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Can Employers Use COVID-19 Waivers To Limit Liability?

May 28 - Posted at 10:00 AM Tagged: , , , , , , ,

With employees returning to work and companies reopening their doors to customers, employers are looking for ways to limit liability related to potential COVID-19 cases contracted in the workplace. To do so, many are considering waivers for not only their employees, but also for customers. Such waivers, however, are somewhat limited in their effectiveness and employers should consider the pros and cons before attempting to implement them. You may also want to consider an alternate strategy that may offer you some of the assurances you seek without many of the negatives associated with waivers.

No waiver or other attempt at limiting liability can replace the need to maintain a safe workplace. You should start by ensuring you are in strict compliance with local orders, state regulations, and guidance from government agencies like the Centers for Disease Control and Prevention (CDC), Occupational Safety and Health Administration (OSHA), Equal Employment Opportunity Commission (EEOC), and local health authorities.  

What Are Waivers?

The term waiver has more than one meaning. In this context, employers may look to a waiver and releases of liability agreement consisting of a series of contractual provisions to mitigate certain risks of liability. Such an agreement not only includes a waiver clause, but also includes additional protective provisions like clauses for assumption of risks, covenants not to sue, and identification. If enforceable, they would eliminate liability for the risks discussed within.

Employee Waivers

Waiver agreements between employers and employees are traditionally disfavored due to the unequal bargaining power between them, as employers typically have superior bargaining power. In most states, such waivers do not apply to gross negligence or willful, intentional, or wanton conduct, as employers cannot waive such liability.

Employee waivers are even further limited due to workers’ compensation statutes, where states generally require medical expenses, lost wages, and rehabilitation costs be provided to employees injured in the course and scope of their employment. For work-related injuries, employees generally cannot waive their worker’s compensation claims. Although it may be difficult for employees to prove they contracted COVID-19 at work, some states (like California) have created a rebuttable presumption that workers who contract COVID-19 are presumed to have a workplace injury covered by the workers’ compensation system.

Waiver agreements with employees do not protect employers from OSHA complaints or enforcement action when a workplace is dangerous. However, the president recently signed an executive order directing federal agencies, like OSHA, to make exceptions for employers who attempt in good-faith to follow agency regulations during the COVID-19 pandemic, which may ease some concerns about agency actions.

Practically speaking, waivers may discourage employees from returning to work and hinder restarting operations as a result. They may also result in negative reactions and publicity concerns, as has occurred in several instances across the country already.

But due to the COVID-19 pandemic, it remains unclear whether courts and states will allow employers to enforce waiver agreements in this unprecedented time. Regardless of whether you decide to institute COVID-19 waivers to your returning workforce, you should develop return-to-work plans including steps to train employees on any exposure danger, how to eliminate those dangers, and best practices to stay safe.  

Customer Waivers

Waivers for your customers may limit your company’s liability associated with COVID-19, but they may also hurt your business. Employers must carefully decide if the benefits of liability waivers for customers outweigh their drawbacks for their business. Some positives aspects of customer waivers include that they:

  • May limit or prevent certain liability, like that in common negligence suits.
  • Can highlight safety efforts and communicate risks to your customers.

However, customer waivers have downsides too, as they:

  • Do not apply to willful, intentional, or wanton conduct or gross negligence. Consequently, they are less effective at preventing all forms of negligence claims.
  • Only apply to language specified in the waiver and must be carefully drafted. Broad examples likely will be ineffective.
  • May not apply to entire industries that have a duty to the public in states like California, Colorado, and Washington.
  • May scare customers away to competing businesses or cause them to question the sanitation, safety, or integrity of your business.
  • Could create negative press in conventional news and online.
  • May require refund of membership fees to those clients who refuse to sign.

Evaluating how a waiver will affect your business requires you to look at your industry, business, and geographic area, as well as how your customers or the public will react. Customers generally do not expect to sign a waiver before shopping or dining in a restaurant.  But waivers are common in potentially dangerous activities, like extreme sports, where adding a COVID-19 clause may go unnoticed.  Overall, customer waivers could impact businesses in more ways than simply mitigating their liability, so businesses must first consider potential unintended consequences.

Other Strategies: Notices And Questionnaires

Alternate routes to limiting liability may be more beneficial than waivers for many businesses. Businesses may avoid the potentially ominous effect of forcing customers to sign waivers by using questionnaires or notices.

A questionnaire asks entrants to the premises questions about whether they have any of the symptoms of COVID-19 or were exposed to it. A questionnaire could also communicate the employer’s reasonable actions to comply with government guidelines for sanitation, social distancing, mask wearing, and other efforts that the employer uses to keep their guests and employees safe. This strategy could allow the employer to show it took affirmative steps to exclude sick people from its workplace. 

