Covid-19 HR Legal Strategies Offered

Tent OX Round-Up #4, April 7, 2020

Recently, we were delighted to welcome Dan Gilmore, a lawyer specializing in HR issues to present to tent and event companies at our most recent OX Round-Up event. Dan covered up-to-the-moment legal issues that may come into play in Tent and Event companies managing layoffs, furloughs and other responses to Covid-19 over the past three weeks. Based in Chattanooga, Tennessee, Dan has advised tent and event companies nationally for years. His “Covid-19 HR Legal Strategies” talk offered plain-spoken advice on steps companies may take now to navigate HR issues triggered by the Covid-19 pandemic. His presentation was offered to us “off the clock.” We are very grateful for his generosity and his deep knowledge of the HR issues every party rental company needs to know to take advantage of what the Small Business Administration is offering.

Dan was introduced by Dan Nolan, one of Dan Gilmore’s clients from the event industry. Dan is a long-time southeastern US Tent and Event company executive at both Epic Tents and Peachtree tents.

Here are some key points Dan made to owners and managers of dozens of Tent and Event companies across the US who attended this, the fourth of our continuing Covid-19 Round-Up series held over just three weeks by Tent OX. Please keep in mind that he was offering information that was correct to the best of his knowledge. However, it was not client-specific legal advice.

Federal rules relaxed to allow you to check on the health of your employees

OSHA has long had a general duty clause that requires employers to provide and maintain a safe workplace. But because of the extraordinary nature of the pandemic, it and many other federal agencies have eased up on restrictions on how much you can check on an individual employee in order to protect the well-being of others. That means that if you have an employee who appears ill, you have more freedom now to check on them – this includes taking employee temperatures – and withholding access to workplaces. If someone must go home, be careful about sharing specifics of their illness with other employees to protect their privacy rights.

OHSA has new guidance for preparing workplaces for use during the pandemic. These and other resources – including a Center for Disease Control-authored cleaning and disinfecting programs – were compiled by Dan and are available upon request to Tent OX or Dan (contact information at the end of this article). If you’re not taking measures to clean, you’re probably increasing your potential for legal exposure. One attendee at the presentation discussed how his company split teams into two discrete teams. Each team is responsible for cleaning trucks and wearing masks, with only two people riding in each vehicle.

Furlough or layoff?

Many employers have already taken steps to downsize their workforce as sales have fallen, and Dan addressed the confusion some have expressed about whether to furlough employees or lay them off. Furlough means that you keep them employed, like a sports team athlete sitting on the bench and ready to go back into the game when business revives. If they are furloughed, they may still be eligible for unemployment benefits based upon the reduction of their hours.

In a layoff, an employee is separated from the company, no longer employed. He or she can also apply for unemployment benefits, and they should also be eligible for the federal government’s new program to pay an additional $600 a week to ease their transition. Maybe you will ask them back. Or maybe it’s a permanent separation. In some cases, some employees can make more being unemployed, and they may request it.

The choice of furlough or layoff is a tough for employee and employer alike. At the moment, no one can be sure when, exactly, the money potentially available to small businesses by the federal government will be coming, and the program specifics are still being worked out.

Employees who are furloughed may ask whether they can take the paid time off (PTO) they are eligible for. If you allow it, keep in mind that what they take won’t be available to them to use when they come back to work.  But they are entitled to it if you decide to allow it.

If you hope to bring laid off employees back, that’s considered a temporary layoff, rather than permanent, and it allows you to apply for loan benefits described later. By the way, if you make an effort to bring someone back and they don’t want to return to work for you, you need to document it.

New Federal Paid Leave Requirement

A new Federal employee rights poster for companies with fewer than 500 employees has been created to highlight employee rights during the Covid-19 pandemic (shown partially below). It needs to be posted at your workplace immediately and communicated to employees who are not at your workplace.

You don’t have to provide employees with additional details, but you should be prepared to respond if the issue comes up and an employee wants to take advantage of it. The poster lists six circumstances under which an employee can request paid leave…

The Federal government is making a significant effort to make this paid leave available to those who qualify as unable to perform available work. Any current employee who wishes to take advantage of it is required to provide a signed statement describing why they qualify for this leave. If they don’t provide the necessary information to you (for instance, for #5, the name of child, age, relationship and the absence of any other suitable person to care for the child), you have no obligation to pay them, so you should remind them to do that. Once you get that info, you must choose to approve the request for paid leave or not. What about someone home taking care of their kids? It’s basically an honor system: You have to take the employee’s word for it when they say they need to take care of their child.

