With the coronavirus continuing to spread, it’ll take more than hand sanitizer to keep Minnesota businesses running.
Companies are drawing up contingency plans, assessing new ways to deploy workers and weighing the potential impact of quarantines, furloughs or closings.
But the nitty-gritty can get complicated quickly.
Having employees work from home can lead to headaches beyond technology. Businesses need to guard against trade secrets or private consumer data getting in the wrong hands if employees use an unsecured network or a personal computer. No one wants an external drive loaded up with customers’ bank accounts getting accidentally left on the bus.
Employers must consider how to manage work shifts if there are widespread school closings. Or how to handle a rash of workers’ compensation claims. “Come up with a plan now,” urged employment lawyer Aaron Goldstein. “It’s your Number 1 protection.”
Other concerns arise in industries where working remotely isn’t an option, such as restaurants, construction, manufacturing, child and elder care. Businesses need to keep the workforce healthy, protect the public and keep the wheels of commerce turning in the event of an outbreak in Minnesota.
“We are dependent on people showing up for work and being healthy,” said Steve Kalina, executive director of the Minnesota Precision Manufacturing Association. “There’s not really a backup plan. If you can’t run machines, you can’t run machines.”
Coronavirus is now a regular agenda item for weekly senior staff meeting at the restaurant group Parasole, whose nine brands include Manny’s Steakhouse, Burger Jones, Salut Bar American and the Good Earth.
“We’re all very worried about it,” said Donna Fahs, chief operating officer of the company. “It could paralyze our business.”
Concerns about the novel strain, which causes a respiratory illness known as COVID-19, have brought a heightened focus on sanitation: wiping down menus, tables and all items touched by customers. Employees who use cellphones during a break must wash their hands afterward.
Parasole offers paid sick leave to its 1,100 employees that Fahs said is more robust than new ordinances in Minneapolis and St. Paul, and it already follows strict health department protocols if anyone shows up sick or with a fever.
But even as workers at the company’s 14 locations strive to diminish the on-site risk, another fear looms that business will dry up if people start to avoid crowds and stop eating out.
“If someone doesn’t come in for a dinner or a birthday or a celebration, you never get that business back,” Fahs said.
The company has discussed whether it might offer delivery if restaurants need to close.
“If we don’t have sales, we can’t pay our people,” she said. “And our margins are thin as it is.”
Midwestern manufacturers already are experiencing a slowdown as quarantines and factory shutdowns in China ripple through the supply chain. Minnesota’s largest businesses, including Ecolab and Best Buy, are warning of lower sales or profits.
The outbreak has potential to reach across industries as vast as the airlines, which are reducing the number of flights amid sharp cutbacks in corporate and personal travel, right down to the neighborhood cafe, whose owners can only hope that the bank won’t turn a blind eye if they can’t make payroll or pay the bills.
“We’re talking about it as a global health crisis,” Goldstein said. “But what we’re witnessing is a global economic crisis.”
Goldstein works out of Dorsey & Whitney’s office in Seattle, now the epicenter of America’s coronavirus outbreak. In a recent webinar aimed at helping businesses manage workplace issues, he and fellow Dorsey labor lawyer Michael Droke urged companies to stay flexible and implement plans immediately.
“Communicate to employees that you’re on top of the situation,” Goldstein said. “It won’t increase panic.”
In the event of school closings, businesses could consider allowing employees to work alternative shifts on evenings or weekends to be home with their children during the day, Goldstein and Droke said.
Because it’s easier to spread disease when people are packed densely together, they suggest managing “worker density” by staggering schedules or remote workdays so that every other cube is empty.
Importantly, businesses must anticipate the need to adjust sick leave and time-off policies temporarily, so workers don’t feel their livelihood is on the line if they stay home.
Disparity in access to health care and paid leave could make the novel coronavirus harder to contain, many public health officials fear.
Overall, about 25% of Americans working in the private sector lack paid sick leave, according to the Bureau of Labor Statistics. It’s even rarer among low-wage earners — disproportionately women, immigrants and people of color. Two-thirds of low-wage workers lack paid leave, compared with 6% of professional workers.
A large segment of such workers are home health aides, in the restaurant industry or in child or elder care.
While Minneapolis, St. Paul and Duluth have passed sick-leave ordinances, the state doesn’t require it, and workers in rural areas are much less likely to have the option.
“The situation I become concerned about are employees who need to make rent, who need to save their banked sick time to take care of a child, who may feel a little sick or have a slight fever,” Goldstein said. “If those people don’t feel like they can stay home, you really do risk spreading the virus.”
Gayle Kvenvold, who leads the state’s industry group for nursing homes and senior housing, is weighing multiple concerns of keeping a chronically understaffed workforce healthy and avoiding the spread of the illness to vulnerable elders and their families.
“We are not panicked, but we have a heightened sense of urgency,” said Kvenvold, chief executive of LeadingAge Minnesota.
Senior-care organizations have discussed creating staffing pools or bringing in workers from other states, which would require temporarily relaxing licensing and regulatory requirements.
LeadingAge communicates daily with its member businesses, updating health department guidelines. It checks in weekly with the Minnesota Hospital Association. Organizations are “doubling down on best practices on prevention and infection control.”
“These are unprecedented times,” Kvenvold said. “We all understand the gravity of this risk for those we serve and those we employ.”
T.J. Brooks, professor of economics at the University of Wisconsin-La Crosse, has examined the economic impact of the flu and other pandemics, including the Spanish flu of 1918 and the more recent swine flu, or H1N1, in 2009.
“There will be pain” for some businesses, as consumers respond to fear and uncertainty. Recent evidence: stock market swings, runs on liquid sanitizer, fears of crowds forcing the cancellation of SXSW festival. With the uncertainty, businesses may cut back on supplies, inventory, staff hours or resort to layoffs.
“Even if people still spend the same, consume the same dollar amount, the types of stuff might rapidly change,” Brooks said. “If people start going to the grocery store and eating out less. Or they order more food on Amazon. It’s that switching of the consumption bundle” that causes pain.
There’s no sign — yet — that the current slowdown could topple into a recession, Brooks said. Big businesses will be able to weather it better than smaller ones.
And Brooks, a macroeconomist, suspects the economy will survive the coronavirus’ bumpy ride
“Most of the evidence suggests when we’ve had these things in the past, it’s a shock to the system that doesn’t have long-term consequences.”
Jackie Crosby • 612-673-7335