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Key 2021 ACA Reporting Deadlines

January 06 - Posted at 1:52 PM Tagged: , , , , , , , , , ,

Every year Applicable Large Employers (ALEs) must file and furnish their ACA information to the IRS and their employees, respectively. Failing to do so can result in significant IRS penalty assessments.

To recap, only groups with 50 or more full time  or equivalent employees or those groups under 50 with self funded medical coverage are required to furnish their employees with copies of either the 1095-B or 1095-C forms (based on group size)

Employers will need to be sure you meet the following IRS deadlines for complying with the ACA’s Employer Mandate for 2020:

  • February 28, 2021: Paper file your 2020 Forms 1094-C and 1095-C with the IRS no later than this date.
  • March 2, 2021: Furnish Forms 1095-C to your full-time employees no later than March 2, 2021. This date was originally January 31, 2021, but the IRS has since issued an extension.
  • March 31, 2021: Employers must electronically file the 2020 Forms 1094-C and 1095-C with the IRS no later than this date. 

Failing to meet these deadlines can result in penalties under IRC 6721/6722, which the IRS is issuing through Letter 972CG. If you receive one of these notices, you only have 45 days from the issue date to respond to the penalty notice. 

For the 2020 tax year, the penalties associated with failing to comply with IRC 6721/6722 for employers with average gross receipts of more than $5 million in the last three years are as follows:

Failure to timely file and furnish correct information returns 

If employers file ACA information returns with the IRS no more than 30 days after the deadline they could be subject to a $50 penalty per return not filed, not to exceed an annual maximum of $556,500. If the ACA information returns are 31 or more days late, up to August 1, 2021, the penalty per return jumps up to $110, not to exceed an annual maximum of $1,669,500. After August 1, the penalty amount steepens to $270 per return, not to exceed an annual maximum of $3,339,000. For intentional disregard, meaning the deadline was missed willfully, the penalty more than doubles to $550 per return with no annual maximum limit.

The penalty amounts for employers with gross receipts of $5 million or less in the last three years will have the same penalty amounts per return with lower annual maximums, except in the case of intentional disregard. For more information on the penalty schedules for failing to meet the IRS deadlines click here

As if the penalties for failing to meet the filing and furnishing deadlines weren’t enough, the IRS is also issuing penalties to employers that fail to comply with the ACA’s Employer Mandate. As a reminder to employers in conjunction with the Employer Shared Responsibility Payment (ESRP), the ACA’s Employer Mandate, Applicable Large Employers (ALEs), organizations with 50 or more full-time employees and full-time equivalent employees, are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is affordable for the employee, or be subject to Internal Revenue Code (IRC) 4980H penalties. These penalties are being issued through IRS Letter 226J.

 

Florida’s Minimum Wage Increased as of January 1, 2021

January 04 - Posted at 1:48 PM

Florida raised its minimum wage to $8.65 an hour beginning Jan. 1, 2021, up 9 cents from $8.56 in 2020. For tipped employees, the minimum wage will be at least $5.63 an hour.

The minimum wage rate is recalculated each year on Sept. 30, based on the Consumer Price Index. 

Employer found liable for intentionally violating minimum wage requirements are subject to a fine of $1000 per violation, payable to the state in addition to potential civil action law suit. 

Be sure to update your required Florida Minimum Wage Posting to reflect this change. You can download a copy of the new poster here.

Reminder: OSHA 300A Logs Must Be Posted By Feb 1st

- Posted at 1:41 PM Tagged: ,
All OSHA 300A logs must be posted by February 1st in a visible location for employees to read. The logs need to remain posted through April 30th.

Please note the 300 logs must be completed for your records only as well. Be sure to not post the 300 log as it contains employee details.
The 300A log is a summary of all workplace injuries and does not contain employee specific details. The 300A log is the only log that should be posted for employee viewing.

Please contact our office if you need a copy of either the OSHA 300 or 300A logs.

What Employers Need To Know About Latest Federal COVID-19 Stimulus Package

December 24 - Posted at 8:34 AM Tagged: , , , , , , , , , , , , ,

Federal lawmakers agreed to a second round of stimulus legislation late Monday night, sending a nearly 6,000-page bill to President Trump for his expected signature. The proposal allocates $900 billion in economic relief to businesses and workers across the country. Of the many provisions tucked within the mammoth bill are several key provisions of interest to employers. Specifically, the proposal continues the popular small business loan program, provides new options for unemployed workers, extends tax credits for continued paid sick leave, and offers a variety of other tax- and benefit-related provisions. It does not, however, create a liability shield for COVID-19 litigation. What do you need to know about the critical workplace-related portions of Stimulus 2.0? Here are summaries of the most significant employment-related provisions and recommendations for actions you should consider as a result of each.

