Employer Resources from April 15, 2020 webinar Leading through COVID-19

Everyone is cancelling their contracts (or I have to cancel mine), how should I respond? 

• Do you have a force majeure clause?
• Do you have common law defenses of impossibility or frustration of purpose?
• See attached memo for all you could ever want to know about these concepts.

What clauses should I have in my contracts to protect me going forward?

Here is a list of clauses you might consider including in your contracts in the future:

• Cancellation Clause
  • A cancellation clause ensures there is a set time period to allow your clients to cancel without having to pay the remainder due on their account, and if they cancel after that period they are obligated to pay all remaining balances.
• Rescheduling Clause
  • A rescheduling clause should either (1) allow rescheduling to occur under your business practices in the event you can rebook the event date, or (2) not allow rescheduling to occur under any circumstances.
• Safe Working Environment Clause
  • A Safe Working Environment Clause tells your clients that your company reserves the right to discontinue service in the event some unsafe condition arose.  You should modify this clause to your business practices and include all unsafe working environments that you do not agree to provide services under.
• Clients’ Responsibility to Secure Insurance Clause
  • An insurance clause ensures that your clients agree to purchase all insurance that they deem necessary to protect themselves from unforeseen events.
    • Non-appearance and cancellation insurance

• Indemnification Clause
  • Indemnification clauses address the duty to compensate and defend for losses incurred.  For service professionals, you want to ensure this clause involves losses incurred by you as the Company for any unforeseen third-party claims.
• Limitation of Liability
  • A limitation of liability clause limits liability under certain circumstances.  This clause excludes indirect damages that may occur under a breach of contract, and also limits the maximum damages to the amount paid under the agreement.

• Force Majeure Clause
  • A force majeure clause should apply to each party to the agreement.  These clauses specify the events which enable either party to declare a force majeure event, how a party should notify its counter-party about the occurrence, and the consequences after a force majeure event has occurred.
• Failure of Company to Perform Services Clause
  • A failure to perform services clause ensures that your clients understand the procedure should you not be able to perform your services.  It is important to allow your clients to agree to substitution of another professional and not require such substitution.

• Inclement Weather Clause
  • An inclement weather clause relates to how your company will perform under certain weather conditions.  This clause ensures to your clients that you will continue your service obligations unless the location or area is deemed unsafe weather-wise to perform your obligations.

Is it true independent contractors can apply for unemployment? 

Yes.  As long as a person’s unemployment is connected to the COVID-19 pandemic, temporary benefits can be made available to self-employed individuals, independent contractors, and “gig” economy employees.  State of Oregon Employment Department.  This is new for many independent contractors.  The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 was signed into law on March 27.  The CARES Act allows payment of Federal Pandemic Unemployment Compensation (FPUC).[1]

They also will be eligible to receive the additional $600 weekly Pandemic Unemployment Compensation.  “The Employment Department is currently reviewing all the new April 10, 2020 federal legislation and will provide more information once [it] receives the required U.S. Department of Labor guidance so that [it] can carry out these changes as quickly as possible.”  Individuals should apply for these temporary new federal benefits through the Oregon Employment Department’s Online Claim System. 

Other potentially helpful resources for solopreneurs

• The Oregon Small Business Development Center Network has developed a set of guidelines for small businesses to consider in not only this unprecedented situation created by COVID-19, but in any situation that may create significant impacts to your business operation.  Topics: Assumptions and Considerations, Sales, Cash Flow, Staffing, Operations, SBA Economic Injury Disaster Recovery Program Tax Relief.
• Facebook is offering $100M in cash grants and ad credits to help during this challenging time.
• Freelancers Relief Fund will offer financial assistance of up to $1,000 per freelance household to cover lost income and essential expenses not covered by government relief programs, including food/food supplies, utility payments, and cash assistance to cover income loss.
• Google made an $800+ million commitment to support small- and medium-sized businesses, health organizations and governments, and health workers on the frontline of this global pandemic.  
• The Small Business Administration is offering Economic Injury Disaster Loans for up to $2 million.