COVID-19 Resources for Metalcasters
All supply chains, including the metalcasting supply chain, have been seriously damaged in recent weeks. These are challenging times, even for an industry as resilient as metalcasting.
As the leading organization for the metalcasting industry in North America, the American Foundry Society (AFS) has continued its advocacy for metalcasting in several important ways through the lockdown. AFS continues to make resources available to its Corporate Members, as well as to others in the industry, as you can see from this edition of Modern Casting and by searching our website, www.afsinc.org.
Here you will find economic information about options for small businesses, how AFS has been communicating with federal elected officials, information specific to certain states, legal HR advice for managing organizations during COVID-19, and more.
This material may also be found at www.afsinc.org. Please don’t hesitate to contact Stephanie Salmon at firstname.lastname@example.org, or other AFS staff members for more information.
AFS Connects You With Economic Information
Small Foundries in All U.S. States Eligible to Apply for Low-Interest Loans Due to Covid-19
The Small Business Administration has created a comprehensive coronavirus page with all of its resources in one place at www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.
The Small Business Administration (SBA) is offering disaster assistance low-interest loans up to $2 million for foundries and other small businesses affected by the coronavirus. Businesses must have sustained “substantial economic injury” from the spread of the virus.
These loans can be used to pay off outstanding debts, payroll, and any other bills they are unable to pay. However, small businesses that have access to credit are not eligible. Small businesses with no available credit qualify for an interest rate of 3.75%, and nonprofits will have an interest rate of 2.75%.
The SBA’s Office of Disaster Assistance will coordinate with state governors that submit relief requests (https://disasterloan.sba.gov/ela/). Once a state or territory is approved, these affected businesses will receive more information. More up to date information about state programs has been posted at www.afsinc.org.
Changes to Tax Filing Deadlines Due to COVID-19
The federal government and several states have extended their deadlines to file and pay 2019 tax returns because of the coronavirus (COVID-19) pandemic.
The IRS pushed out the filing date for 2019 tax returns from April 15 to July 15. Individual states have announced changes as well. AFS has compiled some of these new deadlines on its website.
States Must Designate Metalcasting as Critical Manufacturing Sector
Governors and local officials across the nation have signed various “stay-at-home” or “shelter-in-place” orders in an increased effort to slow the spread of COVID-19. These orders vary in their scope in the restricted activities and affected industries but they typically address: continuing operations of critical businesses; restrictions on non-essential businesses; the activities individuals may continue to perform; and other limitations on gatherings.
AFS is proactively reaching out and sending letters to states and local governments urging them to adopt and follow the Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA) Guidance on Critical Infrastructure Sectors and Workforce. For information about states initiating work restrictions on businesses visit www.nam.org/covid-state-orders.
CISA identifies 16 sectors considered to be “essential,” including critical manufacturing, defense, energy, transportation, and water systems. The DHS CISA guidance designated manufacturers to be an “essential industry,” so manufacturers, including metalcasters and their respective supply chains, can maintain their normal work schedules as a necessary response to the COVID-19 crisis.
The guidance is designed to help state and local officials as they work to protect their communities and ensures continuity of functions critical to public health and safety. Several governors contacted have referenced this DHS CISA guidance in their state’s recent stay-in-place orders, including California, Connecticut, Illinois, Indiana, Michigan, Mississippi, Ohio, Oklahoma, Vermont, and Wisconsin.
In addition, AFS is working closely with foundry state organizations, AFS chapters, the National Association of Manufacturers, the U.S. Chamber of Commerce, and American Chemistry Council urging states that have not yet issued shelter-in-place directives to directly adopt the definition of “critical infrastructure” as defined by the Department of Homeland Security (DHS) as a floor, and commit to keep these critical manufacturing facilities open across the nation. Reliance upon common standards as outlined in the DHS CISA guidance is critical at this time.
If you need information or have any questions on whether metalcasting and manufacturing has been deemed essential in your county or state, please contact Stephanie Salmon, AFS Washington Office, email@example.com or 571-242-0186.
