Minimizing Employment and Financial Risk in the Era of COVID-19

The New Normal: Best Practices for Minimizing Employment and Financial Risk in COVID-19 Era

Bringing People Back to Work

Put out some sort of written material. You need something out there for your “audiences”. 

One audience is your employees:

• Inform with written material exactly what you are doing to protect them, whether it be taking temperatures, limiting visitors, cleaning workstations, etc. 
• You also need to communicate how you are managing employee workflow, such as limiting break room space, changing start times, making them work remote, etc. 
• You also need to communicate the cleaning measures. This all depends on the facility and the written pieces probably do not need to cover every little detail of the cleaning. 
• Overall, you need to communicate how you are cleaning and stay disciplined in that cleaning you communicate.

Second audience is the fact-finders in case someone takes you to court or an agency. 

• They will be asking the question: “Is what the employer is doing look reasonable?”
• Recognize that these are not static documents. 

2.    Manage Employees When They Return

• There are many different options for taking temperatures and gauging symptoms. Be careful of going beyond that, because all this is traditionally protected information. 
• Having staggered starting times or ending times, partial weeks, one week on one week off. These are effective for furloughed employees and remote workers. 
• Think about how many people you have and about spacing and barriers. It all depends on your physical space.
• Encourage social distancing
   

The Fear Factor

Employees who are afraid:

Is fear enough for employees? No, it is not. If their only issue in coming back is fear, then they should still come back. However, be reasonable and try to understand and address their fear. Unpaid leave is also an option for employees that are very afraid.
 
Employers who are afraid:

For at-risk people, you should give them the opportunity to offer their concerns, but you should not make that decision for them. Have a conversation with them first if you have concerns, but do not force older employees to not come into work.

When to Bring People Back

• Threshold Inquiry: Do you want remote workers?
• Set a schedule and even offer some flexibility in those return dates to ease anxiety.
• Know what your local and state governments require for PPE. 

If an Employee Tests Positive:

• Call your local health department. 
• Have a plan and set steps. 
• Maintain privacy for the employee. As the employer, you should not divulge any part of the identity of the worker. They will make their own assumptions and that’s ok, but you should not confirm any rumors or suspicions. 
• If your employee is out in the world and then tests positive, then you have an obligation to reach out to the company and let them know.

OSHA Guidance:
You need to do some reasonable explanation if you think there was COVID exposure. They want to know if there is an alternative explanation. They are assessing if the infection was work-related or if it was not about the facility.

Supply and Customer Contracts

General Note: Customers may decline, but there is no harm in asking. You would not be making an unreasonable request. Ask them to take responsibility for the risk they bring to the table. Supply agreements are a best practice to avoid conflicts in the Terms and Conditions.

Force Majeure Clause: Does not actually include pandemics, and there is a part that says you can cancel the agreement if the Force Majeure lasts longer than 30/60 days, whatever the agreement says. This allows you to replace that customer. 

Suspension of Performance: Customers typically only provide reimbursement for shut down costs, but you should also include reimbursement for costs associated with starting back up.
Add a penalty for late payments. If the relationship is good, you probably won’t have to do it, but it’s within your right to add in a penalty.

Confidentiality: Change the contracts for information if they need to move remote or off-site.

Break-in fee: If the customer changes forecasts, you have the right to reimbursements for that risk if you have to adjust your production, such as taking a press away from another customer to help with this one.

Indemnification: They designed the part and should take the risk of that part. 

Trusted Partner Provisions

• Right of the last refusal: If there is a new product, the customer is gonna take it out to bid to other customers, but you want the last offer so you can meet other bids and you won’t compete against yourself.
• Exclusivity: Add in a part about the next iteration of the part on top of the current version of a part. Might have to hit KPI’s but if you are doing good work then that’s not an issue.
• Binding forecast: Does not allow for a change in the forecast so you do not get screwed on raw materials and press time. 90-day is best.
• Minimum quantity: Very important if you are making a significant investment for a customer, such as adding capital or significant manpower.

Protecting Proprietary Information

Reasonable efforts:

• NDA
• Company Policy
• Training
• Technology Tools
• Be nice!

Making Sure You Get Paid

Molder/Mold-builder Lien – phenomenal, you can hold onto that mold as long as you need to until you get paid. Mark the mold.
Do not waive the liens, all your doing is making sure you get paid, and it comes back if you have to have bankruptcy.

Business interruption insurance: any kind of downtime from things out of your control.

Letter of credit: If you get a letter of credit for the last installment, you set the conditions for the bank to pay you.

Payment provisions: identify in contracts to maybe charge interest, stop work, change the credit. Implied under the law but no harm in making the requests, it is their risk they are taking. 
Make the deposit non-refundable. 

Questions:

Is it a HIPA violation to ask someone about their exposure to a person who has tested positive to COVID-19?  Or, is this an adequate question to ask during a health screening?

HIPPA generally only applies to people with protected information, it is a good idea, in general, to limit it to just information about travel, have you been exposed, are you experiencing symptoms.

Do you have any best practices for employees that are traveling?

Ohio just revoked its 14-day quarantine for people that travel. It is within your right to open the discussion about remote working when they return from traveling, but it gets tricky when you start talking about paying them or not paying them. You should be ok as long as you treat all traveling employees the same.

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