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THINGS EMPLOYERS SHOULD CONSIDER IN DEALING WITH THE COVID-19 OUTBREAK

On March 7, 2020, the State of New York declared a state of emergency in response to the outbreak of COVID-19 coronavirus in the state[1].  On March 11, 2020, the World Health Organization (WHO) declared the COVID-19 coronavirus outbreak as a pandemic[2] and on March 13, 2020, the President of the United States declared a national state of emergency[3].  In the weeks that have followed, local municipalities, as well as the state and federal government have taken unprecedented steps to address the pandemic.  In this fast changing world, it is more important than ever for employers to review their current policies and to make sure they are capable of dealing with the steps taken by our governments to address the severity of the current outbreak.  Our firm is here to assist and we want to provide some guidance on issues that may be anticipated by employers in the upcoming days and weeks.

Workplace Safety:

The Occupational Safety and Health Administration (OSHA) has published a packet titled, “Guidance on Preparing Workplaces for COVID-19”, which outlines comprehensive steps employers can take to help protect their workforce[4].  The Centers for Disease Control and Protection (CDC) has also provided recommendations for managing a community related exposure[5].  Employers should follow the guidelines provided by OSHA and the CDC.  If any employee presents themselves at work with a fever or difficulty in breathing they should seek a medical evaluation.

If an employee has a confirmed or even a suspected case of COVID-19, you should send home all employees who worked closely with that employee for at least two weeks to ensure the virus does not spread. You should ask that employee to identify all individuals who worked in close proximity (three to six feet) with them in the previous two weeks to ensure you have a full list of the other employees who should be sent home. You should not identify the name of the employee who contracted the virus to any other employees in order to comply with privacy regulations.  You should also hire a cleaning service to come into the office and do a deep cleaning before work resumes at that location.

Working Remotely:

Whether your company implements a remote work policy depends on your organization’s circumstances and the area of the country where your workers reside.  You need to identify the roles that are most important to your business operations and determine whether those jobs can be carried out while working remotely.  If you can proceed, the next critical component is assessing your technological capabilities.  Once you determine that your company and employees are capable of engaging in remote work, one of the most important things you can do is to establish a remote work policy that fits their needs.

A remote work policy is a permanent or temporary agreement between employees and managers that governs an employee’s work from home for an extended period of time.  Policies should be careful in addressing exempt/non-exempt workers, medical leave, work environment, disability/discrimination, data concerns and confidentiality.

Data security is an important issue because the systems in people’s homes may not be as secure as the systems at the workplace. You should consult with IT professionals to assure that your remote work will be secure.

Exempt/Non-Exempt Employees:

Exempt employees are generally those employees who are not entitled to overtime as provided by the Fair Labor Standards Act (FLSA).  Broadly, there are three categories: executive, administrative, and professional. Exempt employees must be paid for the entire workweek during which they perform any amount of work, unless any rules or regulations authorize a deduction.  If an exempt employee does not perform any work in a given workweek, they do not need to be paid for that week of work, unless any absence is at the employer’s direction or due to the operating requirements of the business.  It is therefore important that employers ensure that the nature of the tasks being performed remotely by their exempt personnel are largely exempt-qualifying.  In an actual emergency situation, however, an exempt employee does not lose exempt status by performing work of a normally non-exempt nature for a relatively limited period of time.  As a general rule, exempt employees performing non-exempt work on a prolonged basis will jeopardize the exemption.

Non-exempt workers are entitled to the federal minimum wage and qualify for overtime pay, which is calculated at one-and-a-half time pay for each hour worked over the standard 40 hours in a workweek.  Employers are free to reduce their non-exempt employees’ regularly scheduled hours due to temporary closures or reduced demand.  In New York, if an employer sends home a non-exempt employee for lack of work after they have already arrived, the employee is entitled to a minimum amount of pay for the day.

Employee Leave/FMLA:

Employees are typically not entitled to take family medical leave to stay at home to avoid getting sick.  However, employees requesting leave could conceivably be protected by the Family and Medical Leave Act (FMLA) to the extent they otherwise meet FMLA-eligibility requirements. Of course, there is nothing to prevent an employer from voluntarily extending an employee’s leave, even in the absence of any legal obligation.

