The Business Impact of Covid-19, Free Ebook on Negotiating with Your Landlord, Sources of Funding, Business Interruption Coverage, and More
Legal alert! On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act. While this Act is meant to protect workers out of work due to coronoavirus quarantines, sickness and to help those with children at home, the Act is going to be severe consequences to small business owners.
There are two main parts that could affect small business owners:
1) Sick Leave Provisions
PAID SICK TIME REQUIREMENT
(a) In General.—An employer shall provide to each employee employed by the employer paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because:
(1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
(2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
(3) The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.
(6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Except that an employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee from the application of this subsection.
(b) Duration Of Paid Sick Time.--
(1) IN GENERAL.—An employee shall be entitled to paid sick time for an amount of hours determined under paragraph (2).
(2) AMOUNT OF HOURS.—The amount of hours of paid sick time to which an employee is entitled shall be as follows:
(A) For full-time employees, 80 hours.
(B) For part-time employees, a number of hours equal to the number of hours that such employee works, on average, over a 2-week period.
(3) CARRYOVER.—Paid sick time under this section shall not carry over from 1 year to the next.
(c) Employer’s Termination Of Paid Sick Time.—Paid sick time provided to an employee under this Act shall cease beginning with the employee’s next scheduled workshift immediately following the termination of the need for paid sick time under subsection (a).
(d) Prohibition.—An employer may not require, as a condition of providing paid sick time under this Act, that the employee involved search for or find a replacement employee to cover the hours during which the employee is using paid sick time.
Penalties for failure to comply include:
It shall be unlawful for any employer to discharge, discipline, or in any other manner discriminate against any employee who--
(1) takes leave in accordance with this Act; and
(2) has filed any complaint or instituted or caused to be instituted any proceeding under or related to this Act (including a proceeding that seeks enforcement of this Act), or has testified or is about to testify in any such proceeding.
(a) Unpaid Sick Leave.—An employer who violates section 5102 shall--
(1) be considered to have failed to pay minimum wages in violation of section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206); and
(2) be subject to the penalties described in sections 16 and 17 of such Act (29 U.S.C. 216; 217) with respect to such violation.
(b) Unlawful Termination.—An employer who willfully violates section 5104 shall--
(1) be considered to be in violation of section 15(a)(3) of the Fair Labor Standards Act of 1938 (29 U.S.C. 215(a)(3)); and
(2) be subject to the penalties described in sections 16 and 17 of such Act (29 U.S.C. 216; 217) with respect to such violation.
IN ADDITION TO THE NEW SICK TIME PROVISIONS, FMLA HAS BEEN TEMPORARILY EXPANDED:
“SEC. 110. PUBLIC HEALTH EMERGENCY LEAVE.
“(a) Definitions.—The following shall apply with respect to leave under section 102(a)(1)(F):
“(1) APPLICATION OF CERTAIN TERMS.—The definitions in section 101 shall apply, except as follows:
“(A) ELIGIBLE EMPLOYEE.—In lieu of the definition in sections 101(2)(A) and 101(2)(B)(ii), the term ‘eligible employee’ means an employee who has been employed for at least 30 calendar days by the employer with respect to whom leave is requested under section 102(a)(1)(F).
“(B) EMPLOYER THRESHOLD.—Section 101(4)(A)(i) shall be applied by substituting ‘fewer than 500 employees’ for ‘50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year’.
“(2) ADDITIONAL DEFINITIONS.—In addition to the definitions described in paragraph (1), the following definitions shall apply with respect to leave under section 102(a)(1)(F):
“(A) QUALIFYING NEED RELATED TO A PUBLIC HEALTH EMERGENCY.—The term ‘qualifying need related to a public health emergency’, with respect to leave, means the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.
“(B) PUBLIC HEALTH EMERGENCY.—The term ‘public health emergency’ means an emergency with respect to COVID–19 declared by a Federal, State, or local authority.
“(C) CHILD CARE PROVIDER.—The term ‘child care provider’ means a provider who receives compensation for providing child care services on a regular basis, including an ‘eligible child care provider’ (as defined in section 658P of the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858n)).
“(D) SCHOOL.—The term ‘school’ means an ‘elementary school’ or ‘secondary school’ as such terms are defined in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).
In summary, the expanded FMLA provides that employers with under 500 employees must provide effectively 10 weeks of paid leave to employees that are sick or caring for a child out of school due to a Covid-19 closure. Note that this is for an employee that cannot telework.
The law takes effect April 2, 2020.
Employers should now carefully consider their options before the law takes effect.
Our office stands ready to assist. Please book a call to see how we can help you consider your options with employees.
The Small Business Administration (SBA) has published some guidance for business owners on their website. Below is a summary of some important points:
The following interim guidance may help prevent workplace exposures to acute respiratory illnesses, including COVID-19, in non-healthcare settings. The guidance also provides planning considerations if there are more widespread, community outbreaks of COVID-19.
To prevent stigma and discrimination in the workplace, use the guidance described below and on the CDC’s Guidance for Businesses and Employers web page.
Below are recommended strategies for employers to use now. In-depth guidance is available on the CDC’s Guidance for Businesses and Employers web page:
If your business needs some employment law guidance or contract review (force majeure clauses), our office is offering discounted phone consults through March 31. Reach out to our office to book a call.
If we collective a dime every time a client told us they don't know their numbers, we'd be rich!
But seriously, if you have followed the advice and hired an accountant to take over the finances of your business, now you can rest easy and focus on doing what you do best and never worry about that side of things again, right? While this statement feels great, there are still a few financial details about the business that every business owner should be aware of no matter who is managing the finances.
