News

Workplace Issues and COVID-19

For weeks, we have been bombarded with information about the 2019 Coronavirus (“COVID-19”) on a daily basis.  It’s in the news, on social media, and it’s the hot topic around the office.  While it is important to be informed, and there are a multitude of excellent resources available online, there is also a lot of misleading and inaccurate information in circulation which can lead to unnecessary fear and anxiety.  But knowledge is power.  Starting today, and in the coming weeks, Sacks Ricketts & Case, LLP (“SRC”) will be bringing a series of e-alerts to help provide employers with guidance to consider as they prepare for the prospect of a COVID-19 outbreak potentially affecting their workplaces.  While the health risk to the general public in the United States is serious and constantly evolving, it is not yet at a level warranting a Centers for Disease Control (“CDC”) High Risk Warning.  The best thing U.S. businesses can do at this point is to stay calm and informed.

Business Planning for a Reduced Workforce

Unfortunately, COVID-19 has already impacted many segments of the economy, most notably the travel and tourism industries and supply chain businesses that depend on trade with China.  Conferences and business meetings, and even sporting events, have been canceled.  All of these actions have had a ripple effect on other industries, including restaurants, bars, and public transportation.  Even for businesses whose services or products have not yet been directly impacted, there is concern about the potential impact of a reduced workforce if employees (or their families) are exposed to or contract COVID-19.  The best way to ease some of this anxiety is to plan ahead.  Employers need to know what they may or must do, and what they cannot do, from a legal standpoint.  To help employers prepare, we touch on some of these issues below.

    1. Sick Employees or Family Members. From the many articles already published, most employers know they can ask an employee who is exhibiting signs of influenza, i.e., coughing, sneezing, runny nose, fever, and trouble breathing, to go home.  But what if an employee is out of paid sick leave?  To encourage employees to self-report illness and stay home until they are well, employers may consider enhancing their paid sick time policies to add a few extra paid days or to give extra unpaid sick days so that employees are not penalized with attendance violations by staying home.  If the illness lasts more than 3 days, the employer may consider whether the employee is eligible for family and medical leave.  While the flu is not typically a “serious health condition” under the Family and Medical Leave Act (“FMLA”) or a “disability” under the Americans with Disabilities Act (“ADA”), if there are complications, such as hospitalization, both FMLA and/or disability accommodation laws can be implicated.

Keep in mind that employees may need to be absent to care for an ill family member, which may also qualify for FMLA.  However, if the employee must miss work to care for healthy children because a school or daycare is closed, the employee will not qualify for FMLA, but, in California, the employee may be eligible for time off under California’s Family School Partnership Act (which, among other things, allows up to 40 hours of unpaid time off per calendar year to address a child care provider or school emergency).

In some cases when an employee needs to be absent due to illness or does not want to attend work because of fears of contracting COVID-19 on public transportation, employers should consider allowing certain employees to work remotely as business needs permit.  In that case, it is advisable to put in place a telecommuting policy and agreement so that expectations are clear and employees understand this is a temporary measure in response to extraordinary circumstances and will be discontinued when the employer determines it is appropriate.

Employers may be tempted to ask employees questions regarding health or medical conditions of employees they would not normally ask. During a pandemic, however, certain questions that might otherwise be disallowed disability-related inquiries may, in fact, be justified by a reasonable belief of a “direct threat” to the safety of the employee or others.  However, to avoid violations of employee privacy rights, the ADA, the Genetic Information Nondiscrimination Act, and other laws governing confidentiality of medical information, employers must exercise extreme caution and should proceed only with the advice of legal counsel.  While medical information obtained from an employee should generally be kept confidential, there may be circumstances when it is appropriate to disclose medical information to a limited group, especially when the failure to disclose may pose a “direct threat” to high-risk individuals.  For example, if an employee who may be more susceptible to COVID-19 (according to CDC, older people and people of any age with severe chronic medical conditions such as heart disease, diabetes, and lung disease) is exposed to a coworker who tests positive for COVID-19 and is not informed, the employee may not seek treatment in a timely or appropriate manner.  Since every situation is different and fraught with legal risk, employers are advised to seek legal counsel for advice when it comes to medical-related inquiries.

