The Coronavirus Outbreak's Impact on International Employers

Bonnie Puckett

Oqletree Deakins

A leading U.S. law firm 

Focused on labor & employment

As the world responds to the accelerating coronavirus outbreak originating in Wuhan, China - a situation now declared by the World Health Organization to be a Public Health Emergency of International Concern - multinational employers, particularly those with employees based in or traveling to China, are assessing their role in managing workforce impact. 

In addition to taking precautions to prevent the spread of illness, employers are contending with government-imposed travel shutdowns and advisories, quarantines, border screenings, and extended holidays that may affect local operations and global mobility.

While the disease poses serious ongoing concerns affecting the global workforce, employers are well served to keep perspective and avoid unnecessary alarm or disruption. Employers may wish to consider implementing certain measures in their workplaces and taking care when responding to related concerns, while remaining mindful of the legal implications. 


Processing employee personal data

Consider checking the types of data employees have consented to have collected and be transmitted, and as needed, request additional consent to collect and process relevant data (such as health-based data, typically anonymized when necessary to protect workplace health and safety or comply with laws).

China employers can ask employees to disclose a coronavirus diagnosis, and this request would likely be upheld there, though other countries' data-privacy laws may not allow employers to require it. 

China's data-privacy regulations are nonbinding advisory guidelines without penalties, but employers typically observe them. As such, most employers collect employee data through a consent form, and may want to avoid any collection and/or processing of employee data outside that consent. Employers may want to request that employees update their contact information including emergency contact information.


Reinforcing good hygiene practices on-site


Consider encouraging sick employees to stay home (or go home), and if they may have been exposed to the virus, to seek medical treatment. Provide supplies such as hand sanitizers and no-touch thermometers, and in situations where there is a heightened likelihood of transmission or it would otherwise not cause unwarranted panic, other supplies such as surgical masks.


Handling sick leave


Check your local sick leave reporting policy, and consider circulating a reminder about it. Sick leave reporting procedures requiring a medical certificate to take sick leave are highly recommended in China, so if you do not have a sick leave reporting policy, consider communicating one now. 


On the other hand, it is often confusing to update or change an existing sick leave reporting policy in response to a specific outbreak like this, though occasionally a temporary policy may be warranted. 


While some foreign employers use a U.S.-style "paid time off" system in China, this will not be enforceable to the extent it requires employees to use a combined annual and sick leave bank. Consider confirming that employee accruals are accounted properly for sick leave and annual leave, and that the accruals comply with Chinese legal entitlements.


Managing business travel


Consider minimizing required business travel, particularly in and out of China. If there is a business travel necessity, be prepared to articulate it and offer additional support to the traveling employee (such as a higher service class to minimize contact with other travelers). 


If an employee expresses hesitation about traveling to China, avoid requiring that particular employee to go. Many companies have border operations that involve employees crossing between Hong Kong and China frequently, so these operations will be particularly affected.


Dealing with decreased productivity and/or performance


The virus is likely to impact productivity on a group and individual scale. Employers may need to adjust sales and/or bonus targets in some situations to account for unforeseen circumstances and consult their sales plans to determine the parameters. 


Handling day-to-day performance issues in China may become challenging as well, as an employee may argue that a productivity-related issue is tied to the outbreak and that the employee cannot be penalized for it.


Layoffs and other cost-saving measures


Businesses may wish to explore cost-saving measures, and while universally known circumstances like these likely afford some flexibility, companies should be aware of the legal protections that exist. 


Chinese law is particularly protective of employees when it comes to terminations. Now, employers may need to put preexisting plans on hold and for the time being will face challenges in initiating new restructuring initiatives unless their economic situations are dire, as the uncertainty may make employees reluctant to agree to separations. 


In China, employers considering an extended shutdown or furlough must generally pay employees at least a partial salary during the furlough period and must consult with unions or employee representatives before doing so. 


Requiring employees to use their vacation time may be a good option to explore as well - employees are more likely to be understanding and accepting of such measures in a situation so obviously driven by external factors, particularly when it will allow them to keep their jobs longer-term.


Dealing with disciplinary issues


While employers should be reasonable in responding to employees' concerns, employers may need to discipline for attendance violations, refusal to comply with directions, such as to go home when ill or to see a medical doctor for certain symptoms, or abuse of remote work and/or other accommodations implemented in connection with the virus. Check your disciplinary policies to make sure situations like these are covered.


Responding to concerns or incidents with care and flexibility


In situations where there is no HR or office administration infrastructure locally, employers may wish to designate a contact person available to respond to relevant inquiries.

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