Governors Holcomb of Indiana and Whitmer of Michigan both issued Executive Orders on Monday, March 23, 2020 restricting personal and business activities and travel in response to the COVID-19 virus.
· Holcomb’s Executive Order 20-08 Directive for Hoosiers to Stay at Home is in effect from 11:59 PM, March 24, 2020 through 11:59 PM April 6, 2020.
· Whitmer’s Executive Order 2020-21 (COVID-19) is in effect from 12:01 AM, March 23, 2020 through 11:59 PM, April 13, 2020.
Both Orders prohibit individuals “living in the state” from leaving their residence except for permitted activities and travel. The Orders also require all non-exempt businesses or operations to cease operating except for home-based work and certain minimum basic operations required to protect the business assets and facilities or to facilitate home-based work. Even if a business is permitted to continue on premises operations, it must adopt policies to protect its workers and customers, including eliminating in-person meetings where possible, enforcing social distancing, and implementing frequent cleaning and disinfecting practices.
There are several important distinctions between the way that the Indiana and Michigan Orders effect businesses:
Indiana’s Order is set to expire one week prior to Michigan’s;
Indiana utilizes a business-focused exemption approach that allows businesses defined as “Essential Businesses and Operations” to continue on premises operations, while encouraging those businesses to allow as many employees as possible to work from home;
In contrast, Michigan takes an employee-focused exemption approach in which only the portion of a business’s workforce defined as “critical infrastructure workers” may participate in on premises operations, while all other workers must cease working unless they can work from home. Moreover, the Michigan Order requires businesses to proactively determine which, if any of their workers are critical infrastructure workers and to inform those workers of the designation;
Both Orders exempt business operations included in the sixteen Critical Infrastructure Sectors identified by the Federal Cybersecurity & Infrastructure Security Agency (CISA) of the Department of Homeland Security. The Sectors include:
Chemical Sector · Commercial Facilities Sector · Communications Sector · Critical Manufacturing Sector · Dams Sector · Defense Industrial Base Sector · Emergency Services Sector · Energy Sector · Financial Services Sector · Food and Agriculture Sector · Government Facilities Sector · Healthcare and Public Health Sector · Information Technology Sector · Nuclear Reactors, Materials, and Waste Sector · Transportation Systems Sector · Water and Wastewater Systems Sector.
Indiana’s Order expands the exemption by specifically including a broad range of businesses and operations in the definition of Essential Businesses and Operations. Michigan’s list of additional exempt business activities is brief, but the Order allows critical infrastructure businesses to designate suppliers, distribution centers and service providers as necessary to enable, support of facilitate the work of their critical infrastructure workers. A designated business must then designate its own critical infrastructure workers and may designate yet additional suppliers, distribution centers and service providers as necessary to enable, support of facilitate the work of the designated business’s critical infrastructure workers.
A Michigan business’s designation of workers, suppliers, distribution centers and service providers must be in writing and the business is required to notify the designated individual or business of the designation (although designations may be made orally until 11:59 PM March 31, 2020). Indiana’s exemption is self-operating and does not mandate any designation or notice requirement. Nevertheless, Indiana businesses should consider making the designations, particularly where their workforce or supplier base includes Michigan residents or businesses.
The differences in the Orders may create challenges for those businesses operating in one state, but having employees in living in the other state (or in Illinois, Kentucky or Ohio, all of which are subject to Stay Home executive orders). The Michigan Order places affirmative designation burdens on businesses seeking to take advantage of the critical worker and supplier exemptions and it limits the portion of the workforce and operations that may continue. There is little clarity in either Order as to how the business restrictions will be enforced or what penalties may be levied in the event of an intentional or inadvertent breach (although a subsequent Executive Order by Holcomb addresses violations by restaurants and bars).
Additionally, the interplay of the Stay Home Orders with the new Families First Coronavirus Response Act (FFCRA), which was enacted into law on March 18, 2020 and becomes effective on April 2, 2020, is uncertain at best and could have devastating implications for many small businesses. Hopefully, the Department of Labor and the Administration will help clarify the application of the FFCRA in the coming weeks.
This is a high level summary only, and does not constitute legal advice. Please consult our firm or other qualified legal counsel if you need specific legal advice or recommendations.