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Business Law FAQs

COVID-19 Business Law FAQs

We understand businesses are facing extreme circumstances due to COVID-19. The Business Law attorneys at Shaheen & Gordon are here to provide advice. Here are some frequently asked questions and answers for your immediate convenience.

Federal, state and local governments are rapidly responding with emergency orders, and new laws and regulations. Given the fluidity of the situation and the specific nature of business & employment law, we recommend that employers reach out to a member of our team for specific counsel.

On 4/7/20, our attorneys participated in a webinar providing guidance for businesses applying for the Payroll Protection Program under the CARES Act. You may watch that here.

To speak to an attorney, please call 800-451-1002.

The CARES Act Has Become Law: What Businesses Need to Know About the Act’s Small Business Loans​

Updated 3.29.20

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted on March 27, 2020, includes extraordinary public health spending, immediate cash relief for some individuals, targeted relief for some industries, and – most importantly for small businesses - a Paycheck Protection Program.

The Paycheck Protection Plan, among other things, expands the scope of the Small Business Administration’s (“SBA”) available 7(a) loans during a covered period beginning on February 15, 2020 and ending on June 30, 2020. Key elements of the Paycheck Protection Program are described below.

Paycheck Protection Program Overview

For loans under the Paycheck Protection Program during the covered period (“covered loans”), the SBA will guaranty 100 percent of the amount advanced by participating lenders to eligible borrowers. The interest rate on a covered loan will not exceed 4 percent. Lenders will not be permitted to require personal guarantees or collateral. The SBA will have no recourse against any individual shareholder, member, or partner of a borrower for nonpayment of a covered loan, unless the loan proceeds are not used for an allowed use.

Eligible borrowers. Eligible borrowers include any business concern, nonprofit organization, and certain other borrower types that employ 500 or fewer employees. Eligible borrowers will be required to have been in operation on February 15, 2020 and have had employees for whom the borrower paid salaries and payroll taxes, or paid independent contractors as reported on Form 1099-MISC,

Maximum loan amount. The maximum loan amount available to an eligible borrower is the lesser of $10 million or 2.5 times the borrower’s average total monthly payroll costs incurred during the one-year period before the date on which the loan is made, plus the outstanding amount of a loan made under the SBA’s Disaster Loan Program between January 31, 2020 and the date on which such loan is refinanced under this new program. Adjustments to this formula are available for borrowers that are seasonal employers, as well as for borrowers that were not in business during the period from February 15, 2019 through June 30, 2019.

Payroll costs. Payroll costs include: (i) salary, wage, commission, or similar compensation; (ii) payment of cash tip or equivalent, (iii) payment for vacation, parental, family, medical, or sick leave; (iv) allowance for dismissal or separation; (v) payment required for the provisions of group health care benefits, including insurance premiums; (vi) payment of any retirement benefit; (vii) payment of State or local tax assessed on the compensation of employees; and (viii) payments to independent contractors that are wages, commissions, or income. The following are excluded from payroll costs: (A) compensation of an individual employee in excess of an annual salary of $100,000, as prorated from February 15, 2020 through June 30, 2020; (B) taxes imposed under Chapters 21, 22, and 24 of the Internal Revenue Code; and (C) any compensation of an employee whose principal place of residence is outside of the United States.

Allowed Uses. Allowed uses include: (i) payroll costs; (ii) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; (iii) employee salaries, commissions, or similar compensations; (iv) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation); (v) rent (including rent under a lease agreement); (vi) utilities; and (vii) interest on any other debt obligations that were incurred before the covered period.

Deferment relief. During the covered period, the SBA will require lenders to provide complete payment deferment relief for impacted borrowers with covered loans for a period of at least six months and no more than one year, including payment of principal, interest, and fees. An impacted borrower is a borrower in operation on February 15, 2020 that has a covered loan application in process or pending on or after the enactment of the Paycheck Protection Program. The SBA is directed to provide guidance on the deferment process to lenders within 30 days.

Loan Forgiveness under the Paycheck Protection Program

Loan forgiveness is probably the most important component of the program. A borrower will be eligible for forgiveness of a loan for the following costs incurred during the eight-week period beginning on the origination date of a covered loan: (i) payroll costs; (ii) interest payments on any covered mortgage obligation; (iii) payments on any covered rent obligation; and (iv) covered utility payments. Again, as mentioned above, payroll costs exclude, among other things, compensation of an individual employee in excess of the prorated portion of an annual salary of in excess of $100,000 earned within the loan forgiveness covered period and compensation of an employee whose principal place of residence is outside of the United States.

