The Legal Line

   

U.S. DOL Publishes OSHA-Related COVID FAQ's and Recommends Cloth Masks

posted Jul 10, 2020, 12:45 PM by Allison Ayer   [ updated Jul 10, 2020, 12:49 PM ]

        This week, the DOL issued new COVID-19 specific FAQ’s intended to guide employers about the steps they can take during the pandemic to comply with the Occupational Health and Safety Act (“OSHA”).  The FAQ’s address a variety of important topics, including cleaning and disinfecting protocols, training, and handwashing facilities.  The FAQ’s also address dealing with a COVID positive test and the controversial topics of cloth face coverings.  

        On the issue of testing, the FAQ’s note that OSHA does not require employers to notify other employees if one of their coworkers gets COVID-19, but such notification may nevertheless be an advisable step to protect other workers from exposure to the virus that causes COVID-19.  To that end, the FAQ’s recommend that workers tell their supervisors if they have tested positive for COVID-19 so that employers can take steps to protect other workers. Citing to the CDC Guidance for Business and Employers, the FAQ’s also suggest that after a confirmed positive case, employers determine which employees may have been exposed to the virus and inform employees of their possible exposure to COVID-19 in the workplace.   The FAQ’s also note that in deciding exactly what and how they tell their workers about the potential exposure, they must maintain confidentiality of medical information.  Additional safety steps in the case of a confirmed COVID case might also include cleaning and disinfecting, notifying other workers to monitor themselves for signs/symptoms of COVID-19, or implementing a screening program in the workplace (e.g., for signs/symptoms of COVID-19 among workers), and following CDC recommendations for when employees can return to work after having COVID-19.

        On the issue of cloth face coverings, the DOL has taken the position again that employers are not specifically required to provide cloth face coverings to their workers.  However, the FAQ’s note that employers may choose to require face coverings nonetheless.  The strong implication is that cloth face coverages offer an effective way to protect employees from the “hazards” of COVID-19 and for the employer to fulfill the general duty under OSHA to provide a safe workplace.  The FAQ’s also make a point to distinguish between cloth face coverings, which are not considered PPE, and surgical masks, respirators, and other face protection that are considered PPE required for certain industries under OSHA.  As noted by the DOL, whether or not cloth face coverings are required by employers, they are NOT appropriate substitutes for PPE such as N95 respirators or medical face masks in workplaces where such respirators or face masks are recommended or required to protect the wearer.

        What is clear from the FAQ’s is that the virus that causes COVID-19 is among the workplace hazards from which employers must protect their workers in accordance with OSHA, and while OSHA may not specifically require employers to screen employees, clean and disinfect, isolate sick employers, contact tracing for workplace exposure, and mandate cloth face coverings), these protocols are nevertheless useful steps to minimize transmission of the virus and keep the workplace safe in fulfillment of an employer’s OSHA obligations.  The full set of FAQ’s can be found here.  

Supreme Court Green Lights Expansion of Exemption to Affordable Care Act's Contraceptive Coverage

posted Jul 8, 2020, 1:57 PM by Allison Ayer

Today, in Little Sisters of the Poor Saints Peter and Paul Home, et al. v. Pennsylvania, et al., the United States Supreme Court upheld the expansion of the religious exemption to the contraceptive mandate set forth in the regulations to the Affordable Care Act (“ACA”).  Briefly, the Court said that the administrative agency tasked with establishing ACA guidelines had the authority to promulgated a broader religious exemption and add a moral exemption, as well.  

As background, the ACA itself does NOT contain a mandate that employers provide health insurance plans that cover contraception.  The ACA requires covered employers to provide women with “preventative care and screenings” without “any cost sharing requirements.”  But the ACA places the responsibility of deciding what such care and screenings include on the Health Resources and Services Administration (“HRSA”), the executive agency responsible for administering the ACA.  Pursuant to that authority, in 2010, the HRSA issued guidelines which required health plans to provide coverage for all FDA-approved contraceptive methods and sterilization procedures.  This is what is often referred to as the ACA’s “contraceptive mandate”. 

Importantly, HRSA guidelines also have all along contained a religious exemption that allowed religious employers to opt out of the contraceptive mandate.  The HRSA’s 2013 final rule provided an accommodation whereby eligible religious organizations who opposed providing contraceptive coverage could provide a self-certification to the health insurer that it was a non-profit entity that held itself out as a religious organization, and opposed providing contraceptive services on account of religious objections.  In that case, the group health plan would exclude contraception from insurance coverage, and the insurer would make payments for contraceptive services to beneficiaries separate from the employer-provided health plan. 

