Patient Advocate Designations During COVID-19

Issues not typically thought about or discussed are now at the forefront of many people’s minds. During Michigan’s COVID-19 Stay at Home Executive Orders, discussions about life and death are common with friends, family, and loved ones. I recently had this conversation with my husband, Jim:

Me: Do you remember that I designated you as my patient advocate?

Jim: Yes.

Me: If I get COVID-19 and need a ventilator, I want one.

Jim: Why are you telling me this?

Me: I just want you to be clear on what my Patient Advocate Designation means. It states that if there is no reasonable expectation of my recovery, then I don’t want certain things, including a ventilator.

Jim: So, you don’t want a ventilator?

Me: No, I do. Two things are important here. First, if I get COVID-19, I do want to be put on a ventilator if it will help me survive, and second, if I get COVID-19, I do have a reasonable expectation of my recovery so the statement in the Patient Advocate Designation that I don’t want a ventilator won’t even apply. I just wanted you to be very clear as to my wishes.

Jim: Ok, I get it. But to be sure my directions to doctors and hospitals are followed on this, don’t you need to redo your Patient Advocate Designation?

Me: No, the law says I can give you, as my patient advocate, both written and oral instructions, guidelines, and desires for my care, custody and healthcare treatment.

Jim: That’s surprising.

Does Your Patient Advocate Designation Reflect Your Wishes?

It’s a good time to look at your Patient Advocate Designation and be sure its terms are consistent with your current wishes. If not, it’s easy to update the document. However, if updating right now is not possible, you can instruct your patient advocate, orally, with your current instructions.

If your Patient Advocate Designation is like mine, and provides that no ventilator, or respirator, should be used if “there is no reasonable expectation of my recovery,” explain to your designated patient advocate and successors that this language does not mean you don’t want a ventilator if you get COVID-19. Inform them that you if you get COVID-19, you do expect to recover from it, as the odds of survival far surpass the chances of death, and that you want all treatment needed to enable your survival, including being placed on a ventilator.

Is the Right Person Named as Your Patient Advocate?

If the designated patient advocate and successors are not the individuals you want making your healthcare decisions, you should update the document. Changes should be made if those you previously designated have died, or are no longer in your life, or, if your children are old enough to be your patient advocate and you prefer them serving over a sibling or friend.

Talk with Your Patient Advocate About Your Wishes

Now is a good time to talk with your patient advocate and designated successors so they are aware of your current wishes. Knowing what you want will enable your patient advocate to confidently and effectively communicate your wishes to healthcare providers, family members and friends. Knowing your current wishes also reduces the emotional toll on your patient advocate as they implement your wishes.

Remote Witnessing and Signing Is Possible

Michigan Executive Order 2020-41 was very important for the execution of Patient Advocate Designations. Unlike other documents, Patient Advocate Designations must be witnessed by two individuals who are not your patient advocate, heirs, beneficiaries, or employees of a healthcare facility where you are a patient, among others. Remote signing gives you the ability to have two independent individuals as your witnesses so that your Patient Advocate Designation will be effective when needed.

Executive Order 2020-41 made remote witnessing of estate planning documents possible until 11:59 p.m. on May 6, 2020. Many effective dates in Executive Orders are being extended as “Stay at Home” orders are extended. Contact us to confirm availability of remote witnessing if needed after May 6th.

Zoom Meetings

Our office is currently conducting Zoom meetings to discuss and execute Patient Advocate Designations and other estate planning documents remotely. It’s free to use the Zoom meeting platform. Our client checklists make the process easy to understand and Zoom allows us to execute the documents without face-to-face contact.


We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Teahan, Marlaine

Chair of Fraser Trebilcock’s Trusts and Estates Department and serving as Secretary/Treasurer of the firm, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the past Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help with your estate planning needs, contact Marlaine  at 517-377-0869 or mteahan@fraserlawfirm.com.

Governor Whitmer Signs Executive Order 2020-58; Suspends Certain Timing Requirements for the Commencement of Civil and Probate Actions and Proceedings

On April 22, 2020, with Executive Order 2020-58, Governor Whitmer suspended deadlines applicable to the commencement of all civil and probate actions and proceedings from March 10, 2020 until the end of the declared states of disaster and emergency. The EO is consistent with the Supreme Court’s Administrative Order 2020-3 and closes any gaps that might exist between the Court’s power to modify court rules and its inability to modify existing statutory notice requirements and other prerequisites related to deadlines for such filings. While the Governor cannot perform legislative functions, the Emergency Management Act provides that executive orders have the force and effect of law. The Court’s Administrative Order and the Governor’s Executive Order work together to effectuate a suspension of these specific deadlines during the COVID-19 crisis.

An interesting difference between EO 2020-58 and AO 2020-3 exists in the effective dates. While the Administrative Order suspends deadlines until the declared state of emergency ends, EO 2020-58 suspends deadlines until both the declared states of emergency and disaster end. The following timeline provides helpful background:

  • March 10, 2020: Governor Whitmer first declared only a state of emergency in EO 2020-4;
  • March 23, 2020: The Michigan Supreme Court addressed the suspension of certain deadlines applicable to civil and probate actions and proceedings in Administrative Order 2020-3 during the declared state of emergency, when no declared state of disaster existed; and
  • April 1, 2020: Governor Whitmer rescinded EO 2020-4, declared a state of disaster and expanded on the already declared state of emergency in EO 2020-33.