Continuation Of The Paycheck Protection Program

Foremost in the eyes of many businesses, Stimulus 2.0 apportions approximately $284 billion to a revamped Paycheck Protection Program (PPP). It provides small businesses with much-needed financial support in the form of potentially forgivable loans equal to the total money spent on payroll and other specified costs during an eight or 24-week period after the disbursement of the loan. However, the Stimulus 2.0 program makes many critical changes from the previous PPP, including lowering the employee threshold for businesses to 300 employees or fewer (down from 500), and the loan maximum to $2 million (down from $10 million). What do potential borrowers need to know?

Tax Deductibility of Expenses

The first PPP iteration provided that the forgiven amount was tax-free, but the Internal Revenue Service (IRS) ruled that the expenses paid with forgiven PPP loan proceeds were not deductible. Thus, before Stimulus 2.0, the amount of loan proceeds used to cover payroll, if forgiven, would not be deductible. 

Stimulus 2.0 changes that, clarifying that gross income does not include any amount that would otherwise arise from the forgiveness of the PPP loan. The bill states:

no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by [the loan forgiveness provision that says forgiven PPP loans will not count as income.

This means that deductions are allowed for deductible expenses paid with forgiven PPP loan proceeds. This provision is effective as of the date of enactment of the CARES Act and applies to second draw PPP loans.

New Allowable Expenses

Stimulus 2.0 expands qualifying expenses for new borrowers and those who have not yet applied for forgiveness, including the following:

  • Payment for any software, cloud computing, and other human resources and accounting needs;
  • Covered property damage costs, including costs for property damage due to public disturbances that occurred during 2020 that are not covered by insurance;
  • Covered supplier costs for expenditures supplier according to a contract, purchase order, or order for goods in effect before taking out the loan that are essential to the recipient’s operations when the expenditure was made (supplier costs of perishable goods can be made before or during the life of the loan); and
  • Covered worker protection expenditures for personal protective equipment (PPE) and help for compliance with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.

The bill also allows loans made under PPP before, on, or after enacting Stimulus 2.0 to be eligible to utilize the expanded forgivable expenses except for borrowers who have already received loan forgiveness.

Second Draw PPP Loans

Section 311 of Stimulus 2.0 provides for second draws of PPP loans for smaller businesses, capping the loan amount at $2 million. Under this section, eligible borrowers must (1) employ not more than 300 employees; (2) have used or will use the full amount of their first PPP; and (3) demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. Borrower applications submitted on or after January 1, 2021, are eligible to utilize the gross receipts from the fourth quarter of 2020. Eligible second draw borrowers also include non-profit organizations, housing co-operatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives.

Second draw loan terms are reduced and calculated up to 2.5X the average monthly payroll costs in the 12 months before the loan application or the calendar year (2019), with maximum loan amounts capped at $2 million. However, Stimulus 2.0 maximizes benefits for borrowers in the restaurant and hospitality industries by calculating loans up to 3.5X average monthly payroll costs. Additionally, the bill reinstitutes the waiver of affiliation rules that applied during initial PPP loans for second loan borrowers with multiple locations employing not more than 300 employees per location.

Second draw loan recipients are eligible for loan forgiveness equal to the sum of their payroll costs and expanded allowable expenses, subject to the previous program’s 60%/40% allocation between payroll and non-payroll costs.

Streamlined Applications For Borrowers Under $150K

Stimulus 2.0 provides a streamlined process for loans under $150,000. In fact, such borrowers will not be subject to the required reductions in forgiveness amounts generally imposed by reductions in salaries or headcount by simply certifying that the borrower meets the revenue loss requirements described above on or before the date the entity submits the loan forgiveness application.

What You Should Do Next: If you are considering seeking financial assistance, regardless of whether or not you’ve previously received any, you should determine your eligibility for this second round of PPP loans. Additionally, you should continue to follow this rapidly developing situation, especially given the fluidity of the previous Paycheck Protection Program. 

Continued Assistance For Unemployed Workers

The CARES Act previously expanded unemployment assistance for countless Americans whose employment was impacted by the COVID-19 pandemic. Among other things, the CARES Act provided a $600 weekly supplement to state unemployment benefits until the end of July and expanded eligibility to cover COVID-19 related reasons as well as many workers not traditionally covered by unemployment benefits. However, many of the unemployment benefits provided by the CARES Act were set to expire December 31. In light of the ongoing COVID-19 pandemic, Stimulus 2.0 provides for further unemployment benefits in an attempt to bring cash flow to millions of Americans whose employment was adversely impacted. 