But businesses still need to consider how their customers will react to such a questionnaire. Implementing a questionnaire may deter some customers who find it an impediment or feel it invades their privacy, while others may feel safer coming to your business because you screen everyone who enters.

Notices provide a more streamlined approach, communicating the same information as a questionnaire about the business’ steps to keep its premises safe, without requiring the individual to physically sign away any perceived rights. Communicating the rules and restrictions without asking questions or for a signature, notices require fewer steps from employers and customers than waivers and questionnaires.

Either approach requires employers to provide a handout or post signage at all entrances to the building that broadcast safety information and reasonable actions and prohibit sick or exposed persons from entering the building. These strategies allow people to feel safer and accept the risks when they enter the workplace.

Choosing A Strategy

Waivers have limited but potentially valuable benefits if enforceable. Employers should weigh those benefits against the potential impact on their business and carefully consider all their options, such as questionnaires or notices that communicate information and allow guests to assume risk.   

No strategy can eliminate a company’s obligation to take reasonable actions to protect its employees and customers. The CDC, OSHA, and state or local authorities publish guidelines and guidance that businesses should follow. Demonstrating you followed such guidance will be the best proof your company acted reasonably in responding to COVID-19 risks.

Whether an employer institutes employee or customer waivers, they should develop written plans to reopen that include training for their employees on these guidelines and that document their efforts to comply. Ignoring these guidelines will make workplaces less safe and potentially expose employers to civil suits and government enforcement actions.

What Should Employers Do?

As you begin the process of reopening, you should familiarize yourself with several alerts from a national labor law firm: 5 Steps To Reopen Your Workplace, According To CDC’s Latest Guidance. You should also keep handy the 4-Step Plan For Handling Confirmed COVID-19 Cases When Your Business Reopens in the event you learn of a positive case at your workplace. For a more thorough analysis of the many issues you may encounter from a labor and employment perspective, we recommend you review our FP BEYOND THE CURVE: Post-Pandemic Back-To-Business FAQs For Employers and our FP Resource Center For Employers.

These 3 Numbers Offer A Simple Way To Understand Contact Tracing In The Workplace

May 27 - Posted at 10:49 AM Tagged: , , , , , ,

Perhaps the most challenging aspect of encountering a suspected or confirmed case of COVID-19 among your employees as you reopen your business is identifying those employees who worked near the infected worker – and thus must also be quarantined. Luckily, there is a simple numerical sequence you can remember that will enable you to follow the CDC contact tracing guidelines for general businesses: 6-15-48.

You will need infected employees to identify others who worked within 6 feet of them, for 15 minutes or more, within the 48 hours prior to the sick individual showing symptoms, or later.

Remembering these three numbers will offer you an easy way to navigate the CDC’s often complex and confusing guidance.

Determine Who Worked Within 6 Feet Of The Infected Employee

The first step requires you to inquire with the infected employee about those who worked within close proximity of them. The CDC generally defines a direct exposure to COVID-19 as an individual who is a household member with an infected person, intimate partner with an infected person, or an individual who has had close contact (< 6 feet) for a prolonged period of time with an infected individual.

For Those Who Worked Within 6 Feet, Was It For 15 Minutes Or More?

Another challenge for employers during this pandemic has been the constantly changing guidance from government agencies on how to address various workplace topics. The CDC’s definition of “prolonged period of time” is no exception. The current CDC guidance on this issue states that “recommendations vary on the length of time of exposure, but 15 minutes of close exposure can be used as an operational definition.” Thus, after identifying the employees who worked within six feet of the individual worker, you should determine if any remained within that proximity of the sick employee for 15 minutes or more.

Was The Direct Exposure For A Prolonged Period Of Time During The 48 Hours Before The Infected Employee Exhibit Symptoms Or Later?

The CDC defines the key period of time for determining if an employee was exposed to an infected worker as the “period from 48 hours before symptoms onset until” the infected employee is cleared to discontinue self-isolation. For purposes of contact tracing, the key here is to look at the 48 hours before the sick employee had symptoms and was still working in the workplace. If a sick employee worked on Monday and Tuesday, started showing symptoms at 8:00 a.m. on Wednesday, and immediately left the workplace, you should look for employees working near them starting at 8:00 a.m. on Monday.

Ask The 6-15-48 Employees To Remain Home For At Least 14 Days

After following the above three steps, you have identified the 6-15-48 employees. Although asking the sick employee to identify these workers is likely the best contact tracing tool, you may want to check video surveillance to confirm the accuracy of the 6-15-48 employees the sick worker identifies.

