Have you checked your Insurance Coverages?

Simply put, consult your lawyer and insurance broker at the same time to see how you are covered for business interruptions or employee issues. This is a complex topic spanning multiple forms of insurance, each potentially with its own (often unclear) definition of what triggers a reimbursable loss (e.g., what if you have to shut down based on exposure versus actual COVID-19 infections?)  Having this discussion now, sets you up to have your proverbial ducks in a row in case you are impacted.

More details here: https://www.jonesday.com/en/insights/2020/02/time-for-a-policy-checkup

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Have you communicated with your customers?

Do not forget to communicate with your customers! You as the CEO might want to step in here to be sure you roll out the red carpet and keep your customers close. In the last recession, those who stopped communicating did not fare well when things got good again. Being there for your customers when things are bad will ensure that you have a loyal customer when things turn around.

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What about OSHA, HR, and safety concerns related to the virus?

We consulted the experts in labor law for a look at “Labor and Employment Laws in a COVID-19 World.” This information comes directly from Kastner, Westman & Wilkins, LLC . For more information feel free to email Tom Green at tgreen@kwwlaborlaw.com .

Below are some answers to frequently asked questions (FAQs) regarding the employment challenges manufacturers are facing.  What follows is not legal advice, but instead general guidance relating to the current pandemic.  Always consult legal counsel with questions about specific employment decisions impacting your workplace. 

Labor & Employment Laws in a COVID-19 World

• Can an employer send an employee home if the employee displays symptoms associated with COVID-19?
  • According to the Centers for Disease Control and Protection (CDC), employees who experience symptoms associated with COVID-19 such as cough and shortness of breath should leave work and stay home until they are symptom free for 24-hours without use of symptom-altering medicines.
  • With this and several other questions, employers should err on the side of employee health and safety. Employers can reverse the effects of a hastily-made decision to send an employee home, but it cannot reverse the effects of a delayed decision that causes an employee to become ill.

• Can an employer send an employee home if the employee has travelled to a location with reported cases of COVID-19, but is not showing signs of the disease?
  • Perhaps, depending on the severity of the outbreak and the employee’s potential exposure. The CDC currently recommends that travelers returning from China, Iran, South Korea, the United Kingdom, Ireland, and most countries in Europe stay home from work for 14 days until it is clear they do not have symptoms of the disease. Even employees travelling domestically should be cautious, especially when travelling to major metropolitan areas like New York City. Employers can question employees about their travel to these areas even if the travel was for personal reasons.
  • If the employee’s travel was not to one of the designated high-risk zones, and the employee reports he or she did not have close contact with an individual suffering from COVID-19, then the employee should be permitted to return to work.

• Can an employer take employees’ body temperature before they begin work?
  • Yes, but there are risks. In Ohio, Governor Mike DeWine has recommended that employers take the body temperature of all employees each day. This practice is not mandatory.

• • There are also unanswered questions about whether time spent receiving a temperature check is time worked that must be paid to employees. In the manufacturing sector, a worker whose employment is unrelated to the production of equipment used by medical providers would likely not be required to receive pay for having their body temperature checked. Please be sure to consult with legal counsel on this and other wage/hour issues.

• • Under the Americans With Disabilities Act, employers are typically prohibited from performing medical examinations on their employees. However, the EEOC has previously provided guidance that suggests if COVID-19 becomes widespread in the employee’s community, employers may take employees’ temperatures because the disease poses a direct threat to other employees. Companies should recognize that many medical conditions cause fevers, and it is not the only symptom associated with COVID-19.

• What should an employer do if an employee tests positive for COVID-19?
  • Ensure that the infected employee stays home from work and does not return until cleared by a medical professional.
  • Do not disclose the infected employee’s name to coworkers and keep any medical information about the employee confidential.
  • Protect workers in close contact with the sick employee by using safe work practices and PPE.
  • See below for more details about how to define close contact.

