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Is the Gig Up for Some Workers?

By Amy B. Royal, Esq.

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The number of gig workers has been on the rise over the past few years with the advent of many online-platform companies, such as DoorDash, Instacart, and Uber.

The notion of gig workers and a gig-worker-based economy, however, is not new. Whether one refers to such workers as gig workers, freelancers, or broadly as independent contractors, this area of employment law has been a thorn in the side of many businesses for several decades. With the significant and robust growth in the online gig-economy world, the restrictiveness of independent-contractor law on business and business growth, as well as on worker independence, has gotten a new look.

Both a recent victory in the state of California and a new proposed rule from the federal government may be signaling a change in the tide when it comes to the future of independent-contractor law.

Independent-contractor law, especially in Massachusetts, has been very restrictive when it comes to certain business models. Many industries have historically relied on the classification of workers as independent contractors to augment their operations and build capacity as well as to attract workers who want independence when delivering services for them.

For example, traditionally, the real-estate industry has classified real-estate agents as independent contractors. Similarly, tattoo parlors, hair salons, and transportation services have done the same. In these industries, oftentimes, the expectation of the worker is that he or she will be classified as an independent contractor and, thus, have the freedom and flexibility to maintain independence over their own schedule and their own craft.

Indeed, the benefit of such gig work is often mutual: the company can reduce its overhead costs in payroll, benefits, and expenses, while the workers can retain freedom and flexibility over their schedules while garnering higher compensation for the services they deliver.

Earlier this month, California voters sent a message to their lawmakers when they passed a ballot question that exempted app-based drivers working for companies like Lyft and Uber from a California law that had previously made them employees. Earlier this year, a law had taken effect in California that made it clear these drivers were to be treated as employees and, thus, were entitled to certain employment-related benefits and legal protections. The California ballot win is a significant victory for app-based companies that utilize gig workers to deliver services.

Amy Royal

“Whether one refers to such workers as gig workers, freelancers, or broadly as independent contractors, this area of employment law has been a thorn in the side of many businesses for several decades.”

The U.S. Department of Labor (DOL), our federal agency that enforces federal wage-and-hour laws, appears to be trending toward loosening its stance on independent-contractor law as well. This September, the DOL proposed a new rule that establishes two core factors as determinative ones in an overall five-part independent-contractor test. The two core factors are the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss based on initiative and/or investment.

Remember, this rule is pending approval and, therefore, is not the current federal law on this matter. Our current federal rule in effect for establishing independent-contractor status is based upon a multi-factor test, which can be confusing in its application, thus prompting the proposed change. The purpose behind the newly proposed rule is to bring clarity to the confusion in the application of the test itself.

Prior to the proposed rule, there was no definitive guidance on how to go about weighing and balancing the various factors and whether there was a prioritization among them. Now, the two core factors proposed should make it easier to assess a worker’s status and, arguably, pave the way for more workers to be classified as independent contractors. The proposed rule seems to recognize the prerogative of workers who want to work independently and maintain freedom from an employer’s day-to-day control over them.

For now, whether a worker is an independent contractor or an employee is a clear question in the Bay State. Massachusetts law utilizes a clear three-part test that is otherwise very restrictive on both businesses and the workers who do not want to be considered employees. In Massachusetts, when analyzing a worker’s status, there is always a presumption of employment. This means the burden is on the company to prove why a worker is not an employee.

To establish that fact, Massachusetts companies must satisfy all three parts of a three-part test: companies must show that the work is performed without the direction and control of the company, outside the usual course of the company’s business, and by someone who has their own independent business or trade in that type of work. Again, all three parts of this test must be met for the Massachusetts worker to be deemed an independent contractor.

Where most companies fail the test is with respect to the second part — that the worker must perform work outside the usual course of the company’s business. For example, with respect to a driver for Uber, arguably, under Massachusetts independent-contractor law, the driver would be deemed an employee; the company is in the business of ride sharing, and the driver is performing that work by driving customers to and from certain locations.

The problem with the misclassification of workers as independent contractors is that it carries with it very stiff penalties and triggers several potential violations of laws. Indeed, misclassification of an independent contractor can create issues with respect to wage-and-hour law, such as minimum wage and overtime compensation, unemployment benefits, workers’ compensation coverage, and certain payroll-tax withholdings.

Furthermore, situations involving the misclassification of workers can give rise to class-action lawsuits. Companies that violate Massachusetts wage-and-hour laws alone are subject to mandatory treble damages for any unpaid wages. In addition, a prevailing employee will be awarded attorneys’ fees and costs of the litigation.

What is the takeaway on all of this for your company? While the law may be changing in other parts of the country, nothing has changed in Massachusetts (so far). Massachusetts law remains very strict and extremely restrictive when it comes to proving independent contractor status. As noted, misclassifying a worker can carry steep penalties and trigger a violation of various laws, as well as class-action claims.

But stay tuned. This area of the law seems to be evolving with the newly proposed federal rule and the California state-law change. It is estimated that, collectively, Uber, Lyft, Instacart, Postmates, and DoorDash spent approximately $200 million to lobby California voters to change their state law on independent-contractor status. That may spark more challenges to independent-contractor laws in other states, including Massachusetts.

 

Amy B. Royal, Esq. is a litigation attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council; (413) 586-2288; [email protected]

Accounting and Tax Planning Coronavirus Special Coverage

Year-end Tax Planning

By Kristina Drzal Houghton, CPA, MST

 

This year has been unlike any other in recent memory. Front and center, the COVID-19 pandemic has touched virtually every aspect of daily living and business activity in 2020. In addition to other financial consequences, the resulting fallout is likely to have a significant impact on year-end tax planning for both individuals and small businesses.

Kristina Drzal Houghton

Kristina Drzal Houghton

Furthermore, if the election of Joe Biden is confirmed and the Republican party does not hold a majority in the Senate following the runoff elections in Georgia, it is likely to affect the tax situation in 2021 and beyond. This article will first address 2020 planning and then summarize some of the Biden tax proposals at the end.

In response to the pandemic, Congress authorized economic-stimulus payments and favorable business loans as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act also features key changes relating to income and payroll taxes. This new law follows close on the heels of the massive Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA revised whole sections of the tax code and includes notable provisions for both individuals and businesses.

This is the time to paint your overall tax picture for 2020. By developing a year-end plan, you can maximize the tax breaks currently on the books and avoid potential pitfalls.

 

BUSINESS TAX PLANNING

Depreciation-related Deductions

Under current law, a business may benefit from a combination of three depreciation-based tax breaks: the Section 179 deduction, ‘bonus’ depreciation, and regular depreciation.

• Place qualified property in service before the end of the year. Typically, a small business can write off most, if not all, of the cost in 2020.

• The maximum Section 179 allowance for 2020 is $1,040,000 provided asset purchases do not exceed $2,590,000.

• Be aware that the Section 179 deduction cannot exceed the taxable income from all your business activities this year. This could limit your deduction for 2020.

• If you buy a heavy-duty SUV or van for business, you may claim a first-year Section 179 deduction of up to $25,000. The ‘luxury car’ limits do not apply to certain heavy-duty vehicles.

• If your deduction is limited due to either the income threshold or the amount of additions, a first-year bonus depreciation deduction of 100% for property placed in 2020 is also available.

• Massachusetts does not follow the bonus depreciation, but does allow the increased Section 179 expense; however, many states do not follow that increased expense either.

 

Business Interest

• Prior to 2018, business interest was fully deductible. But the TCJA generally limited the deduction for business interest to 30% of adjusted taxable income (ATI). Now the CARES Act raises the deduction to 50% of ATI, but only for 2019 and 2020.

• Determine if you qualify for a special exception. The 50%-of-ATI limit does not apply to a business with average gross receipts of $25 million (indexed for inflation) or less for the three prior years. The threshold for 2020 is $26 million.

 

Bad-debt Deduction

During this turbulent year, many small businesses are struggling to stay afloat, resulting in large numbers of outstanding receivables and collectibles.

• Increase your collection activities now. For instance, you may issue a series of dunning letters to debtors asking for payment. Then, if you are still unable to collect the unpaid amount, you can generally write off the debt as a business bad debt in 2020.

• Generally, business bad debts are claimed in the year they become worthless. To qualify as a business bad debt, a loan or advance must have been created or acquired in connection with your business operation and result in a loss to the business entity if it cannot be repaid.

 

Miscellaneous

• If you pay year-end bonuses to employees in 2020, the bonuses are generally deductible by your company and taxable to the employees in 2020. A calendar-year company operating on the accrual basis may be able to deduct bonuses paid as late as March 15, 2021 on its 2020 return.

• Generally, repairs are currently deductible, while capital improvements must be depreciated over time. Therefore, make minor repairs before 2021 to increase your 2020 deduction.

• Switch to cash accounting. Under a TCJA provision, a C-corporation may use this simplified method if average gross receipts for last year exceeded $26 million (up from $5 million).

• An employer can claim a refundable credit for certain family and medical leaves provided to employees. The credit is currently scheduled to expire after 2020.

• Investigate Paycheck Protection Program (PPP) forgiveness. Under the CARES Act, PPP loans may be fully or partially forgiven without tax being imposed. Despite recent guidance, this remains a complex procedure, so consult with your professional tax advisor about the details.

 

INDIVIDUAL TAX PLANNING

Charitable Donations

Generally, itemizers can deduct amounts donated to qualified charitable organizations, as long as substantiation requirements are met. Be aware that the TCJA increased the annual deduction limit on monetary contributions from 50% of adjusted gross income (AGI) to 60% for 2018 through 2025. Even better, the CARES Act raises the threshold to 100% for 2020.

• In addition, the CARES Act authorizes an above-the-line deduction of up to $300 for monetary contributions made by a non-itemizer in 2020 ($600 for a married couple).

• In most cases, you should try to ‘bunch’ charitable donations in the year they will do you the most tax good. For instance, if you will be itemizing in 2020, boost your gift giving at the end of the year. Conversely, if you expect to claim the standard deduction this year, you may decide to postpone contributions to 2021.

• For donations of appreciated property that you have owned longer than one year, you can generally deduct an amount equal to the property’s fair market value (FMV). Otherwise, the deduction is typically limited to your initial cost. Also, other special rules may apply to gifts of property. Notably, the annual deduction for property donations generally cannot exceed 30% of AGI.

• If you donate to a charity by credit card in December — for example, if you make an online contribution — you can still write off the donation on your 2020 return, even if you do not actually pay the credit-card charge until January.

 

Family Income Splitting

The time-tested technique of family income splitting still works. Currently, the top ordinary income-tax rate is 37%, while the rate for taxpayers in the lowest income tax bracket is only 10%. Thus, the tax rate differential between you and a low-taxed family member, such as a child or grandchild, could be as much as 27% — not even counting the 3.8% net investment-income tax (more on this later).

• Shift income-producing property, such as securities, to family members in low tax brackets through direct gifts or trusts. This will lower the overall family tax bill. But remember that you are giving up control over those assets. In other words, you no longer have any legal claim to the property.

• Also, be aware of potential complications caused by the ‘kiddie tax.’ Generally, unearned income above $2,200 received in 2020 by a child younger than age 19, or a child who is a full-time student younger than age 24, is taxed at the top marginal tax rate of the child’s parents. (Recent legislation reverses a TCJA change on the tax treatment.) The kiddie tax could affect family income-splitting strategies at the end of the year.

 

Higher-education Expenses

The tax law provides tax breaks to parents of children in college, subject to certain limits. This often includes a choice between one of two higher-education credits and a tuition-and-fees deduction.

• Typically, you can claim either the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). The maximum AOTC of $2,500 is available for qualified expenses of each student, while the maximum $2,000 LLC is claimed on a per-family basis. Thus, the AOTC is usually preferable. Both credits are phased out based on modified adjusted gross income (MAGI).

• Alternatively, you may claim the tuition-and-fees deduction, which is either $4,000 or $2,000 before it is phased out based on MAGI. The tuition-and-fees deduction, which has expired and been revived several times, is scheduled to end after 2020, but could be reinstated again by Congress.

• When appropriate, pay qualified expenses for next semester by the end of this year. Generally, the costs will be eligible for a credit or deduction in 2020, even if the semester does not begin until 2021.

 

Medical and Dental Expenses

Previously, taxpayers could only deduct unreimbursed medical and dental expenses above 10% of their AGI. When it is possible, accelerate non-emergency qualifying expenses into this year to benefit from the lower threshold. For instance, if you expect to itemize deductions and have already surpassed the 7.5%-of-AGI threshold this year, or you expect to clear it soon, accelerate elective expenses into 2020. Of course, the 7.5%-of-AGI threshold may be extended again, but you should maximize the tax deduction when you can.

 

Estimated Tax Payments

The IRS requires you to pay federal income tax through any combination of quarterly installments and tax withholding. Otherwise, it may impose an ‘estimated tax’ penalty.

However, no estimated tax penalty is assessed if you meet one of these three ‘safe harbor’ exceptions under the tax law:

• Your annual payments equal at least 90% of your current liability;

• Your annual payments equal at least 100% of the prior year’s tax liability (110% if your AGI for the prior year exceeded $150,000); or

• You make installment payments under an ‘annualized income’ method. This option may be available to taxpayers who receive most of their income during the holiday season.

If you have received unemployment benefits in 2020 — for example, if you lost your job due to the COVID-19 pandemic — remember that those benefits are subject to income tax. Factor this into your estimated tax calculations for the year.

 

Capital Gains and Losses

Frequently, investors time sales of assets such as securities at year-end to produce optimal tax results. For starters, capital gains and losses offset each other. If you show an excess loss for the year, it offsets up to $3,000 of ordinary income before being carried over to the next year. If you sell securities at a loss and reacquire substantially identical securities within 30 days of the sale, the tax loss is disallowed.

• Long-term capital gains from sales of securities owned longer than one year are taxed at a maximum rate of 15%, or 20% for certain high-income investors. Conversely, short-term capital gains are taxed at ordinary income rates reaching up to 37% in 2020.

• Review your investment portfolio. Depending on your situation, you may harvest capital losses to offset gains realized earlier in the year or cherry-pick capital gains that will be partially or wholly absorbed by prior losses.

 

Net Investment-income Tax

In addition to capital-gains tax, a special 3.8% tax applies to the lesser of your net investment income (NII), or the amount by which your modified adjusted gross income (MAGI) for the year exceeds $200,000 for single filers or $250,000 for joint filers. (These thresholds are not indexed for inflation.) The definition of NII includes interest, dividends, capital gains, and income from passive activities, but not Social Security benefits, tax-exempt interest, and distributions from qualified retirement plans and IRAs.

• Assess the amount of your NII and your MAGI at the end of the year. When it is possible, reduce your NII tax liability in 2020 or avoid it altogether.

 

Required Minimum Distributions

As a general rule, you must receive required minimum distributions (RMDs) from qualified retirement plans and IRAs after reaching age 72 (70½ for taxpayers affected prior to 2020). The amount of the RMD is based on IRS life-expectancy tables and your account balance at the end of last year

• Take RMDs in 2020 if you need the cash. Otherwise, you can skip them this year, thanks to a suspension of the usual rules by the CARES Act. There is no requirement to demonstrate any hardship relating to the pandemic. Finally, although RMDs are no longer required in 2020, consider a qualified charitable distribution (QCD). If you are age 70½ or older, you can transfer up to $100,000 of IRA funds directly to a charity. Although the contribution is not deductible, the QCD is exempt from tax. This may benefit your overall tax picture.

 

IRA Rollovers

If you receive a distribution from a qualified retirement plan or IRA, it is generally subject to tax unless you roll it over into another qualified plan or IRA within 60 days. In addition, you may owe a 10% tax penalty on taxable distributions received before age 59½. However, some taxpayers may have more leeway to avoid tax liability in 2020 under a special CARES Act provision.

• Take your time redepositing the funds if it qualifies as a COVID-19-related distribution. The CARES Act gives you three years, instead of the usual 60 days, to redeposit up to $100,000 of funds in a plan or IRA without owing any tax.

• To qualify for this tax break, you (or your spouse, if you are married) must have been diagnosed with COVID-19 or experienced adverse financial consequences due to the virus (e.g., being laid off, having work hours reduced, or being quarantined or furloughed). If you do not replace the funds, the resulting tax is spread evenly over three years.

• This may be a good time to consider a conversion of a traditional IRA to a Roth IRA. With a Roth, future payouts are generally exempt from tax, but you must pay current tax on the converted amount. Have a tax professional help you determine if this makes sense for your situation.

 

Estate and Gift Taxes

Since the turn of the century, Congress has gradually increased the federal estate-tax exemption, while eventually establishing a top estate-tax rate of 40%. The TCJA doubled the exemption from $5 million to $10 million for 2018 through 2025, inflation-indexed to $11.58 million in 2020.

Under the ‘portability provision’ for a married couple, the unused portion of the estate-tax exemption of the first spouse to die may be carried over to the estate of the surviving spouse. This tax break is now permanent.

Finally, guidance has been published establishing that, when the exemption is decreased in the future, a recapture or ‘claw-back’ of the extra exemption used will not be required.

Update your estate plan to reflect current law. You may revise wills and trusts to accommodate the rule allowing portability of the estate-tax exemption. Additionally, consider the maximum gifting currently as allowable in your financial position.

 

Miscellaneous

You can contribute up to $19,500 to a 401(k) in 2020 ($26,000 if you are age 50 or older).

 

BIDEN’S NOTABLE TAX PROPOSALS

Business Tax

• The statutory corporate tax rate would be increased from 21% to 28%.

• The benefits of the Section 199A/qualified business-income deduction would be phased out for individuals with taxable income greater than $400,000.

• The real-estate industry will potentially be impacted. The Biden campaign had suggested potential changes to the §1031 like-kind exchange provisions as well as changes to effectively limit losses that may be utilized by real-estate investors.

 

Individual Tax

Many of the revenue-raising aspects of the Biden tax proposal for individuals apply only to those taxpayers with taxable income over $400,000. It has not been specified whether this threshold is to be adjusted for filing status.

• The top ordinary rate would be restored to 39.6% for taxpayers with income over $400,000. This reflects a return to pre-2017 tax reform when the top ordinary rate was dropped to 37%.

• For top income earners, this rate is currently capped at 20% (plus 3.8% to the extent subject to the net investment-income tax). Under the Biden plan, capital gains and qualified dividends will be subject to the top rate of 39.6% for individuals with more than $1 million in income.

• The Section 199A/qualified business-income deduction would begin to phase out for individuals over $400,000 in taxable income.

• Itemized deductions would be capped to 28% of value. Additionally, benefits would begin to phase out for individuals with taxable income over $400,000.

• The child and dependent care credit would be increased to a maximum of $8,000 for low-income and middle-class families. In addition, the credit would be made refundable.

• First-time homebuyers could receive up to $15,000 of refundable and advanceable tax credit.

• There could be temporary expansion of the child tax credit, depending on the progression of the pandemic and economic conditions. This expansion would increase the credit from $2,000 to $3,000 for children 17 or younger with an additional $600 for children under 6. The credit would also be refundable and allowable to be received in monthly installments.

 

Gift and Estate Tax

The gift- and estate-tax exemption amount would be reduced. Many are suggesting that Biden is looking to reduce the gift- and estate-tax exemption to the pre-TCJA levels.

 

Conclusion

This year-end tax-planning letter is based on the prevailing federal tax laws, rules, and regulations. Of course, it is subject to change, especially if additional tax legislation is enacted by Congress before the end of the year.

Finally, remember that this article is intended to serve only as general guideline. Your personal circumstances will likely require careful examination. u

 

Kristina Drzal Houghton, CPA, MST is partner, Executive Committee, and director of Taxation Services at Meyers Brothers Kalicka; (413) 536-8510.

Community Spotlight

Community Spotlight

By Mark Morris

For Longmeadow Town Manager Lyn Simmons, it’s been quite a first year on the job.

With 16 years of experience in municipal government in of Northampton — the last six years as chief of staff for Mayor David Narkewicz — Simmons became Longmeadow’s town manager a year ago this month. After three months on the job, Longmeadow — like the entire world — found itself in uncharted territory.

As challenging as the pandemic has been, Simmons said one positive has been the opportunity to build relationships with department heads and the emergency-management team much faster than she might have under less-hectic circumstances.

“We had to come together quickly and navigate all of this together,” Simmons said. “As difficult as the pandemic has been, the team that’s in place here and the relationships that we’ve formed have made dealing with it much easier.”

She also credits Longmeadow residents for their response in handling the pandemic, noting that people in town are adhering to public-health guidelines and taking personal responsibility. “We see people social distancing, wearing masks, and doing what they need to do to help protect themselves, their families, and our community.”

Lyn Simmons

“People like living in Longmeadow because it’s a great community, it’s very walkable, and there are lots of outdoor recreation activities. It really appeals to every generation.”

Because most residents complied with state mandates, Longmeadow experienced low numbers of the coronavirus throughout the summer. While the number of cases in town has begun to increase during the fall, this reflects the overall trend in Western Mass. and across the state, Simmons said, adding that a team of municipal employees is monitoring pandemic-related grants and other funding sources that might be available through the state and federal government.

“The pandemic has certainly been a disruption to normal life, whether it’s doing business with town offices or making adjustments to programs that are run by the Parks and Rec department, or the Adult Center,” she noted. But business not been halted, and as she spoke with BusinessWest, she outlined some of the ways progress continues in this small, residential town.

Worth Their Salt

In the midst of all the COVID-related disruption, Simmons points to two town projects she calls bright spots during these challenging times. First, a new Department of Public Works (DPW) facility — a $24 million project on Dwight Road, on the site of a former tennis club — is nearing completion.

The second project is the $14 million Adult Center, where finishing touches are being applied as it gets closer to opening day. While the Council on Aging will have a large presence, the Parks and Recreation department will also run programs and activities from the facility, making it a resource for all residents.

After COVID-19 hit, safety protocols were implemented at the DPW and Adult Center sites to allow construction work to continue and keep both projects on track to open in early 2021.

“The only disruption we had occurred earlier in the spring when the subcontractor who was providing and installing a salt-storage shed was quarantined crossing the state line from New York,” Simmons said. “We’ve been able to move past that, and the salt shed is fully constructed now.”

With 95% of property in Longmeadow devoted to residential dwellings, town officials pay close attention to activity in the real-estate market. Like most towns, the normal sales bump that occurs each spring was delayed by the pandemic. Sales activity returned in July and has remained brisk since then, with most houses selling at the asking price.

“We’ve been able to capture that strong real-estate market,” Simmons said. “On average, houses are staying on the market for about 20 days; low interest rates have certainly helped.”

The demographics in Longmeadow have remained similar to what they’ve historically been. Simmons said the town has a healthy mix of approximately 29% families and about 30% in the over-60 demographic. One key indicator that remains steady is school enrollment, where no declines have been reported.

“People like living in Longmeadow because it’s a great community, it’s very walkable, and there are lots of outdoor recreation activities. It really appeals to every generation,” she noted.

Looking to the future, the town owns a 10-acre parcel on Academy Drive known as the Water Tower property. Prior to the pandemic, the area was under consideration for an over-55 housing development. If this project moves forward, Simmons said, it might solve a dilemma for many seniors in town. Many aging residents want to continue to live in Longmeadow but would also like to downsize from their current home to one-level living, and an over-55 housing development could be a good solution.

Longmeadow at a glance

Year Incorporated: 1783
Population: 15,784
Area: 9.7 square miles
County: Hampden
Residential Tax Rate: $24.21
Commercial Tax Rate: $24.21
Median Household Income: $109,586
Median Family Income: $115,578
Type of Government: Open Town Meeting; Town Manager; Board of Selectmen
Largest Employers: Bay Path University; JGS Lifecare; Glenmeadow
* Latest information available

“Once we get the pandemic behind us, I expect our discussions of this site to be dusted off and brought back into the public sphere,” she added.

Meanwhile, conversations about two other potential projects are continuing, including development of a former church at the intersection of Williams Street and Redfern Drive with a different use, and a project on Williams Street that involves building a long-term-care facility. “As far as I know, those plans are still in the works,” Simmons said of the latter plan, “but it’s been slow-moving.”

 

Sharing Resources

More concrete progress can be found on a regional level. Last year, Longmeadow joined with Chicopee to form an emergency communications center called WESTCOMM. By taking a regional approach to emergency dispatch calls, both towns save money, increase efficiency, and have backup support when multiple calls come into either town.

Now nearly a year into the program, WESTCOMM has been a great success — and is growing, Simmons said. “Since WESTCOMM launched in December, we’ve added two more communities this year, when East Longmeadow and Monson came on board with Longmeadow and Chicopee.”

WESTCOMM currently operates out of the Chicopee Police Department, but officials are exploring a move to a larger facility as more communities come on board. Simmons said she expects to hear more about that in the coming year.

Before the pandemic, Longmeadow was looking to share some public-health services with neighboring East Longmeadow. Because the health departments and boards of health for both towns are expending all their energy on COVID-19 concerns, that project has been set aside at least until the pandemic is over, she added. “Looking at a merger of two health departments right now is a little more than we can take on at the moment.”

Simmons was born and raised in Northampton, and she first became familiar with Longmeadow while pursuing her undergraduate degree at Bay Path University.

As she completes her first year as Longmeadow’s town manager, she’s proud of how well people in the community have responded throughout the pandemic.

“I appreciate everyone’s understanding and support as we all try to get through this time together,” she said. “I am really looking forward to the new year when we will open both the new DPW and Adult Center in town.”

Simmons added that she can’t wait for the public to see both buildings and hopes to take residents on tours of the new facilities when they formally open in 2021 — a year when municipal leaders in all communities hope they can put COVID-19 behind them and are able to focus fully on the future once again.

The Cannabis Industry

Growing a Job Market

By Mark Morris

Jeff Hayden

Jeff Hayden says the Cannabis Education Center was developed to train people for the hundreds of jobs being created in the industry locally.

