The Legal Line

   

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.  

EEOC Issues More Guidance on Accommodating Employees at High Risk for Illness During the Pandemic

posted May 11, 2020, 8:41 AM by Allison Ayer   [ updated May 13, 2020, 5:45 AM by Christopher Vrountas ]

    The Equal Employment Opportunity Commission (EEOC) continues to update its guidance on dealing with employment issues related to coronavirus.  Last week, it added additional information to its Questions and Answers in the Return to Work section.  As a way to help track the ever-changing guidance, the EEOC notes the date when the particular information was added.  The 3 latest Q&A’s specifically address the issues related to accommodations for employees with medical conditions that put them at higher risk for contracting coronavirus.

    Briefly, the new guidance clarifies what an employee with an underlying medical condition at higher risk for COVID-19 must to do request an accommodation.  The guidance provides that an employee must take affirmative steps to let the employer know that he or she needs an accommodation because of an underlying medical condition.  The request can be done in writing, or in an oral conversation, by the employee him/herself or a third-party representative, like the employee’s doctor.  As with any other request for accommodation, there are no magic words an employee seeking a COVID-related accommodation needs to use, and an employee need NOT reference the Americans with Disabilities Act or use the phrase “reasonable accommodation” to trigger the employer’s duty to assess the request.  The guidance also reiterates that in the context of a request for accommodation, an employer may ask questions or seek medical documentation to determine whether the employee has a disability and/or if there exists a reasonable accommodation that does not impose an undue hardship.     

    The guidance also incorporates by reference CDC’s list of medical conditions that may make a person higher risk in the context of COVID-19.  But it also specifies that an employer CANNOT exclude an employee from the workplace based solely on its own concerns that an employee may be high risk for severe illness simply because he or she has a medical condition on the list.  In order to exclude the employee from wok, the employee’s disability must pose a “direct threat” to the employee’s health.  The EEOC notes that this is a “high standard” to meet, it cannot be based solely on the condition being on the CDC’s list, and instead requires an individualized assessment of the employee’s disability, not the disability in general, as well as the risk of exposure in the workplace (among other factors).  Importantly, the guidance also reiterates that even if an employee’s disability poses a “direct threat” to his/her own health, the employer still cannot exclude the employee from the workplace if there is a way to provide a reasonable accommodation to perform his/her essential factions. 

    The new guidance provides a list of examples of accommodations, absent due hardship, that may reduce or eliminate the direct threat to an employee’s health.  Those include, according to the EEOC:

  • Additional or enhanced protective measures, for example, physical barriers that provides separation between an employee with a disability and coworkers/the public;
  • Elimination or substitution of particular “marginal” functions (less critical or incidental job duties as distinguished from the “essential” functions of a particular position);
  • Temporary modification of work schedules (if that decreases contact with coworkers and/or the public when on duty or commuting); and/or 
  • Moving the location of where one performs work (for example, moving a person to the end of a production line rather than in the middle of it if that provides more social distancing).  

    While list of examples is helpful, the guidance also clarifies that the list is not exhaustive and as with accommodating any disability, employers must engage in the interactive process to assess the availability of a reasonable accommodation that allows employees at high risk of severe illness during the pandemic to return to work.   

    The full EEOC guidance provides additional more information from the EEOC on these and other issues related to COVID-19.  

    As states are expected to increasingly permit businesses to reopen, employers are well advised to monitor additions to this EEOC guidance and seek the advice of legal counsel, as necessary, to ensure that their return to work procedures and responses to requests for job accommodations, are lawful under the laws enforced by the EEOC, as well as other relevant statutes.   


Department of Education Releases Final Regulations for Sexual Harassment and Sexual Assault

posted May 8, 2020, 8:42 AM by Allison Ayer   [ updated May 8, 2020, 8:44 AM ]

    On May 6, 2020, Secretary of Education, Betsy DeVos, announced the release of final regulations concerning Title IX.  Title IX is the Federal statute that prohibits discrimination on the basis of sex in education programs and activities that receive Federal financial assistance.  The Department of Education (“DOE”) is the Federal agency responsible for enforcing Title IX. 

