One serious challenge in the age of COVID is how, or whether, to hold in-person meetings. We have received a number of questions from clients about their ability to hold virtual meetings for directors and members. While many states have relaxed rules around virtual meetings, nonprofits must continue to be vigilant. In this post I briefly discuss how nonprofits can make sure they are able to hold virtual meetings while complying with applicable law.

Meetings are important!

Board and member meetings serve important functions. Membership meetings allow the members to elect directors and weigh in on important issues facing the nonprofit. Directors’ fiduciary duties continue, notwithstanding the pandemic – their duties include effective oversight of the nonprofit’s activities and management. While some nonprofit activity has ground to a halt, other organizations are busier than ever, being asked to cope with the intersecting challenges of a pandemic, economic recession, and civil rights movement taking place at the same time. Board members cannot put their fiduciary duties on hold because in-person meetings are more difficult. Directors have to find a way to carry out their normal board activities in these abnormal times. Virtual meetings are one tool.

Check your documents!

Before the Board can arrange a virtual board or member meeting, the Board needs to confirm that virtual meetings aren’t prohibited by the nonprofit’s own rules. Any restriction on virtual meetings would typically be spelled out in the organization’s bylaws. Most nonprofits formed in the past ten years will likely have language that expressly allows for virtual meetings, or will be silent on virtual meetings. If your organization has members, check the sections of the bylaws that apply to member meetings and then check the section that deals with board meetings – sometimes there are different rules!  Also, if your bylaws reference Robert’s Rules of Order as rules applicable to the organization, you should also review those rules with respect to the conduct of virtual meetings.

Unfortunately, some bylaws specifically require in-person meetings. If your bylaws specifically require in-person meetings, the organization cannot move forward without making a revision that allows virtual meetings. Bylaws revisions are important to get right procedurally – I recommend checking with counsel to ensure that any bylaws revisions are properly handled.

Check the law!

Assuming the bylaws do not prohibit virtual meetings, you should check applicable state law to see how state law deals with virtual meetings. The law that applies depends on where the nonprofit is legally incorporated. That can differ from where the nonprofit’s headquarters is located or where it conducts its activities. Be sure to check the appropriate state rules (or get your favorite attorney to check for you)!

State laws vary, but in general they permit virtual board meetings if the nonprofit’s bylaws don’t prohibit such meetings. State laws with regards to member meetings tend to favor in-person meetings, but some states permit virtual meetings. Look for other requirements – some state laws specify that all participants in the virtual meeting must be able to hear and be heard throughout the meeting. Other states have different participation requirements for members and directors.

The “hear and be heard” requirement is tricky when dealing with large meetings (especially in the member context). Logistically, many organizations use the “mute” function of a videoconferencing app for large meetings. The mute function guarantees that there are no unexpected or unintentional disruptions during the meeting. However, in order to comply with state law, your participants need to be able to voice their opinions throughout the meeting. If they’re muted by the organizer, your meeting may technically be in violation of state law unless members are able to un-mute themselves. I recommend asking members to voluntarily mute themselves, or if muted by the organizer, allow users to un-mute themselves if they would like to contribute to the conversation. The organizer could also mute participants for the presentation of each agenda item, then the floor can be opened for discussion for each agenda item so all participants have a chance to weigh in on each piece of business before the organizer mutes the participants again.

Some states require a physical location to be designated in the notices for the meetings, even if they are to be held virtually. I generally recommend designating the organization’s principal office, but clarifying that all aspects of the meeting will be virtual.

Finally, check to see if the state has issued special guidance related to meetings. Many state regulators and governors have attempted to loosen restrictions on virtual meetings during COVID, to the extent they are permitted by law. Their guidance may affect whether you need to make any changes to your organization’s bylaws. For instance, New York’s Charities Bureau issued special guidance with regards to virtual meetings early in the pandemic. The notice discussed temporary changes to New York law during the pandemic allowing annual members’ meetings to take place virtually. The state also provided helpful information to guide organizations as they prepare to carry out a virtual meeting for the first time.

Be Careful!

To ensure that your organization doesn’t become too relaxed with its compliance around meetings, I offer the following cautionary tale. Just as directors must continue to observe their fiduciary duties, state regulators are keeping an eye on nonprofits during the pandemic. In July, the Pennsylvania Attorney General filed a lawsuit against Lincoln University’s Board of Trustees for failing to follow statutory and internal policies and procedures with regards to their meetings. While there were a number of other issues,** a large portion of the lawsuit relates to two main problems: (i) a portion of the Board was unable to participate in a Zoom when their microphones were muted by the host; and (ii) the Board allegedly failed to comply with the notice provisions in its own bylaws.

** The main dispute relates to the ability for newly designated Trustees to be seated without approval of the Board’s Nominations Committee. But the AG’s hook to bring the suit related to relatively dry issues of governance compliance.

Conclusion

While boards and members should make use of the tool of virtual meetings, it’s important to do so while complying with the nonprofit’s internal governance and applicable state law. If virtual meetings are new to your organization, it’s a good idea to check in with your legal counsel to make sure you’re doing everything right.

The post Virtual Nonprofit Board and Member Meetings in the Time of COVID appeared first on Perlman & Perlman.

These and other considerations are discussed in my article Avoiding Legal Pitfalls When Re-Opening Your Workplace: What Nonprofits and Businesses Need to Know.

The post Avoiding Legal Pitfalls When Re-Opening Your Workplace appeared first on Perlman & Perlman.

The PPP loan application requires applicants to make the following certification: “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” The Small Business Administration (SBA) has stated that this certification must be made in good faith and take into account the applicant’s “current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.”

The SBA has indicated that loans made over $2 million are likely to be audited.  In that event, there is the possibility that organizations with large endowments which obtained PPP loans of over $2 million end up being subject to civil and criminal penalties.

The SBA has created a safe harbor regarding the certification if the loan was under $2 million.  This means the SBA will assume the certification was made in good faith.  However, organizations with endowments, especially those with seven to ten figure endowments, may run the risk of serious harm to their reputation from constituents and the press.

The post Charities with Large Endowments May Face Government and Public Scrutiny for Taking PPP Loans appeared first on Perlman & Perlman.

This is a good time to audit the protocols your organization recently implemented and ensure that your colleagues recognize and alleviate risks when they are routinely working from home.  Below are some typical risks, with strategies to minimize those risks.

