The Department of Labor (“DOL”) released a number of “Frequently Asked Questions” related to the FFCRA: https://www.dol.gov/agencies/whd/pandemic. The three main takeaways are:

1. The effective date of the FFCRA is April 1, 2020.

2. Employers are required to post additional labor law posters regarding the FFCRA. Copies of those posters can be found here and here.

3. The DOL has not yet issued regulations related to businesses with fewer than 50 employees claiming exemptions from the new law. In response to the question “how do I take advantage of the small business exemption?,” the DOL advises that small business owners should document why complying with FFCRA “would jeopardize the viability of the business as a going concern.” The DOL also notes that business owners should not send materials to the DOL in an attempt to qualify for the exemption.

In an attempt to “flatten the curve” and prevent the spread of COVID-19/Coronavirus, Mecklenburg County has issued a stay-at-home order for all County residents beginning on Thursday, March 26, 2020 at 8 a.m. and effective through April 16, 2020. This order encourages all county residents to stay in their residence for the next 21 days except when engaging in or providing essential activities and services.

Some examples of essential activities include going to the grocery store, warehouse store, or pharmacy, going to a restaurant for take-out or delivery, receiving medical care that you cannot obtain virtually, caring for a family member or friend, traveling to and from a job performing an essential service, and going outside to walk pets or exercise (while
maintaining a safe distance of at least six feet between you and another person).

For business owners, it is important to know what types of work are considered essential and thus do not need to transition to complete “work-from-home” operations while this order is effective. Businesses and types of work that are considered essential include the following:

