Eugenie Fanning has faced many employee-management issues during her decade as a human resources professional working with technology start-ups, but the coronavirus sent a new one her way: One of the employees at SquareFoot, the New York City-based commercial real estate start-up where Fanning is vice president of people, is currently on vacation in Italy, one of the countries now facing a serious coronavirus outbreak.
With roughly only 70 employees based in the U.S. at SquareFoot, Fanning knew the company would have a decision to make: whether or not this employee should come back to the U.S. office if there was a possibility he was exposed to the virus while overseas.
The employee was already in Italy by the time the Centers for Disease Control had escalated the European nation to a Level 3 warning, an advisory that Americans avoid all nonessential travel. "I didn't even know what that term meant previously," Fanning said. "This is unprecedented."
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But Fanning is far from alone in navigating an emerging series of questions related to managing employees during the coronavirus COVID-19 global outbreak. Two recent surveys conducted by CNBC indicate that more than one-third of companies have workers they describe as being "stranded" away from work for extended periods of time.
Roughly 40% of respondents to a CNBC Global CFO Council flash survey sent out last week said "stranded employees" are an issue, as did roughly 37% of executives responding to a recent CNBC Technology Executive Council survey (that survey was in the field in mid-February, so the percentages could be higher by now).
Amber Clayton, who directs the Society for Human Resource Management's Knowledge Center, which fields calls from HR professionals seeking guidance, said many employers have business continuity plans in place for atypical situations, and some even have infectious disease management plans, but still it has been getting questions from companies, some about employees coming back from China: "Do they have to come back into the office right away? Can we require them to stay at home?"
"Employers worry about this, and that's not a bad thing," Clayton said. "Employers need to assess each individual case. Say a worker came back from China, whether for business or pleasure, and a company asked the employee to work from home. ... There's nothing that says they can't ask an employee to work from home if the person has the available resources and ability."
Sixty-two percent of the CFOs taking the CNBC Global CFO Council survey last week said their companies have allocated more resources to virtual work as a result of the coronavirus.
Even though technology can help facilitate some workplace decisions, Clayton said employers can find themselves in "unknown territory" with labor law implications, especially if the coronavirus outbreak in the U.S. gets much worse and forces more widespread business impacts.
The federal Family and Medical Leave Act, and various state versions of this law, provide protected leave to employees, but in the current situation, it is unclear whether an employee who is not ill would qualify, even if there were reason to ask the employee to remain away from the workplace, such as to tend to an ill relative or due to potential exposure to the virus. It also is not clear if employers could force a worker to take a leave. "Typically, you can't require an employee to take Family and Medical Leave if they don't need it," Clayton said.
The issues are more complicated for workers who are not on salary, and whose employers do not offer paid time off for leave, since often these hourly-wage employees have no legal protection for any nonworking hours, based on the Fair Labor Standards Act, which in other cases does protect them, such as in cases of overtime-pay claims.
Clayton said firms should consider paying employees for time they will be out, even if not covered by medical-leave laws or other company policies, but without a legal requirement this could hit hourly workers hard in sectors where there is no remote work option, such as restaurants and hospitality; or furloughed factory workers without specific protections in an existing collective-bargaining agreement.
Trust for America's Health, a nonpartisan public health policy organization that studies government, health-care system and business readiness for diseases and other disasters, said in its 2020 "Ready or Not" report that only 55% of employed people had access to paid time off in 2019, the same as in 2018.
"The absence of paid time off has been shown to exacerbate some infectious disease outbreaks. It can also prevent people from getting preventative care," it wrote in the report. The report said workers without paid sick days are less likely to get a flu shot, as are their children, and lack of paid sick days can disproportionately impact lower-income workers.
The number of confirmed or "presumptive" cases in the U.S. topped 100 on Monday, and the Trump administration said nearly a million tests could be administered for the coronavirus in the United States by the end of this week. Outside China, where new cases are slowing, the total number of cases topped 8,739 across 61 countries, including 127 deaths on Monday, according to WHO data. About 81% of cases outside China are from four countries — South Korea, Italy, Iran and Japan.
The National Institutes of Health's top infectious disease expert, Dr. Anthony Fauci, said he believes the coronavirus has "now reached outbreak proportions and likely pandemic proportions," in an interview with NBC News Monday, and he said a "major outbreak" in the U.S. might require state and local officials to essentially bring public life to a standstill.
"I'm not sure if companies are prepared," said Andrew Challenger, vice president at outplacement firm firm Challenger, Gray & Christmas, which works with companies on a variety of labor issues, including executive coaching, downsizings and career transition services.
Challenger said the situation already playing out in China, where workers in certain areas have not been able to do their jobs for weeks, raises the issue of private enterprise and government support for workers in unprecedented scenarios. "We're seeing it begin to impact the world economy and workers, and hopefully it doesn't get to this point in the U.S., but there are a multitude of complications from a legal standpoint and from an HR standpoint in terms of doing right by people and employees," he said.
