When New York businesses were required to close their doors last March, there was little advance notice, and many were caught unprepared. With COVID-19 cases spiking in several areas across the state, mandatory business closures are again possible.

While such closures may still cause significant business disruptions, we are now armed with more than seven months of experience.  This time around, the best way to deal with a potential business closure order is to be prepared.

Executive Order 202.68

Executive Order 202.68 directed the New York Department of Health to determine areas in New York State that require enhanced public health restrictions based upon cluster-based cases of COVID-19 at a level that compromises the State’s containment of the virus. The areas are divided into three levels: red, orange and yellow.

  • Red Zones: In the most severe, or “red zones,” the following mitigation measures are required for businesses: All non-essential businesses, as defined published guidance from the Empire State Development, must reduce in-person workforce by 100%; and any restaurant or tavern must cease serving patrons food or beverage on-premises and may be open for takeout or delivery only.
  • Orange Zones: In moderate severity warning areas or “orange zones” the following mitigation measures are required: certain non-essential businesses, for which there is a higher risk associated with the transmission of the COVID-19 virus, including gyms, fitness centers or classes, barbers, hair salons, spas, tattoo or piercing parlors, nail technicians and nail salons, cosmetologists, estheticians, the provision of laser hair removal and electrolysis, and all other personal care services shall reduce in-person workforce by 100%; and any restaurant or tavern must cease serving patrons food or beverage inside on-premises but may provide outdoor service, and may be open for takeout or delivery, provided however, any one seated group or party shall not exceed 4 people.
  • Yellow Zones: In precautionary or “yellow zones,” non-essential businesses may continue to operate. However, restaurants or taverns must limit any one seated group or party size to four people.

With respect to business or entities that operate or provide both essential and non-essential services, supplies or support, only those lines and/or business operations that are necessary to support the essential services, supplies, or support are exempt from the workforce reduction restrictions. In addition, where permitted to operate within the cluster action initiative, businesses must continue to follow the relevant industry-specific guidelines provided by Department of Health for their applicable operations and activities. 

Addressing Mandatory Business Closures

For New York businesses facing potential business closures, the first step is to determine whether you are an essential business under Executive Order 202.68. The list set forth in the Empire State Development guidance includes designated businesses in the services, retail, manufacturing and health care industries.

The next step is to determine whether your business is located in a COVID-19 hot zone. The State has created a lookup tool that lets users enter an address and view any restrictions in the area. The initiative currently applies to clusters in the following areas:

  • Broome County (One Area, Yellow) - Click Here for Map
  • Brooklyn (One Area, Red, Orange and Yellow) - Click Here for Map
  • Orange County (One Area, Red and Yellow) - Click Here for Map
  • Queens (Two Areas, Red, Orange and Yellow) - Click Here and Here for Maps
  • Rockland County (One Area, Red and Yellow) - Click Here for Map

Once an area is designated as a red, orange or yellow zone, the new rules are in effect for a minimum of 14 days. Violations of Executive Order 202.68 may result in a penalty of $1,000 for each violation. The order further provides that any individual who encourages, promotes, or organizes a nonessential gathering (as defined by the New York State Department of Health) is liable for a civil penalty of up to $15,000 per day. 

The zones will change as COVID-19 cases rise and fall. To help ensure compliance with any restrictions, businesses should designate a staff member to monitor restrictions. Businesses should also have a plan in place for dealing with business interruptions caused by any closures. The plan should detail how the business can maintain its core operations if staff can’t physically be in a particular location, as well as a communications plan for addressing employees and the public.

Finally, businesses should also prepare employees for the possibility of closures and/or operating restrictions. Staff should know how they will be informed of the closure, their options to continue working off-site, and any applicable leave policies.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Michael Sheppeard, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.