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Lowenstein Sandler LLP

Catherine Weiss

Catherine Weiss

Partner
Chair, Lowenstein Center for the Public Interest

Expertise

  • Litigation
  • Appellate
  • Class Action & Derivative Litigation
  • Pro Bono

WSG Practice Industries

Activity

Lowenstein Sandler LLP
New Jersey, U.S.A.

Profile

A lifelong public interest lawyer, Catherine is committed to maximizing the impact of Lowenstein Sandler's pro bono work. As Chair of the Lowenstein Center for Public Interest, she brings strategic focus to the firm's pro bono efforts and deepens its partnerships with leading nonprofit and community organizations across the country and within the firm's local communities.

Under Catherine's direction, the center has expanded on the firm's historic commitment to public service by building an award-winning program that serves hundreds of low-income individuals and the nonprofit organizations that support them. The firm has gained extensive pro bono experience in areas such as immigration, juvenile and criminal justice, and housing.

Catherine also maintains her own pro bono docket, focused on litigation and policy initiatives to advance the rights of the populations the center serves.

She brings to her pro bono work at Lowenstein Sandler a significant background in public interest law. Before joining the firm, she served as Director of the Division of Public Interest Advocacy in the New Jersey Department of the Public Advocate, Deputy Director of the Democracy Program at the Brennan Center for Justice at NYU School of Law, and Director of the Reproductive Freedom Project in the national office of the ACLU.

As part of her role overseeing the firm's pro bono work, Catherine maintains a substantive practice as a litigator. She approaches matters with an appellate lawyer's eye, constructing challenges to unjust laws or policies and winning decisions that reform the law. When she isn't leading her own teams in appeals or impact litigation, she manages and participates in a number of Lowenstein Sandler's signature pro bono initiatives, including representation of children in immigration proceedings; victims of persecution in asylum proceedings; survivors of domestic violence seeking orders of protection and custody of their children; veterans in disability hearings; low-income individuals in bankruptcy proceedings; tenants trying to avoid eviction; low-income entrepreneurs who need business advice; low-income inventors who need assistance with patent applications; adults seeking to become legal guardians of children in their care; and nonprofit organizations seeking counsel and assistance in corporate and governance matters.

Bar Admissions

    New York
    New Jersey
    District of Columbia

Education

Yale Law School (J.D. 1987)
Yale University (M.A. 1984), National Science Foundation Fellowship
Princeton University (A.B. 1981), summa cum laude; Phi Beta Kappa
Areas of Practice

Appellate | Class Action & Derivative Litigation | Litigation | Pro Bono

Professional Career

Significant Accomplishments

Represented 25 church-state scholars in an amicus brief to the Supreme Court of the United States, arguing that the Establishment Clause prevents religious nonprofits, colleges, and universities–as well as closely held for-profit companies–from shifting the burden of their religious objections to contraceptive coverage to their employees and students by declining to file paperwork they view as making them complicit in the provision of such coverage by other entities.

Leads the firm's representation of children in immigration proceedings, ensuring that many each year are placed with safe custodians, protected from persecution in their home countries, and defended from deportation.

Represented leading national immigration organizations as amici in the Supreme Court of New Jersey in a case that clarified the role of the state courts in cases involving Special Immigrant Juvenile Status and lifted barriers to this key form of immigration relief for children.

Partnered with Merck and Legal Services of Northwest Jersey to create and run the Veterans Justice Initiative, which was recognized as a model private-nonprofit partnership at the 2014 White House Access to Justice Forum. Enlisted corporate legal departments at Bristol-Myers Squibb and Sanofi in the initiative. Helped secure pro bono medical evaluations for veterans seeking disability benefits.

Partnered with Merck and Volunteer Lawyers for Justice to create and run a Chapter 7 Bankruptcy Program and argued an appeal in the Supreme Court of New Jersey that successfully dispelled unfounded legal ethics concerns about the program, clearing the way for broader nationwide participation by the bankruptcy bar in pro bono practice.

Partnered with Prudential and Volunteer Lawyers for Justice to design and launch an ongoing, court-based pro bono clinic to provide legal advice and document-drafting to assist low-income tenants in defending themselves from eviction.

Represented twenty-one church-state scholars in an amicus brief to the Supreme Court of the United States, arguing that the Establishment Clause prevents the government from allowing for-profit corporations to shift health care costs to their employees by claiming a religious exemption from the Affordable Care Act's contraception mandate.

Represented leading national Latino and Asian organizations in an amicus brief to the Supreme Court of the United States, demonstrating that an Arizona law requiring documentary proof of citizenship to vote impeded registration by naturalized citizens in violation of federal law. Helped persuade the Court to invalidate the law.

Represented legal academics in an amicus brief to the United States Supreme Court arguing that a storefront bakery is a classic public accommodation which, like all other commercial businesses open to the public, cannot succeed in claiming a First Amendment exemption from its obligation to serve its customers without discrimination based on sexual orientation.

Ran voter hotlines for Election Protection in several national and state elections, creating materials that outlined the election laws of various states, training and managing hundreds of volunteers in responding to questions from voters, and working with election officials to solve problems as they arose on Election Day and in the surrounding weeks.

Represented legal New Jersey residents of Latino descent in a federal constitutional challenge to nonconsensual, warrantless, predawn raids of their homes by U.S. Immigration and Customs Enforcement (ICE) as part of its "Operation Return to Sender." Withstood repeated motions to dismiss and defended an interlocutory appeal on qualified immunity in the United States Court of Appeals for the Third Circuit. Ultimately settled on terms favorable for the clients.

Represented a wide range of national religious organizations in an amicus brief to the Supreme Court of the United States, arguing that crisis-level overcrowding in the California prisons had resulted in inhumane, degrading, and unconstitutional conditions. Helped persuade the Court to affirm an order to reduce overcrowding.

Represented national and state child advocacy organizations in an amicus brief to the Supreme Court of New Jersey that presented the legal framework on which the court decided that children in foster care have a legal right to visitation with their siblings and that this right survives even after adoption, and over the objection of an adoptive parent, if the children would be harmed by severing relationships with their siblings.

Speaking Engagements

John Jay College of Criminal Justice, New York, NY



Professional Associations


  • Huber Foundation, Board Member
  • Partners for Women and Justice, Board Member

  • N.J. Supreme Court Advisory Committee on Access and Fairness, Appointee

  • N.J. State Bar Association Pro Bono Committee, Member

Professional Activities and Experience

Accolades
  • 2018 National Law Journal Immigration Trailblazer (Weiss)
  • Thurgood Marshall College Fund - Weiss harris eakley
  • Lifetime Achievement Award, New Jersey Law Journal - Weiss
  • Common Cause Voters' Rights - Weiss

Articles

After being tortured in their home country, two men fled to the United States and were detained when they arrived, seeking refuge. An immigration official denied them release on the ground that Somalian detainees "present a paradigm of deceit."

This would be a highly suspect, not to mention inscrutable, basis on which to deny release to anyone. In these cases, however, it was simply ludicrous as the men were Ethiopian - not Somalian. No judicial review was available. 

And for now, it's staying that way.

The two Ethiopians were part of the plaintiff class in Jennings v. Rodriguez, a case in which the U.S. Supreme Court recently read the immigration statutes to authorize such arbitrary detention of thousands of immigrants - without without hearings on whether they pose a risk of flight or a danger to the community - while the courts decide whether they will be deported, a process that can take years.

Our country should not be a place where we lock people up for no particular reason, indeed without even asking whether there are particular reasons. After holding that our statutes permit this sort of thing, the Supreme Court punted on whether the Constitution prohibits prolonged, untested detention and sent the issue back to the lower courts. 

Three weeks before the Jennings decision, I joined Human Rights First on a tour of the Elizabeth Immigration Detention Center in New Jersey. The tour began, as these things do, with a meeting with an ICE representative and the warden, who works for CoreCivic, formerly Corrections Corporation of America, the largest private prison contractor in the country. "We are all focused on treating people like detainees, not prisoners," they told us. "These people aren't criminals."

Given what was on display at the detention center, one could be forgiven for finding it difficult to tell the difference.

There are no detainees with serious criminal histories at the facility, but those with low-level criminal histories wear bright orange scrubs. Detainees without criminal records wear dark blue scrubs. They all sleep and eat in dormitories, with bunks, showers, and toilets separated by hip-high cinder block dividers.  Pretty much everything is made of cinderblock, including the "outside" recreation yard, a small cement rectangle surrounded entirely by cinder block walls with roof grates to the outside. This is the only "outside" there is, and detainees are escorted by guards wherever they go.

When the tour ended, we gathered in a large visiting room to interview detainees who had agreed to talk to us. I met an older man who is married to an American and has lived in the United States as a green card holder for more than 20 years. A little over a year ago, he was hit by a drunk driver on the New Jersey Turnpike and sustained serious injuries to his back and leg. He had no health insurance in the U.S., so he flew back to his native country, in a wheelchair, and checked into a hospital and rehabilitation center there.

Over several months, he progressed from a wheelchair to a walker to a cane. Then he flew home - and was detained when he landed at JFK on the ground that he had "abandoned" his green card by staying out of the country for more than six months. He's been in detention ever since.

The center won't let him have his back brace, presumably because it has metal parts. Instead, the clinic put him on muscle relaxers three times a day. The drugs make him tired and loopy and he's still in pain. "Why don't they let me go home to my wife?" he asked. 

I also met a young woman who could not tell me what made her leave her country because she could not talk about it without crying, and she did not want to cry in front of so many others. She had passed a "credible fear" interview, meaning that an asylum officer had found a "significant possibility" that she could prove that she had been persecuted or tortured in her home country on account of her race, religion, nationality, political opinion, or membership in a particular social group. She has been in detention for six months. "If they let me out," she said, "I will show up for my asylum hearing. Of course, I will. I cannot go back. I have nowhere safe to be but here."

On a tour of another facility, a colleague of mine met a woman who was picked up at JFK when she returned from a funeral in her country of origin. Her green card was flagged because of a misdemeanor shoplifting conviction from when she was a teenager - nearly two decades ago. She's been in detention for five months, and she has not seen her three young daughters, who are all U.S. citizens. The guards told her that only the legal guardian can bring the girls to visit, and she is the legal guardian, so no visits.  "I have to see my children," she said. "Please get them to let me out."

ICE detains between 31,000 and 41,000 immigrants each day. It is looking for contractors to open five additional facilities so that it can increase that number to 51,000. Because the immense expenditure must appear to be justified ($2.7 billion in the 2018 budget), every additional bed will be filled. 

If the detainees we met are any example, the people caught in the dragnet will include many for whom detention is wholly unnecessary - and therefore nothing but cruel. They come, or come back, believing that America means home, safety, freedom. Even after months of meaningless lockup, many hold onto that view. Eventually, however, they begin to lose hope. "I am not really alive in here," the older, injured man said. "Maybe if I agree to give up my wife and my children and my life here, they will let me out.  Maybe it is better to lose everything than to stay in here."

It violates our international treaty obligations to detain immigrants for the purpose of wearing them down until they agree to leave. It is unconstitutional to lock people up awaiting even a criminal trial (which a deportation hearing is not) unless there is a good reason. Most of all, it is a betrayal of our values to do what we're doing to immigrants.

A collective, noisy rejection of arbitrary detention may be the only way to resist a vindictive president, unseat a paralyzed Congress, awaken the conscience of the courts, and hold to account the private corporations and county jails that contract with ICE to incarcerate immigrants. The message is simple and should be uncontroversial: stop locking people up for no reason.

This story first appeared in The Star-Ledger on May 6, 2018.

The 2018 Pro Bono Report details our firm’s pro bono and community service efforts last year. This year’s report also marks the 10th anniversary of the Lowenstein Center for the Public Interest and its mission of providing access to justice for those most in need.

The 2019 Pro Bono Report provides an overview of the firm’s diverse efforts to stand beside our pro bono clients in their struggle to secure justice. Last year, Lowenstein dedicated more than 23,000 hours of pro bono work, much of which focused on immigration, civil and human rights, and criminal justice. Highlights include: 

  • Overturning a policy that illegally disqualified a class of young immigrants from a key form of relief specifically intended for abused and neglected children called Special Immigrant Juvenile Status (SIJS);
  • Preventing the government from deporting young people who had already been granted SIJS but who were stuck in long lines, waiting for the chance to apply for their green cards;
  • Helping to draft a New Jersey bill–now a law–that provides a national model for juvenile justice reform by reducing incarceration while promoting incentives for positive youth behavior and successful reintegration into society through such measures as the removal of onerous financial penalties, which often inhibit successful reentry;
  • Joining a federal challenge to the government’s restrictions on military service by transgender people;
  • Arguing for systemwide reforms to ensure that, when transgender people are incarcerated, they are held in units appropriate for their gender identity and most likely to protect their safety; and
  • Assisting more than 100 nonprofits to form, grow, achieve, and expand their missions of providing high-quality services to individuals in need.

Resilience and perseverance stand out among our clients' many positive attributes. These qualities have proved critical as we continue to work with our nonprofit partners to serve individuals and communities in need.