This accommodation was not adequate for some religious employers, and they challenged the self-certification as violating the Religious Freedom Restoration Act of 1993 (“RFRA”).  Under the RFRA, a law that substantially burdens the exercise of religion must serve “a compelling governmental interests” and be the “least restrictive means of furthering the compelling governmental interest.”  The Supreme Court never decided these challenges because the religious organizations and the government reached agreement that the exercise of their religious rights would NOT be violated if contraceptive coverage was provided to employees without any notice from the religious employers.  In essence, they agreed there was a way to ensure religious freedom AND contraceptive coverage. 

Despite this agreement, other religious organizations raised a different challenge, claiming that the mandate itself (verses the self-certification piece) violated the RFRA.  In the 2014 decision Burwell, et al. v. Hobby Lobby Stores, Inc., the Supreme Court agreed, holding that the contraceptive mandate, standing alone, violated the RFRA as applied to religious organizations (including closely held corporation with sincerely held religious objections to providing employees with certain methods of contraception).

Expanding on Hobby Lobby, the HRSA of the Trump administration promulgated two additional exemptions to the contraceptive mandate.  The first exemption expanded the definition of who constitutes a religious employer and what they must cover, and the second added a moral exemption to the contraceptive coverage.   The broader religious exemption provides that employers (including for-profit and publicly traded entities) who “object…based on…sincerely held religious beliefs…to…establishing, maintaining, providing, offering or arranging [for] coverage or payments for some or all contraceptive services” need not comply with the contraceptive mandate.  The new “moral exemption” provides that employers (including non-profits and for-profits with no publicly traded components) with “sincerely held moral” objections to providing some or all forms of contraception, also do not have to comply. 

The Supreme Court ruled today that these two exemptions were properly promulgated by the HRSA.  The Court reasoned that the broad language of the ACA which gives exclusive discretion to the HRSA to define what constitutes “preventative care and screenings” also gave the agency broad discretion to create religious and moral exemptions.  Given that authority, the Supreme Court said that broader religious exemption and new moral exemption were valid.  The Supreme Court also said that the failure of HRSA to follow certain procedures when promulgating the new exemptions was not a basis to strike them down because there was no prejudicial error to the extent all interested parties had proper notice and time to comment. 

As the law currently stands, therefore, exempt from the contraceptive mandate of the ACA are not just religious employers with complicity-based objections, but for-profit and publicly traded entities who have sincerely held religious objections to providing, offering or arranging for contraceptive coverage or payments, as well as non-profit and private, for-profit, employers with “sincerely held moral” objections to providing contraception.  But it is important to note that because these exemptions were established by an administrative agency verses by statute, they could be expanded further or eliminated altogether with a different Presidential administration.  The Supreme Court also noted that it was not ruling on the constitutionality of the exemptions as they had not been challenged on that basis.  This too remains another area where the law might develop in future cases.  So as always, stay tuned!

DOL Clarifies when Closed Summer Camps Trigger COVID Leave Rights

posted Jun 29, 2020, 9:40 AM by Allison Ayer   [ updated Jul 10, 2020, 12:51 PM ]

       Late last week, the U.S. Department of Labor (“DOL”) issued a new Opinion Letter No. 2020-4, clarifying that the inability to send one’s child to a summer camp closed because of COVID-19 may well entitle that employee to leave under the Family First Coronavirus Act (“FFCRA”).  This clarification is important because, unlike schools or day cares where attendance is likely regular and consistent, it can be more difficult for an employer to determine if a summer camp is truly a child’s “place of care” (i.e. the physical location where child care is provided while the employee works), so as to entitle an employee to FFCRA.   

        As a refresher, the FFCRA is a Federal law passed in March 2020 which requires covered employers to provide eligible employees with up to 12 weeks (up to 10 of which may be paid) of expanded family and medical leave if the employee is unable to work or telework in order to care for his/her child whose “place of care” is closed due to COVID-19.  Because coronavirus took hold in the middle of the the school year, this expanded family leave entitlement has largely been used to provide paid leave for parents caring for children whose schools or day care centers closed because of coronavirus while children were already attending.  But as summer has progressed, some employers have struggled with determining whether or not they have to provide FFCRA leave to employees who claim they have to care for children who cannot attend closed summer camps. 

        As the DOL makes clear in its new opinion letter, the FFCRA leave entitlement is broader than just closed schools or day cares that were already in session at the time of closure.  The FFCRA leave entitlement certainly extends to summer camps that closed in response to COVID-19 before any children actually began to attend or enrolled. The proper question to determine leave eligibility in these circumstances, according to the DOL, is “whether a specific summer camp or program would have been the place of care of an employee’s child had it not closed for COVID-19 related reasons.” 

        Mere interest in a summer camp that closed because of COVID is generally not enough to render an employee eligible for FFCRA leave.  But, where there is evidence that the employee had a plan for the child to attend summer camp, or short of a plan, if the facts evidence that it is more likely than not that the child would have attended the camp had it not closed due to COVID-19, the employee will likely be entitled to FFCRA leave. 

