Last updated on April 3, 2020.
As each day passes, we witness the coronavirus pandemic alter our way of life—cases rise, businesses close, and lives and families are impacted. It’s difficult to keep up with the news, and the influx of information could easily lead to overwhelm and analysis paralysis. However, for HR leaders, it’s crucial to take all the variables into account and start creating a business continuity plan as best as you can.
So below, we’ve put together a coronavirus plan of action for HR leaders to guide you through several key actions and decisions you will likely have to make in the next few weeks. We’ve listed them in a rough chronological order, starting with the earliest items you may have to act on and ending with the decisions you may face later but can prepare for, today.
This guide includes information on the following policies:
- Families First Coronavirus Response Act (FFCRA)
- Coronavirus Preparedness and Response Supplemental Appropriations Act
- Paycheck Protection Program
- Worker Adjustment and Retraining Notification Act (WARN)
- Pandemic Unemployment Assistance (PUA)
We will continue to update this page as more information trickles in. For the latest content on how to approach the coronavirus from an HR perspective, subscribe to our weekly newsletter here.
Create a coronavirus crisis team.
First things first, if your company does not already have a core crisis response team, it would be advisable to create one now. The team should be cross-functional and include senior executives as well as department heads. This will help streamline the process and action points in dealing with the current outbreak. Since there are reports that the virus may potentially come back stronger next year, the crisis team should meet regularly to discuss and establish business continuity and human resource policies for coronavirus now and for the future.
Evaluate sick and employee leave policies.
Now is also the time to review your paid-time-off practices and clearly explain to employees the benefits and options they are getting at this time. Your policy should take into account the Families First Coronavirus Response Act (FFCRA) which applies from April 1, 2020 through December 31, 2020. The new law requires employers of fewer than 500 employees to provide 10 days of paid sick leave at the employee’s regular rate of pay to quarantine or seek treatment related to COVID-19, or 10 days of paid sick leave at two-thirds of the employee’s usual pay to care for an individual in quarantine or a child whose school or child care is closed or unavailable due to COVID-19-related reasons. The FFCRA places a cap of $511 per day and $5,110 in the aggregate if the leave is driven by the employee’s own health, and $200 per day and $2,000 in the aggregate when the leave is driven by the employee’s need to care for someone else. It’s important to note that this paid sick time is in addition to any pre-existing paid leave benefits, which cannot be altered to avoid the provision.
In addition to the first 10 days of public health emergency leave, the employer must also provide paid expanded family and medical leave at two-thirds of the employee’s usual pay up to an additional 10 weeks to care for a child whose school or child care is closed or unavailable due to COVID-19-related reasons. The FFCRA places a cap of $200 per day and $10,000 in the aggregate in this case, and the employee must have been employed for at least 30 calendar days. The list provision, however, excludes health care providers and emergency responders as well as businesses fewer than 50 employees if the required leave would jeopardize the viability of their business.
To help companies pay for the emergency leave, the FFCRA is providing two new refundable payroll tax credits to fully reimburse the cost of providing coronavirus-related leave to employees. However, keep in mind that these savings likely wouldn’t be realized until 2021. Employers are also able to file a request for an accelerated payment from the IRS if there are not sufficient payroll taxes to cover the all the costs.
Create an official work-from-home policy.
For companies who are new to managing a remote workforce, having a good telecommuting policy will help ensure company-wide alignment. The plan should outline availability expectations, productivity standards, modes of communications that will be used, and what office equipment will be provided. You’ll also want to consider what expenses employees may incur while working from home and if you will cover the costs. Just because an employee isn’t working in the office doesn’t mean an employer isn’t responsible for their health and safety. Remember: If an employee gets hurt on the job, even if they aren’t in the office, the employer could still face legal consequences.
While there’s no shortage of news updates on coronavirus and the incessant fodder can be overwhelming at times, it’s still important that you regularly communicate with employees directly on the matter. With so much uncertainty, employees can understandably be nervous about the future, so you want to be as transparent as possible as to how the company is approaching the situation, and provide ready updates to those plans as the situation evolves.
However, be wary of “fake news” that’s readily available and make sure you are disseminating information from credible sources such as the WHO, the U.S. CDC, or similar national government health organizations in other countries. To consolidate and streamline your communications, you can create a FAQ document that proactively addresses the most common questions employees are asking and update it as new developments arise.
Apply for disaster loan and relief funds.
As part of the Coronavirus Preparedness and Response Supplemental Appropriations Act signed by President Donald Trump, the U.S Small Business Administration is providing low-interest working capital loans of up to $2 million for small businesses and nonprofits that are affected by the coronavirus and cannot get credit anywhere else. The SBA defines a “small business” as one that typically makes a maximum of $750,000 to $38.5 million in annual revenue and has fewer than 100 to 1,500 employees, depending on industry. These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits, and is designed to cover “fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.” Apply online at the SBA Disaster Loan Assistance Portal or call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 for help with your application.
States and municipalities are also adding programs by the day. Be sure to check your governor’s website for up-to-date information about relief available in your area.
Access the new federal Paycheck Protection Program.
