Message from David…
Originally Published : March 11, 2020
Dear HL Client,
Like it’s not hard enough for restaurants and bars to make a buck in this city, now we have to deal with a pandemic and nervous diners? Well, it’s here and it may affect your business, so let’s do our best to keep our heads above water and ride out the storm together. Helbraun Levey is here to help you manage the mess and the stress.
We will be sending out frequent updates designed to keep you in the loop and, most importantly, in business. We will be addressing issues such as:
- Coping with loss of business
- Managing quarantines and social distancing
- Insurance questions
- Dealing with landlords
- Applying for loans, grants, and credits
- Handling your staff and customers
Lee Jacobs, an HL partner, has been designated as our point of contact for all things Coronavirus. He continues to be in close communication with governmental agencies and clients, ultimately committed to ensuring that you all have individualized plans to respond to the specific pressure points you’re beginning to feel. Contact Lee with any questions!
We will also launch a web page on our website in the near future, which will be updated regularly with FAQs and guidance from the government, as well as best practices to help your business navigate these uncertain and troubling times. We also plan to host a virtual town hall, moderated by Lee, to provide our clients with an open forum to ask any questions relating to the virus.
For now, though, we’ve compiled a list of the most common questions we’ve received from clients over the course of the last few weeks. Please keep in mind that the present situation has essentially continued to change on an hourly basis, so the following information is provided to our clients with the understanding that it is accurate and current as of March 11, 2020 at 6:00pm.
BUSINESS PRACTICES, FINANCIAL PLANNING & INSURANCE
I’ve heard that New York City is offering interest free loans to small business, is this true?
Yes. While the full details of this NYC program have not been fully developed yet, here’s what we do know:
- Businesses with fewer than 100 employees who have seen sales decreases of 25% or more may be eligible for zero-percent interest loans for up to $75,000.
- Businesses with fewer than 5 employees may be eligible to receive a grant from the City to cover 40% of payroll costs for a period of 2 months.
New York City is asking employers to sign up here for more information. We continue to monitor the application process and any updates issued by the city.
What questions should I be asking my insurance broker?
Your insurance broker is the person best suited to address any concerns relating to your business interruption insurance policy, its waiting period and/or deductible, and if it will cover any losses resulting from the Coronavirus spread. At this stage, we have seen a wide range of insurance policies, each with different carve-outs and exceptions. Your ability to use insurance to cover your losses may depend on whether your business suffers physical loss/damage and whether the government ultimately decides to enforce exclusion zones. The best thing you can do now is to contact your insurance broker or carrier to learn the intricacies of your specific policy. Of course, you can always reach out to any of our attorneys with any questions or concerns.
We have already seen a drop in business, what are my options to help keep the doors open?
There are multiple ways to quickly access funds to keep your business running. Those include obtaining a bank loan, a line of credit, or merchant financing. Each solution can be tailored to your specific situation. However, we strongly advise contacting your accountant, bookkeeper, and one of our attorneys before you commit to any loan or financing terms.
What is merchant financing?
If you meet certain criteria, you may be able to access a loan from your credit card processing company or other lenders. You will repay the loan through automatic debits from your regular credit card transactions processed by the lender. Again, as with any loan, we encourage you to contact your financial advisers or a member of the HL team so you have a full understanding of the terms and conditions of agreeing to this type of financing.
Do I have to continue to pay my vendors or other contractors?
Yes, you are not discharged of any existing obligations to pay your vendors or contractors. You may, however, be able to renegotiate your vendor terms in light of the current situation. Please note that any renegotiation or payment plan agreement reached with your vendors must be put in writing, signed by both you and your vendor. If you don’t put these new terms in writing, you may not be able to benefit from any new agreement that you ultimately reached with your vendors. Regardless, unless and until new terms are agreed upon, you must continue to pay as obligated, unless and until your vendors or contractors sign off on the change in writing.
Do I have to continue to pay rent during this pandemic?
Yes. Under absolutely no circumstances should you stop paying rent (and/or any additional rent or charges due under your lease), unless and until your landlord agrees to an abatement. Any rent abatement agreement must be in writing, signed by both you and your landlord.
Can I ask an employee to stay home if I believe they have contracted — or have been exposed to — COVID-19?
If an employee, regardless of travel history, has symptoms of acute respiratory illness, you can ask them to stay home until they have been fever-free for 24 hours (without taking fever-reducing medications such as acetaminophen or ibuprofen). There is currently no mandated clearance process for an employee’s re-entry into the workplace after Coronavirus-related illness, exposure, or quarantine. However, under very limited circumstances, employers may request documentation from a health care provider.
Do we need to pay employees who are being quarantined, self-monitoring, or caring for a family member with COVID-19?
In short, the answer is maybe. No government rule or edict has been implemented that should change your normal day-to-day employment practices. Under the New York City Safe and Sick Leave Act, all NYC employees working 30+ hours/week are entitled to a maximum of 40 hours of paid sick leave in any given calendar year. Employees may be entitled to their paid leave automatically upon their hiring or they may be accrue paid leave based on hours worked. New York State currently does not require you to pay your employees for any time off, whether for sick leave or vacation.
Depending on the nature of the job, some employees may be able to work remotely. Employees that choose to work remotely should continue to be paid for any and all hours worked. However, given that the vast majority of the hospitality workforce cannot work from home, you are not required to make any changes to your regular payroll practices.
Some employees may be entitled to benefits under the New York Paid Family Leave Act. These benefits are available to any employees caring for a family member with COVID-19. After an employee uses up their paid leave, your obligations as an employer under PFL will depend on the individual’s employment classification (exempt v. non-exempt) and whether you have asked the individual not to report to work. If you find yourself in a situation where you are unsure about how to proceed, please contact Lee or any member of the firm.
Can I fire someone who has COVID-19?
No. However, you may consider granting the employee an unpaid leave of absence depending on the employee’s situation. Please reach out to Lee to discuss these scenarios on a case-by-case basis.
Should I take my employees’ or customers’ temperatures before allowing them into my business?
No. Because restaurants, bars, and other similar retail businesses are considered a place of public accommodation, any member of the general public has a right to access your establishment freely. It is illegal for an establishment to refuse service based on a person’s race, ethnicity, national origin, or disability. Specifically, you cannot treat a customer differently if you believe they are from a country where the Coronavirus is widespread.
Please also keep in mind that taking an individual’s temperature does not actually indicate whether they have been infected by COVID-19. The virus has shown to be contagious regardless of whether the carrier has exhibited the most common symptom.
If you have any questions or concerns regarding COVID-19 and how to best prepare for, and protect your business from this growing threat, please do not hesitate to contact Lee at (212) 219-1193 or through email at [email protected], or any other member of the Helbraun Levey team.