This document is for informational purposes only, is not intended as legal advice, and does not substitute for consulting with a lawyer about specific facts and circumstances. This document does not constitute a solicitation, and your use of this document does not create any attorney-client relationship between you and Lowenstein Sandler.

LOCKOUTS

Can I be locked out of my home during the COVID-19 emergency?

No. On March 19, 2020, New Jersey Governor Philip Murphy issued Executive Order 106, which immediately suspends evictions throughout the state. This is called an “eviction moratorium,” and it means that, except in rare circumstances, no tenant may be removed from his or her home as a result of an eviction proceeding. This state eviction moratorium does not affect court proceedings; instead, it prevents lockouts and removals. The New Jersey Supreme Court controls court proceedings related to eviction, which are suspended for now. More information is below.

How long will the state eviction moratorium last?

The eviction moratorium began on March 19, 2020, and it will last until two months after Governor Murphy declares an end to the COVID-19 health crisis, unless the Governor issues another Executive Order to end it sooner.

What if a lockout notice or warrant of removal has already been issued?

The moratorium applies to all pre-existing orders for removal. Any previously issued order for removal is suspended, and you cannot be removed from your home during the moratorium.

What if I live in a hotel/motel? Can I be evicted while the Executive Order is in place?

Maybe. Governor Murphy’s Executive Order 106 permits a hotel or motel to evict a “transient guest or seasonal tenant.” Longtime hotel and motel residents, along with many others, are not considered “transient” or “seasonal,” however, and therefore remain protected from eviction under the Order. In general, residents cannot be evicted if they “have no permanent housing to which they may safely or lawfully return and live at a hotel or motel on a continual basis.” Under Administrative Orders 2020-08 and 2020-09 (issued by the State Director of Emergency Management on April 4 and April 24), the following hotel and motel residents are generally protected from eviction:

  • those who are part of state initiatives aimed at getting people out of group shelters;
  • those supported by a governmental housing assistance program;
  • health-care workers who need a temporary place to stay;
  • homeless people;
  • individuals affected by domestic violence; and
  • those staying in hotels or motels in compliance with a court order.

Others may be protected as well. To discuss your individual circumstances, contact a legal services organization such as Legal Services of New Jersey, Volunteer Lawyers for Justice – New Jersey, Community Health Law Project, Essex County Legal Aid Association, or City of Newark Office of Tenant Services.

What if my landlord locks me out illegally?

It is a crime for your landlord to lock you out. Under New Jersey law, only the courts can order evictions, and only government officials can remove you from your home. If your landlord locks you out, call the local police right away.

What happens when the state eviction moratorium ends?

Unless he lifts it sooner, the moratorium will end two months after Governor Murphy declares that the emergency is over. Local officials will then resume removing tenants who are subject to final court orders of eviction. (Renters who live in homes where the owner has a federally backed mortgage or who live in public or subsidized housing may be entitled to protection for a longer period. See below.)

RENT PAYMENTS

Do I still need to pay my rent?

Yes. Rent is still due, and you should pay if you can. If you do not pay, your landlord can still demand the rent and file an action against you in court. The court will schedule the case once the suspension of court hearings is lifted (see below). If you need guidance on how to address your rent situation with your landlord during this time, you can call the New Jersey Housing and Mortgage Finance Agency for free counseling over the phone. Visit https://njhousing.gov/foreclosure for a list of counselors by county.

If I can’t afford to pay my rent and fall behind, will I still owe the money?

Yes. Any payments you miss now will become back-rent that you owe. One way or another, you will probably have to pay later whatever you cannot pay now, or you will ultimately face possible eviction.

Is rental assistance available?

Maybe. The Department of Community Affairs (DCA) recently announced a $100 million COVID Short-Term Rental Assistance Program (CVERAP).

Eighty percent ($80 million) of the program’s funding will go to low- and moderate-income families who are struggling to pay the rent because of substantial loss of income related to the pandemic. Eligible households will receive short-term, temporary rental assistance for up to six months. DCA will make payments directly to landlords. At the three-month mark, household income will be reviewed to determine if assistance is still needed. Assistance that is no longer required will be used to serve additional families. Money from this program cannot be used to cover rental arrears.

The program will open for applications in July and begin paying rental assistance in September.

DCA will administer this assistance through an online lottery. When the lottery is opened, households may submit applications, and recipients will be selected from the overall pool of applicants through a randomized lottery. After selection, DCA will confirm eligibility before making payments.  

General information about the lottery is here, and FAQs are here.

Households are eligible if they:

  • Have a gross, annual household income that is at or below the maximum income limits for the county where they are living (income limits for each county are here);
  • Reside in a rental unit in New Jersey;
  • Owed no back rent as of March 2020;
  • Suffered a substantial reduction in income or are currently receiving unemployment due to the COVID-19 pandemic;
  • Have a lack of assets and savings to pay rent; and
  • Can pay a minimum of 30% of their income (if any) towards the rent.

Individuals must apply online between 9 A.M. on Monday July 6 and 5 P.M. on Friday July 10. As of 5 P.M. on July 10, the application process will close. Once the process opens on July 6, applications can be submitted at this website. Applicants without internet access can call 609-292-4080, option #1, for assistance, including assistance in creating an email address, which all applicants will need. During the 5-day period when applications will be accepted, the website will operate 24 hours a day, and call center customer representatives will be available by phone from 8 am to 5 pm.

Twenty percent of the funding ($20 million) will go to serve those who are very low income and homeless or at risk of homelessness. They will be eligible for up to 12 months of rental assistance. These households are not subject to the lottery process. Instead, DCA will identify and assist these households through its Homelessness Prevention & Rapid Rehousing partner organizations. A list of these organizations, with contact information, is here.

For those who need longer term assistance or who may not be eligible for, or lucky enough to get, the special COVID-19 Emergency Rental Assistance, DCA posts summaries of preexisting rental assistance programs, and you can use the DCAid portal to see if you are eligible. The DCA website also offers some general answers to questions about rental assistance. To get financial counseling on meeting your rental obligations, check the website of New Jersey Housing and Mortgage Finance Agency, which lists free counselors in every county. If you fall behind on your rent payments, you can also try speaking with your landlord to work out a payment plan to avoid having an eviction action filed against you. For additional resources, try calling 2-1-1.

Can I use my security deposit to cover some of the rent I owe?

Yes. On April 24, Governor Murphy issued Executive Order 128, which allows tenants to request in writing (including by email or text) that their landlords apply their security deposits to the rent they owe during the Public Health Emergency and for up to 60 days afterwards. The landlord must comply with such a request. If the tenant causes damage to the apartment (beyond ordinary wear and tear), the landlord may require the tenant to pay for that damage if and when the landlord would otherwise have been entitled to recoup the cost from the security deposit. If the lease is renewed, the landlord may also require the tenant to post a new security deposit either six months after the end of the Public Health Emergency or when the lease is renewed, whichever is later.

Can my landlord increase my rent during the COVID crisis?

Maybe. So far, the state government has not banned rent increases during the crisis. In the absence of statewide protection, tenants retain whatever protections may already have applied, including lease provisions and rent control ordinances, which normally permit rent increases only once a year.

In addition, some tenants have special protections:

  • On April 16, Governor Murphy announced that the New Jersey Housing and Mortgage Finance Agency (NJHMFA) had voted to prohibit rent increases for the duration of the Public Health Emergency in the 36,000 rental units the agency oversees. After the emergency ends, landlords in NJHMFA-regulated properties may raise rents up to 1.4% on 30 days’ notice to tenants.
  • On May 18, Newark’s Mayor Baraka announced a temporary moratorium on all rent increases for tenants living in properties covered by the Newark Rent Control Ordinance. Newark’s prohibition on rent increases is retroactive to April 1 and will last up to two months following the end of Newark’s declared State of Emergency.

COURT HEARINGS

What about court? Is the court holding eviction trials?

Not right now. On June 12, the New Jersey Supreme Court ordered that trials in landlord-tenant court be suspended “until further notice.” This means there will be no eviction trials anywhere in the state until the Supreme Court authorizes the landlord-tenant courts to resume such trials. Check the New Jersey Courts website for updates.

Are the courts accepting cases that landlords file against tenants?

Yes. The June 12 order allows landlords to file eviction complaints against tenants, even though there are no trials at this time. You may therefore receive an eviction complaint in the mail and/or posted at your residence.

Are the courts holding proceedings other than trials?

Yes. The June 12 order instructs the landlord-tenant courts to schedule settlement negotiations “in an effort to resolve matters.” This means you may receive a notice from the court by email directing you to appear at a videoconference or telephone conference to discuss settlement of a case your landlord has filed against you. If you get a notice like this, you should:

Does federal law prevent my landlord from filing an eviction case against me?

Maybe. Under the federal CARES Act, if the landlord has a federally backed mortgage, the landlord may not file an eviction action against you for nonpayment of rent, or charge you fees (such as late fees or attorney’s fees) related to your nonpayment of rent, for 120 days from March 27, 2020 (or through July 25, 2020). After July 25, a landlord with a federally backed mortgage must give you 30 days’ notice before filing an eviction action.

As explained below under “Subsidized Tenants,” the 120-day federal eviction ban also extends to tenants living in public housing and participating in various other subsidized housing programs.

Additional protection may apply if the building where you live has five or more units and the owner got permission to delay payments on a federally backed mortgage loan. In that case, the owner may not file an eviction action against you for nonpayment of rent, or charge you fees related to nonpayment of rent, during the period when the owner is not making mortgage payments. When this period ends, the owner must give you 30 days’ notice before filing an eviction action against you.

The National Low-Income Housing Coalition has constructed a searchable database of many (but not all) of the properties covered by the federal law.

You must still pay rent, and you will owe later what you don’t pay now. Like the state orders, the federal law protects you from being removed from your home during the emergency, but you still owe the rent.

What if my landlord has already started an eviction proceeding against me in housing court and I have an upcoming court date?

If your court date is scheduled during the suspension, the court will mail you a notice with your new court date. While landlord-tenant court is suspended, you should not go to court, no cases will move forward, and you will not be penalized for not going to court.

Can I still get emergency repairs in my apartment?

You always have a right to safe and decent housing. If you have concerns about issues such as inadequate heat, exposure to lead, infestations, leaks, crumbling walls and ceilings, or other hazardous conditions, you should ask your landlord in writing to make repairs (keep a copy). If repairs are not made quickly, you can call 2-1-1, contact the state Bureau of Housing Inspection, or call your municipality to report the problem. Or, if you can manage the repairs on your own, you can make them or pay someone to make them. You can then withhold the money you spent on repairs from your rent (save all receipts for the repairs!). Due to closures, enforcement agencies may be working with limited staff and it may take longer to get repairs or inspections.

What if I already have a court date scheduled for a hearing about emergency repairs?

All landlord/tenant court proceedings, including those for emergency repairs, have been suspended for the time being. You can find updates on the dates of the suspensions at the New Jersey Courts website. You should not go to housing court during the suspension. Instead, you should wait for notice of a rescheduled court date.

SUBSIDIZED TENANTS

Can my landlord file an eviction action against me if I live in public housing or have a Section 8 Voucher?

No. The federal CARES Act prevents landlords from filing eviction actions for nonpayment of rent for 120 days from March 27, 2020 (or through July 25, 2020) against tenants who:

  • live in public housing,
  • have a Section 8 Housing Choice voucher,
  • live in Section 8 project-based housing, or
  • live in other types of federally funded housing, including, among others, certain housing programs for seniors, people with disabilities, people with HIV/AIDS, and people at risk of homelessness.

During this period, the landlord also cannot charge fees (such as late fees or attorney’s fees) associated with nonpayment of rent, and the landlord must give tenants 30 days’ notice after July 25 before filing eviction actions.

Is the Department of Community Affairs still open for business?

Yes. The Department of Community Affairs (DCA) housing assistance programs continue to operate and do all their basic work, including paying rents to landlords and setting the amount of rent subsidized tenants must pay. DCA encourages subsidized tenants to use the online portal at assistancecheck.com to submit documents, or to send documents through the mail (keep copies!). Subsidized tenants who have questions can contact the field offices or use the main customer service line: 609-292-4080 or [email protected]. DCA has announced that it has taken a number of actions to meet the ongoing needs of its clients and to curb evictions and homelessness during the state of emergency. For example, DCA has suspended termination of subsidies in the Section 8 Housing Choice Voucher and State Rental Assistance Programs, unless the tenant has engaged in violence or threats against others. DCA is also accepting through its online portal interim income re-certifications for tenants who have lost income because of the pandemic.

Is the Newark Housing Authority allowed to evict me now?

No. As noted above, the federal CARES Act prevents public housing authorities from filing eviction actions for nonpayment of rent against public housing tenants for a period of 120 days from March 27 (or through July 25, 2020). If the Newark Housing Authority manages your rental subsidy, you are also covered by city-level anti-eviction protections.

ELECTRICITY, GAS, WATER

Can my utilities be shut off during the COVID-19 crisis?

No. As of March 13, New Jersey’s electric and gas utilities voluntarily suspended utility shut-offs, and that suspension appears to be ongoing. We have heard that some of the utility companies are sending shut-off notices to residential tenants, but it seems they are not following through with actual shut-offs.

Do I still have to pay for utilities and water?