The Paycheck Protection Program—part of the historic $2 trillion CARES Act signed into law on March 27, 2020—is a loan program with less red tape and fewer guardrails than the SBA’s disaster relief loans. Small businesses as defined by the SBA, independent contractors, self-employed individuals, and sole-proprieties facing economic uncertainty due to COVID-19 are all eligible for federally guaranteed loans to cover payroll, benefits, rent and utilities for an eight-week period. The loans, available starting April 3, 2020, can go up to $10 million or 2.5 times an employer’s total payroll expenses for the loan period. They will be forgiven in full provided the employer does not conduct any layoffs or make large reductions in pay. The only exception is if an employee is above a $100,000 annual salary—in that case, the first $100,000 will be factored into the company’s loan forgiveness total but not any amount above that. You can apply online now through the Treasury Department.
Reduce salary or hours.
To continue to operate business without having to eliminate any jobs, you can look into reducing your employees’ salaries and hours. Employers can reduce non-exempt employees’ scheduled hours or hourly pay without implicating wage and hour laws as long as the changes are prospective. For exempt employees, the employer must pay for a full week even if the employee works only part of it. To stay compliant with FLSA exemption requirements, you want to ensure that exempt employees are compensated no less than $684 per week, and that you are not legally binded to employees subject to an employment contract that guarantees a certain level of pay.
HR leaders should look into their state’s shared work program to help support employees on reduced hours. Through the program, affected employees can receive unemployment benefits in proportion to the reduction in their hours. By not letting employees go completely, you can help workers retain most of their income and access to health insurance as well as avoid having to recruit and train new workers when conditions improve. Taking this route does tend to be administratively burdensome, but it may be a big signal to your employees that you care for their well-being in this time of distress.
Institute furloughs or temporary layoffs.
A furlough is when employers require employees to take an unpaid leave of absence. Also known as a temporary layoff, furloughs are another way to avoid having employees completely lose their jobs. Similar to a reduction in hours and pay, exempt employees do not have to be paid if they do no work at all for an entire workweek. However, for exempt employees, they must be paid their normal weekly salary if they do any work at all, even if it’s partial work. So if you’re choosing to furlough your employees, make sure you have the proper systems in place so exempt employees are not required to do any amount of work during the furlough period.
The exception here is H-1B and E-3 workers because of the prevailing wage requirements in those visa categories. If it’s not feasible to exempt them from a business perspective, then these workers must be paid their normal wages while on furlough. This remains the case even if the employee chooses to spend the furlough outside the United States.
Evaluate reductions in force. Then evaluate again.
If you find yourself at the end of this list, then you’ve ruled out all the other possibilities and are arriving at the last resort. Unlike a furlough, a reduction-in-force is a group termination that permanently reduces headcount at the company.
Those who are familiar with RIFs have likely heard of the WARN Act, and the possible exemption to this act that the coronavirus crisis might present. Under the federal Worker Adjustment and Retraining Notification Act (WARN), employers with 100 or more employees excluding part-time employees, must provide at least 60 days’ notice to employees, employee representatives, and certain state and local government officials of an employment loss resulting from a plant closing or mass layoff.
A mass layoff in this case is defined as affecting at least 500 employees, excluding part-time employees. This includes shutting down an employment site that causes employment loss for 50 or more full-time employees, conducting a layoff that affects 50 or more employees and 33% or more of the total workforce at a single location, or laying off 500 or more employees at a single location. The exemptions are closures or layoffs resulting from a “natural disaster” or “business circumstances that were not reasonably foreseeable.”
Since the coronavirus outbreak has taken the world by storm, it’s generally believed that the 60-day advance notice requirements will not be applied to this emergency. Already, the Governor of California has added the coronavirus outbreak as an exemption to the California WARN Act. HR leaders should also keep their state and local laws in mind as usual when taking any action.
While downsizing your workforce is a hard pill to swallow, it may be your only option when all else fails. To provide a softer landing for your laid off employees, you want to have an outplacement strategy that will give them the best tools in finding a new job. Outplacement services range from career coaching to resume reviews to social media profile optimization. Download our Essential Guide to Outplacement for more solutions on how to mitigate the many negative impacts of a layoff.
Educate workers on unemployment benefits.
Also part of the CARES Act, the fully federally-funded Pandemic Unemployment Assistance program (PUA) offers generous unemployment benefits to anyone who finds themselves unable to work due to COVID-19 related reasons. This program covers gig workers, independent contractors, freelancers, the self-employed, and other workers who would not otherwise qualify for unemployment insurance. It also covers traditional employees who have exhausted all their other unemployment benefit options.
Those seeking PUA are eligible to receive up to 39 weeks of unemployment insurance payments along with an added $600 per week of unemployment until July 31, 2020. The program also waives the usual jobsearch requirements for unemployment recipients as well as the one-week waiting period for benefits to kick in.
When it comes to leading your company through the coronavirus crisis, there’s no such thing as erring too much on the side of caution. We hope our list keeps you informed, prepared for the unexpected, and one step ahead of the curve. That way, we can all do our part in flattening it together.
To learn more about how you should be supporting your company and people in these uncertain times, watch the recording of our live panel discussion and Q&A on How HR can lead through the coronavirus pandemic. In the session, Tracie Sponenberg, Chief People Officer at The Granite Group, employment attorney Kate Bischoff, HR leader and #HRSocialHour Podcast host Jon Thurmond, and outplacement veteran Caroline Vernon share their tips and tools on guiding companies and employees through this crisis and answer the audience’s most pressing questions. View the recording now.
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