Once identified, the CDC guidance for non-critical businesses provides that the 6-15-48 employees should take the following steps:

  • Stay home until 14 days after last exposure and maintain social distance (at least six feet) from others at all times
  • Self-monitor for symptoms
    • Check temperature twice a day
    • Watch for fever, cough, or shortness of breath
  • Avoid contact with people at higher risk for severe illness(unless they live in the same home and had same exposure)
  • Follow CDC guidance if symptoms develop

If your company is part of the nation’s critical infrastructure, you may follow different CDC guidelines in lieu of quarantining 6-15-48 employees who are asymptomatic. However, all companies can use the guidance above to identify exposed, or 6-15-48, workers.

Conclusion

As orders allowing businesses to reopen continue to be issued, you will face new legal and practical challenges in the workplace. Addressing confirmed COVID-19 cases in your workplace will unfortunately become reality for many employers. Now is the time to prepare for such an event. This a constantly evolving area, with new guidance being issued nearly every day. 

IRS Announces 2021 HSA Contribution Limits

May 22 - Posted at 8:23 AM Tagged: , ,
The IRS has announced the 2021 inflation-adjusted contribution limits for Health Savings Accounts (HSA). The 2021 contribution limits for HSAs as compared to 2020 are:

5 Things Employers Should Consider When Maintaining Telework During COVID-19 And Beyond

May 15 - Posted at 10:00 AM Tagged: , , , , , , , ,

The COVID-19 pandemic has had an unprecedented impact on the workforce, shuttering businesses, prompting mass layoffs, and compelling speedy transitions to remote work. If your company has rushed to implement a temporary remote work practice to accommodate the sudden need for social distancing, or if you have seen the benefits of telework and now choose to maintain what was initially intended as a temporary remote work plan, this article will provide you guidance on the long-term maintenance of remote work plans. Specifically, this article discusses whether work can be performed remotely, the value of up-to-date remote work policies, hours worked considerations, and how to effectively manage remote employee performance and remote worksites. 

1. Which Positions Are Appropriate For Remote Work?

You can measure the viability of remote work in a position by evaluating the feasibility of (a) performing all job functions remotely; (b) modifying the position to exclude non-remote job functions; or (c) modifying the position to be partially remote. In making this determination, and in addition to weighing the health and safety of employees and the community in the current circumstances, you may consider:

  • The need to interact in-person with others to perform the job;
  • Whether upfront technological costs are outweighed by long-term remote work benefits;
  • Security needs and the ability to maintain security remotely;
  • How a position becoming remote affects other employees; and
  • Predictability of job needs.

Once you decide whether remote work is appropriate and for what period, you should clearly articulate the type of telework arrangement that is acceptable (long-term, short-term, or partial). In partial telework-eligible positions, you should clearly define which job duties may be performed remotely and which require an employee to report in person. Maintaining clear rules and expectations is essential to managing remote workers for pay, leave, and discipline purposes, discussed in more detail below.   

2. Do You Need To Institute Or Update Your Remote Work Policy?

You would would be well-served to have an up-to-date remote work policy. A clear, written policy is a great way to set remote work expectations for your employees and keep them up to date on your company’s official policies and procedures established in response to the COVID-19 pandemic. If you instituted a remote work policy specifically for COVID-19 and intended it for short-term use, or if you utilized an existing telework policy that did not specifically contemplate COVID-19, your policy may need tweaking.

A remote work policy should specify required work hours, meal/rest periods, time and attendance records, and whether employees must obtain permission prior to working outside of work hours (or working overtime), and how that permission should be obtained. It is important to fully consider all your needs and options when instituting a remote policy, so you should contact legal counsel before drafting or updating yours.  

3. How Should You Track Time Of Remote Workers?

In order to track the working time of your remote workers, it is key to have a defined process to ensure accurate records. For example, you may require that employees have an established schedule, keep track of their own hours, and request from management permission to deviate from the established schedule for any reason. Such flexible work schedules may be difficult to manage and require a detailed analysis of the employee’s time and the employee’s leave to determine an employer’s obligations on any given day. Thus, it is important to emphasize to employees that they should be diligent with adhering to established schedules, but there should be an open dialogue for addressing deviations. 

You should also properly determine what kind of time is compensable. It is not always obvious when an employee’s time must be included as hours worked. The following examples represent a few scenarios where the answer could require a more fact-specific analysis:  

  • On-call time: Is the employee waiting to be engaged or engaged to wait? This oftentimes depends on the extent to which the employee cannot use the time for their benefit.
  • Unauthorized time: Do you have a policy prohibiting unauthorized time, and does it apply to “overtime” in the legal sense, or “extra hours”? The time must be included as hours worked, but the employee may still be disciplined for working without permission.
  • Commuting: Though generally commute to work time is not compensable, a non-exempt employee who might telework but must come to the office before or after teleworking for some portion of the day may need to have the intervening travel included as hours worked.
  • Salaries: Exempt employees who must be paid on a salary basis and work any portion of a week are generally entitled to pay for the entire week. However, there are some exceptions to this rule. Similar, but different, exceptions may apply to other employees with salaries or guarantees.

