fbpx
COVID-19 Frequently Asked Questions2020-05-29T11:44:38-04:00

COVID-19

Frequently Asked Questions

Check back frequently as we plan to update this page as soon as additional information and resources become available.

If you have any questions as to whether, or how, these items apply to you or your business. Please contact the legal team at (770) 285-7785 or at team@inprimelegal.com.

Last Updated May 29, 2020 at 11:45 am

BUSINESS OPERATIONS

What measures must we implement for reopening our business in Georgia? (Updated May 29)2020-05-29T14:20:12-04:00

On April 23, 2020, Governor Kemp announced his plan to begin “Reviving a Healthy Georgia.” Since that time, Governor Kemp has released several Executive Orders which govern the reopening of businesses in the state. The most recent Executive Order was announced on May 28 and is effective from June 1 to June 15. This FAQ highlights some of the key updates in the Governor’s most recent Executive Order.

  • Encouragement to Wear PPE. The Governor has extended his strong encouragement that all Georgians should wear face coverings as practicable while outside of their homes or places of residence, except when eating, drinking, or exercising outdoors.
  • Extended Shelter in Place for the Medically Vulnerable. The shelter in place order for Georgians who are 65 and older or who have a medical condition has been extended through June 12, 2020. However, such persons are still permitted to participate in essential services, perform necessary travel, and work.
  • Increased Gathering Size. Beginning June 1, 2020, the number of people that can gather in a single location is increased from 10 to 25, so long as all persons can maintain six feet of distancing.
  • Reopening of Bars/Nightclubs. Beginning June 1, 2020, bars and nightclubs may reopen if they comply with 39 mandatory sanitation and social distancing measures, as detailed below.
  • Reopening of Water Parks and Amusement Parks. Beginning June 12, 2020 water parks and amusement parks can start reopening.
  • Guidance for Event Facilities. Banquet facilities, private event facilities, and private reception venues are added to the same category as restaurants and dine-in services to provide clear direction to these businesses on their requirements for reopening.
  • Reopening Summer Camps. Beginning May 31, 2020, overnight summer camps are allowed to resume if they meet 33 mandated criteria.
  • Reopening Schools. Beginning June 1, 2020 summer schools can reopen subject to eleven mandatory criteria.

This FAQ does not address every guideline included in the order and business owners should review the Executive Order themselves and review any questions with counsel. If your business is not covered by this FAQ, we would be happy to review Governor Kemp’s Executive Orders and its impact on your business with you individually. Please contact the legal team at (770) 285-7785 or at team@inprimelegal.com to schedule a consultation.

What measures must bars and nightclubs implement to reopen?

Effective from June 1 Governor Kemp has announced that bars and nightclubs may reopen subject to 39 strict requirements as detailed below:

  • Screen and evaluate workers who exhibit signs of illness, such as a fever over 100.4 degrees, cough, or shortness or breath;
  • require workers who exhibit signs of illness to not report to work or to seek medical attention.
    • If a worker becomes ill or presents signs of illness during the pre-screen, the worker should be sent home.
    • A worker that presents signs of illness during the pre-screen and is therefore suspected of having COVID-19 must follow CDC guidance and self-isolate for at least 10 days after symptom onset and end isolation only after the symptoms have improved and the worker has been fever-free/symptom-free for 3 consecutive days without medication.
  • Limit the number of total persons inside the bar to 25 persons or 35% of total listed fire capacity occupancy of the entire bar, whichever is greater;
  • implement teleworking for all possible workers
  • implement staggered shifts for all possible workers;
  • hold all meetings and conferences virtually, whenever possible;
  • train all workers on the importance and expectation of increased hand washing, the use of sanitizers with at least 60% alcohol, and provide clear instruction to avoid touching hands to face
  • require all workers to wear face coverings at all times. Workers may also wear face shields in addition to their face coverings. Such face coverings and face shields shall be cleaned or replaced daily;
  • discourage workers from using other workers’ equipment, desks, offices, etc.
  • stagger workstations to avoid workers standing adjacent to one another or next to each other
  • establish a maximum number of workers permitted in break rooms to reduce contact
  • prohibit handshaking and other unnecessary person to person contact
  • Enforce Social Distancing of non-cohabitating persons while present on such entity’s leased or owned property;
  • Increase physical space between workers and patrons;
  • Limit contact between workers and patrons;
  • Thoroughly detailing, cleaning, and sanitizing the entire facility prior to reopening and continue to do so regularly, focusing such cleaning and sanitation on high contact areas that would be touched by workers and/or patrons;
  • Between patrons, cleaning and sanitizing tables, digital ordering devices, check presenters, self-service areas, tabletops, and commonly touched areas, and discarding single use items;
  • Removing any self-service items and have workers provide such items to patrons directly wherever practicable;
  • requiring the use of disposable paper menus, if applicable, and discarding such menus after each patron use. Non-touch menus are also acceptable for use;
  • Cleaning and sanitizing restrooms regularly, checking restrooms based on the frequency of use, and always ensuring adequate supply of soap and paper towels;
  • Implementing procedures to increase cleaning and sanitizing
    frequency of surfaces;
  • Verifying that ware-washing machines are operating at the
    required wash and rinse temperatures and with the appropriate detergents and sanitizers;
  • Establishing seating areas for patrons to discourage loitering at the bar or in commonly trafficked areas;
  • Providing service only to seated patrons, or, if not applicable, to patrons in designated areas that are practicing Social Distancing;
  • Updating floor plans for common service areas, redesigning seating arrangements to ensure at least six ( 6) feet of separation from seating to seating. Utilizing physical barriers on booth seating when available to ensure Social Distancing;
  • Limiting party size at tables to no more than six (6) patrons;
  • Where practical, considering a reservations-only business model or call-ahead seating;
  • Posting signage on entrances that no one with Symptoms of COVID-19 is permitted in the facility;
  • Where practicable, physical barriers such as partitions or Plexiglas at registers should be used;
  • Using technological solutions where possible to reduce person-to-person interaction: mobile ordering, mobile access to menus to plan, text on arrival for seating, and contactless payment options;
  • Providing Hand Sanitizer for use by patrons, including contactless hand sanitizing stations when available;
  • Preventing patrons from congregating; designing a process to ensure patron separation that can include floor markings or outdoor distancing;
  • If possible, using an exit from the facility separate from the entrance;
  • Marking ingress/ egress to and from restrooms to establish paths that mitigate proximity for patrons and Workers;
  • Preventing activities that enable close human contact;
  • Establishing pathways for patrons’ ingress and egress and ensuring that they are clear and unobstructed;
  • Setting up hand sanitizing stations at every entrance to the establishment and encouraging patrons to use Hand Sanitizer upon entering;
  • Requiring Workers to wash or sanitize their hands upon entering the establishment, and between interactions with patrons; and
  • Sanitizing the bar at least twice daily before opening and after closing.

What measures must restaurants & dining services implement?

Effective from June 1 to June 15 all dining services are required to continue to follow 39 strict criteria for operating. These requirements remain unchanged from the Governor’s previous Executive Order. However, the Governor has added banquet facilities, private event facilities, and private reception venues to operate according to these same guidelines when reopening. The 39 requirements that apply to these businesses are outlined below:

The restaurant must determine how many patrons are allowed in their space.

  • divide the public portion of your space by 300 (excluding: hallways, restrooms, and space closed to patrons; including: waiting and bar areas as well as patios or any outdoor dining space).
  • Multiply the result by 10
  • This is the maximum number of patrons that can be in your restaurant at one time.

