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Where We Are with COVID In the Workplace

Where We Are with COVID In the Workplace

The Spring of 2022 marks the beginning of the third year of the COVID-19 pandemic.  While many Americans believe the pandemic is over with life returning to pre-pandemic normal, it is certainly not behind us.  The landscape of the pandemic has merely shifted to a new “normal”.  This new normal includes continuing mask mandates, vaccine requirements (including boosters) at some public and private businesses and schools and continued supplemental COVID-19 paid sick leave.  Although the pandemic may appear over when gathered in large groups such as a sporting event, the federal, state and local requirements related to COVID are proof the pandemic is still ongoing.  Below provides a few of the current COVID-19 requirements.

 

COVID-19 Supplemental Paid Sick Leave

In February 2022, Governor Newsom implemented a supplemental paid sick leave for COVID-19 related absences.  A covered employee is entitled to at least 40 hours but no more than 80 hours of supplemental paid sick leave between January 1, 2022 and September 30, 2022 for COVID-19 related absences.  Examples of such absences are: needing to quarantine due to possible exposure to COVID-19, attending a COVID-19 vaccine appointment for themselves or for a family member, experiencing COVID-19 symptoms and seeking a medical diagnosis, caring for a family member, or caring for a child whose school or place of care is closed due to reasons related to COVID-19.

A key component of this supplemental paid sick leave is its retroactivity.  An employee is able to request paid sick leave for a COVID-19 related absence between January 1, 2022 and February 28, 2022, prior to the implementation of the legislation.  While the prior COVID-19 supplemental paid sick leave expired on September 30, 2021, there is nothing to suggest an employee can request paid time off for COVID-19 related leave taken between October 1 and December 31, 2021.

 

Testing and Mask Requirements

CalOSHA continues to modify protocols with regard to testing, close-contact, and return-to-work procedures and has revised certain terms, such as what constitutes a “face covering” to adapt to the changing landscape.  The current Emergency Temporary Standards (ETS) are in effect until December 31, 2022.  The key takeaway from this version of the ETS is it applies to employees without regard of vaccination status. Employers can require employees to submit proof of vaccination and require employees to be vaccinated against COVID-19. Additionally, employers can require employees to wear a face covering, as long as an accommodation is made for those who cannot wear face coverings because of a condition or disability.

 

Protea Financial COVID in the workplace

 

Workplace Safety – Civil Penalties

In September 2021, Governor Newsom signed SB 606, which allows the California Division of Occupational Safety and Health (CalOSHA) to issue company-wide citations for multiple workplace outbreaks of COVID-19. California inspectors may levy a civil penalty against those who are cited between an approximate range of $9,000 to $125,000 for willful violations of workplace safety.

Companies are liable for an automatic penalty, if three or more employees require hospitalization from a COVID-19 outbreak that occurred at their workplace.  These penalties are designed to incentivize companies to maintain safe and healthy work environments.

Employers should carefully review these laws to see where their policies and procedures need updating. The laws can be reviewed in Spanish here.  For example, face coverings are no longer mandatory for unvaccinated workers, COVID-19 testing must be made available to all employees with COVID-19 symptoms, and cleaning and disinfecting requirements were removed. Employers can also view a comprehensive list of changes from the previous Emergency Temporary Standards here. Maier Law Group can provide more guidance if needed to clarify the ever-evolving ETS. Email Info@maierlawgroup.com for a quick response.

This article has been prepared for general informational purposes only and does not constitute advertising, solicitation, or legal advice. If you have questions about a particular matter, please contact the Maier Law Group directly.

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Is It the Right Time to Sell Your Business?

Is It the Right Time to Sell Your Business?

Business owners often ask, “When is the right time to sell my business?”  The answer is some version of “A good time to sell is when there is a seller’s market, and the owner and the business are prepared”.  Simple enough, but there is a lot to unpack in this response.

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Don’t Try to Time the Market 

A seller’s market exists when, because of economic conditions, demand for viable businesses is higher than the supply of businesses on the market.  There are some universal economic metrics that drive demand for businesses like low interest, tax rates and high corporate cash reserves and earnings rates.  When investors are confident about the business environment, they are more likely to pay premiums for their investment targets. 