Yes. You still have to pay whatever electric, gas, or water bills you normally pay. If you cannot pay now, you will have to pay later. The utilities and water companies are not cancelling debts; they are just postponing shutoffs for the time being. DCA offers low-income tenants assistance with some utility bills, and you can call the customer service number on your utility bill to try to work out a payment plan.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here.

This document is for informational purposes only, is not intended as legal advice, and does not substitute for consulting with a lawyer about specific facts and circumstances. This document does not constitute a solicitation, and your use of this document does not create any attorney-client relationship between you and Lowenstein Sandler.

REMOVALS

Can I be removed from my home as a result of a foreclosure proceeding during the COVID-19 emergency?

No.  On March 19, 2020, New Jersey Governor Philip Murphy issued Executive Order 106, which immediately suspends evictions and removals throughout the state.  This is called an “eviction moratorium,” and it means that, except in rare circumstances, no homeowner may be removed from his or her home as a result of a foreclosure proceeding at this time.  You cannot be removed even if a final judgment of foreclosure has been entered and a sheriff’s sale of your property has taken place.  The eviction moratorium does not affect court proceedings; instead, it prevents removals.  More information on court proceedings is below.

How long will the eviction moratorium last?

The eviction moratorium began on March 19, 2020, and it will last until two months after Governor Murphy declares an end to the COVID-19 health crisis, unless the Governor issues another Executive Order to end it sooner. 

Do I still need to pay my mortgage?

Yes.  You will have to make your mortgage payments sooner or later.  If you need extra time, however, help is available. 

If you have a federally backed mortgage, you have the right to ask your mortgage servicer for forbearance (a pause on payments) to relieve financial hardship arising from the pandemic.  The recently adopted federal CARES Act requires servicers of federally backed mortgages to give struggling borrowers a 180-day grace period on payments.  The borrower may request one extension of up to 180 days.  During the grace period, the servicer cannot charge you fees, penalties, or interest other than what you would owe if you had paid on time. 

In addition, Governor Murphy has announced some important relief for homeowners with mortgages, including those that are not backed by the federal government.  If you contact your mortgage servicer, you may be eligible for: (1) a 90-day grace period for mortgage payments; (2) assurance that the servicer will not report late or missed payments during this period to credit agencies; (3) a 60-day moratorium on servicers’ initiation of foreclosure sales or evictions; and (4) relief from certain fees and charges for at least 90 days.  For more information, check the FAQs issued by the state.  You can also check the website of New Jersey Housing and Mortgage Finance Agency for updates on available help and to access a list of counselors by county.

Is there a national moratorium on evictions?

Yes, for some homeowners.  On March 18, the U.S. Department of Housing and Urban Development (HUD) announced a foreclosure and eviction moratorium that applied to single-family homeowners with Federal Housing Authority (FHA)-insured mortgages for 60 days.  Fannie Mae and Freddie Mac also suspended foreclosures and evictions for 60 days for homeowners behind on their mortgages.  In addition, the federal CARES Act made it illegal for the servicer of a federally backed mortgage loan to evict you for 60 days from March 18 (in other words, until May 17).  On May 14, the FHA, Fannie Mae, and Freddie Mac extended their foreclosure and eviction moratoriums for single-family mortgages until June 30, 2020. This period could be further extended by additional agency action or legislation.  The National Low Income Housing Coalition is tracking federal developments.

COURT HEARINGS

Can lenders still begin foreclosure proceedings during this period?

Not if you hold a federally backed mortgage.  The federal CARES Act made it illegal for the servicer of a federally backed mortgage loan to begin or move forward with foreclosure proceedings for sixty days from March 18 (until May 17).  This period has been extended to June 30, 2020 with respect to federally backed single family mortgages only, and may be further extended by additional agency action or legislation.  For updates, check the website of the National Low Income Housing Coalition.

Yes, if you don’t hold a federally backed mortgage.  The state Executive Order and related legislation specifically state that lenders can bring foreclosure actions during the time the order is in effect.  We understand that the Superior Court Office of Foreclosure is still accepting new cases and electronic filings in existing cases.  The portion of the state-negotiated protections under which lenders agreed not to file new foreclosure actions expired on May 27, 60 days from when it was announced. 

Will the Foreclosure Office process cases during this period?

That depends.  The Foreclosure Office administers parts of most foreclosure cases and manages most of the process when a foreclosure is “uncontested,” meaning that the homeowner did not file an answer to the complaint.  Under an April 24 order issued by the New Jersey Supreme Court, however, the Office of Foreclosure will not review or act on motions or judgments it received after March 1, 2020.  Thus, if the lender asks the Foreclosure Office after March 1 to enter a final judgment against the homeowner or seeks other action to advance the foreclosure, the Office will hold those requests for now.  These rules remain in effect under the Supreme Court’s most recent omnibus order.  Please check the New Jersey Courts website for updates on court orders affecting how and when uncontested foreclosure cases will proceed.  If you have questions about an uncontested foreclosure case that is pending, you can also try contacting the Office of Foreclosure at 609-421-6100 or [email protected].

Will the courts hear foreclosure cases during this period?

Yes.  To date, there is no order suspending court hearings in contested foreclosure cases (in which the homeowner answered the complaint).  Please note, however, that the most recent Supreme Court order reaffirms that “in-person court operations will not resume in full for some time.”  Until the Court lifts or amends the order, hearings, conferences, and arguments will be held by video or telephone.  Please check with the court where the case is pending if you have questions.  Please also check the New Jersey Courts website for updates on how and when proceedings will take place.

Can my utilities be shut off during the COVID-19 crisis?

No.  As of March 13, New Jersey’s electric and gas utilities voluntarily suspended utility shut-offs, and that suspension appears to be ongoing.  We have heard that some of the utility companies are sending shut-off notices to homeowners, but it seems they are not following through with actual shut-offs. 

Do I still have to pay for utilities and water?

Yes.  You still have to pay your electric, gas, and water bills.  If you cannot pay now, you will have to pay later.  The utilities and water companies are not cancelling debts; they are just postponing shutoffs for the time being.  DCA offers low-income homeowners assistance with some utility bills, and you can call the customer service number on your utility bill to try to work out a payment plan.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here.

The following information has been adapted from the Small Business Administration’s (SBA) Paycheck Protection Program Borrower Information Fact Sheet to provide information tailored for nonprofits.

This document is for informational purposes only, is not intended as legal advice, and does not substitute for consulting with a lawyer about specific facts and circumstances. This document does not constitute a solicitation, and your use of this document does not create an attorney-client relationship between you, the Pro Bono Partnership, and/or Lowenstein Sandler. 

What is the Paycheck Protection Program?

The Paycheck Protection Program (“PPP”) is a loan program created by the federal CARES Act, which authorized $349 billion in forgivable loans to nonprofits, among other business entities, to pay their employees and cover certain other core expenses during the COVID-19 crisis. 

The first wave of PPP funding was exhausted on April 16, 2020. The government approved $310 billion of new funding for the PPP on April 24, 2020. On April 27, 2020, the SBA resumed accepting PPP applications from participating lenders. About one fifth of the second round of PPP funding is earmarked for smaller banks, smaller credit unions, and community financial institutions that provide financing to underserved and economically disadvantaged communities. According to the SBA, as of June 16, 2020, about $146 billion remains of the second round of PPP funding.  This funding may go quickly.    

UPDATE: The CARES Act was substantially amended on June 5, 2020, with the enactment of the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”). The Flexibility Act updates many aspects of the PPP. As suggested by its name, the new law is intended to give PPP borrowers more flexibility in when and how they spend their PPP funds. New guidance from the SBA and Treasury Department will likely follow. Flexibility Act updates are included below.

How large can my loan be?

Loans can be for up to 2.5 times your average monthly payroll costs from the last year (either the previous 12 months or calendar year 2019). That amount is subject to a $10 million cap. Payroll costs are capped at $100,000 per year for each employee (note: an employee’s cash compensation above $100,000 is not counted as part of the nonprofit’s payroll costs when calculating the amount of the loan, but the full cost of that employee’s benefits is counted).

Payroll costs are calculated on a gross basis without regard to federal taxes imposed or withheld. In other words, payroll cost is not increased by the employer’s share of payroll tax or reduced by taxes imposed on an employee and required to be withheld by the employer.

Are the loans forgivable?

Flexibility Act Update: The loan amounts will be forgiven so long as:

  • the loan is used to cover payroll costs, interest on mortgage, rent, and utility costs over the 24-week period after the loan is made or by December 31, 2020, whichever is earlier; and
  • employee and compensation levels are maintained.

(Before the enactment of the Flexibility Act, to qualify for full forgiveness borrowers had to spend the funds over the 8-week period after the loan was made. The Flexibility Act gives borrowers the option to spend the funds over a longer period. Borrowers whose PPP loan was approved prior to the enactment of the Flexibility Act may keep the original 8-week period if they choose. Most businesses will find the 24-week period preferable, but some may wish to retain the original 8-week period so as to submit the forgiveness application as soon possible.)

Originally, the SBA indicated that at least 75% of the forgiven amount had to be used for payroll costs. The Flexibility Act reduces this percentage: PPP borrowers are now eligible for loan forgiveness so long as they use at least 60 percent of loan proceeds for payroll expenses, with no more than 40 percent of loan proceeds going to eligible non-payroll expenses. 

How much of my loan will be forgiven?

You will owe money when your loan is due if you use the loan for anything other than payroll costs, interest on a mortgage, rent, and utility payments during the covered loan period (which runs for 24 weeks after receiving the loan or until December 31, 2020, whichever is earlier).

You will also owe money if you do not maintain your staff and payroll.

  • Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
  • Level of Payroll: If your total eligible payroll expenses (excluding compensation in excess of $100,000 per employee per year) decreases by more than 25%, loan forgiveness will be reduced by the same amount.
  • Re-Hiring: You now have until December 31, 2020, to restore your full-time employment and salary levels for any reductions made between February 15, 2020 and April 26, 2020. (Before the enactment of the Flexibility Act, workforce restoration had to occur by June 30, 2020.) 

Note, though, that some reductions in workforce will not count against you for the purpose of loan forgiveness.  Loan forgiveness will not be impacted if:

  • you fire an employee for cause; an employee voluntarily resigns; or an employee voluntarily requests and receives a reduction in hours.
  • you have laid off employees, and then:
    • made a good faith, written offer to rehire,
    • documented the employee’s rejection of that offer,
    • informed the state unemployment insurance office within 30 days of the employee’s rejection of the offer (employees who reject offers of reemployment may forfeit eligibility for continued unemployment compensation), and
    • documented your inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020.
  • Rehiring – Flexibility Act Update: In addition to the above, forgiveness will not be reduced if the employer can document in good faith that it is unable to return to the same level of business activity it was operating at before February 15, 2020, due to compliance with operating restrictions related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. 
  • EIDL Grant Reduction: Loan forgiveness will be reduced by the amount of an EIDL grant received by the organization, if any.

What if my nonprofit uses government funding to cover some of its payroll costs? How should I treat the portion of my payroll already covered by other government grants?

The government has not released guidance on this point, but we recommend the following steps.

So long as the nonprofit itself pays the staff member’s compensation (meaning that the government does not pay the staff member directly), the whole of that compensation should be included when calculating average monthly payroll costs in the first part of the PPP application. 

When calculating the amount of loan forgiveness to claim, however, some of the nonprofit’s payroll costs may be excluded. If the nonprofit can defer using its other government grants to cover payroll during the 8 weeks after it receives a PPP loan, it should do so. In that case, the nonprofit can claim all of its otherwise qualifying payroll costs (or that portion for which other government funding can be deferred) as part of its loan-forgiveness amount. 

If the nonprofit cannot defer using its other government grants to cover payroll, then it should exclude the portion of its average monthly payroll costs that are covered by those other grants from the amount it claims for loan forgiveness. 

Which nonprofits can apply?

Nonprofits are eligible to apply for a PPP loan if:

  • they are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code;
  • they were in existence before March 1, 2020; and
  • they employ no more than 500 full-time and part-time employees whose principal place of residence is in the United States.

Be aware that the SBA might consider two or more nonprofits under common control to be “affiliated.” An affiliation of multiple organizations could exceed the 500-employee limit. This determination is complex and may require legal counsel.

What if my nonprofit client is a religious organization? Can it qualify?

Yes. The government considers religious organizations to be eligible for loans under the Paycheck Protection Program.

What can I use these loans for?

You should use the proceeds from these loans on:

  • payroll costs, including benefits;
  • interest on mortgage obligations incurred before February 15, 2020;
  • rent, under lease agreements in place before February 15, 2020; and
  • utilities, for which service began before February 15, 2020.

When can I apply?

Applications will be accepted through June 30, 2020, or until the federal funds for this program are exhausted, whichever is earlier. This program is supposed to operate on a “first come, first served” basis. If you are interested, apply as soon as you can.

Where can I apply?

Check the website of your existing bank or lending institution to determine if it is accepting applications. Many participating lenders are only accepting applications from existing customers. Most lenders are accepting applications through their online portals. Note, however, that many national banks have extremely long backlogs for PPP applications and may never process your application. Check the website for information on expected wait times. To increase the likelihood that your loan application will be processed, you may wish to apply with a community bank or FinTech company such as PayPal.  A full list of lenders is available at www.sba.gov. Contact a lender as soon as possible to begin the application process. 

