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Published in Small Business

SBAM backs legislation to provide liability protection to businesses during pandemic

BY Sunday, August 02, 2020 07:25pm

If an employer follows the rules and complies with requirements to maintain a safe workplace during the COVID-19 pandemic, business advocates argue the company should not have to face liability claims if someone there contracts the coronavirus.

Providing that protection from legal liability for businesses that adhere to requirements ranks as a top priority in a series of state and federal public policy proposals the Small Business Association of Michigan issued late last month. SBAM believes the proposals a COVID-19 task force developed could help small businesses that are recovering from the pandemic.

SBAM President Brian Calley COURTESY PHOTO

Liability protection and other moves would “result in a higher survivability for small businesses,” said SBAM President Brian Calley.

“Ultimately, what we’re just looking for is to create a predictable environment where small businesses owners have a better chance at surviving. We’ll talk about thriving later on once we survive,” Calley said. “We need to find clarity and more certainty in a world that is full of unprecedented uncertainty.”

SBAM considers providing legal liability protections for businesses and their employees that make a “good faith” effort to comply with rules and guidelines for COVID-19 as a “very, very urgent” action that state or federal lawmakers can take to aid small businesses, Calley said.

The task force proposal does not urge blanket liability protections, he said. Nor does it propose liability protections for businesses that ignore rules and regulations intended to protect public health and prevent infections.

“Small business owners don’t look for a free ride,” Calley said. “There is a tremendous amount of uncertainty around the legal landscape surrounding this virus, and if there’s one thing that can dampen economic activity, it’s uncertainty and unpredictability. Putting some expectations in place about what is expected, especially when a business is following the rules, would go a long way to give small business owners the confidence to soldier on, to continue pushing forward against so many obstacles.”

‘Very Optimistic’

State Rep. Tom Albert, a second-term Republican from Kent County, introduced legislation in late July that would enact those protections for employers and employees.

The legislation would provide what Albert calls “common sense” protections for businesses and their employees who follow requirements and guidelines intended to mitigate the spread of COVID-19. He expects the legislation to move to a hearing yet this summer.

“I’m very optimistic that we’ll be able to get something done here,” Albert said. “I’ve had conversations with my colleagues on the other side of the aisle and they get it that legislation like this is pretty necessary. Everyone wants to try and move forward safely.”

Albert’s legislation would exempt businesses from legal liability when they are “in substantial compliance with or (operate) reasonably consistent” with requirements. The bill makes exceptions when there is “clear and convincing evidence that the injuries were caused by a reckless disregard of a substantial and unnecessary risk that an individual would be exposed to COVID-19, or the person engaged in a deliberate act intended to cause harm,” according to the bill’s language.

The legislation, which was referred to the House Judiciary Committee, would make the liability protections retroactive to Jan. 1, 2020.

Liability protections would not apply if a business or employee willfully disregarded COVID-19 requirements or was negligent, Albert said.

“If somebody’s grossly negligent, they’re not going to be protected,” he said. “If an employee calls in and says, ‘Hey, I’m positive,’ and the employer says, ‘Come in to work,’ that would be gross negligence and they would not be protected from a lawsuit in that situation.”

Federal action

Legal liability protections for businesses also are pending at the federal level in Congress.

In a recent letter, a coalition of business advocates urged Michigan’s congressional delegation to back “a bi-partisan compromise that will help ensure businesses are able to safely bring back their employees through careful liability protection for businesses.”

“While businesses that act with negligence, ignorance or malice should be offered no protections, businesses that operate in good faith need liability protection in order to welcome their employees and customers,” according to the letter signed by 15 organizations, including the Grand Rapids Area Chamber of Commerce and Kalamazoo-based Southwest Michigan First. “We urge you to find a reasonable compromise that balances protections for employers and employees as well as recognizes the unchartered health, economic and legal landscape the COVID crisis has forced upon us.”

In addition to the legal liability protections, the SBAM task force urges action to prevent local restrictions that are more rigid than state requirements and to create a regulatory environment that focuses on “compliance and remediation over penalties.”

The state needs to “develop a sense for helping businesses to comply, rather than just catching them doing something wrong,” Calley said.

Other SBAM task force policy recommendations include:

• State policies to ensure the long-term solvency of the state unemployment insurance trust fund to avoid a tax increase, “while providing competitive rates compared to other states;”

• Not automatically presuming that a person with COVID-19 became infected at work, and not expecting that employers are responsible for employees’ activities or conduct outside of work;

• Enhancing state economic development programs to “explicitly focus on small businesses, including rural broadband expansion, stronger small business procurement policies, and entrepreneurship-led economic development;” and

• Allowing small businesses to fully deduct expenses covered by a federal Paycheck Protection Program loan that’s forgiven by the U.S. Small Business Administration.

Deferring taxes

Another top priority for SBAM is legislation to put off property tax payments.

Deferring summer property tax payments to the winter is “just a flat out cash flow consideration” for small businesses that “would go a long, long way to helping small business owners who are slowly rebuilding their customer base,” Calley said.

“They’re not asking for the taxes to be wiped out, just deferred,” he said. “A lot of small businesses are experiencing very dramatic declines in their sales and they’re rebuilding their customer bases, and in some cases having to reinvent how they do business.”

Gov. Gretchen Whitmer on July 8 vetoed two bills passed by the state Legislature that would have deferred summer property tax payments to provide relief to struggling businesses and property owners during the pandemic. Whitmer cited “fatal constitutional flaws” with the legislation and said she heard an “overwhelming consensus” from taxable entities across the state “that these bills create more problems than they solve.”

SBAM hopes lawmakers can renew talks with the governor’s office to revisit property tax deferment legislation, and some GOP lawmakers have urged a vote to override the veto since the legislation passed the state Legislature with bipartisan support. A substitute version of a similar bill to allow deferred property tax payments recently passed the House and was referred back to the Senate for consideration. 

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