You should choose one method for tracking time and apply it uniformly across employees to the extent possible. Inevitably though, because there is no one best method for tracking employee time in all situations, the process will vary by employer, and even by position. Additionally, there might be some flexibility with respect to teleworking employees interrupted for COVID-19 reasons. Accordingly, you should consult with counsel if you have specific questions regarding what constitutes compensable time or the best methods to track compensable time in a given situation.

4. How Do You Manage Employee Performance Remotely?

Successful managers are consistent in applying policies and maintaining open communication with their employees. Specifically, you should ensure that you regularly:

  • Meet with remote workers by phone or video conference to establish measurable goals for employee performance, review employee performance, and listen to and address any employee concerns. After these meetings, you should document the conversation in a follow-up email to the employee.
  • Maintain up-to-date written policies, including remote work, confidentiality, and security policies. Employees who have a written guide to your expectations will be better prepared to work productively in the home environment and meet management’s expectations.
  • Check in with employees regarding time tracking, contemporaneously document any time policy deviations, and notify the employee of violations through the timekeeping system or by email.
  • Provide support to employees, including working technology and IT services.
  • Discipline employees who fail to follow established policies. However, when imposing discipline, be careful to consider whether doing so would be discriminatory or retaliatory depending on the reason for the policy violation.

You should diligently document any departures from established policy, timekeeping or otherwise, at the time the violation occurs or is discovered. You should also not fear pursuing discipline just because an employee is remote – you discourage misconduct by consistently disciplining employees who abuse telework and deviate from established policies. Conversely, employees who request accommodations in their work schedules for COVID-19 related or other protected reasons should be accommodated to the extent possible.

5. How Do You Maintain Remote Worksites?

You may be liable for injuries on the job even if they occur at a remote worksite. It is therefore important to ensure that teleworkers’ remote worksites are safe and suitable for a productive workday. Employees who are responsible for setting up their own worksites may fail to anticipate safety hazards or may not be concerned about safety risks. This could result in worksite arrangements that are prone to injury, including wire tripping hazards and non-ergonomic workstations.

Accordingly, it is prudent to establish remote worksite guidelines in your remote work policies that indicate your expectations of employee worksite set up and maintenance. You may also ask your managers to conduct periodic checks on an employee’s remote workspace by phone or video conference to ascertain whether they are complying with your expectations. These checks are also useful in discerning whether employees need any technological assistance or tools that would allow them to perform their job functions more efficiently, and whether any business expenses call for reimbursement. If you discover policy violations, you can correct the violations and, if necessary, impose discipline to deter future infractions.

Conclusion

Not every position is perfect for remote work. However, with careful consideration of work needs and position functions, you can take advantage of the many technological tools available and maintain a productive remote workforce. By diligently maintaining two-way discourse with remote employees and educating employees with clear, written, and up-to-date policies, you can ensure that your company is using remote work to its full potential.

Returning Employees To Work Following Unemployment Requires A Tailored 10-Step Plan Of Action

May 14 - Posted at 8:30 AM Tagged: , , , , , , , , , , , , ,

As businesses gradually begin to ramp up and bring employees back to work, you may soon need to figure out what to do when employees who are receiving unemployment benefits refuse to return to work. After all, they may be reluctant or disincentivized to return to the job, especially if they can turn down your offer and still collect robust unemployment benefits.

As with all unemployment issues, the solution may differ from state to state – and employee to employee. But while the answers will vary depending on your workplace and individual employee circumstances, you can take steps now to put yourself in the best position to respond to such situations. We recommend an individualized 10-step plan of action to minimize your return-to-work headaches.   

The $600 Dilemma

With the enactment of the CARES Act, employees qualifying for unemployment benefits are in line to receive an additional $600 benefit payment over and above the regular unemployment payment. This benefit is courtesy of the federal government program and continues through July 31, 2020. In many situations, however, the additional $600 benefit has created a disincentive for employees to return to work. This phenomenon has caused a dilemma for many employers (and employees) as businesses start to reopen.

At the lower end of the economic scale, many workers are receiving more from unemployment than they would earn from their regular wages. However, to remain eligible for unemployment benefits in all but a few circumstances, individuals who have been placed on a temporary layoff related to the COVID-19 pandemic must return to work if called back. And since most state unemployment agencies require or request that you notify them when you call an employee receiving unemployment back to work, the agency will likely deny ongoing benefits unless the employee can demonstrate good cause for refusing the offer.  

