I would like to introduce you to our today’s presenter, Robert Bernstein [Esquire 00:00:06], a shareholder at the law firm of Greenberg Traurig, LLP. Rob Bernstein focuses his practice on labor and employment, exclusively for management with an emphasis in litigation and counsel. With over 30 years of experience, Rob has represented many multinational and domestic corporations in a wide range of industries. His practice extends to numerous jurisdictions across the United States involving most workplace issues, including class and collective actions, employee benefits, and trade secret litigation. Prior to joining Greenberg Traurig, Rob chaired the National Labor and Employment Department steering committee of a management side only national labor and employment firm, where he also served as one of five members of the firm’s executive committee. Rob was a member of its board of directors as well. Rob also was a partner at a top 15 international law firm where he headed its global employment practice.
A little bit on the firm, Greenberg Traurig, LLP. It has more than 2200 lawyers in 41 locations in the United States, Latin America, Europe, Asia, and the Middle East. Greenberg Traurig’s multidisciplinary team includes lawyers who have served as chief legal officers at major multinational companies, and those who have spent years solving real world problems in the business, political and legal environments of major commercial centers. The firm serves clients in over 30 separate practice areas from corporate acquisitions, tax and securities, to real estate, cybersecurity and intellectual property. From the obscure regulatory question or compliance issue to the bet the company deals and litigation, Greenberg Traurig’s team is equipped to guide clients through any and all of their businesses difficult legal decisions. Greenberg Traurig’s global labor and employment practice provides national and international corporations with strategic legal advice on all matters concerning the employment relationship. With over 170 practitioners in that particular practice around the globe, Greenberg Traurig offers national and international organizations, strategic and practical legal services that are focused on maximizing human resource potential.
Members of the practice have had numerous trial wins and are frequently called upon to handle complex bet the company and large high stakes cases, including nationwide class and collective actions. Labor and employment team members assist clients with complex employment issues and design practical, proactive strategies that can be readily implemented by today’s human resources professionals. In addition, the practice was recognized by the Legal 500 United States in the areas of labor and employment litigation, labor management relations, [Erasa 00:02:59] litigations, workplace and employment counseling and trade secrets litigation. Today, Robert Bernstein will lead us in a discussion entitled, Reducing Risk Amid the Chaos: The CFO’s Role in Employment Matters. It gives me great pleasure to introduce you to today’s CFO business intelligence, briefing series presenter, Robert Bernstein Esquire, shareholder at Greenberg Traurig, LLP. Rob, thanks for being with us today.
Thank you very much, Andy, and thank you everyone for joining us today. I appreciate the introduction, Andy. Thank you again, everybody for taking the time. Everybody, I’m sure sitting here today, appreciates the unprecedented astonishing impact that this Coronavirus spread and pandemic has caused across the world. While there have been other serious illnesses that have impacted the economy and there have been other serious economic events that have had light severe impact, this, I think most would agree is unprecedented. Indeed, as noted in the [inaudible 00:04:20]. So if you look at the first slide, you can see that there have been roughly, now it’s 470,000, almost a half a million confirmed positive cases in the United States. Many, you can see here, in New Jersey and New York. But notable, and that’s why I included it, there’s been roughly 17 million Americans who filed for unemployment. That’s only in roughly the last three weeks, since roughly mid March.
As a result, employers are facing very novel legal challenges. As I’ll address later, these novels challenges are created because both Congress and many States and municipalities are trying very hard on the fly to deal with these issues. Many of these statutes are being issued with little guidance and little substance. So many times employers today are faced with looking at these statutes, the plain language of the statutes, looking at their workplace, and then trying to figure out what’s the best guidance for dealing with these issues while at the same time, while being sensitive to the employment issues and your workforce, being sensitive as well to the economic impact that all of this will have? Because again, this is so novel and employers and employees are anxious to get up and get back to work.
With that in mind, I’m going to try and present many of these issues to you, which obviously at a major level or principal level, are going to be the legal issues that you will see. But I’m going to try and issue spot and try and present these legal issues and then offer some practical guidance and proposed responses that you should consider as we go forward. As you go forward in your operations, because there aren’t a lot of specific concrete facts and legal principles that will guide you. Most of it is just the base of the statute. Before I get to a discussion of the legal issues, I thought it would be prudent to remind everybody because I suspect strongly that this is going through everyone’s mind and that at major businesses is getting ourselves prepared. That applies to my own law firm, getting ourselves prepared for what we hope will be a gradual return to normal business operations.
As we continue as a country to deal with these issues from a legal perspective, there are other practical things that we need to be thinking about as we get ready, hopefully in the next couple of weeks or more to resume work. Therefore, maintaining during this shutdown, maintaining employee morale is critical. And while this is anecdotal, I’m sure everyone can appreciate, nevertheless from much of what I’ve read, from our own employees, from talking to many people that I know in the business world and for many clients, as we’re trying during the difficult times to maintain competence, business morale, employee morale, as we go forward, among the things that have resonated most would be the consistent and transparent communication with your workforce. That can come in many forms. I’m assuming that many of you already do this, but employees through studies that I’ve read, and again, anecdotal information I’ve collected, welcome regular updates from management on the status of the business. What are the next plans for the company? What are we planning to do as an organization to ride through this crisis and then get ourselves back up and running?
