Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
Updates: On April 7, 2020, the D.C. Council unanimously passed its second emergency COVID-19 relief bill, the COVID-19 Response Supplemental Emergency Amendment Act of 2020 (Emergency Act), addressing a variety of programs and protections for residents. Significant for employers, the Emergency Act expands the District’s unemployment insurance program to take advantage of federal legislation and creates new paid sick leave entitlements for District employees working for mid-sized employers.
On April 15, 2020, Virginia Governor Ralph Northam extended Executive Order 53, which imposes restrictions on nonessential retail businesses during the COVID-19 pandemic, for an additional two weeks. until May 8, 2020.
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Employers of all sizes are facing unforeseen challenges because of the ongoing public health pandemic resulting from the spread of COVID-19. In addition to the federal Families First Coronavirus Response Act (FFCRA)1 and the stimulus package (CARES Act) recently passed by the U.S. Senate (and expected to be passed by the House and signed into law), the District of Columbia, Maryland, and Virginia (DMV) governments have each taken various emergency measures intended to address the pandemic while simultaneously creating a host of new obligations for employers.
Moreover, there are a variety of existing employment laws in these jurisdictions that could be implicated by the actions employers take to deal with the instant crisis. Both D.C. and Maryland require that employers provide particular advance notice to employees if their pay will be reduced. Likewise, each jurisdiction sets specific time limits for when an employee who is terminated (rather than furloughed) must receive their final wages and, if applicable, accrued PTO benefits. Furthermore, D.C., Maryland, and Virginia have all made it easier for workers to receive unemployment benefits, and D.C. has expanded coverage under its local Family and Medical Leave Act (DCFMLA). A more detailed discussion of each jurisdiction’s specific requirements follows.
Current Operating Status
Stay at Home Order
On March 30, 2020, Mayor Bowser issued a Stay at Home Order for all residents of the District of Columbia, which reinforces the mayor’s underlying direction for all residents to stay at home unless they have to perform essential activities. Among the permitted reasons for residents to leave their homes are to:
- engage in essential activities, including obtaining medical care that cannot be provided through telehealth and obtaining food and essential household goods;
- perform or access essential governmental functions;
- work at essential businesses;
- engage in essential travel; or
- engage in certain allowable recreational activities, such as exercising outside but maintaining social distancing practices.
The businesses previously declared by the mayor’s March 24, 2020 Executive Order (discussed below) as essential may continue to operate. The stay-at-home Order remains effective until April 24, 2020.
Closure of Non-Essential Businesses
On March 24, 2020, Mayor Bowser issued an Executive Order temporarily closing all non-essential businesses in the District of Columbia through April 24, 2020. The Order identifies non-essential businesses to include tour guides and touring services; gyms, health clubs, spas, and massage establishments; theaters, auditoriums; nightclubs; hair, nail and tanning salons and barbershops; tattoo parlors; retail clothing stores; and any professional services not devoted to assisting essential business operations.
Exempted from the Order are essential businesses, which the Mayor has identified as:
- Healthcare and Public Health Operations (including hospitals, clinics, dentists, pharmacies)
- Essential Infrastructure (including public works, railways, water and waste water, telecommunications)
- Food and Household Products and Services (including grocery stores, farmers’ markets, food banks, convenience stores, liquor stores, laundromats, dry cleaners, medical marijuana cultivation centers)
- Take-Out and Delivery Services of Restaurants
- Social Services (including organizations that provide food, shelter and social services)
- Communication and Information Technology (including newspapers, television, radio, media services, information technology infrastructure maintenance, construction and restoration businesses)
- Energy and Automotive Services (including electricity, petroleum, natural or propane gas providers, automotive repair shops and supply stores)
- Educational Institutions, but solely for the purpose of facilitating distance learning or providing support for addressing the public health emergency
- Transportation and Logistics (including shipping and delivery businesses, taxis and ride-sharing companies, moving companies)
- Construction and Building Trades
- Housing and Living Facilities
- Professional Services (including legal, insurance, tax preparation, accounting services, but only where necessary to assist in compliance with legally mandated activities or essential business or government functions)
- Childcare facilities
The Order clarifies that any non-essential business may continue telework operations with employees or contactors performing work at their home. Further, the Order provides that all gatherings of 10 or more people are prohibited. Individuals or entities that knowingly violate the Order will be subject to civil, criminal and administrative penalties, including civil fines, summary suspension or revocation of licensure.