• Can employees refuse to come to work due to their fear of becoming infected with COVID-19?
  • Probably not. Under OHSA regulations, an employee may only refuse a work assignment that involves “risk of death or serious physical harm” under certain circumstances.  Recent OSHA guidance regarding COVID-19 states that most workplaces, including manufacturers, are at a low risk for exposure to the virus. Based on current information, it seems unlikely that an employee could lawfully refuse a work assignment based on the risk of exposure to COVID-19.
  • That said, employers are of course able to relax their attendance policies to address employees with a concern about COVID-19. Balancing employee concerns and the need to operate the business is the most difficult part of the pandemic, and is different in each business, and may even be different among positions in the same business.

• Can an employer be held liable if an employee becomes ill while at work?
  • Employers are required to comply with the OSHA “general duty clause”, which mandates employers maintain “a workplace that is free from recognized hazards.” As with other contagious diseases, employers may be liable if the employer allows or directs a known infected employee to come to work and then exposes other employees to the risk of infection.

• Can an employer require employees to use accrued paid time off or vacation time for absences related to COVID-19?
  • It depends on whether the employer and employee are covered by the new Families First Coronavirus Response Act. Effective April 1, 20120, manufacturers with less than 500 employees are covered by the new law.  Part of the law states that employers cannot force an employee to substitute paid sick leave provided by the Act for other types of leave like vacation or PTO. 

• • If a manufacturer has more than 500 employees, it is not obligated to follow the new requirements of the Act and should continue to apply its existing leave policies in a consistent manner for COVID-19 related leave.

• • See more below.

• Can an employer advance paid time off or vacation time to employees to cover absences related to COVID-19?
  • No, if the paid time off is an advance of paid sick time granted by the Families First Coronavirus Response Act.

• • Yes, if the paid time off is provided by an employer’s existing leave policy. If leave is advanced, employers should consider modifying or creating new policies that require employees to repay the advanced time against future accrual.

• • You can find more information on the Families First Coronavirus Response Act here: http://www.kwwlaborlaw.com/congress-passes-new-coronavirus-law or by viewing the FAQ section dedicated to the FFCRA below.

• May an employer dock an employee’s pay for time spent away from work due to COVID-19 if he or she has exhausted all vacation time/sick leave/PTO?
  • It depends on the employee’s classification. Employers may deduct pay for non-exempt employees without question, but deductions for exempt employees is appropriate only in certain circumstances depending on who initiated the absence.

• What should an employer do if it is forced to temporarily lay off employees or significantly reduce their hours?
  • Advise employees to consider filing for unemployment benefits, even if they are only partially unemployed. Ohio Executive Order 2020-03D streamlines the unemployment application process for those employees affected by COVID-19. 

Families First Coronavirus Response Act

Congress enacted the Families First Coronavirus Response Act (the “Act”) that governs many aspects of paid leave during this crisis. Below are some answers to frequently asked questions (FAQs) regarding the Act, who is covered, and how to administer its requirements.  What follows is not legal advice, but instead is general guidance relating to the Act.  Always consult legal counsel with questions about specific employment decisions impacting your workplace.

