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As a result of the Coronavirus disease (COVID-19) the U.S. economy has experienced a systemwide shock. Due to the pandemic, many employers are facing situations they have never addressed before, including employees working from home.

There remain many questions on:

1: Paid sick leave provision of the newly enacted Families First Coronavirus Response Act.

2: Possible economic damages rising from the pandemic to businesses.

IRS Guidelines on Paid Leave:

Employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.

An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay.

An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.

Possible Economic Damages

With business shut down, economic damages are imposed on businesses.

Cost reimbursement: Aside from paid leave and the usual overhead, the business expense necessary for the employee to do his/her job from home is the employer’s responsibility if the employee is permitted to work from home.

Property: Costs to close and sanitize a workplace and business interruption costs.

Directors’ and Officers’ and Employment Practices: Shareholders may allege that directors and executive officers breached their fiduciary duty in responding to COVID-19, resulting in a diminution in share value. Employees may allege a violation of federal, state or local employment discrimination laws or ordinances, and seek recovery of lost wages and benefits and other compensatory damage

Cyber Damages: Professional service workers are working from home due to COVID-19. As a result, damages can occur due to the risk of inadvertent violations of privacy laws and the intentional acts of bad actors.

Stay tuned for updates as this subject is developing quickly.

Roman Garagulagian

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