COVID-19 Response Emergency Amendment Act of 2020
On March 17, 2020, the District of Columbia City Council unanimously approved, and the mayor signed, the COVID-19 Response Emergency Amendment Act (COVID-19 Act) in response to the COVID-19 pandemic. Among other measures aimed at helping District businesses and residents, the COVID-19 Act temporarily expands covered absences under the D.C. Family and Medical Leave Act (DCFMLA) and broadens unemployment insurance access for affected employees.
DCFMLA Coverage Expanded
Notably, the COVID-19 Act expanded the DCFMLA by creating a new category of declaration of emergency (DOE) leave. Employees are entitled to DOE leave when they are unable to work during a period of time in which the mayor has declared a public health emergency and the mayor, other federal or state official, or a medical professional, has ordered or recommended that the employee self-isolate or quarantine. Under these circumstances, the law further suspends the one-year-of-employment and 1,000-hours-of-work requirements for eligibility. The covered leave is indefinite during the period of the public health emergency and applies to all employers in the District regardless of how many employees it employs.
D.C. Unemployment Coverage Expanded
The COVID-19 Act also expands the District of Columbia’s Unemployment Insurance (UI) eligibility by providing coverage to employees who, following the mayor’s declaration of the public health emergency, have been (1) ordered to quarantine or self-isolate by a federal agency, District agency or medical professional; or (2) decided to quarantine or self-isolate in a manner consistent with the District’s Department of Health or other applicable DC or federal agency recommendation or guidance; or (3) are unemployed because their employer has (i) ceased or reduced operations due to a District order or guidance; or (ii) experienced reduced revenue due to circumstances that have led to a District-declared public health emergency. The COVID-19 Act also eliminates the current requirement that employees receiving unemployment benefits need to certify that they are actively searching for new employment.
Grants and Loans to Eligible Small Businesses
To avoid furloughs or layoffs, District of Columbia employers may be able to take advantage of another new provision in the COVID-19 Act, which allows for the mayor to issue grants or loans to eligible small businesses. In order to qualify for such a loan or grant, the small business must demonstrate financial stress caused by a reduction in business revenue due to the circumstances giving rise to or resulting from the current public health emergency. Eligible small businesses include non-profit organizations, certain small local businesses, and independent contractors who do not qualify for unemployment insurance. Employers that receive these grants or loans may be entitled to use the funds to pay for wages and benefits of employees.
Furloughs/Reductions in Hours/Layoffs
As the economic effects of the COVID-19 pandemic begin to take hold, many District businesses have begun to see a dramatic drop in sales and customer patronage, and may need to consider furloughs, layoffs, or reduced hours for their employees. Moreover, due to the mayor’s executive orders, all non-essential District business are required to temporarily close their doors.
With respect to furloughs and hour reductions, employers may generally schedule non-exempt employees for fewer days or hours without liability concerns.2 An employer, however, is required under D.C. law to issue a written wage theft notice within 30 days of the change.
Employers do not need to pay non-exempt employees for hours that are not worked. With exempt employees, however, employers are more restricted when considering furloughs or reduced hours. Under the federal Fair Labor Standards Act (FLSA), an employer must pay an exempt employee the full predetermined salary amount for any week in which the employee performs any work without regard to the number of days or hours worked. However, employers are not required to pay exempt employees if the employees perform no work during an entire work week. Thus, if an exempt employee performs any work during a workweek, the employee must receive their entire salary that week. For example, if an exempt employee is quarantined or self-isolated at home, and that employee still performs work during a given work week such as checking and sending emails, or participating in telephone calls, then that employee must be paid their full salary for the work week. If an employer furloughs an exempt employee for an entire workweek, however, no salary is owed for that week and the employee’s status is not affected. (The requirements under the FLSA do not change if the employee works in Maryland or Virginia.).
A layoff occurs when the employment relationship is formally severed. In the event of a termination or layoff, final wages must be provided “not later than the working day following such discharge.” This obligation may extend to payment of accrued, unused paid leave; however, payment would be dependent upon the terms of the employer’s policies.
The District of Columbia does not have a mini-WARN statute.
The District’s Unemployment Work Sharing Program
The District of Columbia has a shared work program which is designed to reduce unemployment and stabilize the work force by allowing certain employees to collect unemployment compensation benefits. To be eligible for the Shared Work Program, District of Columbia employers must certify that the implementation of a shared work plan would be in the place of temporary layoffs that would affect at least 10% of the employees in an affected business unit. Employers must also certify that they plan to reduce work hours by no less than 20% and no more than 40% for workers in an affected unit.
