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COVID-19: Independent School Business Operations Considerations

By Net Assets posted 03-09-2020 11:55 AM


Risk Management

The information below was accurate as of press time. However, as the situation surrounding COVID-19 has evolved, some data have changed since publication. Additionally, this information is provided for general educational purposes only. It should not be relied upon as, or in place of, legal or other professional advice. Readers are encouraged to stay informed through news and recommendations for their own communities and also work with their schools’ trusted counsel and partners when addressing specific issues.

Last week, the first U.S. schools closed in response to COVID-19 illnesses among the campus community or potential exposures. The students, families, faculty and staff impacted have returned from trips abroad or interacted with infected people in the local area. As of Monday, March 9, at least one public school district in the Seattle area and several West Coast universities have temporarily closed and moved to online learning, and independent schools around the country have closed for deep cleaning following reports that individuals in the school community have contracted the disease or were exposed to it.

Schools are considering how the business office can prepare in a range of ways, from cleaning and closure to liability concerns and facilities rentals. NBOA is working closely with other associations, including NAIS, TABS, EMA and SAIS, to update recommendations. Here’s what we know now:

Considered Communication

Review your school’s policies and handbooks and ensure that they clearly delineate how employees should report illnesses, how the school will provide emergency notifications and how leaders will clarify behavioral expectations. The employee handbook should explicitly state that all employees are required to notify human resources or their manager if they are ill.

Managers should report all illnesses to human resources while ensuring that neither managers nor peers expose employees’ personal medical information to other employees. It is critical that schools clearly respect employees’ right to privacy and medical confidentiality, and share medical diagnoses on a need-to-know basis. All documents related to employees’ health conditions should always be stored in a secure location separate from personnel files.

If an employee is diagnosed with COVID-19, the school should let other employees know if they have been potentially exposed to the disease without letting them know the source of the virus. 

With consistent communication, schools can reduce rumors, establish trust and increase the likelihood that employees will follow the school’s guidance should an outbreak occur. Good sources of information for the latest developments are websites for the World Health Organization, the CDC, and the U.S. Department of Health and Human Services as well as the local health department.

Begin by informing employees that the school is monitoring developments and proceeding with the best interests of the community in mind. Then clearly communicate behavioral expectations, including those regarding hygiene and illness, telework and absence, and travel. If/as conditions change, update expectations, with clear explanations for any changes whenever possible. Communications should not be alarmist and should use easily comprehensible language for all persons, should provide context when possible, and should maintain flexibility for the school to alter its plans should the situation change.

Relay expectations related to hygiene protocols at the school immediately and post reminders in highly trafficked areas. The CDC recommends frequent hand washing with soap and water for longer than 20 seconds and use of alcohol-based hand sanitizer when soap and water are unavailable. Employees should avoid touching their eyes, face and mouth with unwashed hands, and cover all coughs and sneezes with a tissue, which they should then properly dispose. 

Face masks have not been found to be effective in preventing the spread of COVID-19, and schools can disallow employees who are not medical first responders from wearing masks if they are seen as disruptive to operations. Conversely, schools who wish to require employees to wear face masks must provide training on proper use and make accommodations for those with medical conditions that are made worse by masks.

Reporting Requirements

Public health officials have developed guidelines to help control the rapid spread of COVID-19. Schools with an employee who has been diagnosed with COVID-19 should report it immediately to the local or state health department and consult their school counsel for guidance on further reporting requirements. Depending upon the circumstances under which the employee contracted the disease, further reporting to OSHA or your worker’s compensation provider may be required.

Wage and Benefits Accommodations

Communicate clearly to employees what the school expects of them if they are exposed to COVID-19. Strongly encourage employees who are ill or who have an illness in their family to remain home.

The CDC recommends that those who have been exposed to COVID-19 but are not diagnosed to remain under a 14-day self-quarantine. Schools may require a medical release in these circumstances only if there is a documented exposure to the virus.

Those who have been diagnosed with COVID-19 must remain under quarantine for a minimum of 14 days and until they are asymptomatic, as per the CDC’s orders. Schools should require a medical release before allowing ill employees to return to school.

There have been reports of businesses screening employees for fevers prior to allowing them to report to work. Mass medical screenings by employers are not usually legal and should not be implemented. Further, screening only certain demographics of employees or treating them differently based upon a perception of heightened susceptibility to COVID-19, including employees of Asian descent or those with pre-existing conditions, likely violates Title VII of the Civil Rights Act of 1964.

If the school suspects that an employee has reported to work while ill, the school should separate the employee from other employees and students, and send him or her home immediately. Unless restricted by state or local law, the school can require employees to remain home under quarantine until they are asymptomatic or have a medical release from a doctor. Under federal law, schools cannot terminate an employee due to a COVID-19 diagnosis.

