Your Daily Three: May 14

Thank you for your continued readership. Let us know if there are any topics you’d like to see covered in an upcoming issue.

1. Stay informed about important deadlines, especially tax ones. Cook County Board President Toni Preckwinkle announced a plan on Wednesday that will allow property tax bills typically due August 3 to be paid as late as October 1 without incurring late-payment interest penalties. Cook County commissioners are expected to vote on the proposal at the May 21 Board of Commissioners meeting. While second installment tax bills usually go out in July, Cook County Treasurer Maria Pappas announced plans to electronically deliver statements for the second installment of 2019 property taxes in early June to give property owners time to plan. Neighboring counties Lake, DuPage, Kane, and McHenry, have also taken steps to allow property owners to defer or delay payments without incurring penalties (in some cases, only if hardship can be shown). If you ever wondered why Illinois property taxes are paid in arrears, it’s because a one-year reprieve was granted on property taxes during the Great Depression. Use this link to read the press release from the county. Authored by Joshua Bashioum

2. Client Question: “I had to furlough employees as a result of the pandemic. I am considering opening back up for business, but cannot offer employees the same number of hours that they had before. Employees are refusing to come back because they earn more on unemployment – particularly with the additional $600 from the federal government. What can the employer do? Do the employees have the right to refuse to come back and keep collecting this unemployment?” Answered by Becky Canary-King

Answer: This is a common issue for many employers. Employees do not have the right to choose to refuse to work to continue to receive unemployment benefits. Both state unemployment benefits and the additional $600-per-week unemployment benefit provided under the federal CARES Act require that the employee be unemployed and available for work to receive benefits (unless they are unable to work for specific designated reasons related to COVID-19). In fact, the Department of Labor encourages states to ask employers to provide information when workers refuse to return to their jobs for reasons that do not support their continued eligibility for benefits.

Additionally, employees may still be eligible for unemployment benefits if they have reduced hours, depending on state law. In Illinois, a weekly benefit amount (WBA) for that individual is determined using the amount of wages in the claimant’s work history when a claimant files a claim for unemployment benefits. If an employee’s earnings are less than their WBA, the employee may be eligible for all or partial unemployment benefits. Anyone who receives at least $1 of state or federal unemployment benefits for a week, between March 29, 2020, and July 25, 2020, is eligible for the additional $600 per week under the CARES Act.

Ultimately, whether to require employees to return to work is a business decision. Still, employers should keep in mind whatever they decide, to accurately report this information to their local unemployment agency as requested.

3. Client Question: “Would you recommend that we prepare a document or memo that substantiates the certifications we made in our PPP loan application?” Answered by Eileen Sethna

Answer: Yes, we do. Coupled with the guidance issued in FAQ#46, we recommend that if you received a PPP loan over $2M, that you put together a summary of the bases for your certification.

For instance:

• consider your top customers, are their respective industries struggling (like large retailers filing bankruptcies);
• are your receivables aging;
• have you been asked to extend payment terms;
• might any extension of payment terms compromise any potential borrowing base credit facilities you have;
• were your retail tenants sheltered in place and have no way to operate;
• what are the industry trends for your retail clients?

Work to create a narrative as to how and why “economic uncertainty” made your loan request necessary to support your ongoing operations. If and when you are audited, you have already prepared for potential certification scrutiny.

3+. Answer this one-question survey. What is your biggest legal challenge or most important legal question for your business right now? Why? We are thrilled to hear that many of our readers are finding this content helpful. It is our priority to help ease concerns, share perspective, and instill confidence as you continue to make critical decisions for your business every day. We are devolving content, programs, and legal offerings to directly address your needs.

For more resources and LP’s response to COVID-19, visit this webpage.