     Previously there was DOE guidance on how schools should handle the issue of sexual harassment, including sexual assault.  In 2011, the Department of Education published its infamous Dear Colleague Letter, which was withdrawn in 2017, and replaced with Questions and Answers.  These final regulations replace this guidance and impose legally binding rules with respect to responding to sexual harassment.  The final regulations go into effect in August and purport to strengthen protections for victims of sexual harassment and assault while also encouraging full transparency and due process for those accused.  The full final regulations can be found here.  These are some of the highlights: 

  • Definition of Sexual Harassment.  The final regulations define the term sexual harassment to mean unwelcome conduct that a reasonable person would determine is so severe, pervasive, and objectively offensive that it effectively denies a person equal access to education.  In defining the term this way, the DOE rejected the idea of sexual harassment under Title IX consistently with the Title VII standard (Title VII requires conduct of a sexual nature to be severe or pervasive in order to constitute actionable sexual harassment).  In addition, whereas in prior DOE guidance sexual harassment was interpreted to include sexual assault, the final regulations now explicitly define sexual harassment as including "sexual assault, dating violence, domestic violence, and stalking.”   
  • Standard of Proof.  The 2011 Dear Colleague Letter issued during the Obama administration changed the standard of proof in sexual harassment and sexual assault cases from “clear and convincing” to “preponderance of the evidence,” the lowest evidentiary standard requiring a merely showing that the conduct was “more probable than not.”  The new final regulations allow schools to select one of these standards of evidence to apply to all proceedings and for all students and employees, including faculty. 
  • Actual Knowledge.  The final regulations do away with the concept of constructive notice (“should have known”) and instead require “actual knowledge” of sexual harassment.  As a result, only a recipient with actual knowledge of sexual harassment commits intentional discrimination if the recipient responds in a deliberately indifferent manner.  Actual knowledge is defined as “notice of sexual harassment or allegations of sexual harassment to a recipient’s Title IX Coordinator or any official of the recipient who has authority to institute corrective measures on behalf of the recipient, or to any employee of an elementary and secondary school. Imputation of knowledge based solely on vicarious liability or constructive notice is insufficient to constitute actual knowledge.”  The stated reason for the change is that Title IX is a statute “designed primarily to prevent recipients of Federal financial assistance from using the funds in a discriminatory manner.”  As a result, “it is a recipient’s own misconduct – not the sexually harassing behavior of employees, students, or other third parties – that subjects the recipient to liability in a private lawsuit under Title IX.”  “The recipient cannot commit its own misconduct unless the recipient first actually knows about the sexual harassment,” according to the final regulations. 
  • Role of the Formal Complaint.  Consistent with the idea that actual knowledge creates liability, the final regulations obligate a recipient-school to investigate and adjudicate sexual harassment whenever a complainant files, or a Title IX Coordinator signs, a formal complaint.  A “formal complaint” as used in the final regulations means “a document filed by a complainant or signed by the Title IX Coordinator alleging sexual harassment against a respondent and requesting that the recipient investigate the allegation of sexual harassment.”   It is ambiguous from the regulations whether a complaint filed without a specific request for an investigation would meet this definition.  With that said, the final regulations also make clear that a formal complaint IS NOT necessary to trigger a recipient’s obligation to respond promptly and meaningfully to sexual harassment.  As discussed above, when a federally funded school has actual knowledge of sexual harassment, or allegations of sexual harassment, that knowledge activates the recipient’s legal obligation to respond promptly, including by offering supportive measures to a complainant.  A recipient of federal financial assistance must respond in a manner that is not clearly unreasonable in light of the known circumstances, whenever a recipient has actual knowledge of sexual harassment in the recipient’s education program or activity. 
  • Grievance Process.  The final regulations specify the basic requirements for a grievance process related to alleged sexual harassment.  At a minimum the grievance process must, among other things:
    • Involve an objective evaluation of all relevant evidence – including both inculpatory and exculpatory evidence;
    • Assess credibility based on factor(s) other than a person’s status as a complainant, respondent, or witness;
    • Be facilitated by a Title IX Coordinator, investigator, or other decision-maker who has received training on a variety of specified issues;
    • Include a presumption that the respondent is not responsible for the alleged conduct until a determination at the conclusion of the grievance process;
    • Include “reasonably prompt” time frames for completing the grievance process and the filing of appeals;
    • Describe the range of possible disciplinary sanctions and remedies; and
    • State whether the standard of evidence is preponderance of the evidence or clear and convincing evidence standard, and apply the same standard of evidence to all formal complaints of sexual harassment.
  • Rights to Notice, Advisor and Hearing.  For post-secondary institutions, the final regulations provide for rights of students' to written notice of allegations, the right to an advisor (who may, but is not required to, be an attorney), the right to request a live hearing (although such hearing if requested may be conducted in separate rooms using technology to enable participants to see and hear) and the right to submit, cross-examine, and challenge evidence at a live hearing.  Cross-examination at the live hearing must be conducted directly, orally, and in real time by the party’s advisor of choice and never by a party personally.  Schools also may not restrict the ability of either party to discuss the allegations under investigation or to gather and present relevant evidence. 
  • Input from Victims.  The final regulations also provide survivors of sexual harassment to weigh in on decisions about how a school responds to these incidents. 
  • Places Regulations Apply.  The final regulations make clear that they apply to school programs or activities on and off campus, including fraternity or sorority houses.  But they do not apply during study abroad programs as the duty to investigate is triggered only when the school has actual knowledge of sexual harassment in one of its programs “in the United States.” 