Schools may offer to pay for diagnostic visits or medical treatment, but they are not obligated to do so under federal law. Any such offers should be applied uniformly to all employees. If telehealth options exist, it is prudent to advise employees of these options and recommend that they utilize them. The CDC has stated that doctors’ offices cannot do COVID-19 testing and community members should not go to medical offices if they suspect they have COVID-19. If telemedicine options are not available, they should call their general practitioner or a local hospital for instructions.

Note that in the case of a COVID-19 diagnosis, employees may be forced to take specific actions ordered by public health officials. These are legally enforceable directives and must be supported by employers.

Schools should also put into place and communicate expectations around payment of wages when employees are unable to report to work due to illness. In most circumstances, schools are not obligated to pay hourly employees who are unable to report to work or unable to work remotely. Schools should check collective bargaining agreements and state or local laws for exceptions. Salaried employees who are able to work but are being required by the school to self-quarantine must be paid. Employees who have accrued sick or personal time should be permitted to use it (and can often be compelled to use it) if they are not being paid for their time away from work.

Employees who contract COVID-19 and are required to self-quarantine are likely eligible for protections under the Family Medical Leave Act (FMLA) and may also be eligible for any state-mandated sick leave.  Those who experience extended illness may be eligible for disability payments under any active policies and may require Americans with Disabilities Act (ADA) accommodations related to extended leave or partial days upon return to work.

Officials are recommending that, if possible, employers pay all employees for COVID-19-related quarantines because paid sick time discourages employees from attempting to come to work while ill.  According to the New York Times, 68% of employers recently surveyed intended to pay employees for the entirety of their quarantine period, 12% intended to pay employees for the first two weeks of quarantine, and 20% had not yet decided upon a course of action.

The CDC has asked employers to provide employees with flexibility regarding medical releases when employees want to stay home due to illness. In areas with high rates of infection, doctors may have limited capacity to provide medical releases, and the requirement of one may disincentivize employees from voluntarily staying home when sick. Please note some states also regulate when a medical release can be requested by an employer, so schools should consult their school counsel prior to making any changes to employee leave policies related to medical releases.

Employee Absenteeism and Liability

Schools may experience increased employee absenteeism related to COVID-19. Some absenteeism may be related to illness and proactive self-quarantine; other absences may be due to employees’ hesitation to work in an environment that they believe could be unsafe. At all times, the school has a right to enforce its attendance policies, including call-out requirements and regular check-ins. Before reacting harshly to increased absenteeism, however, assess potential reputational damage.

As always, responses to absenteeism should be assessed on a case-by-case basis. Employees who become ill with COVID-19 may develop mild symptoms and return to work at the appropriate time with no issues, while others may develop much more serious symptoms and require more time to heal and/or job modifications upon return. Contracting COVID-19 can be extremely stressful; notify those who fall ill of any support services available to them through an employee assistance program.

Employees who have not fallen ill but have pre-existing conditions that would put them at increased risk of death from the disease may have grounds for leave or telework as an ADA accommodation. Employees who are not ill but who refuse to report to work can be suspended without pay pending an investigation into the necessity of an accommodation, and the school would be within its rights to request medical documentation before proceeding. It should be noted that an employee does not need to be diagnosed with an illness in order to be eligible for ADA protections; the employee only needs to be regarded as having the illness. Employees who are treated poorly by their peers because they are regarded as having had COVID-19 are afforded the same protections as those who were actually diagnosed with the virus.

Further, the contraction of COVID-19 during the course of an employee’s work, such as nursing or dorm parenting, could be grounds for receiving worker’s compensation in some jurisdictions. Employees would not be eligible if they contract it incidentally from a co-worker unless it is established that the contraction was the result of negligence on the part of the school. All COVID-19 diagnoses should be discussed with school counsel to assess potential liabilities.

Trips and Travel

Schools with employees who travel should take extra precautions and limit travel as much as possible. Travel to countries listed by the CDC or the State Department as threat level 3 or higher is not recommended at this time. When travel is required, the school should communicate clearly with employees about expectations such as the following:

  • Check the CDC’s travel health notices prior to departure and during travel.
  • Remain home and do not travel when ill.
  • If employees become sick while traveling for work, they should notify their supervisor immediately and promptly call a healthcare provider if needed.
  • If they become sick while traveling outside the country, follow appropriate policies, which may be different from domestic travel policies.
  • Avoid direct contact with animals, alive or dead, and surfaces contaminated with droppings.
  • Avoid exposure to large groups of people, people who are obviously ill, or areas ill people frequent such as medical centers.

Employees who travel to areas experiencing an outbreak or who are showing signs of illness upon return should self-quarantine for 14 days. 

Most schools are cancelling all international and many domestic trips, but if a school intends to continue a trip, they should re-write the consent agreements specifically calling out the threat of COVID-19 and have parents sign them again, said Ron Wanglin, chairman of Bolton & Company. The courts have generally said if something like COVID-19 is not called out and occurs on the trips, parents are right to say, “The school didn’t think this was a big enough threat to consider” and rule on the side of the parents, he explained.

