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Executive Order 7H: We Are a Non-Essential Business – What Do We Do Next For Our Employees

March 21, 2020

There are several issues for employers to think immediately about:

  • Can the employee work from home? If so, Executive Order 7H expressly permits non-essential employees to continue working from home, regardless of whether they work for an essential or non-essential business. The order addresses in-person work at any company workplace, not at home.
  • Does the employee have an “essential” role so they could continue working? At the time of this Alert, this issue is still not yet clear. We anticipate that there will be some clarification that certain roles at non-essential businesses will be deemed essential -- such as payroll -- but the initial order did not make that clear. The Department of Economic Community Development is expected to issue guidance this weekend.
  • Do employees have to be paid during the length of this order? If employees are doing telework or other work remotely, then yes. If they are not, they do not.
  • Are employees who are not working eligible for unemployment benefits? Yes. You should provide information to these employees as soon as possible to make it easier for them to apply for unemployment benefits, but direct employees to apply right away for these benefits -- they do not need to wait to receive employer packages to apply. Employees who experience a reduction in hours as a result of the Order are also eligible to apply for partial unemployment benefits.
  • If we do not have work for employees, should we lay them off or furlough? This is a business decision, each with pros and cons. A furlough refers to keeping individuals as employees but without any assigned hours for the work (and thus no pay). Under many health plans (be sure to check), they may still remain eligible to continue their benefits and would remain responsible for paying employee premiums. A layoff refers to terminating the employment relationship for now with the hope of rehire in the future. Employees may then qualify to continue benefits in many instances under COBRA. Under both scenarios, the employee is still typically entitled to unemployment benefits in Connecticut. Of course, if a company can afford to continue to pay the employees or allow the employees to use accrued paid time off, the employer is free to do so.
  • If employees are not working as of April 2, 2020, when the new federal legislation goes into effect for EFMLEA and emergency paid sick leave, will they be eligible for benefits? If they have been laid off, they will not be because they will no longer be employed. If they are furloughed, we do not yet think that the order qualifies as a “quarantine or isolation order” under the emergency paid sick leave act that would qualify the employee for such leave. Employers, however, are free to provide such benefits at their choosing. In addition, employees may be entitled to such leave or benefits under other categories in the federal laws. The amount of pay they are to receive may depend on their status, so be sure to check with counsel about compliance as the April 2, 2020 date gets closer.
  • What else should we be considering? Understand your medical plans and be sure to communicate with your plan administrators about the impact of the order on such plans. Communicate with your employees about what you know and do not know at this point, and continue to keep them updated as plans change and develop.
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