Getting Back to Business in the COVID-19 Era

May 22, 2020

Employers face new legal challenges as they consider how and when to reopen as countries relax shutdown orders related to the COVID-19 pandemic.

Because this is a rapidly-evolving situation, employers must monitor developments from public health authorities and governments and be prepared to adapt their return-to-work plans and procedures.

See guidance for countries in the following areas:




Middle East

North America

South America

How do employers determine if they are ready to reopen?

Employers must first consider federal, state and local government business restrictions. In the United States, the White House issued guidelines on April 16, 2020, saying state and local governments should try to reach the following benchmarks before relaxing shutdown orders:

  • A 14-day period in which the state or region has seen a downward trajectory of reported “influenza-like illnesses” (ILI) and “covid-like syndromic cases”
  • A downward trajectory of documented COVID-19 cases or positive tests as a percent of total tests within a 14-day period
  • The ability for hospitals to treat patients without crisis care
  • A robust testing program, including antibody testing, exists for at-risk healthcare workers

In addition, on May 20, 2020, the CDC released detailed guidance in support of the White House guidelines and reopening the U.S. The White House’s and CDC’s guidelines are not binding, however, and state and local governments may revise their applicable restrictions with more lenient or stringent criteria. Employers will need to consider and comply with these requirements when formulating their own reopening plans. 

Suggestions from the Centers for Disease Control and Prevention (CDC)

Components of the CDC’s new guidance work in conjunction with its “workplaces decision tool” to assist employers in navigating the reopening process. Among other things, the guidance includes “Interim Guidance for Employers with Workers at High Risk,” that outlines a three-step process that employers should follow in gradually scaling up their operations based on the “scope and nature of community mitigation” in the areas in which an employer operates.  The Interim Guidance recommends, among other actions, that employers encourage employees at higher risk of severe illness, including those 65 and older and employees with underlying medical conditions, to self-identify and take particular care to reduce those workers’ risk of COVID-19 exposure.

Because this is a rapidly evolving area, employers must continuously monitor the requirements of the jurisdictions in which they operate, as well as the guidance issued by the CDC and other public health authorities, such as the Occupational Safety and Health Administration (OSHA) and the World Health Organization (WHO). Furthermore, when implementing new policies, employers will need to comply with relevant anti-discrimination laws, such as the Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act (ADEA).  

Employers must also assess their individual readiness to resume operations based on their ability to protect employee safety and comply with applicable government orders and guidelines concerning, among other things, social distancing, employee screening and the response to positive cases of COVID-19 among employees.  

What steps should employers take before reopening?

Employers should conduct an assessment of their facility and working conditions to determine the risk of COVID-19 exposure that employees and others might face. This risk assessment, in the United States, should be conducted in accordance with the recently released OSHA guidance, which provides the minimum standards employers should implement to mitigate potential liability upon reopening the workplace. It must be considered in conjunction with all relevant state and local government orders, as these may impose additional requirements depending on the workplace conditions.

Employers should also develop an operational plan for implementing new policies to ensure a safe and healthy workplace. Many employers have chosen to designate a task force or working group to manage this process and oversee the response to confirmed or suspected cases of COVID-19.

What to focus on when developing a plan for a safe and healthy workplace

  • Providing employees with adequate personal protective equipment, such as masks or gloves, based on the risk of exposure
  • Updating the facility with safety measures to promote social distancing and protective measures, such as physical barriers and partitions, automatic doors and trash bins, high-efficiency air filters and equipment to increase ventilation rates
  • Adopting social distancing procedures, including limiting the number of people in common areas and elevators, closing or restricting access to cafeterias and break rooms and limiting or eliminating group meetings and activities
  • Increasing cleaning and disinfecting protocols in compliance with CDC guidance
  • Adopting protocols for responding to confirmed or suspected cases of COVID-19 among employees, including procedures for isolating employees and conducting contact tracing to identify other potentially exposed employees
  • Managing the disinfection of the premises after persons with a suspected or confirmed case of COVID-19 have been in the facility
  • Training employees on the signs and symptoms of COVID-19, heightened hygiene practices to prevent the spread and social distancing measures within the workplace
  • Training Human Resources or safety personnel concerning these practices and protocols

Structuring work arrangements and staffing requirements

As state and local governments relax shutdown orders, some may require employers to limit the proportion of the workforce that can immediately return to in-person operations, and others may continue to require employees to work remotely. Employers should consider, among other things:

  • Which employees will return to the workplace in the first instance, prioritizing those who are critical to the proper functioning of the workplace and asking other employees to volunteer
  • Employee availability based on their individual circumstances (including local curfews, family or child care or underlying medical conditions that may require additional accommodations)
  • Staggered and/or rotational work schedules to allow employees to commute at non-peak times and to limit contact in the workplace
  • Whether, and the extent to which, teleworking should continue
  • What to do about employees who are vulnerable to COVID-19 due to underlying health conditions, or who refuse to come back to the workplace

How should an employer handle the initial reopening?