If the school decides to cancel a trip, clearly communicate the reason for the cancellation in sufficient time for families to make alternative arrangements. As for financial implications, if the planned destination has a Level 4 travel designation from the U.S. Department of State, insurance will likely cover the cancellation. If trip insurance is not in place or the threat level from the State Department does not warrant cancellation under insurance guidelines — a level 3 designation, such as Italy has as of March 9, may not be covered — schools will need to decide if they are going to allow parents to forfeit money or if they will cover the families’ expenses. Decide this prior to sending communications.

Communicable Disease Action Plan

Schools should develop a communicable disease action plan if they do not already have one.  This plan should address:

  1. Prevention procedures
    • Personal hygiene requirements
    • Sanitation protocols for the premises
    • Travel restrictions and provisions for stranded employees
  2. Employee training
  3. Medical monitoring requirements
    • Mandatory reporting of personal or family illness by employees
    • Requirement for employees to remain home when exhibiting signs of illness
    • Mandatory checkups or vaccinations when prudent (consult an attorney prior to mandating health care)
  4. Recordkeeping procedures
    • Storage of medical documentation
    • Incident reporting, including outside agencies who many require notification
  5. Outbreak response
    • Identify the response team members and expand the existing team if needed
    • Tightened hygiene protocols which may include:
      • Avoiding handshakes or hugs
      • Limiting gatherings to small groups
      • “Social distancing” of three feet during meetings
    • Plan for mass employee absences
    • Cross-training for essential job functions
    • Identify the potential for business continuity if the school must close a campus
    • Identify essential functions which must continue

Facilities-Related Liability

Property owners have a duty to protect both residents and visitors from hazards which are not open and obvious. These hazards can include communicable diseases, and schools could be liable for damages related to negligence if they do not respond appropriately to the dangers presented by COVID-19. 

Check facilities rental agreements to see what clauses might allow your school to cancel the contract. Most schools are cancelling all facilities rentals, even if they do not have a clause in the contract and will need to pay damages to the group who was renting the facility, said Wanglin. Having large groups of unaffiliated people on campus is simply too large a risk.

Clean and disinfect frequently touched objects and surfaces when the risk of communicable disease is high. Post signage that encourages good hygiene, including hand washing, and provide hand sanitizer in well-trafficked areas. If someone with COVID-19 may have been on school grounds, schools that house residents have an obligation to tell residents, even those who are not employees or students. 

Financial Impacts

Proactively consider the potential effects of COVID-19 on operational costs related to employee benefits. A local outbreak could affect disability or worker’s compensation rates in the future. Health insurance rates may also increase. Employers can alter their health insurance coverage to limit the financial liability of cost increases, but changes to health plans should not target specific groups of people or specific diagnoses in a discriminatory manner. 

Some states are directing insurers to waive cost-sharing requirements on health insurance policies when the purpose of the visit is for coronavirus testing. Self-insured or HSA-compatible plans may be regulated by federal mandates which contradict these state-level directives. Schools should check with their insurers or third party administrators to see if their coverage is affected and/or being changed by the insurer in response to these directions. 

Further, the financial markets have experienced volatility related to COVID-19. Lockton companies reports that during disease outbreaks, the markets drop an average of 9.5%, and the current market is consistent with previous experience. While reactionary measures are not advised, it is prudent for board finance committees and employee retirement plan investment oversight committees to convene to review their investments to ensure they are meeting their fiduciary obligations and providing an adequate array of options. Information committees may find helpful can be found here. All considerations should be documented in meeting notes.

Schools should analyze which functions of the school are necessary to continue operations if a campus closes. This includes education, but it may also include operations in accounting, payroll, college counseling, or admissions. Should an outbreak require a temporary facilities closure, schools may need to consider remote learning options. Proactively analyze what faculty and staff will need to facilitate remote learning, including conducting a survey to ensure all faculty and staff would have access to high speed internet and adequate technology. Schools should make decisions about potentially funding necessary upgrades for faculty and students prior to the need to act.

Also review employee agreements for clauses related to potential school closures. Contracts should contain exceptions for force majeure, and all agreements should clearly delineate expectations regarding telework and the potential need for remote learning and online classrooms in the case of extended closure.

Schools should also review their agreements with third party vendors who supply materials or personnel to the school.  It is prudent to reach out to critical vendors such as dining services and security services suppliers or those who supply medical and janitorial materials to understand their preparedness capabilities and employee screening procedures.

Check the school’s general liability insurance for business interruption coverage. Many policies only cover interruptions in which there are direct physical losses to the premises in question. They will not cover closures due to illness, according to Wanglin. Pandemic insurance would cover such closures, but schools are not likely to carry it.



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