The Families First Coronavirus Response Act (FFCRA), which the President signed on March 18, 2020, is emergency legislation intended to help employers maintain pay for employees who cannot work due to COVID-19 reasons.

On April 10, 2020, LA County issued a new order further clarifying its shelter in place order, making it clear that all non-essential in-store retail must cease. The order explicitly states remote sales of vehicles are not restricted by the order if the vehicles are delivered to a residence or Essential Business. This means that any car dealer currently offering in-store sales, even if limited to appointment only or for essential workers, must discontinue those sales. If the dealership wants to continue retail sales, it should conduct those sales remotely, being sure to follow state and federal regulations to avoid potential liability.

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.

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.

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.

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.

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.

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.

On February 27, 2020, the California Assembly voted on whether to allow for an emergency vote on Assembly Bill 1928. If AB1928 had been brought to a vote and passed, it would have taken effect immediately as an urgency statute to repeal the so-called “ABC test” set forth in the 2018 California Supreme Court case Dynamex Operations W. Inc. v. Superior Court. As we previously reported, the Dynamex ABC test was codified in AB5, which took effect on January 1, 2020 and which creates a difficult standard for businesses to meet in order to classify a worker as an independent contractor instead of an employee.

In December of 2019, a Florida car dealership was hit by a ransomware attack. This sophisticated style of data security attack breaks into a network and locks access to email, databases, and other essential files and programs. The hackers typically then demand a large payment in the form of an untraceable financial instrument. In this case the hackers demanded 65 Bitcoins, roughly equivalent to $600,000, to restore access to the dealership’s systems.

Law firm Scali Rasmussen announced today that Nima Kamali has returned to the Firm’s litigation practice and will be based out of its Los Angeles office.