“Good Cause” And High-Risk Employees

The determination as to what constitutes good cause for the job refusal, however, will be viewed in light of the COVID-19 pandemic and will be subject to agency review. The U.S. Department of Labor and many states have emphasized that an unreasonable fear over the risk of contracting the virus in the workplace is not enough to constitute good cause, and state agencies will likely deny unemployment claims if this is the only reason offered. 

Several states, however, including Washington, Colorado, Alaska, and Texas, have already adopted rules outlining when an employee’s refusal to return to work may rise to the level of good cause. These rules generally protect unemployment benefits for “high risk” or “vulnerable” employees, such as workers over 65 or with underlying medical conditions.

For example, Texas Governor Abbott has directed the Texas Workforce Commission to continue providing benefits even when the employee refuses an offer of suitable employment where (1) the employee is 65 or older or at higher risk for getting very sick from COVID-19; (2) the employee has a household member at high risk; (3) the employee or a household member has been diagnosed with COVID-19  (and not recovered); (4) the employee is under quarantine due to close contact or exposure to COVID-19; or (5) the employee has child care responsibilities and the school or daycare is closed (and employee has no available alternatives).  

10-Step Return-To-Work Plan To Minimize Unemployment Concerns

Given the complicated issues created by the COVID-19 pandemic, you should be careful to consider the best approach for your workplace and employees. A thoughtful and transparent return-to-work process will help ensure employee safety and boost morale. Here is a 10-point plan you should implement to ensure a smooth return-to-work for your organization.

  1. In all cases, the first step is to develop a plan of action to reopen the workplace that provides a safe work environment for the returning employees. The plan should be consistent with guidelines for return to work developed by the Occupational Safety and Health Administration (OSHA) and the Centers for Disease Control (CDC). OSHA requires employers to provide a workplace that is “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” The plan should include an assessment of risk based upon employee exposure levels to COVID-19 in the workplace, which will vary based upon the workplace and job. For example, a risk assessment will be different for an employee returning to an office setting (low risk) versus the risk to a worker on an assembly line (high risk). The risk assessment should also consider federal, state, and local laws to address high-risk or vulnerable employees.
  2. Create and disseminate a return-to-work communication that outlines all the steps you are taking to comply with the recommended safety protocols, including policies to address high-risk and vulnerable employees.
  3. As noted above, each state is approaching return-to-work situations differently. You should carefully assess the guidelines that apply to your operation before making any decisions regarding an employee’s refusal to return to work or continued employment.
  4. Continue to permit alternative work, including telework or work at an alternative location where feasible, and providing partial employment and work share opportunities.
  5. Clearly communicate the details of any return-to-work offer in writing (start date, hours to be worked, wages, job duties and location). 
  6. If a return-to-work offer is rejected, develop a plan to address for-cause job refusals, including consideration of high-risk and vulnerable employees.
  7. If required, report any refusal to return to work to your state unemployment agency.
  8. Be sure to document an individual’s refusal of an offer to return to work. This is particularly important if you have taken out loans under the Paycheck Protection Program. The Treasury Department recently indicated that an employer’s loan forgiveness amount will not be reduced if the employer’s written offer to rehire is refused.
  9. If an employee expresses concern about returning to work, keep the lines of communication open and try to determine and address any concerns, if possible. If applicable, engage in the interactive process to determine whether a reasonable accommodation can be made before requiring the employee to return to work.
  10. Consider implementing a short-time compensation (STC) program, often called a shared work or workshare program, which allows employers to retain employees on a reduced schedule, while unemployment benefits make up some of the difference in income. 

What Else Should Employers Do?

As you begin the process of reopening, you may want to familiarize yourself with several alerts courtesy of Fisher Phillips LLP : 

New IRS Guidance Impacting Cafeteria Plan Election Changes and FSA Grace Periods and Rollovers

May 13 - Posted at 3:56 PM Tagged: , , , , , , , , , , , , , , ,

This week the IRS released two new sets of rules impacting Section 125 Cafeteria Plans.  Notice 2020-33 provides permanent rule changes that include an increase in the amount of unused benefits that Health FSA plans may allow plan participants to rollover from one plan year to the next.  Notice 2020-29 provides temporary rules designed to improve employer sponsored group health benefits for eligible employees in response to the coronavirus pandemic.  The relief provided under each notice is optional for employers. Employers who choose to take advantage of any of the offered plan options will be required to notify eligible employees and will eventually be required to execute written plan amendments.

Notice 2020-33 modifies the amount of annual rollover of unused benefits that Health FSA plans may offer to Plan participants.  Up until now, rollovers have been limited to $500 per Plan Year.  The new rule sets the annual rollover limit to 20% of the statutory maximum annual employee Health FSA contribution for the applicable Plan Year.  Because the statutory maximum is indexed for inflation, most years it increases (in mandated increments of $50).  