In that regard, it’s really important that managers make themselves available for questions. This is the number one item that I see in many studies that have been done on this. And that is to keep morale up, the managers themselves at all levels should work to make themselves available. That can be by cell phone, periodic email and just periodic telephone calls or text messages, just letting the employees know that they’re available and just checking in equally importantly, on their health and how are they doing and how are their families doing? Senior management can record messages though. I don’t think that’s the best approach, but many do it depending upon the level within the organization. Or again, which has been favorably urged, is to hold regular update calls at least weekly, perhaps twice a week, to just keep the workforce at all levels positive and informed.
Then to the extent that you can do it, and it’s encouraging because you do want to keep your good employees as well, you want to keep your messaging positive. You don’t want to focus on the doom and gloom. You want to focus on what the company is doing to ride this out. What the plans are when we get back up and running and to be responsive to everyone’s needs to make sure that if they have issues, they know to whom they can bring the issue. Also, and some of this may sound trite, I hope not because this is something that our work forces, our employees do look for, is the sensitivity of senior management. We at our firm and many of my clients share with me how they are promoting employee wellbeing, how they are letting everybody know that they care. If they have any personal issues or questions, to make sure everyone knows how they can go about seeking help through the company’s EAP and various wellness programs and other resources that the company may make available.
The other thing to think about, and I suspect many of you are doing this as well, is to be flexible about ordinary workplace rules. I get numerous calls daily about infractions that management is observing in connection with the employees that are there. And while we talk through what needs to be done in these challenging times, sometimes it might be better to be a little bit more flexible, particularly when you’re talking about employees who aren’t even in the workplace. These are employees who are teleworking and as a result are very difficult to figure out, are they really actively engaged? Are they available? Rather than be difficult with employees and challenge them and make them defensive, try to be more sensitive at these difficult times and be a little bit flexible, as I said, about the work rules.
Holding virtual team bonding events. Some of these may seem a little bit corny. A couple of them did to me too, but the amount of favorable reaction, I think you would all find this surprising. Some of you may be doing it. I’ve seen numerous team lunches done virtually, team happy hours, virtually. Different programs that are done virtually, celebrating employee milestones. Somebody has an anniversary, they’ve been with the company five years, it happens to fall at this time. You want to operate as if we’re okay. We’re still functioning vigorously as a company and as a business. And let’s continue to celebrate these milestones. These are things that really do resonate with the workforce. I think with everybody, because you want to have a positive feeling about the company as we approach hopefully the gradual return. Then again, as noted here, encouraging employees to exercise, stay healthy, try and make maybe even virtual yoga or the like. Again, while that may sound corny, even our firm chairman urges this and my colleagues within my firm talk about it. They like it. They like this feeling of essentially a family.
Now, if your workforce is open, we assume by this point you’re encouraging everybody to stay home if they can to tele work and encouraging everybody as noted, to practice good hygiene. Within the organization, it’s also important to have all the sanitizing stations in the office, to have the opportunity or take the opportunity to bring in outsiders, to sanitize the office itself, to make sure that it is and remains virus free to the extent possible. A very important thing not to forget is to make sure that you promptly respond to all employee complaints, whatever they may be. They may not necessarily only go to HR. There may be many of you in the audience, obviously who are CFOs or occupy similar positions, or you may get a number of questions challenging some of the financial decisions that are being made. I see this frequently, and it’s important. Even if the complaint appears to you to be meritless, it’s really important to respond.
There are a number of theories that people can advance besides whistleblower theories, discrimination theories and the like, which we’ll talk about, but compliance should not relax either. To the extent anonymous complaints are lodged with compliance, that cannot be overlooked. It’s important, pay attention to employee complaints and do your best to promptly respond and carefully respond. Because the last thing we all know or need, I should say, is some sort of a lawsuit. That’s why I say, monitor closely the hotline for complaints. Another point that I see frequently, and it bears reminding, is the issue of open communication and information regarding employee benefits. So that those who have them available know how to go about seeking benefits and attaining health benefits during these difficult times. This seems obvious, I’m sure, to many of you, but it always bears reminding.
We talked a moment ago and I’ve been talking about the eventual return to operations, which is a fundamental component of this presentation. So preparing for what will hopefully be the eventual return to normal operations once this crisis has abated. We all need to know that, ourselves included, that there will have to be an adjustment period. To that effect, as we spoke a moment ago about these virtual team meetings and keeping employees regularly informed, the same will hold true, at least in the foreseeable future. When we return to the office to keep that positive momentum going and to maintain these meetings through senior management, department heads, vice presidents and the like who are responsible for groups within the organization to meet with the workforce on a regular basis, as everybody returns. And to urge open communication, let everybody know that you’re there to receive whatever concerns they have, the questions they have and make sure we’re all ready for that return.
