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Legal Alert

Employers Grapple With Essential Business Designations Resulting From Shelter-In-Place and Shutdown Orders

3.23.20

As governors and local leaders across the country are issuing mandates for employees of “nonessential” businesses to stay home, businesses are grappling with a host of issues, including whether they qualify as an “essential” business, how to get clarification on their status, the penalties for getting it wrong, and what to do if they believe they should be deemed essential and are not. Unfortunately, the answers are not always clear and vary by jurisdiction at the state and local level. The Fisher Phillips Essential Business Task Force is monitoring the situation and has assembled the following guidance to assist.

The governors of California, Connecticut, Delaware, Illinois, Louisiana, Massachusetts, Nevada, New York, Ohio, Pennsylvania (Order and Amended Order) and Puerto Rico have all ordered workers of nonessential businesses to stay home.  Governors of other states have issued more limited restrictions, including the closure of restaurants and bars for anything other than takeout food, theaters, fitness centers and certain nonessential retail establishments.  And mayors of cities are also issuing shelter in place orders impacting employers.  In many states including California, Connecticut, New Jersey and Illinois, city and county orders remain in effect so long as they do not conflict with statewide orders.

What Is An “Essential” Business?

Which businesses are “essential” is being determined at the state and local level. But most states and localities are turning to the essential critical infrastructure guidelines issued by the U.S. Department of Homeland Security for guidance. Essential businesses almost universally include:

HEALTH CARE OPERATIONS

INFRASTRUCTURE 

MANUFACTURING

RETAIL 

SERVICES

NEWS MEDIA

FINANCIAL INSTITUTIONS

PROVIDERS OF BASIC NECESSITIES TO ECONOMICALLY DISADVANTAGED POPULATIONS

CONSTRUCTION 

DEFENSE

SERVICES NECESSARY TO MAINTAIN THE SAFETY, SANITATION AND ESSENTIAL OPERATIONS OF RESIDENCES OR OTHER ESSENTIAL BUSINESSES

What Should You Do If Your Business Is Not On The Essential Business List But You Believe It Should?    

Nonessential businesses in the supply chain for essential businesses have successfully lobbied for essential designations or waivers from shutdown orders. For example, the governor of Pennsylvania expanded the list of essential businesses to include all sectors of the nature resource and mining industry, dry cleaning and laundromats, insurance carriers and agencies, and accounting and tax preparation services.

Businesses in Pennsylvania, New York and Connecticut can apply for relief online. In other jurisdictions, what to do if you believe your business should be designated as essential is much less clear although further guidance is expected. Pennsylvania has made clear that businesses requesting a waiver must remain closed while they await a decision. 

What Are The Penalties For Staying In Violation?

Penalties vary from state to state but can include citations, fines, license suspension and criminal penalties. 

Conclusion

Fisher Phillips and the Fisher Phillips Essential Business Task Force will continue to monitor the rapidly developing COVID-19 situation and provide updates as appropriate. Make sure you are subscribed to Fisher Phillips’ Alert System to get the most up-to-date information. For further information, contact your Fisher Phillips attorney, or any member of our Essential Business or COVID-19 Taskforce. You can also review our nationwide Comprehensive and Updated FAQs for Employers on the COVID-19 Coronavirus and our FP Resource Center For Employers, maintained by our Taskforce.


This Legal Alert provides an overview of a specific developing situation. It is not intended to be, and should not be construed as, legal advice for any particular fact situation.

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