As the staffing partner to companies large and small across California, Nelson has spent time talking with corporate executives, small-business owners, hiring managers, and other business partners within a wide range of industries. As the coronavirus situation developed, our clients asked us many questions related to their employees, their businesses, the local and greater economies, healthcare, remote work options, human resources, and more.
Our April 22, 2020, NELSONtalks webinar brought together three experts who discussed these topics and provided insight to over 500 of our business clients and peers who joined the call. Below are some of the questions our panelists answered, and we will continue to add to this QA as new topics arise. Please bookmark this page as a COVID-19 resource for you and your co-workers.
Note: Feel free to listen to and share the full webinar recording and download the slide presentation.
Louise J. Short, MD, MSC is National Clinical Leader with Strategic Benefit Advisors and Brown & Brown and former epidemiologist at the Centers for Disease Control and Prevention. She earned her undergraduate degree at Harvard and her MD from Tufts University School of Medicine.
Dr. Robert Eyler is President of Economic Forensics and Analytics and Dean of the School of Extended and International Education and Professor of Economics at Sonoma State University.
Melanie Wise is Nelson’s Vice President of Human Resources. Her 20+ years of experience extend across all facets of Human Resources, including risk mitigation.
Dr. Robert Eyler 4/22/20In terms of going into this situation and economically speaking, California households were in pretty good shape in that personal savings were up. Additionally, incomes had gone up, wages had risen, and the equity markets had provided good returns, although not everyone participates in them.
So the households that are least prepared are low-wage, commuting households that may be only a couple of paychecks away from being not being able to stay in their homes. We’re hoping that when this is said and done, very few people will have left their homes by force because of the long, slow, and positive economic growth cycle we were in before COVID-19.
We’re hypothesizing that will be the case. The key though is depth and duration. If this episode is deep and mainly cuts at the low to medium-wage scale, and is long in duration, then really no household is safe regardless of how they were positioned coming into this. The tricky scenario taking place, and it’s probably way better for most people, but it should protect some of those households from making marginal decisions about staying in their homes or staying in their cars. The ugly scenario is going to put almost everybody at risk.
Dr. Robert Eyler 4/22/20We should expect a negative impact on consumer confidence in the short end, simply because people are going to be very concerned about job savings and not eroding those savings quickly. Then it’s more about consumer confidence in the types of things people are going to buy. Are they going to be confident to buy groceries – just basic food to keep them alive – or are they going to actually start buying cars, because there’s going to be an amazing amount of incentives to buy consumer durables once this is lifted.
One of the things that a lot of consumer durable businesses are concerned about, such as car manufacturers and appliance sellers, is that we’re just not going to do anything for a while and sit on our hands. So you’re going to see some unbelievable deals come out. And then consumers are going to be tempted to do that, and the idea will be whether or not they’re willing to do it before a vaccine comes into play.
The problem is that we really need to try to restore consumer confidence in any case, so it is possible consumers will be very nervous if there is an open threat of a repeat surge that continues toward the fall, and that’s going to definitely slow things down. And this is why that ugly scenario is possible. Look at the dominoes from reduced demand, to reduce jobs, to reduced businesses. And if those businesses go away, and we can’t rehire, that could lead to another round of job loss and another round of contracted demand that will definitely hurt consumer confidence going into the fall. So you might see some real slow activity come out of this unfortunately.
Dr. Robert Eyler 5/6/20Construction and health care services are likely first, as social distancing and personal protection equipment are part of both those industries. Professional services may have had fewer problems due to portable jobs – we will see. Businesses where people gather and tourism-related businesses will likely be the last to emerge, and, unfortunately, they were also the first to have trouble.
Dr. Robert Eyler 5/6/20The employment situation is going to be tough in the short-term. People may leave if there are places with better job markets and prospects, but if California comes back strong in a year, we will attract folks. Also, most major employment markets are affected by this and will remain so, thus there are not a lot of choices of place to go where there are not some effects of the pandemic.
Dr. Robert Eyler 5/6/20The economy is going to look unstable for a bit, but the underpinnings were good. Hiring is likely to be slow at the start, as businesses feel out how the economy is going to react to re-opening. We should expect a slow start, and then a ramp-up, but not an immediate return.
Dr. Robert Eyler 5/6/20I see changes in the way we work and the cost of doing business, but also some entrepreneurism on how we track medical conditions and also how we work. In the long-run, this may lead to better outcomes for suburban and rural California as people change were they live and how they work, but not their employer.
