Paycheck Protection Program: Making Sure You’re Eligible for Forgiveness

Posted by on May 1, 2020 in Newsflash, Uncategorized | 0 comments

In the wake of COVID-19, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which includes a Payroll Protection Program (PPP). The PPP initially granted over $300 billion in loans to small businesses before running out of funding. The PPP was refunded on April 24, 2020, but with the additional funding came additional guidance from the Small Business Administration (SBA), which is tasked with distributing these funds. One attractive characteristic of the PPP loans is that the funds can be forgiven in full, so long as certain conditions are fulfilled. If your business is like a significant number of others affected by COVID-19, you may have already applied for and received, or are awaiting funding of a PPP loan. Regardless of the stage you are in, you should be aware of the conditions that must be fulfilled for the PPP loan to be forgiven and take careful note of what is required. Is my business eligible for a PPP loan? The threshold question for any business which is thinking of applying for, has already applied for, and/or has already received a PPP loan is whether the business is actually eligible for the loan. The SBA issued guidance on April 23, 2020, which clarified the criteria for business recipients of the PPP loans (which guidance appears to apply with equal force to a business which has already received PPP funds and to a business which receives PPP funds in the future). This clarification came after many large businesses received PPP loans, which are intended for small businesses only. All recipients, regardless of when funds were received, should ensure they still fit the criteria for the PPP loan (it should be noted that SBA’s “guidance” is subject to continuing changes and clarifications). When applying for the PPP loan, businesses must certify that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” This certification must be made in good faith. The SBA’s latest guidance, however, has clarified that this certification must be made in good faith and must take into account the company’s current activity and its ability to access other sources of liquidity to support the business which will not be significantly detrimental to the company. Many key terms within the newly-issued guidance are not further defined, creating a great deal of uncertainty for many small businesses which have already obtained (and spent) PPP funds. These additional considerations likely will eliminate public companies and those companies backed by private equity from being eligible. All businesses who are currently applying or have already applied and/or received PPP loans should evaluate whether their certification is still made in good faith, taking these new considerations into account. The SBA is allowing those businesses who may now question their eligibility for the PPP loan to return any and all PPP loan amounts they have received without any penalty. These funds must be returned by May 7, 2020. What can I use the PPP loan for? Once you have confirmed you can make the above certification in good faith and have received your PPP loan, you must ensure you are spending the funds on the appropriate expenses. The expenses that are eligible for forgiveness are: payroll expenses, interest payments on a mortgage, rent payments, and utility...

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New Law Mandates New Workplace Posters

Posted by on Apr 1, 2020 in Newsflash | 0 comments

April 1, 2020 — As you likely know from our previous emails this month, the Families First Coronavirus Relief Act (FFCRA) becomes effective today. This law provides increased sick leave for employees as well as expands the Family and Medical Leave Act. We have written extensively about this new law here. The Department of Labor has created new posters for the workplace relating to the FFCRA. The poster for non-federal employees can be found here. The poster for federal employees can be found here. If your business is still open, the applicable poster(s) must be either posted in the workplace alongside the other state and federally required workplace postings, or, if your workforce is remote during this time, must be emailed to each employee, uploaded to an employee information internal or external website, or uploaded to an employee message board. If your workforce is both remote and onsite, you should post and electronically deliver the applicable poster(s) so that all employees are able to access the information. If your business is currently closed, you may want to email these posters to any employees that are still on payroll. When your business reopens, you should post the posters in the workplace. As always, if you have any questions, do not hesitate to contact us. We are here to assist you as the situation continues to develop. Stay safe, and take care of yourselves and each...

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California Releases “Essential Critical Infrastructure Workers” List

Posted by on Mar 21, 2020 in Newsflash, Uncategorized | 0 comments

March 21, 2020 — As we begin Day 2 of staying at home pursuant to the order issued by Governor Newsom on March 19, 2020, many of our clients are wondering whether they fall into one of the “essential critical infrastructure workers” categories. If so, these businesses may remain open until further notice. If not, businesses which continue to operate and require employees to work at the physical location will be in violation of the order. The Governor’s office released a memorandum last night describing those industries which are “essential” during this time and descriptions of the types of workers who may remain working. This memorandum can be found here. We know there will still be questions about whether your business can remain open and operating for the time being. We remain here and available to provide as much guidance as possible to our clients during this uncertain time. Stay safe, and take care of yourselves and each...