• Which manufacturers are covered by the Families First Coronavirus Response Act?
  • Only those that employ fewer than 500 employees are covered by the Act. The law calls these employers “covered employers”. If an employer has 500 or more employees, it is not required to provide the paid leave described below.
• How does a manufacturer calculate whether it employs 500 employees?
  • Employers must count all full-time and part-time employees within the United States, including employees on leave, temporary employees who are jointly employed by two entities, and day laborers supplied by a temporary agency.
  • Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether the employer is covered by the Act.
  • In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of the Act.
  • If an employer’s headcount is in doubt, please be sure to consult with legal counsel.
• Is the 500-employee threshold calculated per worksite?
  • No, private employers meet the 500-employee threshold if they employ 500 or more employees within the United States regardless of how many employees are employed at a single worksite.
• Are small businesses obligated to follow the Act too?
  • Employers with fewer than 50 employees may claim an exemption to parts of the law if the requirements in the Act would threaten the viability of the company as a going concern. If an authorized officer of the business determines the business meets one of the following qualifying reasons, the business is not required to provide paid FFCRA leave (either sick leave or expanded FMLA leave) to employees that are unable to work due to the need to care for a son or daughter whose school or childcare provider is closed or unavailable:
    • The leave requested would result in the small business’s expenses and financial obligations exceeding available business revenue and cause the business to cease operating at a minimal capacity;
    • The absence of the employee(s) requesting leave would pose a substantial risk to the financial health or operational capabilities of the business because the employee’s specialized skills, knowledge of the business, or responsibilities; or
    • There are not enough other workers who are able, willing, and qualified to perform the labor provided by the employee(s) requesting leave, and this labor is needed for the business to operate a minimal capacity.
  • If an employer claims an exemption, it is still obligated to provide paid FFCRA leave to other eligible employees that require leave for qualifying reasons other than the one described above.
  • Employers must document the determination that they are exempt and maintain the documentation for four years.
  • If an employer’s exemption eligibility is in doubt, please be sure to consult with legal counsel.
• When did the Act become effective?
  • The Act became effective April 1, 2020. Eligible employees could begin taking leave provided by the Act on that date.
• If my business is a “covered employer”, what am I required to do?
  • Very broadly, covered employers must provide eligible employees with a designated amount of paid time off due required due to one of the reasons listed in the Act.
• What employees are eligible for the leave provided in the Act?

• All employees of covered employers are eligible for two weeks (up to 80 hours) of paid sick time if they require leave due to one of the reasons listed in the Act. Employees who have been employed for 30 or more calendar days may be eligible for additional paid leave as set forth below.

• How much are employees paid for sick time created by the Act?
• It depends on the reason the employee needs leave. Apply the calculations described below.
• Pay an eligible employee his or her regular rate of pay if:
• The employee needs leave because the employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
• The employee needs leave because the employee has been advised by a health care provider to self-quarantine or isolate related to COVID-19.
• The employee needs leave because the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis.
• Pay an eligible employee 2/3 of his or her regular rate of pay if:
• The employee needs leave because he or she is caring for an individual subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
• The employee needs leave because he or she is caring for their son or daughter whose school or place of care is closed (or child-care provider is unavailable) for reasons related to COVID-19.
• The employee needs leave because he or she is experiencing any other substantially similar conditions as specified by the Secretary of Health and Human Services. (No other reasons have been specified yet).
• How much paid time off must an employer provide to eligible employees?
• It depends on whether the employee is full-time or part-time and depends on what reason(s) the employee needs leave. Apply the calculation below.
• Full-time employees receive 80 hours of paid sick time to use for any of the reasons listed above.
• Part-time employees receive the number of hours that is equal to the number of hours that the employee works, on average, over a 2-week period. The employee may use these hours for any of the reasons listed above.
• Both full-time and part-time employees may receive up to an additional 10 weeks of paid leave if: (1) the employee needs leave because he or she is caring for their son or daughter whose school or place of care is unavailable for reasons related to COVID-19 and (2) the employee has been employed with the employer for at least 30 calendar days before the leave starts.
• Remember: any leave taken for this reason is paid at 2/3 the employee’s regular rate of pay.

• Are there limits on how much an employee can receive for paid leave?
  • Yes, apply the calculations listed below.
    • The employee cannot receive more than $511 per day and $5,110 total (over a 2-week period) if:

• The employee needs leave because the employee is subject to Federal, State, or local quarantine or isolation order related to COVID-19.
• The employee needs leave because the employee has been advised by a health care provider to self-quarantine or isolate related to COVID-19.
• The employee needs leave because the employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis.

• • • The employee cannot receive more than $200 per day and $2,000 total (over a 2-week period) if:

• The employee needs leave because he or she is caring for an individual subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
• The employee needs leave because he or she is experiencing any other substantially similar conditions as specified by the Secretary of Health and Human Services. (No other reasons have been specified yet)

• • • • Remember: employees are paid 2/3 their regular rate of pay for the two reasons listed above.

