New York Governor Signs Executive Order Requiring 100% In-Person Workforce Reduction for Non-Essential Businesses and Tolling Statutes of Limitations

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Seyfarth Synopsis: Late Friday night, Governor Cuomo signed the anticipated Executive Order 202.8, which, among other things, requires a 100% reduction of the in-person workforce of all non-essential businesses in New York State.  This Executive Order has not yet been posted on the Governor’s website, but an advance copy was obtained by Seyfarth Shaw LLP.  We expect this version to be made public sometime today.  The reduction is scheduled to sunset on April 19, 2020, but is subject to further extension. 

100% Reduction to In-Person Workforce of Non-Essential Businesses

As set forth in our prior alerts here and here, this week the Governor has executed a series of increasingly restrictive Executive Orders (“EO”) designed to impose mandatory social distancing practices throughout New York.

Governor Cuomo signed EO 202.6 on March 18, 2020, which instructed all “businesses and not-for-profit entities” to maximize any telecommuting or work from home procedures that can safely be utilized.  It also mandated 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 on March 19, 2020, 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, on March 20, 2020, Governor Cuomo announced during a press conference that he was increasing the required reduction from 75% to 100% for non-essential businesses.  The EO implementing these changes, EO 202.8, was signed late Friday night, and sets the deadline for such further in-person workforce reduction as March 22 at 8 p.m.  Like his prior EOs, 202.8 provides that “[a]ny essential business or entity providing essential services or functions shall not be subject to the in-person restrictions.”  Guidance as to “essential” businesses may be found here. 

This EO differs from the prior orders in two key ways, however.  First, EO 202.8 provides that, “[a]ny entity providing essential services or functions whether to an essential business or a non-essential business shall not be subjected to the in person work restriction, but may operate at the level necessary to provide such service or function.”  We are hopeful that further guidance as to the parameters of this language is forthcoming.

Second, the EO provides an enforcement mechanism.  In particular, according to the EO, a violation of the workforce reduction provisions will be treated as a violation of an order pursuant to Section 12 of the Public Health law.  Remedies under the Public Health law appear to be of a civil and criminal nature.

Section 12 of the Public Health law provides that violations carry a civil penalty of up to $2,000 for a first violation, with increasing fines on a sliding scale up to $10,000, depending on the nature and frequency of the violation.  For instance, fines of up to $5,000 may be assessed for a second violation within 12 months of the first, so long as the violation constitutes “a serious threat to the health and safety of an individual or individuals.”  A fine of up to $10,000 may be levied if the violation “directly results in serious physical harm to any patient or patients”   The sliding scale of fines above $2,000 is set to expire by the terms of Section 12 of the Public Health Law on April 1, 2020, due to a change in the statutory framework that is seemingly unrelated to the COVID-19 pandemic.   

The Attorney General is also empowered to obtain injunctive relief, and the law provides that it is meant to provide remedies that are “additional and cumulative” to any other available remedies.  Cities and other localities may therefore impose their own enforcement schemes.

It is unclear under the terms of the EO if the Governor intends for violations to carry criminal penalties.  Section 12-B of the Public Health law provides, however, that willful violations shall be deemed a misdemeanor.

We anticipate the State will use its powers under the Public Health law as aggressively as possible to enforce the terms of the EO, although criminal penalties (to the extent applicable) are likely to be reserved for only the most egregious of violations. 

Other Key Highlights of EO 202.8

The Governor also suspended all state statute of limitations, including, “any specific time limit for the commencement, filing, or service of any legal action, notice, motion or other process or proceeding,” under any state law, act, statute, local law, ordinance, order, rule or regulation, through April 19, 2020.

Moreover, the EO clarifies that there shall be no enforcement of an eviction or foreclosure proceeding against any resident or commercial tenant for a period of 90 days.

Employer Takeaways:

Employers should immediately assess whether they are an essential business, and if not, undertake efforts to reduce in-person workforces to 100% by 8 pm on March 22nd. 

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.