The notice provides that the increased rollover amount may apply to Plan Years beginning on or after January 1, 2020.  Because the corresponding annual Health FSA employee contribution limit for those Plan Years is $2,750, the annual rollover limit may be increased up to $550.

The relief provided under Notice 2020-29 falls into two major categories, both of which apply only for calendar year 2020.  First, the IRS introduces several significant exceptions to the mid-year change of election rules generally applicable to Section 125 Cafeteria Plans. Second, the notice contains a special grace period which offers Health Flexible Spending Arrangement (FSA) and Dependent Care Assistance Program (DCAP) Participants additional time to incur eligible expenses during 2020.

The temporary exceptions to mid-year participant election change rules for 2020 authorize employers to allow employees who are eligible to participate in a Section 125 Cafeteria Plan to:

  1. make a new election to participate in employer sponsored group health plan coverage if the employee originally declined coverage at open enrollment (depending on if the insurance carrier will allow);
  2. change coverage options previously elected during open enrollment;
  3. drop group coverage for covered family members or themselves if they will be replacing the coverage for the impacted individual immediately with other coverage;
  4. make a prospective election to add, change or drop a Health FSA election; and
  5. make a prospective election to add, change or drop a DCAP election.

None of the above described election changes require compliance with the consistency rules which typically apply for mid-year Section 125 Cafeteria Plan election changes.  They also do not require a specific impact from the coronavirus pandemic for the employee.

Employers have the ability to limit election changes that would otherwise be permissible under the exceptions permitted by Notice 2020-29 so long as the limitations comply with the Section 125 non-discrimination rules.   For allowable Health FSA or DCAP election changes, employers may limit the amount of any election reduction to the amount previously reimbursed by the plan.  Interestingly, even though new elections to make Health FSA and DCAP contributions may not be retroactive, Notice 2020-29 provides that amounts contributed to a Health FSA after a revised mid-year election may be used for any medical expense incurred during the first Plan Year that begins on or after January 1, 2020.

For the election change described in item 3 above, the enrolled employee must make a written attestation that any coverage being dropped is being immediately replaced for the applicable individual.  Employers are allowed to rely on the employee’s written attestation without further documentation unless the employer has actual knowledge that the attestation is false.

The special grace period introduced in Notice 2020-29 allows all Health FSAs and DCAPs with a grace period or Plan Year ending during calendar year 2020 to allow otherwise eligible expenses to be incurred by Plan Participants until as late as December 31, 2020.  This temporary change will provide relief to non-calendar year based plans.  Calendar year Health FSA plans that offer rollovers of unused benefits will not benefit from this change.

The notice does clarify that this special grace period is permitted for non-calendar year Health FSA plans even if the plan provides rollover of unused benefits.  Previous guidance had prohibited Health FSA plans from offering both grace periods and rollovers but Notice 2020-29 provides a limited exception to that rule.

The notice raises one issue for employers to consider before amending their plan to offer the special grace period.  The special grace period will adversely affect the HSA contribution eligibility of individuals with unused Health FSA benefits at the end of the standard grace period or Plan Year for which a special grace period is offered.  This will be of particular importance for employers with employees who may be transitioning into a HDHP group health plan for the first time at open enrollment.

As mentioned above, employers wishing to incorporate any of the allowable changes offered under Notices 2020-29 and 2020-33 will be required to execute written amendments to their Plan Documents and the changes should be reflected in the Plan’s Summary Plan Description and/or a Summary of Material Modification.  Notice 2020-29 requires that any such Plan Amendment must be executed by the Plan Sponsor no later than December 31, 2021.

Last week the Department of Health and Human Services, DOL and the IRS extended deadlines for multiple items related to health plan administration.  We don’t expect a huge influx of issues from the changes.  However, you should be aware so you don’t inadvertently misinform your employees.    

There were changes made regarding COBRA premium payments and election timeframes but since we have addressed those in a previous post, we won’t address it here.  COBRA administration is outsourced and those impacted are no longer employees so you can direct their questions to your COBRA administrator or to our office.  We’ll also skip the changes made to claims and appeals as that won’t apply to everyone.  That leaves the changes to your benefit program. 

As you are aware, most of the carriers have reduced or even eliminated the minimum number of hours a previously full-time employee must work to be covered by your plan.  Meaning, we can offer coverage to furloughed employees or those that have otherwise reduced hours to below the full-time requirements. 

