The plight of Norma Arroyo, owner of Mi Cocina restaurant in Highland, makes the case for my two bills, now in the state Senate. They are aimed at helping small businesses ward off permanent closure due to the novel coronavirus.
Arroyo is one of California’s four million small business owners. For almost 29 years the popular eatery was also operated by her parents, Margaret and Carlos Lopez, and her brother, Armando Arroyo. She is doing all she can to stay open and keep her employees working. Asked how it’s going, she replies, “There are lots of waves, and I’m learning to surf.” She has confronted pandemic-related challenges: increased costs for meat, eggs, beans, rice and tortillas.
When restaurants were allowed to offer takeout and delivery, food packaging became more expensive and difficult to obtain. Her team is down to 20 employees, from 40 last year. Some have not returned over anxiety about laboring in a high contact business or lack of childcare. Others are younger people whose parents don’t want them returning to work because they live in multigenerational households with elderly family members and fear infecting them.
She and her staff have even confronted customers expressing hostility about wearing masks and temperature-taking requirements in the restaurant. Arroyo has managed thus far to fulfill the promise she made to her parents to keep the restaurant open. “I also pray all the time,” she said. “Sometimes it feels like I’m in quicksand. I’m doing all I can to hold on.”
Entrepreneurs such as Arroyo are employers and job creators, and California needs them to reboot our economy. They need the state’s help.
My legislation, Assembly Bill 1035, would protect mom-and-pop enterprises with 25 or fewer employees from lawsuits filed by customers if they are following state and local health regulations. The measure would not protect grossly negligent operators, those engaged in willful or wanton misconduct or owners or employees engaging in unlawful discrimination.
Supporters include the Civil Justice Association of California, National Federation of Independent Business as well as local businesses from Big Mike’s Rooter & Plumbing to nonprofits such as Lighthouse for the Blind.
Another bill, Assembly Bill 1552, would allow business owners who pay for a form of property damage insurance referred to as business interruption coverage to have their claims honored by their insurers. It would create a rebuttable presumption clarifying that COVID-19 is the cause of direct physical damage for insured enterprises under certain conditions.
Claims on interrupted business policies, for which people paid premiums for years, are being denied without proper investigation so frequently that in April the California Department of Insurance warned insurers they “need to fairly investigate all business interruption claims as they would during any disaster.” Among supporters of my measure are the California Small Business Association and California Restaurant Association.
Both of my proposals would provide critical relief to California’s restaurants, shops, gyms and other ventures that make our state the world’s fifth largest economy. Companies and firms of all sizes have been hammered by the virus, but small businesses have been especially hard hit.
Minority businessowners are particularly suffering. According to McKinsey’s U.S. Small Business Pulse Survey, 58 percent of minority-owned small businesses are “extremely” or “very concerned” about the financial viability of their enterprises. The figure is 68 percent for Native American–owned firms, compared with 47 percent for all U.S.-based respondents.
Recent research by the MetLife and the U.S. Chamber of Commerce revealed that 43 percent of surveyed companies estimated they were less than six months away from being forced to close for good.
California can do better by Norma Arroyo and other state small business owners. They need the Legislature to approve AB1035 and AB1552.
James C. Ramos, a lifelong resident of San Bernardino County, represents the 40th Assembly District and is the first California Native American elected to the Legislature.