Now, before I turn to this next slide, I talked about preparing for the return. I mentioned to everyone, the idea of ensuring that we maintain a sanitized work environment. I know that may sound obvious to everyone, so forgive me. However, some of you may have read already, there was a lawsuit filed in federal court, [inaudible 00:18:12]. So there was a lawsuit filed yesterday in Illinois against Walmart alleging a variety of damages resulting from a workplace death, allegedly connected to COVID-19. The allegations were that the employers did not maintain at that facility, a safe work environment, a hygienic work environment, that people who allegedly had shared the fact that they had COVID-19 we’re still permitted to work, et cetera. As a result of those events, this plaintiffs of state has brought a lawsuit very quickly due to the death of that former employee.
In addition to some other issues that I will raise later, I do think it cannot be sufficiently stressed, the importance of always being sensitive to maintaining a hygienic, sanitized workplace that’s directed to the virus and following all the recommendations that the CDC urges us to do. Some of these you can see now, apply now on this slide and may later apply. And that is when an employee claims they’re feeling sick, and I hear multiple arguments back and forth, but I think everyone would agree. It’s always best to err on the side of caution and to require employees who are feeling sick to stay home, they can self quarantine. If it means providing emergency paid sick leave under the new First Families Coronavirus Response Act or any comparable state statute, most would recommend you think carefully about it. It may not be worth the risk not to do that because of the potential impact that this individual can have on others in the workplace.
In that regard, and I get a lot of these questions, you are free to ask employees if they’re experiencing COVID symptoms. Often under the ADA and comparable anti-discrimination statute, you’re not supposed to ask these kinds of questions. If somebody looks sick, you’re not supposed to ask them about that or tell them to go home. These kinds of issues have been relaxed by the DOL in interpreting the Families First Coronavirus Response Act, and most States statutes are taking the same position because you don’t want to be that employer that unfortunately gets that very costly lawsuit. Furthermore, hopefully everyone is aware, you’re free to take employee temperatures to verify they have no fever as they come into the workplace. You can require a doctor’s note before letting employees return to the office or the workplace. You can delay their start dates.
All of this in the ordinary circumstance would be viewed as potential violations of federal and state anti-discrimination statutes because you’re considered to have perceived somebody as disabled, but these rules that ordinarily govern, they’re being relaxed. So it’s important to be aware of this because you’re balancing, avoiding the lawsuit under these federal and state statute that have been in place before with ensuring that in your workplace itself, to the extent you’re one of those businesses that’s allow to have employees come in, that you’re being sensitive to these needs and taking the steps that are required. I’m thinking, for example, a production facility. I have several clients that operate in the essential business world and these sorts of questions are coming up regularly. In that regard, if you were planning on extending job offers, but an employee is unavailable due to the Coronavirus, you’re allowed to withdraw the job offer if necessary so that an immediate start date can commence. In other words, if you need somebody at the job, somebody can’t start, you’re authorized to withdraw that offer. Again, contrary to what the law [inaudible 00:22:54].
The next area to talk about, and I suspect this may be of interest to many of you here today, that deals with considering salary reductions and cost cutting measures. This is something that comes up frequently because as we talked about at the outset of the presentation, the number of lost jobs, the unemployment rate, skyrocketing. There have been, as we noted before, roughly seven million loss jobs since mid March. Hopefully many of you have been able to ride this out or managing, struggling to keep the books afloat, the operation afloat. But to the extent that you’re considering salary reductions or like cost cutting measures, you need to look at this two ways, and I’m talking nonunion now. So for your workforce, assuming the workforce that we’re talking about are at-will employees, you have all the appropriate handbooks and disclaimers in your offer letters, et cetera. So you’re operating with at-will employees, non-union, the non-exempt employees, you have a lot of flexibility with addressing these issues. Because with non-exempt employees, you only have to make sure that you pay them at least the minimum wage for the hours that they work. Now, that of course includes overtime.
Now remember, with a non-exempt employee, you only pay for the hours that they work. You can adjust their compensation rate if you choose to do so. Many employers don’t want to do it understandably for the reasons we discussed, you want to keep morale up. But with that said, you do want to ensure that to the extent you cut jobs or you cut hours, that you do so in a way that is sensitive to their pay rates, and at least doesn’t violate wage and hour laws. And you note below that we have the rates, which are in federal and state minimum salary for an exempt employee. And talking about an exempt employee, we’re talking about 35,000. So you can even with an exempt employee, make adjustments to his or her pay provided you don’t fall under the minimum amounts to safeguard their status as exempt employees. Again, the federal rule is 35,500 under federal and New Jersey law. In New York, the amount is higher. In New York city, you’ll lose the exempt status of your worker if their salary falls below $58,500.