When a new industry in Massachusetts reaches $1 billion in sales in only four years, it certainly gets people’s attention.

The Cannabis Control Commission (CCC) recently announced that, four years after legalizing cannabis for adult recreational use, and only two years after the first retail shops opened, this relatively new industry surpassed that $1 billion mark on Oct. 30.

“There are a lot of jobs that go along with a billion dollars in industry activity,” said Jeff Hayden, vice president for Business and Community Services at the Kittredge Center for Business and Workforce Development at Holyoke Community College (HCC).

Shortly after cannabis was legalized in the state, Hayden spoke with advocacy groups and business leaders in the industry, which led to establishing the Cannabis Education Center at HCC to provide training for in-demand occupations in the burgeoning industry.

“Our focus wasn’t on the product itself; we wanted to identify the occupations that make the most sense so we can train people for those jobs,” Hayden said.

After completing a core course to familiarize students with the cannabis industry, more concentrated training is available in four career tracks:

• Patient-service associates work behind the counter at a cannabis dispensary, interact with the public, answer technical questions, and provide information to registered cannabis patients, as well as recreational customers;

• Culinary assistants prepare cannabis-infused products such as gummy candies and baked goods infused with cannabis;

• Extraction technicians work in a lab assisting production managers in extraction, purging, oil manipulation, and quality control of cannabis products; and

• Cultivation assistants provide daily care of the crops from seed to harvest.

“Because HCC offers courses in business and customer service, culinary, chemistry, and agriculture, the career tracks for cannabis training line up well with the expertise the college already has,” said Michele Cabral, executive director of Professional Education and Corporate Learning at HCC, who worked with instructors to set up the cannabis course offerings.

As a community college, HCC doesn’t allow cannabis or associated products on campus. That means classroom instruction might involve using computer simulations to show chemical reactions, for example. When a physical demonstration is needed, legally approved items like hemp plants are used in class.

“While we will not have cannabis or related products on campus, we will still do the job education has always done: share with our students the best knowledge we can provide and the best examples,” Hayden said, noting that students can get actual hands-on experience when they land internships or get placed in a job.

He added that the courses are designed to provide an entry-level workforce for the cannabis industry. Wages are usually comparable and sometimes slightly higher than other industries at entry level.

“Even more important than landing that first job is the ability to make a career out of cannabis, because the levels of compensation can be significant,” he told BusinessWest.

Whether a person is looking for an entry-level job or a second career, Cabral said cannabis can be a “phenomenal career track” for people who have never considered it before.

For example, someone with a sales background could train as a patient-services associate training to build on the skills they already have. Or someone with a science background and wants to work in a lab could train as an extraction technician to learn about cannabis-infused products such as skin creams and shampoos.

“This person with science and lab training would find an entire industry that is exploding, where they could have an amazing career,” she said. “Who knows? They could come in at entry level and work their way up to be the head of the lab.”

There’s much more to the industry than rolling a joint, Cabral continued, noting that cannabis-infused shampoos and skin creams are only two examples of the many different items that appeal to the general public. “These products are extremely clean, closely regulated, and environmentally sustainable. It’s not just about getting high.”

 

Elevating an Industry

Elevate Northeast, a nonprofit workforce-training and cannabis-advocacy group has partnered with HCC on career-training programs at the Cannabis Education Center.

Beth Waterfall, founder and executive director of Elevate Northeast, said the program at HCC is designed to help people become familiar and comfortable with the industry. “The coursework helps people see that this is real. There’s a place for their interests and their skills.”

Elevate Northeast’s main mission is to provide opportunities for people who have been marginalized or were disproportionately harmed by previous marijuana prohibitions. The CCC administers a Social Equity Program to provide assistance and training to encourage those impacted by the ‘war on drugs’ to pursue careers as workers or entrepreneurs in the cannabis field.

Waterfall said righting past wrongs is one of the mandates of the CCC. The Certified Economic Empowerment application process is a way to encourage people from neighborhoods and communities that suffered from the impact of the war on drugs to seek licenses to open cannabis microbusinesses. She added that establishing microbusinesses also prevents larger companies from dominating the cannabis market.

“I’m excited about the cannabis industry because, through programs like social equity and economic empowerment, Massachusetts has an opportunity to be a leader in business ownership by people of color and women,” she said.

Waterfall called HCC’s Cannabis Education Center a “wonderful” way to provide people with both an initial exposure and a deep dive into the cannabis industry, as well as helping people understand how they may fit into it. “Who knows? This exposure may encourage them to someday own their own business.”

While retail cannabis operations have launched in many Western Mass. communities, the city of Holyoke has been most active, currently boasting four dispensaries, with at least two more scheduled to open in 2021. Based on workplace needs identified by these companies, the job market for cannabis looks to be healthy through 2021.

“By rough estimate, I anticipate, within the coming year, we will have 400 to 500 workers in the cannabis industry, just in Holyoke,” Hayden said.

Because Western Mass. offers both skilled workers and cheaper land compared to the eastern part of the state, Waterfall sees real growth potential and cited Holyoke as quickly becoming a center of cannabis commerce. “The city needed innovation and needed jobs. Cannabis is doing that very effectively in Holyoke.”

Such strong demand for talent would normally be an opportunity for career centers like MassHire to be involved. That’s not the case, however; David Cruise, president of MassHire Hampden County Workforce Board, noted that his organization receives most of its funding from the federal government, which has not recognized cannabis as a legal substance.

“Until laws change at the federal level, we cannot be actively engaged in getting involved with job seekers in the cannabis industry,” Cruise said. While he is aware of the increase in local job opportunities in the industry, MassHire will be taking a hands-off approach to cannabis employment.

That presents a stark opportunity for HCC’s programs. In her conversations with cannabis-industry employers, Cabral found they are looking for workers who represent the diversity of their customers. One dispensary owner said clients can range from a 40-year-old woman craving a good night’s sleep to a younger person looking for a recreational product.

“The people who use the products are as diverse as the population in general, so that’s who we want to train, and that’s who the employers want to hire,” she said.

During training, Cabral reminds her students that success means following basics like showing up on time with a good attitude, effectively communicating with the management team, and putting their cell phones away. “These are real careers in real businesses that are trying to make money, so come ready to work.”

Hayden echoes that point and noted that, while it’s not surprising for someone who has an interest in cannabis to work in the industry, employers will expect them to put in an honest effort and have an open mind to learn more and grow. He also advised they pay attention to the little things that can make a big difference.

“One employer told me, he chooses his customer-service people by whether or not they walk into the room with a smile.”

 

Cultivating an Ecosystem

While the cannabis industry offers many career pathways, Hayden said it’s easy to forget about all the traditional back-of-house functions such as accounting, marketing, and data analytics that companies need on top of the industry-specific positions.

While it’s called the cannabis industry, Waterfall added, it’s really more of an ecosystem that encourages people to bring their diverse skills to it.

“While I run a nonprofit, I pay my bills by consulting with cannabis companies on marketing communications and business development,” she said, noting that she started out doing similar work, except her clients were lawyers and accounting firms.

While COVID-19 has made it difficult to get a clear sense of job growth, Hayden said the industry is just getting off the ground and still promises a strong growth trajectory.

“Like any industry, there will be ups and downs,” he added, “but the projections post-COVID are suggesting we could hit a billion dollars a year in a short period of time.”

That kind of success helps overcome some of the stigma of cannabis use, which Waterfall admits can be very strong, whether coming from family or community. While she has been educating her own family, some are still not comfortable with cannabis use.

“Then I hear from someone who tried an infused gummy and has never slept so well, or the person who told me she drinks a CBD tincture in the morning, and it makes her a better mom.”

Anecdotes like those help debunk the stereotypes and stigmas about who uses cannabis, and why. Cabral hopes more people come to understand this is a serious industry with products that can be helpful to a wide range of customers. As such, cannabis needs a committed workforce that also takes itself seriously and moves past old stereotypes.

“Jobs in this field can be extremely technical,” she said. “It’s not just go listen to Bob Marley and have a party.”

Law

An Employment-law Forecast

By Andrew J. Adams, Esq.

On the heels of a fiercely contested election, President-elect Joe Biden has started his transition work, and has laid out plans that have the potential to affect business owners nationwide.

As expected, many these changes lean in favor of the employee as opposed to the employer. However, some plans should assist small businesses. While it’s difficult to predict the future, we can make some solid projections about what employers can expect from the Biden administration.

 

Workplace Safety and OSHA

Andrew J. Adams

Andrew J. Adams

The most immediate effect upon employers is likely to be a push by the Biden administration to enact emergency standards requiring employers to develop workplace-safety plans in reaction to the COVID-19 pandemic. Under the current administration, the Occupational Safety and Health Administration (OSHA) performed the lowest number of inspections in the history of the agency and reduced the number of inspectors on staff to the lowest level in the past 40 years.

Biden will immediately address these policies, leading to increased inspections and enforcement, as was the case under the Obama administration. This means employers will likely face harsher penalties for non-compliance and more substantial fines than they have over the past four years.

Employers are also likely to encounter the return of the Obama administration’s workplace-safety reporting rule. This would require certain employers to report illness and injury information to OSHA, which will then be maintained online as publicly available information.

 

Wage-and-hour Law

President-elect Biden’s campaign has stated he will seek to address wage inequalities between black and white workers, make it easier for workers to pursue claims of discrimination, and push for a higher minimum wage. The administration would increase the funding allotted to the Equal Employment Opportunity Commission, the federal agency tasked with enforcing employment-discrimination laws.

“The most immediate effect upon employers is likely to be a push by the Biden administration to enact emergency standards requiring employers to develop workplace-safety plans in reaction to the COVID-19 pandemic.”

In what is likely to be an immediate change, Biden is expected to rescind President Trump’s executive order banning training for federal agencies and contractors that contained “offensive and anti-American race and sex stereotyping and scapegoating.” The executive order banned training on several topics and recommended keyword searches for terms such as “white privilege,” “systemic racism,” and “unconscious bias” to identify if trainings were inappropriate under the order.

Employers can also expect a push at the federal level for a $15 minimum wage; during his campaign, Biden called for an increase to a $15 minimum wage by 2026. Another likely outcome is an increase in enforcement and compliance actions against employers for wage-and-hour violations, alongside enhanced penalties.

In a follow-up to the first piece of legislation enacted by the Obama-Biden administration (the Lilly Ledbetter Fair Pay Act), Biden will also prioritize ending paycheck discrimination, evidenced by his strong support of the Paycheck Fairness Act, which would amend federal equal-pay laws to require “a bona fide factor other than sex, such as education, training, or experience” in awarding different pay to men or women doing the same or similar work; protect workers from retaliation for discussing wages; and ban the use of salary history in the hiring process.

As an aside, Biden also supports federal legislation that would provide 12 weeks of paid leave for employees for their own or a family member’s serious health condition.

 

Small Businesses

Biden plans to restructure the existing Paycheck Protection Program by adding oversight and an approval guarantee for eligible businesses with 50 or fewer employees. The plan also calls for measures to increase small-business access to capital through an initiative called the Small Business Opportunity Fund.

 

Immigration

The president-elect has proposed a 180-degree turn from the current administration’s policies when it comes to immigration. The Biden plan would call for easing legal immigration into the U.S., including a pathway to citizenship for the large number of immigrants in the U.S. who lack legal permanent status, as well as some of those currently working illegally. Biden also proposes eliminating country-based caps on immigration and increasing the number of employment-based visas awarded each year, such as the H-1B, although those may come with stricter regulation.

 

Workplace Discrimination and Harassment

Biden supports the federal Pregnant Workers Fairness Act (PWFA), which was passed by the House in September, but has yet to be approved by the Senate. Under the PWFA, employers would be required to reasonably accommodate pregnant workers and employees with pregnancy-related conditions and would prohibit them from (1) requiring a qualified employee to accept an accommodation other than any reasonable accommodation arrived at through the interactive process; (2) denying employment opportunities to a qualified employee for the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee; (3) requiring a qualified employee to take paid or unpaid leave if another reasonable accommodation can be provided; and (4) taking adverse action in terms, conditions, or privileges of employment against a qualified employee on account of the employee requesting or using a reasonable accommodation.

The Biden-Harris agenda also includes support of the BE HEARD (Bringing an End to Harassment by Enhancing Accountability and Rejecting Discrimination in the Workplace) Act, which would establish a national harassment-prevention task force and includes several mandates for covered employers, including mandatory non-discrimination training and limitations on the use of non-disclosure and non-disparagement clauses in settlement agreements.

 

Federal Agencies

Employers will likely see a return to the pro-labor days of the Obama administration’s National Labor Relations Board, which is the agency that enforces U.S. labor law in relation to collective bargaining and suspected unfair labor practices. President-elect Biden will take office and have the ability to shift the board to Democratic control within the first year of his taking office.

In addition, the administration has affirmed a strong support for the Protecting the Right to Organize (PRO) Act, a substantial piece of legislation that would provide sweeping reforms, including the imposition of substantial financial penalties on companies that violate labor laws. The Biden-Harris campaign page also promises to “go beyond the PRO Act by enacting legislation to impose even stiffer penalties on corporations and to hold company executives personally liable when they interfere with organizing efforts, including criminally liable when their interference is intentional.”

All in all, employers should be ready for much more employee-friendly changes over the course of the next four (or eight) years.

 

Andrew Adams is an attorney at the law firm Skoler, Abbott & Presser, P.C. in Springfield; (413) 737-4753; [email protected]

Law

Winter Weather Advisory

By Ryan K. O’Hara, Esq.

The start of a New England winter is one of nature’s cruelest jokes — one weekend, it’s 60 degrees and cloudless, stunning foliage glinting in brilliant sun (until it sets, and at a reasonable hour, mind you); the next, it’s pitch black before 5 o’clock, and the outside world morphs into a barren, inhospitable tundra. The chill November breeze whispers: “gotcha!”

Ryan K. O’Hara

Ryan K. O’Hara

Each year, this sudden shift catches me by surprise. If you’re an eternal pessimist like me, talk of winter likely conjures unpleasant visions of storms, salting, shoveling, ice scraping, and (gulp) car cleaning. Apart from the brightness and lightness of the winter holidays, the picture for the next several months is a bit grim.

As we steel ourselves for the winter ahead, it’s a good opportunity to give a moment’s thought to another cheerful seasonal topic — the legal aspects of snow and ice accumulation and removal. Whether you love the winter weather or just love to complain about it, snow, ice, and sleet are facts of life here in Western Mass. for more than a quarter of the year. And, as with any environmental condition, they cause accidents.

When winter weather plays a role in an accident causing property damage or injury, who is responsible? As usual, the old (perhaps roasted?) chestnut of a lawyerly answer applies: it depends. Generally, most liabilities relating to snow or ice arise from claims of negligence. Negligence occurs when someone who owes a duty of care fails to act reasonably, causing harm to someone else. Everyone owes a general duty of reasonable care in their actions to all people those actions may affect.

“Negligence occurs when someone who owes a duty of care fails to act reasonably, causing harm to someone else. Everyone owes a general duty of reasonable care in their actions to all people those actions may affect.”

In practice, this means that, when any of us have snow-cleaning responsibilities, if we are negligent in carrying them out, we may be liable to others — a scary premise. However, simple steps can go a long way in avoiding accidents in the first place. An increased mindfulness of winter weather and its impact on safety will make sure you stay off your insurer’s naughty list. Below are summaries of liability concerns arising from winter weather in some common contexts, with recommendations for how you can appropriately protect yourself and others.

 

Businesses

The Massachusetts Supreme Judicial Court has established a rule that property owners must address all snow and ice on their properties, and act reasonably in removing snow and ice to make the property safe for use (see Papdopolous v. Target Corp., 457 Mass. 368 [2010]). So, for example, when a patron slips on a walkway controlled by the business and breaks their wrist, the business may be legally responsible under Massachusetts law.

In deciding whether a business was negligent as to any harm caused by snow and ice, a jury will be directed to consider the reasonableness of safety measures taken. This analysis takes into account all relevant circumstances, including the severity of the storm, the amount of snow, the amount of time the condition existed, and the cost efficiency of safety measures.

The best way for businesses to protect themselves in these circumstances is to develop a protocol for preventing accumulation of snow and ice where possible, and for prompt post-storm cleanup. A reasonable business is one that anticipates risks posed by snow and ice and takes tangible steps to mitigate those risks.

Therefore, responsible businesses should be aware of impending weather events and take pre-storm steps (such as salting) to prevent accumulation in the first place. Removal of any snow necessary to enable patrons’ access to the business should be the first post-storm step, making sure that all walkways, stairs, and ramps are cleared and fully safe for use as soon as practical. At least one method of legally compliant access should be established before opening for business.

Winter-weather safety doesn’t stop at the front door, either. The business should also be cognizant of secondary weather impacts, such as the accumulation of water from snow melt tracked in by customers. To the extent there is any dangerous condition the business can’t fix, inside or outside, it should put up signs warning patrons of the danger (especially as a court would also evaluate an injured party’s own responsibility for their harm in any claim).

The business should also monitor changing conditions throughout the post-storm period, such as snow that melts and then refreezes. Finally, the business should keep an eye out for season-long hazards, like large icicles accumulating along gutters and eaves.

Often, businesses choose to contract with an outside vendor for snow removal. Although it’s never a bad idea to put a professional in charge, be wary of relying too heavily on contractors: if the contractor is failing, the business must take appropriate steps to ensure its premises are safe.

 

Landlords and Homeowners

In general terms, landlords and homeowners owe the same duty to their tenants and guests as do businesses to their patrons: reasonable care in removing snow and ice in any area controlled by them. Many of the same considerations apply. However, unlike a business, a landlord cannot simply stay closed to the public until snow is cleared; rather, their tenants are often at the property throughout the duration of a storm.

Accordingly, responsible landlords should be especially vigilant in monitoring for storms, and especially prompt in clearing any and all common areas and accesses into the building or units.

 

Drivers

Finally, drivers should be attentive to all weather conditions. Should you be involved in any accident, the reasonableness of your driving (including your speed) will be evaluated in light of the weather and road conditions. Preventive measures such as snow tires, and using additional caution when driving during a storm, will aid you in avoiding accidents (and liability, should an accident occur).

Drivers should be sure to thoroughly clean their vehicles before hitting the road. Accumulation of snow and ice on hoods, windshields, roofs, and trunks is a hazard — who hasn’t seen a practical glacier fly off the roof of a semi on the Pike? State law makes clear that drivers are obligated to clear their vehicles before they begin driving. Scofflaws ignore this rule at their own peril: not only might you earn a fat ticket from a state trooper, but if snow and ice flies off your roof and causes an accident, your violation of state law will be evidence of your negligence (and, therefore, liability for the accident).

 

Conclusion

The law is clear: Massachusetts citizens who take a lackadaisical approach to snow removal are walking on thin ice. If you are unfortunate enough to be involved in an accident involving winter weather, you want to be sure you have taken reasonable, appropriate measures to ensure the safety of yourself and others. Fortunately, such steps are typically simple, inexpensive, and within your control.

No one likes shoveling (no one I know, anyway); however, a little shoveling beats a lot of medical bills and legal fees. Plus, you’ll even get a little exercise. Who couldn’t use that in the middle of the darkest, coldest days of the year?

 

Ryan K. O’Hara is an associate with Bacon Wilson, P.C. and a member of the firm’s litigation team. His legal practice is focused on contract and business matters, landlord-tenant issues, land-use and real-estate litigation, and accidents and injuries; (413) 781-0560; [email protected]

Accounting and Tax Planning

Review, Refocus, and Reset

By Julie Quink, CPA, CFE

Julie Quink

Julie Quink

This year has been riddled with a series of unexpected and unanticipated events for business owners and organizations, the height of which continues to be the pandemic and its continued significant impact.

With the uptick in positive cases continuing, business owners and management continue to face difficult business decisions and worries surrounding the financial and safety impacts of the COVID-19 coronavirus. With much on their minds running a business day to day, it becomes difficult for business owners, management, and even accounting professionals to ‘see the forest for the trees,’ as they say, and, as a result, they often set aside the opportunity to plan.

Using the lessons learned in 2020, there is no better time to review, refocus, and reset.

Review

Countless impacts, some quantifiable and some undocumented or unknown, exist within organizations resulting from the events thus far in 2020. Among them:

• An unprecedented amount of fraud has occurred, impacting unemployment claims, accounting systems, and data breaches, to name a few areas of concern;

• Key accounting standards that were intended to be implemented in 2019 and 2020, including the lease-accounting and revenue-recognition standards, were deferred by the standard setters to ease the strain on companies in this high-pressure economic atmosphere;

• Significant stimulus funds have been made available to the business community through the Coronavirus Aid, Relief and Economic Security (CARES) Act, including the Paycheck Protection Program, the Provider Relief Fund for hospitals and healthcare providers, and the Economic Injury Disaster Loan Program;

• Businesses that have been severely impacted by the pandemic may qualify for the Credit for Sick and Family Leave and the Employee Retention Credits;

• Remote working has become the norm out of necessity rather than convenience as businesses try to keep employees safe, while maintaining the desired level of production;

• Not-for-profit organizations are feeling the pinch of decreased donation levels at a time when their services are needed the most; and

• Interruption of business globally due to the closure of various countries, limited travel, and availability of resources has contributed to the economic challenges for businesses.

Typically, reviewing the results and events of a previous year or period is instrumental in planning for an upcoming year. For many organizations, pivoting and reframing have partially replaced planning in 2020, sometimes just to survive.

Refocus

If there is any bright spot in the current environment, it is the ability to step back and refocus. Bringing the lessons learned from 2020 thus far into clear view, organizations can’t necessarily do what they have always done and survive. Some key areas that may need a refocus include:

• Technology and security of accounting systems and sensitive data;

• The review and planning for changing accounting standards. We know there is potential for new standards or revisions of existing standards to assist in evaluating the impacts of the pandemic on financial reporting. In addition, the timeline for implementation of standards that have already been deferred may be moved even further down the road.

• The use of PPP and other stimulus funds, including employer credits, requires additional consideration from a financial-reporting and a tax-compliance perspective. Will additional stimulus funds be made available in 2021?

• Long-term remote working may encourage the movement from traditional brick-and-mortar locations going forward.

• Fundraising efforts of not-for-profit organizations may need to continue to shift and adapt to our current virtual environment, with gathering restrictions for physical events still in place. The balance of budgeting between mission and funding will seemingly continue for the next few years. Will this spur mergers of not-for-profits to allow for continued mission?

• A shift of international business perspective, including supply chain, will need to continue to occur, perhaps to source more products and services locally.

A common thread weaved in among the suggested areas of refocus is the impact they have on the financial health and well-being of an organization. Taking the time to strategize and refocus in key areas opens new opportunities to shift and reset. With many demands on business owners and management to manage day-to-day operations, this process can be easily lost but remains critical.

Reset

The resetting process is the opportunity to remove the 2020 eyeglasses and pick up a prescription with new, improved lenses for 2021. This ‘new normal’ that organizations are facing encourages outside-the-box thinking, as the original box may not exist anymore or may look entirely different than before. Resetting may continue to be critical to an organization’s success and survival. Resetting in some key areas will help the organization be agile and adaptable to change.

It is clear that business owners and management may not be able to embark on the resetting process all on their own. The reliance on IT, accounting, legal counsel, investment advisors, and business consultants, included in an organization’s team of professionals, will become increasingly important. These spokes in your professional team’s wheel are critical to maneuver through the upcoming year.

Traditionally, strategic planning has encompassed perhaps a three, five-, and 10-year plan. Internal planning — and planning externally with your accounting professionals — have moved to a shorter-term focus, including many transactional and situational planning opportunities, as a result of the continuously changing environment, additional stimulus-fund opportunities, and compliance requirements.

Business owners and management do not need to hold all the information necessary to reset and reframe, but they do need to know the appropriate people to whom they can reach out.

Takeaways

As business owners and management think about the year ahead using the 2020 rearview mirror, one thing is for sure: they should have their team of professionals on speed dial.

If they do not have the right professionals in place, now is the time to make changes. The guidance provided by the spokes on the professional wheel should not be underestimated because one thing is clear: no one of us has all the answers to navigate the new normal, but collectively the team can help provide the input needed to move the organization to the next levels.

Remember: review, refocus, and reset.

Julie Quink, CPA, CFE is the managing principal of West Springfield-based Burkhart, Pizzanelli, P.C., certified public accountants; (413) 781-5609.

Special Coverage

Things May Change, But for Now, Expenses Are Non-deductible

By James T. Krupienski, CPA

For many of us, 2020 has been nothing but a new four-letter word. Unemployment has run rampant, long-standing businesses have shuttered their doors, people have gotten sick, and many have lost loved ones. Those businesses remaining open have had to deal with shutdowns, employees on medical leave, and, ultimately, having to create a whole new way of doing business.

To help businesses from a financial standpoint, the U.S. Congress intervened with the CARES Act back in March. A significant component of this act was the creation of the Paycheck Protection Program (PPP), a series of government loans overseen by the Small Business Administration. The most important provision of this program was the premise that, assuming the loan proceeds were used for certain qualified purposes, 100% of the loan proceeds could be forgiven, and would not be considered taxable income.

Since that time, we have seen loan applications come with revisions that quickly followed, clarifications on allowable expenses have been issued, and now many businesses are now starting the process of loan forgiveness. One significant wrinkle was thrown into the process on May 2, when the Department of Treasury issued Notice 2020-32. stating that otherwise-allowed business deductions would be disallowed for tax purposes if the forgiven loan was used to cover those specific costs.

We have all been waiting for further clarification regarding whether this provision would hold and, if it does, when the non-deductible expenses would need to be taken into income. On Nov. 18, this was clarified for all taxpayers, and this article will cover these recent updates.

Will Non-deductibility Be Overturned?