Dr. Robert Eyler 5/6/20Companies can provide incentives or policies that split the week between home and office, and companies may actually have to do this by force of policies to socially distance.
Dr. Robert Eyler 5/6/20I think there will be some shifts in how commercial real estate is used, but not all of California can go remote. Businesses will be worried about productivity at home vs. the office due to perceived lack of focus at home. Policy is likely the first play to preserve productivity, and that may lead to some competition for labor where businesses that are more flexible attract workers.
Dr. Robert Eyler 5/6/20We expect the effects on housing to be relatively flat vs. the Great Recession and for construction to continue, so it may be a good outcome for housing and not much change. Transportation, especially if more people work from home, may be changed fundamentally due to less demand.
Dr. Robert Eyler 5/6/20Grocery and logistics have seen an uptick, as have some health care organizations.
Dr. Robert Eyler 5/6/20We are not sure yet, but we should assume Governor Newsom is considering the "brake" that SB 3 had inside of it for recession.
Dr. Robert Eyler 5/6/20Have a plan and try to find efficiencies where you can. It is going to be tough, especially for retail, restaurants, and smaller hotels/B&Bs.
Dr. Robert Eyler 5/6/20If the conditions of the loan are met per SBA and Congress, we expect forgiveness is coming. Have to meet the criteria.
Dr. Robert Eyler 5/6/20Most likely through PPE and more cleaning protocols, but assume more costs, less productivity.
Dr. Robert Eyler 5/6/20The key is if the world wants to continue to buy our debt. And while at a lower interest rate, the total carrying cost of the debt is rising, which is the number-one threat from rising debt that the interest payments displace other spending that stimulates the economy. If U.S. residents own the debt, that marginally helps.
Dr. Robert Eyler 5/6/20There is going to be pain across the sector, especially if the shelter-in-place continues deeper into the summer or if air travel remains in low demand. We’re hopeful that by July things get back to somewhat normal in terms of people flow, but I would plan on this year being tough for all segments.
Dr. Robert Eyler 5/6/20As long as the public health order is not violated, that should be okay. The number of people gathering and the distancing is the issue.
Dr. Robert Eyler 5/6/20Yes, they started this week and should continue.
Dr. Robert Eyler 5/6/20Hotels, bars/restaurants, and retail are going to have to pivot to survive, which means our malls also. Places where people gather are going to change in the short-run and need to adapt to a new set of costs and constraints.
Dr. Louise Short 4/22/20That’s a great question and not an easy answer. We are an employee benefits consulting firm and have been looking at this a lot in terms of employer cost. We have a model that takes into account the decreases we will see in inpatient, outpatient, elective surgeries, and office visits. We expect prescriptions to go up, but our model ranges from negative 10, and on some buckets to negative 30, depending on how long the shelter-in-place lasts and the curve in terms of the virus. But we do expect that there will be a spike when these shelter-in-place orders come off, and people are allowed to go back to elective procedures, the dentist office, etc.
There will be an increased demand and a peak, and we don’t know when that will be. It could be different in different geographies. So we expect it decreases in some of these services. We don’t know for how long and what the net impact will be, and there may be increases because of COVID-19 testing and treatment. Where that all lands and how it balances out in terms of employer health plans is something that needs to be sliced and diced on an individual employer basis. Those are some of the considerations. Employers’ self-funded plans are definitely going to foot a lot of this.
Dr. Louise Short 4/22/20Number one, employers should look at the resources they have today and whether or not they have an EAP (employee assistance program). A lot of EAPs offer webinars and even chat groups that are a little bit like group therapy run by a social worker or a psychologist where people can talk about what’s going on and get suggestions about how to manage things. Employers need to make sure all employees know how to access these resources.
Second, there are a lot of free resources available: yoga meditation, behavioral health programs, etc. Our website includes a free tool kit for anyone and resources related to behavioral health, how to deal with grief and other topics.
It’s also really important for people to be able to plan ahead and have some regularity to their lives right now because everybody feels a little out of control. Make sure that people aren’t isolated. Encourage them to have online coffee breaks or set them up through your company. We have an online group for our own teammates every week for half an hour. We do little games and things like that.