Now, one other thing to think about as we consider these special employment considerations, another thing to think about is with an exempt employee. This comes up a lot. So if you’re thinking about cutting pay or laying people off or adjusting hours, it’s much easier, as everyone I suspect knows, to do that with respect to non-exempt. With an exempt employee, you have to remember, if somebody is exempt, a salaried exempt employee, you have to remember that if they work any part of a week, you have to pay them for the entire week. So you can’t make adjustments to their salary just by cutting their hours and prorating it. Sometimes to the extent, you want to save money and cut hours or cut the payroll or exempt employees, you may want to think about staggering schedules so that they work a week at a time, or if you’re okay with partial weeks, that’s fine, but understand you’ve got to pay them for the whole week. You can only cut the pay of an exempt employee if they don’t work for the week.
Now, personnel considerations during this pandemic. Again, you can require the employees to stay home if they feel sick, you can ask them if they’re experiencing symptoms, you can take their temperatures to verify they don’t have a fever. You can require the doctor’s note before letting the employees return, which is really an important recommendation so that you don’t have anyone infecting others in the workplace when they do return. You can delay start dates. As I said before, if you wish, you can withdraw job offers if an immediate start date is necessary. Now, if you’re considering layoffs, as we were talking about a moment ago, you should think about the potential impact on employee benefits. Are the employees eligible or not? Consider how long it will last and the implications of the long-term layoffs. Be mindful of WARN issues. And for those of you, and I’ll talk about a little more detail, WARN is the federal statute. There are many States statutes. They deal with layoffs or plant shut downs, mass layoffs or plant shut downs.
There are requirements if in fact you do lay off a substantial or one third of your workforce within a particular jurisdiction or at a particular job site. But it is important to consider when you lay somebody off, how long will it last? You’ll see down below, there’s a discussion, and I hear it a lot, in which employers are asking about furloughs versus layoffs. Furloughs are as a technical matter while there’s mixed lawn, this as a technical matter, there really isn’t a difference between a furlough and a layoff. However, most would tell you that the furlough is the more desirable approach, the more employee friendly approach if in fact, you believe you’re going to be able to bounce back and bring people back into the workplace when this is over and we start seeing where we are following this pandemic. So when you lay somebody off, we all know that’s a termination and all the benefits associated with a termination apply. Such as last paycheck, sick leave, any PTO time, et cetera, any unused accrued sick days, unused vacation. They have to get all of that for a layoff.
If it’s a furlough, some of the same rules will apply. But the big difference in that is that with a furlough, while most of those paychecks are likely due, a big issue which I think about, and you’re going to get questions about it I suspect, are COBRA rights and employee benefits rights. By that, you probably [inaudible 00:30:57], well, what do I mean? What I mean is that if an employer intends to bring employees back later, the COBRA rights may cease when the employee returns to work, but COBRA has to be offered in the interim. I wanted to raise with some of you or with all of you, the issue of COBRA. If you furlough somebody, they get their COBRA rights as notice. You bring them back to work, then COBRA rights end. However, whether or not they continue eligibility if furloughed is going to depend upon the applicable plan document and associated insurance contracts.
Most of these plan documents are fact specific and they do contain provisions or benefit continuation during unpaid leaves. As a result, did they contain provisions for unpaid leaves? They may contain provisions for the continuation of benefits during a furlough. As a result, I would urge everybody to talk to your benefits people and take a look at what your obligations are in this regard, because this issue comes up a lot. Related to that, if you in fact choose to continue as you interpret your plan documents, to keep somebody who’s furloughed rather than laid off on your benefit plan, but they may not have the money because they’d been furloughed to pay for their portion of the benefits, think about different things that you can do. Some employers are picking up the costs themselves if they sincerely believe that the employee is going to come back and then they work with the employee to recover the money.
One of the things to think about in this regard is A, if you choose to make it a gift and to just cover it yourselves during this pandemic or during the furlough. Many companies do that, some may not. It depends upon how many you’re impacting. To the extent that you will insist that you get recovery for the payment, you need that money back or you’re entitled to the money back that the employee owes for the continued benefit coverage, I would urge you to think about getting some of note from the employee if you advance the pay. To the extent that you advance it, then get some sort of a note from the employee authorizing you to withhold that money from the paycheck when the employee returns to work. Because under wage and hour laws, they’re very strict when it comes to what you can withhold from a paycheck. So for this point, I would encourage you to either decide to carry the employee or to send the employee promises to repay the company for that. Make sure you get a note to that effect.
One last point in this regard, independent contractors. This issue comes up. I would urge everybody to take a look at your independent contractor agreements and what they provide and make sure that you in fact are reviewing carefully, who you have in the workplace. Many, many times I’ve seen situations where employer stank and independent contractor is actually an employee and they’re not. Or somebody has been sitting in a position for upwards of a year and the employer feels comfortable because they think that that individual really is not their problem. It’s the staffing agencies issue, but you could get in trouble with joint employer litigation, or maybe viewed as a matter of fact and law as that individual’s employee. So you want to be sensitive to how you’re treating your independent contractors. Moving further, we’ve talked about these issues in terms of layoffs and furloughs and what we need to do with benefits.