Additionally, such restaurants shall implement the following measures:

  • Screen and evaluate workers who exhibit signs of illness, such as a fever over 100.4 degrees, cough, or shortness or breath;
  • require workers who exhibit signs of illness to not report to work or to seek medical attention.
    • If a worker becomes ill or presents signs of illness during the pre-screen, the worker should be sent home.
    • A worker that presents signs of illness during the pre-screen and is therefore suspected of having COVID-19 must follow CDC guidance and self-isolate for at least 10 days after symptom onset and end isolation only after the symptoms have improved and the worker has been fever-free/symptom-free for 3 consecutive days without medication.
  • establish, maintain, and follow established policies regarding when workers who have become ill are permitted to return to work
  • implement teleworking for all possible workers
  • implement staggered shifts for all possible workers;
  • hold all meetings and conferences virtually, whenever possible;
  • train all workers on the importance and expectation of increased hand washing, the use of sanitizers with at least 60% alcohol, and provide clear instruction to avoid touching hands to face
  • require all workers to wear face coverings at all times. Such coverings shall be cleaned or replaced daily;
  • discourage workers from using other workers’ equipment, desks, offices, etc.
  • stagger workstations to avoid workers standing adjacent to one another or next to each other
  • establish a maximum number of workers permitted in break rooms to reduce contact
  • prohibit handshaking and other unnecessary person to person contact
  • Enforce Social Distancing of non-cohabitating persons while present on such entity’s leased or owned property;
  • Increase physical space between workers and patrons;
  • Limit contact between workers and patrons;
  • Discard all food items that are out of date;
  • Discontinue use of salad bars and buffets;
  • If providing a “grab and go” service, stock coolers to no more than minimum levels;
  • Ensure the Food Safety Manager certification of the person in charge is up-to-date and provide food handler training to refresh employees;
  • Thoroughly detail, clean, and sanitize the entire facility prior to resuming dine-in services and continue to do so regularly, focusing such cleaning and sanitation on high contact areas that would be touched by employees and patrons;
  • Between diners, clean and sanitize table condiments, digital ordering devices, check presenters, self-service areas, tabletops and commonly touched areas, and discarding single-use items;
  • Use rolled silverware and eliminate table presets;
  • Remove items from self-service drink, condiment, utensil, and tableware stations and have workers provide such items to patrons directly wherever practicable;
  • The use of disposable paper menus is strongly encouraged, which should be discarded after each patron use. Otherwise, businesses subject to this Section shall clean and sanitize reusable menus between each use by a patron. Non-touch menus are also acceptable for use.
  • Clean and sanitize restrooms regularly, check restrooms based on the frequency of use, and ensure adequate supply of soap and paper towels at all times;
  • Implement procedures to increase cleaning and sanitizing frequency of surfaces in the back-of-house. Avoid all food contact surfaces when using disinfectants;
  • Verify that ware-washing machines are operating at the required wash and rinse temperatures and with the appropriate detergents and sanitizers
  • Update floor plans for common dining areas, redesigning seating arrangements to ensure at least six (6) feet of separation from seating to seating. Utilize physical barriers on booth seating when available;
  • Limit party size at tables to no more than ten;
  • Where practical, consider a reservations-only business model or call-ahead seating;
  • Remind third-party delivery drivers and any suppliers of your internal distancing requirements;
  • Post signage on entrances that no one with a fever or symptoms of COVID-19 is permitted in the facility;
  • Where practicable, physical barriers such as partitions or Plexiglas at registers should be used;
  • Use technological solutions where possible to reduce person to-person interaction: mobile ordering, mobile access to menus to plan in advance, text on arrival for seating, and contactless payment options;
  • Provide hand sanitizer for use by patrons, including contactless hand sanitizing stations when available;
  • Do not allow patrons to congregate in waiting areas or bar areas. Design a process to ensure patron separation while waiting to be seated that can include floor markings, outdoor distancing, or waiting in cars;
  • If possible, use an exit from the facility separate from the entrance;
  • Mark ingress/egress to and from restrooms to establish paths that mitigate proximity for patrons and staff;
  • Where practicable, take-out and curbside pick-up services should be prioritized over dine-in services; and
  • All restaurant or dining room playgrounds shall be closed.

What measures must gyms and fitness centers implement?

In addition to the other suggested measures, the executive order requires that gyms and fitness centers implement the following additional measures to prevent the spread of COVID-19:

  • Placing signage at any entrance to instruct patrons that they cannot enter if they have been diagnosed with COVID-19, had symptoms of COVID-19, or had contact with a person that has or is suspected to have COVID-19;
  • Placing signage at any entrance and throughout the facility to instruct patrons of the enhanced sanitation procedures, Social Distancing requirements, and other instructions and limitations, as applicable, set forth below;
  • Screening patrons at entrance. Patrons exhibiting a temperature greater than 100.4 degrees Fahrenheit, cough, shortness of breath or difficulty breathing, fever, chills, muscle pain, sore throat, or new loss of taste or smell shall not be permitted to enter;
  • Limiting occupancy to enforce Social Distancing requirements and to prohibit Gatherings (Gatherings means more than 10 persons physically present at a location, if persons are required to stand or sit within 6 feet of each other);
  • Utilizing contactless forms of patron check-in;
  • Providing hand sanitizer stations for patrons and encouraging use;
  • Providing sanitation wipes at or near each piece of equipment and requiring users to wipe down the equipment before and after use;
  • Requiring workers to patrol patron areas to enforce the equipment wipe-down policy and conduct additional cleanings during times when equipment is not being used;
  • Limiting use of cardio machines to every other machine to maintain acceptable Social Distancing between users;
  • Enforcing Social Distancing and prohibiting congregating between non-cohabitating patrons, especially in pools, group fitness classes, and in areas where group sports regularly occur;
  • Encouraging patrons to conduct their workout and exit the facility without unnecessary delay;
  • Complying with the regulations for “Childcare Facilities” included in Section VII of this Order titled “Children” if childcare services are provided.
  • Closing the following facilities and equipment within a gym or fitness center: hot tubs, saunas, and steam rooms;
  • Requiring patrons to spray showers with a provided cleaning spray after use;
  • In addition to the regular cleaning schedule, cleaning and sanitizing high touch surfaces, bathrooms, and locker rooms regularly throughout hours of operation;
  • Prohibiting patrons from sharing equipment without cleaning and sanitizing between uses;
  • Practicing Social Distancing between trainers and patrons as practicable;
  • Requiring no less than ten (10) feet of distance between patrons participating in group fitness classes; and
  • Requiring rooms and equipment used for group fitness classes to be disinfected between classes.

Can a city in Georgia implement different guidelines?

No, Governor Kemp has announced that his measures will apply statewide and will be the operational standard for all jurisdictions. This means that no local action can be taken which is more or less restrictive.

How should I handle rent payments for my commercial lease? (Updated April 14)2020-04-28T12:24:15-04:00

Most commercial leases do not include provisions that would release you from paying rent due to events like a pandemic and the economic turbulence we are seeing now.  Technically, in most cases, you will be legally required to perform under your lease by paying rent.

But in navigating that duty, you have a range of some options, some which carry greater risk than others, as discussed below.

Can I tell my landlord I will not be paying rent on my commercial lease?

