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.
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.
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.
We’ve been getting a lot of questions about how the tax credits work in the Families First Coronavirus Response Act (FFCRA) as there has been a lot of confusion among business leaders and attorneys. We have recently seen some guidance that helps break it down and hopefully answers some of your questions.
We and others have mentioned various competing “stay at home” orders conflict with each other, e.g., State, County and City of Los Angeles, as applied to car sales and whether car sales are considered “essential” thereunder. With guidance issued by the Governor’s office today, it is now clear that the Governor’s order is the applicable order.
Los Angeles County just issued its Order banning the operation of non-essential retail and other businesses, similar to those that have been sweeping across the state and country. It is similar to the “shelter in place” orders issued in the Bay Area, however, the L.A. County Order designates as one of the Essential Services: “…auto-supply, auto repair, car dealerships and related facilities.” This means that car dealership operations can continue in full, and there is no need to close vehicle sales operations. However, dealerships must remember that this is not “business as usual” as they must adhere to other measures under the Order.
Scali Rasmussen has established a COVID-19 Task Force to monitor and respond to the pandemic caused by the novel coronavirus (“COVID-19”). The task force consists of an interdisciplinary group of the firm’s attorneys with decades of experience serving clients in times of crisis and uncertainty.
You may have heard that 6 Northern California counties (Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara) have issued a “shelter in place” order, shutting down all non-essential businesses until April 7, 2020, unless extended. “Essential Businesses” include “gas stations and auto-supply, auto-repair, and related facilities”.
Many employees, especially those who are at worksites that put them in contact with others, are understandably on edge about possible exposure to the virus through their work contacts. Employers have a responsibility to take precautions regarding employee safety and to be prepared for possible incidents of virus exposure.
The California Supreme Court recently held in Frlekin v. Apple that employees’ time spent on the employer’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work by the employees purely for personal convenience is compensable as hours worked within the meaning of Industrial Welfare Commission wage order No. 7-2001, under the “control” test.