Coronavirus (COVID-19): What Employers Should Know

Coronavirus (COVID-19): What Employers Should Know

On March 19, 2020, California Governor Gavin Newsom ordered all individuals in the state to stay at home in order to slow the spread of coronavirus (COVID-19).  The order contains exceptions for essential needs, including work in critical infrastructure sectors. 

Governor Newsom’s California order comes on the heels of “shelter-in-place” orders issued by seven Bay Area counties – Alameda, Contra Costa, Marin, Santa Clara, San Francisco, San Mateo, and Santa Cruz – just days earlier.  

The California and Bay Area orders have led to many questions for employers in the state.  The following information summarizes employer obligations in light of the coronavirus pandemic.  Employers and employees should contact an attorney for further details and to obtain advice on specific legal matters. 

Can California employers have employees work remotely from home during government mandated shutdowns? 

Generally yes, but California employers should make sure to reimburse employees for all necessary business expenses incurred as a result of working remotely.  If working from home requires the use of equipment (such as computers or printers) that the employee does not already own, the employer must provide the equipment or reimburse the employee for the cost of the equipment.  Employers must also reimburse employees for internet and phone costs incurred for business purposes. 

California employers should also continue to ensure compliance with regular wage and hour requirements.  This includes, but is not limited to, meal periods, rest periods, and overtime requirements for non-exempt employees.  

If government mandated shutdowns cause financial hardship for an employer, can the employer reduce employee hours or change other terms of employment? 

Employment in California is presumed to be “at-will” unless the parties agree otherwise or an exception to at-will employment applies.  This means that either the employee or the employer may terminate employment with or without cause or prior notice.  An employer may also change other terms and conditions of employment, such as hours worked and compensation rates.  Employers must pay at least the applicable minimum wage for all hours worked. 

Employers planning a closure or major layoffs as a result of coronavirus can obtain help from the California EDD Rapid Response program.  Rapid Response teams may help avert potential layoffs and provide immediate on-site services to assist employees facing job losses. 

An employer reducing hours or shutting down operations due to coronavirus can encourage employees to file an unemployment insurance claim.  Unemployment insurance provides partial wage replacement to workers who lose their jobs or have their hours reduced through no fault of their own. 

Do employers have to provide paid leave to employees during the coronavirus pandemic? 

Under the federal Families First Coronavirus Response Act, employers with up to 499 employees must provide workers with two weeks of paid sick leave during the coronavirus pandemic.  After this two-week period, employees who have been employed for at least 30 days will be able to take up to 12 weeks of leave under the Family and Medical Leave Act to care for a child whose school or place of care has been closed.  After the first ten days, employees will be able to receive two-thirds of their usual pay, up to $200 per day and $10,000 in the aggregate.  The Act is scheduled to take effect on April 2, 2020.   

Employees may receive paid sick leave under the Families First Coronavirus Response Act if they are unable to work because 1) the employee is subject to a federal, state, or local quarantine or isolation due to coronavirus; 2) a health care provider has advised the employee to self-quarantine due to concerns related to coronavirus; 3) the employee is experiencing symptoms of coronavirus and seeking a medical diagnosis; 4) the employee is caring for an individual who is subject to quarantine or isolation due to coronavirus, or advised to self-quarantine due to coronavirus; 5) the employee is caring for the employee’s child whose school has been closed or place of care if unavailable due to coronavirus precautions, or 6) the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretaries of Treasury and Labor. 

Under the Act, employers will be able to seek reimbursement of paid leave amounts through a refundable tax credit.  Employers with fewer than 50 employees may also seek an exemption from the requirements of the Act. 

This is a brief summary of the Families First Coronavirus Response Act.  For full details of the Act, employers and employees should consult with an attorney. 

Are employers otherwise required to pay employees who cannot work during government mandated shutdowns? 

Generally, there is no legal obligation to pay employees if the employer’s business is shut down due to the coronavirus pandemic.  However, employers are required to provide paid leave to some employees in specific instances and should consult an attorney for specific advice regarding their legal obligations. 

Further, exempt employees must be paid their full weekly salary if they perform any work during the week. 

Employers may also generally permit non-exempt employees to take accrued vacation or paid time off during government mandated shutdowns. 

What notice are California employers required to provide if they must shut down as a result of the coronavirus pandemic?

On March 17, 2020, Governor Newsom signed Executive Order N-31-20, which temporarily suspends Cal-WARN advance notice requirements for mass layoffs, relocation, or termination caused by coronavirus related business circumstances that were not reasonably foreseeable as of the time that notice would have been required.  

The Cal-WARN Act normally requires employers to provide 60 days advance notice of mass layoffs, relocation, or termination to all affected employees.  Under the Order, an employer must only give as much notice as is practicable and provide a brief statement of the basis for reducing the notice period.  

It should be noted that the federal WARN Act, which sets out similar requirements for a 60-daynotice in the case of a closure or layoff, already contains exceptions for closures or layoffs resulting from business circumstances that were not reasonably foreseeable.  

Other Questions?

For more information on employer obligations related to the coronavirus and government mandated shutdowns, contact us online or call us at 415-788-9000.

*The contents of this article are for informational purposes only and does not constitute legal advice.  Employers and employees should contact a licensed California attorney to obtain advice with respect to any particular legal matter. Information on this website may not constitute the most up-to-date legal or other information.  Use of this website does not create an attorney-client relationship between the reader and Minami Tamaki LLP.  Any links contained in this article are only for the convenience of the reader, and do not constitute recommendations or endorsements of the contents of the third-party sites.

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