How to manage your HR issues during the Coronavirus outbreak
The ongoing Coronavirus (COVID-19) health crisis in China is affecting
the global workforce and many multinational companies with
employees based in or traveling to this country are facing serious
difficulties and challenges when managing the impact of this illness in
their teams and business. Government-imposed travel shutdowns and
advisories, quarantines, border screenings, and extended holidays have
become major HR issues for many.
Given the speed in which the situation is evolving, employers should arm themselves with the latest information to avoid unnecessary alarm and be best prepared to make the proper decisions.
There are specific measures that international employers can implement at the workplace, while remaining mindful of the legal implications. Besides extending public holidays, China has imposed no specific requirements on employers to take action (e.g., reporting illnesses). But employees are still subject to existing laws regulating matters such as public holiday work, overtime, sick leave and pay, annual leave, data privacy, economic restructurings/separations, employee performance management, workplace sanitation/safety, and employee consultation on new policies and procedures.
On January 27, China’s State Council announced that the Chinese New Year holiday would be extended to February 2 across the country from January 30. Some local governments have imposed even longer closure periods to reduce travel between cities during this critical period.
Though it was not specified, the extended Spring Festival holiday is to be regarded as “public holiday” status, meaning employees are not required to work or use their annual leave time. They may even be entitled to premium public holiday pay if they work, which means 150 percent to 300 percent of the regular rate. Employees who have traveled over the Spring Festival holiday may not be able to return to the office—so employers can anticipate requests to work remotely or to extend leave even beyond the extended holiday. Employers can likely place employees on unpaid leave in some situations or use annual leave time, as the inability to work is outside their control.
It is important that employees update their contact information, including emergency contact information. You should consider evaluating the types of data employees have consented to have collected and be transmitted, and as needed, request additional consent to collect and process relevant information (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.
A good option, under the circumstances, is to allow employees to work remotely. Therefore, employers may want to advise employees of guidelines about protecting company information and assets, while also reminding employees about being available and responsive as usual. Employers may also want to take the opportunity to remind employees that permission to work remotely can be discontinued.
The best thing for a sick employee is to stay home, and if they may have been exposed to the virus, to seek immediate medical treatment. You should make sure your team has access to supplies such as hand sanitizers and no-touch thermometers, and if necessary surgical masks.
The Beijing Municipal Human Resources and Social Security Bureau issued the “Notice on Maintenance of Stable Labor Relationship During Epidemic Prevention and Control Period” on January 23, 2020. The salaries to be paid in the treatment period, quarantine period, and work resumption period are specified in this Notice.
Employees suffering from coronavirus should be granted a treatment period. Enterprises should pay for sick leave according to the labor contract or collective contract. The sick leave payment should not be lower than 80 percent of the minimum salary standard of Beijing Municipality; employees in the quarantine period and /or medical observation period should be paid by their employers as normal. The situation can vary depending on the municipality and province. It is important that you check and review regional differences.
A medical certificate to take sick leave is 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.
If possible, you should minimize business travel, especially in and out of China. If travel is imperative, 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.
Companies with expats in China may consider offering temporary or longer-term relocation outside of China or accommodating requests to leave China. Employers may also want to check an employee’s assignment documentation for procedures regarding early assignment termination and relocation expenses. If expats do not cooperate with company requests or directives, employers may need to consider negotiating them out of the organization or having them sign waivers acknowledging that they refused assistance or relocation.
Companies’ productivity will be most likely affected by the outbreak. You may have to reevaluate sales and/or bonus targets in some situations to account for unforeseen circumstances. 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.
If cost-saving measures, such as layoffs, are being considered, they should be done so taking into consideration the current legal protections. Chinese law is particularly protective of employees when it comes to terminations. (In general, employers considering measures such as temporary or permanent layoffs often negotiate and pay for such measures, which would include having employees agree in writing to any package.)
New restructuring initiatives may have to wait, unless the company’s economic situation is dire. Given the current uncertainty, employees may be reluctant to agree or negotiate 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.
A good option could be requiring employees to use their vacation time. 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.
Employers should be reasonable in responding to employees’ concerns, however, they 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. Verify your disciplinary policies to make sure situations like these are covered.
The current health crisis has put everyone affected under a tremendous amount of stress and anxiety. Responding to concerns or incidents with care and flexibility will reassure your staff and will have a positive effect in the future. Employees want to know their employer is acting responsibly and will look after and protect them.
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DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.