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What You Need to Know: DC COVID-19 Response Supplemental Temporary Amendment Act

On April 7, 2020, the District of Columbia Council passed the DC COVID-19 Response Supplemental Temporary Amendment Act of 2020.

The Supplemental Act amends the previously issued COVID-19 Response Emergency Amendment Act of 2020 ("What You Need to Know About the New DC Emergency Coronavirus Relief Act"), and extends additional relief to DC residents and businesses impacted by the public health crisis. As emergency legislation, approved during the DC Council’s first ever Zoom meeting, the Supplemental Act will immediately become law as soon as it is signed by the Mayor, and will remain in effect for 90 days.

While the Supplemental Act provides a wide array of relief, businesses and employers need to understand the impact of the protections and benefits concerning paid leave, unemployment, public utilities, debt collections, small business assistance, and rent and mortgage deferrals.

Employee Protections

From March 13 through April 6, the District saw more than 50,000 unemployment claims and disbursed close to $7 million in unemployment payments. These numbers are likely to increase as the Supplemental Act amended DC’s existing Unemployment Insurance (UI) programs to conform with the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act ("What Borrowers and Businesses need to know about the CARES Act").

Under the Supplemental Act, employees who have been unemployed or partially unemployed as a result of the circumstances giving rise to the current pandemic are now eligible for UI regardless of whether their employer has provided a date for their return to work or if they have a reasonable expectation of continued employment with their employer. Additionally, independent contractors and self-employed or gig workers, who previously would not have qualified, are now eligible to apply for UI compensation. The Supplemental Act did not, however, expand UI to undocumented residents.

The Supplemental Act also requires employers in DC with 50-499 employees to provide paid emergency leave to employees who commenced work at least 15 days prior to the request for any of the reasons employees may take leave under the federal Families First Coronavirus Relief Act (FFCRA) ("FFCRA Requires Employers to Provide Expanded Paid Leave"). Under the Supplemental Act, like the FFCRA, full-time employees are eligible for up to 80 hours of paid emergency leave, and part-time employees may be entitled to paid emergency leave, at the regular rate of pay, equal to the usual number of hours worked in a two-week period.

The Supplemental Act also expands the eligibility for paid emergency leave by using the broader definition of “family member” from DC’s Accrued Sick and Safe Leave Act ("What Employers Need To Know About Recent Amendments to the DC Sick and Safe Leave Act"). However, the Supplemental Act did not provide any offsets to employers to cover the cost of paid emergency leave like the FFCRA did.

Consumer Protections

Under the Supplemental Act, as a result of the public health crisis, the fines for deceptive, unfair, or unlawful trade practices will be doubled. Additionally, the Supplemental Act prohibits debt collection activity, including initiating, filing, or threatening new collection lawsuits or visiting consumers’ homes or places of employment, during the public health crisis and for a period of 60 days after the declared emergency has concluded.

The Supplemental Act also expands the utility shutoff moratorium to prohibit cable, internet, and broadband providers from disconnecting, suspending, or otherwise degrading services during the public health emergency.

The DC Office of the Attorney General has announced that it will begin enforcing the Supplemental Act’s protections immediately.

Small Business Assistance

The Supplemental Act requires that at least 50% of the dollar value of any contract for a government-assisted project in excess of $250,000, not related to the District’s response to the COVID-19 pandemic, be subcontracted to small business enterprises. Additionally, government agencies may make advance payments to certified contractors for purchases related to the ongoing public health emergency.

Additionally, the Supplemental Act ensures that small businesses will not be taxed on Small Business Administration loans awarded, and subsequently forgiven, under the CARES Act.

Tenant and Homeowner Protections

The Supplemental Act did not suspend rent or mortgage payments.

However, the Supplemental Act institutes a rent freeze on all residential properties during the public health crisis and for 30 days thereafter. Find more on the restrictions residential landlords face here: "DC Council Imposes Additional Restrictions on Residential Landlords during the COVID-19 Public Health Emergency."

Similarly, the Supplemental Act also requires that mortgage servicers holding rights to either residential or commercial mortgage loans, during the public health emergency and for 60 days thereafter, must offer a 90-day deferment period of mortgage payments for borrowers and waive any late or processing fees during the pandemic. Any property owner who gets a payment deferral is required to pass on the savings to any tenants by reducing the rent proportionally during the deferral period, but may require repayment at the earlier of the end of the lease term or within 18 months.

Mortgage companies are further prohibited under the Supplemental Act from reporting any delinquency or derogatory information to a credit bureau that occurred as a result of the deferral. The Supplemental Act is limited to mortgage companies regulated by DC, which means that payment deferrals may not apply to property owners who borrowed from national banks (although, the CARES Act’s restrictions on federally backed mortgages may still apply).

Additional Protections

Among other protections, the Supplemental Act:

  • Authorizes the Mayor to issue $25 million in grants to DC non-profit and for-profit hospitals for supplies, equipment, and personnel costs to address the impacts of COVID-19;
  • Allows DC residents to create electronic wills with the electronic presence of a witness during the public health emergency;
  • Allows youth who are aging out of foster care to elect to remain in foster care during the public health emergency;
  • Waives the 120 in-seat instructional hour requirement and 100 community service hour requirement for all prospective DC high school graduates; and
  • Allows good time credits to eligible defendants and compassionate release for elderly and infirm defendants.

The Supplemental Act also authorizes the DC Board of Elections to send every voter an absentee ballot request form, and authorizes the District to borrow $500 million to address possible cash flow issues as a result of the economic slowdown.

What’s Next?

The DC Council expects that the Supplemental Act will not be the end of its response to the pandemic, and plans to continue its work of providing protections and support to residents and businesses in the coming months.

As a result of the new and continuously developing legislation in response to the public health emergency, employers should be sure to consult with an attorney to make sure they are aware of what benefits are available and to ensure compliance with all relevant employee protection laws. Lerch Early will continue to monitor the impact of COVID-19 on our clients and communities and provide updates on significant developments as they emerge at our Coronavirus Resource Center.

Josh Schmand is a litigation and employment attorney who works on complex business, corporate, and commercial disputes, as well as employment matters, advising clients on the risks and benefits of litigation, preparing for trial when needed, and serving as a determined advocate. For more information, contact Josh at jcschmand@lerchearly.com or (301) 347-1273.

This content is for your information only and is not intended to constitute legal advice. Please consult your attorney before acting on any information contained here.

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