COVID-19 Briefing Call: What Employers Need to Know

Employers are scrambling to figure out how to manage their workforce during this unprecedented and fast-changing public health crisis. Elizabeth ‘Betsy’ Lewis, partner at Cooley, LLP, graciously gave 45 minutes of her time and invaluable legal guidance to Board of Trade members on March 31 to help them navigate this complex and challenging situation.

You can listen to the full briefing here or scroll down for a summary of the key points.

SUMMARY

Managing and protecting essential employees

• To determine which employees are deemed essential and can physically show up to work, consult the executive order in your jurisdiction.
• For those employees, be sure you are providing a clean and safe work environment. Provide gloves and masks if you can, especially if these employees are required to enter other people’s homes. Provide for social distancing as much as possible by limiting the number of people who can be in the same confined space at the same time.
• If an essential employee refuses to work because they feel unsafe, first ask what might change that. What could you provide to make them feel safer? If no solution is available, see what paid leave you can provide. Then, offer unpaid leave. Avoid termination unless you must have an active employee in that position immediately.
• If an employee contracts the virus and claims that they did so on the job, advise them to file a worker’s compensation claim. They may be denied because for most fields beyond healthcare it is difficult to prove that an employee contracted the virus on the job and not elsewhere. Regardless, this is the right direction to give this employee.
• If an employee contracts COVID-19 and has potentially exposed other employees to the virus, notify other employees that they may have been exposed without naming the diagnosed individual. If you obtain that individual’s permission, you may name them, otherwise you must protect their privacy. There may be exceptions to this rule if naming the diagnosed employee is critical to the safety of other employees, but these cases are rare, and you should seek legal counsel first.

Facilitating remote work

• Don’t be stingy with equipment that will make remote work more comfortable and productive. Do your best to comply with requests for office equipment that the individual may need, such as standing desks.
• If you are concerned that some employees will not be adequately productive working from home, be sure to set very clear expectations about when they should be online, what they should produce, and other aspects of their performance. Then, monitor and assess their performance. This provides an objective measure of their ability to work from home.  
• If possible, be flexible with respect to work hours. Many people are trying to juggle work and childcare, and some might be more productive if they can work when it suits them.
• Communicate, communicate, communicate. Check in with them about work and about their personal lives. Stay connected!

Options for reducing salaries

• Check offer letters and contracts to see if there are any restrictions on your ability to reduce salary. For example, some employment agreements might allow the employee to quit and collect a severance. If your offer letter specifies that the employment is at will, this may not be a problem.
• If you do reduce salaries, include everyone except perhaps your lowest-paid employees. There will likely be ill-will among your workforce if executives are spared the salary reduction. Many companies are reducing salaries by a percentage according to employment tier, with higher earning employees taking the bigger cuts.
• Don’t promise to make up the difference in lost wages later. The law does not allow you to defer wage payments. You can reduce pay now and make employees whole later by issuing a bonus, if you are able. Just don’t make any promises that you aren’t very confident you can keep.

Furloughing employment

• Furloughing an employee means you are temporarily stopping work for an employee but intend to bring them back to work when business resumes. Furlough notices should allow the employer flexibility by stating that employees could be called back early, their furloughed could be extended, or they could be terminated.
• Furloughed employees are eligible for unemployment compensation.
• Furloughed employees may not be able to keep their health benefits, so be sure to check with your policy provider. Some providers are changing the rules and allowing furloughed employees to stay in the plan due to the COVID-19 crisis, but the employer needs to check. If not, furloughed employees can continue in the plan via COBRA or state-provided coverage.

Terminating employment

• Termination means that there is no intention to bring and employee back to work.
• The WARN Act requires that employers give an employee 60 days of notice when terminating their employment. This typically applies to employers with 100 or more employees who work 20 hours or more per week when there are plant closings or mass layoffs.
• If an employee is furloughed for less than six months, the requirements of the WARN Act do not apply and you do not need to give them 60 days of notice. You can later extend the furlough past 6 months if circumstances justify it. For example, an employer that services schools is furloughing employees expecting to bring them back in the fall when schools reopen. But if they don’t, they could extend that furlough and not be impacted by the WARN Act.
• The Family Medical Leave Act (FMLA) requires that eligible employees be given emergency sick leave to care for themselves or a family member. You can find more details on this law here. In response to the COVID-19 pandemic, the IRS is now offering a 100% tax reimbursement to employers who provide paid emergency sick leave. More information on that benefit can be found here. It is inadvisable to ask employees to take paid sick leave followed by a furlough.
• Unemployment is beyond the scope of this call because it is complex and the rules vary from one jurisdiction to another. However, do note that though some jurisdictions provide unemployment insurance to low-wage workers with cut hours, employers should not attempt to use it as a tool to conserve costs.
• Paycheck Protection Program (PPP) loans under CARES Act can help small businesses keep employees on payroll. The specifics of this program are beyond the scope of this call. For information on PPP loans, read this blog from Cooley or join the presentation on the CARES Act by K&L Gates tomorrow at 10:00AM.