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Unfortunately, the economic reality of the COVID-19 pandemic, including recent shelter in place orders in California, is forcing employers to implement a range of cost-cutting measures – furloughs, temporary office and location closings, and layoffs. As employers continue to adjust operations during these extraordinary times, it is essential to remember the notice obligation under the federal Worker Adjustment and Retraining Notification (WARN) Act and similar state mini-WARN Acts like the California WARN Act.

The federal WARN Act requires employers to provide 60 days’ advance notice to covered employees, unions, and government officials prior to a plant closing or mass layoff at a single site of employment. State mini-WARN laws contain separate and distinct requirements from the federal WARN Act that are easy to overlook. Given the recent shelter in place orders issued in California which required all non-essential business to transition to work from home, many employers questioned whether they must comply with WARN.

Click here to learn more, including:

  • Is your company subject to WARN?
  • Exceptions to the 60-day notice period – “the unforeseen business exception” and California’s Executive Order
  • Has your company suffered a triggering event?
  • Immediate Action Required!

 

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To navigate the most-pressing issues facing multinational employers amid the COVID-19 pandemic, the COVID-19 Global Employer Guide offers jurisdiction-specific guidance across 41 countries.

Download the Guide now to read the latest employment law guidance on issues including: legal requirements, practical and operational considerations, and emerging government regulation related to the outbreak.

For more information on the virus’ multidisciplinary business and legal implications for your company, visit Baker McKenzie’s Coronavirus Resource Center and contact your Baker McKenzie relationship partner.

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Everything You Need To Know Right Now

After a “warp speed” Senate vote overwhelmingly approving the Families First Coronavirus Response Act (FFCRA), President Trump signed the FFCRA into law yesterday. The legislation is historic; it was not only enacted in days instead of the usual months, but for the first time in US history, many private employers must provide US-based employees with paid sick leave (up to 80 hours) and paid family care leave (up to 10 weeks) for COVID-19-related purposes.

The FFCRA fundamentally alters the leave entitlements available to most American workers. And while the cost of these entitlements ultimately will be borne by the federal government through offsetting employer tax credits, employees impacted by COVID-19 have a significant new safety net into which to fall.

Much about the FFCRA is uncertain, but one thing is clear: employers must act quickly because they have only 15 days to understand and implement the FFCRA’s paid leave requirements, as those provisions take effect April 2, 2020.

To help you prepare, our latest FAQ summarizes the new Act’s requirements, explains its mandates, and highlights what’s changed since our original client alert on the FFCRA.

Q: Give me the basics. What does the FFCRA require?

A: The FFCRA mandates employer-paid sick leave and partially-paid family care leave, offset by tax credits. The Act also includes federal funding and waivers for free COVID-19 testing, food and nutrition assistance programs, and state unemployment insurance programs.

The paid sick leave provisions of the FFCRA are contained in the Emergency Paid Sick Leave Act (EPSLA). The family care leave provisions are found in the Emergency Family and Medical Leave Expansion Act (EFMLEA).

Both the EPSLA and the EFMLEA apply to private employers who engage in commerce and who have fewer than 500 employees and to certain government employers. Large employers (500 or more employees) are excluded from both Acts. It is not yet clear how, or if, different business units or subsidiaries may be grouped together for employee headcount purposes, although it is likely that the “integrated employer” and “joint employer” tests used under the Family and Medical Leave Act (FMLA) will apply to the EFMLEA provisions.

The Secretary of Labor is authorized to issue regulations excluding employers with 50 or fewer employees from the EFMLEA and EPSLA for “good cause” when the imposition of such requirements would jeopardize the viability of the business as a going concern. Employers of health care providers or emergency responders may elect to exclude such employees from both Acts.

The EPSLA provides up to 10 days (80 hours) of paid sick leave when employees must miss work for COVID-19-related purposes.

The EFMLEA expands the FMLA to provide up to 12 weeks of FMLA leave for employees who are unable to work (or telework) because of childcare needs caused by COVID-19. The first 10 days of FMLA COVID-19 childcare leave are unpaid. The remaining childcare leave (50 additional days for an employee who works a 40 hour schedule) is paid at a percentage of the employee’s regular wages.

