Mar 18, 2020

The Coronavirus is Giving Employers a Headache! You Have Questions. We Have Answers.

COVID-19 Q&A

As the novel coronavirus COVID-19 pandemic continues to unfold, employers are facing an avalanche of uncertainty over what they must do, can do and should do.  Below we have compiled a list of common questions employers are asking, along with our insights on each topic.

  • NOTE: The employment and benefits team at Smith, Gambrell & Russell LLP is carefully monitoring the proposed legislation before Congress regarding paid employee medical leave and other issues related to the coronavirus.  We will be providing an updated Client Alert on such legislation as soon as it is finalized.

Employee Inquiries, Testing and Leave

May an employer require an employee to provide information about recent travel?

Yes. Employers may ask employees to inform them if the employees are planning to or have traveled to countries considered by the CDC to be high-risk areas for exposure, even if the travel is personal. In addition, employers may ask employees returning from high-risk areas about potential exposure to the coronavirus. Employers do not need to wait until the employee develops symptoms to ask about possible exposure during a trip.

From an OSHA perspective, employers may have an obligation to require employees to disclose information regarding recent travel.  Under OSHA, employers have an affirmative obligation to provide a workplace free of known hazards.  OSHA recommends that employers develop an Infectious Disease Preparedness and Response Plan which includes the prompt identification and isolation of sick and potentially exposed employees.

May employers require employees to stay out of the workplace following travel?

Generally, yes. Employers may prevent employees from coming work so long as there is an objective and non-discriminatory reason to support the decision. For example, it is permissible to instruct employees who have recently traveled to high-risk areas to stay out of work. In addition, it is permissible to instruct employees who have been exposed to the coronavirus or employees who are displaying symptoms of the virus to stay home.

Under the ADA, employers are within their right to send home any employee who is perceived as posing a “direct threat” to the workplace. A “direct threat” is “a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” The “direct threat” assessment must be based on objective and factual information, not on subjective ideas about a disability or a perceived disability.                      

Under OSHA, employers have an affirmative obligation to provide a workplace free of known hazards.  Under this duty, employers have an obligation to shield employees from potentially infected persons.  If a potentially infected employee cannot be moved to a location away from other workers, such as an isolation room, or other appropriate engineering or administrative control, potentially sick or exposed employees may need to be removed from the worksite.

May an employer send employees home if they display flu-like symptoms?

Yes. Employers may ask employees if they are experiencing symptoms and may instruct employees displaying symptoms to leave the workplace. Remember, however, that employers must maintain confidential medical information in compliance with the ADA and other privacy laws that may be applicable.

Under OSHA, it is recommended that employers develop policies and procedures for immediately isolating people who have signs and/or symptoms of COVID-19.  If onsite isolation is not available, potentially sick people should be removed from the worksite.

May employers identify which employees may be more likely to be unavailable for work, without violating the Americans with Disabilities Act (ADA)?

Yes. Employers are permitted to make certain inquiries so long as the inquiry is designed to obtain both non-medical reasons for absence during a pandemic as well as medical reasons. The EEOC has published an example of an “ADA-Compliant Pre-Pandemic Employee Survey” at: https://www.eeoc.gov/facts/pandemic_flu.html.

May an employer require employees to work remotely, even if the employees are not sick?

Yes. Employers may implement remote work policies as long as they are not discriminatory or being administered in a discriminatory fashion.

Under OSHA, if no engineering or administrative controls are available to make a workplace, or a job within a workplace, free from known hazards, the employer may have an affirmative obligation to require employees to work remotely to prevent exposure.

May an employer terminate an employee who refuses to come to work based on fear of exposure? 

OSHA contains anti-retaliation/whistle-blower guidelines that may be triggered by an employee’s reasonable fear of coming to work due to concerns over contracting COVID-19.  Under the guidelines, an employee may refuse to work upon a reasonable belief that they are in imminent danger, and that there is a threat of death or serious physical harm. Where the belief is reasonable, the employer is prohibited from discriminating against the employee including termination or other retaliatory measures such as demotion. In addition, if an employee is raising concerns that the employer is not taking appropriate steps to prevent employee exposure in the workplace, OSHA protects the employee from retaliation. The best defense against a potential anti-retaliation/whistle-blower claim is to stay current with OSHA and CDC control and prevention guidelines applicable to your place of business.

