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What is an “Essential Business” Amid the COVID-19 Pandemic? What is an “Essential Business” Amid the COVID-19 Pandemic?

What is an “Essential Business” Amid the COVID-19 Pandemic?

Governing bodies across the United States are issuing executive orders restricting business activity and movement of people generally within the limits of their jurisdictions. They range from orders with relatively few restrictions accompanied by some suggestions on how citizens should behave to avoid further spread of COVID-19 (for example, Indiana), to full “shelter-in-place” restrictions, like the ones recently adopted in California, Illinois and New York City. In between, there are examples like the order adopted by New Jersey, which created a curfew but allowed more activity during daytime hours.

While the orders vary in substance, content and specific restrictions, most exclude from the restrictions “essential businesses.” So, the question many businesses are currently asking is “what is an essential business?” Some jurisdictions have defined an essential business directly in the order. For example, the San Francisco shelter-in-place order adopted on March 16, 2020 (you can find the San Francisco order here) defines “Essential Businesses” directly, naming a number of types of businesses that citizens rely on to live and survive (e.g., food, health care, banks, etc.), as does the order adopted on March 20, 2020 by the state of Illinois (you can find the Illinois order here). Pennsylvania’s governor adopted an order on March 19, 2020 (you can find the Pennsylvania order here), which provided a detailed list of types of “life sustaining businesses” that may remain open and also a list of those businesses, which are not deemed “life sustaining” and must close (you can find the list here).

While the federal government has not taken a uniform stance and defined what an “essential business” means, the U.S. Department of Homeland Security has provided guidance on what it is calling “Essential Critical Infrastructure Workers” (you can find the federal guidance here), to direct which industries and types of businesses need to continue to operate as “essential businesses” during this crisis period. The order issued by California on March 19, 2020 (you can find the California order here) links directly to the DHS website and provides that the only exceptions to the shelter-in-place restrictions are to the extent “needed to maintain continuity of operations of the federal critical infrastructure sectors.”
 
For many businesses, it may not be obvious whether all or part of the business is an “essential business.” Most orders to date have also exempted businesses that support essential businesses as well. As such, a detailed analysis of the type of business, lines of business and jurisdictions where a business operates is necessary to determine if a particular business is “essential” in whole or in part and therefore exempt from the restrictions of an executive order promulgated in connection with the COVID-19 pandemic. Although it is not yet clear in most jurisdictions what the penalties ultimately will be, most orders give government agencies broad enforcement authority and also may impose criminal penalties for a violation.
 
If you are a business uncertain whether you are considered “essential” and whether you are bound to the restrictions put in place by the governing body of your jurisdiction, contact the Ice Miller COVID-19 Task Force for more information and guidance.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances. 
 
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