Coronavirus Lockdown Orders Impacts Businesses: Banks Offer Relief

April 30, 2020 by

coronavirus lockdown ordersCoronavirus lockdown orders have permeated the country creating dire consequences for employers and employees. Coronavirus has led to social distancing measures to protect communities, but the collateral damage on businesses, particularly small businesses, is proving to be devastating. Enter the banking industry. 

Coronavirus Lockdown Orders – Essential vs. Nonessential Businesses

California’s Governor Newsom issued executive coronavirus lockdown orders in March requiring residents to stay home unless they were needed to maintain “essential infrastructure.” That means a number of businesses have been shuttered, and employees left wondering how they will pay their bills. The businesses considered essential, to date, include grocery stores, pharmacies, banks, laundromats, law enforcement, fire and EMT, gas stations, and, of course, medical services. Some manufacturers and distributors, particularly those involved with the medical field, are also remaining in business. Likewise, employees who assist vulnerable populations in areas such as food and shelter operations may continue to work, as well as those dealing with child abuse and elderly care. Public works and communications employees are still going to work, and electricians, plumbers, and sanitation workers continue to support the community. Additionally, veterinary services are still available to the public. Finally, those working in mortuary, funeral, and cemetery services are deemed essential.  That leaves entertainment venues, salons, fitness centers and more with no way to make money. Those in transportation, and hospitality industries have limited employment. Indoor dining is prohibited, so restaurants can earn a marginal income through take-out and delivery orders.

State Options for Your Business 

The governor has worked with both national banks and state-chartered ones, along with credit unions, to create a grace period on loan payments in the wake of the COVID-19 outbreak prompted coronavirus lockdown orders. Additional programs centered around payment deferrals, fee waivers, interest rate adjustments, and various loan modifications are available to assist business owners who have been negatively impacted by the pandemic.

Federal Assistance

The federal government has enacted legislation to address financial assistance for small businesses that have been hit by the virus. Organizations with 500 or less on the payroll may obtain loans from the Small Business Administration to help with business expenditures. This may include the following:

  • Payroll and compensation;
  • Healthcare costs;
  • Mortgage and other interest obligations;
  • Rent and utilities.

These loans are provided with no collateral or personal guarantees, and costs associated with employee payroll will be forgiven up to $100,000. The remainder of the loan will carry no more than 4% interest. [Read more…]

Filed Under: California Employment Law, COVID-19 Tagged With: , ,

Coronavirus Pandemic Shuts Down Commerce

March 30, 2020 by

coronavirus pandemicIf you are a worker who is concerned about making ends meet in the era of the coronavirus pandemic, you are not alone. Nearly 7 million Californians do not have enough money on hand to pay for basic necessities. So, when income is cut off, it puts people in dire straits. 

The Coronavirus Pandemic Cripples the Economy

In just a matter or weeks, once thriving businesses have had to shutter, and entire sectors have closed down. Workers of all stripes are wondering how they will be able to afford food and other necessities, and where the money for their next rent payment will be coming from. And indicators like colossal drops in the stock market, federal reserve municipal bond purchases, and a drop in Treasury yields tell us the financial decline is going to stick around for a while.  Estimates are that jobless claims will skyrocket to 2 million in the coming days and weeks, putting many across the nation in difficult situations.

Who is Primarily at Risk?

Hourly employees generally are at greatest risk of layoffs and losing their jobs, particularly those in the service industry. We have seen employees in hotels and restaurants hit hard by the coronavirus pandemic. Those in manufacturing and retail are finding themselves in the same boat. Often, these workers do not have paid leave or other benefits to help.

Government Pandemic Plan 

The federal government has passed a coronavirus pandemic prompted plan to send Americans cash in the coming weeks. The stimulus package included payments of up to $1,200 to US taxpayers but not everyone will get the entire amount and others, not at all. Federally funded emergency leave has been passed and here in California, the governor also extended the eligibility period for Medi-Cal, welfare, and food stamps by three months.  

For families who have mortgages that are federally backed, evictions and foreclosures have been suspended until May. Governor Newsom also issued an executive order to allow local governments to ban commercial and residential evictions. 

Voluntary Assistance

California’s largest power utilities have voluntarily agreed to protect customers from phone, water, and power shutoffs. Comcast is giving new customers 60 days of free Internet.

Unemployment 

For workers who have had hours cut, unemployment benefits may be available.  Those who have contracted the coronavirus may qualify for disability benefits.

Food

The federal coronavirus pandemic relief is designed to assist mothers and pregnant women, as well as seniors, with funds for groceries and/or home delivered meals. Previously planned cuts to food stamp programs have been halted by a federal judge, allowing able-bodied but unemployed individuals to continue to collect benefits.  In the works during the coronavirus pandemic are plans for bolstered food banks, as well. [Read more…]

Filed Under: Blog, COVID-19 Tagged With: , , ,

Disclaimer

The information on this website should not be considered to be legal advice, nor construed to be the formation of any manner of attorney client relationship. Prior to taking any form of legal action, please consult with an attorney experienced in the appropriate area of law germane to your situation. Case results and testimonials presented on www.californialaborandemploymentlaw.net or any of its related websites are germane to the facts present for each individual case and is not a promise of similar outcomes for any other cases. This website is not intended to solicit clients for matters outside of the State of California.