     1. Healthcare and Public Health Operations: This includes all healthcare workers in hospitals; healthcare workers
where medical or dental care cannot be provided virtually, pharmacy personnel, mental health and substance abuse
providers, reproductive healthcare providers, home healthcare service providers, collectors of blood or plasma,
pharmaceutical and biotechnology companies, and other healthcare workers or suppliers that assist with or provide
services for healthcare operations
     2. Essential Infrastructure: This includes food production, distribution, and sale,distribution centers, construction,
building management and maintenance, operations of utilities such as water, gas, sewage, electricity, collection and
removal of garbage and recycling, oil and biofuel refineries, airport operations, maintenance of roads and public
transportation, cybersecurity, internet, video, and telecommunications systems
     3. Human Service Operations: This include long-term care facilities; residential settings and shelters for adults and
children, including seniors, or people with disabilities, substance abuse disorders, and/or mental illness,
home-based services for such individuals, field offices relating to the provision and/or determination of eligibility for
basic need services, developmental centers, adoption centers, or businesses providing food, shelter, social services,
and other basic necessities of life to disadvantaged or needy individuals
     4. Essential Government Functions: This includes first responders, dispatchers, court personnel, law enforcement
and corrections personnel, hazardous materials responders, child and adult protection services, housing and shelter
personnel, military; and other employee working to support essential businesses or operation
     5. Stores Selling Groceries and Medicine: This includes grocery stores, pharmacies, certified farmer’s markets,
convenience stores, pet supplies, stores selling fresh meats, fish, and poultry, stores selling alcoholic beverages,
and stores selling household consumer products, such as cleaning products or personal care products
     6. Food, Beverage, and Agriculture: This includes food and beverage manufacturing, production, processing,
cultivation, including farming, livestock, fishing, baking, distribution of animals and good for consumption, providing
food, shelter, and other necessities for animals. This also includes animal shelters, animal rescues, kennels, and
adoption facilities.
     7. Hardware and Supply Stores
     8. Information and Media: This includes media, such as television, radio, newspapers, and communication
​and information technology, such as internet service providers and IT
     9. Businesses Essential to Transportation Services: This includes airlines, taxis, public transportation,
transportation network providers (such as Uber and Lyft), other transportation and logistics necessary to facilitate
essential activities or essential business operations, vehicle rental, logistics, gas stations, auto-supply and auto-
repair and related facilities, and bicycle shop and related facilities
     10. Financial Institutions: This includes banks, currency exchange, and consumer lenders, including but not limited,
to payday lenders, pawnbrokers, consumer installment lenders and sales finance lenders, credit unions, appraisers,
title companies, financial markets, trading and future exchanges, affiliates of financial institutions, entities that issue
bonds, related financial institutions, and institutions selling financial products
     11. Mail and Shipping/Delivery Services: This includes post offices and other businesses that provide shipping and
delivery services, businesses that ship or deliver groceries, food, goods or services to end users or through
commercial channels
     12. Educational Institutions: This includes all public and private educational institutions from pre-K through college
and university and which may only operate for purposes of facilitating distance learning, performing critical research
related to COVID-19, or performing essential operations as defined below
     13. Public Works and Utilities: This includes energy, water and wastewater, transportation and logistics for the
County, and businesses handling hazardous materials
     14. Organizations Providing Charitable and Social Services: This includes both businesses and nonprofits (both
religious and secular) providing food, shelter, and social services, such as homeless shelters, services to help the
economically disadvantaged or disabled, and food banks
     15. Home-based Care and Services: This includes home-based care for adults, seniors, children, people with
disabilities. This includes nannies who may travel to a child’s home to provide care and meal delivery services.
     16. Residential facilities and shelters: This includes facilities for adults, seniors, and children, and/or people with
disabilities, substance abuse disorders, or mental illness. Some examples include nursing homes, assisted living
facilities, and homeless shelters
     17. Childcare Centers: This is limited to childcare for employees providing essential services such as first
responders, healthcare workers, public health, health and human services staff, and others responding to COVID-19
     18. Restaurants for Off-Site Consumption: This is limited to restaurants offering curb-side pick-up, delivery
services (through the restaurant or third-party delivery service), or drive-thru. No on-site consumption is permitted.
     19. Hotels and Motels: Operations are limited to lodging and providing carry-out or delivery food
     20. Laundry Services: This includes laundromats and dry cleaners, both industrial and commercial
     21. Funeral Services: This includes cremation, burial, cemetery and related services.
     22. Professional Services: This includes legal, accounting, insurance, and real estate (restricted to appraisal and
title services)
     23. Construction and Critical Trades: This includes tradespeople providing services such as building and
construction and related services such as plumbers, electricians, exterminators, cleaning and janitorial staff for
commercial and governmental properties, security staff, operating engineers, HVAC, painting, moving and relocation
services, and other service providers who provide services that are necessary to maintaining the safety, sanitation,
and essential operation of residences, essential activities, and essential businesses
     24. Business manufacturing or providing supplies to work from home
     25. Businesses providing supplies for essential business and operations: This includes businesses
manufacturing such products or providing support, such as computers, audio-visual electronics, household
appliances, IT and telecommunication equipment, hardware, heating, cooling, and plumbing equipment, firearm and
ammunition suppliers for purposes of safety and security, optics and photography equipment, medical and
orthopedic equipment
     26. Manufacturing, distribution, and supply chain: This is limited to critical products and industries. This includes
manufacturing companies, distributors, and supply chain companies producing and supplying essential products and
services related to healthcare, pharmaceuticals, technology, biotechnology, chemicals and sanitation, waste pickup
and disposal, food and beverage, transportation, energy, national defense, steel and steel products, petroleum and
fuel, mining, construction, communications, and other products used by essential businesses

All non-essential businesses must reduce operations except for “minimum basic operations,” which means operations limited to those activities necessary to maintain and preserve the value of the business (including maintaining inventory, preserving condition of the business’s physical location and/or equipment, ensure security, process payroll and employee benefits) or facilitate employees being able to work from home. Some examples of non-essential businesses are gyms and recreational centers, theaters, shopping malls, museums, sporting and entertainment venues, salons and spas, bowling alleys, and skating rinks.

