Answers to Questions

As events are being cancelled and bars, nightclubs, restaurants, gyms, etc. are being closed, everyone is worried about their employees and their business. We are getting a lot of questions on what employers could or should be doing during this national emergency. We’ve tried to provide a few answers for you here:

  • Your business interruption insurance won’t cover your losses during a pandemic.
  • Your workers’ compensation insurance won’t cover employees who have been exposed because it’s impossible to prove it was a work-related illness.
  • State disability insurance won’t be available to employees unless they have medical certification, which doesn’t appear to be easily available at this time. However, employees can apply if they are diagnosed and have a doctor’s note.
  • Employees cannot decide on their own to stay home from work as a precaution. They can only make that choice if they are truly in imminent danger. However, you can approve an unpaid leave of absence.
  • You may ask for a doctor’s note stating they should stay home and you can ask for a doctor’s note before letting them return to work if they’ve missed any work due to illness.
  • You may send employees home and use sick (if available) or unpaid time off if they come to work with any potential symptoms.
  • California requires you to pay for all time worked so start reducing hours BEFORE you don’t have enough money for payroll. Now is the time to look at how much your revenues may be affected by cancelled work or your inability to still do the work.
  • Salaried, exempt employees must continue to be paid at least the minimum salary allowed in California ($49,920 <25 employees; $54,080 >26 employees) and they will lose that exempt status if they don’t receive the full salary. Consider temporarily transitioning them to an hourly non-exempt role on a proactive basis.
  • Salaried, exempt employees must be paid for the full week if they do any work that week. Hourly non-exempt employees are only paid for time worked.
  • Reducing hours allows employees to stay employed and helps you save on payroll costs. Depending on how much they still make, employees may be eligible for unemployment for the lost income.
  • Furloughs are unpaid time off but the employees are still employed by you. You are basically shutting down the company or a division for a period of time. Employees will be eligible for unemployment.
  • Layoffs are when you terminate employees you hope to hire back when you can. Employees will be eligible for unemployment.
  • Sick time is not paid out when reducing hours, doing a furlough, or laying off employees. You keep track of any remaining balance and, if/when you rehire that employee, that balance is immediately available for the employee’s use upon rehire.
  • If employees are not working or are working fewer hours, don’t forget about any insurance premiums where the employee pays part of the premium. Have a plan on how you will get their share.

There is a federal law being passed soon that is focused only on companies with under 500 employees. It is meant to help smaller companies and their employees with the financial impact of this pandemic. Once it has passed, we’ll provide you the highlights. Meanwhile, keep any gatherings to fewer than 10 people and wash, wash, wash those hands!

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>





This site uses Akismet to reduce spam. Learn how your comment data is processed.