Employers know how to operate safely during COVID-19

Jun 3, 2020

The recent proclamation ‘Safe Start – Stay Healthy’ has relaxed the criteria for re-opening a business in Washington during the COVID-19 crisis. It still requires, however, the government bureaucracy to approve a business for reopening.

The directive allows any county that has been operating in phase 1, 2 or 3 of the Safe Start Washington Plan for 3 weeks or more, to apply for approval from the state to move to the next phase. Once approved, the County Health Board is charged with overseeing and setting guidelines for keeping businesses compliant with COVID-19 state recommendations within their jurisdiction.

Depending on the type of business, the reopening qualification requirements can differ significantly. In some cases, these requirements create an untenable situation where a business has the option to open but can’t because it cannot generate enough business activity to make it financially viable.

Consider the retail business sector. Many stores operate on razor thin profit margins. This profit margin can be as thin as 3% or 4%. While occupancy can be enforced to meet the requirements of the Safe Start Phase 2 plan, a retailer will not be able to operate efficiently or profitably unless there is a reduced staff compliment. This will slow economic recovery and put more pressure on the unemployment trust fund as under-employed staff members will continue to claim unemployment.

The Federal Cares Act provides funding for business to cover their payroll costs to bridge the gap until the stay at home restrictions are lifted. The federal program includes a forgiveness provision for employers that continued to pay salaries to their employees and keep them on the payroll during the COVID-19 crisis. To qualify for forgiveness, the original loan forgiveness rules required 75% of the federal grant money to be spent on salaries within 8 weeks of the loan being funded. This created a problem for many Washington businesses as if the rules were not followed, the loan had to be repaid. Subsequent changes have eased this restriction, reducing the qualification amount spent on salaries to 60% and extending the qualification period.

In many cases, businesses have opted not to take the federal grant funding because of Washington’s inconsistent application of COVID-19 business restrictions. The extended Washington lockdown means any additional payroll costs over the forgiveness portion of the federal program, have to be covered by the employer while little or no revenue is being generated. Businesses need certainty to plan for employee and business financial stability. Every day social media brings news of another business deciding to close due to this uncertainty, introduced by the state.

Washington state was one of the first states to close for business and is on track to be one of the last to reopen. This is one of the longest shutdowns in the nation for business.

The criteria used for social distancing and other safety requirements should be applied consistently across business sectors, without the state picking favorites. A light regulatory hand from the state is needed and, in many circumstances, simple guidelines, not restrictive regulations will be the only requirement needed to ensure a safe restart of the economy.

Washington State need to provide an easing of the restrictions and a consistent approach to regulation as soon as possible.

Washington business owners are quite capable of understanding what is needed to keep both employees and customers safe in the COVID future. A business should be allowed to operate without government interference.