While essential businesses are allowed to continue operating, it is important to establish education and protocol for allowing employees to continue doing their jobs while minimizing the risk of exposure among employees and others. This includes continuing to practice social distancing practices of maintaining at least six feet between employees and customers, enhanced sanitation protocol and access to sanitization products, separating vulnerable employees or populations when applicable, and maintaining communication with employees so that they may be able to reach their employer remotely if necessary.

Finally, the County has ordered that all public and private gatherings of more than 10 people are prohibited (except where they reside in the same house).

Yesterday, Congress passed the Families First Coronavirus Response Act, and the day before Governor Cooper issued an Executive Order expanding unemployment insurance benefits.  The President has not yet signed the federal act into law, but it is anticipated that he will do so immediately.

Unlike the regular Family Medical Leave Act (“FMLA”), The Families First Coronavirus Response Act (FFCRA) would apply to an employer with fewer than 50 employees. Both the proposed FMLA changes and the proposed paid sick leave would take effect 15 days after enactment and would remain in place only until the end of 2020. There are there separate acts within the FFCRA that are relevant to business owners.

1) Emergency FMLA Expansion Act (EFMLAEA)
          a. Unlike regular FMLA, this would apply to employees if they had been employed at least thirty days.
          b. Eligible employees get 12 weeks of FMLA leave if they have to miss work (or cannot telework) because they have to stay home with children if the school is closed more than five consecutive days.
          c. FMLA leave is unpaid for the first two weeks. However, the employee can choose to use their own paid sick leave (or the emergency paid sick leave granted below).
          d. After the first two weeks, employers are required to pay the employee at a rate greater than or equal to 2/3 the employee’s rate of pay.
          e. Leave is capped at $200 per day and $10,000 in the aggregate.
          f. This is in addition to benefits already available under the FMLA.
          g. The Department of Labor has explicit authority to create regulations that would “exempt small businesses with fewer than 50 employees from the requirements of the EFMLAEA when the imposition of such requirements would jeopardize the viability of the business.”*
          h. While the FMLA generally requires employers to restore covered employees to the job they had before they took leave, employers with fewer than 25 employees would not be required to if the employee takes leave under this Act and their position no longer exists due to economic conditions or other changes in the employer’s operating conditions that (1) affect employment and (2) are caused by the public health emergency during the leave period. However, the employer must make reasonable efforts to restore the employee to a position equivalent to one they held when leave began (i.e., equivalent benefits, pay, terms and conditions of employment). Additionally, the employer would be required to make reasonable efforts to contact the employee if an equivalent position becomes available during the one year period beginning on the earlier of (i) the date on which the qualifying need related to public health emergency concludes, or (ii) the date that is 12 weeks after the date on which the employee’s public health emergency leave commences.

2) Emergency Paid Sick Leave Act
          a. If an employee takes leave due to being quarantined or ordered isolated, a diagnosis of Coronavirus, showing symptoms of the Coronavirus, being ordered to stay home due to exposure to Coronavirus, staying home to care for a sick or exposed person, or staying home with children, an employer must pay two full weeks of paid leave (part time employees will be paid according to the number of hours they work on average).
          b. Leave is capped at $511 per day and $5,110 in the aggregate to care for themselves and $200 per day and $2,000 in the aggregate to care for another.
          c. This leave would be in addition to any employer-provided leave, and employers would not be permitted to change their leave policy.
          d. An employee can take this leave no matter how long they’ve been employed (no thirty-day requirement).

3) Tax Credits for Paid Sick and Paid Family and Medical Leave - Covered employers would be provided payroll tax credits to cover the wages paid to employees under the sick leave and family medical leave programs described above.
               
                               *We have no idea when regulations would be issued and what they would say.

