To limit the spread of COVID-19, on March 17, 2020 at 12:01 a.m., San Francisco and six neighboring counties (Santa Clara, San Mateo, Marin, Contra Costa, Alameda, and Santa Cruz) enacted health orders requiring residents to “shelter-in-place” — i.e., isolate themselves and stay home except to attend to essential activities, essential business and government operations. In Northern California, San Benito, Monterey, and Sonoma counties along with certain cities, like Davis, enacted similar orders that extend through April 7, 2020.

On March 19, 2020 California Gov. Gavin Newsom issued a shelter-in-place order for the entire state of California, effectively extending restrictions that began in the Bay Area statewide. The governor's office also published this Q&A offering details on the new measures.

Businesses in other states and jurisdictions can use this alert to start thinking about how they would deal with similar restrictions where they operate.

These orders require businesses to cease operations unless they fall within the definition of “Essential Business,” but allow nonessential businesses to limit operations to “Maintain Basic Operations.” While certain government agencies are issuing guidelines or recommendations, these orders make violation a misdemeanor, with attendant enforcement penalties.

There is significant confusion over what is deemed an essential business under the orders and/or whether other businesses’ roles are required to maintain basic operations of “Essential Businesses.” (See below Q&A for additional information on the meaning of "Essential Businesses" and "Maintain Basic Operations.")

Given the fact that we are wading in uncharted waters, many companies are seeking exemptions to continue operations.

Businesses that continue to operate and employ individuals on-site need to be vigilant in providing a safe workplace for those employees. Inadequate efforts may expose employers to negligence, workers’ compensation, unfair labor practices and other types of claims. For a detailed overview, review Coronavirus Workplace Considerations for Employers.

Moreover, federal, state and local governments are issuing new mandates and recommendations on a daily basis. We encourage companies and individuals to get ahead of the situation and plan for continued business disruptions and the attendant fallout. Our attorneys are working full-time to address our clients’ ongoing needs and questions, and to stay abreast of these rapidly evolving areas of concern, interpretation and enforcement in orders.

For businesses, compliance with these shelter-in-place orders boils down to understanding two terms: “Essential Business” and “Maintain Basic Operations.”

The basics: All businesses must cease operations except to Maintain Basic Operations unless they are exempt by way of qualifying as an Essential Business or necessary for the basic operation of Essential Businesses. If your business is exempt and continuing its operation, specific Social Distancing Requirements as defined in the order must be complied with to the greatest extent possible.

Q. What does it mean to "Maintain Basic Operations" applicable to all businesses?

A: The orders define this two ways:

• Minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and employee benefits or related functions. Examples include on-site security guards or reception staff to ensure security of the property, or accounting staff to process payroll and employee benefits. These activities must adhere to Social Distancing Requirements.
• Minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences. For example, businesses can have on-site technology staff to ensure employees can work remotely. These activities must also adhere to Social Distancing Requirements.

Q: What types of businesses are considered "Essential Businesses"?

A: The orders break these businesses into categories. According to the shelter in place order for the City of San Francisco, which mirrors those of the surrounding counties, the following businesses are essential and exempt from the shelter in place orders:

Health care operations: hospitals, clinics, dentists, pharmacies, pharmaceutical and biotechnology companies, other health care facilities, health care suppliers (including health care supply stores), home health care services providers, mental health providers or any related and/or ancillary health care services, veterinary care and all health care services provided to animals.

Essential infrastructure: businesses involved in construction of housing and operation of public transportation and utilities (public works construction, construction of housing, airport operations, water, sewer, gas, electrical, oil refining, roads and highways, public transportation, solid waste collection and removal, internet and telecommunications systems).

Specific retailers: grocery stores, certified farmers’ markets, farm and produce stands, supermarkets, food banks, convenience stores, and other establishments engaged in the retail sale of canned food, dry goods, fresh fruits and vegetables, pet supply, fresh meats, fish, and poultry, and any other household consumer products (such as cleaning and personal care products). This includes stores that sell groceries and also sell other non-grocery products, and products necessary to maintaining the safety, sanitation and essential operation of residences, including hardware stores.

Agricultural: food cultivation, including farming, livestock and fishing.

Social services businesses: those that provide food, shelter, and social services and other necessities of life for economically disadvantaged or otherwise needy individuals.

Media outlets: newspapers, television, radio and other media services.

Transportation and related businesses: airlines, taxis and other private transportation providers offering transportation services necessary for Essential Activities and other purposes expressly authorized in this order, gas stations and auto supply, auto repair and related facilities.

Financial institutions such as banks and related financial institutions.

Specific service providers: plumbers, electricians, exterminators, and others who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, Essential Activities, and Essential Businesses.

Mailing, post office box and shipping services businesses.

