Which California Businesses Are Allowed to Reopen?

California’s stay-at-home orders are continually modified as Governor Gavin Newsom eases restrictions on the economy. Many businesses are now allowed to reopen as long as they follow a new set of guidelines for operation as the pandemic continues. If you are one of the millions of people wondering what businesses are allowed to reopen, here is an overview:

·  Bars – Bars are allowed to reopen, but employees must wear face coverings and gloves. Background music should be lowered so that communication is easier, and when possible, windows should be open.

·  Campgrounds – Campgrounds are slated to reopen on June 12th. Reservations are encouraged to help control the number of people camping. New guidelines for cleaning and sanitation are also being implemented.

·  Child Care – Child care facilities are reopening with evolving guidelines for health, safety, and social distancing.

·  Day Camps – Summer camps are allowed to reopen on June 12th. Camps will be limiting the number of campers and implementing social distancing.

·  Entertainment – Starting June 12th, Californians can enjoy movie theaters, bowling, batting cages, and miniature golf. There are capacity and social distancing guidelines.

·  Gyms – Gyms are only allowed to reopen if they require visitors to wear a face covering and utilize more stringent disinfection practices.

·  Hotels – Hotels have only been allowed to house essential workers or homeless individuals during the pandemic. Starting June 12th, hotels in some counties will be allowed to reopen for tourism. These hotels must screen tourists for symptoms and close shared food or ice machines.

·  Music, Television, and Film Production – Productions are allowed to resume no sooner than June 12th. Only businesses in counties with attestation from the state will reopen.

·  Professional Sports – Pro sports team training and competing will resume on June 12th. It is unclear if/when live audiences will be allowed to participate.

·  Places of Worship – Places of worship can reopen for in-person services at 25% capacity or a maximum of 100 congregants.

·  Salons and Barbershops – Some counties are allowing salons and barbershops to reopen. These businesses must require face coverings and social distancing.

As the economy continues to reopen, we can expect more guidance on reopening and what guidelines we can expect to follow. If you need legal advice for your business, contact our law firm in Long Beach today. 

 Is Your Small Business at Risk of Bankruptcy from a PPP Loan?

In March, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act is more than just a law – it is a commitment to small businesses across the U.S. that are suffering from the impact of COVID-19. Through the CARES Act, small businesses were allowed to take out loans that promise low-interest rates and partial or complete forgiveness.

The most sought-after of these loans was the Paycheck Protection Program or PPP loan. The PPP loan offers small businesses with a loan equal to 2.5 times their monthly payroll requirements. If the small business uses the money to pay payroll or rehire employees, the loan amount would be forgiven. Millions of small business owners applied for and received, loan funds.

While the PPP is a program tailored to small businesses, a subsequent announcement from the Internal Revenue Service (IRS) challenges the entire goal of the PPP program. In April, the IRS announced that small businesses that receive a PPP loan will not be able to deduct those expenses paid on their upcoming tax return. That means that small businesses would not be able to deduct expenses routinely deducted, such as payroll and rent.

The PPP program was designed by Congress to be helpful, and the idea was that these loans would not count as taxable income. Not being able to deduct these expenses could lead some small businesses into a further state of financial despair. Similarly, businesses that have bounced back from the economic strain could find themselves back in financial trouble.

Businesses whose tax burdens are increased due to the CARES Act may find themselves on the brink of bankruptcy when it is time to file this year’s taxes. 

What can you do?

If you are a small business at risk of bankruptcy due to a PPP loan impacting your tax burden, you may find it helpful to speak with an attorney about your rights and the best options to stay financially secure. You can also take action by contacting local or state lawmakers to express how the IRS’ decision could negatively impact your business.

How Will the Workplace Change After COVID-19?

How Will the Workplace Change After COVID-19?

COVID-19 has impacted almost every aspect of daily life. One of the most hard-hit elements of life for American’s is the workplace. Many businesses have temporarily or permanently closed. Those that remain open have to abide by new rules for social distancing and hygiene.

With all of this in mind, we must consider how the workplace will change after the initial threat and pandemic subside. New guidelines for social distancing and hygiene will likely stay in place – at least for a while. Here are a few of the changes that we believe workplaces can expect:

More Remote Work – The pandemic has forced millions of Americans to work from home. That includes every position from office workers to healthcare providers. One of the potential legacies from the pandemic is that many businesses will likely utilize remote work more. Some workers may even become permanently remote.

Expanded Sick Leave – Before the COVID-19 pandemic, there was no federal law that required employers to provide paid sick leave to employees. Even the Family and Medical Leave Act (FMLA) only provides unpaid leave. Now, Congress has passed the Families First Coronavirus Response Act (CARES), which provided employees with up to 80 hours of paid sick leave. This aspect of CARES will expire at the end of the year, but most states and the federal government will likely keep providing paid sick leave.