Pandemic Unemployment Assistance

Stimulus 2.0 expands the Pandemic Unemployment Assistance (PUA) created by the CARES Act to March 17, 2021 and allows those who have not yet exhausted their rights under PUA to continue to receive such assistance until April 5, 2021. The stimulus package also expands the number of weeks for these PUA unemployment benefits from a 39-week period to a 50-week period.

While providing these additional benefits, Stimulus 2.0 adds a documentation requirement starting January 31, 2021 for both new applicants as well as those receiving PUA. Specifically, new applicants must submit documentation to substantiate employment or self-employment within 21 days although this deadline may be extended for good cause. Similarly, individuals receiving PUA as of January 31, 2021 must submit documentation to substantiate employment or self-employment within 90 days.

Federal Pandemic Unemployment Compensation

Stimulus 2.0 restores the Federal Pandemic Unemployment Compensation (FPUC) supplement to all state and federal unemployment benefits. While lower than its predecessor under the CARES Act, this stimulus package provides a $300 weekly boost from December 26, 2020 to March 14, 2021.

Pandemic Emergency Unemployment Compensation

Like the PUA, the Pandemic Emergency Unemployment Compensation (PEUC) permits individuals receiving benefits as of March 14, 2021 to continue to receive such assistance through April 5, 2021 as long as they have not reached the maximum number of weeks. The new stimulus also increases the number of benefit weeks under the PEUC from 13 weeks to 24 weeks.

Mixed Earner Unemployment Compensation

Stimulus 2.0 provides $100 per week additional benefit to individuals who have at least $5,000 a year in self-employment income but are disqualified from PUA because they are eligible for regular state unemployment benefits.

 

Federal Support To Governments And Non-Profit Organizations

To help make these expanded benefits possible, Stimulus 2.0 extends the unemployment relief for government entities and non-profits from December 31 to March 14, 2021. Similarly, this stimulus package extends several CARES Act provisions originally created to incentivize states to provide the unemployment benefits by aiding with the expense and burdens created by these unemployment programs.

Return-To-Work Reporting Requirement

Stimulus 2.0 requires states to implement methods within 30 days to address situations where claimants refuse to return to work or accept an offer of suitable work without good cause. This must include a reporting method for employers to notify the state when an individual refuses employment and a notice to claimants informing of return-to-work laws, their rights to refuse work, and what constitutes suitable work.

What You Should Do Next – You should ensure you provide information on the additional unemployment benefits to those employees impacted by your staffing decisions. In addition, you should continue to monitor your obligations to report when individuals refuse employment, as states will likely change these over the next 30 days.  

No Extension Of FFCRA Paid Leave (Yet) – But Tax Credit Period Extended Through March

The compromise agreement does not extend the paid sick leave and paid family and medical leave requirements of the Families First Coronavirus Response Act (FFCRA), which expires on December 31. Therefore, an employer’s obligation to provide paid leave under the FFCRA will cease at the end of the year. 

However, the final legislation does extend the tax credit for both the Emergency Paid Sick Leave and the Emergency Family and Medical Leave under the FFCRA until March 31, 2021. This means that you are not required to provide paid leave under the FFCRA after December 31, 2020. If you choose to voluntarily do so (assuming the employee still has eligible leave remaining), you will be able to obtain a tax credit for those payments until the end of March under the compromise agreement contained in Stimulus 2.0.

In addition, depending on the circumstances of an employee’s leave, it is possible that the employee could be entitled to normal unpaid leave under the FMLA even after the FFCRA expires, if they still have weeks available under the FMLA. You should work with counsel to determine whether any employees out on FFCRA leave may be entitled to regular FMLA unpaid leave after the end of the year. 

Moreover, you should pay close attention to developments in Congress after the new year. There is already talk about a larger stimulus package after Congress returns and President-elect Biden is inaugurated. Congress could very well pass legislation early in the new year that extends (or even expands) the paid leave requirements of the FFCRA, and they could make it retroactive to the expiration of the prior law. 

In addition, you need to be aware of state and local laws passed in recent months that require the payment of sick leave to employees for a variety of COVID-19-related reasons. Some of these local laws expire at the end of the year, some are tied to the expiration of the FFCRA, and some do not expire. We could also see state and local lawmakers extend these paid sick leave requirements into the future. You should work closely with counsel to determine any applicable state and local mandates, and to continue to monitor developments on this front into 2021.

What You Should Do Next – Decide whether you will voluntarily extend paid leave benefits into the new year in order to gain a tax credit for those payments through March 2021. Work with counsel to determine whether any employees out on FFCRA leave may be entitled to regular FMLA unpaid leave, or some other form of leave under state law, after the end of the year. 

