Cuomo Cuts Restaurant Capacity in Half! Survival Mode
Originally Published : March 12, 2020
Dear HL Client, We will send out a new email every day to HL clients with updates on how we, as an industry, should best handle the issues at hand related to the pandemic. So many clients called us today about what to do about the prospect of losing business, the possibility of laying off staff, and closing their shop for a few weeks or months. Let’s talk about it.
HEADLINE OF THE DAY
Governor Cuomo Is Requiring Bars and Restaurants to Lower Capacity By 50%
What the @!#$!!?? We know he said it but what does it mean? If you have 100 seats you can only serve 50 people? Now? When we need to earn every penny? Does this also include staff? We are working as quickly as we can to get to the bottom of this and will provide you with updated information as we have it. As of now, the rule requires you to cut your capacity in half by 5:00 PM on Friday. How will the government enforce this policy? No idea. This is messed up. As more information becomes available, we will update you.
LANDLORDS AND VENDORS
Paying Landlords and Vendors — let’s be honest — if there’s only money to pay your staff and keep the doors open, you may find yourself in the position where you can’t pay the rent or your vendors. It sucks, but what can you do? We are advising our clients to do whatever is necessary to keep their doors open, keep people employed and stay in business. It’s survival mode at this point and if this means that the landlord doesn’t get paid on time or that vendors have to relax their terms, so be it.
Throughout today we have spoken to a number of serious landlords and their attorneys and they all suggest the same thing:
COMMUNICATE! Don’t dismiss, ignore or avoid your obligations. Be proactive. Reach out to your landlord and vendors and let them know your situation. Our experience tells us that you will have more success asking for permission rather than forgiveness. If you don’t, there is one thing we can guarantee — your landlord and vendors will absolutely sue you, and that is the last thing you need to add to the mix right now.
EMPLOYMENT PRACTICES Today, we have received a number of questions asking about your employment practices obligations with respect to this ongoing and very dynamic situation.
As the Coronavirus continues to spread here in New York, businesses in our industry are being forced to take drastic measures just to make payroll. We’re here to help you weigh all of your options when it comes to reducing labor costs to ensure that you can keep your doors open. That being said, our overview only addresses these issues on a global scale – and, as we always say, there’s really no one-size-fits-all solution.
What can I do to cut my payroll down as soon as possible?
You can consider staff furloughs or layoffs. When an employer furloughs its employees, it requires them to work fewer hours or days in a given pay period. A layoff, on the other hand, is a temporary separation from payroll: an employer may essentially “terminate” an employee temporarily on the basis that there is not enough work for them to perform, while also having the option to continue paying a laid-off employee’s benefits. If you are interested in pursuing a more permanent option, you may also terminate employees at-will.
Do I need to provide any kind of notice to my staff before making any these changes?
Yes, but specific type of notice will depend on a number of different factors relating to the size of your staff and the extent of the changes being made. In short, however, the New York Worker Adjustment and Retraining Notification (WARN) Act requires businesses with 50+ full-time employees to provide their staff notice of closures or layoffs. If you fall into this category, call us.
What is the effect of a furlough?
When it comes to your hourly (non-exempt) employees, you may actually be able to begin adjusting your staff schedules beginning as early as your next regularly-posted schedule. When it comes to your salaried employees, though, you will be required to pay those employees their full salary for any pay period during which they perform any work, including even minimal tasks like checking emails. As a general note, an employer may require all employees to go on furlough, or it may exclude some employees who provide essential services. Generally, the theory is to have the majority of employees share some hardship as opposed to a few employees losing their jobs completely. And in the event of a furlough, employees may choose to use sick leave, paid time off, or vacation in order to get paid during a portion of their furlough.
Are furloughed and laid-off employees entitled to unemployment?
Generally speaking, yes. While some employees may be subject to certain waiting periods, individuals can file for full or partial benefits, depending on their circumstances.
If I decide to permanently terminate any of my employees, should I go about this any differently than I would a “normal” termination?
No. While we do suggest being open and honest with your employees – particularly with respect to the difficulties the business is facing – it is incredibly important that you be as brief and concise as possible. Don’t belabor it. Be prepared to collect any company property that might be in the employee’s possession and have a written termination letter ready to give to the employee at the end of that meeting.
Handled respectfully and communicated thoughtfully, this meeting should leave you feeling good about the way you’ve managed a particularly difficult situation and will give the employee the chance to focus on his or her future, rather than dwell on the past.
I’m planning on implementing a mass lay-off or furlough, how should I go about notifying those employees of their change in status? Can I meet with multiple employees at the same time?
No. Under no circumstances should you be laying off or terminating more than one employee in a single meeting. Each employee must be communicated with separately, and while each meeting should be handled in a somewhat systematic and uniform manner, no employment relationship should be treated the same.
NYC SMALL BUSINESS LOANS
Following yesterday’s news, we wanted to to provide you with additional information on probably the one topic asked most about today — NYC’s Small Business Loan Program. Unfortunately, we do not have much to add. New York City has not provided any new information regarding the process of obtaining assistance for businesses impacted by the Coronavirus. The city suggested signing up for emails and to fill out a web based survey, linked here, to obtain additional information. Here is a link to the City’s website discussing the program. However, there is a small amount of information currently known. Businesses with fewer than 100 employees who have seen sales decreases of 25% or more are eligible for zero interest loans of up to $75,000. The city is additionally offering businesses with fewer than five employees a grant to cover 40% of payroll costs for two months. We are following this on a daily basis and will keep you updated. For now, make sure you can accurately track your sales so you can prove the decrease in sales when the time comes.
Federal SBA Loans and Tax Relief – Lots of ideas being bandied about but no real details yet from the Feds. Shocker! As more information becomes available, we will of course spread the word.
FAQs We will be updating these FAQs daily so you can easily refer to them and use them as a reference. All of these questions are being compiled on a website located at https://helbraunlevey.wpengine.com/coronavirus and we encourage you to check this site for updates and additional resources for you, your staff, and your guests. 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 12, 2020 at 7:00pm.
Currently, our employees accrue paid sick leave based on hours worked, and they don’t get all their sick leave upfront. Most people don’t have a lot of sick leave accrued yet, and so I’m wondering if it makes sense for us to just give them all their sick leave now instead of using the accrual model. Are there any implications I should be aware of re: switching this mid-year?
There is no practical difference between changing from accrual to giving your employees the allotted time. You must communicate this change to all of your employees and to your payroll processing company so that the actual number of sick hours being taken by your staff is actually tracked and monitored. To be clear you are under no obligation to pay more than 40 hours of sick leave in one calendar year.
As we stay open, how should we be responding to guests? What information do we have to provide to our guests concerning our practices about the Coronavirus?
There is no requirement at the present time for you to tell your guests anything. Further, even if you have a suspected case of the COVID-19 virus in your establishment, privacy laws will forbid you from disclosing any information to your guests or other employees about who was in fact infected. Best practices require you to inform your staff and guests that there has been an infection (if in fact there was one) and to remediate your space if an infection has occurred, beyond your normal health and safety protocols.
Are there extra health protocols that we should be taking in addition to just washing our hands?
The CDC has posted numerous guidelines for how to best clean your place of business to protect your staff and guests. Please see the following link for more information, https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html. 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.
Hang in there and call us if you need anything. Kind regards, David