        Applying this standard, the DOL has said that an employee will likely be entitled to FFCRA leave as a result of a camp closure if the child was already enrolled at the time the closure is announced (i.e. Pre-Closure Enrollment). 

       But affirmative steps short of enrollment may also entitle an employee to FFCRA leave to care for a child over the summer. 

        For example, if an application or deposit was submitted before the camp’s closure (Deposit/Application Submission) this likely establishes that the summer program was the child’s “place of care” so as to entitle the employee to FFCRA leave if he/she has to care for the child and cannot work or telework because of the closure. 

        Similarly, prior attendance and current eligibility at a summer camp that has closed because of COVID-19 (Prior Attendance/Current Eligibility) is another example of a situation where an employee will be eligible for FFCRA leave.  In this example, a child’s attendance at a camp during the summer of 2018 or 2019 offers strong support that the camp would have been the child’s “place of care” for summer 2020 if not for COVID closure, as long as the child continues to satisfy other qualifications for attendance (for example age eligibility).  An employee who cannot work or telework, and instead must care for the child because of this closure, is eligible for FFCRA leave.      

        Being accepted to a waitlist pending the camp reopening (Wait List Status) is another circumstance that will create eligibility for FFCRA for an employee who cannot work because of the closure, assuming the employee meets the other requirements for leave.    

        The DOL also notes that a summer camp may be “closed” for purposes of FFCRA leave it is partially closed, i.e. operating at reduced capacity such that some children who could have attended cannot, because of COVID.   

        While these examples are helpful, the DOL also pointed out that there is no one-size fits-all rule.  There are a “multitude of possible circumstances” where an employee will be able to establish a plan to send his/her child to summer camp or, in the absence of a specific plan at the time of closure, that the child would nevertheless have attended the summer camp had it not closed, so as to entitle the employee to FFCRA leave.  While it remains true that an employee cannot take FFCRA leave based on a summer camp closure that the child has never attended, if there is some indication that the child would have attended the camp if not for the COVID closure, then the employee may well be entitled to FFCRA leave. 

        Employers are well advised to understand all relevant facts before making a decision on an employee’s request for FFCRA leave.  To that end, an employee who requests FFCRA leave must provide its employer, either orally or in writing, an explanation of the reason for the leave and a statement that the employee is unable to work.  Just as when they request FFCRA for school or day care closures, employees who make a FFCRA leave request related to a camp closure must provide the name of the child, the name of the summer camp, and a statement that no suitable person is available to care for the child.  Even with this information, in circumstances where the right to leave may be a close call, Employers may also wish seek advice of legal counsel to help avoid potential a claim that leave has been wrongfully denied under the FFCRA.  Such claims are only likely to increase as coronavirus continues to plague the United States and businesses struggle with how to deal with getting back to business during this unprecedented time.  

EEOC Clarifies that Employers Should Not Screen for COVID19 Antibodies

posted Jun 17, 2020, 1:42 PM by Christopher Vrountas

The EEOC clarified today that while employers may screen employees for active cases of COVID19, employer may not screen employee for COVID19 antibodies as a precondition for returning to the workplace.  The EEOC’s position in part relies on the CDC’s recent guidance providing that antibody test results should not be used in making decisions in the workplace.  Bottom line, the EEOC takes the position that an antibody screen constitutes a medical examination under the ADA and that such a test would not be job related or consistent with business necessity given the CDC’s position on the issue. 

Here’s the new EEOC guidance on the issue: 

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A.7.  CDC said in its Interim Guidelines that antibody test results “should not be used to make decisions about returning persons to the workplace.” In light of this CDC guidance, under the ADA may an employer require antibody testing before permitting employees to re-enter the workplace? (6/17/20)

No. An antibody test constitutes a medical examination under the ADA. In light of CDC’s Interim Guidelines that antibody test results “should not be used to make decisions about returning persons to the workplace,” an antibody test at this time does not meet the ADA’s “job related and consistent with business necessity” standard for medical examinations or inquiries for current employees. Therefore, requiring antibody testing before allowing employees to re-enter the workplace is not allowed under the ADA.  Please note that an antibody test is different from a test to determine if someone has an active case of COVID-19 (i.e., a viral test).  The EEOC has already stated that COVID-19 viral tests are permissible under the ADA.

The EEOC will continue to closely monitor CDC’s recommendations, and could update this discussion in response to changes in CDC’s recommendations.

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Here's the link to the entire EEOC guidance: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=


USSC Says Title VII Protects Against Sexual Orientation and Transgender Discrimination

posted Jun 15, 2020, 4:17 PM by Allison Ayer   [ updated Jun 29, 2020, 7:57 AM ]

In a historic 6-3 decision entitled Bostock v. Clayton County, the United States Supreme Court finally answered the much-debated question whether Title VII prohibits an employer from discriminating against an employee because of sexual orientation and/or gender identity - the answer is a resounding "yes."    