You have probably heard of some companies who have gone a “rent strike.”  For example, the Cheesecake Factory informed the landlords of its 190 locations that it would not pay rent for April.

While this may seem proactive, aggressive and effective, it actually presents some serious risks.

BREACH OF LEASE:  First, if you decide to tell your Landlord that you will not be paying rent on time, or at all, you will likely immediately be in breach of each lease agreement as soon as you send the letter, even if you have not actually missed the payment date yet. You do not have to actually miss the payment to be in breach. Simply notifying the Landlord that you will not pay rent will automatically constitute a breach.

If a Landlord initiates legal action, a court will also likely agree with the Landlord that you are in breach. It is extremely rare that commercial leases provide you with a justification for not paying or withholding rent. In fact, we have never seen any restaurant lease that gives the Tenant with a right to withhold rent payment in situations such as this. And, in our opinion, a Landlord would likely never agree to such language.

ACCELERATION OF RENT:   In many cases, upon a breach, leases give Landlords the right (but not the obligation) to accelerate rent for the remainder of the lease term. For example, if you have a lease with 7 years remaining, and the monthly rent is $10,000 per month, you could immediately be on the hook for $840,000 all at once. Again, you could be liable for this immediately once you send the letter (not when you actually miss the rent payment deadline).

This means that if you send one of these letters to each Landlord, you could, in the aggregate, be looking at potential liability in the millions of dollars, with little recourse or defense. Ultimately, we cannot predict what they will do – that decision is solely in their hands. Regardless, this is a major risk that we need to account for and consider very carefully.

PERSONAL GUARANTIES:   Most commercial leases include a personal guaranty from an owner of the company. This means that you could be facing personal liability for the accelerated rent and breach of the lease. If the landlords determine that you are in breach (which they will) and then decide to exercise their rights under the lease (which we don’t know), this could have a significant impact on your personal financial interests, including your personal assets, your future lending ability, your credit, etc.

Does COVID-19 count as a “force majeure event”?

A Force Majeure clause addresses situations in which one party is prevented or delayed from performing their contractual obligations due to unforeseeable events outside their reasonable control; for example, because of an act of god, restrictive governmental laws or regulations, inability to procure materials, or other similar reasons, then your performance will be excused, but only for the period of the delay.

Unfortunately, not all commercial leases include a “force majeure” clause.  And most don’t excuse or delay your obligation to pay rent or allow you to back out of a lease. In fact, many force majeure clauses explicitly state that the force majeure event does not justify withholding rent or delaying rental payments.

If your lease does include a force majeure clause, the COVID-19 situation may constitute a force majeure event depending on how it evolves and how long it lasts.  Ultimately, this will depend on the facts and wording of the clause. The provision might provide you with a possible way to delay and extend the time frame to perform. Courts usually interpret force majeure provisions very narrowly and strictly, so it is important that you do not deviate from the strict language of the clause without first consulting an attorney. For these reasons, we recommend not relying on a “force majeure” provision as a justification for backing out of the lease or withholding rent.

Will my Landlord give me a break on my rent payment under these circumstances?

Maybe. You have no way of knowing what the landlords will do. Again, just because these landlords have these rights, it does not mean that they will enforce them (only that they could if they want to). This is a risk you must be willing to take prior to making this decision.

Candidly, we expect that there will be some landlords who simply do not care and will expect you to pay rent on time regardless of the circumstances. These landlords might be willing to sue you, and it is highly likely that you will not have any available defenses to their claims of breach (and could lose the lawsuit).  Depending on the number of leases you have, this could mean potentially hundreds of thousands or millions of dollars in liability, in addition to hundreds of thousands of dollars in attorneys’ fees to pay litigation attorneys (and perhaps their attorneys as well, if you lose the lawsuit). You likely will not have any available coverage under your insurance policies to protect you in the event of a lawsuit (insurance policies typically do not cover a tenant for losses when the tenant is withholding rent without a contractual justification).

On the other hand, we expect that there may be some landlords who understand the reality of the situation and are willing to work with you. 

As we discuss below, consider that they might be less willing to negotiate if you simply send them a letter unilaterally stating that you are not going to pay rent, when you have no contractual right to withhold. Instead, they might be more receptive to an open invitation to discuss such as, “We are suffering financially and concerned about closing down temporarily, can you work with us on a solution? We are all in this together.”  Remember at the heart of any agreement is a personal relationship with reasonable people looking for solutions. Consider one or both of the options below.

OTHER OPTIONS:

OPTION 1 – Softer Approach – Ask Landlord to Work with You.

If you are not comfortable with sending a letter stating that you will not pay on time after considering the risks described above, you can adopt a softer, alternative approach. This would include reaching out to the landlords and letting them know about your concerns.   Simply ask them to work with you on a solution that provides some temporary relief that will be paid back at a later date. This way, you do not risk being in immediate and automatic breach as soon as you send the letter. Instead of saying “We are not paying rent,” say, “We are seriously struggling and we intend to comply with the lease, but can you work with us on some relief?”

Approach the landlord and very tactfully explain the situation and how the global epidemic has impacted your business from a financial standpoint. Ask for a 90-120 day (or more) freeze on everything and see if the Landlord is willing to agree.  After the freeze is over, we re-assess.

You could offer to pay additional rent amounts tacked on to the end of the lease term. In other words, if a lease is set to expire on April 1, 2024, and you Blue asked for a month forbearance, they would now extend the lease term to May 1, 2024 to make up for rent not paid in April 2020.  Alternatively, you could fold the unpaid rent into increased rent payments after the conclusion of the freeze.

OPTION 2 – Only Reach Out to Some, Not All Landlords.

If you have multiple leases, conduct an internal evaluation of which locations require the most support, and which locations can afford to pay an additional month’s rent. This way you can mitigate the potential impact of breaching leases across a few locations, instead of all locations. In other words, for now, continue to normally pay rent for those locations that are the most successful and reach out only to the landlords for those locations that are struggling the most.

Loans through the CARES Act

Funds received through a CARES Act loan may be used for rent payments.  If you intend to apply for one of these loans, inform your landlord, and request your rent payment be delayed until funds are received.

Will my business interruption insurance cover me for losses due to COVID-19? (Updated April 2)2020-04-28T12:24:15-04:00

As discussed below, business interruption (“BI”) insurance generally does not provide coverage for situations such as those stemming from COVID-19.  These policies are designed to protect you in the event that your business, alone, experiences a physical loss. BI policies are not designed to provide protection for community-wide disasters such as COVID-19.  However, the law is changing quickly, and it is important to keep up to date on the changes, prepare documentation of your losses, and take action where appropriate.

Business interruption claims require a “direct physical loss.”

BI insurance can provide coverage when a policyholder suffers a loss of income due to direct physical loss or damage to covered property at its location or another location.   In Georgia, insurance policies are strictly construed against the insurance companies. However, these policies generally do not cover loss of income due to market conditions, a slowdown of economic activity or a general fear of contamination. Nor do policies usually provide coverage for cancellations, suspensions and shutdowns that are implemented to limit the spread of the coronavirus. These are not a result of direct physical loss or damage. Accordingly, business interruption losses resulting from these types of events do not present covered losses under our property coverage forms.

Other Exclusions

Even if there has been direct physical loss or damage to property, most BI policies contain a number of exclusions that are likely to apply to business interruption losses. The most important exclusion to note is the exclusion for losses resulting contamination from a virus or bacteria, which would include coronavirus.