In addition, the agencies, have decided to disregard the Outbreak Period (the time period between March 1st and at least 60 days after the announced end of the COVID 19 National Emergency) when establishing a deadline to request enrollment in coverage for certain qualifying events.  Meaning, the agencies, added a “pause” to the time frame required for employees to notify you about special enrollment periods, such as marriage or birth of a child.  We are not able to determine the exact end date of the Outbreak Period yet as that is based on an end to the National Emergency (and that had yet to be determined). 

For our examples, we’ll assume the COVID 19 National Emergency ends for the country on June 30th.  This would make the Outbreak Period March 1st to August 29th (60 days following June 30). 

Example 1 – Sally has a baby on March 3rd.  Normally, she would have 30 days to notify us that she would like to add the baby.  However, you are being instructed to disregard the Outbreak Period, therefore she has until September 28th (30 days from the end of the Outbreak Period) to let us know her desire to add her child.

Example 2 – Tom gets married June 1st.  He will have until September 28th to let us know if he intends to enroll his spouse. 

Under these examples, the dependents would be enrolled back to their original eligibility date and the employee would owe those back premiums.  I don’t expect this to become a big issue, however, depending on the employees circumstances it could.  The drawback to employers, other than the inconvenience, is this could have an impact on the group claims.  Normally Tom and Sally would only have 30 days to enroll their dependents.  With the extensions, employees have information about any issues or medical expenditures that have already happened along the way.  Carriers will be responsible to back up, enroll the dependent, and pay any claims incurred. 

Please let us know of any questions you have. 

Employers Get EEO-1 Reporting Reprieve In 2020

May 08 - Posted at 10:05 AM

Employers across the country got a bit of good news today as the federal government announced that the EEO-1 reporting process would be delayed by a year, with the next reporting deadline pushed to March 2021. You are now temporarily spared from having to submit the annual EEO-1 report which requires businesses to submit employment data related to race, ethnicity, gender, and job category. Specifically, your 2019 EEO-1 reports, which we had expected to be due by March 31, 2020 (but which employers could not submit because the portal was not available) are now officially postponed. What do you need to know about this development?

What Happened?

This announcement from the Equal Employment Opportunity Commission (EEOC) acknowledges that the nation’s employers are dealing with “unique and urgent” issues related to the COVID-19 pandemic. “The EEOC recognizes the impact that the current public health emergency is having on workplaces across America and the challenges that both employers and employees alike are now facing,” the announcement said. “Delaying the collections until 2021 will ensure that EEO filers are better positioned to provide accurate, valid and reliable data in a timely manner.”

Employers had begun anticipating that such an announcement was forthcoming. While the filings are generally due by March 31, the EEOC had not yet opened the collection process that would have permitted businesses to submit 2019 data to the agency. Oddly, although the EEOC requested approval from the Office of Management and Budget to renew its authorization to require the reports months ago, the approval was not forthcoming, as stated on the EEO-1 report landing page. Those businesses required to turn in the EEO-1 data – employers subject to Title VII with 100 or more employees and federal contractors with 50 or more employees – were uncertain of their obligations to report the 2019 data until today’s announcement.

Who Else Is Impacted?

Besides the EEO-1, several other related data collection efforts were delayed by today’s announcement. Local unions were given a reprieve for their EEO-3 reports (which collect information on the composition for their workforces by sex and by race/ethnic category), and public elementary and secondary school districts are temporarily spared from completing EEO-5 reports.

What Should Employers Do?

The agency recommended that covered employers should begin preparing to submit EEO-1 data from 2019 and 2020 in March 2021. The announcement said that the EEOC would notify businesses of the precise date that the surveys will open as soon as possible. Those subject to the EEO-3 and the EEO-5 should expect to provide their reports in January 2021. The EEOC said it would be directly reaching out to those businesses subject to the data collection requirements to inform them of the delay, so don’t be surprised to receive a communication in the near future.

By way of reminder, the EEO-1 report no longer includes a pay data component after a September 2019 announcement from the EEOC eliminating the “Component 2” portion of the report. While it is possible that some form of pay data reporting could one day be reinstated through court order or a new streamlined rule from the EEOC, for now there is no obligation to collect and turn over compensation information as part of your annual filing. However, because state legislatures across the country will be taking it upon themselves to fill in the gap now left by the federal government, you should also make it a priority to review your current pay systems and identify and address any areas of pay disparity. Ideally, you would work with counsel to conduct this initial review under the protection of the attorney-client privilege.

May is Mental Health Month

May 07 - Posted at 9:08 AM Tagged: , , ,

Since 1949, Mental Health America and affiliates across the country have led the observance of May is Mental Health Month by reaching millions of people through the media, local events and screenings. They welcome other organizations to join in spreading the word that mental health is something everyone should care about by using the May is Mental Health Month toolkit materials and conducting awareness activities.

