The state (Virginia) Department of Labor has implemented workplace standards for Virginia employers to protect employees from the effects of Covid-19. These are mandatory and Virginia is the first state to do that. Review these on the Department of Labor's web site. If you still have questions, please call our firm.
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The Virginia Department of Labor and Industry, Safety and Health Codes Board, adopted regulations on employers in regard to Covid-19. Virginia is the first state to adopt its own regulations on this subject. However, if the employer could prove that the Center for Disease Control recommendations are equal to or more restrictive than the state regulations, the employer may follow the CDC requirements, but that may be difficult and expensive.
The Virginia regulations have the force of law, must be obeyed and carry potentially large fines. Before the regulations can be enforced, they must be published in the Virginia Register and, it is expected that will be on the week of July 27, 2020. The regulations are 35 pages in length, but in part, they require the adoption of a plan for deal with suspected Covid-19 virus, posting of notices, providing at the employer’s expense face masks, hand cleaner and facilities for employees to wash their hands and procedures for employees with symptoms or suspected symptoms. Do not risk a fine and if you have questions, please give us a call. We at MCGEEHAN PASCALE, PLC are healthy and we wish our clients, fellow lawyers, court personnel and opponents good health. We are successful in helping clients by phone and the internet. The pandemic creates some legal issues, however, and we are prepared to answer questions. Here are some answers:
Can employers send home a worker displaying symptoms of the Covid-19 virus? Yes. Anyone with this infectious disease is a life-threatening danger to fellow workers and other with whom they may come in contact. Employers may fear that sending home a sick worker will trigger legal liability under the Americans With disabilities Act (ADA) or other federal or state law, but there already are suits when an employer fails to protect employees. There are safe harbors built into the ADA protect employers from liability as long as they establish a set of criteria and stick to them. We advise employers to use the CDC guidelines. The CDC defines a person as symptomatic if they have a fever over 100.4 and is coughing or has difficulty breathing. They should get a doctor’s order and be tested an then follow medical advice. If possible, the employer may require an employee to telecommute. Read my earlier post regarding the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (FFCRA)for questions regarding paid and unpaid leave. Can an employer impose conditions on employees for safety? Yes. Employers are required by OSHA to provide a safe work environment for its employees. The employer may require the use of masks and protective clothing and regular effective washing of their hands. That can be enforced through normal disciplinary means, including termination. Can employers send home or bar from work during a self-quarantine period asymptomatic employees who have been exposed to COVID-19 as defined by the CDC? Yes. The incubation period is 14 days during which time an employee may be asymptomatic, but can infect others. An employee is considered exposed if he or she:
Can employers ask about an employee’s suspected conditions? Because the intent is to shield other workers from illness, employers may ask these questions without violating the ADA’s prohibition on posing questions that could reveal a disability. The personal impact of the Covid-19 virus is immense. For small and medium sized businesses, there are legal questions that include the fulfillment of obligations under contracts and leases when revenues are reduced or non-existent. Some on-line sources have used the term force majeure as a possible solution.
Attached is an excellent article written by Dennis P. Chapman, Esquire, of this firm that explains legal concepts of impossibility of performance and force majeur in Virginia. The article is for purposes of general education of the business community. This article does not replace legal advice by an experienced lawyer. Contact a lawyer experienced in business, leasing or commercial matters and discuss with her or him the facts in your situation. We at McGeehan Pascale, PLC hope the following article will inform and help you in these unique times. Please click on the following link to download a PDF version of the article. Some of our small business clients are determining whether the small business federal loans are necessary and suitable for their business. Two sources for answering you questions are the US Small Business site and https://disasterloan.sba.gov/ela/ and the George Mason University Small Business Development Center
https://masonsbdc.org/wpcontent/uploads/2020/03/Three_Step_Process_SBA_Disaster_Loans.pdf Care for School Age Children: On March 23, 2020, Governor Notham issued an executive order. Foremost, it orders all public and private schools to cease all in person instruction for the remainder of this academic year. That leaves open a possibility of alternative learning, such as on-line learning. Facilities providing childcare services may remain open, subject to Virginia Department of Social Services guidance for daycare providers. This may affect businesses having employees with school age children who will need supervision during this period. Look at the posting on the federal Families First Covid-19 Virus Response Act as to what is your businesses obligations in situation such as caring for a child exposed to Covid-19 or who may be ill with it.