Governments May Address – Prepare to Take Action

In some states, legislatures and regulators are taking action to address whether business losses related to the virus might implicate the “business interruption.”

For instance, in New Jersey, a bill was introduced to require that business interruption insurance policies be interpreted to provide “coverage for business interruption due to global virus transmission or pandemic.”  New York and other states are examining this issue as well.

Georgia has not yet begun to address this issue.  However, Georgia has directed all property/casualty insurers to refrain from canceling any commercial policies, including business interruption or business income coverage, for the cause of non-payment for the next 60 days.

Ultimately, the scale of this problem likely must be resolved by the Federal government.  There has been some discussion of forming a Federally-backed insurance fund like the Terrorism Risk Insurance Program.

 With this issue developing rapidly, it is important to be prepared:

  • If in doubt, go ahead and file a claim with your insurance company.  It is better to preserve your claim earlier than to learn later that you have forfeited rights.
  • Keep meticulous documentation of your losses.  If relief becomes available in the future, you will be prepared to document your losses and hopefully receive benefits.
  • Importantly, speak with your broker proactively.  They will have knowledge of your policy and be able to explain available options and resources.
What are the loans available under the CARES Act / Payroll Protection Program? (Updated April 14)2020-04-28T12:24:15-04:00

On March 27, 2020, the President signed into law the CARES Act, which includes the Paycheck Protection Program.  The Paycheck Protection Program provides up to $349 billion in cash flow assistance through 100% federally guaranteed loans to small businesses and 501(c)(3) nonprofit organizations.

To help bring workers who may have already been laid off, the program can be retroactive to February 15, 2020, so employees can return onto payrolls. The loan’s covered period is February 15 to June 30, 2020.

The benefits of this loan include: No personal guaranty and no liability for shareholders, officers, etc. (absent misuse of funds), and the lender can only consider whether you were in operation as of February 2020 and whether you had employees/independent contractors as of February 2020.

Click to view a comparison of Paycheck Protection Program (PPP) and SBA Economic Injury Disaster Loans (EIDL)

Am I eligible for a loan under the Paycheck Protection Program?

You are eligible if you are:

  • A small business with fewer than 500 employees
  • A small business that otherwise meets the SBA’s size standard
  • A 501(c)(3) with fewer than 500 employees
  • An individual who operates as a sole proprietor
  • An individual who operates as an independent contractor
  • An individual who is self-employed who regularly carries on any trade or business
  • A Tribal business concern that meets the SBA size standard
  • A 501(c)(19) Veterans Organization that meets the SBA size standard

In addition, some special rules may make you eligible:

  • If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis
  • If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply

If you already have received an SBA disaster loan for COVID-19 related needs, you are not eligible for a loan through the CARES Act. However, if you have applied for an SBA disaster loan, you can opt to not proceed with it and choose a CARES Act loan instead.

How much can I borrow?

The maximum loan amount must be the lesser of:

  1. Average monthly payroll costs (defined below) for the year prior to the loan date.
    • For a seasonal employer, the business calculates the maximum loan amount is 2.5 x average total monthly payments for payroll costs for the 12-week period beginning February 15, 2019 or March 1, 2019 (decided by the loan recipient) and ending June 30, 2019; or
  2. (2) $10,000,000

For determining the loan amount, “payroll costs” means:

  • The sum of payments for employee compensation (wage, salary, commission) up to $100k annually for each employee;
  • Payment of cash tip or equivalent;
  • Payment for vacation, parental, family, medical, or sick leave;
  • Allowance for dismissal or separation;
  • Payment required for the provisions of group health care benefits, including insurance premiums;
  • Payment of any retirement benefit; or
  • Payment of State or local tax assessed on the compensation of employees

Restricted from being included in the payroll calculation are: Any salaries above $100,000 per year, payments for workers outside the U.S., and any qualified sick leave wages for which a tax credit is allowed under section 5101,et. seq. of the Families First Coronavirus Response Act.

Also, if you already have received an SBA disaster loan for COVID-19 related needs, you are not eligible for a loan through the CARES Act.  However, if you have applied for an SBA disaster loan, you can opt to not proceed with it and choose a CARES Act loan instead.

How can I use loan money?

The loan funds can be used to pay for:

  1. “Payroll costs” for U.S. workers; “payroll costs” means:
    • The sum of payments for employee compensation (wage, salary, commission) up to $100,000 per employee;
    • Payment of cash tip or equivalent;
    • Payment for vacation, parental, family, medical, or sick leave;
    • Allowance for dismissal or separation;
    • Payment required for the provisions of group health care benefits, including insurance premiums;
    • Payment of any retirement benefit; or
    • Payment of State or local tax assessed on the compensation of employees.
  2. payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
  3. rent (including rent under a lease agreement);
  4. utilities; and
  5. interest on any other debt obligations that were incurred before the covered period.

What are the requirements for forgiveness of a loan through the CARES Act?

A loan recipient is eligible for forgiveness up to the total principal amount of the loan that is spent on: (i) payroll, (ii), payment of interest on a covered mortgage obligation, (iii) covered rent payments, (iv) covered utility payments.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Specifically, the amount that is eligible for forgiveness is reduced by:

  1. Reductions in employees:
    The percentage of your employees that you have during the 8-week loan period divided by either (at your election):

    • The average number of employees you had from Feb 15, 2019 to June 30, 2019 or
    • The average number of employees you had in Jan-Feb 2020.
      AND
  2. Reductions in pay in excess of 25%:
    The percentage of compensation reduction of employees that exceeds 25% as compared to their pay during the most recent calendar quarter (e.g. if you reduce an employee’s pay by 30%, then your forgiveness will be reduced by 5%).  This does not apply to employees earning more than $100k.

So reductions in the number of your employees or their pay (in excess of 25%) will not make you outright ineligible for the loan, but they will reduce the amount of loan forgiveness to which you are entitled.

IMPORTANT – Exemption for Rehires & Eliminating Reductions: If you eliminate these reductions (i.e. rehire employees and eliminate the pay reduction) by June 30, 2019, these reductions on the forgiveness don’t apply. However, the SBA has indicated that only 25% of non-payroll expenses will qualify for forgiveness. Therefore, at least 75% of the loan must go towards payroll to be fully forgiven.

Here are some examples of how this could play out (which assume that you have not laid off any employees and all reductions in salary were made between February 15, 2020, and April 26, 2020):

If you request and receive a PPP loan based on your workers’ full compensation from last year, and pay 75% of those wages during the 8 weeks after you receive the funds, then you will have only used 75% of the loan towards payroll costs eligible for forgiveness. Assuming you use the other 25% for other eligible payments under the PPP, then the loan may be fully forgiven (75% payroll costs + 25% other eligible costs = 100% forgiveness).

However, if you pay your workers less than 75% during that time – say you use 60% of the loan for payroll and 40% for other qualifying expenses – then the maximum forgiveness would be 85% (i.e., 60% payroll costs + 25% other eligible costs = 85% forgiveness).

What if I don’t use all of my loan funds for approved expenses, i.e. part/all of my loan is not forgiven?

Any loan amounts not forgiven at the end of one year is carried forward as an ongoing loan with terms of a max of 2 years, at a max 1% interest.

Lenders are required to provide complete payment deferment (including payment of principal, interest, and fees) for at least  6 months and not more than 1 year.

How do I apply for a CARES Act loan?