In ruling that an employer cannot fire an employee for being gay or transgender, the Court reasoned that Title VII's prohibition against sex discrimination also necessarily prohibits discrimination on the basis of sexual orientation or gender identity.  In essence, the Court concluded that by definition an employer commits sex discrimination in violation of Title VII when it fires an employee because he/she is gay or transgender.  In other words, "it is impossible to discriminate against a person for being homosexual or transgender without [also] discriminating against an individual based on sex." 


Notably, the majority opinion was written by Neil Gorsuch, a Donald Trump appointee.  Justice Gorsuch was joined by Chief Justice Roberts, as well as Justices Ginsburg, Breyer, Sotomayor and Kagan. 


In making its ruling, the Court reasoned that the explicit, unambiguous language of Title VII prohibits discrimination because of sex.  And "homosexuality and transgender status are inextricably bound up with sex." Not because homosexuality or transgender status in some vague sense or because discrimination on these bases has some disparate impact on one sex or another, but because to discriminate on these grounds requires an employer to intentionally treat individually employees differently because of their sex.


The Court rejected the argument that Title VII's prohibition against sex discrimination should be read narrowly, to exclude sexual orientation or gender identity claims.  Citing its own precedent, the Court pointed out that it had in the past broadly interpreted Title VII's prohibition against sex discrimination to prevent an employer from 1) refusing to hire women but not men with young children (Philips v. Martin Marietta Corp., 400 U.S. 542 (1971)), 2) requiring women to make larger pension contributions than men because they were more likely to receive more from the fund (Los Angeles Dept. of Water and Power Manhart, 435 U.S. 702 (1978)), and 3) allowing sexual harassment in the workplace, including same-sex harassment by other male co-workers (Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998)).    


But even more compelling, the Court laid out in painstaking detail why logically the legal standard applied to discrimination claims could result in only one conclusion - that discrimination based on gender identity or sexual orientation by definition also constitutes sex discrimination that is unlawful and not allowed under Title VII.  


The Court noted that under the applicable "but-for" causation standard, an employer violates Title VII when it intentionally terminates an employee based in part on the individual's sex.  This is so even if additional factors other than sex contributed to the employment decision.  The decisive question for assessing this standard, according to the Court, is whether changing the employee's sex would yield a different employment result.  If it would, then sex is a but-for cause of the employment decision supporting a claim of sex discrimination in violation of Title VII.


The Court used the firing of a Yankees fan as an example of this principle.  To the consternation of many Red Sox fans, it turns out that the USSC believes that firing an employee for her allegiance to the Yankees would be unlawful discrimination but only if the employee's sex was also a reason for the termination.  As the Court explained, firing a woman because she was a Yankee's fan and a woman is still a firing "because of sex" (and violates Title VII) if the employer would have retained a man Yankees fan. 


This example likely seems obvious to most people.  But the Court also went on to explain that an employer who fires a female employee because she is a lesbian similarly commits sex discrimination even though another factor - namely the sex of the person to which the employee is attracted - also contributed to the decision.  Just like in the Yankees example, if this employee were male and similarly attracted to women, the employee would not be fired.  In either example, then, changing the employee's sex would yield a different employment result.  Title VII's causation standard is therefore met, and there may be liability, even though there exists another contributing factor to the decision. 


Just as sex is necessarily a but-for cause when an employer discriminates against a homosexual or transgender employee, an employer also "inescapably" intends to discriminate because of sex when it bases its employment decisions on sexual orientation or gender identity, according to the decision.  For this point, the Court used the hypothetical of an employer with a policy of firing homosexuals.  A model employee arrives at an annual outing and introduces a manager to the employee's wife, Susan.  Whether the policy triggers the firing of this employees depends entirely on whether the model employee is a man or a woman.  Applying the employer's anti-gay policy, the man would not be fired, while the woman would.  While the employer's ultimate goal might actually be to discriminate on the basis of sexual orientation, not sex, "to achieve that purpose the employer MUST along the way, intentionally treat an employee worse based in part on that individual’s sex."  This constitutes sex discrimination that violates Title VII, according to the Court. 


In concluding that Title VII prohibits discrimination because of sexual orientation or gender identity, the Court also rejected the argument that the fact that men and women might be treated equally would change the result.  In other words, the fact that men and women both could be the subject of equal firings if sexual orientation not sex drove the decision, does not save the employer from a discrimination claim.  Sex discrimination does not exist only when the class of men collectively are treated differently than the class of women, according to the Court.  Rather, Title VII protects and creates an independent violation for each instance that an employer discriminates against an individual employee because of that individual's sex, irrelevant of the fact that an employer might fire both males and females if they are transgender or gay.  In other words, Title VII focuses on eliminating discrimination against individuals, not groups.  As a result, just as "an employer who fires both [female and male employee] for failing to fulfill traditional sex stereotypes doubles rather than eliminates VII liability, an employer who fires both [female and male employee] for being gay or transgender does the same." 


