International arbitration report
In this issue, we cover a broad spectrum of ‘hot button issues’ for boards and companies operating internationally.
The United States, like much of the rest of the world, continues to social distance to minimize the spread of COVID-19. For many employers, this means that a significant number of employees are working remotely and will continue to do so. For others, it may mean that offices, stores or worksites are temporarily closed until applicable orders are lifted. However, essential businesses and entities continue to operate in-person, with a significant portion of employees reporting to work sites. Moreover, as states have started to ease stay-home restrictions, many business are resuming operations.
Businesses with operations in New York and, particularly, in New York City, face unique obstacles with respect to reopening. With over 380,000 confirmed cases across the state, and over 200,000 confirmed cases in New York City, most New York residents have been affected by the virus in some way, and many are apprehensive about reentering the workplace. New York City's dense population of over 8 million residents and approximately 10 million commuters — many of whom rely on public transportation — undoubtedly exacerbates these concerns.
In light of these concerns, Governor Cuomo extended portions of the New York On PAUSE Order until June 28, 2020 (or another date if specified by a future order), but has also issued a reopening plan that permits non-essential businesses to reopen in a phased approach based upon a data-driven, regional analysis.1 The analysis considers several public health factors, including new COVID-19 infections, as well as healthcare systems, diagnostic testing, and contact tracing capacity. On May 15, 2020, the first reopening phase ("Phase One") began in several regions of New York and, on May 29, 2020, certain New York regions entered the second reopening phase ("Phase Two"). As of June 8, 2020, New York City — the region most impacted by the virus — entered Phase One.2
A list of regions and sectors that are authorized to re-open, as well as detailed guidance for each sector, is available through Governor Cuomo's reopening plan. Moreover, New York businesses that reopen must develop a written safety plan demonstrating how its workplace will prevent the spread of COVID-19. A template safety plan is available through the New York State Department of Health. Certain industries are also subject to additional local safety requirements, such as the construction industry in New York City.
Given this phased reopening approach – which eases at-home restrictions and concomitantly imposes new requirements – New York employers that intend to reopen are taking steps to ensure the safety of their employees and business while also ensuring compliance with state requirements. Below are some key considerations for employers as they consider plans and strategies to reopen:
Companies and individuals may access the New York Forward Business Reopening Lookup Tool to determine whether a business is eligible to reopen, and the public health and safety standards with which the business must comply.
Businesses must ensure that they meet the industry-specific requirements in Governor Cuomo's reopening plan. Additionally, at a minimum, businesses should follow the guidelines in the NY Forward Safety Plan Template. This includes, without limitation, adhering to the following:
New York State employers must implement a written safety plan outlining how its workplace will prevent the spread of COVID-19. As noted above, a business may comply with this requirement by completing the NY Forward Safety Plan Template. The written safety plan does not need to be submitted to a state agency for approval, but it must be retained on the premises of the business and must be made available to the New York State Department of Health or local health or safety authorities in the event of an inspection. Business owners should also refer to state and local industry-specific guidance for additional requirements.
No, employees who work for a non-essential business may not be forced to go to the worksite or otherwise threatened if they do not work at a place other than their home.3 Employees may file a complaint with the New York State Department of Labor if they are being forced to report to work at a non-essential business. They may also file a complaint if their employer has not paid their wages earned for hours worked, sick pay, or paid time off; their employer threatened or fired them for reasons related to COVID-19; they qualify for COVID-19 sick leave and their employer refuses to pay it; or their employer is forcing them to work while sick.
It depends on the employee and nature of the job position. Even employees who work for an essential business may not be forced to report to a worksite if: (1) they do not perform an essential function; (2) their employer is making them report to a worksite when their job could be performed at home; (3) their employer is not following health and safety mandates; or (4) they have particular concerns because they are over 70 years of age and/or have an underlying illness. Employees who are forced to report to an essential workplace in violation of these conditions have grounds to file a complaint with the New York State Department of Labor.4
Even after the On-Pause Order is lifted, guidance issued by the White House ("White House Guidance")5 states that employers should continue to encourage telework, whenever possible and feasible with business operations. Accordingly, if it is possible for employees to telework, employers should not mandate that such employees report to an office or a worksite unless it is necessary. There are also further considerations for employees who are at risk or who may request reasonable accommodations, as discussed below.