You do not apply through the SBA.  Eligible entities may file applications with an SBA-approved lender. Lenders have been delegated authority to make loans without SBA review. Eligible applicants will have been in operation on February 15, 2020, and will have paid employees and payroll taxes or independent contractors.

You should consult with your local lender as to whether it is participating in the program.  Lenders may begin processing loan applications as soon as April 3, 2020.

Applicants will need to certify that the loan is necessary, and will be used to retain workers and pay eligible expenses. Applicants will further need to certify that no other application for a loan for the same purpose is pending and that the entity has not received any other loan for the same purposes through December 31, 2020.

If you wish to begin preparing your application, you can download a sample form to see the information that will be requested from you here: https://www.sba.gov/document/sba-form–paycheck-protection-program-ppp-sample-application-form

I have already furloughed or laid off employees.  May I rehire them to get the benefits of the loan forgiveness?

Yes. To encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period.

Are my business tax filings and payments still due on April 15? (Updated April 1)2020-04-28T12:24:15-04:00

No, both federal and Georgia filing deadlines have been extended.  

Federal Extension:

On March 21, 2020, the IRS announced that the federal income tax filing date has been extended from April 15, 2020, to July 15, 2020. This is an automatic extension and no action is required from taxpayers. Further, “taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations, and other non-corporate tax filers as well as those who pay self-employment tax.” This would cover LLCs taxed as partnerships or as S-corps. Should a business require additional time beyond the new July 15, 2020 deadline, businesses can file Form 7004 for an additional extension. 

While individual and business tax deadlines have been extended, the IRS still recommends that taxpayers file for a refund as soon as possible, as most tax refunds will be issued within 21 days, potentially providing taxpayers much needed financial relief.

State Extension

On March 23, 2020, Georgia’s Governor, Brian Kemp, announced that Georgia’s tax filing deadline would be extended to match the federal extension, extending the deadline from April 15, 2020, to July 15, 2020.

EMPLOYMENT LEAVE & COMPENSATIONS

Can I terminate an employee for refusing to come to work out of a fear of contracting COVID-19? (Updated April 28)2020-05-13T13:30:24-04:00

If an employee refuses to come to work, and the ONLY reason he or she gives is a general fear of contracting COVID-19, you likely may terminate the employee.

However, be careful. There are some important qualifications if the employee has additional reasons for not wanting to come into work.

Protected Sick Leave: If the reason involves the employee being sick, having symptoms, or caring for someone who is sick, then the employer may be required to give the employee leave. See the question above for more information about leave.

Concerns About Workplace Safety: If the reason is because the employee feels the employer has not done what is required to make the workplace safe, this could present some complications.

In some cases, an employee have protections from retaliation under the Occupational Safety and Health Act (“OSH Act”) administered by OSHA. Employees may refuse to do a job because conditions are hazardous under the following requirements:

  • Where possible, the employee must have asked the employer to eliminate the danger, and the employer failed to do so; and
  • The employee refused to work in “good faith.” This means that he or she must genuinely believe that an imminent danger exists; and
  • A reasonable person would agree that there is a real danger of death or serious injury; and
  • There isn’t enough time, due to the urgency of the hazard, to get it corrected through regular enforcement channels, such as requesting an OSHA inspection.

If the employee can show that he or she took these steps and is terminated, the employee could have a claim for retaliation in violation of the OSH Act and OSHA rules.

So if an employee voices concern about returning to work, we recommend that the employer proactively inform the employee of the measures the employer has taken to ensure workplace safety. In Georgia, this includes complying with Governor Kemp’s order for businesses discussed above.

Unemployment: The Georgia Department of Labor has indicated that employees who do not report to work due to a fear of COVID-19 likely will not be eligible for unemployment benefits but ultimately eligibility will depend on the facts of each case. This could mean that if the employee refuses to work out of a concern in addition to a fear of COVID-19, the employee’s other concerns might be grounds for unemployment, depending on the facts.

For an independent contractor, sole proprietor, or self-employed individual, can I apply for a loan under the CARES Act / Payroll Protection Program? (Updated April 14)2020-04-28T12:24:15-04:00

Starting April 10, 2020, independent contractors and self-employed individuals (“self-employed”) can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.

Who can apply?

All businesses who were in operation on February 15, 2020 – including sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply.

How much can a self-employed individual request in the loan?

The maximum loan amount is the lesser of:

  1. 2.5 x your average monthly payroll costs (defined below) for the year prior to the loan date up to an amount that equals $100,000 per year; or
  2. $10,000,000

For the self-employed, “Payroll costs” consists of individual wages, commissions, income, or individual net earnings from self-employment or similar compensation.

Here are the steps to determine this amount if you are self-employed:

  • Step 1: Aggregate “payroll costs” from the last 12 months (e.g., calendar year 2019, March 2019 to March 2020).
  • Step 2: To the extent not already taken into account when calculating Step 1, make sure that the annualized wage, commissions, income, or net earnings paid to yourself is capped at $100,000. Subtract any amounts paid to you as an independent contractor or sole proprietor in excess of $100,000.
  • Step 3: Divide by 12 to calculate the average monthly payroll costs.
  • Step 4: Multiply by 2.5.
  • Step 5: If you have any outstanding amount of an Economic Injury Disaster Loan (“EIDL”), which you received between January 31, 2020 and April 3, 2020, add the outstanding amount, less the amount of any “advance” under an EIDL COVID-19 loan.

What documentation is required for a self-employed person to apply for a PPP loan?

An eligible self-employed individual, independent contractor, or sole proprietorship seeking a PPP loan must submit documentation to establish that the individual is eligible, including:

  • 2019 tax return,
  • Form 1099-MISC
  • 2019 income statement, or
  • Payroll processor records

For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.

How can I use loan money?

The loan funds can be used to pay for the following during the 8 weeks after you receive the loan:

  • “Payroll costs” (as defined above)
  • Payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
  • Rent (including rent under a lease agreement);
  • Utilities; and
  • Interest on any other debt obligations that were incurred before the covered period.

What are the requirements for forgiveness of a loan through the CARES Act?

A loan recipient is eligible for forgiveness up to the total principal amount of the loan that is spent on: (i) payroll, (ii), payment of interest on a covered mortgage obligation, (iii) covered rent payments, (iv) covered utility payments.

If you have employees, forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Specifically, the amount that is eligible for forgiveness is reduced by:

1. Reductions in employees:

  • The percentage of your employees that you have during the 8-week loan period divided by either (at your election):
  • The average number of employees you had from Feb 15, 2019 to June 30, 2019 or
  • The average number of employees you had in Jan-Feb 2020.

AND

2. Reductions in pay in excess of 25%:

  • The percentage of compensation reduction of employees that exceeds 25% as compared to their pay during the most recent calendar quarter (e.g. if you reduce an employee’s pay by 30%, then your forgiveness will be reduced by 5%). This does not apply to employees earning more than $100k.

So reductions in the number of your employees or their pay (in excess of 25%) will not make you outright ineligible for the loan, but they will reduce the amount of loan forgiveness to which you are entitled.

IMPORTANT – Exemption for Rehires & Eliminating Reductions: If you eliminate these reductions (i.e. rehire employees and eliminate the pay reduction) by June 30, 2019, these reductions on the forgiveness don’t apply. However, the SBA has indicated that only 25% of non-payroll expenses will qualify for forgiveness. Therefore, at least 75% of the loan must go towards payroll to be fully forgiven.