In sum, the Supreme Court has now decided that discrimination based on homosexuality or transgender status necessarily entails discrimination based on sex because "the first cannot happen without the second." "For an employer to discriminate against employees for being homosexual or transgender, the employer must intentionally discriminate against individual men and women in part because of sex.  That has always been prohibited by Title VII's plain terms - and that 'should be the end of the analysis.'"  As far as the USSC's is concerned, it now is. 


This decision will have little impact on employers operating in states where sexual orientation and/or gender identity are already protected by applicable anti-discrimination statutes, like New Hampshire and Massachusetts for example.  But employers who operate elsewhere and are subject to Title VII must change any policies or practices of discriminating against employees because they are gay or transgender.if they want to avoid a Title VII claim.     

The EEOC Provides Useful New Guidance for Employers Returning People to Work

posted Jun 12, 2020, 1:18 PM by Christopher Vrountas

Just yesterday, the EEOC updated its guidance for employers on their duties and obligations when returning their employees to work. We now have new, much more specific answers to some frequently asked questions on how to manage “high risk” people and how to manage employees working remotely.  Here’s some of the most notable new stuff:

HIGH RISK PEOPLE:

In this category, the EEOC discusses employees over 65, pregnant workers, and people living with high risk family members.  The keys here are not to exclude and not to favor high risk employees.  

How about those employees over 65? Are they entitled to accommodations with respect to COVID19 and new procedures based on their age status? NO! But, do not let that easy answer fool you.  It is true that the ADEA does not require accommodations, but the ADA does.  If the request for accommodation involves a disability of any sort, including those may stem from the aging process, then the employer must proceed with the interactive process under the ADA.  If not, while the employer is free to provide accommodations to meet employee’s requests, it need not do so.  

Importantly, however, the employer cannot exclude from returning to work or other opportunities those employees over the age of 65 merely because of their statistically high risk status. Doing so for that reason alone would certainly amount to age discrimination and a violation of the ADEA.

What about pregnant employees? Are they entitled to accommodations?  Potentially.  First, if there is a pregnancy complication then the ADA would require a reasonable accommodation due to such condition. Second, even if no ADA issue exists, a pregnant employee is always entitled to be treated the same as other employees with the same limitations or abilities.  They should not be favored or excluded or treated differently at work than those others similarly situated. 

Also, just like employees over 65, employers cannot exclude pregnant workers solely on the grounds that such workers are statistically high risk with respect to COVID19.  Such exclusion would amount to sex discrimination in violation of Title VII. 

What about that employee who lives with a high risk family member? Does that employee have a right to a reasonable accommodation on that basis alone? NO! Of course, while that status may not be legally relevant, any discrimination may fall within a category of unlawfulness due to its potential impact against a protected class.  In short, always be fair and reasonable, but know that this category alone does not constitute a protected class. 

WORKING FROM HOME:

Employers who have people working from home remain responsible for the conduct of those teleworking employees on the job.  For example, to the extent any teleworking employee harasses from home, the employer must respond in the same manner as if such employee was in the employer’s physical workspace. 

Are there sex discrimination considerations for allowing accommodations for child care reasons? Yes. Employers must be sure not to provide benefits on the basis of sex. Here, on the issue of childcare, the EEOC has noted that employers may favor women over men. The short answer here? Don’t. 

OTHER ACCOMMODATION ISSUES:

What about a request for accommodation with respect to screening procedures? Do you need to hear them? YES! Same standards apply under the ADA for accommodation requests about screening as for accommodation requests regarding any other aspect of the employment relationship. 

How do you deal with an accommodation request? Listen. Conduct the interactive process. Work to develop a reasonable accommodation. Know that flat out failing to conduct an equally effective COVID19 screening might not be reasonable given the current pandemic and a request to simply be exempted from the screening while also working in the employer’s workspace may constitute an undue burden.  

What information do you gather during the interactive process?  Determine if there is a disability. Understand the limitations it poses. Request medical documentation to support accommodation request if necessary. Suggest alternative accommodation if appropriate. 

Can employers be proactive and invite employees to explore flexible work arrangements? Yes. But do so for all employees. As part of that invitation, you can include with your invitation a list of CDC list of high risk conditions to help people understand whether they may wish to ask for an accommodation. You can also have different contact people to take differing requests for accommodation based on the differing reasons for such requests.  So, you may have one person to manage pregnancy requests, another for child care, another for disabilities, another for other high risk categories.  Whatever you do, just ensure that decision makers are knowledgeable and coordinated so that they make consistent and appropriate decisions for your employees. 

