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Legislation impacting private clubs during the COVID-19 crisis

(11/4) Biden Admin Announces Details of Vaccination Policies

 Today (November 4, 2021) , the Biden Administration is announcing the details of two policies to fight COVID-19 that will drive even more progress and result in millions of Americans getting vaccinated, protecting workers, preventing hospitalization, saving lives, and strengthening the economy. 

First, the Department of Labor’s Occupational Safety and Health Administration (OSHA) is announcing the details of a requirement for employers with 100 or more employees to ensure each of their workers is fully vaccinated or tests for COVID-19 on at least a weekly basis. The OSHA rule will also require that these employers provide paid-time for employees to get vaccinated, and ensure all unvaccinated workers wear a face mask in the workplace. OSHA has a strong 50-year record of requiring employers to take common sense actions to prevent workers from getting sick or injured on the job. This rule will cover 84 million employees. 

Second, the Centers for Medicare & Medicaid Services (CMS) at the Department of Health and Human Services is announcing the details of its requirement that health care workers at facilities participating in Medicare and Medicaid are fully vaccinated. The rule applies to more than 17 million workers at approximately 76,000 health care facilities, including hospitals and long-term care facilities. 

View Full Announcement Here

IRS & Treasury Update (Aug 2021)

IRS

Treasury Department

PPP Eligibility Information

The American Rescue Plan allowed nearly all 501(c) entities, including 501(c)(7) clubs, nominally eligible for the PPP, but Small Business Administration (SBA) regulations restricting its programs from being utilized by private clubs that restrict membership for reasons other than capacity has created a some amount of concern and confusion. Because each individual club’s practices are unique, NCA strongly advises clubs to consult with their attorneys and auditors to determine whether the PPP is a viable option. 

3-12-21 Update: American Rescue Plan Signed Into Law

President Biden has signed into law the “American Rescue Plan,” which is the latest in Congress’ efforts to bolster the economy in response to the now year-long coronavirus pandemic. Over the past year, the National Club Association has been working with representatives and senators on both sides of the aisle to address key priorities for the club community. Early in the pandemic, NCA identified and advocated for three policy priorities: extension and enhancement of the Employee Retention Tax Credit (ERTC), expansion of the Paycheck Protection Program (PPP), and increased state and local aid. With enactment of the American Rescue Plan, all three of these priorities were addressed. In addition, the American Rescue Plan established a new grant program for restaurants and bars, which may be available to clubs licensed as such.

Employee Retention Tax Credit
The American Rescue Plan builds upon the extension and enhancement of the ERTC achieved in December by continuing the program through the end of 2021. The refundable tax credit against payroll taxes amounts to 70 percent of the first $10,000 in eligible wages per employee, per quarter for a maximum credit of $7,000 per employee, per quarter. The credit is available to businesses who meet one of two eligibility tests:

  • Have operations that were fully or partially suspended during any calendar quarter due to orders from an appropriate governmental authority limiting commerce, travel or group meetings due to COVID-19; or
  • Experienced a significant decline in gross receipts during the calendar quarter.

Paycheck Protection Program
The American Rescue Plan expands eligibility for the PPP by including all 501(c) organizations, including 501(c)(7) clubs that do not fall under Small Business Administration regulations barring the participation of private clubs that limit their membership for reasons other than capacity. The PPP loan program provides forgivable, low-interest loans to businesses to pay for expenses such as rent, mortgage, wages and other expenses. ​While the program has been opened up, the program is set to expire on March 31, 2021, unless Congress extends the deadline. NCA has joined the U.S. Chamber of Commerce in requesting additional time for applications to be submitted.

Restaurant Revitalization Program
The American Rescue Plan establishes a new grant program for licensed restaurants and bars that have been impacted by COVID-19. The legislation sets aside $28.6 billion for the Restaurant Revitalization Fund and allows businesses to determine losses through a simple calculation of revenues in 2020 compared to similar quarters in 2019. Guidelines for the new program have not been established, so additional information on this new relief should be available in the coming weeks.

State and Local Assistance
The impact of the pandemic on state and local budgets have been a concern of NCA and allied organizations over the course of the past year. While some state and local budgets appear to have weathered much of the impact, our concerns have been centered on the potential pressure local officials may feel to raise taxes and fees to backfill budget shortfalls. By providing a total of $360 billion in assistance for state and local governments to meet the increased costs and declining revenue from the pandemic, Congress has taken much of this pressure off local officials.

