The Coronavirus, or COVID-19, outbreak is causing unprecedented changes to the workplace and society at large across the globe. This guide is meant to help educate employers on what steps to take to both protect their workers and their business, specifically in California as of March 20th, 2020. For further information or clarification, please contact our office.
Can I keep operating my business?
Most businesses can continue operating, but with caveats. California Governor Gavin Newsom issued a statewide order (available at https://covid19.ca.gov/img/Executive-Order-N- 33-20.pdf) on March 19, 2020 that all California residents are to remain at home except to continue the operation of essential functions. In short, if your business is considered essential, it can continue operating from the regular place of business. If your business is not considered essential, it must be operated from home. Individuals can only leave their homes to get food, care for a relative or friend, get necessary health care, or go to an essential job as defined above.
As of writing, businesses that qualify as essential functions include the 16 federal critical infrastructure sectors, critical government services, schools, childcare, and construction, including housing construction. The 16 federal critical infrastructure sectors include:
• Chemical Sector
• Commercial Facilities Sector
• Communications Sector
• Critical Manufacturing Sector
• Dams Sector
• Defense Industrial Base Sector
• Emergency Services Sector
• Energy Sector
• Financial Services Sector
• Food and Agriculture Sector
• Government Facilities Sector
• Healthcare and Public Health Sector
• Information Technology Sector
• Nuclear Reactors, Materials, and Waste Sector
• Transportation Systems Sector
• Water and Wastewater Systems Sector More information on these sectors can be found at: https://www.cisa.gov/identifying-critical- infrastructure-during-covid-19.
The only businesses that are specifically mandated to close are: dine-in restaurants, bars and nightclub, entertainment venues, gyms and fitness studios, public events and gatherings, and convention centers.
Though the Governor has issued this statewide order, other public health orders enacted by local municipalities also remain in effect. It may be confusing to try and figure out which rules apply, but as a rule of thumb, if either order prohibits an activity, it should not be performed. Local orders can be more restrictive than state orders, but they cannot be more permissive. In essence, the state provides a range of acceptable activities, and the local governments can only narrow that range, not broaden it. For now, the biggest difference between state and local orders is that most localities also require that certain “social distancing” measures are met. These measures vary by municipality, so it is recommended to read the public health order that applies to your area.
Businesses and individuals alike should also note that violations of these state or local orders are punishable by misdemeanor fines of up to $1000 and imprisonment up to 90 days under California law.
What do I need to do differently?
For those businesses that are allowed to continue operating at their place of business, the California Division of Occupational Safety and Health Administration (Cal/OSHA) has issued guidance on the requirements to protect workers from COVID-19. (Available at https://www.dir.ca.gov/dosh/coronavirus/Health-Care-General-Industry.html). This guidance essentially divides employers into two categories: 1) those where employees are susceptible to transmission of airborne diseases (specifically Aerosol Transmissible Diseases or ATD), and 2) those where employees are not.
Cal/OSHA primarily defines the first category of employers with increased risks of transmission as those involved in health care, correctional facilities, homeless shelters, and drug treatment programs. These employers are required to provide respiratory protection (such as N95 face masks), implement screening procedures for patients, and provide specific ATD training for employees. A fact sheet with more information for employers in the first category can be found here:
https://www.dir.ca.gov/dosh/dosh_publications/Aerosol-Diseases-fs.pdf.
Cal/OSHA defines the second category of as all other employers. However, Cal/OSHA still has guidelines for these employers. These guidelines include prevention measures such as:
• Actively encouraging sick employees to stay home
• Sending employees with acute respiratory illness symptoms home immediately
• Providing information and training to employees on:
o Cough and sneeze etiquette o Hand hygiene o Avoiding close contact with sick persons o Avoiding touching eyes, nose, and mouth with unwashed hands o Avoiding sharing personal items with co-workers (i.e. dishes, cups, utensils, towels)
o Providing tissues, no-touch disposal trash cans and hand sanitizer for use by employees
• Performing routine environmental cleaning of shared workplace equipment and furniture (disinfection beyond routine cleaning is not recommended)
• Advising employees to check CDC’s Traveler’s Health Notices prior to travel Can I fire or dock the pay of my employees who don’t show up?
