Business & Employment Guidance for Coronavirus (from March 17, 2020)
Our office wanted to share some insight we have recently gained into Governor Wolf’s mandated closures for the entire state of Pennsylvania, as well as useful information regarding employment and compensation-related issues.
The mandate was announced yesterday (March 16, 2020) at a 2pm press conference. However, a subsequent press was released which provided more specifics regarding businesses that may remain open. Due to your substantial operations in Pennsylvania, please note the below.
Note: Please note that due to demographic differences, Philadelphia has slightly different mandates. If you require Philadelphia-specific guidance, please contact our office directly. Please also note, this applies to the private sector, and does not apply to government positions such as first-responders and government offices.
Essential Services to Remain Open
Essential services and sectors may remain open (but should employ social distancing practices and be thoughtful in visits). These essential services include, but are not limited to, the following:
- Food processing
- Industrial manufacturing
- Feed mills
- Trash collection
- Grocery and household goods (including convenience stores)
- Home repair/hardware and auto repair
- Pharmacy and other medical facilities
- Biomedical and healthcare
- Post offices
- Shipping outlets
- Gas stations
- Veterinary clinics and pet stores
- Warehousing, storage and distribution
- Public transportation
- Hotel and commercial lodging
Non-essential Businesses to Remain Open (on a modified basis)
These other businesses are deemed non-essential but may remain open nonetheless. However they are strongly encouraged to have employees work remotely or telecommute. If the foregoing precautions are not possible, such businesses should employ social distancing and be aware of the Trump Administration’s guidance to avoid gatherings of 10 or more people. The non-essential businesses that may remain open on a modified basis generally include the following, and those similar professional services:
- Legal services
- Business and management consulting
- Professional services
- Insurance services
Non-essential Businesses to Close
The following non-essential businesses are mandated to temporarily close for 14 days. These non-essential businesses generally include public-facing industries such as entertainment, hospitality and recreation facilities. The non-essential businesses that are mandated to close (or operate on a modified basis) include the following:
- Restaurants and bars must close dine-in facilities. They are permitted to offer carry-out, delivery and drive through food and beverage service, but must employ social distancing best practices and avoid gatherings of 10 or more as per the Trump Administration’s guidance.
- Retail stores and facilities, including shopping malls (except for pharmacy or other health care facilities located therein)
- Community and recreation centers
- Gyms, including yoga and spin facilities
- Hair salons, nail salons, and spas
- Casinos, concert venues, cinemas and theaters
- Sporting events facilities and golf courses
Please note, the above mandates have been issued by the Wolf Administration for Pennsylvania businesses, but are not been legally compelled closures. Rather, the Wolf Administration’s goal in the mandates is to rely on businesses to immediately act according to the mandate without legally compelling closures. If the mandates are ineffective, either the Wolf Administration or the Secretary of Health may compel closures under the law for the interest of public health, including pursuant to § 7301 of the Emergency Management Services Code.
Additional information for York County based businesses can be located here: www.preparedyork.com/. This site is a compilation of information to assist businesses, non- profits, and employees with resources and information. Due to these unprecedented and incredibly dynamic circumstances, the website will continue to be populated with new and additional information. For direct information on COVID-19, we direct you to the CDC, PA Department of Health, or other healthcare agencies and organizations.
If you are unsure of how your business operation should be treated under the above guidance, please contact our office directly to discuss your concerns.
EMPLOYMENT AND COMPENSATION ISSUES
Compensation for Employees during Quarantine or Furlough Periods
Employers will need to consider issues regarding payment of wages and/or the use of PTO during a quarantine or furlough or when an employee is sent home due to COVID-19 concerns. In general—and subject to the below reporting time or predictive scheduling laws, as well as state and local paid sick leave laws—an employer can send a non-exempt employee home without pay and, so long as the employee does not perform any compensable work from home, no wages are due.
Compensation may be required during an extraordinary event, however, for waiting time or on-call time. The Fair Labor Standards Act considers employees to be “on call” if they must remain on the employer’s premises and are unable to use their time for their own purposes. Thus, for example, employees who are required to remain at a location where operations have shut down to assist when they begin again should be paid for the time spent “holding down the fort” despite their inactivity.
Importantly, if a non-exempt employee performs any work during a quarantine or similar period, the employer should ensure that the employee accurately tracks their working time and is paid for that time in accordance with all applicable federal, state and local laws. Non-exempt employees working from home during quarantine should be directed to comply fully with any and all company policies related to timekeeping, overtime approval, and meal and rest breaks.