Here are some examples of how this could play out (which assume that you have not laid off any employees and all reductions in salary were made between February 15, 2020, and April 26, 2020):

If you request and receive a PPP loan based on your workers’ full compensation from last year, and pay 75% of those wages during the 8 weeks after you receive the funds, then you will have only used 75% of the loan towards payroll costs eligible for forgiveness. Assuming you use the other 25% for other eligible payments under the PPP, then the loan may be fully forgiven (75% payroll costs + 25% other eligible costs = 100% forgiveness).

However, if you pay your workers less than 75% during that time – say you use 60% of the loan for payroll and 40% for other qualifying expenses – then the maximum forgiveness would be 85% (i.e., 60% payroll costs + 25% other eligible costs = 85% forgiveness).

Can I reduce my employees’ salary, wages, or hours? If I do, can they file for partial unemployment? (Updated March 18)2020-04-28T12:24:15-04:00

Wage Employee Reductions:   Is it legal for us to reduce the wages or number of hours of an hourly employee?

Yes, as long as you still meet minimum wage and overtime requirements.  The FLSA requires that all covered non-exempt employees receive at least the applicable Federal minimum wage for all hours worked. In a week in which employees work overtime, they must receive their regular rate of pay and overtime pay at a rate not less than one and one-half times the regular rate of pay for all overtime hours. The Act does not preclude an employer from lowering an employee’s hourly rate, provided the rate paid is at least the minimum wage, or from reducing the number of hours the employee is scheduled to work.

 Salaried Employee Reductions:  Can we make prospective reductions in pay for a salaried exempt employee due to the economic downturn?

 Yes, as long as notice of the reduction is given prior to the pay period of the reduction at the employee still receives at least $684 per week.  An employer is not prohibited from prospectively reducing the predetermined salary amount to be paid regularly to a Part 541 exempt employee during a business or economic slowdown, provided the change is bona fide and not used as a device to evade the salary basis requirements. Such a predetermined regular salary reduction, not related to the quantity or quality of work performed, will not result in loss of the exemption, as long as the employee still receives on a salary basis at least $684* per week.  If you need to reduce the salary below $684 per week, the exemption is lost.  You should switch the employee to an hourly rate and pay overtime.

Unemployment Benefits:  If we reduce the pay or hours of our employees, can they file unemployment claims to make up for the difference?

Employees may collect partial unemployment benefits for a reduction in hours (but not pay) if their pay is reduced by a sufficient amount.

Partial Claims & Threshold:  Partial unemployment insurance claims may be filed by employers for full-time employees who work less than full-time during a pay period due to lack of work only. The employees must still be attached to the employer and must have earned wages that do not exceed the weekly benefit amount plus $50.00 (see below regarding the weekly benefit amount calculation). 

Weekly Reports of Low Earnings:  The employer initiates partial claims by filing a “Weekly Report of Low Earnings”, Form DOL-408 each week of reduced hours.  Effective March 15, 2020, employers must file partial claims online. Employers also must file partial claims reports “with respect to any week during which an employee works less than full-time due to a partial or total company shutdown caused by the COVID-19 public health emergency.”

Benefit Calculation:  Generally, an applicant’s weekly benefit amount depends on wages earned during the “base period.” The base period includes the first four of the last five calendar quarters completed when the applicant files a claim. The actual weekly benefit amount is the total amount of wages earned in the two highest-earnings quarters divided by 42, up to the maximum amount.  This formula works out so that the employee gets up to 1/4 of their base period earnings. Effective July 1, 2019, for benefit years beginning on or after July 1, 2019, the minimum weekly benefit is $55 and the maximum is $365. The maximum number of weeks a claim can be established will range from 14 to 20, depending on the seasonal adjusted statewide unemployment rate.  The higher the unemployment rate, the more weeks the employee may receive benefits.

Am I still required to pay exempt, salaried employees during a COVID-19 forced business closure? (Updated March 20)2020-04-28T12:24:15-04:00
  • When You Must Pay: Under the Fair Labor Standards Act (FLSA), employers are generally obligated to pay exempt, salaried employees their full salary in any week in which they perform any work, with limited exceptions. In other words, if your business was open Monday, but then closed on Tuesday, and the salaried employee worked on Monday, you would be required to pay the salaried employee for the full work week even though he or she only worked a partial work week.
  • Requiring Use of Vacation Time: The Families First Coronavirus Response Act (see below) provides employees up to 80 hours of paid sick leave, and employers cannot require that employees use their accrued leave or vacation time during this time. However, once the employee has utilized all of their eligible time under the FFCRA, you may require salaried employees to use accrued leave or vacation days as long as the employee still receives payment equal to the employee’s guaranteed salary. If an employee does not have enough accrued time to cover the absence, the employer must still pay the employee the full guaranteed compensation amount in order for them to remain exempt.
  • When You Cannot Deduct: Employers may not deduct from the predetermined salaried compensation amount for absences resulting from office closures during a week in which the employee performs any work. In other words, if the salaried employee performed any work during a given work week, do not make any deductions from his or her salary in that work week.
  • When You Do Not Have to Pay: The general rule is that an employer is not required to pay exempt, salaried employees in weeks in which they perform no work. As stated above, an employer can choose pay salaried employees but require them to use their accrued vacation time.
What COVID-19 leave is required for employees? (Updated April 8)2020-04-28T12:24:15-04:00

On March 14, 2020, the House of Representatives passed the “Families First Coronavirus Response Act” (“FFCRA”) which responds to the economic impact that employees are facing as a result of the pandemic. The FFRCA passed the Senate on March 18, 2020 and the President signed it into law. The FFRCA will become effective by April 2, 2020. As such, must comply with the provisions below and notify employees of their rights. A more detailed description on complying with each requirement follows:

Emergency Paid Sick Leave

  • What businesses are covered?
    • The FFCRA would apply to any business with fewer than 500 employers. However, Businesses with less than 50 employees may be exempted from the legislation. The FFCRA allows the Secretary of Labor to issue regulations which exempt businesses with fewer than 50 employees when the required leave would “jeopardize the viability of the business as a going concern.”
  • How long is the sick leave?
    • Full-time employees are eligible for 80 hours of paid sick leave at the employer’s regular rate of pay, or two-thirds of the employee’s regular rate if the sick leave is taken by an employee to care for a child or family member who has or is exhibiting symptoms of COVID-19.
    • Part-time employees are eligible for a number of hours equal to the average number of hours they work over a 2-week period.
  • Can I require the Employee to try to cover their shift?
    • No, an employer may not require the employee search or find a replacement employee to cover their hours while the employee is using paid sick time.
  • Do I have to notify Employees of this?
    • Yes, employers must post, in a conspicuous place, a notice that will be provided by the Secretary of Labor.
  • What Employees Would Be Eligible For This Leave?
    • All employees, regardless of how long the employee has worked for the employer, who are unable to work (or telework) due to a need for leave because the employee is:
      1. subject to a federal, state, or local quarantine or isolation order related to COVID-19;
      2. advised by a health care provider to self-quarantine due to concerns related to COVID-19;
      3. experiencing symptoms of COVID-19 and seeking a medical diagnosis
      4. caring for an individual who is subject to an order as described in (1) or advised as in (2);
      5. caring for their son or daughter, if the child’s school or place of care has been closed due to the public health emergency or the child care provider is unavailable due to COVID-19 precautions.
      6. experiencing “any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.”
  • Is the Pay Subject to a Cap?
    • Yes, the maximum amount of pay during leave will not exceed $511 per day ($5,110 aggregate) when sick leave is used for reasons 1-3 above and will not exceed $200 per day ($2,000 aggregate) when used for reasons 4-6 above.
  • What are Employers Required To Pay?
    • Full-time Employees: Employers must pay the eligible employees according to their reason for taking sick leave:
      • For reasons 1-3 above: The employee must be paid the higher of (a) the employer’s regular rate of pay, or (b) the minimum wage rate (federal or local, whichever is higher).
      • For reasons 4-6 above: The employee may be compensated at two-thirds the rate described for reasons 1-3.
    • Varying Schedule: Employers must pay according to the average number of hours the employee was scheduled per day over the 6-month period ending on the date on which the employee takes the paid sick time, including any hours the employee took for any other type of leave (vacation, sick, etc.).
  • Would this be in addition to the Employer’s existing sick leave policy?
    • Yes, the sick leave is in addition to the employer’s current sick leave policies (which cannot be changed after the law’s enactment). Further, employers cannot require their employees to use other paid leave before the employee uses the paid sick time under this legislation.
  • Can I discipline, discharge, terminate, or take other action in regards to an employee who is on sick leave?
    • No, any discharge, discipline, or discrimination (such as reducing the employees hours when they return to work) will be found to be a violation of the FLSA and expose the employer to significant financial liability.