Many taxpayers were in an uproar when the Treasury Department clarified that expenses would not be deductible. In essence, this would lead to an increase in taxable income, which was not the intent of Congress when the CARES Act was passed. There has been some hope that this provision would be overturned.

However, like many other promised stimulus extensions, there has been no forward movement on this in Washington to overturn the Treasury Department’s decision. Therefore, as this article is being written, we can only hope some decision will be made. As of now, we need to proceed as guidance currently stands — that the expenses are non-deductible.

When Do the Non-deductible Expenses Hit the P&L?

There has been lively discussion within the accounting community for months about when the non-deductible expenses would have an impact on each company’s bottom line. One camp was adamant that it would not become income until the loan was forgiven, because what if it wasn’t? The other camp argued that the expenses would be non-deductible as the expense was incurred, assuming a belief that the loan would be forgiven in the future. This can all be put to rest now, as the Department of Treasury ruled on this debate.

Revenue Ruling 2020-27 clarifies that the expenses are disallowed when incurred, assuming that there is ‘reasonable expectation of reimbursement.’ This holds true regardless of whether the taxpayer plans to apply for forgiveness in 2020 or 2021.

With its ruling, the Treasury Department provided two examples. In each, the taxpayer incurred and paid expenses that were qualified expenses per the PPP loan program, and in each, the taxpayers believed they had basis to achieve forgiveness of the loans. In the first example, forgiveness was applied for during November 2020. In the second example, the taxpayer does not expect to apply for forgiveness until 2021.

Given that all expenses were eligible expenses, and given that each taxpayer believes forgiveness is expected, then the deduction as incurred would not be allowed. This would then have an impact on their current-year tax filing. It is critical for all businesses to note that the impact of non-deductibility of their PPP loan expenses will need to be considered when engaged in tax planning for 2020 year-end, which is presently upon us.

What If the Loan Is Subsequently Not Forgiven?

For those taxpayers who either do not have their loan forgiven, or those who do not plan to apply for forgiveness, these expenses will then become deductible. This was addressed by the Treasury Department in a safe harbor under Revenue Procedure 2020-51, issued concurrently with Revenue Ruling 2020-27.

This guidance clarifies that a taxpayer will be able to claim as a deduction, on either their current or subsequent tax return, any expenses now deemed deductible by not achieving forgiveness of the loan, depending on the circumstances. This would occur if forgiveness is declined or not requested.

To request the safe harbor and be able to deduct these expenses, a statement must be attached to the tax return, with a series of required inclusions, along with a heading of “Revenue Procedure 2020-51.”

Where Do We Go from Here?

At this time, everyone who received a PPP loan should be reaching out to their accountant to discuss the impact on their 2020 business return. Strategies will need to be discussed regarding how to handle and best address this increased taxable ‘income’ that will be reported on your business tax return.

For those who were hopeful that the non-deductibility provision would be overturned, all we can do is wait and see if Washington makes any further changes down the road. Stay tuned!

James T. Krupienski, CPA is partner and Auditing, Accounting, Healthcare Services leader at Holyoke-based Meyers Brothers Kalicka; (413) 536-8510.

Opinion

How to Handle Unemployment Fraud

By Chris Geehern

State officials and Massachusetts employers continue to deal with a surge of fraudulent unemployment-insurance claims generated as part of a national scheme using stolen personal information to attempt to access jobless benefits.

Criminal enterprises with access to stolen personal information from prior national data breaches have been taking advantage of the COVID-19 pandemic by attempting to file large numbers of unemployment-benefit claims through the Massachusetts Department of Unemployment Assistance (DUA) system.

DUA revealed in July that 58,000 fraudulent claims had been detected, preventing the loss of $158 million. At the time, the Department of Labor said it was working with the state and federal law enforcement to investigate the fraud and hired a private accounting firm to perform a forensic audit. Now, fake unemployment claims are on the rise once again as scammers appear to be targeting public employees.

Associated Industries of Massachusetts (AIM) has also continued to receive reports from member companies about fraudulent unemployment claims. Companies report in some cases that employees have been unaware that a fraudulent claim has been filed in their names and are thus unable to bring the scam to the attention of their employers.

Employees and employers should work together to address the scam by reviewing a set of online identity-fraud tools developed by DUA. Meanwhile, state officials are providing guidance to employers on how each of the following situations where there is a questionable claim should be handled.

If an employer has received a ‘Confirmation of Employment’ letter, complete the form online. If the person still works for you, select ‘still employed part-time,’ even if the person is a full-time employee. If the person never worked for you, select ‘The claimant did not work for me during the time period stated.” The employer should encourage the employee to file a fraud report and follow the guidance at www.mass.gov/info-details/report-unemployment-benefits-fraud.

If an employer has received a ‘Lack of Work’ letter for an employee who either has never worked for the company or is employed by the company without any break in service for the past year, follow the same instructions as for a ‘Confirmation of Employment’ letter.

If the employer or employee is responding to a ‘Fact Finding Letter,’ complete the form as provided. Employers should inform employees who had a claim filed without their permission to visit the website noted above to report the fraudulent claim and find information and advice on other things they should do to protect their identity.

If an employer has received a ‘Monetary Determination’ with which they disagree, encourage the employee to file a fraud report and follow the guidance at the website.

If an employer is protesting a claim a result of a ‘Benefit Charge Statement’ they are in disagreement with, protests can only be filed online and not by any other mechanisms. On the online form, enter a comment saying ‘fraudulent claim’ and then provide information why you believe the claim was fraudulent (for example, the claimant still works for our company, and when we spoke to the claimant, they said they never filed a claim).

In a case where both the employer and the employee acknowledge the claim was not filed by the employee, the employer should fill in the protest form using their UI Online account, and the employee should file a fraud report and follow the guidance at the website noted above.

 

Chris Geehern is executive vice president of Associated Industries of Massachusetts.

 

Women of Impact 2020

Director of Human Resources, Loomis Lakeside at Reeds Landing

She Changes Organizations for the Better Through Empathetic Leadership

By Mark Morris

Toni Hendrix

Toni Hendrix

 

Toni Hendrix has a few philosophies she’s fond of sharing.

The first is “the fish rots from the head.” To prevent that rot, she believes it’s important for each person to set a high standard.

“We need to lead by example,” said Hendrix, director of Human Resources at Loomis Lakeside at Reeds Landing in Springfield. “I’m extremely passionate about leadership, and when it’s done right, good leaders are role models.”

Her second philosophy is “God don’t like ugly.” She acknowledges the phrase uses improper grammar, but stating the idea this way gives it more impact. The point is not to treat others in an ugly way.

“Let’s do the right thing and treat people with dignity and respect because, if you don’t, karma can come back and bite you.”

Her third philosophy comes from a sergeant she served with while stationed in Germany with the U.S. Army.

“You won’t know how much people can do until they know how much you care,” she said, calling it a great message about the power of empathy. “If you show people that you care, take time to learn about their families, and show a real interest in them, they will take that hill for you. They will even die for you. Otherwise, they’re not even going to follow you up that hill; you’ll be by yourself.”

“If you show people that you care, take time to learn about their families, and show a real interest in them, they will take that hill for you. They will even die for you. Otherwise, they’re not even going to follow you up that hill; you’ll be by yourself.”

Those three philosophies basically boil down to one guiding principle, she added: treat people with dignity and respect. In a quarter-century of honing her skills as as a human-resources professional, she’s followed that guiding principle, especially when facing her toughest challenges.

After graduating from West Springfield High School, Hendrix served for seven years in the Army, which brought her to several U.S. states as well as Germany, Turkey, and South Korea. Her job was supposed to be as a military policewoman, but in the 1980s, the Army prohibited women from serving in that role.

“I ended up doing other duties, like guarding the gate and working as the provost marshal’s secretary, but I was never allowed to work as a military police person,” she said. But instead of letting that experience bring her down, she turned it into a motivator.

“I’ve had my own personal experiences with gender discrimination, sexual harassment, and being treated very differently because I lived in a country where I didn’t speak the language.”

Treating people with dignity and respect has been a touchstone of Toni Hendrix’s career, including in her current role at Loomis Lakeside.

Treating people with dignity and respect has been a touchstone of Toni Hendrix’s career, including in her current role at Loomis Lakeside.

But those experiences provided a background that would become valuable in shaping her career, first as a Human Resources director with Mass Mutual and at several stops after that — all of them marked by a simple desire to be impactful by leading with empathy and treating people the right way.

 

Focus on Diversity

In the mid-1990s, Mass Mutual was working to address diversity issues that affected not only internal employees, but potential customers as well.

“At that time, their marketing messages were directed to white men with salaries over $100,000,” Hendrix said. “But they were ignoring families with dual incomes, women business leaders, and women entrepreneurs.”

When then-CEO Tom Wheeler decided he wanted diversity to be his legacy, Hendrix became the leader of that effort at MassMutual. Later, in the early 2000s, she brought those same leadership skills to Pennsylvania-based Simmons Consulting.

“We worked with a number of Fortune 100 and Fortune 500 companies that had gotten in trouble around gender or race discrimination issues,” she told BusinessWest. “With our help, they were able to better address diversity in their workforces.”

Hendrix also worked to improve human-resource processes at the American Cancer Society and Baystate Health before taking on her current role with the Loomis Communities.

It was a Loomis board member who encouraged her to be part of Bridge for Unity, a group of people from around the Pioneer Valley who come together to talk about race relations. With a goal of starting a dialogue among diverse people in a thoughtful and safe environment, the group has also hosted similar groups from South Carolina and Kentucky.

The simple act of gathering people to have a dialogue about race has been enlightening at times for Hendrix. “The people from Kentucky have a very different experience than the people from Amherst,” she observed.

A desire to be involved in the community has provided numerous opportunities for Hendrix to share her philosophies. In what she calls “my love project,” she serves as board president for the Art for the Soul Gallery in Springfield. Founded by Stella Butler and Rosemary Tracy Woods, Art for the Soul is a place where underrepresented groups can to display their art in all its various forms. When Woods decided to form a board of directors for the gallery, she asked Hendrix to lead it.

As a first order of business, Hendrix set a strategic goal to get the gallery out of the red. After some modest local fundraising, Art for Soul stepped up its game and organized its largest event, arranging for Harold Melvin’s Blue Notes to perform a concert in Springfield in 2018. Since then, the gallery has operated in the black, allowing the board to be more forward-thinking.

“We can now start to build the brand and develop our board to put the organization in a good place for the future,” she said.

Woods appreciates the impact her friend has had on the gallery. “Toni’s leadership and out-of-the-box thinking have been an inspiration and a godsend to the sustainability of Art for the Soul Gallery,” she said in nominating Hendrix to be recognized as a Women of Impact.

 

Building Community

As a human-resources professional, Hendrix has been a member of the Employers Assoc. of the NorthEast for some time, and in January, EANE invited her to join its board of directors. She admitted she was initially hesitant because the group lacked minority staff and board members. “Then I reminded myself, it’s not good enough to just be critical — I also have to serve when asked.”

Once the pandemic is behind us, she said, the human-resources profession will have to operate under a whole new set of rules and policies. “And I think the Employers Association will be right at the forefront of what this new world will look like, so I’m glad to be on their board.”

Meanwhile, years of experience anchored by those strong principles have enabled Hendrix to manage her own staff during these unprecedented times of COVID-19.

“In my entire career, I’ve never seen the kind of fear employees have now,” she said. “I’ve always been a proponent of treating people right, so we are focused on helping people feel more safe.” That involves reassuring employees that their workplace is a safe place and that support systems are in place should they have a problem.

Hendrix and her husband Joe, owner of Smokey Joe’s Cigar Lounge, have lived their lives in a way in which they are always building community. She credits her mother with setting the example a long time ago by always having room at the dinner table, treating visitors with dignity and respect.

“I start every board meeting at Art for the Soul Gallery by going around the table to ask, ‘what’s good in your world?’” she noted. “That way, we know what’s happening in each other’s lives.”

Whether it’s inviting people to her own house for dinner or offering Smokey Joe’s to a family that can’t afford a post-funeral gathering, Hendrix and her husband are dedicated to building community by treating others the way they’d like to be treated. “If that’s the only impact I leave in this world, that’s perfectly fine with me.”

 

Women of Impact 2020

President and CEO, Caring Health Center

In Both Healthcare and Ministry, She Leads with a Servant’s Heart

By Mark Morris

Tania Barber

Tania Barber

Tania Barber likes to say her main motivation is servant leadership.

As president and CEO of Caring Health Center, as well as the founder and pastor of Living Water Global Ministries, her passion is focusing on the needs of others rather than the wants of self.

“I’m working in the career of healthcare, and I’m intertwining my calling, which is being a help to others,” she said. “It’s what gives me my drive.”

Barber’s story with Caring Health Center (CHC) begins in the salon where she worked as a hairdresser, which was about to close. As she was trying to figure out what to do next, one of her customers offered Barber temporary work as a switchboard operator at CHC.

“That was definitely not in my future plans, but it was bread and butter on the table for my children, so I said, ‘absolutely, I would love to come and help out,’” she recalled.

After a year as an independent contractor, Barber was hired as the permanent switchboard operator. As the years progressed, so did her career in roles of increasing responsibility, culminating in 2005 when she was asked to be CHC’s chief operations officer. She declined that offer and was asked two more times before finally accepting the position. Her hesitation was due to a concern that the COO position would remove her from the ability to engage and communicate directly with patients.

“I finally realized that I could have a greater impact in an executive management role, to help inform the policies and practices of the organization,” she told BusinessWest. “It was a chance to make positive changes to the issues I saw first-hand when I worked on the front line.”

 

Community Ties

Barber’s empathy for people in the community goes much deeper than her experience as a healthcare worker.

“I am one of our patients; I come from the same community,” she said. “When I was on MassHealth, I was denied services because they weren’t covered.”

These inequities made her more passionate about her position because community health centers are mandated to provide care for everyone, whether they have insurance or not. “It gave me the chance to speak to family members and people in the community that they could receive high-quality healthcare like everyone else and not be denied because of their ability to pay.”

Her passion for helping others led to her promotion to president and CEO of CHC in 2013. Under her leadership, the center has increased the number of patients seen every year from 14,000 to nearly 20,000, while staffing has increased from 109 employees to 250.

New services offered under her watch as president include a pharmacy, behavioral-health and substance-use treatment, and a wellness center. She has also built a diverse team, with strong representation by people of color in executive management and throughout the organization.

Barber has also put a special emphasis on improving services for the underserved and refugee populations in the community, noting that “I want to help remove the barriers and increase their access to quality care.” Currently, CHC serves the largest number of refugee and immigrant patients outside of Boston.

“I finally realized that I could have a greater impact in an executive management role, to help inform the policies and practices of the organization. It was a chance to make positive changes to the issues I saw first-hand when I worked on the front line.”

COVID-19 has brought multiple challenges to healthcare organizations, and CHC is no exception. Like most facilities, CHC offers telehealth, which works well for those who can access it. For others, it leads to a ‘digital divide’ where patients who might benefit from telehealth lack access to the internet or the devices to connect. This concerns Barber because recent data shows communities of color have contracted COVID-19 at a disproportionate rate.

While patients can still go to CHC for care, fear of leaving the house and becoming infected by coronavirus are preventing many from treating their other ailments. For the refugee population, these fears are compounded by the dual concerns of being exposed to immigration authorities, as well as to the coronavirus.

One solution, then, was to bring CHC to its patients.

“We purchased a mobile van to bring care to the community,” she explained. “The Mobile Health Clinical Services program has enabled us to confront some of the challenges we’ve seen during these times of COVID.”

Working with the Community Foundation of Western Massachusetts, CHC also arranged to provide mattresses as a way to combat COVID-19. Barber explained that a mattress makes a big difference for patients who live in dense neighborhoods or housing.

As a person of faith, Tania Barber says she believes in adding value to the lives of others.

“Many of these people were sharing the same sleeping quarters or even sleeping in the same bed. By setting up individual mattresses, they are able to get some separation.”

 

Woman of Faith

In addition to her full-time career with Caring Health Center, Barber is a minister with Living Water Global Ministries, which she founded in 2011. While wearing two hats can be exhausting, the key for her is balance. “I make sure to rest and take a vacation when I feel its time. Of course, I factor in family time as well.”

As a woman of faith, Barber said she believes in adding value to the lives of others. It starts with seeing a person’s potential, and she has encouraged several CHC employees to enroll in undergraduate and graduate programs.

“They have gone back to school, graduated, and now work in different roles in the organization. Two of our employees are currently pursuing doctorate programs,” Barber said with pride. “If you believe in people, they will have the faith to believe in themselves.”

In the spirit of that philosophy, Barber founded EST.HER, a leadership-consulting firm, in 2019. “One day I was looking at the Book of Esther and I didn’t see the name ‘Esther’ I saw E-S-T, H-E-R, and thought, ‘establish her.’”

Because her passion is to help others achieve their goals and dreams, Barber founded EST.HER to help motivate disenfranchised women and allow them to eventually become pillars in the community. In fact, the EST.HER logo uses the acronym PILLHERS, which stands for ‘Purposely Impacting Lifestyle Leaders Helping Each Reach Success.’

Biblical scholars have noted that the Book of Esther teaches that our past doesn’t dictate our future, and God places mentors in our lives to teach us wisdom, she noted. “I want to help women aspire to become the pillars in our community and serve as the anchors who can help the next generation of leaders.”

In her nomination of Barber as a Woman of Impact, Yvonne Williams, chief Development officer at CHC, noted that “it’s not an overstatement to say that Tania Barber’s intelligence and vision directly impact the lives of thousands of patients and their families, as well as hundreds of employees.”

Early in her career, Barber took a professional-development course titled, “How to Take Charge of the Front Desk.” Among other things, she credits it with teaching her how to switch gears to the supervisor role after making friends with co-workers.

“The course was also instrumental in teaching how to lead, how to help people see beyond the horizon of where we are and where we need to go, and, finally, how to get there.”

That early course launched a career of servant leadership, in which she is still helping people see beyond the horizon by making the simple declaration, “I’m here to help.”

With a long track record of leading by example and helping others do the same, Barber is a true Woman of Impact.

Health Care

What’s Next for Hospitals

By Spiros Hatiras

The year is 2020, in the midst of an unprecedented pandemic, and the subject is the U.S. healthcare system — more specifically, the average U.S. hospital. Is it alive and well, or is it ailing?

I will argue that all is not well with our healthcare system, and that the average U.S. hospital is facing tremendous challenges now and for the foreseeable future.

It is important to establish that, while the healthcare-delivery model has been shifting to less hospital-centric models, the acute-care hospital remains solidly in the center of our delivery system and, in my opinion, will continue to do so. Any notion of a more decentralized model with less emphasis on hospitals has been pushed many years into the future, in part as a result of the COVID-19 pandemic. Despite the accelerated growth of telemedicine during the pandemic, the need for hospital bed capacity, specialized equipment, and personnel — including the ability to ‘surge’ when needed — has all but ensured that the trend toward a smaller hospital footprint will slow down if not entirely reverse.

Shouldn’t that be good news for the future of hospitals? Well, not quite. While we may have a new appreciation for the need of readily available inpatient hospital care, we have also not solved any of the problems that hospitals have been facing for many years. In fact, the pandemic laid bare one of the most fundamental problems facing the industry, especially for smaller community hospitals. At the very onset of the pandemic, it was immediately clear that many hospitals, suffering from years of underfunding, faced immediate financial threat and would not be able to survive without a financial bailout, while private insurance companies reported record profits.

“I will argue that all is not well with our healthcare system, and that the average U.S. hospital is facing tremendous challenges now and for the foreseeable future.”

Why is this the case in a country where healthcare demands the highest per-capita expenditure of all developed countries? According to a study published in January 2019 by the Johns Hopkins Bloomberg School of Public Health, the U.S. topped the ranking of healthcare spending among developed countries in 2016 at $9,982 per capita per year, a figure that is more than double the median of $4,033.

The reason for this disconnect is that most of that money is spent not on actual care, but on administrative costs. A recent study by the Center for Medicare and Medicaid Services found that, of the $3.5 trillion spent on healthcare in 2017, 33%, or $1.1 trillion, was paid to hospitals. Unfortunately, a significant portion of that money covered unnecessary costs to process bills and get paid by insurance companies, meaning the total spent on actual hospital care was far less. The same is also true for doctors’ offices.

In a study published in 2017 in Annals of Internal Medicine, Steffie Woolhandler and David Himmelstiein noted that the administrative cost of our healthcare system was estimated to be $1.1 trillion, of which the vast majority is excess and unnecessary spending. We are spending vast sums of money on a deliberately confusing and complex insurance system.

Trying to navigate the onerous billing requirements, denied-claims management, pre-authorization requirements, and a host of other administrative hurdles unique to the U.S. healthcare system is wasteful and frustrating to hospitals, doctors, and patients alike. We spend more money administering the system than we spend on care. This should alarm each and every one of us and prompt us to look a little more carefully at proposals for a single-payer system.

It is time to ignore private insurers who portray a single-payer system as the boogeyman, or the end of healthcare as we know it, and recognize their argument for what it really is: a reluctance to part with huge profits being made from a broken system at the expense of our health.

 

Spiros Hatiras is president and CEO of Holyoke Medical Center.

Health Care

What’s Next in Health Education

By Marie Meckel, Kathleen Menard, Susan McDiarmid, and Theresa Riethle

Despite the complexities that COVID-19 has brought to healthcare education, the trajectory from traditional models to hybrid or virtual experiences was inevitable. Today’s technology allows healthcare educators to transcend geography, which widens access to health education in all segments of the population despite location, economic status, and race. The pandemic also revealed the vulnerabilities of underrepresented minorities.

These challenges caused many educators to pause to re-evaluate and readapt to how we teach and develop medical curriculum. Incorporating technology through virtual learning experiences while focusing on how social determinants of health impact patient care and outcomes are two areas of focus in the future of healthcare education.

Health programs can integrate in-person and remote simulation experiences; these include the traditional simulation lab consisting of realistic mannequins where learners can develop clinical skills in a safe setting without patient harm. Additional virtual experiences include a wide array of interactive patient-encounter portals where learners can conduct histories, perform physical examinations, order and interpret diagnostic tests, develop assessments and treatment plans, all while documenting patient records and receiving coaching and feedback every step of the way.

“By incorporating technology into healthcare education, medical learners will be better prepared for clinical practice.”

Live rounding with certified medical providers has also enabled learners to experience traditional hospital rounding from wherever they are in an interactive manner. Even surgical experiences can be supplemented with high-definition surgical videos and medical lectures from subject-matter experts.

While none of these experiences will replace the need for traditional hands-on learning, they can provide learners with unique education experiences that directly correlate to what is seen in clinical practice. With the increase in telehealth visits, medical learners are now equipped to adapt to these visits, delivering care in a better and more effective manner.

Technology is intertwined into healthcare today as seen with diagnostic imaging, robotic surgery, and electronic health records. By incorporating technology into healthcare education, medical learners will be better prepared for clinical practice. The virtual experiences will also develop independent and critical thinking, thus making it easier to adapt to innovations and changing patterns of illness and health systems.

In order to provide equitable, high-quality healthcare to all patients, we must include social determinants of health in the curriculum. These include socioeconomic status, education, neighborhood and physical environment, employment, and social-support networks, as well as access to healthcare.

This charge became more evident with the pandemic, as we have seen its profound impact on underrepresented minorities. It would be a disservice to future providers to ignore the current healthcare disparities in these populations. Addressing these determinants is not only important for improving overall health, but also for reducing health disparities that are often rooted in social and economic disadvantages.

Healthcare providers of the future will not necessarily be those who have a traditional classroom education, but will be those who know how to use, implement, and apply technology in healthcare systems and provide high-quality healthcare to all patients.

 

Marie Meckel, MS, MPH, MMSc, PA-C; Kathleen Menard, MS, PA-C; Susan McDiarmid, MS, PA-C; and Theresa Riethle, MS, PA-C are physician assistant faculty members at Bay Path University.

Health Care

What’s Next in Cancer Care

By John Sheldon, M.D.

Cancer is the second-leading cause of death in the U.S., but we continue to make significant advances in reducing its toll.

John Sheldon

John Sheldon

Key developments have included targeted drug therapies resulting from genomic profiling of tumor samples, which determines the molecular ‘fingerprint’ of the tumor; immunotherapy, which allows the body’s own natural immune system to better attack tumors; more sophisticated radiation-delivery technologies, which allow for more precise targeting of tumors and better sparing of adjacent normal tissues from radiation dose; and newer combination or ‘multi-modality’ treatment regimens, taking advantage of a combination benefit effect of different ways of attacking and killing tumor cells.

In lung-cancer treatment, for example, we now have drugs to target a variety of specific mutations that may be present, such as EGFR, ALK, ROS1, MET, RET, BRAF, or NTRK. Immunotherapy has been shown to provide a survival improvement in both stage-3 and stage-4 lung cancer. For earlier and smaller lung cancers, highly targeted radiation treatment can be delivered in a short regimen of just three to five sessions, as an alternative to surgery for patients who are not good surgical candidates. And for other patients, combination regimens of radiotherapy and chemotherapy followed by immunotherapy may be the preferred approach.

Even newer types of drugs are now available called antibody-drug conjugates, or ADCs, which target with high affinity a particular protein expressed on the surface of tumor cells, attach to the target, and then deliver a toxic payload to kill those particular tumor cells. This type of treatment was just approved by the FDA in April for metastatic ‘triple-negative’ breast cancer (a more aggressive type of breast cancer), and another drug in this category was approved last December for locally advanced or metastatic bladder cancer.

Molecularly targeted radiation delivery is another category of treatment that is advancing. Also known as peptide-receptor radiotherapy (PRRT), it consists of a radioactive particle, or radionuclide, linked to a protein, and this protein seeks out and targets its intended receptor, which is overexpressed on certain tumor cells. Once the protein-receptor binding takes place, the radionuclide is internalized into the tumor cell — and destroys the tumor cell. This treatment is currently being utilized for neuroendocrine tumors of the abdomen (the type of cancer that afflicted both Steve Jobs and Aretha Franklin), and it is being investigated for the treatment of metastatic prostate cancer.