OTHER TITLE VII ISSUES:

It is truly maddening that the EEOC would ever need to state this last point, but it nevertheless is sadly a point that must be stated. Harassment and/or discrimination against people who are or who simply perceived as Asians is illegal. It is also obviously wrong and illogical, as are race discrimination and national origin discrimination generally.  Given the current pandemic, however, and the fact that the conventionally accepted likely origination of the virus was from Wuhan, China, the EEOC suggests sending reminders to employees that harassment on the basis of national origin is wrong and unlawful. You may also want to point out that discrimination against Asian people is wrong and unlawful. Additionally, you might want to remind employees of the process generally for reporting harassment concerns internally and/or to the EEOC.  Knowledge can give potential targets more confidence and comfort in the workplace.

CONCLUSION:

In short, accommodate disabilities, do not exclude the high risk, and do not tolerate discrimination or even mistakenly allow it to occur from unfounded assumptions. Law, like business, is easier said than done.  Contact counsel for any specific guidance you may need.  In the meantime, the EEOC’s publication can be found in the following link à

https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

 

New DOL Rule Permits Bonuses and Enhanced Pay with Fluctuating Workweek

posted May 26, 2020, 1:23 PM by Allison Ayer

The DOL has issued a final rule that allows employers greater flexibility in paying bonuses and other enhanced pay to employees paid on the “fluctuating workweek” basis.  According to the DOL’s announcement, the new rule provides that incentive-based payments like bonuses, hazard pay and commissions, paid to employees in addition to their fixed weekly salaries are intended to cover fluctuating work hours and therefore "are compatible" with the fluctuating workweek overtime calculation method.  As a result, the payment of these enhanced amounts above and beyond the salary do not disqualify an employer from continuing to pay overtime to an employee on a fluctuating workweek basis, according to the new DOL rule.   

As a bit of background, Section 7(a) of the Fair Labor Standards Act (“FLSA”) requires employers to pay non-exempt employees overtime at the rate of 1.5 times the regular rate for all hours worked in excess of 40 in a workweek. See 29 U.S.C. §207(a).  In some circumstances, when an employee’s working hours genuinely fluctuate from week to week and the employer and employee have a clear and mutual understanding that the employee will be paid a fixed salary as straight time compensation for whatever hours the employee is called upon to work in a workweek, whether few or many, an employer is allowed to use the “fluctuating workweek method” to compute overtime compensation. 29 CFR 778.114(a). In such cases, the regular rate must be determined separately each week “by dividing the number of hours worked in the workweek into the amount of the salary,” and an employer satisfies the overtime pay requirement if it compensates the employee, in addition to the salary amount, at a rate of at least .5 times the regular rate of pay for the hours worked each overtime hour.  29 CFR 778.114(a). 

The DOL’s new final rule clarifies that the payment of additional bonus and premium payments to employees paid on a fluctuating workweek basis are consistent with the use of the fluctuating workweek method of compensation, and will not disqualify the employer from using the fluctuating workweek method of pay so long as all other conditions are met.  The new final rule also clarifies that the additional bonus or premium payments will be considered part of the straight-time compensation for all hours worked of the employee in any given week, and that any such additional bonuses or premium payments paid to the employee must be included in the calculation of the regular rate unless they may be excluded under FLSA sections 7(e)(1)-(8). See 29 U.S.C. 207(e)(1)-(8).

Most believe that the new rule will allow employers and employees to better utilize flexible work schedules.  The substance of the rule was under consideration as far back as 2008, but for a variety of reasons was not finalized.  But the DOL believed it was particularly important to finalize the rule now, as workers return to work following the COVID-19 pandemic.   As the DOL noted “Some employers are likely to promote social distancing in the workplace by having their employees adopt variable work schedules, possibly staggering their 5 start and end times for the day. This rule will make it easier for employers and employees to agree to unique scheduling arrangements while allowing employees to retain access to the bonuses and premiums they would otherwise earn.”

SBA Provides Details on PPP Loan Forgiveness

posted May 18, 2020, 12:56 PM by Adam Chandler   [ updated May 19, 2020, 8:06 AM ]

After many weeks of uncertainty, the Small Business Administration has finally published an application for forgiveness of loans issued under the Paycheck Protection Program, which answers many of the questions raised by the statute and clarifies what was previously unclear.  You can download the application from the SBA website here.

Here are some of the major the issues that have been clarified by the forgiveness application:

What is the Covered Period?

PPP loan funds must be paid during the "covered period," which the statute defines as the eight weeks immediately following loan disbursement.  While the application maintains this definition, it also allows for the use of an "Alternative Payroll Covered Period," which allows borrowers with a biweekly or more frequent payroll schedule to use an eight-week period beginning with the first pay period following PPP loan disbursement for certain expenses, including payroll expenses.