Business that must close until April 23, 2020: The Virginia executive order closes all dining and congregation areas in restaurants, dining establishments, food courts, breweries, wineries, distilleries, tasting rooms and farmers’ markets until April 23,2020. Delivery and carry-out are permitted. Also closed until April 23, are public and private social clubs, theaters, performing arts centers, concert venues, and other indoor entertainment centers, fitness centers, beauty salons, barber shops and other locations where personal care services are performed that do not allow social distancing (six feet). This list in not exhaustive. Businesses that need not close: Essential business may remain open. These include grocery stores, pharmacies and retailers that sell food and beverage products and medical supplies, those sell or service cell phones and computers or automotive parts, construction and home improvement centers, lawn and garden retailers, beer, wine and liquor store and gas stations. Retailers not included in the “essential retail business” category may continue to operate, but they must limit in-person shopping to no more than 10 persons (not counting staff). Professional services businesses: Business that offer professional rather than retail service, which includes lawyers and accountants, may remain open but are asked to use teleworking as much as possible. When that is not feasible, they must adhere to social distancing as much as possible, enhanced sanitizing practices on common surfaces and apply workplace guidance from state and federal authorities. McGeehan Pascale, PLC remains open. We are here and we are available to assist our clients. If you have questions, please call us. (703)273-5303 THIS SHOULD NOT BE CONSIDERED LEGAL ADVICE IN A PARTICULAR SITUATION OR PARTICULAR SET OF FACTS. NEITHER WILL IT COVER THE ENTIRE RECENT LEGISLATION. YOU MAY CAN USE THIS SUMMARY FOR GENERAL FAMILIARIZATION AND THEN CONSULT AN EMPLOYMENT LAW ATTORNEY AND TAX ADVISOR, AS APPROPRIATE FOR YOUR PARTICULAR QUESTIONS.
On March 18, 2020, President Trump signed into law the Families First Coronavirus Act “the Act”) This law provides many things including supplemental appropriations for Food and Nutrition Service including Supplemental Nutrition Program for Women, Infants and Children. Defense Health Program, Veterans, IRS and school lunch waivers and waivers of fees for COVID-19 testing. It includes the Emergency Family and Medical Leave Act, which expands the Family and Medical Leave Act of 1993. This is through December 31, 2020 and there are caps on leave and amount to be paid. For small business, it expands the 1993 act to businesses with “fewer than 500 employees”. It provides unpaid leave for initial 10 days, which can be substituted for vacation, personal leave and medical or sick leave. After 10 days, it provides paid leave for each day of leave after 10 days. It provides calculation as to defining days and the calculation of the “regular rate of pay”. An employee’s notice of leave, when practicable, is to be given. Employers are to make reasonable efforts to restore the employee to an equivalent position held when leave commenced. There also is the Emergency Paid Sick Leave Act. For employees with COVID-19 or who were advised to self-quarantine or isolation, or seeking a medical diagnosis or who are caring for person self-quarantine for caring for a son or daughter whose school is closed due to COVID-19 precautions, the employee is entitled to paid sick leave for 80 hours (full time) or the hours the employee works on the average (part-time). Employers also must post notices in the work place of the employee’s rights under this Act and employers may not discharge the employee who takes leave permitted by the Act. A failure to do these things is a violation of the Fair Labor Standards Act of 1938 (29 U.S.C. 206, 215 and 217) and subject to penalties under the FLSA. Employers are allowed credits (not deductions) against taxes imposed by the Internal Revenue Code §3111(a) and 3221(a in an amount equal to 100% of the qualified sick leave paid by the employer in that quarter. The amount is increased by a credit allowed by so much of the employer’s qualified health plan expenses attributable to qualified sick leave wages. Eligible self-employed persons are allowed a credit against tax imposed by subtitle A of the Internal Revenue Code for any taxable year in an amount equal to the qualified sick leave equivalent amount with respect to the individual. There is a credit for Family Leave for Self-employed individuals who are entitled to receive paid leave if the individual were an employee of an employer. All wages required to e paid by reason of these acts shall not be considered wages for the purposes of the Internal Revenue Code §3111(a) or § 3221(a0 UPDATE ON COVAD 19 VIRUS
TRAVEL BAR EXPANDED: The federal government has extended the bar to persons entering the United States also to Ireland and the United Kingdom. FEDERAL LEGISLATIVE ACTION: The House of Representatives passed a bill Family First Coronavirus Response Act. Before that becomes law, this must be passed by the Senate, which is expected to act on the Bill quickly. The Bill authorizes, among many things, money for research, expands some social welfare benefits, requires all health insurance to provide testing without co-pays. Addressing its impact on businesses, it states that employees of companies with fewer than 500 employees and government staffers may take up to 12 weeks of protected family and medical leave, including two weeks at full pay, with any additional weeks taken with no less than two-thirds of the employee's usual pay, to either quarantine or seek preventative care and related to coronavirus. Small and mid-sized businesses would receive tax credits (to pay for medical and family leave of up to 100% of the wages they pay out. Employers with fewer than 500 employees are required to provide two weeks of sick leave at full pay for employees who are seeking treatment for the virus. Self-employed individuals would also receive tax credits to receive paid leave. Workers would be eligible for paid sick leave if they have a child whose school or childcare facility is closed due to the coronavirus. These employees are required to receive not less than two-thirds of their regular pay. PRECAUTIONS: In addition to the