The COVID-19 pandemic has had an unprecedented impact on businesses and our economy, with many businesses being forced to temporarily adapt or close their doors. As a result, many business owners are trying to figure out how to pay their employees (in addition to rent and many other financial obligations) so they can (eventually) resume operations and start to rebuild their business and repair the damage caused by the COVID-19 pandemic.

As an employer, you likely have many questions about how the COVID-19 pandemic will affect your business and your employees.

For employers, it is important to know your rights and your obligations to your employees (and independent contractors) if you have (or might have) to furlough or lay off anyone, and what resources (financial and otherwise) are available to help you continue operations, pay employees, and adapt to the “new normal.” 

Several options are available for business owners to help take care of your employees and pay rent during these uncertain times.

If you are uncertain whether you qualify, or how to complete an SBA loan application, Catalyst Law attorneys are available to assist you with the application process and, if needed, connect you with a qualified SBA lender.

Reserve your consultation today by contacting us at (503) 207-1711 or

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The Paycheck Protection Program, part of the Small Business Administration (“SBA”) 7(a) loan guaranty program, is designed to provide a direct incentive for small businesses to keep employees on the payroll. The SBA will forgive loans if all employees are kept on the payroll during the “covered period” (which is 24 weeks for loans disbursed on or after June 5, 2020 or – at the election of the borrower – either 8 weeks or 24 weeks for loans disbursed before June 5, 2020) and the money is used for payroll, rent, mortgage interest, or utilities. 

The SBA provides PPP loans of up to a $10M maximum to qualified small businesses for the period between February 15, 2020 and June 30, 2020. Eligibility requirements for small businesses include:

  1. In operation on February 15, 2020
  2. No more than 500 employees – broadly defined to include “full-time, part-time, and “other basis” employees.”
  3. Nonprofit 501(c)(3) public charity organizations 
  4. Businesses described in section 31(b)(2)(C) of the Small Business Act with no more than 500 employees; 
  5. Businesses in the “Accommodations and Food Services,” as classified by NAICS, industries with more than one physical location but with fewer than 500 employees at each site;
  6. Veteran 501(c)(19) Organizations
  7. Separate application process for sole proprietors, independent contractors, and other self-employed individuals

Allowable uses of the PPP funds include (a) payroll costs, (b) interest on any (personal or real property) mortgage obligation incurred before February 15, 2020, (c) rent under a lease that began before February 15, 2020, and (d) utilities (for electricity, gas, water, transportation, telephone, and internet service that began before February 15, 2020). 

“Payroll costs” are defined broadly to include: 

  1. Salary, wage, commission, or similar compensation up to a limit of an annualized salary of $100,000.00 (excludes federal payroll withholdings, including income tax, Social Security, and Medicare);
  2. Payment of cash tip or equivalent;
  3. Payment for vacation, parental, family, medical, or sick leave;
  4. Allowance for dismissal or separation;
  5. Payment required for the provisions of group health care benefits, including insurance premiums,
  6. Payment of any retirement benefit; and
  7. Payment of state or local tax assessed on the compensation of employees

Loans do not require collateral or a personal guarantee. To qualify for loan forgiveness for PPP funds spent during the borrower’s “covered period” (whether 24 weeks or 8 weeks), the company must keep detailed records of how it uses the loan for qualified expenses, including:

  1. Payroll costs
  2. Costs related to continuance of group health care benefits during periods of sick, medical, or family leave, and insurance premiums;
  3. Mortgage interest payments (but not mortgage pre-payments or principal payments)
  4. Rent payments
  5. Utility payments
  6. Interest payments on any other debt obligations that were incurred before February 15, 2020; and/or
  7. Refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020 (Proceeds on any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.)

At least 60% of the PPP funds must be used on payroll costs to be eligible for forgiveness. If less than 60% are used on payroll costs, a borrower’s total forgiveness amount will be reduced accordingly. 

Loan terms, including a possibility of 100% loan forgiveness, are as follows:

  1. Program total funding of $349B is on a first-come, first-served basis
  2. Interest rate of 1%
  3. Maturity date of 5 years from the disbursement date for loans disbursed after June 5, 2020. For loans disbursed before June 5, 2020, the maturity date remains at 2 years unless the lender agrees to extend.
  4. Loan payments deferred up to six (6) months following the date of disbursement of the loan
  5. To qualify for loan forgiveness, an authorized representative of the applicant must certify in good faith** to all of the below:
    1. Applicant was in operation on February 15, 2020
    2. Applicant had employees form whom it paid salaries and payroll taxes or paid independent contractors as reported on an IRS Form 1099-MISC
    3. Current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant
    4. The funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments
  6. SBA lenders rely on borrower certification in order to determine eligibility.

** The applicant is legally liable if funds are knowingly used for unauthorized purposes, including steep fines and criminal prosecution.


  • Congress authorized $10 billion in small business loans as part of the SBA’s economic injury disaster loan (EDIL) program. 
  • Eligible small business owners may apply for a cash advance on the loan up to $10,000, which will be distributed by the SBA within three days after application submission. 
    • There is no requirement to repay an advance, even if the application is ultimately denied. 
    • Such advances may be used to provide paid sick leave to employees; maintain payroll; address increased costs to obtain materials, and rent and mortgage payments; and repay obligations unmet due to revenue loss. 
    • The advance amount will be reduced from the loan forgiveness amount for recipients who transfers into, or is approved for, the loan program under section 7(a).
  • Applicants must demonstrate 
  • “Eligible entity” includes 
    • small businesses, private nonprofit organizations, and small agricultural cooperatives
    • businesses with fewer than 500 employees, sole proprietors, independent contractors, cooperatives or ESOPs with fewer than 500 employees, and tribal businesses described in section 31(b)(2)(C) of the Small Business Act with no more than 500 employees. 
  • “Covered period” is defined as January 31, 2020 through December 31, 2020


For those businesses with an existing relationship with an SBA Express Lender, the Express Bridge Loan Pilot Program helps the business access up to $25,000 quickly to cover any temporary loss of revenue. Contact your SBA lender directly if this applies to your business.


