As of this alert, governors from California, New York, and Illinois have issued “shelter in place” or “stay at home” orders requiring all residents to stay at home, subject to certain exceptions, in response to the COVID-19 pandemic. It is anticipated that other states may follow suit. These orders are intended to encourage residents to stay home and restrict their travel as much as possible, only going out for essential activities, including essential business. Below we address a few important questions with respect to companies’ complying with these orders.
What is an “Essential Business”?
Each of the orders issued in the past few days by these three states has a different definition of what constitutes an essential business. Broadly speaking, however, the categories of “essential businesses” or “essential operations” that would be exempt generally include businesses related to the following industries:
- Healthcare
- Infrastructure (broadly defined)
- Government functions
- Food and beverage, including manufacturing and distribution
- Agriculture
- Charitable and social services
- Media
- Gas stations and transportation-related businesses
- Financial institutions
- Manufacturing, and distribution and supply chain industries
As noted above, however, each state’s order is different, and should be reviewed in light of a company’s specific location and circumstances, and each company’s business operations within each state should be reviewed against the applicable state order and guidance.
It is important to note that both Illinois’ order and New York’s guidance regarding its order require an “essential business” to comply with the guidance and directives for maintaining a clean and safe work environment, which includes the “Social Distancing Requirements” recommended by the Centers for Disease Control and Prevention (CDC).
If my business is an “Essential Business,” how can I protect my employees who are still working?
Inform and prepare your employees to comply with the order. This can include issuing a form letter or certificate for them to carry as they travel to and from work, and also advising them on how to interact with law enforcement or other state and local government officials while in transit, should that circumstance arise. Specifically, we recommend that you advise your employees as follows:
- Present documentation that she or he works for a business considered “essential” under the order (e.g., a letter or certificate from their employer), that he or she is in transit in relation to that business and be courteous.
- If law enforcement rejects the letter, instruct the employee to politely take the citation, ticket, or fine (if applicable), and deliver it to the appropriate company personnel for handling.
- If the employee is fined by law enforcement while on the job or during their commute, they should promptly notify human resources, and provide a copy of the ticket.
- Let employees know that the company will pay any and all fines associated with the employee being cited under “stay at home” orders, whether on the job or during their commute.
- Reiterate that it is important to be polite to law enforcement and government authorities, as they are just trying to do their job in curtailing this pandemic. Employees should courteously accept whatever fine or sanction that is administered and thank law enforcement for their service.
If my type of business does not match the definition of an “Essential Business,” can I apply for an exemption?
As of this writing, only New York has an application form for businesses that do not fall under the exemptions described in the guidance for those who may wish to be exempt from the order. Companies with operations and employees in New York who do not fall within the stated exceptions should review the guidance and application and seek counsel regarding filing for exemption.
Although California does not have an appeal or application process, employees may still commute to and from work to perform “Minimum Basic Operations.” These are operations are necessary activities to (1) maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions, or (2) facilitate employees of the business being able to continue to work remotely from their residences.
Similarly, in Illinois if a business is a “non-essential business” it must cease all activities within Illinois except for Minimum Basic Operations, which are defined as activities to (1) maintain the value of the business's inventory, preserve the condition of the business's physical plant and equipment, ensure security, process payroll and employee benefits, or for related functions and (2) facilitate employees of the business being able to continue to work remotely from their residences.
Lastly, each company’s particular situation in each state which has or will enact these orders may vary, and may vary from state to state; careful analysis about compliance with the state orders should be undertaken. Local, state, and federal responses to the coronavirus pandemic develop on a daily or even hourly basis. Many businesses in these locations and elsewhere may struggle with overlapping jurisdictional requirements and orders. For advice on how to respond to these new orders and other developments related to coronavirus, please do not hesitate to reach out to your Schiff Hardin contact.
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