As the nation continues to respond to the COVID-19 pandemic, RSI is working with federal, state, and local governments to ensure that there are clear and consistent guidelines in place surrounding the continued operations of the railway supply industry. While the health and safety of employees always comes first, we are committed to ensuring that the railway supply industry continues to do its part in serving freight and passenger railroad customers as they meet the needs of our communities and the nation. Critical supplies and resources must keep moving on our rail systems without disruption. A reliable network of railway supply manufacturing, maintenance and repair facilities, and their employees, are crucial to ensuring that railroads can continue to support America’s COVID-19 response.
Individual State Restrictions on Manufacturing Operations
Multiple states have issued emergency orders to help limit the spread of the COVID-19 virus. The National Association of Manufacturers (NAM) has compiled a state-by-state list of these orders that is updated regularly and RSI continues to monitor each of them closely for potential impacts on railway supply operations. For businesses that have any concerns about how a specific restriction on business operations applies to their company, we note that many jurisdictions have set up specific procedures for companies to request a waiver and/or guidance from the appropriate state/local authority.
Letter of Continuity of Operations for Essential Critical Infrastructure Workers
RSI’s legal counsel has also drafted a template letter for companies to use to communicate to managers, employees, or third parties with questions about a company’s operations to clarify how the CISA guidance identifies rail suppliers as “essential critical infrastructure workers” in the event they are concerned about differences between federal and state/local definitions. The National Association of Manufacturers has also provided a draft letter indicating a company’s essential manufacturing operations that can be used to communicate with Governors and other state agencies.
As State and local jurisdictions continue to put additional COVID-19 response measures into place around the country, RSI continues to strongly encourage companies to follow the CDC’s guidance for businesses and employees to ensure the health and safety of your employees and our communities.
Resources for Small and Mid-Sized Businesses
On March 27, President Trump signed the $2.3 trillion coronavirus aid package (CARES Act) into law, marking the end of several days of negotiations over the largest relief bill in U.S. history. The bill includes several key provisions intended to offer relief for small business in in a variety of forms including loans, debt relief, grants, and tax credits. You can find a full summary of the bill’s small business provisions here and a Q&A document here. To access any of these programs or stay up to date as they are implemented, please contact your local Small Business Administration (SBA) District Office.
- Paycheck Protection Program (PPP) Loans: The program will provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis. PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees, and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020.
- Small Business Debt Relief Program: This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of enactment.
- Economic Injury Disaster Loans & Emergency Economic Injury Grants: These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
- Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship: This provision would provide a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis. The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis.
- Delay of Payment of Employer Payroll Taxes: This provision would allow taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. Payroll taxes that can be deferred include the employer portion of FICA taxes, the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer FICA rate), and half of SECA tax liability.
We would encourage any RSI members who do take advantage of these programs to share information on your experience with the process and anything you think would be helpful for other companies that are trying to do that. Obviously, the more we can support one another during this time the better and we can also share that feedback with the federal government to the extent appropriate.