Employers should notify employees prior to reopening the workplace. That notice should detail policies that have been created to prevent the spread of COVID-19 and provide the contact information for the person responsible for answering questions.

Offering employees a health questionnaire

Employers may also wish to consider including a health assessment or questionnaire for employees to provide information.

The employer may ask the employee whether they have experienced symptoms of, or were diagnosed with, COVID-19, or have had close contact with anyone who has a suspected or confirmed case of COVID-19.

Employers may not ask employees if they have any underlying conditions that put them at increased risk of contracting COVID-19. All medical information also must be kept confidential and in compliance with the Americans with Disabilities Act (ADA) in the U.S.

As employees arrive at the worksite, employers will likely need to provide extra direction and guidance for navigating the new policies and procedures. This may include providing staff to monitor and remind employees of social distancing requirements and to provide personal protective equipment.

Steps businesses should take when reopening in the COVID-19 coronavirus era

Screening employees for COVID-19

Employers may wish to implement employee screening measures, such as temperature testing, COVID-19 testing and antibody testing. Not all infected individuals will exhibit a fever, so additional precautions may be necessary.

The U.S. Equal Employment Opportunity Commission (EEOC) has stated that employers may conduct temperature screening of employees as a condition of returning to work and/or entering into the workplace. Employers may also require employees to provide medical clearance before returning to work.

Additionally, although COVID-19 tests may not be widely available to employers in many areas, the EEOC has confirmed that such testing will not implicate the ADA if the tests are administered in a consistent and non-discriminatory manner. Employers must be sure all testing is done in compliance with state and local requirements as well as guidance from the public health authorities.

All results must be recorded and maintained in a log separate from the employee’s personnel file. Absent an exceptional reason, employers may prohibit an employee from entering the worksite if the employee refuses to submit to a permitted screening measure.

What are the key considerations in continuing operations?

Employers should remain in close communication with their employees and provide them with the most up-to-date guidance and health and safety precautions. Employees who fail to adhere to social distancing requirements can and should be disciplined in accordance with the employer’s updated policies.

Employers must also be prepared to respond quickly to governmental orders imposing new limitations on business operations due to an increase in the number of COVID-19 cases in an area.

Handling new cases of COVID-19 among employees

Aside from maintaining new protocols in the workplace, employers must implement a process for promptly addressing employees who contract COVID-19 or exhibit symptoms of the virus while in the workplace.

Once an employee with a possible or confirmed infection has been identified, employers should be prepared to:

  • Isolate that employee in a designated area and require that the employee go home or seek medical care
  • Notify the appropriate Human Resources/safety personnel or COVID-19 task force member of the situation
  • Obtain a list of individuals with whom the affected employee had close contact (typically defined as contact within six feet for 10 minutes or more) within two days before the employee began experiencing symptoms
  • Direct those individuals to self-quarantine or self-monitor and take other protective measures
  • Deep clean and disinfect all areas in which the affected employee was present; this may require temporarily closing the workplace for 24 hours

The CDC recommends that employers monitor employee absences due to COVID-19 and consult with health authorities if there are cases in the workplace or an increase in cases in their local areas.

Handling employees who recovered from COVID-19

Employers need to establish procedures that employees with a suspected or confirmed case of COVID-19 must follow prior to returning to the workplace.

The CDC has released guidance for “ending home-isolation,” which sets forth criteria to determine whether an employee may return to the workplace, depending on their particular situation and the availability of COVID-19 testing. Employers should consult this CDC guidance and their state and local orders to effectively bring an employee back to the workplace.