Current Operating Status
Stay at Home Order
On March 30, 2020, Governor Hogan issued a Stay at Home Order for the residents of Maryland, ordering that residents may only leave their home if it is for an essential job or to perform certain activities deemed essential. The Order clarifies that Essential Activities include: grocery shopping, obtaining supplies and equipment needed to work from home, laundry, obtaining sanitation products, seeking medical services or supplies, transporting other individuals to obtain necessary services or supplies, traveling to and from an educational institution for purposes of receiving meals or instructional materials for distance learning, and engaging in outdoor exercise activities.
The Stay at Home Order does not change the categories of businesses deemed essential by the governor’s previous executive order issued March 23, 2020 (discussed below). However, the Order allows non-essential business owners and staff to continue to travel to and remain on site at non-essential businesses for essential purposes, including:
- facilitating remote working.
- preventing loss of or damage to property.
- performing essential administration functions such as picking up mail and processing payroll.
- caring for live animals.
- for non-essential business that are retail establishments, continuing to sell retail products on a delivery basis.
Further, Governor Hogan has recommended that Maryland employers provide letters to all employees that continue to travel out of their homes for work purposes. The letters should state:
- The name and address of the employee.
- The name and address of the company.
- The type of the employee’s job, including the reasons why the employee’s job meets the Executive Order’s definition of essential.
- The employer’s signature and contact information.
Employees are directed to maintain possession of this letter on their commute to and from a job site, and may be asked to present the letter if stopped by law enforcement.
Closure of Non-Essential Businesses
On March 23, 2020, Governor Hogan issued an Executive Order that closes all nonessential businesses, organizations, establishments and facilities in Maryland. Further, the Order prohibits all social, community, spiritual, religious, recreational, leisure and sporting gatherings and events of more than 10 people. All planned large gatherings and events must be cancelled or postponed until after the termination of the state of emergency in Maryland has been rescinded.
Among the businesses and organizations that are closed as a result of the Order are restaurants and bars (excepting take-out and delivery services), fitness centers, theaters, malls, recreational establishes (such as bowling alleys, golf courses, or skating rinks), salons and barber shops, tattoo parlors and tanning salons. Businesses that are defined as essential by the Order and allowed to stay open are those in healthcare, food and agriculture, energy, public works, community-based government operations or defense and industrial-base sectors, law enforcement, public safety, transportation, critical manufacturing, media, financial services, and water and waste water industries.
Leave Protections for Employees
The Maryland Healthy Working Families Act (MHWFA) requires employers with 15 or more employees to provide paid sick and safe leave for covered employees, while employers that employ 14 or fewer employees are required to provide unpaid sick and safe leave for covered employees. Montgomery County also imposes additional paid sick and safe leave requirements. Depending on the reason for leave, employees in Maryland and Montgomery County may be able to use accrued leave under either law for COVID-19-related absences.
Further, the Maryland Flexible Leave Act (MFLA) requires any paid leave given to employees to be used for absences related to the illness of a child, spouse or parent.
Furloughs/Reduction in Hours/Layoffs
Maryland employers may also generally schedule non-exempt employees for fewer days or hours without liability concerns.3 However, an employer is required to provide at least one pay period notice before making a change that reduces any employee’s pay.
If an employer conducts layoffs, final wages, including any accrued, unused vacation or PTO owed pursuant to applicable policies, must be paid by the pay date following the termination.
The Maryland General Assembly recently passed a “mini-WARN” statute. However, the governor has not yet signed it and the earliest effective date would not be until October 1, 2020. Thus, Maryland currently does not have any mandatory mini-WARN requirements. Instead, it has implemented “voluntary” guidelines requesting Maryland employers provide 90 days’ written notice to each employee when the employer is shutting down a workplace or a portion of the operations of a workplace, when that shutdown will reduce the number of employees by at least 25% or 15 employees, whichever is greater, over any 3-month period.
When laying off 25 or more employees for periods in excess of 7 days, Maryland employers are required to give notice to their local unemployment insurance office. Employers laying off 25 or more employees may use Maryland’s Bulk Claims Service, which eliminates the need for an employer to complete a Request for Separation Notice (DOL/DUI 207) for each employee.
Maryland recently passed the COVID-19 Public Health Emergency Protection Act of 2020, which expands the ability to collect unemployment benefits in the event that:
- the employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;
- the employee is quarantined due to COVID-19 with the expectation of returning to work after the quarantine is over; or
- the employee leaves employment due to a risk of exposure or infection of COVID-19 or to care for a family member due to COVID-19.
