California’s Stay-At-Home Order: What’s an Essential Service?

Governor Newsom’s statewide Stay-at-Home Executive Order N-33-20 was issued and took effect on March 19, 2020, with no express end date. The Order broadly requires all Californians to stay at home, except to maintain continuity of operations in federally-identified critical infrastructure sectors.

California businesses, including those in the construction industry, and local officials, are now faced with deciphering whether operations fall within a critical infrastructure sector. Given the Order’s criminal penalties for non-compliance, understanding whether operations remain lawful going forward is an important step for California business owners, and their workers. Businesses excepted from the Order may allow their workers to physically report to work. Otherwise, workers must work from home.

Federal Critical Infrastructure Sectors

The Order expressly excepts operations in 16 federally identified critical infrastructure sectors. Guidance on the critical infrastructure sectors is provided by Presidential Policy Directive 21 (PPD-21). PPD-21 identifies each of the sectors:

  • Chemical Sector
  • Commercial Facilities Sector
  • Communications Sector
  • Critical Manufacturing Sector
  • Dams Sector
  • Defense Industrial Base Sector
  • Emergency Services Sector
  • Energy Sector
  • Financial Services Sector
  • Food and Agriculture Sector
  • Government Facilities Sector
  • Healthcare and Public Health Sector
  • Information Technology Sector
  • Nuclear Reactors, Materials, and Waste Sector
  • Transportation Systems Sector
  • Water and Wastewater Systems Sector

Detailed information regarding each of the 16 sectors can be found here.

State guidance further identifies all categories of businesses and workers that are excepted from the Stay-At-Home Order:

  • The 16 federal critical infrastructure sectors;
  • Critical government services;
  • Schools;
  • Childcare; and
  • Construction, including housing construction.

My Business is Excepted from the Order, What Work and Services can Continue?

As outlined above, the Order generally allows work on critical operations to continue, including for construction projects, housing, airport operations, water, sewer, gas, electrical, oil refining, roads and highways, public transportation, solid waste collection and removal, internet and telecommunications, as well as government, childcare, and school-related services. However, employers and all workers must nevertheless comply with social distancing standards and other COVID-19 health and safety precautions.

Whether your business falls under an exception to the Order is highly case and business specific. Even if one aspect of a business falls under an exception, it is possible that other services may not.

Contact us to discuss whether and to what extent your businesses operations fall within an exception to the Order. We are available to provide targeted analyses addressing whether your operations are excepted from the Order, and what specific services can continue to be lawfully provided by your team.

Employee Benefits Issues

As COVID-19 continues to spread and more restrictions are placed on businesses’ ability to lawfully operate, employers considering temporary furloughs of employees – in an effort to delay or avoid layoffs – face a number of issues with respect to employee benefits, including questions about continuing health insurance benefits for furloughed employees.

The Impact of Employee Furloughs on Healthcare Coverage Continuation

Most employer sponsored health insurance plans provide that an employee who is not “actively at work” (i.e. an employee on furlough) may only have coverage for a designated period of time. Therefore, employers should begin addressing this subject by contacting their health plan administrator, and review their group medical plan document or certificate of coverage, to identify any limitations on continuing coverage for employees not “actively at work.”

After the expiration of the designated period, healthcare coverage will (typically) be terminated, but the covered employee becomes eligible for COBRA. As such, the duration of the employee furlough period will impact employer obligations with respect to continuing health insurance benefits for affected employees.  

Depending on an employer’s type of health plan (self-funded vs. fully insured plans), there may be flexibility to amend the plan to waive eligibility conditions and allow furloughed employees to continue coverage. However, such arrangements must be negotiated with the insurance carrier. Again, the first step is to communicate with the plan administrator. Contact us with any questions that follow. 

Health Insurance Premium Payments During a Furlough

If your business covers 100% of employee health insurance premiums, that obligation will continue during the duration of the furlough, until an employee’s active coverage terminates under the plan.

Some employer health insurance benefits require premium contributions to be made by the employee, which are deducted from the employee’s pay each pay period. An employer has the option to cover the premiums for furloughed employees in order to keep the coverage in place, but options to later recover those costs are severely limited by the California Labor Code, which prohibits any deduction from any employee’s paycheck.

Managing Employee Health in the Workplace During the Pandemic: Can I Take My Employee’s Temperature? 

Newly updated guidance from the U.S. Equal Employment Opportunity Commission (EEOC) provides that employers may measure employees’ body temperature due to reasonable concerns about community spread of COVID-19 and the related public health precautions. Conducting such exams in the workplace can be a legal (and public health) landmine for employers. We advise employers to exercise great caution whenever conducting medical-related testing in the workplace and how to communicate about such testing with employees. Thus, conduct temperature checks where reasonable, and with respect and consideration of privacy: The cautious approach is to recognize that, as with all employee medical and health information, an employee with a fever or other medical symptoms has federal (ADA, HIPAA) and state confidentiality medical rights to consider.

Contact us with questions about whether and how to implement such protocols in this unusual time or any questions about operating your business in this challenging time.

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