Quality of life is an ongoing focus of cancer care, and while we always aim to increase survival, we simultaneously aim to optimize quality of life for patients under our care. In the realm of radiation treatment, shorter course regimens are more frequently being used (supported by evidence from clinical trials) in order to increase convenience for patients. Such regimens are now commonly used in the treatment of breast cancer, for early-stage lung cancer (as mentioned above), for some brain-tumor patients, and for some patients with prostate cancer. For the latter, radioactive seed implants into the prostate gland may be an option for a one-visit outpatient treatment.

In short, we continue to push forward strongly in the treatment of a broad range of cancers.

 

Dr. John Sheldon is medical director, Radiation Oncology at the Mass General Cancer Center at Cooley Dickinson Hospital.

Health Care

What’s Next in Behavioral Health

By Barry Sarvet, M.D.

As a science-fiction fan, I would love to be able to travel in time to see into the future of psychiatry. But, of course, the future isn’t really knowable and depends in large part on the choices we make. A more useful and realistic approach is for us to envision a possible future based on our awareness of the most urgent needs in the field, and to assume linear progress from the current state of our scientific knowledge and discovery.

Barry Sarvet

Barry Sarvet

In my opinion, the two most compelling needs within the field of psychiatry are the need for more effective, safe, and reliable treatments for the subset of psychiatric patients who don’t respond optimally to current treatments, and the need to make psychiatric care more accessible and equitable for everyone who suffers from mental-health conditions.

Depression is one of the most common psychiatric illnesses, affecting 7.1% of all adults and 13.3% of adolescents in the U.S. Severe depression is a potentially deadly illness, and suicide is a leading cause of death in this country. Although we already have a host of effective treatments for depression, between 10% and 30% of patients do not respond favorably to treatment. However, ongoing advances in our understanding of the neurobiology of mental illnesses in recent years have led to a number of novel biological treatments for treatment-resistant depression and other psychiatric conditions.

One recently developed treatment that has shown great promise with treatment-resistant depression is repetitive transcranial magnetic stimulation (rTMS). Available at Baystate, rTMS is a non-invasive procedure in which focused pulses of electromagnetic energy are applied to specific regions of the brain resulting in increases in blood flow and metabolic activity. rTMS belongs to a branch of psychiatric treatment referred to as psychiatric neuromodulation. We expect to see further development of this branch in coming years, particularly because of the encouraging observations of clinical effectiveness and safety of this type of treatment for patients whose conditions have not responded to conventional medications.

Other biological psychiatry advancements on the horizon include the development of medications targeting receptors for neurotransmitter systems (such as glutamate and NMDA) which have recently been implicated in the pathophysiology of depression and other psychiatric illnesses. We are also seeing a renaissance of research activity studying the use of so-called psychedelic drugs in combination with talk therapy to induce states of consciousness in which patients may find it easier to change well-worn patterns of thinking associated with psychiatric illnesses such as PTSD, anxiety, and depression.

Lastly, on the biological front, advances in the understanding of genetic variability in metabolism and responsiveness of the nervous system to psychiatric medications promise to usher in an era of personalized medicine in psychiatry, allowing psychiatric clinicians to select effective and tolerable medication treatments for patients without having to go through a trial-and-error process.

Even more important than advances in biological psychiatry is the need for progress in making psychiatric treatment more accessible to everyone who needs it. Currently, a majority of patients with mental illness do not receive any treatment at all, and for many more, treatment is delayed. In fact, many patients with untreated mental illness, disproportionately persons of color, end up in the criminal-justice system because of a lack of access to care.

In recent years, we have seen steady reduction in stigma surrounding mental illness and increased acknowledgment of the importance of mental health across society. Baystate’s recently announced plan for the development of a new, state-of-the-art psychiatric hospital facility for our region reflects the growing recognition of the importance of improving access to behavioral healthcare.

This new facility is just one component of a comprehensive strategy which needs to be executed in partnership with the whole community to improve access to all levels of mental healthcare and address persistent racial and socioeconomic disparities in access to care. Some of the components of this strategy includes work we have been doing at Baystate to embed mental-health services into our primary-care services. In addition, our development of new training programs for psychiatrists and child and adolescent psychiatrists have established a pipeline for enhancing the psychiatric workforce in our region.

We also will see continued use and improvement in telehealth models of psychiatric practice, which, of course, have dramatically grown in response to the pandemic, and have proven to be an important tool in reducing geographic barriers to access to care.

 

Dr. Barry Sarvet chairs the Department of Psychiatry at Baystate Health.

Law Special Coverage

Risky Business

By Amy B. Royal, Esq.

The pandemic has already created a flurry of individual and class-action lawsuits against companies. In fact, according to data collected through a national association for lawyers, it is estimated that approximately 80 COVID-related litigation cases have been filed in Massachusetts alone, and more than 5,000 across the country. These cases are expected to be very costly to defend.

The most common types of cases that have emerged involve health and safety violations, discrimination, and leaves of absence from work. In understanding the trends of lawsuits that have already been filed, businesses can better prepare by assessing risk and perhaps mitigate their exposure to liability in the process.

 

The Safety Suits

Not surprisingly, several COVID-related lawsuits involve health and safety claims. The common theme among them is that a company failed to provide a safe environment either for their employees or for their customers. Some of the lawsuits allege a failure-to-warn component, i.e., that the company knew an individual had exhibited COVID-19 symptoms at the place of business, yet the company failed to inform employees and customers. Other lawsuits involve claims that companies either did not provide adequate PPE or otherwise take necessary precautions to protect people.

Amy B. Royal, Esq

Amy B. Royal, Esq

An offshoot of the safety suits involve whistleblower claims under OSHA, a federal law that addresses standards for workplace health and safety. Employees can blow the whistle on their employer by reporting potential workplace health and safety issues to (and filing complaints with) the Occupational Safety and Health Administration, a division of the Department of Labor.

“According to data collected through a national association for lawyers, it is estimated that approximately 80 COVID-related litigation cases have been filed in Massachusetts alone, and more than 5,000 across the country.”

Many of the COVID-related OSHA claims are for retaliation. Specifically, several employees have filed complaints alleging they suffered an adverse employment action after notifying their employer of violations of social-distancing guidelines or failures to maintain proper cleaning of workspaces or PPE.

 

Discrimination

Age, disability, and pregnancy discrimination cases related to COVID-19 have been on the rise since the summer months. These types of cases typically arise under the following general set of circumstances: the employee refuses to return to the physical workspace citing their age, disability, or pregnancy as too much of a risk factor, and their employer terminates them or, in the context of disability and pregnancy, does not accommodate them by allowing them to work at home.

However, these same types of discrimination cases arise in a different way as well, underscoring the fact that no good deed goes unpunished. Believe it or not, good-intentioned employers that have told their older workers or those with known pre-existing conditions to work from home, take a leave of absence, or accept a furlough while bringing back their younger or non-disabled counterparts are getting smacked with age and disability discrimination claims.

Although these employers may have been acting out of concern for their workers that they perceived as high-risk, preventing them from returning to the workplace can give rise to a potentially viable age or disability discrimination claim. Indeed, the Equal Employment Opportunity Commission (EEOC), our federal enforcement agency for discrimination claims, issued guidance on this specific situation. In a nutshell, the EEOC has taken the position that employers cannot do this unless they can show their employee’s physical presence in the workplace poses a “direct threat,” which is an extremely high standard to meet.

 

The Families First Coronavirus Response Act (FFCRA)

The FFCRA came into effect in what felt like a nanosecond and, thus, created a quagmire. Businesses suddenly needed to understand the act, implement it, and comply with it.

The act, which included the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act within it, requires covered employers to provide employees with paid sick leave or expanded family and medical leave for certain qualifying reasons. The act took effect in April and presently is slated to remain in effect through the end of the year. It applies to employers with fewer than 500 employees.

“Some of the lawsuits allege a failure-to-warn component, i.e., that the company knew an individual had exhibited COVID-19 symptoms at the place of business, yet the company failed to inform employees and customers.”

Now that the act has been in effect for just over six months, lawsuits under it have begun to emerge. The majority of these lawsuits involve the caregiver provisions of the act.

The act mandates that employers provide 80 hours of paid sick leave to employees to care for:

• An individual who is subject to a governmental quarantine or isolation order or is advised by a healthcare provider to self-quarantine due to COVID concerns; or

• Their child if the child’s school or daycare is closed or the childcare provider is unavailable due to the pandemic.

Further, the Emergency Family Medical Leave Act portion of the FFCRA permits employees to take 12 weeks of job-protected leave to care for their child if the child’s school or daycare is closed or the childcare provider is unavailable.

In these FFCRA lawsuits, employees are claiming either that their requests for leave were improperly denied or that they were retaliated against for availing themselves of their rights under the act.

 

The ‘Take Home’ Cases

The ‘take home’ cases are the scariest of them all as they carry the biggest monetary exposure to businesses. The crux of them is this: an employee contracts COVID-19 at his or her workplace. A family member becomes infected and becomes very ill or tragically dies. A claim is then brought by the family member against the employer for negligence under the theory that the employer failed to warn or failed to take reasonable precautions.

Workers’ compensation laws are generally the exclusive remedy to employees for workplace injuries. This means employees cannot bring negligence claims against their employer for workplace injuries. The reason for the workers’ compensation system was to limit employers’ exposure to large, multi-million-dollar damage awards in personal-injury cases, as workers’ compensation laws impose caps on damages. Take-home cases, however, are not capped and could potentially generate a nuclear verdict.

There is precedent for take-home cases in the asbestos litigation space. Indeed, family members have received landslide settlements and verdicts from many companies claiming they developed mesothelioma after their spouse, for example, brought asbestos into their home after work.

The first take-home COVID-19 case was recently filed in Illinois by a daughter who alleged her mother died after her father contracted coronavirus at work and then brought it back into the home, infecting her mother. In this wrongful-death lawsuit, the daughter alleges her father’s employer should be on the hook for the exposure to her mother that her father ‘took home’ to her, which ultimately caused her mother’s death. Other take-home cases have begun to emerge around the country as well.

 

What Can Be Done to Mitigate Risk?

Two words: comprehensive planning. Proper planning includes knowing what laws apply to your company, assessing them and assessing your overall areas of risk, taking proactive steps, and designating a team to help create, implement, manage, and adapt to COVID-related issues. Then, put pen to paper and document your efforts.

 

Amy B. Royal, Esq. is a litigation attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council; (413) 586-2288; [email protected]

Community Spotlight Special Coverage

Community Spotlight

By Mark Morris

Charlie Christianson

Charlie Christianson says many local businesses have had to pivot and be nimble in the face of COVID-19.

Despite all the challenges a pandemic brings, Mary McNally says, town officials and business leaders in East Longmeadow are looking forward with a sense of optimism.

After serving in an interim role, McNally became East Longmeadow’s permanent town manager in December 2019 — just before every town in America began dealing with the effects of COVID-19.

Even though Town Hall has been closed to the public since mid-March, McNally said the staff has worked hard to maintain town services to the public and keep projects moving.

“All of our Planning Department functions, such as petitions and site-plan reviews, are being conducted — business as usual,” McNally said. “That is, if you accept Zoom meetings as business as usual.”

According to Charlie Christianson, those types of adjustments have enabled the town and its businesses to find their way during these difficult times. Christianson, board president of the East of the River Five Town Chamber of Commerce, said COVID-19 forced a number of companies to pivot and find new ways to stay viable. He cited Go Graphix, maker of signs, vehicle wraps, and other marketing materials, as an example of an East Longmeadow company that made a big adjustment and found success by doing so.

“When business fell off at the beginning of the pandemic, Go Graphix pivoted early to make plexiglass partitions as well as signs to help communicate social distancing and mask wearing. Now, it’s a big part of their business.”

In addition to his work with the chamber, Christianson runs CMD Technology Group, a provider of IT solutions and support. With so many people working from home, his business was able to pivot to set up workers who needed remote connections.

“We have seen a lot of activity in our remote-access business where we help companies get their remote employees into their online system in an effective and secure way,” he explained.

“All of our Planning Department functions, such as petitions and site-plan reviews, are being conducted — business as usual. That is, if you accept Zoom meetings as business as usual.”

Chamber member Steve Graham, CEO of Toner Plastics, said several of the products his company makes are considered essential, a designation that kept his workers busy all year. Perhaps the most notable product Toner makes these days is the elastic for N95 masks.

“Since the pandemic, you can imagine the demand for that product went through the roof,” Graham said, adding that, during a time when other companies were cutting back due to COVID-19, his company had to quickly ramp up for more production.

With Toner facilities in Pittsfield and Rhode Island, as well as in East Longmeadow, Graham appreciates the opportunity to continue his operations during these challenging times. “We’re fortunate that we are able to keep people employed and continue to ship to our customers; best of all, none of our employees have been inflicted with COVID-19.”

 

Go with the Flow

Despite the pandemic, municipal projects in East Longmeadow keep moving. The town applied for a $600,000 grant through MassWorks to improve sewage outflow where it connects to the Springfield system, allowing East Longmeadow to more accurately monitor what gets sent to Springfield.

“While it’s not a glamourous project, it’s a big undertaking and represents a real improvement in our town’s infrastructure,” McNally said.

After years of applying to the Massachusetts School Building Authority, East Longmeadow is in the eligibility period to explore funding for a new high school. McNally said this milestone is significant because it represents the first step in the process to eventually replace the current, 60-year old facility.

For many years, residents have been concerned about the site of the former Package Machinery site, with any potential development hampered by its industrial zoning status. McNally said the Town Council and the Planning Board have recently taken action to change the zoning status to mixed use, which would allow residential as well as commercial buildings to locate there.

“While no official project is in front of the Town Council, one development that has been discussed could include single-family homes, condominiums, apartments, and light-use business entities,” McNally said. “The idea is to have a new walkable neighborhood near the bike trail and the center of town.”

To keep projects like these moving forward, McNally and her staff are working to develop a new master plan for East Longmeadow. The last master plan for the town dates back to 1976, prompting her to put this effort high on the must-do list. The first phase of the plan is scheduled to be complete by June 2021.

A master plan allows the town to move from talking about projects to getting them done. One example is Heritage Park, where architect drawings were generated in 2016 to add athletic fields, an amphitheater, and other improvements. The $5 million price tag has kept the redevelopment in the discussion stage.

McNally said including Heritage Park in the master plan improves its chances of eventually reaching completion. “It’s a beautiful resource, and we want to capitalize on it to make the park available to everyone, but right now it’s still a work in progress.”

“We have seen a lot of activity in our remote-access business where we help companies get their remote employees into their online system in an effective and secure way.”

During the pandemic, the chamber has been successful in bringing people together to talk about the challenges of COVID-19 and a variety of business topics. Christianson credits the chamber’s ability to quickly embrace the virtual world.

“To say we didn’t skip a beat would be an exaggeration, but we’ve done a pretty good job to help our members and to keep a consistent value proposition for them.”

He noted that the chamber has even found a way to keep the popular Feast in the East event going. Traditionally, this is a networking event in which members sample food from area restaurants while local chefs compete for the Top Chef Trophy.

“This year’s event will be like the show Iron Chef, with three local chefs competing in front of judges,” he explained. Offered as a paid Zoom event, ticket purchasers can watch the competition and receive a ‘takeout’ package of offers from local restaurants. “Through creative thought and hard work, the chamber found another way to still run this popular event.”

 

Here’s the Scoop

One of the real strengths of East Longmeadow, according to Christianson, is the healthy mix of residential and business interests. One intriguing project scheduled to open next year involves the train depot built in 1876 and located in the center of town.

Earlier this year, Graham bought the train depot and the three acres where it sits. He is in the process of converting it into an ice-cream shop called the Depot at Graham Central Station.

“Even though there have been a lot of delays due to COVID, we are finishing up the conversion, and we’re looking forward to opening the depot for the town to enjoy next spring,” he said. Because of its close proximity to the bike path, he hopes to open in the morning and offer light breakfast items, too.

While the anticipation of a new ice-cream shop in town is certainly something to look forward to, Graham said he’s anticipating even bigger news on many fronts.

As a plastics manufacturer, he works with industries as far-ranging as aerospace and automotive to medical devices and retail displays. “We are affected by many of these industries, and when they were down, it had an impact on us,” hs said.

But recent conversations with his customers reveals that many industries are starting to come back, and come back strong. “I have a great deal of optimism for the future.”

COVID-19

Glass Half Full

By Mark Morris

many people with a history of alcohol abuse have relapsed

Edna Rodriguez says many people with a history of alcohol abuse have relapsed during the pandemic due partly to boredom and disconnection.

Each October, as the weather becomes colder and the days get shorter, it’s not unusual to see an increase in demand for substance-abuse services due to seasonal depression. This fall, however, counselors are expecting an even larger spike in the need for their services because of COVID-19.

Since the beginning of the pandemic, treatment centers in Massachusetts have seen an increase in opioid-related overdoses in the patients they treat — a problem exacerbated by the fact that the drugs have become more dangerous, said Steve Winn, president and CEO of Behavioral Health Network (BHN).

Health professionals believe the problem stems from interruptions in the worldwide supply chain of illegal drugs, making it harder to get heroin and synthetic opioids like fentanyl. As a result, what is being sold as pure heroin is often mixed with a more lethal type of fentanyl, causing the increase in overdoses and deaths.

“We don’t know if use is up, but we know the repercussions of use are more serious now than they were a year ago,” Winn told BusinessWest. “In 2018 and 2019, Massachusetts had begun to flatten the curve on opioid overdoses, but now that curve has accelerated up.”

It’s not a regional problem, he added, as the most recent data shows opioid deaths up in every county in the state.

People with substance-use disorders often have a co-occurring mental-health diagnosis, a situation that may increase their COVID-19 risk, said Millie Rivas, clinical supervisor for Outpatient Behavioral Health at Center for Human Development (CHD), adding that several factors can make people with substance-use disorders more vulnerable to coronavirus.

“Patients with a co-occurring diagnosis usually have a history of poor healthcare and poor nutrition,” she noted. “Add substance use to that, and they become a magnet for COVID-19.”

In short, the stress and anxiety caused by the pandemic — and the economic turmoil that has followed in its wake — aren’t the only COVID-related factors making things tougher for those struggling with substance abuse and those striving to help them. Not by a longshot.

 

From a Distance

Even treating people with substance-use issues became more complicated when the pandemic first hit. By following CDC guidelines to keep everyone safe, one-on-one support was severely reduced, resulting in more isolation for vulnerable people who needed help.

While support has largely shifted to virtual appointments, Rivas and her staff have had to provide technical guidance, as well as their normal counsel to their clients.

“We’re doing things we aren’t accustomed to, such as training people how to use Zoom platforms and how to use their phone beyond Facebook so they can reach services and telehealth,” she said.

Working on virtual platforms allows CHD staff to interact in a more normal way with clients and observe their behavior. Rivas noted that meeting one-on-one would require clients to wear masks, making it more difficult to hear them or see their facial expressions. When clients use virtual platforms, they are also able to increase their engagement in the world.

Steven Winn

“We don’t know if use is up, but we know the repercussions of use are more serious now than they were a year ago. In 2018 and 2019, Massachusetts had begun to flatten the curve on opioid overdoses, but now that curve has accelerated up.”

“At times, going virtual has been frustrating for the client, but overall, it’s nice to have them experience an achievement like that,” Rivas said, adding that clients can now more easily connect with healthcare providers as well as family and friends, and hopefully become more engaged and feel less isolated.

While it’s not surprising that those with a history of substance abuse would be more vulnerable during a pandemic, Rivas has observed an increase in substance use among people with no diagnosed substance-use disorders. The myriad factors include health concerns, increased isolation from not going out and socializing, and anxiety about finances. “It’s not unusual for people to manage stress with one too many beers or one too many glasses of wine.”

Winn noted that clinicians at BHN have observed an increase in people coming in to talk about alcohol use and overuse. “They are self-medicating because they feel more stressed, more unhappy, and more isolated.”

Edna Rodriguez, director of Clinical Assessment and Clinical Ambulatory Programs at Providence Behavioral Health Hospital, has noticed a trend during the pandemic of people having relapses and abusing alcohol after years of being clean and sober. She cited one example of a person who relapsed after five years of sobriety. Clients tell her they start drinking again out of boredom and being stuck at home.

“In my opinion, since COVID hit, we’ve seen an increase in the glorifying of alcohol use,” Rodriguez said, noting social-media memes about people day drinking and taking Zoom calls with a drink in hand. While meant to be humorous, she explained, these messages are dangerous for people with substance-use disorders, especially when so many are feeling less connected to the community.

“Distractions that were healthy, like going to the gym, going to church, or programs that encourage people to live healthy lifestyles, have all been reduced or eliminated,” she said. “We’re in a moment of depleted connections.”

Because the pandemic creates uncertainty for everyone, Winn encourages anyone who has a question about their substance use to reach out to BHN or one of the other local agencies.

“If you’re struggling with something, reach out and ask for help. We’re all doing telehealth, so it’s safe in terms of social distancing.”

 

Heal Thyself

Providers face a dilemma of trying to help people while at the same time feeling their own stress and uncertainty about the coronavirus. Rodriguez said many of her colleagues are experiencing ‘pandemic fatigue.’

“I wish there was a book on my shelf titled ‘How to Treat Substance Use Disorders During a Pandemic,’ but we don’t have that book; we’re all new to this, and we’re still learning.”

Rodriguez and her colleagues are supporting each other by having conversations about how to stay grounded. She mentioned a ‘comfort cart’ that goes around to staff with bottles of water, soda, and treats like chocolate and candy.

“It’s a way of recognizing that everyone is stressed and needs something to comfort themselves,” she said. “The more we take care of each other, the better resource we’re going to be for our patients.”

Rivas said she often reminds her staff about the importance of self-care.

“It’s easy to forget about yourself when you’re trying to take care of someone else,” she noted, adding that, among other changes since COVID-19, staff can no longer use their offices for one-on-one meetings because they are too small to accommodate proper social distancing.

As everyone is still trying to figure out how to stay safe from a virus that just won’t fade away, Rodriguez said her normal work process now includes thinking about how to take care of herself as a provider.

Yet, she remains hopeful the scientific and therapeutic communities will use their creativity to develop new ways for everyone to deal with coronavirus. “These times are calling for an honest and humble review of how we administer treatment, how we approach our patients, and how we approach ourselves as providers.”

COVID-19

PPP Loan Forgiveness 101

By Jeff Laboe, CPA

Please realize that the information available today is different than it was a four months ago, and will most likely look different two months from now, so keep that in mind while reading this article.

With all the uncertainty these days, the last thing taxpayers should be worrying about is how to complete the application for your Paycheck Protection Program loan forgiveness. The intent of this article is to give taxpayers an idea of the application process and forms that need to be submitted for forgiveness of the PPP loan the business received.

Jeff Laboe

Jeff Laboe

A business of any type (LLC, S-corp, sole proprietor, etc.) that received funds via a PPP loan in 2020 may apply for the forgiveness of repayment of this loan. Taxpayers who received a loan, maintained proper records, followed the Small Business Administration rules and guidelines with respect as to how the loan proceeds were spent, and performed all necessary calculations should qualify for forgiveness on the repayment of the loan or the portion of the loan that qualifies.

There are three different application forms that may have to be completed based upon your individual PPP loan program. You have 10 months from the completion of your loan period to file one of these forgiveness applications. The three forms to be used are Form 3508S, 3508EZ, and Form 3508, or the equivalent forms offered by your bank.

The first is Form 3508S, which can be used only by those who received $50,000 or less in PPP loan proceeds. The application asks taxpayers to provide the forgiveness amount requested and to certify with signatures that all the conditions were met. There are no calculations required on the application and no reductions in forgiveness due to reduced head count or salaries or wages. This form is the most straightforward.

Form 3508EZ may be used by self-employed individuals, independent contractors, or sole proprietors that have no employees and/or wages at the time of the loan-application process.

A business also qualifies to use this form if it received more than $50,000 but less than $150,000 in PPP funds, and met one of two additional scenarios:

• Salary and wages were not reduced by more than 25% during the loan period, and the employee head count was restored by the end of the chosen loan period — essentially, the net head count wasn’t affected; or

• Salary and wages were not reduced by more than 25% during the loan period and you were unable to operate the same level of business due to compliance with requirements to any work or customer safety requirements related to COVID-19. Similar to the 3508S application, there are no calculations required. Taxpayers instead need to confirm and provide support that the loan proceeds were used for eligible costs.

The last form is the standard Form 3508. This application is for all taxpayers who do not meet the thresholds to file one of the previously discussed forms. This standard application is much more detailed and complex, and may require some additional time and supporting documents. Taxpayers might want to seek assistance from their professional advisors.

“With all the uncertainty these days, the last thing taxpayers should be worrying about is how to complete the application for your Paycheck Protection Program loan forgiveness.”

Additionally, if your business also obtained an EIDL advance, that amount needs to be subtracted from the amount of loan proceeds that would otherwise be eligible for forgiveness. This applies for all three loan-forgiveness forms. Legislation has also been introduced (U.S. Senate Bill 4321) that details potential automatic forgiveness for any PPP loan under $150,000 if the debtee “signs and submits to the lender an attestation that the eligible recipient made a good-faith effort to comply with the requirements under section 7(a)(36) of the Small Business Act.” The status of the bill is uncertain at this time.

Once you have submitted your application, the loan provider has 60 days from the date the application was received to issue a decision to the SBA. The SBA then has 90 days to review the application and remit the forgiveness amount to the lender.