Presumably, such declared states will end simultaneously; however, it will be interesting to see if Executive Order 2020-58 provides for tolling of these deadlines that extend past the Court’s extension of deadlines. More details about Supreme Court Administrative Order 2020-3 can be found at: https://www.fraserlawfirm.com/blog/2020/03/michigan-supreme-court-extends-civil-and-probate-filing-deadlines-due-to-covid-19/.

If you have a question about filing deadlines or about the filing of a civil or probate action or proceeding, contact your attorney for guidance. Fraser Trebilcock’s attorneys are working steadily through this crisis to address all your questions and legal needs.


We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Teahan, Marlaine

Chair of Fraser Trebilcock’s Trusts and Estates Department and serving as Secretary/Treasurer of the firm, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the past Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help with your estate planning needs, contact Marlaine  at 517-377-0869 or mteahan@fraserlawfirm.com.

Navigating Executive Order No. 2020-54 (“Order 54”); The Eviction and Land Contract Forfeiture Moratorium

UPDATE: On Monday, April 20, 2020, Governor Gretchen Whitmer signed Executive Order 2020-54, extending the duration of relief in prior Order 2020-19 through May 15, 2020.

With Executive Order 2020-54, Governor Whitmer enacted a “temporary prohibition against entry to premises for the purpose of removing or excluding a tenant or mobile home owner from their home,” which can fairly be described as an “eviction moratorium.”

The text of Order 54 largely mirrors Order 19 analyzed below, save for minor changes to Section 3 thereof that seek to clarify that the traditional landlord’s “Notice to Quit” for non-payment of rent can no longer threaten to evict or re-take possession. As such, a customized demand for payment of rent will be likely for the duration of Order 54. This is also discussed below.

This is a brief summary and does not constitute legal advice. You can view our summary of Executive Order 2020-19 here. We encourage you to review Executive Order 2020-54 in its entirety, and contact your Fraser Trebilcock attorney for any questions you may have.


On Friday, March 20, 2020, Governor Whitmer signed an executive order enacting a “temporary prohibition against entry to premises for the purpose of removing or excluding a tenant or mobile home owner from their home,” which can fairly be described as an “eviction moratorium.” It was intended to stay in place until the end of the night on Friday, April 17, 2020, which effectively left it in place until Monday, April 20. On Monday, April 20 it was rescinded, and the nearly identical Order 2020-54 (“Order 54”) took its place.

Order 54 prohibits landlords and land contract vendors from evicting tenants or vendees until after May 15, 2020. It also prohibits personal delivery of demands for payment of rent, prohibits the use of Notices to Quit and other forfeiture notices that threaten eviction or seek to take possession. It has provisions that apply to court officers as well. It is both detailed and summarized below.

Legal Basis: Like all the COVID-19 executive orders, Order 54 follows the March 10, 2020 Executive Order 2020-4 and cites to updated versions, which declared a state of emergency across Michigan. It cites Michigan’s Constitution (Const 1963, art 5, sec 1) (vesting executive power in the governor) for support, along with Michigan’s 1976 Emergency Management Act, codified at MCL 30.401-421, and its 1945-era Emergency Powers of the Governor Act, codified at MCL 10.31-33 (please see links below to these statutes). Order 19 states:

“[t]he current states of emergency and disaster would be exacerbated by the additional threats to the public health related to removing or excluding people from their residences during the COVID-19 pandemic. To reduce the spread of COVID-19, protect the public health, and provide essential protections to vulnerable Michiganders, it is reasonable and necessary to provide temporary relief from certain eviction-related requirements.”

In sum, the Governor has determined that the personal interactions necessitated by the eviction process, and the possibility of people being put out “on the street,” so to speak, presents avoidable risks. Thus, the landlords of Michigan and those who sold residential property on land contract are being called on to contribute resources to the public good. At the time of writing and publication of this article, this contribution is uncompensated. Without addressing or resolving those issues, this article simply identifies what is prohibited and places those prohibitions into the context of the ordinary procedures for evictions or summary land contract forfeitures.

Prohibited Acts: Order 54 prohibits or regulates the following, described as numbered under the Order itself. The terms of Order 54 are summarized here:

  1. No person shall remove or exclude a residential tenant, people holding under that tenant (such as roommates, family members, and likely any other hangers-on), land contract vendees (buyers) or those holding under those vendees from the residential premises in question until after May 15, 2020. This does not apply if the “tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. This order should be broadly construed to effectuate that purpose.”

In other terms, regardless of where one was at in an eviction or land contract forfeiture process, actual removal or execution on a Writ of Restitution or other eviction order is stayed, barring exception. The “severe risk” exception is discussed briefly in the “What This Means” section below.

  1. “This order does not affect the inherent power of a judge to order equitable relief.”

It is uncertain at this time whether this section intends to create a judicial carve out that would allow the equitable relief of eviction in circumstances not contemplated under Order 54, or whether this is a statement intended to limit the scope of Order 54 and prevent it from being mis-applied in commercial or other contexts. The later seems more likely, but this section is open to some interpretation.

  1. This section, translated, provides that tenants and vendees still have to pay, and will still owe money for the time they occupy the property in question. In addition, landlords and vendors may issue written demands for payment of rent,, but they may no longer mail notices to quit (and by extension, other forfeiture notices) that threaten eviction or re-possession as a remedy. These demands for rent cannot be personally delivered or served during the moratorium period – they must be mailed or e-served if allowed under the applicable lease.

It is highly unlikely that any judge will construe this section as prohibiting a landlord or vendor from knocking on a tenant’s door to conduct other business, to check on a tenant, or to provide assistance to a tenant. The landlord just cannot knock on a tenant’s door to deliver the “bad news” of a demand letter, and in no circumstances may a landlord deliver or send a notice to quit or other document threatening eviction. The damages to the landlord for non-payment of rent continue to accrue, however.

