between the emergency sick leave provisions and emergency family leave provisions described below.
    • Workers under multiemployer collective bargaining agreements whose employers pay into pension plans will have access to paid emergency leave.
    • Wages required to be paid under the emergency sick leave provisions will not be subject to the 6.2 percent social security payroll tax typically paid by employers on employees’ wages.

    Emergency Family Leave

    Private-sector employers with fewer than 500 workers, along with governmental entities, will have to provide up to 12 weeks of FMLA leave for employees who have been on the job for at least 30 days, and who are unable to work or telework because they have to care for a minor child if the child’s school or place of care has been closed, or if the child care provider of that child is unavailable due to a coronavirus emergency. An employer of an employee who is a health care provider or an emergency responder may elect to exclude the employee from the emergency family leave provisions.

    Employers should be aware of the following provisions of the Emergency Family Leave:

    • The first 10 days of leave can be unpaid (a worker could opt to use accrued vacation days or other available paid leave for those days). For subsequent days of leave, workers will receive a benefit from their employers equal to at least two-thirds of their normal pay rate. The paid leave is capped at $200 per day and $10,000 in the aggregate.
    • Generally, the employee on leave must be restored to his or her prior position; however, this requirement does not apply to employers with fewer than 25 employees if the position held by the employee on leave no longer exists due to economic conditions or other changes in the employer’s operating conditions caused by the coronavirus pandemic, and the employer makes reasonable efforts to restore the employee to an equivalent position.
    • Wages required to be paid under the emergency family leave provisions will not be subject to the 6.2 percent social security payroll tax typically paid by employers on employees’ wages.
    • The Department of Labor will be authorized to issue regulations to (i) exclude certain health care providers and emergency responders from paid leave benefits, and (ii) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”
    • Workers under multiemployer collective bargaining agreements whose employers pay into pension plans will have access to paid emergency leave.

    The full text of the Act can be found here.

    The Coblentz Employment team will continue to monitor this legislation and provide necessary updates. For further information or questions, contact any of our Employment lawyers: Fred Alvarez (falvarez@coblentzlaw.com), Stephen Lanctot (slanctot@coblentzlaw.com), Kenneth Nabity (knabity@coblentzlaw.com), and Hannah Jones (hjones@coblentzlaw.com).

    Posted on: March 20, 2020 Tags: Categories: News

  • Emergency Protections in Place for Tenants and Homeowners in Response to COVID-19 Pandemic

    In recent days, the federal government, the state of California, and many local governments have taken action to provide tenant and homeowner protections in response to the COVID-19 pandemic.

    On March 18, President Trump announced a suspension of foreclosures and evictions by the Department of Housing and Urban Development through April 30. The moratorium will apply only to homeowners with mortgages insured by the Federal Housing Administration.

    Also on March 18, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to suspend foreclosures and evictions for at least 60 days.

    At the state level, on March 16, 2020, California Governor Gavin Newsom issued Executive Order N-28-20 prohibiting rent hike evictions, authorizing local governments to implement further protections against evictions, delaying foreclosures by mortgage lenders, and monitoring customer service protections delivered by utility providers. Unless extended, the protections under the order are in effect until May 31, 2020 and are intended to address the challenges for many Californians to pay rent, mortgages, and utility bills as a result of the COVID-19 pandemic. A summary of protections included in the order is as follows:

    • It is unlawful to evict any residential tenant through May 31, 2020 (as may be extended) and subsequently rent or offer to rent to another person at a rental price greater than the evicted tenant could be charged. Landlords may continue an eviction process that was lawfully initiated prior to March 4, 2020.
    • Local governments may impose substantive limitations on residential or commercial evictions through May 31, 2020 (as may be extended) where the basis of the eviction is nonpayment of rent or a foreclosure, and the tenant or homeowner can demonstrate economic hardship caused by the COVID-19 pandemic.
    • Public housing authorities are requested to extend deadlines for housing assistance recipients and applicants to deliver documents.
    • Home and commercial mortgage lenders are requested to immediately place a moratorium on foreclosures and evictions that arise out of economic hardship caused by the COVID-19 pandemic.
    • The California Public Utilities Commission (CPUC) is requested to monitor and report the customer service protections provided by utility providers for electric, gas, water, internet, landline telephone, cell phone service, and other critical utilities, in response to COVID-19.

    The order contemplates that a quarantine or similar public health measure could also prohibit an eviction if it compels an individual to remain physically present in a particular residential property.

    The order does not relieve a tenant from its obligation to pay rent, nor does it restrict a landlord’s ability to recover rent.

    On March 17, 2020, the CPUC confirmed that, retroactive to March 4, 2020, utility companies under CPUC’s jurisdiction (including PG&E, AT&T and Comcast) will not be allowed to suspend service for customers who cannot pay their bills during the COVID-19 state of emergency.

