OC DEALERBACK TO BUSINESS DURING COVID-19: FAQ’S FOR DEALERS2nd Quarter 2020, Volume 67, Issue 2TAX TOOLS TO HELP IMPROVE CASH FLOWPAGE 8PAGE 20orange countyBusiness Transactions• Buy-Sell Agreements • DMV, BAR and other governmental approvals • Lender flooring and capital loan agreements • Entity formation and structure• Shareholder Agreements • Manufacturer approvals and relations • NMV non-profit association representationEstate Planning • Succession planning for business continuation • Family estate planning (wills and trusts)Tax• Property tax planning, audits and appeals • Federal estate and gift tax controversies with IRS • EDD audits BUSINESS LAW | LITIGATION | ESTATE PLANNING | REAL ESTATE | TAX | EMPLOYMENT PRACTICES FERRUZZO & FERRUZZO, LLP | A Limited Liability Partnership, including Professional Corporations 3737 Birch Street, Suite 400, Newport Beach, California 92660 | PH: (949) 608-6900 | ferruzzo.comBusiness Litigation• Consumer Legal Remedies Act lawsuits• Sales and Service Agreements• Disputes before the CA New Motor Vehicle Board• Consumer claims regarding the sale/lease of autos• Manufacturer audit disputes• Hearings before the AQMD, RWQC and OSHAReal Estate• Dealership site acquisitions and lease agreements• Lender opinion letters• RelocationsEmployment Practices • Arbitration agreements• Wage and hour class action lawsuits• Private Attorneys General Act (PAGA) claimsFerruzzo & Ferruzzo, LLP began providing legal representation to new car and truck dealers nearly four decades ago. Over the course of that time, one of the central goals of the firm has been to remain rooted in our client relationships. With the strength of over 20 attorneys, we provide a spectrum of legal services to support every aspect of running and owning your new car and/or truck dealership. Each member of our team is available to service the needs of you and your dealership.18 2026168 PRESIDENT’S MESSAGEWELCOME TO OUR NEW ASSOCIATE MEMBER68BACK TO BUSINESS DURING COVID-19: FAQs FOR DEALERS2020 OCADA-PAC HONOR ROLL1214A SIGNIFICANT RISE IN AUTO THEFTTAX TOOLS DEALERSHIPS CAN USE TO HELP IMPROVE CASH FLOWASK ALISON25GET TO KNOW JANET NGUYEN: CANDIDATE FOR ASSEMBLY DISTRICT 72161820HOW TO HANDLE OSHA INVESTIGATIONS FOLLOWING A COVID-19 COMPLAINT26OC DEALER is the Official Publication of the Orange County Automobile Dealers Association3737 Birch Street, Suite 220 • Newport Beach, CA 92660www.ocada.org • Phone: 949-428-5050orange countyCANDIDATE FOR ASSEMBLY DISTRICT 72orange countyBOARD OF DIRECTORS PRESIDENT Scott WadeDavid Wilson’s Villa FordVICE PRESIDENTJared HardinHardin Automotive GroupTREASURERJames GrahamSanta Margarita FordSanta Margarita ToyotaAUTO SHOW CHAIRMANDavid SimpsonSimpson Buick GMC Cadillac of Buena ParkSimpson Chevrolet Garden GroveSimpson Chevrolet Irvine DIRECTORSBen BonfoeyThe CAR GroupMiles BrandonCapistrano VolkswagenCapistrano MazdaK.C. HeidlerTom’s Truck CenterJohn OhLexus of WestminsterGeorge SaadTuttle-Click Automotive GroupEXECUTIVEDIRECTOR/SECRETARYJohn SackrisonINTERESTING OC AUTO FACT4©2020 Orange County Automobile Dealers Association. All rights reserved. OC Dealer is published four times each year by OCADA and is the official publication for the association. The information contained in this publication is intended to provide general information for review and consideration. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the OCADA, its board of directors, or employees. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. OC Dealer is a collective work and as such, some articles are submitted by authors that are independent of OCADA. While OC Dealer encourages a first print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission from OCADA. For further information, please contact OCADA.ORANGE COUNTY DEALERS MADE $6.7 MILLION IN CHARITABLE CONTRIBUTIONS DURING 2019SAVE THEDATEOCADA ANNUAL GOLF TOURNAMENT August 10, 2020 Mission Viejo Country ClubANNUALOC AUTO INDUSTRY FAST FACTSFRANCHISED DEALERSHIPS IN ORANGE COUNTYTOTAL DEALERSHIP SALESTOTAL EMPLOYMENTEMPLOYEESPAYROLLSALES TAX COLLECTEDCHARITABLE CONTRIBUTIONSORANGE COUNTY SOLD MORE NEW VEHICLES THAN 24 STATESTHE AVERAGE DEALERSHIP EMPLOYEE SALARY IS $63,000 A YEAR$96 MILLION GOES DIRECTLY TO ORANGE COUNTY CITIESAVERAGE CHARITABLE CONTRIBUTION OF $56,000 BY EACH DEALERSHIPAVERAGE OC DEALERSHIP’S PAYROLL IS $6,608,000AVERAGE DEALERSHIP COLLECTS OVER $6 MILLION IN SALES TAXNEW VEHICLE SALESUSED VEHICLE SALES120$12.6 Billion12,600$793 Million$746 Million$6,745,000199,68090,9606President’s MessageScott WadeDavid Wilson’s Villa FordAt the beginning of each new year I am always excited for the opportunities the year holds; and I think this is true for every entrepreneur. In the first two months of 2020 we saw unemployment falling to record lows, the economy continuing to expand, and new vehicle sales remaining at healthy levels. The next two months brought a pandemic, shelter-in-place orders, record highs in unemployment, and new vehicle sales dropping by 50%. Now there are nationwide protests and curfews.These past three months have been the longest and most challenging in my career. While we were fortunate in Orange County to be able to keep our dealerships open, it certainly has not been easy. It seemed like each day brought a new order or directive from our federal, state, and local governments. We were required to decipher and comply with each of these – all while steering our dealerships in the right direction and making gut-wrenching decisions that none of us ever imagined.I am proud of the important role OCADA played in keeping Orange County dealerships open and providing information and guidance to assist Dealers with these challenges. The Association has been impacted as