For additional information on COVID-19 relief, please contact NCA Vice President of Government Relations Joe Trauger at 202-822-9822 or [email protected] or visit the Coronavirus Resource Center at coronavirus.nationalclub.org.

2-9-21 Update: 501(c)(7) Included in Draft Relief Bill

Private 501(c)(7) nonprofit clubs are included in the Paycheck Protection Program (PPP) in the $1.9 trillion COVID-19 stimulus package being considered by Congress. Today, the House Committee on Small Business released their additions to the framework bill and included 501(c)(7) clubs with less than 300 employees to be eligible to receive PPP loans. Additionally, the Paycheck Protection Program is expanded by $7.25 billion to provide relief to nonprofits.

The House Committee on Small Business will complete their markup tomorrow evening. Following committee consideration, NCA will apprise you of the status and will confirm the inclusion of 501(c)(7) clubs. Please note committee consideration marks an early step in the legislative process to enact an additional COVID-19 relief bill before Speaker Nancy Pelosi’s stated goal of March 15.

This inclusion marks a critical step to provide the relief clubs have requested since the onset of the pandemic.

NCA Signs Letter to Protect Businesses

NCA signed onto a U.S. Chamber of Commerce letter urging Congress to take strong action and provide a national baseline of liability protection during the pandemic to prevent unnecessary lawsuits from inhibiting businesses and the economy.

The letter states that legislation “should ensure that unfair lawsuits will not hamper those who work to comply with applicable government guidelines. We also believe these protections should be limited in duration and scope in addition to preserving reasonable recourse for those harmed by truly bad actors.”

What Help Did Clubs Get in the $2 Trillion Stimulus Package?

The National Club Association is working to ensure clubs receive relief funding during the COVID-19 crisis.

3 Benefits for Clubs:

Critical Walkthrough: The CARES Act: A Guide to the Resources for Nonprofit Organizations

We are continuing to advocate to Congress to provide critical relief for our industry, like 501(c)7  inclusion in the SBA’s Payment Protection Program (PPP), and will update you on future developments. NCA sent out letters on April 2 to the Senate, House, House Small Business Committee and Senate Small Business Committee urging members to include 501(c)(7) organizations in upcoming relief and PPP inclusion efforts.

For additional guidance on this urgent issue, please contact NCA Vice President of Government Relations Joe Trauger at [email protected].

Contact Your Representative

The National Club Association encourages all clubs to reach out to their Representatives to urge them to do three things:

  • Expand the Paycheck Protection Program to make 501(c)(7) social and recreational clubs eligible
  • Enhance and extend the Employee Retention Tax Credit through the end of the year
  • Provide additional assistance to state and local governments

Please email or call to make your voice heard.

Resources to track COVID-19 legislation:

  • Department of Health and Human Service COVID-19 Resources page here
    • Press release on the American Rescue Plan here
  • Food and Drug Administration COVID-19 resources here
  • Small Business Administration COVID-19 Relief Options webpage here
    • Paycheck Protection Program information here
    • Recent PPP changes information here
    • Economic Injury Disaster Loans information here
  • IRS COVID Relief page here
    • Employer tax credits information here
    • Tax Relief for Businesses and Tax-Exempt Entities information here
    • Tax Relief for Health Plans and Retirement Plans information here
  • Treasury COVID-19 Relief Page (still being updated from CARES) here
    • Small Business Assistance (PPP and EIDL) information, including application forms, FAQs, term sheets here
    • Payroll support and tax credits/tax deferral information here
  • Department of Labor COVID-19 Resources Page here
    • OSHA Guidance and Information here
    • Information on paid leave here, which was enacted in the Families First Coronavirus Response Act and extended in the American Rescue Plan
    • Unemployment Insurance information here

 

LEGISLATION

CARES Act ($2.2 Trillion Stimulus)

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was passed on March 28 and provides $2.2 trillion of relief to Americans and businesses throughout the country. See the 3 benefits for private clubs in the CARES Act. The National Club Association is working to ensure clubs receive relief funding during the COVID-19 crisis. Access the CARES Act walk-through for nonprofits here.

The CARES Act allows private clubs to take a credit against their payroll tax for 50% of employee wages if they were partially or fully shut down due to COVID-19. Learn more by accessing our FAQs at the bottom of this page and by listening to a full explanation of the Tax Credit here. 

As referenced in the March 25 COVID-19 Update for Clubs, while 501(c)7 organizations were not included in the SBA Paycheck Protection Program in the CARES Act, low-interest, non-forgivable SBA loans called Emergency Injury Disaster Loans (EIDL) may be available for private clubs that are in states that have declared a disaster by the governor of that state.

