10 Tips on Employment Practices for Cannabis Businesses During the COVID-19 Pandemic
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10 Tips on Employment Practices for Cannabis Businesses During the COVID-19 Pandemic

From communicating everchanging policies with employees to making difficult decisions regarding layoffs, two employment law attorneys share insight into best practices during these uncertain times.

March 23, 2020

As the COVID-19 outbreak continues to shutter businesses and confine people to their homes, many employers are faced with difficult decisions about keeping sick employees at home, providing paid sick leave and, in some cases, layoffs. As the global coronavirus epidemic continues to evolve and federal and state laws shift to protect public health, cannabis business owners have much to consider, with one of the main concerns being their employees’ safety.

Here, Adam Kemper, partner of Greenspoon Marder’s Labor & Employment and Cannabis Practice Groups, and Dean Rocco, partner with Wilson Elser, provide tips on employment practices during these uncertain times to ensure business owners handle the unprecedented situations that might arise in the best way possible.

1. Determine whether your business can remain open under state and local ordinances.

As states and municipalities order certain businesses to close in the wake of the COVID-19 outbreak, cannabis businesses are increasingly being deemed “essential” businesses that can remain open. However, cannabis operators should ensure this is the case in their location before continuing operations, Rocco says, and they should be talking with their local and state representatives to encourage them to deem cannabis businesses as “essential” to ensure access for their patients.

2. Maintain open lines of communication with employees.

When it comes to employers communicating their coronavirus-related policies with employees, Kemper says, “If they haven’t already done so, they need to do so immediately. This is an ongoing pressing issue that is affecting a lot of lives yesterday, today and going forward.”

First and foremost, employees need to know if the company plans to remain open, Rocco says. If the company does plan to continue operations during this time, employees need to know that employers are taking steps to stop the spread of the virus.

When sharing these updates in company policy and overall strategy in the wake of COVID-19, employers need to assure their workers that they are paying attention to the issue and taking it seriously, Kemper says. Employers should communicate that employee safety is top priority, whether that means remote working possibilities or simply sending any sick employees home immediately.

And timing is everything, Kemper adds.

“If employers haven’t come up with a plan on how to address this in their workplace, they should do that immediately because you don’t know if you have a worker who’s sick,” he says. “The worker who’s sick may feel like they need to continue to work through that, but they could be a risk of harming everybody else and putting your whole company at risk of this. A company needs to really step in and provide some guidance, and then also make those tough decisions in terms of sending certain employees home to go quarantine for 14 days while they heal from the virus.”

Through it all, employers should remember that this is a health crisis, and many employees and their families are being affected by this, Kemper says. It is important to be compassionate and to do what is right for employees’ health.

“I know employers are very, very concerned about their bottom lines, and justifiably so, but you’re still dealing with people’s lives and everybody is very nervous about this,” Kemper says. “Provide some level of reassurance that this might be a difficult time now, ... but that things will improve and these loyal employees … [will] be the first to be brought back to normal salary [and] normal hours … when the company can re-hire again. Sending that message that we’re all in this together is really important.”

It is also critical for employers to communicate their expectations of employees who are continuing to work during this time, Rocco says. “Remind them of [any] guidance [that’s in place] and [educate] them on … what the symptomology is. [Encourage] them to take their temperature before they come in. If someone is sick, encourage them to stay home.”

3. Keep sick employees at home.

That point may seem obvious, but both Kemper and Rocco stress the need for any sick employees to stay home in order to keep others in the workplace safe.

“It’s tough because on the one hand, the employee you sent home may very well not have it—maybe they tested negative for a case—but the employer has to balance the risk and the potential harm of the employee who may have a positive case infecting the rest of the workplace and possibly consumers, if you’re working with products,” he says. “The risk of harm is way too high for an employer to take that risk and keep an employee who possibly could be infected in the workspace.”

Employees who have recently traveled to high-exposure areas should also be quarantined, Rocco says.

“An employer can keep an employee out of work if they test positive or show symptoms, and they could even make the choice to require employees to quarantine if they have traveled to an area that’s believed to be a high-exposure area,” he says. “At the beginning of this crisis, we saw people coming back to the U.S. from business travel and being asked to stay at home for 14 days before they came back to work under quarantine, so employers do have some control there.”

While being overly cautious is not a necessarily a bad thing, employers should use their best judgement, Kemper adds. If an employee simply sneezes, for example, it probably doesn’t warrant sending them home for two weeks, unless additional factors are at play.

4. Don’t force employees to get tested for COVID-19.

While it may be tempting to order an employee with coronavirus symptoms to get tested before returning to work, Kemper and Rocco both advise against this kind of action.

“It’s possible that there would be a context in which the employer could require some level of medical certification from workers in connection with discussions about time off, family medical leave [and] things of that nature,” Rocco says. “But just across the board testing of employees is going to start to implicate some privacy rights of employees, and employers would need to work through those things with an attorney before they roll anything out.”

“I think the best advice an employer can give is if you’re feeling sick, regardless of how sick or how severe, … stay home and go seek medical attention,” Kemper adds. “If a medical doctor says it’s time for you to go take a test because … you check off all the boxes of criteria which would match the coronavirus, then let the doctor make that recommendation.”

5. Find ways to maintain social distancing.

The cannabis industry’s supply chain makes remote work nearly impossible as employees must be on-site to work with live plants and the management of products, but employers in this space should still be thinking about ways to maintain social distancing while still getting the job done, Kemper says.