While 1 in 5 people will experience a mental illness during their lifetime, everyone faces challenges in life that can impact their mental health. In 2020, their theme of Tools 2 Thrive will provide practical tools that everyone can use to improve their mental health and increase resiliency regardless of the situations they are dealing with. They now believe that these tools – even those that may need to be adapted for the short term because of COVID-19 and social distancing – will be more useful than ever.

 

You can reach their full website here to download their toolkit or let us know and we can send you a copy. 

6 Factors Employers Must Consider When Taking Employees’ Temperatures

May 05 - Posted at 1:00 PM Tagged: , , , , , , , , ,

Employers may be required to take the temperatures of employees when businesses begin to reopen in the coming days and weeks following the expiration of many states’ stay-at-home orders. Screening for fevers is a task never previously undertaken by many companies. Given that many states will require or highly recommend this practice, now is the time for to consider what precautions and procedures to undertake to implement this safety measure.

You should consider these six issues when contemplating whether to take temperatures at your workplace:

  1. Do You Have To Do It?
    Unless required by a local or state order, taking temperatures is not required in most workplaces. Doing so will require extensive planning, training, and could even be quite expensive. In addition, many individuals infected with COVID-19 won’t exhibit any symptoms, and thus temperature screening likely won’t prevent all workers who can transmit the disease from entering your worksite.

    Although the CDC recommends screening employees for fevers of more than 100.4 degrees Fahrenheit, keep in mind some states make recommend different thresholds. If you decide to screen your employees, also plan to check the temperatures of guests, clients, vendors, and contractors to ensure a safe work environment.

  2. Training And Personal Protective Equipment For Those Taking Temperatures
    The safety of all employees is paramount, but those administering temperature screenings will be especially vulnerable to hazards. If you require employees to be within six feet of any individual who may have COVID-19, the Occupational Safety and Health Administration (OSHA) recommends that they wear personal protective equipment (PPE) consisting of some combination of gloves, a gown, a face mask, and/or a face shield or goggles.

    The screening employees should also be trained on the required PPE under OSHA’s PPE standard. You should also prepare a job hazard assessment and PPE certification related to the screening. To the extent that screeners may also be exposed to bloodborne pathogens (BBP), such as mucous or saliva, you should ensure they are properly trained under OSHA’s BBP standard – which requires employers to prepare an exposure control plan.

    Keep in mind that, where not required by a local or state order, the CDC allows employers to screen employees for COVID-19 symptoms, including a fever, without ever touching or interacting with them. You can do so by standing more than six feet away and asking the employee to confirm they don’t have a temperature and making a visual inspection of the employee (e.g., looking for flushed cheeks or fatigue). Only under this method could the employee screener not be required to wear PPE.

  3. Maintaining Social Distancing
    Not only should screening employees be protected, safety measures should also be taken for workers waiting in line to be screened. This includes ensuring employees stand six feet or more from each other while they wait to have their temperature taken.

  4. Logistics
    You may have to screen 50 or more employees prior to the beginning of each shift. This likely will cause delays and create disruption to normal production activities. Be prepared to create outdoor waiting areas (e.g. tents and other temporary structures) where employees must be in lengthy lines prior to entering the facility. Employee privacy, especially where screening takes place and results are announced, should be accounted for during this time.

  5. Privacy Concerns
    Employee privacy concerns will be prevalent during the employee screening process. The Equal Employment Opportunity Commission (EEOC) has cautioned that employers can ask employees if they are experiencing symptoms of COVID-19, including taking their temperatures, provided that all biomedical information is maintained as a confidential medical record, and separate from the employee’s personnel file. Some states, such as California, require employers to provide a notice to all employees prior to screening them for biomedical data.

    For many businesses, maintaining employee privacy can be challenging as you may not have the experience or knowledge to ensure compliance. To mitigate these issues, and if not required by a governmental order, avoid collecting or storing an employee’s biomedical information to the extent possible. Instead, use an instantaneous-reading thermometer and show the employee their temperature simultaneously with the screening.

  6. Wage Issues
    Keep in mind that employees may claim that their time waiting in line or being screened for a fever before their shift is compensable and thus they should be paid for it. Although no case law or Department of Labor guidance on point currently exists on this topic, it is recommended that you err on the side of paying employees throughout the screening process. This also requires you to implement a system to have employees “clock in” when they get in line for screening and to document their time.

What Should Employers Do?

As you begin the process of reopening, you may want to familiarize yourself with several pieces of information: 

For a more thorough analysis of the many issues you may encounter from a labor and employment perspective, we recommend you review  FP BEYOND THE CURVE: Post-Pandemic Back-To-Business FAQs For Employers and FP Resource Center For Employers.
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