COVID-19 Relief for Small Business Owners and Employers

By Jessica Suotmaa 0

With the current COVID-19 pandemic, the closing of non-essential businesses, and the fears for an upcoming recession, many small business owners are either suffering, or preparing to suffer. We, at Lum Law Group, are in the same boat. We are also a family-owned small business with few employees that, for the most part, caters to our local community.  While we are still answering calls and helping existing and potential clients, we share the same concerns as our clients, our employees, and our fellow small business owners.

In this article, we have outlined relief and resources that may assist small business owners during these difficult times. We would like to remind you that you can call us if you need assistance with vendors, landlords, or any other COVID-19 related issue. We are here to help!

Payroll: Paycheck Protection Program

Part of the CARES Act was to fund the Small Business Administration (SBA) to provide assistance to small business to continue to make payroll.  The SBA’s Paycheck Protection Program (PPP) allows businesses with fewer than 500 employees to borrow money specifically for payroll.  Less than twenty five percent of the borrowed amount can be used for other things, such as mortgage interest, rent, and utilities. You can borrow enough to cover an eight week period, which must be used within eight weeks after receiving the funds.  Loan repayments are deferred for six months.

While applications opened today (April 3, 2020), SBA announced that self-employed individuals and independent contractors will not be able to apply until April 10, 2020.

Payroll: Defer Paying Social Security

If you are self-employed, or have employees, you can defer making the social security portion of employment taxes for the time being.  This would mean a reduction of 6.2 percent tax paid on wages. The deferral allows you to pay the deferred amount over a two and a half year period, where half of it would have to be paid by December 31, 2021 and the second half by December 31, 2022.

Payroll: Keep Paying Your Employees

As part of the new economic stimulus plan, if you can prove that your business has lost fifty percent or more in profits due to coronavirus, your business can qualify for a “prize” for retaining your employees. Even if your business is closed, if you keep your employees on payroll, you can qualify for up to fifty percent of your employee’s wages.  This “prize” for keeping payroll not only helps your employees who may not be able to work from home, or may not have much to do.

As an employer, you will receive the prize in the form of a tax credit on your business tax return.

Note: Businesses that receive a SBA loan will not qualify for this tax credit.

Tax Deduction: Restaurant, Retail, Hotel

If you are a restaurant, hotel, or retail store owner, you can prepare and file amended tax returns to deduct the cost of property improvements. This deduction was supposed to be part of the 2017 tax overhaul anyway.

 

As you can tell, most of the available relief is for employers.  If you have questions about California unemployment benefits for independent contractors and self-employed individuals, please visit the EDD website. If you would like to learn more about the “stimulus check”, please read our post here.  If you have issues with vendors, landlords, business partners, etc. please contact us for how we can help you. Together, we can get through the crisis!

The 7 new 2020 laws in California

By Jessica Suotmaa 0

If you’re a business owner with employees, it is time to familiarize yourself with these seven new employment-related laws that went into affect on January 1, 2020. Ensure you follow best hiring practices and follow these laws for existing employees.

1. New minimum wage

California has a new minimum wage. If your business employees 25 or less people, the new minimum wage is $12/hour. Otherwise the new minimum wage is $13/hr.

2. Independent contractors

We wrote about the AB-5 law previously, but it is still worth revisiting if you’re hiring freelance workers and treating them like independent contractors. The new law dictates that if a business controls and directs the work of the worker, and the work is an integral part of the business (think, a gig economy driver working for a ride service company), then they cannot be characterized as an independent contractor. Instead, the business has to treat them as an employee.

3. Sexual Harassment Training

If your business has more than five employees, you are required to provide sexual harassment training to all employees every two years.  SB 1343 also requires employers to provide new employees sexual harassment training within six months of being hired.

4. Lactation Accommodation

California already requires businesses to provide nursing mothers time to nurse or pump, but with the passing of SB142, businesses must ensure nursing mothers have a proper place to do so. A restroom or break room is insufficient. The location must be close to the employee’s work station, must have electrical outlets, and must be private.

5. Arbitration Agreements

An arbitration agreement is a contract whereby an employee and employer agree that certain, if not all, disputes will be settled via arbitration outside the court (rather than in court with a lawsuit). Companies can no longer force employees into mandatory arbitration agreements with the passing of AB51. This law does not apply to arbitration agreements entered into prior to January 1, 2020.

6. Paid Family Leave

With SB 83, the benefits under paid family leave increase from six weeks to eight weeks. New parents will have more time to stay home with their children starting July 1, 2020.

7. Hair Discrimination

California has banned discrimination based on natural hair style or texture with the passing of SB 188, also known as the Crown Law. Employers and schools cannot discriminate against potential incumbents based on their natural hair, or require a certain hairstyle instead of their natural hair.

 

Do you have questions or concerns as a business-owner and employer? Call an experienced business and employment attorney today! 