When it comes to PPP loan-forgiveness applications, remember the three different levels: less than $50,000, between $50,000 and $150,000, and above $150,000. As of now, taxpayers have to apply for forgiveness within 10 months of the end of the loan period. Be sure you complied with all the rules and guidelines on what the qualified expenses are and kept accurate and complete records. And don’t be overwhelmed by the applications. If you need assistance, there are resources for you.

 

Jeff Laboe is a senior tax associate with MP CPAs; www.thempgroupcpa.com

Law

Planning for PFML

By John Gannon, Esq. and Meaghan Murphy, Esq.

 

John S. Gannon

John S. Gannon

Meaghan Murphy

Meaghan Murphy

COVID-19 has created an extraordinary level of uncertainty and anxiety for businesses across the world. Since March, countless employers have been forced to dedicate just about all their energy and resources to sustaining a viable business in the face of mandatory closures, layoffs and furloughs, and ever-changing reopening regulations and guidelines.

In the midst of this chaos, it is easy to forget that the most generous paid-leave law in the country is coming to Massachusetts on Jan. 1, 2021. The Massachusetts Paid Family and Medical Leave (PFML) law provides all employees up to a total of 26 weeks of paid, job-protected family and/or medical leave to each year (up to 12 weeks of paid family leave and up to 20 weeks of paid medical leave). The PFML obligations extend to all employers in Massachusetts, regardless of size. As we approach the Jan. 1 PFML kickoff date, here are five things all businesses should be thinking about as they prepare to implement this complex new law.

 

Private-plan Exemption

The Massachusetts PFML program is a state-offered paid-leave benefit available to anyone who works in the Commonwealth. PFML is funded through a Massachusetts payroll tax paid by employees and employers with 25 or more employees. Interestingly, there is an avenue for employers to receive an exemption from collecting and paying PFML contributions. If a business offers company-provided paid-leave benefits that are greater than or equal to the benefits provided by the PFML law — typically through a private insurance carrier — it may be granted an exemption from the state PFML program.

Employers seeking an exemption need to submit an application with the state, which usually can be facilitated by the private carrier that is administrating the paid family and medical leave benefit.

Importantly, businesses that opt out of the state PFML program still need to abide by the job-protection and anti-retaliation provisions in the PFML law. Generally, employees who take family or medical leave under the law must be restored to their previous position or to an equivalent position when they return from leave, with the same status, pay, employment benefits, and seniority as of the date of leave. In addition, it is unlawful for any employer to discriminate or retaliate against an employee for exercising PFML rights (more on this below).

 

Employer-notice Obligations

Businesses are required to notify their workforce about the Massachusetts PFML program, including the new benefits and protections that apply to them. This notification includes displaying the PFML workplace poster in a highly visible location; providing written notice of contributions, benefits, and workforce protections to your eligible employees; and collecting acknowledgments of receipt of such written notice signed by all eligible employees.

Both the workplace poster and model employer-notice forms can be found on the state’s PFML website: www.mass.gov/info-details/informing-your-workforce-about-paid-family-and-medical-leave. Failure to provide the notice can lead to in a fine of $50 per employee for first violations, increasing to $300 per worker for subsequent violations.

Handbook Policies

In addition to meeting their PFML poster and written-notice requirements, employers should review and update other workplace policies that will be impacted by the new law. For example, other leave policies (e.g., sick, PTO) should be updated to note that PFML leave runs concurrently with those other leaves. Employers may also want to update attendance and related discipline policies, including procedures for requesting time off and/or call-out procedures.

It goes without saying — but we’ll say it anyway — that employers should establish and enforce their PFML policy and all other workplace policies consistently.

 

Performance Management

Employers should examine and recommit to their performance-management, discipline, and documentation policies and procedures. This is because employees who are let go or disciplined after taking PFML may have a lawsuit for retaliation if a business cannot prove the employment decision was related to poor performance or misbehavior. In fact, any adverse action taken against an employee during or within six months of PFML leave is presumed to be unlawful interference or retaliation.

As a result, employers’ expectations for performance and workplace conduct, and the consequences for failing to meet those expectations, should be clearly defined, and employers should document all such failures in a timely manner. This is critical to defending against a potential claim by an employee that his termination constitutes unlawful retaliation for his PFML leave use.

 

Training

Employers should make sure all managers receive training on performance-management and discipline policies and procedures, as well as how to properly document such issues. Managers should be disciplining employees consistently and holding them accountable for performance and discipline issues. If an employee who has used PFML leave is terminated for performance-related or disciplinary reasons, employers want to be in a position to support their lawful reasons for termination with proper documentation.

A manager turning a blind eye to performance or discipline issues, or failing to properly document them, can cost employers significantly down the road in the face of a lawsuit filed by a disgruntled employee. Well-trained managers are worth their weight in gold.

 

Bottom Line

Jan. 1 is fast approaching. Massachusetts employers need to be prepared to meet their PFML compliance obligations, which not only involves understanding how PFML benefits work, but also planning for increased frequency of employee time-off requests and longer leaves of absence. Employers with questions about how the new PFML law will impact their business should seek advice from legal counsel. u

 

John Gannon is a partner with Springfield-based Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including the Americans with Disabilities Act, the Fair Labor Standards Act, and the Occupational Health and Safety Act. Meaghan Murphy is an associate with the firm and specializes in labor and employment law; (413) 737-4753.

Law

Taxing Decisions

By Hyman G. Darling, Esq.

As this article is being written, the election is pending, and many people are trying to consider the options relative to tax issues for the end of 2020 and going into 2021. Since no one can predict with 100% accuracy what the tax laws will be in the future, even beyond 2021, it is important to consider the options available. Taking action now will allow you (or your heirs) to save funds.

Hyman Darling

Hyman Darling

Before proceeding, a refresher on federal estate and gift taxes may be needed. The federal estate-tax and gift-tax exemption is what is known as a unified credit, which means the amount may be used to make gifts during one’s lifetime or at death, or a combination of both.

The amount currently is set at $11.58 million for 2020. If the law does not change, this amount is due to reduce to $5 million in 2026 (indexed for inflation as of 2010, so this amount will probably be $6 million). This means a person may gift up to $11.58 million during his or her lifetime or at death before any tax is due. If this amount is exceeded, a tax rate of 40% applies to the excess. Since the unified credit may be reduced, larger gifts may be considered prior to year-end before a new law is enacted next year that could be effective as of Jan. 1, 2021.

Many misconceptions apply to gifts, the most popular being the annual exclusion of $15,000 per recipient. Most people believe that, if the $15,000 amount is exceeded, the donor or the recipient must pay a tax. The law states that a person may gift up to $15,000 each year without reporting any gifts. If this amount is exceeded, then a gift-tax return is required to be filed by April 15 of the year following the gift.

But, again, no tax is due until the $11.58 million is exceeded. For example, if a person gifts to their child, there is a requirement to file a return, but the first $15,000 is ‘free,’ and the next $100,000 merely reduces the credit from $11.58 million to $11.48 million, which is still available to gift during the lifetime or at death. Thus, a person does not have to limit a gift to $15,000 as, in most cases, they will not be paying a tax. (Note that this rule is a tax rule, and does not have a relation to Medicaid planning, which treats all gifts as disqualifying for the five-year look-back period.)

If the estate credit is reduced after 2020, it is anticipated that the credit utilized this year will not adversely affect the amount a person will have available under a new law when he or she dies. So, if a person wishes to make significant gifts, they should make them before the end of the year to utilize as much of the credit as they may want.

For income-tax purposes, there are several options to consider. One easy one is the ‘above-the-line’ charitable deduction for up to $300 if given to a qualified charity. This is not for donations of clothing, as it must be a gift of cash, and it qualifies for everyone, even if a person is not itemizing.

Another significant option is that, in 2020, a minimum deduction is not required to be made from an IRA or other qualified plan. However, some people who have little to no other taxable income may still want to take a distribution as their tax bracket may be low enough to eliminate taxes this year.

“If the estate credit is reduced after 2020, it is anticipated that the credit utilized this year will not adversely affect the amount a person will have available under a new law when he or she dies. So, if a person wishes to make significant gifts, they should make them before the end of the year to utilize as much of the credit as they may want.”

In addition to this option, there is also the benefit for those age 70½ and older who may wish to make a donation to charity. Funds may be paid directly to a charity (or multiple charities) from the retirement account, and this donation will not be taxable income. The annual limit is $100,000, but the distribution does satisfy the required minimum distribution (RMD). If the taxpayer is going to make donations in any event, the IRA should be used to fund the donations.

The amount does not get added to taxable income, so the taxable amount will be less, Social Security payments may then not be taxable, and the Medicare premium will not be higher as the RMD does not get factored into the calculation.

If a taxpayer has losses to report, they may be taken and either reduce income up to $3,000 or perhaps offset gains of other assets. If a person has gains, they may wish to take the gain in 2020 with the anticipation that capital-gains rates could increase and/or income-tax rates may increase.

As with all tax and estate-planning considerations, there are many general rules with specific exceptions, so a qualified professional should be consulted prior to making any decisions. But be sure to get started soon, as decisions should be made and implemented prior the end of 2020.

 

Attorney Hyman G. Darling is a shareholder and the head of the probate/estates team at Bacon Wilson, P.C. He is a past president of the National Academy of Elder Law Attorneys and has been a frequent presenter for the Massachusetts Bar Assoc., MCLE, and many Springfield civic and professional groups. He is a member of the Special Needs Alliance and many local planned-giving committees, as well as an adjunct faculty member in the LLM Program at Western New England University School of Law and Bay Path University; (413) 781-0560; [email protected]

Community Spotlight

Community Spotlight

By Mark Morris

John Page and Claudia Pazmany

John Page and Claudia Pazmany say the chamber has stepped up its role this year in many ways to help businesses, including those in Hadley.

Before the pandemic, up to 80,000 cars would travel on Route 9 in Hadley each day, bringing workers, students, and customers to and through the town.

Known for its agriculture, proximity to the Five College community, and a robust retail corridor along Route 9, Hadley has been challenged, like all towns, since the arrival of COVID-19. But efforts by a group of town officials are meeting those challenges to keep Hadley viable today and well into the future.

David Nixon, deputy town administrator, said area colleges play an important role in the local economy. Hadley’s location is central to the Five College community, but Nixon actually sees it as a 30-campus community because that’s how many colleges are within an hour’s drive of Hadley.

While some campuses are open, others have stayed closed, and some are taking a hybrid approach, mixing on-site classes with distance learning.

“This has had an impact on local businesses,” he said, noting that less activity at the colleges, most notably UMass Amherst, which borders Hadley, adds to the struggles many businesses are facing as they try to comply with pandemic restrictions and stay afloat. “Right now, we are doing as much as possible to keep people safe and to support our businesses.”

Hadley officials have reduced licensing fees and expedited the process for businesses that are adapting to state COVID-19 guidelines. For example, when restaurants had to amend their food and liquor license permits to allow outdoor service, Nixon said the town was quick to respond to get the changes made.

“We’ve also expedited the inspections that are necessary when a business changes the footprint of their building,” he added, noting that cooperation among the town’s Planning Board, building inspectors, Fire Department, and Select Board ensured an easier process for the businesses involved.

Hadley is also one of seven communities benefiting from a $900,000 Community Development Block Grant to help microbusinesses stay afloat during the pandemic. Easthampton is the lead community on the grant, which allows businesses with five or fewer employees to apply for up to $10,000 in grant money.

David Nixon

David Nixon

“This project is also an opportunity to replace 100-year old sewer and water pipelines under Route 9. By doing this all at once, it will save taxpayers a lot of money.”

Also pitching in to help businesses is the Amherst Area Chamber of Commerce, which covers Hadley and other surrounding towns. Claudia Pazmany, executive director of the chamber, said the area has been fortunate in that the number of COVID-19 cases is lower than most parts of the state. To keep it that way, the chamber is now providing PPE, as well as printed posters and floor decals, that reinforce messages of social distancing, mask wearing, and hand washing. Available at no charge to chamber members, the signage is just one of the ways to help businesses get back on their feet.

“These are not business-saving techniques by themselves, but we hope to help our members reduce their costs as they open back up under the new guidelines,” she told BusinessWest.

 

Lines of Communication

The chamber has stepped up its role during the pandemic in other ways as well. “Our ability to advocate for and to market our businesses has become even stronger since COVID-19,” Pazmany noted, adding that it’s one of the few “silver linings” of these times.

The town and the chamber have been working together on a series of Zoom meetings with local businesses to hear their concerns and offer whatever help they can, she said. “We’ve been hosting these meetings to keep an open conversation between the town and businesses.”

One of the popular topics in the meetings has been the widening of Route 9, which is expected to start next year. The $26 million project will add travel and turning lanes to the road.

“This project is also an opportunity to replace 100-year old sewer and water pipelines under Route 9,” Nixon said. “By doing this all at once, it will save taxpayers a lot of money.”

Pazmany said the Route 9 widening has been in the planning phase for years, and once complete, the improvements will benefit all who use the roadway.

“Many people use the bus to go to work and school. Among other things, the widening project will provide much safer bus stops and allow buses to get more people moving in an efficient manner.”

The widening project will begin at Town Hall and go east for 2.6 miles to the intersection of Route 9 and Maple Street.

Business owners located along Route 9 have expressed concerns about the loss of business due to COVID-19 being followed up by a loss of business due to road construction. To alleviate that concern, the town has applied for an economic-development grant to market the Route 9 corridor. John Page, the chamber’s marketing and membership manager, said the idea is to position Route 9 as a great place to open a business.

“The grant would be about marketing and planning the future of Route 9 post-COVID,” he explained. “Hopefully, that’s coming sooner rather than later.”

As plans for the future of the town come into focus, Pazmany reminded everyone that Hadley has a great deal to offer right now.

“For those looking for a day trip, this is the time to come and visit,” she said, adding that, with the arrival of autumn, “Hadley will be at its most beautiful and picturesque in the next few weeks.”

She noted that many local restaurants participate in farm-to-table efforts with Hadley farms supplying many of the vegetables.

And, as more people take part in outdoor activities, the Norwottuck Rail Trail bike path has seen more riders than ever before, she said. The path runs completely through Hadley and features scenic views of farms and neighborhoods.

Hadley at a glance

Year Incorporated: 1661
Population: 5,250
Area: 24.6 square miles
County: Hampshire
Residential Tax Rate: $12.78
Commercial Tax Rate: $12.78
Median Household Income: $51,851
Median Family Income: $61,897
Type of Government: Open Town Meeting, Board of Selectmen
Largest Employers: Super Stop & Shop; Evaluation Systems Group Pearson; Elaine Center at Hadley; Home Depot; Lowe’s Home Improvement
* Latest information available

Nixon said the rail trail gives people another perspective on his town. “I often talk about the view of Hadley from Route 9 and the view from the bike path. They look like two completely different communities.”

 

Moving On

Two out of three building projects started last year in Hadley have been completed. The new Senior Center is complete and providing remote programs for residents. The new fire substation is also up and running, and the town library is close to completion.

As those projects conclude, Nixon is planning to wrap up his 15-year career with Hadley and retire on Dec. 31. To transition out of his role as town administrator, he has assumed the title of deputy town administrator while he helps Carolyn Brennan, the recently hired town administrator, transition into the job.

As someone who has been involved in municipal governments for more than 30 years, Brennan’s experience ranges from working with councils on aging in Amherst, Hampden, and East Longmeadow. She remains active as a selectman in Wilbraham, where she lives. Back when Brennan was a student at UMass, she lived in Hadley and worked at the Shady Lawn Rest Home.

Brennan said she’s glad to be back and described Hadley as being in great shape thanks to the town employees and Nixon’s management. “Having worked in other municipalities, I’m impressed with the all of the employees; they are real stakeholders in their community.”

She also appreciates having Nixon work with her while she gets acclimated to the job. “With David staying on until the end of the year, you couldn’t ask for a better transition plan for the town and for me.”

As for Nixon, he reflected on his career with Hadley and spoke of how rewarding it was to serve the town for 15 years.

“I’ll definitely miss the people,” he said. “I’m glad I was part of advancing our community a little further down the road.”

Technology

Career Connections

To celebrate Massachusetts STEM Week, Oct. 19-23, Springfield Technical Community College (STCC) announced a week-long series of events.

STEM Week 2020 is organized by the Executive Office of Education and the STEM Advisory Council in partnership with the state’s nine regional STEM networks. It is a statewide effort to boost the interest, awareness, and ability for all learners to envision themselves in science, technology, engineering, and mathematics (STEM) education and employment opportunities.

The theme for the third annual statewide STEM Week is “See Yourself in STEM,” with a particular focus on the power of mentoring.

Barbara Washburn, interim dean of the School of STEM at STCC, said the initiative represents an opportunity to learn about interesting and exciting real-world applications of STEM.

“We’re thrilled to participate in STEM Week again this year. We have several engaging live and recorded virtual events planned,” Washburn said. “As the only technical community college in Massachusetts, STCC is known for its high-quality STEM programs, and this is a chance to showcase them.

“We invite our students and the general public to participate in these free events,” she went on. “We particularly encourage people who are underrepresented in STEM to join us. They include women, people of color, first-generation students, low-income individuals, English-language learners, and people with disabilities. We want to show how everyone can see themselves in STEM.”

The following events will be held live through Zoom videoconferencing. For more information and to register, visit stcc.edu/stem-week.

 

• Monday, Oct. 19, 11 a.m. to noon: “Farming While Black: Uprooting Racism, Seeding Sovereignty.” Naima Penniman, program director of Soul Fire Farm, will give a talk about the importance and value of food production. The presentation will explore racism in food distribution, access, and other related topics. This is a collaborative event with HSI STEM, the Officer of Multicultural Affairs, the School of STEM, and the Urban Studies program.

 

• Tuesday, Oct. 20, 2-3 p.m.: “Know Where Your Food Comes From.” Speakers include Ibrahim Ali, co-director of Gardening the Community; Dr. Raja Staggers, assistant professor of sociology; and Jose Lopez-Figueroa, director of the Center for Access Services. The event features a panel discussion on the importance of food security, the prevalence of food deserts in our inner cities, the need to know where food comes from, and food access within the Greater Springfield community. This is a collaborative event with HSI STEM, Multicultural Affairs, the School of STEM, and the Urban Studies program.

 

• Wednesday, Oct. 21, 10 a.m. to noon: “Virtual STEM Careers Symposium.” Hosted by the STEM Starter Academy at STCC, this event features UMass Amherst professors and STEM industry leaders who will participate in an interactive symposium on STEM pathways and careers.

 

• Friday, Oct. 23, 11:15 a.m. to 12:15 p.m.: Dell Technologies will host a webinar about employees’ experience with the company.

STEM Week will also feature recorded presentations featuring faculty in specific STEM programs. The following are planned:

• Physics: “The Science of Sports and the Engineering Behind Sports Equipment.”

• Engineering: “Computer Application in Engineering”.

• Optics and Photonics: “What is Optics & Photonics?”

• Math: “The Mathematics Behind Bin Packing.”

• Manufacturing: “Extreme Precision: Splitting Hairs on a CNC Machine and Measuring Them in the Metrology Lab,” and a video created at Governors America Corp., an electronics manufacturer in Agawam.

• Robotics: A demonstration of a Fanuc robot functioning as a pill sorter with programmable logic controllers.

• Computers/IT: “What is Computer Systems Engineering Technology?”

 

While there is a concentration of events planned for STEM Week, STCC offers STEM-themed discussion and presentation for students and the public throughout the year. In early October, STCC STEM Starter Academy joined students and researchers from UMass Amherst, Florida International University, and other universities and organizations from across the globe as part of the International Assoc. for the Study of the Commons (IASC) Global Symposium on Commons Without Borders: Global Multiscale Ecosystem Frameworks. A playlist of the symposium’s presentations is available on STCC’s YouTube channel.

 

Banking and Financial Services

Seeking Relief

By Lisa White and Malik Javed

 

On March 27, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law. The Act has provided taxpayers with much-needed relief during this pandemic by establishing additional funding sources, such as the Paycheck Protection Program (PPP); by creating new tax credits, such as the Employee Retention Credit; and by significantly changing several existing tax provisions.

Lisa White

Lisa White

Malik Javed

Malik Javed

When reviewing what relief is available, taxpayers should consider all possible opportunities, including cost-segregation studies, which help identify misclassified Qualified Improvement Property (QIP); by reviewing current- and prior-year capital expenditures for retirements, dispositions, or repair deductions; and by considering accounting-method changes necessary to take full advantage of the new provisions in the tax law.

Two key changes to existing tax law within the CARES Act that provide cash flow for taxpayers include changes to the cost-recovery period for QIP and changes to the application and recognition of Net Operating Losses (NOLs).

 

Qualified Improvement Property

Qualified Improvement Property (QIP) is defined as any improvement made by the taxpayer to an interior portion of a commercial building as long as the improvement is placed into service after the building was first placed into service by any taxpayer. Additionally, QIP specifically excludes expenditures for the enlargement of a building, elevators or escalators, and the internal structural framework of a building.

Prior to the CARES Act, a drafting error in the tax law required QIP placed in service after Dec. 31, 2017 to use a 39-year tax life, making it ineligible for bonus depreciation. The CARES Act retroactively changed the recovery period for QIP to 15 years, thus making it eligible for bonus depreciation through 2026 (100% through 2022).

Taxpayers who want to take advantage of deducting the cost of improvements to real estate must segregate between interior and exterior improvements, as well as identify items excluded from QIP. Since budgets and design plans should be reviewed to identify these items, cost-segregation engineers can be engaged to assist with this analysis.

Tenant improvements often include items that are not eligible for QIP treatment. For example, HVAC costs in a retail shopping center might include both ductwork inside the building that is eligible for QIP and package units on the roof that are not eligible. Other examples include certain storefronts and interior seismic retrofits. When evaluating QIP, taxpayers should not assume all tenant improvements automatically qualify. Although QIP is now eligible for 100% bonus depreciation for federal income taxes, many states do not conform to bonus deprecation and require a 39-year tax life. For higher-taxed states, cost segregation can still make sense when interior improvements are significant.

Taxpayers who elected out of the business interest expense limitation under 163(j) are required to use a 20-year ADS life for QIP and are not eligible for bonus depreciation. In these cases, a cost-segregation study is greatly beneficial because the items segregated into personal-property categories do not get ADS treatment and are therefore eligible for bonus depreciation.

There is also an additional interplay with the business interest expense limitation provision. Part of the calculation to determine the amount of limited business interest expense for a given year includes determining the adjusted taxable income (ATI). This calculation favorably considers tax depreciation, but only for one more year. For tax years beginning after 2021, the deduction for depreciation, amortization, or depletion are not taken into account in calculating ATI. Thus, any bonus depreciation recognized on assets identified through a cost-segregation study will incrementally increase the ATI.

 

Net Operating Losses

Prior to the CARES Act, the Tax Cuts and Jobs Act (TCJA) and other legislation severely constrained the ability to use net operating losses to lower tax liabilities. TCJA restricted carrybacks of NOLs generated in tax years after Dec. 31, 2017 and limited carryforwards to 80% of taxable income.

The CARES Act made two significant changes to NOLs that provides cash flow for businesses:

• Net operating losses (NOLs), which are generated in 2018, 2019, or 2020, can now be carried back five years. Businesses that paid federal income taxes in 2013 to 2017 may be able to claim a tax refund as a result of 2018, 2019, or 2020 NOLs. Procedurally, NOLs are carried back to the earliest of their five-year period and then to subsequent tax years. But taxpayers may elect to forgo the five-year carryback and carry NOLs forward.

• The CARES Act suspends the 80% limit on carryforwards, allowing NOLs to fully offset taxable income until the end of 2020. An NOL carryback can also free up unclaimed federal tax credits and other tax attributes from closed tax years. If the NOL carryback results in credits no longer being used in the closed year, these items are eligible to be carried forward. In addition, if credits or other tax attributes were missed on the original return (e.g. unclaimed Research Tax Credit), the taxpayer may determine the unclaimed credits in the closed year and carry them forward without having to amend returns.

The calculation of NOLs for tax years beginning in 2019 and 2020 may be greater because of changes in the CARES Act to Section 163(j). The changes allow certain taxpayers to increase their business interest expense deduction based on a higher percentage of adjusted taxable income. Taxpayers should also consider the impact of additional tax depreciation on shorter-lived assets eligible for bonus depreciation, such as QIP, that can be identified from a cost-segregation study. For tax years beginning in 2020, the CARES Act also allows taxpayers to substitute their 2020 ATI with 2019 ATI if it results in a more favorable NOL calculation.

In these unprecedented times, taxpayers should take advantage of the many tax opportunities provided in the CARES Act to maximize tax deductions. Reach out to a tax specialist to discuss how these changes may impact your tax situation.

 

Lisa White, CPA is a tax manager at Meyers Brothers Kalicka, focusing primarily on federal and state income-tax compliance and planning within the construction and real-estate industries. Malik Javed, CCSP is a principal at KBKG and oversees engineering operations for cost-segregation projects from KBKG’s Northeast practice.

Business of Aging Special Coverage

Safe at Home

By Mark Morris

Cheryl Moran

Cheryl Moran says she increased staffers’ hours and pay to make sure they worked only at the Atrium during the pandemic.

Beth Cardillo said the arrival of COVID-19 caused a “wildfire effect.”

As executive director of Armbrook Village, a senior-living community in Westfield that offers independent and assisted living, as well as memory care, Cardillo said the first days of the pandemic created huge challenges for healthcare professionals who faced major decisions while working with limited information.

For example, hospitals were only admitting COVID-positive patients if they had a fever and showed respiratory symptoms. Some seniors at Armbrook, however, were testing positive but manifesting different symptoms.

“We had someone who tested COVID-positive, but he didn’t have a fever or a respiratory problem,” she said. “He felt weak, fatigued, and he almost passed out.”

Cardillo’s call for an EMT to transport the positive-testing resident to the hospital was met with disappointment when she was told the hospital would not admit anyone for the coronavirus unless they had a fever or respiratory symptoms.

