Staying Safe Online During a Pandemic.

Staying Safe Online During a Pandemic.

From Zoom Bombing to security breaches with the SBA, the Coronavirus Pandemic has created the perfect environment for computer crime, identity theft, and general shenanigans. I mean everything is super weird right now, people are stressed and there are over 17 million Americans applying for unemployment benefits, this doesn’t even get into how many businesses are applying for SBA loans through either the PPP program or the EIDL.

Here is the thing when you have a whole bunch of people stressed and trying to navigate things they haven’t done before it’s the perfect opportunity for fraud, computer intrusion, and other forms of theft, identity theft, and bullshit like Zoom Bombing. It’s really hard to slow down and focus on protecting yourself during this time, but you also really don’t have the time to unwind identity theft right now either

SBA Data Breach

 When the SBA announced it’s security breach I wasn’t surprised. Overwhelmed systems are a great opportunity for hackers to take advantage of. Combine that with a workforce largely working remotely and aging government tech powering these systems and it’s almost too easily done. Then you have the fact that you know when people are going to be submitting their information, all their information….social security information, banking information, addresses, licenses…it’s everything you need to either sell profiles on the dark web or perpetrate identity theft. This is why the major credit agencies are allowing weekly credit checks for free through April 2021 and you should take them up on it. 

Zoom Bombing

It’s not all identity theft online these days. As most of us move online for work and school video conferences have become essential. Zoom, one of the most popular conferencing services publicly offered free options with extended capabilities to schools and school-age children. With that came, the quick overwhelm of the technology and zoom bombings of everything from classroom meetings to Congressional committee meetings.

Again, people are on zoom all damn day right now which makes it really easy to hit zoom rooms. The Zoom bombings generally involve foul language, racial slurs, and, of course, pornography. Not that pornography is new to Zoom…though against their terms of use, in-person sex clubs are also going online and taking the party to Zoom in the time of Covid as well….but that is for another post, and for Episode 31 of the Get Legit Law & Shit Podcast

What to Do

SO…what do you do to stay safe online right now? First, make sure the websites where you are entering data are the actual website you think they are. Expand the full site in the address bar so you know you are actually on the site. If you are trying to reach a government site it’s a .gov address. Second, Government agencies aren’t going to call you to ask for more information. They use the mail. Do not give that information over the phone. For that matter, no one is going to call and offer you money, help you get your stimulus check, or qualify for an SBA loan. Third, if you can use a VPN like Express VPN to try to keep your computer safe. Finally, be very careful with email attachments, it is one of the most common ways computers are infected with bots and backdoors. 

Stay safe out there and if you want a more in-depth exploration of this topic and others check out the Get Legit Law & Shit podcast

 

Emily D. Baker, Esq.

Emily D. Baker, Esq.

Badass Lawyer for Online Business

Emily has been running business for 15 years and has ove 13 years of legal experience. She spent 10 years at the Los Angeles County District attorney's office where she truly learned to be a solopreneur. Emily has built her consulting and speaking business from the ground up, in her garage jamming out to 90's music. She specializes in no BS practical advice for the starting and scaling online entreprenur. Emily will tell you what the business gurus can't in a way that is both hillarious and empowering.

The War on How We Work

The War on How We Work

Opinion. Small business is under attack.

The situation in the world right now with the Coronavirus is going to fundamentally change the way we work and I see self-employment as being under attack.  Everyone should be able to work the way they want. Be it as a gig worker, independent contractor, service provider, employee, business owner….whatever it is!  If we can make money doing it (and it is not illegal) then you should have the freedom to choose what you do to make money and how you do it. 

The Coronavirus public health crisis is bringing to light the way we work and integrate our work and our life.  Work has become our primary identity, especially as people are choosing to step away from communities like a church community or a hobby community, a bowling league….people just aren’t as involved in activities outside of work as they used to be.  We often don’t have a community outside of work, and therefore work becomes our community and our identity, and that can be a very dangerous thing, especially when it’s suddenly taken away.