The amount of loan forgiveness may be reduced (but not increased) if the borrower reduces the number of covered employees or reduces the pay of any covered employee by more than 25% as of the last calendar year. A reduction in number of covered employees will result in a proportional reduction in forgiveness amount determined by (i) the average number of full-time equivalent covered employees during the loan forgiveness covered period divided by (ii) the average number of full-time equivalent covered employees during either, at the election of the borrower, (A) the period from February 15, 2019 through June 30, 2019 or (B) the period from January 1, 2020 through February 29, 2020. A reduction in wages for any covered employee in excess of 25% will result in a dollar for dollar reduction in the amount of the loan forgiven.

"Covered Employee" refers only to any employee who did not receive, during any single pay period during 2019, wages or salary at an annualized rate exceeding $100,000.

Borrowers must apply for loan forgiveness by submitting required documentation and will receive a decision within 60 days. If a balance remains after loan forgiveness, the outstanding balance will have a maximum maturity date of 10 years after the application for loan forgiveness. The SBA is directed to provide guidance and regulations on the forgiveness process to lenders within 30 days.

The CARES Act appropriated $349 billion for commitments for 7(a) loan guarantees during the covered period. In addition, the CARES Act provides COVID-19-related relief in other areas of the SBA’s purview, including, among others, entrepreneurial development, the state trade expansion program, the women’s business center program, the minority business development agency, and subsidies for certain loan payments.

Contract enforceability: Are you protected during crisis?

Updated: 3.19.20

Force Majeure

Many contracts, including leases, contain force majeure clauses relating to unanticipated and uncontrollable events which may delay or excuse the parties’ obligations to perform.

While not always called force majeure, the clauses almost always refer to a certain set of defined events which excuse performance such as natural disasters, terrorism, “Acts of God”, labor issues (often strikes) and war, although this is not an exhaustive list. The criteria generally is that the event be both unforeseeable and not caused by either party.

Courts generally require the party claiming relief under these clauses to prove that the event qualifies and generally Courts will not go beyond the events listed in the contract. Additionally, the relief provided may be specific or may except out certain portions of the contract. For instance, a force majeure clause may excuse the duty to perform per a certain time frame but the clause may require that all payments be made, regardless of force majeure circumstances.

Businesses should review their contracts, including leases, and prepare to invoke or to defend a force majeure claim. Our current circumstances are unprecedented and it is not at all clear whether the COVID-19 virus or the actions of government in shutting down businesses will qualify for claims.

In short, businesses should be prepared for these claims, especially as the situation worsens and businesses can’t pay rent or as are forced to layoff employees and cannot perform contractual duties. Businesses should keep careful records during this time.

Impossibility/Frustration of Purpose

Even if your contract does not contain a force majeure clause there still may be relief in the form of the common law defenses of “Impossibility” or “Frustration of Purpose”.

These contract defenses will not appear in a contract itself and instead arise from case law. Courts will narrowly construe these defenses and they are very fact specific to each case. An example would be a business that leased a property for the specific purpose of the sale of marijuana followed by the legislature passing a law making such sales illegal. The purpose of the lease (contract) would be frustrated and it would be impossible to fulfill the contract.

There are many orders from Federal, State and Local officials that are significantly affecting business contracts and these orders are increasing and changing almost daily. Business owners should consult with their lawyers to examine the availability of these remedies and to understand their other rights and obligations under their contracts.

Business interruption insurance: Do I have a claim?

Updated: 3.19.20

Businesses almost always have “business interruption” as a component of their larger insurance packages, usually related to their property coverages.

Many businesses are hopeful that these policies will help as businesses are forced to shut down, either due to governmental direction or just due to lack of business due to the COVID-19 virus. Most often these clauses only provide coverage in the event of physical harm to property. For instance, if a business experienced a flood which in turn caused the business to close for a period of time, the business may have a covered claim.

These policies are often different. Some may require a complete shutdown while others may provide coverage in the event business losses without shutdown. It seems likely that insurers will take the position that losses arising from the COVID-19 are not related to property losses and thus are not covered events. Insurance policies are very detailed and complex and Courts will review them strictly and per the plain meaning of their language. In the event there is an ambiguity in an insurance contract, New Hampshire Courts will construe it against the insurer.

Businesses in New Hampshire should review their policies or have them reviewed by their insurance agents or attorneys to determine whether their particular policies afford coverage from the losses caused by this crisis.

Are evictions allowed at this time?

Updated: 3.23.20

New Hampshire

On March 17, 2020, New Hampshire Governor Christopher T. Sununu issued Emergency Order #4 entitled “Temporary prohibition of evictions and foreclosures.”

The emergency order suspends all eviction actions for both residential and commercial property in New Hampshire during the current state of emergency. The order prohibits the filing of an eviction action with the Circuit Court, and forwarding an issued writ of possession to the Sheriff's office for service. The order seems to also implicitly prohibit any landlord from issuing demands for rent and eviction notices as well. The order extends statutory fines and assessment of attorney’s fees if a residential landlord initiates eviction proceeding during the state of emergency. The penalties are set forth in RSA 540-A:4, and include a $1,000 fine plus the assessment of the tenant’s attorney's fees.