• • • The employee cannot receive more than $200 per day and $12,000 total (over a 12-week period) if:

• The employee needs leave because he or she is caring for their son or daughter whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.

• • • • Remember: employees are paid 2/3 their regular rate of pay for the reason listed above.

• If most schools are closed in Ohio, are all employees eligible to receive paid leave to care for their son or daughter?
  • No, an employee is eligible for leave to care for their son or daughter whose school or childcare provider is closed or unavailable only if employee actually needs to, and is, caring for their child. According to the Department of Labor, “Generally an employee does not need to take such leave if another suitable individual – such as a co-parent or co-guardian – is available to care for the [child’s needs]”
• If an employer already has a paid sick leave policy, can the employer require employees to use that leave instead of the leave created by the Act?
  • An employee may elect to use leave created by the Act before using accrued paid vacation, personal, medical, or sick leave from the employer’s pre-existing policies.
  • Employees may supplement the pay received for leave created by the Act with accrued paid vacation, personal, medical, or sick leave.
    • For example, if an eligible employee requires time off to care for a son or daughter whose school was closed due to COVID-19, the employee would receive 2/3 their regular rate of pay for such periods of leave. The employee may use accrued paid vacation, personal, medical, or sick leave from the employer’s pre-existing policy to pay for the 1/3 of wages not covered by the Act. 
    • An employer may require employees to use accrued leave to supplement the employee’s wages if the reason for leave is to care for a son or daughter whose school or childcare provider is closed or unavailable.
  • If an employer closes a worksite, does the employer still have to provide paid leave created by the Act?
    • If an employer furloughed, laid off, or terminated an employee because of lack of work, the employee is not eligible for paid leave created by the Act. This is true regardless of whether the employer closed the worksite due to a Federal, State, or local directive related to COVID-19.
  • Is Ohio’s Stay-at-Home Order a “quarantine or isolation order” according to the Act?
    • Y es, but that does not mean all employees are eligible for paid leave. The Department of Labor has said, “An employee subject to one of these orders may not take paid sick leave where the employer does not have work for the employee.”
    • For example, if a manufacturer laid off an employee due to the downturn in business caused by the stay-at-home order, the employee would not qualify for paid leave under the Act. In the Department of Labor’s view, the employee is “unable to work” because the customers were subject to the stay-at-home order, not the employee. Similarly, if the entire plant is closed due to a stay-at-home order, the employee is unable to work because the business is subject to the order, not the employee. In either event, the employer did not have work for the employee to complete, and as a result, the employee is not entitled to paid leave under the Act.
  • Is there tax relief available for employers related to this law?
    • Yes, according to the Department of Labor, every dollar paid for leave created by this Act will be “100% covered by a dollar-for-dollar refundable tax credit available to the employer”.
    • Consult with your tax advisor regarding the tax implications of the Act.
  • Are employers required to inform employees about this new law?
    • Yes, covered employers must post in a conspicuous place on its premises a notice of the Act’s requirements. A copy of the model workplace poster published by the Department of Labor can be found at the link below. https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
    • More information on notice requirements – such as where to post the notice when most of a workforce is telecommuting – can be found here: https://www.dol.gov/agencies/whd/pandemic/ffcra-poster-questions

What Is “Close Contact” and What to Do after Coming in Close Contact with an Infected Person?

The Center for Disease Control and Prevention warns that individuals that came in close contact with an infected person are at risk for contracting COVID-19 and should remain at home to limit the spread of the disease. For COVID-19, the CDC defines “close contact” as being about six feet from an infected person for a prolonged period while not wearing recommended personal protective equipment.  Close contact also includes having direct contact with infectious secretions of a COVID-19 case like being coughed on.

