Articles by Our Attorneys

The SBA Emergency Loan funding included in the COVID-19 relief package enacted last week
has rightfully gotten a great deal of attention in the press and numerous summaries of the new
law, including our own.

If you have an existing SBA Loan, the SBA’s deferment policies are another tool available to
help you navigate these uncertain times. The SBA recently reminded SBA lenders that its
existing guidelines give them broad authority to grant SBA borrowers deferments that
restructure or delay payments. Lenders can make deferment decisions and design their terms
based upon each borrower’s unique situation. If a lender owns the loan it can offer deferments
of as long as 6 months. If the loan has been sold to an investor, the lender can offer deferments
for up to 90 days without the investor’s consent.

If you have a SBA Loan we would encourage you to contact your lender to update them about
the current status of your business and, if you are concerned about COVID-19’s impact on your
business, to ask them what information they will need to consider a deferment.
If you have any questions about the terms of your current SBA Loan or how to work with your
lender on a loan deferment, please contact Mary Kay Gaver at [email protected].

A common question many employers face is, “how do we respond to a workplace accommodation request under the Americans with Disabilities Act (ADA)?”  Like many legal questions, the answer starts with “it depends …”

Simply put, employers responding to accommodation requests must navigate a host of legal issues, including understanding the coverage of the ADA, how the ADA defines key terms like “disability” and “undue hardship”, and knowing how to engage in the necessary “interactive process” to address the request.  Notably, the failure to properly respond to an ADA accommodation request can lead to significant legal exposure for an employer, particularly if the employment relationship ends.  Successful plaintiffs under the ADA can recover not only back and front pay, but also compensatory and punitive damages and attorney’s fees.

The following are a few key points to consider when addressing an ADA accommodation request.

The Request

Broadly speaking, a reasonable accommodation is a modification to the work environment that an employer can reasonably implement that would allow an employee with a disability to perform the essential functions of a job, or enjoy benefits and privileges of employment that are enjoyed by similarly situated, non-disabled employees.

There is no specific form, or question, or magic phrase that an employee has to use to request an accommodation under the ADA.  An employee may request a reasonable accommodation orally or in writing, at any time, and is not even required to have a particular accommodation in mind before making the request.  Generally, all that is required is that the employer knows or has reason to know that the employee has a disability and a need for an accommodation.

Is the employer covered by the ADA or an analogous statute?

After receiving a request, the employer must consider whether it is covered by the ADA or an analogous state or local statute.  With limited exceptions, a private employer is covered under the ADA if it has 15 or more employees on its payroll.  Notably, however, state and local statutes often have narrower coverage provisions, but also prohibit discrimination based upon disability.  For example, the Pennsylvania Human Relations Act applies to Pennsylvania businesses with 4 or more employees, while the Philadelphia Fair Practices Ordinance narrows the coverage to employers with 1 or more employees.  Therefore, knowledge of the applicable law is essential to determining what action by the employer is required.

Does the employee have a “disability” protected by the ADA?

The ADA broadly defines disability as “a physical or mental impairment that substantially limits one or more major life activities of an individual (that is, an actual disability)” or “a record of this kind of impairment”. 42 U.S.C. § 12102(1).[1]  A physical impairment includes any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more body systems (e.g. neurological, musculoskeletal, respiratory, etc.)  A mental impairment includes a mental or psychological disorder, such as an intellectual disability or emotional or mental illness. 29 C.F.R. § 1630.2(h)(1), (2).  “Major life activities” include seeing, hearing, sitting, standing, walking, lifting, bending, sleeping, breathing, thinking, and many more. 29 C.F.R. § 1630.2(i)(1)(i).  Notably, the “record of impairment” definition of disability extends ADA protections to individuals who have a history of, or who have been misclassified as having, a physical or mental impairment. 29 C.F.R. § 1630.2(k)(3)).

