FMCSA’s New Rules Offer Improved Flexibility to Commercial Motor Vehicle Drivers

For years, commercial drivers and transportation companies have urged the Federal Motor Carrier Safety Administration (FMCSA) to provide greater flexibility in the hours of service (HOS) regulations. This call grew even louder following the implementation of the electronic logging device (ELD) mandate. This summer, FMCSA finally announced revisions to the hours of service regulations. The new rules went into effect on September 29, 2020.

The FMCSA’s rule changes affect four areas: the short-haul exception; the adverse driving conditions exception; the 30-minute break requirement; and the sleeper berth provision. Additionally, although it is not a formal rule change, the FMCSA issued new guidance regarding personal conveyances. These updates will help provide flexibility to an industry that often grapples with rigid regulations that have failed to keep pace with reality.

Short Haul Exemption

The short-haul exemption applies to drivers who report at the same location at the start and end of each workday and operate in a limited area. These drivers can keep a time record in place of the more burdensome HOS log. FMCSA’s new rule increases the geographic restriction from 100 air-miles to 150 air-miles. This change will allow motor carriers utilizing this exemption to expand their range, and some drivers whose regular routes previously prevented them from taking advantage of the exemption now can do so. Further, the on-duty limit for short haul operations has increased from 12 hours to 14 hours. Continue reading »

Accumulating Cash and Improving Your Business’ Cash Flow

Part 2 of a 5-part series: Options for Small Business Owners in Financial Distress

Cash is how your business likely will get through its difficulties. Simply put, obtain as much cash as you can, and spend it sparingly.

In Part 1 of this five-part series on options for small business owners in financial distress, I suggested some ideas about improving the operation of your small business in order to survive different types of disasters. In Part 2, I’ll share some thoughts on improving your cash position and cash flow.

First, look at your business as a source of cash.

• Account receivables: Contact your customers with outstanding account receivables and encourage them to make payment. Provide discounts for prompt payment and charge interest on past due amounts if you can.
• Line of credit: If you have unused room on a line of credit, draw on it now while you still can. If things get bad enough, your lender might freeze your line and cut off further draws.
• Business loan: If you need to approach a lender for a new loan or an increase in an existing one, do your homework. No lender is going to give you money just because you ask for it.
• Business plan: Prepare a business plan or update your current plan to reflect current conditions. You may need help from your accountant, attorney, consultant or similar outside sources in order to do so. Your plan may include both a “needs” list and a “wants” list.
• How much? Determine how much money you need to implement your plan whether your business plan is to simply tread water, grow, or pivot in another direction. Break it down so your potential lender understands how it is going to save your business.
• How to pay it back? Once you have a rough number, consider how you’re going to repay it. Your business’ survival depends in part on its ability to pay its debts. Consider both the amount and duration of the likely payments.
• Avoid “hard money” lenders: When looking for lenders, be very careful to avoid “hard money” lenders and their draconian interest rates and repayment schedules. These can include factoring companies who purchase your receivables, MCA lenders who say they are “purchasing” your accounts receivable but in reality are lending against them, and other types of lenders with outrageous interest rates and impossible repayment terms.

Continue reading »

$5,000 Grants Available to Restaurants and Small Businesses in St. Louis County

In response to the tightening of COVID-19 restrictions for restaurants and some other small businesses, St. Louis County Executive Sam Page announced $5,000 grants through the Small Business Rapid Deployment Fund.

Grants can be used for operating expenses or business costs (e.g., rent and payroll) and purchases needed to adapt to COVID-19 restrictions (e.g., heaters and tents) “incurred between April 1 and December 16, 2020 as a direct result of COVID-19.”

According to the fund’s website, restaurants and small businesses must meet the several eligibility requirements including: Continue reading »

Your Small Business: Getting Through the Economic Turbulence

Part 1 of a 5-part series: Options for Small Business Owners in Financial Distress

Suppose your small business has been doing fairly well over the last few months in spite of COVID-19 and the many other factors affecting our economy. However, you are worried about the upcoming change of seasons, additional shutdown orders, or other circumstances which might adversely affect it.