“At that time, no one knew there were a host of other symptoms,” she said. “It’s nobody’s fault because nobody knew.”

Cardillo informed Baystate Medical Center about residents who showed different symptoms for the coronavirus, and the hospital quickly sent a team of specialists in infectious disease and emergency medicine to Armbrook to further examine these cases.

“Incidents like this were happening all over the country,” Cardillo said. “It’s how we learned that people can manifest other symptoms but still have the coronavirus.”

Similarly, at the beginning of the pandemic, health officials were not encouraging everyone to wear masks; later, with better information, they shifted course. As information on all aspects of COVID-19 improved and safety guidelines were implemented across the U.S., senior-living facilities that already had sanitizing and infection protocols in place increased their efforts to battle the spread of coronavirus.

Emily Tamilio, Corporate Marketing director for Rockridge Retirement Community in Northampton, said her complex revamped its already-strong infection-control policies before the state went into lockdown. “We’ve redoubled our protocols and to make sure all our staff is up to date on proper infection control, hand washing, and strict sanitization procedures.”

Beth Cardillo

“We had someone who tested COVID-positive, but he didn’t have a fever or a respiratory problem. He felt weak, fatigued, and he almost passed out.”

Meanwhile, at Atrium at Cardinal Drive in Agawam — an assisted-living facility exclusively for people with memory loss — Executive Director Cheryl Moran imposed strict screening procedures to keep residents and staff safe, such as requiring all outside agencies to get her approval before they could enter the facility.

In the caregiving community, it’s not unusual for workers at one assisted-living facility to take a second part-time job at a similar site or earn additional income by providing care at a person’s home. Moran knew she had to address this vulnerability to keep the virus away. “I met with all our associates and offered more money, more hours, and different hours to encourage them to work only for the Atrium.”

Tamilio said Rockridge also offered additional pay and hours to keep staff working only at that facility. “Having our people just work for Rockridge was key to preventing transmission.”

Both Moran and Tamilio said encouraging staff to work only at one community is one of the main reasons neither campus has had any COVID-19 cases to date. It’s an example of how senior-living communities across Western Mass. had to be creative and aggressive — and continue to do so — to protect the most vulnerable population from a pandemic that’s far from over.

Visitation Consternation

In mid-March, the state issued guidelines for senior-living facilities to allow visitors only after they’ve had a health screening prior to their entry. When the pandemic first hit, all three communities BusinessWest spoke with said they restricted all outsiders except health providers and other essential personnel. Unfortunately, that meant families were not able to visit their loved ones in assisted living.

“As disappointing as that was, we had a solid communication process in place, and we were transparent about any changes, so it was much easier to get the families, residents, and staff on board,” Tamilio said.

Cardillo also stressed that communication was key, and personally checked in with every family member. “We were honest with people and let them know what was going on, and they appreciated that.”

As a further precaution for those in assisted living, the Executive Office of Elder Affairs mandated that everyone be quarantined in their apartments. No communal dining or walking around the halls was allowed.

Emily Tamilio

Emily Tamilio

“We’ve redoubled our protocols and to make sure all our staff is up to date on proper infection control, hand washing, and strict sanitization procedures.”

Cardillo noted that many residents in assisted living have cognitive impairments that make processing and retaining information difficult, so structure and constant communication are very important. Still, cognitively impaired residents who had been making progress before the quarantine began to backslide.

“They were confused again, depression was setting in, and their anxiety increased,” she recalled. “In some ways, the social isolation was almost worse than the virus.”

Staff dressed in full personal protective equipment (PPE) began meeting one-on-one with each resident in their apartment. Cardillo said reaching out and having conversations with the residents began to make them feel better.

Moran said the configuration of the Atrium made it possible to allow residents out of their apartments and still keep them safe. “Because we have the space, we were able to socially distance our residents while still allowing them to take part in modified programs and activities.”

As late spring arrived and the weather improved, residents in most communities were able to go outside more often and socialize with others. Cardillo said positive changes began to happen the minute residents were able to enjoy some fresh air. “Whether it was having a conversation or taking a walk or simply looking at the birds, we saw their depression and anxiety lessen once they could spend time outside.”

The warmer weather also enabled the facilities to resume family visits. Moran said the Atrium has a designated area for outdoor visits where families can schedule time with their loved ones either after breakfast or after lunch.

“We can only allow two family members at a time, and they have to wear masks,” she explained. “Unfortunately, they can’t hug or kiss their loved ones, so they do air hugs and things like that.”

Videoconferencing through platforms like Zoom, Skype, and FaceTime have been effective ways for families to stay connected — and send air hugs to their loved ones — when a physical visit is not possible. Tamilio said Rockridge staff will often work with families to coordinate a videoconference or even a phone call to help them feel connected during the pandemic.

“There are many times when our staff are the eyes and ears for the families of our residents, so we work very hard to stay in contact with them,” she told BusinessWest.

Using videoconferencing tools is one more way to be reassuring and transparent with families and staff, Moran added. “It’s important for families to know about the place where their mom and dad are living.”

Cardillo talked about a recent Zoom conference conducted like a town-hall meeting that included 80 resident family members, as well as Armbrook department heads. The purpose was to let everyone know what’s been done so far to keep residents healthy and engaged, and their plans going forward.

“Many family members had no idea about everything we’d gone through to keep their loved ones safe,” she said. “They want to do this type of meeting again.”

Meeting with potential new residents and their families is an important part of any senior-living community. The arrival of COVID-19 has moved much of that activity from in-person meetings to videoconferences. For families who want a tour of the facilities, Tamilio said virtual tours have been an effective alternative to an actual visit.

“We can connect them to our community and help them feel engaged,” she said. “Videoconferencing also allows us to bring together multiple family members from different locations to answer all their questions in one meeting.”

Cardillo is still able to meet with families in-person in Armbrook’s private dining area by using social distancing and requiring masks for everyone. Before the meeting, she will have a phone conversation and send information so that, when a family arrives for the meeting, they have some idea about the community.

“I will show them apartments, but we can’t wander around the building anymore,” she noted. “That’s the only thing that’s really changed.”

While Moran is not yet meeting in person, she depends on virtual tours and has identified a number of families willing to serve in an ambassador-type role.

“There are several family members of current and past residents who are willing to speak with new families about their experience here,” she said. “They are able to give their perspective on how things have been going for their loved ones.”

Winter Is Coming

Seven months into the pandemic, and with fall and winter coming, the Executive Office of Elder Affairs is allowing senior-living facilities to permit indoor visitation to specific areas of the building.

Moran said the Atrium will use office space in its main building to screen visitors and supply full PPE. She plans to limit visits to 30 minutes and restrict visitors to meeting in the front areas of the building.

A similar visitor policy will be in effect at Rockridge, which is about to install an air-purification system to use in common areas. The idea is to monitor air quality to make sure those areas are safe, especially as they begin to open the dining area and allow more visitors

“We are trying to find the right balance between mitigating risk and enhancing the quality of life for everyone here,” Tamilio said.

As the weather gets cooler, Cardillo is looking forward to bringing activities such as exercise classes indoors. There will be limits on the number of people who can participate at any one time, but that’s just part of life in these times.

She reflected on the challenges facilities like hers faced with the sudden arrival of the pandemic back in March, and how far they’ve come. “At the beginning, we were all learning together at the same time. With all that we’ve learned since then, we have a much better handle on things now.”

She said residents are in a much better frame of mind these days, with no COVID-19 cases reported in months.

All the administrators we spoke with said a spirit of cooperation — with everyone pitching in and constantly doing more than expected — has been a true highlight of these last six months. To acknowledge that spirit, Cardillo is planning a series of recognition ceremonies for her staff in the coming weeks.

“We had people who got very sick, and our staff did some beautiful things,” she said. “Sometimes it was just sitting with a resident and holding their hand. Their families were really touched by it.”

With the pandemic still a daily reality, Cardillo said she and her colleagues are better prepared if there is another flare-up of the virus.

“We hope it doesn’t happen, but we’re ready if it does.”

Insurance

Covering All the Bases

By Mark Morris

When COVID-19 became a daily reality in March and working from home became the default for many businesses, Trish Vassallo had to scramble. Of the 26 employees at Encharter Insurance, where Vassallo is director of Operations, only three were set up to work from home.

“Thanks to our tech provider, we were all up and running within a week,” Vassallo said, noting that the system at her office is advanced to the point where calls to the Encharter switchboard are fed through to employee laptops. “When customers call us, they have no idea whether we are in the office or at home. It’s seamless.”

Bill Trudeau, executive vice president and partner at HUB International New England, recalled that, when workimg from home became the norm, his business was about 95% ready to serve clients remotely.

“While our people certainly didn’t plan for a pandemic,” he said, “we were fortunate that our business was designed for our staff to effectively serve clients remotely from home.”

Both Encharter and HUB International have since limited interactions in their offices to only necessary functions and are not yet open to the public. It’s a different situation at Axia Insurance, which offers Registry of Motor Vehicles services in its office.

Michael Long, president and CEO of Axia, explained that, to safely accommodate people using the registry services, a dedicated area at the building entrance was set up to screen people before they come in. While Axia has offered RMV services for several years, it’s seeing an increase in the number of people using it since the pandemic.

“The RMV requires everyone to make an appointment, which can often be scheduled up to two weeks out,” Long said. “At our location, we can take care of people the same day.” Before COVID-19, he added, 30 to 40 people a month would use Axia’s registry service. Long said it now serves that many every week.

Trish Vassallo

Trish Vassallo

“Thanks to our tech provider, we were all up and running within a week. When customers call us, they have no idea whether we are in the office or at home. It’s seamless.”

Because of the registry service, most of Axia’s staff are working in the office. Long said shifts are staggered so that a typical five-day work week means working from home two or three days and in the office for the balance of the week.

For years, staff have been able to work from home when necessary, but Long admits the pandemic adds a layer of difficulty. “Working out schedules that will adapt to everyone’s needs at home and taking care of their families has been a harder challenge than actually maintaining business.”

For this issue’s focus on insurance, BusinessWest spoke with area agencies about how they’re managing to keep the customer experience consistent even as they change how they do business, thanks to a pandemic that continues to challenge all sectors of the economy.

Adjusting Expectations

The agencies BusinessWest spoke with all said their business was steady — if, some cases, only slightly lower due to the pandemic, which has hurt a number of their commercial insurance clients.

For example, several of Encharter’s restaurant customers reduced their insurance coverage because so many of them closed in the early days of the pandemic. With most offering only limited service even now, Vassallo said her agency tried to help its restaurant clients in their time of need.

“When stay-at-home first happened, we went to all of our local restaurateurs and purchased a large amount of gift certificates to try to help them keep going,” she recalled. To get the gift certificates out into the community, Vassallo used them as prizes in weekly and monthly contests Encharter ran on its social-media platforms.

Long said insurance companies are offering deferred billing and special payment plans to help companies that have lost business during the pandemic. One creative approach involves companies that need to take a vehicle off the road. They can now temporarily suspend the vehicle’s insurance coverage instead of ending it.

“In the past, insurance companies would not have agreed to do that,” Long said. “The business would have had to turn in the license plate, and if they suddenly needed the vehicle, they’d have to go through the insurance and registry process all over again.”

Trudeau added that, while some of his clients have been under pressure to reduce staff and sales estimates, others are doing more business. “We have a few businesses that are growing because of changing demands during the pandemic and people shifting their buying habits.”

Not surprisingly, all three agency managers said videoconferencing on Zoom, Skype, and other popular platforms has allowed them to keep in touch with staff and customers.

Because HUB International has 28 locations in New England, Trudeau and his counterparts have been using conference calls and videochats in ways they hadn’t before — a trend he predicts could have a lasting impact.

“Instead of asking people to travel to a central New England location every quarter, they might choose to do that only once a year and have the other three quarterly meetings by videoconference,” he said.

Bill Trudeau

Bill Trudeau says the increased adoption of videoconferencing platforms in his industry could have a lasting impact.

When the pandemic ended the walk-in traffic at Encharter, Vassallo and her staff started to make wellness calls to keep in touch with clients.

“The calls had nothing to do with insurance,” she said. “They were simply a way to contact our customers during the early months of the pandemic to say, ‘we’re just checking in; how are you doing?’” So far, she and her staff have made more than 2,000 calls, and the effort has been well-received. They’ve continued the calls to check in and to remind clients about policy renewals.

As valuable as modern tools are to keeping in touch, certain personal dynamics get lost during a pandemic. In the past, Long would often get together with other managers in Axia’s offices across Massachusetts and Rhode Island, and he has missed doing so since the pandemic.

“We have a culture of being a close-knit organization, and when you are not in contact with people on a regular basis, some of that culture seems to dissipate,” he said. “We use videoconferencing, but it’s not quite the same.”

Trudeau cited another culture challenge resulting from the pandemic: bringing a new employee on board.

“You want to invite someone into the culture of your company, but they can’t be there to experience it,” he said. “Part of a new job is the work, and part of it is walking around, meeting people, and creating the feeling of a social connection with your co-workers.”

Gradual Return

Calling it a “soft approach,” Vassallo is talking with her staff about re-entry to the office. She acknowledges some families need at least one parent at home for schooling reasons, but her greatest concern is that everyone becomes too comfortable staying home.

“Right now we have a re-entry date of mid-November, so we are not rushing this,” she said. “When the time comes, we need to get back because we still need to have a presence in our office.”

As staff from all three agencies return to their respective offices, the spaces are all being reconfigured to follow the current pandemic safety guidelines. Temperature checks, hand sanitizer, and other precautions are all part of the new normal.

Still, according to Long, one thing that doesn’t change is the role of the insurance agent.

“Our job is to protect your potential financial loss as best as we can,” he said, while cautioning against looking at insurance protection as a commodity. “It’s not about getting the cheapest insurance; it’s about getting the most value out of your insurance.”

Helping customers achieve that goal hasn’t been easy this year, but it’s a task that continues at all area insurance agencies — if sometimes a bit differently than before.

Wealth Management

A Seeming Disconnect

By Jean M. Deliso

Have you wondered how the S&P 500 stock-market index has been trading at near all-time highs when, in the second quarter, S&P 500 corporate earnings were down compared to the first quarter of 2020, daily confirmed cases of COVID-19 in the U.S. are currently stable or declining, and the Bureau of Labor Statistics’ July unemployment report showed more than 16 million unemployed Americans, with an unemployment rate of 10.2%?

That question is a good one, with the seeming disconnect between what the stock market has been doing and what we are seeing in the news and the U.S. economy. No doubt the stock market was arguably pricing in what the economy will look like a year from now and what the market sees as significant pent-up demand, a fading pandemic-induced economic impact, and a wall of liquidity coursing its way through capital markets.

The real question is whether investors should be concerned about the U.S. stock market hitting all-time highs with the economy still bruised and slowly recovering. Could this mean a crash or major correction is coming?

Jean Deliso

Jean Deliso

“There is a chance the economy one year from now will be in better shape than it is today — or it may be worse. But being a participant in the market for the long haul means participating in the growth and losses that happen between now and then, and always focusing on your investment time horizon.”

No one truly knows the answer to that question. But we know that market corrections and bear markets are normal and common; we just don’t know when they will arrive or how long they will last. And if anyone tells you ‘with certainty’ when a market downside is coming and how long it will last, you might want to run the other way.

When thinking about where the markets and economy could go in the next year and beyond, it’s useful to break it down by key categories:

Economics. The pandemic-induced recession has been steep and ugly. But there is a good argument that the worst of the crisis could be behind us. Manufacturing and service activity have rebounded, the housing market has seen very solid activity, and spending has outpaced expectations, according to the Washington Post.

Earnings. Second-quarter earnings were bad, plain and simple. But at the same time, earnings were not as bad as the double-digit expectation of Wall Street, and clearly stocks love positive surprises. Will earnings continue to improve going forward? That is the question — and we all hope the answer is ‘yes.’

Interest Rates. Overnight rates in most developed countries are near historic lows, meaning borrowing costs and financing costs are highly attractive for businesses and individuals that can obtain loans. The Federal Reserve also signaled plans to keep interest rates near zero for years; these actions make equities attractive by comparison.

Inflation. The amount of global stimulus is massive; the total global fiscal and monetary stimulus being deployed amounts to approximately 28% of world GDP, according to the Wall Street Journal. This ‘wall of liquidity’ makes inflation seem more likely in the coming years and will be a factor to watch.

Sentiment. Consumer and investor sentiment is improving in the wake of the pandemic, but may sour as the election nears.What’s the bottom line for investors? The nature of bull markets is that we can expect the stock market to reach new highs over time. This is what history has told us to expect every time. That said, I would caution against seeing an all-time high in the S&P index as a reason to go completely defensive. When setting a long-term investment strategy, it is important to consider how the economy may grow or contract in the next six, 12, or even 18 months, and how that plays into your personal goals and objectives. If your retirement date is close, it is always prudent to review how much safe money you may need to weather an unexpected storm.

There is a chance the economy one year from now will be in better shape than it is today — or it may be worse. But being a participant in the market for the long haul means participating in the growth and losses that happen between now and then, and always focusing on your investment time horizon.

Jean M. Deliso is a registered representative offering securities through NYLIFE Securities, LLC (member FINRA/SIPC), a licensed insurance agency. Deliso Financial and Insurance Services is not owned or operated by Eagle Strategies, NYLIFE Securities, LLC, or any of their affiliates.

Features

Telecommuting Can Be Taxing

By Carolyn Bourgoin and Lisa White

In response to the COVID-19 pandemic and the related public-health concerns, many businesses have implemented work-from-home (WFH) arrangements for their employees. Whether due to government-mandated shutdowns or voluntary efforts of employers to protect workers, there has been a significant rise in telecommuting that continues even as some states begin to relax restrictions.

Carolyn Bourgoin

Carolyn Bourgoin

Lisa White

Lisa White

Businesses with telecommuting workers need to evaluate the potential payroll and business-tax consequences created by those employees working from home in states where the business would not otherwise have a taxable presence.

Though most states have existing guidance addressing telecommuting for both businesses and workers, the unusual circumstances created by the COVID-19 pandemic has necessitated the need for states to revisit these rules. Unfortunately, there is also little uniformity among the states in both the existing guidance and the temporary guidance being issued.

In order to remove some of the uncertainty and to limit the potential adverse state tax consequences of employees working remotely, the Remote and Mobile Worker Relief Act (RMWR) was introduced to the Senate in July as part of the American Workers, Families, and Employers Assistance Act. The RMWR contains special provisions prohibiting a state and its localities from taxing the wages of an employee who is performing services in a state other than their state of residence due to the COVID-19 public-health emergency.

“Businesses with telecommuting workers need to evaluate the potential payroll and business-tax consequences created by those employees working from home in states where the business would not otherwise have a taxable presence.”

For calendar year 2020, this protection is afforded for a period not to exceed 90 days. Businesses would also be provided protections under this tax-relief package concerning their telecommuting employees. Remote workers performing duties in a state or locality where the employer does not otherwise have a presence would not automatically cause the business to be subject to taxation in that state. However, as it is unclear when or if this bill will pass, employers must continue to review the guidance of the respective states and localities where their remote workers are performing services.

Massachusetts Guidance

Massachusetts issued temporary guidance providing tax relief where an employee is working remotely in the state due to the COVID-19 pandemic. A recent technical information release (TIR 20-10) issued by the Department of Revenue provides that the presence of one or more employees working remotely in Massachusetts will not by itself create a withholding responsibility with respect to that employee if the remote work is due to any one of the following:

• A government order issued in response to the COVID-19 pandemic;

• A remote-work policy an employer adopts to comply with federal or state guidance or public-health recommendations relating to COVID-19;

• A worker’s compliance with quarantine requirements due to a COVID-19 diagnosis or suspected diagnosis; or

• A worker’s compliance based on a physician’s advice due to a worker’s COVID-19 exposure.

For businesses, wages paid to a non-resident employee who, prior to the pandemic, was performing services in Massachusetts, but who is now telecommuting, will continue to be treated as Massachusetts source income, subject to income tax and withholding. The information release further provides that, while it is in effect, the presence of one or more remote workers in the state due to the COVID-19 pandemic will not automatically create a Massachusetts sales and use tax-collection responsibility or a corporate excise tax-filing responsibility.

These provisions are effective until the earlier of Dec. 31, 2020 or 90 days after the state of emergency in Massachusetts is lifted. Employers must maintain written records to substantiate the pandemic-related circumstances that caused an employee to fall under the TIR’s provisions.

Massachusetts issued its temporary guidance with the understanding and expectation that other states either have adopted or are adopting similar sourcing rules. However, similar to the relief provided in the Senate bill discussed earlier, it would still be prudent for an employer to still review the guidance of the respective states and localities where their remote workers are performing services.

Guidance from Neighboring States

New York: New York is one of five states that has a ‘convenience of the employer rule,’ treating as New York wages any compensation earned by employees of a New York company while they are working outside the state. Under this rule, the wages of a telecommuter could be sourced to both New York and the telecommuter’s resident state, requiring payroll withholdings for both states.

A bill was introduced in the New York Senate in May that would offer relief to businesses by exempting the non-resident employee wages from New York income tax and withholding requirements for a specified amount of time. However, as of the time of this article, the New York Department of Revenue has remained silent on its position regarding these matters.

Connecticut: Connecticut is another state with a ‘convenience of the employer rule.’ However, the state only applies this rule in determining Connecticut source income of residents of states that also apply the convenience rule. Otherwise, wages are sourced to Connecticut based on the portion of services performed within the state.

The Connecticut Department of Revenue has not issued any form of guidance to date, but did respond to a state survey this past May regarding telecommuting due to the COVID-19 crisis. The agency replied that it was working on guidance that would ensure ‘fair and equitable treatment’ to both its individual residents and Connecticut-based businesses.

Rhode Island: Rhode Island has issued formal guidance similar to that of Massachusetts, providing that the presence of one or more remote workers in the state due to the COVID-19 pandemic will not automatically create an income tax-filing responsibility and sales and use tax-collection responsibility. Wages paid to a non-resident employee who is now telecommuting will continue to be treated as Rhode Island source income subject to income tax and withholding.

Businesses with telecommuting employees in other states must check to see if those states offer tax relief from withholding taxes, income-tax nexus, and sales and use tax-filing obligations created by these remote workers during the COVID-19 health crisis. Unfortunately, there is no set time frame or requirement that states issue such guidance.

Passage of the Remote and Mobile Worker Relief Act would help to remove some of the uncertainty surrounding the tax treatment of these workers. Employers in the meantime are left to monitor potential changes to state tax laws where their remote workers are located during the COVID-19 pandemic to determine whether they have relief from tax filings in the telecommuting state.

Carolyn Bourgoin, CPA is a senior manager, and Lisa White, CPA is a manager for the Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.; [email protected]; [email protected]

Banking and Financial Services Coronavirus

Volume Business

By Mark Morris

When COVID-19 made its arrival in Western Mass., it was mid-March, just weeks before the start of the traditional home-selling season. Area mortgage professionals didn’t know what to expect when the pandemic hit, but they certainly weren’t projecting a solid year.

Soon, though, they had to adjust those expectations and projections.

Indeed, a combination of factors, from historically low interest rates to high demand and low inventories, have made this a much busier, much better year than most residential lenders and home sellers could have hoped for back in the dark days of March.

Indeed, instead of completely canceling the spring home-buying market, the pandemic merely postponed it, said James Sherbo, senior vice president of Consumer Lending with Holyoke-based PeoplesBank.

“We’ve been very busy because the activity we would have normally seen in April or May, we saw in June, July, and August,” he told BusinessWest.

Jeffrey Smith, vice president and chief Lending officer with Freedom Credit Union, concurred, noting that any debilitating effects on the housing market from the pandemic have been more than offset by lower interest rates. The rates were already fairly low — in the 3.25% to 3.5% range — before the pandemic, he said, but now consumers can now get a 30-year fixed-rate mortgage for well under 3%.

James Sherbo

James Sherbo

“We’ve been very busy because the activity we would have normally seen in April or May, we saw in June, July, and August.”

“This is probably the best real-estate market I’ve seen in years,” Smith said. “When the pandemic first hit, I thought it was going to be just the opposite.”

Meanwhile, many mortgage holders are taking advantage of these lower rates to refinance, and this high volume of refis, as they’re called, is keeping most all lending institutions busy.

“It’s crazy … we’ve seen an 80% volume increase in our overall business compared to last year,” Smith noted. “And we certainly did not expect that.”

Tami Gunsch, senior executive vice president and director of Relationship Banking at Berkshire Bank, agreed. She said the bank is pleased with the Mortgage Division’s performance, “especially during these unprecedented times of COVID-19.”

For this issue and its focus on banking and financial services, BusinessWest takes an in-depth look at the housing market and the various, and powerful, forces that are driving it.

Rooms for Improvement

Flashing back to mid-March, Sherbo said his department was mostly focused on where (and how) team members would work, and keeping employees and customers safe.

“We just tried to prepare as best as we could to keep our team safe and our customers safe,” Sherbo said. “When COVID-19 first hit, everybody wondered what would happen; nobody had a crystal ball.”

Indeed, no one could have foreseen how the drop in interest rates — one of many steps taken to stimulate the economy — and other factors would collaborate to stimulate virtually all aspects of the housing market and create a unique set of circumstances.

Home sales are strong, again, because of low interest rates even though fewer homes are for sale, said Sherbo, adding that he can’t recall a time when both conditions have happened at the same time.

Jeffrey Smith

“This is probably the best real-estate market I’ve seen in years. When the pandemic first hit, I thought it was going to be just the opposite.”

“I’ve seen rates this low before, but I’m not sure we’ve seen this lack of supply in quite a while,” he said, adding that it’s no surprise that many people do not want to move or sell during the pandemic, so the supply of homes for sale is limited. That creates an environment where many purchase offers are coming in higher than the asking price.