What do I need to apply?

You will need to complete the Paycheck Protection Program loan application and submit the application with the supporting documentation to an approved lender. Click here for the SBA’s model application (which individual lenders may modify).

What supporting documentation will I need to include with my application?

Each lender’s requirements may vary. You should be prepared to provide your lender with documents that verify the number of full-time equivalent employees and pay rates, as well as eligible mortgage, lease, and utility obligations.  Consider compiling the following:

  • 2019 IRS quarterly payroll tax reports.
  • Last 12 months of payroll reports beginning with your last payroll date, including:
    • gross wages for each employee, including the officer(s) if paid;
    • W-2 wages;
    • paid time off for each employee;
    • vacation pay for each employee;
    • family medical leave pay for each employee;
    • state and local taxes assessed on the employee’s compensation for each employee;
    • documentation showing the total of all health insurance premiums paid by the nonprofit under a group health plan for all employees; and
    • documentation of the sum of all retirement plan funding paid by the nonprofit (excluding contributions from the employees).
  • Borrowers who do not have this documentation should provide supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.

Do I need to look for other funds first, before applying to this program?

No. The SBA waived its usual requirement that a borrower first try to obtain some or all of the loan funds from other sources.

How can I request loan forgiveness?

You will need to submit an application for forgiveness directly to the lender that provided your PPP loan. On June 16, the SBA released a revised 7-page loan forgiveness application that incorporates changes to PPP loan forgiveness requirements made by the Flexibility Act. On the same date, the SBA also released a simplified 3-page “EZ” loan forgiveness application for borrowers who can satisfy any of the following requirements:

  • the borrower applied for a PPP loan as a self-employed individual, independent contractor or sole proprietor who had no employees at the time of the PPP loan application.
  • the borrower did not reduce salary or wages for any employee by more than 25% during the covered loan period as compared to the period between January 1, 2020 and March 31, 2020, and did not reduce the number or hours of employees between January 1, 2020 and the end of the covered loan period (ignoring reductions related to employees who refused offers of rehire and whose positions could not be filled with similarly qualified workers).
  • the borrower did not reduce salary or wages for any employee by more than 25% during the covered loan period as compared to the period between January 1, 2020 and March 31, 2020, and was unable to return to the same level of business activity it was operating at before February 15, 2020, due to compliance with official requirements related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.

What are the general PPP loan terms:

  • Interest rate will be 1%.
  • No collateral will be required.
  • No personal guarantees will be required.
  • You do not need to apply first for credit elsewhere.

When do I have to pay the loan back?

Flexibility Act Update: You now will not have to start making payments on the loan until after you submit your forgiveness application and the SBA pays the forgiveness amount to the lender. Interest will not accrue during this time. 

For PPP loans made before the enactment of the Flexibility Act, the full amount will be due within 2 years of when you received the money. If you receive your PPP loan after the enactment of the Flexibility Act, you will have 5 years to repay the loan. Existing PPP loans can be extended up to 5 years if the lender and borrower mutually agree. If you want to pay earlier, there are no penalties for pre-payment.

What do I need to certify?

As part of your application, you need to certify in good faith that:

  • Current economic uncertainty makes the loan necessary to support your ongoing operations.
  • The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
  • You have not received and will not receive another loan under this program.
  • You will provide documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities during the 24 weeks after getting this loan.
  • You understand that loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities, and not more than 40% of the forgiven amount may be for non-payroll costs.
  • All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
  • You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS.  And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.

Can I make the certifications above if my nonprofit has a large operating reserve?

This is a business decision that depends on the facts and circumstances of your nonprofit and should be supported by careful and documented deliberation of your board members. SBA guidance issued on April 24 states that, in making the above certifications, organizations should take into account their current business activity and their ability to access other funds sufficient to support their ongoing business operations in a manner that is not significantly detrimental to their business.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here. 

DESALOJOS RESIDENCIALES: LO QUE LOS PROPIETARIOS DE VIVIENDAS NECESITAN SABER

A partir del 3 de junio de 2020

El presente documento es únicamente de carácter informativo, no pretende ser un asesoramiento jurídico y no sustituye la consulta con un abogado sobre hechos y circunstancias específicos. Este documento no constituye una solicitud, y su uso de este documento no crea ninguna relación de abogado-cliente entre usted y Lowenstein Sandler.

REMOCIONES 

¿Me pueden remover de mi casa como resultado de un procedimiento de ejecución hipotecaria durante la emergencia de COVID-19? 

No. El 19 de marzo de 2020, el gobernador de Nueva Jersey, Philip Murphy, emitió la Orden Ejecutiva 106, que suspende inmediatamente los desalojos y las remociones en todo el estado. Esto se llama una "moratoria de desalojo" y significa que, excepto en circunstancias excepcionales, ningún propietario puede ser removido de su hogar como resultado de un procedimiento de ejecución hipotecaria en este momento. No puede ser removido incluso si se ha emitido un sentencia firme de ejecución hipotecaria y se ha realizado una venta judicial de su propiedad. La moratoria de desalojo no afecta los procedimientos judiciales; en cambio, evita las remociones. Más información sobre los procedimientos judiciales se encuentra a continuación. 

¿Cuánto tiempo durará la moratoria de desalojo? 

La moratoria de desalojo comenzó el 19 de marzo de 2020, y durará hasta dos meses después de que el gobernador Murphy declare el final de la crisis de salud de COVID-19, a menos que el gobernador emita otra orden ejecutiva para terminarla antes. 

¿Todavía necesito pagar mi hipoteca? 

Sí. Tendrás que hacer los pagos de su hipoteca tarde o temprano. Sin embargo, si necesitas más tiempo, hay ayuda disponible. 

Si tiene una hipoteca respaldada por el gobierno federal, tiene derecho a pedirle al administrador de su hipoteca una paciencia (una pausa en los pagos) para aliviar las dificultades financieras derivadas de la pandemia. La recientemente adoptada Ley federal CARES requiere que los administradores de hipotecas respaldadas por el gobierno federal otorguen a los prestatarios con dificultades un período de gracia de 180 días para los pagos. El prestatario puede solicitar una extensión de hasta 180 días. Durante el período de gracia, el administrador no puede cobrarle honorarios, multas o intereses que no sean los que debería si hubiera pagado a tiempo.

Además, el gobernador Murphy ha anunciado un alivio importante para los propietarios con hipotecas, incluyendo las hipotecas que no están respaldadas por el gobierno federal. Si contacta a su administrador hipotecario, puede ser elegible para: (1) un período de gracia de 90 días para los pagos de la hipoteca; (2) la garantía de que el administrador no informará a las agencias de crédito sobre pagos atrasados o incumplidos durante este período; (3) una moratoria de 60 días sobre el inicio de las ventas de ejecución hipotecaria o desalojos por parte de los administradores; y (4) alivio de ciertas tarifas y cargos por al menos 90 días. Para más información, consulte las preguntas frecuentes emitidas por el estado. También puede consultar el sitio web de la Agencia de Financiamiento de Viviendas e Hipotecas de Nueva Jersey para obtener actualizaciones sobre la ayuda disponible y acceder a una lista de asesores por condado. 

¿Existe una moratoria nacional sobre los desalojos? 

Sí, para algunos propietarios. El 18 de marzo, el Departamento de Vivienda y Desarrollo Urbano de los EE. UU. (HUD, por sus siglas en inglés) anunció una moratoria de ejecución hipotecaria y desalojo que se aplicó a los propietarios de viviendas unifamiliares con hipotecas aseguradas por la Autoridad Federal de la Vivienda (FHA, por sus siglas en inglés) durante 60 días. Fannie Mae y Freddie Mac también suspendieron las ejecuciones hipotecarias y los desalojos durante 60 días para los propietarios de viviendas que estén atrasados en sus hipotecas. Además, la Ley federal CARES estableció que es ilegal que el administrador de un préstamo hipotecario respaldado por el gobierno federal lo desaloje por 60 días a partir del 18 de marzo (en otras palabras, hasta el 17 de mayo). El 14 de mayo, el FHA, Fannie Mae y Freddie Mac extendieron sus moratorias de ejecución hipotecaria y desalojo para las hipotecas unifamiliares hasta el 30 de junio de 2020. Este período podría extenderse por acción adicional de la agencia o legislación.  La Coalición Nacional de Viviendas de Bajos Ingresos está siguiendo los desarrollos federales. 

AUDIENCAS JUDICIALES 

¿Pueden las entidades crediticias comenzar los procedimientos de ejecución hipotecaria durante este período? 

No si tienes una hipoteca respaldada por el gobierno federal. La Ley federal CARES estableció  que es ilegal que el administrador de un préstamo hipotecario respaldado por el gobierno federal inicie o siga adelante con los procedimientos de ejecución hipotecaria durante sesenta (60) días a partir del 18 de marzo (hasta el 17 de mayo). Este período se ha extendido hasta el 30 de junio de 2020 con respecto a las hipotecas unifamiliares respaldadas por el gobierno federal solamente, y puede ser extendido por acción adicional de la agencia o legislación. Para actualizaciones, consulte el sitio web de la Coalición Nacional de Vivienda de Bajos Ingresos

Sí, si no posee una hipoteca respaldada por el gobierno federal. La Orden Ejecutiva estatal y la legislación relacionada establecen específicamente que las entidades crediticias pueden iniciar acciones de ejecución hipotecaria durante el tiempo que la orden esté vigente. Entendemos que la Oficina de Ejecución Hipotecaria de la Corte Superior todavía está aceptando nuevos casos y presentaciones electrónicas en los casos existentes.  La parte de las protecciones negociadas por el estado en virtud de las cuales los prestamistas acordaron no presentar nuevas acciones de ejecución hipotecaria expiró el 27 de mayo, 60 días a partir de la fecha en que se anunció. 

¿La Oficina de Ejecución Hipotecaria procesará casos durante este período? 

Eso depende. La Oficina de Ejecución Hipotecaria administra partes de la mayoría de los casos de ejecución hipotecaria y gestiona la mayor parte del proceso cuando una ejecución hipotecaria es "no impugnada", lo que significa que el propietario no presentó una respuesta a la denuncia. Sin embargo, según una orden del 24 de abril emitida por la Corte Suprema de Nueva Jersey, la Oficina de Ejecución Hipotecaria no revisará ni actuará sobre las peticiones o juicios que recibió después del 1 de marzo de 2020. Por lo tanto, si la entidad crediticia le pide a la Oficina de Ejecución Hipotecaria después del 1 de marzo que presente un juicio final contra el propietario de la vivienda o busque otra acción para adelantar la ejecución hipotecaria, la Oficina retendrá esas solicitudes por ahora. Estas reglas siguen vigentes bajo la más reciente orden general de la Corte Suprema. Consulte el sitio web de las Cortes de Nueva Jersey para obtener actualizaciones sobre las órdenes judiciales que afectan cómo y cuándo procederán los casos de ejecución hipotecaria no impugnada. Si tiene preguntas sobre un caso de ejecución hipotecaria no impugnado que este pendiente, también puede intentar comunicarse con la Oficina de Ejecución Hipotecaria al 609-421-6100 o [email protected] 

¿Las cortes escucharán los casos de ejecución hipotecaria durante este período? 

Sí. Hasta la fecha, no hay ninguna orden que suspenda las audiencias judiciales en los casos de ejecución hipotecaria impugnada (en los que el propietario respondió a la denuncia). Sin embargo, tenga en cuenta que la orden más reciente de la Corte Suprema reafirma que "las operaciones judiciales en persona no se reanudarán en su totalidad durante algún tiempo". Hasta que la Corte levante o enmiende la orden, las audiencias, conferencias y argumentos se realizarán por video o teléfono. Si tiene alguna pregunta, consulte con la corte donde está pendiente el caso. Consulte también el sitio web de las Cortes de Nueva Jersey para obtener actualizaciones sobre cómo y cuándo se realizaran los procedimientos. 

¿Pueden desconectar mis servicios públicos durante la crisis de COVID-19? 

No. Desde el 13 de marzo, las utilidades eléctricas y de gas de Nueva Jersey voluntariamente suspendieron las desconexiones de las utilidad, y esa suspensión parece estar en curso. Hemos oído que algunas compañías de servicios públicos están enviando avisos de desconexión a los propietarios de viviendas, pero parece que no están cumpliendo con las desconexiones actuales.

¿Todavía tengo que pagar por los servicios públicos y el agua? 

Sí. Todavía tiene que pagar sus facturas de electricidad, gas y agua. Si no puedes pagar ahora, tendrás que pagar más tarde. Las empresas de servicios públicos y de agua no están cancelando deudas; solo están posponiendo las interrupciones por el momento. La Oficina de Asuntos de la Comunidad de Nueva Jersey (DCA, por sus siglas en inglés) ofrece asistencia a propietarios de bajos ingresos con algunas facturas de servicios públicos, y puede llamar al número de servicio al cliente en su factura de servicios públicos para tratar de elaborar un plan de pago. 

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here.

