Tag: coronavirus

May 11, 2020

New York Staffing Agencies and COVID-19

On March 20, 2020, Governor Andrew Cuomo signed an executive order that outlined New York’s 10-point Policy enacted to Assure Uniform Safety for Everyone (PAUSE). Among other things, the PAUSE order closed non-essential businesses and encouraged the residents of New York to stay at home. Some “essential businesses” could continue operating under social distancing rules, often meaning only essential personnel worked onsite. New York staffing agencies faced these restrictions as well, but often without control over the employees’ workplaces.

Under certain conditions, non-essential businesses and non-essential personnel who work for essential businesses were permitted to continue operations. Companies of all shapes and sizes and in all industries immediately scrambled to develop alternative ways to operate under the new restrictions. The most common change across all sectors in New York was a shift to a remote workforce.

Are New York Staffing Agencies “Essential Businesses”?

The COVID-19 pandemic has significantly affected business operations for New York staffing agencies. Many staffing agencies determined that their company was an “essential business,” because they provide other essential businesses with temporary contractors and assistance with direct-placement needs. These include clients throughout the health care, food service, manufacturing, and technology industries, as well as some start-up companies.

Despite being able to continue servicing these clients, some staffing agencies experienced a steady decline in revenue and the number of placements. Even “essential businesses” reduced their total headcount, including temporary workers that were previously placed on assignment. Outstanding job orders and negotiations with prospective clients were also canceled due to the economic downturn.

New York staffing agencies had to modify their business operations quickly to remain operational and survive this pandemic. These changes typically included one or more of the following:

An increase in the number of remote workers;
Permanent or temporary layoffs of direct staff and contractors;
Reduced compensation for either direct staff employees or contractors;
An immediate need to purchase equipment and technology for remote workers;
Adopting or revising company policies and procedures, employment agreements, and client contracts to address changes arising from the public health emergency.

The federal, state, and local governments are working on a plan to reopen the economy without significantly increasing the number of COVID-19 cases, hospitalizations, or deaths. President Trump announced that individual states would have the discretion to determine when and how to reopen their economies subject to some recommended prerequisites.

Recommended Federal Criteria for States to Reopen the Economy

Symptoms:

A downward trajectory of influenza-like illnesses reported within a 14-day period; AND
A downward trajectory of COVID-like syndromic cases reported within a 14-day period.

Cases:

A downward trajectory of documented cases within a 14-day period; OR
A downward Trajectory of positive tests as a percent of total tests within a 14-day period (flat or increasing volume of tests)

Hospitals:

Treat all patients without crisis care; AND
A robust testing program in place for at-risk healthcare workers, including emerging antibody testing.

New York’s Approach to Reopening

In New York, Governor Andrew Cuomo took the reins in determining how and when the State would reopen. On May 4, 2020, he announced during his daily press conference, a 4-phase plan for reopening the economy. Then on May 11, 2020, Governor Cuomo announced the creation of 10 regional Control Rooms across the state. These Control Rooms, consisting primarily of county executives, will apparently lead the reopening within their part of the State.

If the number of positive cases, hospitalizations, and deaths continues to decline, New York will begin to reopen businesses. During this transition, the State and the regional Control Rooms will carefully monitor the relevant data, including the transmission rate for COVID-19. If the transmission rate exceeds 1.1 (additional infections per infected individual), all reopening efforts may come to a screeching halt.

Prerequisites to Reopening a New York Region

So far, Governor Cuomo has indicated that before a region within New York can begin to reopen the economy, the following must occur:

There must be a 14-day drop in hospitalization and deaths;
The rate of new hospitalizations must fall below 2 per 100,000 residents across a 3-day rolling average;
At least 30% of hospital and ICU beds must be unoccupied;
At least 30 tests must be given for every 1,000 residents per month; and
Each county must retain at least 30 contact tracers per 100,000 residents.

4-Phase Approach

Before reopening, regions must meet the above prerequisites. Governor Cuomo previously mentioned a 14-day waiting period between phases to collect and review all relevant data. However, on May 11^th, he indicated the data, not a fixed timeline, would guide the transition between the phases. Relevant factors will include whether the action taken under each phase has led to an increase in the number of positive cases, hospitalizations, and deaths. Officials will also be monitoring the transmission rate and will be prepared to shut everything down if the rate meets or exceeds 1.1.

Phase 1 – Allows construction, manufacturing, wholesale suppliers, and some retailers to reopen as soon as May 15^th in regions reporting a steady decline in COVID-19 hospitalizations and deaths.

