Preparing and Protecting Your Business as California Reopens

3 Tips for a Successful Reopening

After fifteen months of pandemic restrictions, California plans to reopen its economy on June 15, 2021. While the full extent of this reopening is still unknown, businesses can still prepare and equip themselves for a successful reopening in three ways.

1. Stay on top of the ever-changing compliance landscape

It is vital for you and your business to stay informed of all applicable state and local orders that govern your field of business. These orders determine whether you are allowed to reopen, bring back employees, as well as other limitations on business hours, occupancy, and compliance. As seen over the past year, orders can change rapidly on the state, county, and city-level often without notice.

Masks

Despite the CDC’s recent guidance that fully vaccinated persons may stop social distancing and masking in most settings state and local rules and regulations still apply entirely. [1]

As recently as May 5, 2021, Cal/OSHA still maintains that all employees, whether vaccinated or not, must wear facial coverings in the workplace. [2] Until Cal/Osha changes these guidelines, every business in California is required to follow the rules. Starting on June 15, 2021, California desires to align with the CDC guidance on masking and social distancing; however, businesses should prepare for many different scenarios. 

Testing, Quarantining, and Contact Tracing

Constant communication with employees regarding the ever-changing compliance landscape is vital to protect your business going into this summer. Businesses should update their Illness Prevention Program (IPP) to reflect the latest Cal/Osha Emergency COVID Regulations.

California still requires tracking and tracing procedures for all employees. [3] However, fully vaccinated persons with no symptoms no longer need to quarantine or get tested after close contact. [4]

With significant staffing shortages nationwide, it is also essential to prepare contingency plans in case vital employees contract Covid-19 and must quarantine.

2. Overcommunicate with your Key Stakeholders 

Employees

Businesses with employees on furlough must have a plan to systematically and carefully bring them back to work. While it may be unintentional, a business might run into anti-discrimination suits or disparate impact claims based on whom they bring back first in the same way they would with layoffs.[5]

As a result, businesses should conduct a disparate impact analysis before selecting which employees to bring back to work. Be sure to document relevant factors for bringing back each employee and keep track of the decision-making process to avoid expensive litigation.

Customers

Make sure that your customers are fully informed of any regulations in your workplace, changes in your services, or anything else that might affect their expectations of your business. Your business should provide its customers with every means for obeying these regulations and restrictions without inconveniencing them.

Landlords and Tenants

If you are a landlord, the COVID-19 Tenant Relief Act extended protections for renters served with an eviction notice if they cannot pay their rent or other charges until June 30, 2021, due to the financial stress of COVID-19. [6] While landlords may now file residential eviction notices, if a tenant delivers their landlord a declaration of COVID-19-related financial distress within 15 days of an eviction notice, the landlord may not proceed with the eviction. [7] By June 30, 2021, tenants who receive protection under this bill must pay 25% of the total amount of rent due between September 1, 2020, and June 30, 2021. [8]

A myriad of other federal protections and local ordinances also extend special protections to renters during the pandemic. Whether you are a tenant or a landlord, it is crucial to get help to understand your rights and responsibilities under these new laws and ordinances.

Suppliers and Contractors

While California is reopening soon, businesses need to remember that supply chains are still suffering the effects of the last year. Many parties in the supply chain cannot obtain the necessary employees, materials, and supplies required to perform their agreements. Global and domestic distribution and shipping channels are wholly disrupted and overloaded. Bottlenecks and short staffing have led to shortages and massive price inflations in many sectors.

 Before cranking your operations back into full gear, it is vital that you run a full audit on your suppliers and contractors and prepare a list of backup plans in case of supply squeezes.

An incredibly vital aspect of protecting your business through this environment is reevaluating the contractual terms you may have with your usual suppliers or contractors. Because many of these suppliers might be unable to perform under their contracts because of supply chain issues or the inflation of raw materials, parties may be able to declare a “force majeure” event caused by COVID-19. In many cases, a force majeure clause will completely relieve the supplier or contractor from their contractual obligations and resulting liability to your business.

Mishandling of this process will inevitably lead to expensive disputes and litigation for your business. Therefore, it is incredibly important to reevaluate and possibly renegotiate the terms of supplier contracts with the assistance of a competent attorney.

Insurers

Another thing that businesses should reevaluate before a full reopening is their insurance. COVID-19 triggered a massive wave of insurance claims across the entire spectrum of traditional business coverages. Claims include losses ranging from every type of business interruption and event cancellation to severe illness and death.

New and incredibly wide-sweeping regulatory schemes and compliance obligations have developed in the insurance industry as a result. Many regulators issue schemes that take coverage and claims handling entirely outside the traditional confines of the insurance industry. It is vital for your business to reassess your coverage regularly in this ever-changing environment.

3. Use all avenues of assistance that your business may need

If your business lacks the funding or resources necessary to scale up operations, many useful programs are still available on the local, state, and federal levels that may help.

Until May 31, 2021, your business may still apply for Paycheck Protection Program (PPP) loans. [9] First Draw PPP loans may help pay or fund payroll, benefits, mortgage interest, rent, utilities, supplier costs, expenses for operations, and more. These loans are forgivable if your business meets all employee retention criteria associated with them. [10]

Eligible businesses may also claim the Employee Retention Credit (ERTC), which extended to December 31, 2021. The ERTC is a refundable credit that businesses may claim on up to 70% of past and future qualified wages paid to employees during the pandemic.[11]

Your business may also claim the SBA Economic Injury Disaster Loan (EIDL). The EIDL provides economic relief to small businesses and nonprofit organizations that experience a temporary loss of revenue for a small fixed interest rate.

There are many other loan and assistance programs available at the state, county, and city levels.

If you or your business would like any further information on any of the advice within this article, please feel free to contact us. Tyler Law LLP is keeping up to date with the latest COVID-19 developments and can help advise your business on best practices unique to your situation.