3 Interview Questions to Stop Asking in California

By Jessica Suotmaa 0

If you’re a small business owner who isn’t accustomed to hiring, you’re probably unaware that many of the common interview questions from “back in the day” are now illegal to ask in California. We’ve divided this article into two sections: the three questions you need to stop asking now, and the three questions you should’ve stopped asking yesterday. Read on for how you can protect your business from employment discrimination claims.

Stop Asking These Questions Today!

1. “What are you making now?” Or, “How much were you making at your previous position?”

Remember when job ads would require a “five year salary history” in the cover letter? Those days are gone in California.

Previously, hiring managers might ask how much a job candidate was making, or is currently making, and decide which candidate would be the “cheapest” to hire.  Hiring managers may also offer different compensation packages based on current or prior salary history. As a result, if there was a wage gap between men and women, that wage gap was further increased with each new job offer.

California passed AB168 in 2017, which went into effect January of 2018, prohibiting employers from asking for a “salary history” or inquire how much a candidate is or was making at a previous position.

Note: If a potential hire reasonably requests a “pay scale“, you are required to provide it.  AB2282 clarifies that a pay scale is a salary or hourly wage for the open job position and does not have to include bonuses or other benefits.

2. “Have you ever been convicted of a crime?” or “Check here if you have criminal convictions.”

Gone are the days of asking an applicant about their criminal history at the interview.  California requires employers to discover any criminal history in the background check process. The bill, AB1008 was signed into effect in 2017 following the lead of San Francisco and Los Angeles cities, banning employers with five employees or more from asking about a candidate’s criminal history on job applications.

You don’t begin the background check process until after you have extended an offer of employment. You cannot run a background check before offering the position to the candidate.  If the background check results prevent you from hiring the candidate, you are required to follow these steps:

  1. Inform the candidate of the results and explain why you’re rescinding the offer.
  2. Provide a copy of the background check report (if available).
  3. Allow the candidate five (5) days to respond and defend themselves.
  4. If the candidate responds to the decision, you are to wait five (5) more days to consider his or her defense.

Note: The exception to the rule are employers who run medical facilities and hire employees who have access to drugs.

3. “How’s your credit score?” Or, “Will you consent to sharing your credit report?”

Where previously potential employers could obtain an applicant’s credit information as part of the on-boarding process, California now limits it to certain occupations.  You can no longer slip in credit consent forms into the offer package, nor can you judge a candidate’s hire-ability based on their credit report.

California limits the use of credit history in employment decisions, but does not outlaw it.  The following are exceptions to the rule:

  • Department of Justice employees
  • Managerial position
  • Peace officer or Law enforcement officer
  • Any position wherein a credit check is required by law
  • Position wherein an employee would regularly access credit card information
  • Position where an employee is a signatory for an employer’s bank or credit card account, or authorized to transfer funds
  • Position that involves access to confidential or proprietary information
  • Position that involves access to $10,000 or more of cash.

 

Are you not sure what you can ask now? Do you have questions about your job description? Contact us today!

 

3 Things You Can Do to Make Interviewing Job Candidates Easier

By Lisa 0

While startup founders are well-known for their skills in selling their business, they’re also known for being smart about hiring.  Small business owners, especially long-term owners or new entrepreneurs, may not be as hiring savvy. If you’re new to the hiring process, here’s a few strategies you can employ for a more successful interview. 

Prepare to Sell the Position

A job interview is a two-way street. The candidate is interviewing you every bit as much as you are interviewing them. You will need to give a candidate a reason to want to work for you, knowing that they may have several employment options available to them. In order to prepare, you should figure out ahead of time what the selling points of your organization are and prepare an elevator pitch.  Rehearse how to work them into the interview. Expect that every candidate who walks in the door will be the right candidate for the job and be ready ahead of time to seal the deal.

Prepare Questions Beforehand

Job interviews are generally not very long. Before you know it, you are saying goodbye to the job candidate and sending them on their way. Wasting time during an interview helps neither you nor the candidate.  By taking some time before the interview to plan the flow of the interview and the questions you’ll be asking, you can use the scheduled time more effectively.  Just like you can sense that a candidate came unprepared, they can sense the same of you.  Not only does a little preparation go a long way to making a good impression, it also helps to guide the conversation. Come up with a few questions that you believe will give you a sense of your candidate’s abilities. It’s also a good idea to know who you can and can’t hire.

Practice Active Listening

President Lyndon Johnson once said, “You aren’t learning anything when you’re talking.” This holds true when you are conducting an interview as talking too much is one of the common mistakes that interviewers make. While you want to sell your company, an interview is also your chance to see how a job candidate handles certain situations and responds to pressure. It is difficult to get a sense of the candidate when you are the one who is doing all of the talking. At the same time, practicing active listening does not necessarily equal silence as it is possible to listen and still participate in the conversation.

By knowing ahead of time how best to conduct a job interview, you can go a long way to ensuring that interview will be productive.  A good job interview helps you schedule fewer interviews, spend less time interviewing, and ultimately find the right candidate quicker.

If you would like share your interviewing tips and experiences with other new employers, please comment below!