DESALOJOS RESIDENCIALES: LO QUE LOS INQUILINOS NECESITAN SABER

A partir del 22 de junio de 2020

El presente documento es únicamente de carácter informativo, no pretende ser un asesoramiento jurídico y no sustituye la consulta con un abogado sobre hechos y circunstancias específicos. Este documento no constituye una solicitud, y su uso de este documento no crea ninguna relación de abogado-cliente entre usted y Lowenstein Sandler.

DESALOJO – BLOQUEO DEL ACCESO AL HOGAR

¿Me pueden bloquear el acceso a mi casa durante la emergencia COVID-19?

No. El 19 de marzo de 2020, el gobernador de Nueva Jersey, Philip Murphy, emitió la Orden Ejecutiva 106, que suspende inmediatamente los desalojos en todo el estado. Esto se llama una "moratoria de desalojo" y significa que, excepto en circunstancias excepcionales, a ningún inquilino se le puede bloquear el acceso a su hogar como resultado de un procedimiento de desalojo. La moratoria de desalojo no afecta los procedimientos judiciales; sino que, evita los bloqueos al acceso al hogar y las mudanzas. La Corte Suprema de Nueva Jersey controla los procedimientos judiciales relacionados con el desalojo, que están suspendidos por ahora. A continuación, se ofrece más información.

¿Cuánto tiempo durará la moratoria de desalojo? 

La moratoria de desalojo comenzó el 19 de marzo de 2020, y durará hasta dos meses después de que el gobernador Murphy declare el fin de la crisis sanitaria de COVID-19, a menos que el gobernador emita otra Orden Ejecutiva para terminarla antes.

¿Qué sucede si ya se ha emitido un aviso de cierre patronal o una orden de desalojo? 

La moratoria se aplica a todas las órdenes de remoción preexistentes. Cualquier orden de remoción emitida previamente está suspendido, y no puede ser desahuciado de su hogar durante la moratoria.

¿Qué pasa si vivo en un hotel/motel? ¿Puedo ser desalojado mientras la Orden Ejecutiva está vigente?

Tal Vez. La Orden Ejecutiva 106 del Gobernador Murphy permite a un hotel o motel desalojar a un "huésped transitorio o inquilino estacional". Sin embargo, los residentes de hoteles y moteles de tiempo prolongado, al igual con muchos otros, no se consideran "transitorios" o " estacionales", por lo que siguen estando protegidos contra el desalojo en virtud de la Orden. En general, los residentes no pueden ser desalojados si "no tienen una vivienda permanente a la que puedan regresar de forma segura o legal y vivir en un hotel o motel de forma continuada". Los siguientes residentes de hoteles y moteles están generalmente protegidos contra el desalojo en virtud de las Órdenes Administrativas 2020-08 y 2020-09 (emitidas por el Director Estatal de Administración de Emergencias el 4 de abril y el 24 de abril):

  • aquellos que forman parte de iniciativas estatales destinadas a sacar a las personas de los refugios grupales;
  • los que reciben apoyo de un programa gubernamental de asistencia para la vivienda;
  • los trabajadores de la salud que necesitan un lugar temporal para alojarse;
  • personas sin hogar;
  • personas afectadas por la violencia doméstica; y
  • los que se alojan en hoteles o moteles en cumplimiento de una orden judicial.

Otros pueden ser protegidos también. Para consultar sobre sus circunstancias individuales, póngase en contacto con una organización de servicios legales como.


¿Qué pasa si mi propietario me deja fuera de forma ilegal? 

Es un delito que tu propietario te prohíba la entrada. Según la ley de Nueva Jersey, solo las cortes pueden ordenar desalojos, y solo los oficiales del gobierno pueden sacarlo de su hogar. Si su propietario le prohíbe la entrada al hogar, llame a la policía local inmediatamente.

¿Qué sucede cuando termina la moratoria de desalojo del estado? 

A menos que lo levante antes, la moratoria terminará dos meses después de que el gobernador Murphy declare que la emergencia ha terminado. Los oficiales locales reiniciarán entonces el desalojo de los inquilinos que están sujetos a órdenes judiciales definitivas de desalojo. (Los inquilinos que viven en hogares donde el propietario tiene una hipoteca respaldada por el gobierno federal o que viven en viviendas públicas o subsidiadas pueden tener derecho a protección por un período más largo. Véase a continuación)

PAGOS DE LA RENTA

¿Todavía necesito pagar mi renta? 

. La renta aún está por pagar, y usted debe pagarla si puedes. Si no pagas, el propietario aún puede exigir la renta y presentar una denuncia contra Ud. ante la corte. La corte programará el caso una vez que se levante la suspensión de las audiencias judiciales (véase a continuación). Si necesita orientación sobre cómo abordar su situación de renta con el propietario durante este tiempo, puede llamar a la Agencia de Financiamiento de Hipotecas y Vivienda de Nueva Jersey (NJHMFA, por sus siglas en inglés) (New Jersey Housing and Mortgage Finance Agency - NJHMFA) para obtener asesoramiento gratuito por teléfono. Visite https://njhousing.gov/foreclosure para obtener una lista de consejeros por condado.

Si no puedo pagar mi renta y me atraso, ¿seguiré debiendo el dinero?

. Cualquier pago que no haga ahora se convertirá en renta atrasada que debe. De una forma u otra, probablemente tendrás que pagar más tarde lo que no pueda pagar ahora, o al final tendrá que enfrentarse a un posible desalojo.

¿Hay asistencia para la renta?

Quizás. El Departamento de Asuntos Comunitarios (DCA) anuncio recientemente el Programa de Asistencia para la Renta a Corto Plazo de $100 millón relacionado con COVID.

El ochenta por ciento ($80 millones) de los fondos del programa se destinarán a familias de ingresos bajos y moderados que están luchando por pagar el alquiler debido a la pérdida sustancial de ingresos relacionada con la pandemia. Los hogares que cumplan los requisitos recibirán ayuda para el alquiler temporal a corto plazo durante un máximo de seis meses. DCA hará los pagos directamente a los propietarios. En el plazo de tres meses, se revisarán los ingresos familiares para determinar si la asistencia sigue siendo necesaria. La asistencia que ya no se necesite se utilizará para atender a otras familias. El dinero de este programa no puede ser usado para cubrir los atrasos de alquiler.

El programa iniciará las solicitudes en julio y comenzará a pagar la ayuda para el alquiler en septiembre.

DCA administrará esta asistencia a través de una lotería en línea. Cuando se abra la lotería, los hogares podrán presentar solicitudes, y los beneficiarios serán seleccionados del conjunto de solicitantes a través de un sorteo al azar. Después de la selección, DCA confirmará la elegibilidad antes de hacer los pagos.  

La información general sobre la lotería está aquí, y las preguntas frecuentes están aquí.

Los hogares califican si cumplen con los requisitos:

  • Tienen un ingreso familiar bruto anual que está en o por debajo de los límites de ingreso máximo del condado donde viven (los límites de ingreso de cada condado están aquí);
  • Residen en una unidad de alquiler en Nueva Jersey;
  • No deben ningún alquiler atrasado a partir de marzo de 2020;
  • Sufrieron una reducción sustancial de sus ingresos o están actualmente recibiendo desempleo debido a la pandemia COVID-19;
  • No tienen activos ni ahorros para pagar el alquiler.
  • Pueden pagar un mínimo del 30% de sus ingresos (si los hay) para el alquiler.

Los individuos deben solicitar en línea entre las 9 A.M. del lunes 6 de julio y las 5 P.M. del viernes 10 de julio. A partir de las 5 p.m. del 10 de julio, el proceso de solicitud se cerrará. Una vez que el proceso se abra el 6 de julio, las solicitudes pueden ser presentadas en este sitio web. Los solicitantes sin acceso a Internet pueden llamar al 609-292-4080, opción #1, para obtener ayuda, incluyendo asistencia para crear una dirección de correo electrónico, que todos los solicitantes necesitarán. Durante el período de 5 días en que se aceptarán las solicitudes, el sitio web funcionará las 24 horas del día, y los representantes de los clientes del centro de llamadas estarán disponibles por teléfono de 8 am a 5 pm.

El veinte por ciento de la financiación ($20 millones) se destinará a atender a las personas de ingresos muy bajos y a las personas sin hogar o en riesgo de quedarse sin hogar. Serán elegibles para recibir hasta 12 meses de asistencia para el alquiler. Estos hogares no están sujetos al proceso de lotería. En su lugar, DCA identificará y ayudará a estos hogares a través de sus organizaciones asociadas de Prevención de Desamparo y Realojamiento Rápido. Una lista de estas organizaciones, con información de contacto, está aquí.

Para aquellos que necesitan asistencia a largo plazo o que no cumplen con los requisitos, o que no son afortunados de tener, la Asistencia de Alquiler de Emergencia de COVID-19, DCA publica resúmenes de los programas de asistencia de alquiler preexistentes, y puede utilizar el portal de DCAid para ver si cumple con los requisitos. El sitio web de DCA también ofrece algunas respuestas generales a preguntas sobre asistencia de alquiler. Para obtener asesoramiento financiero sobre cómo cumplir con sus obligaciones de alquiler, consulte el sitio web de la Agencia de Financiamiento de Hipotecas y Viviendas de Nueva Jersey, que tiene una lista de asesores gratuitos en cada condado. Si se atrasa en los pagos del alquiler, también puede intentar hablar con el propietario para elaborar un plan de pago para evitar que se presente una acción de desalojo en su contra. Para obtener recursos adicionales, intente llamar al 2-1-1.

¿Puedo usar mi depósito de garantía para cubrir parte de la renta que debo?

Sí. El 24 de abril, el Gobernador Murphy emitió la Orden Ejecutiva 128, que permite a los inquilinos solicitar por escrito (incluso por correo electrónico o texto) que sus propietarios apliquen sus depósitos de garantía a la renta que deben durante la emergencia de salud pública y hasta 60 días después. El propietario debe cumplir con dicha solicitud. Si el inquilino causa daños al apartamento (más allá del desgaste normal), el propietario puede exigirle que pague por esos daños siempre y cuando el propietario, de lo contrario, hubiera tenido derecho a recuperar el costo con el depósito de garantía. Si el arrendamiento se renueva, el propietario también puede exigir al inquilino que deposite un nuevo depósito de garantía seis meses después de la finalización de la emergencia de salud pública o cuando se renueve el arrendamiento de la vivienda, cualquiera es más tarde.

¿Puede mi propietario aumentar mi renta durante la crisis de COVID?

Quizás. Hasta ahora, el gobierno estatal no ha prohibido los aumentos de alquiler durante la crisis. En ausencia de protección estatal, los inquilinos conservan las protecciones que ya se hayan aplicado, incluyendo las disposiciones del contrato de arrendamiento y las ordenanzas de control de alquiler, que normalmente permiten aumentos de alquiler sólo una vez al año.

Además, algunos inquilinos tienen protecciones especiales

  • El 16 de abril, el gobernador Murphy anunció que la Agencia de Financiamiento de Hipotecas y Viviendas de Nueva Jersey (NJHMFA, por sus siglas en inglés) había votado para prohibir los aumentos de renta durante la emergencia de salud pública en las 36,000 unidades de renta que la agencia supervisa. Después de que la emergencia termine, los propietarios de las propiedades reguladas por el NJHMFA pueden aumentar las rentas hasta un 1.4% con un aviso de 30 días a los inquilinos.
  • El 18 de mayo, el alcalde de Newark, Baraka, anunció una moratoria temporal de todos los aumentos de alquiler para los inquilinos que viven en propiedades cubiertas por la Ordenanza de Control de Alquiler de Newark. La prohibición de Newark sobre los aumentos de alquiler es retroactiva al 1 de abril y durará hasta dos meses después del fin del Estado de Emergencia declarado por Newark.


AUDIENCIAS JUDICIALES
 

¿Qué hay de la corte? ¿La corte está teniendo juicios de desalojo?

No en este momento. El 12 de junio, la Corte Suprema de Nueva Jersey ordenó que los juicios en la Corte de Propietarios e Inquilinos sean suspendidos “hasta nuevo aviso”. Esto significa que no habrá juicios de desalojo en ningún lugar del estado hasta que el Tribunal Supremo autorice a los cortes de propietarios e inquilinos a reanudar dichos juicios. Consulte el sitio web de las Cortes de Nueva Jersey para ver las actualizaciones.

¿Las cortes aceptan los casos que los propietarios presentan contra los inquilinos?

Sí. La orden del 12 de junio permite a los propietarios presentar quejas de desalojo contra los inquilinos, aunque no hay juicios en este momento. Por lo tanto, usted puede recibir una queja de desalojo por correo y/o por correo postal en su residencia.

¿Tienen las cortes otros procedimientos además de los juicios?

