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Manufacturing and Best Practices for COVID-19 

Brass Tacks: Practical Things to Think and Do


We manufacturers are pragmatists at heart.  We at MAGNET are completely focused on finding ways to help our manufacturers stay strong, and while we are not experts in most of the topics below, we know the right people and are ready to make the time to help you figure out next steps.  Please don’t hesitate to reach out. This list is compiled through hundreds of conversations across the country of what we have heard is important:







Have you modeled your cash position?

  1. Cash is king: Do you know if you have enough? If you come up short, reach out to your bank to try and leverage your line of credit.

  2. Do “zero-based budgeting.” Examine your entire P&L to determine what is essential vs. non-essential. Then look at headcount; who are your A-players? Do whatever you can to keep them, even if they aren’t productive right now. They are impossibly hard to find, so do whatever it takes.

  3. And, if after you leverage your line of credit you still don’t have enough, check out:

    1. SBA’s disaster relief loans (up to $2M) –we have more information we can share if you need it. Start here: https://www.sba.gov/funding-programs/disaster-assistance.  

      1. Low-interest loans of up to $2 million are available for small businesses and private non-profits.
      2. Loans may be used to pay fixed debts, payroll, accounts payable and other bills and have repayment options of up to 30 years. 
      3. Interest rates are 3.75% for small businesses and 2.75% for private non-profits.
      4. Need help filling out the application? Access these step-by-step instructions

                   2.  SharedWork – a voluntary across-the-board furlough program so that you can cut your company’s hours and wages, recoup them through unemployment, and not have to fire anyone http://jfs.ohio.gov/ouio/SharedWorkOhio/


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Have you checked your Insurance Coverages?

Simply put, consult your lawyer and insurance broker at the same time to see how you are covered for business interruptions or employee issues.This is a complex topic spanning multiple forms of insurance, each potentially with its own (often unclear) definition of what triggers a reimbursable loss (e.g., what if you have to shut down based on exposure versus actual COVID-19 infections?)  Having this discussion now, sets you up to have your proverbial ducks in a row in case you are impacted.

More details here: https://www.jonesday.com/en/insights/2020/02/time-for-a-policy-checkup

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Have you communicated with your customers?

Do not forget to communicate with your customers! You as the CEO might want to step in here to be sure you roll out the red carpet and keep your customers close. In the last recession, those who stopped communicating did not fare well when things got good again. Being there for your customers when things are bad will ensure that you have a loyal customer when things turn around.

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What about OSHA, HR, and safety concerns related to the virus?

We consulted the experts in labor law for a look at “Labor and Employment Laws in a COVID-19 World.” This information comes directly from Kastner, Westman & Wilkins, LLC. For more information feel free to email Tom Green at tgreen@kwwlaborlaw.com .

Below are some answers to frequently asked questions (FAQs) regarding the employment challenges manufacturers are facing.  What follows is not legal advice, but instead general guidance relating to the current pandemic.  Always consult legal counsel with questions about specific employment decisions impacting your workplace.  RED IS UPDATED AS OF 3/27/2020.

Labor & Employment Laws in a COVID-19 World

Below are some answers to frequently asked questions (FAQs) regarding the employment challenges manufacturers are facing.  What follows is not legal advice, but instead general guidance relating to the current pandemic.  Always consult legal counsel with questions about specific employment decisions impacting your workplace.