Tax And Benefit-Related Provisions

The bill also contains the following tax and benefit related provisions:

  • PPP Forgiven Loan Amounts – The IRS had argued that expenses incurred using forgiven PPP funds were not deductible. For example, wages paid with those funds could not be deducted. With Stimulus 2.0, Congress overruled the IRS and decreed that expenses incurred using forgiven PPP funds are deductible.
  • 2019 income may be used for the earned income tax credit – If 2020 earned income is less than 2019 earned income, 2019 income can be used when calculating the earned income tax credit. A lower 2020 income (for example, due to loss of employment during the year) may reduce the amount of credit available. Using a higher 2019 income amount may mean a higher credit for those who otherwise qualify.
  • Deductibility of business meals – Derided by some as the “three martini lunch” deduction, business meals after December 31 and before January 1, 2023 will be fully tax deductible. The current administration believes this provision will aid in reviving the ailing restaurant industry.
  • The Employee Retention Tax Credit – The employee retention tax credit is a credit for wages paid to certain employees during: i) a full or partial suspension of operations; or ii) a significant decline in gross receipts. The stimulus package enacts several technical clarifications but more importantly extends the credit’s availability from January 1, 2021 until June 30, 2021.
  • Flexible Spending Accounts – The law has several provisions which increase employer flexibility in administering health and dependent care flexible spending accounts. Usually subject to the “use it or lose it rule” (unused amounts at the end of the year are forfeited) the act makes available expanded carryover, grace period, and election change rules.

What You Should Do Next – Work with your counsel and your tax preparers to ensure you understand the new tax and benefit provisions and work them into your planning for 2021 and beyond.

No Federal Liability Shield In Stimulus 2.0

It is often said that the result of a good mediation leaves both sides a little bit unhappy. The negotiations for the stimulus bill could be said to have done that with the Democrats not getting aid to state and local governments, and Republicans not getting liability protection for business owners.

Republicans had sought through various bills, such as the Safe to Work Act, to offer a liability protection for business owners. These efforts were criticized by organized labor and safety advocates as potentially diminishing employee safety measures. The proposal also sought to pre-empt state laws that conflicted with it. While the liability shield did not survive the sausage making process of Congress, some states have already taken measures to implement similar shields.

Roughly a dozen states have instituted some form of liability shield through either legislation or executive order. The types of protection vary from broad to narrow. Some states provide immunity for businesses as long as the owner attempted in good faith to comply with guidance from public health agencies. This protection may be in the form of an affirmative defense where the burden is on the business to demonstrate that it made good faith efforts to at least attempt to comply with public health guidance. Other states provide broader protections: as long as the owner did not act with willful misconduct or gross negligence, the burden will be on plaintiffs to prove that the business acted with willful misconduct or gross negligence. At least one state, North Carolina, has limited these protections to “essential businesses.” While some of the states provide immunity from civil liability, others focus on limiting what types of damages can be recovered.  

The majority of states have not implemented any COVID-19-specific protections – or at least not yet. This has led to a cottage industry of COVID-19 litigation springing up in workplaces across the country, as detailed in the Fisher Phillips COVID-19 Employment Litigation Tracker (with over 1,200 such lawsuits having been filed against employers through date of publication).

What You Should Do Next – You should determine whether the states in which you operate are providing any form of liability protections, and if so how is it limited. The best thing employers and businesses can do, even in state that are providing liability shields, is to make best efforts to comply with the ever-changing guidance from health departments, the CDC, and state and federal OSHA.

Florida’s New Mandatory E-Verify Law Will Require Changes To Hiring Practices In the New Year

December 21 - Posted at 10:00 AM Tagged: , , , , ,

Beginning on January 1, 2021, Florida’s new “Verification of Employment Eligibility” statute will require many employers to use the federal E-Verify system before hiring any new employees. This new law could force significant changes to your hiring practices. What do Florida employers need to know about this significant development?

Legislative Background And Campaign Promises

E-Verify was introduced by the U.S. Department of Homeland Security in partnership with the Social Security Administration as a voluntary program. However, many employers in Florida will soon be faced with mandatory implementation of the web-based system to confirm employment eligibility for new hires.

Under preexisting federal law, all employers are required to complete an I-9 Employment Eligibility Verification form for each new employee to verify the identity and eligibility of that employee to work in the United States. Since its inception in 1996, most states have also encouraged voluntary participation in the federal government’s E-Verify program, which compares information supplied by an employer from its Form I-9 to information available to the federal government from various databases. Only nine states require E-Verify for all employers.

Since 2011, E-Verify has been required on all state projects in Florida. However, following a nationwide trend of growing support for the federal employment verification system, Governor Ron DeSantis signed Florida Senate Bill 664 on June 30, requiring all public employers – as well certain private employers – to use E-Verify beginning January 1, 2021.