How to Handle the Last Pay Period?

The CARES Act stated that an employer could receive forgiveness for costs incurred and payments made during the eight-week covered period.  This left uncertainty as to how employers should handle payroll for the final week of the covered period, where the costs are incurred when the employee works but may not be paid until a pay day outside the covered period.  The application takes the logical approach to this problem and states that payroll costs incurred but not paid during the last pay period of the covered period are eligible for forgiveness if paid on or before the next regular pay day.  Similarly, if rent or utilities are paid in arrears, those too can be considered incurred during the covered period and paid on or before he next regular billing date, even if it is after the covered period.

Enforcement of 25% Limit on Non-Payroll Costs

In its Interim Final Guidance, the SBA introduced a requirement that no more than 25% of the PPP loan amount could be used on non-payroll costs.  How exactly this would be interpreted or implemented was not clear at the time.  The application makes clear that, if dividing payroll costs by 0.75 yields a smaller number than all of the costs added together, this smaller number will be the forgiven amount.  This calculation, in effect, limits non-payroll costs to one-third the total payroll costs (or 25% of the total amount forgiven.  For example, if an employer received a $100,000 loan and only spent $60,000 on payroll costs and $40,000 on non-payroll costs, the employer would divide $60,000 by 0.75, which equals $80,000.  Only $80,000 of the $100,000 loan would be forgiven, $60,000 of which (or 75%) would be payroll costs, and $20,000 (or 25%) would be non-payroll costs.

Calculation of Full-Time Equivalents

PPP loan forgiveness will be reduced in proportion to the reduction in an employers full-time equivalents.  Unfortunately, the statute did not define a full-time equivalent.  Under the application, employers can choose make this determination in one of two ways.  First, it can take the average number of hours worked per week (max 40), divide that number by 40, and round to the nearest tenth.  Second, it could choose to assign any employee averaging over 40 hours per week the number 1.0 and assign any employee averaging less than 40 hours per week the number 0.5. 

FTE Reduction Safe Harbor

Employers who have reduced their payrolls or cut salaries during the pandemic have a safe harbor to rehire employees or restore salaries by June 30, 2020.  Employers also will not be penalized for reductions in FTEs when the employer made a good-faith, written offer to rehire the employee during the covered period and the employee refused, or when the employee voluntarily resigned, was fired for cause, or voluntarily requested a reduction in hours.

Massachusetts Begins Phase 1 for Reopening

posted May 18, 2020, 9:25 AM by Christopher Vrountas   [ updated May 18, 2020, 1:58 PM ]

The Governor has issued today his first phase order for reopening business in Massachusetts under Covid19 protocols.  Here is the brief summary: 

WHAT IS OPEN?

Under Phase 1, while essential businesses will obviously remain open, manufacturing and construction may now open today with new protocols calling for 6 foot distancing where possible and the wearing of masks inside.  

Meanwhile, non-essential offices may open on May 25 at 25% capacity (in Boston, non-essential offices may open at 10% capacity on June 1).  Limited personal services such as hair stylists and pet grooming (by appointment only) and car washes may open on May 25 as may general retail operations that can provide curbside pick-up.  In addition, many outdoor venues such as beaches and parks, athletic fields and courts, outdoor gardens and zoos, drive-in theaters and other public installations will be opened with guidelines starting on May 25.

Restaurants remain closed for dine in business until Phase 2, which will be no less than three weeks away. The same is true for non-essential retail, lodging, and other personal services such as nail salons and day spas.

The plan sets out a goal for Phase 3 to open bars, gaming, and other entertainment venues such as museums and gyms, but that Phase 3 will not occur for at least 6 weeks from today.

Phase 4 will be the “new normal”.  What that will look like remains to be seen.

HOW TO OPEN?

The Phase 1 Order sets forth safety standards for workplaces, at least for now.  Among other things, employers must require 6 foot social distancing where possible, require use of masks, provide for signage to remind employees and visitors of social distancing requirements, and provide protocols to ensure proper practices.

The Phase 1 Order also requires certain work place hygiene practices, such as hand washing capacities throughout the work space, frequent hand washing practices and adequate supplies for same, and regular sanitizing and cleaning at certain high touch areas such as workstations, equipment, screens, door knobs, and restrooms.  

The Phase 1 Order further requires each business to develop its own custom cleaning protocols for its work areas.  Among other things, the Phase 1 Order also requires disinfection of areas where any positively tested employee worked prior to being sent home and requires a plan to regularly clean and disinfect all common areas of the workplace.  