The EPSLA and the EFMLEA each sunset (expire) on December 31, 2020.

Q: Tell me more about the paid sick leave law. What does the EPSLA require?

A: Covered employers must provide emergency paid sick leave to employees who are unable to work or telework because they:

  1. Are subject to a Federal, State or local quarantine or isolation order related to COVID-19;
  2. Have been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. Are experiencing COVID-19 symptoms and seeking a medical diagnosis;
  4. Are caring for an individual (not just family members) subject to a quarantine order, or who has been advised by a health-care provider to self-quarantine;
  5. Are caring for a son or daughter when the child’s school or place of care has closed, or the child’s child care provider is unavailable, “due to COVID-19 precautions” (a different standard than the “public health emergency declared by a Federal, State, or local health authority” discussed below for COVID-19 FMLA leave); or
  6. Are experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
    Employers must provide 80 hours of paid sick leave (10 work days) for full time employees. Part time employees are entitled to a prorated amount of paid sick leave calculated using their average hours worked over a two-week period.

Emergency paid sick leave is capped at $511 per day and $5,110 in the aggregate when used for the employee’s own well-being (subparagraphs 1, 2, and 3, above), and $200 per day and $2,000 in the aggregate when used for family or child care (subparagraphs 4, 5, and 6).

Employers cannot require the use of other paid leave before the employee utilizes EPSLA paid sick leave. And employees do not need to find replacement workers to cover shifts they miss while using EPSLA leave.

EPSLA violations are considered violations of the minimum wage provisions of the Fair Labor Standards Act (FLSA). The EPSLA also prohibits discrimination, discipline, or discharge of employees who use sick leave or file a complaint under EPSLA.

The EPSLA extends paid sick leave benefits to employees who work under a multiemployer collective bargaining agreement and whose employers pay into a multiemployer plan.

Unused sick leave does not carry over from year to year, and need not be paid out on termination of employment.

Finally, the FFCRA authorizes employer tax credits for qualified sick leave wages paid by an employer. The credits are allowed against the employer’s portion of Social Security taxes, and are subject to the same caps on daily dollar amounts and aggregate days as the required sick leave payments.

Q: Tell me about paid family care leave. What does the EFMLEA require?

A: The EFMLEA expands the FMLA by authorizing eligible employees to take up to 12 weeks of job-protected “public health emergency leave” when needed to care for a son or daughter under 18 years of age if the child’s school or place of care has closed, or the child’s child care provider is unavailable, as a result of a COVID-19 health emergency declared by a Federal, State, or local authority. Employees must be unable to work or telework while caring for the child to qualify for EFMLEA leave.

The first 10 days of EFMLEA leave are unpaid, but employees may elect to use any accrued vacation leave, personal leave, or medical or sick leave during this period. The original draft of the FFCRA would have prohibited employers from requiring employees to use other paid leave during a COVID-19 FMLA leave, but that provision was deleted from the final bill, suggesting that employers may follow the general rule permitting the required use of paid vacation, PTO, personal or family leave during COVID-19 FMLA leave, but not the use of paid sick leave (which may only be required under the FMLA during a leave for the employee’s own serious health condition). As a practical matter, the grant of 10 days of EPSLA paid sick leave means that employees will not need to use their other accrued leave balances during the first 10 days of EFMLEA leave.

Following the 10 days of unpaid leave, an employee must be paid for the remainder of the EFMLEA leave in an amount that is not less than two-thirds of the employee’s regular rate of pay (as determined under the FLSA) multiplied by the number of hours the employee would otherwise normally be scheduled to work, but capped at $200 per day and $10,000 in the aggregate. Employees who work varying schedules may be paid based using the average number of hours the employees were scheduled per day over the prior six-month period or, if the employees did not work in that period, the reasonable expectation of the employees at the time of hiring of the average number of hours per day that the employees would be scheduled to work, also subject to the caps.