Exempt employees must be paid their full salary if they perform any work in workweeks during which they are quarantined at home or furloughed (including only minimal tasks, such as checking emails). If an exempt employee is quarantined for a complete workweek, and performs no work in that week, it is possible that the employee may not need not to be compensated – however, this assessment should be determined on a case-by-case basis with counsel to ensure the employee’s exempt status is not compromised.
In the event of a quarantine or furlough, employees may choose to use sick leave, PTO or vacation during this time.
Furloughs and Other Temporary Responses to Coronavirus (Covid-19) Disruptions
Among the many issues employers are facing in the wake of the spread of the novel coronavirus (COVID-19) is the possibility of furloughs, temporary office and location closings, and short-term layoffs. A furlough involves reducing the days or weeks that an employee may work. A layoff can be temporary or permanent. Employers may also consider reducing the daily hours of some employees.
A common concern that employers have for planning COVID-19 decisions is whether the employer has a notice obligation under the federal Worker Adjustment and Retraining Notification (WARN) Act and similar state mini-WARN Acts. Fed WARN requires employers to provide 60 days’ advance notice to covered employees, unions, and government officials prior to a plant closing or mass layoff at a single site of employment. State mini-WARN laws contain separate and distinct requirements from Fed WARN that can be a trap to unwary employers. A WARN notice requirement can be a significant concern if a company is moving rapidly to address COVID- 19 disruptions.
The following guidance is designed to help address some common questions that employers have and inform employers of different areas of concern involved with furloughs and temporary shutdowns and layoffs.
What is the effect of furloughs or reduced hours?
Employers generally can schedule non-exempt employees for fewer days or hours without liability concerns. Employers do not need to pay non-exempt employees for time not worked. Exempt employees involve a more difficult analysis when considering furloughs or reduce hours as an alternative to layoffs. Employers should be aware that exempt employees under federal law and most state laws must be paid the same minimum salary for each pay period. Moreover, if an exempt employee performs any work during a workweek, that exempt employee must receive their entire salary that week. Failure to compensate an exempt employee for a week where any work is performed jeopardizes that employee’s exempt status. If an employer furloughs an exempt employee for an entire workweek, however, then no salary is owed for that full week and the employee’s status is not affected. Certain types of furloughs may involve changes to pay practices. Generally, prospective changes are acceptable, but state law may require specific periods for advance notice and may limit changes to particular types of pay (e.g., PTO).
When employees are furloughed, employers should expect that they will not work, including checking email and voicemail. An exempt employee is entitled to pay for any workweek in which they perform any work. Employers should therefore inform employees that work is not authorized during the furlough period without advance written approval. Employers also should notify non-exempt employees about the same issue as non-exempt employees generally are entitled to compensation for performing work when not in the office. A signed policy indicating the types of activities that require supervisor approval and the company’s expectation for recording any time spent on such activities is something employers should seriously consider.
If the employer has to furlough or temporarily lay off employees, are there any notification requirements?
There may be. Fed WARN and state mini-WARN statutes require employers to provide advance notification (60 days or 90 days, depending on the jurisdiction) to employees and government officials of certain group employment terminations. Not all layoffs trigger these requirements, however, and exceptions may apply. Temporary layoffs of less than six months are not considered to be employment losses under Fed WARN, and the same is true under many, but not all, state mini-WARNs. The size of the layoff also matters. Fed WARN is not triggered unless, at a minimum, there are 50 employment losses at a single site of employment in a 90-day period. State mini-WARNs can be triggered at lower levels.
Unfortunately, there is no exception to WARN for epidemics. Although Fed WARN and most state mini-WARN statutes have provisions addressing terminations due to natural disasters or calamities, it is unlikely that these provisions could be used to cover an epidemic.
What level of layoffs will trigger notice under Fed WARN?
Generally, 60 days’ specific written notice must be provided for a plant closing or a mass layoff. A plant closing is defined as 50 or more countable employment losses at a single site of employment in a 90-day period that results from ceasing operations in one or more operating units. A mass layoff is defined as 50 or more countable employment losses at a single site of employment in a 90-day period that also involves 33% of the active workforce at the site. Employees with less than 6 months of service in the prior 12 months, or who work less than 20 hours per week, are not countable. Notably, temporary layoffs of less than 6 months are not counted as an employment loss under Fed WARN.
If you feel that your employment issues may trigger Fed WARN or the PA mini- WARN, as described above, please contact our office directly to discuss whether any WARN notifications are required, as exceptions do apply.
Important Notice: This content is for informational purposes only. It is not intended to be, nor should it be considered, a substitution for legal counsel by a licensed attorney.