There is no identifiable risk for individuals that had brief interactions with an infected person such as walking past the infected person. However, individuals that shared the same indoor environment (e.g. an office or conference room) with an infected person for a prolonged period are at a low risk of contracting the virus that causes COVID-19.  According to the CDC, those individuals at a low risk are not required to self-isolate unless they begin to experience symptoms associated with COVID-19.

The virus is thought to spread mainly from person to-person, including between people who are in close contact with one another (within about six feet) and through respiratory droplets produced when an infected person coughs or sneezes. It may be possible that a person can get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes, but this is not thought to be the primary way the virus spreads.

If an employee is positive for COVID-19, steps must be taken to immediately prevent further spread of the virus. You should send home all employees who had close contact with that employee for a 14-day period of time to ensure the infection does not spread. If possible, ask the infected employee to identify all individuals who worked in close proximity (within six feet) with them in the previous 14 days to ensure you have a full list of those who should be sent home. When sending the employees home, do not identify by name the infected employee or you could risk a violation of confidentiality laws.

After the infected employee is removed from the facility, employers should close off areas used by that person. If possible, open outside doors and windows to increase air circulation in the area. Wait 24 hours (or as long as possible) before you clean or disinfect. Researchers have found that the virus that causes COVID-19 is detectable for up to three hours in aerosols, meaning an infected person’s sneeze or cough could leave particles of the virus floating in the air hours later. After the waiting period, clean and disinfect all areas used by the infected person, such as offices, bathrooms, common areas, shared electronic equipment like tablets, touch screens, keyboards, remote controls, and ATM machines.

If you have more questions, please contact the author of this advice, Tom Green, at tgreen@kwwlaborlaw.com.

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What you need to know about the new legislation passed that might affect your manufacturing company:

The CARES Act provides for a loan of up to 2.5X your average monthly payroll including to help pay for 8 weeks of payroll, healthcare, rent and utilities – you need to talk to your bank:

• The SBA disaster loan is still in place for up to $2M loans, but the newly-passed CARES act created a new loan up to $10M that can be partially or fully forgiven.  To qualify you must be less than 500 people domestically.
• Amount of loan is up to 2.5X the total monthly payroll costs from 2019. 
• In general, the amount that is forgivable is the amount that you spend on payroll, healthcare, interest on mortgage debt, rent, and utilities over an 8-week period during this coronavirus crisis.  There will be many more details on exceptions and how to claim this forthcoming in future government regulation releases.
• There are also much larger loans for companies between 500 and 10,000 employees that have significantly tougher restrictions, more information on those can be found here . 

You can defer social security tax and may be able to claim tax credits

• Everyone can defer the 6.2% social security tax for 2020 and pay it over two years (half on Dec 31, 2021 and half on Dec 31, 2022).
• If you had operations suspension or a 50% reduction in quarterly receipts when compared to prior year’s same quarter, you may be eligible for tax credits up to $10,000 per person based on wages for companies affected by COVID-19
• If you already have an SBA loan, you will have no payments on principal, interest or fees for six months (it is unclear whether this is forgiven or just deferred). 
• More details on loans for small businesses can be found here . 
• There are many more tax implications regarding AMT, carry back losses, business interest deduction, and more to check out here .
  
  There is a lot in the new bill to expand and pay for unemployment, this may affect your strategy for retaining people
• Each person receiving unemployment will also get $600 more per week from the federal government.  This has strategic implications for your company because in Ohio, if someone qualifies for the $600, and if they make under $50,000-60,000 they will likely be making more while on unemployment than working for you for the next 4 months that this benefit from the federal government is in place.
  
  • The state has made it much easier for an employee who has been laid off to get unemployment, and it has extended those benefits to those who are forced out of work due to coronavirus.

  • Your future rates will likely not go up directly based on the number of people let go in your facility, they will be “mutualized” across all employers. There may be future federal relief so that rates don’t go up too much in the future as well.