Employers are also required under the Phase 1 Order to provide adequate training for workers about distancing and hygiene protocols. Employers must require symptomatic employees be sent home from work, and must also develop policies for dealing with employees who catch Covid19 at work and for returning recovered employees back to work. 

There will be sector by sector safety guidance for specific industries as reopening moves from Phase 1 to Phase 2 and so on to the “new normal” goal of Phase 4.  

The PowerPoint setting out the Phase 1 Order, as well as the general plan for moving forward, is set forth here:  https://www.mass.gov/doc/reopening-massachusetts/download

ASSESSMENT

Many have complained about the pace of the Governor's reopening plans and, more particularly, about the pace of his communication concerning such plans.  While the Governor's announcement is comprehensive and thoughtful, it lacks many of the details offered by other states such as what New Hampshire provided a couple weeks ago. Whether the slow and deliberative pace being taken in Massachusetts will better serve the public remains to be seen.  

 

New Coronavirus Legislation Introduced in the House and Senate

posted May 14, 2020, 8:52 AM by Allison Ayer

    Businesses across the country are beginning to reopen and state stay-at-home orders are slowly lifting.  While we all try our best to find a way to get back to some kind of normalcy, there is a sense among some in Congress that there remains more that needs to be done to address the challenges created by COVID-19.  To that end, Congressional democrats recently introduced 2 new bills in response to the coronavirus pandemic. 

    The Emergency Limitation Periods Extensions for Workers Act seeks to extend the statute of limitations for employees to bring claims against their employers under a variety of Federal employment laws.  Specifically, the bill would allow employees to file claims under Title VII, the Fair Labor Standards Act, the Family and Medical Leave Act, the National Labor Relations Act, and a variety of other federal employment laws, up to and including “the 90th day after the last day” of the declared COVID-19 public health emergency plus the "overlap interval," which is the period when the pre-COVID filing deadline overlaps with the pandemic.  This means, for example, that while typically the an employee would have 180 days to file a Title VII claim with the EEOC (300 calendar days if a state or local agency enforces a law that prohibits employment discrimination on the same basis), the deadline would be extended much longer until sometime after the end of the government-declared coronavirus emergency.  More specifically, if the bill passes, an employee who had just 5 days left to file a Title VII claim when the COVID public health emergency was declared in January, would not have blown the statute of limitations but rather would have 95 days after the COVID emergency to file his or her Title VII claim. 

    Another bill, called the Heroes Act, was introduced by the House.  It is the next coronavirus relief bill in a series that includes the Paycheck Protection Program (“PPP"), the Coronavirus Aid and Relief Act and the Families First Coronavirus Response (CARES) Act and the Families First Coronavirus Relief Act. The Heroes Act would appropriate an additional $3 million to assist health care workers and other first responders working on the front lines during pandemic, include additional testing funds, and provide for another round of stimulus payments to certain qualifying Americans, among other things.  According to the House Press Release, these are some of the key components of the bill:

  • Provides $1 trillion to state, local, territorial and tribal governments to pay vital workers like first responders, health workers, and teachers;
  • Provides $200 billion to fund hazard pay to essential workers who have risked their lives working during the pandemic;
  • Provides $75 billion for coronavirus testing, contact tracing and isolation measures;
  • Makes a second round of economic impact payments of $1,200 per family member, up to $6,000 per household;
  • Enhances the employee retention tax credit to encourage employers to keep employees on payroll;
  • Establishes a requirement under OSHA for employers to develop and implement infection control plans based on CDC expertise, and prevent employers from retaliating against workers who report infection control problems; 
  • Expands PPP by providing $10 billion for COVID-19 emergency grants through the Economic Injury Disaster Loan program;
  • Provides COBRA subsidies to allow employees who have lost employer -provided health insurance to maintain coverage and create a special enrollment period in the Affordable Care Act exchanges for the uninsured;
  • Extends the extra $600 Federal unemployment benefits through next January; and
  • Provides $175 billion in new supports to assist renters and homeowners make monthly rent, mortgage and utility payments and other housing-related costs.

Senate Majority Leader Mitch McConnell and other Republican leaders have said that the Heroes Act is dead on arrival at the Senate.  It is similarly doubtful that the Emergency Limitation Periods Extensions for Workers Act will pass, given Republican control of the Senate.  

While these bills probably will not pass in their current form, there is likely to be some continuing legislative response to the pandemic.  The reality is that the virus is likely to be with us for some time.  Federal, state and local governments will try to respond with new guidance, programs, and additional economic relief for individuals and businesses.  New Hampshire and Massachusetts are both expected to provide revised guidelines on mobility and business reopening shortly.  Businesses are well-advised to continue to assess how their legal obligations are affected by these ongoing changes.  Individuals too should know their rights under any new laws and guidance.  In the meantime, we will continue to monitor developments and provide updated information to help navigate this ever-changing world.  

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