Educational institutions: includes public and private K-12 schools, colleges, and universities —for purposes of facilitating distance learning or performing essential functions, provided that social distancing of six-feet per person is maintained to the greatest extent possible.

Laundry service providers such as laundromats and dry cleaners.

Restaurants and food service facilities, but only for delivery or carry out. This includes schools and other entities that provide free food to the public.

Delivery services: businesses that ship or deliver groceries, food, goods or services directly to residences.

Suppliers: businesses that supply products needed for people to work from home, businesses that supply other essential businesses with the support or supplies necessary to operate.

Home care and residential facilities: home-based care for seniors, adults or children; and residential facilities and shelters for seniors, adults and children.

Professional services: services such as legal or accounting services, when necessary to assist in compliance with legally mandated activities.

Q: What about child care facilities?

A: Child care facilities providing services that enable employees exempted in the order to work as permitted may remain open. To the extent possible, they must operate under the following mandatory conditions:

• Child care must be carried out in stable groups of 12 or fewer. “Stable” means that the same 12 or fewer children are in the same group each day.
• If more than one group of children is cared for at one facility, each group shall be in a separate room. Groups shall not mix with each other.
• Child care providers shall remain solely with one group of children.

Q: My business doesn’t fit into any of these categories, what should I do?

A: There are two other categories of exemptions. In short, if your business doesn’t fit into one of the above categories but is relied upon by an “essential business” or “essential government function” in order to operate, the following provisions apply:

• Maintain basic operations of Essential Businesses: Roles required for any Essential Business to “maintain basic operations,” which include security, payroll, and similar activities.
• Essential Government Functions: Services needed to ensure the continuing operation of government agencies and provide for the health, safety and welfare of the public.

Q: What should a business do if it’s not sure about whether it is essential?

A: You can gather additional information in following ways:

• Contact customers who you believe qualify as Essential Businesses and inquire whether your goods and services are necessary for them to operate.
• Contact your local Sheriff’s department, mayor’s office, or county supervisor’s office and inquire whether your business is exempt. Local law enforcement agencies are charged with enforcing violations of the orders.

Q: If I am an essential business, or a business necessary for essential businesses to maintain basic operations, can I operate as usual?

A: No, you may not operate as usual. Your business must make necessary modifications to its operation to ensure compliance with Social Distancing Requirements (and CDC’s health guidelines) to the greatest extent possible. Additionally, your employees are required to follow, and you should implement policies and measures to ensure that they are complying with, Social Distancing Requirements, Essential Travel and Essential Activities restrictions.

Q: What are Social Distancing Requirements?

Social Distancing Requirements, as defined in the order, include maintaining at least six-foot social distancing from other individuals, washing hands with soap and water for at least twenty seconds as frequently as possible or using hand sanitizer, covering coughs or sneezes (into the sleeve or elbow, not hands), regularly cleaning high-touch surfaces and not shaking hands.

Q: What is considered Essential Travel?

A: The following are considered essential:

• Any travel related to the provision of or access to Essential Activities, Essential Governmental Functions, Essential Businesses, or Minimum Basic Operations.
• Travel to care for elderly, minors, dependents, persons with disabilities or other vulnerable persons.
• Travel to or from educational institutions for purposes of receiving materials for distance learning, for receiving meals and any other related services.
• Travel to return to a place of residence (includes hotels, motels, shared rental units, and similar facilities) from outside the jurisdiction.
• Travel required by law enforcement or court order.
• Travel required for non-residents to return to their place of residence outside the County. Individuals are strongly encouraged to verify that their transportation out of the County remains available and functional prior to commencing such travel.

Q: What are considered Essential Activities?

A: The following are considered essential:

• Engaging in activities or performing tasks essential to their health and safety, or to the health and safety of their family or household members (including, but not limited to, pets), such as obtaining medical supplies or medication, visiting a health care professional or obtaining supplies they need to work from home.
• Obtaining necessary services or supplies for themselves and their family or household members, or to deliver those services or supplies to others, such as canned food, dry goods, fresh fruits and vegetables, pet supply, fresh meats, fish and poultry, any other household consumer products and products necessary to maintain the safety, sanitation and essential operation of residences.
• Engaging in outdoor activity, provided the individuals comply with Social Distancing Requirements as defined in this section, such as walking, hiking, or running.
• Performing work providing essential products and services at an Essential Business or to otherwise carry out activities specifically permitted in this order, including Minimum Basic Operations.
• To care for a family member or pet in another household.

Employers should follow reliable public health guidance – such as that offered by the federal Centers for Disease Control and Prevention and stay updated on safety mandates.

Additional Resources:

Fox Rothschild Coronavirus Resources

California Department of Public Health COVID-19 Updates

California Department of Public Health Guidance

Cal/OSHA Guidance

Center for Disease Control Guidance for Businesses and Employers

San Francisco Assistance & Guidance for Businesses and Workers

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