But beyond that just encouraging people to stay healthy, eat well, sleep well, not stay with the news cycle too much. You want to know what’s going on, but it can drive you crazy. So take breaks from the news cycle. Also we’re hearing a lot from employers about what to do about the angry worker: someone who’s been furloughed or someone who’s having tough economic times, or even someone who’s essential but who’s very scared. There are many resources for tips on managing angry workers. Check with your EAP. But that’s an issue that’s going to come up more and more.
Dr. Louise Short 4/22/20This pandemic has changed the landscape for telemedicine. A lot of employers have telemedicine – either through independent contracts, telemedicine companies, or their health plans, and a lot haven’t been able to get traction for telemedicine. And now what we’re seeing is utilization is up tremendously for telemedicine because a majority of doctors’ offices around the country are closed.
There are sort of two prongs to this. Telemedicine vendors, such as teledoc, doctor-on-demand, etc., have a 600 percent increase in utilization, both for COVID-19 screening and for other services that people just can’t get now in bricks and mortar. But what’s happened now is that aa lot of bricks and mortar doctors that weren’t doing telemedicine have jumped into it. And again we’re talking about economics, because these doctors are small businesses or maybe even larger businesses, but they are businesses, and so they’ve had to adapt and move to telemedicine and pivot very, very quickly. So we’re seeing a lot of specialists doing telemedicine now, such as gastroenterology, which is a procedure-oriented specialty that can’t do elective procedures right now, but they can do telemedicine.
The landscape is changing, and it’s going to accelerate how we use virtual care in general. Telemedicine vendors are growing their networks, and we’re also seeing changes in terms of legislation for telemedicine. Previously telemedicine physicians were not allowed to cross state lines. Now at least eight states have loosened that up to cross state lines.
I think we’re going to see a huge shift to virtual care. And with that is going to come a lot of innovation in terms of monitoring patients at home. We’re going to also see much more primary care done virtually, whereas now we’re seeing more subacute care done virtually. It’s also going to change the cost of care. It may bring down the cost of care, but we have to be careful that physicians still get reimbursed at a reasonable level. Otherwise, we’re going to have a problem. We already have a shortage of primary care physicians. And we’ll have a bigger shortage if the reimbursement doesn’t even out to what physicians are getting today.
Melanie Wise 4/22/20Many associations and law firms are providing guidance on the ever-changing regulations. I suggest staying connected to resources such as the Society for Human Resource Management (SHRM), the Employment Development Department (EDD), and the California Department of Industrial Relations. Also, county websites are really helpful and provide information on local quarantine orders. It’s good to frequently visit your industry’s websites as most have COVID-19 resource pages with updated information. For example, our local industry association is the American Staffing Association, and we’re staying connected to them.
We’re also in regular contact with our legal counsel, and we stay on top of regulations by visiting several local and state government sites on a daily basis. Those sites are listed on our Resources document.
Melanie Wise 4/22/20Yes, there have been recent changes in light of the COVID-19 issues. The EDD (Employment Development Department) has extended some benefits. The governor has waived the one-week unpaid waiting time for any COVID-19 related unemployment and disability insurance claim. They are requiring some documentation on that. Those who can’t work due to having or being exposed to COVID-19 are able file for disability insurance. At first we weren’t sure how the EDD was going to handle that, but they have now published on their website that a doctor’s note will be required to support any of those claims. Paid Family Leave as well may be available to those caring for an ill or quarantined family member. That benefit typically provides up to about six weeks of benefits. However, starting July 1, 2020, this will be extended to eight weeks. Also benefits may be available to those who have lost childcare. The EDD will determine eligibility on a case-by-case basis. Starting the week ending April 11, 2020 and up through July 31, 2020, the EDD is going to begin paying an additional $600 on top of that weekly award amount.
Many HR folks as well as our ourselves are getting a lot of questions from your employees about self-quarantine. What we’ve been telling our employees is that the EDD is making those decisions, which are a little bit out of our hands. The EDD’s comprehensive COVID-19 response page addresses questions for both the employee and employers and how to file.
Moderator, Tony Bartenetti 4/22/20As an example, some companies have used our payroll services when they have reduced their headcount and have a project or other work that they need a former employee or consultant to complete. Since we do all of the on-boarding and employment administrative work and process all payroll at a rate that is lower than our candidate-sourced rates, clients have found this to be a cost-effective alternative when they consider their total-to-total cost of an employee as a percent of the employee pay rate or salary (e.g. payroll taxes, cost of healthcare benefits, PTO, sick leave, and administrative costs).
Melanie Wise 5/5/20See the CalChamber article on this subject.