  1. Further, no person may enter residential property to remove a tenant, vendee or anyone claiming under them, even if they have already obtained a Writ of Restitution or other eviction order. Like Section 1 above, there is an exception where the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property.

This is largely a re-hash of Section 1: if no person can remove or evict under Section 1, it follows that no person may enter a rental unit or residential property subject to a land contract for those purposes.

  1. There is a moratorium preventing any court officer, sheriff or deputy from serving process (i.e., new lawsuits) that seek eviction of forfeiture as a remedy.

This section governs law enforcement, as opposed to the landlords or land contract vendors. It does not, on its face, bar lawsuits that only seek money damages. Assuming your local district court will take the filing and issue process (which remains uncertain at this time), one may theoretically initiate a new contract-based suit for money damages and seek to amend to add an eviction remedy when the moratorium is lifted.

  1. “[N]o person may deny a mobile home owner access to their mobile home, except when the mobile home owner’s tenancy has been terminated because the mobile home owner poses a substantial risk to another person or an imminent and severe risk to property.”

This section basically brings mobile home parks under the same prohibitions applicable to residential landlords and land contract vendors.

  1. For 30 days after the restrictions in sections 1 through 6 expire, courts have latitude to adjourn proceedings, toll redemption periods, toll limitations periods, and extend deadlines.

This appears to be a “housekeeping” section granting court latitude with scheduling that likely already would be found to exist under Michigan’s rules of Court and revised Judicature Act.

  1. As used in this order, all terms have the meaning provided by the Revised Judicature Act.
  1. This section rescinds Order 19 .
  2. This section provides that a willful violation of this Order is a misdemeanor.

This section requires little or no translation.

  1. A copy of this order will be transmitted to the State Court Administrative Office.

This is a mechanical section that will mean little to landlords or land contract vendors.

What This Means: Landlords and those who sold residential property on land contract must either challenge the legality of Order 54, or wait out all evictions until it expires or is amended to allow evictions.

Order 54 excepts situations where a tenant is creating substantial risk to another person or an imminent and severe risk to property. While Order 54 is silent as to what those situations are, the case-by-case determinations that a court might make in that regard will be governed and informed by existing statute and common law. Owing to the numerous pronouncements in Order 54 regarding the necessity for people to shelter in place, along with the “Stay At Home” Order issued March 23, 2020 (and its successor orders), it seems clear that having a tenant or vendee with COVID-19 will not likely be deemed an exception, unless that person is taking assaultive or offensive actions to spread it to others in the building. If you are confronted with that situation, nothing in Order 54 prevents a landlord from calling the police along with pursuing legal remedies.

Landlords may still mail and e-mail demands for payment, but (unlike Order 19 that was rescinded), landlords and land contract vendors may no longer deliver, mail, email or otherwise tender notices to quit, notices to terminate tenancies and related land contract forfeiture notices. This is the substantive change in Order 54 that may create problems for landlords and land contract vendors. Order 54 does not technically prohibit a contract-based lawsuit against a tenant or vendee for money damages, but your counsel may advise that, in these uncertain times, such a suit may be of limited utility, unless it is later amended to add the eviction remedy.

In the meantime, Michigan’s prohibitions against landlord self-help and retaliatory eviction remain in place. While it was never a good time for landlords to take certain matters into their own hands before the current state of emergency, now is an even worse time to do so. It is anticipated that courts would treat lockouts or landlord utility shutoffs or service denials harshly at this time. It is unknown whether courts would likewise be lenient with landlords regarding repair issues at this time, but there are good arguments to support a rule of reason in that regard.

In Conclusion: Every situation is different. This general discussion cannot be used as a substitute for legal advice, pursuant to an established attorney-client relationship. Thus, contact your legal counsel or the undersigned if you have questions. The attorneys at Fraser Trebilcock remain ready and able to serve.


We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Jared Roberts is a shareholder at Fraser Trebilcock who works in real estate litigation and transactions, among other areas of the law. Jared also “walks the walk” as a landlord and owner of residential rental properties and apartments in Downtown Lansing. He may be reached at jroberts@fraserlawfirm.com and (517) 482-0887.

Michigan Temporarily Suspends Tickets for Expired Driver’s Licenses and Registrations

Late in February, the Secretary of State’s office advised me that I had to renew my license in person this year. Dreading a visit to the Secretary of State’s office, I decided to wait until closer to my birthday at the end of March. Unfortunately, the following events have kept that visit from happening:

  • March 10 – A state of emergency is declared in Michigan due to the COVID-19 pandemic.
  • March 13 – The Secretary of State (“SOS”) announced that in-person visits were restricted to critical services only, with no in-person license renewals.
  • March 23 — Executive Order 2020-21 (“Stay Home, Stay Safe”) was signed, preventing an in-person visit before my birthday.
  • March 24 – Online, I made an appointment at my local SOS office for April 27th.
  • April 9 — Governor Whitmer extended Stay Home, Stay Safe through April 30th with Executive Order 2020-42 and, within hours, SOS notified me by email that my appointment was cancelled.

If you’re in a similar position, don’t worry. On April 13, 2020, Governor Whitmer issued Executive Order 2020-EO-47 which temporarily extends the validity of certain driver’s licenses, state ID cards and vehicle registrations. To the extent you can, you should complete your license renewal and vehicle registration at the Secretary of State’s website. For State ID cards, operator’s licenses, and chauffeur’s licenses that expire between February 1 and May 31, 2020, you have until June 30, 2020 to renew.

