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STEPS FOR MARYLAND SMALL BUSINESSES TO TAKE DURING THE COVID-19 PANDEMIC

Posted March 30, 2020 by Ray M. Aragon, Kathleen B. Asdorian, Daniel Preston Dozier, Jamie Kent Hamelburg, Fredric A. Press, Janell F. Wheeler in Articles & Publications, Press Releases, Press, Dozier & Hamelburg News

Dear Clients and Friends,

We hope that you are well.  We know this is a challenging time for all of you—personally as well as professionally.

To help you navigate the unique issues raised by the COVID-19 pandemic, we’ve identified three steps all small business owners should be taking. We hope you will find them useful in this complex and rapidly changing environment. 

Like many of you, our attorneys and staff are now working remotely. If you need any follow-up assistance on these or any other legal matters, we’re just a phone call or email away. You can reach our lawyers at (301) 913-5200 and office@pressdozierlaw.com.

If you’re a small business owner, we suggest you: 

  1. Stay informed

Check government websites regularly for new policies that affect your business.

The environment is changing so rapidly that it’s difficult to keep up-to-date with accurate information. When dealing with employees and customers, it’s critical that you stay informed because changing governmental policies can affect your ability to operate, as well as your client’s ability to buy your goods or services.

Don’t rely on everything you see on the internet or social media.

Focus on official government websites instead.  We recommend you (or someone on your team) establish a list of government sources and check them at least daily for relevant developments.

Federal Law: The US Department of Labor’s website provides information on changes to federal labor laws made in response to the COVID-19 epidemic. Just last week, Congress passed the Emergency Family and Medical Leave Expansion Act, which amended the Family and Medical Leave Act to temporarily require all employers with less than 500 employees to offer 12 weeks of unpaid medical leave to their employees who have COVID-19 or who are caring for a family member with the illness. Another new law, the Emergency Paid Sick Leave Act, requires all employers with less than 500 employees to offer up to 80 hours of paid sick leave to full-time employees.  The Department of Labor has the authority to exempt a small business with fewer than 50 employees from compliance with both the unpaid and paid sick leave requirements if they would jeopardize the viability of the business.

State Law: Information relating to COVID-19 for Maryland businesses is located on the Maryland’s egov website, including hyperlinks to Maryland state orders affecting businesses.

Maryland’s Governor Hogan has now ordered that effective at 5 pm on March 23rd all nonessential businesses in Maryland must close.  At this time, essential businesses include  restaurants, bars and similar food service establishments, although they are still permitted to offer carry-out and delivery as an essential service.  Other business services that are deemed essential include financial services, utility providers, healthcare providers, and transportation services. In addition, Maryland Governor Hogan has limited all gatherings to no more than 10 people.

However, a new Maryland law called the COVID-19 Public Health Emergency Protection Act of 2020 makes it easier for physicians and other therapists to conduct appointments electronically by waiving certain privacy restrictions.

County Law and Other Requirements: In addition to federal and Maryland state information, you should keep up-to-date on county information that might affect your business.  As an example, Montgomery County is now processing licenses for restaurants to deliver, for off-premises consumption, alcohol along with meals.  For franchised businesses, it’s also helpful to check in regularly with your franchisor for policies being developed to address the COVID-19 outbreak.

It’s essential for small businesses to stay on top of these fast-changing rules and policies. By focusing your attention on the official government sites noted above, you’ll have more accurate and timely information about laws that could significantly affect your business. If needed, we can provide additional and more specific information on how shifts in the law could affect your business.

  1. Take appropriate safety actions for employees and customers.

We all know that it’s to everyone’s benefit to enact safety measures like disinfecting workplaces and adopting work-from-home policies to slow the transmission of COVID-19.

  • Businesses should refer to CDC, OSHA, and Maryland Department of Health recommendations for safe practices (including decontamination and cleaning), and put into place safety procedures for their employees to follow.
  • To facilitate remote work and anticipate employees dealing with their own or family member illnesses, we recommend that businesses update their employment policies to cover teleworking and to clarify availability of sick leave.

These steps are important from a public health perspective. They also reassure your employees and your customers that you’re concerned about and committed to their safety.  Additionally, they can even limit your exposure to potential lawsuits. There are already cases being filed against companies for not taking steps to protect customers from becoming exposed to the disease. Examples are customers suing cruise ship companies for their exposure to COVID-19.  We can assist in drafting and implementing these policies.

  1. Explore options to mitigate a financial downturn.

In some industries, businesses have had to close their doors without notice, like health clubs and gyms.  In other industries, businesses might be suffering financial harm although they can continue in some fashion, like restaurants serving to-go orders.

In these cases, a critical first step is to check insurance policies.  Many businesses have insurance that is designed to address losses from event cancellation, business interruption, or supply chain disruptions. However, many policies include terms that exclude coverage for pandemics.  We can help you to closely evaluate policies to determine your rights, submit claims and advocate for coverage.   

Companies may also need to temporarily lay-off or terminate employees to keep the business viable.  If you fall in this category, this can be complicated if most of your staff are working remotely. To the extent possible you should communicate the action personally (either in-person or by phone), followed by a written confirmation. Remind the employees of their obligations to return employer-provided equipment, provide instructions for continuation of health insurance coverage, and tell them when they will receive their last paycheck.  In Maryland, wages must be paid with the next regularly scheduled paycheck following termination.

It’s important to note that there are new restrictions on terminating employees. Maryland’s COVID-19 Public Health Emergency Protection Act prohibits employers from terminating employees solely due to COVID-19 related absences. For example, this includes an employee exposed to COVID-19 who needs to be quarantined. We recommend that you consult with counsel before terminating employees to make sure you understand any legal restrictions that may apply.

Businesses may also need to explore changes in the terms of their financing arrangements. Note that commercial loans and mortgages generally don’t excuse late payments, even during a pandemic. Commercial leases typically are written the same way.  Businesses will have to check their loan documents and their leases to determine their payment obligations and should keep an open line of communication with their lenders and landlords. 

While FEMA does not provide assistance to businesses, the Small Business Administration has a disaster relief program offering low-interest loans to struggling small businesses.  Tax deadlines have also been extended.  There may be other sources of relief on the way from federal and state governments.

We wish you all good health and financial success.

Press, Dozier & Hamelburg partners with businesses to achieve their goals, and represents families and individuals, often when they are most vulnerable. Our attorneys deliver valuable insight and counsel in the areas of business law, employment law, litigation, commercial real estate, estate planning and administration, and business succession planning. We provide all of our clients with personal service, emphasizing responsiveness, sensitivity, and respect. We are located in Bethesda and serve Maryland, Virginia and Washington, DC. You can reach our attorneys at (301) 913-5200 and office@pressdozierlaw.com.