However, local and industry specific factors are often more important to the creation of a seller’s market.  A mature industry that begins to consolidate may create an industry-specific seller’s market that doesn’t exist in other industries.  The rise of private equity has driven consolidation in many industries.  Also, when a regional competitor embarks on an acquisition growth strategy it may create a localized opportunity for owners in the same industry to sell.

It is wise for a business owner to pay close attention to these market signals. However, owners can’t control supply and demand in the marketplace and are generally better off not trying to time the market.  In the second quarter of 2020, the market for small businesses came to an abrupt halt, dashing the hopes of many owners that were ready to retire.  But by the fourth quarter of the same year the market returned stronger than before.  No amount of prognosticating could have anticipated those market changes.  

Business Preparation is Key 

The preparation of the business is more important to the success of the business sale than the state of the marketplace, and it’s something that the business owner can control.  A well-prepared business is more likely to sell in a soft market, than a poorly prepared business in a strong market. 

It’s been estimated that 80% of US small business owners don’t have a written transition plan and 50% have no plan at all.  A key component of the transition plan is preparing the business for succession.  Many books have been written and teams of professionals deployed to help business owners prepare their businesses for sale.  Conceptually, the buyer of a business is investing with the confidence that the future earnings and growth potential enjoyed by the seller can be transferred to the buyer.  To make the business attractive, the owner must then mitigate the risks in the business and to fortify its opportunities for growth.  The specific measures necessary to prepare the business vary widely.  Some critical areas for consideration are:

  • What are the growth prospects of the business? Is there a viable pathway to achieve growth?
  • What constitutes the goodwill of the business? Is the goodwill persistent and can it be transferred to a buyer?
  • Is the business’ intellectual property sufficiently protected?
  • What is the owner’s role in the business? How easily can the owner be replaced?
  • Does the remaining management team have the experience and resources necessary to operate the business efficiently?
  • Is the business properly staffed for its size and to recognize its growth potential?
  • What supplier and customer risks exist? How can they be addressed?
  • Do the business assets have deferred maintenance or unfunded capital expenditures?

There are times when a business is clearly not ready to be placed on the market.  The business may not be performing because of loss of an important client, vendor, or key employee or because of an acute business issue that the business is facing like a lawsuit or a loss of facility lease.  These red flag issues should be resolved by the owner, before trying to sell their business.

The process to identify and address the specific issues faced by a company may take 3-5 years, so it’s important to plan ahead.  But the owner of a company that has been properly prepared for sale, may be rewarded with a price premium, while an unprepared business may sell for a discount, or not at all.

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The Owner is Motivated, but not Compelled to Sell

Lastly and most importantly, the owner needs to be psychologically ready and financially prepared to exit their business.  Most owner’s only own one business in their life and selling it is momentous.  For some, the business is tightly intertwined with their personal life and identity.  However, there inevitably comes a day when the owner no longer wants to or no longer can be involved in the business. 

Owner’s end up selling for a variety of reasons, for some it’s poor health, for some its divorce from their life or business partner.  These personal challenges can make the process of selling the business more difficult and may put the owner at a disadvantage during negotiations with a buyer.  The best reasons are because the owner realizes that there is something that they would rather be doing with their time or assets like retirement or another venture.  Ideally, they are personally motivated, but not compelled to exit.

Even if the owner is determined to sell, they may hesitate to do so if they haven’t determined that the proceeds from the sale are sufficient to support their retirement or pursue other ventures.  Professionals can help with this analysis.  Business appraisers can help to anticipate the proceeds from selling the business.  While a financial planner can help an owner estimate the amount needed to support their retirement.

Ultimately, determining the right time to sell their business requires the owner to plan ahead and prepare the business for the time when market conditions are adequate, and the owner is personally motivated.  Exit Strategies Group helps owners to plan for and execute their business exits.  If you’d like help in this regard or have any related questions, you can reach Adam Wiskind, Certified Business Intermediary at (707) 781-8744 or awiskind@exitstrategiesgroup.com.

Let Protea Financial Help You Get Your Books In Order

If you plan to sell your business, then make sure you have everything in order to make the process easy. Reach out to have help getting your books in order to show potential buyers what your business has to offer!