It remains to be seen whether these final regulations will actually address the significant challenges schools have faced in balancing the importance of reporting and eliminating sexual harassment with the rights of those accused to defend themselves.  Notably, many schools chose not to change their Title IX policies and procedures following the DOE’s withdrawal of the 2011 Dear Colleague Letter and 2017 publication of 2017 Questions & Answers.  But schools will have no choice but to review and change their policies to comply with the final regulations, which unlike prior guidance, is now legally enforceable.     

 

More DOL Guidance on CARES Act Unemployment Expansion - Workshare Programs

posted May 6, 2020, 1:35 PM by Allison Ayer   [ updated May 6, 2020, 1:43 PM ]

Hoping to provide some financial relief to millions of U.S. workers, Congress passed the CARES Act back in March.  Among other tings, the Act provides expanded Federal unemployment benefits to workers who lost jobs because of coronavirus and were eligible for state unemployment benefits.  But this expanded unemployment has had the unintended consequence of creating a disincentive for some employees to return to their jobs because they collect more in unemployment than they would if they were working.  This creates real challenges for businesses trying to reopen. 

For its part, the DOL continues to issue new guidance concerning unemployment assistance during the pandemic.  The guidance seems to be trying to address some of the challenges inadvertently resulting from expanded Federal unemployment.   

For example, we noted in an earlier Legal Line post that the DOL published guidance that furloughed or laid off employees would not be allowed to continue receiving unemployment benefits if they refuse a job offer or refuse to return to work after the lifting of the stay home orders.  Moreover, employees will not be entitled to unemployment if they refuse to come to work out of a mere “general concern” about contracting the COVID-19, according to that guidance.

In new guidance issued May 3, the DOL provided an overview of state work-sharingprograms under the CARES Act and federal reimbursement available thereunder.  Typically, an employee has to have lost his/her job for a reason attributable to the employer in order to receive unemployment benefits.  But state work-share programs allow employees to continue to work reduced hours while still collecting partial unemployment benefits.  In essence, the work sharing programs discourage layoffs because employers, under a state-approved plan, can the reduce hours for a group of workers while at the same turn these workers can receive a reduced unemployment benefit payment.  New Hampshire, Massachusetts and many other states have worksharing programs.   

The benefits available for state worksharing programs vary according to state rules, but generally the employee receives partial benefits proportionate to the reduction in hours.  For example, if a worker’s hours are cut by 1/3, he/she may continue to work and collect up to 1/3 of the maximum weekly benefit available. 