Planning for Emergencies – One thing that the COVID-19 pandemic has taught Americans is that we all could be better prepared for emergencies – specifically healthcare emergencies. Now, businesses are increasingly looking at ways to better prepare for a health emergency. Many are implementing policies, and others are taking steps to be more mindful of health and safety in general. Businesses may start to enforce healthy policies, such as:

· Stocking protective gear and hygiene items all the time

· Displaying signage that reminds employees to wash hands

· Periodically conducting remote work drills

· Encourage employees to stay home when they are sick

While it’s not sure how long the pandemic will continue, it is clear that COVID-19 has changed the workplace’s face in profound ways.

Tips on Protecting Your Family and Business from Legal Risk

Business owners must delicately balance their personal and business assets. There is a constant mindset of protecting one’s family from business risk, and also protecting one’s business from other outside threats. If you are a business owner, here are some tips for how you can protect your family and your business from legal risk.

Tips for Protecting Your Family and Business from Legal Risk

Here are some things you can do as a business owner to protect your personal assets and family from legal risk:

·         Choose the right entity for your business – If you want to protect your personal assets from business risk, you must choose the correct entity for your business. It is often advised to use an entity like a corporation or a limited liability company (LLC) in order to protect your personal assets if your business were to be sued.

·         Keep your business and personal assets separate – Have a separate checking/savings account and checks for your business assets and your personal assets. Maintain all documentation for your business as meticulous as possible to maintain annual maintenance and compliance with applicable rules or guidelines.  

·         Maintain proof of ethical business ownership – Should a creditor or other party attempt to attack your assets, you want to be able to show that you are a model, ethical business owner. Maintain reliable records of your business dealings, communication with customers or vendors, and any warnings or information you provide to customers about your business or services.

·         Maintain proper insurance – Insurance is an essential part of protecting your family and your business. Make sure that you have the right insurance policy for your business. Shop around for insurance that offers coverage for your type of business. Have an annual review with an agent who can offer options based on your needs.

·         Hire a competent attorney – In order to complete the recommendations above and maintain your business, one of the best things that you can do is hire a qualified business attorney. He or she can advise you on the best way to manage your business and finances in order to keep your assets safe.

What Resources are Available for Small Businesses Affected By COVID-19?

Small businesses in the United States are facing unprecedented hardships and disruptions due to the novel coronavirus COVID-19. Many small businesses have been forced to close due to being an “unessential” business temporarily. Companies that are not essential are forced to downsize their workforce either by laying off employees or temporarily suspending work.

Without regular customer volume, businesses are finding it difficult to continue meeting their financial obligations, including payroll, rent, and utilities. Recognizing the suffering of small businesses and how detrimental COVID-19 is for our nation’s economy, the U.S. government and the U.S. Small Business Administration (SBA) are working together to help our nation’s small businesses.

On March 27, 2020, President Donald Trump signed the CARES Act – the Coronavirus Aid, Relief, and Economic Security Act. The CARES Act provides $376 billion for small businesses and workers. If your small business is affected by COVID-19, you can get help through the following resources:

Paycheck Protection Program (PPP)

The PPP is a loan program that helps small businesses keep their workers on the payroll. The loan will be forgiven if at least 75% of the credit goes toward employee payroll for eight weeks, rent, mortgage interest, or utilities.

EIDL Loan Advance

The EIDL loan advance allows small businesses to apply for an Economic Injury Disaster Loan advance. The advance may be up to $10,000, and will not have to be repaid. In order to qualify, businesses must show that they are experiencing a temporary loss of revenue.

SBA Express Bridge Loans

The Express Bridge Loan Pilot Program allows small businesses to access up to $25,000 quickly if they already have a relationship with an SBA Express Lender. These loans are designed to bridge the gap between average revenue and temporary loss of income.

SBA Debt Relief

Small businesses that are using SBA loans can also qualify for debt relief options through the SBA. Debt relief options include assistance with principal and interest, deferments, and loan forgiveness.

The best way to find out what your small business qualifies for is to speak with your attorney and a financial counselor. These laws are new, so it is wise to make sure you understand the requirements and terms before applying for business assistance.

Stimulus Bill Means Small Businesses Will Get Help Paying Workers

Small businesses have been hit especially hard during the outbreak of the novel coronavirus COVID-19. Safer at home orders, stay at home orders, and shelter in place orders all have a tremendous impact on foot traffic to brick-and-mortar businesses. But for communities where small or “nonessential” businesses have been ordered to close, business owners are struggling to stay afloat financially.

One of the biggest challenges for small businesses is meeting payroll requirements. Recognizing this difficulty, the recently signed stimulus package promises over $370 billion in financial assistance for small businesses. The stimulus package will provide small business loans backed by the Small Business Administration (SBA).

What makes these loans so incredible for small business owners is the fact that portions of the loans will not have to be paid back. Portions of the loans that are spent on payroll, rent, mortgage or utilities would not have to be paid back by the business owner. Instead, they would be paid by the Treasury Department, which is slated to receive $377 billion for the program.

For small business owners, this means that they have the opportunity to participate in a loan program that will not hurt them financially as they try to stay open in the midst of the coronavirus crisis. Business owners will be able to pay their employees without using their personal savings or tapping into reserves. In order to qualify to not repay the payroll portion, business owners must use the money to cover payroll for up to eight weeks, within two months.  

