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Read the latest news from Scali Rasmussen, including legal alerts and event listings.

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The Mayor of Los Angeles issued a further emergency order on April 7, 2020, regarding the COVID-19 pandemic directed at certain essential businesses, which more likely than not effects some, if not all vehicle service operations. Retail businesses, restaurants, and delivery businesses that are deemed essential are among the effected businesses as well. Businesses subject to the order now have additional requirements for providing masks, hand washing, and social distancing and may refuse service to customers not wearing masks. The new requirements take effect this Friday, April 10, 2020.

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This document is created from Frequently Asked Questions we receive from our clients concerning the application of the Families First Coronavirus Response Act (FFCRA) that are not addressed in our original analysis of the FFCRA. It is not the sole input we have on the FFCRA and its practical effect on you and your business. But in the interest of time and due to the onslaught of questions and triage legal advice we are providing into the wee hours of the night, we are doing our best to provide you with information on only the most commonly asked questions that aren't addressed in our other publications. It will be continually updated as more information comes in from the federal government and agencies.

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On April 1, the City of Los Angeles issued a modified version of its Safer At Home order initially issued on March 19. This order applies only to dealers in the city of Los Angeles. The updated version contains a statement that “no auto dealership shall operate, with the exception of its auto service and parts stores.” This follows closely behind modified orders issued by local jurisdictions in Northern California that require closure of dealership sales operations. The Northern California orders, however, expressly state that they are not intended to prohibit online sales if the vehicle is delivered to an essential business or residence. The Los Angeles City order does not mention online vehicle sales at all.

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Title 1 of the CARES Act is referred to as the “Keeping American Workers Paid and Employed Act.” The “Keeping American Workers Paid and Employed Act” establishes an SBA Loan program called the “Paycheck Protection Program” (PPP) and process for forgiveness of the loan if certain compensation and employment metrics are met. It also expands access to Economic Injury Disaster Loans (EIDL) and provides a subsidy to help businesses repay SBA loans (with the exception of the PPP loans). Below are many of the frequently asked questions about the Paycheck Protection Program portions of the CARES Act...

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Temporary regulations applicable to the Families First Coronavirus Response Act (FFCRA) were released by the DOL today. Among other things, the regulations clarify that state and local shelter in place and safer at home orders and directives do qualify as a quarantine or isolation order for the purposes of emergency paid sick leave (EPSL). However, this leave is available only when an employer is open and operational and has work for the employee to do, but it is the employee who is unable to work due to the order. Thus, if an employer is closed because it is a non-essential business and ordered to close under the state or local order, or the employer is an essential business (and remains open), but experiences a slowdown in customers such that there is no work for the employee, the affected employee would not be entitled to EPSL absent some other qualifying reason. On the other hand, if the employee is scheduled to work or can telework, but experiences some circumstance related to the stay at home order preventing her from working, she can avail herself of the leave.

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In the face of local and state orders mandating individuals to “stay at home” and “shelter in place,” many employers are turning to telework and allowing employees to work from home as a way to maintain business continuity and payrolls. This means non-exempt employees who have never before worked from home face a new reality.

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On March 19, 2020, Governor Newsom issued Executive Order N-33-20 (“Executive Order”) directing all residents to heed current State public health directives. The order directed all individuals to stay home except as needed to maintain continuity of operations of essential critical infrastructure sectors.

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With all of California under a “shelter in place” order from the Governor, car dealers across the state are wondering if their business interruption insurance will cover any of the income lost due to mandatory showroom closures and other disruptions. At first blush, it appears that most insurers will not cover these losses, as most policies only apply where there is damage to the covered building or the immediate vicinity, and others also have exclusions for communicable disease. Nonetheless, depending on the specific wording of your policy and the facts at your dealership, there may be compelling arguments that coverage applies. 

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Yesterday evening, the United States Senate passed the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act.” The bill is expected to be taken up for a vote in the House of Representatives tomorrow morning by voice vote at 9 AM EDT, and President Trump has indicated that he would sign the bill when passed.

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We have been analyzing the effects and interactions of various new laws, including the FFCRA, and have been working to obtain further guidance from various agencies including the DLSE as to these issues. Additionally, the Department of Labor (DOL) issued new guidance on March 24, providing further clarification on interpreting the FFCRA, here are some of the highlights.

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