How can I safeguard my small business during coronavirus?

By Jessica Suotmaa 0

As the coronavirus pandemic continues to affect small businesses post-lockdown, many small business owners might wonder what can be done to safeguard the future of their business.  With new regulations for reopening during the COVID-19 pandemic (and the recent protests), you might question whether it is enough to continue the status quo.  If you’ve come to determine that business cannot continue as usual, then this article is for you. Here, we list six ways you can safeguard your small business during difficult times.

1. Business Strategy

When the economy is not doing well, it is a good time to review your current and past business strategies.  See how your business has grown, why you made the changes you made, and whether you need to make additional changes. Try to predict what the future will look like as a result of the pandemic, and simulate your business model–does it work? Is your business profitable? Or maybe you need to make adjustments.

Economic downturn can change the outlook of supply and demand, inventory, and prices. Make sure you leave nothing out of your review.

2. Regulations and Compliance

As conditions change, be sure to remain to up-to-date on business regulations, employment regulations, and any other regulations that require compliance.  This is also a good time to review tax compliance, and how you can minimize your end-of-your business taxes.

3. Contractual Obligations

If you have obligations to vendors, suppliers, or clients, ensure that you are able to meet your contractual obligations. Try to negotiate whenever possible if the reason you’re unable to meet requirements is due to circumstances out of your control, e.g. pandemic. If you need assistance with negotiations, feel free to consult a qualified business attorney.

In addition, it’s a good time to evaluate the relationships you have with vendors, suppliers, or clients, and prioritize those of more importance.  Add value to the important relationships by communicating more with them and finding out how they are also affected by current circumstances. You might discover new ways to serve your clients through these discussions.

4. Business Insurance

If you have a current policy, review the relevant insurance policies regarding business interruption and event cancellation.  If you do not have insurance policies for your business, this is a good time to consider adding a good insurance policy to your business arsenal.

5. Commercial Real Estate

If you have a mortgage, or commercial lease, identify and review updated policies. Remember to ask about repercussions on non-payment of rent due to impact on the business.

6. Employment

If your business has employees, be sure to remain up-to-date on current employment policies and benefits. Review your employee handbooks for policies on sick and family leave to ensure compliance with local regulations.

 

While we try to suggest what we can in our articles, we realize that every small business is different.  We welcome you to contact our office to discuss your business’ unique needs during these challenging times.

Coronavirus: Can I be fired?

By Jessica Suotmaa 0

Due to the coronavirus pandemic, companies have lost business, sales have gone down, and profits have plummeted. As a result, many are cutting costs by reducing work hours, or even their workforce. Here in Southern California, we have encountered questions from you regarding job loss, such as:

“Can my company let me go for no reason?”
“Can I be fired because of the coronavirus / COVID-19?”
“Can I fight back if my company lays me off for no reason?”

Also, on March 17th, 2020, Governor Gavin Newsom signed an executive order regarding this issue. If you’re working in California, please continue reading as we explain the ordinary situation, and the current situation.

California is “at will”

Unless you have an employment contract specifying employment terms, such as the length of employment, or specific dates of employment, you are subject to the “at will” employment terms in California state.  What “at will” means is that you can be let go at any time, for any reason–or alternatively, no reason at all, at the employer’s will.

Given this, the short answer to all of the questions above is: “yes”. You can be let go, for no reason at all, by your employer due to the coronavirus.

If you do have an employment contract, be sure to see what the terms state regarding breach of contract or early termination.

What is Cal-WARN Act?

If you’re an employer, the executive order signed on March 17th, 2020 will help you.  The order modifies the existing Cal-WARN act to cover COVID-19 (coronavirus).  California Worker’s Adjustment and Retraining Notification (Cal-WARN) originally applies to California employers with more than 75 employees, including part-timers.  Under the act, qualified employers must provide 60-day notice to its employees prior to closing the business operations at the employee’s location, relocating operations to a location more than 100 miles away, or terminating more than 50 employees in a 30-day period.

However, the Cal-WARN act does not cover physical calamities or acts of war, which could be an exception the COVID-19 pandemic falls under.

Violation of the Cal-WARN Act could entitle employees to back pay and cash equivalent to benefits for up to a 60-days or one half of the employee’s employment period (whichever is shorter).

