fbpx

This Blog addressed state relief, benefits available to small businesses, and Governor Gavin Newsom’s actions impacting health care workers during the COVID-19 pandemic.

Tax Benefits

Relief for Business Taxpayers

Governor Gavin Newsom signed executive order N-40-20[1] granting additional relief for business taxpayers. Small businesses now have until July 31, 2020 to file first quarter returns. The order classifies small business as business filing tax returns for less than $1 million.[2]

The California Department of Tax and Fee Administration (CDTFA) announced that small businesses have an additional three months to file returns and pay taxes.[3] Additionally, all business have an extra 60 days to file claims for a refund from CDTFA or to appeal a CDTFA decision to the Office of Tax Appeals.

The extension applies to small businesses, which is a business filing a return for less than $1 million in taxable income.[4] The same provisions apply to the other tax and fee programs administered by CDTFA. Taxpayers need not file for an extension or request relief from penalty or interest; it is automatic through July 31, 2020.

Small Business Relief Payment Plans

CDTFA offers immediate interest free payment plans. Small business may defer up to $50,000 of sales and use tax liability for 12 months.[5]

Under this program, qualifying business can enter payment plans to distribute up to $50,000 of sales tax liability over a 12-month period, interest free. For taxpayers deferring their first quarter 2020 liability, up to $50,000 of the obligation would now be paid in twelve equal monthly installments with the first payment not due until July 31, 2020.

This allows small business owners to spread out financial obligations over a year with no interest and no penalties.[6]

The payment plans are in addition to the previous assistance CDTFA has rolled out to small business for any tax and fees administered by CDTFA:

  • Providing a three-month extension for a tax return or payment to any businesses filing a return for less than $1 million in tax. For the approximate 99.5% of business taxpayers below the $1 million threshold for their California sales and use tax obligation, returns for the 1st quarter 2020 will now be due on July 31, 2020.
  • All businesses will have an extra 60 days to file claims for refund from CDTFA or to appeal a CDTFA decision to the Office of Tax Appeals.[7]

If your business does not fall within the parameters, please contact the local CDTFA office because they retain administrative flexibility to assist businesses needing relief.[8]

At this time, the program is only available for sales and use tax liabilities. There are health related exemptions from sales and use tax.[9] This may not benefit physical therapists unless they sell goods or products in addition to services. Generally patient services are not taxable.[10]

Displaced Workers

Resources

Governor Newsom joins Bitwise Industries and Kapor Centers to launch onwardca.org.[11] This new platform will connect displaced California workers with over 70,000 job opportunities in critical industries.

The platform will connect the displaced workers with essential life services, retraining opportunities, and ultimately their next job.

On April 2, 2020, the Governor also announced that $17.8 million in new state initiatives will support California workers affected by COVID-19.[12] The allocation will come from Workforce Innovation and Opportunity Act funds with $7.8 million going to the Los Angeles region and $10 million provided statewide.

Unemployment Benefits

Unemployment benefits provided by the Employment Development Department (EDD) have also been altered.[13]

  • Unemployment insurance to eligible workers who become unemployed or partially unemployed.
  • Benefits available to otherwise eligible employees laid off due to the impact of COVID-19.
  • Workers temporarily laid off because of COVID-19 who expect to return to work with the same employer within a few weeks do not have to actively seek work each week they are unemployed if they remain able, available, and ready to work during their unemployment and meet other eligibility requirements.[14]
  • The otherwise applicable one week waiting periods has been waived for claims relating to COVID-19.

Disability Insurance

Disability insurance is provided to those unable to work due to non-work related illness, injury, or pregnancy.[15] This disability insurance program provides short-term benefit payments to eligible workers who suffer a full or partial loss of wages – approximately 60-70 percent of wages, depending on income, ranging from $50-$1,300 a week for up to 52 weeks.

