Updated: March 17, 2020 at 12:30 p.m.
Here in San Diego, Mayor Kevin Faulconer has issued an Executive Order to combat the novel Coronavirus (COVID-19). This Executive Order closes all bars and nightclubs to the public, limits all restaurants to delivery, pick-up, and/or drive-thru only, prohibits gatherings of 50 or more people and strongly discourages non-essential gatherings, closes all City buildings to the general public, and limits parking enforcement. This comes six days after the World Health Organization (WHO) classified Coronavirus as a pandemic. Thus, regardless of where your business is located in California, you are likely going to be affected. Below we have compiled the information most relevant to business owners whose businesses will likely be affected by this pandemic. We will endeavor to update this article to include additional information as it becomes available.
If your employees are still coming to work:
Can you test their temperature to see if the employees are sick? Yes. Because the WHO has classified the Coronavirus a pandemic, the Americans with Disabilities Act (“ADA”) allows employers to take this preventative action. Be sure you are not singling particular employees out for testing based on discriminatory grounds, such as race, ethnicity, origin, or age. Similarly, be certain you are maintaining hygienic practices when taking the temperatures of employees.
Can you send someone home who is exhibiting influenza-like symptoms? Yes. The Centers for Disease Control (CDC) notes the symptoms for Coronavirus are primarily fever, dry cough, and shortness of breath. (See https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html for more information on the CDC’s Coronavirus recommendations.)
Can you ask an employee about recent travel to high-risk countries (i.e., Italy, China)? Yes. Employees do have a right to medical privacy, though, so be careful not to infringe on that right when asking.
If you send an employee home at some point due to lack of work, will you owe the employee any additional wages beyond what they worked? Potentially. California’s Wage Orders generally require that any employee who reports to work and is not then put to work, or who is permitted to work less than half of the employee’s scheduled shift, be compensated for half of the scheduled shift (in no event less than 2 hours nor more than 4 hours of pay). For example, if an employee is scheduled to work from 12 p.m. to 8 p.m. and reports to work but then is sent home without working at least four hours, the employee must be compensated for four hours of work. Recent caselaw requires “reporting time” pay even where an employee does not physically show up for a shift, but is merely required to call in two hours prior to the start of a scheduled shift to determine whether the employee needs to report to work or not. This reporting time will not apply if there is a state of emergency which includes a recommendation to your business to cease operations. While a state of emergency has been declared, it currently does not include a recommendation for any businesses to cease operations (unless your business will cause gatherings of 250 or more persons). Until it is determined that one of the exceptions to reporting time pay applies to the COVID-19 situation, the safest course of action is to assume that reporting time pay should be paid to employees who are scheduled to work and show up, but who are sent home before working at least half of their scheduled shifts. If there is a possibility that your business may be sending employees home without completing their normally scheduled shifts, it may be possible to limit reporting time pay by scheduling shorter shifts and allowing employees to work beyond those shifts should business require it.
Do you need to take extra measures to comply with OSHA and Cal/OSHA? Potentially. OSHA and Cal/OSHA require employers to provide their employees with a safe, hazard-free work environment. The threat of Coronavirus may create an unsafe work environment in which employers must take additional measures. Currently, Cal/OSHA states that medical workers, including doctors, nurses, and home health care workers, employees at certain laboratories, public health services, and police services that are reasonably anticipated to expose employees, and employees at correctional facilities, homeless shelters, and drug treatment programs require additional protections to protect from this airborne virus. Cal/OSHA requires that employers in these industries develop and maintain the required programs and plans for their facilities or operations. As a practical matter, all employers should ensure there is adequate soap and warm water to allow all employees to wash their hands more frequently, hand sanitizer for all employees (and patrons), and that all communal areas and equipment are being sanitized thoroughly and often.
Can I require my employees to take further precautionary measures, like wearing face masks or gloves? Yes. If you choose to require this, make sure you are prepared to provide accommodations to anyone requiring them. For example, if an employee is allergic to latex, you will be required to provide non-latex gloves for that employee. You should not require employees to provide their own facemasks or gloves, or be prepared to reimburse them for this expense if it is required for the job.
If your workforce is social distancing or self-quarantining, are they to be paid for this time? Potentially. First and foremost, you should remind your employees of your sick leave and paid time off (PTO) policies, and advise on how these policies will work during any social distancing/quarantining. California requires that all full-time employees receive 24 hours of paid sick leave per year, either accrued at a rate of 1 hour of leave for every 30 hours of work or provided in one lump sum at the beginning of each year. In the City of San Diego, employees accrue one hour of paid sick leave for every 30 hours worked, with a minimum of 40 hours of paid sick leave per year. Many other cities and counties have their own minimum requirements which exceed those required by the State of California. Should your business be in a position to offer it, employees may also be permitted to accrue negative balances in their PTO or paid sick leave accounts, which can be offset against future accruals. Regardless of which policy applies to your business, make sure paid sick time and PTO is easily accessible and available to all employees upon request. Employees may use either or both to cover any lost income due to social distancing preventative efforts or self-quarantining. The FMLA and CFRA discussed below also could apply here.
If an employee is staying home to care for a family member who is social distancing, self-quarantining, or in isolation, are they to be paid during this time? The Family Medical Leave Act (FMLA) and California Family Rights Act (CFRA) allow employees to take six weeks off to care for a family member who is ill. However, this leave is generally unpaid. Employees may use their paid sick time or PTO to receive wages during these six weeks. These Acts only apply to employers with 50 or more employees. California’s Paid Family Leave benefits may also be available to employees who need to take time off of work to care for loved ones, and provide up to 6 weeks of partial pay for eligible employees (benefits are set to increase to 8 weeks starting on July 1).