Maryland’s Unemployment Work Sharing Program
Maryland had also long established a work sharing program which provides an alternative to layoffs for employers confronted with a temporary decline in business. For example, if an employer needs to reduce work hours by 30%, the employees will be eligible for 30% of their UI benefits.
To apply for this program, employers must notify their employees and union (if applicable) that they are applying for the program. Indeed, a union is required to consent in writing to this program. An employer should submits its application 7 to 15 days prior to the start date of its plan. Applications will apparently not be reviewed that have start dates more than 15 days in the future.
Montgomery County Emergency Relief for Local Employers
On March 31, 2020, the Montgomery County Council enacted a Public Health Emergency Grant Program that provides up to a $75,000 grant for an eligible small business or nonprofit that has been impacted by the COVID-19 crisis. To be eligible, Montgomery County small businesses and nonprofits must demonstrate that they have suffered financial distress as a result of the mandated closures that the state of Maryland and Montgomery County have put in place to help stop the spread of COVID-19. Businesses and nonprofits qualify if they maintain their principal place of business in Montgomery County, and have 100 or fewer full-time-equivalent employees. Recipients of the grant are entitled to use the funds for employee wages and benefits, taxes, debt, rent or other operating losses during the public health emergency.
Current Operating Status
Stay at Home Order
On March 30, 2020, Governor Northam issued Executive Order 55, which requires all individuals in Virginia to remain in their residences, except for the purposes of:
- Obtaining food, beverages, goods, or services as permitted in Executive Order 53 (discussed below).
- Seeking medical attention, essential social services, governmental services, assistance from law enforcement, or emergency services.
- Taking care of other individuals, animals, or visiting the home of a family member.
- Traveling required by court order to facilitate child custody, visitation or child care.
- Engaging in outdoor activity, including exercise, provided individuals comply with social distancing requirements.
- Traveling to and from one’s place of residence, place of worship or work.
- Traveling to and from an educational institution.
- Volunteering with organizations that provide charitable or social services.
- Leaving one’s residence due to a reasonable fear for health or safety, at the direction of law enforcement, or at that direction of another government agency.
Further, the Order does not restrict (a) the provision of health care or other medical services; (b) access to essential services for low-income residents, such as food banks; (c) the operations of the media; (d) law enforcement agencies; or (e) the operation of the government.
The Order remains in effect until June 10, 2020. Violations of the Order are Class 1 misdemeanors.
Closure of Nonessential Retail Businesses
On March 23, 2020, Governor Northam issued Executive Order 53, restricting the operation of nonessential retail businesses in the Commonwealth from 11:59 p.m., on Tuesday, March 24, 2020 through 11:59 p.m., Thursday, April 23, 2020. During this timeframe, all public and private in-person gatherings of 10 or more people are prohibited. Also during this same time period, all dining areas are ordered closed, though restaurants can remain open to offer delivery and take-out services. Finally, all K through 12 schools for the remainder of the 2019-2020 school year are closed. Essential businesses excluded from the Order’s restrictions include:
- Grocery stores, pharmacies, and other retailers that sell food and beverage products or pharmacy products, including dollar stores, and department stores with grocery or pharmacy operations;
- Medical, laboratory, and vision supply retailers;
- Electronic retailers that sell or service cell phones, computers, tablets, and other communications technology;
- Automotive parts, accessories, and tire retailers, as well as automotive repair facilities;
- Home improvement, hardware, building material, and building supply retailers;
- Lawn and garden equipment retailers;
- Beer, wine, and liquor stores;
- Retail functions of gas stations and convenience stores;
- Retail located within healthcare facilities;
- Banks and other financial institutions with retail functions;
- Pet and feed stores;
- Printing and office supply stores; and
- Laundromats and dry cleaners.
The Order also mandates that the complete closure of all recreational and entertainment businesses including:
- Theaters, performing arts centers, concert venues, museums, and other indoor entertainment centers;
- Fitness centers, gymnasiums, recreation centers, indoor sports facilities, and indoor exercise facilities;
- Beauty salons, barbershops, spas, massage parlors, tanning salons, tattoo shops, and any other location where personal care or personal grooming services are performed that would not allow compliance with social distancing guidelines to remain six feet apart;
- Racetracks and historic horse racing facilities; and
- Bowling alleys, skating rinks, arcades, amusement parks, trampoline parks, fairs, arts and craft facilities, aquariums, zoos, escape rooms, indoor shooting ranges, public and private social clubs and all other places of indoor public amusement.