This program covers otherwise eligible employees who are able unable to work due to medical quarantine or medically-certified illnesses related to COVID-19. The one week waiting period usually association with disability insurance has been waive for claims related to COVID-19.

Program Unable to work reason Duration Pay
Disability Insurance[16] medical quarantine or illness related to COVID-19[17] Short term benefit payments to eligible workers with full or partial loss of wages due to non-work related illness, injury, or pregnancy Approximately 60-70 percent of wages (depending on income); ranges from $50-$1,300 a week for up to 52 weeks.
Paid Family Leave[18] caring for an ill or quarantined family member with COVID-19 (certified by a medical professional) Up to six weeks of benefit payments to eligible workers with a full or partial loss of wages Approximately 60-70 percent of wages (depending on income); ranges from $50-$1,300 a week for up to 6 weeks.
Unemployment Insurance[19] If you have lost your job or have had your hours reduced for reasons related to COVID-19 Partial wage replacement benefit payments to workers who lose their job or have their hours reduced Range from $40-$450 per week for up to 26 weeks.
Paid Sick Leave[20] you or a family member are sick or for preventive care when civil authorities recommend quarantine The leave you have accumulated or your employer has provided to you under the Paid Sick Leave law. Paid to you at your regular rate of pay or an average based on the past 90 days.
Workers Compensation[21] unable to do your usual job because you were exposed to and contracted COVID-19 during the regular course of your work temporary disability (TD) payments, which begin when your doctor says you cannot work for over three days or you are hospitalized overnight.[22] TD generally pays two-thirds of the gross wages you lose, up to maximum weekly amount set by law.[23]

 

Business Functions

Telehealth Services

To minimize the opportunity for exposure to COVID-19, Governor Gavin Newsom signed executive order N-43-20 on March 4, 2020.[24]

The executive order allows further protection to medical providers to promote the use of video chats and similar applications to provide routines and non-emergency medical appointment. The state privacy and security laws for medical providers are also relaxed without the risk of being penalized.

  • Telehealth services include the use of telehealth services to engage in the provision of behavioral or mental health services, in additions to using telehealth services to engage in the provision of medical, surgical, or other health care services.[25]
  • A health care provider need not document or obtain verbal or written consent before using telehealth services.[26]
  • There are no penalties associated with inadvertent, unauthorized access or disclosure of health information during the good faith provision of telehealth services.[27]
  • Including administrative, criminal, and civil penalties

Medical Supplies

Executive order N-44-20 expanded consumer protection against price gouging as California responds the COVID-19 pandemic.[28] The executive order provides the Department of Justice additional tools to act against price gougers.

  • A person or other entity – including, but not limited to, any business enterprise of any kind – shall not from April 4, 2020 until September 4, 2020, and except as set for the below, sell or offer to sell any item from among these categories of goods for a price that is over 10 percent greater than the highest price charged by that person or entity for that item on February 4, 2020:
  • Food items;
  • Consumer goods;
  • Medical or emergency supplies; and
  • Any other materials designated by the US Secretary of Health and Human Services as Scarce Material or Threatened Material under section 102 of the Defense Production Act[29]
  • A price increase of greater than 10 percent specified above shall not be unlawful if the seller can prove either of:
  • The increase was directly attributable to additional costs imposed on the seller by suppliers of the item, and the price is no more than 10 percent greater than the total of the cost to the seller plus the markup customarily applied by the seller for that item in the usual course of business on February 4, 2020; or
  • The seller was offering the item for sale at a reduced price on February 4, 2020, and the increased price is not over 10 percent greater than the price at which the seller ordinarily sold the item.

Mortgage and Rental Payments

Executive order N-28-20, protects renters and homeowners by halting eviction for renters and homeowners, slowing foreclosure, and protects against utility shutoffs for Californians affected by COVID-19.[30]

The order does not relieve a tenant from the obligation to pay rent or restrict the landlord’s ability to recover rent due.