One of the most difficult aspects of defining a disability is the meaning of the phrase “substantially limits”.  While there is no clear definition in the ADA, the ADA Amendments Act of 2008 (ADAAA) and its regulations provide guidance on this issue.  Per these regulations, employers are to construe “substantially limits” broadly.  To qualify as a substantially limiting impairment, the impairment need not prevent, or significantly or severely restrict the individual from performing a major life activity.  Employers are to judge the ability of the individual compared to most people in the general population, and without consideration of most mitigating measures, such as hearing aids. 29 C.F.R. § 1630.2(j)(1)(i)-(ix).

Is the employee “qualified”?

The purpose of an accommodation request is to allow the requesting employee to perform certain job duties, either in their current role or in a position they are seeking.  Therefore, the individual making the request must be “qualified”, meaning the employee is able to perform the essential functions of the job with or without a reasonable accommodation, and otherwise has the skills, experience, etc. necessary for the position.  Essential functions are “fundamental job duties of the employment position the individual with a disability holds or desires”. 29 C.F.R. § 1630.2(n)(1)).

“Undue Hardship” and “Direct Threat”

An employer is not required to make an accommodation if the accommodation would impose an undue hardship on the employer.  This is a case-by-case determination, however the factors that determine undue hardship include: the nature and net cost of the accommodation, the overall financial resources of the employer, and the number of employees of the employer. 42 U.S.C. § 12111(10)(B).

In addition, certain disabilities can be considered to create a “direct threat” to the health or safety of others, which no reasonable accommodation can negate. 29 C.F.R. § 1630.2(r).  For example, an employer may not be required to accommodate an individual who suffers from dizziness or fainting spells if the only jobs available require operation of heavy machinery, since the condition could endanger the workplace.

The Interactive Process

Assuming the proper criteria are met, the next step is for the employer and employee to engage in an “interactive process”.  This is an area where difficulties often arise, as this process imposes duties on both the employer and the employee.  As stated by the Third Circuit Court of Appeals in Taylor v. Phoenixville Sch. Dist., 184 F.3d 296, 312 (3d Cir. 1999), employers and employees “have a duty to assist in the search for appropriate reasonable accommodation and to act in good faith.”  This means that both the employee and employer must engage in an “interactive process” “to work toward finding a suitable accommodation.” Id.  Employers can show their good faith compliance in a number of ways, such as: “meeting with the employee who requests an accommodation, requesting information about the condition and what limitations the employee has, asking the employee what he or she specifically wants, showing some sign of having considered the employee’s request, and offering and discussing available alternatives when the request is too burdensome.” Id. at 317.

Importantly, if an accommodation is offered and it is reasonable, the employer has satisfied its obligations, even if the proposed accommodation is not the preferred choice of the employee. See, Khoury v. Secretary United States Army, 677 Fed.Appx. 735 (3d Cir. Jan. 27, 2017) (employee is not entitled to her preferred accommodation, only a reasonable one); Diaz v. City of Philadelphia, 565 Fed.Appx. 102, 106 (3d Cir. May 2, 2014) (“The ADA does not … require an employer to provide a disabled employee with the accommodation of her choosing.”)

Examples of Accommodations

Since accommodations are judged under a “reasonableness” standard, accommodations can be as unique as the person requesting them.  However, common examples of reasonable accommodations include:

• physical changes such as installing a ramp or changing a workspace layout;
• accessible or assistive technologies such as reader software;
• accessible communications such as closed captioning at meetings;
• light-duty for certain physical demands of a job;
• modifications of work schedules;
• telecommuting; and,
• job reassignment.

For individuals with a “record of” disability, common accommodation examples include a schedule change or time off for medical follow-up or monitoring appointments with their physician.

Employer compliance: the bottom line

ADA compliance is a process.  Training of management and maintaining clear and up-to-date employment policies are critical to properly responding to an accommodation request.  Equally important is engaging in meaningful communications with any employee who requests an accommodation, as every situation is unique.  Ultimately, the proper handling of accommodation requests requires not only active participation, monitoring and documentation, but also an understanding of this constantly evolving area of the law.