Healthcare/HIPPA Issues:

In February the government sent a stern reminder to all employers, especially those involved in providing healthcare, that they must still comply with the protections contained in the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule during the COVID-19 coronavirus outbreak[6].  We recommend you treat all medical information as confidential and afford it the same protections as those granted by HIPAA in connection with your group health plan.

Group Health Plan Benefits/Coverage:

The Families First Coronavirus Response Act signed into law by President Trump on March 18 requires group health plans to provide coverage for FDA-approved COVID-19 diagnostic testing products and related items and services furnished during a provider visit[7]. This requirement applies to all fully-insured and self-insured group health plans other than retiree-only plans and other HIPAA excepted benefits. Even grandfathered group health plans must comply.

Beginning March 18 through the end of the public emergency period mandated coverage must be provided without cost sharing (including deductibles, copayments and coinsurance). Covered services and related cost waivers apply to diagnostic testing, attendant health care provider services (in-person and telehealth), and facility costs (physician office, urgent care center and emergency room) to the extent the costs are related to evaluating the need for a COVID-19 testing product. In addition, plans shall not require prior authorization or similar medical management requirements as a precondition of COVID-19 coverage.

Medicare/Medicaid:

Medicare covers the lab tests for COVID-19 and any medically necessary hospitalizations[8].  This includes if you are diagnosed with COVID-19 and might otherwise have been discharged from the hospital after an inpatient stay, but instead you need to stay in the hospital under quarantine.  At this time, there is no vaccine for COVID-19. However, if one becomes available, it will be covered by all Medicare Prescription Drug Plans (Part D).  Many plans also offer additional telehealth benefits.

Medicaid coverage varies by state and governors across the country may be getting some of the financial relief and flexibility they have been asking for in regard to Medicaid if Congress passes a federal stimulus bill in the coming days.

Wages and Hours:

Under the FLSA, for the most part employees who are not working are typically not entitled to the wages the FLSA requires. Of course, an employer might have a legal obligation to keep paying employees based on an employment contract, a collective bargaining agreement, or some policy or practice that is enforceable as a contract or under a state wage law.  Employers should be cautious in denying pay to employees due to their attempt to avoid COVID-19 based on the current climate, as these kinds of issues could become problematic later on with the media or in the courts.

Union Contracts:

The National Labor Relations Act (NLRA) is another federal law that must be considered due to the outbreak of COVID-19.  Employers with represented employees may have a duty to bargain over new policies developed to respond to COVID-19.  If the contract does not give the employer the right to proceed unilaterally, and the employer determines that it has a duty to bargain, timing may be an issue.  In an emergency, employers may need to proceed before agreement or impasse is reached. That does not, however, relieve employers of a duty to bargain—it may need to negotiate with the union after implementation.

Unemployment Insurance:

New York State has waived the 7-day waiting period for unemployment insurance benefits for people who are out of work due to COVID-19 closures or quarantines[9].

[1] https://www.governor.ny.gov/news/no-202-declaring-disaster-emergency-state-new-york

[2] https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19—11-march-2020

[3] https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/

[4] https://www.osha.gov/Publications/OSHA3990.pdf

[5] https://www.cdc.gov/coronavirus/2019-ncov/php/public-health-recommendations.html

[6] https://www.hhs.gov/sites/default/files/february-2020-hipaa-and-novel-coronavirus.pdf

[7] https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

[8] https://www.medicare.gov/medicare-coronavirus

[9] https://labor.ny.gov/unemploymentassistance.shtm

This is not intended to be legal advice.  You should contact an attorney for advice regarding your specific situation.


Samuel C. Bergsohn

Samuel Bergsohn is an associate with the firm and practices Landlord/Tenant and Land Use Law.

He can be reached by phone at 866-303-9595 toll free or 845-764-9656 and by email.

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Jacobowitz and Gubits Counselors at Law