In the midst of COVID-19, restaurants have been forced to change their business model quickly. Withum is partnering with New Jersey Restaurant and Hospitality Association to provide insight on PPP Loan forgiveness and how to prepare for re–opening your restaurant.

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PPP Loan Forgiveness and
Reopening Guidance for the
Restaurant Industry
May 18, 2020

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Presenters
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Marilou Halvorsen
President & CEO, New Jersey
Restaurant & Hospitality
Association
Daniel Mayo , JD, LLM,
Principal, National Lead, Federal
Tax Policy

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Today’s Webinar Will Cover
 Reopening guidance for the restaurant industry
 PPP Loan Forgiveness & HEROES Act
 Q&A Session (as time permits)
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RE-OPENING GUIDANCE

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New Jersey’s “Safe Dining” Re-Opening Plan
NJRHA has come up with a 3-stage plan for eateries to reopen in NJ in response from Governor Murphy’s ask to
NJRHA of what reopening looks like for the restaurant and hospitality industry during and exiting COVID-19.
Guidelines:
1. Summary
2. Staff Safety Guidelines
3. Guest Safety Guidelines
4. NJRHA Industry Promise

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Staff Safety Guidelines
Stage 2:
• At least one manager per shift certified in ServSafe Manager.*
• Mandate that all staff members to be certified in food
handler.
• Mandate guest-facing staff to wear masks.
• Train all employees on the importance of frequent hand
washing, the use of hand sanitizers with at least 60% alcohol
content and give them clear instruction to avoid touching
hands to face.
• All staff required to take health check, survey and/or
temperature prior to shift.
• All employees are required to report any fever or illness to
supervisor.
• Any sick employees are prohibited from the workplace and
may only return after the employee self-isolates for seven
days from the onset of symptoms and be symptom-free for
three days without medication (as per CDC guidelines).
Stage 3:
• At least one manager per shift certified in ServSafe Manager.*
• Mandate that all staff members to be certified in food
handler.
• No guest-facing staff are required to wear masks.
• Train all employees on the importance of frequent hand
washing, the use of hand sanitizers with at least 60% alcohol
content and give them clear instruction to avoid touching
hands to face.
• All staff required to take health check survey.
• All employees are required to report any fever or illness to
supervisor.
• Employees can wear masks at their discretion.
• Any sick employees are prohibited from the workplace and
may only return after the employee self-isolates for seven
days from the onset of symptoms and be symptom-free for
three days without medication (as per CDC guidelines).

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Guest Safety GuidelinesStage 2:
1. Post sign on door that no one with a fever or cough is to be permitted in
the restaurant.
2. Limit the number of customers in the restaurant to comply with proper
social distancing guidelines.
• Customer seating and bar seating to be either 6’ apart or reduced
to 50% capacity.
• If practical, physical barriers such as partitions or Plexiglas
barriers at registers/booths are acceptable but are not required.
3. Seating to be limited to no more than 8 guests per table/bar table
4. Tables, chairs, and bars to be cleaned and sanitized after every use.
5. Common areas and high customer contact areas (i.e. door entrances) to be
cleaned and sanitized at least once per hour.
6. Restrooms to be checked regularly and cleaned and sanitized based on
frequency of use.
7. Place settings, utensils, and menus to become either single-use or
cleaned/sanitized after every use.
8. Condiments are not to be left on table, instead provided upon request and
cleaned after usage or personal packets should be used (salt, pepper, salad
dressings, syrup, etc.)
9. Drink refills shall be in clean/unused glass/cups.
10. Lemons and unwrapped straws to be removed from self-service drink
stations.
11. Hand sanitizer or washing stations upon exits/entrances.
12. Require the installment of certain equipment or markings, such as tape on
the floor in checkout lines for limited service restaurant ordering in which
customers stand in line.
Stage 3:
1. Post sign on door that no one with a fever or cough is to be permitted in the
restaurant.
2. Normal capacity allowed. No restriction to the number of customers in the
restaurant/bar areas.
3. Tables and chairs to be cleaned and sanitized based on frequency of use.
4. Common areas and high customer contact areas (i.e. door entrances) to be
cleaned and sanitized at least once per shift.
5. Restrooms to be checked regularly and cleaned and sanitized based on
frequency of use.
6. Place settings, utensils, and menus to be cleaned/disinfected at least every
shift.
7. Condiments are not to be left on table, instead provided upon request and
cleaned after usage or personal packets should be used (salt, pepper, salad
dressings, syrup, etc.)
8. Drink refills shall be in clean/unused glass/cups.
9. Lemons and unwrapped straws to be removed from self-service drink
stations.

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NJRHA Industry Promise
• Our Promise to You
• Your Promise to Us
• NJRHA Suggested Best Practices

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PPP LOAN FORGIVENESS

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Status of PPP
Loans and Current
Developments
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PPP Funds Disbursed
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‘Before the PPP, SBA’s largest single year in
7(a) lending volume was approximately $25.4
billion, in fiscal year 2017. Between April 3
and May 6, 2020, SBA lenders participating in
the PPP approved 4,102,736 loans totaling
more than $525.8 billion, an amount
representing more than 20 times the largest
year in SBA’s history in just 33 days.’