If an employee exhausts sick leave, are there any other types of leave to which an employee might be entitled?

Yes. If an employee exhausts sick leave available to an employee through the employer’s policies or as the result of applicable local sick or other leave laws, employees still might be entitled to paid time off under a separate PTO policy or vacation leave policy. In addition, depending on the health condition of the employee or the individual for whom the employee is caring, the employee may be entitled to leave under the Family and Medical Leave Act (FMLA), leave under similar state family and medical leave laws, leave under local school closure or public health laws, leave under state quarantine laws, leave under an employer’s short-term disability policy, or leave as a reasonable accommodation under the ADA. Ultimately, an employee’s leave rights will depend on the need for leave, employer leave policies, and the federal and state (or local) laws to which the employer is subject.

Congress is currently finalizing federal legislation that may require certain employers to provide additional paid sick leave and/or FMLA rights to certain employees. We will provide updates and a summary of the final legislation once it becomes law.

May an employer require an employee who is quarantined to exhaust paid sick leave or other available PTO?

It depends. State law will dictate whether an employer can require exhaustion of paid sick leave. Under some state laws, an employer cannot require that the employee use paid sick or other paid time off.  In addition, some states have expanded state-mandated short-term disability (STD) programs, and so quarantined employees may be entitled to STD benefits under those state expansions (alleviating the need to use paid sick leave).

The proposed federal legislation referenced above may also impact the extent to which an employer can force exhaustion of paid sick leave.

May an employer require an employee who is out of work due to the pandemic to provide a doctor’s note or a return-to-work certification?

Yes. The EEOC has taken the position that such requirements are permissible under the ADA. However, the agency has also noted that employers should remain flexible with respect to these requirements in light of the fact that doctors and other healthcare professionals may be too busy to provide the documentation.

May an employer take employee temperatures at work?

Since the spread of the Coronavirus has been declared a pandemic, employers may conduct certain screenings to ensure a safe workplace. EEOC guidance provides that employers may measure employee body temperature without violating the ADA’s rules regulating “medical examinations.” Remember, however, any screenings must be conducted in a non-discriminatory manner.  Additionally, as a practical matter, an employee may be infected with the coronavirus without exhibiting symptoms such as a fever and, therefore, taking an employee’s temperature may not be the most effective method for protecting your workforce.

May an employer ask an employee why s/he has been out of work if the employer suspects a medical reason for the absence?

Yes. Employers are permitted to ask an individual why s/he did not report to work. In addition, during the current pandemic, this sort of inquiry is not a “disability-related” inquiry under the ADA.

May an employer ask employees to provide results of COVID-19 tests?

Yes. Employers are permitted to ask employees for COVID-19 test results or records associated with the results. There are no HIPAA concerns, so long as the employer (as opposed to the medical benefit plan) is asking the employee to disclose the information and is not pulling claims data or information from the medical plan’s records.  In addition, asking employees to provide information related to a test result or records verifying a COVID-19 diagnosis is also permissible under the ADA, provided the employer treats these records as confidential (i.e., limits access to those who have a need to know, such as a select group of HR professionals) and maintains the records in files separate from general employment or personnel records. Given the current pandemic, the ADA will not treat these sort of medical inquiries as “disability-related.”

What may employers ask about an employee’s family members or individuals residing in the employee’s home? 

An employer may ask employees about possible exposure to the virus, including whether a member of their household has tested positive for, or is displaying symptoms of, the coronavirus. Employers may also ask for information related to recent travel of family members, including whether they have traveled to any high-risk areas to conduct assessments of potential exposure in the workplace. Employers must ensure there are objective, legitimate reasons for the inquiries.

Is an employer required to report a confirmed case of COVID-19?

Yes.  OSHA recordkeeping requirements mandate that covered employers record certain work related injuries on their OSHA 300, 301 and 300A Logs.  While OSHA specifically exempts recording of the common cold or flu, COVED-19 is a reportable illness when a worker is infected on the job.

