COVID-19 Series, Vol. 1: Doing Business in Maryland During The COVID-19 Pandemic
The COVID-19 pandemic has caused the world to come to a screeching halt. Businesses big and small have felt the impact of sweeping lock downs and laws targeted at protecting the public at large. By no surprise, these shutdowns have affected small businesses the hardest. Many businesses that were forced to close cannot even afford to re-open. However, if you were fortune to make it through the storm, congratulations, but we are not out of the woods yet. The United States is the world leader in COVID-19 cases, and it does not look like those numbers will be dropping anytime soon. It is important for small businesses to have a firm grasp on the rapidly changing laws and to be able to comply. The purpose of this post is to help small businesses through this trying time.
On March 5, 2020, Larry Hogan, Governor of Maryland and President of the National Governors Association, declared a State of Emergency in Maryland in response to the COVID-19 pandemic. Following the declaration, the total cases of COVID-19 rapidly grew to 16,616 between March 5, 2020 and April 24, 2020.
On April 24th, when Maryland’s 7-day positivity rate fell from its high of approximately 26% to 24%, Governor Hogan released his roadmap to recovery for Maryland. In the roadmap to recovery, the reopening of Maryland is split into three phases.
Phase One included that, on May 15, 2020, the stay at home order placed on March 5, 2020, was lifted and the state moved to a “Safer at Home” public health advisory. Small shops were permitted to reopen, restaurants could provide curbside pickup, and businesses that ran outdoor activities were permitted to open with distancing measures. Although some businesses could re-open, Governor Hogan highly encouraged work from home if possible.
On June 5, 2020, Maryland entered Phase Two where the reopening of non-essential business occurred. This included facilities such as retail establishments (small and large), manufacturing establishments, financial institutions, technology firms, auto dealerships, indoor gyms and fitness classes, childcare services, and restaurants/bars with restrictions. On June 10th, there was a change to the Governor’s order but the state is still in stage two as of July 13, 2020.
During Phase 3, Maryland will see things go back to as normal as possible. Larger social gathers will be permitted, as well as high capacity bars and restaurants. Restrictions on visits to nursing homes, hospitals, larger religious gatherings will also be loosened.
After months of social distancing, I have really missed going out to simply do things like eat, shop, and get a haircut. I am sure I am not the only one. So let's explore the rules around the re-opening for businesses in the retail, food, and personal services industries.
Restaurants and Bars
During Phase Two, food service establishments (i.e. restaurants, bars, nightclubs, social clubs, and other similar establishments) are permitted to serve customers indoors. In contrast to outdoor activities, indoor food establishments must require all staff to wear face coverings, in accordance with the Face Coverings Order. Masks can be taken off to eat and drink but must be worn when entering and exiting the facility.
In addition to limiting occupancy to 50%, food service establishments cannot serve food in a buffet form; they must refrain from serving customers who are not seated, and they must clean and disinfect each table between each seating, in accordance with CDC and MDH guidelines, using cleaning products that meet the criteria of the U.S. Environmental Protection Agency for use against COVID-19.
Businesses are also placing employees at specific areas of the facility to make sure people are complying with the rules. In order to advise customers, the business’ COVID-19 rules are often posted on company’s website and social media sites.
Retail establishments and malls are all permitted to open so long as they do not exceed 50% of that Establishment’s Maximum Occupancy. Employees must wear a mask. Lastly, hours and schedules should be adjusted to allow employees to practice social distancing amongst themselves.
During Phase Two, personal services - including beauty salons, barber shops, tattoo parlors, tanning salons, massage parlors, and establishments that provide esthetic services or provide nail technician services (as described in Title 5 of the Business Occupations Article of the Maryland Code) - can open to the public. Again, masks are required, and the establishment must not exceed 50% capacity. Personal services companies must also provide services on an appointment basis only. So, no walk-ins. Lastly, after providing services to each customer, the business must clean and disinfect the area in which services were performed in accordance with applicable guidance from the CDC and MDH.
Gyms and fitness centers are also permitted to open at 50% capacity. Customers and guests must wear a mask when entering and exiting the facility, but they do not have to wear masks while using the machines.
To keep social distancing, some fitness centers restrict the use of some machines by putting a “not in use” sign on the machine. Fitness centers must also thoroughly clean and sanitize the machines between uses.
Religious establishments, outdoor recreation establishments like golf courses, shooting ranges, boating, and drive-in theaters are also permitted to open so long as they do not exceed 50% of the Establishment’s Maximum Occupancy. The state has not required masks, however there may be requirements at the county level.
The Governor states that a person who knowingly and willfully violates the Phase 2 Order, or any Local Order, is guilty of a misdemeanor and on conviction could be sentenced to up to a year in prison and/or a $5,000.00 fine.
Enforcement for the business is handled by the county the business is located. For example, in Montgomery County, Maryland, the Department of Health and Human Services handles enforcement. Due to the unexpected need for COVID-19 specific workers, Montgomery County hired county workers, who normally enforce the housing code, to serve as “ambassadors” to businesses that are opening back up. The ambassadors are responsible for checking to see whether businesses are following the current guidelines while also offering resources that may be helpful.
In response to the outcry from the small business community, legislators and President Trump launched the Paycheck Protection Program (PPP). The PPP is “a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA forgives loans if all employee retention criteria are met, and the funds are used for eligible expenses.” On July 6, 2020, the PPP resumed accepting applications in response to the President signing the program's extension legislation. The new deadline to apply for a Paycheck Protection Program loan is August 8, 2020. Read more about the PPP here.
In addition to the PPP, Maryland has a relief fund that closed on April 6, 2020. Maryland’s Department of Commerce states that the "COVID-19 Emergency Relief $75M Loan Fund offers working capital to assist Maryland for-profit small businesses disrupted operations due to COVID-19. Loan assistance is intended to provide interim relief complementing actions with its bank, business interruption insurance, and financial partners.” Although Maryland is no longer accepting applications, do not be discourage. With cases growing around the country, the state may start taking applications again. Read more about this program here.
Lastly, in Montgomery County, all nine Councilmembers sponsored the Public Health Emergency Grant Program. This program will enable the “County Executive to provide grant funding to small businesses and nonprofits that can demonstrate they’ve suffered financial distress as a result of the critical steps and mandated closures the County and State of Maryland have put in place to stop the spread of COVID-19.”
On Wednesday, July 24, 2020 at 1:30pm, the Montgomery County Council will hold public hearings on the following Special Appropriations. These appropriations are targeted at providing some relief to small businesses and entrepreneurs in the county. Read more about this and other initiatives here.
Compliance can be tricky, so feel free to reach out to go over your compliance plan and applying for any loans or grants that you may be eligible for.