“Some industries are … distancing when they’re working together in person, giving [employees] gloves [and] as much hand sanitizer as a person can physically take,” he says. “[They’re] also, separating people and working around shifts to ensure that strategic decisions are made to keep a minimal amount of people on and away from each other.”

Dispensaries should explore delivery options, where regulations allow, and all companies should be launching campaigns, email and otherwise, to reassure customers about their cleanliness practices.

“We all have to reinvent ourselves during this because this is not going to be an overnight issue,” Kemper says.

6. Adhere to all applicable laws regarding paid sick leave and layoffs.

President Trump signed the Families First Coronavirus Response Act into law March 18 to provide paid sick leave for employees, free coronavirus testing, expanded food assistance and unemployment benefits, among other provisions. This makes significant changes to employers’ obligations to their employees during this time, Rocco says, and it includes cannabis operators.

“There’s no indication that federal law wouldn’t apply to cannabis operators even though the federal government doesn’t recognize cannabis as a trade,” he says. “My general experience in working with businesses across all industries is that smaller businesses tend to overlook these family medical leave or disability leave management issues as opposed to larger employers that may have more robust HR departments. So, employers that are encountering these sorts of issues should not only be following guidelines in terms of social distancing, but when talking with employees, they should keep in mind that if an employee contracts coronavirus or a family member of an employee contracts coronavirus, that person, depending on the size of the organization, may qualify for federal or state medical leave.”

These issues could become more complicated under the Families First Coronavirus Response Act, Rocco adds. Broadly speaking, the new law extends the federal Family Medical Leave Act (FMLA) to families with children home due to school and daycare closures, and provides paid federal sick time for individuals who have been diagnosed with or show symptoms of COVID-19, or who have been ordered to shelter in place.

“This is the first time we’ve ever had mandated paid federal leave in the history of the United States, so it’s a big deal,” Rocco says.

The new law also places federal dollars into a fund that is available for states to use to expand their unemployment programs.

“The unemployment claims are going to start rolling in at a pretty unprecedented level, and this provides additional funds to the system and allows states to respond to those,” Rocco says.

In addition, employers should be compliant with the Worker Adjustment and Retraining Notification (WARN) Act, which includes notification requirements regarding company closures and layoffs.

“This is a totally unforeseen situation we have here—totally unprecedented—but just give your employees as much notice as you can that they’re unfortunately going to be laid off,” Kemper says. “Provide them with the resources for applying for unemployment because every employee who’s laid off during this should apply for unemployment, and they should seek the maximum benefit they can. Let employees know that the company isn’t going to challenge any truthful application for unemployment benefits, and then provide job resources so the employee can get back on their feet as quickly as they can.”

7. Comply with wage and hour requirements.

In addition to other applicable federal and state laws, employers should also be paying close attention to wage and hour requirements when considering the reduction of their employees’ hours.

“One of the most common questions I’m getting now is, ‘If I have to reduce my employees’ hours, can I pay them less?’” Kemper says. “It becomes a question of, ‘Are they exempt [or] are they non-exempt?’ If they’re exempt, technically you’re supposed to pay them the same salary, regardless of hours worked, so a lot of employers are converting their exempt employees to non-exempt and just paying them by the hour for this period of time. Even so, they still have the obligation to comply with wage and hour laws, so [they must continue] to at least pay employees the minimum wage [and continue] to pay overtime.”

“If you start changing employees’ hours of work, some notice might be required, and if you have exempt employees who are paid a salary [and] you try to pay them less because they’re working less, you can run afoul of federal and state wage and hour laws and destroy individuals’ exempt status,” Rocco adds. “Instead of just paying them for the type of work that they do, you’re reducing their pay in such a way that implies you’re paying them for the amount of work that they provide, which is more akin to a non-exempt employee. So, there are ways to do these things, and you can have part-time and reduced salary employees, but you have to be smart about the ways you do those sorts of things.”

8. Consider discrimination concerns.

With a lot of companies reducing employees’ hours and even reducing the size of their staff during this uncertain time, it is imperative that employers make downsizing decisions based on non-discriminatory, business-related factors, Kemper says.

“They need to look at the demographic of employees that are affected by their staffing decisions because even if it’s not intentional, but it works out so that the staff that you’re choosing to lay off versus the staff that you’re choosing to retain all fits into one demographic versus the other, you may need to do some tinkering there to still fit within your business needs and goals, but so that one demographic is not more adversely affected by this than another, if it’s practicable,” he says. “I don’t think any companies are looking to make those discriminatory decisions now. I think [they should just] be mindful of the demographics of the people that are chosen and the business-related reasons for the staffing decisions and if they need to tinker with that, then they should.”

9. Protect employees’ privacy.

In cases where employees test positive for COVID-19, employers should be aware of privacy laws that may apply, Rocco says.

“You’re not going to want to say, ‘Hey, Bob just came down with COVID-19,’ but you can let employees know that there has been a case and you can shut operations down, if only on a temporary basis, to provide some level of disinfecting,” he says.

10. Seek legal counsel when needed.

With all the changes that businesses are facing almost daily, Kemper says it may not be a bad time for operators to build a relationship with an employment attorney to help them navigate this landscape.

“This is a fluid situation, and these are very sensitive issues,” he says. “If you do this the wrong way, even though it might not technically be illegal, just imagine what a judge is going to say if you did the wrong thing here during this crisis when we’re all supposed to be working together. [We need to be] working together as a collaborative effort to get through this and thinking about future outcomes during this time. I would recommend [getting] together with an employment or labor attorney that’s in your state and [working] through these difficult situations together, so you have someone there who can help guide you with the most recent available information."