More than 40 states have issued “Stay at Home” orders in response to the spread of coronavirus, and more will likely follow. In a nutshell, Stay at Home directs individuals to stay inside their homes unless they need to go out for “essential travel” or “essential activities.”
For small business owners, the order can present interpretation challenges. In determining whether a business remains open fully, remains open with employees working from home, remains open under modified arrangements and a reduced staff, or shuts down completely – depends on some factors that small business owners have never had to decipher before.
For attorneys, this is an opportunity to be of service to their communities. As the owner of a legal services company in Silicon Valley, I experienced this first-hand when pro bono counseling small business owners after California issued its Shelter in Place order. I found that these owners were scared and confused about the future of their businesses. With this in mind, below are questions for attorneys to think about when advising small business owners on Stay at Home orders.
Is the business “essential?”
“Essential” can sometimes mean different things to different people, but in the “Stay at Home” context, what is considered essential is often limited to a subset of necessities for daily life and communities to operate. For instance, food, pharmaceuticals, medical care, electricity, water, housing, and basic transportation, as well as caring for the elderly, children and pets are all part of “essential activities.” Travel to and from “essential businesses” are among the exceptions enumerated in the order.
As you might expect, “essential businesses” are those that provide these “essentials” or support those who provide these “essentials.” There is an extensive laundry list in the order of what is considered an “essential business” so it’s important to understand if your business meets such criteria.
If not essential, then what?
Don’t despair; the business may fall within one of the other categories that offers support or supplies to other essential businesses. For instance, since electricians and plumbers are considered essential businesses, the hardware stores that provide the supplies they need to perform their work are also considered essential businesses and may remain open. But there are gray areas.
Case in point: Should a company that performs blood tests and background checks on home care and senior health center workers be given an exception? Such services are arguably necessary to a clearance for such workers to perform their services which, by the order are defined as “essential.” In my counsel with small business owners, situations like this were many, and weren’t always easily solved.
If the business doesn’t fall into the essential business or essential support categories, it may still be kept open under “minimum basic operations,” meaning it’s operating only to maintain the value of its inventory, to ensure security, or to facilitate other employees to continue working remotely. While not optimal, taking advantage of the “minimum basic operations” provisions is a way to still keep the business afloat, even if only on reduced power.
What if the business isn’t conducive to working from home?
Then small business owners must think creatively to ensure that their businesses stay connected with customers. Fine dining restaurants have retooled to offer less expensive takeout. Craft stores are offering tutorials on Facebook Live and selling their products online. Beauty salon owners have shifted to offer in-home visits. In this environment, they must be willing to pivot in order to survive.
Thousands of owners of what may be considered “nonessential” small businesses are facing the reality of moving operations remotely, reducing their staff, pivoting their business temporarily, or, in the worst case, shutting down. Preparing them for multiple scenarios and providing them with advance knowledge will help alleviate some of the uncertainty and stress that accompanies such outcomes. It will also allow them to focus more on ensuring their most important assets – themselves, their employees and their loved ones – are safe.