Phase 2 – Finance, real estate, insurance, and other types of retail businesses could begin to reopen.

Phase 3 – Begin to open restaurants and more retail.

Phase 4 – Reopen arts, entertainment, and education.

How Should Staffing Agencies Prepare for Reopening?

Employee Screening and Testing

Staffing agencies must determine if it makes sense to perform screenings or testing on direct staff employees before they enter the workplace. These measures could include temperature screening, symptom screening, questions related to recent travel or contact with individuals who tested positive for COVID-19, and active or antibody testing for COVID-19. Agencies should develop a plan for the implementation of whatever screening and testing they decide to conduct.

The decision to screen or test contract employees is much more complicated for staffing agencies. Contract employees typically work onsite at a client location. Therefore, staffing agencies must decide if it is feasible to screen or test contract workers or whether a more practical solution would be for clients to include contract employees in their screening and testing procedures. For the latter, staffing agencies would need to contact each client to determine what policies and procedures have been implemented. They would then need to determine whether their clients could treat contract employees similarly. Agencies should review the client procedures to determine if they comply with local, state, and federal law and whether the clients will conduct them in a non-discriminatory manner.

Return-to-Work Protocol

Each staffing agency should be developing a detailed plan to handle employees that test positive for COVID-19, are symptomatic, or must quarantine or isolate because of potential exposure to the coronavirus. The plan should include procedures for both direct staff and temporary contract employees. For example, will the employee need to provide medical documentation before returning to work?

Sanitizing and Disinfecting

Before reopening, staffing agencies should develop policies and procedures for disinfecting workstations, office equipment, and common areas such as lunchrooms, break rooms, and restrooms. They should provide employees access to sanitizer and tools to clean their workstations regularly and personal protective equipment, such as face masks and gloves, where possible.

Modifications to the Office

New York staffing agencies should consider making necessary changes to the physical workspace to optimize social distancing. Possible approaches include maintaining or increasing the number of employees that have permission to work remotely and staggering in-office workdays, shifts, or hours to reduce the number of employees present in the office. Agencies should implement policies to reduce the number of employees allowed in the breakroom, lunchroom, or restrooms at one time.

Staffing agencies should inform employees about the steps taken to educate, train, prepare, and protect its workforce and clients during this pandemic and reduce the risk of exposure or transfer of the COVID-19 virus to others. Agencies should also take the time to notify their clients of the steps taken to maintain or increase the level of customer service, to address client needs during this public health crisis, and to educate and equip staff and contractors with the tools necessary to perform their job duties safely and successfully.

It is also critical for staffing agencies to request that all clients provide information about all changes to their worksites, workstations, job duties, and policies and procedures that would affect their contract employees. This information is necessary for staffing companies to determine if the proper health and safety protocols are in place to protect their contract employees while on assignment. Since a staffing agency generally does not control the office space, worksite, schedules, safety protocols, and job duties for contract employees, an agency needs that information to assess the overall health and safety risks to its contractors and reduce its future liability. This information will allow staffing agencies to determine the risk level associated with the temporary placement and whether it makes sense to remove the contractor from the position given potential exposure.

Additional Considerations for New York Staffing Agencies

For New York staffing agencies to remain in business and be successful, they must review their current business operations and determine what changes to make and how to improve operations and customer service moving forward. Communication is key. As with any business, staffing agencies must communicate effectively with both employees and clients about how they’re managing these circumstances.

Due to the economic downturn caused by the pandemic, businesses will be looking to reduce costs wherever possible. It is prudent for staffing agencies to find ways to remain relevant during this time. These measures may include providing contractors with equipment or technology that would enable them to work from home and give clients peace of mind about security and privacy, as well as productivity. Staffing agencies should also review existing contract terms. They need to ensure that all terms can still be met under the circumstances. They should also consider future modifications that would help reduce or eliminate any obstacles encountered during or following this pandemic.

We expect rapid development on these issues over the following months. For more updates, subscribe to our email newsletter and follow Horton Law on LinkedIn.

April 29, 2020

Preparing for the Post-Pandemic Workplace (Webinar Recap)

On April 29, 2020, Julie Bastian and I presented a complimentary webinar called “Preparing for the Post-Pandemic Workplace”. For those who couldn’t attend the live webinar, we’re happy to make it available for you to watch at your convenience.

In the webinar, we discuss:

Government Reopening Plans
(Still) Working from Home
Health & Safety Issues
Medical Screening
USERRA Compliance
Overtime Exemptions
Productivity vs. Liability

The United States is starting to gradually “reopen” following coronavirus shutdowns. In this webinar, we caution that we have not yet reached the “new normal”. But businesses still must begin planning how they will return to work when allowed to do so.