    • Can an employer send an employee home if the employee displays symptoms associated with COVID-19?
      • According to the Centers for Disease Control and Protection (CDC), employees who experience symptoms associated with COVID-19 such as cough and shortness of breath should leave work and stay home until they are symptom free for 24-hours without use of symptom-altering medicines.
      • With this and several other questions, employers should err on the side of employee health and safety. Employers can reverse the effects of a hastily-made decision to send an employee home, but it cannot reverse the effects of a delayed decision that causes an employee to become ill.
    • Can an employer send an employee home if the employee has travelled to a location with reported cases of COVID-19, but is not showing signs of the disease?
      • Perhaps, depending on the severity of the outbreak and the employee’s potential exposure. The CDC currently recommends that travelers returning from China, Iran, South Korea, the United Kingdom, Ireland, and most countries in Europe stay home from work for 14 days until it is clear they do not have symptoms of the disease. Even employees travelling domestically should be cautious, especially when travelling to major metropolitan areas like New York City. Employers can question employees about their travel to these areas even if the travel was for personal reasons.
      • If the employee’s travel was not to one of the designated high-risk zones, and the employee reports he or she did not have close contact with an individual suffering from COVID-19, then the employee should be permitted to return to work.
    • Can an employer take employees’ body temperature before they begin work?
      • Yes, but there are risks. In Ohio, Governor Mike DeWine has recommended that employers take the body temperature of all employees each day. This practice is not mandatory.
      • There are also unanswered questions about whether time spent receiving a temperature check is time worked that must be paid to employees. In the manufacturing sector, a worker whose employment is unrelated to the production of equipment used by medical providers would likely not be required to receive pay for having their body temperature checked. Please be sure to consult with legal counsel on this and other wage/hour issues.
      • Under the Americans With Disabilities Act, employers are typically prohibited from performing medical examinations on their employees. However, the EEOC has previously provided guidance that suggests if COVID-19 becomes widespread in the employee’s community, employers may take employees’ temperatures because the disease poses a direct threat to other employees. Companies should recognize that many medical conditions cause fevers, and it is not the only symptom associated with COVID-19.
    • What should an employer do if an employee tests positive for COVID-19?
      • Ensure that the infected employee stays home from work and does not return until cleared by a medical professional.
      • Do not disclose the infected employee’s name to coworkers and keep any medical information about the employee confidential.
      • Protect workers in close contact with the sick employee by using safe work practices and PPE.
    • Can employees refuse to come to work due to their fear of becoming infected with COVID-19?
      • Probably not. Under OHSA regulations, an employee may only refuse a work assignment that involves “risk of death or serious physical harm” under certain circumstances.  Recent OSHA guidance regarding COVID-19 states that most workplaces, including manufacturers, are at a low risk for exposure to the virus. Based on current information, it seems unlikely that an employee could lawfully refuse a work assignment based on the risk of exposure to COVID-19.
      • That said, employers are of course able to relax their attendance policies to address employees with a concern about COVID-19. Balancing employee concerns and the need to operate the business is the most difficult part of the pandemic, and is different in each business, and may even be different among positions in the same business.
    • Can an employer be held liable if an employee becomes ill while at work?
      • Employers are required to comply with the OSHA “general duty clause”, which mandates employers maintain “a workplace that is free from recognized hazards.” As with other contagious diseases, employers may be liable if the employer allows or directs a known infected employee to come to work and then exposes other employees to the risk of infection.
    • Can an employer require employees to use accrued paid time off or vacation time for absences related to COVID-19?
      • It depends on whether the employer and employee are covered by the new Families First Coronavirus Response Act. Effective April 1, 20120, manufacturers with less than 500 employees are covered by the new law.  Part of the law states that employers cannot force an employee to substitute paid sick leave provided by the Act for other types of leave like vacation or PTO. 
      • If a manufacturer has more than 500 employees, it is not obligated to follow the new requirements of the Act and should continue to apply its existing leave policies in a consistent manner for COVID-19 related leave.
      • You can find more information on the Families First Coronavirus Response Act here: http://www.kwwlaborlaw.com/congress-passes-new-coronavirus-law or by viewing the FAQ section dedicated to the FFCRA below.
    • Can an employer advance paid time off or vacation time to employees to cover absences related to COVID-19?
      • No, if the paid time off is an advance of paid sick time granted by the Families First Coronavirus Response Act.
      • Yes, if the paid time off is provided by an employer’s existing leave policy.  If leave is advanced, employers should consider modifying or creating new policies that require employees to repay the advanced time against future accrual.
      • You can find more information on the Families First Coronavirus Response Act here: http://www.kwwlaborlaw.com/congress-passes-new-coronavirus-law or by viewing the FAQ section dedicated to the FFCRA below.May an employer dock an employee’s pay for time spent away from work due to COVID-19 if he or she has exhausted all vacation time/sick leave/PTO?
      • It depends on the employee’s classification. Employers may deduct pay for non-exempt employees without question, but deductions for exempt employees is appropriate only in certain circumstances depending on who initiated the absence.
    • What should an employer do if it is forced to temporarily lay off employees or significantly reduce their hours?
      • Advise employees to consider filing for unemployment benefits, even if they are only partially unemployed. Ohio Executive Order 2020-03D streamlines the unemployment application process for those employees affected by COVID-19. 

