Please continue to check back for updates as this is an evolving issue. Please do not hesitate to call or email if you have questions. 610-238-0880
- Paul Bucco – PaulBucco@davisbucco.com
- Dave Makara – Dave.Makara@davisbucco.com
- John Dorsey – JDorsey@davisbucco.com
1. WHAT IS THE CURRENT STATUS FOR JOB/WORK SITE SHUTDOWNS AND WHAT IS THE DIFFERENCE BETWEEN THE PHILADELPHIA AND PENNSYLVANIA ORDERS?
Pennsylvania and New Jersey are all presently under some type of executive order of their respective governors restricting business operations.
Governor Tom Wolf has issued an order suspending all non-life-sustaining business operations at their physical locations, including many aspects of commercial construction. This has now been expanded to a ‘stay at home’ order for certain counties. “Emergency repairs” and projects involving “health care facilities” are now outside of the Governor’s shut down order. However, these two items are not defined in the order. Philadelphia has also issued its own Executive Order imposing a “stay at home” order with exception for those “essential” activities listed in the Philadelphia Order.
Importantly, the Philadelphia Order elaborates more on what is considered exempt from the shutdown orders. Therefore, the Order may be a helpful resource in guiding people seeking a waiver from the Governors order and to show what officials intend to exempt from the term “non-life sustaining” activities. The Commonwealth has also started to define more standards for seeking a waiver on its website.
Philadelphia has itemized a list of “Essential Infrastructure and Industrial Business Activities”. These, like the Governor’s order, include health care facility projects, but also lists pharmaceutical and medical facility work. The Philadelphia Order also includes “City Essential Infrastructure Projects” as well as a number of “emergency” categories, such as “Residential Building Construction” “Nonresidential Building Construction” “Utility Work” “Highway Bridge and Street Construction” “Building Finishing Contractors” “Other Specialty Trade Contractors” among others. These appear to expand on what the Governor’s Order defines as permissible, and given the lack of definition in the Governor’s Order, the Philadelphia Order may provide some helpful authority for those seeking a Pennsylvania waiver.
Contractors have two options in the context of the Philadelphia and Pennsylvania shutdown orders:
- ‘ask for forgiveness, rather than permission’ if you believe you have a good faith argument that your work is exempt, and not subject to any violation or liability arising out of continuation of work; or
- seek a waiver under the Commonwealth’s waiver process (link below Item #2).
In the waiver request, you should articulate that the work performed under the waiver will proceed with appropriate mitigation measures to prevent COVID-19 spread.
The Governor’s Order began Monday, March 23, 2020 at 8:00 a.m., and has since been modified. The City of Philadelphia Executive Order was issued on March 22, 2020. Parties performing, essential or “life sustaining activities” as defined in the respective orders, are not subject to the ‘stay at home’ order. Construction work that is non-essential or ‘non-emergency’ in Philadelphia shall have until March 27, 2020 at 5:00 p.m. to secure job sites.
NEW JERSEY AND DELAWARE
New Jersey Governor Phil Murphy and Delaware Governor John Carney have issued Executive Orders similar to that of Pennsylvania Governor Tom Wolf. However, as of Tuesday, March 24, 2020, construction projects may continue in New Jersey so long as businesses “reduce staff on site to the minimal number necessary to ensure that essential operations can continue [. . .].”
In Delaware, as of Tuesday March 24, 2020, construction projects and businesses are permitted to remain open, as they are considered life-sustaining businesses.
Please note that working remotely from home is not prohibited by any of the above-referenced Orders.
ALSO, WORK FOR THE FEDERAL GOVERNMENT IS NOT SUBJECT TO STATE OR MUNICIPAL SHUTDOWN ORDERS.
2. HOW CAN I APPLY FOR A PENNSYLVANIA WAIVER?
If you believe your work should be subject to a waiver, you can apply through this link: https://www.pa.gov/guides/responding-to-covid-19/#ForBusinesses
The waiver request should articulate:
- how your work will support one of the industries deemed “life-sustaining” in Governor’s Order;
- how the work will support an important public safety, health or welfare interest;
- workers performing the work, will be the minimum needed, and will be subject to protections that will mitigate the spread of COVID-19 in performing that work, and/or
- It could also be helpful to reference if all workers are from, and the work will be performed in, a county that has few or no COVID-19 cases.
3. IF YOUR OPERATIONS ARE AUTHORIZED TO CONTINUE, EMPLOYERS SHOULD TAKE PRECAUTIONS TO PROTECT EMPLOYEES. FAILURE TO DO SO COULD RESULT IN A WORKERS COMPENSATION CLAIM OR OTHER LIABILITY. SOME PROTECTIVE MEASURES BEING SUGGESTED BY HEALTH CARE PROFESSIONALS INCLUDE:
- Pre-site admission screening of ALL workers reporting for each shift by shift should be subject to pre-admission screening at the job site.
- “QUALIFIED, LICENSED PROFESSIONAL” should perform the screening of personnel before they appear on site.
- The pre-screening should include:
- body temperature
- a questionnaire of physical wellbeing
- questions about recent travel and history of potential exposure to COVID-19
- obtaining consent for the disclosure of that person’s COVID-19 positive status applicable
- Employers should have a protocol/policy for handling potential risk candidate and their removal from the site and sent for testing, as well as a policy for steps that will be taken if an employee on the job site tests positive and addressing the decontamination of the job site.
- Jobsite/Office must have hand washing stations and PPE equipment made available on site.
