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Viewpoint: Running a business in pandemic requires careful planning

Contributing Writer //April 8, 2020//

Viewpoint: Running a business in pandemic requires careful planning

Contributing Writer //April 8, 2020//

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For employers, operating amid a worldwide pandemic is difficult. Managing the core business and doing so in compliance with the federal, state and local laws that govern the workplace is challenging enough. Now, employers also must closely monitor the news coverage of the COVID-19 pandemic, the government response to the outbreak and evolving guidance from public health authorities. 

Information is pouring in from numerous sources and it is hard to know where to start and what to do. Before making decisions affecting the workplace, it would be best to become acquainted with some authoritative and reliable resources available at the touch of a keystroke. Here are a few websites employers should review:

  • The latest general Guidance to Businesses and Employers from the Centers for Disease Control and Prevention website. The CDC’s guidance has been universally accepted by employers and policymakers alike and has been afforded great deference by agencies that handle employment claims, such as the Equal Employment Opportunity Commission and the National Labor Relations Board. This CDC reference instructs employers on how to prevent workplace exposures to COVID-19.    
  • Specific CDC Guidance for Risk Assessment of Persons with Potential Coronavirus. This CDC guidance is technical but readable and provides valuable information on assessing and managing risk of potential COVID-19 exposures based on information about an employee’s activities. 
  • The S.C. Emergency Management Division website. Employers will find links here to important materials related to restrictions on activities in South Carolina, such as Gov. Henry McMaster’s executive orders as well as video feed of the governor’s news conferences.
  • The S.C. Department of Employment and Workforce website.  Here employers will find the very informative SC DEW COVID-19 Hub as well as answers to general questions related to COVID-19 and unemployment insurance benefits (.pdf), as well a discussion of some likely COVID-19 related unemployment insurance scenarios (.pdf). 

When confronted with a downturn of the business caused by the COVID-19 pandemic, employers are faced with difficult choices, such as whether to stay open at all and, if so, to what extent. For some businesses, the workflow is conducive to allowing all employees to work remotely, in which case, the decision is easy. The biggest challenge remains to assure that employees are meeting productivity standards.   

For other businesses, varying degrees of onsite presence is desirable or necessary. How does the employer balance the need to maintain a physical presence in the workplace with the goal of maintaining a safe work environment and protecting employees from COVID-19 exposure?  Many employers are using a reduced office staff model or a rotational staffing model. 

Under a reduced staff plan, employers can direct those who are able to work remotely to do so, and those whose duties require a physical presence to report to work. Some employees who cannot work remotely may not want to come to the workplace out of safety concerns. Employers can manage this by offering some combination of accrued paid leave or unpaid leave. 

For some employers, a majority of their employees can work remotely but the employer may nevertheless prefer to maintain an on-site workforce presence. In this case, basing a staffing plan on a rotational model may be attractive. After determining employee preference for working remotely, working on site or rotating, the employer can create a staffing schedule that can reduce employee presence in the workplace to a desired percentage. If the employer determines the need to reduce staffing further, those who prefer to work from the office can be pulled into the rotation.   

At a certain point, these approaches may not fully address the challenge. The employer may find itself unable to keep employees fully occupied, e.g., because of a business decline, or the employees may be unable to remain in the workplace as a result of a government-ordered quarantine or isolation order. 

In this case, employers will seek to implement cost-cutting measures. For companies that intend to remain in business after the health crisis subsides, they may wish to avoid full-blown reductions in force. Many employers are opting instead for personnel cost reduction measures designed to be temporary and reversible placeholders in the event the economy returns to health quickly. Some of these options include: mandatory furloughs, reduced pay with no reduction in hours, reduced hours and pay, unpaid personal days for volunteers, deductions for bona fide sick leave, docking PTO for shortened work periods, and voluntary separations with severance.

Each of these choices must be made carefully and in recognition of applicable workplace laws.  For example, there will be limitations to several of these options for exempt employees under the Fair Labor Standards Act. Several federal laws, such as ERISA, COBRA, and the ACA, come into play when workers remain in employed status. And the federal Worker Adjustment and Retraining Notification Act may apply even if an employer believes a layoff will be for less than six months but cannot really be sure how long the layoffs will last.

South Carolina employers also must consider how the provisions of the S.C. Payment of Wages Act may apply to employment decisions made in the context of a pandemic. In the event of a termination, furlough or layoff, here are the basics:

  • An employer must provide written notice of changes in normal hours and wage decreases to an affected employee at least seven calendar days before the change becomes effective. 
  • When an employer separates an employee from the payroll for any reason, the employer must pay all wages due to the employee within 48 hours of the time of separation or the next regular payday, which may not exceed 30 days.

There are no easy choices for employers making workforce adjustments caused by current the shutdown of the American economy. With careful planning, employers have the flexibility to make temporary changes to weather this current storm and avoid unnecessary liability.

Phillip A. Kilgore has been in the practice of litigation and labor and employment law in the Greenville office of Ogletree Deakins since 1986. He is the office managing shareholder.