Rob, excuse me. I’d like to offer our guests our next polling question. Ladies and gentlemen, for those of you who are interested in receiving CPEs, you must answer all of our polling questions. Those of you who are not looking for CPE, we invite you to answer anyway. This next polling question, has your business made any workforce adjustments such as layoffs or reducing employee hours? We’ll leave this question up for about 45 seconds. By the way, the answer to the first question, which was, does your business have any employees who have reported contracting COVID-19? 68% of respondents said no, 32% said yes. Okay, Rob, thank you. Lawrence, can you put up the results? So, has your business made any workforce adjustments such as layoffs or reducing employee hours? 42% said no. Excuse me, 42% said yes. 58% said no. Rob, back to you.
That’s a very impressive number actually under the circumstances. I think that attribute to those who were doing their very best to avoid any workforce impact. Thank you. Thank you, Andy. I thought with the remaining few minutes in mind, we would talk about some of the state emergency and the federal statute that deals with these issues. I think by now, everybody is aware of who operates in New York and New Jersey, the emergency sick leave law that went into effect the end of last month and the fact that you are required under these statutes, and there are other requirements that we’ll talk about it in a minute under the federal statute, dealing with paid sick leave. So you can see the numbers on your screen regarding your obligation in New York and New Jersey. Even though New Jersey says it has no change in an existing law, unknown Jersey, there still is a requirement that people have earned sick leave under an existing statute for roughly five paid days over the course of a year. That’s under this New York state and New Jersey state laws, and most every other state has a similar statute.
The one that many people now are reading about at the federal level, because you turn on any of the talking heads on TV or any newspapers, we’re all aware of I suspect by now, at least the existence of the Families First Coronavirus Response Act. So you know that this statute, and this has raised an interesting issue, is that it applies to businesses with less than 500 employees. I’ve received a lot of questions from clients as to whether they are or are not an employer with less than 500 employees. What do I mean by that? Many companies have affiliates. Many companies are parent companies that may have 400 employees, but they are the sole shareholder of subsidiaries with let’s say, 50 or 60 or 100 employees, whatever the number that would then bring them over the threshold so that they are then not subject to the statute. The law largely follows the analysis done under the FLSA and the FMLA, the FMLA, I apologize, that’s the Federal Family and Medical Leave Act, which gives employees unpaid time off to basically care for a loved one or their own illness. That’s the FMLA.
You have to meet certain statutory requirements to be eligible for it. Then the FSA or the Fair Labor Standards Act. Those analyses will guide you regarding whether you are above or below the 500 number. I have a number of clients that really want to end up being above the 500 number. In many instances, if you look at the analysis they are. So you want to look at common ownership, which is important. Essential lines, labor relations, hiring and firing. Those are the principle criteria. There are others that help you determine whether or not you can consider yourself a single enterprise for purposes of being above that 500 number. Time doesn’t allow me to go into detailed level on this, hopefully everybody knows that I’ll stay as long as you need me afterwards. If you have questions in this regard or you have any need for a follow up for some of the detail, time just doesn’t allow to cover all of it. But I did think it was important to address this 500 employee threshold and the issue as to whether you are above or below it, because that’s critical.
Then we look at the Emergency Family and Medical Leave Expansion Act, which is part of this FFCRA. You’ll see that if an employee is on the payroll for only 30 days, he or she will get 10 paid weeks of leave. Now it’s two thirds pay a maximum of $200 a day. But if you have a lot of employees eligible for it, that can be pretty costly. The first two weeks are unpaid. But if the employee has to take care of an ill family member or under this expanded statute, a child going to school, so you have to stay home to care for a child who’s 18 or under, many employees are statutorily obligated to extend this protection under this statute to their workers. So the first two weeks are unpaid, the last 10 are going to be paid at the rate you see. You will likely receive a tax credit for that. So for all the finance folks in the audience, be mindful of that, which we’ll address in a moment, but there are some tax credits for this.
Then you have the emergency paid sick leave, which comes up a lot. You can see, it’s two weeks paid leave and you don’t have to require your employees to exhaust whatever paid leave, whether PTO or otherwise that they have, they will get this 80 hours or two weeks of paid leave per the numbers you see on the screen if they are subject to quarantine, they experience Coronavirus symptoms, or they’re caring for a family member who’s affected by a quarantine or school closure. These two provisions, which are the principal provisions of the Families First Coronavirus Response Act, those are the two most important, and they are generous to your workforce. So you need to be sensitive to it as you go forward. But remember again, the fully refundable tax credits for the paid leave that is extended to these employees under the law. Like the Families First Coronavirus Act, it applies to businesses, like we pointed out, with less than 500 employees, the CARES statutes that you can say.