Under most state unemployment rules, employers pay the state for a portion of the partial benefits.  But under the DOL’s new guidance, if benefit payments meet the criteria for full reimbursement, states are permitted to waive the employer’s share of partial benefits during the COVID-19 pandemic for employers who voluntarily participate in state worksharing programs.  According to the guidance, the Federal government will pay states back if the programs meet federal standards in many circumstances.  These rules apply to statutory worksharing programs states, not temporary programs allowed to be implemented through the CARES Act by agreement with the Secretary of Labor.  

The DOL’s position seeks to encourage businesses and employees alike to find a mutually beneficial way to get individuals back to work even where new safety guidelines, social distancing measures, and a decline in business prevent operating at full time staffing levels for all employees.  The DOL notes that the worksharing program “benefit payment cushions the adverse effect of the reduction in business activity on workers and, by maintaining their connection to their employers, ensures that these workers will be available to resume prior employment when business demand increases.”  As states increasingly permit businesses to reopen, employers should consider whether these relaxed contribution rules make it worth their while to participate in worksharing programs.  

NH Governor Sununu Issues Stay At Home Order 2.0

posted May 1, 2020, 4:47 PM by Allison Ayer   [ updated May 2, 2020, 6:54 AM by Christopher Vrountas ]

On May 1, 2020, Governor Chris Sununu issued a new emergency order with revised stay-at-home guidelines and a timeline for certain business openings. The entire Stay At Home Order 2.0, which remains in effect until May 31, 2020, can be found here.  New Hampshire appears to be leading the region in setting forth its planned, phased reopening of the state’s economy.  These are some of the highlights:

All businesses and organizations, essential or not, are encouraged to continue to operate remotely (i.e., telework) instead of requiring employees, customers, or the public to report to the company or organization’s physical facility.  For essential businesses that do reopen and begin on-site operations, the governor issued universal guidelines to follow.  This is a summary of the guidelines for New Hampshire employers who wish to reopen: 

1.)  Screen Employees for Illness.  Employers must develop a process for screening all employees who are reporting to work for COVID-19 related symptoms.  As part of that screening process, employers must assign one person and location to, on a daily basis, take employee temperatures with a non-touch thermometer, and ask a series of specific questions about COVID-19 symptoms BEFORE they enter the workplace.  The assigned screener must wear a face covering, and employers must communicate the screening procedures to all employees. 

 

2.)  Keep Sick Employees at Home.  Employers must require all employees who are sick or not feeling well to stay home, and employees must notify their supervisor by phone if they are sick and cannot come in.  Screened employees who have reported to work AND who have a temperature that exceeds 100.00 degrees Fahrenheit or who have answered “yes” to any of the screening questions must be instructed to leave the premises immediately and to seek medical advice.  If an employee becomes sick during the day, they should be sent home immediately, as well.  Per EEOC and other pertinent guidelines, employers must maintain the confidentiality of employee health information. 

 

3.)  Promote Good Hygiene.  Employers are required to “strongly promote” frequent hand washing, make hand sanitizer (with at least 60% alcohol) readily available, and promote proper sneezing and coughing etiquette.  Employers should also discourage workers from using other workers’ phones, desks, offices, or other work tools and equipment, when possible.

 

4.)  Clean the Premises.  Employers must implement workplace cleaning and disinfection practices that follow CDC guidelines, including regular sanitation of high to moderate touch surfaces at least every two hours.  Surfaces in employee workspaces should also be cleaned and disinfected. Employers must develop policies for worker protection and provide training to all staff prior to assigning cleaning tasks

 

5.)  Wear Masks.  All employees should wear a cloth face covering while at work and in potential close contact with others and/or where social distancing is difficult to maintain.

 

6.)  Adhere to Social Distancing: Employers must implement social distancing guidelines, and modify employee schedules, where possible, to reduce the number of physical interactions. For example, employers should avoid in-person meetings, and instead conduct them by phone or video conference, if possible.  If an in-person meeting is necessary, employees should be at least 6 feet from others at all times.  Employers should limit self-service of communal food, such as candy dishes, common creamers at coffee stations, water coolers, etc. 