The EFMLEA increases the number of employees eligible to take COVID-19 FMLA leave. While traditional FMLA leave remains limited to employees who have been employed for at least 12 months and 1,250 hours of service, the EFMLEA grants COVID-19 FMLA leave to any employee who has been employed by a covered employer for 30 calendar days. This broader definition of “employee” grants FMLA protection to significantly more employees, including newly hired, temporary, part time, and seasonal employees (as long as they have been employed for at least 30 calendar days). The original, more restrictive definition of “employee” remains in place for traditional FMLA leave types.

Similarly, the EFMLEA both expands and limits the number of companies subject to COVID-19 FMLA leave by changing the definition of “employer” from “any person engaged in commerce or in any industry or activity affecting commerce who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year” to “any person engaged in commerce or in any industry or activity affecting commerce who employs fewer than 500 employees.”

The new law contains important exceptions for small businesses and healthcare workers. First, employers with less than 25 employees need not guarantee job reinstatement at the end of a COVID-19 FMLA leave if the employee’s position is eliminated as a result of economic conditions caused by a public health emergency, but employers must make a reasonable effort to restore the employee to an “equivalent” position upon leave expiration, and if no equivalent position is available, make reasonable efforts to contact the former employee if an equivalent position becomes available in the following 12 months. Job reinstatement guarantees remain for larger employers and traditional FMLA leave types.

Second, the Labor Secretary is authorized to issue regulations excluding certain health care providers and emergency responders from the definition of employees eligible to take COVID-19 leave and exempting businesses with fewer than 50 employees from the paid leave requirement if offering such leave would jeopardize the viability of the business as a going concern.

Certain multi-employer paid leave benefit plans will have to allow employees to take paid leave for the childcare reason specified in the EFMLEA. Employers who contribute to multi-employer benefit plans which provide employees paid leave based on the employees’ hours worked will meet their obligation to provide paid COVID-19 FMLA leave by making the contractually described contributions to that plan.

Q: What changed from the first version of the bill?

A: The House of Representatives approved an earlier version of the FFCRA on March 15, 2020, as described in our previous alert. The House then made numerous “technical corrections,” most of which are substantive, to the bill before sending it to the Senate. The changes include:

  • In addition to childcare leave, the original version of the EFMLEA would have permitted employees to take leave if necessary to comply with a recommendation or order of a public health official or health care provider that the physical presence of the employee on the job would jeopardize the health of others because of the exposure of the employee to COVID-19 or the employee’s exhibition of COVID-19 symptoms, or to care for a family member if a public health official or a health care provider determines that the family member’s presence in the community would jeopardize the health of others because of COVID-19 exposure or symptoms. Both of these permitted purposes were eliminated from the final bill.
  • The final bill specifies that an employee seeking paid time COVID-19 FMLA leave must be seeking leave because of the employee’s inability to work or telework.
  • The final bill reduced the unpaid EFMLEA leave from 14 days to 10 days.
  • The original version would have expanded the definition of “family member” and “parent” beyond existing FMLA coverage. These expansions were removed from the final bill.
  • The final bill imposed the daily and aggregate caps on paid sick leave and paid FMLA COVID-19 leave.
  • The final bill allows employers of healthcare providers and emergency responders to exclude them from the EFMLEA and the EPSLA.
  • The EPSLA allows employees to use sick leave to care for “any individual,” not just family members.

For more information, please visit our Coronavirus Resource Center.

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As previously reported, effective Tuesday, March 17, 2020, San Francisco, Alameda, San Mateo, Santa Clara, Santa Cruz, Marin, and Contra Costa counties imposed Shelter-In-Place Orders (“SF Bay Area Orders”).  The SF Bay Area Orders require all individuals to shelter in place in their residences and businesses to cease all activities at facilities located within the listed counties with certain exceptions for: (1) “Essential Businesses” (as defined by the Orders); and (2) “Minimum Basic Operations” for businesses that do not qualify as “Essential Businesses.” The Shelter-In-Place Orders currently remain in effect through April 7. Although each of the six Bay Area counties, plus Santa Cruz, issued a separate Order, the substantive terms of the SF Bay Area Orders are the same.