As a gubernatorial candidate in 2018, DeSantis vowed to mandate the use of E-Verify among all employers in the state. This was controversial and opposed not only by some immigrant advocacy groups, but also by business groups — especially those in agriculture, construction, and hospitality. Following Governor DeSantis’ signing of the bill, a spokesperson explained, “Given the high unemployment rate due to COVID-19, it is more important than ever to ensure that the state’s legal residents benefit from jobs that become available as Florida continue to reopen in a safe and smart manner.” While the measure expands the use of E-Verify, Florida does not join the states that require use of the system in hiring practices for all employers. 

What Does the New Law Require?

There are varying obligations for employers depending on whether they are public or private, and whether they contract with the state or receive certain state incentives.

Public Employers And Private Employers Who Contract With The State Or Receive State Incentives

Once in effect, every Florida public employer, along with their private contractors and subcontractors, must enroll in and use the E-Verify system to confirm the eligibility of all employees hired after January 1, 2021. No public contract can be entered into without an E-Verify certificate.

Any contractor who hires a sub must require an affidavit stating that they don’t employ, contract with, or subcontract with any unauthorized immigrants. Importantly, this affidavit provides for all newly hired employees, not just those working on government contracts. This affidavit must be kept by the general contractor for the duration of the contract and all contractors will need to go through this process for each public project.

If a public employer has a good faith belief that these requirements have been knowingly violated, it can terminate the contract, without liability for breach of contract, or demand that its contractor terminate any noncompliant subcontractors. Terminations for purported violations of these requirements may be challenged in court within 20 days of the date of termination. However, if the contractor is in fact found guilty, the contractor will be barred from public contracting for at least a year after termination and may be held liable for any additional costs associated with the termination.

In addition to private employers who contract with public entities, these new E-Verify employment eligibility requirements will also apply to employers who receive taxpayer-funded incentives through the state Department of Economic Opportunity. Beginning on January 1, 2021, the DEO will not approve an economic development incentive application unless the application includes proof that the applicant business is registered with and uses the E-Verify system in the eligibility verification process for all newly hired employees. Should the DEO make a final determination that an awardee has failed to be compliant, the employer will be forced to repay all moneys received by the DEO as an economic incentive.

E-Verify For All Other Private Employers

For private employers who do not contract with the state or receive state incentives, Florida law will now require these private employers to use E-Verify, or alternatively use the Form I-9 and maintain copies of the documents used to complete the Form for three years (which is optional under federal law). If the E-Verify certificate or Form I-9 documentation is requested by certain parties (such as the State Attorney, Attorney General, Department of Law Enforcement, etc.), the employer must provide them with proof of the employee’s eligibility.

Private employers accused of non-compliance will be provided notice from the DEO and the employer must terminate any unauthorized employees, begin complying with the legal procedures, and respond with an affidavit of compliance within 30 days. Failure to do so risks potential suspension of existing licenses until the employer provides such an affidavit. If an employer fails to properly respond to a DEO notice three times in any 36-month period, it could permanently lose its business licenses and may be liable for additional civil or criminal liabilities.

The E-Verify requirements will also go into effect for the private sector on January 1, 2021. This new law will not apply to any employees that were hired before then. However, any existing employment contracts that need to be renewed or extended after that date will be required to go through the verification process without going through the E-Verify process.

Ensuring Compliance Readiness Is The Next Step for Employers

Public employers in Florida and those who bid on contracts with the state should be ready to comply with the new law by updating their onboarding and new hire practices. Private employers who choose not to use E-Verify should continue to complete and maintain Form I-9 verification records, including copies of the documents that were reviewed. The enforcement procedures under the new E-Verify mandate are significant, and failure to comply can seriously impact your ability to do business within the state.

Notably, government scrutiny of employment verification records at both the state and federal level has the potential to increase when the COVID-19 pandemic subsides. You can prepare for government reviews by periodically auditing your employment verification records to ensure you have been completed fully and properly.

Top 7 Things You Need To Know As EEOC Says Employers May Mandate COVID-19 Vaccines

December 17 - Posted at 8:47 PM Tagged: , , , , , ,

Employers now have clarification that they will be able mandate the COVID-19 vaccine among their workers in certain circumstances without running afoul of key federal anti-discrimination laws, according to updated guidance issued Wednesday by the Equal Employment Opportunity Commission. While there are numerous issues to consider before mandating that your employees get vaccinated, this guidance is the first official pronouncement on the subject from the employment law watchdog agency and provides an outline of various hurdles to overcome. Here are the top seven takeaways for employers from this critical development.

1. The EEOC indicates that employers can require their workers to get a COVID-19 vaccine in certain circumstances, even under the Emergency Use Authorization.