My TEDx talk “The Three Words That Will Change Your Life”, addresses what happens when our identities get wrapped up in work and how hard it is to break that cycle. Kinda like a bad relationship cycle where It’s like, “But it fills me up and when it’s great, it’s so good, but when it’s bad, it’s so bad and I don’t know how to get out of it”.  Then when your finances, healthcare, retirement plans, and social group are all tied up in that it can be really hard to leave. The choice to be self-employed is a hard one, but it’s getting harder…which is crazy to me because Americans are so driven by the identity of being an individual. Americans won’t be told to eat healthy, stay home, not own guns, practice a specific religion or lifestyle or being told they can’t. Americans want to do what we want in our own way. So it’s no surprise that self-employment is so popular, yet it’s not being well supported during this crisis. What I am seeing during this time is that most of us feel like we are failing, at everything, all the time. Right now it’s really hard to be a full-time parent, full-time employee/boss/business owner, full-time spouse, and still process the trauma of what we are going through during this pandemic. 

When you add to that the fact that it’s getting harder for gig workers and contractors to find work independently with States like California categorizing most workers as employees, it’s even harder for those out of work right now to simply pick up digital gigs while they are ordered home by the government. Trying to find work on something like Upwork, Fiverr or Rev is near impossible if you have an address in California due to AB5. Not be able to pick up gig work that you can do on the internet is ridiculous to me right now. States are pushing contractors to rely on unemployment rather than their own ability to work.  Then when you finally get into Government help for small businesses, the self-employed, independent contractors businesses aren’t being treated the same.

The Self-Employed weren’t even able to apply for the Paycheck Protection Program until a week this program rolled out to formal corporations and businesses.  30% of the nation’s workforce were self-employed as of 2019. The self-employed accounted for 44 million jobs. That’s a lot of jobs created by the self-employed. It’s estimated that there are over 16-million people who are self-employed, Solopreneurs who pay themselves on a draw and not on a W-2 paycheck.  Yet, this sector is still being treated like second class businesses because they generally don’t have existing borrowing relationships with banks, don’t have lawyers on call for help and don’t also have accountants or CPAs to help navigate these programs. 

It’s estimated right now as the self-employed and solos are able to apply for things like the paycheck protection program apply for things like an economic injury that there are over 26 million Solopreneurs who pay themselves on a draw and not a W2 yet. That sector, that sector, that accounts for 44 million jobs was not allowed to apply for the paycheck protection program until a week after other companies had been allowed to apply.

There is still this secondary treatment of the self-employed through even getting aid during coronavirus. The cares act allows self-employed individuals and in that, I’m lumping in, you know, sole proprietorships, independent contractors, gig workers, all, all y’all self-employed are being treated less than and less valuable than traditional companies that pay W2’s are being treated as if they aren’t as important, but this is 30% of the workforce. This is a big deal, but when the cares act rolled out, unemployment for self-employed, most States still don’t have that up and running. When they rolled out the paycheck protection program, including self-employed businesses, they couldn’t apply until a week later and then can’t always apply at their bank. If they don’t have a lending relationship. A lot of people who are self-employed try not to take on business debt. That’s their choice to work the way they want to work and to make their work and their life look different.

I keep seeing attacks on small business in news stories, on social media, and in conversations. Businesses should be prepared, people should be prepared with savings and a disaster plan. Did anyone (well I am sure some did, but it wasn’t the dominant conversation) have these discussions with the banking industry in 2008 when they needed a bailout for a situation they created?? This pandemic caused government forced closures of non-essential business, unlike anything we have lived through. This is unanticipated and for some business ending and it wasn’t caused by the industry themselves.

I am frustrated, I am with you and I don’t know how to make it better at the moment. If you need to save your business do it, apply for the PPP, if it doesn’t fit the EIDL might. If that doesn’t then unemployment. You didn’t cause this, this is an unprecedented event and it’s ok to be in survival mode. Don’t let anyone, or anything makes you feel like your business isn’t worth saving.  You’ve got this, hang in their friend. If you want to hear my full rant on this…it’s in Episode 29 of Get Legit Law & Sh!t. 

Emily D. Baker, Esq.

Emily D. Baker, Esq.

