Coronavirus (COVID-19): What Employers Need to Know


March 2020

March 12, 2020

The outbreak of the coronavirus (COVID-19) presents significant issues for employers. The United States Center for Disease Control and Prevention (CDC) does not forecast a near-term resolution to the COVID-19 pandemic. As such, employers must be prepared to respond thoughtfully to the crisis and to understand the legal issues it poses. Each scenario will present unique factual and legal issues and this advisory outlines some of the major issues employers may face.   

Scenario 1: What steps can employers take to mitigate the effects of a local COVID-19 outbreak?

In the event of a local COVID-19 outbreak, employers will face increased employee absences. Employees may be required to self-quarantine or take time off to care for themselves or a family member. Employers should devise plans now that address personnel shortages to avoid disruptions to operations. Optimally, employers should endeavor to cross-train employees to handle new tasks in case of absent coworkers and should consider testing the feasibility of implementing remote work policies. Employers should ensure that employees understand their sick leave policies, their rights, and the company’s plan to respond to a possible outbreak.

Scenario 2: May employers implement reductions in force and/or furloughs and if so, what are the wage and hour law implications? 

A reduction in force is permitted if it is not discriminatory. Furloughs too are permissible, however, employers must carefully consider the exempt or nonexempt status of their employees before they are furloughed.  

Exempt employees are not entitled to overtime under the Fair Labor Standards Act (FLSA). For any week in which an exempt employee performs at least one of their job duties—drafting a work-related email or making a work-related phone call, for example—they are entitled to their full weekly salary. Most exempt employees are able to work effectively away from the office, and, if possible, employers should consider enabling these employees (if financially feasible) to work remotely without implementing a furlough. If a furlough is in place, employees must not perform any work during that time. Employers are prohibited from reducing an exempt employee’s salary during a furlough unless they can demonstrate a legitimate and corresponding reduction in work.

Nonexempt employees, on the other hand, are only compensated for time they have worked. Due to the tight labor market and the unknown duration of the COVID-19 disruption, employers may consider permitting nonexempt employees to work remotely as well, if it is possible. In this case, strict compliance with all wage and hour rules including timekeeping and meal and rest breaks is required. Attention must also be paid to overtime and working off the clock issues which may present during an employee’s remote work. We recommend that employers set times to speak with remote employees about strict wage and hour compliance to avoid any liability. 

Employers must be mindful of the optics of refusing to pay employees who live paycheck to paycheck and should consider implementing a policy that provides nonexempt employees with some form of compensation, even if they are unable to carry out their duties. In this event, employers must consider state law pay rate and adjustment notice requirements.

Scenario 3: What should employers do if an employee seeks time off to self-quarantine or care for a family member who has contracted COVID-19? 

Employers should encourage employees who seek time off from work due to COVID-19 to use their remaining paid vacation and sick days. If an employee has no remaining paid time off, employers must consider how the Family Medical Leave Act (FMLA) applies. Qualified employees who are unable to work due to a serious health condition may take FMLA leave to care for themselves or their children, spouses, or parents in the event they develop a serious health condition. With respect to children, parents may take FMLA leave for a non-minor child when the child has an ADA-recognized disability. Under no circumstances should employers ask about an employee’s health. 

Due to the severity of COVID-19, employers should allow FMLA leave when a nonexempt employee or a qualified dependent contracts COVID-19 and has no remaining paid time off. Exempt employees, if they are able to complete their tasks while caring for themselves or their qualified dependent(s), should continue to be paid their salaries.  

If, however, a nonexempt employee who exhibits no symptoms but is concerned they may have contracted COVID-19 seeks to take time off, employers should be wary of initiating FMLA leave. Rather, employers should consider allowing employees to take time off without pay. If the employee is exempt, the employer should consider allowing the employee to work remotely. We caution that many “fear of” contracting cancer and asbestosis cases have permitted recovery for legal claims in the past and if the COVID-19 continues on its current trajectory, it may result in laws specific to dealing with its spread and eventual consequences. 

Similarly, when an employee who exhibits no symptoms is required to self-quarantine and has no remaining paid time off, the employee should take an unpaid leave and then likely convert to FMLA leave if the employee exhibits symptoms of having contracted COVID-19 or develops a different serious health condition. As is the case above, exempt employees, if they are able to work, should be paid. Although there is no obligation to pay nonexempt employees, employers should consider offering some form of compensation, if only to avoid bad optics.

Employers must also be aware of local and state laws that may require them to compensate employees who self-quarantine or provide care for a qualified family member.

Scenario 4: What should an employer do when an employee is too nervous to come to work for fear of contracting COVID-19?

Employers should attempt to strike a balance between addressing a nervous employee’s fears while also reminding them that they are generally required to come to work. Under most circumstances, employees may not refuse to go to work because they fear that they may contract COVID-19. The Occupational Safety and Health Act (OSHA) requires employers to provide a safe and hazard-free workplace for their employees. Unless employees reasonably believe they are in imminent danger, they may not refuse to work. However, in some circumstances, if an employee is required to travel to a COVID-19 “hot spot,” the employee may be able to demonstrate an imminent danger. If such circumstances arise, employers should attempt to find a resolution in order to avoid triggering OSHA §11(c), which forbids retaliation against an employee who has expressed concerns about workplace safety. If an exempt employee cannot demonstrate an imminent danger, the employer nevertheless may want to consider allowing him or her to work from home, particularly if the employee can complete their tasks out of the office. For a nonexempt employee, employers may consider offering unpaid time off. 

Scenario 5: When can employers authorize disability leave when an employee needs an accommodation?

Employees and employers are still required to engage in the interactive process in response to COVID-19. The coronavirus, although potentially lethal, does not appear to cause permanent damage to the majority of people who contract it. Impermanent conditions typically do not qualify as disabilities under the ADA. Nevertheless, COVID-19 can place significant stress upon the respiratory system. It may result in long-term or permanent damage to certain individuals by exacerbating their preexisting conditions. Consequently, employers should be aware of potential ADA implications.

Critically, an employer who sends an employee home who poses a “direct threat,” is not a violation of the ADA. When a person poses a “significant risk or substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation, he or she is not protected by the nondiscrimination provisions of the ADA.”

Scenario 6: What happens to an employee who contracts COVID-19 at work?

An employee who contracts COVID-19 at work may be entitled to workers compensation benefits—especially if the employee is a first responder or healthcare worker. We caution that these issues are unsettled and may change day by day. Each situation is necessarily fact specific. Whether the employee is entitled to compensation does not hinge on whether the employer was negligent.  The employee must merely establish that the injury occurred at work and was proximately caused by their employment. We believe that COVID-19 will be analyzed not as an injury but as an “occupational disease.”

An occupational disease is one that (1) arises arose out of and was in the course of employment; and (2) arises out of or be caused by conditions peculiar to the work and creates a risk of contracting the disease in a greater degree and in a different manner than in the public generally [was the employee involved in an activity to benefit the employer when he/she was exposed to the virus].

We believe it is possible that Governor Newsom, a prolific bill signer, may follow Washington’s Governor Jay Inslee and implement changes to the California Workers’ Compensation laws to afford broader protections to California workers in response to the COVID-19 virus.

As Your 50 State Partner, Gordon Rees Scully Mansukhani is carefully tracking how the various states are responding to the pandemic. 

Conclusion

The coronavirus poses substantial challenges to employers. The COVID-19 virus presents new challenges every day, and legal obligations may change just as quickly. Our skilled team at Gordon Rees Scully Mansukhani is standing ready to answer your with specific questions and ensure that your response complies with the law in your community.

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