Or suppose you expect to do well over the holidays even in the face of (or because of) the pandemic, but dread your normally slow months of January, February, and March.

Or suppose you recently undertook a large project which fell apart and left you owing a ton of money.

Different situations require different responses.

Specific Event

If a specific event led to your problems, but your business is otherwise profitable, you may be able to work out of them.

Equipment Problems

Imagine that your business was doing so well that you bought additional equipment and hired additional employees in order to meet the demand.

Unfortunately, your new equipment didn’t work as promised. Rather than the promised six weeks, the new equipment took a year to get up and running smoothly. In addition to failing to fulfill all of your orders during this time, you paid employees overtime to produce as much as they could despite the distractions caused by the equipment problems. Continue reading »

Options for Small Business Owners in Financial Distress: A 5-Part Series

Many small business owners are suffering financially due to the effects of COVID-19 and the unpredictable, rapidly changing economy in general. In this five-part series, we will discuss the various options available to small businesses in financial trouble, all the way from working out obligations informally to Chapter 11 reorganization to going out of business.

The series will cover the following issues:

• Introduction: Options for Small Business Owners in Financial Distress: A 5-Part Series
• Part 1: Your Small Business: The Economic Turbulence – Analyzing and improving your business operations
• Part 2: Accumulating Cash and Improving Your Business’ Cash Flow – Analyzing and improving the business’ flow, as well as obtaining additional financing if necessary
• Part 3: Non-Bankruptcy Ideas for Helping Your Troubled Small Business –  Ideas on using non-bankruptcy options in an effort to restructure your debts
• Part 4: Bankruptcy Options for Your Troubled Small Business – Pros and cons of various types of bankruptcy
• Part 5.1. Getting Through Chapter 11 – Part One: After Filing – Getting through a bankruptcy case and coming out on the other side
• Part 5.2: Getting Through Chapter 11 – Part Two: Plan of Reorganization – Putting together your plan for reorganization and confirmation by the bankruptcy court

Continue reading »

Updates Made to Three Main Street Loan Facilities from the Federal Reserve

The Federal Reserve Board recently adjusted the terms of the Main Street Lending Program (MSLP) in an effort to focus their support on smaller businesses who continue to suffer due to the pandemic. The minimum loan size for the Main Street New Loan Facility (MSNLF), Main Street Priority Loan Facility (MSPLF), and Nonprofit Organization New Loans Facility (NONLF) have been reduced from $250,000 to $100,000. The fees on these three facilities have also been adjusted to encourage business owners to apply for these loans.

New Fee Amounts for the MSNLF, MSPLF, and NONLF

• Transaction Fees: If the initial principal amount of the Eligible Loan is $250,000 or greater, an Eligible Lender will pay the Special Purpose Vehicle (SPV) a transaction fee of 100 basis points of the principal amount at the time of origination. Eligible Lenders may require Eligible Borrowers to pay this fee. No fee will be imposed if the initial principal amount is less than $250,000.
• Origination Fees: If the initial principal amount of the loan is $250,000 or greater, an Eligible Borrower will pay an Eligible Lender an origination fee of up to 100 basis points of the principal amount at the time of origination. If the initial principal amount is less than $250,000, the origination fee will be up to 200 basis points of the principal amount at the time of origination.
• Servicing Fees: If the initial principal amount of the loan is $250,000 or greater, the SPV will pay Eligible Lenders 25 basis points of the principal amount of its participation in the Eligible Loan per annum. If the initial principal amount is less than $250,000 the SPV will pay 50 basis points of the principal amount of its participation in the loan per annum.

PPP Loan Considerations Continue reading »

Is the Arbitration Provision in Your Employment Contract Enforceable?

Many employers require their employees to execute employment agreements, often containing confidentiality and non-compete clauses, which contain provisions requiring arbitration of any claim which an employee might file against the employer.  However, unless these provisions are carefully drafted, the arbitration provisions may be found unenforceable.