Badass Lawyer for Online Business

Emily has been running business for 15 years and has ove 13 years of legal experience. She spent 10 years at the Los Angeles County District attorney's office where she truly learned to be a solopreneur. Emily has built her consulting and speaking business from the ground up, in her garage jamming out to 90's music. She specializes in no BS practical advice for the starting and scaling online entreprenur. Emily will tell you what the business gurus can't in a way that is both hillarious and empowering.

The Paycheck Protection Program Explained.

The Paycheck Protection Program Explained.

I will continue to update the Guide that covers the PPP as information changes. If you want to stay up to date — get the guide.

Updated 4-4-2020

What you need to know about the Paycheck Protection Program.

First. If you are considering a Paycheck Protection Program SBA Loan this is the information you need now. If your bank does not yet have an application live for you you can use the SBA Application to gather the necessary information and read the fine print. If your business bank is accepting applications I will break down the information you need on hand to apply…then go do that….today!

What is the program for?

To allow businesses to maintain employees on payroll and continue to cover expenses such as mortgage interest, rent, utilities and of course payroll and employee benefits.  

How long does this program run?

You can apply through June 30, 2020, or ‘until funds made available for this purpose are exhausted’ – SBA interim final rule.  Currently, there are 349 Billion set aside for the PPP program. If you need these funds apply early, and honestly.

Who can apply?

Businesses with under 500 employees, though there are some exceptions if you are a restaurant and have under 500 employees at a particular location and a few other exceptions…if that could be your business go call your attorney and parse this out. My information is directed at small businesses, the self-employed, contractors and online-business owners.

  • Businesses with under 500 employees who are US-based employees. (S-Corps, C-Corps and LLC’s as well as 501(c)(3)’s)
  • Sole Proprietors, Independent Contractors, Self-Employed (though some banks are requiring these individuals to wait to apply until 4/10).
    • You must submit documentation to establish eligibility ie. payroll processor records, payroll tax filings, 1099s or income and expenses from a sole proprietorship.
      • IF you do not have that the lender may use bank records to demonstrate the qualifying payroll amount.

NOTE you must have been in legit business operation as of 2-15-2020 and had employees who you paid salaries and payroll taxes for OR paid independent contractors, as reported on a form 1099.

Can you apply for more than one PPP Loan?

No. Each eligible borrower may only apply for one loan. This is part of the rule from the SBA and is not broken down in the CARES Act.

Are any businesses not eligible?

YES

  1. activity considered illegal under federal, state or local law. So legally operating marijuana dispensaries, are still illegal under federal law, gambling, sex work and the like.
  2. If you are a household that employees household help (nannies, housekeepers and the like).
  3. Businesses who have defaulted on SBA loans in the last 7 years
  4. If an owner of 20% of the business or more is incarcerated, on probation has been convicted of a felony and a few other provisions.

What circumstances qualify?

If your business isn’t struggling just yet what does that mean? You are required to verify that “the current economic uncertainty makes this lan request necessary to support the ongoing operations of the applicant.” SBA Application 

Is this a loan or a grant or what?

This is a loan program. The current fixed rate of the loan is 1%…however, funds used for the intended purposes “documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities, and not more than 25% of the forgiven amount may be used for non-payroll costs”, any amounts falling outside that are a loan which a 2-year repayment at 1%.

What amount of this loan can be forgiven?

Up to 100% of the loan plus incurred interest so long as the forgiveness provisions are met. Including not reducing employee compensation levels, not using more than 25% of the loan for non-payroll expenses.

How do I apply?

Through your business bank, if your business bank is not an authorized SBA lender there are some loan aggregation services facilitating this loan. You do not apply through SBA.gov.

How much money can my business get?

The loan amount is the lesser of either the average monthly payroll costs for the previous 12 months multiplied by 2.5 or 10 million. There is a 10 million cap per business.