DHS CISA identifies 16 critical infrastructure sectors “whose assets, systems, and networks, whether physical or virtual, are considered so vital to the United States that their incapacitation or destruction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof.” (Presidential Policy Directive 21). The following 16 critical infrastructure sectors include: Chemical Sector; Commercial Facilities Sector; Communications Sector; Critical Manufacturing Sector; Dams Sector; Defense Industrial Base Sector; Emergency Services Sector; Energy Sector; Financial Services Sector; Food and Agriculture Sector; Government Facilities Sector; Healthcare and Public Health Sector; Information Technology Sector; Nuclear Reactors, Materials, and Waste Sector; Transportation Systems Sector; and the Water and Wastewater Systems Sector.
AFS Advocating With Elected Officials
AFS Pushes for Key Provisions in Stimulus Package to Benefit Metalcasters
AFS has worked closely with the National Association of Manufacturers (NAM) and the U.S. Chamber of Commerce to ensure key provisions are included for the benefit of metalcasters in the stimulus package which the House and Senate were on the verge of passing as Modern Casting was going to press with this edition.
AFS has called on Congress and the Administration as legislative negotiations proceeded, to take critical steps to support American manufacturers, and in particular, the metalcasting industry, during the coronavirus pandemic.
Key Provisions AFS was supporting in the bill:
- Language to cancel payment of all payroll taxes typically paid by employers for the rest of the year.
- Language expanding and streamlining loan programs for small businesses with fewer than 500 employees experiencing revenue loss as a result of the coronavirus.
- Language enabling the creation of credit facilities to provide loans and loan guarantees to employers with more than 500 employees experiencing significant revenue loss as a result of the coronavirus.
These three ideas, combined with the following actions, would ensure that U.S. foundries, their suppliers and customers of all sizes have increased liquidity and access to necessary financing to help them weather the temporary loss in revenue caused by the coronavirus.
1. Payroll Taxes: Payroll taxes typically paid by employers for the remainder of the year starting in March 2020. Each month, employers remit more than $100 billion to the federal government in the form of Social Security, Medicare, and unemployment taxes. Collectively, these taxes add slightly more than 15% to the cost of employing the average employee.
Temporarily cancelling the collection of these taxes will reduce employers’ costs of continuing to pay employees regardless of whether they are working or on sick leave and will increase liquidity for employers to help them respond to losses in revenue. Further, for employers with fewer than 500 employees, cancellation of the taxes combined with the refundability for paid sick and family leave included as part of the Families First Coronavirus Response Act will provide meaningful additional financial support.
2. Loans for Small Business: Loan programs should be streamlined for small businesses with fewer than 500 employees experiencing revenue loss as a result of the coronavirus. The Small Business Administration (SBA) disaster loan program for those impacted by the coronavirus should be immediately made available nationwide, eliminating the state-by-state and county-by-county certification process. AFS also recommended giving SBA the authority to streamline its disaster loans for amounts below $350,000 to provide emergency capital more quickly to small businesses. This should include removing the requirement that small businesses demonstrate they cannot access credit elsewhere before receiving the SBA-disaster loan.
3. Creation of Credit Facilities to Provide Loans & Loan Guarantees for Large Businesses: AFS supports enabling the creation of credit facilities to provide loans and loan guarantees to employers with more than 500 employees experiencing significant revenue loss as a result of the coronavirus. Specifically, legislation should expand the use of the Federal Reserve Discount Window through the liberalization of the restrictions of Section 13-3 of the Federal Reserve Act.
Then the U.S. Treasury, Federal Reserve, Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) should work in combination with banks to establish a system of credit facilities to provide loans and loan guarantees that can be accessed by businesses with more than 500 employees to address disruptions created by the coronavirus emergency. Banking regulators should temporarily suspend and review requirements such as the liquidity coverage ratio and provide flexibility in their supervisory expectations for banks extending credit to businesses. These actions should allow for an orderly ration of a program of loans and loan guarantees.