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Employer-Related Provisions of the Families First Coronavirus Response Act

Posted by on Mar 20, 2020 in News and Highlights, Newsflash | 0 comments

March 20, 2020 — THE EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT Part of the Act makes significant changes to the Family and Medical Leave Act (“FMLA”). Generally speaking, the FMLA applies to employers with 50 or more employees who worked at least 20 weeks during either the current year or preceding year, and covers employees who have worked for an employer for at least 12 months and 1,250 hours within the last 12 months. Based on these guidelines, many smaller businesses are not required to comply with the FMLA. However, the new Public Health Emergency Leave provided under the Act greatly expands the number of employers who must comply with the newly passed law and also greatly expands the number of employees who are eligible for protection. The new law is set to take effect no later than 15 days after enactment (April 2), and will remain in effect until December 31, 2020 (unless otherwise expanded). The new law will cover ALL employers with fewer than 500 employees, which encompasses a huge number of employers who are not subject to FMLA requirements. Likewise, the new law will cover all employees who have been on payroll for at least 30 days, drastically increasing the number of employees eligible for protection and benefits. The new law provides up to 12 weeks of job-protected leave to eligible employees who miss work due to a qualifying need related to a public health emergency (as defined). The first 10 days of the leave may be unpaid, and during this time an employee may utilize accrued PTO, vacation time, or sick leave if the employee chooses to do so (employers may not force employees to use this time). After this initial 10 day period, the employer is required to provide paid leave to the employee for 10 weeks. The paid leave requires that the employer provide paid leave at a rate which is at least two-thirds of the employee’s regular rate of pay and based on the employee’s normally-scheduled work weeks. Such pay is not to exceed $200 per day or $10,000 over the course of the leave. Employees are eligible to use the new leave where such employee is not able to work (either physically at work or remotely) in order to care for the employee’s minor child if the child’s school or caregiver establishment is closed due to an emergency relating to COVID-19 declared by a federal, state, or local authority. To the extent possible, the employee is to provide the employer with as much advance notice as is practicable, but notice will likely be minimal. Because the leave is protected, the employer is required to allow the employee to return to his/her position (or its equivalent) at the conclusion of the leave. For a business with less than 25 employees, an exception may be granted where: (1) that employee’s position no longer exists due to economic conditions or other changes in the employer’s operating conditions resulting from the public health emergency; and (2) despite the employer’s reasonable efforts, an equivalent position is not available. In such circumstances, the employer has an affirmative duty to make reasonable efforts to contact the employee if an equivalent position becomes available for a period of one year. There are indications that the Secretary of Labor...

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Coronavirus: What You Should Know as a Business Owner

Posted by on Mar 17, 2020 in Newsflash | 0 comments

Updated: March 17, 2020 at 12:30 p.m. — Here in San Diego, Mayor Kevin Faulconer has issued an Executive Order to combat the novel Coronavirus (COVID-19). This Executive Order closes all bars and nightclubs to the public, limits all restaurants to delivery, pick-up, and/or drive-thru only, prohibits gatherings of 50 or more people and strongly discourages non-essential gatherings, closes all City buildings to the general public, and limits parking enforcement. This comes six days after the World Health Organization (WHO) classified Coronavirus as a pandemic. Thus, regardless of where your business is located in California, you are likely going to be affected. Below we have compiled the information most relevant to business owners whose businesses will likely be affected by this pandemic. We will endeavor to update this article to include additional information as it becomes available.   If your employees are still coming to work: Can you test their temperature to see if the employees are sick? Yes. Because the WHO has classified the Coronavirus a pandemic, the Americans with Disabilities Act (“ADA”) allows employers to take this preventative action. Be sure you are not singling particular employees out for testing based on discriminatory grounds, such as race, ethnicity, origin, or age. Similarly, be certain you are maintaining hygienic practices when taking the temperatures of employees. Can you send someone home who is exhibiting influenza-like symptoms? Yes. The Centers for Disease Control (CDC) notes the symptoms for Coronavirus are primarily fever, dry cough, and shortness of breath. (See https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html for more information on the CDC’s Coronavirus recommendations.) Can you ask an employee about recent travel to high-risk countries (i.e., Italy, China)? Yes. Employees do have a right to medical privacy, though, so be careful not to infringe on that right when asking. If you send an employee home at some point due to lack of work, will you owe the employee any additional wages beyond what they worked? Potentially. California’s Wage Orders generally require that any employee who reports to work and is not then put to work, or who is permitted to work less than half of the employee’s scheduled shift, be compensated for half of the scheduled shift (in no event less than 2 hours nor more than 4 hours of pay). For example, if an employee is scheduled to work from 12 p.m. to 8 p.m. and reports to work but then is sent home without working at least four hours, the employee must be compensated for four hours of work. Recent caselaw requires “reporting time” pay even where an employee does not physically show up for a shift, but is merely required to call in two hours prior to the start of a scheduled shift to determine whether the employee needs to report to work or not. This reporting time will not apply if there is a state of emergency which includes a recommendation to your business to cease operations. While a state of emergency has been declared, it currently does not include a recommendation for any businesses to cease operations (unless your business will cause gatherings of 250 or more persons). Until it is determined that one of the exceptions to reporting time pay applies to the COVID-19 situation, the safest course of action is to assume that reporting time pay should be...