Relief for Employers

The executive order signed by Governor Newsom went into effect on March 4th, 2020, when California officially declared a state of emergency.  Most notably, the order suspends the 60-day notification requirement to employers who meet certain requirements, such as:

  • Prior to termination, relocation, or mass layoffs, the employer notifies affected employees, Employment Development Department (EDD), the local workforce investment board, and the chief elected official of each city and county government.
  • If the employer cannot give 60-day notice, it is required to provide notice as soon as possible, with a brief explanation as to why it cannot adhere to the 60-day requirement.
  • The employer is terminating, relocating, or laying off employees due to circumstances caused by COVID-19, that were not reasonably foreseeable.
  • If the employer is providing notice after March 17, 2020, the employer must include the following statement in the notice:

“If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UY and other resources available for workers is available at labor.ca.gov/coronavirus2019.“

If you have any questions regarding unlawful termination, how to handle mass layoffs, or just questions regarding the legal aspects of covid-19 and how it may affect your employment or employees, contact us today!

 

 

 

Are Your Hiring Practices Guilty of Accidental Discrimination?

By Lisa 0

Workplace discrimination has always been a hot subject. Yet, in today’s progressive society, employers need to be more conscious than ever in how they hire. By focusing your attention on equality and integrity during your hiring process, you can eliminate accidental discrimination. This will ensure you’re hiring the best candidate for every position. 

Avoid accidentally leaving certain demographics out of the loop. Don’t deprive your company of valuable candidates that could contribute to your company’s bottom line. Read the three major red flags that your hiring practices are discriminatory below. 

You Use Discriminatory Language

Check your job listings, website, and career pages for any discriminatory or preferential language usage. For example, using “he” when referring to a general individual instead of “their.” Also, be careful of using words that usually apply to a specific gender. For example, The Hire Talent says the adjective “dominant” may make the posting seem like it favors male applicants. 

Language preferences can be seen as narrowing down candidates based on race or ethnic group. Avoid writing your entire job post in a different language or peppering in words in another dialect.

Remove every restrictive term from your job description and ensure that everyone in your office, especially human resources and hiring managers, are well-versed and only use non-discriminatory language. Gender-specific job titles, stereotypical descriptions of men or women, and any references to skin color, ethic background, religion, gender identity, or sexuality should be omitted.

Hiring Decisions Are Made on “Gut Feelings”

According to Perception Institute, relying on a gut feeling could result in implicit biases leading to discrimination. Many companies pride themselves on hiring candidates based on connection rather than credentials, but personal connection is subjective. Most of the time, this means people are only being hired based on the opinion of hiring staff or the manager. To avoid implicit bias and discrimination in the hiring process, you should employ a variety of screening measures that ensure applicants are being judged fairly based off their competency, educational background, and commitment to the position.

Your Workplace Lacks Diversity

Take a look at your current employee population; are they all from the same ethnic background, or is there a major discrepancy between gender in various positions? If you only hire women to work in support positions and men for high-level roles, you could be at risk of discriminatory hiring practices. 

Go through your current list of resumes and see what type of candidates are applying to your company. If you find there is also limited diversity among applicants, this could strongly indicate discriminatory phrasing in your job listings. 

Take a closer look at who is hiring and make sure that your staff completes cultural sensitivity and discrimination training. Sometimes, just learning about the impact of subconscious bias can make people more aware and less likely to discriminate.

Still have questions on the best way to avoid a lawsuit on discriminatory hiring practices? Speak to the experienced attorneys at Lum Law Group today!

How Much Protection Does Your Business Actually Need?

By Lisa 0

If you own a business, you need insurance to protect it. The world is unpredictable. Although you can take some precautions, you cannot control or prevent every problem. An unexpected weather event can damage your main facility. An unforeseen problem can injure someone using your product. Even as attorneys, we have malpractice insurance.  The amount of insurance protection your business needs depends on several factors.

Where Are You Located?

Basic liability and commercial property insurance should handle most issues that happen at your physical location. The cost and limits of that insurance are based on the location and nature of your physical space.

The reason an insurance adjuster will come to your location when you start a policy is because the insurance company needs to have an idea of any potential risks. A business located in a flood plain will have higher insurance costs than a business in a safer zone.

It also makes a difference if you are a brick and mortar business where many clients will come to you during the day or an online company with little direct customer contact.

What Do You Do?

Different businesses carry different kinds of risks. People can be injured in both a family restaurant and a skydiving expedition, but the types of injury and risks of injury are quite different. In the case of product liability, insurance looks at the type of product your company makes, and how risky it is to be on the market. Your legal team or insurance company will ensure that you meet the legal requirement for your type of business. They will also advise you of expanded coverage options if you run a higher risk business.

What Sort of Equipment Do You Have?

Your employees are your biggest asset as a business, but they can also suffer injury and bring claims against your company. The level of coverage you need can depend on the type of equipment you use. Even with standard safety procedures, people are injured by manufacturing equipment on a daily basis. Certain types of equipment also require regular maintenance and safety inspections. On the other hand, an office worker has less exposure to serious injury, requiring less in insurance coverage.