The agency’s updated FAQs do not unequivocally state that “employers can require the vaccine.” However, the Equal Employment Opportunity Commission (EEOC) repeatedly answers questions discussing what actions employers can take in response to various circumstances after an employer has mandated the vaccine. This approach plainly suggests there must be circumstances where employers are legally permitted to require vaccine immunization of their workers without violating the Americans with Disabilities Act (ADA), Title VII, and other federal anti-discrimination laws. According to the EEOC, this is true even though the COVID-19 vaccine is only authorized under the FDA’s Emergency Use Authorization (EUA), rather than approved under the full and comprehensive FDA vaccine licensure process, known as a Biologics License Application or “BLA.”

To be clear, the only scenario described by the EEOC as a permissible basis to mandate vaccination under the ADA is when a worker poses a “direct threat” to themselves or others by their physical presence in the workplace without being immunized. This means mandating vaccines is only permitted if workers would pose “significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” Therefore, if an employee is capable of fully performing their current job duties remotely without the potential spread of the virus to co-workers or work-related third parties, it does not appear that you can require that they get vaccinated.

2. Employers that require the COVID-19 vaccine must consider reasonable accommodations for employees with disabilities.

Notably, simply because your company chooses to mandate vaccine usage for those workers who may pose a direct threat to themselves or others does not mean you have complete freedom to require the vaccine for all such workers. If an individual cannot be vaccinated because of a disability, you need to determine whether you can provide a reasonable accommodation (absent undue hardship) that would eliminate or reduce the safety risk. You cannot automatically exclude them from the workplace or take any other negative action against them.

First and foremost, the EEOC recommends that those managers responsible for communicating with your employees about compliance with your vaccination requirement should know how to recognize an employee’s accommodation request. You should also train your managers about the process they should follow to refer accommodation requests through the proper channels for consideration. While the EEOC’s guidance does not mention this, you should strongly consider providing details about the accommodation request procedure in writing to all of your employees (whether in hard copy, electronically, or both). 

Next, the EEOC indicates you should engage in a flexible, interactive process with any employee requesting an accommodation to identify options that do not constitute an undue hardship (significant difficulty or expense). This process should include determining whether it is necessary to obtain supporting documentation about the employee’s disability and considering the possible options for accommodation given the nature of the workforce and the employee’s position. Some things you should consider include the prevalence in the workplace of employees who already have received a COVID-19 vaccination, the amount of involvement with customers, and the rate of vaccination in your community, as well as the amount of contact with others whose vaccination status could be unknown. You should consult your Fisher Phillips’ attorney in developing a medical inquiry for an employee’s doctor or a protocol for responding to requests for accommodation more generally.

Finally, the EEOC reminds employers that it is unlawful to disclose that an employee is receiving a reasonable accommodation, just as it is a violation of federal law to retaliate against an employee for requesting an accommodation. Likewise, you should not reveal which employees have or have not been vaccinated.

3. Similarly, employers need to consider reasonable accommodations for employees who are unable to receive the vaccine for religious reasons.

The EEOC says you must provide a reasonable accommodation if an employee’s sincerely held religious belief, practice, or observance prevents them from receiving the vaccination – unless it would pose an undue hardship under Title VII. The definition of “undue hardship” is slightly different in the religious context compared to the disability context, as courts have defined it as simply “having more than a de minimis cost or burden” on an employer.

While you should ordinarily assume that an employee’s request for religious accommodation is based on a sincerely held religious belief, you would be justified in requesting additional supporting information if you have an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance. The key word here is “objective.” This is a delicate area of the law and you should not unilaterally contact the employee’s place or worship seeking proof about their level of belief, or engage in any conduct that could raise potential discrimination issues. We recommend consulting with an attorney before making such a request to any of your employees.

4. Employers can require employees to show proof that they received a COVID-19 vaccination.

Assuming you can demonstrate that a mandatory vaccine is appropriate and that no accommodation requirements are in play, the EEOC indicates you can require workers to prove they have received the COVID-19 vaccine. The EEOC says that simply requesting proof of receipt of the vaccination is not likely to elicit information about a disability and, therefore, is not a disability-related inquiry. 

However, subsequent questions, such as asking why an individual did not receive a vaccination, may elicit information about a disability and would be subject to the pertinent ADA standard that disability-related inquiries be “job-related and consistent with business necessity.” For this reason, if you require employees to provide proof that they have received a COVID-19 vaccination from a pharmacy or their own healthcare provider, you may want to warn the employee not to provide any medical information as part of the proof in order to avoid implicating the ADA. If you do receive medical information along with proof of vaccination, you should store the medical information in a confidential medical file consistent with ADA requirements.

5. The administration of a COVID-19 vaccine is not a “medical examination” for purposes of the ADA.

The EEOC confirmed that the act of administering the COVID-19 vaccine is not an ADA “medical examination.” Therefore, if you (or a third party with whom you contract to administer the vaccine) simply administer the vaccine to an employee, the EEOC does not consider you to be seeking information about an individual’s impairments or current health status – but see the next point about questionnaires relating to giving the vaccine.

