So… lots going on. Based on various conversations I have had with insurance representatives and attorneys, below are some thoughts about what types of actions you should be considering. Please always check directly with your insurance carrier and labor attorney for direction.
Not sure what your decision is regarding operating. Obviously the only option is curbside or delivery. If you do decide to stay open for these activities please make sure you follow the directives from the health department:
As far as recommendations for documenting – please do a hard inventory count today. Inventory loss will probably not be covered on your insurance policy because the cause is not a covered event. Almost all policies, unless otherwise negotiated, exclude virus outbreak, pandemic from business interruption coverage. Having said that- you should contact your carrier and put in a claim, the worst thing that can happen is its denied. Would like to have a hard inventory count in case some type of relief appears that we could take advantage of.
Also- if you donate any product or allow employees to take home product – please document that.
During this anticipated short-term furlough, you should be eligible for unemployment benefits through the California Employment Development Department (“EDD”). Please note that your employment is not being terminated, and that we anticipate the furlough of work to be finite. Given the severity of the situation, the Governor has taken steps to waive the normal one-week waiting period for benefits. We recommend you file today so that you can be eligible for the earliest benefit window possible. Additional information can be found on the EDD’s website, which also provides for the quickest processing of claims (https://www.edd.ca.gov/). We would, of course, provide assistance in processing claims and helping to ensure the receipt of timely benefits.
You can request relief from the EDD for an extension for filing and paying payroll taxes. Of course if no one is working then this will not amount to a lot- but every relief helps and I would encourage you to do this. You will need to work with your payroll provider if given the extension.
What if I can’t file or pay my payroll taxes on time because of COVID-19?
With the Governor’s emergency declaration, if your business is directly affected by COVID-19, you can request up to a 60-day extension to file your state payroll reports and deposit state payroll taxes without penalty or interest. The written request for extension, noting the impact of COVID-19, must be received within 60 days from the original delinquent date of the payment or return. For the address to send the request, along with other information, please see the State of Emergency or Disaster Fact Sheet (DE 231SED) (PDF).
You can also call the EDD Taxpayer Assistance Center with any questions you may have about your payroll tax responsibilities.
• Toll-free from the U.S. or Canada: 1-888-745-3886
• Hearing impaired (TTY): 1-800-547-9565
• Outside the U.S. or Canada: 1-916-464-3502
Start the conversation immediately by phone- not email. Full abatement, partial abatement- whatever you can get them to consider. The Force Majeure provision in your lease will not usually help you in this situation as it most likely does not include “Acts of God”, so your best strategy is an honest conversation about what you are going to need to do to stay in business.
On March 12, the SBA announced that it will work with state governments to provide targeted, low-interest disaster recovery loans to small businesses severely impacted by the outbreak. You can find out more about these loans and how to access them here: SBA Loan Info
Please see the information flyer we have prepared for our clients at the following link: https://www.krostcpas.com/accounting-news/how-to-secure-an-sba-loan-if-your-business-is-impacted-by-the-coronavirus-covid-19
Please feel free to call me at anything with questions or concerns. We are here to assist you and help you survive this challenge. You, as our client are incredibly important to us both personally and professionally. We will work with you through this crisis and help all of us get back to normal as soon as possible. We continue to work on all our clients’ accounts to ensure that you have good and accurate financial data to use for the various “reliefs” that will present themselves. We are monitoring every possible advantage that we can find for our clients and their business.
Stay safe and healthy- we are here if you need us.