    Cities in California that have moved to impose temporary moratoriums on evictions include San Francisco, Oakland, San Jose, Los Angeles, Santa Monica, San Diego, Santa Barbara, South Pasadena, and Suisun.

    • On March 13, San Francisco Mayor London Breed issued a 30-day moratorium on residential evictions related to financial impacts caused by the COVID-19 pandemic. Tenants will have up to six months after the end of the emergency declaration period to pay the total of their missed rent. Guidance for tenants and landlords, including tenant obligations to provide notice of inability to pay rent, can be viewed here.
    • On March 14, Santa Monica issued a temporary moratorium on evictions for non-payment of rent by residential tenants financially impacted by COVID-19 during the period of local emergency. A landlord also cannot pursue a no-fault eviction during the period of local emergency unless necessary for the health and safety of tenants, neighbors, or the landlord. On March 18, Santa Monica added a moratorium on commercial tenant evictions through April 30, 2020.
    • On March 15, Los Angeles Mayor Eric Garcetti issued a moratorium on residential evictions through March 31, 2020 where the tenant can demonstrate economic hardship caused by the COVID-19 pandemic. Tenants will have up to six months following the expiration of the local emergency period to repay any back due rent. The Mayor is considering a halt to commercial evictions as well.
    • A proposed ordinance for a residential eviction moratorium in Oakland will be considered at the Oakland City Council’s next meeting on April 7.
    • San Jose City Council is moving forward with a temporary ban on COVID-19-related residential evictions, which is expected to receive final approval in the next week. Council members will consider adding small businesses under commercial leases to the moratorium.
    • San Diego city leaders voted on March 17 to draft an emergency ordinance aimed at preventing residential rental evictions triggered by the COVID-19 pandemic.
    • Santa Barbara City Council will vote on a draft ordinance pausing evictions on March 24, 2020. It is undetermined whether the pause will extend to both residential and commercial evictions, or one or the other.
    • On March 18, South Pasadena considered a resolution that would establish special protections for residential and commercial tenants and property owners.
    • Suisun City Council is poised to pass a resolution that would prohibit any new residential or commercial evictions due to financial impacts caused by the COVID-19 pandemic.

    The situation and responses are evolving quickly, and other local jurisdictions are considering similar controls. The Governor’s Office may also provide additional guidance on this issue. We will continue to monitor these developments.

     

  • 2019 Federal and California Income Tax Payment Deadlines Extended

    [Updated March 20, 2020]

    Federal / IRS

    Individual Taxpayers.  On March 20, 2020, Treasury Secretary Steven Mnuchin announced that, at the President’s direction, “we are moving Tax Day from April 15 to July 15.”  While no formal notice has been issued, we expect that the Internal Revenue Service (“IRS”) will release a formal announcement shortly. This announcement comes following a notice released by the IRS on March 18, 2020 that postponed the due date for certain payments of income and estimated tax for 90 days (from April 15, 2020 to July 15, 2020). A copy of the full notice can be accessed here. Specifically, the due date for making up to $1 million of Federal individual income tax payments (including payments of tax on self-employment income) due on April 15, 2020, has been postponed to July 15, 2020. This includes both (a) tax payments due with respect to a taxpayer’s 2019 tax year and (b) estimated tax payments (including payments of tax on self-employment income) due in connection with a taxpayer’s 2020 tax year.

    Corporate Taxpayers. The payment postponement operates in the same manner for corporate taxpayers with April 15, 2020 payment obligations, except that the limit on total income taxes for a consolidated group which may be postponed is $10 million.  Mnuchin’s announcement regarding extending the due date for filing federal tax returns to July 15, 2020 also applies to corporate taxpayers: “[a]ll taxpayers and businesses will have this additional time to file and make payments without interest or penalties[.]”

    California

    Governor Newsom’s March 12, 2020 Executive Order grants filing and payment extensions to June 15, 2020, but the California Franchise Tax Board (“FTB”) has announced an updated relief for California taxpayers, pushing back the filing date for California returns to July 15, 2020 in conformity with the federal extension. Currently, the FTB has postponed until July 15, 2020 the filing and payment deadlines for all individuals and business entities for:

    • 2019 tax returns;
    • 2019 tax return payments;
    • 2020 first and second quarter estimated payments;
    • 2020 LLC taxes and fees; and
    • 2020 non-wage withholding payments.

    Taxpayers do not need to claim any special treatment or call the FTB to qualify for this relief. These extensions will not affect the payment of refunds to taxpayers by either the IRS or the FTB, so if you expect your returns will generate refunds to you, you should proceed to file on your usual schedule.

    For more information, contact Coblentz Tax attorneys Jeffry Bernstein, jbernstein@coblentzlaw.com, or Wendy Bleiman, wbleiman@coblentzlaw.com.