Many of you may have heard of this statute, this one is a Coronavirus Aid Relief and Economic Security Act. Again, just like Families first Coronavirus Response Act, it applies or is available to employees who are less than 500. That’s the conflict. If you argue on the one hand, I’m not subject to the Families First Coronavirus Act because I don’t want to have to pay out all that leave. Then you may be stuck taking a contrary position if you want some of the benefits under the CARES Act. And you’ll see there’s the payroll tax credit, as well as the payroll protection program. I’m not a tax lawyer, but from the discussions I’ve had of many of you, I hope or I suspect are talking to your accountants and tax advisors to determine which is a better benefit to you. For me, this is purely anecdotal, but most are saying that the loans are more beneficial than the tax credits. It’s just not that much, but you should again, check with your financial advisors.
This tells you a little bit more, you see on the screen, the eligibility for the payroll tax credit and the loans. I have material for everybody if you need more, I just didn’t want to impose on everyone and burden everyone. Now if you look, we have New Jersey and New York that have these stay at home orders. So in conjunction with the federal statute, and I mentioned earlier that your statutes are these stay at home orders about whether or not anybody is allowed to come into the workplace. Unless you’re an essential business and they’re pretty limited, most everybody, I assume, has their workforce working from home. Now, we talked about, I have a couple more minutes, we talked about these mass layoff concerns. We had talked briefly about it earlier. Again, I just wanted to remind everybody that if you’re contemplating layoffs, there are statutory requirements under the federal WARN statue, as well as the New Jersey statute and the New York statute.
Again, many States have many WARN [inaudible 00:46:15] and they’re all different based on the number of employees that you have and how many employees are at a particular job site and how many employees get laid off that would subject you to the statute, but I would be remiss. So you need to look at these numbers. There are more detailed numbers, I would be happy to share with you. This is more of the 35,000 foot view. But I want to make sure that I bring to your attention that if you are contemplating because of first quarter financials and April, for example, may be a slow month. You are thinking about how to conserve costs. So you are thinking about layoffs. I would urge everyone to be mindful of these statutes. And remember there are notice requirements, you know in the federal WARN there’s a 60-day notice requirement. New Jersey has a 60-day notice requirement, which is going up to 90 in July. And the same is true in New York. The New Jersey and New York statutes carry penalties. So you need to be sensitive to the notice requirement.
The federal WARN statute can be a very, very hefty fine, as well as civil liability for back wages if you don’t give adequate notice to your employees. Speaking now only to the federal WARN statute, I note there is a 60-day notice requirement. However, there’s an exception for unforeseeable financial consequences that prohibited or prevented you as the employer from providing that 60-day notice. But again, I would urge you, and forgive me, I don’t mean to belabor the point, but I see this a lot, to be thinking through whether or not if you’re planning layoffs, you think about these statutes and the notice requirements. So you don’t get subject to litigation, whether by the DOL, the state DOL or private litigation what you’re going to be subject to just as easily. And remember, obviously for those who have unions, if you’re planning layoffs or furloughs or the like, check your collective bargaining agreements for your obligation to notify the union.
Andy, I believe we’re coming to the end. What I did for everyone is decided to put a few hypotheticals up on the screen and then I’ll walk through these. Because I know some may have questions too, but these are examples of real life issues that I’ve been asked multiple times and they raised, I thought, some interesting questions for everyone here to think about. So looking at the first one by way of example, what if an employee notifies his supervisor that he believes he has been exposed to COVID-19 through a family member, but he doesn’t display any signs or symptoms himself? I got this question two days ago and I couldn’t resist adding it to this presentation. So everyone I’m sure is thinking about this one and thinking, gee, have I been asked this one?
The issues you should be thinking about are, one, to press the individual employee as to the extent of his or her interaction with the family member. Was he or she caring for the family member? Do they live together? What was the nature of the interaction? If they live together, then the suggestion is to have the employee, suggesting employee to get tested, to self quarantine and to have the employees stay at home for 14 days. There is no technical requirement or the employee who does not display symptoms himself or herself. However, that being the case, then you’re arguably not required to pay the employee strictly for the two weeks they’re out on self quarantine or company imposed quarantine. But the law is not entirely clear on this. So there is risk if you don’t pay the employee the two weeks and have the employees stay home. The advice is typically to pay just to avoid the possibility that you might be responsible for such payment. But again, urge self quarantining, urge the employee to clarify his or her relationship to the individual who has the COVID-19. Determine that level of interaction.
When the employee comes back on the assumption you impose that they are required to quarantine, make sure they give you a doctor’s note to return. I’m trying to help everyone and my clients avoid litigation on claims of negligence or the like, if they know of a potential COVID-19 issue and they don’t address it sufficiently such that others may become subject to COVID-19 and then you’re alleged to have somehow been negligent. In that regard, by the way, I don’t want to forget, I would urge everybody to look at your workers’ comp policies and think about worker’s comp. If somebody claims negligence, workers’ comp issues are hard to advance, or defenses rather, and coverage are hard to advance in these sorts of environments because it’s difficult to establish that somebody actually contracted the Coronavirus in the workplace. If they didn’t, you can’t advance a workers’ comp defense, but it happens as we discuss at the outset with the lawsuit I mentioned against Walmart in Illinois.