FMLA expansion

  • What Businesses are Covered?
    • Less than 500 Employees. The FFCRA would apply to any business with fewer than 500 employers.
    • Exemption for Less than 50 Employees. However, Businesses with less than 50 employees may be exempted from the legislation. The FFCRA allows the Secretary of Labor to issue regulations which exempt businesses with fewer than 50 employees when the required leave would “jeopardize the viability of the business as a going concern.”
    • Reinstatement Exemption for Less than 25 Employees. In addition, employers with fewer than 25 employees may be exempt from the FMLA’s reinstatement requirement if, at the end of the employee’s leave, his or her position no longer exists due to COVID-19 related economic conditions, the employer makes reasonable efforts to restore the employee to an equivalent position, and the employer makes reasonable efforts to contact the employee if an equivalent position opens up over the following year.
  • How long is the leave?
    • Employees may take up to 12 weeks of paid, job-protected leave if they meet one of the requirements in the next bullet point.
  • What Employees are Eligible For This Leave?
    • An employee is eligible if:
      1. the employee has been employed for at least 30 days prior to the first day of leave, and
      2. the employee is unable to work (or telework) due to
        • the need for leave to care for the son or daughter under 18 years of age of such employee if the child’s school or place of care has been closed, OR
          • Note: On April 1, 2020, Governor Kemp announced that Georgia schools will be suspended for the remainder of the school year.
        • the child care provider (a provider who receives compensation for providing child care services on a regular basis) of such child is unavailable, due to the public health emergency.
    • This is in addition to the existing eligibility requirements for FMLA leave, which remain:
      • Because of the birth of a son or daughter of the employee and in order to care for such son or daughter.
      • Because of the placement of a son or daughter with the employee for adoption or foster care.
      • In order to care for the spouse, or a son, daughter, or parent, of the employee, if such spouse, son, daughter, or parent has a serious health condition.
      • Because of a serious health condition that makes the employee unable to perform the functions of the position of such employee.
      • Because of any qualifying exigency arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces.
  • What are Employers Required To Pay?
    • The first 10 days of the leave may be unpaid and employees may choose whether to use any accrued paid time off, including vacation and sick leave, to cover the initial 10-day period. However, employers cannot require the employee to do so. Additionally, the Emergency Paid Sick Leave provisions above may also be used during this time. Following the initial 10-day period, employers are required to provide the employees a portion of their pay as detailed below:
      • Full-Time Pay Requirements: Employers must pay full-time employees at least two thirds of the employee’s regular rate of pay for the number of hours the employee would normally be scheduled.
      • Salaried Pay Requirements: Employers must pay salaried employees at least two-thirds of their base salary.
      • Varying Schedule: In the case of an employee whose schedule varies, the employer should pay an amount equal to the number of average hours that the employee was scheduled per day over the 6-month period ending on the date on which the employee takes such leave, including hours the employee took leave of any type.

This expanded access to paid sick leave and FMLA leave may create a significant financial burden for employers. In an attempt to mitigate this burden, the drafters incorporated refundable tax credits for employers that are required to make such payments. Subject to certain caps, employers may be able to recover 100% of qualified sick leave wages and 100% of qualified family leave wages.

NOTICE TO EMPLOYEES

  • What type of notice are employers required to provide? The U.S. Department of Labor has prepared a poster to be placed in a conspicuous place on the employer’s premises. A link to the poster is listed under the Useful Links & Resources.
  • What if employees are working from home? Emailing, direct mailing, or posting this notice on an internal or external website satisfies the requirement.

WORKPLACE SAFETY

Can I require employees to submit to a temperature check? (Updated April 28)2020-05-01T10:02:08-04:00

Generally, measuring an employee’s body temperature is a type of medical examination. Under the Americans with Disabilities Act (ADA), a medical examination must be job-related and consistent with business necessity to be lawful.  Job-relatedness includes concerns about a direct threat to the health and safety of workers or the public.

Applying this standard to the current circumstances of the COVID-19 pandemic, the Equal Employment Opportunity Commissions (EEOC) has said employers may take steps to determine if employees entering the workplace have COVID-19 because an individual with the virus will pose a direct threat to the health of others. Therefore an employer may choose to administer COVID-19 testing to employees before they enter the workplace to determine if they have the virus.

The EEOC also has said that consistent with the ADA standard, employers should ensure that the tests are accurate and reliable.  For example, employers may review guidance from the U.S. Food and Drug Administration about what may or may not be considered safe and accurate testing, as well as guidance from CDC or other public health authorities, and check for updates.  Employers may wish to consider the incidence of false-positives or false-negatives associated with a particular test.  (Note that accurate testing only reveals if the virus is currently present; a negative test does not mean the employee will not acquire the virus later).

InPrime encourages employers to subject employees to a temperature check on a case-by-case basis.  A medical examination for determining whether an employee has a fever should be used only if an employee is experiencing COVID-19-like symptoms, such as fever, cough, and shortness of breath, and the employer reasonably believes the employee represents a direct threat to the health and safety of workers or the public.