To the extent applicable, employers in the U.S. must also adhere to the general requirements of the Family and Medical Leave Act, the ADA, and any other state and local regulations. Employers with fewer than 500 employees must continue to adhere to the COVID-19-related leave requirements set forth by the Families First Coronavirus Response Act (FFCRA). Notably, the FFCRA is in effect until December 2020 and requires that employers provide supplemental paid and unpaid leave for a variety of COVID-19-related issues.

In light of ongoing developments, the CDC recommends that employers remain flexible in relation to their leave policies and practices. 

What are the key tax considerations?

Employers should be aware that there are a significant number of unsettled tax issues relating to employees working remotely either temporarily or possibly permanently.  In many, if not most, jurisdictions (at the national as well as the local level), the presence of employees (whether or not in a formal office of the employer – so, for example, their homes) can create “nexus” – a sufficient connection between the employer and the jurisdiction to permit the jurisdiction to impose income (and other) taxes on the employer.  Similarly, the presence of an employee in a jurisdiction who is performing services for an employer based elsewhere might permit the jurisdiction to tax the employee.  These issues are not new in the COVID-19 era, but have become relevant on a heretofore unprecedented scope.
Addressing Employer Tax Issues
At the national level, at least in the United States, there is no de minimis rule – in principle, an employee present in the United States even for short periods of time, if carrying out business activities for a non-U.S. employer, potentially exposes the non-U.S. employer to federal income tax.  If the non-U.S. employer is fortunate enough to be resident in a jurisdiction with which the United States has a double tax treaty, then there are specific, and usually much more generous, rules for when employee presence gives the United States jurisdiction to tax – the so-called “permanent establishment” rules.  Non-U.S. employers that have employees working remotely in the U.S. should examine the application of these rules in detail.
At the State level in the United States there are again generally no de minimis rules for employee presence that can subject an employer to local taxation.  Furthermore, unlike in the cross-border setting, there are generally no interstate compacts (the state-level version of a treaty) that prevent multi-jurisdictional taxation.  However, some States have begun to issue guidance – both pro-employer but also pro-jurisdiction – that should be examined carefully.
Addressing Employee Tax Issues
For federal tax purposes, U.S. citizens (and resident aliens) are generally taxed on their worldwide income, regardless of where they reside.  However special, very technical rules partially exempting from tax certain wages earned outside the United States can apply (or not) based on days present within and without the United States.  Workers who would have benefitted from those rules may lose those benefits by temporary or permanent relocation to the United States.
Nonresident aliens are typically not taxed on wages earned outside the United States. A major test for nonresident alien status is the number of days present within the United States, with certain narrow exceptions not of wide applicability.
Rules for state residency vary considerably, typically looking at questions of domicile (where an individual intends to have a permanent residential connection) and presence plus place of abode. It is quite possible that temporary or permanent remote work can create state residency where none previously existed.
Few Special Rules for Taxation in Time of Pandemic or Other Disaster
As employers contend with remote workers, at this time there are still very few special rules that have been promulgated to minimize the impact of unintended tax nexus.  In the U.S., there is some leeway for temporary presence – presence for study, training, medical care, travel connections and a few other narrow reasons.  At the federal level, special protection is afforded for corporations that deploy sales personnel for certain sales activity.  Apart from those special rules, physical presence, to date, is physical presence.  Notably, to date the physical presence rules do not address disasters and other significant events – such as COVID-19 – that may result in unexpected, unintended or undesired physical presence of an employee in another jurisdiction.
The IRS has, however, issued some very limited protective rules for COVID-19.  Revenue Procedure 2020-20, issued in April, provides that under certain circumstances, up to 60 consecutive calendar days of U.S. presence that arise from travel disruptions caused by the COVID-19 pandemic will not be counted for purposes of assessing an individual’s eligibility for tax treaty benefits.  Notice 2020-27 addresses the issue of presence on the U.S. for purposes of the exclusion for certain wage income earned outside the United States.  At the same time, the IRS issued a separate document addressing the parallel concern of corporations with employees in the United States due to the COVID-19 pandemic, both in the case where a tax treaty applies and where it does not.
States have been slow to issue guidance on the tax treatment of both employers and employees where work is temporarily being conducted in jurisdictions where it otherwise would not have been.
Some other nations have begun to issue guidance on the subject.  For example, Germany, Belgium, France and Luxembourg have begun to issue guidance on the tax impact of the presence of individuals in jurisdictions as a result of COVID-19.

