Publication

April 3, 2020

Due to their close proximity, Washington, D.C. ("DC"), Maryland, and Virginia are host to many businesses that cross state lines, with employees located in each distinct jurisdiction that may be subject to differing state orders. Businesses in the DC area face a unique challenge in navigating an ever-changing pandemic response landscape.

In March alone, DC, MD, and VA each announced between 5-10 executive orders to update the community on COVID-19 responses. Most significantly, on March 30, all three issued Stay-at-Home Orders, which each placed significant restrictions on residents and businesses alike.

Of course, the respective jurisdictions’ directives on these issues are a dynamic proposition and are subject to change.

Consistencies in State Orders:

While there are differences that may apply to employers in the DC area, there are also many consistencies in their collective response.  

Stay-at-Home Orders:

DC, Maryland, and Virginia all issued stay-at-home orders on March 30, requiring residents to stay in their homes with minimal exceptions, which include working in essential jobs, obtaining food or medical care, and exercise. Social distancing measures are to be maintained to the greatest extent possible, and violations of the order may be subject to misdemeanor charges.

Mass Gatherings:

At first, DC, Maryland, and Virginia provided direction on mass gatherings both at different times and in different capacities, but as of March 25, 2020, gatherings with more than 10 people are prohibited.

Essential businesses, discussed in detail below, are encouraged to follow social distancing guidelines to the best of their ability while remaining open.

Closed Businesses:

DC, Maryland and Virginia have overall come close to cohesion on many of their closed businesses, some with more leeway than others. Throughout the DC Metro region, theaters, gyms, salons, and any general recreational facility remain closed.

While there are some distinctions between the three, they are generally in agreement in terms of closing establishments that either tend to gather groups of people (such as gyms, and theaters), or by nature require close contact with others (such as hair and nail salons).

Restaurants and Bars:

The DC area has also had a great level of cohesion in their regulation of bars and restaurants to combat the pandemic. All restaurants and bars are permitted to continue take-out and delivery service, although each region came to this conclusion at different times.  

Essential Businesses:

With some differences in implementation, timing, and specifics, the DC Metro region has largely agreed on the following essential businesses:

• All healthcare related industries, whether suppliers or care providers, including veterinary services and animal shelters
• Essential Government Functions, such as Police Departments other emergency services
• Grocery stores, food banks, and other food retailers, including liquor stores
• Financial institutions, such as banks
• Gas stations and convenience stores
• Electronics retailers and internet/telecommunications service providers
• Construction, subject to some provisions, to ensure safety
• Home improvement hardware stores and services
• Laundromats and dry cleaners
• Media outlets, such as newspapers and television/radio shows
• Public transportation services - subject to reduced schedules 

Minimum Business Operations:

DC and Maryland have allowed “minimum business operations” to continue for non-essential businesses. While there are some differences in implementations and consequences for violations, they agree that businesses should be permitted to continue operations in limited circumstances.

In Washington, D.C., the Mayor has specified that this includes minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and benefits, and allow for continued telework.

Also in DC, the Mayor alerted businesses that those non-essential businesses  that are operating under the “minimum business operations” umbrella, may be asked to show an operational plan to explain why they need to conduct activities, how they are conducting them, and how they fit into the allowable limits. Further, DC may impose penalties.

In Maryland, this includes for purposes of promoting telework, maintaining essential property, performing essential functions (i.e. mail and payroll), caring for live animals, and allowing retail locations to conduct delivery services.   

Important Differences in Closures and Essential Businesses:

The list of essential businesses and provisions guiding their operations is constantly evolving, with some areas providing more clarity than others. The following chart details some important differences in language in each state’s provisions on essential businesses:

Maryland Price Gauging:

In addition to the above regulations to combat COVID-19, Maryland has additionally enacted price gauging measures to prohibit price increases on goods and services that would cause the retailed to profit by more than 10%. These industries include, but is not limited to

• Food and beverage Sales
• Fuel
• Medicine and medical supplies and equipment
• Hygiene and personal care products
• Cleaning products
• Pet food and veterinary care
• Motor vehicle parts and repairs
• Building supplies and equipment
• Home improvement and maintenance
• Electronic devices
• Internet, telephone, and other telecommunications
• Child care

Maryland Remote Notarizations:

On March 30, Maryland issued an order allowing notaries to conduct remote notarization though use of video technology. To use these services, the notary must be able to see and hear the individual.

Employment Regulations:

Affected employers and employees have access to many services, which are only increasing, to make it through the COVID-19 outbreak. These services and programs are available through both state and federal regulations. Below is a breakdown of what is available in the DC area.

The Federal WARN Act

The Worker Adjustment and Retraining Notification (WARN) Act guides employers through the requirements for giving advance notice of closings and layoffs to employees.

A WARN notice is required when a business with 100 or more full-time employees is laying off at least 50 people at a single site of employment, or employs 100 or more workers who work at least a combined 4,000 hours per week, and is a for-profit business, private non-profit organization, or a quasi-public entity separately organized from the regular government.