. La orden del 12 de junio instruye a las cortes de propietarios e inquilinos a programar negociaciones de acuerdos, conferencias de administración de casos y mociones para avanzar en un esfuerzo por resolver las disputas "en un esfuerzo por resolver los asuntos". Esto significa que puede recibir una notificación del corte por correo electrónico indicándole que se presente a una videoconferencia o conferencia telefónica para discutir el arreglo de un caso que su propietario ha presentado en su contra. Si recibe una notificación como esta, debería:

  • Póngase en contacto con una organización de servicios legales como Servicios Legales de Nueva Jersey (Legal Services of New Jersey ), Voluntario Abogados por la Justicia - Nueva Jersey (Volunteer Lawyers for Justice – New Jersey), Proyecto de Ley de Salud Comunitaria (Community Health Law Project ), Asociación de Asistencia Legal del Condado de Essex (Essex County Legal Aid Association ), y la Oficina de Servicios para Inquilinos de la Ciudad de Newark (City of Newark Office of Tenant Services).
  • Comparta la queja que recibió con cualquier organización o abogado que esté de acuerdo en ayudarle. Si no recibió una queja, hágaselo saber a su abogado y al corte.
  • Recuerda que, ¡no tienes que resolver tu caso! Si no llegas a un acuerdo, tu caso será programado para el juicio cuando las cortes comiencen a realizar juicios de desalojo de nuevo. Pero no puede ser bloqueado del acceso de entrar su hogar y removido de su hogar hasta dos meses después de que el Gobernador declare el fin de la emergencia de salud pública.


¿La Ley federal impide que mi propietario presente un caso de desalojo contra mí?

Tal vez. Según la Ley Federal CARES (CARES por sus siglas en inglés - Ley de Asistencia, Alivio y Seguridad Económica por el Coronavirus), si el propietario tiene una hipoteca respaldada por el gobierno federal, el propietario no puede presentar una acción de desalojo en su contra por falta de pago de la renta, o cobrarle honorarios (tales como cargos por retraso o honorarios de abogados) relacionadas con su falta de pago de la renta, por 120 días a partir del 27 de marzo de 2020 (o hasta el 25 de julio de 2020). Después del 25 de julio, un propietario con una hipoteca respaldada por el gobierno federal debe darle un aviso de 30 días antes de presentar una acción de desalojo.

Como se explica a continuación en "Inquilinos subsidiados", la prohibición federal de desalojo de 120 días también se extiende a los inquilinos que viven en viviendas públicas y que participan en otros programas de viviendas subsidiadas.

Puede haber protección adicional si el edificio donde vive tiene cinco o más unidades y el propietario obtuvo permiso para retrasar los pagos de un préstamo hipotecario respaldado por el gobierno federal. En ese caso, el propietario no puede presentar una acción de desalojo en su contra por falta de pago de la renta, o cobrarle honorarios relacionados con la falta de pago de la renta, durante el período en que el propietario no haga los pagos de la hipoteca. Cuando este período termine, el propietario debe notificarle 30 días antes de presentar una acción de desalojo en su contra.

La Coalición Nacional de Viviendas para Bajos Ingresos ha creado una base de datos accesible para la búsqueda de muchas (pero no todas) las propiedades cubiertas por la ley federal.

Todavía debe pagar la renta, y luego deberá lo que no pague ahora. Al igual que las órdenes del estado, la ley federal lo protege de ser desalojado de su hogar durante la emergencia, pero usted todavía debe la renta.

¿Qué sucede si el propietario ya ha iniciado un procedimiento de desalojo contra mí en la corte de vivienda y tengo una cita en la corte?

Si su fecha de corte está programada durante la suspensión, la corte le enviará un aviso por correo con su nueva fecha de corte. Mientras la corte de propietarios e inquilinos está suspendida, no debe presentarse a la corte, ningún caso avanzará y no será penalizado por no presentarse a la corte.

¿Todavía puedo recibir reparaciones de emergencia en mi apartamento? 

Siempre tienes derecho a una vivienda segura y decente. Si tiene inquietudes sobre problemas como la calefacción inadecuada, la exposición al plomo, las infestaciones, las fugas, el desmoronamiento de las paredes y los techos u otras condiciones peligrosas, debe pedir por escrito al propietario que haga las reparaciones (guarde una copia para sus archivos). Si las reparaciones no se realizan rápidamente, puede llamar al 2-1-1, comunica con la Oficina de Inspección de Vivienda del estado o llame a su municipio para informar el problema. O, si puede hacer las reparaciones por su cuenta, puede hacerlas o pagar a alguien para que las haga. Luego puede retener el dinero que gastó en reparaciones de su renta (¡guarde todos los recibos de las reparaciones!). Debido a los cierres, las agencias que se encargan de aplicarla ley pueden estar trabajando con personal limitado y puede tardar más tiempo obtener reparaciones o inspecciones.

¿Y si ya tengo una cita en la corte para una audiencia sobre reparaciones de emergencia? 

Todos los procedimientos judiciales de propietarios e inquilinos, incluidas las reparaciones de emergencia, han sido suspendidos por el momento. Puede encontrar información actualizada sobre las fechas de las suspensiones en el sitio web de las cortes de Nueva Jersey. No debe ir a la corte de vivienda durante la suspensión. En cambio, debe esperar el aviso de una fecha reprogramada en la corte.

INQUILINOS SUBVENCIONADOS 

¿Puede el propietario presentar una acción de desalojo contra mí si vivo en una vivienda pública o tengo un Vale de la Sección 8?

No. La Ley federal CARES impide que los propietarios presenten acciones de desalojo por falta de pago de la renta durante 120 días a partir del 27 de marzo de 2020 (o hasta el 25 de julio de 2020) contra inquilinos que:

  • viven en viviendas públicas,
  • tienen un Sección 8 Certificado para la Elección de Vivienda,
  • viven en viviendas basadas en proyectos de la Sección 8, o
  • viven en otros tipos de viviendas financiadas por el gobierno federal, incluyendo, entre otros, ciertos programas de vivienda para ancianos, personas con discapacidades, personas con VIH/SIDA y personas en riesgo de quedarse sin

Durante este período, el propietario tampoco puede cobrar honorarios (como cargos de demora o los honorarios de abogados) asociados con la falta de pagar la renta, y el propietario debe avisar a los inquilinos con 30 días de anticipación después del 25 de julio antes de presentar acciones de desalojo.

¿Sigue abierto el Departamento de Asuntos de la Comunidad? 

Sí. Los programas de asistencia de vivienda del Departamento de Asuntos de la Comunidad (DCA, por sus siglas en inglés) continúan operando y haciendo todo su trabajo básico, incluido el pago de rentas a los propietarios y la determinación de la cantidad de renta que deben pagar los inquilinos subvencionados. El DCA recomienda a los inquilinos subsidiados que utilicen el portal en línea de assistancecheck.com para presentar documentos o enviarlos por correo (¡guarden copias!). Los inquilinos subsidiados que tengan preguntas pueden comunicarse con las oficinas locales o utilizar la línea principal de servicio al cliente: 609-292-4080 o [email protected] El DCA ha anunciado que ha tomado una serie de medidas para satisfacer las necesidades actuales de sus clientes y para frenar los desalojos y la falta de vivienda durante el estado de emergencia. Por ejemplo, el DCA ha suspendido la terminación de los subsidios en el Sección 8 Certificado para la Elección de Vivienda y Programas Estatales de Asistencia para la Renta, a menos que el inquilino haya cometido actos de violencia o amenazas contra otros. El DCA también está aceptando a través de su portal en línea recertificaciones de ingresos provisionales para inquilinos que han perdido ingresos debido a la pandemia.

¿Tiene permiso la Autoridad de Vivienda de Newark para desalojarme ahora?

No. Como se señaló anteriormente, la Ley federal CARES impide que las autoridades de vivienda pública presenten acciones de desalojo por falta de pago de la renta contra los inquilinos de vivienda pública por un período de 120 días a partir del 27 de marzo (o hasta el 25 de julio de 2020). Si la Autoridad de Vivienda de Newark administra su subsidio de alquiler, usted también está cubierto por las protecciones contra el desalojo a nivel de la ciudad.

ELECTRICIDAD, GAS, AGUA

¿Pueden desconectar mis servicios públicos durante la crisis de COVID-19?

No. A partir del 13 de marzo, los servicios públicos de electricidad y gas de Nueva Jersey han suspendido voluntariamente las desconexiones de los servicios públicos, y esa suspensión parece estar en curso. Hemos oído que algunas de las compañías de servicios públicos están enviando avisos de desconexión a los inquilinos de las viviendas, pero parece que no están cumpliendo con las desconexiones reales.

¿Todavía tengo que pagar los servicios públicos y el agua?

Sí. Todavía tiene que pagar las facturas de electricidad, gas o agua que normalmente paga. Si no puede pagar ahora, tendrás que pagar más tarde. Las empresas de servicios públicos y de agua no están cancelando las deudas; solo están posponiendo las desconexiones por el momento. El DCA ofrece a los inquilinos de bajos ingresos asistencia con algunas facturas de servicios públicos, y puedes llamar al número de servicio al cliente que aparece en tu factura de servicios públicos para tratar de elaborar un plan de pago.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here.

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. Use of this article does not create an attorney-client relationship between you and Lowenstein Sandler. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney. In addition, the information in this article may change based on guidance by the SBA or Treasury as well as a change in law.

We have been sharing client alerts about the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) created by the CARES Act.  Below are some frequently asked questions and answers with respect to the PPP that we hope will help you understand this program.

What is the Paycheck Protection Program?

The PPP is a loan program that allows eligible borrowers to obtain loans on favorable terms to cover payroll and other eligible expenses (rent, utilities, certain health care benefits and health insurance premiums, and certain interest expense). This loan program is for the specific purpose of helping eligible borrowers affected by the coronavirus pandemic to keep paying employees and to keep their doors open for business. To the extent the PPP loan is promptly used to pay payroll, rent, mortgage interest and utilities, the loan never has to be repaid (“terms and conditions apply,” naturally).

The first wave of PPP funding was exhausted on April 16, 2020. The government approved $310 billion of new funding for the PPP on April 24, 2020. On April 27, 2020, the SBA resumed accepting PPP applications from participating lenders. About one fifth of the new PPP funding is earmarked for smaller banks, smaller credit unions, and community financial institutions that provide financing to underserved and economically disadvantaged communities. According to the SBA, as of June 17, 2020, about $146 billion remains of the second round of PPP funding. This funding may go quickly. As the law is currently written, no new loans may be issued after June 30, 2020. It is possible Congress will extend this period.

UPDATE: The CARES Act was substantially amended on June 5, 2020, with the enactment of the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”). The Flexibility Act updates many aspects of the PPP. As suggested by its name, the new law is intended to give PPP borrowers more flexibility in when and how they spend their PPP funds. New guidance from the SBA and Treasury Department will likely follow. Flexibility Act updates are included below.

Who is eligible for a PPP loan?

You are eligible for a PPP loan if you employ fewer than 500 employees (full-time and part-time) who live in the United States, AND you were in operation on February 15, 2020, AND you either (1) paid salaries and payroll taxes for employees or (2) paid independent contractors.

Some businesses may qualify under other applicable tests. Please check with your lender or advisor about eligibility on other grounds.

Be aware that two or more businesses under common control could be “affiliated” under SBA rules. “Affiliated” employers are lumped together in determining the 500-employee limit. This determination often requires detailed analysis. Check with your attorney even though you may think your organization stands 100% alone.

Do independent contractors count as employees for purposes of PPP calculations?

No. Independent contractors can apply for a PPP loan on their own; the entities that engage them cannot count them for purposes of a PPP loan application.

I don’t have employees. Can I still qualify?

Yes. The rules issued under the CARES Act state: “You are also eligible for a PPP loan if you are an individual who operates under a sole proprietorship or as an independent contractor or eligible self-employed individual . . . .” In that case, you must submit documents such as payroll processor records, payroll tax filings, Forms 1099-MISC, income and expenses from a sole proprietorship, or other documents sufficient to demonstrate the qualifying loan amount.

Can I apply for a PPP loan if I am receiving unemployment assistance?

Yes, but proceed with caution. There is no restriction on receiving both benefits, but you cannot use the PPP loan to cover your own compensation while at the same time receiving unemployment benefits. If you are receiving unemployment benefits, you can use your PPP for other business expenses, such as other employees’ compensation, rent, or utilities. 

At least 60% of the forgiven amount must be used for payroll costs; if you use all or most of your loan for non-payroll expenses, therefore, the forgivable amount may be low.

How do I apply for a PPP loan?

You should contact your existing lender or lending institution where you maintain your bank accounts. Many participating lenders are accepting applications only from existing customers. Most lenders are accepting applications through their own online portals. If your existing bank is not participating in the PPP program or is no longer accepting applications, you may wish to apply with a community bank such as Northeast Bank, Kabbage, or Old Dominion Bank, or FinTech company such as PayPal. If you need additional help finding a qualified lender, this SBA search tool will identify lenders near you.

When can I apply?

Applications will be accepted through June 30, 2020, or until the funds for this program are exhausted, whichever is sooner. This program is supposed to operate on a “first come, first served” basis. APPLY AS SOON AS YOU CAN.

What is the maximum amount I can borrow?

It’s a formula amount: 2.5 times your average monthly payroll expenses for either (1) the 12 months before you apply for the loan or (2) calendar year 2019 (the bank to which you apply may require you to use (2), which many applicants who use payroll services will find more convenient anyway).

The Treasury Department has released guidance to help general partnerships, sole proprietors, and independent contractors calculate payroll. See Paycheck Protection Program: How to Calculate Maximum Loan Amounts – By Business Type, for complete instructions. 