If your business has an existing SBA loan, the SBA provides the following benefits:

  • The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months.
  • The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.
  • The SBA is providing automatic deferments through December 31, 2020 for SBA Serviced Disaster (Home and Business) Loans if the disaster loan was in “regular servicing” status on March 1, 2020. Deferment, in this case, includes the following terms: 
    • Interest will continue to accrue on the loan.
    • 1201 monthly payment notices will continue to be mailed out which will reflect the loan is deferred and no payment is due.
    • The deferment will NOT cancel any established Preauthorized Debit (PAD) or recurring payments on your loan.  
      • Borrowers that have established a PAD through Pay.Gov or an OnLine Bill Pay Service are responsible for canceling these recurring payments.  Borrowers that had SBA establish a PAD through will have to contact their SBA servicing office to cancel the PAD.
    • Borrowers preferring to continue making regular payments during the deferment period may continue remitting payments during the deferment period. SBA will apply those payments normally as if there was no deferment.
    • After this automatic deferment period, borrowers will be required to resume making regular principal and interest payments.  Borrowers that cancelled recurring payments will need to reestablish the recurring payment.


The Families First Corona Virus Response Act (FFCRA) provides paid leave, effective April 1, 2020 through December 31, 2020, for employees that are not otherwise eligible for unemployment assistance under state or federal law, but provide a self-certification that he or she is unemployed or unable to work for any of the following reasons:

  • the individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; 
  • a member of the individual’s household has been diagnosed with COVID-19; 
  • the individual is providing care for a family member diagnosed with COVID-19; 
  • a person in the household is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency; 
  • the individual is unable to reach the place of employment because of a quarantine imposed as a direct result of a COVID-19 outbreak or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; 
  • the individual was scheduled to begin employment and is no longer employed or is unable to reach the job as a direct result of a COVID-19 outbreak
  • the individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID-19; 
  • the individual must quit their job as a direct result of COVID-19; 
  • the individual’s place of employment is closed as a direct result of COVID-19; or 
  • the individual is self-employed, is seeking part-time employment, does not have sufficient work history, or otherwise would not qualify for regular unemployment under state or federal law and becomes unemployed or cannot find work. 



The CARES Act provides a refundable payroll tax credit of 50 percent of qualified wages for each calendar quarter. The amount of qualified wages taken into account should not exceed $10,000, including health benefits, paid to an eligible employee, and the credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020. 

For eligible employers with more than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit.



The CARES Act allows employers and self-employed individuals 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. 

Employers generally are responsible for paying a 6.2-percent Social Security tax on employee wages. The provision requires that the deferred employment tax 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 Social Security Trust Funds will be held harmless under this provision.


Relaxes the limitations on a company’s use of operating losses in previous years by providing that a loss from 2018, 2019, or 2020 can be carried back by five years preceding the loss, allowing the taxpayer to apply the net operating loss against any taxable income to get a tax refund, and by removing the taxable income limitation to allow net operating losses (NOLs) to fully offset income.


The provision enables employers to provide a student loan repayment benefit to employees on a tax-free basis. Under the provision, an employer may contribute up to $5,250 annually toward an employee’s student loans, and such payment would be excluded from the employee’s income. The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (e.g., tuition, fees, books) provided by the employer under current law. The provision applies to any student loan payments made by an employer on behalf of an employee after the date of enactment and before January 1, 2021.



The Oregon Employment Department website includes general guidance for employers, workers, and job seekers who may be impacted by the COVID-19 virus. Also, the Employment Department has provided a useful overview of unemployment insurance benefits – which may be helpful for you (as an employer) to review and understand as you try to make decisions about whether you can retain your employees during this crisis. 

The Oregon Bureau of Labor and Industries website includes guidance and information related to Oregon Sick Time, as well as general guidance and information related to Oregon workplaces.

The US Department of Labor website provides a number of FAQs related to the Families First Coronavirus Response Act and some guidance on related paid leave requirements (and has also issued a “temporary rule” related to the application of paid leave). Additionally, the Department of Labor provides a PDF copy of the “Employee Rights” notice that certain employers are required to post.


In general, you can ask (or require) an employee who may have been exposed to the COVID-19 virus to stay home from work (whether or not they are showing symptoms or have been tested). 

However, you need to be careful to avoid any request (or policy) that discriminates against employees based on their national origin or family heritage. 

The Oregon Department of Employment has provided some useful guidance on how to handle these situations. Additionally, make sure you comply with applicable “paid sick time” laws and requirements under state and federal law.


Catalyst Law Blog

Knowledge is power. Information is liberating. Education is the premise of progress, in every society, in every family.

Kofi Annan

The articles in this blog are intended to help educate you on some common issues people in Oregon face during divorces, custody disputes, and other family law matters.

The information provided is general and is not intended to be legal advice for any specific case. Reading these articles is not a substitute for consulting with a family law attorney.

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