• Unsecured WIFI networks: Home networks (and use of public networks) may be vulnerable to malware or ransomware attacks through their wireless router – Secure home WIFI networks with a robust password and, when possible, avoid use of public networks. 
• Working on unsecured personal devices: Home computers may lack critical security patch management – Employees should only conduct work on their employer-issued computers. Where this is not possible personal laptops should not be allowed to leave the home. 
• Transferring corporate data using personal email accounts: Employees may send sensitive information to their personal email accounts; non-enterprise email accounts usually lack the protections that commercial accounts often have – Advise employees against sending sensitive company data to their personal email accounts, and to permanently delete any corporate data remaining on their email accounts after they return to their normal working arrangement. 
• “Hard-Copy” document management and destruction: Employees may take hard-copy sensitive or confidential materials off-site that they would not otherwise – Advise as to proper destruction and to avoid disposing of documents at home or in a public place without proper cross-cut shredding. 
• Unsecured connections to organizational systems: Absent a secure virtual private network (VPN), employees may attempt to connect to your systems in an insecure manner – Investigate the viability of configuring a VPN for employees accessing your systems.
• Syncing with personal cloud storage accounts: Employees working remotely may use a personal cloud service account to transfer documents or data to and from office that may be less secure – Monitor use and consider creating a list of recommended providers.
• Key vendor relationships: Most organizations rely on third-party vendors to support both internal and external mission-critical services.  These services could be impacted should these companies also ask their employees to work from home – Proactively reach out to these vendors to inquire as to their plans to continue to support your organization and to keep your data safe (as summarized above); also review the contracts in place to be aware of your rights and remedies.

It is important to remember that although COVID-19 has posed challenges in regard to good cyber practices, privacy laws, regulations and expectations still apply. 

For example, the New York State’s Stop Hacks and Improve Electronic Data Security Act (“SHIELD Act”), went into effect on March 21 of this year.   This new law applies to any for profit or nonprofit organization that receives or collects private information about New York residents.  Simply put, if your organization has a website, it’s likely you need to comply with the provisions of the SHIELD Act (and there are substantial fines for noncompliance).  Among the many obligations, the SHIELD Act expects organizations to 1) implement reasonable [administrative, physical and technical] safeguards to protect the security, confidentiality and integrity” of data, and 2) properly vet all third-party service providers and include specific provisions related to cyber-security practices, and 3) designate a “point person” to coordinate your data security program.   Many organizations would have fallen short of these requirements prior to COVID-19 — many more will fall short today as employees continue their work from home.  While meeting these requirements may seem daunting, they are more easily achieved than one might initially think.  I routinely help organizations to achieve compliance with the SHIELD Act and other similar regulations and best practices, and in doing so these organizations become better “stewards” of the personal information they collect on behalf of their employees and donors.

Jon Dartley is an attorney with in-depth knowledge of the laws of data privacy regulation. You may reach him at jon@perlmanandperlman.com. 

The post Is it Time for a Cyber Risk Check-up? appeared first on Perlman & Perlman.

The Governor also directed that, effective at 8 p.m. on Friday, April 17, 2020 any individual who is over age two and able to medically tolerate a face-covering, must cover their nose and mouth with a mask or cloth face-covering when in public and unable to maintain, or when not maintaining, social distance.  This includes but is not limited to, when walking on the sidewalk or in a park, traveling on public transit or in an Uber, Lyft, Via, etc. 

Effective Sunday, March 22, 2020 at 8 p.m., all “non-essential” businesses and nonprofit organizations in New York State were directed to have their workers work from home and everyone was directed to maintain a 6-foot distance from one another in public,  due to the pandemic of COVID-19, the disease caused by the novel coronavirus,[1]  as per an Executive Order from Governor Andrew Cuomo.  Additionally, all non-essential gatherings of any size for any reason were banned.

On Sunday, March 29th, Governor Cuomo extended all school and non-essential business closures to April 15^th.    On April 6th, Governor Cuomo further extended the “PAUSE” Order to April 29th, 2020. The Governor also increased the fine for violating social distancing rules from $500 to $1000.

Further, Governor Cuomo has approved an additional $600 per week in New York State unemployment insurance benefits to be paid, and has extended the unemployment insurance benefits period from 26 weeks to 39 weeks.  As noted previously, New York State is waiving the 7-Day waiting period for Unemployment Insurance benefits for those unemployed due to Coronavirus (COVID-19) closures or quarantines.  New York employers must provide terminated employees with a Record of Employment form to provide to the New York State Department of Labor when they file for unemployment insurance benefits.  Typically, employers provide a completed Record of Employment form to separated employees together with the letter of termination.  New York employers have to provide a letter of termination, stating the date of termination and date that benefits will terminate, within 5 working days of an employee’s separation.

If you have any questions, please contact Lisa M. Brauner, Esq., Head of Employment Law Practice, Perlman & Perlman LLP, lisa@perlmanandperlman.com, 212-889-0575 ext. 207.

The post NY “PAUSE” Extended to April 29th and Extended Unemployment Insurance Benefits appeared first on Perlman & Perlman.

Generally, business interruption insurance protects an organization against lost income due to physical loss or damage to covered property resulting from covered peril. Some business interruption policies include special endorsements that insure against lost income sustained due to the existence of a communicable disease at the insured property or a government order prohibiting the use of the property. Other policies specifically exclude claims based on these circumstances. For example, policies entered into after the SARS outbreak in the early 2000s often exclude coverage for loss due to viral infections or contamination.

The most challenging element of any business interruption claim for COVID-19 related losses will likely be establishing that COVID-19 caused physical loss or damage to the insured property. Some state courts have held that, in certain circumstances, contamination of a property (e.g., due to smoke, noxious fumes, asbestos, etc.) is enough to establish physical loss. Whether contamination of a property by COVID-19 is enough to establish “physical loss or damage” is still an open legal question. Two lawsuits have already been filed by policyholders in California and Louisiana claiming, in part, that COVID-19 contamination at an insured property is a physical loss and, consequently, any resulting business interruption should be covered under the policy. French Laundry Partners, LP dba The French Laundry, et. al. v. Hartford Fire Insurance Company, et. al.;  Cajun Conti, LLC et. al. v Certain Underwriters at Lloyd’s London et. al.

Due to the challenges in establishing coverage for COVID-19 related losses, several members of Congress wrote a letter to insurance industry executives asking insurance companies to cover COVID-19 related losses as business interruption losses. Industry executives responded that “business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19,” setting the stage for further litigation of these claims.

New Jersey is considering a bill that would require insurance companies to cover COVID-19-related losses, including loss of use and occupancy, under business interruption policies in force on the date the Governor of New Jersey declared a state of emergency. Insurance industry groups have actively opposed this legislation. To date, no other state has proposed similar legislation.

