Extraordinary Measures in Extraordinary Times

As everyone in business knows, a company is only as good as its employees.  And when employee health is threatened, so is the company’s – a seamless connection often overlooked in the frequent but often artificial distinction between “employee” and “employer” interests.

This is precisely the situation in these challenging days of the coronavirus known as COVID-19.  And employer responses for the good of their employees regarding this rapidly spreading virus have embodied an old adage: extraordinary times call for extraordinary measures.

A summary of those measures follows, with one major caveat – what works for Company A may be different than what works for Company B.  So while the below discussion addresses both the general and the specific, each employer should do what’s appropriate for its own workplace, seeking legal, tax, human resources and other professional advice as needed.

COVID-19 Preventive Health Measures

First, employers still able to keep their offices and facilities open are adopting preventive health measures to better protect employees, customers and anyone else who comes into their workplace.   These measures especially include those recommended by the Centers for Disease Control and Prevention (CDC), in addition to those issued by state and local health agencies and officials.

Specific steps that generally apply to most worksites include social distancing from others (at least six feet apart), regular and thorough hand washing (for 20+ seconds), placement of hand sanitizers for frequent use, the regular cleaning and disinfecting of equipment and commonly touched surface areas, sneezing and coughing into tissues or one’s covered arm, and having any employee stay home if he or she has a fever or other symptoms typical of COVID-19, such as a persistent cough or shortness of breath.  Note: See below for a reference to recent EEOC guidance regarding temperature checking and other medical inquiry steps employers may be able to take in certain circumstances.  Being allergy and regular flu season, a touch of common sense and each employee’s awareness of their own personal medical history should also be considered.

Some of the best resources for helping employers implement preventive COVID-19 measures are as follows:

• cdc.gov – The CDC’s website provides outstanding practical guidance along with COVID-19 updates, Internet links, research summaries and detailed discussions.
• dol.gov and www.dol.gov/coronavirus – The U.S. Department of Labor (DOL) has COVID-19 resources on both its general website and a new dedicated site specifically addressed to coronavirus issues in the workplace. Topics include OSHA/safety matters; FLSA/wage payment requirements involving minimum wage, overtime and salaried exempt employees; the FMLA and recent Families First Coronavirus Response Act (FFCRA); as well as other laws and regulations within the DOL’s jurisdiction and which all remain in effect, increasing employer obligations to understand navigating them within the context of COVID-19.

As most employers are now aware, the FFCRA (effective April 1, 2020), provides up to 10 days of paid sick leave and up to 10 weeks of expanded paid Family and Medical Leave for eligible employees working for companies with under 500 employees.  See especially the link under “Wages, Hours and Leave” in the DOL’s dedicated website, which accesses detailed guidance and other FFCRA resources, including an ability to download and print the newly required poster about FFCRA rights and obligations.

• ncdhhs.gov – The N.C. Department of Health and Human Services (NCDHHS) has COVID-19 links and other resources on preventive measures and related concerns, as well as the latest North Carolina statistics regarding the virus and an ability to access Governor Cooper’s Executive Order 121 (Stay at Home Order effective 5 p.m. on March 30 through April 29), and Executive Order 120 (closure of K-12 public schools through May 15).
• co.forsyth.nc.us – Forsyth County’s website has helpful links to the county’s Stay at Home Order issued on March 27, 2020, a FAQ concerning that order, and further links to preventive measures and other resources about COVID-19 in Forsyth County and the state of North Carolina. The website also provides a helpline to the Forsyth County Department of Public Health for COVID-19 questions (336-582-0800).

Layoffs, Terminations and Unemployment Insurance in the World of COVID-19

Employers are also implementing practical workplace measures to help stay in business and continue providing jobs for their employees – whether during these challenging days, or once the COVID-19 crisis is over and our economy stabilizes.  Given the mass of new unemployment claims just recently filed (3.3 million in the United States during the week of March 23 alone), the most dramatic measure currently facing employers should perhaps be first addressed:  terminations from employment, layoffs and facility closures.

Terminations and Layoffs

Terminations are precisely that, a complete separation from and ending of employment.  Terminations may occur on an individualized, per-employee basis, or they may occur as part of a “group” occurrence.  If a group occurrence, then the employment action is often referred to as a layoff or reduction-in-force.  A layoff may be “permanent”, which would involve an actual termination from employment, or it may be temporary in nature (often called a “temporary layoff” or “furlough”).  In the current world of COVID-19, and its sudden and severe ripple effect throughout our economy, there are three primary reasons being cited for terminations and layoffs: a dramatic reduction in business, a government closure mandate, or when the workplace can’t be adjusted in such a way that it honors needed coronavirus protections.

