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EO 2020-21Shutdown Guidelines for Construction Projects

On March 23, 2020, the Governor of the State of Michigan issued Executive Order 2020-21 (https://www.michigan.gov/whitmer/0,9309,7-387-90499_90705-522626–,00.html) which ordered the temporary suspension of activities in the State not necessary to sustain or protect life.  This Order takes effect on March 24, 2020, at 12:01 a.m.  While the Order is at best ambiguous as it relates to the construction industry, some guidance is possible.  The Order places the responsibility on employers to determine whether their businesses are essential and therefore permitted to continue to operate.  This means that each construction company may be considered essential if any one of its projects is essential, although only to the extent necessary to support such essential projects.  The Order referenced the United States Department of Homeland Security’s Guidance on the Essential Critical Infrastructure Workforce (March 19, 2020), which identifies the industries and activities considered essential.  While construction projects are not specifically mentioned, activities that support critical functions are considered essential and will likely include construction projects needed to support those activities.

While developments in the near future will further shape our recommendations, the checklist below should be used to organize your company’s response to the Michigan Stay at Home Order.

• The Project owner should make the call as to whether the project is essential.
  • Contact upstream parties immediately for directions
  • Notify downstream parties of request for direction
• Make your own determination in case you are ordered to continue.
  • Each employer has its own liability under the Order
  • You will need to provide the upstream party a “force majeure notice of suspension pursuant to government order” if you decide you are nonessential
• If you are an essential business:
  • Designate minimum employees as critical in writing by March 31, 2020, at 11:59 p.m.
  • Notify subcontractors and suppliers that they are critical
  • Notify supply chain
  • Review the Executive Order for the additional required social distancing practices and begin drafting and implementing social distancing procedures and guidelines for employees
• Deciding what is essential:
  • Projects in any area considered critical by Homeland Security are likely essential.  See https://www.cisa.gov/publication/guidance-essential-critical-infrastructure-workforce
  • Private commercial construction is suspect
  • Public infrastructure projects are likely essential
  • All service operations are essential
• What to do if you are not essential:
  • Cease business operations other than maintenance
  • Keep operating facilities to enable employees to work from home, where possible
  • Maintain and protect inventory and equipment
  • Contact your accountant and lender
  • Notify essential employees in writing by March 31, 2020, at 11:59 p.m.  Essential employees can be, but are not limited to:
    • Payroll operations
    • IT
  • Notify customers