During this unprecedented time, we are open – albeit, conducting meetings via telephone and video conference – and ready to assist you with any legal questions you might have about any of the following (and more):

• Working remotely
• Ramifications of closing your business
• Liability for remaining open for business or holding events
• Employee wage issues, including the pending employment law (federal legislation has passed the House, but not Senate)
• What happens if you cannot perform as required under your contract
• What happens if your vendor cannot supply as required under your contract
• Do you have to issue refunds?
• Should you amend contracts now?
• SBA Disaster Assistance Loans for Small Businesses 
• Interpretation of business interruption insurance clauses

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The beauty of being a technologically advanced firm is that really very little will change. All of our systems are already cloud based, we have e-signature and credit card processing via email, and we can do telephone and video Zoom meetings as requested!

For our clients with court matters: The Chief Justice of the North Carolina Supreme Court has postponed most court hearings indefinitely (excepting emergency hearings). However, court filing deadlines are still in effect.  

We are asking our clients to allow our team to mail in court filings instead of hand delivering them to the courthouse.  This will result in a delay, and for probate matters, it may result in a substantial delay. We need to lead by example. We hope you understand. 

For our estate planning clients: As of right now, we can still hold signing ceremonies if it is really important to our clients that their documents are executed soon.  We do not want to delay considering we could be “social distancing” for an extended period of time. However, this only applies to our clients who are not sick, have not been around someone with flu-like symptoms, and are comfortable coming into the office. We will be taking extra precautions surrounding the signing ceremonies like not shaking hands or sharing pens.  We will clean thoroughly before and after each appointment.
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We could also utilize a clipboard and do signings through a cracked car window. Another option is to mail your documents to you along with detailed instructions, but this only works if you have access to two unrelated, non-beneficiary, non-healthcare worker witnesses and a third person who is a notary. Our ability to make on-the-spot edits would be limited in these two circumstances.

For our elderly or immune-compromised clients: Please let us know if there is anything we can do to assist you in getting food or supplies.  We are happy to simply drop at your door.

By Associate Attorney Danielle Nodar
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After completing the numerous steps to form a business, business owners sometimes forget that they have to file annual reports with the North Carolina Secretary of State to keep their business active.

Each Business Corporation, Limited Liability Company (LLC), Limited Liability Partnership (LLP), and Limited Liability Limited Partnership (LLLP) must file an Annual Report. Limited Partnerships, Professional Corporations (PCs), and
Professional Limited Liability Companies (PLLC’s) do not have to file an Annual Report.

The due date for your business’s annual report depends upon the type of business. For corporations and partnerships (LLP and LLLP), the annual report is due to the Secretary of State’s Office the 15th day of the fourth month following the entity’s fiscal year’s end. For example, if your fiscal year ends on December 31, your annual report for that year is due on April 15th. The due date for LLC’s Annual Reports is April 15 each year after the date of creation. There is also a fee due each year when filing the Annual Report. For LLC’s and partnerships, the fee is $200 and for corporations, the fee is $25.

Businesses can file their Annual Report to the Secretary of State’s Office by mail, or they can file their Annual Report and pay the fee online via the Secretary of State’s website.

The Annual Report is used to keep the business records on file with the North Carolina Secretary of State up to date. On the Annual Report, you will provide basic information about your business, such as the nature of the business, the name and address of the registered agent, the principal address of the business, and the names and signatures of company officials.

The consequence for not filing an Annual Report and/or paying the fee is that the Secretary of State can administratively dissolve your business for failing to file the Annual Report. This means that you will lose the liability protection you enjoy by being a formal business, and a creditor can come after your personal assets.

It is important for business owners to make sure their registered agent information and email address is current throughout the year because the Secretary of State sends notices related to the Annual Report to the registered agent and the email it has on file for the business. We see a lot of businesses get dissolved and the owner does not even know because they have not updated their registered agent’s information in years (or paid their professional registered agent’s fee, who promptly drops them as a client).

If you are a business owner and have questions about filing your Annual Report or reinstating a business that has been dissolved for failure to file an Annual Report, contact Jesson & Rains.