Temporary layoffs (or furloughs) are frequently a preferred course when an employer hopes to recall most if not all of the affected employees after conditions improve.  Any recall usually depends on whether and when those conditions actually improve in a lasting way, but in the interim temporarily laid off (or furloughed) workers are usually still considered “employees” even though not actively working.

This inactive but continued employment status can have significant advantages.  In particular, it could enable the continuation of employer-provided benefits, such as group health insurance, if the terms of the plan document allow employees who are not actively working – or who work less than a certain number of hours – to still receive the benefit.  (Be sure to check the plan document and with your plan administrator as needed.)  A temporary layoff could also allow for the employee’s potential qualification for federal or state coronavirus-related paid leave or other benefits (such under as the FFCRA), assuming eligibility requirements are met and subject to further regulatory guidance.  Temporary layoffs/furloughs can also provide an advantage of maintaining as cohesive a workforce as possible until conditions improve and any return to work occurs, while enabling the affected employees to likely qualify for unemployment benefits similar to “permanently” laid off workers whose employment has actually ended.

Facility or plant closings and “mass layoffs” may have their own legal requirements.  Although North Carolina does not have its own plant closure or mass layoff law, the federal Worker Adjustment and Retraining Notification Act (WARN) does apply – provided, of course, that the company and situation are subject to WARN obligations.

In summary, and unless certain exceptions exist, WARN requires employers with at least 100 full-time employees to provide at least 60 days prior written notice to affected employees and specified government officials/agencies when the company is closing a facility or instituting a mass layoff.  Under WARN, a plant closing occurs when the employer shuts down a facility or operational unit and, in the process, lays off at least 50 full-time workers during any 30-day period at that facility or unit.  A mass layoff occurs when the workforce reduction is not due to a plant closing, but still involves 500 or more employees losing their jobs at the facility during a 30-day period, or 50-499 employees losing their jobs if they constitute at least 33% of that facility’s active workforce.  Again, appropriate legal counsel should be obtained regarding any WARN Act concerns, as well as any state-specific laws similar to WARN for facilities outside of North Carolina.

Unemployment Insurance

Three major shifts have recently occurred in the unemployment insurance laws of NC and many other states due to workers being displaced by the coronavirus:  (1) no waiting period for benefits; (2) no requirement to seek other employment while receiving the benefits; and (3) benefits paid for claims related to COVID-19 are not expected to be charged to the employer’s account – rather, federal reimbursement and/or direct payments or tax credits are being sought.

Each of these shifts, along with other passed or pending federal or state legislation, can make unemployment a more attractive option than ever before in terms of employers doing “right” by their employees while still hoping to one day return them to work.  However, remember that unemployment laws are state-specific, so be sure to seek appropriate legal counsel and other guidance, especially if you have employees in multiple states and are unfamiliar with their unemployment insurance requirements.

• For helpful information and assistance regarding North Carolina unemployment insurance claims, see des.nc.gov, the N.C. Department of Commerce, Division of Economic Security’s website.

Note: New federal legislation, such as the FFCRA which goes into effect on April 1, and the $2 trillion coronavirus relief stimulus package (CARE Act) signed into law last Friday, can greatly impact the analysis of whether, when and how to allow leaves of absence, to pay or not pay employees while on a leave, and whether to temporarily layoff or proceed with terminating employees due to a reduction in business or other permitted reason.

In addition, your company and/or employees may be eligible for direct or indirect payments, reimbursements, tax credits or other forms of financial and operational assistance due to laid off, furloughed or terminated employees, or due to other impacts of COVID-19.  Therefore, once again, be sure to seek appropriate counsel from your attorneys and tax advisors regarding any new or existing government payments, tax credits, reimbursements, and reporting mandates, in addition to whether and to what extent your business and employees may be eligible for these special allowances.  This is particularly important due to legal liabilities that also apply if any of these new laws or regulations are violated.

Human Resources / Personnel Policies

As for managing COVID-19 workplace concerns on a practical, day-to-day basis, employers are being pushed in unprecedented ways to reassess their own policies, procedures, job assignments, and frankly the manner in which they’re conducting business.

First, some initial good news is that absent specific regulatory mandates (and assuming legal compliance), employers are generally free to do anything they want concerning internal policies, procedures and practices.   For purposes of addressing COVID-19 issues, this at least includes the potential suspension or revision of existing policies, or adopting new policies, even if on a temporary basis.  (If temporary, be sure to notify employees of their temporary nature.)  In addition to the social distancing and CDC preventive measures previously discussed, the most commonly affected policies and procedures related to the coronavirus include those regarding attendance – e.g., paid or unpaid sick days, leaves of absence and other paid or unpaid time off from work, and whether an employee’s job position may be performed remotely.