Despite uncertainty surrounding coverage for COVID-19 related losses, nonprofits should not wait to notify their insurance company of a potential claim.  Business interruption policies often have very strict notice provisions. Policyholders who wait to file a claim may find coverage is denied because notice was not provided within the time frame outlined in the policy.

When filing a claim, remember to keep accurate records, track expenses, and document any losses meticulously. Insurance carriers typically require policyholders to file a “proof of loss” within a set period (often 60-90 days) after discovery of the loss. The proof of loss will set forth additional details about the claim including, among other things, the policyholder’s interest in the property, the value of the property damaged, and the time and origin of the loss.

The post Business Interruption Insurance for Nonprofits – Is COVID-19 Covered? appeared first on Perlman & Perlman.

 I .  FOR ALL EMPLOYERS REGARDLESS OF STATE

Overview

Families First Coronavirus Response Act:  Following the devastating impact of COVID-19 on the health of American workers and the workplace, on March 18, 2020, the President of the United States signed Families First Coronavirus Response Act, or H.R. 6201 (“FFCRA” or the “Act”) into law.  The FFCRA requires employers with fewer than 500 employees –including nonprofit organizations—to provide their employees with job-protected paid sick leave and/or expanded family and medical leave where they miss work for specified reasons related to COVID-19.

The law took effect on April 1, 2020 and ends on December 31, 2020.  Among other provisions of the FFCRA, most relevant to U.S. employers are three key provisions:

• Emergency Paid Sick Leave Act (EPLSA)
• Emergency Family and Medical Leave Expansion Act, amending the Family and Medical Leave Act of 1993 (EFMLEA)
• Payroll tax credits for employer paid leave payments under EPSLA or EFMLEA

This Alert addresses these three key FFRCA provisions, some specific questions answered by the U.S. Department of Labor in its guidance, and New York State’s own COVID-19 Quarantine Paid Sick Leave Law (“NYS Paid Sick Leave”), also signed into law on March 18, 2020, and the interplay between the two laws. Regulations implementing the FFCRA are expected in early April.

NYS’s Paid Sick Leave Law also took effect on March 18, 2020, and requires employers to provide job-protected sick leave to employees and their minor children who are subject to a quarantine or isolation order due to COVID-19.

U.S. DOL Regulations and Guidance

On April 1, 2020, the U.S. Department of Labor (DOL) issued temporary implementing regulations.

Prior to that, on March 24, 28 and 29, 2020, the U.S. Department of Labor (DOL) supplemented its resources on COVID-19 and the American Workplace by issuing:

• Q & As for employers covered by FFCRA (i.e., those with fewer than 500 employees)
• FACT SHEETS FOR EMPLOYERS AND EMPLOYEES (in English/Spanish)
• MANDATORY FFCRA POSTER AND Q & A ON POSTING: Posting required by April 1^st.
• DOL FIELD ASSISTANCE BULLETIN: Providing employers with temporary non-enforcement of violations of the FFCRA by the DOL through April 17th.

Below are Q & As addressing each of those three provisions of the FFCRA affecting workers at businesses and nonprofit organizations, including some questions and answers by the DOL:

Q: Which Employers are Covered by FFCRA?

A: In general, the paid sick leave and expanded family and medical leave provisions of the FFCRA apply to employers with fewer than 500 employees (for-profit and non-profit alike), and certain public sector employees with at least 1 employee. Most employees of the federal government are covered by Title II of the Family and Medical Leave Act (FMLA), which was not amended by this Act, and are therefore not covered by the expanded family and medical leave provisions of the FFCRA. However, federal employees covered by Title II of the Family and Medical Leave Act are covered by the paid sick leave provision.

Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

Q:  What are FFCRA’s Paid Leave Entitlements?

A: Under the FFCRA, eligible employees are entitled to:

• Up to two weeks (80 hours for full-time employee) fully or partially paid leave, or a part-time employee’s two-week equivalent of paid sick leave based on the higher of their regular rate of pay, or the applicable state or Federal minimum wage, paid at:

– 100% for Qualifying Reasons #1-3 below, up to caps of $511 per day and $5,110 in the aggregate;

– 2/3 for Qualifying Reasons #4 and 6 below, up to $200 daily and $2,000 aggregate for the entire two-week paid leave period; and

– Up to 12 combined weeks of paid sick leave and expanded family and medical leave (paid at 2/3 for Qualifying Reason #5 below (2 weeks’ paid sick leave plus additional 10 weeks’ paid family leave), up to a cap of $200 per day per employee and $12,000 total (over 12-week period).

Employees need not be employed for any particular period of time to be eligible for Emergency Paid Sick Leave Act (EPSLA).  Note, however, that in order to be eligible for leave under the Emergency Family and Medical Leave Expansion Act (EFMLEA) which is an expansion of the federal Family and Medical Leave Act (FMLA), employees must be employed for at least 30 days before their leave request to be eligible for up to an additional 10 weeks of partially paid expanded family and medical leave under EFMLEA for Qualify Reason #5 below.

A part-time employee is entitled to leave for his or her average number of work hours in a two-week period.

Q: What are the Qualifying Reasons for Paid Leave Related to COVID-19?

A: An employee is entitled to take leave related to COVID-19 if the employee is unable to work (including telework) because:

(1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.

(2) The employee has been advised by a health care 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 above in subparagraph (1) or has been advised as described in paragraph (2).

(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 child care 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.

Where the paid sick leave is being used because of Qualifying Reasons #1, 2 or 3, above, the employee is eligible for his/her regular rate of pay, up to a cap of $200 per day and $2,000 in the aggregate.

Q:  How much will an employee be paid while taking paid sick leave or expanded family and medical leave under the FFCRA?

A:  The amount depends on an employee’s normal schedule as well as why the employee is taking leave.

1. If an employee is taking paid sick leave because they are unable to work or telework due to a need for leave because they (1) are subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (2) have been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (3) are experiencing symptoms of COVID-19 and are seeking medical diagnosis, he/she will receive for each applicable hour the greater of their regular rate of pay, the federal minimum wage in effect under the FLSA, or the applicable State or local minimum wage. An eligible employee is entitled to a maximum of $511 per day, or $5,110 total over the entire paid sick leave period.

2. If an employee is taking paid sick leave for reasons above in #4 and 6 (i.e., specifically because he/she is: (a) caring for an individual who is: (1) subject to a Federal, State, or local quarantine or isolation order related to COVID-19 or (2) an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or (3) experiencing any other substantially-similar condition that may arise, as specified by the Secretary of Health and Human Services), the employee is entitled to compensation at 2/3 of the employee’s regular rate of pay, or federal or State minimum wage. Under these circumstances, the employee is subject to a maximum of $200 per day, or $2,000 over the entire two-weeks.