In New York City, an employer is required to engage in a cooperative dialogue with the employee about the employee's specific situation and requested accommodation. A cooperative dialogue is the process by which an employer engages in good faith in a written or verbal dialogue concerning the employee's accommodation needs; potential accommodations that may address such needs, including alternatives to a requested accommodation; and the difficulties that such potential accommodations may pose for the employer. The employer's obligation to engage in a cooperative dialogue is triggered once an employee has requested an accommodation, or the employer is on notice that the employee may require an accommodation, such as when the employee's need for accommodation is apparent, or a request is made on the employee's behalf. Once a cooperative dialogue has taken place, employers must provide the individual requesting an accommodation with a written final determination identifying any accommodation that has been either granted or denied.
Outside of New York City, an employer must engage in a good faith, individualized interactive process that assesses the need of the disabled individual and the reasonableness of the requested accommodation. The interactive process continues until, if possible, an accommodation is reached.
First, employers should consider whether it is possible for such employees to telework, as that is likely the easiest and best way to eliminate risk of exposure. If the employee must return to the office, accommodations suggested by the EEOC include:
Yes, if the employer does not already know about an employee's disability, an employer may verify the existence of a disability, discuss why an accommodation is needed and discuss why an accommodation will meet the employee's health concerns. This includes requesting documentation from the employee's healthcare provider. Nonetheless, when requesting medical documentation, employers should keep in mind the following advice from the EEOC:
Under the current circumstances, for employers seeking documentation from a healthcare provider to support the employee's request, they should remember that because of the health crisis many doctors may have difficulty responding quickly. There may be other ways to verify the existence of a disability. For example, a health insurance record or a prescription may document the existence of the disability. If the employer is waiting to receive documentation, it may want to provide the accommodation on a temporary basis. This could be particularly critical where the request is for telework or leave from an employee whose disability puts them at higher risk for COVID-19.6
Although employers are not required to grant accommodations to employees simply because they are members of a vulnerable population, the White House Guidance states that employers should "strongly consider special accommodations for personnel who are members of a vulnerable population." Accordingly, employers should still listen to any requests for accommodations from such employees and, if feasible, agree to an accommodation that works for all sides. New York employers should note that the New York State and New York City Human Rights Laws both already mandate that covered employers provide reasonable accommodations for pregnant workers.
Employees with certain preexisting mental health conditions, such as anxiety disorder, obsessive-compulsive disorder, or post-traumatic stress disorder, may see an exacerbation in their mental illness or disorder due to the COVID-19 pandemic. Employers should engage in the same accommodation process discussed above (cooperative dialogue and/or the interactive process) to reach the accommodation that best fits the employee's needs.
It depends. If the employee has an underlying health condition, it is possible that a request to stay at home may need to be accommodated under applicable disability accommodation law, as discussed above, or that the request would be considered a request for leave under the FMLA. Absent those circumstances, the employer must consider its obligations under the Occupational Safety and Health Act (OSHA) to provide a workplace free from recognized hazards that are causing, or are likely to cause, death or serious physical harm. Under OSHA, an employee has the right to refuse to work based on a belief that workplace conditions could cause serious imminent harm; however, this is a high standard that would be difficult to meet if the employer has followed all applicable federal, New York State, and local health and safety guidelines (as described above). If multiple employees share concerns that it is not safe to return to a particular worksite, and decide not to return to work for that reason, it is possible that they will be considered to be engaging in "concerted activity" under the National Labor Relations Act and going "on strike" for health and safety reasons. However, like under OSHA, this is a high standard and the health and safety concerns must be objective and specific, not just due to a generalized fear of contracting COVID-19. If faced with employees who do not want to return to the workplace due to the generalized fear of contracting COVID-19, the employer should take such concerns seriously and discuss with each such employee his or her specific concerns and the various measures that the employer is taking to ensure health and safety upon return to the workplace. If none of the legal exceptions described above applies, and the employer cannot address the employee's specific concerns, the employer may be able to terminate the employee (subject to any collective bargaining or other individual contract restrictions, if applicable) for refusal to return to the workplace; however, employers may wish to try to be as accommodating as possible without jeopardizing the business and should consult legal counsel in connection with any contemplated termination of employment.
Furloughed employees that have remained on payroll may return to their prior position at the same pay rate that was in place before the furlough, and with the same benefits. These employees do not need to go through the re-hiring process, but we recommend documenting the return to work with a formal letter confirming their pay rate and benefits. If there is a unionized workforce, employers should check collective bargaining agreements to see what obligations are triggered by recalling the employees from furlough. If an employer wants to recall employees but at a reduced pay rate and/or reduced benefits, this may be permissible, but the employer should comply with New York State's advance notice requirement (see below) and consider whether there are any applicable contractual restrictions on such a reduction. Employers should also ensure that any such reductions are implemented in a manner that does not violate federal, state, and local anti-discrimination laws.