[1] The ADA definition of disability also includes “being regarded as” disabled.  Individuals “regarded as” disabled are protected from discrimination under the ADA, however they are not entitled to a reasonable accommodation.

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Jeffrey P. Burke, an associate in MacElree Harvey’s West Chester office, counsels businesses and individuals on employment agreements, equal employment policies, non-competition agreements, independent contracting issues, and other employment-related matters. Jeff also represents businesses and individuals in employment discrimination litigation, such as Americans with Disability Act claims, Age Discrimination in Employment Act claims, discrimination based upon sex, race or religion, sexual harassment, and hostile work environment.

To schedule a consultation with Jeff, call (610) 840-0229 or email [email protected].

The Tax Cuts and Jobs Act of 2017 (TCJA) gave us the highest estate and gift tax basic exclusion amount in history – $10 million.  The exclusion amount, adjusted for inflation, was $11.4 million in 2019 and will rise to $11.58 million in 2020.  Married couples can double that amount if they elect to exercise “portability” on a timely filed Estate Tax Return.  The TCJA exclusion increase is temporary, however, and in 2026 the $10 million exclusion will revert back to a $5 million base.

The estate tax generally is calculated using a taxpayer’s taxable estate at death, combined with any lifetime taxable gifts.  Because the increase in the basic exclusion amount is temporary, some have wondered whether taxpayers who die after 2025 will receive the full benefit of the higher exclusion. The problem can be illustrated by the following example:

Suppose an individual taxpayer gifts $11.4 million to his child today, his only taxable gift. This gift currently would be sheltered by the heightened exclusion amount and no gift tax would be due. The taxpayer then dies in 2026 with a $4 million taxable estate. The taxpayer’s total taxable estate and lifetime gifts are $15.4 million, however, only $5 million of exclusion is now available.  This would result in a much higher estate and gift tax due than the taxpayer originally anticipated when he made the gift.

The final regulations issued by the IRS on November 26, 2019 resolve this “clawback” issue.[1]  In calculating the credit against the estate tax, the exclusion amount used is the greater of: (1) the exclusion amount at death and (2) the exclusion amount at the time the lifetime gift(s) were made.[2]  The regulations provide the following example:

An unmarried individual made cumulative taxable gifts of $9 million during his lifetime, all sheltered from gift tax by the $11.4 million basic exclusion amount on the date of the gifts.  The basic exclusion amount on the individual’s death is $6.8 million.  Because the total exclusion amount allowable on the dates of the gifts exceeds the $6.8 million exclusion amount allowable at the individual’s death, the exclusion amount for purposes of calculating the individual’s estate tax is $9 million.[3]

The regulations also ensure that a Deceased Spouse’s Unused Exclusion Amount (DSUE) will not be reduced when the exclusion amount decreases in 2026.[4]  Accordingly, if one spouse dies in 2019 and elects portability on a timely filed Estate Tax Return, that unused $11.4 million exclusion will not be lost even if the basic exclusion amount is reduced at the surviving spouse’s death.

The result is that a taxpayer can take advantage of a fluctuating estate and gift tax exclusion during his or her lifetime, and will not be subject to estate tax simply because the exclusion is lower at death.  In light of the increased exclusion amount and the recently published regulations, taxpayers should consider using their increased exclusion amount before it reverts back to $5 million in 2026.

[1] Treas. Reg. § 20.2010-1.

[2] Treas. Reg. § 20.2010-1(c).

[3] Treas. Reg. § 20.2010-1(c)(2)(i).

[4] Treas. Reg. § 20.2010-1(c)(2)(iii).

In a recent court decision, Pennsylvania joined many other states in recognizing the presumption of paternity in a same-sex marriage situation.

The presumption of paternity presumes, that if a woman gives birth during her marriage, her spouse is the other parent of the child. Historically, this presumption has been one of the stronger presumptions under the law.