3. Similarly if an employee is taking expanded family and medical leave under Emergency Family and Medical Leave Expansion Act (EFMLEA) as they are unable to work because they are caring for their child whose school or childcare place is closed, or child care provider is unavailable, due to COVID-19 related reasons, the employee gets up to 12 weeks of paid sick leave and expanded family and medical leave combined.

The first ten (10) days of that EFMLEA leave period are unpaid (or the employee may substitute any accrued vacation leave, personal leave, or medical or sick leave under an employer’s policy, or if the leave also qualifies for paid sick leave under EPSLA, the employee can get those first 10 days paid under EPSLA’s terms), but the remaining leave will be paid at an amount no less than 2/3 of the employee’s regular rate of pay for hours he/she would be normally scheduled to work.   An employee will not receive more than $200 per day or $10,000 for the remaining weeks.

Q:  If an employee takes paid sick leave under the Emergency Paid Sick Leave Act (EPSLA), does that count against other types of paid sick leave to which an employee is entitled under State or local law, or against the employer’s own sick leave policy?

A:  No. Paid sick leave under the Emergency Paid Sick Leave Act (EPSLA) is in addition to other leave provided under Federal, State, or local law; an applicable collective bargaining agreement; or an employer’s existing company policy.

Q:  If an employee is able to telework while caring for their child, are they still entitled to paid sick leave or expanded family and medical leave?

A:  No.  To the extent an employee is able to telework while caring for their child, paid sick leave and expanded family and medical leave is not available.

Q:  Does the employee have to provide notice of the need for sick/family leave and supporting documentation?

A:  Yes,  it will be reasonable for an employer to require notice as soon as practicable after the first workday is missed, and to require that employees provide oral notice and sufficient information for an employer to determine whether the requested leave is covered by the FFCRA. It is reasonable for the employer to require the employee to comply with the employer’s usual notice procedures and requirements, absent unusual circumstances.

An employer may require an employee to provide supporting documentation for their request to take paid sick leave including the qualifying reason for the leave, dates for the leave, and a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason.   An employee may need to provide additional supporting documentation depending on the qualifying reason for the leave.  For paid family leave, for instance, where leave is sought because a child’s school is closed, the employer may require  a notice that has been posted on a government, school, or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care, or child care provider.   The employer must retain this documentation in support of leave under the FFCRA for four years.

The employee may also be required by the employer to provide the employer with supporting documentation for paid sick and expanded family and medical leave as specified in applicable IRS forms, instructions, and information.

Job Restoration

Q:  Does FFCRA guarantee job restoration for employees? 

 A: Yes, but with conditions if the employer has fewer than 25 or more employees.  The FMLA Expansion Act is an amendment to the FMLA which provides job-protected leave to employees. In most instances, an employee  is entitled to be restored to the same or an equivalent position upon return from paid sick leave or expanded family and medical leave.

However, an employer may also refuse to return an employee to work in the same position if he/she is a highly compensated “key” employee as defined under the FMLA, or if the employer has fewer than 25 employees, and the employee took leave to care for his/her own son or daughter whose school or place of care was closed, or whose child care provider was unavailable, and all four of the following hardship conditions exist:

• the position no longer exists due to economic or operating conditions that affect employment and due to COVID-19 related reasons during the period of the employee’s leave;
• the employer made reasonable efforts to restore employee to the same or an equivalent position;
• the employer makes reasonable efforts to contact the employee if an equivalent position becomes available; and
• the employer continues to make reasonable efforts to contact the employee for one year beginning either on the date the leave related to COVID-19 reasons concludes or the date 12 weeks after the employee’s leave began, whichever is earlier.

Further, an employee is not protected from employment actions, such as layoffs, that would have affected the employee regardless of whether the employee took leave. The employer can lawfully lay off employees for legitimate business reasons, such as the closure of the worksites so long as the employer can demonstrate that the employee would have been laid off even if he/she had not taken leave.

Exemptions

 Q:        Are There Any Exemptions Under FFCRA?

A:  The U.S. Department of Labor may issue regulations to (i) exclude certain health care providers and emergency responders from paid leave benefits, and (ii) exempt small businesses with fewer than 50 employees from the paid leave requirements “when the imposition of such requirements would jeopardize the viability of the business as a going concern.”

Q:  When does the small business/small nonprofit exemption apply?

A:  An employer, including a religious or nonprofit organization, with fewer than 50 employees is exempt from providing:  (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern.

Furlough, Layoff, Termination

Q:  If an employer closes its worksite on or after April 1, 2020 (the effective date of the FFCRA), but before an employee goes out on leave, can the employee still get paid sick leave and/or expanded family and medical leave?

A:  No. If an employer closes after the FFCRA’s effective date (even if the employee requested leave prior to the closure), the employee will not get paid sick leave or expanded family and medical leave, but may be eligible for unemployment insurance benefits.

Q:  If an employer is open, but furloughs an employee on or after April 1, 2020 (the effective date of the FFCRA), can that employee receive paid sick leave or expanded family and medical leave?

A:  No. If an employer furloughs an employee because it does not have enough work for that employee, the employee is not entitled to then take paid sick leave or expanded family and medical leave, but the employee may be eligible for unemployment insurance benefits.

Reimbursement for Paid Leave/Payroll Tax Credits

 Q:  Is the Government Going to Help with Costs of Mandatory Paid Leave That Employers are Being Forced to Pay During this Time of Financial Hardship? 

 A:  Yes.  FFCRA provides covered employers (both nonprofit and for-profit) with refundable payroll tax credits that reimburse them for their paid sick and family leave payments under the law.  The credits are applicable to the employer’s portion of Social Security taxes for 100% of the qualified sick leave and family leave wages paid by the employer in accordance with the law, up to the appropriate per diem and aggregate payment caps.  Covered employers may seek reimbursement for these tax credits after employer pays the paid leave (whether it’s the paid sick or paid family leave) when filing their quarterly returns (IRS Form 941).  Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.

The IRS has issued guidance and an FAQ concerning the tax credits.  Under IRS guidance, the employment tax credits under FFCRA are available for wages paid for the period between April 1, 2020, and December 31, 2020.  (Note, however, that SBA loans under the Paycheck Protection Program may not be used to pay for leave under the FFCRA).

Penalties and Enforcement

Q:  What are the penalties for non-compliance with the Act?

 A:  Employers in violation of the EPSLA or EFLMEA, including retaliation, will be subject to penalties and enforcement by U.S. DOL’s Wage and Hour Division.  Employees may file complaints with the US DOL for violations of those laws.  With respect to violation of the EFMLEA, an employee may have a private right of action against the employer if they would otherwise be protected by the FMLA.