What do I do if an employee reports they were infected with COVID-19? (Updated March 18)2020-05-13T13:31:10-04:00
  • Send the Employee Home. Ask the employee to stay out of work until at least 14 days after the employee was diagnosed with the coronavirus. Employees should confirm with their doctor that they have been cleared of the virus prior to returning to work.
  • Notify Colleagues. Notify colleagues who work with the employee that they may have been exposed to a person with COVID-19 and request that they visit their doctor to confirm that they have not contracted the virus. As discussed below, be sure to respect the confidentiality of the confirmed victim’s medical information and avoid disclosing the identity of the victim before discussing with other employees.
  • Be Careful with Blanket Suggestions and Testing. Consider refraining from testing employees for fever or other symptoms, or issuing blanket suggestions that all employees get tested. Such blanket suggestions or testing could violate the Americans with Disabilities Act.
  • Record the Incident in Your OSHA Logs. If the employee begins showing symptoms while at work or contracted COVID-19 at work, log the incident on your OSHA 300 logs. OSHA has declared COVID-19 as a recordable illness.
  • Respect Employee Confidentiality! Respect the confidentiality of all employees’ medical information, including employees who may have contracted COVID-19. Disclosing such information could result in harassment or violations of the ADA’s medical privacy rules. Please discuss with your InPrime Legal team prior to disclosing the identity of a confirmed COVID-19 victim to others in the workplace.
What measures should I take to promote a safe working environment? (Updated March 18)2020-04-28T12:24:15-04:00

OSHA REQUIREMENTS

The Occupational Safety and Health Administration (OSHA) does not have any specific standard addressing COVID-19, however among the most relevant OSHA requirements that may apply to COVID-19 are:

  • Personal Protective Equipment Standards. OSHA promulgated the Personal Protective Equipment (PPE) standards, which require the use of gloves, eye and face protection, and respiratory protection for certain workers. If respirators are necessary to protect workers, employers must implement a comprehensive respiratory protection program in accordance with OSHA standards.
  • General Duty Clause. Section 5(a)(1) of the OSH Act requires employers to furnish to each worker “employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.”
  • Recordable Illness.OSHA has deemed COVID-19 a recordable illness on OSHA 300 logs. When an employee is infected on the job, employers should record COVID-19 on their 300 logs. Employers must also refrain from retaliating against employees who raise concerns about safety and health conditions.

WORKPLACE RECOMMENDATIONS

The CDC and OSHA recommendations concerning COVID-19 include the following:

  • Routine Workplace Hygiene and Cleanliness. Employers and workers should:
    1. Frequently wash their hands with soap and water for at least 20 seconds (and use alcohol based hand rub that contains at least 60% alcohol if soap and water are not available).
    2. Avoid touching their eyes, nose or mouth with unwashed hands.
    3. Cover their nose and mouth with a tissue (or into upper sleeves, if tissues are unavailable) when sneezing or coughing and immediately throw used tissues in the garbage and wash hands with soap and water. The CDC’s guidance on proper coughing and sneezing etiquette is linked below.
    4. Regularly clean surfaces of regularly touched areas in the workplace (e.g. workstations, countertops, doorknobs, light switches, keyboards, mouses, phones, etc.) ideally through the use of disposable wipes.
    5. Avoid close contact with people who are sick.
    6. Ensure you have enough relevant supplies (including soap, hand sanitizer, tissues, paper towels,  disinfectant and trash receptacles).
    7. Practice social distancing.
    8. Consider the use of tele-conferencing options instead of in-person meetings.
    9. Consider the feasibility of implementing a remote work policy.
  • Stay Home! Employers should actively encourage sick employees or employees exhibiting symptoms of acute respiratory illness to stay home and not come to work until they are free of fever, signs of fever, or any other systems and until they get tested and cleared from having contracted COVID-19. This applies to all employees, including contract or temporary employees. Employers should do the same for employees who report that they have been in contact with someone who has contract COVID-19. Such employees should stay out of work until the employee visit his/her doctor to confirm that they did not contract the virus or they can also self-quarantine themselves for 14 days.
  • Separate Employees. Employers should separate employees who appear to have acute respiratory illness symptoms upon arrival to work or who become sick during the day, and send such employees home immediately.
  • Advise Employees Before Traveling. Advise employees to check themselves for symptoms prior to travel and to check the CDC’s Traveler’s Health Notices (linked below) for latest guidance and recommendations for each country to which the employee may be traveling.
  • Refer Employees to CDC Guidance. Suggest to employees who have been exposed to a co-worker or family member with confirmed COVID-19 to refer to the CDC guidance to conduct their own risk assessment of their potential exposure. The CDC guidance on how employees may conduct their own risk assessment is linked below.
  • Planning. Prepare an Infectious Disease Outbreak Response Plan, which may allow for telecommuting, flexible work hours, staggered shifts, and modified business operations.
  • Avoid Discrimination. Employers should not make any determinations or assessments based on race or national origin. Discrimination based on race or national origin is prohibited by federal employment laws.
  • Workplace Posters. Place posters that encourage staying home when sick, cough and sneeze etiquette, and hand hygiene at the entrance of your workplace and in other areas where they are likely to be seen. Links to the CDC posters are below.
  • Avoid Retaliation. As stated above, do not retaliate against any employees for raising health or safety concerns related to COVID-19.
What is my safety liability as the Employer for COVID-19? (Updated March 18)2020-04-28T12:24:15-04:00

OCCUPATIONAL SAFETY & HEALTH ACT

Any business with 10 or more employees must comply with the OSH Act.  

OSH Act Enforcement

The OSH Act does not create a private right of action that would allow employees to sue you for injuries caused by your violation of the Act or OSHA standards. Instead, the Occupational Health & Safety Administration (“OSHA”) enforces the OSH Act. Violations may lead to fines between $13,494 per serious violation, up to $13,494 per day for failing to correct a violation, and up to $143,937 for willful or repeated violations. https://www.osha.gov/penalties In addition, evidence of OSHA violations may be admissible as evidence in a suit based on other laws, such as in workers’ compensation proceedings.

Relevant OSHA Standards

While there is no specific OSHA standard covering the disease, several general OSHA standards may apply that could help prevent occupational exposure to COVID-19.

First, OSHA’s General Duty Clause, Section 5(a)(1) of the OSH Act of 1970, requires employers to provide to workers “employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.” The General Duty Clause is broad enough that it may apply to COVID-19, depending on the workplace and spread of the disease.  So your liability exposure here depends on the nature of the specific work conditions at your office or work site. For example, a work site that requires employees work in close proximity to each other presents a greater risk than a site where employees are working alone.

Second, OSHA’s Personal Protective Equipment (PPE) standards require the use of gloves, eye and face protection, and respiratory protection for certain workers. When respirators are necessary to protect workers, employers must implement a comprehensive protection program in accordance with OSHA standards.

Third, OSHA has deemed COVID-19 a recordable illness on OSHA 300 logs. This means that employers must record COVID-19 when a worker is infected on the job.  So be sure to record if any employee on a site notifies you of a COVID-19 diagnosis. A sample 301 Incident Report is available at OSHA: Injury & Illness Recordkeeping Forms.

OSHA Anti-Retaliation

The OSHA rules prohibit retaliation against workers for raising concerns about safety and health conditions.

Specifically, the rules require employers to (1) inform employees of their right to report work-related injuries and illnesses without retaliation, which can be satisfied by posting the required OSHA workplace poster; (2) have a reasonable procedure for reporting work-related injuries and illnesses which does not discourage employees from reporting; and (3) refrain from retaliating against employees from reporting work-related injuries and illnesses

These anti-retaliation rules are frequent subjects of employee complaints to OSHA. Take care not to discourage or retaliate employees from complaining about COVID-19 risks and take steps to address any concerns they raise.

WORKERS’ COMPENSATION

Georgia’s workers’ compensation laws cover occupational diseases.  This means employees may bring a claim for workers’ compensation if he or she can show that he sustained an injury arising out of and in the course of the employment. O.C.G.A. § 34-9-1(4).

If an employee can prove they contracted COVID-19 at the workplace, they may have a workers’ compensation claim.

DISCRIMINATION

CDC, EEOC, OSHA and other health regulatory authorities have all emphasized that COVID-19 must be handled free of any discrimination or retaliation. Implement any relief or work-from-home programs without regard to protected classes such as race, gender, age, religion, disability, or national origin.