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We Are Here for Our Clients and Friends

Posted by on Mar 17, 2020 in Newsflash | 0 comments

March 17, 2020 — We are in the midst of an unprecedented threat brought on by the novel Coronavirus pandemic.  I am writing to let you know that Navigato & Battin, LLP remains ready to assist our clients and our friends during this challenging time. Like you, we are closely monitoring developments related to the coronavirus outbreak and the recommendations and directives coming from various governmental and health agencies including the U.S. Centers for Disease Control and Prevention (CDC) and the World Health Organization.  With our network infrastructure, all of our attorneys have the ability to work remotely. For the time being, most of our attorneys will be working from home; however, clients should notice very little difference in the delivery of our legal and consulting services.  Of course, we are available for telephone conferences as usual.  Where available, we will be utilizing telephonic court appearances and video depositions. Many of our clients are employers and this is an unprecedented and uncertain time for you.  We are available to advise employers on your obligations and your options during the Coronavirus outbreak.  There are many difficult and interrelated legal issues, from termination/layoff, to leaves of absence, to workplace safety compliance.  We are currently preparing an article to try to address some of the bigger and more pressing legal issues and provide you some basic guidance.  However, please call us with any questions about your particular situation. We will get through this.  Please take care of yourselves and each other.   Yours, Mike Battin Navigato & Battin,...

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Exempt Employee Salary Requirement Increased in 2020

Posted by on Mar 2, 2020 in Newsflash | 0 comments

We have written extensively on the labyrinth of California’s wage and hour laws, including the requirements to pay hourly employees minimum wages, provide meal breaks and rest breaks, properly record and pay any and all overtime hours, and provide employees with compliant pay stubs. Some employees, however, maybe exempt from all of these requirements. For a company to avail itself of this exemption pertaining to certain employees, those employees must (1) earn a specified minimum salary and (2) perform duties which fall into a specified classification. The salary requirement for an employee to qualify for exempt status is a bright line rule where there are no exceptions. In California, to be exempt on January 1, 2020, employees working for employers with less than 25 employees must make $54,080 per year. Employees working for employers with 26 or more employees must make $49,920. This minimum salary amount is set to steeply increase in the coming years. By 2024, exempt employees must earn a salary of at least $62,400. If employees meet the salary requirement, they will also need to fit into one of the four exempt categories: professional, executive, administrative, or outside salesperson. The professional category applies to workers licensed or certified and primarily engaged in the practice of law, medicine, dentistry, optometry, architecture, engineering, teaching, accounting, or an occupation deemed to be an “artistic profession.” The executive category applies to workers who manage the company, direct the work of at least two other employees, have the power to hire and fire, and regularly exercise independent judgment. The administrative category applies to workers who perform office or non-manual work related to management policies or general business operations, and who regularly exercise discretion and independent judgment. The coaches and trainers will not qualify for this exemption. The outside salesperson classification is special in that the employee does not need to meet the minimum salary requirement above. Instead, the employee need only make minimum wage. The category applies to employees who are 18 years of age, spend over half of their working time outside of the company’s headquarters, and sell goods or services for the employers. Because of the employee-friendly laws which are currently in place in California, it is a good idea for all employers to regularly conduct an audit of their employees to ensure none are being misclassified as exempt. A non-exempt employee classified as exempt would likely be able to recover for missed meal breaks, missed rest breaks, overtime worked and not compensated, and much more. As we’ve discussed in many articles previously, judgments in these cases can grow exponentially. If you would like assistance in conducting an audit of your workforce or you believe you may be misclassifying an employee, contact us. We can...

