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Employers of healthcare providers will soon be required to provide paid sick leave and partially paid family leave to a broader category of employees, and all employers subject to the law now have clarification on a number of other obligations, thanks to a revised set of regulations released by the Labor Department late Friday afternoon. After a federal court judge recently knocked down the agency’s first attempt to provide employers with practical direction in complying with the Families First Coronavirus Act (FFCRA), the Labor Department issued a second set of rules on September 11 that in some instances revise and in other instances clarify employer compliance duties. Here are the key changes and clarifications, which are slated to go into effect on September 16, that employers need to know about:
Three weeks ago many of your employees started inquiring about when you were going to stop taking their payroll taxes out and you likely told them you were awaiting guidance and nothing would happen until September 1st. Guess what?? It’s September 1st and employees are starting to ask again. The big picture they need to know is that it’s a temporary delay not a permanent cut.
Late Friday (8/28), the Department of Treasury released some guidance. Many questions remain unanswered, like, can we simply decline to participate in the deferral or what if an employee leaves before they’ve repaid the deferred taxes? The guidance doesn’t provide us an option to not participate and states the employer “may make arrangements to otherwise collect the total Applicable Taxes from the employee”….. which means they’ve never tried to collect money from a terminated employee!
That being said, we will do the best we can with the information provided thus far. Most employees don’t understand that this is a deferral or delay of taxes, not a permanent cut, for employees making $104,000 or less annually. All delayed taxes would need to be repaid by the end of April 2021. Meaning, while most employees would have the chance to get a 6.2% boost in their paychecks for the last 4 months of this year, this could cause them to get slammed with a 12.4% withholding for the first 4 months of 2021. The concern is that once employees get accustomed to the increase in pay, the double down approach to collect at the beginning of the new year may cause them undue financial stress.
The tax deferral has the potential to cause more aggravation and confusion among staff than its worth, so we recommend the opt out approach. The guidance doesn’t provide employers the option to not offer to their employees and we know plaintiffs’ attorneys are always looking to make a quick buck, so we recommend providing employees with the information and let them make an informed decision.
We have drafted a sample letter that you may wish to share with staff to explain the deferral and requires them to complete and sign paperwork to defer their tax for the remainder of 2020. The letter also states that nothing will change on their withholding unless they choose to opt in to the tax holiday. Please contact our office if you would like a copy of this sample letter.
As the summer draws to a close, schools are announcing their re-opening plans, which vary widely across states and localities. Some schools plan to remain open several days a week and direct students to attend remotely the other days. Others will split classes into morning and afternoon sessions, allowing students attending in the morning to participate remotely at home for the rest of day and vice versa. Still others will require physical attendance at all times, while some will choose to operate entirely under a remote learning model.
In light of these different reopening plans, employers need to understand how the Families First Coronavirus Response Act (FFCRA) affects the leave rights of employees for each of these different types of school schedules. The below serves as a list of answers to frequently asked questions related to the issues you could face as schools begin to reopen.
The Basics: FFCRA Leave Benefits For Working Parents
Under the FFCRA, eligible employees are entitled to Emergency Paid Sick Leave (EPSL) and/or expanded family and medical leave (EFML) if they are unable to work or telework because they need to care for their son or daughter if (a) the child’s school or place of care is closed, or (b) the child care provider is unavailable, due to COVID-19-related reasons. The FFCRA regulations provide that an employee may take leave to care for their child only when the employee needs to, and actually is, caring for the child. The Department of Labor (DOL) has advised that “generally, an employee does not need to take such leave if another suitable individual — such as a co-parent, co-guardian, or the usual child care provider — is available to provide the care the employee’s child needs.”
Frequently Asked Questions
1. Is a child’s school or place of care deemed “closed” for purposes of the FFCRA if it has moved to online instruction or to another model in which children are required to complete assignments at home?
Yes. If the physical location where an employee’s child received instruction or care is closed, the school or place of care is deemed “closed” for purposes of the EPSL and EFML. The DOL has instructed that this is true even if some or all instruction is being provided online or whether, through another format such as “distance learning,” the child is still expected or required to complete assignments. But this seemingly does not contemplate a hybrid model (discussed below) and likely pertains only to those circumstances where the child is not reporting to a physical location. Also note that in order to be eligible for FFCRA leave, employees must still certify that there is no other suitable person that can care for the child.
2. Is an employee entitled to FFCRA leave if they choose to keep the child at home or have the child homeschooled even though the child’s school is open?
No. The DOL has stated that employees do not need to take leave if their usual child care provider is available to provide care. But if the school is operating on a reduced capacity due to COVID-19, which then necessitates remote learning for the child, FFCRA leave could be available. See DOL guidance on summer camps.