Again, the intent of the Orders is to ensure the maximum number of people self-isolate in their places of residence to the maximum extent feasible, while enabling essential services to continue, and to slow the spread of Coronavirus (also known as COVID-19) to the maximum extent possible. To that end, we have seen local sheriff’s departments implementing the Orders against companies that do not fall squarely under an express exemption.

As of Wednesday, March 18, 2020, more California counties have issued Orders, bringing the total count to 11 out of 58 California counties.  The below includes an update on the SF Bay Area Orders and the latest counties to issue Orders.

What Businesses are Covered by the SF Bay Area Orders?
 
All businesses with a facility in San Francisco, Alameda, San Mateo, Santa Clara, Marin, and Contra Costa counties, except for “Essential Businesses,” are covered by the SF Bay Area Orders. The Orders list 21 categories of Essential Businesses, ranging from healthcare operations and hardware stores to businesses that ship or deliver goods directly to residences. Employees of Essential Businesses may perform travel to/from and related to the Essential Business. The full list of Essential Businesses may be found in each of the Orders, here:

What are the Guidelines for Essential Businesses?

The Orders strongly encourage Essential Businesses to remain open. To the greatest extent possible, Essential Businesses shall comply with the “Social Distancing Requirements.” Social Distancing Requirements include maintaining at least six-foot social distancing from other individuals, washing hands with soap and water for at least 20 seconds as frequently as possible or using hand sanitizer, covering coughs or sneezes (into the sleeve or elbow, not hands), regularly cleaning high-touch surfaces, and not shaking hands.

What if My Business Is Not On the List of “Essential” Businesses?

Generally, businesses that do not provide “essential” services must send workers home. All travel other than “essential travel” is prohibited. Businesses may continue operations that consist exclusively of employees or contractors performing activities at their own residences (i.e., working from home).  The Orders do, however, contain a limited exception for “Minimum Basic Operations.” Minimum Basic Operations includes the following, provided that employees comply with Social Distancing Requirements, to the extent possible, while carrying out such operations:

  • The minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions.
  • The minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences.

Are Impacted Employees Eligible For Unemployment Insurance?

Individuals who are laid off or subject to reduced hours due to Coronavirus restrictions may apply for unemployment benefits through the California Employment Development Department. Individuals do not need to be sick to apply. California has waived the normal one-week waiting period, so an employee may collect unemployment insurance benefits for the first week he or she is out of work.

Is there a penalty for noncompliance?

Per the orders, violation of or failure to comply is a misdemeanor punishable by fine, imprisonment or both. At the moment, the country sheriff’s departments and county chiefs of police are responsible for enforcement.  For instance the Alameda County Sheriff notified a manufacturing employer, via Twitter, that it was not an essential business as defined in the Alameda County Health Order.  The Alameda County Sheriff notified the business that it was limited to minimum basic operations per the Order.

What Are Other Counties Doing?

Following the initial SF Bay Area Orders, the counties of Santa Cruz, Monterey, San Benito, Sonoma, and Sacramento have issued similar orders or directives from county health officials.  The subsequent orders and directives contain different language, but are also designed to restrict movement to essential services and businesses, such as healthcare operations, grocery stores, and gas stations.

Orange County has issued a public health order that closes bars and other establishments that serve alcohol but not food, and restricts restaurants to pick-up, delivery, and drive thru services. This is not a Shelter in Place Order.

At this time, Napa and Solano counties have not issued similar mandates.

How Do I Get More Information?

This is an evolving area and changes on a daily basis.  Please contact your Baker & McKenzie employment lawyer if you need assistance navigating these issues, or visit our Coronavirus Resource Center for more information. You can also click here for our most recent client alert on employee pay during COVID-19 leaves, furloughs, and closures.

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Last week, in Kim v. Reins International California, Inc., No. S246911, after more than two years on review and extensive briefing by amicus curiae, the California Supreme Court unanimously resolved an issue of first impression concerning the Private Attorneys General Act (PAGA): whether settlement of individual Labor Code claims extinguishes PAGA standing.