7.)  Update Sick Polices.  Employers must review policies and practices and make changes as necessary to ensure that they are consistent with public health recommendations and the existing state and federal workplace laws. The guidelines suggest that employers should amend sick policies to include symptoms of COVID-19 or create a COVID-19 specific policy.  Employers are also encouraged to maintain flexible, non-punitive policies that permit employees to stay home if ill or to care for a sick family member.  These policies should incorporate any sector specific recommendations by the state of New Hampshire.   Finally, employers are encouraged to post these policies and have employees sign the policy as well.  


8.)  Plan for potential COVID-19 cases.  Employers must develop plans to allow them to continue essential business functions if they experience high absenteeism as a result of COVID-19. Employers should work with state and local officials when needed to monitor and investigate cases of COVID-19. In all cases, employers must work in a manner to ensure privacy rights.

Hospitals may begin conducting “time-sensitive procedures”, starting May 4, such as MRI or CT scans, knee replacements or biopsies, according to these additional restrictions.   

Barber, hair salons and cosmetology businesses, drive-in movie theaters, golf courses, and retail establishments will be allowed to reopen May 11, subject to specified restrictions applicable to each industry.  For example, hair salons and barbers will be open by appointment only with restrictions on arrival procedures and maximum occupancy.  Parked cars at drives-ins will have to be at least 10 feet apart and food available for purchase must be pickup-only and eaten in vehicles.  Golfers are prohibited from arriving sooner than 15 minutes before tee time, and may play only with personal clubs and without caddies.  Retail stores must limit occupancy to 50%, with staff members required, and customers suggested, to wear face coverings at all times. These are links the full industry-based opening guidelines for Barbers and Salons, Drive-Ins, Golf, Retail.    

Restaurants will be allowed to open for outdoor dining starting May 18, as well as by reservation or call ahead only (no walk-ins).  Bars and indoor seating will remain closed.  No more than six people may sit at a table, and tables must be configured so customers are seated at least 6 feet apart from diners at other tables.  Restaurants must stagger reservations to prevent congregating in waiting areas, and waiting areas must allow for customers and employees to be spaced at least 6 feet appear.  Customers also will be asked to wear face coverings or masks when entering or exiting the restaurant or seating area or going to the restroom, but they will not be required while a customer is seated and dining outdoors. 

Restaurants will be permitted to expand outdoor seating to parking spaces close to entrances, sidewalks, existing patios, and lawn areas, if seating can be set up safely.  The outdoor space also must be clearly delineated and distanced from the general public.  If expansion is in a shared space, restaurants must coordinate and seek approval from local authorities.  Restaurants must also use disposable menus or menus that can be sanitized between each use. Self-serve buffets, condiment stations and beverage stations aren't allowed.  Signage must be prominently posted with questions to screen out customers experiencing COVID-19 symptoms.  Restaurants also must make alcohol-based hand-sanitizer readily available at the reception desk for both customers and employees.  The full set of restaurant guidelines can be found here.   

Campgrounds also will be allowed to open only to New Hampshire residents and members of private campgrounds, with additional limitations on occupancy, reservations, check ins, and access to public gathering space. 

While these requirements may seem onerous at first glance, they do not require anything more than we have been doing for weeks.  Indeed, the New Hampshire guidelines largely incorporate previously published CDC, OSHA, and EEOC guidelines, and they expand upon the guidelines provided by the President’s Commission, which calls for a 3-phase approach that looks similar to the new guidelines provided by the Governor’s order. 

New Hampshire is leading the way. New Hampshire is moving forward more quickly to announce a plan for the phased reopening of its economy while its neighbor to the south continues to debate how to proceed.  For now, the general shutdown of non-essential businesses in Massachusetts continues, as the Massachusetts shutdown order has been extended to May 18Meanwhile, on the same day as the New Hampshire Governor's re-opening order, the Governor of Massachusetts ordered all people in the state to wear masks in public when one cannot ensure 6-foot distance from people.  