3. Would an employee qualify for FFCRA leave if their child’s school is open but the employee chooses remote learning based on a doctor’s recommendation due to the child’s vulnerability to COVID-19?
EFMLA is likely not available to the employee because the child’s school is not closed. The employee might be eligible for EPSL if they can demonstrate that they are taking leave to care for a person who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 (permitted reason #4 under EPSL). It is unclear however, whether a recommendation for remote learning is the same as a recommended self-quarantine for purposes of the FFCRA.
4. Will employees be eligible for FFCRA leave if a child’s school is operating on a hybrid model (whereby children are to alternate between physical attendance and remote learning)?
Likely yes. While this scenario is not specifically addressed in the statute or DOL guidance, one would argue that the child’s school is technically “closed” to that child on the days when the child is required to participate via remote learning. Thus, if the employee cannot work or telework during those days, they should qualify for FFCRA leave.
It is uncertain, however, whether a parent may take the leave consecutively or intermittently to coincide with the days and times the child is home remote learning. If the child’s school requires them to attend school daily (e.g., child attends school half of the day and spends the other half remote learning), leave is likely to be taken consecutively. If, on the other hand, the child’s schedule requires the child to physically attend school only on certain days of the week, leave is likely to be taken intermittently. Note that while the DOL regulations mandate employer consent for intermittent leave, a New York federal court recently struck out this requirement as unreasonable.
5. Would an employee qualify for FFCRA leave if the child’s school is open but the child’s before or after school program is closed?
Yes. The DOL defines a “place of care” as a physical location in which care is provided for the child. The physical location does not need to be solely dedicated to such care. Examples include day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs, and respite care programs.
6. Can an employer deny FFCRA leave to an employee who previously teleworked while the child’s school was closed but intends to request leave if the child’s school remains closed for the fall?
No. The DOL has made clear that simply because an employee has been teleworking despite having their children at home does not mean the employee is prevented from now taking leave to care for the child whose school is closed for a COVID-19-related reason.
7. Can more than one parent take paid sick leave or expanded family and medical leave simultaneously to care for a child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons?
No. An employee may take EPSL or EFML leave to care for their child only when they need to, and actually are, caring for the child if they are unable to work or telework as a result of providing care. Generally, employees do not need to take such leave if a co-parent, co-guardian, or the usual child care provider is available to provide the care the child needs.
8. Can an employee take paid FFCRA leave to care for a child who is 18 years old or older?
It depends. EPSL and EFML leave may only be taken to care for an employee’s non-disabled child if they are under the age of 18. If the employee’s child is 18 years of age or older with a disability and cannot care for themselves due to that disability, the employee may take EPSL and EFML leave to care for the child if their school or place of care is closed or the child care provider is unavailable due to COVID-19-related reasons and the employee is unable to work or telework as a result. Additionally, EPSL is available to care for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. If an employee has a need to care for a child age 18 or older who needs care for these circumstances, the employee may take EPSL if they are unable to work or telework as a result of providing care. But in no event may the employee’s total paid sick leave exceed two weeks.
9. Can an employee use EPSL for child care purposes if the employee already used up their 80 hours of EPSL for other permitted purposes?
No. The DOL regulations state that employees are entitled to only a one-time use of 80 hours of EPSL, regardless of the reason. However, if an employee has not exhausted their full EPSL allotment, they may use the remaining time for other permitted reasons.
10. If a new employee has used up their EPSL leave allotment while employed at their previous employer, are they entitled to another 80 hours of EPSL leave with the new employer?
No. The DOL regulations specify that any person is limited to a total of 80 hours of EPSL. An employee who has taken all such leave and then changes employers is not entitled to additional EPSL from their new employer. However, an employee who has taken some (but fewer than 80 hours of) EPSL and then changes employers is entitled to the remaining portion of such leave from their new employer, but only if the new employer is covered by the FFCRA.
11. Can employees use EFML leave if they have already exhausted all of their FMLA leave allotment for the benefit year?
No. An employee may only take a total of 12 workweeks for FMLA or EFMLA reasons during the employer’s designated benefit year.
12. Does EFML contain the same limitation contained in the FMLA that requires spouses who work for the same employer to share the 12 weeks of leave (instead of each getting 12 weeks)?
No. Under 29 CFR 201(b), spouses who work for the same employer can be required to share a combined 12 weeks of FMLA leave to bond with their new child or care for their own parent with a serious health condition. The EFMLA does not provide for the same carveout. But keep in mind that while both employees who work for the same employer would each be eligible for EFMLA leave, they would likely not be able to both take leave to care for their child since they have to certify that there is not alternative suitable caregiver.