California’s Labor Code contains a number of provisions designed to protect the health, safety, and compensation of workers. Among those laws, PAGA provides a mechanism for employees to enforce the Labor Code as the state’s designated proxy. In particular, PAGA authorizes “aggrieved employees” to pursue civil penalties on behalf of the state. Those penalties differ from statutory damages or other penalties an employee may recover individually for alleged Labor Code violations because relief under PAGA is intended to benefit the general public, not the party bringing the action.

Continue Reading Employee Remains “Aggrieved” Under PAGA Even After Settling Individual Claims

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Effective Tuesday, March 17, 2020, San Francisco, Alameda, San Mateo, Santa Clara, Santa Cruz, Marin, and Contra Costa counties imposed Shelter-In-Place Orders. These Orders require all individuals ordered to shelter in place in their residences and for businesses to cease all activities at facilities located within the listed counties and with certain exceptions for: (1) “Essential Businesses” (as defined by the Orders); and (2) “Minimum Basic Operations” for businesses that do not qualify as “Essential Businesses.” The Shelter-In-Place Orders currently remain in effect through April 7. At this time, Napa, Solano, and Sonoma counties have not issued similar mandates.

The intent of the Orders is to ensure the maximum number of people self-isolate in their places of residence to the maximum extent feasible, while enabling essential services to continue, and to slow the spread of Coronavirus (also known as COVID-19) to the maximum extent possible. Although each of the seven Bay Area counties issued a separate Order, the substantive terms of the Orders are the same.

What Businesses are Covered by the Orders?

All businesses with a facility in the above-listed counties, except for “Essential Businesses,” are covered by the Orders. The Orders list 21 categories of Essential Businesses, ranging from healthcare operations and hardware stores to businesses that ship or deliver goods directly to residences. Employees of Essential Businesses may perform travel to/from and related to the Essential Business. The full list of Essential Businesses may be found here:

Continue Reading Shelter-In-Place Orders Take Effect In The San Francisco Bay Area

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Current and Anticipated Requirements

The stark reality of government quarantines, mass-gathering bans, school closures, public health emergencies, and travel restrictions is impacting the American workplace and workforce in truly unprecedented ways. Every day, US employers institute facility closures, remote-working, furloughs and, in some cases, layoffs in response to the economic and health impacts of the COVID-19 pandemic. Employers are no longer asking whether they can check the temperatures of their employees, but instead are hyper-focused on continuing critical business operations while helping employees mitigate the financial burdens of the current crisis.

Click here to review our latest FAQ which addresses these challenging employment and humanitarian concerns.

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Encouraging employees to wash their hands is no longer enough!

As anticipated in our last alert, the World Health Organization (WHO) has now declared the COVID-19 virus a pandemic, changing the legal landscape for employers in terms of how they navigate the impact of the outbreak on their workforce. As such, we are circulating an updated FAQ with additional tips for US employers. As previously explained, these FAQs are based on experience with prior pandemics, and the ADA and EEOC guidance, which are the main “drivers” for managing employees. Of course, bear in mind that there are many other considerations that can come into play, such as OSHA and state equivalent health & safety laws, FMLA and state equivalent leave laws, HIPPA and state privacy laws, state and federal wage and hour laws, and the NLRA, all of which will need to be “ticked through” depending on the facts.

Q. Does the WHO’s declaration of a “global pandemic” mean that that US employers may rely on the “direct threat” ADA exception to conduct employee medical exams (e.g., temperature checks) and make disability-related inquiries (e.g., asking employees if they have a weakened immune system that might make them more susceptible to severe illness if exposed to COVID-19)?

