We undoubtedly “live in interesting times.” The COVID-19/Coronavirus pandemic is imposing sudden and dramatic restrictions on all of our daily lives and our businesses.
As founders, business owners, and entrepreneurs, countless questions have probably arisen as to how to responsibly operate and maintain the continuity of your business in a manner that both prioritizes the health and safety of your employees and the impact of your actions on the community.
And, given the constantly changing legal landscape and the patchwork of federal, state, and local laws and regulations, it is difficult to even know what questions to ask.
Further, we understand that for many of our early-stage startup clients, certain types of legal compliance can get put on the backburner. But given the health emergency we are facing, we can reasonably expect heightened scrutiny around regulatory compliance in areas that are touched by COVID-19 (including employment protections, policies, etc…).
This Client Update addresses high-level issues your company may face in navigating the COVID-19 pandemic’s impact on your employment practices.
Please note that the law and regulatory guidance is changing rapidly. There are no one-size-fits-all answers and an analysis of your company’s situation is necessary to provide substantive legal advice. We urge you to consult with legal counsel before implementing changes to your employment practices.
Understand Your Legal Obligations To Employees
As you navigate transitioning some or all of your employees to remote work, adapting your business to a very different commercial landscape and economy, and face challenges related to sick employees and employees with increased childcare burdens, it is important to keep track of the patchwork of laws (some just now changing) that apply to your business.
A) Review And Update Your Sick Leave And Medical Leave Policies
Make sure you have sick leave policies that are in place that comply with applicable state and local law. In addition, your employees may be eligible to take medical leave due to their own illness or to care for sick family members under the Family and Medical Leave Act or state law.
Depending on the size of your business and where you operate, your employees may be eligible for disability or paid leave under state law or insurance policies your company maintains.
Even if you have these policies in place, the laws are changing. Congress just enacted the Families First Coronavirus Response Act (which will be the subject of a separate Client Update), which expands the right to paid sick, family, and medical leave.
B) Compliance With Wage And Hour Laws for Remote Employees
More often than not, remote work has been the province of exempt employees. If you are going to ask non-exempt employees to work remotely, you should have policies and procedures in place to ensure that you are complying with applicable wage and hours laws.
Reporting Time: Make sure your timekeeping system can be accessed by your employees remotely so that they can accurately log the hours worked. You should also have a written policy in place ensuring that employees know to accurately report all time worked (i.e. no under- or over-reporting or working “off the clock”)
- Rest and Meal Breaks: You should have a clear policy regarding the number and length of rest and meal breaks and when they will be compensated. These requirements do not change just because an employee is working from home.
- Overtime Policies: When you have a non-exempt employee at the office, you can always direct them to leave at 5 pm on the dot to ensure they are not working overtime. When employees are working from home, that failsafe is not there. You should have a policy in place prohibiting overtime and a written approval process where overtime becomes necessary. Please remember you must compensate employees for overtime worked, even if not approved in advance. A written policy will help reduce the frequency of unapproved overtime and provide a basis to take disciplinary action for those employees who engage in unapproved overtime.
For exempt employees, do not be tempted to dock their pay if they suddenly work reduced hours while telecommuting during the pandemic. Both the Federal Labor Standards Act (FLSA) and most state laws require employers to pay an exempt employee their full salary for any work week in which they do any work whatsoever, with limited exceptions.
C) Don’t Forget The ADA
Remember to keep in mind the Americans With Disabilities Act (ADA) and other related laws when governing who is permitted to work from home.
If you have an employee with a medical condition that puts them at high risk for COVID-19 complications, you may be required to allow them to work remotely as a reasonable accommodation for their disability, even if you are otherwise permitted to require employees to work onsite.
For example, as discussed below with respect to the San Francisco Bay Area shelter-in-place orders, while all residents in the impacted counties are required to stay at home, there are exceptions that permit some businesses in some circumstances to allow workers to carry out their jobs onsite. But even if you have an employee with a business function that fits into one of those exceptions, the ADA may still require you to allow that employee to work from home as a reasonable accommodation for a disability, if that disability would make them susceptible to complications from the Coronavirus.
D) Do You Have An Injury And Illness Prevention Policy?
While not universally required under federal OSHA laws, some state OSHA laws require businesses to have a written Injury and Illness Prevention Policy in place to, among other things, reduce the spread of infectious disease in the workplace.
In California, all businesses are required to have such a written policy in place.
If you do not have such a policy, this is the time to make sure you do.
E) Think Thoughtfully About Furloughs And Layoffs
As unpleasant as it seems, the economic impact of the COVID-19 pandemic and the varying ability of businesses to adapt to remote work may necessitate temporary or permanent workforce reductions.
You should be cognizant of the costs and compliance issues arising from furloughs and layoffs.
- Your employees may be eligible for unemployment benefits for either permanent or temporary layoffs or even for a reduction in hours
- Be careful about reducing hours/salary for exempt employees, as you may inadvertently wind up paying them below the threshold to continue being exempt employees
- Depending on your business, you may be required to comply with federal or state WARN act statutes
What New Restrictions Impact My Company’s Operations?
In addition to the laws that are already in place, as discussed above, you may be facing new and changing legal restrictions on the conduct of your business.
In the U.S., the most drastic such restrictions are now in place in the Bay Area, with residents of San Francisco, San Mateo, Santa Clara, Marin, Alameda, and Contra Costa counties being subject to shelter-in-place orders that prohibit residents from leaving their homes, except in limited circumstances. But the Bay Area may not be alone. For example, residents of New York City have been warned that a similar order may go into place in a matter of days.
The impacted Bay Area counties have instituted shelter-in-place orders that are quite similar in design. Assuming these restrictions are borrowed in other jurisdictions, as shelter-in-place requirements expand to other cities and states, it is helpful to understand how that impacts your company.
