Client Alert
June 4, 2020

PPP Flexibility Act Passes &
Outdoor Dining Opening in NY 
Yesterday, two important announcements were made for employers across all industries, but particularity for restaurant employers in New York.

Paycheck Protection Program Flexibility Act

The Senate passed the Paycheck Protection Program (PPP) Flexibility Act on June 3, 2020 with no changes to the House’s version of the bill. It now awaits the President’s signature, which is expected to happen in the next few days.

As we alerted you earlier this week, this legislation makes many improvements to the PPP program, which will apply retroactively, including:

  • Maintaining forgiveness potential while allowing 40% of the loan to be used on non-payroll expenses;
  • Expanding the forgiveness period from 8 weeks to 24 weeks while maintaining the option of using the 8 week time frame;
  • Moving the rehire and restoration of wages safe-harbor date to 12/31/2020;
  • Making the loan repayable over 5 years, instead of 2 (only retroactive if the lender agrees);
  • Making a reduction in FTE irrelevant to forgiveness if, at December 31, the borrower is able to document an inability to return to the same level of business activity as pre-crisis due to compliance with safety and health requirements.

Outdoor Dining For NY Restaurants In Phase 2

On June 3, 2020, Governor Cuomo announced that outdoor dining will be permitted in Phase 2 of the New York Forward reopening plan. As New York City is expected to enter Phase 1 on June 8, this means New York City restaurants could begin outdoor service as early as June 22, 2020. Indoor dining is not permitted until the third phase of New York’s reopening plan.

In combination with this announcement, the State Department of Health published an Interim Guidance  for Outdoor and Take-out/Delivery Food Services During the COVID-19 Public Health Emergency. All restaurants who are currently open with limited take-out/delivery services, as well as restaurants who seek to reopen for outdoor dining must read the Guidance and affirm such to the State.

The Guidance provides minimum requirements restaurants offering delivery, take-out and/or outdoor dining must meet. It is extremely detailed and covers topics such as physical distancing, screening and testing, protective equipment, and tracing and tracking. Below, we summarize some recommendations and requirements restaurants should abide by to offer outdoor dining:

  • Maintain at least 6 feet of separation between outdoor tables, or enact physical barriers where distancing is not feasible;
  • Limit the party size at tables to no more than 10 persons;
  • Require customers wear face masks at all times, except when seated;
  • Require employees wear face masks at all times, and undergo health screenings before their shift;
  • Promote social distancing between customers while waiting for a table and using the restroom;
  • Provide hand hygiene stations for customers;
  • Encourage reservations for seating and ordering ahead of time;
  • When possible, offer single-use menus, display menus on whiteboard/chalk board/projector or encourage customers to view menus on their smart phones;
  • Use pre-packaged silverware or pre-rolled silverware (which was rolled while wearing masks and gloves);
  • When possible, provide condiments directly to customers in single-use disposable containers;
  • Create a safety plan in line with the New York State Business Reopening Safety Plan template, and post the completed plan on the restaurant’s premises;
  • Maintain logs of cleaning and sanitization of the restaurant, and of every person who may have had close contact with other individuals at the work site to assist with contract tracing; and
  • Affirm that the restaurant has reviewed and understands the Guidance.

This is just a summary of some requirements. It is imperative that all restaurants currently open, or seeking to reopen, read the entire Guidance and/or seek the advice of counsel to ensure compliance.

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EGS can assist you in preparing to reopen your business by providing you with advice and materials to help ensure compliance with the many local, state and federal guidelines implemented to stop the spread of COVID-19. If you have questions or would like additional information on how to obtain these materials,   please contact Ilan Weiser at iweiser@egsllp.com or the EGS attorney with whom you work.    
This memorandum is published solely for the informational interest of friends and clients of Ellenoff Grossman & Schole LLP and should in no way be relied upon or construed as legal advice.