Melanie Wise 5/5/20In response to COVID-19 our federal, state, county, and many city governments have developed emergency leave plans to address the various leave concerns workers now face. Several of these leave plans have provided protection and even pay for workers who are sick or required to care for a sick family member, have experienced reduced hours or been laid off, and/or have childcare issues.
Melanie Wise 5/5/20Determining whether or not to furlough vs. lay off a position off should be based on whether or not the employer believes the role or position will be needed once business resumes at its normal rate. If a company determines a role is needed post-COVID-19 and the position is assumed to be needed sooner than later, a furlough (which is ultimately a leave) may be a better option. A layoff of a position assumes the role will no longer be necessary.
Melanie Wise 4/22/20To put this in perspective, at-home work arrangements have been in play for a while but have become much more relevant with COVID-19. Many businesses extending at-home work arrangements during the quarantine had not done so in the past. And no, it is not illegal to ask someone if they can work from home if that position becomes classified as work from home.
The one thing employers don’t want to forget is the understanding of whether people can perform their duties from home with or without a reasonable accommodation. Just as with an in-house candidate, reasonable accommodation needs to be considered, and it’s not necessarily so much about equipment; it’s more about can they perform, what do they need? Are there any accommodations that might need to be made in the way of headsets or keyboards, things employers would have provided in the past. So it’s really important to get to know some of those items and consider those folks who already had an accommodation when they were in the office.
Melanie Wise 5/5/20Many details go into determining if a role can be considered indefinitely remote. Criteria can be based on the needs and resources of both the employer and the employees currently in those roles. When reviewing a position’s eligibility for remote work, the following criteria should be taken into consideration:
To maintain equity across the organization, it’s best to assure that roles with multiple individuals and/or like positions have the same flexibility. Although an employee’s personal work ethics and home environment can be strong indicators of an employee’s success as a remote worker, these factors should not be the bases for considering whether or not a position will be remote.
Melanie Wise 5/5/20The Fair Labor Standards Act (FLSA) does not require employers to reimburse employees for cell phone use, but California law does require cell phone reimbursement per the California Labor Code Section 2802. California Court of Appeals decided in Cochran v. Schwan’s Home Services Inc., 228 Cal.App.4th1137 (2014) that if an employee uses his or her own cell phone for work-related calls and messages, the employer must pay “some reasonable percentage of the employee’s cell phone bill.”
Melanie Wise 4/22/20Many employers are looking at this very scenario right now and trying to understand their approach to the answer. We certainly have realized how many goals can be accomplished remotely and completed in a work-from-home environment. We’ve understood the challenges with that very intimately and very quickly.
I do believe that these are personal decisions each business will need to make and these are the challenges they may have if they do require their teams to go back into the office.
Melanie Wise 5/5/20Home office and/or remote work expenses traditionally have not been reimbursable under California law. This has been the case for telecommuting and remote work options when the options are not mandated by the employer, as many companies have had optional work-from-home programs which are for the employees' convenience. In addition, these employees continue to have the option to work in their employer's office and use company equipment and supplies if they desire.
For the duration of the pandemic, many employees will be forced to work from home. Employers therefore could be required to reimburse employees who are forced to work from home during the COVID-19 epidemic for their reasonable and necessary home office expenses, which may include a portion of the expenses associated with:
However, these reimbursement criteria may not necessarily include other home office expenses, which are merely at the convenience of the employee, such as higher-speed internet, computer monitors, ergonomic chairs, or printers.
See Nelson blog.
See Nelson blog.
Melanie Wise 4/22/20I suspect that as we figure out more ways to conduct business in quarantine, it will become more apparent as to how we can slowly return to work safely. Most likely we will see the expansion of essential business in a phased approach to returning to some form of the old norm. Our focus should be on effective ways to deliver information through various communication channels and multimedia resources.
Melanie Wise 4/22/20The answer will vary from industry to industry and company to company, but here are a few that may be common for many organizations:
Current local salary ranges
developed from recent local data (and not from a national formula) for more than 200 positions across California’s major metro markets.
Insights into workplace trends
from more than 500 of your peers in California, revealing the top trends that might affect your company’s success in 2020.
other business leaders are using to attract talent in this highly competitive market, and what you can do to compete
Employees give their perspectives
in our survey of 400 working or job-seeking Californians. We reveal employees’ top considerations for accepting a new role, how commute times impact their job choices, why employer reputation really matters, and much more!