13. What supporting documents must employees provide to their employers for FFCRA purposes?
When requesting EPSL or EFML leave, employees must provide the following information to their employers, either orally or in writing:
If the employee requests leave because they are subject to a quarantine or isolation order or to care for an individual subject to such an order, they should additionally provide the name of the government entity that issued the order. If the employee requests leave to self-quarantine based on the advice of a health care provider or to care for an individual who is self-quarantining based on such advice, they should also provide the name of the health care provider who gave the advice.
If the employee requests leave to care for a child whose school or place of care is closed, or child care provider is unavailable, they must also provide:
Notably, a New York federal court recently held that supporting documentation may not be required as a precondition for FFCRA leave. Thus, employers should ensure documentation is not required to commence the leave under the FFCRA. Supporting documentation can be submitted after the leave has commenced.
The U.S. Department of Labor just released a Field Assistance Bulletin (FAB) to provide employers with guidance regarding their wage and hour obligations to track the hours of employees working remotely or teleworking. Importantly, while the August 24 FAB directly speaks to employers’ Fair Labor Standards Act (FLSA) requirements under remote work arrangements that have arisen amid COVID-19, it also applies to all other telework or remote work arrangements. This guidance may be especially useful to employers who are new to the remote work world.
The Basics: What Does Federal Law Require?
As a reminder, the FLSA requires that an employer compensate employees for all hours it “suffers or permits” them to work. This means that employees must be compensated for time that may be unscheduled, but during which the employee still performs work. Thus, if an employer knows or has reason to believe that work is being performed, the time must be counted as hours worked.
A challenge for employers is preventing work that it does not want performed. Notably, the employer cannot rely exclusively on its stated policy. Indeed, the guidance notes that it is not easy to define when an employer “has reason to believe that work is being performed.” The FAB reinforces that employers are not required to compensate employees for work they do not know about and have no reason to know about.
New Challenges Raised By Remote Work
Rather, employers are only required to compensate employees for hours worked that are based on “actual knowledge” or “constructive knowledge” of that work. Employers will be deemed to have “actual knowledge” of employees’ regularly scheduled hours and through employee reports or other notification “actual knowledge” of the hours worked. Employers might be deemed to have “constructive knowledge” if it could have acquired information regarding additional work done through the exercise of “reasonable diligence.”
Importantly, the FAB clarifies that “reasonable diligence” is limited to what the employer should have known, not what it “could have known.” This means employers are not necessarily required to “cross-reference” phone records or otherwise review other non-payroll records to determine whether or not employees were working beyond their scheduled hours, especially during these remote work times.
What Should Employers Do?
Instead, you should provide employees with a process and procedure to report hours worked, particularly to ensure that unscheduled hours also are recorded. If the employee fails to utilize the process or procedure, you might be able to make an argument that the employee has prevented you from satisfying your obligation to compensate employees and thwarted your efforts to prevent unwanted work. Thus, you may be able to avoid FLSA liability for failing to compensate employees for work performed that you did not know about and that the employee didn’t advise you about.
You should review your remote work and telework policies to ensure that they provide clear guidance to employees about your expectations regarding schedules and working hours. You should also implement a policy or procedure by which employees can report work that was performed outside their regularly scheduled time frames or their recorded hours.
Overall, you should exercise reasonable diligence to ensure that you capture all hours worked (whether scheduled or not, just as they must for employees working onsite). But you can take some solace in the USDOL’s guidance reminding us all that “constructive knowledge” is not without limits.
Throughout the COVID-19 pandemic, the Centers for Disease Control and Prevention has issued constantly changing guidance for employers that many view as complex, confusing, and impractical. In its perplexing web of guidelines, the CDC recommends that companies take several actions to protect workers from contracting COVID-19, like self-isolating sick employees, quarantining exposed employees, screening employees for symptoms prior to work, and installing partitions to protect public-facing employees.
Given their complexity, some of these directives are often not fully understood by companies. Further complicating matters, many of the recommendations have never been previously undertaken by employers, leading to misapplication. Worst of all, other guidelines are simply not feasible for some employers, leaving them with the tough decision of not following the CDC directive in order to stay in business.
Unfortunately, ignoring or misunderstanding these confusing guidelines, like the four commonly misinterpreted guidance listed below, could lead to legal risks for your company.