NCA received questions from clubs regarding how to fill out the ownership section of the application to access SBA Economic Injury Disaster Loans (Note:This is different from the Paycheck Protection Program). In response, NCA contacted the SBA and we received guidance over the weekend to help 501(c)7 clubs navigate this issue. Here is the guidance:

(1) Affiliation based on ownership. For determining affiliation based on equity ownership, a concern is an affiliate of an individual, concern, or entity that owns or has the power to control more than 50% of the concern’s voting equity. If no individual, concern, or entity is found to control, SBA will deem the Board of Directors or President or Chief Executive Officer (CEO) (or other officers, managing members, or partners who control the management of the concern) to be in control of the concern. SBA will deem a minority shareholder to be in control, if that individual or entity has the ability, under the concern’s charter, by-laws, or shareholder’s agreement, to prevent a quorum or otherwise block action by the board of directors or shareholders.

CARES Act Resources

Act Summary

FAQs Payment Protection Loans Loans, Treasury Dept.

$10,000 Relief Loans: Economic Injury Disaster Loan (EIDL) Emergency Advance 

Tax Guidance: CARES Act (COMD)

Bill Breakdown: HELP Committee Provisions

Key CARES Act Relief Provisions Available to Employers by Business Size, AALRR

FAMILY FIRST CORONAVIRUS RESPONSE Act (FFCRA)

The Family First Coronavirus Response Act rapidly moved through Congress to provide relief to businesses impacted by COVID-19. Here is a User’s Guide to Implementation.

See Guidance from the IRS on implementing the Families First Act.

Provisions Most Likely to Impact Clubs

Coronavirus testing is made cost-free for the uninsured and insurance companies are required to provide the test and related services such as office visits with no co-payment or prior-authorization.

Coronavirus Emergency Leave is provided in the bill for employees of businesses with fewer than 500 workers.

  • Employers would have to provide as many as 12 weeks of job-protected Family and Medical Leave for employees who have to:
    • Comply with a requirement or recommendation to quarantine because of exposure to or symptoms of the virus.
    • Provide care to a family member who’s complying with such a requirement or recommendation.
    • Provide care for a child younger than 18 who school or day care has closed due to the virus.
  • The first 14 days of the leave could be unpaid, though a worker could choose to use accrued vacation days, personal leave or other paid time off.
  • Following the 14 day period, workers would receive a benefit from their employers that would be at least two-thirds of their normal pay rate.
  • FMLA is also amended so employees could use unpaid leave if they are diagnosed with the virus, caring for a family member or child due to closures.
  • Department of Labor is authorized to issue regulations that would exempt small businesses with fewer than 50 employees and exclude certain health care providers and emergency responders from paid leave benefits.

 

Emergency Sick Leave

Emergency sick leave for employees of businesses with fewer than 500 employees would be a total of 80 hours for full-time employees and the equivalent of the normal number of hours a part-time employee would work over a two-week period.

Sick leave would be made available for those who:

  • Self-quarantine.
  • Obtain a medical diagnosis or care for coronavirus.
  • Provide care for a family member who has been diagnosed or is in quarantine or for a child who school or day care has closed due to coronavirus.

Employers with similar existing paid leave policies would be required to provide workers with the emergency paid sick time and cannot require a worker to use any other available paid leave before using the sick time:

  • Employers would be prohibited from requiring a worker to find a replacement to cover their hours during time off.
  • Discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer.

This is the provision that had a significant error that requires the House to pass the legislation again. It has to do with the pay caps that are set at $511 per day to care for themselves or $200 a day to care for a family member or child.

An employer could be subject to civil penalties for a violation of paid sick leave requirements.

 

Employer Tax Credits

Employment Tax Credit is Now Available for Businesses subject to mandated paid leave under the Family First Coronavirus Response Act. The legislation provides payroll tax credits to employers to cover wages paid to employees while they are taking time off under the bill’s sick leave and family leave programs. The credit is refundable if it exceeds the amount the employer owed in payroll taxes and would be in effect for wages through the end of 2020.

The bill also contains additional unemployment benefits.

To access the credit, eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200.