The down side to the stimulus package is that it will take some time for everything to fall into place. The SBA-backed loans, for example, could take two weeks to process and finalize. Sadly, many business owners are already at the end of their financial rope. Two weeks could mean the difference between their business staying open or shutting doors.

In the meantime, the government is asking banks to help their customers out and start the loan process now. Understanding that the process is more difficult due to social distancing and business closures, small businesses should start talking to their lenders soon to get the process started.

Why Should You Hire a Business Law Attorney?

Starting your own business is an exciting endeavor. It can also be challenging and somewhat intimidating. Statistics show that small businesses and startups have a high failure rating within the first 18 months. One of the reasons why businesses often struggle early on is because excited entrepreneurs often overlook the many ins and outs of starting and operating a business.

Fortunately, business owners do not have to go through the startup process or the operation of their business alone. Hiring a business law attorney can be a valuable asset for a budding business. Business law attorneys offer numerous benefits for new businesses, including:

· Ensuring compliance with local, state and federal laws
· Helping determine the legal structure of the business
· Applying for licenses, permits, or registrations
· Drafting contracts
· Registering for copyright or trademarks
· Helping raise money and keep legal records of finances
· Helping ensure that business taxes are understood and properly filed
· Offering advice for liability and risk
· Resolving contract or business disputes
· Helping draft partnership agreements

As you can see, there are numerous reasons why a business law attorney is a valuable asset to new businesses. There are many aspects of business that involve different aspects of the law and legal requirements. It is important for business owners to make sure that they understand the law and how it applies to them.

Contact a Skilled Business Law Attorney

If you are a business owner and have questions about business law matters, contact a skilled business law attorney. At Hitzke & Ferran, our attorneys have a great deal of experience managing business law matters in California. From business formation to employment law, immigration to bankruptcy – no matter what sort of business you operate, we can help you find the best options that protect your rights and ensure the stability of your business.
Learn more about how Hitzke & Ferran can help you by calling us at 1-800-437-4005.

Why are Financial Forecasts for Your Business Crucial?

Much like the weather, your business’s finances may change. Some months you may have more income than anticipated, and in other months, you may find money going out due to unexpected events. This can make your business seem unstable, but it is actually completely natural.

One of the ways that you can avoid the stress that accompanies a changing financial status is by establishing a financial forecast. A financial forecast is a financial plan for your business that helps you track your income and expenses. It is called a forecast because, of course, you can never guarantee exactly how much income you will receive, or what sort of expenses may arise.

Why are Financial Forecasts Important?

There are two primary reasons why financial forecasts are so crucial for a business. These are:

  1. A Financial Forecast Allows you to Plan Ahead

As you operate your business, you will find that certain expenses are routine. You will also develop a sense for expenses that change over time. With a financial forecast, you can estimate expenses and how they may change. You can then make a plan for how to increase your income in order to offset a higher expense.

  1. A Financial Forecast Helps you Plan Profits

If you obtain a loan or capital from an outside source, you will need a plan to show when you think your business will start to make a profit. This is important because you will need to show creditors or investors when you expect that you can begin to pay back their investments. In many cases, having a financial forecast ahead of time can actually help you obtain funding. Banks and investors are more likely to lend you money if they see a well-organized financial forecast.

Benefits of a Financial Forecast

A financial forecast is beneficial for several reasons. As noted above, it helps you plan income and expenses, and can even help you obtain funding. It is also easy to update as your business changes, which is helpful, especially if your business is relatively new or evolving. A good financial forecast can help you evaluate your goals and see how your business is progressing.

How will California’s Assembly Bill No. 5 affect Small Businesses?

Many California business owners are watching the status of Assembly Bill 5 (AB 5) and its impact on small businesses. AB 5 took effect in February 2020, and could impact thousands of small businesses and self-employed workers. If you are unfamiliar with AB 5, here is an overview:

What is AB 5?

AB 5 is legislation designed to reclassify “gig workers.” Gig workers are those who are self-employed, who own startups or who own small businesses. Gig workers are classified as independent contractors.  Examples include companies like DoorDash, GrubHub, Uber and Lyft. The bill does not specify if other self-employed jobs will be included in changes under the legislation, such as freelance writers and truck drivers.

Under the new rules, independent contractors must meet an ABC test in order to maintain their status. Workers must meet the following requirements:

  •         A – They must work independently
  •         B – They must perform work that is different than what the business offers
  •         C – They must offer their services to other businesses or directly to the public

Under this test, millions of workers in California will no longer qualify as independent contractors. There are thousands of workers who have cases in court to determine their status. Numerous companies are also appealing to the court, accountants and human resources officers to help them understand the rules and how they can avoid steep fines for misclassification.

How is AB 5 Affecting Small Businesses?

Under AB 5, many independent contractors, or gig workers, must be reclassified when they are hired. Under the new classification rules, they will be considered employees. The positive side of this is that, as employees, workers would have access to minimum wage, benefits and overtime pay. However, they lose the flexibility of setting their own hours and establishing their own work routines.

Small business owners in California are already reporting headaches, paperwork and issues with technicalities in the new rules. Some business owners are having to charge more for services in order to meet the costs associated with Medicare and Social Security taxes for employees. Costs they would not have had previously.