We don’t anticipate a straightforward, consistent approach for any organization. Many questions remain unanswered. But it is time to start answering them and preparing to evolve as the answers change.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “Preparing for the Post-Pandemic Workplace”

When and how your business can reopen depends on many factors. These include where your facilities are located and what industry you’re in.

Will you screen employees coming in to work? Should you change work schedules to enhance social distancing? Might the government require you to take such actions?

Even if your business hasn’t closed or is already open, conditions continue to change. Make sure you have a plan in place to adjust when new directives come down.

Looking ahead, it will be critical for employers to maintain good employee relations to stay ahead in these tumultuous times. This webinar offers suggestions on how to pursue that goal and avoid costly litigation.

Don’t Miss Our Future Webinars!

Click here to sign up for the Horton Law email newsletter to be among the first to know when registration is open for upcoming programs!

And follow us on LinkedIn for even more frequent updates on important employment law issues.

April 16, 2020

Enhanced Unemployment Offers Employers A New Option During Coronavirus Pandemic

Here’s a little secret. Most employment lawyers historically didn’t have to pay much attention to unemployment laws before COVID-19 came along. Employees would leave jobs and either get unemployment benefits or not, for various reasons. But new enhanced unemployment benefits under the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act have suddenly created many new legal complexities surrounding the unemployment system. Solely in the vein of making a horrible situation slightly better, the CARES Act has produced some new approaches to layoffs and work reduction that might pose unique benefits to both workers and their employees.

Another secret. Here are the main takehomes from all the words below:

People on unemployment get an extra $600/week until the end of July 2020.
The extra money doesn’t come at the expense of employers.
New York’s Shared Work Program is a much more attractive option than it ever has been before.

If any of these points seem interesting, please keep reading.

New York State Unemployment

Even before the CARES Act came along, unemployment has long been a fairly complicated system. But most of that complication came in the back end. It involved the details of calculating who has worked enough to receive unemployment benefits, how much they earn, and how much each employer has to pay to enable workers to receive these benefits. Luckily, the government usually handles most of that complexity–in essence, they send workers checks and send employers the bill to cover the benefits.

Although the federal government plays a role in unemployment, it’s usually in the background. Processing unemployment claims and providing compensation to workers out of a job usually falls to the states. Thus, most employers in New York, for example, make regular contributions to the state unemployment insurance system. These contributions vary depending on how many workers receive benefits credited to a particular company’s account. In other words, companies with more employees (usually former employees) who receive benefits typically contribute more to the system. (Many non-profit organizations have the option of essentially being self-insured for unemployment. If they choose to do so, these organizations can refrain from paying unemployment “taxes” and instead reimburse the State directly for the amount of any benefits received by their employees.)

New York workers who become eligible for unemployment must first file a claim with the State. Then they have to re-certify on a weekly basis. The re-certification process serves to confirm that an individual is still out of work, but is available to work and actively looking for a new job. As long as that remains true, a claimant can normally continue to receive unemployment benefits for up to 26 weeks out of a year. To keep things simple, the amount of benefits is usually equal to half of what the person made while working, up to a max of $504 per week.

CARES Act Enhanced Unemployment

Among its numerous stimulus measures, the CARES Act includes many provisions that create temporary enhanced unemployment benefits. This article isn’t going to address all of them in detail. For example, the CARES Act enables self-employed individuals to receive unemployment benefits more easily than they normally could. It also allows workers to receive unemployment beyond the standard 26 weeks in some situations. These and other enhanced unemployment benefits may be relevant to your business or its employees. But, for now, we’re going to primarily focus on other aspects of the CARES Act unemployment enhancements that will likely have a broader and more immediate impact on how companies choose to manage their workforce during the coronavirus crises.

$600 “Federal Pandemic Unemployment Compensation”

Perhaps the most publicized aspect of the CARES Act unemployment measures gives virtually anyone receiving unemployment benefits an additional $600 per week. This extra benefit only lasts until July 31, 2020 (technically, the week of unemployment ending before that date). But it’s still a huge expansion of standard unemployment benefits.

Remember, the NYS max unemployment benefit is normally $504 per week. That’s what someone who normally makes $1,008 or more per week would get. Now they’ll receive $1,104. Yes, even if they made less than before!

The U.S. Department of Labor has issued guidance clarifying that people receiving unemployment will get the $600 extra per week as long as they normally qualify for at least $1 of state unemployment benefits. So, for example, someone who only made $400 per week when working could now get $800 on unemployment ($200 state unemployment benefits plus the $600 federal addition).