If an employee has been terminated and removed from the payroll, the employee should go through the company's standard hiring process, including filling out an application, a Form I-9 (depending on the length of time between the termination and the re-hire), and all necessary paperwork. Additionally, once hired, the employee should execute all new hire paperwork, such as confidentiality agreements and employee acknowledgement forms. If there is a unionized workforce, employers should check collective bargaining agreements for procedures and other rights related to re-hiring after a layoff and note that notice to the union and bargaining are likely to be required.
Yes, employers may change the wage back to the original rate so long as employers ensure compliance with wage and hour obligations, including ensuring that hourly workers are paid for all hours worked and are paid at least the minimum wage. Such employees should also be provided with advance notice of changes to their pay or workweek schedules. New York State's new hire pay rate form can be used to notify employees of pay changes, and must be given in both English and the employee's primary language. The New York State notices are available in various languages.
Yes, but the salaries of exempt employees should not be changed regularly and salary exemption thresholds must be met ($1,125 per week/$58,500 per year in New York City; $975 per week/$50,700 per year in Nassau, Suffolk, and Westchester counties; and $885 per week/$46,020 per year in the rest of New York State). It is also recommended that salary adjustments be made on a company-wide or department-wide basis.
Be aware that extending a furlough (even if the extension does not apply to all of your furloughed employees) could trigger notice requirements under the federal WARN Act and/or the New York State WARN Act. For more information, see Reduction in work considerations for New York employers during the COVID-19 pandemic. If an employer has a unionized workforce, the employer should also consider whether extending the furlough could trigger obligations under collective bargaining agreements.
No, an employer should not terminate or take an adverse action against an employee who has the coronavirus or is suspected of having the virus. It is illegal to take any discriminatory actions on the basis of one's disability (including having COVID-19 or another serious illness, to the extent they constitute a disability under applicable law).
The employer should take immediate steps to eliminate the discriminatory behavior and to appropriately discipline the offending employees. With respect to the types of national origin discrimination claims that an employer may face, the New York City Commission on Human Rights has noted that, in recent months, there has been "a sharp increase in instances of hostility and harassment directed at Chinese and other Asian communities related to COVID-19 anxiety."7 Employment discrimination based on national origin is unlawful. Per the EEOC, employers "may wish to remind workers in these difficult times about policies on workplace harassment, and emphasize the broad nature of the prohibition against harassment – meaning that policies include a prohibition on any harassment based on national origin, among other bases, even if the harassment is linked to fear about the virus."8
If an employer has not already done so, it should update applicable leave policies to address COVID-19-related leave protections. For more information about New York State's COVID-19-specific leave protections, see New York State employers must provide job-protected time off to employees subject to COVID-19 quarantine. For more information about the COVID-19-related leave protections of the Families First Coronavirus Response Act, see US: DOL issues key federal paid leave rule, extends leave to certain employees under stay-at-home orders; US: New federal coronavirus response act provides paid leave requirements for some employers and US DOL answers questions on new federal sick and family leave, issues new posters and announces limited amnesty. Employers may want to consider adding separate appendices or exhibits to existing handbooks and policies to address these provisions, which are rapidly changing and, in some cases, temporary and set to expire on a set date.
Employers should also consider adopting detailed policies on what employees should do if they experience symptoms consistent with COVID-19, test positive for COVID-19, or experience an event that involves potential risk of exposure to COVID-19. Employers may also want to issue policies restricting business travel and imposing restrictions on employees returning to the workplace after certain personal travel. Employers should also ensure compliance with the industry-specific standards and written safety plan requirements discussed above. Employers will want to inform employees about the various safety and infection prevention measures that have been put into place for employee safety, and the related protocols that the employees will be required to follow.
Depending on whether an employee was furloughed or terminated and rehired, and the length of any furlough and/or termination, an employer will need to consider whether an employee is considered a "new hire" or a "rehire" under various employee benefit plans and policies (which answer may be different from plan to plan or policy to policy). For example, this may affect 401(k) plan vesting, service credit, deferral elections, and automatic enrollment procedures. As another example, this may affect whether an employee can immediately rejoin an employer's group health insurance plan or will be subject to a waiting period. Employers should carefully review the terms of all benefit plans and policies, as well as the specifics of how an individual was treated during any period of furlough or layoff and the length of such time period, in addressing benefits coverage and related issues for returning employees.
In this issue, we cover a broad spectrum of ‘hot button issues’ for boards and companies operating internationally.
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