The order asks the California Public Utilities Commission to monitor measures undertaken by public and private utility providers to implement customer service protections for critical utilities, including electric, gas, water, internet, landline telephone, and cell phone service weekly.[31]

Executive order N-37-20, builds on the previous suspension of evictions and foreclosures. The order prohibits landlords from evicting tenants for nonpayment of rent and prohibits enforcement of evictions by law enforcement or courts. It also requires tenants to declare in writing, no more than seven days after the rent comes due, that the tenant cannot pay all or part of their rent due to COVID-19.[32]

This ban of eviction orders is through May 31, 2020. The tenant must retain documentation but not required to submit it to the landlord in advance. Again, the tenant remains obligated to repay full rent in a timely manner and could still face eviction after the enforcement moratorium is lifted.

What’s Next

Employers need to stay in close contact with their legal counsel because of the constantly evolving legal atmosphere and other employment issues arising from COVID-19. For further questions or assistance, please contact Simas & Associates at 888.999.0008 or info@simasgovlaw.com.

[1] https://www.gov.ca.gov/wp-content/uploads/2020/03/3.30.20-N-40-20.pdf.

[2] Executive Order N-40-20.

[3] Id.

[4] Id.

[5] Executive Order N-40-20.

[6] Id.

[7] https://www.cdtfa.ca.gov/news/20-07.htm.

[8] https://www.cdtfa.ca.gov/news/20-07.htm.

[9] See Cal Rev & Tax Code Div. 2, Pt. 1 et seq.

[10] See Cal. Rev. & Tax Code §§ 6369, 6369.2, 6401 et seq.

[11] https://www.gov.ca.gov/2020/04/02/governor-newsom-announces-new-help-for-small-businesses-workers-displaced-by-covid-19/.

[12] Id.

[13] https://edd.ca.gov/unemployment/eligibility.htm.

[14] Id.

[15] https://www.edd.ca.gov/about_edd/coronavirus-2019/faqs.htm#DIBenefits.

[16] https://www.edd.ca.gov/disability/am_i_eligible_for_di_benefits.htm.

[17] Labor.ca.gov (illness certified by medical professional).

[18] https://www.edd.ca.gov/disability/Am_I_Eligible_for_PFL_Benefits.htm.

[19] https://www.edd.ca.gov/unemployment/eligibility.htm.

[20] https://www.dir.ca.gov/dlse/paid_sick_leave.htm.

[21] https://www.dir.ca.gov/InjuredWorkerGuidebook/InjuredWorkerGuidebook.html.

[22] See https://www.dir.ca.gov/InjuredWorkerGuidebook/InjuredWorkerGuidebook.html (You may be entitled to TD for up to 104 weeks. TD stops when either you return to work, your doctor releases you for work, or your doctor says your illness has improved as much as it’s going to).

[23] See https://www.dir.ca.gov/InjuredWorkerGuidebook/InjuredWorkerGuidebook.html (In addition, eligible employees are entitled to medical treatment and additional payments if a doctor determines you suffered a permanent disability because of the illness).

[24] Executive Order N-43-20 https://www.gov.ca.gov/wp-content/uploads/2020/04/4.3.20-EO-N-43-20.pdf.

[25] Id.

[26] Id., see also Bus. and Prof. Code § 2290.5(b).

[27] Id. see also Civ. Code §§ 56.35, 1798.29, 1798.82, Health and Saf Code §§ 1280.15, 1280.17, Wel & Inst Code § 14100.2, Bus & Prof. Code § 725 et seq.

[28] Executive Order N-44-20.

[29] See 50 USC § 4512.

[30] https://www.gov.ca.gov/2020/03/16/governor-newsom-issues-executive-order-to-protect-renters-and-homeowners-during-covid-19-pandemic/.

[31] Id.

[32] https://www.gov.ca.gov/2020/03/27/governor-newsom-takes-executive-action-to-establish-a-statewide-moratorium-on-evictions/, see also Executive Order N-37-20.