Employees will even receive the $600 bump if they’re only receiving partial unemployment benefits. In New York, workers whose pay is cut resulting in them working less than four days in a week and earning under $504 may qualify for partial unemployment. Though usually only a small benefit of a couple hundred dollars, the extra $600, plus whatever they’re still earning from working on a reduced schedule, will often result in such employees earning way more than they regularly would.

Though they might rather be working as normal, this enhancement is at least a meaningful upgrade for individuals on unemployment.

There’s also good news for employers (beyond the peace of mind in knowing their out-of-work employees are getting more money). The federal government is paying for this extra $600/week. Under existing New York law, this means it won’t count against employers’ unemployment experience rating. But that’s only the extra $600. The standard NYS portion will still be charged to the employer as normal.

Federal Funding of Shared Work Program

New York has had a “Shared Work Program” for decades. This program allows employers to establish a plan for reducing employee hours and compensation that will also enable workers to receive some unemployment to supplement the lower wages.

Employers must apply to the State for approval under this program. To qualify, a Shared Work Plan must:

Reduce work hours and corresponding wages 20–60%
Apply only to employees who normally work no more than 40 hours per week
Not reduce or eliminate fringe benefits (unless also doing so for the entire workforce)
Cover a period of up to 53 weeks
Replace a layoff of an equal percentage of employees

For more, read New York’s Shared Work Program Provides a Layoff Alternative

Some companies with seasonal fluctuations in their business routinely use this program. The primary benefit for employers is that they keep their workforce intact and in touch with the company. Another feature of the program is that employees don’t have to look for alternative work despite receiving partial unemployment benefits. The idea is for them to continue working for their current employer.

Usually, the State charges the employer’s account for the unemployment benefits employees receive under the Shared Work Program. However, the CARES Act creates full federal funding for the program through the end of 2020. This funding makes the program very attractive for employers who have less work to be done, need to save money, and don’t want to lose their employees during the COVID-19 crisis.

Note: The CARES Act does not provide federal reimbursement for Shared Work benefits paid to temporary, seasonal, or intermittent employees even though such workers can participate in a Shared Work plan under New York law.

Putting It All Together

To show the value of these enhanced unemployment provisions, let’s look at an example.

Company X

Suppose a company with 50 employees has 10 management employees who still need to and are able to work full-time right now. The other 40 are hourly employees who all make $20 per hour (not realistic, but it keeps the math simple). These employees all normally work a 40-hour week. The company qualifies as an essential business, so it can continue to operate. But customer demand is down, and management wants to keep employees safe through social distancing and remote work as much as possible. Consequently, there is much less work for these 40 employees to perform.

Let’s say the company decides it only has about 800 hours of work per week for the hourly employees. That’s half of the standard 1600 hours (40 employees x 40 hours/week). It could lay off 20 of the employees and let the other 20 work full-time, or it could let everyone work 20 hours instead of 40. Assume the company expects business to pick up later this year and will again need 40 hourly employees.

If the company either lays off half of the employees or reduces everyone’s hours, the affected employees can apply for unemployment. They will all get the $600/week enhanced unemployment benefit. The employer won’t have to pay for that. But it will have to pay for the standard NYS benefits the employee will also receive. That is, those benefits will affect the company’s unemployment insurance experience rating and the UI taxes it pays.

Shared Work Program Option

But, under the Shared Work Program, the federal government will pay all of the unemployment with no charge to the employer. Here’s what that would look like:

Each of the 40 employees will work 20 hours
Employee benefits remain intact
The company pays each worker $400/week (20 hours x $20/hour)
Each employee receives $200 in standard NYS unemployment for up to 26 weeks (subject to some individual circumstances)
Each employee also receives $600/week in enhanced unemployment until the end of July 2020

Through July, each employee will “earn” a total of $1,200 per week for working only 20 hours! That’s $60/hour, or triple their regular hourly rate!

At the same time, the company is still only paying $20/hour and saving $200/week per employee, or $8,000 for the 40 employees.

Can Your Company Take Advantage of This Situation?

The scenario above is just one hypothetical example. The math will vary for each company looking at options to reduce labor costs during the COVID-19 pandemic. But the Shared Work Program does offer flexibility. An employer can divide up its workforce in various ways to include/exclude different employees. You can modify the hour/compensation reduction between 20 and 60% to suit your business needs.

There may also be some logistical hassles. You do have to apply for and receive approval to participate in a Shared Work Program. But it seems New York is encouraging employers to take advantage of this option and may be able to process applications reasonably quickly.

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