California Resources Available to Employers Dealing with COVID-19 Related Issues
As COVID-19 cases grow in California, lawsuits are already being filed against essential business employers, alleging companies did not or are not taking proper precautions to protect employees from the pandemic. Employers are doing all they can to ensure they are complying with all applicable laws and regulations in these uncertain, historically significant times. With the economy at an all-time low, most companies, including essential businesses, are also losing profits at an unprecedented rate and struggling to stay operational.
Thankfully, California has established numerous resources to assist employers through this difficult time, such as guidelines for employers to maintain healthy and safe workplaces, programs to avoid layoffs, assistance for employers dealing with closures and layoffs, temporary suspension of notice requirements to employees that have been furloughed, tax assistance and other financial assistance. An overview of the relevant programs follows.
Guidelines for Employers to Maintain Workplace Health and Safety
The California Occupational Safety and Health Administration has provided guidance on requirements to protect workers from coronaviruses, including industry-specific health and safety guidance and model written plans and programs. The guidance can be found here.
The Center for Disease Control and Prevention (CDC) has also established guidance to assist employers to plan, prepare and respond to COVID-19. The pertinent recommendations include guidelines such as:
Precautions to reduce transmission among employees: such as actively encourage sick employees to stay home, separating sick employees, and educating sick employees regarding how they can reduce the spread of COVID-19;
Managing healthy business operations: such as implementing flexible sick leave and supportive policies and practices, assessing the employer’s essential functions and reliance that others and the community have on its services or products, determine how to continue operations if absenteeism spikes, and establishing policies for social distancing; and
Maintaining a healthy work environment by increasing ventilation rates and the percentage of outdoor air that circulates into the systems, as well as establishing sanitization practices to maintain a clean and sanitized work environment.
The CDC guidance and applicable resources can be found here.
Unemployment Insurance Work Sharing Program to Avoid Layoffs
Employers who are experiencing a slowdown in businesses or services as a result of COVID-19 may apply for California’s Unemployment Insurance Work Sharing Program. This program allows employers to evaluate alternatives to layoffs to avoid the cost of recruiting hiring and retaining employees later. Some alternatives include retaining trained employees by reducing their hours and wages which may be partially offset with unemployment benefits.
Qualifying employers must meet all of the following requirements:
Be a legally registered business in California;
Have an active California State Employer Account Number;
At least 10 percent of the employer’s regular workforce or a unit of the workforce, and a minimum of two employees, must be affected by a reduction in hours and wages;
Hours and wages must be reduced by at least 10 percent and not exceed 60 percent;
Health benefits must remain the same as before, or they must meet the same standards as other employees who are not participating in Work Sharing;
Retirement benefits must meet the same terms and conditions as before, or they must meet the same as other employees not participating in Work Sharing;
The collective bargaining agent of employees in a bargaining unit must agree to voluntarily participate and sign the application for Work Sharing;
Identify the affected work units to be covered by the Work Sharing plan and identify each participating employee by their full name and Social Security number;
Notify employees in advance of the intent to participate in the Work Sharing program.
Identify how many layoffs will be avoided by participating in the Work Sharing program; and
Provide the EDD with any necessary reports or documents relating to the Work Sharing plan.
There are certain restrictions on participation. Comprehensive information relating to the IU work-sharing program can be found here.
California Rapid Response Program for Employers Dealing with Closures and Layoffs
Non-essential employers who are closed or employers who have to conduct major layoffs as a result of COVID-19 may apply for assistance through California’s Rapid Response program. Rapid response is a business-focused program designed to assist companies facing potential layoffs or plant closures. Rapid response teams will meet with the employer to discuss the employer’s needs in an attempt to avert potential layoffs and provide any available immediate on-site services to assist workers facing job losses.
More information about the Rapid Response Program and how to get started can be found here.
Temporary Suspension of The Worker Adjustment and Retraining Notification Act Notice Requirements
In light of COVID-19 layoffs, California Governor Gavin Newsom issued an Executive Order which temporarily suspends the 60-day notice requirement in the California Worker Adjustment and Retraining Notification (“WARN”) Act for qualifying employers. The California WARN Act applies to employers that employ or have employed 75 or more full time or part-time workers in the preceding 12 months. (Cal. Lab Code section 1400 (a)) and generally requires employers to provide advance notice in case of qualified closings and layoffs.
The suspension was intended to permit employers to act quickly in order to mitigate or prevent the spread of Coronavirus. The Executive Order does not suspend the California WARN Act in its entirety, nor does it suspend the law for all covered employers. The Executive Order only suspends the California WARN Act’s 60-day notice requirement for those employers that satisfy the Order’s specific conditions. Further, we note, employers seeking to rely on the Executive Order’s suspension of the California WARN Act’s 60-day advance notice requirement must still satisfy a number of conditions, including providing notices to the EDD, the Workforce Development Board, and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs.
Further guidance on the conditional suspension of the Cal- WARN Act Notice Requirements can be found here.
Employers directly affected by COVID-19 may request up to a 60-day extension to file state payroll reports and deposit state payroll taxes without penalty or interest. Employers must include the impact of COVID-19 in the written request for the extension and the request must be received within 60 days from the original past-due date of the payment or return.
More information explaining Employer Resources can be found here.
Additional Assistance Funds for Workers and Businesses
In response to COVID-19, the Governor also announced the availability of an additional $17.8 million in Workforce Innovation and Opportunity Act funds to help impacted workers and businesses with re-employment, supportive services for basic needs, and Rapid Response activities.
$10 million of the funds were set aside to assist workers most impacted by COVID-19. The remaining $7.8 million was has been set aside to help workers and businesses in industries most impacted by COVID-19 including entertainment, hospital, travel, and leisure.
More information about the funds and how to determine if employers’ are eligible for services can be found here.