The SBA recommends the following

  1. Aggregate all payroll costs
    1. PAYROLL IS – compensation for US employees in the form of salary, wages, commissions, cash tips, etc, benefits including vacation, parental, family, medical or sick leave, employee benefits consisting of health care, insurance premiums and retirement compensation, and payment of state and local taxes assessed on employee compensation
    2. FOR INDEPENDENT CONTRACTORS, SOLE PROPRIETORS AND INDEPENDENT CONTRACTORS PAYROLL IS: wage earnings, commissions, income or net earnings from self-employment. 
    3. What is excluded from payroll costs
      1. Employees outside of the US
      2. Compensation to any one employee over 100K a year
      3. Sick & Family leave which is credited under FFCRA (see my guide to FFCRA for info on that)
  2. Subtract any compensation to a single employee in excess of 100K a year
  3. Calculate the average monthly costs (divide the above amount by 12)
  4. Multiply the average monthly costs by 2.5
  5. Add any outstanding amount from an EIDL loan made between January 31, 2020, and April 3, 2020, less the amount of any ‘advance’ under the EIDL COVID-19 loan (Generally 10K)

Can you apply for more than one PPP loan?

The SBA states that only no eligible borrower may receive more than one PPP loan.

Can I use the PPP to pay Independent Contractors?

NO- Independent contractors have the ability to apply for a PPP loan on their own, therefore they do not count to be paid by a business under the PPP loan. 

When do I have to pay this back? 

There should not be payments required for the first 6 months, but during that time interest will accrue. Then it is a 2-year loan. 

How are they determining who gets loans and when?

The funds are first come, first served until they run out…may the odds be ever in your favor on this one.

How does this work with Economic Injury Disaster Loans (EIDL)?

If you are using an EIDL loan to cover payroll it will need to be refinanced into a PPP loan and the application will ask about that. If you received a $10K advance through EIDL you do not need to refinance it and it will not be counted against your PPP loan. 

What is the deal with this 10K advance?

Under the EIDL loan business can request a 10K advance that may be used for

  1. Payroll costs
  2. Making rent or mortgage payments
  3. Repaying obligations that cannot be met as a result of losses in revenue
  4. Meeting increased costs to obtain materials

This is applied for through SBA.gov

 

Emily D. Baker, Esq.

Emily D. Baker, Esq.

Badass Lawyer for Online Business

Emily has been running business for 15 years and has ove 13 years of legal experience. She spent 10 years at the Los Angeles County District attorney's office where she truly learned to be a solopreneur. Emily has built her consulting and speaking business from the ground up, in her garage jamming out to 90's music. She specializes in no BS practical advice for the starting and scaling online entreprenur. Emily will tell you what the business gurus can't in a way that is both hillarious and empowering.

AB5 & How It Screws YouTube Creators

AB5 & How It Screws YouTube Creators

I have said it before, California is special. But this new law may just screw a whole bunch of YouTube creators. Even if you aren’t in California you need to pay attention because this now exists in California, New Jersey, Massachusetts and Connecticut. It’s the growing trend and it will continue to grow in states across the US. As goes California goes the nation.

Last week California codified an existing California Supreme Court decision Dynamex Operations west, Inc. v. Superior Court of Los Angeles. This ruling changed the way that Independent contractors (sometimes called 1099) are classified. This new law will have far reaching impact on the intended industries as well as some unintended consequences that suck.

What’s the point of the ‘Uber Law’

Yes, AB5 is being referred to as the ‘Uber’ law because under the new test Uber is one of the biggest companies that will face sweeping changes classifying all drivers from independent contractors to employees. The thought of Ca. legislatures is that they are protecting individuals who work exclusively for one company from being exploited and not having benefits such as health care, unemployment etc. I am sure it has nothing to do with increased revenue from taxes paid to the sate when someone is an employee. What it means for companies like Uber is a 20%-30% overhead increase and likely an increase in rates in Ca., as well as a decrease in Uber drivers in Ca. But drivers aren’t the only industry impacted.

So what’s the ‘Test’.

California is now embracing what’s referred to as the “ABC” test to determine if someone is actually an Independent Contractor or if they are an Employee. The law, and court decision state that a person can only be classified as an independent contractor if all of the following are true.

