As you no doubt know by now, Executive Order 2020-21 suspended “activities that are not necessary to sustain or protect life.” The Order directs that no person or entity shall operate a business or conduct operations that require workers to leave their homes or places of residence except to the extent that those workers are necessary to sustain or protect life or to conduct minimum basic operations. “Critical infrastructure workers” are exempt as workers who are necessary to sustain or protect life. Businesses and operations must determine “which of their workers are critical infrastructure workers,” designate such workers, and inform the workers of the designation.
How does this play out on a construction project? It is our opinion that the designation of critical infrastructure workers should flow downstream from the project owner.
The owner should decide whether the project is considered critical infrastructure and then designate the general contractor as a critical infrastructure worker. The general contractor, in turn, should designate applicable subcontractors as critical infrastructure workers. Subcontractors should designate sub subcontractors/suppliers as critical infrastructure workers, and so on and so forth.
Then, each contractor should designate each of its own workers as critical infrastructure workers. Think of it this way: the owner decides whether the project itself is the type that is exempt from the Order, then designates the general contractor, who then determines which subcontractors are critical for moving the project forward to support the goals of the Order and designates them accordingly.
The Order also allows for the designation of critical suppliers and services providers. This follows a similar approach: The owner determines whether the project is critical infrastructure. It can then designate “suppliers, distribution centers, or service providers” whose continued operation is necessary to enable, support or facilitate the owner’s critical infrastructure work and workers. These suppliers or service providers then designate workers only to the extent those workers are necessary to progress the original business. This critical supplier or service provider may also designate someone downstream as critical in a similar fashion.
Tying it all together: the owner in a critical industry has critical infrastructure workers. The owner needs critical suppliers and service providers to support its own operations and its critical infrastructure workers. The owner designates its critical infrastructure workers, and also designates its critical suppliers and service providers. The general contractor in turn designates its own critical infrastructure workers and, in turn, designates its critical subcontractors and suppliers. Again, this cascading designation is tied to the Owner’s designation as a critical industry, so the owner should start the designation process.
How do you designate someone as a critical worker? Before March 31, the designation may be made orally. After March 31, the designation must be in writing. Of course, best practice would be to make/receive such designations in writing as soon as possible.
How can this go wrong? In the rush to get back to work, it is quite possible that lower-tier contractors will self-designate as critical infrastructure workers on a project. It is our opinion that this would be incorrect and could open the contractor to liability for violating the Order. If a downstream contractor made the initial determination, the “tail would wag the dog” regarding whether and how the Order covers the project. Accordingly, designations should not flow upstream.
Finally, the Order also exempts workers who are necessary to conduct minimum basic operations of a business. These workers include those whose in-person presence is strictly necessary to allow the business or operation to maintain the value of inventory and equipment, care for animals, ensure security, process transactions (including payroll and employee benefits), or facilitate the ability of other workers to work remotely. Your business must designate and inform such workers of the designation. Until March 31, the designation can be done orally, but it must be in writing after March 31. Again, it is better to have it in writing as soon as possible.
As with everything else in this rapidly changing regulatory environment, Hilger Hammond is here to help you navigate these uncertain times. Contact us any time.