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The CCPA is in Effect, is your Website Compliant?

Posted by on Mar 2, 2020 in Newsflash | 0 comments

The California Consumer Privacy Act of 2018 (CCPA or the Act) relates to companies that collect personal information from consumers. The Act arose as a way to override a ballot initiative proposed by a private citizen. As such, the CCPA is recognized as having been rushed through the legislative process and having a number of flaws as a result. The CCPA became effective on January 1, 2020; however, based on the ambiguity of the CCPA as currently written, the California Attorney General is to release guidance memorandums. The CCPA is to be enforced by the Attorney General after July 1, 2020. Between January 1, 2020, and July 1, 2020, the CCPA can only be enforced through a private cause of action. In an increasingly online world where data hacks and privacy breaches are becoming more commonplace, the CCPA aims to put the consumer in more control of his or her personal information collected by certain businesses. A business is subject to the CCPA if the business: (1) collects consumers’ personal information and determines the purposes and means of processing the information and (2) either (a) has a gross annual revenue exceeding $25 million; (b) buys, receives, or sells the personal information of 50,000 or more consumers, households, or devices, (c) or derives 50 percent or more of its annual revenue from selling consumers’ personal information. The Act will also apply to those businesses which control or are controlled by a business which fits one of the above criteria and shares common branding with that business. The CCPA will not apply to your business unless your business satisfies both of these requirements. The CCPA provides consumers with five distinct rights relating to their personal information: (1) the right to know, (2) the right to deletion, (3) the right to opt-out, (4) the right for a minor to give consent via opt-in, and (5) the right to non-discrimination. Every website in 2020 should already have a privacy policy. These policies now must be updated with various provisions related to the CCPA. Specifically, these additions must provide information about the categories of personal information collected during the preceding twelve months; sources from which the business collects personal information; the purpose for collecting or selling personal information; categories of third parties who have received the personal information; and a description of the consumers right to: (a) access and request specific pieces of personal information, (b) obtain individualized disclosures, (c) deletion, and (d) non-discrimination. Additionally, the methods for submitting consumer requests must be listed in the privacy policies, including a toll-free phone number and online submission, as applicable. Finally, the policies must state whether the business sells personal information to third parties. If so, notice of the same must be given in the policy along with notice that the consumer may opt-out and a link to the “Do Not Sell” page. These privacy policies should already be undergoing a periodic review to ensure they are up to date with the business’s practices. The Act now requires the business review and update its privacy policy, and especially the notices listed above, at least annually. After updating its privacy policy and creating notices on its website along with a “Do Not Sell” link, a business must take certain actions to remain compliant with the CCPA. The...

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Using DocuSign® or Similar Programs? Case Cautions Business Owners to Think Twice

