Special Edition
Employer COVID-19 Preparedness Guide
March 18, 2020

Workplace Issues and COVID-19

As the 2019 Coronavirus (“COVID-19”) pandemic spreads across the world, it is vital that employers remain vigilant in monitoring the situation and staying informed of governmental orders and developments.  As the second of a series of informational e-alerts, Ricketts Case discusses some key issues of concern to employers while the virus continues to greatly impact our clients.

Planning or Implementing Reduced Hours, Furloughs, or Operation Closures

In many areas, government orders to “shelter in place,” maintain social distancing and, for some businesses (e.g. bars, restaurants, and gyms), to close or limit services, have employers facing a significantly reduced workforce and temporary furloughs.  Consequently, there are myriad questions employers are facing—key among them whether a notice under the Worker Adjustment and Retraining Notification (“WARN”) Act is required.  In certain situations, the federal WARN Act requires 60-days advance notice of a “plant closure” or “mass layoff.”  However, if the closure or layoff is less than six months, notice may not be required.  This may present a challenge for employers during the COVID-19 pandemic because it is very difficult at this time to predict how long workplaces will be impacted.  There are exceptions to the 60-day notice requirement for unforeseeable business circumstances, but such exceptions must be carefully analyzed by a legal professional to avoid potential litigation.

Similarly, as noted in a prior alert, at California covered worksites, Cal-WARN will be triggered in a mass layoff situation (if 50 or more employees suffer an employment loss at that covered establishment regardless of the duration of the layoff), or in the event of a termination (defined as the cessation or substantial cessation of industrial or commercial operations in a covered establishment).  Cal-WARN has an exception for a mass layoff, relocation, or plant closure necessitated by a physical calamity or act of war.  Unfortunately, there is no legal guidance at this time as to whether COVID-19 would constitute a “physical calamity.”

Even in the event of a temporary furlough, state laws may require that wages be paid immediately, particularly because the duration of furloughs is currently unknown.  For example, in California, if there is no specific return date identified, the furlough is treated as a termination and wages are due and payable on the last day of work.  If there is a specific return to work date that occurs within the pay period, and the employee returns to work, all of the employee’s wages may be paid at the next regular payday.

Employers should also be familiar with state law requirements regarding whether vacation or PTO is considered “wages” and must be paid out at termination.  In California, for example, payment of accrued, unused vacation or PTO is mandatory at the time of termination, including, as noted above, when a furlough will last for an extended period of time.

In the event employees report to work and are told to go home before working a full day, some states may have reporting time pay requirements, but there are generally exceptions.  In California, for example, a reporting time payment is not required if operations cannot commence or continue due to threats to employees or property; when recommended by civil authorities; or the interruption of work is caused by an Act of God or other cause not within the employer’s control.  These exceptions are likely to apply to the current COVID-19 pandemic but, to the extent possible, employers may wish to consider promoting public health and safety, and employee morale, by paying employees who report to work and are sent home having worked less than half their usual day’s work.  Employers will also need to think about communication systems for alerting employees when they do or do not need to report to work.

Non-exempt employees are paid by the hour and do not need to be paid if they do not report to work.  In contrast, exempt employees generally must be paid their full weekly salary if they perform any work in a workweek.  If there is a business closure, and the exempt employee worked part of the workweek, the exempt employee must be paid for the entire workweek.  If the exempt employee does not work for a full workweek, then the employer is excused from paying the salary for that week.

Benefits and Other Resources During Reduced Hours, Furloughs, and Closures

Another issue to consider with regard to furloughs is the obligation to provide a COBRA Notice.  When a covered employee is terminated, furloughed, or has a reduction in hours that causes them to lose group health coverage, they may be eligible for COBRA continuation coverage.  As noted in a prior SRC e-alert, to minimize the risk of legal liability, it is highly important to make sure the COBRA administrator is using the correct and complete COBRA notices.  Included here is a link to the Department of Labor’s website for model notices:

Many employers have asked about benefits to help employees financially while they weather the pandemic.  In California and other states, employees who have lost a job or have had their hours reduced for reasons related to COVID-19 may be able to partially recover their wages by filing an unemployment insurance claim.  For example, employees in California who work less than their full-time hours and whose employers want to keep them employed may file a claim for “partial unemployment.”  See  The EDD also offers a workshare program for employers as an alternative to layoffs.  See

In an effort to mitigate the effects of such closures and unemployment issues, and pursuant to an Executive Order of the Governor of California, the Employment Development Department (“EDD”) is waiving the one-week waiting period for employees to collect unemployment insurance in the event their employer reduced hours or shut down operations due to COVID-19.  See

Emergency government mandates are constantly emerging and employment law requirements may vary by state and locality.  Employers must keep abreast of communications on a daily, and sometimes even hourly, basis.

Financial Options in Light of School Closures and Mandated Isolation for Certain Areas and For Employees Age 65 Years and Older or With Chronic Conditions

For employees who must stay home, employers should consider informing them about the use of paid sick leave and other programs to support preventative care measures.  For example, in California, if an employee is unable to work because he or she is caring for an ill or quarantined family member with COVID-19, the employee may qualify for Paid Family Leave.  Similarly, if an employee is unable to work due to medical quarantine or illness, the employee may qualify for State Disability Insurance.  In California, according to the EDD’s website, the one-week waiting period for SDI benefits is waived.  If an employee or an employee’s family member is sick or staying home due to school closures, employees may use accrued paid sick leave as “preventative care,” per the state’s Labor Commissioner.  See  In some cases, employees may also be eligible for workers’ compensation benefits if they are unable to do their usual job because they were exposed to and/or contracted COVID-19 during the regular course of their work.

Finally, with childcare issues becoming an increasing concern for employees, employers should continue to remind employees of sick leave and other paid time off (“PTO”) benefits available to them.  Whether use of these benefits can be mandated will depend on applicable laws.  Further, vacation and PTO policies may provide employees with some options to mitigate the financial impact of social distancing during the pandemic.  Many states have laws that permit parents to participate in school activities and, in California, for example, that law permits employees at worksites with 25 or more employees to use up to 40 hours per year for school-related emergencies, which could include the closure of a child’s school or daycare by authorities.  Whether the leave is paid will depend on the employer’s policy.  For those with employees who participate in a flexible spending account (“FSA”) for dependent care, depending on the terms and conditions of the plan, the employee may be able to make changes if, for example, the employee no longer needs to pay for child care.  Generally, FSA election changes are made only during open enrollment or upon the occurrence of a “qualifying event.” Therefore, employers will need to review their FSA plan to determine what qualifying events are available under their plan.

These and other financial options will likely vary by state and locality.  Employers should consult legal counsel for specific guidance on all the options available to them and their employees during these unprecedented times when health and safety is of the utmost importance.

Additional Select Resources for Employers Regarding COVID-19

U.S. Department of Labor:

Centers for Disease Control and Prevention:

California Labor Commissioner’s Office:

California Employment Development Department:


For further guidance about specific workplace issues, please contact one of our employment attorneys.

The contents of this newsletter are intended for general informational purposes only and should not be construed as legal advice or a legal opinion.  You are advised to consult an attorney about any specific legal question.