An uncovered claim can have a serious financial impact on your business. It can also take up time and energy as you work through the legal system. By making certain that your coverage is sufficient and up to date, you are protecting your business from the unexpected.

For all your business advice needs, Lum Law Group is here to help. Contact us to find out how we can best serve your needs!

Should I be worried about Social Security Administration's "No Match" Letter?

By Jessica Suotmaa 0

Starting March 2019, the Social Security Administration (SSA) has been sending out letters demanding employers to correct a discrepancy between names and social security numbers. This letter is called a “No Match letter” for short.  These “Employer Correction Request Notices” (ECRN)  were common before 2012. Under the “Buy American, Hire American” directive, the SSA has resumed sending out “No Match” letters to employers. The letter promotes hiring US citizens over undocumented workers.

In this article, we will address the two situations you may be in, the first where as the employer you receive a “no match letter”, and the second, where your employer informs you they have received a “no match letter” about you. Read on to determine how worried you should be about the ECRN, or no match letter.

What Employers Should Worry About

The New York Times reports that in California’s San Joaquin Valley alone, over sixty percent of the 39,978 employees employed by a total of 49 businesses have received SSA’s no match letters.  Clearly, a “no match letter” is not uncommon and even you could receive one as a small business owner with employees.

The first step is to realize that there are many reasons why you might be receiving that “no match letter”. Don’t assume receipt of the letter means your employee lied or is working illegally.  Here are a few of the legitimate reasons why you received a “no match letter”.

  • typo on your W2/W3 forms
  • typo on the I-9
  • employee name change
  • transposition of numbers
  • identity theft
  • Sometimes the letter is generated by a typo, a name change, or even identity theft.  This is one of the reasons SSA wants employers to cooperate.

The second step is to realize the consequences of a mismatch to you.  While SSA is not threatening you with a fine or penalizing late responses that exceed the sixty day window, that does not mean it won’t affect you later.

As an employer, if you’re withholding federal income taxes, social security, and medicare then you’re also having your employees fill out a Form I-9, Employment Eligibility Verification.  Part of being prepared for an Immigration & Customs Enforcement (ICE) raid or audit is having updated I-9 forms for all your employees, and having proof that you addressed all “no match letters” received from the SSA.

In other words, an unaddressed “no match” letter from SSA proves you were aware that your employee(s) were unauthorized to work or even illegally present in the United States.  To avoid the hefty fines of noncompliance with immigration laws, employers should address employees regarding their “no match letters”. Here’s what to do:

  1. Verify that it was not your mistake by checking your Forms W2 and W3 for the last seven years. If it is your mistake, prepare corrections/amended forms and submit to the appropriate location. Submit a copy to SSA and keep a copy for your records.
  2. Prepare a letter to your employee with a copy of the “no match letter” from SSA and mail it to their address. Keep a copy of the letter. Document responses, if any.
  3. Prepare a declaration for your employee to sign proving you had the discussion and they received a copy of the “no match” letter. Have the meeting with your employee, then give them a copy of the signed declaration while keeping the original. Send a copy to SSA.
  4. If your employee resigns or disappears, document the exact dates of your contact and their disappearance in their file.

If you have questions on how to address the “no match” letters, contact our experienced immigration and employment attorneys today!

What Employees Should Be Worried About

The purpose of providing your social security number to your employer is for the planning of your future. Your employer is required to withhold and deposit your taxes, social security and medicare withholding to your social security account. A mismatch means that you’re not receiving money that belongs to you. As such, SSA’s notification is actually a favor to employees.

If your employer notifies you of a “no match letter”, you should review your I-9 and contact SSA.

However, if you’re notified of a “no match letter” and you know exactly why, then you may have a problem.  Here are a few common ways a no match letter could be intentionally generated:

  • using a purchased SSN
  • providing a borrowed SSN
  • stealing a deceased person’s SSN
  • creating a made-up SSN
  • sharing one SSN with several people

If you’re misusing the system then understand that the consequences could include deportation.  Do not show false documents to your employer as this could mean trouble. While SSA is not currently sharing information with ICE, the records remain.  As such, it could come up later in the future.

If faced with immigration consequences, contact an immigration attorney for additional information. Remember, you have employee rights too!