Q:  Is there a safe-harbor period for employers before enforcement?

 A:  Yes. On March 26, 2020, DOL issued a Field Assistance Bulletin, stating that it would not enforce the law against employers through April 17^th (30 days from the Act’s passage) where the employer has acted reasonably and in good faith to comply with the Act.

II.  FOR NEW YORK STATE EMPLOYERS

New York State Emergency COVID-19 Quarantine Paid Leave Law

On March 18, 2020, Governor Cuomo signed into law New York’s Emergency COVID-19 Paid Sick Leave law (NY Paid Sick Leave), on the same day as the FFCRA was enacted.  Unlike FFCRA which takes effect on April 1, NY Paid Sick Leave Law took effect on March 18, 2020.  Notably, NY Paid Sick Leave Law took effect before the Governor issued the “NY on PAUSE.”

Below are Q & A addressing the key components of New York State’s Emergency COVID-19 Quarantine Paid Sick Leave/Paid Family Leave law and addressing interplay with FFCRA:

Q:  Who Is Eligible for New York State’s Emergency COVID-19 Quarantine Paid Sick Leave/Paid Family Leave (NYS Paid Sick Leave Law)?

A:  Employees in New York or their minor dependent child–who are subject to an order of mandatory or precautionary quarantine or isolation due to COVID-19–may be eligible for a certain amount of job-protected sick leave and compensation through a combination of disability and paid family leave benefits, for the duration of the quarantine order.  To be eligible, a full-time employee must have regularly worked 20 hours or more per week and must have been in employment for at least 26 consecutive weeks with that employer.  A part-time employee who regularly works less than 20 hours per week must have worked 175 days to be eligible. The State guidance on the leave makes clear that employees are not eligible for this leave if they can work remotely or through other means.

Q:  If an Employee is Asymptomatic or Not Diagnosed with a Medical Condition and Is Physically Able to Work, Are They Eligible for These Benefits?

A:  No.   Benefits do not apply in cases where an employee is deemed asymptomatic or has not yet been diagnosed with any medical condition and is physically able to work while under a mandatory or precautionary order of quarantine or isolation, whether through remote access or other similar means. Benefits are also not available to employees who voluntarily traveled to a country with a level 2 or 3 health notice from the Centers for Disease Control and who were provided notice of the travel health notice and knew about this restriction in the new law.

Q:  How Does This Apply to A Minor Dependent Child?

A:  If an employee’s minor dependent child is under a mandatory or precautionary order of quarantine or isolation issued by the state of New York, the New York State Department of Health, local board of health, or any government entity duly authorized to issue such order due to COVID-19, an employee may be eligible to take Paid Family Leave to care for them. This benefit is not available to an employee able to work through remote access or other means.

Q:  How much paid leave is an eligible employee entitled to?

A: The amount of job-protected paid leave depends on employer size:

– Employers with 10 or < employees (as of 1/1/20):   New York employers already provide statutory short-term disability and Paid Family Leave benefits to their employees. This requirement has not changed with the new rules related to Coronavirus/COVID-19. Those insurance policies will provide compensation to employees who are under quarantine.  Employees complete the same form as they would if they would ordinarily be applying for paid family leave benefits.

– Employers with 11-99 employees, or employers with < 10 employees (as of January 1, 2020) and annual income > $1 million in 2019:  Employers must provide employees with at least 5 days of paid sick leave while on quarantine. If employees do not have more sick leave while on quarantine, an employer should help them apply with the employer’s Paid Family Leave and disability insurance carrier (the maximum paid family leave and disability benefit is $2,884.62 per week). Employees may not be required to use any accrued sick leave that their organization provides, but may choose to use any paid time off after exhausting the State-mandated five days of paid sick leave.

Eligible employees make a request for leave for themselves or their minor child due to COVID-19 directly to their employer who then provides them with applicable forms.

– Employers with 100 or more employees as of January 1, 2020 and public employers:  Employers must provide employees with at least 14 days of paid sick leave.   Public employers (for example, town, public school, public college or university, district, county, city, village, fire district and state), must provide at least 14 days of paid sick leave, regardless of how many employees they have.

Q:  Is There Job Protection?

A:  Yes.  Employers must reinstate the employee to the same or a comparable position, upon returning from leave, and like FFCRA, retaliation is prohibited.

Q: If An Eligible Employee Already Has Accrued Paid Sick Leave Under NYC Paid Sick Law or Under Its Own Employer Policy, Must An Employer Also Still Provide COVID-19 NY Paid Sick Leave?

A:  Yes.  COVID-19 NY Paid Sick Leave is in addition to any other paid sick leave.

Interplay Between FFCRA and NYS Paid Sick Leave Law

Q: If an Employee is Eligible for Both FFCRA and COVID-19 NYS Paid Leave, Which Leave Law Applies?

A:  Where the federal and state laws overlap on mandatory quarantine, the federal law applies. State law applies to the extent it gives employees additional benefits beyond what federal law allows.

Q:  How Do the FFCRA and NYS Paid Sick Leave Law Overlap?

A: The federal Emergency Paid Sick Leave Act and EFMLEA  (expanded FMLA) and NYS Paid Sick Leave Law overlap when the reason for leave is due to an employee being subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19, as this is a reason for paid leave supported by both federal and state law.

For example, an employee works for an employer with 60 employees and is subject to a mandatory order of quarantine or isolation due to COVID-19.  Under the federal Emergency Paid Sick Leave Law, this employee is entitled to 80 hours of paid sick leave at their regular rate of pay, capped at $511 per day and $5,110 in the aggregate.  Under the NY Paid Sick Leave Law, based on employer size, this employee is entitled to 5 calendar days of paid sick leave at their regular rate of pay, and may also be eligible for disability and paid family leave benefits after the 5 days of paid leave, with a maximum of paid family leave and disability benefits payable at $2,884.62.

Thus, to the extent the employee is eligible for benefits greater than the 80 hours of paid sick leave from the New York Paid Sick Leave Law through disability and paid family leave benefits under New York law, the employee may still take advantage of those State law benefits.

Q:  What are Penalties for Non-Compliance with COVID-19 NYS Paid Sick Leave Law?

A:  If an employer does not provide the required COVID-19 paid leave under New York State’s Paid Sick Leave Law, if the employer requires employees to come to work even if the employer is not an essential business, if the employer requires employees to come to work even if they are performing business operations that are not necessary to support essential services, or is not permitting employees to telecommute or work from home where their job responsibilities would permit them to do so, an employee may file a complaint with the NYS Department of Labor who can enforce the law.

Q:  Is There Additional Guidance?

