During this very turbulent time, there are a number of key practical and legal considerations your business must consider in light of the pending pandemic as follows:
1. If your company cannot perform under the terms of any existing contracts whether it be a lease, loan, promissory note or otherwise, you will need to check those agreements to see if they contain a "force majeure" clause. Force majeure means "superior force" that is something outside of the contemplation of the parties at the time the contract was entered into and would otherwise cause the existing contract to be unable to be performed. The current pandemic has forced many parties to be unable to perform their contracts particularly supply chain companies. The question then becomes will that clause excuse a contracting party from performance and whether the force majeure clause in the contract is sufficiently broad so as to include pandemics such as Covid-19. I will be addressing force majeure in my next blog in greater detail.
2.Business Interruption Insurance. Your company may have this separate insurance coverage and not even know it. It is expensive, but in certain situations, it can really pay for itself. Contact your insurance broker or agent to see if you have, in fact, purchased business interruption insurance. if you have done so, make sure that you file a claim for coverage. Most business interruption insurance policies will, however, likely not cover pandemics or even epidemics.
3. Payment to hourly employees as a result of a business closure must be done. Under federal law, an employer continues to be responsible to pay non-exempt employees for all hours actually worked and not for any time that those employees may have worked.
4. Quickly developing remote and teleworking strategies outside of the workplace. Many of my clients have already done this or started doing this before the pandemic hit. The remote and teleworking policies must apply equally and fairly to all employees. Your company will also need to create a procedural mechanism by which employees can log in their hours actually worked.
5. Massachusetts law must still apply for those employees terminated from the company such as the issuance of any final paychecks, compliance with payment for accrued or unused vacation time, and any COBRA notice to that employee relating to the continuation of health care coverage post-employment.
6. If the employee has a written contract with the company then any termination of that employee must be carried out in accordance with that written contract.
7. As an employer, make sure you continue to follow all applicable Massachusetts law and regulations as it relates to the treatment of your employees whether it be in the areas of discrimination or sexual harassment.
8. Although not required, for those employees who are terminated and now unemployed your business should let each employee know that as of March 16, 2020, emergency legislation was passed waiving the one week waiting period for any person making a claim for unemployment insurance.
9. First and foremost, continue to focus on employee safety as it relates to infection. The first thing to do is to get updates from the Center for Disease Control ("CDC") website. As mentioned in a past article, the CDC publishes updated information entitled "Interim Guidance for Business and Employers to Plan and Respond to Coronavirus Disease 2019." This bulletin will provide your company with both guidance and direction in meeting the safety challenges of this pandemic. Providing your employees with ongoing information from the CDC whether they are still working in the office or at home is imperative. Businesses are required under OSHA to be updating their employee base as to infection prevention as soon as new information becomes available.
10. Given the fact that most employees are now working remotely, the next issue that will arise is when and whether your employees can return to work. This is certainly a more difficult decision than taking them out of the workplace because the inherent nature of this virus is such that no one knows at this time as to how long the virus will be prevalent and if, in fact, the virus will return at a later date. The present medical thinking is that the Coronavirus will come in waves over the next 12 to 18 months thereby making it very difficult for employers to actually know when the "coast is clear." At all times, make sure that you apply official guidelines from the CDC and your company's own medical consultants to ensure that your company is taking all of the right medical and legal steps to protect your employees.
One thing is certain at this time. The continued volatility in the workplace due to the Coronavirus is going to be here for the indefinite future. Business strategies, as such, should be fluid and practical and must, at all times, deal with this new workplace reality. At the Katz Law Group, we know how to navigate our clients through stormy waters and have been doing so for 37 years. Please call us for guidance at 508-480-8202.