1. Returning Exposed Employees To Work Too Early After A Negative Test
Of the innumerable companies that have sought our assistance during the COVID-19 pandemic, the most common misunderstanding of CDC guidance we see involves returning to work employees who have been directly exposed to COVID-19 too early following a negative test. Employers falling under the CDC’s general business guidance (not critical infrastructure employers) should quarantine employees for 14 days since their last direct exposure to a confirmed or suspected COVID-19 case, defined as being within 6 feet of the infected person, for 15 minutes or more, within the 48 hours prior to the sick individual showing symptoms, until the infected person is released from self-isolation (“6-15-48”).
Critically, the 14-day quarantine period cannot be cut short by a negative test due to the lengthy incubation period of COVID-19. This is an often-misunderstood CDC guideline, which even the agency has recognized:
Note that recommendations for discontinuing isolation in persons known to be infected with SARS-CoV-2 could, in some circumstances, appear to conflict with recommendations on when to discontinue quarantine for persons known to have been exposed to SARS-CoV-2. CDC recommends 14 days of quarantine after exposure based on the time it takes to develop illness if infected. Thus, it is possible that a person known to be infected could leave isolation earlier than a person who is quarantined because of the possibility they are infected.
Thus, an exposed employee cannot return to work during the 14-day quarantine period following a negative COVID-19 test received on, for example, day three, seven, or 12 of that period. Returning exposed employees too early due to a negative test could lead to preventable COVID-19 infections if co-workers are exposed to individuals who should be quarantined and develop the virus after a negative test.
2. Miscalculating The Appropriate Quarantine Period For Those Exposed To An Infected Household Member
Along those same lines, employers often misunderstand CDC guidance when calculating the length of the quarantine period for a worker who has been exposed to an infected spouse or household member. The key here is that the 14-day quarantine period does not begin until the last day the employee was directly exposed, using the 6-15-48 analysis above, to the spouse or household member prior to the infected person being released from self-isolation. Thus, if the employee is directly exposed to the spouse or household member on days one through 10, the quarantine period does not begin until day 10.
Accordingly, the worker may ultimately miss 24 days of work, instead of 14, if directly exposed to the spouse or household member every day until the spouse is released from self-isolation. The CDC addresses this confusing guidance here, noting that the exposed employee should stay home until 14 days have elapsed after the last exposure.
3. Not Notifying Employees Of A Confirmed COVID-19 Case In Your Workplace
The Fisher Phillips COVID-19 litigation tracker has been following closely the number of lawsuits filed with COVID-19-related claims. The prevalence of claims relating to an employer’s failure to notify employees of a confirmed case of COVID-19 in the workplace is a troubling trend. Throughout the pandemic, transparency by employers has been a critical tool in maintaining positive employee morale. Failure to do so can lead to negative consequences, including not only lawsuits, but Occupational Safety and Health Administration (OSHA) complaints and employees refusing to work, as well.
Although it may not be clear to some employers, the CDC recommends not only informing directly exposed employees (6-15-48) of a confirmed COVID-19 case in the workplace, but also to inform other “employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA).” The CDC defines “possible exposure” to COVID-19 as those who do not meet the 6-15-48 parameters. Thus, when a confirmed COVID-19 case occurs in your workplace, remember to inform those employees who worked near the infected worker (e.g., the same hallway, area, or corridor), even though they weren’t directly exposed.
4. Incorrectly Believing That Wearing Face Coverings Trumps The 6-15-48 Analysis
When analyzing whether an employee has been exposed to an infected co-worker, employers often misconstrue the impact of wearing face coverings to prevent the spread of the virus. Although the CDC recommends wearing masks to slow the spread of COVID-19, whether employees are wearing masks while directly exposed (6-15-48) to an infected person does not change that analysis. The determination of whether someone should be quarantined for 14 days does not change if the individuals at issue are wearing masks, another point of confusion specifically clarified by the CDC:
Note: This is irrespective of whether the person with COVID-19 or the contact was wearing a mask or whether the contact was wearing respiratory personal protective equipment (PPE).
To ensure the safety of your workers, remember to quarantine all employees who meet the 6-15-48 analysis, even if they were wearing a face covering while exposed.
Legal Risks For Not Following CDC Guidelines
Although CDC guidance is not a law or regulation, such guidelines can be construed by OSHA and the courts as the legal standard that defines what actions a company should take to protect its workers during this unprecedented time. In fact, the Assistant Secretary for the U.S. Department of Labor has already indicated that OSHA could rely upon the general duty clause, which the agency can enforce in the absence of a standard on point, to enforce the CDC’s guidelines for employers on COVID-19.
