STEPS FOR VIRGINIA SMALL BUSINESSES TO TAKE DURING THE COVID-19 PANDEMICPosted April 10, 2020 by in Articles & Publications, Press Releases
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 action items 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 matters, we’re just a phone call or email away. Our contact information is at the end of this communication.
If you’re a small business owner, we suggest you:
- Stay informed by checking 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. Congress recently 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: COVID-19 information relating to Virginia businesses is located on the Virginia.gov website, including information about government support for small businesses and impacted employers.
At the time of this writing, Virginia’s Governor Northam has ordered the closure of certain businesses, including entertainment, recreational and dine-in establishments. Other business may continue to operate so long as they limit the number of customers to 10 or less. Businesses deemed “essential” are exempt from the 10 or less customer rule. Essential businesses include grocery, healthcare, home improvement, gas stations, financial institutions, pet stores, office supply stores, and laundromats. Restaurants, bars and similar food establishments may offer carry-out and delivery services only.
County Law and Other Requirements: In addition to federal and Virginia state information, you should keep up-to-date on county information that might affect your business. As the situation continues to evolve, the response to the pandemic may move to more localized restrictions. 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.
- 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 Virginia 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.
- 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 Virginia, wages must be paid with the next regularly scheduled paycheck following termination. 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.
Businesses also should investigate new emergency financial assistance programs. On a federal level, Virginia received an Economic Injury Disaster loan declaration, which means that businesses can begin applying for special loans from the Small Business Administration’s disaster relief program. This emergency assistance provides low-interest loans up to $2 million which can be used to pay operating expenses including rent, fixed debt payments, and payroll. Businesses will less than 500 employees may also apply for the Paycheck Protection Program which is designed to help cover the costs of payroll and other operating expenses. Alexandria City and Arlington County are working together to provide grants through the Emergency Layoff Aversion Assistance Program. In addition to loans and grants that may be available, the IRS, Virginia Department of Taxation, and local counties (including Fairfax and Arlington Counties) have extended the deadlines for filing and paying some, but not all, taxes this year. Virginia’s income tax filing deadline of May 1, 2020 is one deadline that has not yet changed.
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, 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.
We wish you all good health and financial success.