Other recommendations include:
The Administration should encourage regulators to provide financial institutions with flexibility regarding the credit conditions of small and medium-sized businesses facing short-term challenges, including offering extended grace periods and short-term loans.
The Administration and Congress should take steps to ensure small businesses have working capital during the pandemic. Measures for small-business bridge financing should include:
- Waiving the requirement that small businesses prove they cannot access credit elsewhere before receiving SBA-backed financing up to $35,000 for a limited time frame and within responsible credit-score criteria.
- Automatic referral by SBA to their lender-match program for other financing options if a small business does not qualify for an SBA loan.
- The U.S. Citizenship and Immigration Services (USCIS) should allow employers to use scanned, photocopied, and electronic signatures as acceptable alternatives to original signatures on all USCIS forms.
- The Administration should maintain the current waiver to the hours-of-service regulations for commercial motor vehicle drivers delivering goods critical for coronavirus response efforts for the duration of the emergency.
AFS Urged Administration to Classify Metalcasting as Essential Industry
On Friday, March 20, AFS sent a letter to Vice President Mike Pence in his role leading the COVID-19 task force, asking the administration to identify foundries, their supply chains, and workers as essential when drafting and enforcing shelter-in-place rules during the pandemic.
“Countless sectors rely upon the existence of castings, including those vital to critical infrastructure such as national defense, medical, transportation, electric power and energy generation systems, as well as our drinking water and wastewater systems,” wrote Doug Kurkul, AFS CEO. “Foundries are the mainstay of national defense. … Critical castings are found in military aircraft, tanks, ships, submarines, communication systems,” and other vital defense weaponry, the letter said.
“As the Trump administration continues to take critical actions aimed at limiting the spread of COVID-19, we ask that foundries (ferrous and nonferrous), their suppliers, and their workers in the U.S. be recognized as “essential” to the nation’s COVID-19 pandemic response. We also request that you encourage state, city, and local governments to make the same designation,” the letter said.
The complete letter is online at www.afsinc.org/Essential_Industry_Letter.
HR Guidance to Members
Webinar Covers Legal Concerns
The human resources function is always a critical concern for anyone in the metalcasting supply chain, but that concern is heightened during crises like the present one.
AFS is providing resources to support members who have questions or need guidance.
Fisher Phillips, a law firm focusing on workplace law, twice presented an AFS members-only webinar, which can be found at www.afsinc.org/members-only-webinars. The webinar offered guidance on a variety of vital HR issues facing small businesses right now.
The following is a partial list the important advice offered in the webinar:
- “Accept that every day brings new facts and guidance. We must try to plan, but next week will be VERY different.”
- The good news is that everyone should stay calm. Most of us will not get very sick.
- The bad news is “cases will rapidly increase in all areas and disruptions in travel, gatherings, business, and education will occur —sooner than expected.”
- Messaging needs to be transparent and balanced—“not too dark versus being Pollyanna.”
- “It’s time for the CEO’s role—making the tough risk weighing decisions based on sound advice of HR, Legal, Operations, and Safety.”
- There are specific OSHA and ADA requirements for handling employees who refuse to work because of the public health and safety risk; these requirements are sensitive to whether one employee voices concern, or whether more than one employee does.
- How do employers respond when an employee, or a customer, or a public member onsite has been exposed or tested positive, or is actually ill?
- Is COVID-19 a Recordable and Reportable Workplace Illness?
- What requirements can employers impose for using masks? (For more information on masks please see Tom Slavin’s article on respirators on page 40).
Those who are not AFS members can purchase the webinar for $250 through the AFS store at www.afsinc.org. An individual AFS membership costs half that: $125. Access to all archived webinars comes with an individual membership.
New Paid Family and Sick Leave Obligations Take Effect on April 1
Metalcasters with fewer than 500 employees will be required to provide paid sick leave and paid family and medical leave to certain employees for coronavirus (COVID-19) related reasons, but this paid leave would be 100% refundable to employers providing under the Families First Coronavirus Response Act signed into law by President Donald Trump on March 18.