Medical certification requirements are temporarily suspended for Group A, Group B, and Group C designations until June 20, 2020, but you should carry a paper copy of an otherwise-valid medical certificate showing an expiration on or after March 1st. If a commercial vehicle has an otherwise-valid vehicle registration that expired on or after Mach 1st, operator and chauffeur license holders with Group A, Group B, or Group C may operate the vehicle as though it had a valid vehicle registration until June 30, 2020.

Until June 30, 2020, law enforcement will not arrest any person or impound any vehicle as a result of a vehicle registration, operator’s license, or chauffer’s license that expired on or after February 1, 2020. Late fees for having such expired documentation will not be assessed so long as renewals occur by June 30, 2020. This Executive Order is no panacea; nothing in EO 2020-47 prevents the Secretary of State from suspending or revoking an operator’s or chauffeur’s license, commercial learner’s permit, vehicle designations, or endorsements or an operator’s or chauffeur’s license pursuant to the Michigan Vehicle Code. Further, this relief does not apply to individuals who had their driving privileges suspended or revoked for traffic offenses or who, since their last medical certificate was issued, have been diagnosed with a medical condition that would disqualify them from operating a commercial vehicle, or who have developed a condition that requires an exemption or Skill Performance Evaluation from the Federal Motor Carrier Safety Administration.

Until I can renew my license, I’m tempted to carry a copy of EO-2020-47 in my car; however, my current, expired license is probably all I need. Meanwhile, I’ve got my new SOS appointment all set and hope to have my renewed license in June. To avoid delays, it is advisable to make an appointment at the Secretary of State’s website to update your license, registration and other documentation in advance of June 30, 2020.


We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Teahan, Marlaine

Chair of Fraser Trebilcock’s Trusts and Estates Department and serving as Secretary/Treasurer of the firm, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the past Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help with your estate planning needs, contact Marlaine  at 517-377-0869 or mteahan@fraserlawfirm.com.

Governor Whitmer Allows Michigan Liquor Control Commission to Buy Back Liquor from Certain Liquor License Holders

In Executive Order 2020-46 issued April 13, 2020, Governor Whitmer authorized the Michigan Liquor Control Commission (“Commission”) to offer a licensee a cash buyback of any spirits a licensee ordered from the Commission and received and accepted from an Authorized Distribution Agent before March 16, 2020. When a licensee opts into this buyback program, the Commission must advance to the licensee 100% of the purchase price of those spirits that are in the licensee’s inventory.

The Commission may accept buyback requests, by email or on its website, only from licensees that hold one of the following license types: Class C, B-Hotel, G-1, Club, Continuing Care Retirement Center, Aircraft, Watercraft, and Train License. The Commission must begin accepting requests on its website as soon as reasonably possible, and must accept all requests made by 5:00 pm on April 17, 2020.

Upon advancing cash to a licensee pursuant to the buyback program, the Commission will hold legal title to all spirits purchased by the licensee before March 16, 2020 that are in the licensee’s inventory at the time the licensee opts into the buyback program. But, in recognition of the risks of COVID-19 infection and transmission associated with in-person contact, the Commission must not take physical possession of any such spirits except as provided in the Order or any Order that may follow from it. The licensee must take all reasonable care to account for and preserve the inventory of any such spirits.

A licensee that opts into this buyback program may, at any time until the Commission takes physical possession of spirits it owns, repay to the Commission the full amount advanced to the licensee. Upon repayment of the full buyback amount, the licensee will again hold title to the spirits in its possession.

The Commission may take physical possession of any spirits held by any licensee to which the Commission holds legal title at any time later than 90 days after the end of the declared states of emergency and disaster.

The Order is effective immediately, and can be viewed here.


We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Fraser Trebilcock Business Tax Attorney Edward J. CastellaniEdward J. Castellani is an attorney and CPA who represents clients involved with alcohol beverages as a manufacturer, wholesaler, or retailer. He may be contacted at ecast@fraserlawfirm.com or 517-377-0845.

Estate Planning and More Can Continue from Home Under Executive Order 2020-41

Executive Order 2020-41 Allows Remote Witnessing and Notarization

Electronic signatures, remote notarizations, remote witness attestations and acknowledgments, and remote visitations are now permitted under Executive Order 2020-41, signed by Governor Whitmer on April 8, 2020. This Executive Order is effective through May 6, 2020, and ensures that necessary transactions and interactions may continue to occur during this time of crisis without unduly compromising the health and safety of those performing these transactions.

This means that you can sign important documents, like wills, trusts, durable powers of attorneys and designations of patient advocate, deeds, and other business and financial documents requiring a witness or notary safely from your own home. Further, notaries public and necessary witnesses can handle these transactions safely from their homes, too.

There are specific conditions that must be met under Executive Order 2020-41, but the attorneys at Fraser Trebilcock are ready and available to help you. Now is the perfect time to contact your attorney to discuss updating your estate planning documents and getting your business and financial affairs in order, all from the comfort and safety of your own home.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions. 

We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Attorney Melisa Mysliwiec

If you would like to talk with an attorney about putting legal plans in place, contact attorney Melisa M. W. Mysliwiec. Melisa focuses her work in the areas of Elder Law and Medicaid planning, estate planning, and trust and estate administration. She can be reached at mmysliwiec@fraserlawfirm.com or 616-301-0800.

Employers Stay Informed: FFCRA Temporary Rule Issued – New FFCRA Guidance & Requirements Continue to Impact Compliance

While COVID-19 continues to attack our nation, businesses face the ongoing struggle with managing workforces and finding a game plan that is morally and fiscally responsible. New programs and laws are constantly being issued and updated which makes compliance matters all the more difficult.
 