- Full disclosure of any COVID-19 positive test by any person in contact with the project(s).
- Employers should have a safety or other qualified person charged with ensuring compliance with CDC guidelines including the enforcement.
4. SHOULD I KEEP MY STAFF ON PAYROLL OR LAY THEM ALL OFF?
This decision is a difficult business decision. Employers should know that if they decided to keep their employees on the payroll while out of work due to the COVID-19 crisis, the “Emergency Paid Leave Act” (“Act”), included as a part of the larger Families First Coronavirus Response Act, provides some guidance and relief. The Act is scheduled to be effective April 3, 2020.
First, the Act now requires employers to provide full-time employees up to 80 hours of paid leave at the normal pay rate. Part-time employees are due a number of hours based on a formula related to the history of hours worked. Employees entitled to this benefit are those unable to work during this crisis due to, among other reasons, COVID-19 health related or child care reasons. Also, employees “subject to a Federal, State, or local quarantine or isolation order related to COVID-19” would be entitled to such benefits, which appears to cover employees subject to a government issued ‘stay at home’ order and unable to work remotely. There are also forthcoming regulations to implement this Act, including an exception for employers with 50 or fewer employees.
BENEFIT AMOUNT DUE
Employers must pay employees at their normal rate of pay for the paid leave number of hours. However, the Act apparently provides a cap for those benefits in the definition of the term “Paid Sick Time”. This definition provides:
“$511 per day and $5,110 in the aggregate for” persons out due to isolation/quarantine, or having suspected symptoms.
“$200 per day and $2,000 in the aggregate for” those caring children or sick persons due to COVID-19.
Employers that are subject to collective bargaining agreements can pay into the respective benefit trusts the amount they otherwise would pay to the employee for paid sick leave under the Act, provided the employee can receive sick leave from that benefit fund.
TAX CREDIT FOR SICK LEAVE PAID
To assist employers with this cost burden of this leave, the Act authorizes employers to take a credit against their quarterly federal payroll taxes for the amounts paid pursuant to this Act. This program applies to employers with fewer than 500 employees.
The ACT ALSO MANDATES POSTING OF THESE EMPLOYEE SICK LEAVE RIGHTS IN TH AREA WHERE THE EMPLOYER’S DOL MANDATED POSTING ARE PLACED. Any employer can also be subject to penalties for any adverse job action taken against an employee availing themselves of any benefits under the Act.
LAY OFF OPTION
The other option is to lay-off the employees, who will then file for unemployment compensation. This latter option also may release needed staff and impede the start up process once everyone goes back to work. A lay off could also result in losing employees that you otherwise would have liked to retain if they find work elsewhere.
5. WHAT SHOULD I DO TO PREPARE FOR THE PROJECT SHUTDOWN?
Contractors should take measures to protect their work site from trespassing or becoming a hazard to third parties during the shutdown. Contractors should also make sure they are protecting materials, supplies and equipment on the job site, or remove them if possible, from the jobsites during this suspension period. Protecting work in place as well as the property of the abutters to the project are also crucial steps. Failure to take key steps to secure the job site could trigger indemnity obligations, insurance claims or the need to perform work again if damaged while the project is stopped. A review of the contract obligations, and applicable general conditions, is necessary to ensure what your obligations should be.
Preserve your rights
The other key steps is to track the costs incurred as a result of this shutdown. Also, make sure you are providing timely notices of delay and/or claims to preserve your contractual rights to a time extension and/or contract adjustment. If the project is suspended for the owner or contractor’s convenience, there may be an entitlement to contract price adjustment. Additionally, if you are entitled to adjustments for a delay event, you should be tracking costs also. Again, familiarize yourself with your contract, and preserve your rights. Remember, it is incumbent upon the contractor to mitigate incurring any unnecessary costs during this shutdown.
6. WHAT ARE THE PENALTIES FOR A FAILURE TO COMPLY WITH THE SHUTDOWN?
The respective State and Philadelphia Orders provide for no specific penalties. However, the enabling statutes and regulations upon which these actions are predicated do provide for certain penalties. For example, the “Disease Prevention and Control Act,” cited by the DPH as the legal authority under which it is acting for issuing this shutdown, provides:
“..for each offense, upon conviction thereof in a summary proceeding before any magistrate, alderman or justice of the peace in the county wherein the offense was committed, be sentenced to pay a fine of not less than twenty-five dollars ($ 25) and not more than three hundred dollars ($ 300), together with costs, and in default of payment of the fine and costs, to be imprisoned in the county jail for a period not to exceed thirty (30) days.” 35 P.S. § 521.20; 28 Pa. Code § 27.8.
The shutdown order is being enforced by local police, local boards of health, the State Police and the regulatory agencies overseeing various industries, such as PLCB, building inspectors and others. Non-compliance could also result in action against any license issued for performance of your work and/or operation of your business.
Upon being issued a notice of violation, you will be given certain due process to contest the violation or pay it. The vague and uncertain enforcement and regulatory context of this COVID-19 will also be source of disputing violations for those parties issued violations despite operating under a good faith believe they are in compliance. Submitting a waiver application now could help with your defense of an enforcement action. Keep a copy for your records.
Please note, there is precedent in the Commonwealth of Pennsylvania upholding the arrest and conviction of those who violate the directives of a lawfully issued “emergency proclamation” such as Governor’s “Emergency Proclamation” that became effective on March 19, 2020.
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