Depending on the situation, many employers are taking steps they’ve never considered before.  For example, some are no longer requiring medical notes before employees return to work after several days of absence.  This typical requirement becomes impractical if the employee’s physician is not accepting appointments, or if a diagnosis of not being infected with COVID-19 is impossible due to the lack of available testing.  Another example is suspending the depletion or the granting of additional sick days or other accrued time off, whether paid or unpaid.  Not to mention suspending any disciplinary action for attendance or other workplace violations unless first determining the action does not violate one of the new coronavirus-related laws such as the FFCRA, which enables certain absences including for child care due to school closures.  Note:  Although special caution should be taken before any disciplinary action occurs due to attendance-related reasons that might implicate COVID-19, employers should still hold employees properly responsible and accountable in the workplace.  This includes for behavior and job performance reasons, taking appropriate disciplinary or other action as allowed by law.

Concerning workplace schedules and telecommuting, employers are also generally able to do whatever is appropriate for their workforce.  This may include allowing or not allowing employees to work remotely from home, to allow or not allow flexible schedules, to have or not have cutbacks/skeleton shifts that alternate between employees (so as many as possible are able to earn a paycheck), and whatever else makes sense for their business and their employees. While trying their best to honor recommended CDC protective measures and maintaining social distancing.  This is also true even if certain job positions are treated differently due to the nature of the job duties (such as most if not all restaurant cooks, production workers and construction employees probably not being able to work remotely).

Certain businesses, including health care providers, may be excluded from various requirements under specific laws, orders and regulations. So whatever the requirement, be sure to inquire into whether your overall business or specific job positions are considered “essential”, “non-essential” or qualify for any applicable exception.  These designations may have particular allowances or prohibitions regarding an employer’s ability to stay open, the allowed working hours and manner of staying open, and other aspects of daily operations that until now have been taken for granted.

Federal and State Laws Against Employment Discrimination

Employers must also remember that federal and state anti-discrimination and anti-retaliation laws still apply if they’re otherwise subject to them.  These at least include the Americans with Disabilities Act (ADA) and its medical examination and privacy protections, as well as Title VII of the Civil Rights Act (Title VII), the Age Discrimination in Employment Act (ADEA), the Family and Medical Leave Act (FMLA), the new FFCRA, the Fair Labor Standard Act (FLSA), the North Carolina Wage and Hour Act (governing wage payment requirements), the North Carolina Retaliatory Employment Discrimination Act (REDA), and the North Carolina Workers’ Compensation Act.  Remember too that while employers certainly have an overall duty under the Occupational Safety and Health Act (OSHA) to maintain a safe workplace, that general duty is subject to what might be reasonable and effective for a particular company, accounting as well for any applicable government or regulatory requirements.

In addition to the United States DOL website, www.dol.gov, which provides links and guidance regarding OSHA, the FLSA, FMLA and FFCRA, two excellent websites regarding other federal and North Carolina employment-related laws include the following:

• eeoc.gov – The U.S. Equal Employment Opportunity Commission (EEOC) website has guidance and other resources for helping employees and employers navigate COVID-19 within the context of federal employment discrimination laws. As mentioned, all of these laws remain in effect, even if certain coronavirus allowances are being made. Two of the more important allowances involve the ADA:  (1) designating COVID-19 as a “direct threat” to the health and safety of employees, which provides more options for whether and in what manner a “reasonable accommodation” may be provided or denied; and (2) relaxing the more limited rules on conducting medical examinations on current employees, including certain allowances for temperature checks and inquiring into the employee’s existing health condition.
• labor.nc.gov – The North Carolina Department of Labor has guidance and links for updated information regarding COVID-19 in our state, plus information and links concerning the North Carolina Wage & Hour Act, REDA, and other state laws and regulations concerning the employer-employee relationship.

Conclusion

Much more could and should be said about how COVID-19 is affecting employers and employees throughout our country, especially given the almost daily and sometimes hourly developments at the national, state and local levels.  But hopefully this discussion provides at least an overview of how many companies and their employees are meeting those challenges.

There’s no easy answer, but if there’s any comfort it should also include knowing you’re not alone.  And that employers everywhere are doing their best to do the right thing toward their employees in avoiding and containing the coronavirus – while still staying in business for the overall good of those they’re trying to protect.

Contact for Additional Information:

Kenneth P. Carlson, Jr.
Constangy, Brooks, Smith & Prophete, LLP
[email protected]; (336) 721-6843