With respect to the Families First Coronavirus Response Act (FFCRA), affecting nearly all private employers with fewer than 500 employees, as well as public employers, the Departments are continually updating existing guidance sources and issuing new ones. 
 
DOL Questions & Answers
 
Over the past week, the Department of Labor’s Q&As on the FFCRA’s provisions for Emergency Paid Sick Leave Act (EPSLA) and Emergency FMLA Expansion Act (EFMLEA) have been updated and/or modified at least 3 times. Answers which have changed include 7, 15, 16, and 31-33. For the most recent version, see: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
 
IRS FAQs Relating to Employer Tax Credits
 
The IRS has now issued guidance on how to calculate the tax credits, how to claim them, how to calculate the allocable health insurance costs, the method used to request advance payment, and what documentation and substantiation requirements must be followed. These tax credits will offset the employers’ required cost to provide FFCRA paid leave, as well as the allocable share of health care costs and the employer’s portion of Medicare. See: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs
  • Questions 1-19: general information.
  • Questions 20-24: determining the amount of the tax credits for Paid Sick Leave.
  • Questions 25-30: determining the amount of the tax credits for FMLA Expansion leave.
  • Questions 31-36: how to determine the amount of allocable qualified health plan costs.
  • Questions 37-43: how to claim the credits.
  • Questions 44-46: employer substantiation requirements.
  • Questions 47-48: describe time periods (including leave taken before December 31, but paid later).
  • Questions 49-51: special issues of taxation and deductibility.
  • Questions 52-56: other special issues for employers including interaction with other tax credits, use of third-party payers, etc).
  • Questions 57-59: special issues for employees.
  • Questions 60-66: self-employed issues.
IRS Advance Tax Credit Form & Instructions
 
Additionally, IRS tax forms and instructions were released to apply for advance credits in cases where retention of allowed withholdings is not enough to cover the cost of paid leave:
Temporary Regulations
 
Finally, temporary regulations were released which modify numerous previous FFCRA provisions and shed light on others.  See https://www.dol.gov/agencies/whd/ffcra 

On April 1, 2020, the U.S. Department of Labor announced new action regarding how American workers and employers will benefit from the protections and relief offered by the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (FFCRA).

FFCRA helps the United States combat the workplace effects of COVID-19 by reimbursing American private employers that have fewer than 500 employees with tax credits for the cost of providing employees with paid leave taken for specified reasons related to COVID-19. The law enables employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus. The Department’s Wage and Hour Division administers the paid leave portions of the FFCRA.

These temporary regulations are effective from April 1, 2020 through December 31, 2020 and cover, in detail:
  • Paid Leave Entitlements
  • Employee Eligibility
  • Employer Coverage
  • Intermittent Leave
  • Leave to Care for a Child Due to School or Place of Care Closure or Child Care Unavailability — Interaction between the EPSLA and the EFMLEA
  • Leave to Care for a Child Due to School or Place of Care Closure or Child Care Unavailability — Interaction between the EFMLEA and the FMLA
  • Employer Notice
  • Employee Notice of Need for Leave
  • Documentation of Need for Leave
  • Health Care Coverage
  • Multiemployer Plans
  • Return to Work
  • Recordkeeping
  • Prohibited Acts and Enforcement
  • Effect of Other Laws, Employer Practices, and Collective Bargaining Agreements
The regulations further explain and outline circumstances, as well as documentation requirements, for the six (6) qualifying reasons to provide paid sick leave under the EPSLA. Additionally, the regulations set forth options for intermittent leave; how to calculate the average regular rate; updates to many definitions, including son or daughter, school, and place of care; limits on the term “individual” for whom one may provide care; detailed record keeping requirements; as well as numerous other important information. 
 
Employers with fewer than 50 employees should also keep in mind that they may qualify for the small business exemption from the Emergency FMLA Expansion Act and/or the school closure/day care unavailability portion of the Emergency Paid Sick Leave Act. The details of how to qualify are set forth in the regulations. Additionally, employers with under 25 employees may not have to comply with the FMLA job restoration provisions if certain conditions are met. 