Action will, however, come soon from Massachusetts.  As the task force appointed by the Massachusetts governor to develop reopening protocols continues its work, experts such as a panel on the Massachusetts High Technology Council have already submitted a preliminary plan for reopening. The report calls for reopening the economy in segments, developing therapies and a vaccine, and establishing new workplace and social norms to stop the spread of disease, which would include a massive testing and tracing plan as well as social distancing.  This is still all debate and not yet government action.  The briefing summary of the report is here: http://www.mhtc.org/wp-content/uploads/2020/05/20200430-MHTC-COVID-19-Briefing-Summary.pdf

Bottom line, we are beginning to see the “new normal” that has been anticipated for the reopening of the economy in a post-COVID world, and New Hampshire, for now, is in the lead.   

No PPP Loan, No Problem?

posted Apr 30, 2020, 7:51 AM by Adam Chandler

For several weeks now, the news cycle concerning the COVID-19 bailouts has been dominated by controversies surrounding the Paycheck Protection Program and the loans available to “small businesses.”  The first round of funding ran out in under two weeks with only approximately 5% of the nation’s small businesses obtaining funds.  Companies ranging from Shake Shack, to prominent investment firms, to the Los Angeles Lakers took advantage of this $350 billion round of funding, and many of these businesses were shamed into giving the money back. Now, a second, smaller, round of funding is underway.  It stands to reason that these funds will also be quickly depleted, and many small businesses will be left on the outside, looking in.  

If your business misses out on this second round of funding, are you completely out of luck?  Thankfully, the answer is no, the CARES Act still provides you with a couple of options to soften the blow of the current pandemic.  Depending on your business and how it is affected, you may even come out better in the long run by not taking a PPP loan.

Both options involve your business’ payroll taxes.  The first option provides that certain businesses that do not get PPP loans may be eligible for payroll tax credits or even refunds.  The second option allows all businesses that have not yet applied for forgiveness of a PPP loan to defer the payment of payroll taxes over the next two calendar years.

Tax Credits

In addition to requiring that a business not receive a PPP loan, the payroll tax credit option offered under Section 2301 of the CARES Act is only available to businesses during a calendar quarter in which they: (1) are either subject to a government order fully or partially suspending the business’ operations; or (2) suffer a significant decline in gross receipts during a calendar quarter.  Many businesses, including restaurants not able to serve dine-in guests, hotels, and any business not deemed essential and subject to a shutdown order, will meet the first standard.   A “significant decline in gross receipts” necessary to meet the second standard is a 50% reduction in gross receipts for a 2020 calendar quarter as compared to the same calendar quarter in 2019.  This “decline” is deemed to continue through the calendar quarter following the first calendar quarter in which gross receipts are greater than 80 percent of the same quarter for the previous year.

If your business qualifies for the tax credit, what do you get?  Employers will get a credit against their share of employment taxes equal to 50% of the first $10,000 paid to each employee during a calendar quarter. For example, for each employee making over $40,000 annually, the employer would earn a $5,000 payroll tax credit per affected quarter.  In addition, if the amount of the credit exceeds the payroll taxes paid, the employer will receive a refund from the government.  Wages subject to this credit do not include paid leave under the Families First Coronavirus Response Act, since those wages are already subject to a payroll tax credit under that statute.

There is one further important qualification for these tax credits.  If the employer had more than 100 employees in 2019, the credit/refund is only available for wages paid to individuals who are not performing services for the employer due to the pandemic.  If the employer had less than 100 employees in 2019, the credit may be taken for wages paid to any employee during a shutdown or significant decline in gross receipts.

Tax Deferral

In addition to the payroll tax credits available under Section 2301, Section 2302 of the CARES Act allows for employers to defer those Social Security taxes that it does owe for wages paid in 2020 by several years.  Under the statute, 50% of these payroll taxes must be paid by the end of 2021, with the remainder being paid by the end of 2022.