When an employee doesn’t need or want to take off full days (let’s say the employee’s spouse is taking over for half of each day), that’s called intermittent leave. If employees use paid leave for less than full time, the employer is not obligated to provide it. The decision is up to you, the employer. Here’s some detail the Federal government offers for how this leave is paid:

NOTE: In the last sentence shown above, the last line should read “over that two-week period.”

Important information regarding SBA Loans

Below you’ll find an SBA spread sheet that identifies multiple Federally sponsored Small Business Administration (SBA) loan options you can consider. Many of you are already pursuing one or more of these. Basically, these loans are a way to provide a measure of financial security for employers in extraordinary times. While the loans are sponsored by the SBA, some of the loans are processed by banks who choose to participate, not the Federal government.

The most talked about of these is the Paycheck Protection Program (PPP) highlighted below. The PPT is there to help you maintain your payroll when your firm’s reduced income makes it harder to meet your financial obligations. It offers up to a maximum of $100,000 per employee or a total of up to $10 million for your business (this is just a cursory sketch of the loan features; do not act on this without reading up on it yourself). It offers a forgiveness feature dating back to February 15 of this year if you have had to lay off people and you hire them back by June 30. As long as you have an equivalent number of laid off employees returning to work by June 30, you won’t have to repay that loan, or least a significant portion of it.

If you qualify for a PPP loan and you don’t pursue it, you’re losing an opportunity for very cheap money. It’s relatively easy to apply for, and it doesn’t require a deep commitment on your part to supply financial information. The idea is to streamline the process to get you money when you need it: now. 

Suggestion: Some banks don’t understand the SBA process, so you will want to deal with an SBA Preferred Bank, where SBA loans are a big part of what they do. These banks are often more willing to throw resources at such loans than other banks.

Dan Nolan adds this warning: If you apply for one of these loans to more than one bank, you put yourself in jeopardy, including, potentially, an accusation of fraud. Keep communicating with the bank you’ve applied to.

Another SBA loan that’s getting a lot of attention is the EIDL Forgiveness/Advance grant, highlighted below. It pays up to $10K. It is also easy to apply for. Many of the tent and event rental companies attending Dan’s presentation have applied, though none had received the money at the time of this writing (April 10).

Final note: Clients ask, “Can’t we just reclassify our employees as independent contractors to avoid having to pay this new leave?” Enforcement agencies scrutinize these reclassifications very closely, and they have done so for some time. Reclassifying an employee as an independent contractor mid-year raises a very big red flag with the enforcement agencies and should be avoided.

A few notes from the discussion that followed Dan’s talk:

If a government agency asks you to build a quote, ask if it’s a small business set-aside. If it’s not, you’ll be competing with huge vendors, and it might not be worth bidding for unless you have a good relationship with the agency.

New opportunity to get into existing facilities to put up vinyl to provide better patient isolation than ordinary pipe and fabric drape installations.

Immigration issue: On May 1 the Federal government is issuing a new I-9 form. It lessens restrictions about hiring individual workers who work remotely.

Major banks have contacted Gary Stansberry (business consultant to a number of companies in the event sector. He presented at our second OX Covid-19 Round-Up March 26) saying they are looking to loan to people.

Is there a limit to the number of SBA loan programs each financial institution can provide? Not that Dan Gilmore knows of. He advises businesses to move forward with them either way. Dan Nolan of Epic Tents adds: Bigger banks are putting arbitrary cash limits on these things, something they can choose to do. Some institutions are not willing to take on SBA loans because they are hammering resources for their other customers. Probably they will look at loan requests on case by case basis, possibly giving preference to good customers.

Dan Gilmore Bio and Contact Info

Dan is a lawyer specializing in HR issues, and he works with tent and event companies like Dan Nolan’s Epic Tents and Peachtree Tents & Events and Mike Holland’s Chattanooga Tent Company. Dan has represented clients across the nation in all phases of proceedings in state and federal courts and before administrative agencies.  He has extensive experience in equal employment opportunity matters, employee and management training, alternative dispute resolution, and traditional labor law.

Dan is available to contact via LinkedIn, phone (Office: 423.308.7282) and email (dan@squirestrategies.com).