6. Employers can pose pre-screening vaccination questions, so long as they comply with ADA requirements.

The EEOC’s FAQs offered some direction for employers who want to ask pre-screening vaccination questions as they administer the inoculation. The first thing employers need to know is that pre-screening vaccination questions may implicate the ADA’s provision on disability-related inquiries (defined as any such inquiries likely to elicit information about a disability). Therefore, if you administer the vaccine, you must show that any pre-screening questions are job-related and consistent with business necessity. To meet this standard, the EEOC says, you need to have a reasonable belief, based on objective evidence, that an employee who does not answer the questions and, therefore, does not receive a vaccination, will pose a direct threat to the health or safety of themselves or others.  

The EEOC does explain that there are two circumstances in which these screening questions can be asked without needing to satisfy the “job-related and consistent with business necessity” requirement. First, you can offer the vaccination to employees on a voluntary basis (i.e. employees choose whether to be vaccinated), which means the employee’s decision to answer pre-screening, disability-related questions would also be voluntary. If an employee chooses not to answer these questions, you may decline to administer the vaccine to them but may not retaliate against, intimidate, or threaten them for refusing to answer the questions.  

Second, if an employee receives an employer-required vaccination from a third party with whom your organization does not have a contract (such as a pharmacy or other healthcare provider), the ADA “job-related and consistent with business necessity” restrictions on disability-related inquiries would not apply.

  Finally, regardless of whether you meet the “job-related and consistent with business necessity” standard, the ADA requires you to keep any employee medical information obtained in the course of the vaccination program confidential. On a related note, the agency reminds employers that any pre-screening questions that ask about genetic information, such as family members’ medical histories or immune systems of family members, may violate the Genetic Information Nondiscrimination Act (GINA). As the EEOC explicitly says that “it is not yet clear what screening checklists for contraindications will be provided with COVID-19 vaccinations,” this is an issue that employers should be aware of as we move closer to vaccines being provided to members of the general population.

To avoid these complications, the EEOC says that employers who want to ensure that employees have been vaccinated may want to request proof of vaccination instead of administering the vaccine themselves. However, to steer clear of unintended GINA violations, you may still want to warn the employee not to provide genetic information as part of the proof. If this warning is provided, the EEOC says any genetic information you receive in response to your request for proof of vaccination will be considered inadvertent and, therefore, not a GINA violation. 

7. Employees may be confused about their ability to “refuse” the vaccine as a result of the EUA.

We expect that some employees may believe they have the right the “refuse” the vaccine even if mandated by their employer. That’s because of language in the EEOC’s updated guidance about the EUA that may cause confusion.

The EEOC notes that, for any vaccine issued under an Emergency Use Authorization, the FDA (and the vaccination provider) has an obligation to inform vaccine recipients about its potential benefits and risks, the extent to which such benefits and risks are unknown, whether any alternative products are available, and “that they have the option to accept or refuse the vaccine.” This language comes from the federal statute governing the EUA.

The FDA’s website (cited by the EEOC) says that the option to refuse is typically included in a “fact sheet” provided to the individual receiving the vaccine (or, alternatively, the party administering the vaccine can direct the individual to the weblink to view the fact sheet online). That fact sheet for the Pfizer/BioNTech vaccine can be found here, and it explicitly says that “the recipient or their caregiver has the option to accept or refuse [the] Pfizer-BioNTech COVID-19 Vaccine.”

This directive seems to be targeted at whether an individual can be forced to take the vaccine by a government entity (as a New York lawmaker recently suggested), not whether an employer can condition an individual’s continued employment on taking the vaccine. After all, in at-will employment settings, an employee can always pursue alternative employment if they do not want to get vaccinated as a condition of their current job. Note that this analysis may be different in unionized settings governed by a collective bargaining agreement. If you are working with a union, you should consult with your Fisher Phillips counsel before proceeding with any mandatory vaccination plan.

Conclusion

Although the EEOC seems to permit mandating vaccinations of employees in certain circumstances, most employers should consider encouraging rather than mandating vaccinations due to potential related risks. Whether you simply encourage or mandate vaccinations, you should be prepared with at least a policy framework and a communications plan as wider availability of the vaccine draws closer. 

Article courtesy of Fisher Phillips 

Will a Biden Administration Push to Expand Paid-Leave Benefits?

November 24 - Posted at 9:19 AM Tagged: , , , , , ,

Federal coronavirus-related paid-leave benefits are set to expire at the end of the year, and if those benefits aren’t extended, some workers may be left without coverage as the pandemic persists through the winter months.