A:  For employer guidance on Emergency COVID-19 NY Paid Leave, click here and fact sheet here; or the State’s FAQ about the law, click here; and here, for guidance for New York City employers concerning COVID-19 laws.

 III.  What Should Employers Do Now?

• Prepare an emergency leave policy addressing the emergency paid sick/family and extended FMLA leaves and ensure that it aligns with existing paid time off/leave policies as well as any mandated paid leaves under State or local laws
• Communicate the updated policies and employee rights under these laws to all staff
• Inform employees how to apply for such leaves and timely respond to employee requests for leave
• Budget for the costs of paid leave for the remainder of the year
• Anticipate how staffing will be addressed to cover those employees on such leave.
• Confer with legal counsel on addressing these updates.

The information provided does not constitute legal advice, and is not intended to substitute for legal counsel.

If you have questions about the FFCRA and its exemptions, or need assistance preparing emergency paid leave policy and other policies related to COVID-19, please contact Lisa Brauner, Esq., Head of Perlman & Perlman LLP’s Employment Law Department, 212-889-0575, ext. 207, lisa@perlmanandperlman.com.  Our firm is here for you during this crisis and doing everything we can to support and guide you.

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In response to the dilemma faced by many charities during the 2008 recession, which had limited operating income, but large sums in endowments, 47 states adopted some form of the Uniform Prudent Management of Institutional Funds Act (UPMIFA) which, amongst other things, allows charities to draw on the principal of endowment funds under certain circumstances.

Under New York’s version of the uniform law, the New York Prudent Management of Institutional Funds Act (NYPMIFA), institutions can, under certain circumstances, spend endowment funds below their original gift amount (“historic dollar value”) without court approval or Attorney General review, if the institution’s board of directors concludes that such spending is prudent. More specifically, NYPMIFA requires that boards, when deciding whether to appropriate from an endowment fund, must act “in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances,” and must consider, if relevant, the following factors:

1. the duration and preservation of the endowment fund;
2. the purposes of the institution and the endowment fund;
3. general economic conditions;
4. the possible effect of inflation or deflation;
5. the expected total return from income and the appreciation of investments;
6. other resources of the institution;
7. where appropriate and circumstances would otherwise warrant, alternatives to expenditure of the endowment fund, giving due consideration to the effect that such alternatives may have on the institution; and
8. the investment policy of the institution.

There are situations where an institution cannot spend below historic value without court approval, including when donors specifically explicitly prohibit this type of spending in the gift instrument.

Lastly, an institution may lift or modify a donor-imposed restriction on the management, investment, or purpose of an institutional fund if the fund is less than $100,000 in value and has been in existence for more than 20 years. If an institution determines that such a restriction is unlawful, impracticable, impossible to achieve, or wasteful, the institution may release or modify the restriction, in whole or part, without court approval, after giving written notice to the Attorney General, who then has 90 days to object. If the Attorney General does not notify the institution within 90 days, the institution may proceed with the release or modification.

The post Charities’ Response to COVID-19: A Guide to Using Endowment Funds for Emergency Purposes appeared first on Perlman & Perlman.

1. Can my 501(c)(3) charitable organization conduct an emergency hardship assistance program, even if such assistance was not part of the stated purposes of my organization when it applied for tax-exempt status with the IRS?

With respect to federal tax law considerations, 501(c)(3) organizations do not have to obtain pre-approval from the IRS to provide emergency hardship or disaster relief assistance, including fundraising to make grants for such purpose.  However, if a public charity carries on emergency hardship and disaster relief assistance as one of its three largest programs, it will need to describe those services in the organization’s annual Form 990 filed with the IRS. The organization may also need to report grants and other assistance given to organizations or individuals within and outside the U.S., and noncash contributions received, such as donations of food or other supplies to distribute to families in need.

With respect to state law considerations, organizations should review their statement of legal purposes, as documented in their certificate of incorporation filed with the state in which they are incorporated.  Some organizations draft their statement of purpose very broadly to include any charitable purposes and activities that are permissible under section 501(c)(3) of the Internal Revenue Code (which would include operation of a disaster or emergency hardship assistance program).  However, some organizations draft their statement of purposes narrowly.  If the organization’s legal purposes are drafted narrowly, and would not include the operation of a disaster or emergency hardship assistance program, the organization may need to amend the purposes in its certificate of incorporation to conduct the program.  In addition, organizations should use donations that were previously received for a different charitable purpose for those specified purposes only, and only apply new donations solicited for purposes that include disaster or emergency hardship assistance for that purpose.

2. Can my organization solicit donations to support specific individuals or families in need?

An emergency hardship or disaster relief assistance program cannot be designed to serve any particular individuals, but rather, must be designed to assist a “charitable class.” An assistance program serves a “charitable class” if the group of eligible beneficiaries is either: (1) large enough that the potential beneficiaries cannot be individually identified, or (2) sufficiently indefinite such that the entire community benefits from the charitable assistance.

If the group of eligible beneficiaries is limited to a smaller group, an assistance program will still be considered to benefit a charitable class if the group of beneficiaries is indefinite. For the group of beneficiaries to be indefinite, the program should be open-ended such that the total number of potential members making up the charitable class cannot be counted or identified. For example, if a financial assistance program is designed to benefit families of alumni from a particular college in connection with a current disaster or emergency as well as future disasters and emergencies, the program would be viewed as serving an indefinite charitable class.

3. What kind of documentation must my organization maintain as part of an emergency assistance program?

In general, organizations must maintain adequate records to show that the organization’s assistance, whether in the form of tangible goods, services, or cash assistance, furthered charitable purposes, and that the recipients are needy or distressed.

Organizations providing emergency short-term assistance (e.g., hot food, clothing) to individuals in need of immediate assistance with basic necessities are not required to undertake a needs assessment. The organization should document the criteria for disbursing assistance (e.g., sudden loss of home and/or belongings), date/place of distribution, estimated number of individuals assisted, the charitable purpose intended to be accomplished, and the cost of the aid.

For longer-term assistance, organizations must maintain more detailed records to demonstrate that the organization has conducted an appropriate needs assessment which confirms that the individuals or families are financially in need. Being in financial need does not require individuals to be totally destitute; it is sufficient if they simply lack the resources to obtain basic necessities. An organization’s decision to provide financial assistance should be based on a reasonable determination that the individual’s financial resources, such as available cash, expenses, other financial obligations, assets that can be disposed of without causing further personal hardship, and anticipated cash flow (income, insurance proceeds, etc.), will be insufficient to provide for timely coverage of his/her existing obligations and basic needs.  Longer term financial assistance may include assistance with rent, mortgage payments or car loans to prevent loss of a primary home, utilities payments, and childcare and tuition costs for children.

