Workers and companies face new legal and financial threats as pandemic continues

Staying in business and staying financially solvent are part of surviving a pandemic. USC experts talk about stresses and uncertainties for employees, their employers and the unemployed.

September 22, 2020 Ron Mackovich-Rodriguez

Workers are worried. Supply chain breaks have left shelves bare, and bank balances are hitting zero. The COVID-19 shutdown is forcing anyone trying to stay afloat to prepare for the worst.

Bankruptcy is bearing down on many low-income workers, many of whom were not ready for emergency expenses even before the lockdown, according to bankruptcy expert Robert K. Rasmussen of the USC Gould School of Law.

“Before the pandemic, it was estimated that 40% of Americans would struggle to meet an unexpected bill of $400,” he said. “The bankruptcy court system probably does not have sufficient resources to process and resolve the coming wave of cases. If Congress neither restores the supplemental unemployment benefits nor acts to increase the capacity of the bankruptcy system, courts will be inundated.”

Bankruptcy isn’t the only legal risk for businesses navigating the evolving pandemic landscape.

“An array of legal issues awaits employers, from Cal/OSHA citations and worker’s compensation liabilities to wrongful death lawsuits,” said Thomas Lenz, a USC Gould lecturer.

While gratitude for a pandemic-era paycheck may ease workplace tensions, Lenz advises employers to keep on top of changing safety standards and stay flexible.

“Employers who are good listeners and nimble in the face of constant change are most likely to succeed in these times,” he said. “Surmounting these challenges can make businesses and working relationships stronger.”

Pandemic has meant big issues for small businesses

Always running on thinner resources and reserves, small businesses have to go without navigational guidance for the sudden economic, regulatory and health changes that came with COVID-19.

“Many business owners are working five times as hard for 15% of the money they made last year,” said Michael Chasalow, director of the Small Business Clinic at USC Gould. “They don’t have a team of lawyers that can help them navigate the sea of COVID rules and regulations that change frequently and impact operations at every level.”

Many business owners are working five times as hard for 15% of the money they made last year.

Michael Chasalow

Chasalow believes adaptation will keep some in businesses, like gyms operating in parking lots, while others may simply ride out the storm — an option not open to operations that are forced to fundamentally rethink the ways they bring in revenue.

Kristen Jaconi, a professor of the practice in accounting at the USC Marshall School of Business and an expert in risk management, shares three such examples.

“Will an attempt by the NCAA and college conferences to impose a bubble or a series of bubbles around college basketball herald the end of amateur athletics as we know it?” she asks. “Will Amazon, often labeled the e-commerce slayer of the mall, ironically become its savior as the primary anchor tenant and a brick-and-mortar pillar? Will studios releasing their films only on streaming platforms or video-on-demand during the pandemic effectively finish off the movie theater?”

COVID-19 exposes need to shore up supply chain

The pandemic exposed weaknesses in the worldwide supply chain, which has become globally integrated over the past three decades. Medical professionals were left without personal protective equipment, and consumers faced scattered shortages.

Nick Vyas, executive director for the Center for Global Supply Chain Management at USC Marshall, believes those disruptions will lead to improvement.

“There are many efforts to bridge the gap, including those by industry experts and academic researchers,” he said. “Companies, communities and government will be held responsible to help ensure future supply chain network designs are in place to mitigate issues and keep their respective citizens out of harm’s way.”