In Caldwell v. Unifirst Corp, et al. issued on October 27, 2020, the Missouri Court of Appeals, Eastern District, upheld a decision by an arbitrator holding the arbitration clause at issue there to be unenforceable due to a lack of consideration.  The Court in Caldwell agreed with the arbitrator that the arbitration clause in the employment agreement Caldwell signed with Unifirst was invalid for lack of mutual consideration because the employer had reserved the right to seek injunctive relief in court in the event the employee violated his non-compete obligations.  Thus, while the employee was required to arbitrate all claims he might have, the employer would not be required to arbitrate its claims for breach of the non-compete clause, the type of claim most likely to be pursued by the employer against a former employee.  As a result, the arbitrator (and the Court) held that the consideration offered by the employer was illusory, such that the agreement to arbitrate was void. Continue reading »

Access to Patient Medical Records During COVID-19

Issues relating to a patient’s right of access to medical records have never been more important than now, in the midst of the COVID-19 pandemic.  Healthcare providers, big and small (from a large New York City non-profit providing health care and other services to the homeless population to small psychiatric services providers in Virginia and Colorado), are facing monetary penalties and having to comply with Corrective Action Plans (CAP) imposed by the Office for Civil Rights (OCR) with strict requirements and short deadlines.

One of these psychiatry services providers must distribute new policies and procedures concerning patient requests for records to all members of its workforce and relevant business associates within 30 days and to new employees upon hiring. Recipients are required to execute certification of having read, understood, and promised to abide by these policies and procedures. Training and individual certifications must be completed within 60 days. Going forward, the practice must implement annual training. Any reportable events must be fully investigated and described in a report as part of the full-scale written “Implementation Report.” The practice must submit the report to the U.S. Department of Health and Human Services (HHS) within 120 days. The CAP concludes with a “Final Report,” again containing specific terms and obligations of the psychiatry practice. Continue reading »

What is The Best Franchise Model For You?

Today, approximately 35 percent of franchises are owned solely or co-owned by women and that percentage is steadily increasing. Women’s superior relationship skills shine in service businesses and women gravitate toward more female oriented franchise models such as hair salons, weight loss centers, flower shops, cosmetic companies, etc. Driven by the desire to start a small business in order to create more flexibility and control over their time and to be their own boss, the franchising model is an exciting lure. Caution, however, speed bumps abound. Your entrepreneurial zeal should be tempered with a reality knowledge check which includes due diligence performed by you, number crunching services performed by your accountant and perspective and legal advice provided by your attorney.

What to Expect from Franchise System

Although the franchise model is no guarantee, the model may increase your chance of staying in business. The Small Business Administration, however, has consistently found that franchises have the same success rates as independent small businesses. Businesses fail for many reasons, some of which the franchise model cannot fix.  A good franchisor should eliminate, control, or manage many of the common mistakes a starting small business makes.  At the minimum for the initial investment and recurring costs of royalty and marketing monthly fees, a franchisee should receive brand recognition (trademarks, advertising and promotion), quality control, site selection and opening support, continuing training and operational guidance, stability, and value for the investment.

Continue reading »

Department of Labor’s Updated Regulations for FFCRA

The Department of Labor (DOL) published new guidelines on September 16, 2020 that revise and clarify portions of the Families First Coronavirus Relief Act (FFCRA). The new guidelines were issued following a ruling by a New York District Court that declared certain previously issued regulations invalid. These updated regulations relate to the following:

• The requirement of “work availability,”
• The requirement of employer approval for FFCRA leave to be intermittent,
• The definition of “health care provider,” and
• Requirements for notice and documentation.

The new regulations went into effect at the time they were published and will remain in effect until December 31, 2020 when the FFCRA is set to expire.

Work Availability Requirement

The DOL clarified that the work availability requirement applies to all qualifying reasons to take leave under the FFCRA. Thus, the leave may only be taken if the employer has work for the employee. The qualifying reason must be the actual reason the employee is unable to work, rather than not having work to do regardless of whether the qualifying reason occurs. Previously, the work availability requirement was only explicitly applicable to three of the six possible qualifying reasons for leave.

Intermittent Leave Requires Employer Approval Continue reading »