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PPP Certification
 PPP loan application certification – current economic uncertainty makes the loan request
necessary to support the ongoing operations of the applicant
 April 23rd – FAQ #31 created a lot of uncertainty
 Applies to businesses owned by large companies, and to public companies with substantial market value
 Take into account current business activity and ability to access other sources of liquidity
 April 29th – FAQ #39 – SBA will review all loans > $2M, and other loans as appropriate, before
forgiveness is approved
 May 13th – FAQ #46 –
 Loans < $2M, borrower deemed to make the certification in good faith (i.e., it is a safe harbor)
 Loans > $2M, facts and circumstances review; SBA will review and if borrower lacked an adequate basis
for the certification, then SBA will seek repayment; if borrower repays, then SBA will not pursue
administrative enforcement or referral to other agencies
 May 13th – FAQ #47 – safe harbor repayment date extended to May 18th
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PPP Loan Forgiveness
 Forgiveness applies to “costs incurred and payments made” within the 8-week period
 4 limitations on amount of loan forgiveness
 Headcount (FTE) reductions
 Wage reductions (EE by EE)
 Principal amount of loan plus accrued interest
 No more than 25% of amount forgiven can be for overhead (i.e., non-payroll) costs
 Elimination of headcount and wage reductions
 Rehire rule – reductions from 2/15 – 4/26 eliminated if rehired/restored by 6/30/2020
 SBA FAQ #40 (May 3, 2020) (ER lays off and gives written offer to rehire at comparable wage/hours –
no reduction in forgiveness if EE declines offer and ER documents)
 Amount forgiven is tax-free, but no deduction is allowed for expenses relating to the
amount forgiven – IRS Notice 2020-32 – legislative change?
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PPP Loan Forgiveness (cont’d)
 Borrower required to submit application to lender (no form or filing deadline prescribed
yet)
 Verify # of FTEs and pay rates for the 8-week period
• Payroll tax filings reported to IRS (Forms 941)
• State income, payroll and unemployment insurance filings
 Canceled checks, payments receipts, transcripts of accounts, and other documents verifying
payments on covered overhead (mortgage, rent, and utility payments)
 Certifications of borrower
• Documentation submitted is true and correct
• Amount for which forgiveness is requested was used to retain employees and to pay covered overhead
• Any other documentation required by SBA or by lender
 Lender will have 60 days to process the application
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Allowable Uses vs. Forgivable Expenses
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Allowable Uses (during the 2-year term of the loan) Forgivable Expenses (during the 8-week period)
1 Payroll costs (including salary, wages, retirement benefits, group
health care benefits, state and local employment taxes, etc.) for
employees whose principal place of residence is in the U.S.
Same (note: salary cap is $15,385 for the 8-week period)
2 Interest on business mortgage obligations (but not prepayments
or principal payments) on real or personal property
Interest on business mortgage obligations (but not prepayments or
principal payments) on real or personal property, if the loan was incurred
before 2/15/2020
3 Business rent for real and personal property Business rent for real and personal property, if the lease was in effect
before 2/15/2020
4 Business utilities (including electricity, gas, water, transportation,
telephone and internet)
Business utilities (including electricity, gas, water, transportation,
telephone and internet), if the service was in effect before 2/15/2020
5 Interest in any other debt obligations incurred before 2/15/2020 None
6 Costs related to the continuation of group health care benefits
during periods of paid leave, and insurance premiums
None

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House Bill – the HEROES Act
 House voted on Health and Economic Recovery Omnibus Emergency Solutions (“HEROES”) Act, a $3 trillion stimulus package that is larger than
the CARES Act ($2.2 trillion)
 Senate did not participate in drafting this bill – not likely to be passed in present form – bill is more than 1,800 pages in length
 Proposed changes to PPP:
 Would extend the 8-week covered period to 24 weeks
 Would eliminate the 75/25 rule on use of loan proceeds
 Would extend maturity date from 2 years to 5 years
 Would create a safe harbor for borrowers who cannot rehire in the prescribed timeframe
 Would expand eligibility to all section 501(c) entities
 Would provide a second round of economic impact payments of $1,200 per family member, up to $6,000 per household
 Would provide more EIDL money – $10B would be set aside for the EIDL program to continue to fund businesses
 Would provide 90% refundable income tax credit for the self-employed who have experienced a significant loss of income
 Would eliminate the $10K SALT deduction limitation that was passed in 2017 as part of TCJA
 Would extend unemployment benefits to ensure the weekly $600 federal unemployment payments continue through January 2021 (as opposed
to 4 months under CARES Act)
 $175B would be set aside to assist renters and homeowners to make monthly rent, mortgage and utility payments
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QUESTIONS?

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Marilou Halvorsen
President & CEO, New Jersey
Restaurant & Hospitality
Association
mhalvorsen@njrha.org
Daniel Mayo , JD, LLM,
Principal, National Lead, Federal
Tax Policy
dmayo@withum.com
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