Laura J. Thalacker participates in the IR Global Disputes Virtual Series – COVID-19: Unprecedented Times, Desperate Measures

Foreward by Andrew Chilvers

The coronavirus pandemic has caused governments across the world to take measures that impact the movement of people rarely if ever, seen in peacetime before. Understandably, this has adversely affected businesses and created a host of employment law issues in every country.

When the first case of coronavirus – or COVID-19 – was reported in Wuhan, China in December 2019, nobody could have guessed that within three months it would spread across the globe at lightning speed. Indeed, from the start of March hundreds of thousands of cases of the disease have been reported in more than 160 countries and territories, resulting in thousands of deaths.

The speed of the spread of the virus – declared a pandemic by the World Health Organization on March 11 – caught governments across the world off guard. And many have since reacted with draconian action. This includes travel restrictions, quarantines, curfews and event cancellations, and advising people to avoid all but essential contact with each other for the foreseeable future.

Of course, this has had a tremendous impact on employment and with employment law in ways that have never been seen before. For instance, with employees being told to stay at home, flexible working has become more common than ever, although in some professions it just isn’t feasible. What this means for employers and employees – especially in terms of payment for those employees who have to take time off because they are sick, to quarantine or self-isolate, or to take care of dependents – has never been tested and different jurisdictions are reacting in different ways.

With the COVID-19 crisis and the response to it among different countries evolving daily, employment lawyers are advising employers on what they can or cannot do to safeguard their businesses and their employees under existing legislation. And the disease is spreading faster than laws can be adopted – although some countries are starting to respond quickly to take care of workers and ensure that businesses stave off bankruptcy. 

How are companies responding to COVID-19 (the coronavirus) and what practical suggestions do you have?

As a result of an Emergency Order of Nevada’s Governor Steve Sisolak, entered on March 20, 2020, certain “Non-Essential Businesses” in the State are closed or are having to change fundamental aspects of their operations to stay open. This means many businesses cannot operate at all unless telework is available. “Essential Businesses,” which are part of critical infrastructure as identified by the US Department of Homeland Security, as well as the Nevada Governor’s March 20, 2020, Emergency Order, are allowed to remain open but must adopt social distancing and other safety measures.

One of the big issues in the US is a lack of available paid sick leave. A lot of people here live paycheck to paycheck. By some estimates, only around 40% of low wage workers in the US receive any paid sick leave. So, the government is trying to figure out how to keep people home if they are sick when they really need their paychecks to live. The legislation was recently passed at the federal level to provide emergency paid sick leave to employees of businesses with less than 500 workers. This law, however, with a focus on smaller companies, only covers around 20 per cent of the US workforce.

Nevada is a little bit unusual as the legislature passed a law in 2019 that went into effect on January 1, 2020, requiring employers with 50 or more employees to provide paid sick leave to employees. And under the statutory formula, it basically works out that if you’re a full-time employee working 40 hours a week, you would receive 40 hours of paid sick leave per year, and the employer has the choice of loading that upfront at the start of the year or it can accrue over time.

But this Nevada law does not apply to businesses that have been in operation for less than two years. Likewise, smaller companies with under 50 employees are not covered (although federal legislation has now filled in this gap).

The coronavirus is moving faster than the law – how are lawyers responding and adapting to this evolving crisis?

The Nevada Legislature is currently out of session so there has not been new legislation adopted. However, Nevada’s Governor has entered various Emergency Orders responding to the crisis, including closing all gaming establishment in the state and other businesses deemed non-essential.

Also, on March 18, 2020, per the instructions of Nevada’s Governor, Nevada has temporarily waived certain eligibility requirements for unemployment applicants including a required seven-day waiting period and the requirement that employees demonstrate they are actively seeking suitable work.

The federal government in the US is having a lot of trouble responding to this. It’s the Governors of the individual States and local (city and municipal authorities) and health officials that have really stepped up and are addressing the day-to-day impacts of COVID with emergency closures of businesses and schools, mandatory social distancing measures, etc.

In Nevada, state agencies are generally using the framework of existing laws to address unique challenges and novel questions during this crisis. The Nevada Health Response website has an information page for businesses and the workforce: https://bit.ly/2vLwIPJ This page includes a number of links to useful information provided by state agencies. For example, the Office of the Nevada Labor Commissioner has published an “Employer & Employee Information Sheet on COVID-19” and other guidance on a variety of questions like, “what happens to an employee’s paid leave if the employee is subject to a mandatory quarantine?” Before COVID-19, this is not a question where there were any specific Nevada wage and hour rule. Now, we have guidance issued from the Nevada Labor Commissioner on March 11, 2020, that employers should not dock employees’ sick leave or otherwise count it against employees if they are quarantined on a mandatory basis. However, if employees who are under quarantine want to use available paid leave, employers should allow them to do this.

How are specific industries or sectors and their employees impacted and what are the potential legal consequences?

So many workers in Nevada are directly and indirectly dependent on gaming and tourism for their livelihoods. These are Nevada’s main industries and they have been massively affected. On March 17, 2020, Nevada’s Governor and the State of Nevada’s Gaming Control Board Chairperson ordered the shutdown of all gaming machines, devices, tablets, games and equipment. The casinos and resorts have closed, and thousands of workers have been furloughed or laid off.

I agree that one of the sectors also being affected is the gig economy. There are a substantial number of gig workers in Nevada. For example, there’s Uber and Lyft drivers everywhere, freelance lawyers and other professionals, and restaurant workers who use apps to find side-jobs for the day. Even some exotic dancers – this might be unique Las Vegas – are gig workers as they go from job to job and rent their space at the clubs as independent contractors. Gig workers generally are self-employed, independent contractors (not employees) so they don’t have paid sick leave or unemployment benefits. This creates a real social safety-net problem, especially during a crisis like this where the economy is largely shut down and it’s nearly impossible to find regular gigs given business closures, safety concerns and social distancing requirements. The federal government in the US is currently considering legislation that would help these gig workers and provide certain benefits and payments for which they normally wouldn’t be eligible.

Nevada employers that I’m dealing with are not panicking at this point. They are still hoping this is a short-term crisis. They value their workers and don’t want to fire people because they want those workers to come back and be with them when the economy strengthens again. What I hear clients saying (and this is fast-moving and obviously could change next week) is that they’re going to try to hold onto their workers and avoid extensive layoffs if at all possible. In that regard, there may be help from the federal government’s Small Business Administration (SBA). Nevada was one of the first states in the US to receive state-wide approval from the SBA for low-interest federal loans to help small businesses and non-profit organizations that are suffering a substantial economic injury due to COVID-19. And, for larger companies, there are currently efforts underway to pass legislation at the federal level to provide additional economic assistance.

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