The U.S. has transitioned from a manufacturing-led economy to a service economy over the past few decades, and in the past few years tightness in the labor market has allowed more employees to negotiate for more telecommute days. Both of these trends provide what Challenger called a potential "short-term productivity buffer," since many of these jobs can be performed effectively on a remote basis for a limited duration of time. "But even professional services companies will take a hit if it extends beyond a few weeks," he said.
That's the case at SquareFoot, which decided that once the vacationing employee does return from Italy, he will work from home for two weeks. "He's been checking emails and RSVP'd to a team event we're doing in a few weeks," at which point he is expected to be working from home, Fanning said. And he is currently healthy. "He is out there and enjoying himself," she said.
SquareFoot has made broader decisions for its workforce short of having everyone work remote. All workers are traveling with laptops and chargers every day, and any employee returning from a Level 2 ("practice enhanced precautions") CDC warning region or above will work from home for two weeks to ensure safety of all employees and clients.
"We all have video conferencing and Slack, and if we do all need to work from home, we have those capabilities," Fanning said. Such a situation will be fine "for a few weeks," she added, before obstacles from the client side would begin to pose business risks.
As a commercial real estate and office space firm, SquareFoot ultimately has to be able to meet with clients to view potential sites, and those clients need to be able to travel freely. A few clients have recently delayed search activity, according to the company, due to travel issues or more general concerns about the economy.
In China the ability for service-based firms to leverage technology is in use across local workforces.
Tim O'Brien, senior vice president of INTO University Partnerships, which prepares and recruits tens of thousands of international students from 160 countries for placement in U.S. and U.K. universities, has its largest student market in China, and O'Brien said the organization's entire China-based staff of between 150 and 200 workers have been working from home since February, and monitoring the situation on a daily basis.
O'Brien, who worked through previous outbreaks like H1N1 and SARS, said a big difference with the coronavirus outbreak is how significantly technology has changed. In an ideal scenario, supporting students and building relationships with them involves face-to-face meetings alongside digital engagement, and digital connection will never be as effective. But many of the service firm's relationships already have been built with clients, making the current reality less disruptive than it is in, for example, manufacturing. "We don't have factories where people go and make LCD screens. We are able to put in place mitigation that isn't quite as disruptive," he said, adding, "So much work can be done remotely today."
A key enabler of this rapid shift is the fact that individuals, including students in China, already have social media technology central to their daily lives, such as platforms like WeChat. "Every aspect of their life is on mobile," O'Brien said.
"We are working to make sure internal meetings, all hands and other important tasks are optimized for remote participation. We recognize that working from home is not ideal for some job functions. For those employees who prefer or need to come into the offices, they will remain open for business," the social media firm said.
Working from home for Twitter employees in Hong Kong, Japan and South Korea offices will be mandatory.
In cases where workers are not required by government mandate to restrict certain work decisions, O'Brien said INTO's management felt it had to make clear that executives have welfare and well-being of staff and students as first priority, and therefore they follow guidance of public health agencies and medical professionals like the WHO and CDC.
Employees should not make decisions out of fear they would be judged, which was especially important to communicate because so many of the company's employees — working with 35,000 students including many from China, India and the Middle East, as well as across the rest of Asia, including South Korea, Japan, Thailand and Vietnam — travel routinely for work.
"If the advice [from medical professionals] is to not travel, employees should know that in no way will they be held accountable for travel plans, there would be no expectation they would follow through on travel, and no colleague's career would be in any way be compromised by not taking the advice of medical professionals," O'Brien said.
Beyond government-required quarantine and self-quarantine voluntarily entered into by individuals, the current situation will be a test of entrenched U.S. work norms.
"We are not used to companies or even governments telling us 'You have to stay somewhere,'" Challenger said. "It's a difficult thing for companies to communicate."
For companies in the U.S. that don't already have a culture that clearly communicates it is not just OK, but best, to stay home from work when sick, now is the time to change the communication, Challenger said.
"The idea that if you're not coming in, staying home sick, that you will not get put on the next big project or not get the next promotion, this is the time to combat that ... to change the norms," he said. "At the majority of companies, that is still not the case. Employees are still worried in normal flu season about this, even though it saves a company money when people stay at home, and in this environment it's a whole different ball game."
SHRM's Clayton said she is less sure about permanent changes to workplace culture resulting from the current outbreak, but she said that, in the least, for companies that don't have business continuity plans and infectious disease management plans in place, it is time to implement them.
Note on surveys: The CNBC Global CFO Council flash survey from last week includes responses from 33 CFOs representing firms from North America, Europe and Asia regions. The Technology Executive Council survey, which ran from Feb. 6– Feb. 24, included responses from 39 senior technology executives from industry, nonprofit and government organizations.