By Shaun Pearman
Top Ten Takeaways From the Corona Virus
During these trying times, we are being bombarded with a plethora of information, some of which is confusing. Here are my top ten takeaways you need to know:
- MAKE YOUR CONFIDENTIAL HOME WORKING CONFIDENTIAL: When working from home, be sure to shut off your Alexa, Hey Siri, Google Home, and any other voice activated listening devices because they constantly record to their servers and then use computers to know when to respond to you. Your confidential work information is not confidential if these devices are on.
- APPLY QUICKLY FOR GOVERNMENT MONEY: If you are applying for one of the government programs, apply immediately lest they run out of money and close down the program and you get nothing. Your accountant’s office is a great place to begin your journey on these programs because most have been taking training classes on the programs.
- GET THE RIGHT INSURANCE COVERAGE:
- If you are working from home, you should add “occasional business use” to your homeowner’s or renter’s policy. And, no harm in asking your employer to pay for the additional premium for this endorsement.
- If you are a business that does deliveries or pickups in any way, such as your employees delivering or contractors delivering food (e.g., Door Dash or Uber Eats), make sure you have “hired and non-owned auto” coverage. This is an endorsement your business can add to your existing liability policy.
- All insurance policies exclude coverage for pandemic viruses. However, check with your insurance company to verify what they do cover, such as if someone is infected at your home or business, would do you have coverage for alleged negligence?
- Worker’s Compensation may be available to provide coverage if your employee gets the virus while at work.
- READ THE ACTUAL EMERGENCY ORDERS: The virus orders have frequently changed. Do not rely on the television news, but instead you should locate and then read the actual orders for yourself to make sure what is legal and what is not. You can find the actual orders on the official government websites. And, do not forget that there may be orders from multiple jurisdictions, all of which apply to you. So, look for orders from the Governor, the Colorado Department of Public Health & Environment, your city and county health departments. Remember, if any orders conflict, the rule of thumb is that the most restrictive order applies to you.
- PREPARE YOUR CRITICAL AND ESSENTIAL BUSINESS CERTIFICATION: If your business is designated as critical or essential, you should get from your employer, or create it if you are the employer, original, signed certification letters for every employee to carry with them to show law enforcement if pulled over when going to or from work. The Colorado Department of Public Health & Environment has a self-certification form at https://covid19.colorado.gov/sites/covid19/files/Critical%20Business%20Self%20Certification.pdf Your business may want to complete this self-certification form and create their own signed, descriptive letter for each of their employees to carry along with a copy of the self-certification.
- SECURE YOURSELF AND YOUR THINGS: Make sure that the windows and doors of your house, car, and business are locked when you are not around. Also, there are many do-it-yourself, easy to install home camera systems such as Blink and Google Nest that will allow you to watch remotely. The courts have been doing early releases of inmates who would otherwise have been in jail. There is no need to panic, but now is the time to be more circumspect and careful in all that you do.
- SELECT YOUR VIDEO MEETING PROVIDER CAREFULLY: There are many platforms out there for video conferences. Zoom has become the more popular one, due to its ease of use and the fact that it is free for entry level users (up to 40 minutes per videoconference). But Zoom has received criticism because hackers have been interfering with conversations and meeting recordings have been made public. It has a great feature which allows you to easily share your screen with the others on the Zoom meeting. Apple’s Facetime is one of the easiest to use and is fully encrypted from end to end. If your business is handling any confidential matters, get advice from an IT expert on which videoconference platform is best for you.
- YOU NEED A “BEST PRACTICES” HEALTH AND SAFETY PLAN: It is now critical that you determine, write out and implement a “best practices” plan on how to disinfect your business and protect your workers and customers from the virus. Wearing a mask may help protect you and may be mandated in some places at least for now. Properly clean and sanitize your mask if you use it over. Bleach may be the best, least expensive, and most easily obtained cleaner and disinfectant for surfaces. You can dilute it and use it in a spray bottle. Wear gloves when you clean. And do not forget that your hair and shoes can pick up and carry microorganisms. Consider cleaning the soles of your shoes with a good disinfectant before walking into your house, or better yet, remove them at the door. And consider covering your hair during the day and washing it before bed at night to prevent depositing bugs on your pillow if you are possibly exposed to the virus. Remember, heat kills viruses (try for at least 118°), so it is possible that blow drying your hair may be an alternative to washing it so often.