It is hoped that more jurisdictions will acknowledge that COVID-19 has brought about both temporary and permanent changes to where employees may be based, and that some concessions to traditional tax nexus based on physical presence will be made as a result.  At the same time, however, virtually all jurisdictions are experiencing revenue losses due to COVID-19, and are going to be challenged to raise revenue from new sources.  The interplay of these two issues is going to make cross-jurisdiction tax awareness an important tax planning matter for many business enterprises for years to come.

What are some considerations relating to employee benefits that U.S. employers should consider when reopening?

How can I help my employees access emergency distributions from their retirement plans? 

Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), employers can adopt provisions to allow for certain COVID-19-related distributions (CRDs) from covered retirement plans, including, for example, traditional pension plans, so-called "401(k)" plans and individual retirement accounts (IRAs).  Under certain conditions, if a participant or the participant’s spouse or dependent is diagnosed with COVID-19 or where a participant experiences adverse financial consequences due to a COVID-19-related impact on employment, the participant may be eligible for a CRD.  Such a distribution must be made between January 1, 2020 and December 31, 2020, and CRDs in the aggregate cannot exceed $100,000.  CRDs will not be subject to early distribution taxes.

Participants can contribute the amount of the CRDs back into the retirement plan, another retirement plan or an IRA within three years of distribution.  Special tax treatment may also apply to CRDs.  

If an employer wants to provide for CRDs, an amendment to the plan will be needed.  However, the distribution provisions can be implemented immediately and the amendment adopted later within the specified grace period, with retroactive effect. 

There are also provisions allowing increased access to plan loans. 

Employers considering the implementation of these provisions should proceed thoughtfully, and not adopt them merely because they can be adopted.  It should be realized that, when a participant accesses retirement assets early, those assets, if not returned to the plan, will not be available for the participant's retirement.   

Can participants conserve their retirement assets to an increased extent?

The new rules also provide for a temporary moratorium on so-called required minimum distributions (RMDs) from covered retirement plans for those employees who want to retain those assets in the plan and increase the tax-deferred amounts available for retirement.  Certain RMDs can even be returned to the plan, another retirement plan or an IRA. 

What should I do about the financial targets in my annual bonus plans?

In order to continue to incentivize employees, particularly where it has become clear that employees won’t be able to meet certain targets in a company’s bonus arrangements, employers may wish to consider steps like revising bonus targets and making other favorable changes.  Careful communication could be key here. 

What new benefits programs should I consider to help my employees handle the COVID-19 pandemic?

Example of benefit programs that employers might consider adopting or enhancing to assist with the COVID-19 pandemic include adding employee assistance programs (EAPs) to provide counseling to employees, telehealth medical services, on-site medical arrangements, on-site day care, on-site meal services, the provision of personal protective equipment in the workplace, tuition reimbursement and financial wellness programs.  

Can my employees change their health plan or FSA elections during 2020?

Yes, certain cafeteria plan election changes are permitted to be made during 2020 as a result of the COVID-19 pandemic. The Internal Revenue Service (IRS) issued Notice 2020-29 to provide relief to individuals seeking to change their elections. This includes making a new election for employer-sponsored health coverage, revoking existing elections (provided that the employee attests that it will obtain other health coverage).

This relief is available even if facts that typically would be required by the cafeteria plan election change rules are not present.

With respect to FSA elections, Notice 2020-29 provides that employers may permit employees to revoke elections, make new elections or decrease or increase an existing election.

Plan sponsors that adopt any of these new rules must amend their plans to reflect the temporary relief, which is only available during 2020.  The amendment must be adopted by Dec. 31, 2021, and may be retroactive to Jan. 1, 2020.

Do I need to provide paid leave to employees who are absent from work due to the COVID-19 emergency?

Yes.  Under the Emergency Family and Medical Leave Expansion Act, enacted as part of the Families First Coronavirus Response Act (FFCRA), private sector employers with fewer than 500 employees must provide up to 12 weeks of emergency paid FMLA leave (at 2/3 of employees’ regular rate) for employees who have been employed for at least 30 days and are unable to work or telework due to a need for leave to care for their minor children as a result of closures of schools or other child care facilities, or because their paid child care provider is unavailable, in each case due to COVID-19.

Under the Emergency Paid Sick Leave Act, also enacted as part of the FFCRA, private employers with fewer than 500 employees must provide employees with up to two weeks (80 hours) of emergency paid sick leave to be used for time off in specific circumstances related to the COVID-19 emergency. 