    Posted on: March 17, 2020 Tags: Categories: News

  • We’re Getting Closer: AG Releases New Modified CCPA Draft Regulations

    California Attorney General Xavier Becerra wasted no time in issuing new modified draft regulations for the California Consumer Privacy Act (“CCPA”), announcing new draft regulations on March 11, 2020 – just two weeks after the public comment period expired on the prior draft regulations. While the March 2020 changes are more limited than the February 2020 modifications to the original October 2019 draft regulations, the new changes have an immediate impact on all businesses currently working to comply with the CCPA’s requirements. Selected provisions of the newest draft regulations are set forth below:

    1. Personal Information Reverts to the Statutory Definition – There was a lot of excitement in February about the modification to the definition of “personal information” under the statute, including in what contexts certain information not explicitly linked to an individual or household (such as IP addresses collected from website visits) would or would not be considered “personal information.” As we noted in a previous article, the problem with that modification was that it created ambiguity regarding when certain personal information collected or disclosed by the business may be “capable of being associated with, or could be reasonably linked, directly or indirectly, with a particular consumer or household” when combined with other available information, even if the business itself makes no effort to create such a  link or identification. The newest draft regulations have accordingly deleted this attempt at narrowing the definition of “personal information,” essentially reverting back to the broad definition in the statute. Thus, as currently defined, essentially every piece of information that is reasonably capable of being related to a California resident or household, including IP addresses or other information not currently linked to an individual or household, constitutes collection of personal information under the CCPA.
    2. Businesses That Do Not Collect Information Directly Do Not Need To Provide Notice At Collection – Although this appeared to be the case based on statutory language and previous regulations, the March 2020 modifications added back in the provision that a business that does not collect personal information directly from a consumer does not need to provide a notice at collection if it does not sell consumers’ personal information.
    3. The Opt-Out Button And Logo Is Gone – The proposed Opt-Out Button and Logo released with the February 2020 modifications has been entirely deleted in the March 2020 modifications. It remains to be seen whether a new button or logo will be forthcoming or what it will look like.
    4. Responses to Request to Know Specific and Sensitive Information – The February 2020 modifications clarified that businesses are restricted from disclosing certain sensitive information such as driver’s license number or other government-issued identification numbers, social security number, financial account number, health insurance or medical identification number, account password, security questions and answers, and biometric data, in response to consumer requests to know specific pieces of information collected about them. However, the new modifications explain that businesses must still disclose with “sufficient particularity” the type of sensitive information collected without disclosing the actual information. For example: if a business collects biometric data, it must respond that it collects “unique biometric data including a fingerprint scan” without disclosing the actual fingerprint scan data.
    5. Notice of Employment-related Information – A business collecting employment-related information still needs to provide notice at collection to employees and job applicants but does not need to include a link to a business’s main privacy policy in that notice.
    6. Privacy Policy Right To Know Description– Although the description of personal information required to be disclosed in a business’s privacy policy appeared to be somewhat relaxed by the February 2020 modifications, the new modifications clarify that a privacy policy must identify not only the categories of personal information collected about consumers in the previous 12 months, but also the categories of sources from which personal information is collected and the business or commercial purposes for collecting and selling the personal information (in addition to the previous requirement of identifying the categories of personal information sold or disclosed to third parties and –for each category – the categories of third parties to whom information was sold or disclosed).
    7. Information Of Minors – If a business has actual knowledge that it sells personal information of minors under 16 years of age, it must include a description of the affirmative opt-in consent process required for selling personal information of minors in its privacy policy.
    8. Opt-Out Privacy Controls – The February 2020 modifications prohibited businesses from providing pre-selected opt-outs in user-enabled privacy controls and required consumers to affirmatively exercise their choice to out-opt.  However, the March 2020 regulations deleted this affirmative selection requirement leaving the possibility of pre-selected settings. Moving forward, how businesses handle opt-outs in privacy controls will depend on a variety of factors including the industry the business operates in, target audience, and the value of the collected data to the business.

    Despite all of this new information and guidance, it is important to remember that these modifications are still in draft form and will undergo further revisions until finalized later this year.  It remains to be seen how many more modifications will come between now and July, and businesses are already frustrated at the moving target of compliance presented by the ever-changing regulations.  While it is helpful to get periodic glimpses into the AG’s thought process and see where the regulations are heading, additional draft modifications – including adding and then removing requirements, or removing them and then adding them back in, as well as making other substantive changes – will likely incentivize businesses to stop taking any further steps toward compliance until final regulations are released.  The good news is the recent changes are less extensive, indicating that we are hopefully getting closer and closer to the final product.

    For further information on how the modified regulations or the CCPA impacts your business, contact Cybersecurity & Data Privacy attorney Scott Hall (shall@coblentzlaw.com).  You can also review additional CCPA articles and resources in our CCPA Resource Center.