Tips for Shutting Down in Response to State Shelter-in-Place Orders

California, Connecticut, Illinois, Pennsylvania, and New York have all issued statewide shelter-in-place orders in response to the COVID-19 pandemic, and more states may follow. Employers that do not qualify for an exemption under the applicable state order or that decide to severely curtail or shut down operations may want to consider some of the following issues.

Mobilize for Remote Work

First, employers will need to mobilize all laptops and resources that employees will need to work from home. This may involve ordering additional laptops and virtual private networks (VPNs) in addition to increasing network capacity. Employers will also want to take steps to ensure that key people have access to any documents, records, or other resources that will need to be referenced while away. These may include, for example, employees’ personal contact information.

 

Security and Minimum Operations

Second, employers will need to figure out how to secure their facilities, preserve confidentiality maintain the condition of their property, and preserve inventory. Depending upon the language of the order, employers may or may not be able to keep security employees onsite to secure company property. (The Illinois order, for example, permits “minimum necessary activities to maintain the value of the business’s inventory, preserve the condition of the business’s physical plant and equipment, ensure security, process payroll and employee benefits, or for related functions.” By contrast, the Pennsylvania order prohibits “operating a place of business.”)

Telecommuting

Third, employers will want to consider an emergency telecommuting policy. Keep in mind that under the laws of California, Illinois, and certain other states, employees who incur expenses to work from home may have to be reimbursed for them. If non-exempt employees will work from home, then employers need to ensure they record and are paid for any time they spend working and then have the capacity to report their time worked, and instructions and a means to do so accurately. If any employees receive paper paychecks, employers will need to figure out how to deliver them.

Pay and Leave

Going forward, employers need to decide what they want to do about pay and leave.  Exempt employees need to either be paid their full salaries or placed on leave (or an unpaid or reduced pay furlough) for the entire week. If exempt employees perform any work in a week, then they have to receive their full salaries—unless they elect to take time off (such as under a paid time off (PTO) policy). Employers may be able to impose salary reductions, but many states require have state-specific notice requirements for such changes. Employers may also want to note that some will have new family and medical leave and paid sick leave obligations under the newly-signed Families First Coronavirus Response Act.

 

Other Issues

There undoubtedly will be many other issues at play. Ogletree Deakins will continue to monitor and report on developments with respect to COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Critical information for employers is also available via the firm’s webinar programs.