Tax credits may be available with respect to paid leave provided under these new laws for private sector employers.  

Are there restrictions on companies sending PPE across country borders?

Yes.  As countries grapple with the short supply of PPE, governments have established new restrictions on the export/import of PPE.  These restrictions impose an added layer of complexity for multinational companies seeking to ensure safety – and access to PPE – for their personnel across all jurisdictions.

Companies seeking to export and import PPE and medical equipment need to carefully assess applicable regulations and obtain required authorizations. The failure to comply with relevant requirements, or efforts to avoid the requirements, subject companies to penalties and the risk that a relevant government authority may seize their goods.  We address below requirements for both exports and imports.



On March 15, 2020 the European Commission first published Implementing Regulations requiring the export authorization for the export of certain PPE outside of the EU in order to ensure an adequate supply of such products in the EU.  The European Commission updated the regulations on April 24, 2020.  Companies seeking to export specified PPE outside of the Union are required to obtain written authorization from the competent authority of the Member State where the exporter is established.  Pursuant to Article 127(3) of the Withdrawal Agreement, during the transition period, the United Kingdom of Great Britain and Northern Ireland is treated as a Member State and not subject to the export approval requirement.  Specified non-Union destinations are also excluded from the export approval requirements, such as Norway, Switzerland and Vatican City State, because they are dependent on the supply chains of Member States.

The PPE subject to the EU export authorization is specified in the Commission’s regulations and includes protective spectacles and visors, mouth-nose protection equipment and protective garments and the requirement applies to both large commercial exports as well as exports of small quantities.  Authorizations are to be granted only in situations where an export does not pose a threat to the availability of the goods in the Member State or elsewhere in the EU.  In considering applications to export PPE, Member States consider:

  • The adequacy of supply within the UE;
  • The need for the exported goods in the exporter’s market;
  • If the recipient is an EU neighbouring country, preferential trade partner or country with close historic ties to the UE; and
  • The end use of the commodity – humanitarian or commercial 
The EU requirement for export authorisations will remain in place until May 26, 2020.  However, the Commission many elect to continue the restrictions as it deems appropriate.  
On April 10, 2020, the U.S. government issued rules prohibiting the export of PPE from the United States without express approval of the U.S. Federal Emergency Management Agency (“FEMA”).  PPE subject to the U.S. export restrictions includes N95 masks, other face respirators and their component parts (e.g., replacement cartridges), surgical masks and protective gloves (e.g., surgical gloves).  The U.S. rules, issued under the Defense Production Act, grant the President with authority to allocate (i.e., seize) certain PPE for U.S. domestic supply.  The U.S. rule will remain in place until August 10, 2020 at which time it will be evaluated and may be extended. Here is additional information on the specifics of the export restrictions, and the process for obtaining FEMA approval.
On April 21, 2020, the U.S. government issued 10 generally applicable exceptions that allow for the export of PPE without FEMA’s express approval.  These exceptions create opportunities for U.S. companies to share PPE with their affiliated companies, allow for exports to Mexico and Canada and authorize PPE exports by NGOs.  For certain exemptions, including intra-company transfers and exports to Canada and Mexico, the exports must be supported by letters of attestation. Despite the issuance of the exemptions, the U.S. government continues to have authority to seize any export in accordance with the Defense Production Act.  Here is additional information on the 10 exemptions.
Imports of PPE and medical equipment (such as COVID-19 testing kits, sterilizers, disinfectant devices, air purifiers, clinical thermometers and gowns) are subject to regulatory requirements.  As companies move back to operational status and seek to ensure they have an adequate supply of PPE and medical equipment, companies that have not previously imported medical-related equipment need to be cognizant of the applicable requirements.
In the United States, the importation of medical devices, including certain PPE, are regulated by U.S. Customs and Border Protection (“CBP”) and the Food and Drug Administration (“FDA”).  Companies involved in the production and distribution of medical devices in the U.S. may be required to register with the FDA while companies that import for personal use may be excluded from the requirement. Determining the registration requirement is a case-by-case analysis.  
The importation of medical devices into the U.S. may trigger reporting obligations to the FDA.  However, the FDA’s import requirements apply to FDA-regulated medical devices, but not to general industrial equipment/gear that could also serve a medical function.  Personal protective equipment that is intended for general commercial use (not intended for use to prevent disease or illness) is not regulated by FDA and not subject to import the reporting requirements.