Here are some takeaways from the regulations:
  • EPSLA: Full-time employees are those normally scheduled to work 40 hours per workweek.  Anyone working under that is deemed part-time.  This will affect the number of hours (80 or less) of paid sick leave required under the EPSLA and the amount of the tax credit an employer is allowed.  If an employer provides an employee who works 30 hours a week with 80 hours of paid sick leave, the employer will not receive a tax credit for all 80 hours.
  • EPSLA Qualifying Reasons for Paid Sick Leave: Guidance and rationale is provided for the COVID-19 related qualifying reasons to take EPSLA, including discussion of shelter-in-place and stay-at-home orders, employees who are advised to self-quarantine, caring for an individual subject to the above, affirmative steps employees with COVID-19 symptoms such as dry cough or fever must take to seek a diagnosis, and others.
  • EPSLA Qualifying Reason: An “individual” for whom an employee cares for due to the COVID-19 reasons as set forth in the FFCRA is restricted to a person with which the employee has a relationship as further described under the regulations.
  • Child Care Provider: Child care provider is modified, in part, to include family members, friends or neighbors who regularly care for the child even if they are not compensated or licensed.
  • Son or Daughter: Son or daughter is expanded to include children 18 or older who are incapable of self-care due to a mental or physical disability.
  • Calculation of Leave and Pay:  Formulas and timelines are provided for how to calculate the amount of leave required, the amount of pay, and the average number of hours an employee was scheduled per day, especially for those with varying hours.
  • Unable to Work: Further details on how an employee must be unable to work or telework in order to claim FFCRA leave is explained.
  • Intermittent Leaves: Expanded information on intermittent leaves and when that may be allowed, which depends on whether the employee is working on-site or teleworking, as well as the reason for leave.
  • Exceptions from Employee: The definitions of “health care provider” and “emergency responder” are expanded for purposes of those employees for whom employers can exclude under the EPSLA and EFMLAEA and therefore will not be eligible for FFCRA leave.
  • Notice: Notice requirements are provided, including the prohibition of employers asking for more information beyond what is allowed in the temporary regulations.
  • Documentation: Detailed documentation requirements are provided depending on the leave requested. This is incredibly important as proper documentation is also required to receive the tax credits. 
  • Recordkeeping: Recordkeeping obligations are set forth, including that the employer is required to retain all documentation for four years, regardless of whether leave was granted or denied, and regardless if employee’s notice was oral or written.  Records must include how the paid leave was calculated, how health insurance was allocated, as well as numerous other information. 
  • Health Care Coverage: The requirement for employers to maintain health care coverage is described, including the employee’s right to reinstatement of coverage upon returning from leave.
  • Intersection of Leave Requirements: Guidance is provided regarding intersection of EPSLA and EFMLEA, EFMLEA and FMLA, as well as paid leave under FFCRA and other available paid time off.
  • Return to Work: EFMLEA return to work obligations are set forth.
  • Small Business Exemption (Under 50 Employees): The small employer exemption for employers with fewer than 50 employees is set forth, including requirements to qualify.  The exemption is only for purposes of EFMLEA and EPSLA leaves relating to schools and place of care closures or where a child care provider is unavailable for COVID-19 reasons.
  • Small Business Exemption (Under 25 Employees): Details of when the FMLA job restoration requirements may not apply to an employer with fewer than 25 employees are described.
  • Multiemployer Plans: Further information is provided regarding multiemployer plans.
  • Effect on Other Laws / Contracts: Provisions regarding the FFCRA’s effect on other laws, employer practices and collective bargaining agreements are set forth, including the sequencing of paid leave.
  • Prohibited Acts: FFCRA’s prohibitions as well as enforcement measures under both the EPSLA and EFMLEA are detailed.
Guidance regarding the FFCRA is continually updated and is evolving rapidly; however, this is a general outline of information currently available.  It may be prudent for employers to review their handbooks, policies, and plans as well as check administrative procedures and protocol to ensure compliance.
 
This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions. 

We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Governor’s Executive Order Protecting Workers Exposed to Coronavirus From Discharge or Retaliation

Governor’s Executive Order Protecting Workers Exposed to Coronavirus From Discharge or Retaliation

Today, April 3, Governor Whitmer signed Executive Order 2020-36 (“EO-36”). Under the Governor’s prior “stay home” order, EO 2020-21. Employers were permitted to continue operations in essential industries and under other specified situations, see, Employer Actions to Comply with Michigan Stay-At-Home Order. The original stay home order did not address whether and under what situations employees permitted to work could refuse to report, and what actions employers were permitted to take to require those employees to report.

Today’s EO-36 addresses some of those questions. First, EO-36 prohibits any employer from discharging, disciplining, or retaliating against an employee who is otherwise permitted to work, but who stays home from work because the employee or a person in contact with the employee has symptoms of or tests positive for COVID-19.

The EO also expands on the Governor’s prior “stay home” order (EO 2020-21) by declaring as public policy that any person who has symptoms of the virus or tests positive, or who is exposed to someone symptomatic or positive, should remain at home. We interpret this Order to require an employee of a permissibly-continuing business performing in-person work to stay at home, and that the Employer of such persons will screen to prevent the reporting to work of such persons. Health care, first responder and other groups are exempted meaning that those employees are expected to continue to report to work.

Persons Addressed by EO-36

Key to the scope of this Order are the persons addressed. The Order identifies two groups of persons:

  1. Positive Tested or Display Symptoms. Persons who themselvestest positive for COVID-19 or who display one or more of the principal symptoms of COVID-19″ are referenced in “Section 2” of the Order. These persons are subject to the longest-duration stay-home requirements.
  2. Close Contact. Persons who “have had close contact with an individual who tests positive for COVID-19 or with an individual who displays one or more of the principal symptoms of COVID-19″ also are subject to specific stay home conditions.

For the purpose of this article, persons in these groups are here referred to as “Presumed Infectious.” Different and specific “stay home” periods are established for each Presumed Infectious group identified. Note that all key terms used in the Executive Order are defined there.

No Adverse Employment Action Against Presumed Infectious Employees

Presumed Infectious employees otherwise permitted to work who absent themselves to stay home are protected where their health status falls into either of the categories described in the immediately prior section of this article.

A Presumed Infectious protected employee must be treated by the Employer “as if he or she were taking medical leave under the Paid Medical Leave Act” (“PMLA”). Leave used may be debited and may be unpaid if the worker has exhausted paid leave entitlement. Significantly, we conservatively interpret EO-36 to mean that the length of such leave is unlimited by the amount of leave that a protected employee has accrued under the PMLA or any leave provision of the employer’s policy. EO-36 expressly states that the leave right extended to the employee under that Emergency Order “must extend, whether paid or unpaid, as long as the employee remains away from work within the time periods” specifically set forth in the two situations identified above.

