COVID-19 and Potential Employment and Liability Issues

April 24, 2020
COVID-19 and Potential Employment and Liability Issues
By Brian L. Allard, Associate

As businesses confront challenges not seen in generations, due to the COVID-19 crisis, it is extremely easy to become complacent with basic personnel and business liability matters. Yet now more than ever, businesses must stay vigilant. As revenues drop and payrolls become more difficult to maintain, wage and hour disputes will become more and more prevalent. Even in a crisis, businesses must pay their employees. Also, in financially difficult times more scrutiny will be placed on employees’ wages and hours. More information regarding wage and hour laws in the state of Colorado can be found here.

If a business cannot pay its employees and chooses to do a layoff or furlough, it must be careful to do it in the right manner, using the right terminology. A layoff is when an employer lets an employee go for financial reasons, such as an economic downturn. Employees that are laid off lose their benefits and are not expected to return. Those employees are able to collect unemployment, as was recently, and temporarily, expanded under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). A furlough, on the other hand, is a temporary layoff for a short period to help a business during financial difficulties. During that time, employees maintain their benefits, however are not paid their wage or salary. Employees cannot work during the furlough, but can collect unemployment. USA Today provides more details on furloughs versus layoffs. Not explained in that article, however, are the costs and benefits that business must weigh when deciding whether to do a furlough or layoff, particularly with recent tax incentives and loans provided by the federal government under the CARES Act. Although all of the tax and loans benefits associated with furloughs and layoffs is beyond the scope of this article,  one of the federal loans, the Paycheck Protection Program (“PPP”), is explained  in great detail in three articles written by attorneys at Lyons Gaddis:

PPP – Keeping Employees Employed

PPP – You Are Approved, Now What?

PPP Loan Update: Borrow Now or Wait?

Employers must also remember that Colorado is an at-will state, meaning that an employee can generally be terminated for any reason at any time, except for reasons based on discrimination. Learn more here. COVID-19 is not a protected class under the nondiscrimination laws. However, COVID-19 is creating, and will create, numerous contextual reasons for employees to claim discrimination for reduction in their hours or termination, particularly in essential businesses. For example, employees could claim that because of their protected class they were unfairly and disproportionately exposed to COVID-19 and therefore discriminated against. Similarly, if a vaccine is eventually mass-produced and widely administered and, citing religious beliefs, an employee refuses to get the vaccine and is treated differently than other employees because of this, a discrimination claim could arise.

Employer liability is another potential issue during this crisis. Wrongful death and premise liability claims are inevitable as the general populous falls ill with COVID-19, and tragically, some perish. Although such claims will be relatively difficult to maintain, employees or patrons who contract the virus could allege it was due to uncleanliness or lack of enforcement of protective measures, such as the wearing of masks, on an employer’s premise. Businesses are obligated to keep their premises safe for their employees and patrons. Businesses should therefore regularly clean their establishment, consistently wipe down highly frequented surfaces, and post notices to patrons and employees of the risks of contracting the virus. Businesses should also review their insurance policies for coverage and exclusions related to viruses.

With all of this in mind, diligent record keeping during this time is critical, including but not limited to cleaning logs, notifications to the public and employees about COVID-19, staffing needs and expectations, payment of employees’ wages and hours, employee reprimands, and insurance coverage. To help keep track of all that is going on, see our Employer Checklist for dealing with COVID-19 related issues. 

Attorneys in the Employment Law and Litigation Group at Lyons Gaddis are available to advise you in relation to employment issues other COVID-19 related matters impacting your current and future operations.