well. And while one third of the budget has been cut, we stay committed to serving our members every step of the way on our path to recovery. As we start the second half of 2020, I once again find myself optimistic and I will tell you why. We as Dealers have survived World Wars, the Great Depression, recessions, oil embargos and now a pandemic. What has seen us through each one of these challenges is our ability to change, adapt, and overcome whatever has come our way. As Dealers we are each extraordinary entrepreneurs that have an uncanny ability to not only survive, but build ourselves stronger through each challenge. There will certainly be more challenges in 2020; but I know we will also find the opportunities to once again thrive. “We stay committed to serving our members every step of the way on our path to recovery.” orange countyPORTFOLIO REINSURANCEMy Succession Strategy.My Portfolio.“It’s my roadway to wealth and my bridge to the future.” Portfolio builds significant wealth through the affiliated reinsurance companies that I control outside my dealerships. This wealth has helped me grow my business, and I want to see that continue. Working with Portfolio and my estate planning advisor, I have created an orderly succession strategy involving family members and two key executives. I did this by making them stockholders in the ARCs.When the time comes, they’ll have the means to buy the stores with less need for outside funding. Portfolio provides a unique way to give them a real stake in the business. I would tell any dealer to start building a bridge to the future with Portfolio now. © 2020 Portfolio Holding, Inc. All rights reserved.For a confidential conversation about reinsurance, contact:Ryan Hanlon, Managing Director(805) 275-2023 office(818) 599-3373 cellryan@portfolioco.comBack-to-Business During COVID-19: FAQs for Dealers By James J. McDonald, Jr.; Fisher & Phillips LLPWhat does state and local law require us to do?The state has issued industry-specific guidance for auto dealerships operating during the pandemic, and Orange County has made that guidance mandatory. You must post the state-issued checklist of requirements, with a statement of compliance signed by the dealer principal or general manager, in a visible place at the entrance to the dealership. The guidance and checklist are available at www.covid-19.ca.gov.If we do not bring back all of our employees right away, can we invite our better performers back first?Yes, provided you have some objective measure for determining who are the better performers. You may use sales volume for salespersons and service advisors, productivity for repair technicians, etc. Where objective measures are not available you should invite the more senior employees back first. Do not apply only subjective judgments of who is a better performer or you will be vulnerable to discrimination claims.May we eliminate the positions of some employees?Yes, provided you are eliminating the job and not merely the employee. For example, if you decide you will not need an assistant service manager in the foreseeable future you may eliminate that position. If on the other hand you are reducing the number of service advisors you will employ, for example, use an objective measure as recommended above to determine who will be cut.Will we have to onboard employees again when we bring them back? Not if you furloughed them as opposed to terminating them. Unless you sent them a COBRA notice you will not likely have to re-enroll them in benefits (but check with your health plan or broker). You will not need to have them complete a new I-9 form or other onboarding paperwork. This is a good time, however, to check to be sure that you have a current arbitration agreement signed by each employee and if some are missing or outdated you can require returning employees to sign new ones.What if employees do not return when we invite them to do so?Unfortunately, many lower-paid employees are receiving more in unemployment benefits than they would earn if they were working. These employees might not want to return to work. When you invite employees back to work, do so in writing. Give them a specific date to return and warn them that if they fail to return as scheduled their employment will be terminated and you will have to advise the EDD that they declined an offer of reinstatement which could affect their continued receipt of unemployment benefits. What if an employee does not want to return to work for health reasons?If an employee who is 65 years of age or older, or who has a serious health condition, requests not to return to work at this time, pursue an interactive process with that employee to determine if a reasonable accommodation can be reached. Could the employee work from home, or in an alternative position not involving contact with customers? If not, then leave the employee on furlough status for the time being. A general fear of catching COVID-19 on the part of otherwise healthy employees under age 65 is not a valid basis for declining to return to work, however. What if an employee cannot return to work on account of a lack of child care? Under the extended family leave provision of the Families First Coronavirus Response Act (FFCRA), an employee may take up to 12 weeks of paid leave at two-thirds of pay to care for children whose school or daycare provider is closed due to the pandemic. In order to be eligible for this leave, however, the parent must certify that no other adult is available to care for the children and the employee must not be able to work remotely and care for the children. You must provide such paid leave and then take a credit for the paid amount against your next quarterly federal payroll taxes.89Next >