     

    Families First Coronavirus Response Act

    • What employers are covered by the Families First Coronavirus Response Act?
      • All private employers with less than 500 employees are covered by the Act. To meet the 500-employee threshold, employers must count all full-time and part-time employees, including employees on leave, temporary employees who are jointly employed by you and another employer, and day laborers supplied by a temporary agency. If an employer’s headcount is in doubt, please be sure to consult with legal counsel.
    • What does the Act require?
      • Effective April 1, 2020, the Act requires covered employers to provide eligible employees with certain amounts of paid leave required due to the qualifying reasons listed in the statute related to COVID-19.
    • How much paid leave under the Act are employers required to provide?
      • For covered employers, paid time must be paid to eligible employees as described below:
        • Up to 80 hours of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined or isolated (pursuant to Federal, State, or local government order or advice of a health care provider), or is experiencing COVID-19 symptoms and seeking a medical diagnosis; or
        • Up to 80 hours of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine or isolation (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services; and
        • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
    • Are there limits on how much an employee can receive for paid leave?
      • Yes, employees taking leave for reasons listed in the first bullet point above are entitled to pay at their regular rate or minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
      • Employees taking leave for reasons listed in the second bullet point above are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day, and $2,000 in the aggregate (over a 2-week period).
      • Employees taking leave for the third bullet point above are entitled to pay at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period).
    • Are employers required to inform employees about this new law?

     

If you have more questions, please contact the author of this advice, Tom Green, at tgreen@kwwlaborlaw.com.

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What you need to know about the new legislation passed that might affect your manufacturing company:

There are still LOTS of unknowns until all of the regulations and guidance are written (likely in 30 days), but until then, here is what you should know:

The CARES Act provides for a loan of up to 2.5X your yearly payroll including to help pay for 8 weeks of payroll, healthcare, rent and utilities – you need to talk to your bank:

  • The SBA disaster loan is still in place for up to $2M loans, but the newly-passed CARES act created a new loan up to $10M that can be partially or fully forgiven. To qualify you must be less than 500 people domestically.
  • Amount of loan is up to 2.5X the total monthly payroll costs from 2019. 
  • In general, the amount that is forgivable is the amount that you spend on payroll, healthcare, interest on mortgage debt, rent, and utilities over an 8-week period during this coronavirus crisis.  There will be many more details on exceptions and how to claim this forthcoming in future government regulation releases.
  • There are also much larger loans for companies between 500 and 10,000 employees that have significantly tougher restrictions, more information on those can be found here

 

You can defer social security tax and may be able to claim tax credits

  • Everyone can defer the 6.2% social security tax for 2020 and pay it over two years (half on Dec 31, 2021 and half on Dec 31, 2022).
  • If you had operations suspension or a 50% reduction in quarterly receipts when compared to prior year’s same quarter, you may be eligible for tax credits up to $10,000 per person based on wages for companies affected by COVID-19
  • If you already have an SBA loan, you will have no payments on principal, interest or fees for six months (it is unclear whether this is forgiven or just deferred). 
  • More details on loans for small businesses can be found here
  • There are many more tax implications regarding AMT, carry back losses, business interest deduction, and more to check out here.

    There is a lot in the new bill to expand and pay for unemployment, this may affect your strategy for retaining people
  • Each person receiving unemployment will also get $600 more per week from the federal government.  This has strategic implications for your company because in Ohio, if someone qualifies for the $600, and if they make under $50,000-60,000 they will likely be making more while on unemployment than working for you for the next 4 months that this benefit from the federal government is in place.
    • The state has made it much easier for an employee who has been laid off to get unemployment, and it has extended those benefits to those who are forced out of work due to coronavirus.
    • Your future rates will likely not go up directly based on the number of people let go in your facility, they will be “mutualized” across all employers. There may be future federal relief so that rates don’t go up too much in the future as well.


    So, the key question is what qualifies a person to get unemployment and the extra $600?
  • Below is a summary of the reasons under the new CARES Act.  A “slow down” in your business not one of the reason, but “closed” is included (however, Ohio unemployment guidance suggests that slowdown is a reason to get unemployment, so future guidance from the federal government will be required). “Quitting” is also included below, but only “as a direct result of the coronavirus pandemic” which is not yet defined.  Ohio is saying, as of March 29, 2020: “If an asymptomatic employee imposes a self-quarantine because of the coronavirus, will they be eligible for unemployment benefits? In most cases, no….”