Unlike the payroll tax credits, employers can defer payroll tax payments even if they applied for and received a PPP loan.  The only limitation is that employers lose the right to defer payroll taxes if they have their PPP loan forgiven.  Thus, as the IRS recently clarified, employers who have received PPP loans may get tax deferral through the date that they receive a decision from their lender on loan forgiveness. By contrast, employers who have not obtained PPP loans may get deferral for Social Security taxes for the remainder of 2020.

New DOL Guidance on CARES Act Unemployment Expansion

posted Apr 29, 2020, 1:00 PM by Christopher Vrountas

The DOL issued new guidance to the states for implementation of Pandemic Unemployment Assistance (PUA) under the CARES Act. In doing so, the DOL answered a number of questions about who is eligible for benefits, how claims can be filed, how are benefits are calculated, and, importantly, what happens when you call workers back to return to work. But, be careful. It's not as simple as it seems.

Among other things, the DOL discussed what happens when an employee refuses to return to work when offered a job or when the stay at home orders end. Simply put, furloughed or laid off employees cannot continue receiving their unemployment benefits if they refuse a job offer or refuse to return to work after the lifting of the stay home orders. Moreover, employees will not be entitled to unemployment if they refuse to come to work out of a mere “general concern” about contracting the Covid19 virus.

The new DOL Guidance on these issues can be found here --> https://wdr.doleta.gov/directives/attach/UIPL/UIPL_16-20_Attachment_1.pdf

That said, the employer’s legal obligations regarding return of employees are more complicated than those simple statements from the DOL's new Guidance may suggest. There are many reasons why an employee may legitimately refuse to return to work even when a job has been offered to him or her.

For example, an employee eligible for paid leave under the FFCRA obviously cannot be discharged for requesting it. An employee may be entitled to paid leave under the FFCRA if he or she requests it for a qualifying reason which includes the following: 1) the employee is subject to a government quarantine or isolation order; 2) the employee has been advised to self-quarantine; 3) the employee is experiencing symptoms; 4) the employee is caring for an individual described in (1) or (2) above; 5) the employee is caring for a child whose school or daycare center has been closed; or 6) the employee is experiencing any other substantially similar condition. 

In addition, the DOL, OSHA, the CDC and the EEOC have all issued guidelines on how to manage the workplace in the new Covid19 era.  Failure to meet these guidelines may potentially form the basis for an employee's refusal to return to work depending on the circumstances.  If, for example, the employee notes that the employer has failed to take reasonable precautions to keep employees safe, perhaps by referencing CDC or OSHA Guidelines, the employee’s refusal to come to work under that circumstance could be considered a reason attributable to the employer and not a resignation by the employee.  In addition, an employer who fails to provide a reasonable accommodation for an employee’s disability, which may present more of a critical issue during this time of pandemic, may well be construed as having terminated the employee’s employment.  Of course, failure to reasonably accommodate an employee with a disability may create other liability as well.

OHSHA Guidance can be found here--> https://www.osha.gov/Publications/OSHA3990.pdf

CDC Guidance can be found here--> https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

EEOC Guidance can be found here--> https://www.eeoc.gov/coronavirus/

The Presidential Commission has also issued a suggested 3-Phase process for reopening the workplace.  Phase 1 involves encouraging employees to telework, returning people to the workplace in phases, closing common areas, minimizing non-essential travel, and offering special accommodations to persons in the "vulnerable population" even if they do not have specific disabilities. Phase 2 involves the same the same elements, except for the suggestion against travel. Phase 3 would involve simple unrestricted staffing of worksites, but with special considerations for vulnerable populations. 

The Presidential Commission Guidelines are here--> https://www.whitehouse.gov/openingamerica/

While the Commission guidelines are not law, they do provide a standard of care that should be considered when returning employees to work. In any event, any return to work at any Phase level will always need to comply with OSHA guidelines and other existing laws against discrimination, laws providing for paid and unpaid leave, and laws requiring accommodations for employees with disabilities.

In the end, make these decisions thoughtfully after considering all the facts. Of course, seek the advice of counsel to develop a strong policy that complies with the employer's legal obligations and be sure to keep advised as these laws continue to develop. 

 

 

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