Coronavirus: Business and Legal Implications

march 25, 2020 | coronavirus
Stack of small business documents

Protecting Your Business Amid the Coronavirus 

The COVID-19 outbreak has created much fear and uncertainty for people from all walks of life. Concerns about getting the disease itself are paired with worries about the effects of a global pandemic upon economies and businesses the world over. Small business owners are feeling the stress particularly, having to worry about not only the well-being of their family and their employees but the challenges of staying afloat as the economy slumps during this period of social distancing and shelter in place. Making matters worse is the uncertainty and lack of information available to help quell fears. We’re offering general answers to eight of the most pressing questions small business owners are facing and encourage you to communicate regularly with your employees. 

Frequently Asked Employer Questions Amid Coronavirus:

  1. Employee Obligations
  2. Workplace Safety
  3. Remote Work Policies
  4. Employee Pay
  5. Employee Healthcare
  6. Healthcare Coverage
  7. Workers Compensation
  8. Force Majeure
  9. Business Closure
  10. Other Potential Risks

Employee Obligations

As an employer, what are my obligations to my employees?

Employers should wish to provide a safe workspace for their employees and themselves, and employers still requiring workers to come into the office should post Occupational Safety and Heal Administration (OSHA) and CDC guidelines in restrooms and common areas outlining guidelines for cleanliness and hygiene. Employers should look to cut down on close proximity in offices by instituting remote work when possible, or if employees have to be on-site, staggering shifts and spreading people out. Any business trips scheduled for your employees should be canceled.  

In addition to following any guidance from state or federal governments regarding travel and closures, employers are required to abide by the provisions of the Family Medical and Leave Act (FMLA) in providing leave and sick time to those employees that need it. The Families First Coronavirus Response Act will mandate two weeks paid sick leave and up to ten weeks of family leave at two-thirds pay for all employees employed for at least 30 days at companies of less than 500 employees. 

Despite the chaos and ever-changing circumstances, you are still required to pay your employees for that two-week sick leave. However, there are provisions that can exclude a small business with under 50 employees when these new requirements would jeopardize the company’s viability. Also, there are tax credit relief programs that will be announced so please check with your tax advisor.

Work Place Safety

What should I do if someone in my office potentially has coronavirus?

While employers are typically forbidden from asking about an employee’s medical condition under EEOC guidelines, you are within your rights to send the employee home if they are experiencing coronavirus symptoms before they risk any further exposure to the rest of your workforce and to ask them to seek appropriate medical advice or attention. Employers can also ask for a doctor’s note before any employees suspected of having the coronavirus are allowed back to work. Any employees who came into close proximity with the possibly infected individual should be sent home to self-quarantine for 14 days, and clients, guests or visitors who may have had physical contact with that employee should be informed of that exposure. If you work in a building with other occupants, you should notify those other companies of any potential exposure as well. 

As recommended by the CDC, you should institute a remote or work from home policy for any employees not required to be on-site and arrange for professional cleaning of the office. 

Remote Work Policies

What do I need to do to institute a remote work policy?

Provided that your business is one that can be run outside of your offices, you need to ensure that your company has the right security and privacy protocols in place for remote access to your network and that your employees have the equipment and tools to do their job from home as well as they would at the office. 

You should also be sure to communicate with your employees about the arrangement — not only about your expectations but discuss any extenuating circumstances or needs that might be demanding their time, like children off from school. 

Employee Pay

Do I have to keep paying employees that aren’t currently working?

Strictly speaking, employers are most likely not required to continue to pay employees who are no longer working. There are of course exceptions for salaried employees working even a minimal schedule, as well as employees governed by employment contracts, collective bargaining agreements or other state labor laws. 

Employers that are still able to pay employees at least some of their wages should strongly consider doing so to avoid giving your business a terrible reputation (to say nothing of leaving your employees in dire straits during a crisis). Businesses that are feeling the financial crunch of the slowdown are able to apply for an Economic Injury Disaster Loan from the U.S. Small Business Administration once their state has requested assistance.    

Employee Healthcare

Are my employees still covered by the company health plan if they’re no longer working? 

Depending on your health plan provider, your employees may or may not be eligible for health benefits after a certain period of not working; you should consult with your provider to determine eligibility.

Health plans may also lapse when employers are no longer able to pay their share of the required premiums. Under current circumstances, carriers or employers may choose to cover the employees’ share of premiums to maintain coverage; again, it’s worth consulting your provider to determine what you or they can do to keep your employees insured.

Under the provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA), employees of companies of 50 or more workers can be offered continued health coverage under your group health plan for a period of 18 to 36 months under a set of qualifying circumstances, including termination of employment for reasons other than gross misconduct or a reduction in hours. If you have to lay off employees or cut back on hours, you may still be able to offer health benefits to your team.   

Healthcare Coverage

Is coronavirus testing and treatment covered under our health care plan? 

Given that it’s unclear how much testing is currently available, it’s not yet clear what or how much will be covered by insurance depending on what state you live in. 

Workers Compensation

Is my employee eligible for workers’ compensation if they contracted the coronavirus at work?

Save for health-care workers, the chances of a workers’ comp case being awarded to an employee depends on whether the disease was contracted in the course of their work and in circumstances unique to their work.  Coronavirus represents a unique case for workers’ compensation, so it’s best to consult with a qualified attorney to determine the merits of the case. 

Force Majeure

What is a “force majeure” clause and does it protect me in these circumstances? 

“Force majeure” refers to a circumstance that prevents you from fulfilling a contract. It’s typically associated with natural disasters like earthquakes and hurricanes but could potentially apply to the COVID-19 crisis. Given the unprecedented nature of our current circumstances, it’s impossible to say that the clause would be triggered in all cases — it might vary from contract to contract. You should have an attorney review any documents where this may be an issue.

Business Closure

What do I do if I have to close my business?

For employers of more than 100 workers, the WARN Act requires that employees be given 60 days’ notice of a mass layoff or plant shutdown. Smaller businesses may have no such requirements, making the news an even bigger gut-punch for all involved. While it hurts to have to lay people off during such difficult times, there are provisions to try and help them get through. The Emergency Unemployment Insurance Stabilization and Access Act of 2020 offers increased unemployment benefits for those who lose their job due to a business slowdown caused by the outbreak.  

Other Potential Risks

What risks besides the virus exist during this pandemic? 

The spread of the coronavirus has coincided with the rise of people looking to take advantage of the situation and people’s vulnerabilities. Apps that purport to track the disease are loaded with malware, hackers are using coronavirus-related emails for phishing and ransomware schemes and the proposed stimulus relief checks that citizens would be getting might provide a target for scammers. We’re all looking for answers and some sense of control, and that can leave our personal information vulnerable if we’re not careful about what we click or download. 

The coronavirus has presented employers with challenges and questions they couldn’t have possibly imagined, with many veering into complex legal and bureaucratic territory. The above may not answer your question fully and does not address any specific circumstance. With a LegalShield Small Business Legal Plan, you can consult with an attorney on any business-related legal questions, have documents reviewed and more starting at $39 a month.   

LegalShield provides access to legal services offered by a network of provider law firms to LegalShield Members through member-based participation. Neither LegalShield nor its officers, employees or sales associates directly or indirectly provide legal services, representation or advice. See a plan contract at for specific state of residence for complete terms, coverage, amounts, and conditions. This is not intended to be legal or medical advice. Please contact a medical professional for medical advice or assistance and an attorney for legal advice or assistance.

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