Posted by on Feb 3, 2020 in Newsflash | 0 comments

As businesses become more reliant upon technology, the prevalence of DocuSign® is no surprise. The DocuSign® program allows parties to electronically sign documents without having to print, manually sign, and scan documents. This program has streamlined many transactions by allowing parties to simply open the DocuSign® request, insert their signatures where requested, and “complete” the document, which returns the “signed” document to the originator. However, in November 2019, a California Court of Appeal found that when disputed, a document signed through the DocuSign® program may not be sufficient to establish a party’s agreement to certain terms contained therein. Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, involved a woman named Rosa Fabian who had discussed installing and financing solar panels on her home with Renovate America, Inc. Renovate America had contacted Fabian over the phone in an unsolicited sales call. Fabian had already had the solar panels installed on her home, and Renovate America was offering to finance the solar panel system. Fabian claimed she was never presented with any documents to sign, and never had any conversations with Renovate America other than over the phone. When Fabian filed a lawsuit against Renovate America relating to improper installation of the solar panels, Renovate America petitioned the court to move the dispute to arbitration. Renovate America presented a contract including an arbitration clause which had purportedly been signed via the DocuSign® program by Fabian. Fabian denied ever signing the document, either physically or electronically. A Renovate America director testified in a deposition that no Renovate America personnel had been present when Fabian allegedly signed the contract via the DocuSign® program, but based on his “extensive experience” Fabian must have been present and signed the document. To prove Fabian’s signature was indeed authentic, Renovate America needed to present evidence of the content of the contract and the circumstances surrounding the contract’s execution. Renovate America presented two pieces of evidence: Fabian’s printed electronic initials, which the DocuSign® program purportedly authenticates, and a declaration from the employee who had spoken with Fabian. The Court of Appeal found the electronic initials on the agreement were insufficient to establish the formation of a contract because Renovate America failed to provide additional information as to the authentication process used by the DocuSign® program. Additionally, Renovate America did not provide any information to indicate how it verified Fabian’s electronic signature. This type of information would include: who sent the contract to Fabian, how the contract was sent to Fabian, how Fabian’s signature was placed on the contract, who the finished contract was sent to, and how Fabian’s signature was verified by that recipient. The Court of Appeal therefore rejected this argument. The Court of Appeal was similarly unpersuaded by the declaration Renovate America submitted. Specifically, the declaration lacked any substantive information regarding the details of Fabian’s purportedly signing the contract. Instead, the declaration summarily stated Fabian had signed the contract without providing any detail as to how that conclusion had been reached. Renovate America’s bid to arbitrate the dispute brought by Fabian was therefore denied, and Fabian will be allowed to pursue her claim in court. This case should raise eyebrows of those businesses which routinely rely upon the DocuSign® program to complete contracts intended to be binding – especially when those contracts include arbitration clauses....

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Navigato & Battin, LLP Obtains $10 Million Decision After 6 Day Bench Trial

Posted by on Feb 3, 2020 in Newsflash | 0 comments

After a bench trial spanning 6 days of trial in Orange County Superior Court’s Complex Department, Navigato & Battin’s client, Sheila Guarderas, obtained a decision awarding her $10 million and several hundred thousand dollars in pre-judgment interest, in a breach of contract action against former business partner Steve Holmes.  Ms. Guarderas and her company, XccelerateHR, LLC, were also cleared of any liability on all 9 causes of action in Mr. Holmes’ cross-complaint, which sought at least $740,000 from NavBat’s clients.  All in all, the case amounted to a complete victory for Ms. Guarderas. The case raised several issues of complex contractual analysis, fiduciary duty, and indemnification responsibilities, and included expert and percipient witness testimony regarding the formation of the business, the unraveling of the business and its root causes, and the arrangement struck by Ms. Guarderas and Mr. Holmes relating to the disposition of the company’s assets (which formed the basis for the $10 million decision).  Trial counsel Travis M. Bray offered the following: “Mr. Holmes made a deal with Ms. Guarderas and reaped all of the benefits of that deal, but when the time came for him to pay up he denied that he owed a dime and did his best to cover his tracks along the way.  Credibility of the witnesses was a huge factor in this case.  I am glad that we dug up the evidence and got the testimony we needed, both before and during trial, to hold Mr. Holmes accountable for the agreement he made.  It was not an easy road, but Ms. Guarderas had the wherewithal to stick to her guns to see her claims verified by the decision reached by the Court.  After being told for years by someone she had trusted a great deal that she was lying about their arrangement and that she did not have a leg to stand on, it was certainly a nice feeling to deliver news of this hard-fought decision to Ms. Guarderas.” About Navigato & Battin, LLP: Navigato & Battin, LLP is an experienced business law firm.  For over 20 years, Navigato & Battin, LLP has prosecuted and defended multi-million dollar lawsuits, in both trial and appeal settings, as well as alternative dispute resolution processes, such as arbitration and mediation. The firm counsels’ corporate clients in dealing with their organizational, labor, and management issues and has represented both corporations and their principals in a variety of business...

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