Keeping an eye on this number will help you have a constant finger on the pulse of your business. If the amount of cash flowing out starts to outpace the amount of cash flowing in, some adjustments need to be made and quickly to keep things running. Cash is the lifeblood of a business! Your business cannot stay afloat long with miles and miles of accounts receivable and promises to "pay later."
This number is closely tied to your cash flow and is basically what is left over after everything is paid. To ensure the health of your business you want to make sure that this number is always positive and better yet, steadily growing!
This is the number that is left after you subtract operating expenses from what you are charging. Whether you are a service or product-based business, you want to make sure that you are frequently looking at and adjusting your rates based on this number. Ideally, you want to find that sweet spot where you are charging enough to cover expenses, make a profit, and be competitive.
Profit and Loss
This is a snapshot of the financial status of your business at a given point in time. Knowing and being able to reflect back on this information will allow you to predict future performance and budget accordingly.
You do not have to be an accountant to have a grasp on the financial health of your business at any given point in time. Simply familiarizing and keeping up to date with these four numbers will give you a picture of where you stand and where you need to make adjustments.
Need help with your business plan and whether it's set up for success? Reach out to our office today for help.
If you have employees then you have had some dealings with the I-9 form. The I-9 form is a tool to help employers verify that new hires are eligible to work in the United States. It is a federal requirement that employers fill out and retain this form for all new hires. While this seems like a pretty straight forward process, there are some common questions that come up when completing this form.
Do I need to complete an I-9 for Independent Contractors?
No, it is the contracting companies responsibility to collect this information, however, if your contractor is an individual you need to make sure they meet the test to be classified as an independent contractor and are not actually an employee.
Can I choose which documents to accept for verification?
No, the employee can present any acceptable document from the appropriate list for verification. Insisting that an employee provide a specific document could be problematic.
What is my responsibility concerning the authenticity of the documents?
You should physically examine the documents and if they appear to reasonably be genuine and correct for the person presenting them, then you must accept them.
May I accept an expired document?
No, while there are certain documents that can be accepted after expiration with an official extension, the general rule is no.
Can I accept a photocopy?
No, all documents must be original.
These are just a few of the common questions involved with I-9 completion and compliance, it is a good idea to regularly train your HR team members on proper compliance and check for updates to make sure that you are appropriately following the rules. Reach out to our office with any questions or for help with hiring employees.
An asset purchase agreement is an agreement between a buyer and a seller that finalizes terms and conditions related to the purchase and sale of a company's assets.
A business purchase can be a tedious process, including how to determine whether to structure as either an asset sale or stock purchase. If you are going ahead with an asset sale, you need a plan of attack and detailed documentation.
What is an asset sale? In an asset sale, only the assets of the business are transferred to the new owner without a transfer of ownership of the actual business entity. A sale of the assets of a business requires a great deal of documentation. Following is a sample checklist of documents and other items for the sale of the assets of a business when real estate is not being transferred.
Checklist A sale of the assets of a business requires a great deal of documentation. Following is a sample checklist of documents and other items for the sale of the assets of a business when real estate is not being transferred.
Documents prepared and signed pre closing
List of Assumed Contracts
List of Liabilities Assumed
Disclosure of Claims, Liens, and Security Interests
List of Trademarks, Trade Names, Assumed Names, and Internet Domain Names
Disclosure of Licenses and Permits
List of Existing Warranty Claims
Obligations to Brokers or Finders
Opinion of Legal Counsel
Required Waivers and Consents
List of Employees and/or Consultants of Seller with whom Buyer shall have reached Agreements or Contracts
Employment or Consulting Agreement(s)
Certified Check or Wire Transfer of Amount Due at Closing
Check to Broker or Finder
U.C.C.-1 Financing Statement
Certificate of Officer of Seller as to Incorporation and Authority (and a certified copy of the authorizing corporate resolutions)
Certificate of Officer of Buyer as to Incorporation and Authority (and a certified copy of the authorizing corporate resolutions)
Assignment of Contracts and Leases
Consents to Assignment of Contracts and Leases, where required
Bill of Sale
Vehicle Title Certificates
Keys to Premises and Vehicles
Asset sales require legal expertise and knowledge of business laws. You will want a knowledgeable business and commercial law attorney on your side through the process. Speak to our office today.
Are you a business in need to find investors to launch a startup or scale your business to the next level? There’s more than one way to approach fundraising and to get noticed by those with the capital you need to get your business started.
The difference between Debt and Equity capital
With social media and networking worldwide, it is easier to raise funds than before. Debt capital is usually raised by obtaining bank loans, personal loans, credit cards or bonds etc. Equity capital, on the other hand, is raised by selling shares of stock. Ideal capital raising skills, however, require determining a mix of both these types such that it is most cost effective.
Here are a few ways you can raise funds for your startup:
Ways to earn capital
Funding your own idea
Funding your own startup is one way of telling your potential investors, how serious you are about this venture. Putting your money in the project shows that you are willingly taking the risk of putting the money that you have worked hard for at stake, supporting your idea with the faith you have in your company.
Any option you choose this option is of low risk as if you want to put the product in the market and also get funds to finance your product and make it the reality.
An angel investor is a high net worth person who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. An angel investor can be found in you community among friends and family.
If you can acquire real customers, you will be under less pressure to seek outside money. When you do, you can achieve better terms, from better investors.
Need help with raising capital? Reach out to our office for help.
Sarah E. Holmes is a Philadelphia business attorney and strategist that helps start ups and established businesses looking to expand, protect their assets and increase their profits in an approachable, down-to-earth way. When you're looking for a business lawyer in Philadelphia, the Main Line or New Jersey, we can help.