If your company fails to follow a CDC guideline, it could receive a citation under OSHA’s general duty clause and, if classified as willful (e.g., reckless disregard for, or deliberate indifference towards, employee safety), the maximum penalty for each citation would be $134,937. Keep in mind that state OSHA plans, not regulated by the federal government, can adopt emergency COVID-19 regulations, which have the same impact as any other OSHA regulation, and enforce those against employers who fail to comply with them. Virginia recently became the first state adopt such a regulation, which includes notification requirements that vary from those of the CDC.
Although it is an evolving area of the law, claimants’ counsel will argue to courts that the violation of a CDC guideline is evidence of negligence, willfulness, or intent on behalf of the employer. Plaintiffs’ counsel will assert that the CDC guideline has established the level of care or duty owed to an employee or other claimant, and that the duty was breached by the company.
This argument will be made regardless of the jurisdiction, venue, or type of claim, including workers’ compensation claims, claims filed directly by an employee seeking recovery above and beyond workers’ compensation benefits, and those filed by third-parties (e.g. visitors, employee spouses) against companies. To protect your company from such claims, remember to follow these steps to minimize your exposure.
Earlier this month, the DOL’s Wage and Hour Division issued new model forms for employers to use when administering employee leave under the FMLA. The revised model notice of rights, certification, and designation forms were immediately effective and are now available to assist employers and employees in meeting their FMLA notice and certification obligations.
The federal Family and Medical Leave Act (FMLA) covers private employers with 50 or more employees as well as public agencies and public and private elementary or secondary schools, regardless of the number of employees. The FMLA generally entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave in a 12-month period for specified family and medical reasons and additional leave to care for a covered servicemember.
All covered employers must post a general notice about the FMLA (FMLA poster) in each workplace and distribute a notice to new hires. Additionally, covered employers who have FMLA-eligible employees must provide them with notices about: FMLA eligibility status, rights, and responsibilities; when specific leave is designated as FMLA leave; and the amount of time that will count against their FMLA leave entitlement. When an employee requests FMLA leave due to their own or a covered family member’s serious health condition, or for military family leave, the employer may require appropriate certification.
The DOL’s Wage and Hour Division (WHD) released revised versions in mid July of its model notice of rights, certification, and designation forms under the FMLA. According to the WHD, the new forms, which are effective immediately, are “simpler and easier for employees, employers, leave administrators and healthcare providers to understand and use.”
The following updated FMLA forms are now available to assist employers and employees in meeting their FMLA notification and certification obligations:
These optional-use forms can be used by employers to provide required notices and by employees to provide certification of their need for FMLA qualifying leave. The new forms are electronically fillable PDFs that can be saved and transmitted electronically. Employers may still use the agency’s prior model forms or they may use their own forms, as long as they provide the same basic notice information and require only the same basic certification information.
To some extent, the new model forms simplify FMLA administration by substituting check boxes for some previously required written responses. The revised Notice of Eligibility & Rights and Responsibilities form contains additional information on the substitution of paid leave and concurrent leave usage during a qualifying FMLA absence. The revised certification forms similarly include additional information on the circumstances in which employers may obtain follow-up information from health care providers and are reorganized to make it easier to determine whether a serious health condition exists. As the WHD made clear, an employee who already provided the required FMLA information using the old certification form cannot be required to provide that same information using the revised form.
Notably, the WHD did not revise the FMLA poster or issue a generic “Fitness-for-Duty” certification. Further, the new forms do not address the paid sick leave or expanded FMLA leave requirements of the Family First Coronavirus Response Act (FFCRA).
An employee who erupts into an angry tirade or bursts into tears may be just as surprised as everyone else at the workplace by the sudden onslaught of emotion.
As workers deal with the uncertainty and loss resulting from a global pandemic, a recession and racial tensions, such emotional flare-ups are increasingly likely to occur. However rattling, a meltdown is not necessarily a terrible thing.
Emotions that aren’t dealt with “don’t go away. They just go underground, to the detriment of everybody,” said Laura Putnam, a workplace wellness consultant and the CEO of Motion Infusion, a wellness and performance improvement provider in San Francisco.
With so much for employees to worry about, “there’s an extra load on a manager right now, no question,” said Jordan Friesen, national director of Workplace Mental Health at the Canadian Mental Health Association, based in Winnipeg, Canada. “But the idea of creating a sense of psychological safety among your employees hasn’t changed; it has just become more important.”
Managers who find themselves in the middle of an employee’s emotional crisis should aim to be patient and kind—and to stay calm themselves. Other tips for dealing with breakdowns in a compassionate way include:
Do not direct the employee to an employee assistance program (EAP) or other outside resource until the very end of the conversation. “It shouldn’t be just putting it on the employee—’This is your problem, here, go fix it,’ ” Lewis cautioned.