Documentation relating to long-term assistance should generally include:

• a complete description of the assistance provided,
• costs associated with providing the assistance,
• the purpose for which the aid was given,
• the charity’s objective criteria for disbursing assistance under each program,
• how the recipients were selected,
• the name, address, and amount distributed to each recipient,
• any relationship between a recipient and officers, directors, or key employees of, orsubstantial contributors to, the charitable organization, and,
• the composition of the selection committee approving the assistance.

4. How do we determine the appropriate amount of assistance to provide to families as part of our financial assistance program?

An organization’s decision about how much to distribute to individuals and families in need must be based on an objective evaluation of the individual’s needs at the time the grant is made.  The amount needed to relieve financial hardship and distress should be based on all the facts and circumstances of the individual’s situation and the charity’s resources.  Making an individual whole on account of a disaster or emergency hardship does not, necessarily, further charitable purposes. IRS guidance cautions that an outright transfer of funds based solely on an individual’s involvement in a disaster or without regard to meeting the individual’s particular distress or financial needs would result in private benefit, which is impermissible. Similarly, grants to replace lost income rather than to meet basic living needs would generally be viewed as serving personal and private interests, which is also impermissible.  Adequate documentation should be maintained to justify that the individual grants are appropriate in amount and further charitable purposes.

5. Will recipients of financial hardship funds need to pay taxes on the amounts received from a 501(c)(3) tax-exempt organization?

Financial assistance that a 501(c)(3) tax-exempt organization gives to individuals or families in need for emergency hardship situations are excludible from the recipient’s gross income as a gift under Section 102 of the Internal Revenue Code.

6. Can a public charity, private foundation, or donor-advised fund established by a company provide disaster or emergency hardship assistance to the company’s employees and their families as a result of COVID-19?

Companies can provide disaster or emergency hardship assistance to employees and their families in connection with the COVID-19 outbreak through these charitable vehicles, but as further discussed below, need to structure their programs in ways that do not provide impermissible private benefit to the employer.

Employer-sponsored public charities, which typically receive broad financial report from the general public and are subject to greater transparency requirements, may provide disaster or emergency hardship assistance to their employees and their family members, as long as a related employee does not exercise excessive control over the organization.  Typically, a significant portion of the board of such employer-sponsored public charities are individuals who are not in a position to exercise substantial influence over the affairs of the employer.

Employer-sponsored donor-advised-funds (DAFs) and private foundations are only allowed to provide assistance to employees and their family members if they’ve been affected by a “qualified disaster.” COVID-19 was officially declared a “qualified disaster” on March 13, 2020, so employer-sponsored DAFs and private foundations can provide payments to employees and their family members as long as there are safeguards in place to make sure the payments are for charitable purposes.

Employer-sponsored assistance programs should follow the program requirements discussed above (e.g., support of a charitable class, selection of recipients based on an objective determination of need, and adequate documentation of recipients’ need for assistance). In addition, the selection of beneficiaries must be made using either an independent selection committee or adequate substitute procedures to ensure that any benefit to the employer is incidental and tenuous. The selection committee is considered “independent” if a majority of the members of the committee are not in a position to exercise substantial influence over the affairs of the employer.  Pursuant to statutory restrictions applicable to donor-advised funds, no payment may be made from the DAF to or for the benefit of any director, officer, or trustee of the sponsoring public charity, or members of the fund’s selection committee.

Additional information about providing disaster relief assistance through charitable organizations, including employer-sponsored assistance programs, is available in IRS Publication 3833.

The information provided does not constitute legal advice, and is not intended to substitute for legal counsel.

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I. Governor’s Executive Order

 Effective Sunday, March 22, 2020 at 8 p.m., all businesses and nonprofit organizations were required to have all employees in New York staying home/working remotely due to the pandemic of COVID-19, the disease caused by the novel coronavirus,[1] except for those employees providing “essential services,”* as per an Executive Order from Governor Andrew Cuomo.  All non-essential businesses and schools in New York State must remain closed.  Additionally, all non-essential gatherings of any size for any reason are banned.[2] On Sunday, March 29th, Governor Cuomo extended all school and non-essential business closures to April 15th.

Empire State Development also issued guidance* identifying which types of for-profits businesses and non-profit organizations are considered to be providing “essential services” as per Governor Cuomo’s Executive Order and could remain open (other States should take note of the terms as well as you may be next). Exemptions from the order include: shipping, media, warehousing, grocery and food production, pharmacies, healthcare providers, utilities, banks and related financial institutions and any business with a single employee/occupant (i.e., gas station).

How Can I Seek an “Essential Function” Designation?  Notably, certain businesses and nonprofits deemed “non-essential” may request a designation from NYS State to be designated an “essential function” by completing an online form at Empire State Development’s website or emailing: covid19designations@esd.ny.gov.

Note, however, that the following may not seek an “essential function” designation:  Any business that only has a single occupant/employee (i.e. gas station) as that has already been deemed exempt and need not submit a request to be designated as an essential business; businesses ordered to close on Monday, March 15, 2020 under the restrictions on any gathering with 50 or more participants, including but not limited to, bars, restaurants, gyms, movie theaters, casinos, auditoriums, concerts, conferences, worship services, sporting events, and physical fitness centers.

Is There Any Government Guidance on the Executive Order?

 Yes, Empire State Development has issued an FAQ for businesses and nonprofit organizations.

It includes answers to common questions (excerpted here) like:

QUESTION: If my business is determined to be an “Essential Business” are all employees permitted to work at the business location?

ANSWER: No. Only those employees that are needed to provide the products and services that are essential to provide such products or services are permitted to work at the business location. In addition, Essential Businesses are still required to utilize telecommuting or work from home procedures to the maximum extent possible. Those employees who do report to work must adhere to the requirements set forth in the Department of Health guidelines, which can be found at https://coronavirus.health.ny.gov/home.

QUESTION: What if my business is not essential, but a person must pick up the mail or perform a similar routine function each day?

ANSWER: A single person attending a non-essential closed business temporarily to perform a specific task is permitted so long as they will not be in contact with other people.

Further information for New Yorkers can be found at: https://esd.ny.gov/covid-19-help

New York State’s Office of Children and Family Services has also issued guidance to a variety of different categories of non-profit organizations during New York’s “Pause.” including nonprofit organizations providing social services, during New York’s “Pause.”

II. What Else Should Employers Consider in the Face of the “New York Pause?”

 What If We Need to Close our Office and Lay off Our Employees; What Do We Do When We Lay off Employees?

