Hospitality Industry FAQs (COVID-19)

The following is a running list of frequently asked questions (FAQ) from industry members. 
Where can I find updated guidance?

OR-OSHA Guidance
Oregon Health Authority Guidance
CDC Guidance
Industry Guidance
How can I take advantage of the Employee Retention Tax Credit for 2020?
  • The IRS recently released its Employee Retention Tax Credit (ERTC) guidance for eligible businesses accessing up to $5,000 per employee in 2020 as long as it does not directly intersect with PPP payroll funds.
  • The National Restaurant Association released the a helpful fact sheet on the ERTC to help members discuss this opportunity with their tax and accounting team. The guidance in Notice 2021-20 makes major changes for those restaurants who accessed PPP in 2020, and permits many restaurants to access a credit is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020.

Where do I find information on the Paycheck Protection Program (PPP)?
Can employers “opt out” of allowing employees to take advantage of the deferral or do employers need to allow individual employees to take advantage of the deferral if they so choose?
  • The Society for Human Resource Managers (SHRM) and the AICPA both agree that if an employer suspends Social Security payroll tax withholding for eligible employees it must do so for all employees as there is no guidance that allows for individuals to opt out. This is a clarification that has been requested but at this time there is no option for employers to do this on a case by case basis. We strongly recommend employers not defer. Employees would be forced to double up on their payroll taxes in 2021 putting that much more financial hardship on those hardest hit. 
  • Tonkon Torp shared two documents that may help clarify the deferral for businesses: Treasury Releases Guidance on Temporary Deferral of Employee Payroll Taxes, and Deferring Payroll Tax Obligations.

Does the CARES Act provide forgivable loan opportunities for small businesses? 
  • The Paycheck Protection Program (PPP) may be entirely forgivable if the business brings back employees or restores wages. The U.S. Chamber of Commerce has developed a guide and checklist on the PPP; read more here. 

What’s the first step I should take to apply for funds through the Paycheck Protection Program? 
  • According to the SBA, the fastest and best way for you to get PPP/EIDL loans is to work directly with the bank where you hold your business banking account or have a current loan. We encourage everyone to reach out to your business bank immediately to learn if your bank will be participating in the PPP and when you can apply. Update: The last day to be issued a loan is August 8.

What can be paid for by funds received through the Paycheck Protection Program? 
  • 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 force before February 15, 2020; and utilities, for which service began before February 15, 2020. 
  • Payroll costs include: salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee); employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit; state and local taxes assessed on compensation; and for a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee. For more guidance on the PPP, click here for the final interim rule. 

Where can I find participating leaders for the Paycheck Protection Program?
  • Click here to see a list of lenders participating in the Paycheck Protection Program. For other SBA loans and programs, contact SBA directly.

How are part-time employees accounted for in the Paycheck Protection Program? 
  • There are two options for how to treat part-time employees in the Paycheck Protection Program; the method chosen must be used for all part-time employees. In the first option, employees who were paid for less than 40 hours per week can be calculated based upon the actual hours worked during a given week compared to 40 hours. In the second option, the part-time employee can be assigned as a 0.50 FTE. To read more, view page 33008 here. 

Where is the PPP forgiveness application? What else should I beware of for forgiveness?
  • Streamlined forgiveness applications for PPP loans under $50,000 have been released. To view the 3508S Forgiveness application, click here. To read the instructions on the application, click here. The SBA has released PPP forgiveness applications incorporating changes made by the PPP Flexibility Act. See the applications here.
  • Read the latest FAQ guidance on loan forgiveness from the Small Business Administration and the Department of Treasury.
  • A business can submit its loan forgiveness application before the end of the covered period if the business has used all of the loan funds for which the business is seeking loan forgiveness. The lender has 60 days after receiving a PPP loan forgiveness application to issue a decision on forgiveness to the SBA. In turn, the SBA will remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, no less than 90 days after the lender issues its decision on PPP loan forgiveness to the SBA. 
  • PPP recipients must certify in “good faith” documentation that their reduction in business activity during the PPP covered period is due to compliance with COVID requirements or guidance. If PPP recipient maintains this documentation, they are exempt from any reduction in loan forgiveness due to a reduction in FTE employees during the covered period. For instance, documentation may include the government directive to shut down in response to COVID-19 as well as proof of reduction in business activity.  

Will my PPP loan forgiveness amount be reduced if I offered to rehire the same employee, but the employee declined the offer? 
  • No. Employers who have attempted to rehire staff (for the same salary/wages and same number of hours) will not be penalized because of a declined offer in the CARES Act’s loan forgiveness reduction calculation. Be sure to make a written offer and carefully document these efforts. To read more, click here. Note that the newest guidance requires employers to inform the State Unemployment Insurance agency of the employee’s “rejected offer of reemployment within 30 days” of the rejection. To read the latest there, visit page 33007 of the Interim Final Rule.

Do you recommend paying employees bonuses with the PPP loan?  
  • The Treasury has officially announced that bonuses or hazard pay for employees are both acceptable to be forgiven under the PPP, so long as it does not exceed $100,000 as prorated for the covered period. To read more on the issue, view page 33006 here. Previous guidance stated that business owners are not eligible for bonuses.