I would make sure you will familiarize yourself at a minimum with your workers’ comp policy and think about it if you get any of these claims. About the second hypothetical. You have reasons to believe a non-employee visited your workplace, a third party vendor, customer, whomever it may be, and that person is infected with COVID-19. Thinking it through many of the same issues, you need to probe, you need to determine. If you have reason to believe, what’s the reason? Gather the facts, call up the vendor, determine whether or not the individual, in fact, tested positive. What are the individual’s symptoms that would lead you to believe that they have the Coronavirus or tested positively?
The other thing to make sure you do, if somebody came up, two other things, one, it would be advisable, it’s not legally required. It’s just advisable without disclosing names, to circulate a note among your workforce. You may want to target it to the area where the vendor went if that’s possible, but in any event, notify your workforce of this. So at least they’re aware, you don’t disclose again the name of the vendor or the individual, but you do want to put them on notice so the individual employees can test themselves if they wish. Then the other thing you want to do potentially is to sanitize that part of the workplace for hygiene, and to make sure it’s clean and sanitized. We talked about reducing labor costs by implemented staggered hours or house reductions. What about wage or salary cuts? We talked about that one before. Be sensitive to minimum wage requirements and be sensitive to whether the employee is exempt or non-exempt and how they can be imposed.
Finally, what if you’re otherwise operating workplace test to close temporarily for cleaning due to a potential COVID-19 exposure? What do you do? Does everybody get paid? Well, the short answer is you’re not technically required to pay your non-exempts. You’re not. It’s a morale practice if you choose to do it and your finances permit it, but it’s a good practice. It would be a good morale practice if you can do it, but obviously you have to balance it against the financial impact to the organization. How many employees you have and what that would cost you. The temporary closure is more likely than not only going to be roughly half a day, maybe a day. And you try and schedule a course when nobody’s in the work place to begin with. Some of these issues may arise when we’re all back at work, because COVID-19 issues will still percolate when we’re all back and resuming operations.
Andrew or Andy, I’m watching the clock and I’m free for any questions that anybody has. I hope this was helpful. I know I covered a lot of material in a relatively short time, but I tried to issue spot as much as I can, and I hope it was helpful. I appreciate everybody’s time and attention. So if anybody has questions, I’m happy to answer.
Rob. That was a great presentation. We actually have one more polling question before we go to Q&A. The next question, this is actually the last polling question. For those of you who are seeking CPE credits, you must answer all polling questions. Those of you who are not seeking CPE, we invite you to answer questions as well. This last polling question, do you think the economy will be fully recovered by the fourth quarter of this year? Do you think the economy will be fully recovered by the fourth quarter of this year? We’ll leave this question up for about 30 or 45 seconds. And then Rob, what I will do is share with you the Q&A, the questions that we receive from our guests.
I will wrap this question up in a few moments and then Lorenz, when we’ve closed it, if you would put the results up on the screen. By the way, the answer to the last question, has your business made any workforce adjustments such as layouts or reducing employee hours? 42% of respondents said yes, 58% said no. And this question, do you think the economy will be fully recovered by the fourth quarter of this year? 23% said yes, 77% said no.
Now we’ve got some Q&A to put in front of you.
All right. So first question we have is from our friend, [Sas 00:57:38] Mukherjee. Hello Sas. I hope you’re well. Here’s a question, Rob, for you. If the county has a shelter at home order but employee jobs require them to be on site, how should the employer handle that situation?
There typically are exceptions to the shelter and home ordinances. So you should look carefully to see what they are. More likely than not, if you’re a business that is exempt from such an order, you’re more likely [inaudible 00:58:15]. A practical answer by the way, would be to alert the local and government agency to this effect, advising them of your intention and making sure if you want, you’re not missing anything, or you can have your council do a check to make sure. But in most instances, even with the shelter at home orders, there are exceptions card for essential businesses.
Got it. Before I go onto the other questions from our guests, I want to remind everyone that next Friday, April 17th, at 12:45 PM, CFO Studio will host another business intelligence briefing entitled, Corporate Real Estate Strategies in Chaotic Times. It’s basically a discussion about actionable tactics and strategies that CFOs, you can take today to reduce real estate risk, reduce occupancy costs, protect your employees, protect your company’s operations. That presentation will be delivered by Scott [inaudible 00:59:09] from JLO, and yours truly. Also, while we bring this event to you today at no cost to you, we invite you to make an investment. You can pay zero or you can provide us with any investment that you’d like. That link was provided to you in the chat room. We appreciate your consideration if you choose to do so. Rob, we have another question from our friend George Annan. Hello George. I hope you’re well. The question is, can a company first lay off people and then reemploy them after learning that the company qualifies for PPP?
Okay. I’m not an expert on the CARES, but as a general proposition, the answer to that would likely be yes. Because if the circumstances change such as you bring them back, you still are likely have the advantages available to you. It’s going to depend upon how many employees you’re talking about, and what’s the length of time between the original layoff and when you contemplate bringing him back, because the statute is not designed to discourage employers from reemploying employees.