       A.  NY Termination Requirements: In New York, when an organization terminates an employee, it must provide a written notice of termination containing the termination date and date any health insurance coverage so that the employee can file for unemployment insurance benefits, and provide COBRA paperwork.

      B. WARN Acts: Some organizations will also need to consider New York’s Worker Adjustment and Retraining Notification Act (WARN).  In fact, NYS Department of Labor has made clear on its website that an employer’s 90-day New York WARN notice obligations in the event of a “plant closing, mass layoff or covered reduction in work hours”– as defined by the regulations– are not suspended because of COVID-19.  Where a covered organization is forced to close unexpectedly, it still must provide a WARN notice as soon as possible and identify the circumstances that required the closure. The federal WARN Act which applies to employers with 100 or more employees and requires 60 days’ advance notice may also be applicable depending on the particular facts.

      C. Unemployment Insurance (UI) Benefits: There is no waiting period in New York for claiming unemployment insurance benefits related to COVID-19 (typically, there’s a 7-day waiting period after separation before filing for UI benefits).   Additionally, the U.S. Department of Labor issued new guidance providing flexibility to States in administering their UI programs because of the COVID-19 outbreak. For example, federal law allows states to pay benefits where: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; and (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.

If We Reduce Our Full-Time Staff to Part-Time, May They Collect Unemployment Insurance?

Maybe.  It will depend on how many hours they work and how much they are earning. New York State has a Shared Work Program for employers who may want to reduce the number of hours worked for employees but still allow those employees to be able to continue their health insurance benefits and collect unemployment insurance.

What Kinds of Things Should We Be Considering with Respect to Business Continuity and Logistics of Dealing with The Closure of Our Office During the “NY PAUSE”?

 There are a whole host of issues—logistical and practical—to consider when shutting the office temporarily for an indefinite period of time and working remotely.  Some include:

1. Does our business continuity plan address contingencies for pandemics?
2. What are alternative means of servicing clients?
3. How will our budget need to be modified?
4. Have we anticipated/mapped out different scenarios and consequences depending on longevity of closure by the Governor, and what, if any, staffing/personnel/restructuring changes need to be made, even if on a temporary basis, depending on how long the office shutdown is in place?
5. Insurance/Financial Assistance: Do we have business interruption insurance or other insurance that will cover any losses?  Do we need a line of credit from a bank, disaster relief loan, disaster grant (for nonprofits)?
6. How will we process payroll, send out invoices, receive our mail (and any checks)?
7. How will we access files if our landlord closes the building?
8. How will we stay connected with our clients/stakeholders/donors?
9. Will there be a rent suspension by landlords during this period we are unable to use our space due to the “NY Pause”?
10. Remote working:
    • how data will be kept secure with all of your employees working remotely: See tips here: Consider https://www.perlmanandperlman.com/covid-19-cyber-readiness-good-practices-remote-work/
    • Implement and enforce remote work policy and employee agreement
    • Implement timekeeping system to ensure nonexempt employees are tracking and reporting hours worked each day, and advance approval for overtime; prohibit off-the-clock work; consider whether to implement time-tracking software
    • Determine whether worker’s compensation policy covers office workers working remotely
    • Consider how productivity and creativity will be maintained with all staff working remotely and how you will keep employees not used to working remotely, motivated and focused; schedule regular video-conference sessions and other means to keep team connected.
11. Consider if you need to postpone or cancel events and review force majeure provisions of your contracts with event hosts to determine rights under the contract. (See more here).

III.     What Should New York Employers Do Now? 

• Institute business contingency plans in view of the Governor’s “PAUSE”
• Review applicable insurance policies for coverage
• Implement temporary remote work-from-home policies (and employee agreements) (see our earlier blog on COVID-19 and the workplace for more on that topic)
• Consider short-term and long-term staffing plans, reduction of hours, layoffs, including preparing for staff absences due to NY’s COVID-19 Quarantine Leave Law and federal Families First Coronavirus Response Act
• Post mandatory FFCRA poster by April 1, 2020 in the workplace, through email and organization intranet for those working remotely. On March 25, 2020, the U.S. Department of Labor issued a Families First Coronavirus Response Act poster explaining employee paid sick leave and family leave rights and employer responsibilities under the law.
• Confer with your legal counsel to review updated policies and agreements and any actions you are planning to take with respect to your staff during this period to ensure they comply with these new laws as well as existing laws like WARN (and State mini-WARN statutes), FMLA, ADA, wage/hour laws, and laws prohibiting disability discrimination, sex and/or caregiver discrimination.
• Consider options for financial assistance being offered through various legislation, disaster relief loans and/or grants for nonprofits when needed.

 You can subscribe to NYS’s website for updates on COVID-19 here and for NYC-specific guidance, you can check here.

If you have questions, need assistance determining whether you are an “essential business” in New York, need to prepare a temporary remote work policy or update your policies related to COVID-19, please contact Lisa Brauner, Esq., Head of Perlman & Perlman LLP’s Employment Law Department, 212-889-0575, lisa@perlmanandperlman.com.  Our firm is here for you during this crisis and doing everything we can to support and guide you. (The above does not constitute legal advice and you should confer with your attorney for legal advice on your particular situation).

[1] As of the afternoon of March 29, 2020, in New York State–the pandemic’s epicenter in the United States, there were 59,513 confirmed COVID-19 cases and 965 deaths.  New York now has the dubious distinction of having half of all COVID-19 confirmed cases in the U.S., and 5% of all cases worldwide. As of March 29th, there were 33,768 confirmed COVID-19 cases and at least 192 deaths in New York City alone.  As of March 29th, in the U.S., there are 135, 502 confirmed COVID-19 cases and 2,384 COVID-19 related deaths.  The CDC has now issued an advisory to NY, NJ and Connecticut residents not to travel domestically in light of the doubling of the U.S. death toll in just two days.

[2] Governor Cuomo’s Executive Order also:

• Bans all non-essential gatherings of individuals of any size for any reason;
• Enacts Matilda’s Law to protect New Yorkers age 70+ and those with compromised immune systems, requiring them to: Remain indoors, only go outside for solitary exercise; pre-screen all visitors by taking their temperature; wear a mask in the presence of others and stay at least 6 feet from others; not take public transportation unless urgent and absolutely necessary.
• Requires closing of all barbershops, hair salons, tattoo or piercing salons, nail salons, hair removal services and related personal care services, effective Saturday, March 21 at 8:00PM.
• Places a 90-day moratorium on evictions for residential and commercial tenants.
• Closes all casinos, gyms, theaters, retail shopping malls, amusement parks and bowling alleys until further notice. Bars and restaurants are closed, but takeout can be ordered during the period of closure.

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