Practice Group: Business Law & Transactions
Most of us know that to deal with the Coronavirus pandemic, governments have ordered certain businesses to close. Three or so weeks ago, few imagined that the world would be turned on its head. The global pandemic is a different kind of crisis. Businesses are struggling to determine what they can do, when life might return to any kind of normal and how to get from here to there.
Obviously, most important is to do everything possible to protect yourself, your family, and your employees.
But while doing so:
WHO CAN WORK?
In New York, anyone who can work at home or remotely and those engaged in “essential” jobs and industry sectors; non-essential businesses were required to keep 100% of their workforce home and were ordered closed to the general public (see more on this later) by Executive Order of the Governor on March 20, 2020. The Executive Order took effect on Sunday, March 22, 2020, at 8 p.m., and will last until April 19, 2020. The Executive Order can be found at: https://www.governor.ny.gov/news/no-2028-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency.
Prior to this, at the Federal level, on March 16, 2020, the President issued updated Coronavirus Guidance for America which stated that:
“If you work in a critical infrastructure industry, as defined by the Department of Homeland Security, such as healthcare services and pharmaceutical and food supply, you have a special responsibility to maintain your normal work schedule.”
The Cybersecurity and Infrastructure Security Agency (CISA) has developed a list of “Essential Critical Infrastructure Workers” to help guide decisions to be made by State and local officials in connection with their efforts to protect their communities, while, at the same time, ensuring continuity of essential public health and safety functions, as well as economic and national security. This guidance can be found at: https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce.
Guidance issued by the New York State Department of Economic Development (doing business as Empire State Development) dated March 20, 2020 clarifies and enumerates many specific industries and occupations which it considers an “essential business.” Any essential business or entity providing essential services or functions are exempt from the Order, and therefore are allowed to continue in-person operations. The Guidance, which is subject to further updates and revisions, is available at: https://www.governor.ny.gov/news/governor-cuomo-issues-guidance-essential-services-under-new-york-state-pause-executive-order.
Even if a business does not fall within a category listed as an “essential business” on New York’s list, it can request to be designated as such here: https://esd.ny.gov/content/request-designation-essential-business-purposes-executive-order-2026.
Importantly, the Governor’s Executive Order closes non-essential businesses to the general public. The implication of this and informal advice provided by the New York State Department of Economic Development (doing business as Empire State Development) is that non-essential businesses which do not deal with the general public are not required to close. Those businesses should, of course, strictly follow the advice of health experts, including advice regarding working remotely when feasible, social distancing, limiting large meetings, and keeping workplaces clean and sanitized.
A violation of the workforce reduction provisions will be treated as a violation of an order pursuant to Section 12 of the Public Health Law. Section 12 of the Public Health Law provides that violations carry a civil penalty of up to $2,000 for a first violation, with increasing fines on a sliding scale up to $10,000, depending on the nature and frequency of the violation. The sliding scale of fines above $2,000 is set to expire by the terms of Section 12 of the Public Health Law on April 1, 2020.
Additional developments can be expected to follow in the coming days and weeks.
Of course, please reach out to us if you have any questions regarding the Executive Order generally or would like our assistance in analyzing whether your business falls within the “essential business” categories on the New York or CISA list.
Allison Rosenzweig contributed to this Article.
She can be reached at (347) 589-8548 or firstname.lastname@example.org
ABOUT ALLISON W. ROSENZWEIG
Allison W. Rosenzweig concentrates her practice in business and transactional matters for a wide range of clients, including startups, closely held businesses, and national entities. Allison’s experience includes mergers and acquisitions, equity financing, early stage investing, entity formation and governance, business divorce, the drafting and review of shareholder and operating agreements, supply and distribution agreements, entertainment agreements, licensing agreements, employment and consulting agreements, and a wide variety of other general corporate and commercial agreements.
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