“The typical formula for dealing with emotions has been to just refer out,” said Putnam, who is the author of Workplace Wellness that Works: 10 Steps to Infuse Well-Being and Vitality into Any Organization (Wiley, 2015). But providing a referral to an EAP can come across as aloof and disinterested if there isn’t a sense of rapport between the employee and the manager. “It’s difficult to play this role if there’s not a foundation of trust,” she said.
Of course, it’s always better to prevent an employee breakdown than to clean up the aftermath. Managers may notice performance or personality changes that can indicate a worker is struggling, including:
Don’t make the mistake of assuming female employees are more likely to have an emotional breakdown at the office. A January study by Totaljobs, a London-based job board, found that while women were twice as likely to have cried in the workplace (41 percent compared to 20 percent of men), men were far more likely to have been overcome by anger. Forty-three percent of men reported shouting in the workplace, compared to 26 percent of women. Men were also three times more likely to get upset because a project missed a deadline, went over budget or got canceled.
“Managers are uniquely positioned within the organization to create a safe harbor for their team. This is more true now than ever before,” Putnam said. To this end, managers can build employee trust by incorporating routines that anticipate workers’ concerns and prevent or address some of their worries.
One-on-one check-ins. Managers should check in with their employees on a one-on-one basis, ideally every week, experts said. That’s not the same as taking a couple of minutes at the start of an in-person or virtual meeting to ask how everyone is doing.
During this one-on-one time, employees should be encouraged to talk about the demands of the job, their workload, any safety concerns or any personal issues. Some employees may have no one they can talk to outside of work.
“The message should be, ‘We care about you first,’ ” said Mari Ryan, the founder and CEO of Advancing Wellness, a workplace well-being consultancy based in Watertown, Mass.
Communication—lots of it. “There is a huge amount of job insecurity right now,” said Ryan, who is the author of The Thriving Hive: How People-Centric Workplaces Ignite Engagement and Fuel Results (Pequossette Press, 2018). “So it’s important to communicate in a really transparent way—and frequently.” She suggests a weekly or even daily e-mail from a manager or head of the organization saying, “Here’s what’s going well, here’s where we’re having challenges.” A lack of communication only adds to the uncertainty, so even if nothing has changed, tell employees that.
The second type of communication that employees need right now: anything that pertains to benefits or help they can receive. “Whatever resources your organization offers, make sure that employees know about them,” Friesen said. “Employees in crisis may not have the energy or the will to take on an extensive search” to uncover the details of a company’s physical and mental health or financial services options.
“By repeating simple messages often, employers can reach more employees and have more of an impact,” said Jenny Burke, senior director of the Impairment Practice at the National Safety Council in Itasca, Ill.
Modeling self-care. For physical and mental well-being, good self-care is essential. But for employees who are already strained, carving out time to do something for themselves might seem like an impossible task.
Managers can lead the way by practicing good self-care and making it a point of discussion with their teams. “Getting some exercise, preferably outside, getting enough sleep, eating healthy foods—these can all create a sense of security and are things each person feels they can control to some degree,” Ryan said. During work hours, managers can allow time for employees to take walks, engage in meditation or yoga, or take part in support groups and other wellness-related opportunities.
It’s expected that the mental health impacts of the COVID-19 pandemic, the recession and racial tensions will continue to manifest in the coming months and years, Burke said. “Providing support for individuals and educating employees is critical but will have limited impact if workplaces do not simultaneously work toward the reduction or elimination of stressors in the workplace.”
Lewis agreed that even after the virus is under control, unemployment goes down and racial tensions ease, “it’s important for organizations to come up with a long-term plan to make sure they have the supports in place for dealing with employees who will be suffering from anxiety, depression and trauma in the future.”
Organizations have a responsibility to their workers to reduce stress on the job and to provide for their physical and mental well-being, Friesen believes. “If it’s the human beings that make the work great, we as the employers need to be taking care of them,” he said.
The 2021 open enrollment season is quickly approaching. This week the IRS released Rev. Proc. 2020-36 which, among other items, set the affordability threshold for employers in 2021. In order to avoid a potential section 4980H(b) penalty, an employer must make sure one of its plans provides minimum value and is offered at an affordable price.
A plan is considered affordable under the ACA if the employee’s contribution level for self-only coverage does not exceed 9.5 percent of the employee’s household income. This 9.5 percent threshold is indexed for years after 2014. In 2021 the affordability threshold will be 9.83 percent which is up slightly from the 2020 affordability threshold of 9.78 percent.