It depends. Generally, employment in California "having no specified term" is "at will," meaning that it may be terminated at the will of either party for any or no reason at all. Though, there are several restrictions when it comes to discrimination, employees in unions, and employees taking leave. We will focus more on employees taking leave, since that is the most likely scenario in light of current events.
First off, you should not terminate or reduce pay for employees who have a reasonable, good faith belief that they will be exposed to the COVID-19 in the performance of their duties. Federal law prohibits employers from taking such actions against employees who “refuse in good faith to expose himself to the dangerous condition.” The condition must be one that a “reasonable person, under the circumstances then confronting the employee, would conclude that there is a real danger of death or serious injury and that there is insufficient time, due to the urgency of the situation, to eliminate the danger through regular statutory enforcement channels.” Due to the ongoing uncertainties relating to the severity and spread of COVID-19, it is wise to avoid negative employment actions if there is a reasonable threat to your employees.
Secondly, employees are permitted to take paid sick leave under California law. Paid sick leave is more expansive than most people think- it can be used for absences due to illness, the diagnosis, care or treatment of an existing health condition or preventative care for the employee or the employee’s family member. Preventative care may include self-quarantine as a result of potential exposure to COVID-19 if quarantine is recommended by civil authorities. Additionally, both Federal and California law have specific leave provisions for when employees’ family members are faced with a “serious health condition.”
Many employees may be affected by the numerous school closures occurring throughout California. This means employees may face a situation where they are required to stay home and supervise their children. California law requires employers with 25 or more employees to provide 40 hours of leave per year for school-related emergencies.
Employers of less than 500 employees should also be aware that both sick leave and leave for family members have been expanded under the Family First Coronavirus Response Act which was signed into law on March 18, 2020. Under this new law, employers must provide two weeks of paid sick leave if employees are subject to quarantine or isolation, experiencing symptoms of COVID–19, caring for someone who is in quarantine or isolation, or have children in schools that have closed. Twelve (12) weeks of leave for family members is available to employees who have children that they must supervise as a result of school or child-care closures due to the COVID-19 outbreak. This new law now provides that employers must pay employees at least two-thirds of the employee’s regular pay capped at $200 per day. These new expansions of sick and family leave are in addition to other paid sick leave already in place, so employers must give employees this leave even if they have exhausted their previous sick leave or paid time-off. Employers are able to receive tax-credits for payments issued under this leave and employers of 50 or less can request an exemption from making these payments if significant hardship would result to their business as a result.
What if my business is suffering?
There are various things an employer can do to keep their business viable due to slowdowns associated with the COVID-19 outbreak. California has various programs to help, including the Unemployment Insurance Work Sharing Program, the Rapid Response Program, the Economic Injury Disaster Loan Program, and the delaying of tax payments.
Unemployment Insurance Work Sharing Program
This program aims to help employers who experience slowdowns by allowing employers to reduce their hours for their employees. The program then pays the difference to the employees with reduced work hours. More information on this program can be found here:
https://www.edd.ca.gov/Unemployment/Work_Sharing_Program.htm
Rapid Response Program
This program aims to help employers who are nearly ready to layoff employees due to slowdowns. The program provides training and guidance for both employees and employers to help their skillset and business remain competitive. More information on this program can be found here: https://www.edd.ca.gov/pdf_pub_ctr/de8714rrb.pdf
Economic Injury Disaster Loan Program
The U.S. Small Business Administration has expanded the Economic Injury Disaster Loan Program to help provide low-interest loans to small businesses that have been severely impacted by COVID-19. These loans can help cover payments towards fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. More information can be found here: https://www.sba.gov/funding-programs/disaster-assistance
Delaying of Taxes
For Federal taxes, the Internal Revenue Service has extended the payment deadline for 2019 income taxes from April 15 to July 15. While the payment deadline has been extended, the filing deadline remains April 15. If you cannot make the filing deadline, you can request a filing extension with a Form 4868. More information can be found at https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020.
For California State taxes, employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return. More information can be found by calling the EDD Taxpayer Assistance Center at 1-888-745-3886.
Out of options?
If your business is simply out of options and is forced to proceed with layoffs or suspension of pay, it is recommended that you reach out to our office as each situation differs drastically and can result in serious legal consequences if done improperly. Please note that the information contained in this article is meant to be used for educational purposes only and does not constitute legal advice.
Sincerely,
Andrade & Associates