A. Probably. A pandemic declaration describes the scope of the disease’s spread, but not the severity of the disease, so a pandemic declaration by itself is not enough. But given the CDC’s current assessment of the severity of COVID-19, the WHO’s pandemic declaration, and local public health agency proclamations about the disease, many U.S. employers should now be able to take steps to protect their workforces from COVID-19. The 2009 EEOC guidance outlines the relevant ADA standard:

Whether pandemic influenza rises to the level of a direct threat depends on the severity of the illness. If the CDC or state or local public health authorities determine that the illness is like seasonal influenza or the 2009 spring/summer H1N1 influenza, it would not pose a direct threat or justify disability-related inquiries and medical examinations. By contrast, if the CDC or state or local health authorities determine that pandemic influenza is significantly more severe, it could pose a direct threat. The assessment by the CDC or public health authorities would provide the objective evidence needed for a disability-related inquiry or medical examination. During a pandemic, employers should rely on the latest CDC and state or local public health assessments. While the EEOC recognizes that public health recommendations may change during a crisis and differ between states, employers are expected to make their best efforts to obtain public health advice that is contemporaneous and appropriate for their location, and to make reasonable assessments of conditions in their workplace based on this information.

It is now relatively clear that COVID-19 will be deemed severe in comparison to seasonal influenza or the 2009 H1N1 influenza. The CDC recently declared:

Outbreaks of novel virus infections among people are always of public health concern. The risk to the general public from these outbreaks depends on characteristics of the virus, including how well it spreads between people; the severity of resulting illness; and the medical or other measures available to control the impact of the virus (for example, vaccines or medications that can treat the illness). That this disease has caused severe illness, including illness resulting in death is concerning, especially since it has also shown sustained person-to-person spread in several places. These factors meet two of the criteria of a pandemic. As community spread is detected in more and more countries, the world moves closer toward meeting the third criteria, worldwide spread of the new virus. It is important to note that current circumstances suggest it is likely that this virus will cause a pandemic. This is a rapidly evolving situation and CDC’s risk assessment will be updated as needed.

The CDC also notes that there is no current treatment for COVID-19, that the International Health Regulations Emergency Committee of the World Health Organization declared the outbreak a “public health emergency of international concern” and that, on January 31, 2020, Health and Human Services Secretary Alex M. Azar II declared a public health emergency (PHE) for the United States to aid the nation’s healthcare community in responding to COVID-19. Many states have now declared local health emergencies, and cases of community spread are being commonly reported throughout the US. With close to 1,200 confirmed cases in 41 different states and the District of Columbia, US employers likely have the “objective evidence” necessary to justify disability-related inquiries or medical examinations.

Q: Can I send employees home if they display influenza-like symptoms during a pandemic?

A: Yes. The CDC and WHO have stated that employees who become ill with symptoms of influenza-like illness at work during the COVID-19 epidemic should leave the workplace. Advising such workers to go home is not a disability-related action if the illness is akin to seasonal influenza. You can also send an employee home if the illness is serious enough to pose a direct threat (as defined under the ADA) to the employee or others (see above for an analysis of the current “direct threat” level). But if your workforce is unionized, make sure you consider any CBA-related obligations, such as guaranteed workweek provisions or shift change notice requirements. It is also important to not overreact; train your supervisors on the symptoms to watch for and when to send an employee home.

To continue reading our Q&A, click HERE.

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Employers and their workforce are waking up to news this morning of further US travel restrictions given the COVID-19 pandemic. This time, the restrictions affect most travelers from the European Union (EU). The following are highlights of what you need to know today:

Foreign nationals who have visited the Schengen Area in the past 14 days will not be permitted to enter the United States under Presidential Proclamation.

Similar to recent presidential proclamations that restrict travelers who have visited China or Iran, the Presidential Proclamation that President Trump signed yesterday suspends the entry of most foreign nationals who have been in the Schengen Area at any point during the 14 days prior to their scheduled arrival to the United States. The countries in the Schengen Area are Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland. The proclamation is effective at 11:59 p.m. Eastern Daylight Time on March 13, 2020. The proclamation does not apply to persons aboard a flight scheduled to arrive in the United States that departed prior to 11:59 p.m. Eastern Daylight Time on March 13, 2020.

Click here to obtain additional information regarding restrictions, enhanced screening procedures at select airports, and steps employers should take.

With thanks to our Global Immigration and Mobility team for this alert.

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To review the new and expanded version of the Coronavirus Quick Guide for Employers click here.

This guide covers 19 jurisdictions across Europe, Middle East and Africa and covers the latest country updates from the last couple of days, including employer obligations following school closures around the region.