If you are a seasonal business, you can borrow 2.5 times average monthly payroll costs from: (1) February 15 to June 30, 2019, (2) March 1 to June 30, 2019, or (3) during any consecutive 12-week period between May 1, 2019 and September 15, 2019, whichever generates the best result.

If you are a startup business that did not exist between February 15 and June 30, 2019, you can calculate your average monthly payroll costs based on payroll from January 1 to February 29, 2020.

Salary and wages above $100,000 per employee are excluded from the calculation of average monthly payroll, but all benefits the business pays on behalf of such employees (e.g., health insurance, retirement benefits) are counted in the payroll calculation. If you already have an Economic Injury Disaster Loan, please inform your lender or lawyer.

Finally, there’s an absolute cap of $10 million on every PPP loan, and each borrower can get only one such loan. 

What information should I gather in order to apply for a PPP loan?

You should have evidence of paying payroll or self-employment taxes. Any or all of the following information may be required by your lender for the relevant period; check before applying:

  • 2019 IRS quarterly 940, 941, or 944 payroll tax reports;
  • Documentation for the following:
    • Gross wages for each employee
    • Paid time off for each employee
    • Vacation pay for each employee
    • Family medical leave pay for each employee
    • State and local taxes assessed on the employee’s compensation for each employee
    • Documentation showing the total health insurance premiums the company paid under a group health plan for all employees and owners
    • Documentation of the sum of all retirement plan funds the company paid (note: do not include money that came from employees’ paycheck contributions); this includes 401K plans, simple IRAs, and SEP IRAs;
  • Organizational documents for your business;
  • Sole proprietors, independent contractors, and the self-employed must submit documents such as payroll processor records, payroll tax filings, Form 1099-MISC, or income and expenses from a sole proprietorship;
  • Borrowers who do not have any of this documentation should provide supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.

What can I use the loan proceeds for?

The loan proceeds can be used for:

  • payroll costs;
  • costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
  • payments of interest on any mortgage obligation (but not to pay principal or prepay a mortgage);
  • rent (including rent under a lease agreement);
  • utilities;
  • interest on any other debt obligations that were incurred before the covered period; and
  • refinancing an SBA Economic Injury Disaster Loan (EIDL) made between January 31, 2020, and April 3, 2020.

When will I have to repay the loan?

Flexibility Act Update: You now will not have to start making payments on the loan until after you submit your forgiveness application and the SBA pays the forgiveness amount to the lender. Interest will not accrue during this time. 

For PPP loans made before the enactment of the Flexibility Act, the full amount will be due within 2 years of when you received the money. If you receive your PPP loan after the enactment of the Flexibility Act, you will have 5 years to repay the loan. Existing PPP loans can be extended up to 5 years if the lender and borrower mutually agree. If you want to pay earlier, there are no penalties for pre-payment.

Are there any other PPP loan terms I should know about?

  • Interest rate will be 1%.
  • No collateral will be required.
  • No personal guarantees will be required.

Will all or a portion of my PPP loan be forgiven?

Flexibility Act Update: The loan amounts will be forgiven so long as:

  • the loan is used to cover payroll costs, interest on mortgage, rent, and utility costs over the 24-week period after the loan is made or by December 31, 2020, whichever is earlier; and
  • employee and compensation levels are maintained.

(Before the enactment of the Flexibility Act, to qualify for full forgiveness borrowers had to spend the funds over the 8-week period after the loan was made. The Flexibility Act gives borrowers the option to spend the funds over a longer period. Borrowers whose PPP loan was approved prior to the enactment of the Flexibility Act may keep the original 8-week period if they choose. Most businesses will find the 24-week period preferable, but some may wish to retain the original 8-week period so as to submit the forgiveness application as soon possible.)

Originally, the SBA indicated that at least 75% of the forgiven amount had to be used for payroll costs. The Flexibility Act reduces this percentage: PPP borrowers are now eligible for loan forgiveness so long as they use at least 60% of loan proceeds for payroll expenses, with no more than 40% of loan proceeds going to eligible non-payroll expenses.

 

Reductions to Forgiveness:  Forgiveness is reduced based on headcount reductions and salary reductions.  Both are hard to work through and may require the assistance of legal counsel. 

Note that some reductions in workforce will not count against you for the purpose of loan forgiveness. Loan forgiveness will not be impacted if:

  • you laid off workers between February 15, 2020 and April 26, 2020 and then rehire them by December 31. (Before the enactment of the Flexibility Act, employers only had until June 30, 2020 to rehire employees laid off between February 15 and April 26.) 
  • you fire an employee for cause; an employee voluntarily resigns; or an employee voluntarily requests and receives a reduction in hours.
  • you have laid off employees, and then:
    • made a good faith, written offer to rehire,
    • documented the employee’s rejection of that offer,
    • informed the state unemployment insurance office within 30 days of the employee’s rejection of the offer (employees who reject offers of reemployment may forfeit eligibility for continued unemployment compensation), and
    • documented your inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020. 
  • Rehiring – Flexibility Act Update: In addition to the above, forgiveness will not be reduced if you can document in good faith that your business is unable to return to the same level of activity it was operating at before February 15, 2020, due to compliance with operating restrictions related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. 

Is loan forgiveness automatic?

No. You will need to submit an application for forgiveness directly to the lender that provided your PPP loan. On June 16, the SBA released a revised 7-page loan forgiveness application that incorporates changes to PPP loan forgiveness requirements made by the Flexibility Act. On the same date, the SBA also released a simplified 3-page “EZ” loan forgiveness application for borrowers who can satisfy any of the following requirements:

  • the borrower applied for a PPP loan as a self-employed individual, independent contractor or sole proprietor who had no employees at the time of the PPP loan application.
  • the borrower did not reduce salary or wages for any employee by more than 25% during the covered loan period as compared to the period between January 1, 2020 and March 31, 2020, and did not reduce the number or hours of employees between January 1, 2020 and the end of the covered loan period (ignoring reductions related to employees who refused offers of rehire and whose positions could not be filled with similarly qualified workers).
  • the borrower did not reduce salary or wages for any employee by more than 25% during the covered loan period as compared to the period between January 1, 2020 and March 31, 2020, and was unable to return to the same level of business activity it was operating at before February 15, 2020, due to compliance with official requirements related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.

Is the amount forgiven taxable?

No. The amount of any loan forgiveness will not be considered gross income under the Internal Revenue Code, although state and local tax authorities may or may not tax the forgiven amount.   

What happens if PPP loan funds are misused?

If you use PPP funds for unauthorized purposes, the SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you will be subject to additional liability such as charges for fraud. If one of your shareholders, members, or partners uses PPP funds for unauthorized purposes, SBA will have recourse against the shareholder, member, or partner for the unauthorized use.

Can I apply for more than one PPP loan?

No.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here.

This resource was prepared by Lowenstein Sandler for informational purposes only. It is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. Use of this article does not create an attorney-client relationship between you and Lowenstein Sandler. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney. In addition, the information in this article may change based on guidance by the SBA or Treasury as well as a change in law.

  1. PAYCHECK PROTECTION PROGRAM

The federal government has created several forms of financial relief for small businesses and nonprofits. One important federal program that your business may want to consider is the Paycheck Protection Program (the “PPP”), established by Section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Volunteer lawyers from Lowenstein Sandler are helping under-resourced entrepreneurs and nonprofits apply for PPP loans.

The first wave of PPP funding was exhausted on April 16, 2020. The government approved $310 billion of new funding for the PPP on April 24, 2020. On April 27, 2020, the SBA resumed accepting PPP applications from participating lenders. About one fifth of the second round of PPP funding is earmarked for smaller banks, smaller credit unions, and community financial institutions that provide financing to underserved and economically disadvantaged communities.  

The terms and conditions of a PPP loan are very attractive to most small business owners. If used properly, all or most of the loan is forgiven and will not need to be repaid. If you are concerned about the financial wellbeing of your business, you should consider applying for a PPP loan. Applications will be accepted through June 30, 2020, or until program funds are exhausted, whichever is earlier. This program is supposed to operate on a “first come, first served” basis. According to the SBA, as of June 16, 2020, about $146 billion remains of the second round of PPP funding. This funding may go quickly.     

UPDATE: The CARES Act was substantially amended on June 5, 2020, with the enactment of the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”). The Flexibility Act updates many aspects of the PPP. As suggested by its name, the new law is intended to give PPP borrowers more flexibility in when and how they spend their PPP funds. New guidance from the SBA and Treasury Department will likely follow.

Some small businesses and nonprofits have reported difficulty finding a bank to accept their PPP applications, and others did not hear from their bank after they applied. An existing relationship with a bank typically helps facilitate the loan process as many banks are taking applications only from those clients who already have an existing relationship. Note, however, that earlier in the program, some banks had extremely long backlogs for PPP applications and failed to timely process borrowers’ applications. Now, at the end of the program, some lenders may have closed their application portals. Check the lender’s website to determine if it is still accepting applications. To increase the likelihood that your loan application will be processed, you may wish to apply with a community bank or FinTech company like PayPal. While Lowenstein Sandler does not endorse any particular bank or lender, as of the date of this writing, we have heard that the following institutions have relatively light or no backlogs and may accept applications from new customers: Northeast Bank, Kabbage, and Old Dominion Bank. Contact a lender as soon as possible to begin the application process.

Full FAQs about the Paycheck Protection Program are available on Lowenstein Sandler’s website.

In addition to applying for a PPP loan, you may wish to consider which other federal, state and private financial support programs your business may be eligible for and applying for those that match your business needs. The NJ COVID-19 Business Emergency Assistance Eligibility Wizard is a helpful resource for companies and nonprofits in New Jersey. The New York City Department of Small Business Services offers weekly webinars on financial assistance for organizations financially impacted by COVID-19 that may be helpful for companies and nonprofits in the New York City area.

  1. COVID-19 ENTREPRENEUR QUESTIONS AND ANSWERS

Lowenstein Sandler received a list of legal questions that entrepreneurs have posed. Many of these questions are also applicable to nonprofits. Please find below general information to assist entrepreneurs and nonprofit organizations in navigating COVID-19 relief programs and complying with applicable laws. As noted above, information should not be relied upon for legal advice in any particular circumstance or fact situation.

Question 1:

My business had to suspend operations due to COVID-19. What benefits might I qualify for?

Answer:

General: You may wish to consider applying for a Paycheck Protection Program loan to pay your own salary and/or your payroll costs for other employees. The program covers sole proprietors, self-employed people, and independent contractors, among other small businesses.

If you are a self-employed sole proprietor or single member LLC, you also have another alternative. Federal Pandemic Unemployment Assistance expands eligibility for individuals who are typically ineligible for unemployment benefits, and federal Pandemic Unemployment Compensation provides an additional $600 per week, on top of regular benefits, to all recipients of unemployment insurance. The program is set to expire at the end of July. You should submit your application on the website of your state unemployment authority. Note that you cannot apply for Unemployment Assistance and use a Paycheck Protection Loan or SBA Economic Injury Disaster Loan (EIDL) to pay your own salary (though if you collect unemployment you could use the PPP loan or EIDL to pay other expenses). You can only apply to one of these programs to cover your salary.

New Jersey: Guidance on which New Jersey businesses and nonprofits may stay open during the public health emergency, and which must close, is available on the NJ COVID-19 Business Information Hub, which includes comprehensive information on federal, state, and private emergency support programs for your business. Check the FAQ: “Does My Business Need to Close.” Guidance on applying for state and federal unemployment benefits is available on the New Jersey Department of Labor website.

New York: Guidance on what constitutes an essential business in New York can be found on the Empire State Development website. Check the FAQ: “Determining Whether A Business Is Subject To A Workforce Reduction Under Recent Executive Order Enacted To Address Covid-19 Outbreak.” Guidance on applying for state and federal unemployment benefits is available on the New York State Department of Labor website.

Question 2:

I own a company and do not receive a W2 form or paycheck. I compensate myself and my business partner from petty cash after business expenses are paid. How do I apply for PPP assistance?

Answer: To apply for a PPP loan, your business would need to provide records documenting the amount of compensation paid and establishing (i) that the particular method of compensation is in the ordinary course of the business, and (ii) that you have paid applicable federal, state, and local taxes. If your business cannot document any payroll expenses, the PPP is not the best option for you.

Assuming that a business can satisfy these two criteria, it may apply for a PPP loan. Different types of entities should follow different steps to calculate the loan amount. SBA Guidance, Paycheck Protection Program: How to Calculate Maximum Loan Amounts – By Business Type, provides complete instructions for general partnerships, sole proprietors, and independent contractors, among others.

Question 3:

My compensation is project-based and inconsistent throughout the year. I do not receive the same amount of compensation each month. How do I demonstrate my average pay in order to obtain the largest possible PPP loan?

Answer: See Question 2 above and SBA Guidance, Paycheck Protection Program: How to Calculate Maximum Loan Amounts – By Business Type. You should base your payroll calculations on net earnings for self-employment (if a partnership) or net profit amount (if a sole proprietor, single member LLC, or independent contractor) during the 2019 calendar year.  

Question 4:

Should an hourly employee who is too scared to come to work still be paid?