How does the Corporate Activities Tax (CAT) work with the PPP? 
  • Despite a great deal of pressure from our industry and other business groups, Governor Brown indicated she will not delay the Corporate Activities Tax. However, some changes have been made with the Department of Revenue. No penalties will be assessed for underestimated payments or for not making a quarterly payment if businesses don’t have the financial ability to make the estimated payment; businesses must document their efforts to comply, including how COVID-19 has impacted their business. DOR has also raised the threshold for making estimated tax payments from $5,000 of annual tax liability to $10,000 of annual tax liability for the first year of the tax; businesses in this situation that have not yet made their first quarter payment will not have to do so. It is providing updates on the DOR website. 
  • In the first special session of 2020, the Legislature made some small changes to the CAT, including eliminating the requirement to re-register for CAT annually, except in particular situations. They also reduced the penalty for underpayment of quarterly estimated payments to 5 percent, added a safe harbor provision, and extended the 80 percent threshold for estimated quarterly payments through tax year 2021. To read more, click here.
  • The Oregon Department of Revenue has declared that federal assistance to businesses under the CARES Act is not commercial activity under Oregon statute and will not be subject to the Corporate Activity Tax. The exempt assistance includes forgiven Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loan (EIDL) advances, and Small Business Administration (SBA) loan subsidies. More information can be found in the Beyond the FAQ section of the CAT page on the department’s website. 

I’ve heard that some individuals claiming unemployment may receive more in unemployment benefits than working. What are some ways to make things work for my business in spite of that?
  • The Director of the Oregon Employment Department has indicated that if someone is not returning to work because they would be getting more in benefits than they would by returning to work, or similar reasons, those people would not be able to receive UI benefits. If you suspect UI fraud is happening in Oregon, please use the Fraud Hotline. For more information, the Oregon Employment Department has released temporary rules addressing COVID-19 related unemployment insurance benefits and eligibility.
  • Bar & Restaurant has a good discussion of this issue, especially as it relates to the PPP loan.

What do I do if an employee has COVID-19 or a confirmed guest is traced to my business? 
  • First, if they are still at your place of business, ask the person to leave your property, or to stay home and not come in. Direct them to their doctor and CDC guidelines. Gather as much information as you can that will assist in contact tracing and check the schedule or ask the employee who their close contacts were in the workplace. Be sure not to identify the individual to employees. If you can get information on customers and co-workers who encountered an ill employee, for example, please do. Finally, contact your local public health department, who will work on contact tracing. Find health and business contacts by county here. 
  • The Restaurant Law Center has developed step by step guidance on employees who are COVID-19 positive; view here.
  • Educate your staff on following the guidance and recognizing the symptoms; see OHA’s guidance here. 
  • Oregon Health Authority has developed a testing site locator at healthoregon.org/covid19testing or healthoregon.org/pruebasdecovid19 (Spanish).

If I have businesses under separate entities, should I file for multiple SBA disaster relief loans? Where is the money coming from? 
  • Operators can file for multiple SBA disaster loans if they have different LLCs as long as each has their own EIN. The money is coming from the US Treasury. 

I’ve chosen to close my business permanently. What are the steps I need to take for that? 
  • If you choose to close your business permanently, the Secretary of State outlines the steps for making a permanent closure.
QUICK LINKS

- Announcements & Resources
​​- FAQ
​- Federal Action 
- Guest Check-In Statement/Lodging (pdf)
​- Keep Our Communities Fed (To-Go/Retail)
​- ORLA Advocacy / CEO Updates
- ORLA Relief Efforts
​- Reducing Food Waste Resources
- Relief Available for Employers & Employees
​​​- Safety Checklists, Decals, Postings
- Sanitation Cards (pdf)
What are some best practices to ensure safety while operating takeout/delivery?  
  • Many restaurants are implementing “contact-less” pickup for pre-paid orders and delivery service drivers. Orders are placed on a shelf in the restaurant’s lobby, empty dining room or near the door so customers and drivers picking up orders have minimal contact with restaurant staff or other customers. 
  • The National Restaurant Association launched two new training videos on ServSafe Takeout and Delivery: COVID-19 Precautions. These videos are offered complimentary, on demand, in both English and Spanish.

If my area is moving toward outdoor dining, what does that mean for my license with the OLCC? 
  • The OLCC has announced licensees are allowed to expand into additional indoor areas or onto sidewalks, parking lots, or streets with the permission of the property owner or local government. This announcement serves to allow greater flexibility in creating more usable customer space due to social distancing guidelines. If you plan to modify your space to include addition space per this announcement, please fill out the application here. Be sure to check with your local government on what is required to expand outdoor seating. ​

I have decided to close. What are some best practices for closing procedures? 

How can hotels best protect their guests during this time?
  • The CDC has recommended practices for hotels, resorts, and lodges here.  
  • The American Hotel & Lodging Association has many helpful resources available on their website for hotel owners and operators: https://www.ahla.com/facts-about-coronavirus.  
  • The American Hotel & Lodging Association has launched “Safe Stay” – an initiative for enhanced industry-wide cleaning standards.  
  • Oregon Health Authority has released a guide on cleaning hotel rooms after a potentially COVID-19 positive guest has stayed in them.

How do the new state eviction and rent laws impact lodging facilities? 
  • Landlord and tenant laws only apply to renters without a “transient occupancy” in a hotel or motel. A transient occupancy is in effect when all of the following conditions are met: 1) rent is charged per day and is not collected more than six days in advance; and 2) maid and linen service is provided at least once every two days; and 3) the person has not lived there more than 30 days. If any of those factors are not met, the individual is not in a transient occupancy. If you have someone on your property who is no longer in a “transient occupancy,” refer to this handbook on the new laws related to payment and evictions in COVID-19.