Coronavirus: How to Manage Your Business & Legal Risks

Coronavirus: COVID-19 American map How to Manage Your Business & Legal Risks

Businesses of all sizes are facing a wide range of potential legal and risk concerns as the impact of the coronavirus (or COVID-19) continues to play out, including employment law issues, contract concerns and a variety of other potential problems. Small businesses should carefully consider how their liability will be increased in light of these circumstances, what they can do to limit that and how to move forward in the short term.  

Occupational Safety and Health Act

Under Section 5(a)(1) of the Occupational Safety and Health Act (OSHA), employers have a duty to provide a workplace free from recognized hazards that are causing or are likely to cause death or serious physical harm. That duty is likely to include taking steps to limit the spread of infectious diseases. Failing to take reasonable steps to limit the spread of the virus could open up your business to negligence claims in the event any clients, customers or employees become infected. 

Employers looking to reduce some potential liability should take steps to try and limit the spread of the virus, for example, some reasonable actions could be adopting a policy that lets sick employees work from home or sending home any employee that discloses symptoms of the virus. Additionally, employers should be careful about disciplining or terminating employees who miss work because they have a fear of contracting the disease. There are jurisdictions where courts have found a public policy exception to at-will employment in situations like this and allowed lawsuits for wrongful termination to move forward. That doesn’t mean your business would lose that lawsuit, but is it even worth the risk, time and money to have to fight it in the first place? 

Action Plans

Developing and communicating an action plan will be beneficial for a couple of reasons: 

  1. it will help with reducing some of the additional liability your business could face in situations like this; 
  2. it will help stabilize the business (as much as possible) in these uncertain times, when it’s important to try and keep the business functioning at something near normalcy, both for the sake of the business itself and for employees, clients or customers. 

Any Action Plan should be customized to your specific business and tailored to the needs of your workforce. Try not to make it overly alarming so you don’t upset employees or workers any more than necessary given the situation. Pay attention to your tone and delivery when you’re letting people know about the action plan. You will want to inform the workers that you are actively monitoring the situation and are taking steps to address the situation. It’s important to let your workforce know that their safety is a top priority, you value the work they are doing and understand that this may cause something of a burden for them in the short term. 

Here are some recommendations in terms of how to start thinking about an action plan: 

Encourage sick employees to stay home. The Centers for Disease Control lists the following recommended strategies for employers:

  • Employees who have symptoms of acute respiratory illness should stay home and not come to work until they are free of fever (100.4° F or greater), signs of a fever, and any other symptoms for at least 24 hours.
  • If someone is sneezing or coughing, you can send them home. But remember, taking someone’s temperature could be considered a medical examination within the meaning of the Americans with Disabilities Act. 
  • Ensure that sick leave policies are flexible and that employees are aware of these policies. Policies should require that employees notify their supervisor if they are sick and staying home.
  • Retrain your supervisors on the importance of not overreacting to situations in the workplace potentially related to COVID-19 in order to prevent panic among the workforce.

Encourage good respiratory etiquette and hand hygiene by all employees:

  • In line with OSHA’s requirement that employers have a general duty to maintain a safe workplace, you should encourage workers to stay home if they are sick, remind them about proper etiquette around coughing and sneezingand instructions on clean hand hygiene
  • Provide tissues and no-touch disposal receptacles for use by employees.
  • Instruct employees to clean their hands often with an alcohol-based hand sanitizer, or wash their hands with soap and water for at least 20 seconds.
  • Provide soap and water and alcohol-based hand rubs in the workplace.

Prepare for Employee Absenteeism:

  • Employers should consider allowing for more flexible leave policies that allow employees to stay home to care for themselves, sick family members or any children impacted by school closures.  
  • For employers covered by the Family and Medical Leave Act (50 or more employees within 75 miles), COVID-19 will likely be considered a serious health condition so a covered employee with COVID-19 or an employee who is taking care of a qualifying family member with COVID-19 may be permitted to take FMLA leave.
  • Cross train employees to perform essential functions so that the business can continue to operate even if key staff members are absent.
  • Consider whether telecommuting or remote work might be options for employees.

Remote Work Policies 

Whether or not to implement a remote or work from home policy for your company will depend on your business’s ability to do so and what part of the country you are in (you may not have much of a choice). From a business standpoint, attempting to implement a remote system you haven’t tested or developed yet could be detrimental to your company. However, if you’ve got the capabilities in place, know they work, and can function somewhere near normal this way, it could be a good opportunity for you to put the remote system in place. It could help with employee morale and give your workers a little more peace of mind about the outbreak situation. If you don’t have a system in place, or haven’t tested it, it may be to your benefit to at least start looking into whether or not it’s feasible, given that several locations already have shelter-in-place orders and more are sure to follow. 

Wage and Hour Issues

Under the Fair Labor Standards Act (FLSA), for the most part you don’t have to keep paying employees that aren’t working. The minimum-wage and overtime requirements go along with hours worked during a workweek, so employees who aren’t working typically aren’t going to be entitled to the wages required under the FLSA. 

One thing to be aware of however, is that employees who are  considered “exempt”, and are paid on a salary basis, typically must be paid their salary if they performed at least some work during their designated work week. You’ll also need to make sure that you're complying with any state wage and hour requirements that may be in effect. 

Outside of that there may be other considerations to take into account when it comes to paying, or not paying your employees. Looking at the big picture may serve you better in the long term.  Think about the negative media, reputational damage and employee morale when making these decisions because all of those could have a long term lasting impact on your business after this current situation blows over.  

While the likelihood of your business actually incurring any liability as a result of how it handles an outbreak like this may be small, erring on the side of caution is the smart move. It will be cheaper in terms of time and money than dealing with a potential lawsuit over any of these issues. 


If you have any questions about how to limit your business's potential liability in regards to the COVID-19 outbreak, want help developing an Action Plan or have questions in general, reach out for a free consultation

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