All other brick and mortar retail establishments may continue to operate but must limit all in-person shopping to no more than 10 patrons per establishment with proper social distancing requirements. All other businesses that do not offer retail services may remain open but are encouraged to utilize telework as much as possible.
Violations of the Order are punishable as Class 1 misdemeanors.
Leave Protection for Employees
Virginia does not require employers to provide fringe benefits such as vacation, sick, holiday, or severance pay. Employers may establish any or no policy regarding such benefits. Similarly, Virginia does not have any mandatory paid sick leave, paid family and medical leave, or state-run disability insurance.
Furloughs/Reductions in Hours/Layoffs
For employers that reduce employees’ hours in lieu of layoffs, Virginia law does not require any specific timeframe for notice to employees. It is generally recommended, however, that employers provide written notice before any hours reduction goes into effect.
Virginia’s wage payment law (Va. Code § 40.1-29) requires that employees be paid their final “wages or salaries due [them]” on or before the date when they would have been paid if still employed, i.e., by the next regular payday. The term “wages,” however, is not defined in the statute.
As mentioned above, Virginia does not require employers to provide benefits such as vacation, sick, holiday, severance, or other paid time off (PTO). Instead, employers are free to establish any or no policy regarding such benefits. Though the Commonwealth’s wage payment law does not establish whether accrued PTO benefits are considered “wages” that must be paid out at termination, the Virginia Department of Labor and Industry (DOLI)—the agency charged with enforcement of that law—takes the position that fringe benefits, including those “provided for by company policy,” are not collectible as wages. See DOLI Field Operations Manual, ch. 10 at § 1.00(D). Therefore, where an employer has a policy establishing, for example, that accrued PTO benefits are not payable upon termination, the employer is not required to pay out any such PTO balance.
Virginia does not have a “mini-WARN” act requiring any specific form or timing of advance notice to employees being furloughed or laid off. Similarly, for layoffs of fewer than 50 employees at a single work site and/or layoffs lasting less than six months, the federal WARN Act will not apply.
However, in any “mass separation,” i.e., a situation where at least (i) 20% of all workers in an establishment, (ii) 50% of all workers in any division or department of an establishment, or (iii) 25 workers in an establishment are separated from employment at or about the same time, for the same reason, and for a period of at least seven days (or indefinitely or permanently), employers may either file a report with the Virginia Employment Commission by no later than 24 hours after the date of separation or may file individual reports for each affected employee who files for unemployment. That report may be filed online using the State Information Data Exchange System (SIDES).
Failure to comply with this filing obligation is punishable as a Class 1 misdemeanor and may carry additional civil penalties.
It is generally recommended, however, that employers provide copies of Virginia’s unemployment notice to employees when their employment ends. In addition, employers that are not covered by the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) must provide employees with written notice of their option to continue health insurance coverage within 14 days of their last date of employment.
The Virginia Legislature adjourned on March 12, 2020, prior to considering any COVID-19-related legislation. The Virginia Constitution allows for a special session of the Legislature to be called, but requires that two-thirds of the House of Delegates and two-thirds of the Senate demand such a session, and for the governor to consent. At this time, there have not been widespread calls for a special session.
On March 17, 2020, Virginia Governor Ralph Northam announced that the one-week waiting period for unemployment benefits would be waived beginning with claims effective March 15. The Directive also authorized that individuals would be eligible to receive unemployment benefits if an employer needed to temporarily close or cease operations due to COVID-19, if a worker has been issued a notice to self-quarantine by a medical or public health official and is not receiving paid sick or medical leave from their employer, or if the worker must care for a family member with COVID-19.
Littler will continue to provide updates on significant developments with the laws and orders coming from the District of Columbia, Maryland, and/or Virginia as they emerge.
1 For a discussion of the Department of Labor’s Frequently Asked Questions (FAQs) concerning interpretation of the FFCRA, see Jim Paretti, Jeff Nowak, Alexis Knapp, Sebastian Chilco, and Michael J. Lotito, DOL Releases Q&A Guidance on Families First Coronavirus Response Act, Littler ASAP (Mar. 24, 2020).
2 The only exception would be reductions that resulted in a 50% decrease in hours for 50 full-time employees at a single work site, or for 33% of active full-time employees at a single worksite, which could trigger notice obligations under the federal WARN Act.
3 Except, again, for the potential WARN Act notice obligations referenced in footnote 2, supra.