An employer wishing to use one of the affordability safe harbors will use the 2021 affordability threshold of 9.83 percent when determining if the safe harbor has been satisfied. The first affordability safe harbor an employer may utilize is referred to as the form w-2 safe harbor. Under the form w-2 safe harbor, an employer’s offer will be deemed affordable if the employee’s required contribution for the employer’s lowest cost self-only coverage that provides minimum value does not exceed 9.83 percent of that employee’s form w-2 wages (box 1 of the form w-2) from the employer for the calendar year.
The second affordability safe harbor is the rate of pay safe harbor. The rate of pay safe harbor can be broken into two tests, one test for hourly employees and another test for salaried employees. For hourly employees an employer’s offer will be deemed affordable if the employee’s required contribution for the month for the employer’s lowest cost self-only coverage that provides minimum value does not exceed 9.83 percent of the product of the employee’s hourly rate of pay and 130 hours. For salaried employees an employer’s offer will be deemed affordable if the employee’s required contribution for the month for the employer’s lowest cost self-only coverage that provides minimum value does not exceed 9.83 percent of the employee’s monthly salary.
The final affordability safe harbor is the federal poverty line safe harbor. Under the federal poverty line safe harbor, an employer’s offer will be deemed affordable if the employee’s required contribution for the employer’s lowest cost self-only coverage that provides minimum value does not exceed 9.83 percent of the monthly Federal Poverty Line (FPL) for a single individual. The annual federal poverty line amount to use for the United States mainland in 2021 is $12,760. Therefore, an employee’s monthly cost for self-only coverage cannot exceed $104.52 in order to satisfy the federal poverty line safe harbor.
Obviously employers are dealing with a lot of issues as the COVID-19 crisis continues to impact almost every employer in the country. However, it is important for employers to remain compliant with the always evolving ACA rules and regulations. When planning for the 2021 plan year, every employer should check to make sure at least one of its plans that provides minimum value meets one of the affordability safe harbors discussed above for each of its full-time employees. It would not be surprising if individuals were more scrupulous with their healthcare choices in 2021 which could leave noncompliant employers exposed to section 4980H(b) penalties.
The U.S. Supreme Court recently ruled that employers can’t terminate workers based on their lesbian, gay, bisexual, transgender or queer (LGBTQ) status, and employers should understand that the ruling provides employment protections beyond being fired.
The court ruling is significant as the decision makes clear that “sex” discrimination under Title VII of the Civil Rights Act of 1964 includes sexual orientation and gender identity.
Title VII prohibits an employer from discriminating against workers based on protected characteristics with respect to terms and conditions of employment, including hiring, firing, laying off, training or disciplining.
An employer may not discriminate with respect to benefits provided to any group of similarly situated workers that includes members of a protected class, and that would be particularly true with respect to health care coverage, parental leave and similar emoluments.
Employers should thoroughly review their application, hiring and ongoing work processes to look for issues that may relate to these areas, said Randy Coffey, an attorney with Fisher Phillips. The review should include health plan coverage and procedures, leave and insurance benefits, and any other areas in which LGBTQ employees conceivably might be affected or treated differently from other employees, he said.
Under Title VII, employers are prohibited from discriminating against workers because of their color, national origin, race, religion or sex. The act makes it unlawful for an employer to “fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment.”
The Supreme Court held in its landmark ruling, Bostock v. Clayton County, Ga., that an employee’s “homosexuality or transgender status is not relevant to employment decisions.” Federal appeals courts had disagreed on whether Title VII’s ban on discrimination based on sex included LGBTQ status, but the high court found that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”
The decision focused on unlawful terminations, which were the subject of the cases before the court, but the ruling extends to all employment actions that are protected under Title VII.
“The Supreme Court’s decision not only prohibits an employer from refusing to hire or discharging an employee based on LGBTQ status, but also prohibits treating employees differently in the spectrum of compensation, terms or conditions of employment because of the individual’s LGBTQ status,” explained Amy Blaisdell, an attorney with Greensfelder, Hemker & Gale in Chicago and St. Louis.
Of course, employers will still be able to defend such discrimination claims in the same ways they have defended against other Title VII discrimination charges. In the event that an employee can make a viable, initial claim of discrimination—or prima-facie case—the employer will then have the opportunity to show nondiscriminatory reasons for the employment action.
As is the case generally with respect to Title VII, it is a best practice not only to be fair but to document employee-related decisions, furnish accurate evaluations, and maintain and publicize anti-discrimination policies.
Employers should note that Title VII applies to employers with at least 15 employees, though many state and local anti-discrimination laws that protect LGBTQ workers apply to smaller employers.