recommendations in the previous posting, including cleaning the elevator knobs and front door knobs several times daily and having available at entrances and waiting rooms hand sanitizer that has 60% or more alcohol, one medical client is using DC GOLD which is a medical disinfectant that will not harm the finish on the floors, door knobs etc. Bleach products can mar the finish. Cleaning surfaces helps, but even “deep cleaning” will not eliminate the risk. " The second anyone touches a door knob, door, or elevator button, the previous night’s cleaning becomes moot. COVID 19 is a respiratory virus. It is spread via droplets from coughing, sneezing etc., including those suspended in the air. It can survive on inanimate objects for short periods, but that is not felt to be the major mode of transmission. The CDC definition of exposure is 10 minutes of close contact with an infected individual. The best step is hand cleaning with soap and water for 20 seconds or more. While that may seem counterintuitive to what I just said about inanimate surfaces, your hands will touch you face, nose, mouth a hundred times a day and that can readily transmit the virus. Next to washing your hands, stay 6 feet away from those who are sick. Last, it may be wise to inform employees, customers, clients, patients, vendors, etc. to let you know if they have been exposed to the virus and then work with them via teleconferences, phone and other similar remote means. They will appreciate your efforts to protect them. LEGAL ISSUES: I still am concerned what legal issues may come from this. These can arise from principles of negligence or contract. The standard for negligence is to take reasonable care, but for some businesses it may he higher than to take reasonable care. In contracts, the issues may be delaying or excusing performance. If you have business interruption insurance, read you policy and see if a disruption to your business is covered or excluded. If that is in doubt, file a claim. Keep informed, including any legislation action at the state or federal levels. Use updated government guidelines as the standard of care. Keep the focus on what will happen when this passes, as it inevitably will. I have gotten calls from clients asking what they should do regarding the COVAD 19 virus. This virus is unprecedented in modern times and has been declared a pandemic (prevalent over a whole country or the world) by the World Health Organization. It also raises several unresolved legal questions, such as liability for someone contracting the disease and proves it happened at you place of work, inadequate hygienic cleaning of the work site, performance on a contract that is interfered with by the illness. On the liability, the standard is “use reasonable care” on contracts that is a case-by-care matter that depends on the language in the contract.
SCOPE OF PROBLEM: The United States has taken several serious steps, including restrictions on non-US residents entering the United States from the EU, Iran and China and enhanced screen for others and the OPM has given guidelines to agencies. The District of Columbia of Columbia has declared a medical emergency and requests that people postpone or cancel gatherings of 1,000 people or more. It should be taken seriously, but do not panic. GOOD NEWS: The actual infection rate is low for the entire population group and the death rate for those infected is 2%. This is far below the infection and death rate for the other forms of viruses. The disease seems to be transmitting by physical conduct or by persons sneezing etc. within six feet of another person. On the Fairfax County web site there is a good program before the Board of Superviss by health department officials. Having said that, I recommend these actions by businesses:
[JM1] The 7(a) Program is one of the most popular programs of SBA loan guarantees for small businesses that are unable to obtain loans from banks. The 7(a) program lets you get loan amounts (up to $5 million) to fund startup costs, buy equipment and more. Here’s what else you can do with 7(a) funds:
Purchase new land (including construction costs) Repair existing capital Purchase or expand an existing business Refinance existing debt Purchase machinery, furniture, fixtures, supplies or materials However, recently the SBA’s Office of Inspector General published its management advisory that presents the evaluation results of two 7(a) loans as part of our ongoing High Risk 7(a) Loan Review Program. The management advisory is Report 18-23. The objectives of its evaluation were to determine whether (1) high-dollar/early-defaulted 7(a) loans were originated and closed in accordance with the Small Business Administration’s (SBA’s) rules, regulations, policies, and procedures and (2) material deficiencies existed that warrant recovery of guaranteed payments to lenders. The review of two high-dollar/early-defaulted 7(a) loans identified that lenders for both loans did not provide sufficient evidence to support that they originated and closed the loans in accordance with SBA’s requirements. Specifically, the lenders did not provide adequate documentation to substantiate reasonable assurance that the borrowers met requirements for repayment ability, size eligibility, and equity injection. As a result, the lenders’ material noncompliance with SBA requirements while originating and closing the loans resulted in a combined potential loss to SBA of approximately $1.3 million. The report recommended that SBA require the lenders to bring the two loans into compliance or seek recovery of approximately $1.3 million. That could mean the loan will be called on the borrower. While this report addresses the responsibility of the lenders to document loans in accordance with SBA requirements, if the bank’s solution is to seek recovery of the loan proceeds, the ultimate consequence will ultimately fall upon the borrower. John P. McGeehan VSB #9160 McGeehan Pascale PLC |
AuthorJohn P. McGeehan is the managing member of McGeehan Pascale, PLC. His practice focuses on business structures, especially new, emerging, small businesses and not for profit organizations, all business transactions, employment law, real estate, commercial leasing, estate planning and litigation before administrative agencies and all courts. Archives
March 2020
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