Eviction actions filed prior to March 17, 2020 and which were scheduled for a hearing will be postponed. The court will issue a new hearing notice once the state of emergency has ended.

The emergency order does not relieve any tenant from their obligation to pay rent when due.

On April 3rd, the Governor issued Emergency Order #24 “Modification and Clarification of Emergency Order #4.” The Order states that the temporary prohibition on evictions shall not apply to eviction proceedings for violations of a lease or violations of law which result in either (i) substantial damage to the premises by the tenant or by members of the tenant’s household, or (ii) a substantial adverse impact on the health or safety of the other persons residing on the premises. Eviction proceedings initiated against a tenant in cases of the tenant’s abandonment of the rental unit will also be allowed.

Emergency Order #24 also reiterated that tenants are not relieved of their obligation to pay rent or comply with any other provision of their lease agreement. Tenants are strongly encouraged to work with their landlords to pay all rent that then can afford and to utilize expanded unemployment benefits provided by the State and Federal Government for this purpose.

Both emergency orders may be found at:


On March 18, 2020, The Supreme Judicial Court of Maine issued an Order continuing all Forcible Entry and Detainer Action (evictions) through May 1, 2020. Evictions will not be scheduled or heard.

Are foreclosures allowed at this time?

Updated: 3.23.20

New Hampshire

On March 17, 2020, New Hampshire Governor Christopher T. Sununu issued Emergency order #4 entitled “Temporary prohibition of evictions and foreclosures.”

The emergency order suspends all foreclosure actions in New Hampshire during the current state of emergency. The order prohibits all judicial and non-judicial foreclosures and the initiating of any foreclosure. The order seems to apply to both residential and commercial mortgages.

Foreclosures begun prior to March 17, 2020 will be postponed and any schedule foreclosure auction must be rescheduled once the state of emergency has ended.

The emergency order does not relieve any homeowner from their obligation to pay their mortgage payment when due.

On April 3rd, the Governor issued Emergency Order #24 “Modification and Clarification of Emergency Order #4.” The Order states that Executive Order #4 shall not apply to recording of a foreclosure deed and affidavit with respect to a foreclosure that occurred on or before March 16, 2020. Such foreclosure deeds and affidavits of sale may be recorded in the applicable Registry of Deeds without violation of Emergency Order #4. Any eviction proceedings brought by the grantee of such foreclosure remain subject to Emergency Order #4 and #24.

Both emergency orders may be found at:


On March 18, 2020, The Supreme Judicial Court of Maine issued an Order continuing all Foreclosure actions through May 1, 2020. Foreclosures will not be scheduled or heard.

Do I still need to file/pay 2019 taxes?

Updated 3.30.20

On March 17, 2020, the IRS announced that it will allow individual taxpayers and small businesses who have not yet paid their 2019 taxes the ability to defer payments of 2019 taxes otherwise due on April 15, 2020. Individuals may defer up to $1 million of payments interest and penalty-free for 90 days. The $1 million dollar limit applies whether filing singly or married filing jointly. Corporations may defer up to $10 million of payments. Therefore, 2019 tax payments normally due April 15 may be deferred until July 15, 2020 without incurring interest or penalties. The IRS has also announced that 2020 estimated tax payments due on 4/15/2020 may be deferred. The IRS has extended the income tax return filing date until July 15, 2020 as well. The IRS Notice may be found here:

The State of New Hampshire Department of Revenue has extended the deadline for filing and payment of Business Profits Tax, Business Enterprise Tax, and Interest and Dividends Tax until June 15, 2020 for most taxpayers. More information may be found here:

The State of Maine has also extended the deadline for filing and payment of Maine state income taxes until July 15, 2020. More information may be found here:

Other states may be providing similar relief. The American Institute of Certified Public Accountants is maintaining a chart of state tax filing responses to the Coronavirus Pandemic. It can be found at:

Do employers have a duty to keep employees safe?

Updated: 3.19.20

The Occupational Safety & Health Administration (“OSHA”) imposes a general duty on employers to provide a workplace free of recognized hazards or likely to cause death or serious physical harm to employees. OSHA recently issued a new guidance which specifically addresses COVID-19. It does not impose new obligations, but contains recommendations as well as descriptions of mandatory safety and health standards.

Read more:

Can employers require employees to work from home?

Updated: 3.19.20

Yes, employers may require employees to work from home as an infection-control or prevention strategy. Employers, however, cannot single out employees either to work from home or to continue working at his or her regular job site, on a basis prohibited by any of the Equal Opportunity Laws.