In addition to a Company’s paid sick time or other paid time off benefits, California employees who are unable to work due to their own illness may be eligible for State Disability Insurance benefits (“SDI”).  If the employee needs time off work to care for an ill family member, they may be eligible for Paid Family Leave benefits (“PFL”).  Such employees can be directed to the Employment Development Department (“EDD”) website for further information on applying for these benefits at www.edd.ca.gov.

    1. Reduction in Work. Unfortunately, some businesses may need to reduce employees’ work hours and/or pay and benefits or even eliminate some jobs, temporarily or permanently, in order to remain viable as a business.  To avoid unnecessary exposure to legal claims for wrongful discharge, discrimination, retaliation, breach of contract, and the like, an employer must have a well thought-out plan.

Before taking more drastic measures, an employer may wish to consider other ways to cut costs such as withdrawing outstanding employment offers and freezing or postponing hiring and wage increases, eliminating overtime, and discontinuing all nonessential business travel, offsite meetings, and Company parties.

If a reduction in force or temporary layoff is necessary, the planning process should include a preliminary assessment in which the employer confidentially, and in consultation with legal counsel, considers, among other things, the business units or departments to be affected, the selection criteria, whether there is a union contract, and policies or past practices.  It will be important to document the selection strategy and advisable to provide written aids to managers and FAQs for employees so that there is consistency in the Company’s communications.

In the case of a layoff, employers must consider the federal Worker Adjustment and Retraining Notification Act (“WARN”) and, for California employers, California’s mini-WARN Act, which may require advance notice to employees.  The federal WARN Act provisions are complex and a full discussion is beyond the scope of this article.  However, if there is a “mass layoff” (a layoff of 50-499 employees at a single site of employment and where those employees constitute at least 33% of the full-time workforce at that site, or a layoff of 500 or more employees at a single site), WARN notices must be provided. These Notices have specific contents and must be provided to affected employees (or their union representative) and to specified government officials.  WARN is not triggered when a layoff is for 6 months or less or work hours are not reduced 50% in each month of any 6-month period.

However, in the current COVID-19 pandemic, an employer may not be able to forecast when a layoff may be triggered or how long it may last.  There are exceptions to the 60-day notice requirement, two of which may arguably apply to a COVID-19 pandemic: unforeseeable business circumstances (i.e., a business circumstance that is caused by some sudden, dramatic, and unexpected action or conditions outside the employer’s control, like the unexpected cancellation of a major order; or the mass layoff is the direct result of a natural disaster such as a flood, earthquake, drought, storm, tidal wave, or similar effects of nature).  If an exception applies, a WARN notice must still be provided as soon as is practicable and must include an explanation for reducing the timing of the Notice.

California’s mini-WARN Act applies when there are 75 or more persons employed at a “covered establishment” within the preceding 12 months.  Cal-WARN will be triggered in a layoff situation if 50 or more employees suffer an employment loss at that covered establishment.  Cal-WARN has an exception for a mass layoff, relocation, or plant closure necessitated by a physical calamity or act of war.  Unfortunately, there is no legal guidance at this time as to whether COVID-19 would constitute a “physical calamity.”

Finally, when a reduction in hours or layoff becomes necessary, employees may be eligible for unemployment benefits.  Employees who work less than their full-time hours and whose employers want to keep them may file for a “partial unemployment claim.”  See https://www.edd.ca.gov/Unemployment/Partial_Claims.htm.  The EDD also offers a workshare program for employers as an alternative to layoffs.  See https://www.edd.ca.gov/Unemployment/Work_Sharing_Program.htm.

These are complicated times, but SRC is committed to providing employers with timely and practical advice to navigate this difficult and constantly evolving situation.

 

For further guidance about specific workplace issues, please contact one of our employment attorneys.

ATTORNEY ADVERTISING
The contents of this newsletter are intended for general informational purposes only and should not be construed as legal advice or a legal opinion.  You are advised to consult an attorney about any specific legal question.