Do I have to provide time off for employees whose children’s schools or daycares have closed due to Coronavirus? Yes. The Labor Code requires that all employers with 25 or more employees provide their employees to 40 hours per year of leave to deal with their children’s school-related emergencies. A closure of a school or daycare would constitute such an emergency. The leave may be paid or unpaid, depending on your policies.
Do I have to pay my employees who are working from home? Yes. If your workforce is partially or fully working from home, you will need to compensate them for all hours worked. If the employees working from home are non-exempt, you will need to ensure they are keeping track of their hours and taking the required meal and rest breaks (meal and rest periods will be difficult to track, so employers must make it clear in writing that all employees are to take such breaks). If the employees working from home are exempt, they are owed their weekly salary if they perform any work during a week. If either an exempt or non-exempt employee performs no work during a workweek, you do not need to compensate them.
One of my employees has come into contact with someone who tested positive for Coronavirus. What do I do? You should inform your workforce that someone who works at the location has come into contact with another person who tested positive. You may not reveal that employee’s identity, as this private medical information must be protected by the employer. You should determine which other employees have frequent contact with the potentially-infected employee (you may ask the potentially-infected employee to identify those who work within a six foot range) and send those employees home to self-quarantine for 14 days. Those employees may be entitled to reporting time pay for the day. You should also inform any building management, so additional sanitizing can be completed.
If you need to cut back your workforce due to declined business:
How do I decide whose hours to cut? It is critical you do not make this decision on a discriminatory basis. We recommend making a cut in hours across the board to all employees. For example, instead of cutting the youngest workers’ hours completely for two weeks, cut all workers’ hours by a set percentage from their monthly average hours.
Does the WARN Act apply? For most of our clients, probably not. The WARN Act applies to commercial and industrial workplaces with 75+ employees when there is a mass layoff, closure, or relocation. Unless you fit this criteria and you are laying off a significant portion of your employees (more than 50), WARN does not apply to you. If the WARN Act does apply, you will need to give your employees 60 days’ prior notice of the closure or layoff before that occurs or you will need to pay and provide benefits to those employees for 60 days after the announcement. The WARN Act’s language is vague, so there may be additional guidance on the Act’s applicability to temporary shutdowns shortly.
Can employees use paid sick leave or PTO during the time their hours are cut? Most likely, yes. Paid sick leave may be used for employees to engage in preventative care, i.e., social distancing and quarantining. Employees can likely use their accrued paid sick leave and/or PTO, or some combination of the two, to ensure they have some income during the time they are not working. The points made above regarding paid sick leave and PTO also apply here. At this time, at least in San Diego County, doctor’s notes should not be required from employees to justify absences.
If you have closed completely, whether voluntarily or by mandate:
Keep an eye on federal, state, and local health official’s statements. Certain businesses may be required to shutter for a certain time while others may only be encouraged to shutter or limit their services. Other businesses, primarily those providing essential services, may be requested to stay running, while taking additional precautions. While we will provide updates as they become available, the governmental sources below should be relied upon for the most immediate news:
CDC Coronavirus updates can be found here: https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fsummary.html
California Coronavirus updates can be found here: https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/Immunization/ncov2019.aspx
San Diego County Coronavirus updates can be found here: https://www.sandiegocounty.gov/coronavirus/
City of Carlsbad Coronavirus updates can be found here: https://www.carlsbadca.gov/services/depts/fire/emergency/coronavirus.asp
If my business has closed, do I provide unemployment information to my employees? During a business slowdown or shutdown based on the Coronavirus, California employees can receive unemployment benefits. To avoid a slowdown or shutdown, however, California has a Rapid Response Program (https://www.edd.ca.gov/pdf_pub_ctr/de8714rrb.pdf) as well as a Work Share Program (https://www.edd.ca.gov/unemployment/Work_Sharing_Program.htm). Both will work with employers to ensure the costs to employers are lessened. We recommend contacting these programs to determine if you are eligible. If you do not wish to take advantage of these programs, we recommend you still provide your employees whose hours are cut due to a slowdown or shutdown with unemployment benefits information (EDD Form DE 2320) and let them know they may be eligible to receive benefits to make up for their loss of income. Governor Newsom issued an executive order eliminating the waiting period for these benefits, so employees should receive these benefits relatively quickly.
Do I need to provide employees with “final” paychecks when I inform them of a shutdown? Probably not. Unless you are terminating your employees at the time of the shutdown, you probably do not need to provide them with final paychecks. A final paycheck, under the Labor Code, is one which includes all accrued vacation time or PTO and other deferred benefits. This paycheck is due and payable to the employee at the time of termination. While it may be beneficial to employees to provide them with their next paycheck upon notification of the shutdown rather than waiting until the normal payroll processing date, we do not believe a final paycheck is required at that time.
I have suffered business losses from the Coronavirus. Does my business insurance cover these losses? In some limited cases, there may be insurance coverage for some cases of business losses depending on the cause of the loss. You should check your insurance policy(ies) to determine whether these business losses may be covered. Most policies written after January 2020, however, will likely have excluded any losses related to the Coronavirus.
The Coronavirus itself is novel and is providing for a novel situation for business owners. We will continue to monitor the situation and provide guidance as quickly as we can. If you have any questions that are not addressed here, please do not hesitate to contact us.
The materials above have been prepared for informational purposes only and are not legal advice. This information is not intended to, and does not, create an attorney-client or similar relationship.