In terms of notice to the CDC, the reporting obligation to the CDC is on the healthcare provider, not the employer.

Employee Pay and PTO

How should we pay our employees who are unable to work?  Should they get paid time off benefits while out?

Employers only have to pay non-exempt workers for their actual working time. The rules change, however, for salaried, exempt employees. 

If an exempt employee works any part of a workweek and then is out of the office for the remainder of the week, that exempt employee is entitled to a full week’s pay under the FLSA.  If the employer offers paid time off for vacation and sick days (PTO), the PTO will serve as a form of check and balance because the employer may deduct the absences from the employee’s PTO bank.  For example, if a salaried, exempt employee works on Monday and takes the rest of the week off, the employee must receive their full week of pay, but 4 days of PTO may be deducted from the employee’s PTO bank if they did not work Tuesday through Friday. The employee must have sufficient PTO to justify the time off.

Once an exempt employee has used up (exhausted) all available PTO, then there are some additional rules that come into play that allow for deductions from pay. For instance, if an employee is absent from work for two days for personal reasons (other than sickness or disability), an employer generally may deduct two full days of pay from salary if there is no PTO left.  Similar deductions may be permissible for absences due to sickness or disability but there are specific rules around this that the employer must follow.

Whether an employee is entitled to PTO depends on the employer’s leave and PTO policies, applicable employment agreements or CBAs, and state or local paid time off laws (e.g., sick leave laws). Depending on the employer’s benefit program or policies, employees unable to work due to the coronavirus also may be entitled to payment of STD benefits. Employers who fund their own STD benefit programs have discretion to expand the circumstances under which benefits are paid. In addition, some states have expanded their state-mandated STD programs to allow for payment of disability benefits in the event of quarantine or possible exposure to COVID-19. Whether an employee is entitled to STD benefits under a fully-insured benefit program will depend on the STD policy’s definition of “disability” and the insurance carrier’s interpretation of such policy.

As noted above, Congress is currently considering legislation that may impose additional paid leave requirements.  We will provide an update such legislation when it is finalized.

May an employer reduce employee pay as an alternative to layoffs?

Absent a contractual obligation (e.g., an employment agreement or collective bargaining agreement), in most cases the employer may – with notice – reduce employee pay.  But in doing so employers should be sure that the reduced level of pay meets minimum wage requirements.  Also, for exempt employees, the reduced salary still must meet the level required for exempt status.

Layoffs and Terminations

May we terminate employees to allow them to file for unemployment?

Yes, with caveats.  Be mindful that some employees may have written employment agreements that govern the employer’s ability to terminate with or without advance notice or with or without cause.  Many such employment agreements require severance pay if an employee is terminated without cause.

For employees without such an employment agreement, many employers are going ahead and terminating employees so as to enable them to submit applications for unemployment compensation benefits.   Some states are working to speed up and streamline the application process.  New York, for example, is currently waiving the 7-day waiting period for unemployment insurance benefits for people who are out of work due to coronavirus COVID-19 closures or quarantines.

Many states also offer “partial unemployment” benefits to employees who are forced to work less than full-time during a pay period due to lack of work.

Does COVID-19 fall within the unforeseeable business circumstances exception of the Worker Adjustment and Retraining Notification (WARN) Act?

Likely yes. The WARN Act requires that some employers with 100 or more full-time employees to provide 60 days’ written notice to affected employees or their union representatives if they order a “plant closing” (an employment site, facility or unit will be shut down resulting in an employment loss for 50 or more employees during any 30-day period) or “mass layoff” (employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer’s active workforce).  Some states and local jurisdictions have their own versions of the WARN Act that may impose different criteria.

One exception to this rule is the “unforeseeable business circumstances” exception. This exception applies when a “sudden, dramatic, and unexpected” event that was not reasonably foreseeable has placed the employer in a position where it must incur immediate layoffs without providing the requisite sixty days’ notice. But the scope of the unforeseeable business circumstances exception is unclear.