Answer: For purposes of obtaining maximum forgiveness of a PPP loan, you may want to keep them on payroll. Before the enactment of the Flexibility Act, for a PPP loan to be fully forgiven, the employee headcount had to remain the same in the eight weeks following disbursement of the PPP loan. The Flexibility Act extended this period: For 24 weeks after receiving their loans, or until December 31, 2020, whichever is earlier, employers must maintain their workforce at pre-pandemic levels if they want to secure maximum loan forgiveness.

Note, though, that some reductions in workforce will not count against you for the purpose of loan forgiveness. Loan forgiveness will not be impacted if:

  • you laid off workers between February 15, 2020 and April 26, 2020 and then rehire them by December 31. (Before the enactment of the Flexibility Act, employers only had until June 30, 2020 to rehire employees laid off between February 15 and April 26.)
  • you fire an employee for cause; an employee voluntarily resigns; or an employee voluntarily requests and receives a reduction in hours.
  • you have laid off employees, and then:
    • made a good faith, written offer to rehire,
    • documented the employee’s rejection of that offer,
    • informed the state unemployment insurance office within 30 days of the employee’s rejection of the offer (employees who reject offers of reemployment may forfeit eligibility for continued unemployment compensation), and
    • documented your inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020.
  • Rehiring – Flexibility Act Update: In addition to the above, forgiveness will not be reduced if the employer can document in good faith that it is unable to return to the same level of business activity such business was operating at before February 15, 2020, due to compliance with operating restrictions related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. 

Distinct from PPP loan forgiveness considerations are protections for certain kinds of time off from work under state and federal laws.

New Jersey: In New Jersey, guidance issued by the New Jersey Department of Labor specifically indicates that workers who are afraid of gathering in a group and stay home from work because they are self-distancing are entitled to take New Jersey Earned Sick Leave, even if their employer is permitted to remain open. Under New Jersey’s Earned Sick Leave law, most employers must provide full-time, part-time, and temporary employees with up to 40 hours of earned sick leave per year so they can care for themselves or a loved one. The employer is responsible for paying this benefit.

New York: No New York State law requires an employer to pay an hourly employee who is too scared to come to work. On March 18, 2020, New York State enacted an emergency COVID-19 sick leave law, but it applies only in limited circumstances. On April 3, 2020, the state enacted a general sick leave law, but it does not go into effect until September 30, 2020. On the other hand, New York City’s Paid Sick and Safe Leave Law would arguably protect the cautious worker. Guidance released by the NYC Department of Consumer Affairs states that an employee may take paid leave to “self-isolat[e] for preventative purposes.” Additional information about New York State’s and New York City’s sick leave laws can be found in response to Question 5 below.

General: After state and federal leave obligations are satisfied, an employer would generally be free to cease paying an employee who is not working. Under the federal Fair Labor Standards Act (FLSA), which covers many but not all employers, a business is not required to keep paying employees who are not working. FLSA minimum wage and overtime requirements attach to hours worked in a workweek, so employees who are not working are typically not entitled to the wages the FLSA requires. Of course, an employer might have an obligation to keep paying employees because of, for example, an employment contract, a collective bargaining agreement, or some policy or practice that is enforceable as a contract or under a state wage law. Consult an attorney for specific advice.

Question 5:

If an hourly employee is unable to work for reasons related to COVID-19, should they be paid?

Answer: If your business is able to obtain a PPP loan, then the amount of forgiveness will depend on your business’s keeping as many employees on payroll as possible. So, it is to your business’s advantage to keep these individuals on payroll and maintain their regular level of compensation.

Federal Law: In addition, the federal Families First Coronavirus Response Act (“FFCRA”) requires private employers with fewer than 500 employees to provide income and job protection for employees who are unable to work or telework because they are:

  • following quarantine orders (including shelter-in-place or stay-at-home orders issued by any government authority or are quarantined by a health care provider),
  • experiencing symptoms of COVID-19,
  • caring for an individual under quarantine orders, or
  • caring for a child whose school is closed or for whom childcare is unavailable for reasons related to COVID-19.

Exemption: Small businesses with fewer than 50 employees may request an exemption if providing FFCRA leave would jeopardize the viability of their business as a going concern. The U.S. Department of Labor has indicated that it will release additional guidance on the criteria for meeting the exemption.

Duration of leave and pay depends on the reason the leave is taken:

  • The employer must pay an employee’s regular rate of pay (up to $511 a day) for two weeks, up to a maximum of $5,110, if the employee is unable to work because of the employee’s own illness, quarantine order, or self-isolation.
  • The employer must pay two-thirds of the employee’s regular rate of pay, up to a maximum of $200 a day and a total of $2,000, if the employee is unable to work because they must care for someone else.
  • The employer must pay employees who take childcare leave at the employee’s regular rate of pay (up to $511 a day) for two weeks, up to a maximum of $5,110. An employee may take up to ten additional weeks of childcare leave, paid for by the employer at two-thirds of the employee’s regular rate of pay. Mandatory compensation for childcare leave is capped at $12,000 for the twelve weeks.
  • Employers are free to pay more, but not less, than these mandatory amounts, and tax credits are available only for the mandatory amounts (see below).

Documentation: According to U.S. Department of Labor guidance, employers must document the following:

  • the name of employee requesting leave;
  • the date(s) for which leave requested;
  • the reason for leave:
    • if due to quarantine or stay-at-home order, document the name of government entity or health care provider that gave the order;
    • if to care for a child whose school or place of care is closed, document the name of the child and the name of the school or place of care, and obtain a statement from the employee that no other suitable childcare is available;
  • a statement from the employee that he or she is unable to work because of qualifying circumstances.

Reimbursement: Employers may apply for a tax credit for the amount of COVID-related emergency sick leave and emergency family leave benefits paid to their employees. Employers may fund the leave by accessing federal employment taxes (including withheld taxes that are required to be deposited with the IRS) or by requesting an advance from the IRS. Detailed guidance is available on the IRS’s website.

New Jersey: Under New Jersey’s Earned Sick Leave law, employers must pay employees sick leave benefits while the workplace is ordered closed, when a public health authority or health care provider orders a worker to quarantine, or (as noted above) when an employee is afraid of gathering in a group and – even though their place of work is open – stays home from work because they are self-distancing. See New Jersey Department of Labor website for a summary of state leave benefits and detailed guidance on the interplay of federal and state leave laws.

New York: As noted above, New York’s sick leave law, enacted on April 3, 2020, has not yet gone into effect. Under the new law, which will apply to all private employers, the amount of leave, and whether it is paid or unpaid, will depend on an employer’s size and net income.

On March 18, 2020, New York State enacted an emergency COVID-19 sick leave law that applies to employers of all sizes and covers employees who are unable to work for reasons related to COVID-19. The rate of pay is based on an employer’s size and business earnings. Employees are eligible for COVID-19 Paid Sick Leave if a public health authority directs them personally to quarantine or self-isolate (a general stay-at-home order does not meet this standard). The local health department provides the order of quarantine or isolation, and the employee must submit the order to the employer’s disability and Paid Family Leave insurance carrier as part of its COVID-19 paid sick leave application package. Employees who are not showing symptoms and are physically able to work through remote access do not qualify for this benefit. See New York COVID-19 Paid Sick Leave: Frequently Asked Questions for additional information.

Under New York City’s Earned Sick and Safe Time Act, employers in New York City with five or more employees are required to provide employees with up to 40 hours of paid leave time per year (the time is unpaid if the employer has fewer than five employees). Employees may take sick leave for various COVID-19-related reasons:

  • the employee feels ill or shows symptoms of COVID-19,
  • the employee needs to gets tested for the flu or COVID-19,
  • the employee is under quarantine or self-isolating for preventative purposes,
  • the employee is caring for a family member under a mandatory or precautionary order of quarantine,
  • a public official temporarily closes the employee’s place of work due to a public health emergency, or
  • a public official closes the employee’s child’s school or childcare provider due to a public health emergency.

An order of quarantine or isolation is not required. Detailed guidance is available on the New York City Department of Consumer Affairs website.

Question 6:

I have no work for my employees. Should I keep them on payroll?

Answer: For purposes of obtaining maximum loan forgiveness under a PPP loan, you may want to keep them on payroll. See Question (4) above.

Employers should consider whether individual employees are entitled to paid sick leave or family leave benefits provided for under the federal and state laws described above.

Employers should also consider whether an employee can use vacation or other paid or unpaid time off during the period they are not working, and whether their job duties can be completed on a flexible schedule or reduced time basis.

After federal and state law and contractual paid leave obligations have been satisfied, an employer can generally elect to stop paying employees, at which point most employees will be eligible for unemployment assistance.  

Question 7:

Can I ask an employee who shows symptoms to go home?

Answer: The Centers for Disease Control (“CDC”) states that employees who become ill with symptoms of COVID-19 should leave the workplace. During a pandemic, employers may ask employees who are entering the workplace if they are experiencing symptoms of the pandemic virus and may ask symptomatic employees to leave the workplace. For COVID-19, common symptoms include fever, chills, cough, shortness of breath, and sore throat. As public health authorities learn more about COVID-19, they may expand the list of associated symptoms. Employers should rely on CDC guidance on emerging symptoms associated with the disease.

Applicable anti-discrimination laws do not prevent an employer from asking a sick employee to leave the workplace, but they do prevent adverse employment actions against employees based on their real or perceived illness with COVID-19, among other reasons.  

Federal, New Jersey, and New York Anti-Discrimination Law: Certain businesses are required to comply with the Americans with Disabilities Act (the “ADA”), and other federal, state and local laws that prohibit discrimination on the basis of disability. The New Jersey Division on Civil Rights has made clear, for instance, that an employer may not fire or otherwise discriminate against an employee because the employee has, or is perceived to have, COVID-19. The New York State Division of Human Rights and New York City Commission on Human Rights have made similar pronouncements. Employers must also protect employees from workplace harassment based on perceived or actual COVID-19 symptoms or on national origins that some assume to be connected to the pandemic.

Employers should maintain all medical information about a particular employee in a confidential medical file, separate from the employee’s personnel file, in compliance with the ADA. Medical information includes an employee’s statement that he or she has the disease or suspects he or she has the disease, or the employer’s notes or other documentation from questioning an employee about symptoms. Employers may store information related to COVID-19 in an employee’s existing medical file.

Question 8:

How would sending an employee to collect unemployment affect my business?

Answer: Employees who are laid off or furloughed for business-related reasons arising from the pandemic may be eligible to collect unemployment. The unemployment charges made to an employer’s account can affect the employer’s experience rating – i.e., the business’s or nonprofit’s prospective unemployment insurance tax rate. This can result in significant increased unemployment insurance costs going forward. Some states have introduced legislation to prevent employers from incurring increased unemployment insurance costs as a result of COVID-19-related unemployment benefits, but neither New Jersey nor New York has passed such a law as of this writing (although legislation has been introduced in both states).

Question 9:

What obligations do I have to employees now that I intend to shut down my operations?

Answer: The termination of employees, including a complete shutdown of business operations, requires careful consideration of multiple legal issues. An employer must determine whether it has any contractual or statutory notice obligations, including advance notice under the federal Worker Adjustment and Retraining Notification (“WARN”) Act and analogous state laws, if applicable, and if so, whether any exceptions to those notice requirements apply. An employer should review existing employee agreements and policies that may include employee rights to compensation, severance, or benefits triggered by certain termination events.

New Jersey and New York: When letting employees go, employers in both New Jersey and New York are legally obligated to pay all outstanding wages no later than the regular payday for the pay period in which the termination occurred. An employee compensated in full or in part by an incentive system may be paid a reasonable approximation of all wages due until the exact amount is computed. New Jersey and New York employers are not required to pay unused accrued vacation upon termination absent a company policy stating the contrary. An employer should review plan documents to determine the effect of a shutdown on employee benefits, including group health insurance and pensions, notify plan administrators, and prepare and send any required notices relating to continuation of health insurance under the federal COBRA law, New Jersey’s “mini-COBRA” law, or New York’s “mini-COBRA” law. If employees on a temporary employment visa are affected by the shutdown, the employer should determine whether there are any reporting obligations to the government, obligations to pay the reasonable cost of return transportation abroad, or ways to structure severance payments to address immigration issues. Companies and nonprofits should consider whether they need employees while operations are winding down, and if so, which positions and how many employees are needed. When selecting wind-down employees, an employer should use objective selection criteria to avoid discrimination claims.

Question 10:

How can I avoid discrimination issues that may arise from the COVID-19 crisis?

Answer: Employers can remind employees that it is against federal law to harass or otherwise discriminate against coworkers based on race, national origin, color, sex, religion, disability, or genetic information. Applicable state laws may prohibit discrimination and harassment based on additional protected characteristics. An employer should remind employees of existing company policies prohibiting discrimination and harassment in the workplace and of its reporting system for lodging and handling discrimination and harassment complaints. Employers should make clear that they will promptly review allegations of discrimination and harassment and take appropriate corrective action when necessary. Further, employers should assure staff that no retaliation will be taken against an employee who makes a good-faith report of unlawful discrimination or harassment.

To see our other material related to the pandemic, please visit the Coronavirus/COVID-19: Facts, Insights & Resources page of our website by clicking here. 


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