I have a question for you, Rob, before we go onto our guests questions, what should businesses do to balance employee morale concerns with economic considerations? Very interesting dynamic.
It is. And we talk about it, frankly, within my firm all the time. I talk about it with clients who are struggling with this issue. I’m not saying anything that’s magical, it really does boil down to the company’s appetite for absorbing a financial hit to some level, with ensuring that they keep the employees that they want to keep. To this end, Andy, some employers take advantage of this, and I don’t mean it to sound nefarious, but to take advantage of job eliminations of the less productive, the weaker employees. But many times, and again, forgive me if I’m being repetitive, but the real balances, how long do you think you as a company can ride this out? What do we all feel about the return of the economy and whether or not we can survive? Because most importantly, the survival of the company is most important. Because you if you can’t do that, you’re not going to have jobs.
I was interested by the poll results, and it was a little surprising and that I would have thought it was more about 50, 50, my information obviously purely anecdotal. So to some extent, I think that’s a little discouraging. Though I also recognize that the polling question was vague in terms of whether we all think the economy will be back to full throttle by the fourth quarter, as opposed to up and running energetically. It may take perhaps another six months to a year after that.
Sorry, Rob, there’s an awful [crosstalk 01:02:33]. I’m sorry. There’s an awful lot going on. And a lot of these things are moving and changing very rapidly. How should businesses keep abreast of new state and local guidance and legal requirements?
The best advice I can give to folks is, if you’re not being already barraged and inundated by your outside counsel, I myself, by way of example, try very hard and does my firm, to keep everybody in the loop. I try and be discerning in terms of the email alerts that I send around or circulate to make sure they’re the right ones and they’re tailored to the needs of my clients. I think really, I’m not trying to gin up work here. I honestly think, Andy, it’s the best way you can do it is to connect with outside counsel. Because so many firms, mine included, are staying on top of the day and night. The hours are long. I’ve had many weekend calls trying very hard as these statutes and ordinances come out to keep everybody posted.
That’s really the best advice I can give. Tell your outside counsel or whomever you get this information from, urge them, if you like to send them to you at the appropriate email address or tell them, maybe I got it, don’t barrage me or what I’ve done with some clients is we just set up a schedule call. So twice a week, I get on the phone for 20, 30 minutes with my clients and we just talk about what’s going on. What are the issues they’re facing? What do they need from me? What forms do they need? What details do they need from me? Obviously some of the details, particularly if it gets into the tax area, I’m not the right person, but I direct them to the right people within my firm. Same with benefits. That’s the best advice, set up a regular call.
Here’s a question from our friend, Lisa Strassman. Hi Lisa. Say hello to the other part of your duet. I hope you guys are both well. Do you know if accrued vacation or PTO paid in lieu of work can be included in the employee retention loan calculation as wages paid with no work performed?
I’m almost certainly the answer to that is no. If you’d like, I can follow up on that, but I’m almost certain the answer is no.
Got it, got it. We have another question from a [Marrow 01:05:04]. How can a company not pay… Well, I’m going to try to read this. How can you not pay 14-day quarantine with emergency sick leave regulations? I’m not sure I got that question. Did you understand that one, Rob?
I think so. I think the question is, in a scenario where you send an employee home, you don’t know whether or not they’re sick, they don’t display any symptoms, but because of the nature of their interaction, you fear that they may have been exposed and they may test positive. If that’s the case, you technically are not required, but it’s encouraged that you provide the employee, if the facts are such, with the appropriate paid sick leave.
Got it. I have one last question for you. From a legal perspective, what lasting effects do you think this crisis will have on companies, on employees, on citizens?
That’s a very difficult question. Very good one, very difficult one. It’s early. So it is difficult to determine with any level of certainty what that will be. But I think it may change to some extent how we deal with workplace in terms of making sure that we have a more sanitized workplace. Some of these hygiene type issues that we talked about before, and some of us look upon those types of issues as touchy feely. But I think that may in fact, precipitate a broader view of those kinds of issues. I also think that the way the economy will work and the way our businesses will function now will be to be sensitive more to sick leave and sick time and perhaps more flexible as it relates to those kinds of issues.
That makes perfect sense. Rob, I want to thank you very, very much for sharing your insights with us today. It was full of great information. I’m sure our guests appreciate it as well. Ladies and gentlemen, I’d like to thank you for joining us. I’d like to congratulate Rob Bernstein, a partner and shareholder at Greenberg Traurig, LLP for delivering a great presentation with some great content. To the extent you have any questions for Rob, we have sent you through the chatroom, his email and his phone number. If you’d like to get copies of this presentation, you can contact him directly or you can contact our office as well.
Rob, I wish you good health. We wish you continued success and we hope to see you soon. Ladies and gentlemen, if you would let us know your thoughts on this presentation, did you find today’s discussion beneficial? Yes or no? That’s a very important information. We look forward to seeing you again. Thank you for joining us. Enjoy your weekend. For those of you who are celebrating the holidays, a happy Passover, happy Easter. If you don’t celebrate any holidays, happy life. Get home safe. God bless.