Business Decisions During the COVID-19 Coronavirus Pandemic

Many businesses are facing difficult decisions during the COVID-19 Pandemic. As many states force certain businesses to close to protect the employees and general public, employers need to make decisions about what to do with their employees. Maryland has closed all non-essential businesses. Contracts are being cancelled during the Pandemic. For business, however, employers have several options during this time.

Teleworking During the Coronavirus Pandemic

If an employer has the ability to allow its employees to telecommute and work, the employer can continue to produce income and continue to pay its employees. It is important for employers to remember that if their employees are providing services, they need to be paid for those services. Employers may realize that while services are still being provided, that if their customers are not timely paying or the employer is unable to collect on those services, it could face a financial hardship. Employer need to ensure they will have the income to cover their employee’s salaries, as well as all taxes that may be due on those salaries.

Employee Options During the Coronavirus Pandemic

If teleworking is not an option or the employer is not able to continue to pay the salaries of the employees due to a decrease in revenue, there are additional options. First, is to keep all employees on and continue to pay their salaries. While this would be an ideal option it is unlikely feasible, especially if the closures continue for a lengthy period of time. If an employer would like to explore an option such as this, it could offer it employees the opportunity for advance payments on future paychecks and work out a repayment schedule with their employees when they return to work. It is important for the employer to remember that when their employees return to work if they work more than 40 hours in a week in an attempt to repay the advanced payments, they would still be required to pay them at the overtime rate for all services.  In addition, sometimes this can be difficult because the employer will have to advance the costs for those services when they don’t have the income. In addition, it can be difficult to try and recoup those fees if the employee leaves the employer’s services prior to the full repayment of those advanced payments.

If employees are furloughed or terminated until the end of the Pandemic, those employees will have the right to claim unemployment from the state. While this will typically have an effect on the employer’s unemployment rate, hopefully many states understanding the circumstances will not increase the business’ rate. While there has been no legislation regarding the specifics relating to unemployment, hopefully the states will waive those increases in the future.

While none of these decisions are easy a business owner will have to decide what they have to do in the best interest of the business and trying to protect the ability to return to business when everything has settled down. Many states are working on legislation to assist business by providing tax credits and even working to get small business interest free loans. Business owners should explore all of these avenues when trying to determine way in which they can save their business for the return.

Robb Longman and our other business law lawyers practice in all areas of business law throughout Maryland and Washington DC. Contact us at (301) 291-5027 to discuss your business or coronavirus matter one of our business lawyers at one of our Maryland (Rockville or Bethesda) Offices or Washington DC Office.