Employers will be required to continue paying employees at the same hourly rate or salary if they are required to work from home. Employers cannot require employees who are covered by the Fair Labor Standards Act to reimburse the employer for the costs incurred by teleworking if doing so reduces the employees’ wages below the minimum wage.

OSHA does not have regulations regarding telework in a home office. OSHA will not conduct inspections of employees’ home offices, will not hold employers liable for employees’ home offices, and does not expect employers to inspect their employees’ home offices.

Is a sick employee entitled to paid leave?

Updated: 3.19.20

As an example of rapidly changing laws and programs, Congress has recently enacted the Families First Coronavirus Response Act (“Coronavirus Response Act”), which grants two (2) weeks paid leave to employees sick with COVID-19. While we don’t know the details yet, it is reported to apply to all employers having fewer than 500 employees, with an opt out provision for employers with fewer than 50 employees. It also expands and modifies the Family Medical Leave Act, takes effect on April 2, 2020 and expires on December 31, 2020.

Prior to the enactment of the Coronavirus Response Act, the U.S. Department of Labor had issued a Questions and Answers on the Family Medical Leave Act.

Read more at:

In addition to the federal leave benefits, an employer may have its own policies on granting leave. Every employer should review those policies when considering how to treat requests for leave.

Can an employer require an employee who appears sick to seek medical treatment?

Updated: 3.19.20

Employers may ask employees general questions about how he or she is feeling. Employers may not share personal health information regarding an employee with other employees. In the event that an employee has been exposed to coronavirus, the employer should inform other employees without disclosing any identifying information about the exposed employee. The Center for Disease Control has issued a guidance on risk assessment and public health management for persons with potential COVID-19 disease.

Read more at:

Can I get documents notarized remotely?

Updated 3.24.20

This morning Governor Chris Sununu signed Executive Order 2020-04, #11, authorizing the use of audio-video technology to conduct a notarization, under the following conditions:

  • The individual is located in New Hampshire;
  • The individual and the notary can communicate simultaneously by sight and sound through an electronic device or process during the notarization;
  • The notary has identified the individual through:
  • Personal knowledge of the individual;
  • At least two different processes or services that provide the notary with the means to verify the individual’s identity through a review of public or private data sources; or
  • An oath or affirmation of a credible witness; and
  • The notary records and retains a copy of the performance of the notarization for the term of the notary’s commission, including any renewals.

A notary may remotely notarize a document for an individual located outside of New Hampshire using the same process, so long as:

  • The record is intended for filing or relates to a matter before a court, governmental entity, public official, or other entity subject to the jurisdiction of New Hampshire; or
  • The record involves property located in New Hampshire or a transaction substantially connected to New Hampshire; and
  • The notary has no knowledge that the execution of the record is prohibited by the laws of the jurisdiction where the individual is physically located.

Upon signing a document remotely, the signer must mail the signed copy to the notary for certification and execution with the notary’s signature and official stamp or seal. The Order provides that the date of the notarization shall be the date the individual signed the document.

This Order would not require the signer to execute the document using electronic signatures, though such may be used to execute the documents. However, the notary must execute the document using a traditional wet signature in combination with the notary’s official stamp or seal.

Under New Hampshire law, this Executive Order is effective for 21 days following its declaration unless renewed.

In addition, on March 19, 2020, U.S. Senators Mark R. Warner (D-VA) and Kevin Cramer (R-ND) introduced S. 3533, the “Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020.” This federal proposal would allow notaries in every state to remotely notarize documents in accordance with minimum standards set forth in the bill. Those minimum standards require the use of tamper-evident technology and multifactor authentication to verify the identity of the signer. As of March 24, 2020 there has not yet been a vote on this proposed Federal legislation.

Where can I get more information?

Updated 3.23.20

NH Bureau of Business and Economic Affairs launches COVID-19 website

The New Hampshire Bureau of Business and Economic Affairs has launched a website with resources for New Hampshire businesses seeking information and guidance regarding the COVID-19 virus and its effect on New Hampshire businesses. The site includes links to the Small Business Administration and to the loan application forms regarding newly available disaster loans which allow businesses to apply for loans to cover business expenses including payroll, rent and utilities. The site also links to all 9 of Governor Sununu’s Executive Orders and to the New Hampshire Department of Employment Security which is providing relief to New Hampshire employees under the extraordinary provisions of Executive Order #5.

The Maine Department of Economic & Community Development has issued Resources for Maine Businesses Impacted by COVID-19 Pandemic. This includes links to the Small Business Administration and to the loan application forms regarding newly available disaster loans and other loans through the Finance Authority of Maine (FAME) and State of Maine Loan Guarantee Fund.

If you would like to speak with a Shaheen & Gordon lawyer regarding COVID-19 related questions, please contact us at: 800-451-1002.

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