New York Governor Announces 100% In-Person Workforce Reduction for Non-Essential Businesses and Guidance Issued on What Qualifies as an “Essential” Business

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Seyfarth Synopsis: During a press conference mid-morning today, Governor Cuomo announced that he would be issuing an Executive Order requiring a 100% reduction for non-essential businesses.  This Executive Order has not yet been issued.  To help employers prepare, the Empire State Development Corporation has issued guidance as to what qualifies as an essential business. The guidance is set forth in more detail below. However, this guidance is subject to change and may be revised in light of today’s announcement.     

1.  Executive Orders 202.6 and 202.7

As set forth in our prior alert here, Executive Order (“EO”) 202.6 issued on March 18th instructed all “businesses and not-for-profit entities” to maximize any telecommuting or work from home procedures that can safely be utilized.  It also mandates that every non-essential business “reduce the in-person workforce at any work locations by 50% no later than March 20 at 8 p.m.”  EO 202.7, issued late last night, increased the required reduction from 50% to 75%, with an implementation deadline for the additional 25% to be no later than March 21 at 8 p.m.  As with EO 202.6, “essential” businesses or entities “providing essential services or functions” are not subject to the in-person workforce restriction.  

Then, mid-day today, Governor Cuomo announced during a press conference that he was increasing the required reduction from 75% to 100% for non-essential businesses.  The Executive Order containing this directive has not been issued yet, but based on prior practice, it is anticipated that the deadline for this order will be March 22 at 8 p.m. 

2.  Empire State Development Corporation Guidance on “Essential” Businesses

While EO 202.6 provided a general outline of what was considered an “essential” business, it required the New York State Department of Economic Development d/b/a Empire State Development to provide further guidance.[1]  The full guidance can be found here, but in light of the Governor’s recent announcement, may be further revised.  For now, the key provisions are as follows:

• The guidance applies to each business location individually.
• For businesses that operate or provide both essential and non-essential services, supplies or support, only those lines and/or business operations that are necessary to support the essential services, supplies, or support are exempt from the restrictions.
• Essential businesses include:

1.  Essential health care operations including

• research and laboratory services
• hospitals
• walk-in-care health facilities
• veterinary and animal health services
• elder care
• medical wholesale and distribution
• home health care workers or aides
• doctor and dentist offices
• nursing homes, or residential health care facilities or congregate care facilities
• medical supplies and equipment providers

2. Essential infrastructure including

• utilities including power generation, fuel supply and transmission
• public water and wastewater
• telecommunications and data centers
• airports/airlines
• transportation infrastructure such as bus, rail, or for-hire vehicles, garages

3. Essential manufacturing including

• food processing, including all foods and beverages
• chemicals
• medical equipment/instruments
• pharmaceuticals
• safety and sanitary products
• telecommunications
• microelectronics/semi-conductor
• agriculture/farms
• paper products

4. Essential retail including

• grocery stores including all food and beverage stores
• pharmacies
• convenience stores
• farmer’s markets
• gas stations
• restaurants/bars (but only for take-out/delivery)
• hardware and building material stores

5. Essential services including

• trash and recycling collection, processing and disposal
• mail and shipping services
• laundromats/dry cleaning
• building cleaning and maintenance
• child care services
• auto repair
• warehouse/distribution and fulfillment
• funeral homes, crematoriums and cemeteries
• storage for essential businesses
• animal shelters or animal care or management

6. News media

7. Financial Institutions including

• banks
• insurance
• payroll
• accounting

 8. Providers of basic necessities to economically disadvantaged populations including

• homeless shelters and congregate care facilities
• food banks
• human services providers whose function includes the direct care of patients in state-licensed or funded voluntary programs; the care, protection, custody and oversight of individuals both in the community and in state-licensed residential facilities; those operating community shelters and other critical human services agencies providing direct care or support

9. Construction including

• skilled trades such as electricians, plumbers
• other related construction firms and professionals for essential infrastructure or for emergency repair and safety purposes

10. Defense

• defense and natural security-related operations supporting the U.S. Government or a contractor to the US government

11. Essential services necessary to maintain the safety, sanitation and essential operations of residences or other essential businesses including

• law enforcement
• fire prevention and response
• building code enforcement
• security
• emergency management and response
• building cleaners or janitors
• general maintenance whether employed by the entity directly or a vendor
• automotive repair
• disinfection
• doormen

12. Vendors that provide essential services or products, including logistics and technology support, child care and services needed to ensure the continuing operation of government agencies and provide for the health, safety and welfare of the public including

• logistics
• technology support
• child care programs and services
• government owned or leased buildings
• essential government service

For employers whose business does not fit into the above categories, but believe that they are essential or are providing essential services or functions, they may request designation as an essential business from Empire State Development by completing the form found here, and submitting it via email.[2]

The guidance, which still refers to EO 202.7, issued yesterday, does not address whether it is permissible to allow a single employee performing an essential role in a non-essential business to be on-site in order to perform necessary operations, such as collecting mail or providing IT maintenance.  The guidance does, however, currently exempt from the workforce reduction order any business that only has a single occupant/employee.  As noted, this guidance was issued before the Governor’s order requiring a 100% in-person workforce reduction, and so may be updated.  A request for clarification has been submitted to Empire State Development.  

Essential businesses must continue to comply with the guidance and directives for maintaining a clean and safe work environment issued by the Department of Health.

Employer Takeaways:

Employers should immediately assess whether they are an essential business, and if not, undertake efforts to reduce in-person workforces by at least 50% by 8 p.m. March 20th, by 75% by 8 p.m. on March 21st, and by 100% by what we anticipate will be implementation deadline of 8 p.m. on March 22nd.  Alternatively, companies seeking to be deemed essential by the Empire State Development Corporation can contact it with a request for a determination.

With the COVID-19 landscape continuing to evolve rapidly, employers are encouraged to reach out to their Seyfarth contacts regarding how they may adapt. To stay up-to-date on COVID-19 developments, click here to sign up for our daily digest.

 

[1] We note that the guidance, which was issued prior to EO 202.7 being published, states that the deadline for the 75% decrease in the in-person workforce is 8 p.m. on March 20, 2020.  The issuance of EO 202.7 clarifies this deadline as being 8 p.m. on March 21, 2020.  A request to clarify the guidance has been submitted to Empire State Development Corporation.

[2]              Businesses previously ordered to close or operate restricted services, including but not limited to, bars, restaurants, gyms, movie theaters, casinos, auditoriums, concerts, conferences, worship services, sporting events, and physical fitness centers must remain closed and are not eligible for designation as an essential business for purposes of this guidance.