Exceptions to Notice Requirement:

Exceptions to the 60-day notice requirement exist for unforeseen business circumstances and natural disasters. The exception for unforeseen business circumstances applies when there is a sudden, dramatic, and unexpected action or condition beyond an employer's control that was not foreseeable when notice ordinarily would have been required. This may include unanticipated and dramatic major economic downturns and government-ordered closings of employment sites without prior notice. The exception for a natural disaster typically applies when a closing or mass layoff is the direct result of a natural disaster. While it is more likely that the first exception would apply in a pandemic, it is worth keeping the second exception in mind due to the fact that President Trump has activated emergency powers under the Stafford Act, which most often involves natural disasters. Keep in mind, these exceptions may not fully eliminate the obligation to provide notice but may serve to shorten the notice period. Employers should provide as much notice as practicable under the circumstances.

It is additionally important to note that WARN does not supersede laws or collective bargaining agreements that require additional notice, rights, or remedies.

New Federal Sick Leave Law

The Families First Coronavirus Response Act (“FFCRA”) is effective April 1, 2020. Employers of up to 500 employees are required to provide Emergency Paid Sick Leave (EPSL) to their employees without regard for eligibility or time worked requirements.  Please note, if you allow an employee to go on leave (whether paid or unpaid) or furlough an employee (as opposed to a layoff), then your employees are entitled to this EPSL.

Reasons for leave:

1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 – note this would include any employee subject to a shelter in place order provided they do not work for a business providing an essential service.  If your employees are working because they are providing an essential service, then the employee could not use EPSL to take time off for this particular reason. The following reasons may still apply.
    
2. The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
    
3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
    
4. The employee is caring for an individual who is subject to an order as described in subparagraph 1 above or has been advised as described in paragraph 2 above.
    
5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.
    
6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Hours of paid leave:

1. Full Time – 80 hours
2. Part Time – average hours for a 2-week period.                    

If you intend to have employees remain on staff who would be eligible for EPSL, contact one of our attorneys so we can guide you through how much to pay.  Your business may be entitled to tax credit for providing this type of leave.

As this law applies to employers with up to 500 employees, you may have questions about how this total is calculated.  If under the FMLA, your company and subsidiaries are considered integrated then it is true for FFCRA.  FMLA follows Title VII guidance for whether subsidiaries are integrated.  The factors to consider are:

• Interrelation of operations, i.e., common offices, common record keeping, shared bank accounts and equipment;
• Common management, common directors and boards;
• Centralized control of labor relations and personnel, i.e., hire and fire employees; and,
• Common ownership and financial control.

The factors are not evaluated as stand-alone.The entire relationship is to be reviewed in its totality.

Federal Medical Leave Expansion Act (EFMLE)

Effective April 1, 2020, EFMLE provides additional protections for employers with fewer than 500 employees. Employees who are eligible must be employed for at least 30 days at the time the leave is requested, and the leave must be a “Qualified Need Related to A Public Health Emergency” or “PHE,” which exists when declared by a Federal, State, or local authority. Under the EFMLE, employees must be restored to their position upon return from their leave.

This is a very narrow policy- employees may only request leave if they are unable to work (or telework) due to the need to care for their child under the age of 18 if the child’s elementary or secondary school or place of care is closed, or the care provider of the child is unavailable due to a PHE.

Coronavirus Aid, Relief, and Economic Security (“CARES”) Act

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act – the Federal government’s third aid package intended to keep businesses and individuals afloat during the COVID-19 Pandemic.

Small businesses, which includes businesses eligible for loans from the SBA, non-profit organizations, veterans organizations, or Tribal businesses, are eligible for the Paycheck Protection Program if they have fewer than 500 employees.

Maximum loan amounts are the lesser of $10,000 or 2.5 times the borrower’s average monthly payroll costs – determined by the one year period preceding the date of the loan. These loans can be used for payroll costs, group health care benefits, employee salaries, payments of interest on any mortgage obligation, rent, utilities, and interest on any other debt obligations incurred prior to the covered period.?

Options for Employers:

Making a Decision:

When deciding how to handle a financial crisis, employers have more to consider than a reduction in their work force. Cost is associated with each route discussed above, that can be dependent on a number of factors.

Furloughed employees are able to keep their benefits package, which can be costly to employers, and, under new sick leave policies, employers may also be required to pay for additional leave. Terminated employees are able to have their vacation time paid out, which, particularly for long-term employees, may be more costly than a reduction in hours or furlough. These are only a few of the many considerations employers need to evaluate prior to making any staffing decisions.

Fortunately, DC, Maryland, and Virginia are creating programs that ease the pain on employers when dealing with these issues, and have increased services for terminated or furloughed employees, and eased penalties on employers given the unprecedented impacts of the COVID-19 outbreak. The DC area is likely to continue to create new protections and services for employers and employees to help businesses and individuals survive in such a volatile climate. With the situation constantly evolving, it is important than businesses monitor each Governor’s executive orders, and seek advice as needed to navigate this changing landscape.

Visit our COVID-19 Hub for ongoing updates.