- BEWARE OF THE PITFALLS OF INDEPENDENT CONTRACTORS vs. EMPLOYEES: If you are out of a job, can you become an independent contractor to help make ends meet? Or, if you are a business wanting to save money, can you hire independent contractors instead of employees to save money? Here are some rules of thumb:
If you are a business hiring an independent contractor:
- If the independent contractor you are hiring passes the tests that Pinnacol Assurance (the Colorado Worker’s Compensation program) has on its form on its website, then you MIGHT HAVE hired a qualifying independent contractor. See: https://www.pinnacol.com/knowledge-center/declaration-of-independent-contractor-status
- When you pay an independent contractor, ALWAYS write the check to a trade name or corporation. NEVER write the check to an individual.
- Make sure that your independent contractor provides you a copy of their certificate of insurance for both worker’s compensation and general liability. Some independent contractors opt out of worker’s compensation and carry health insurance instead, so if that is the case with your independent contractor, get proof but be aware that you are still at risk if he or she gets hurt doing work for you.
- You could be considered to be a “statutory employer” if you hire someone you think is an independent contractor but they are not. What this would mean to you is if the person is hurt on the job and had no worker’s compensation insurance, you are the insurance company and you pay ALL the money that worker’s compensation would have paid or does pay, including lost wages, permanent impairment damages, and all medical bills, plus possible fines and attorney fees. This could be catastrophic to your business and you personally if you are not operating your business correctly or you personally guaranteed the worker’s compensation expenses (which is standard on their forms).
- You must be correctly operating as an entity, such as a corporation or a limited liability company, and NEVER be operating as a sole proprietorship if you are hiring independent contractors. If you are not already an entity, you need to become one. The two most common examples are S corporations and limited liability companies. Get advice from your tax preparer as to which entity type is best for you.
If you are an individual wanting to become an independent contractor:
- Ask your tax preparer which type of entity is best for you, and then form an entity such as a corporation or an LLC. If you form a corporation, you most likely need to make an S Election with the IRS, which is due in 75 days from the entity formation date.
- Get insurance – general liability, auto, and either worker’s comp or health insurance. If you can afford short and/or long term disability insurance, get it as well.
- Get a bank account and checks in your new entity’s name.
- Do not mix your personal and business expenses – only do business activities out of your business checking account, including paying yourself a paycheck when you need money and then depositing that check into your own personal checking account.
- EVICTIONS, FORECLOSURES AND LATE FEES ARE TEMPORARILY PROHIBITED ON “COVERED DWELLINGS”:
- a. Congress’s recently enacted the C.A.R.E.S. Act, Section 4024, Temporary Moratorium on Eviction Filings, prohibits most Landlords from evicting tenants or charging late fees, and most lenders from foreclosing on defaulted loans. This is temporary so it goes for 120 days from March 27, 2020 (i.e., July 25, 2020, but keep watching because it seems likely Congress may extend this). This law covers residential real properties which are financed by a federally backed loan or which are participating in other federal programs. It appears that most, but not all, residential properties are covered by this law. But even if this law did not stop evictions, many courts have done the same thing by no longer accepting new eviction case filings. Most importantly, all landlords are required to send a written notice of these “federal protections” to all their tenants pursuant to Executive Order D 2020 051, issued by the Governor of Colorado. And, this notice requirement seems to apply to all rental properties, including commercial, industrial, and residential. If you are a landlord, contact us and we will send you a template to use for giving this notice of federal protections to your tenants.
- b. Loan Defaults: The word is that most lenders are willing to work with borrowers who cannot pay. Borrowers beware, though! A “forbearance” usually means that you do not have to pay your payments now, but you will have to pay all the missed payments later in one lump sum. For example, if your mortgage is $1,000 per month and you ask for a six month forbearance, you will owe a lump sum of $6,000 all at once in six months from now. This could become a big problem for you later. A loan “modification” is much different – it means your loan is modified, which will allow you to go a few months without any payments but you will have more months of payments due (basically adding the missed payments to the end of the loan). A loan modification is what you should ask for in most circumstances, but they are harder to get.