Coronavirus Update – Workforce Reduction and Litigation Impacts

March 23, 2020 | David S. Wilck | Avigael C. Fyman | Professional Liability

In recent days, the State of New York has instituted a number of emergency measures affecting business professionals.

All employers in New York State providing non-essential services have been directed to reduce their in-person workforce by 100% no later than March 22 at 8 p.m. This order will likely require many business professionals to transition to fully work-at-home operations. Businesses violating this order are subject to enforcement under Section 12 of the Public Health Law, including civil penalties of up to $2,000 for a first violation and up to $10,000 for subsequent violations, depending on the nature of the violation. The Attorney General may also bring an action to enjoin conduct in violation of the order.

In addition, non-emergency litigation in the New York State Courts has effectively been shut down.  On March 20, 2020, Governor Andrew Cuomo issued an Executive Order providing that statutes of limitations and other time limits for the commencement, filing, or service of legal actions; notices; motions; or proceedings have been tolled, effective March 20, 2020, through April 19, 2020.

On March 22, 2020, the Chief Administrative Judge of the Courts, the Hon. Lawrence K. Marks, issued an administrative order directing that no papers shall be accepted for filing, either in paper or electronic format, in any non-essential matters until further order. The combined effect of these orders is to halt the service and filing of all pleadings, motions and other papers in most litigation in the New York courts.

Tax deadlines have been extended as well. The authority to abate late filing and payment penalties has also been expanded to authorize the abatement of interest. The Commissioner of Taxation and Finance is authorized to abate interest payments for a period of 60 days for taxpayers required to file returns and remit sales and use taxes by March 20, 2020 for the sales tax quarterly period ending on February 29, 2020. New York State’s income tax filing deadline is also being moved to July 15, 2020, following the Federal government’s decision to move its tax deadline for filing returns and paying taxes.

Other actions have been taken to mitigate the economic effects of the pandemic. Gov. Cuomo has ordered the Department of Financial Services to ensure that all licensed or regulated entities provide any consumer in the State of New York an opportunity for a forbearance of payments due to financial hardship stemming from the COVID-19 pandemic. He has also ordered that there be no enforcement of eviction of residential or commercial tenants or foreclosure of residential or commercial properties for a period of ninety days, starting on March 20, 2020.

Our firm remains fully operational in a remote-working capacity and is available to advise our clients as to how any of these emergency measures may affect their businesses.

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