By Elisa Nadeau and Lisa Horgan on
March 22, 2020
NOTE: This article was posted on March 22, 2020 at 9:30 a.m. PDT. Because the COVID-19 situation is dynamic, with new governmental measures each day, employers should consult with counsel for the latest developments and updated guidance on this topic.
On March 19, 2020, California Governor Gavin Newsom issued the historic Executive Order N-33-20 (“Order”), requiring all individuals living in California to stay at home “except as needed to maintain continuity of operations of the federal critical infrastructure sectors” or to obtain critical needs, such as food, healthcare, or prescriptions. The goal of the Order, in part, is to slow the pace – or “flatten the curve” – of the spread of the novel-coronavirus to ensure the healthcare delivery system is not overwhelmed and to protect public health and safety.
What Are “Critical Infrastructure Sectors?”
For businesses assessing whether and what operations can continue, the Order identified two reference sources: the “CISA1 Critical Infrastructure Sectors,” a list of 16 critical sectors (“List”), and the much more detailed “Guidance on the Essential Critical Infrastructure Workforce – Memorandum on Identification of Essential Critical Infrastructure Workers During Covid-19 Response” (also by CISA) (“Guidance”). The Guidance includes 14 (not 16) critical sectors, but provides a description of each as well as subheadings for some.
The first step in the assessment process is for companies to determine whether their business or some portion of it falls within the identified critical sectors in these two documents, which contain considerable overlap. Below is a chart comparing the 16 critical infrastructure sectors in CISA’s List with the 14 sectors identified in the Guidance. In some cases, a business will not fall neatly within any of the critical sectors (on the left), even though it may be included in the more detailed Guidance. For example, removal of medical waste is included in “hazardous materials” in the Guidance but does not fit squarely within any of the 16 identified critical sectors in the List.
Businesses should also refer to the California State Public Health Officer’s further guidance published on March 20, 2020, available here. That further guidance identifies additional businesses that are critical, for example, construction workers and service providers such as plumbers who support sanitation or safety on construction sites and projects, and professional services, such as legal or accounting services necessary to assist in compliance with legally mandated activities and critical sector services. Employers should also review the FAQs generally addressing the Order published on March 21, 2020, available here. Employers can also check for updates at California’s COVID-19 page.
Once a business confirms its inclusion within a critical infrastructure sector, it must identify which of its functions can remain in operation and which should be shut down. All operations that can be performed remotely should be, and employees should be provided with the equipment reasonably necessary to do their work from home. Employees critical to the operations of the portion of the business that is continuing to operate should be instructed to comply with social distancing rules and applicable safety/health guidance. Employers might wish to review Littler’s prior article discussing wage and hour considerations.
Employers should consider certain proactive steps as the process moves forward, particularly in communications with employees and business partners. Knowledgeable legal counsel can assist with drafting notices to employees who will remain on the job at work and those who will work remotely. In addition, while not required by the California Order (or any other “stay at home” order issued in the U.S. to date), as a practical matter the business may want to supply its managers or operations leaders with a letter that can be shown to public officials identifying which critical sectors apply and how the company fits within them. Vendors and other suppliers may also request such letters.
Relationship to Other Jurisdictions’ Orders
Prior to issuance of the state Order, many California counties had issued similar local shelter in place orders. In some cases, the local orders are inconsistent and may be more (or less) stringent than the state order. The State of California initially published an FAQ on the morning of March 21 that stated: “This is a statewide order. Depending on the conditions in their area, local officials may enforce stricter public health orders. But they may not loosen the state’s order.” The California Chamber of Commerce quickly released a statement urging local officials to conform their directives to the state order, citing the large number of California businesses that operate across the state and the need for consistency in supply chain operations.
On the afternoon of March 21, California revised its response to the FAQ to state simply, “This is a statewide order.” It thus remains unclear whether local directives that are stricter than those in the state order may be enforced. For the time being, the most conservative course of action is to: 1) determine whether a business may continue operating under the state order; 2) if so, determine whether the business may continue operating under any applicable local order; and 3) remain in operation only if the first two criteria are satisfied. Like many COVID-19-related issues, this is a quickly evolving area. It would not be surprising to see further guidance from the state on this issue.
Meanwhile, multistate employers also must account for “stay at home” orders implemented outside California, which may or may not mirror the California Order.
Staffing firms are not listed specifically as a critical infrastructure industry. The staff they are supplying, however, may be exempted from the Order to the extent that they are performing work that is deemed critical. If a staffing company supplies staff to critical sectors and it is necessary that a skeleton crew of the staffing company’s employees work on site to continue supplying such workers, presumably that skeleton crew would also be deemed critical under the Order. To the extent that any such work can be performed remotely, however, it must be.
Businesses Should Continue Monitoring Developments
The response to COVID-19 is constantly evolving, with unprecedented action at the federal, state, and local levels every day. Over the past week, both the state and 18 counties have implemented such “stay at home” orders, and companies should remain alert for further developments in this rapidly changing environment. Companies with questions about their coverage and obligations under these orders should contact experienced legal counsel for assistance.
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This article only includes general information and IMS is not, by means of this article, rendering any tax, legal or other professional services. This communication should not be relied upon for any decision or action that may have an impact on your business. Prior to taking any action, you should be in contact with your advisor.