5 New 2019 California Employment Laws Every Business Owner Should know

By Jessica Suotmaa 0

California will implement many new regulations in the coming year. As a small business owner, it’s important to remain up-to-date with new legislation so that you can ensure your business is in compliance with State regulations. As employment defense attorneys, we encourage businesses to take preventative action before they’re sued by their employees. Here’s five ways you can avoid an employment related lawsuit in 2019:

1. Is he/she an Independent Contractor or an Employee?

The ABC test for determining whether your independent contractor is truly an independent contractor or actually an employee was already implemented in April this year (2018).  The California Supreme Court ruled on the subject in its decision on Dynamex Operations West, Inc. v. Superior Court. Since then, to determine whether your worker is an independent contractor or employee, you should ask yourself the following:

A – Is the worker free from your control and direction?

B – Does the worker’s performance take place outside your company’s usual scope?

C – Does the worker primarily function in an external, independent business or trade?

The answer to all three questions should be “yes”, if not, you cannot issue a 1099 for their work. This means many existing 1099 workers, such as freelancers and contractors, can no longer be considered independent contractors.  Also, if you are self-employed and using a 1099, you may need to administer the ABC test on yourself.

Read more on Forbes’ An End of an Era? How the ABC test could affect your use of independent contractors

2. Do I have to pay the $11 or $12 state Minimum Wage?

In 2016 California passed a legislation raising the state minimum wage to $11 an hour for those working in small businesses with fewer than 25 employees.  For businesses with more than 25 employees, the minimum wage is $12 an hour.

3. What about agricultural workers has changed?

Employers of agricultural workers with more than 26 workers will see changes in overtime policy.  Where the current law requires agricultural workers to be paid time and a half after ten hours of work in a day, or sixty hours in a week, the new law reduces the threshold.  In 2019, an agricultural worker working over 9.5 hours in a day, or 55 hours in a week, will be entitled to time and a half.

But what if you don’t have 25-26 agricultural employees? What if you have 10? The law does not go into effect for you until 2022.

4. Do I have to accommodate breastfeeding mothers?

Yes, yes you do.  Federal law requires employers to accommodate lactating mothers by providing them time and place to expunge breast milk, but it did not specify what type of room. As a result, many mothers were required to pump in a restroom, or even take their infant into a restroom with them.  New law, called lactation accommodation, requires employers to provide nursing mothers with a private room that does not have a toilet stall.

5. What about the #metoo movement and Workplace Sexual Harassment?

Sexual Harassment training used to only be required of companies with over 50 employees, but starting in 2019, even small businesses with as few as five employees will be required to provide sexual harassment education.  The new law mandates that, within two years, supervisory staff should have a minimum of two hours of sexual harassment training while non-supervisory staff should have one hour of sexual harassment training.

 

 

Source: https://www.northbaybusinessjournal.com/northbay/sonomacounty/8947388-181/california-employment-law-2019

Are There Restrictions on Who I Can Hire?

By Lisa 0

When you want your business to succeed, you need to start by looking at the people that you employ. These people are the ones who will help you make or break your business, so you want to find the best people possible. When hiring new employees, it can be difficult to make sure that you have the very best candidates possible, but you also need to make sure you stay within legal requirements. So what are those legal requirements and does the government care who you hire?

Discrimination Law Requirements

You want to make the best decision when hiring an employee to work at your company, but the decision-making progress is not just about the “best hire.” You also need to consider federal law requirements when hiring employees. Under the law, no employer can discriminate against a person during the hiring and application process. Specifically, federal law forbids discrimination or retaliation against a potential employee with regard to race, color, religion, sex, national origin, age, disability, or genetic information.

I-9 Compliance

You also need to make sure that you are I-9 compliant, or that all of your employees are authorized to work in the United States. Each employer must ensure that Form I-9 is completed for all employees whether the person is a U.S. citizen or a foreign national. I-9 compliance does not keep you from hiring foreign nationals, but it does make sure that you won’t get in trouble with the government for hiring someone who can’t legally work here.

Prohibited Policies and Practices

The discrimination laws enforced by the federal government apply to various aspects of employment practices. The practices include job advertisements, recruitment, and application and hiring. Any job advertisements you post internally and externally cannot discourage people of certain ages or other discriminatory factors from applying for a job. These same practices also apply to people, who are trying to be hired by a business through recruitment (such as a college fair) or using a job interview by the potential employer.

Conclusion

While it may make the hiring process a little more difficult, you need to take all precautions when hiring an employee and not resort to discriminatory practices. You may not mean to discriminate, but if someone can make a case against you, it doesn’t end well for you. Court litigation, heavy fines, and poor publicity are just some penalties that you may suffer. To avoid this, make sure you fill out the required documentation promptly and eliminate any targeted language. It may take some effort, but it is worth it.

References:

Discrimination by Type

Types of Workplace Discrimination

I-9 Verification and Compliance

Legal Rights During the Hiring Process

Avoid Discrimination in Hiring