“New listings are selling very quickly,” noted Smith, adding that nearly all the houses offered for sale in early July were sold by early August.

In addition to people moving out of the city and into the suburbs to take advantage of low interest rates, Smith said the demand for second homes is exploding.

“In the last three to six months, prices have increased by 20% or more in areas like Cape Cod or Maine,” he noted. “Second homes are a hot market right now, and because there is a limited supply, properties are on the market for only a short time before they are sold.”

Then, there’s the refi market.

Gunsch said that, in addition to strong new-mortgage activity, Berkshire Bank is doing a high-volume business in refinances.

“Refis account for 52% of our closed-loan production through July,” she said, “while in the prior year, during the same period, they accounted for 35% of the closed loan volume.”

Smith added that, thanks to the robust business Freedom is doing with loan refinancing, he does not anticipate the lack of housing supply to limit the institution’s growth potential this year.

Strong housing-sales activity is even more impressive considering how the entire home-buying process had to quickly change when COVID-19 hit.

The notion of a real-estate agent walking potential buyers through a house for sale sounds almost quaint these days, as virtual tours have replaced showings, and drive-by looks at a house have become the norm.

“People are buying homes based on what they see online,” said Smith. “Many people are not even going out to the house to see it. In some cases, particularly for second homes, they are buying them sight unseen.”

Before COVID-19 struck, Smith said Freedom had limited online mortgage-application capabilities, but the virus forced the institution to quickly go all in.

“Luckily, we had the technology to be able to make a fast adjustment to online only, so we were kind of ready for it,” he told BusinessWest.

PeoplesBank launched its paperless mortgage-application system in October 2019 after two years of refining it. When COVID-19 arrived and disrupted so much of daily life, Sherbo said having a touchless system already up and running made it easier to maintain business levels.

“Our customers don’t have to meet or sign anything in person,” Sherbo explained. “The entire application process can be done online or over the phone. We were ready for this, which was great.”

Gunsch said Berkshire also uses an online application process. When an appraisal of the property is needed, only the exterior is appraised to reduce physical contact.

“Loan closings are still done in-person with everyone wearing masks and following social distancing guidelines,” she added.

Critical Deferrals

A serious concern at the beginning of the pandemic was the potential for mortgage delinquencies to spike due to homeowners affected by financial and health issues. In April, Gov. Charlie Baker signed into law a moratorium on evictions and foreclosures on consumers through March 2021.

Meanwhile, those who are struggling with COVID-related issues are encouraged to contact their mortgage holder to defer payments. The law makes it clear that, by deferring, consumers merely extend the length of the mortgage without taking a hit on their credit rating.

All the mortgage professionals BusinessWest spoke with said the deferral program has worked to keep delinquencies down and allow people to stay in their homes.

“We have a strong team in place to assist our borrowers with loan deferrals and ensure they understand their options to defer payment during this time,” said Gunsch.

Smith said that roughly 5% of Freedom mortgage holders have taken advantage of the deferral program. “We’re actually seeing our delinquencies at very low levels, lower than they’ve been in years.”

Smith added that most of the deferral requests occurred in April and May. With each passing month, the number of new deferrals continues to decline.

“The deferral program is working the way it was intended,” Sherbo added. “It’s giving people the chance to maintain their own stability and credit.”

As for inventories, even that picture may improve soon. A recent report from the U.S. Census Bureau and Housing and Urban Development (HUD) showed new housing construction starts are up more than 23.4% in July 2020 compared to July 2019. The national figure closely mirrors the Northeast, which saw a similar increase of 23.3%.

Locally, Sherbo said new home starts are relatively flat, but if interest rates continue at record lows, that would encourage more new construction in Western Mass.

Just as no one had a crystal ball back in March, none of the mortgage professionals we spoke with can really say what will happen six months or a year from now. That’s the nature of this pandemic — a high level of unpredictability.

For now, the housing market is booming at a time when few thought it would. This is good news for banks and credit unions — and for the customers they serve.

And it’s certainly one of the more intriguing stories in a year with seemingly no end of them.

Banking and Financial Services

Course of Action

By Gabriel J. Jacobson and Ian Coddington

In addition to the obvious financial benefit to the employee, employer-funded advanced education can carry financial and soft benefits for employers, employees, and colleagues alike.

These benefits extend beyond the person who is pursuing advanced education, as this article explains.

More Accessible to Working Professionals

As access to online education grows, the number of professionals seeking to advance their education also increases. In 2017, one in six students enrolled entirely online, and one in three enrolled in at least one online course.

With the advent of the COVID-19 pandemic, schools around the country shut down their physical locations, and students were forced to move to online learning. Now that most students have taken some form of online classes, it is likely that many will choose to continue this method of learning.

Gabriel Jacobson

Gabriel Jacobson

Ian Coddington

Ian Coddington

Advanced education has become more attractive to employees and employers because it is a more accessible option for working professionals. One tax associate at Meyers Brothers Kalicka recently took advantage of the opportunity to pursue an advanced degree while continuing to work full-time. He enrolled at the Isenberg School of Management at UMass Amherst to gain a BBA in accounting and decided to remain online rather than go in-person.

Prior to making this choice, he worked full-time for a few years before deciding he wanted to earn his business degree. He enrolled in a la carte online classes immediately to accelerate his degree track before he was officially admitted. Once he was accepted into Isenberg, he decided to remain online so he could continue working a full-time internship at Meyers Brothers Kalicka, which ultimately led to him being offered an associate position at the firm.

He attributes the combination of full-time school and full-time work to his success, claiming that experiencing real-world situations reminiscent of the subject matter of his classes helped cement key concepts related to his profession. He graduated with more than a year of real-world professional experience under his belt.

The heart of online school is the flexible pace; students choose any quantity of classes each semester, meaning they could offload during busy season and upload during the slow season. Some employers allocate otherwise-unassigned slow-season hours to degree-earning coursework.

“Employers can sponsor employees with funds for academic training to build job-related skills. They may provide up to $5,250 in employer education-assistance benefits for undergraduate or graduate courses tax-free each year.”

With the increase in availability of online education due to the pandemic, companies can leverage this opportunity to attract talent earlier to both their and the student’s benefit.

Tax Incentives for Employers

Employers can sponsor employees with funds for academic training to build job-related skills. They may provide up to $5,250 in employer education-assistance benefits for undergraduate or graduate courses tax-free each year. To receive the benefit, the funds must pay for tuition, fees, books, supplies, and/or equipment. As an added bonus, these funds qualify for a business deduction and are not required to pay FICA or FUTA payroll taxes.

However, the education must be legally required for the employee to maintain their current position, or it must improve or maintain skills required for the position. One of these two stipulations must be met to satisfy the tax-free treatment.

There are limits, as these benefits are for employees only, and not for spouses or dependents. Also, there is no choosing between the education benefit and a cash payment to the employee. Employers should provide these rules and others as a written notice to employees interested in receiving the benefit.

Organizational and Culture Benefits

Outside of the financial benefits, there are workplace benefits to supporting student employees. Collaborative teams are a mainstay of most successful businesses. These teams often group employees with differing niches and experience levels, so they translate directly to supporting newer employees’ development through mentorship.

Mentorship relationships can help maintain accountability and time management for online student professionals. They can also serve as sounding boards for in-class work and discussion that reflect areas of interest to the student employee.

For example, the previously mentioned associate nurtured a mentorship relationship with his manager by discussing his primary interests and questions from his corporate tax class. Outside the mentor relationship, he found solidarity and motivation with peers at his level as many completed online master’s programs to advance their careers.

These relationships foster vibrant cultures of positive reinforcement toward educational goals within firms all over the country. Further, this culture can extend beyond the classroom and cultivate a collaborative and supportive work environment.

The human-capital, financial, and cultural benefits of incentivizing employees’ advanced education through online learning cannot be overlooked in today’s business climate. With the tools highlighted above, companies should take advantage of this opportunity.

Gabriel J. Jacobson and Ian Coddington are associates at Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.; (413) 536-8510.

Company Milestones

Company Milestones

Paul Scully, president of Country Bank

Paul Scully, president of Country Bank

It was March 1850. Millard Fillmore was still working through his first 100 days in office as the thirteenth President of the United States — although no one was probably counting the days back then. In six months, California joined the Union as its 31st state, taking the country from coast to coast and Ware Savings Bank was incorporated under the laws of the Commonwealth of Massachusetts. Thus, the first chapter in the 170-year history of Country Bank was written.

There have been a number of important chapters written since — including the incorporation of Palmer Savings Bank in 1870 and the merger of those two institutions in 1981 to form Country Bank for Savings (later shortened to simply Country Bank). Paul Scully, the bank’s current president, noted that many things have changed at this institution over those 170 years, everything from its footprint — it now stretches from Ludlow to Worcester, with 14 branches and 23 ATM/ITM locations — to how people do their banking.

Company:
Country Bank
www.countrybank.com
800-322-8233
Home Base:
Ware, Mass.
Founded:
1850
President:
Paul Scully
Company Snapshot:
A community bank with 14 locations

What’s more significant to him — and all members of the Country Bank team — is what hasn’t changed in that time. Specifically, it’s a commitment to the customers, communities, and staff that sets this institution apart. In short, what hasn’t changed is that this is still a community bank in every sense of that phrase. “What we are celebrating is the bank’s support for those who have been right there with us along the way,” stated Scully. “And we’re celebrating our independence in being a mutual savings bank, and one of the most highly capitalized banks in the Commonwealth.”

This rich history of support prompted the bank to assume a leadership role during times of crisis — and there have been many over the past 170 years, perhaps none more significant than the COVID-19 pandemic.

Over the past several months, the bank has stepped up to assist its commercial and consumer customers impacted by the virus and resulting economic downturn. “Every customer matters, regardless of their deposit balance, and we’re here to help them achieve their dreams or navigate through rough waters.” None have been rougher than those generated by the pandemic, he noted, adding that the bank has written 475 Payment Protection Plan (PPP) loans in amounts ranging from $1,500 to $2 million and helped many commercial and mortgage borrowers. “It’s the premise of why community banking and Country Bank exist,” he went on. “Since the start of the pandemic, the bank has donated over $450,000 to COVID-related relief efforts along with an additional $400,000 to other local non-profits. For the past one hundred and seventy years, the bank’s operated with the belief that healthy communities thrive; recognizing that it has not only an opportunity but a responsibility to support its communities at varying levels.”

A RICH HISTORY

There have been many milestones for Country Bank since 1850, and dates to remember:

July 1869: The Committee of Investment voted that the bank loan to the town of Ware in the amount of $70,000 was to be used in the building of the Ware River Railroad;

• 1920: The service of school savings accounts was inaugurated to help establish a habit of thrift among young savers;

• 1945: The first home loan to a veteran of World War II was made under the G.I. Bill of Rights;

• 1982: The first ATM was installed;

• 2017: The Boston Business Journal first recognized the bank for its charitable donations; and

• 2019: Country Bank became a founding member of the Worcester WooSox.

These milestones collectively speak to the notion of what a community bank is — or should be — and that legacy is being celebrated as this institution turns 170. “Behind the individual milestones is a consistent pattern of service to the community,” Scully said.

A LEGACY OF CARING

When asked how the bank would mark its 170th birthday, Scully said there would be “subtle” celebrations. “We’re not big on tooting our own horn on things,” he noted, adding that there would be themed events in the fall celebrating its 170th birthday and the staff and customers who have been a part of the bank’s legacy. Rather than celebrate with lots of hoopla, the bank is far more focused on continuing — and building upon — its strong track record. “It’s a significant milestone that you can’t take lightly,” he said. “For all of us who are associated with the organization, we are given the challenge — and opportunity — to maintain a legacy: a legacy of supporting those in need and helping customers achieve their financial goals and dreams, whatever they may be. And that’s what is being celebrated as this institution turns 170.”

Opinion

Opinion

By Suzanne Parker

This year marks the 100th anniversary of the passage of the 19th Amendment and women’s constitutional right to vote. This historic moment provides an important opportunity to emphasize that full gender equity requires racial justice and equity as well.

While the women’s suffrage movement benefited tremendously from the leadership of black women, it did not advance or include their right to vote. In fact, it took more than a half-century later for women of color to access the ballot with the passage of the Voting Rights Act of 1965.

The U.S. has a long history of denying its citizens the right to vote. ​Building a more equitable society means ensuring ​all ​people, regardless of race, gender, and socio-economic status, are able to participate in our political system. Many of our most heavily debated issues — the economy, healthcare, education, and public safety — carry tremendous consequences for those most vulnerable and with the least amount of political power.

That’s why it’s so important for girls, particularly girls of color, to be civically engaged as early as possible. Through our She Votes initiative, Girls Inc. helps girls realize the power of their voices, learn about the structure and role of the U.S. government, and even be inspired to run for elected office one day. Girls are innately powerful and, with the right opportunities and support, can grow up to be leaders and change agents in the world.

​Building a more equitable society means ensuring ​all ​people, regardless of race, gender, and socio-economic status, are able to participate in our political system.

Often overlooked in the pages of history, women of color have played an instrumental role in advancing civic engagement, voting rights, and social movements for centuries. From abolitionists like Sojourner Truth and Harriett Tubman to suffragettes and activists like Mary Church Terrell, Nannie Helen Burroughs, and Ida B. Wells, black women bravely fought for the rights of women and men long before they themselves were seen as equal citizens under the law or had the right to vote. They endured racial prejudice, discrimination, and even violence to advance justice and freedom for all. As ​educator and civil rights activist ​Nannie Helen Burroughs wrote​, “to struggle and battle and overcome and absolutely defeat every force designed against us is the only way to achieve.”

When the Voting Rights Act of 1965 was passed — making racial discrimination in voting illegal — it marked more than a century of work by black suffragists to secure voting rights for all people, which finally would include them. To this day, however, obstacles to voting still persist for black Americans and communities of color, including voter suppression, ​photo-ID requirements, early-voting cutbacks, under-resourced polls, and inadequate funding for elections.

Young people of color face additional barriers. ​Mail-in ballots, which many young people complete (as well as first-time ​voters and people of color), have been found to be rejected at a higher rate than in-person ballots, according to the U.S. Election Assistance Commission. Tougher voting rules, difficult absentee-ballot procedures, and irregular school and work schedules serve as additional obstacles to young people exercising their right to vote.

Increasing voter participation is critical for democracy. With Nov. 3 just two short months away, we must do everything we can to ensure safe, fair, and accessible elections amid the COVID-19 pandemic. Many states have begun preparations to educate people about the health risks, make polling places as safe as possible, and also encourage voting by mail. We must also urge Congress to appropriate emergency funding to support such efforts, as the funds provided in the CARES Act fall tremendously short of what is necessary.

Millions of eligible voters, many of them women and people of color, are not active in our political decision making — and we need them to be. During this year’s centennial celebration, we remember the women who paved the way for future female voters and political leaders, and the work that remains to ensure ​all​ girls and young people grow up in an equitable and just society.

Suzanne Parker is executive director of Girls Inc. of the Valley; (413) 532-6247.

Community Spotlight

Community Spotlight

By Mark Morris

Despite what she described as “shifting sands and shifting times,” Easthampton Mayor Nicole LaChapelle believes her city is more than holding its own in the face of COVID-19.

By that, she meant this community of roughly 16,000 people is moving ahead with a number of municipal projects and economic-development initiatives. And it is also undertaking several efforts, often in cooperation with other entities — such as the Greater Easthampton Chamber of Commerce — to help its business community, and especially the very small businesses that dominate the landscape, weather this intense storm.

“We’re focused on a good, basic plan that addresses infrastructure and quality of life for everyone in our city,” she said, as she addressed the former — and the latter as well.

In that first category, she listed everything from a $100 million school-building project to a $45 million mixed-use development, called One Ferry, that involves renovating old mill buildings and reworking the infrastructure in the Ferry Street area.

“Easthampton’s grit and resilience has gotten us through things like this in the past, and it’s getting us through these scary times. It’s not graceful, but we’ll still be standing at the end.”

And in the second category, she mentioned several initiatives, from small-business grants to a community-block-grant program designed to help microbusinesses, to efforts to help renters. Indeed, the city has put aside $300,000 in relief for renters; the relief begins in the fall and is meant to keep an important source of affordable housing in place.

“If you start losing renters, many of the owners will have to sell because they’ll have trouble paying their mortgages,” the mayor said, adding that there are many ripple effects from the pandemic, and the city’s strategy is to keep the ripples from gaining size and strength.

Overall, LaChapelle acknowledged that COVID-19 is forcing businesses, families, and institutions to make pivotal changes during very uncertain times, but she remains an optimist.

“Easthampton’s grit and resilience has gotten us through things like this in the past, and it’s getting us through these scary times,” she noted. “It’s not graceful, but we’ll still be standing at the end.”

Progress Report

Like other mayors BusinessWest has spoken with in recent weeks, LaChapelle said COVID-19 has certainly impacted businesses in every sector, changed daily life in innumerable ways, and even altered how city government carries out its business.

But in many respects, it hasn’t slowed the pace of progress in the city — at least when it comes to a number of important municipal and development projects, including the aforementioned school project.

Mo Belliveau

Mo Belliveau

“It’s one place where anyone who wants to do business in Easthampton can go to learn about what resources are available to them.”

The as-yet-unnamed school, located on Park Street, is an example of several elements of the city’s plan coming together. The new building will house students from pre-K through grade 8, replacing three older elementary schools in Easthampton. New road infrastructure is planned in front of the building as well, with the addition of a roundabout intersection.

LaChapelle noted that the $100 million project is slightly ahead of schedule and should be completed by late 2021 or early 2022. The roundabout will be completed this month.

Meanwhile, other projects are taking shape or getting ready to move off the drawing board. One involves River Valley Co-op, the Northampton-based food cooperative, which is currently building a 23,000-square-foot market in Easthampton on the site of the former Cernak Oldsmobile Pontiac dealership. The co-op is scheduled to open by spring or summer of next year.

Once complete, the mayor explained, River Valley will employ 60 full-time union workers with the potential to expand to nearly 100 workers in the next two years. Road improvements that will benefit the new co-op include a dedicated turning lane into the market and straightening the road in front.

“This is an area along Route 10 that has been a traffic pain point for economic development,” she said. “While it’s a $400,000 project, we expect the return to far exceed those dollars.”

Another project in the works is One Ferry, an initiative expected to bring new residents, new businesses, and more vibrancy to the city.

“In the next 18 to 24 months, this project will add quality apartments, condominiums, and office space,” LaChapelle said, adding that public infrastructure to support this project includes a roundabout that connects a residential area, the industrial park, and the mill district of Easthampton. The first building in the project, recently completed, provides space for two businesses and two apartments.

“Right now, this project is providing jobs and vitality for the area, and that will only increase,” she noted. “One Ferry is huge for our future.”

Dave Delvecchio

Dave Delvecchio

“While many restaurants in the city were affected by the virus, they’ve adapted well by doing things they didn’t do before, like offering takeout options. It’s remarkable that they’ve been able to continue to offer a service to the community, but in a different way.”

Another bright note for the future involves Adhesive Applications, which makes adhesive tapes for use in more than a dozen industries. The longtime Easthampton manufacturer is planning a 40,000- to 50,000-square-foot addition to the company, the mayor said.

The chamber and the mayor’s office are also working together on Blueprint Easthampton, a resource map designed for entrepreneurs and business people.

“It’s one place where anyone who wants to do business in Easthampton can go to learn about what resources are available to them,” said Mo Belliveau, executive director of the chamber.

According to a news release on Blueprint Easthampton, the mapping initiative will improve access to available business tools and strengthen the links between the city and the business community.

New Normal

While work continues on these projects, efforts continue to assist those businesses impacted by the pandemic. And the Greater Easthampton Chamber has played a large role in such efforts.

Prior to the pandemic, Belliveau had begun shifting the emphasis at the agency away from events and more on education and discussion-type programming. After organizing and scheduling programs for the year, stay-at-home orders went into effect in March and wiped out all those plans.

“Like so many small businesses, we at the chamber had to pivot along with our partners and find new ways to provide meaningful value to our community,” Belliveau said, adding that many of these new ways involve providing information — and other forms of support — to businesses during the pandemic.

Indeed, Easthampton received a $30,000 grant from the state attorney general’s office designed to help small businesses pay for COVID-19-related expenses and allow them to continue their operations. LaChapelle invited the chamber to be the administrator of what became the Greater Easthampton Sustaining Small Business Grant (SSBG) program. Applicants could request up to $1,500 and use the grant for buying PPE, paying their rent, or purchasing supplies needed to comply with state guidelines on reopening.

A total of 31 businesses qualified for the grants, which were to be awarded on a first-come, first-served basis. Fortunately, all 31 applicants received grant money totaling more than $43,000, thanks to donations from Easthampton-businesses Applied Mortgage, which kicked in an additional $10,000, and Suite 3, which covered the remainder of the funding requests.

“My goal going forward is to find other businesses that are able to contribute to this effort so we can do another round of funding,” Belliveau said. “The need is great, and the money from this first effort went fast.”

In addition, Easthampton and six surrounding communities recently became eligible for a $900,000 Community Development Block Grant to help microbusinesses get through the pandemic. Businesses with five or fewer employees can apply for up to $10,000 in grant money. Easthampton was the lead community in applying for the block grant.

“We have many innovative small businesses in Easthampton who still can’t reopen,” LaChapelle said. “This grant program is designed to help them stay afloat.”

Dave DelVecchio is president of Suite3, a company that provides IT services for businesses of all sizes. While most of his customer base is in Western Mass., Suite3 also has clients internationally and in several U.S. states.

As an IT service provider, DelVecchio measures success by “ticket requests,” an indication that a customer needs support. When COVID-19 started taking its toll and many businesses were shut down in March and April, ticket requests were at their lowest point. Since then, Suite3’s business has come back to pre-pandemic levels.

As a past president and current treasurer of the chamber, DelVecchio was concerned about the impact COVID-19 was having on the business community, and especially its growing portfolio of restaurants.

“While many restaurants in the city were affected by the virus, they’ve adapted well by doing things they didn’t do before, like offering takeout options,” he said. “It’s remarkable that they’ve been able to continue to offer a service to the community, but in a different way.”

He added that Easthampton has a good number of other businesses affected by COVID-19 that did not receive as much attention as the restaurants.

“Businesses such as travel agencies and professions that require personal interaction, like chiropractors and massage therapists, were also affected by the virus,” he said, noting that the SSBG and Community Development Block Grant can make a real difference for such businesses.

Coming Together

DelVecchio credits Belliveau with changing the focus of the chamber to more education without losing its important role as a provider of networking opportunities. Part of the changing organization involved moving from an annual fee model to monthly dues. While that can be a risky move, DelVecchio noted there was almost no attrition in membership.

“We are grateful that we continue to get support from the business community and they see value in the chamber,” he said, “especially at a time when expenses are being put under greater scrutiny.”

This support is another indication of how the community, which had been thriving before the pandemic, has come together to cope with a crisis that has provided a real test — or another real test — for residents and businesses alike.

As the mayor noted earlier, Easthampton’s grit and resilience has helped it survive a number of economic downturns and other challenges in the past. And those qualities will see it through this one as well.

Features

What’s New?

By Isaac C. Fleisher

It’s that time of year again. On July 20, the Cannabis Control Commission (CCC) revealed the latest round of proposed revisions to its regulations. Following a period of public comment and review, the CCC is scheduled to take a final vote on these revisions on Sept. 4.

Last year’s round of revisions made waves with two new categories of licenses (social consumption and home delivery), but this year’s revisions are more focused on the owners behind the licenses. This is not too surprising because the demographics of license ownership has become a heavily debated (and litigated) topic.

When the CCC crafted its initial regulations (way back in the halcyon days of 2018), it included provisions intended to diversify the industry, such as a fast track to licensing for economic-empowerment (EE) applicants, as well as fee waivers, training, and technical assistance for social-equity (SE) applicants. Even the new license types that were created under last year’s revisions to the regulations are initially reserved for EE and SE applicants. However, as small startups slam into the economic realities of the cannabis industry, it has revealed a tension between the need for capital and the need for equity.

The CCC’s latest round of draft revisions would require economic-empowerment applicants to satisfy at least one of the criteria related to ‘majority equity ownership’ and then report any changes of ownership and control when renewing their license. EE status is revoked if fewer than 51% of the owners meet the EE criteria. Similarly, the draft revisions specify that the various fee waivers and discounts available to SE applicants only apply to licensees with at least 51% SE ownership.

Last year’s round of revisions made waves with two new categories of licenses (social consumption and home delivery), but this year’s revisions are more focused on the owners behind the licenses.

These changes would help prevent EE and SE certification from being turned into a commodity that could be purchased by investors that were never the intended beneficiaries. However, it would also further trap EE and SE applicants in the catch-22 of needing to raise millions in investment without giving up equity to investors that don’t satisfy the EE or SE criteria.

The draft revisions also seek to tighten the definition of what constitutes ‘control’ over a cannabis business. This is significant because Massachusetts prohibits any entity from controlling more than three licenses of any type. This restriction is a substantial departure from the trend in most other states that have legalized a recreational cannabis industry, and it has become a thorn in the side for cannabis investors trying to build a diverse portfolio, as well as for large, multi-state cannabis companies that rely on economies of scale. As a result, more than a few savvy investors and entrepreneurs have utilized creative corporate structures in an attempt to circumvent the limitations on control.

In 2019, the CCC made substantial updates to its definition of control, making it clear that it was serious about enforcing the three-license cap. The current draft revisions further expand the definition of control by establishing a precise dollar amount for the types of contracts that would be evidence of control; clarifying that anybody with the power to appoint 50% of the company’s board is in control of that company, whether the board members are called directors, managers, or anything else; and, in a possible sign of the times, establishing that a person appointed as a receiver for the licensee is in a position of control.