As a general matter, under the new regulations in place in the Bay Area, all of your employees will be required to work from home, except in limited circumstances. While the exceptions are fact specific, they can be viewed in broad categories.
A) Essential Businesses
If your business falls into one of a set of delineated categories of “Essential Businesses,” you can permit your employees to work onsite.
While some of the categories of Essential Businesses are obvious – healthcare, grocery stores, gas stations – some are less obvious and your business might fall into one of those other categories. Some less obvious Essential Businesses that you should be aware of are:
- Biotechnology companies
- Educational institutions facilitating distance learning
- Media services
- Businesses that ship or deliver goods or services directly to residences
- Businesses that supply products needed for people to work from home
- Businesses that supply other Essential Businesses for support or supplies necessary to operate
If you believe your business falls into the last category, you are, of course, dependent on your customer or customers being deemed Essential Businesses and the understanding that your provision of support or supplies are truly necessary for them to operate. Consider getting something in writing from your customer(s) to this effect to bolster your position if there end up being compliance concerns. An agreement from your customer(s) to indemnify you if you are fined or otherwise penalized for relying on their assertion that they are an Essential Business and/or that they need your support/supplies to operate would be helpful, though presumably an aggressive ask.
B) Maintaining Value of the Business
Employees necessary to maintain the value of business inventory, ensure security, and process payroll and employee benefits may continue to work onsite. Examples of this would be security personnel, certain HR personnel, and personnel to secure package deliveries.
C) Facilitating Work from Home Functions
Employees whose presence onsite is necessary to facilitate the ability of business employees to work from home are permitted to work onsite at your business. This would include, for example, IT personnel.
D) Limited Exception to Obtain Supplies Needed to Work from Home
If you or one of your employees needs supplies from the office to be able to work remotely, the Bay Area orders generally permit them a limited right to visit their work facility just to retrieve those items.
Thoughts On Best Practices During The Pandemic
Once you know what you can and can’t do in terms of keeping your company running, there are the fuzzier questions of what you should and shouldn’t be doing.
A) Implement Social Distancing Policies
We have all become familiar with the concept of “social distancing” as of late. The general concept is to:
- Maintain at least six-foot social distancing from other individual.
- Wash hands with soap and water for at least twenty seconds as frequently as possible or using hand sanitizer (if you can find it).
- Cover coughs or sneezes (into the sleeve or elbow, not hands)
- Regularly clean high-touch surfaces.
- No hand shaking
To the extent your employees are permitted to be onsite at your business, you are required to ensure they follow these social distancing procedures.
But in addition to these minimally required procedures, there are additional recommended policies to put in place to enhance your social distancing compliance. These, of course, depend on your business and its operations. But some examples are:
Limit in-person meetings onsite, but to the extent necessary follow these protocols:
- Limit meetings to less than ten people.
- Distance yourself within any meeting room or gathering location.
- Select meeting rooms that are large enough to otherwise follow social distancing requirements.
- Limit your presence in common areas.
- Use stairs in lieu of elevators, if possible, and if not possible, limit elevator occupancy to no more than two people at a time standing in corners.
- Avoid using your hands to open doors, turn on faucets, or other high-touch surfaces.
- If you are visiting the office to pick up supplies necessary to work from home, please try to visit during off-hours (early morning, evenings, or weekends).B) Keep Up To Date On CDC Guidelines
The CDC has put out and is updating guidance for businesses and employers to plan, prepare, and respond to the COVID-19 outbreak. You should regularly monitor this guidance for best practices during this rapidly changing situation.
C) Think About Your Sick Employee Policies
If an employee is experiencing symptoms of illness that could indicate COVID-19/Coronavirus, please advise them to stay home even if they are otherwise permitted to be onsite. Those symptoms include fever, cough, and shortness of breath. Such employees should be encouraged to stay home at least until they have gone 24 hours without fever or symptoms and without medication.
Be careful about what questions you ask your employees if they call in sick, as applicable laws do not typically permit employers to inquire into employee medical conditions. CDC guidance advises that it is appropriate to ask questions targeted at COVID-19 exposure or infection specifically, such as whether the employee has traveled internationally (particularly to high-risk areas) and whether they are exhibiting symptoms that indicate COVID-19.
Your current sick leave policy may require employees provide a doctor’s note to substantiate their absence. Consider altering that policy at this time. The CDC warns that healthcare facilities will likely be overrun at this time and this would unnecessarily burden the healthcare system. Also, please be aware that applicable law may not permit you to ask for a doctor’s note in the first place.
D) Consider Self-Quarantine Policies
To the extent employees have traveled internationally or have been exposed to someone with a confirmed case of COVID-19, you should consider implementing a self-quarantine policy. General guidance suggests requiring such employees to self-quarantine for 14 days, symptom free, before returning to work onsite.
E) Get It In Writing
As lawyers, we always advise our clients to document, document, document.
It is not enough to put policies in place to delimit which employees can work onsite and when, as well as the practices in place to limit COVID-19 exposure while in the workplace, you should adopt written policies that your employees can read and refer to and update them as necessary.
While the health of your employees, their families, and our community is the number one priority, liability risk can never be ignored. We are in an undeveloped legal landscape and it’s unclear the extent to which employers can be held vicariously liable for employee violations of shelter-in-place orders or mandated social distancing requirements or whether we will see a parade of lawsuits against employers by employees exposed to COVID-19.
In an abundance of caution, in addition to having written policies and procedures in place regarding COVID-19, you should consider having your employees sign some sort of written acknowledgment and certification before coming onsite to your workplace.
Confronting COVID-19’s impact on your employees and your business is understandably stressful and confusing. If you have any questions about any of the information in this article or wish for assistance in evaluating these issues, please do not hesitate to contact us.