  

(1)

The employee is diagnosed with coronavirus,

  

(2)

The employee is experiencing symptoms of coronavirus and is seeking a diagnosis or test,

  

(3)

A member of the employee’s household has been diagnosed with coronavirus,

  

(4)

The employee is caring for a family member or household member who has been diagnosed with coronavirus,

  

(5)

The employee is caring for a child or other household member whose school or daycare facility has been shut down due to the coronavirus pandemic,

  

(6)

The employee is unable to reach his or her workplace due to quarantine imposed as a direct result of the coronavirus pandemic,

  

(7)

The employee is unable to reach the place of employment because a health care provider has advised him or her to self-quarantine due to concerns related to coronavirus,

  

(8)

The employee “was scheduled to commence employment and does not have a job or is unable to reach the job” as a direct result of the coronavirus pandemic

  

(9)

The employee has become the breadwinner or major support for a household because the head of the household died from coronavirus,

  

(10)

The employee quit his or her job as a direct result of the coronavirus pandemic, or

  

(11)

The employee’s workplace as closed because of the coronavirus pandemic.

 

  • Second unemployment was extended to independent contractors, part-time workers, and self-employed individuals. 

You must extend sick leave and in certain cases paid-FMLA if you are under 500 employees, but it will be paid fully by the government – and you need to put up a poster on this now

  • According to the Families First Coronavirus Response, employees affected by COVID-19 must be given 80 hours of sick leave that covers many coronavirus related issues including having to self-quarantine, being sick, or taking care of family or out-of-school kids.  Further, even you are under 50 people and FMLA doesn’t normally apply to you, you also must pay (at a reduced salary) for 10 weeks of required FMLA leave if one of your employees needs to take care of out-of-school kids.  The government will reimburse these expenses through taxes, potentially through an advance on the payment rather than on the back end. Details have not yet been released on how to get those funds back.  Please see more details about amounts and details from Tom Green, an employment lawyer at KWW are in the previous HR section.
  • You also have to put the Families First Coronavirus Response poster up in your facility – found here.

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Are we all over-reacting?

  • In case you're worried that “social distancing” sounds ridiculous, check out this simulation that illustrates the goal of these restrictions. This shows very starkly why our political leaders are instituting seemingly drastic measures. They are following sound scientific advice.  If you want to go down the rabbit hole and see everything about this disease including symptoms, spread rate, comparison to the flu, and so much more, here is the article for you.

  • If you want to go one step further and speculate on the future outcomes of how this will play out over time, McKinsey's model is the best frequently updated resource.  McKinsey models different outcomes based on the rate of spread and public-health/interventions that counties do.  Some scenarios are bleak with economic recovery not coming until Q2 2021, other scenarios are more optimistic with recovery yet this year. 

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Have you invested and updated your cybersecurity?

 

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How do you plan to add a personal touch? 

  • First, the chart below shows the risk by age – this disease is very dangerous to at-risk populations and those over 70 years old. As much of our employees are under 70, this may be comforting.  But it emphasizes that the risk to the families of your employees are high.  Do you have employees who care for elderly parents?  What about those near retirement?  Do you have any people with asthma, auto-immune disorders?  This is the world that your people are living in.

McKinsey_Covid_Chart


  • What are you doing provide accommodations for and comfort to those who are at risk, or those who are fearful of being at risk? What communications are you sending? Are you able to increase the distance your employees need to be near each other? Are you able to make some exceptions for those who may be at risk?

    Working remotely may not be an ideal option for most of you. But if some of your team is remote, you should consider a business license to Zoom, WebEx, Skype, or Microsoft Teams which is likely already loaded or available for download if you use Office365. Click on this article for other thoughts on going remote.
  • You can do A LOT to provide a personal touch that helps calm your employees and shows them you respect their efforts and dedication by; being physically present, talking openly about future plans, not having too many closed door meetings, communicating with your staff every day, making sure you know about your employees’ personal concerns (even if all you can do is be empathetic) and ensuring your managers are keeping up with the emotional state of their direct reports.

  • Oh, and don’t forget that there are some crazy rumors out there.  Stop the spread of misinformation by debunking those for your employees. Here are printable lists of myths debunked.

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Will you look for the opportunity in the midst of uncertainty?

  • I believe that our manufacturers, are the foundation of our economy. And when we come out the other end of this crisis, we can be stronger than before. We can choose to use any extra time we have to plan, to look for talent now, to increase our roster of A-players later, to start thinking of how to minimize future supply chain disruption through reshoring products, and to plan for 18 months from now when we can again invest in new ways of doing things. There is always a silver lining…even if we have a marathon to get through first. What opportunity is just beyond our reach today that, with your strategic vision, you can aspire to? Maybe today is too soon to think about it, but when the day-to-day crisis management becomes overwhelming, perhaps sitting back to think about the future again is the right thing to do.