FAMILIES FIRST CORONAVIRUS RESPONSE Act Resources

IRS FAQs: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs (IRS)

Employee Credit FAQs: Employee Retention Credit available for many businesses financially impacted by COVID-19

DOL FAQs: Families First Coronavirus Response Act: Questions and Answers

DOL Guidance: Department Of Labor Announces New Paid Sick Leave And Expanded Family and Medical Leave Implementation  

The Wage and Hour Division (WHD) offers a number of plain-language compliance assistance materials to explain FFCRA’s benefits and requirements, including:

WHD provides additional information on common issues employers and employees face when responding to COVID-19 and its effects on wages and hours worked under the Fair Labor Standards Act and job-protected leave under the Family and Medical Leave Act at https://www.dol.gov/agencies/whd/pandemic.

Social Clubs and Families First Coronavirus Response Act (COMD)

HR 6201 Update: Families First Coronavirus Response Act: Forms of Paid Leave (AALRR)

Keeping American Workers Paid and Employed Act: A Section-by-Section Review

Employment Tax Credit is Now Available for Businesses Subject to Mandated Paid Leave Under the Family First Coronavirus Response Act (AALRR)

Employer’s Quick Guide to the Families First Coronavirus Response Act (Nelson Mullins)

Additional Resources

SBA’s Economic Injury Disaster Loans and Advance Program Reopened to All Eligible Small Businesses and Non-Profits Impacted by COVID-19 Pandemic, SBA

EEOC Says Employers Can’t Require COVID-19 Antibody Tests, Law360

Coronavirus Regulations: A State-By-State Week in Review, Law360

Payroll Protection Program: Private Clubs and HOA’s Should Read the Fine Print, Club Board Professionals

New Guidance Issued by SBA/IRS Changes the Landscape on PPP Eligibility Requirements, AALRR

Social Clubs: Qualified Disaster Payments Under IRC Section 139, COMD

Tax Relief – Federal and State Governments Extend a Helping Hand (AALRR)

Restaurants and Bars: Current and Temporary Restrictions 

Schools: Coronavirus and School Closures

State Level

Wisconsin Guidance for Golf Courses (See page 6, Section C)

Denver, Colorado Guidance for Golf

A Guide to State Coronavirus Lockdowns (WSJ)

National Governor’s Association regarding COVID-19 includes State Action Tracking Chart and State/Territorial Resource Page.

National Conference of State Legislatures State Action on Coronavirus

Restaurant Industry: California, Illinois and New York.

State bills related to the COVID-19

Series of Maps shows how states are responding to COVID-19

Frequently Asked Questions

Questions and answers are for informational purposes and not for the purposes of providing legal advice. Viewers should not rely upon the information shared as legal advice.

Low-interest SBA loans called Emergency Injury Disaster Loans (EIDL) that offer up to $2 million in assistance are available for private clubs. These loans are not forgiveable.

Listen to NCA explanation of the EIDL here.

Clubs can also apply an EIDL advance of up to $10,000 that is forgivable.

These loans are different from the SBA’s Paycheck Protection Program (PPP) loans. NCA is working with Congress to have clubs nationwide included for SBA PPP loans.

See the 3 benefits clubs received in the $2.2 trillion CARES Act here. Read an in-depth walk-through of the benefits for nonprofits here.

Section 2301 of the CARES Act allows private clubs to take a credit against their payroll tax for 50% of employee wages if they were partially or fully shut down due to COVID-19.

While 501(c)(7) organizations were not included in the SBA Paycheck Protection Program in the CARES Act, low-interest SBA loans (EIDL) are available for private clubs.

Last, clubs may delay payments of the employer’s portion of 2020 Social Security taxes, instead paying 50% by the end of 2021 and the remaining 50% by the end of 2022.

501(c)(7) organizations are eligible to receive Economic Injury Disaster Loans (EIDL) from the SBA. These loans are not forgivable and offer up to $2 million in assistance. EIDLs may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 2.75% for nonprofits. The EIDL also has a $10,000 grant that is paid out within 3 days of the application regardless of whether the loan is offered.

Paycheck Protection Program (PPP) loans are forgivable if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Currently, 501(c)(7) organizations are not eligible for PPP loans.

NCA is working diligently to have clubs included in this program. If clubs are included in the Paycheck Protection Program, clubs can convert their EIDLs into PPP loans.

Listen to an explanation of the Tax Credit here.

Relief legislation provides payroll tax credits to employers to cover wages paid to employees while they are taking time off under the bill’s sick leave and family leave programs. The credit is refundable if it exceeds the amount the employer owed in payroll taxes and would be in effect for wages through the end of 2020.

The bill also contains additional unemployment benefits.

Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200.

For more information, see “How to Claim the Credits” on the IRS website.

The total credit that can be taken per employee (not per quarter, but per employee) is $5,000.  It is 50% of the qualified wages up to $10,000, so a maximum credit of $5,000 per employee. (AALRR)

Qualifying wages are based on the average number of a business’s employees in 2019.

Employers with less than 100 employees: If the employer had 100 or fewer employees on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not. If the employees worked full time and were paid for full time work, the employer still receives the credit.

Employers with more than 100 employees: If the employer had more than 100 employees on average in 2019, then the credit is allowed only for wages paid to employees who did not work during the calendar quarter.

Qualified sick leave wages are wages that the FFCRA requires an employer to pay to an employee who is unable to work or telework because of either the employee’s personal health status (that is, the employee is under COVID-19 quarantine or self-quarantine or has COVID-19 symptoms and is seeking a medical diagnosis) or the employee’s need to care for others (that is, the employee is caring for someone with COVID-19 or for a child whose school or place of care is closed or child care provider is unavailable).

For more information, see “What is included in “qualified sick leave wages”?” – IRS

Qualified family leave wages are wages that the FFCRA requires an employer to pay to an employee who is unable to work or telework because the employee is caring for a child whose school or place of care is closed or child care provider is unavailable due to COVID-19-related reasons.

For more information, see “What is included in “qualified family leave wages”?” – IRS

Qualified health plan expenses are amounts paid or incurred by an Eligible Employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code) that are allocable to the employee’s qualified leave wages.

For more information, see “Determining the Amount of Allocable Qualified Health Plan Expenses.” – IRS

After the CARES Act we expect there will be additional bills. The situation is very volatile and fluid right now, but NCA is trying to stay on top of everything. NCA sent letters to Congress urging the inclusion of associations and nonprofit entities in any legislation ahead.

NCA has drafted language for clubs to use to advocate for their representative for the inclusion of 501(c)7 organizations in future relief bills. You can find your Congressperson here.

Coronavirus testing is made cost-free for the uninsured and insurance companies are required to provide the test and related services such as office visits with no co-payment or prior authorization.

Coronavirus Emergency Leave is provided in the bill for employees of businesses with fewer than 500 workers.

Employers would have to provide as many as 12 weeks of job-protected Family and Medical Leave for employees who have to:

  • Comply with a requirement or recommendation to quarantine because of exposure to or symptoms of the virus
  • Provide care to a family member who’s complying with such a requirement or recommendation
  • Provide care for a child younger than 18 who school or day care has closed due to the virus

The first 14 days of the leave could be unpaid, though a worker could choose to use accrued vacation days, personal leave or other paid time off.

Following the 14 day period, workers would receive a benefit from their employers that would be at least two-thirds of their normal pay rate

FMLA is also amended so employees could use unpaid leave if they are diagnosed with the virus, caring for a family member or child due to closures.

  • Department of Labor is authorized to issue regulations that would exempt small businesses with fewer than 50 employees and exclude certain health care providers and emergency responders from paid leave benefits

Emergency sick leave for employees of businesses with fewer than 500 employees would be a total of 80 hours for full-time employees and the equivalent of the normal number of hours a part-time employee would work over a two-week period.

– Sick leave would be made available for those who:

  • Self-quarantine
  • Obtain a medical diagnosis or care for coronavirus
  • Provide care for a family member who has been diagnosed or is in quarantine or for a child who school or day care has closed due to coronavirus.

Employers with similar existing paid leave policies would be required to provide workers with the emergency paid sick time and cannot require a worker to use any other available paid leave before using the sick time

  • Employers would be prohibited from requiring a worker to find a replacement to cover their hours during time off and;
  • Discharging or discriminating against workers for requesting paid sick leave or filing a complaint against the employer

This is the provision that had a significant error that requires the House to pass the legislation again. It has to do with the pay caps that are set at $511 per day to care for themselves or $200 a day to care for a family member or child.

An employer could be subject to civil penalties for a violation of paid sick leave requirements.

The credit is against the employer portion of the Social Security liability, but the IRS has issued guidance that employers can fund the credit by deducting it from the total amount of federal employment taxes that are to be deposited for the quarter. (AALRR)

If you have replied in full and were sent a confirmation that it has been received, then you do not need to reapply. EIDLs are processed on a  first-come-first-serve basis.

If you have not received any confirmation, you may need to reapply to access the EIDL.

Listen to NCA’s full explanation here.