Employers are prohibited from discharging, disciplining, or otherwise retaliating against a protected employee during the period of their protected status. The details of the duration of protected status are set out in Sections 2 and 3 of the Executive Order.

Workers Who are Not Protected Who Fail to Report

EO-36 does not expressly sanction discipline or discharge for employees who are permitted and expected by their Employer to work, but who fail or refuse to report. However, the Executive Order does so indirectly. The EO states:

“Nothing in this [EO-36] shall be taken to prevent an employer from discharging or disciplining an employee (1) Who is allowed to return to work … but declines to do so … or (3) [f]or any other reason that is not unlawful.”

Workers Exempted from Protections of EO-36

The following are expressly exempted from EO-36, with the result that they cannot refuse to report to work even if they meet the criteria set out in the Order:

“(a) Health care professionals.

(b) Workers at a health care facility…

(c) First responders (e.g., police officers, fire fighters, paramedics).

(d) Child protective service employees.

(e) Workers at child caring institutions…

(f) Workers at correctional facilities.”

Specification of Further Stay-at-Home Provisions For Those Possibly or Actually Infected, Including Employer Screening of In-Person Workers

EO-36 expands non-employment provisions of the prior stay home order. Under EO-36, no person who meet the criteria as “Presumed Infectious Persons” (test positive, display symptoms, or were exposed to someone meeting these criteria) should leave their home except to “the extent absolutely necessary to obtain food, medicine, medical care, or supplies that are needed to sustain or protect life” or for permitted recreational purposes. Further, Presumed Infectious persons who elect to leave home “should wear some form of covering over their nose and mouth, such as a homemade mask, scarf, bandana, or handkerchief.”

There is no qualification limiting the scope of this section of EO-36 other than the exempt industry groups identified above. Thus, we conservatively interpret this enhanced stay home directive to mean that Presumed Infectious employees providing in-person services to Employers whose businesses are otherwise permissibly continuing to operate must not report to work. Similarly, while EO-36 does not expressly so provide, we conservatively conclude that Employers who continue to operate must take reasonable measures to screen employees continuing to provide in-person services and bar them from entering the Employer’s premises for any reason.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.


We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.

CARES Act Offers Emergency Small Business Relief

CARES Act Offers Emergency Small Business Relief

One of the central pieces of the CARES Act is the provision of $349 billion for small businesses through federally backed loans under a modified and expanded Small Business Administration (SBA) 7(a) loan guaranty program called the Paycheck Protection Program. Congress has designed the program to make funds available to qualifying businesses quickly through approved banks and nonbank lenders.

The CARES Act is designed to provide broad and targeted lending program towards small businesses including:

  • Paycheck Protection Program (“PPP”) to cover payroll costs, interest costs, rent, and utilities;
  • Economic Injury Disaster Loan Grants to provide an ‘immediate’ advance of up to $10,000.00 of working capital to businesses that have applied for Economic Injury Disaster Loans in response to coronavirus; and
  • Entrepreneurial Development Programs

Paycheck Protection Program – General Loan Terms:

SBA will provide 100% federally backed loans to eligible small businesses. These PPP loans are being offered on the same terms, conditions, and processes as a loan made under the SBA’s current Business Loan Program. No collateral or personal guarantee is permitted to be required for a PPP loan. The interest rate on loans under the PPP is not to exceed 4%. There will be no subsidy recoupment fee associated with the loans and no prepayment penalty for any payments made. Additionally, the SBA has no recourse against any individual, shareholder, member, or partner of an eligible loan recipient for non-payment, unless the individual uses the loan proceeds for unauthorized purposes (see below for permitted uses).

Lenders will not require collateral or any personal guarantee as security for these loans, and the interest rate cannot exceed 4%. Additionally, prepayment penalties are not allowed. The only instance in which a lender will have recourse against any individual, shareholder, member, or partner of a borrower would be when the loan proceeds are used for an unauthorized purpose. The typical SBA requirement that borrowers not be able to obtain credit elsewhere will also be waived.

A loan made under the SBA’s Disaster Loan Program on or after January 31, 2020, may be refinanced as part of a covered loan under this new paycheck protection program as soon as these new loans are made available. The CARES Act specifically allows SBA Disaster Loan recipients with economic injury disaster loans made since January 31, 2020 for purposes other than the permitted loan uses under the PPP to receive assistance under this program.

Loan Origination:

The SBA can provide these loans directly or in cooperation with private sector lenders through agreements to participate on an immediate or deferred (guaranteed) basis. Lenders authorized to make loans under the SBA’s current Business Loan Program are automatically approved to make an approve PPP loans under this new CARES Act program.  As a result these can be accessed directly through lenders and will not require SBA pre-approval. The goal is to be ready to fund loans as quickly as possible.  So, the best starting place for a small business seeking one of these loans is with the business’s lender.

Additionally, the Treasury Secretary may extend this lending authority to additional private sector lenders under criteria established by Treasury (including, for instance, allowing additional lenders to originate loans).

Eligible Small Businesses:

With some exceptions, eligible recipients include those “small business concerns” currently defined under the SBA, but also include any business concern, nonprofit organization, veterans’ organization, or Tribal business if it employs not more than the greater of:

  • 500 employees (includes full-time, part-time, and those employed on other bases); or
  • If applicable, the size standard in number of employees established by the SBA for the industry in which the entity operates.

There is a special eligibility rule for businesses in the hospitality and dining industries. For businesses with more than one physical location, if it employs 500 or fewer employees per location and is assigned to the “accommodation and food services” sector (Sector 72) under the North American Industry Classification System (NAICS), the business is eligible to receive a loan.