  1. The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact
  2. The person performs work that is outside the usual course of the hiring entity’s business.
  3. The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

California AB 5 Section 2 amending the labor code section 2750.3  emphasis added. 

Why is this a problem for YouTube Creators in California

If you are a content creator who hires an outside editor or videographer they will be considered in the usual course of the hiring entity’s business.’ because creating videos comprises those actions. That means the person you are working with would have to be the creators employee. Here is what that looks like…they have to be paid W-2…like through a payroll company and the creator will need to pay payroll and likely unemployment taxes for that employee. The creator will become responsible for adhering to the labor laws in Ca., including work hours, break periods. The creator can also be sued for work place discrimination, harassment and workers compensation if your employee gets hurt out on a shoot. The creator will need to have insurance to cover their business, oh yea …and will need an actual business. I would never advise hiring employees as a sole proprietor. This means forming an LLC or C-Corporation and adhering to all those rules and regulations as well.  Take a deep breath and let’s dive into this more …I have some suggestions.

Emily WTF, that is a whole lot! Are there other options??

Yes, AB 5 has a number of exceptions that some may improperly apply to YouTube cretors. The problem is that there is an exemption to one of the main exceptions. That being an exception for still photographers or photojournalists. But in that exception there is an exemption. This clause is not applicable to an individual who works on motion pictures, which includes, but is not limited to, projects produced for theatrical, television, internet streaming for any device….. I understand that the temptation is to immediately argue that a YouTube video is not a Motion Picture.  However, it is. The labor code in a different section defines motion picture in part as any other moving images, including those  created for entertainment purposes transmitted by web cast or any other technology that is nor in use. 

I know, that was some deep lawyer shit. But Calififornias definition of motion picture clearly includes YouTube videos. Keep breathing.

So Now What.

You have to be a business. The people you work with also have to be businesses. The only way to salvage this without creating an employee relationship is to properly fit under the business to business exceptions to this law. So how do you do that?? Depending on your business I would consider becoming an LLC, it’s the least formal commercial entity in California. Just know that becoming an LLC in California starts with about $1,000 in fees and there is an annual $800.00 mandatory tax to start. There are regulations to keeping your LLC legit but that is a post for another day. 

If you are a business entity you also need:

Your business entity to be in GOOD STANDING

A business license

An EIN

A business bank account (not just a separate account, and actual BUSINESS ACCOUNT)

Possibly a DBA/FBN

Proper business accounting and legal practices 

A business location

A business address

 

It is your responsibility as the creator to get this sorted before January 2020. You have to ask the people you pay to work with you if they are a legal business entity. Only then will you be able to prove that you have a business-to-business contracting relationship and not an employer/employee relationship. 

There are numerous other considerations in whether a relationship is a business to business one or not, but most importantly the business you are contracted with must work with other businesses and must set their own hours and location of work.

Deep Breath.

If you are totally freaking out, I get it. Call me. I provide legal consulting to creators and online businesses all day, erry day. It’s my jam. It’s my job to know this stuff. You are aware now so you can do it right. If you are interested in creating an LLC in California you can do that through the Secretary of State or, you can contact me through the form below for help with that. 

If you are creating a valid business to business relationship make sure you have the appropriate contracts in place …a handshake and an agreement isn’t sufficient. You have to have legal agreements with the business you are working for. My Get Legit Shop is a great place to start. I suggest the Independent Contractor agreement! 

If you have a community that needs this information I am here to help. Shoot me an email to hello@emilydbaker.com. I am happy to talk to your community, podcast, channel about how to Get Legit™.

Want to see if an LLC is right for you?? I’ve got you…..fill out the form below!

Emily D. Baker, Esq.

Emily D. Baker, Esq.

Badass Lawyer for Online Business

Emily has been running business for 15 years and has ove 13 years of legal experience. She spent 10 years at the Los Angeles County District attorney's office where she truly learned to be a solopreneur. Emily has built her consulting and speaking business from the ground up, in her garage jamming out to 90's music. She specializes in no BS practical advice for the starting and scaling online entreprenur. Emily will tell you what the business gurus can't in a way that is both hillarious and empowering.

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