The regulations describe the test as whether an employer exercising a commercially reasonable business judgment would have projected the events and the downturn in demand. COVID-19 would likely fall within this category because of the potential negative effects the pandemic will have on the market, economy and demand. But even if COVID-19 creates an unforeseeable business circumstance, it is a fact-specific inquiry and disputes may still exist about when the circumstance occurred, which may lead to future litigation.

Additionally, although the exception may apply, an employer should give as much notice of the layoff as possible and should also provide a brief statement explaining the reduction of the notification period. And while a conditional notice is not mandatory, in order to protect themselves, employers might want to provide conditional notices. When an adverse event is seen as a real possibility and terminations would be necessitated, a notice conditioned on the event occurring may preserve for the employer the ability to lay off immediately upon the occurrence of the event.

Does COVID-19 fall within the natural disaster exception of the Worker Adjustment and Retraining Notification (WARN) Act?

Unlikely. The WARN Act defines a natural disaster as “floods, earthquakes, droughts, storms, tidal waves or tsunamis and similar effects of nature.” Therefore, even though the World Health Organization has classified COVID-19 as a pandemic, it would not automatically classify as a natural disaster.  This is an issue that may well get litigated.

Tax Implications

What changes are there to tax filing laws as a result of the coronavirus?

Extended Payment Deadlines:

    On March 11th, the President announced that he “instructed” Treasury to defer tax payments and penalties or interest for individuals and businesses typically due on April 15th.  Treasury Secretary Mnuchin announced on March 17th, that IRS would allow individuals and pass through entities owing up to $1,000,000 and corporations owing up to $10,000,000 to defer their income tax payments 90 days without penalty or interest.  However, there has been no waiver of the filing requirement and the April 15th deadline remains unchanged.  Typically, taxpayers can request and automatically receive a six month filling extension, which also eliminates failure to file and failure to pay penalties.  Interest does ordinarily run for any payments not made by April 15th.  While there has yet to be a written confirmation, Treasury already has this authority under IRC section 6081 and guidance should be coming.

Federally Declared Disaster Solutions:

    On March 13th, the President declared a national state of emergency.  This is not the same as a “federal declared disaster,” which means the IRS still does not have authority to waive employee benefit plan deadlines.  Unless a “disaster” is declared, the IRS has limited authority to waive plan deadlines.

Appeals and Collection Deadlines:

    The IRS has the authority to extend deadlines to extend the time period to file appeals and adjust collection deadlines, although no guidance has been provided.  The IRS does not have the authority to extend the deadline to appeal to Tax Court.  As of today, nothing has been done to extend any of these deadlines.

HSA guidance:

    On March 11th, the IRS provided guidance that high deductible plans can provide coverage for testing, however, the handling of treatment is unclear.  IRS has provided that testing and treatment of COVID-19 count as preventative care, but the term treatment has not been defined.

Additional Resources:

Please note that state and local officials continue to enact laws that impact individuals and employers in those respective jurisdictions.  The National Governors Association webpage provides a helpful and updated list of state initiatives and legislation: https://www.nga.org/coronavirus/#states

The National Conference of State Legislatures has also published a helpful guide to state action that can be found here: https://www.ncsl.org/research/health/state-action-on-coronavirus-covid-19.aspx

Smith, Gambrell & Russell will continue to provide updates on this evolving crisis.  In the meantime, we suggest you review these additional SGR resources on the coronavirus pandemic:

SGR Employer Guide to the Coronavirus – https://www.sgrlaw.com/client-alerts/employer-guide-to-the-coronavirus-outbreak/

SGR Trust the Leaders 2.0 Special Digital Edition focused on numerous legal issues related to coronavirus – https://issuu.com/smithgambrellrussellllp/docs/trust_the_leaders_2.0?fr=sZmNmMTk4OTUxNg

SGR Webinar on Coronavirus Guidelines in the Workplace – Practical Guidelines for Employers – https://www.youtube.com/watch?v=7LG8QqJv19E&feature=youtu.be

For more information on coronavirus-related employment and benefits issues, please contact your Labor & Employment law counsel at Smith, Gambrell, & Russell, LLP.


Share via
Copy link
Powered by Social Snap