In addition to small businesses, sole-proprietors, independent contractors, and other self-employed individuals are eligible for these loans. Non-profits and churches designated as 501(c)(3) organizations may also participate in PPP borrowing, while 501(c)(6) organizations are not eligible.

Maximum Loan Amount:

The maximum loan amount is capped at $10 million and will equal to 2.5 times the business’s monthly payroll costs. Loan funds can be obtained and forgiven when used to cover payroll costs, interest on mortgage obligations, rent, and utilities.  Under the PPP, businesses can re-hire employees they had initially laid off, as long as they can demonstrate to the lender that they were in business before February 15, 2020, and that the employee was formerly on the payroll.

Permitted Uses:

Loans may be used for:

  • Providing sick leave to employees unable to work due to direct effect of COVID-19;
  • Maintaining payroll during business disruptions during slow-downs;
  • Meeting increased supply chain costs;
  • Making rent or mortgage payments; and
  • Repaying debts that cannot be paid due to lost revenue.

Loan Payment Deferral Relief and Forgiveness:

The CARES Act provides that businesses that were operating on February 15, 2020 and that have a pending or approved loan application under the PPP are presumed to qualify for complete payment deferment relief (for principal, interest, and fees) for 6- months to one year. Lenders are required to provide this relief during the covered period (if secondary market investors decline to approve a lender’s deferral request, the SBA must purchase the loan).

The CARES Act’s broader loan forgiveness provision in Section 1106 provides that the debt may be forgiven (and excluded from gross income) in an amount (not to exceed the principal amount of the loan) equal to the following costs incurred and payments made during the covered period:

  • Payroll costs;
  • Interest payments on mortgages;
  • Rent; and
  • Utility payments.

Forgiveness amounts will be reduced for any employee cuts or reductions in wages.

The reduction formula for fewer employees is:

  1. The maximum available forgiveness under the rules described above multiplied by:
  1. The average number of full-time equivalent employees (FTEEs) per month – calculated by the average number of FTEEs for each pay period falling within a month – during the covered period divided by:

Either (at election of the borrower):

  • Average number of FTEEs per month employed from February 15, 2019 to June 30, 2019; or
  • Average number of FTEEs per month employed from January 1, 2020 until February 29, 2020;

Or, for seasonal employers:

  • Average number of FTEEs per month employed from February 15, 2019
  • until June 30, 2019.

This formula will be used to reduce forgiveness amounts, but cannot be used to increase them.

For reductions in wages, the forgiveness reduction is a straight reduction by the amount of any reduction in total salary or wages of any employee during the covered period that is in excess of 25% of the employee’s salary/wages during the employee’s most recent full quarter of employment before the covered period. “Employee” is limited, for purposes of this subparagraph only, to any employee who did not receive during any single pay period during 2019 a salary or wages at an annualized rate of pay over $100,000.

There is relief from these forgiveness reduction penalties for employers who rehire employees or make up for wage reductions by June 30, 2020. Specifically, in the following circumstances, the forgiveness reduction rules above will not apply to an employer between February 15, 2020 and 30 days following enactment of the CARES Act:

  • The employer reduces the number of FTEEs in this period and, not later than June 30, 2020, the employer has eliminated the reduction in FTEEs; or
  • There is a salary reduction, as compared to February 15, 2020, during this period for one or more employees and that reduction is eliminated by June 30, 2020 (it is unclear whether this is also intended to be limited to employees who made under $100,000 in 2019).
  • Employers with tipped employees (as described in the Fair Labor Standards Act) may receive forgiveness for additional wages paid to those employees. Also, emergency advances received under the expanded SBA Disaster Loan Program discussed below will be excluded from forgiveness amounts.

Business borrowers seeking forgiveness of amounts must submit to their lender:

  • Documentation verifying FTEE on payroll and their pay rates;
  • Documentation on covered costs/payments (e.g., documents verifying mortgage, rent, and utility payments);
  • Certification from a business representative that the documentation is true and correct and that forgiveness amounts requested were used to retain employees and make other forgiveness-eligible payments; and
  • Any other documentation the Administrator may require.

Additionally, grant money will be made available to loan applicants and certain small businesses, such as:

Economic Injury Disaster Loan Grants:

Businesses who have applied for an Economic Injury Disaster Loan in response to coronavirus may, during the 2020 fiscal year, request an advance of up to $10,000 (which does not have to be repaid, even if the loan application is later denied) to provide covered leave, maintain payroll, and pay debt obligations. Advances are to be made by the lender within three days of an application for such advance.

Entrepreneurial Development Programs:

Grants and funding will be available through this program to offer training, counseling, and assistance to small businesses affected by a coronavirus.  Examples of recipients will include Small Business Development Centers, Women’s Business Centers, Minority Business Centers, and resource partner associations that provide online information and training. Under this program, participants in the State Trade Expansion Program (STEP) can gain access to federal grant funds appropriated to them for fiscal years 2018 and 2019 to remain available for use through fiscal year 2021.  STEP participants will also be reimbursed for events cancelled due to coronavirus, as long as the reimbursement amount does not exceed the participant’s federal grant amount.

Conclusion

The CARES Act provides much needed stimulus to individuals, businesses, and hospitals in response to the economic distress caused by the COVID-19 pandemic. The CARES Act is, however quite long and complex, and successful navigation of the Act’s provisions as well as the economic challenges facing individuals, business and the healthcare system will require thoughtful and comprehensive planning. This is a summary of a complex new law and business are encouraged not to rely on this summary alone and to seek legal counsel regarding this new law.


We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.


Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.