Since the US Supreme Court legalized same-sex marriages several years ago, the question was opened as to the presumption of paternity in same-sex marriages.

The Pennsylvania Superior Court answered this question recently in the case of In Re A.M.   While procedurally In Re AM was a dependency case, the Superior Court did address the broader issue of whether the presumption of paternity applies to same-sex marriages. The court concluded that, since same sex-marriages are legal in Pennsylvania, same-sex couples must be afforded the same rights and protections as opposite-sex couples. Therefore, the presumption of paternity is equally applicable to same-sex marriages is as it is to opposite-sex marriages.

The legalization of same-sex marriages has raised many legal issues involving family law, estates and trust law, as well as many other areas.  At MacElree Harvey, we have many attorneys knowledgeable and ready to help answer your questions in this important emerging area of the law.

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Like the families we serve, matters of family law come in all shapes and sizes—and our Pennsylvania and Delaware Family Law attorneys are equipped to manage and resolve a variety of legal issues. Our attorneys cover all aspects of family law, from drafting prenuptial agreements before parties marry to negotiating divorce settlements when a marriage ends, as well as helping parents resolve child custody disputes. Learn more about our family law practice.

Lance Nelson of MacElree Harvey’s family law practice has over 25 years of experience representing clients in family law matters such as divorce, marital agreements, adoption, custody, and support.

For high-income child support cases, the Pennsylvania Supreme Court has held that courts are permitted to perform additional scrutiny of the reasonable needs of the actual children involved in the case. High-income child support cases are classified as cases where the parties have a combined monthly net income (CMNI) above $30,000.

In Hanrahan v. Bakker, the issue before the Court was whether child support guidelines account for the reasonable needs of the children of high-income households and whether a discrete analysis of those reasonable needs by an independent factfinder is improper; the Court held that it is not improper to evaluate the specific needs of children of high-income households.

In Hanrahan, the father’s 2010 support payments were approximately $3,700 per month; by 2013, due to a substantial pay increase, his payments rose to a significantly higher amount per month. The lower courts rejected the father’s claim that the courts were required to conduct an analysis of the reasonable needs of his children and concluded that any such analysis had been eliminated from the child support guidelines. The lower courts relied on the Explanatory Comment and Ball v. Minnick, – a standard, non-high-income support case decided by the Supreme Court some time ago.

The Explanatory Comment states that there are universal guidelines for determining child support, and all child support cases are to receive similar treatment in their calculation. The Comment also states that “high income” child support cases will no longer be decided pursuant to Melzer v. Witsberger. In an effort to bring uniformity to support cases, the Supreme Court held that courts were to first engage in a discrete analysis to determine the essentials needs of the child(ren) to maintain an established lifestyle and then potentially allow for additional nonessential expenses.

In Ball v. Minnick, the Supreme Court stated that the rules make it clear that the amount of support as determined from the support guidelines is presumed to be the appropriate amount of support. There is a strong presumption that the payment is not only an amount the paying parent can afford but is reasonably necessary to further the child’s welfare. As the Supreme Court in Hanrahan properly noted, Ball is only meant to affect standard income support cases and is different from this case.

The Court held that even though high income cases are no longer decided according to the standards in the Melzer case, this did not mean that courts were prohibited from engaging in additional analysis. High-income support is not actually tied to any economic data estimating the reasonable needs of children living in high income households and by using reasonable discretion, courts should engage in additional scrutiny on a case-by-case basis to determine the needs of the children in these high-support situations.

This case will have no impact on cases where the parties’ CMNI is less than $30,000. However, in cases where the CMNI is above $30,000, courts can give greater weight to the deviation factors that will lead to less uniformity in determining support. Additionally, the receiving parent will now bear the burden of demonstrating that they deserve the amount provided for through the guidelines, as it is presumed that support amounts recommended in established guidelines are now excessive. The receiving parent should be prepared to present extensive and detailed evidence demonstrating that the amount provided for is the actual amount necessary to further the child’s welfare and lifestyle.