Additionally, the revisions would redefine the threshold for when control over a parent company constitutes control over the subsidiary. In the current regulations, anybody “with a controlling interest in” the parent company is considered to have control over the subsidiary, but the revised draft would change this to anybody “having control over” the parent company. This subtle change is potentially significant, as the “controlling interest” language has generally been interpreted to relate only to an actual equity interest, while the meaning of “having control” could include people with substantial decision-making authority, even if they are not actually a majority owner. These changes may not be nearly as substantial as the 2019 overhaul of the definition of control, but the fact that the CCC felt that additional changes were necessary at all is a sign that attempts to circumvent the license cap are still happening.

One prosed change that seems to cut against the trend of tightening restrictions on ownership is the revision to the craft marijuana cooperative license, which would actually loosen the requirement that a member of the cooperative filed a profit or loss from farming in the last five years (i.e. they’re a farmer). If accepted, the revisions would allow a cooperative to satisfy this requirement by merely leasing land from such a person. There are plenty of good reasons for this change, but ultimately it likely arises from the CCC’s recognition that the requirements for a craft cannabis cooperative are so burdensome and idiosyncratic that only three applications have been submitted for this license type, and of those, only one has even received a provisional license.

With nearly 550 applications receiving provisional or final licenses, and only 122 currently authorized to commence operations (and a shameful dearth of racial or economic diversity among these licensees), it is becoming clear there is a financial bottleneck in the licensing process. Most commercial financial institutions still won’t go anywhere near the cannabis industry, and cannabis entrepreneurs must therefore rely on venture-capital financing. The result has been an increase in the number of provisional licenses being ‘flipped’ as small startups are forced to sell out to simply cover their growing debt.

This trend toward market consolidation has put the CCC’s equity provisions and ownership limitations under tremendous strain. The draft revisions address that strain by attempting to close potential loopholes in the restriction. These changes would certainly help align the letter of the law with the spirit of the law, but ultimately, they do not address the actual root of the problem.

In order to build a cannabis industry that is stable, sustainable, and diverse, much more needs to be done to lower the economic barrier of entry, such as establishing a state lending program to provide SE and EE applicants with access to financing, or even just simplifying the licensing process so that applicants aren’t forced to submit hundreds of pages of plans, policies, and procedures, only to wait over a year just to obtain a provisional license. But those changes may need to wait for 2021.

Attorney Isaac C. Fleisher is an associate with Bacon Wilson, P.C., where his practice is focused on business and corporate law, with particular emphasis on the rapidly expanding cannabis industry. An accomplished transactional attorney, he has broad experience in all aspects of business representation in legal matters ranging from mergers and acquisitions to business formation and financing; (413) 781-0560; [email protected]

Features

An Uphill Battle

By Mary Bonzagni

Federal trademark registration is viewed as an attractive form of property-rights protection for most industries. The benefits of such a registration are numerous.

A federal trademark registration serves to recast what would normally be localized common-law trademark rights into nationwide trademark rights. It provides the owner with the right to use the ® designation, to enforce the owner’s rights in federal court, and to file the trademark registration with U.S. Customs to block infringing imports. A federal registration also provides a basis for registering the trademark in foreign countries and jurisdictions.

Unfortunately, members of the cannabis industry have faced an uphill battle when trying to protect their brands on the federal level.

This article will focus on strategies for protecting trademarks used on CBD products, which may be grouped into two categories: marijuana-derived CBD products and hemp-derived CBD products.

Mary Bonzagni

Mary Bonzagni

“Unfortunately, members of the cannabis industry have faced an uphill battle when trying to protect their brands on the federal level.”

Marijuana is still treated as a controlled substance and is illegal under the Controlled Substances Act (CSA), regardless of its legality under certain state laws. As such, trademarks for marijuana-derived CBD products cannot be federally registered. The U.S. Patent and Trademark Office (USPTO) has issued trademarks for goods and services that are indirectly related to marijuana, but the closer the description of goods and services is to the sale or distribution of marijuana, the less likely it is that the UPSTO will allow the application.

Hemp was previously regulated as an illegal substance under the CSA. It was removed as an illegal substance under the Agricultural Improvement Act of 2018, also known as the Farm Act, which federally legalized hemp and hemp-derived products that contain no more than 0.3% THC (by dry weight). The 2018 Farm Act legalized CBD derived from hemp not from marijuana, so, at least for now, the federal government will view the source of the CBD as decisive in determining its legality under federal law.

To recap, marijuana-derived CBD products are illegal under federal law, and, thus, trademarks for such products cannot be federally registered. On the other hand, products infused with CBD derived from hemp, which have a low-THC content, are now legal under federal law, and the trademarks under which they are used are capable of federal registration. Being capable of federal registration, however, does not guarantee registration.

The U.S. Patent and Trademark Office’s current policy is to refuse trademarks for foods, beverages, dietary supplements, and pet treats containing hemp-derived CBD that have not been approved by the Food and Drug Administration (FDA). These goods raise lawful-use issues under the Federal Food Drug and Cosmetic Act (FDCA). Trademarks for the following goods, however, can be federally registered:

• Hemp-derived CBD products that are not consumed (e.g. salves, ointments, and skin oils) which contain less than 0.3% THC on a dry-weight basis; and

• ‘Generally recognized as safe’ (GRAS) products (e.g. hulled hemp seeds, hemp seed protein powder, and hemp seed oil). On Dec. 20, 2018, the same day the 2018 Farm Act took effect, the FDA approved the sale of hulled hemp seeds, hemp seed protein powder, and hemp seed oil, and the use of these products in human food. Therefore, trademarks for these hemp products are eligible for federal registration at the USPTO.

In addition, trademarks for hemp advocacy groups and trade associations, and for services such as consulting and advertising services and the like, can also be federally registered. It is legal for advocacy groups and trade associations to educate the public and advocate for changes in hemp and marijuana laws. Thus, the USPTO is willing to issue trademarks to those groups and to others providing services to the legal hemp industry.

Let’s assume for purposes of this article that your trademark is being used on goods that do not fall within one of the above categories, and thus your trademark cannot be federally registered. Here are some options for proceeding.

Federal Registration for Permissible Ancillary Products and/or Services

The first area to explore is whether you also sell goods or offer services that fall outside the restrictions of the CSA or FDCA. For example, do you sell goods without CBD as an ingredient, or provide a website featuring blogs and publications (e.g. articles, brochures, etc.) advocating for changes in hemp and marijuana laws, which constitute lawful goods or services? By obtaining a federal trademark registration in relation to any such lawful goods and services you provide (i.e. registering around the edges of the CSA or FDCA), you may still be able to protect your brand.

Alternatives to Federal Registration

Whether or not you pursue federal registration, you should also consider proceeding within the common-law and state-law frameworks so that you can protect your mark within your geographical trading area. You may also consider copyright protection to protect your logo or design trademark.

Common-law Trademark Rights

By using your trademark in commerce on select goods and services, you will develop common-law rights in that mark. Common-law rights are based solely on use of the mark in commerce within a particular geographic area. Your common-law rights may be used to stop infringers.

State Registrations

Another option to consider is seeking one or more state registrations for your trademark in states that recognize the legality of your goods or services. While state registrations confer the benefits of registration only within the boundaries of that state, registering on the state level can be an effective way to protect your mark and to prevent third parties from using the same or confusingly similar mark on the same or similar goods or services in that state.

Copyright Registrations

Copyright protection may constitute an alternative route to protecting your logos or design trademarks, provided they contain original authorship and are not just familiar shapes, symbols, or designs. Copyright is a form of protection provided under U.S. law to ‘original works of authorship,’ once fixed in a tangible form. A copyright registration establishes a public record of a copyright claim as well as offering several other statutory advantages.

In Conclusion

CBD-based businesses should start using their trademarks on their goods and services as soon as possible in order to establish common-law trademark rights, seek federal registration for trademark uses that are legal under the CSA and do not raise lawful-use issues under the FDCA, seek state registrations in states where trademark use occurs and where cannabis use is legal, and seek copyright registrations for eligible logo and design trademarks.

Please contact us for further information or to set up an initial consultation. We look forward to assisting you in protecting your valuable IP.Please contact us for further information or to set up an initial consultation. We look forward to assisting you in protecting your valuable IP.Please contact us for further information or to set up an initial consultation. We look forward to assisting you in protecting your valuable IP.

Mary Bonzagni is the IP partner with the Springfield-based law firm Bulkley Richardson; (413) 272-6200.

Coronavirus

Safe at Home

By Mark Morris

Keiter Homes’ ‘project of the month’

This before-and-after view of Keiter Homes’ ‘project of the month’ is just one of many jobs keeping crews busy recently.

When COVID-19 began spreading earlier this year, it forced everyone to make adjustments. Or, as Brian Rudd put it, “The pandemic lets you know how prepared you are for change.”

Rudd, owner of Vista Home Improvement, said his company handles around 700 projects every year, and keeps everything straight by following an organized process. Once the pandemic hit, those processes had to change on the fly.

“Thanks to our staff and our company culture, we were able to adapt quickly, especially in the way we interact with our customers,” Rudd said, adding that some of the changes, such as heavier reliance on technology to interact with customers and employees, will benefit the business long after coranavirus is under control.

Amid such changes, though, several home-improvement contractors who spoke with BusinessWest tell a similar story about 2020.

Specifically, they all experienced downtime in March and April; even though they were included among ‘essential’ workers, the home-improvement business suffered a severe slowdown, as most people were not comfortable with any outsiders in their home during the early months of the pandemic.

But as more precautions have been put in place, business has returned to most companies — and, in some cases, increased over last year.

Back in December, Ger Ronan, president of Yankee Home, organized what he calls a ‘mastermind’ group of 11 home-improvement companies from all over the U.S. The point of the group is to network and share ideas about what’s working and what’s not.

“In the early days of the pandemic, members of the group came together and wanted to help in any way they could,” he said. “I got lots of ideas and strategies from companies much larger than mine, and they really helped.”

Ronan expressed a common observation as to why home renovation work has picked up. With people spending so much time at home, they are looking at faded siding, worn-out roofs, and other needed repairs. On top of that, fewer people are going away on vacation this year, opting instead to invest money in their homes.

With everyone staying put, homes are simply getting more use — and attention — than in the past.

“There’s more wear and tear on rooms in the house, especially bathrooms,” he said. “Our bathroom-renovation sales are really strong.”

Scott Keiter, president of Keiter Homes, said his company is working on a wide range of home projects. From new additions to kitchens, bathrooms, and especially outdoor living spaces, he said people want to make their houses more user-friendly in this time of increased isolation.

“We’re doing a huge deck for a client who just had a swimming pool installed,” Keiter said. “Because they are spending so much time on their property, I think people are reinvesting in their homes for their own enjoyment.”

Safety First

All three contractors follow state guidelines for COVID-19 in terms of masks, sanitizing worksites, and keeping a safe distance from clients. They also emphasized the importance of safety for their employees and clients.

“Every morning, we give all of our employees the option to not work that day if they do not feel safe,” Rudd said. “That’s become part of our daily routine, and it’s worked great.”

When working on exterior projects such as siding and roofs, Keiter said, it’s fairly easy to maintain a safe distance from the homeowner.

“It’s a little more complicated when we have to work inside the home,” he said. “A simple solution like a plastic partition wall allows us to segregate our work area from the client’s living space.”

Yankee Home uses red carpets to protect clients’ floors when working inside the home. In addition to having the carpets cleaned frequently, Ronan said, project managers from his company visit every job site to make sure all safety protocols are in place.

These contractors told BusinessWest that having people at home during renovation projects was definitely a help and not a hindrance to the job. They all pointed out how much easier it is to discuss changes to a project while the owner is on site, rather than trying to reach them at work and waiting for a reply.

Ger Ronan

Ger Ronan says people have been spending more time at home — and finding more reasons to invest in their home.

“We do a lot of customization, so it’s nice to have people there so they can tell us exactly what they want,” Ronan noted.

At a recent siding and window installation, Rudd added, the homeowner appreciated the details of the work and enjoyed seeing the job from start to finish. “We love people being home because they can see the craftsmanship and what goes into the investment they’ve made with us.”

One trend developing as a result of so many couples working from home involves ‘his and her’ home-office spaces. Keiter, who builds new homes as well as additions, said he has not worked on such projects, but expects he might get requests in the near future. Long before the work-at-home explosion, his clients have wanted home-office setups either for work or to stay in touch with distant family members online.

Scott Keiter

Scott Keiter

“We’re doing a huge deck for a client who just had a swimming pool installed. Because they are spending so much time on their property, I think people are reinvesting in their homes for their own enjoyment.”

“Whether it’s a dedicated office space, flex space, or a study, many plans call for one room in the house that’s being dedicated for computer use,” he explained, noting that the next trend in home offices will likely involve upgraded wireless infrastructure. “From parents working at home to kids trying to go to school online, and all the other laptop and iPad use, I think we will be seeing more sophisticated wireless access points in the home.”

Security Blanket

Though business is booming now, Ronan predicts that the pent-up demand caused by COVID-19 will eventually dissipate, but won’t reduce business too much.

“You know the old adage of, no matter how bad the recession might be, you’ll always get your haircut,” he said. “Well, we’re not quite up there with hairdressers, but you’re always going to take care of your home.”

Rudd said 2020 reminds him of the period right after 9/11 when people saw the home as a security blanket. Similar to that time, his clients are focused on ‘nesting’ in the safety of their home — so it’s not surprising his business is up 32% over last year.

“Anything related to the home is booming,” he noted. “Friends of mine who are landscapers are having record years, too.”

Homeowners have long been advised to make renovations to their kitchens and bathrooms because money spent on those two rooms will provide the best return on investment if the house ever goes up for sale. While kitchen and bathroom renovations remain popular, Keiter said, he’s finding that people are investing in those spaces for a different reason: quality of life.

“We’re staying at home because the virus has made the world unpredictable in so many ways,” he told BusinessWest. “With all this uncertainty, putting money into our homes seems like a pretty safe bet.”

Coronavirus Law

A Stern Test

By Marylou Fabbo

With schools reopening, parents and employers will be in a difficult boat together as they attempt to juggle parenting with personal and professional responsibilities.

Parents are understandably anxious about how they will meet their obligations to both their children and their employers. Several school districts have announced hybrid returns with students alternating between attending school and remote learning. Some jobs just can’t be done from home, and some parents who would otherwise be able to work at home will be needed to help their children with remote learning (or breaking up arguments).

To make matters worse, schools that are already back in session have shown us that, despite precautions that are being taken, school-based COVID-19 outbreaks are a real concern.

Employment-law Compliance

There is no question that many parents will be working from home in some capacity once the school year starts. Businesses should keep in mind that laws that are applicable in the workplace don’t go out the door simply because the workplace has moved to an employee’s home.

Marylou Fabbo

Marylou Fabbo

“Does workers’ compensation insurance apply when an employee trips over a toy during the workday and fractures her ankle?”

For instance, Massachusetts employers must continue to make sure their employees take their 30-minute meal break and keep records of all hours worked, which may not look like the normal 9-to-5 workday. State and federal laws that require employers to provide a reasonable accommodation to disabled employees in the workplace apply to remote employees as well.

To meet these requirements, employers may need to do things such as make adjustments to equipment or the manner in which work is completed. Notices that must be posted in the workplace should be electronically distributed or mailed to an employee.

Still, there are many unanswered questions, and businesses are advised to consult with legal counsel before taking any risky actions. For example, employers are required to reimburse employees for required business-related expenses, but what does that mean when employees use their own laptops and internet for at-home work?

Does workers’ compensation insurance apply when an employee trips over a toy during the workday and fractures her ankle? How does an employer prevent and address sexual harassment in the remote workplace? Is it discriminatory to distribute extra or different tasks that can’t be done at home to older employees who no longer have kids at home? All these issues should be discussed with your employment-law advisors.

Job-protected, Paid Time Off

Not all employees will be able to work when their children are taking classes from home. Employers should be prepared to work with a reduced staff for the foreseeable future. Federal laws will provide many parents with job-protected time off when school is closed, which includes situations where some or all instruction is being provided through distance learning.

The Families First Coronavirus Response Act (FFCRA) generally requires employers to provide paid time off to employees who cannot work (or telework) because their child’s school is closed. However, it’s not enough that a child is attending class remotely. The parent must be needed to care for the child, and the child must be under 14 absent special circumstances.

Still, the FFCRA does not cover all employees or all employers. Employers with 500 or more employees are not covered by the law, while small employers and healthcare providers may be exempt from certain requirements. Also, employees who have been employed for less than a month are only eligible for a maximum of two weeks of ‘emergency sick’ leave, while employees who have been employed for at least 30 days may be able to take up to an additional 12 weeks of expanded family and medical leave (EFML), including on an intermittent basis, assuming that the leave hasn’t already been taken for other permissible purposes.

Eligible employees can earn up to $200 per day when taking childcare EFML, subject to certain maximum dollar amounts. Lawmakers in several states, including Massachusetts, are considering legislation that would fill the gaps in the FFCRA’s paid-leave provisions, and several states have already extended virus-specific paid leave. Employers whose employees aren’t eligible for protected leave will have to decide whether to allow job-protected leave or lay off or otherwise separate with the employee.

School-related Exposure

Unpredictable, illness-related absences can pose another challenge for employers and employees. Children may be exposed at school and bring the virus home.

Employees may be needed to care for their children who are ill and may even test positive themselves. The FFCRA provides up to two weeks paid time off for COVID-related illnesses. The Massachusetts paid-sick-leave statute and the FMLA may also provide employees with paid time off. Employees may also be able to take protected time off (or time at home) as a reasonable accommodation for the employee’s own disability that makes it risky for the employee to go into the office.

Plan Ahead

There’s never been a return to school quite like 2020. The only certainty is that employers could not possibly plan for all potential scenarios. Businesses should make sure they have effective remote-work policies, practices, and procedures in place, be prepared to operate with fewer employees on an intermittent and possibly long-term basis, and designate one or more people within the organization to whom management and employees can direct their questions.

Marylou Fabbo is a partner with Springfield-based Skoler, Abbott & Presser, P.C., a law firm that exclusively practices labor and employment law. She specializes in employment litigation, immigration, wage-and-hour compliance, and leaves of absence. She devotes much of her practice to defending employers in state and federal courts and administrative agencies. She also regularly assists her clients with day-to-day employment issues, including disciplinary matters, leave management, and compliance; (413) 737-4753 ; [email protected]

Senior Planning

Follow These Five Steps When It’s Time to Talk About Care

Whether your loved one needs full-time care or you’re just beginning to anticipate a need, here’s a series of steps you’ll need to take, with some thoughts on each from leading voices in the field. Just take it one step at a time.

1. Start the Conversation

“Talking with your parents about their future will not be a one‐time conversation, but an ongoing process,” says Catherine Hodder, author of Estate Planning for the Sandwich Generation: How to Help Your Parents and Protect Your Kids. “You must be patient and willing to wait until your parents feel comfortable. They will need to be ready to talk with you or to make certain decisions about their future. The hardest part will be for them to admit they need help and that you will be taking on more responsibility for them. Understand they still see you as their child who they should be helping, not the other way around. Try to feel out the right times to talk about healthcare concerns and when to talk about finances. Depending on your parents’ personalities, one may be an easier conversation than the other.”

2. Consider How Much You Can Take On

“For many, our responsibilities extend beyond the needs of our aging parents and carry over to our own families,” says Amy Osmond Cook, author of Things to Discuss with Aging Parents Before Becoming Their Caregiver. “Those obligations don’t end when a parent needs extra care. By discussing a schedule with your loved one, you can establish a balance between his needs and the needs of your family. For example, you may have a nurse stay in the home on certain days with an understanding you will take your aging parent to all of the doctor’s appointments. A routine can provide comfort to your loved one because he will know when to expect you or other helpers when care is needed.”

3. Build a Team and Make a Plan

“Family meetings are a way for siblings, parents, and other concerned relatives or friends to try to clarify the situation, work out conflicts, and set up a care plan that, ideally, all can agree upon,” says  Bonnie Lawrence, author of A Sibling’s Guide to Caring for Aging Parents. “If the meeting is likely to be contentious, or if you want an experienced, objective voice to guide it, involve a facilitator such as a social worker, counselor, geriatric care manager, or trusted outside party who will ensure that all participants have a chance to be heard. You may need more than one meeting.”

4. Discuss How You Will Pay for Care

“What is the truth about your parent’s situation — finances, health, and what they want for care?” asks Catherine Flax, author of Aging Parents and Money: Difficult Conversations That Need to Be Had. “The reality is that, when it comes to finances, most people (parents and their children) are largely in the dark. What are the rules around Social Security? How much do they currently spend on healthcare, and how do Medicare and insurance supplements work? What is the optimal, tax-efficient draw-down schedule for their retirement assets — and how far will these assets take them? Do they have other assets that they could manage to their advantage (like a home that could be downsized) to give them a higher quality of life, and would they want that?”

5. Make the Transition — and Follow Up

“Once your mother selects a place and settles in, visit frequently — by whatever means possible,” says Kerry Patterson, author of Preparing for a Crucial Conversation with an Aging Parent. “Check to see what is working and what isn’t. Where possible, make further changes to match her needs to the facility. Finally, live up to the promise you made to yourself. You meant it when you decided that you wanted what’s best for your mom/dad or loved one. Whether this turns out to be true depends a great deal on how often you make contact with him/her once she’s/he’s found a new place to live.”

Senior Planning

Start the Conversation

From the AARP FOUNDATION

The reality is that some conversations are just plain difficult — even with the people to whom you feel the closest. When preparing to discuss a difficult topic like senior care needs, it helps to follow the ground rules below to ensure that everyone’s feelings are respected and viewpoints are heard. To help make the conversation as productive and positive as possible:

1. Try not to approach the conversation with preconceived ideas about what your loved ones might say or how they might react. “Dad, I just wanted to have a talk about what you want. Let’s just start with what is important to you.”

2. Approach the conversation with an attitude of listening, not telling. “Dad, have you thought about what you want to do if you needed more help?” — as opposed to “we really need to talk about a plan if you get sick.”

3. Make references to yourself and your own thoughts about what you want for the future. Let them know they are not alone, that everyone will have to make these decisions. “Look, I know this isn’t fun to think about or talk about, but I really want to know what’s important to you. I’m going to do the same thing for myself.”

4. Be very straightforward with the facts. Do not hide negative information, but also be sure to acknowledge and build on family strengths. “As time goes on, it might be difficult to stay in this house because of all the stairs, but you have other options. Let’s talk about what those might be.”

5. Phrase your concerns as questions, letting your loved ones draw conclusions and make the choices. “Mom, do you think you might want a hand with some of the housekeeping or shopping?”

6. Give your loved ones room to get angry or upset, but address these feelings calmly. “I understand all this is really hard to talk about. It is upsetting for me, too. But it’s important for all of us to discuss.”

7. Leave the conversation open. It’s okay to continue the conversation at another time. “Dad, it’s OK if we talk about this more later. I just wanted you to start thinking about how you would handle some of these things.”

8. Make sure everyone is heard — especially those family members who might be afraid to tell you what they think. “Susan, I know this is really hard for you. What do you think about what we are suggesting?”

9. End the conversation on a positive note. “This is a hard conversation for both of us, but I really appreciate you having it.”

10. Plan something relaxing or fun after the conversation to remind everyone why you enjoy being a family. Go out to dinner, attend services together, or watch a favorite TV program.

These are just a few suggestions of things you, your loved ones, and other family members can do to unwind after a difficult conversation.

Senior Planning

Having the Talk

From VISITING ANGELS

Here are sample conversation starters and strategies to introduce home-care services to your loved one. Each scenario is a catalyst to take action and start talking. Prior to talking, prepare and arrange with a reliable friend or your spouse to take part in the plan.

SCENARIO: Your loved one mentions plans to drive to the grocery store. He’s shown signs of unsafe driving (getting lost or confused or unexplained dents on the car). Coordinate with a trusted neighbor, friend, or spouse to serve as a driver for one trip. 

SAY: “I see you’re planning to go to the grocery store.  I think it would be a great idea to ride with [the neighbor/friend/spouse] next time or even hire a professional who can take you where you need to go. You could tell her exactly where you want to go, and she’ll get you there. You’d be in control.”

SCENARIO: You noticed your mom or dad isn’t eating.  

SAY: “I don’t have the time to stay and cook tonight, but [neighbor/friend/spouse] loves to cook, and said she would love to cook with you tomorrow night, and she won’t have to leave early. Then you won’t have to worry about making dinner, and the family will feel good knowing someone’s with you to help you out in the kitchen. You can tell them what you’d like to eat, and you’ll be in total control. Let’s at least try it and talk about it afterward to see if it’s an arrangement you’d like.”

SCENARIO: Your loved one forgets to take her medicine repeatedly. (Alert the doctor first.)

SAY: “I’m worried that you forgot to take your medicine again. I spoke with your doctor, and he’s especially concerned about missing doses. He suggested we find a way prevent it from happening. I thought a professional caregiver would be really helpful. Let’s at least give it a try and see how you like it. Then we can talk about it and see if it’s something you want going forward.”

SCENARIO: Your elderly loved one is struggling to get dressed, whether it’s a fall or a misbuttoned shirt. You’ve realized they need help in the bedroom to get dressed.

SAY: “I’ve noticed you’re wearing the same clothes again. What if we got you a helper for the mornings — someone who can stop by and help get you ready for the day? She could even do a load of laundry or two; that’s completely on your terms. Think of how nice it’ll be knowing there’s one less thing you have to do. Mind if we give this a try?”

SCENARIO: You notice a high pile of dishes in the kitchen sink. 

SAY: “I know you care about keeping your place clean and tidy. But your dishes have piled up again, and the kitchen’s getting dirty. I’ll help you get those done, but what if we explored getting someone in here to keep the dishes done and the place clean? We’d love to take that off your plate, and then everyone can feel good knowing your house is clean and the way you like it. Let’s at least give it a try and go from there.”