Under the law which took effect April 1, metalcasters will have to provide two different forms of leave:
Employers must provide up to two weeks (80 hours) of paid sick leave at 100% of an employee’s pay if an employee is unable to work because of quarantine, they are experiencing symptoms of COVID-19 or seeking a diagnosis. Employers must provide up to two weeks (80 hours) of paid sick leave at 2/3 of an employee’s pay if an employee is unable to work because they need to care for an individual in quarantine, their child’s school is closed or they need to comply with directives from government health officials.
Employers must provide up to ten weeks of expanded paid family and medical leave at 2/3 of an employee’s pay if an employee is unable to work because a child’s school is closed.
In addition, employers will be able to receive tax credits for the wages paid to employees on leave:
For the first form of leave, employers will be eligible to receive a refundable sick leave tax credit up to $511 per day and $5,110 in the aggregate, for a total of 10 days when an employee is sick or needs to quarantine. Employers will be eligible to receive a refundable sick leave tax credit up to $200 per day and $2,000 in the aggregate, for a total of 10 days when an employee misses work to care for an individual that is quarantined or their child’s school is closed.
For the second form of leave, employers will be eligible to receive a refundable childcare tax credit up to $200 per day and $10,000 in the aggregate.
Employers can also receive an additional tax credit for the costs of maintaining health insurance for employees on leave. The new law expires on December 31.
IRS Guidance on Reimbursement of Paid Leave Provided by Employers
Under the Families First Coronavirus Response Act, eligible employers are reimbursed immediately through payroll tax credits for paid leave benefits mandated by the act that are provided to employees. In a joint statement issued on March 20, the U.S. Department of Labor, the Internal Revenue Service (IRS) and the U.S. Department of the Treasury announced that employers may now begin to take advantage of the tax credits, which are “designed to immediately and fully reimburse [employers], dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.”
A key question for employers is how to obtain the tax credits for reimbursement. In the joint statement, the DOL previewed the process of obtaining the tax credits. Eligible employers that pay for qualifying leave under the act will be able to refund the cost of the leave paid to employees by withholding the commensurate amount of money from the payroll taxes paid rather than deposit them with the IRS as normal. The payroll taxes available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees. If the amount of payroll taxes is not enough to cover the cost of the leave paid, employers will be able to file a request for an accelerated payment for the disparity from the IRS. The IRS has indicated that the processing of these requests will be done in two weeks or less.
The DOL also will issue emergency guidance regarding the exemption for small businesses (less than 50 employees) from the leave requirements related to school closings or childcare unavailability where the act’s requirements would jeopardize the viability of the business as an ongoing concern. The DOL indicated that the exemption would involve “simple and clear criteria.”
The pending SBA Paycheck Protection Program loans in the new Coronavirus Aid, Relief, and Economic Security (CARES) Act which passed the Senate on March 26 can be used to cover paid sick leave. The legislation also includes payroll tax credits (a new employee retention credit). The bottom line is that metalcasters will need to read the details of each of these programs and loan benefits, and determine what works best for their business, and how these all work together.
DOL Publishes Initial Guidance on How to Implement Emergency Paid Sick and Paid FMLA Leave
On March 24, the Department of Labor issued an initial question and answer guidance aimed at helping employers administer emergency paid sick leave and paid FMLA leave as part of the Families First Coronavirus Response Act. Among the key questions answered in the Q&A, the agency addresses which (and when) employees should be included in the calculation to determine employer coverage, and outlined how to calculate the employee’s regular rate of pay when providing emergency paid sick leave and paid FMLA.
The department also made it clear it would not bring an enforcement action against employers for any violations within the first 30 days the law is in effect so long as the employer is acting in good faith to comply. During this transition time, the DOL will focus on compliance assistance.
In addition, the department has made available a required workplace poster. Employers should post the required workplace poster in their offices as soon as possible and, to the extent they have workers working remotely, should also send them the poster via email and/or post it on an internal or external website. AFS will continue to post key documents to its COVID-19 resource page related to the emergency paid sick and paid FMLA leave requirements.
Click here to see the article in the April 2020 digital edition.