Scope of the Ruling
“There are definite health and benefit considerations for employers stemming from the court’s ruling,” Blaisdell said. For example, LGBTQ employees may rely on the case to argue that employers are required to offer medical plans providing transgender medical benefits to them.
“Yet, many faith-based employers decline coverage for such services on the basis that covering transgender benefits would conflict with moral and religious teachings,” she said. “This push and pull between individual rights and religious liberties was left unresolved by the court’s decision.”
Jay Dade, an attorney with Polsinelli in Kansas City, Mo., said he would caution anyone from drawing legal conclusions past the issues addressed by Bostock—that is, those of employment. However, he noted, employers are always free to offer protections beyond those provided by applicable laws and many provide employment protections to LGBTQ employees through workplace policies.
“The court also made it a point to note that these cases did not require the court to address concerns about religious conviction,” added Jason Plowman, also an attorney with Polsinelli in Kansas City, Mo. On that point, the court specifically noted that “how these doctrines protecting religious liberty interact with Title VII are questions for future cases” because “none of the employers before us today represent in this court that compliance with Title VII will infringe their own religious liberties in any way.”
The intersection of these two sets of protections will almost certainly be a focus of future litigation related to sexual orientation and gender identity, along with how the Bostock ruling applies or does not apply in other contexts, Plowman said.
For instance, the U.S. Department of Health and Human Services (HHS) announced a final rule on June 12, three days before the Bostock decision, that eliminated anti-discrimination protections based on gender identity in health care and health insurance that the agency said were unenforceable and exceeded the prior administration’s authority.
“The Supreme Court ruling does not directly impact the recent HHS rule,” noted Jeffrey Smith, an attorney with Fisher Phillips. That’s because the HHS interpretation is based on Section 1557 of the Affordable Care Act, while the Supreme Court was interpreting provisions of Title VII.
“That said, it does demonstrate a shift in the legal landscape, and it may be harder for HHS to continue to enforce the interpretation it has just released,” Smith added.
Coffey said employers should expect a wave of litigation over the “outer reaches” of the Bostock decision. “There is no question that there will be many new filings alleging discriminatory failures to hire, harassment and hostile work environment claims, and discriminatory termination, all based on the sexual orientation, transgender status or gender identity of applicants and employees.”
For many employers, the Bostock decision will reinforce their policies prohibiting discrimination in employment on the basis of sexual orientation and gender identity, said Lori Armstrong Halber, an attorney with Reed Smith in Philadelphia and Princeton, N.J. Other employers will need to amend their policies immediately to include sexual orientation and gender identity within the classes protected from discrimination in their workplace.
“All employers would be best served by taking the opportunity to educate and train their employees on their anti-discrimination and anti-harassment policies and to focus some of that training on LGBTQ bias,” she said.
IRS Notice 2020-44 was issued last week as a reminder that Patient-Centered Outcomes Research Institute (PCORI) fees were extended under the Further Consolidated Appropriations Act of 2020 and are now not scheduled to expire until plan years ending after September 30, 2029. Annual PCORI fees will still need to be paid by insurers for employers with fully insured group health plans (and will remain to be included in annual premiums). Groups that offer self-insured plans are responsible for filing and paying the fee on IRS Forms 720, which must be filed by July 31 each year.
The IRS Notice also clarifies there is still a filing obligation owed for all such group health plan filings for plan years ending on or after October 1, 2019, and before October 1, 2020, with the PCORI Fee amount being $2.54 (up from $2.45 for the previous PCORI fee period). However, the guidance recognizes that insurers and self-funded plan sponsors may not have been accurately tracking the number of covered lives to be reported and paid for the plan year periods from October 1, 2019, through October 1, 2020, because the previous PCORI fee assessments under the Affordable Care Act were scheduled to end after September 30, 2019. To allow for ease in current reporting of covered lives information, the Notice clarifies that in addition to the other statutory methods of reporting covered lives, for the PCORI reporting periods for plan years ending from October 1, 2019, through October 1, 2020, the IRS will allow insurers and plan sponsors to use a “reasonable” method to calculate the average number of covered lives for this period.
Impact on Employers
Employers with fully insured health plan coverage provided by an insurance carrier may see a slight increase in future insurance premiums to account for this recent update from the IRS. Self-funded health plan sponsors need to ensure they timely file their annual Form 720 by July 31, 2020, using the appropriate PCORI fee amount (i.e., $2.45 per covered life for plan years ending on or before September 30, 2019, or $2.54 per covered life for plan years ending on or after October 1, 2019), based on the calculated covered lives formula alternatives (e.g., actual count method, snapshot method, Form 5500 method, or for the October 1, 2019, through October 1, 2020, periods, a “reasonable” method for average covered lives).