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What actions inside the plant have others taken to keep coronavirus away?

Some manufacturers locally and around the world are going to great lengths to protect themselves and their employees.  Here are some of the things that others are doing.  Please note that we are giving you the best ideas we have seen to figure out what will work for your company. More details and complete guides can be found here, here, and here.

  • All office teams work remotely (sales team, marketing teams and finance teams as well as back-office). When this isn’t possible, spread out remaining staff as far as possible and hold not in-person meetings – use remote tools even room-to-room.
  • People should keep 6 feet distance when they talk and even some things are being rearranged in the plant to accommodate others working 6 feet from one another if possible.  As this may become the new normal, any steps you take now to spread areas out will likely be good for the future too.
  • Temperature checks before entering the factory gate (use IR scanning thermometer that does not require touching skin or ear temperature with an alcohol swab in between). Note: there are legal implications for this (see here). A person who shows temperature above 99.5 degrees is not allowed to enter.
  • Wearing a masks or other PPE while in the factory (there is a shortage now, so this is not likely useful).
  • All doors are left open or even removed when appropriate to eliminate surfaces.
  • Increase ventilation rates and increase the percentage of outdoor air that circulates into the system
  • Buy all no-touch disposal receptacle or remove lids that require contact to open.
  • Disinfect all touched surfaces between each shift.
  • Eliminate all routine shift hand-off meetings or limit them to just particular people or do them virtually.
  • If you can move from 1 or 2 shifts to 3 shifts and keep each shift with the same people each day, then if one shift is sick the others are protected. This arrangement can also work by have one crew for part of the week and one crew for the other part of the week.  This may also accommodate shifting child care schedules.
  • Stagger shift start/stop times, break times, and lunchtimes to minimize congregations at the time clocks or break areas.
  • Zone the factory and prohibit employees from wandering into zones where they do not need to be to perform their jobs.
  • Isolate key personnel without whom the factory cannot operate (e.g., boiler operators, wastewater treatment engineers, lead electricians, maintenance, etc.) to prevent them from getting ill.
  • Shutdown the plant when production is not needed (even if you ramp on and off on a daily basis). Every bit of time not spent around other people may eliminate the spread of the virus.

These are all in addition to the specific guidelines from Ohio's Executive Order that include:

  • Allow as many employees as possible to work from home by implementing policies in areas such as teleworking and video conferencing
  • Actively encourage sick employees to stay home until they are free of fever
  • Separate employees who appear to have acute respiratory illness symptoms from other employees and send them home immediately. Restrict their access to the business until they have recovered.
  • Reinforce key messages – stay home when sick, use cough and sneeze etiquette and practice hand hygiene – to all employees, and place posters in areas where they are most likely to be seen. Provide protection supplies such as soap and water, hand sanitizer, tissues and no-touch disposal receptacles for use by employees.
  • Frequently perform enhanced environmental cleaning of commonly touched surfaces, such as workstations, countertops, railings, door handles and doorknobs. Use the cleaning agents that are usually used in these areas and follow the directions on the label. Provide disposable wipes so that commonly used surfaces can be wiped down by employees before each use.

If you are looking for signage to put inside here plant, please click here.

 

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Have you disinfected all of the proper areas in your plant?

  • Machine control panels
  • Tow motor and other vehicles
  • Packaging centers
  • Shipping/receiving offices and docks
  • Locker rooms
  • Restrooms
  • Break/lunch rooms
  • Time clocks
  • Administrative offices
  • Air conditioner coils and drip pans
  • Shared computers, telephones and office supplies


All surfaces are not the same, it’s critical to follow the proper procedure for disinfecting based on the type of surface being disinfected.  The specific procedure for disinfecting the variety of surface at your manufacturing facility varies depending upon the type of cleaner you are using (make sure it is EPA registered product against coronavirus and that you leave it on the surface for long enough).  One local companies products are sure to do that if you are concerned: https://www.stateindustrial.com/disinfecting-during-the-covid-19-pandemic

 

EPA List here https://www.epa.gov/pesticide-registration/list-n-disinfectants-use-against-sars-cov-2

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We are here to help

We exist to serve Northeast Ohio's robust and resilient manufacturing industry, and that can start with you. Please reach out with concerns, and we will do our best to create a solution that is best for your business.