  
  So, the key question is what qualifies a person to get unemployment and the extra $600?
• Below is a summary of the reasons under the new CARES Act.  A “slow down” in your business not one of the reason, but “closed” is included (however, Ohio unemployment guidance suggests that slowdown is a reason to get unemployment, so future guidance from the federal government will be required). “Quitting” is also included below, but only “as a direct result of the coronavirus pandemic” which is not yet defined.  Ohio is saying, as of March 29, 2020: “If an asymptomatic employee imposes a self-quarantine because of the coronavirus, will they be eligible for unemployment benefits? In most cases, no….”

• Second unemployment was extended to independent contractors, part-time workers, and self-employed individuals. 

You must extend sick leave and in certain cases paid-FMLA if you are under 500 employees, but it will be paid fully by the government – and you need to put up a poster on this now

• According to the Families First Coronavirus Response, employees affected by COVID-19 must be given 80 hours of sick leave that covers many coronavirus related issues including having to self-quarantine, being sick, or taking care of family or out-of-school kids.  Further, even you are under 50 people and FMLA doesn’t normally apply to you, you also must pay (at a reduced salary) for 10 weeks of required FMLA leave if one of your employees needs to take care of out-of-school kids.  The government will reimburse these expenses through taxes, potentially through an advance on the payment rather than on the back end. Details have not yet been released on how to get those funds back.  Please see more details about amounts and details from Tom Green, an employment lawyer at KWW are in the previous HR section.
• You also have to put the Families First Coronavirus Response poster up in your facility – found here.

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Are we all over-reacting?

• In case you're worried that “social distancing” sounds ridiculous, check out this simulation that illustrates the goal of these restrictions. This shows very starkly why our political leaders are instituting seemingly drastic measures. They are following sound scientific advice.  If you want to go down the rabbit hole and see everything about this disease including symptoms, spread rate, comparison to the flu, and so much more, here is the article for you.

• If you want to go one step further and speculate on the future outcomes of how this will play out over time, McKinsey's model is the best frequently updated resource .  McKinsey models different outcomes based on the rate of spread and public-health/interventions that counties do.  Some scenarios are bleak with economic recovery not coming until Q2 2021, other scenarios are more optimistic with recovery yet this year. 
  
  

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Have you invested and updated your cybersecurity?

• This now-ubiquitous issue never goes away. There has been a rise in phishing schemes taking advantage of panic-stricken employees.  It never hurts to reinforce the need to respond appropriately to strange emails.  https://www.who.int/about/communications/cyber-security ; https://www.forbes.com/sites/ mattperez /2020/03/16/ coronavirus -scams-watch-out-for-these-efforts-to-exploit-the-pandemic/
  
  

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How do you plan to add a personal touch? 

• First, the chart below shows the risk by age – this disease is very dangerous to at-risk populations and those over 70 years old. As much of our employees are under 70, this may be comforting.  But it emphasizes that the risk to the families of your employees are high.  Do you have employees who care for elderly parents?  What about those near retirement?  Do you have any people with asthma, auto-immune disorders?  This is the world that your people are living in.
  
  

• What are you doing provide accommodations for and comfort to those who are at risk, or those who are fearful of being at risk? What communications are you sending? Are you able to increase the distance your employees need to be near each other? Are you able to make some exceptions for those who may be at risk?

  Working remotely may not be an ideal option for most of you. But if some of your team is remote, you should consider a business license to Zoom, WebEx, Skype, or Microsoft Teams which is likely already loaded or available for download if you use Office365. Click on this article for other thoughts on going remote.

• You can do A LOT to provide a personal touch that helps calm your employees and shows them you respect their efforts and dedication by; being physically present, talking openly about future plans, not having too many closed door meetings, communicating with your staff every day, making sure you know about your employees’ personal concerns (even if all you can do is be empathetic) and ensuring your managers are keeping up with the emotional state of their direct reports.

• Oh, and don’t forget that there are some crazy rumors out there.  Stop the spread of misinformation by debunking those for your employees. Here are printable lists of myths debunked.
  
  

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