By Trent Sutton, Aki Tanaka and Nancy Zhang on
April 27, 2020
The COVID-19 pandemic has had an unprecedented impact on individuals and businesses across the globe. Governments closed their borders, issued health advisories, implemented social distancing, shutdown all but essential businesses, and legislated significant support for companies and individuals. Employers found themselves making unexpected and tough choices about employees’ job status, wages and benefits, privacy, and employee safety. While the future still holds uncertainty as to the ultimate impact of the virus, the pandemic’s initial origination in Asia provides an opportunity for western-based employers to anticipate where they might be in six weeks to two months and what they might anticipate as they prepare to manage their employees’ to return to the workplace.
Prepare for Additional Waves. The most obvious risk in a return to work scenario is the likelihood of a secondary spread of the virus. Singapore provides an important case study. Singapore’s first wave of the virus arose out of the significant travel to and from China around the Chinese New Year. Singapore took quick action and largely succeeded in limiting the spread. The second wave came as individuals returned to Singapore from Europe and the United States, triggering another, more serious, outbreak. And, despite government intervention, a third wave flooded the city with 1,000+ new cases in a single day as the virus spread through high-occupancy workers’ dormitories. Employers considering a return to work must do so with care for the possibility (or likelihood) of additional waves of the virus. This means appropriate planning and prioritizing administrative and environmental controls that limit the spread of the virus. It also means caution in creating return to work plans, such as using a phased approach.
Stick to the Basics: Aggressive Disinfecting and Personal Hygiene. Wherever the employees are located, there is relative global consensus on basic strategies to manage the spread of the virus. The employer’s implementation of aggressive controls to maintain a clean environment should remain a hallmark of any return to work strategy. Many countries in Asia continue to require and even monitor aggressive cleaning strategies, and the current plans of many western countries for reopening maintain this as a key requirement. Employers must ensure that they are watching out for local guidance and regularly disinfecting the workplace accordingly. Also, every employer should consistently remind employees of the expected personal hygiene, such as regular handwashing, sanitizing one’s own worksite, recognizing the symptoms of the virus, and other steps.
Enforce Social Distancing. Two months ago, no one even knew what “social distancing” was. Now, it is a constant discussion from Asia to the Americas. Social distancing refers to the precautions individuals (and employers) take to maintain sufficient “distance” between individuals to reduce the spread of the virus. Social distancing strategies are numerous: putting up partitions between employees in open-work areas or manufacturing lines to limit the likelihood of contagion; placing desks sufficiently distant from one another; limiting room / elevator capacities; staggering shifts to eliminate lines at the start or end of shifts; or other steps.
The experience so far in Asia is that companies are getting creative to address social distancing principles. In China, one manufacturer is requiring employees to eat in designated spots, to face the same direction when eating, and to use separate tables from one another. A number of Korean employers prohibit eating lunch across from one another and maintain video conferencing to reduce face-to-face interactions.
Social distancing strategies may not directly impact employment restrictions, so companies in the East and the West have relative freedom to establish practices to fit their worksite. Ultimately, employers must still comply with any local social distancing regulations. For example, Korea and Singapore continue to maintain significant social distancing requirements while countries like China or Japan strongly recommend, but may not as actively enforce, such practices.
Plan for the Long-Term Impact of Work-From-Home. Given the numerous lockdowns, companies were forced to adopt work-from-home strategies (where possible) to maintain business continuity. In addition to the practical administration of such a program, multinational employers had a crash course on compliance with disparate rules for reimbursement of home office expenses across jurisdictions. It is still too early to tell, even in Asia, the long-term impact of the new familiarity with work-from-home. It seems safe to say that work-from-home is likely to remain an ongoing option for many months to come as, even when restrictions are lifted, employers in China have been reluctant (or unable) to reopen at 100%. This cautious (or unavoidable) approach has the advantage of allowing employers to test social distancing strategies in advance of full staffing. On the other hand, it serves to further entrench workers in a newfound familiarity with (or perhaps even preferences for) work-from-home.
Provide Personal Protective Equipment. Unfortunately, an employer’s obligation to provide personal protective equipment is complicated and fraught with employment risks. This is one area where employers will need to know (among other things) (i) whether local rules require certain equipment in their industry; (ii) who must provide that equipment; and (iii) for how long must it be used. Employers are also faced with locating the equipment, purchasing it, maintaining it, and perhaps training employees on proper use. This is no small task and one that many Asia-based companies continue to manage. For example, though the wearing of masks as a way to curtail the spread of the virus seems to have finally achieved more global recognition, masks continue to receive significant attention as to which masks are sufficient for which people in which industry – and whether they can even be purchased.
Beware the Testing Quagmire. Most countries require employers to maintain a safe workplace. Employers routinely implement testing in the form of temperature checks, health questionnaires, and more recently, tests designed to identify COVID-19. The kind of test used and the manner in which it is implemented raise significant employment concerns as they often trigger data privacy, confidentiality, collective bargaining, and other employment requirements. Though temperature screening and health questionnaires are and remain common in Asia, tests designed to identify whether an individual actually has or had COVID-19 (i.e., swab tests or antibody testing) can raise significant employment risks. While locations like China, Hong Kong or Singapore have relatively few limitations on such testing, other locations have strenuous limitations on medical testing, which can lead to litigation, penalties, or fines. In the United States, for example, medical testing is highly regulated, and employers must be cognizant of important disability anti-discrimination laws.
Take a Local View on Leaves and Refusals to Return. The thorniest issue for return to work will be managing the employees’ entitlements to leaves, requests for accommodations, or refusals to return. There is no one-size-fits-all approach. In Singapore, employers enjoy relatively broad discretion in creating and enforcing leaves. Other than sick and annual leave, there are relatively few leave protections that would prohibit an employer from disciplining and terminating an employee unwilling to return to work. In contrast, the United States has issued enhancements to its leave laws (at the federal, state, or even city level) to protect workers. Workers may enjoy job-protected leave if they do not return to work because of their own (or family members’) exposure to COVID-19 or to take care of children who cannot return to school, among others. Asia’s experience, unfortunately, provides little help for western companies in this regard. Hong Kong, Thailand, and Korea did not undergo significant lockdowns and, therefore, have not had to address the massive return-to-work challenges experienced elsewhere. And, China’s protections for leave are not as significant as those in many western locations.
Bear in Mind the Bottom Line. The economic impact is uncertain and some industries have seen extensive impact while others have not. In any case, the return to work will continue to require employers to manage ahead for reduced cash flow, supply chain impediments, diminished business opportunities, and other risks. In Asia, as in the West, employers are and continue to assess and revise compensation structures, headcount, and benefits. The employment requirements for any such change must be viewed at the local level, though appropriate planning at higher regional or global levels can improve efficiency and timing to address a company’s bottom line.
In short, Asia’s experience with the virus has provided some helpful tips for what many western companies may see as they now begin to emerge from government-enforced lockdowns. But, the process has only just begun and will require vigilance at the global and local levels to ensure compliance with employment rules while also managing the business’ bottom line.
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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.