The Families First Coronavirus Response Act (FFCRA), which took effect in April 2020, is a temporary measure that provides COVID-19-related paid-sick-leave and paid-family-leave benefits to certain eligible workers.

Will FFCRA’s emergency benefits be renewed as the coronavirus crisis continues? Will President-elect Joe Biden make expanding paid leave a priority? Here’s what employment attorneys had to say.

FFCRA Leave

Coronavirus cases in the U.S. recently hit record highs with more than 150,000 new cases reported each day since Nov. 16, according to the U.S. Centers for Disease Control and Prevention. FFCRA benefits will end on Dec. 31 unless Congress renews them. 

For now, many employers are required to provide up to 80 hours of paid-sick-leave benefits if employees need leave to care for their own or someone else’s coronavirus-related issues. The legislation also updated the Family and Medical Leave Act (FMLA) to provide workers with job-protected, paid leave when they can’t work—either onsite or remotely—because their son’s or daughter’s school or child care service is closed due to the public health emergency.  

FFCRA’s emergency paid-leave provisions apply to certain public employers and businesses with fewer than 500 employees, and there are exceptions available for small businesses and companies that employ health care workers.

Will FFCRA leave be extended? With the upcoming change in the presidential administration, employment attorneys are divided in their predictions.

“It will be renewed,” predicted Philip Voluck, an attorney with Kaufman Dolowich & Voluck in Blue Bell, Pa. He said it may be renewed by the Trump administration, noting the Biden administration does not assume office until Jan. 20, 2021. Voluck said new legislation may expand the FFCRA’s reach and clarify employer’s paid-leave obligations.

Employers covered by FFCRA earn refundable tax credits that reimburse them for the cost of providing paid leave related to COVID-19. “These need to be carried over to any new legislation to ease the financial strain on covered employers,” he noted.

Senate Majority Leader Mitch McConnell, R-Ky., said he wants Congress to finalize a new coronavirus economic stimulus bill before the end of the year, but that might be difficult during a lame-duck session, according to Politico.

Sara Jodka, an attorney with Dickinson Wright in Columbus, Ohio, believes that there will be a FFCRA extension or supplemental legislation but not until Biden takes office. Biden’s current COVID-19-related leave plans would expand FFCRA to provide for 100 percent wage coverage up to $1,400 a week, provide for paid leave during a mandatory quarantine or isolation period, and expand coverage to domestic workers, caregivers, gig-economy workers and other independent contractors. Employers would also continue to receive tax deductions and reimbursement for COVID-19-related paid leave.

Charles Thompson, an attorney with Ogletree Deakins in San Francisco, noted that the Biden administration may focus on other coronavirus priorities, such as putting money directly in people’s pockets.

Nationwide Paid Leave

In addition to the FFCRA’s paid-leave provisions, there is the longer-term consideration of whether a lasting nationwide paid-leave law may garner bipartisan support.

In the 116th Congress, Democrats and Republicans put forward several proposals to provide paid leave to new parents. In December 2019, Congress passed paid parental leave for qualifying federal employees. Senate Minority Leader Chuck Schumer, D-N.Y., has said he “will not stop fighting until this benefit is provided to all workers nationwide.”

Biden supports the Family and Medical Insurance Leave Act, which is known as the FAMILY Act. The proposed legislation would provide workers with paid time off to care for a newborn or recently adopted child, take care of themselves or family members with serious health conditions, or care for military family members and help them prepare for deployments.

Jodka noted, however, that the Biden-Harris campaign platform focused on expanding other employee rights, such as making it easier for workers to organize and collectively bargain, increasing the federal minimum wage, and extending overtime pay to more workers.

She thinks any paid-leave law will likely stem from an amendment to the FMLA, like the FFCRA did. “Employers, especially smaller ones, struggled—and continue to struggle—to meet the paid-leave requirements of the FFCRA,” she said, “so it is likely that first attention will be to the COVID-19 response with a discussion of a federal paid-leave law well off into the future.”

State and Local Trends

Some states and cities already provide paid leave, and their laws operate independently of federal law, Voluck explained. “States will likely become even more generous with paid leave,” he predicted.

SHRM has long advocated for a voluntary federal framework for paid leave, rather than a fragmented patchwork of state and local leave laws, and recently outlined employers’ need for consistency and simplicity in a letter to the U.S. Department of Labor’s Women’s Bureau.

Thompson thinks that states and local jurisdictions “will continue to be at the forefront of requiring that employers provide COVID-related leave.”

Many jurisdictions—including Arizona, California, Colorado, Michigan, New Jersey, New York, Rhode Island, Washington and Washington, D.C.—have enacted their own emergency paid-leave laws in response to the pandemic. Many cities in California and elsewhere have also passed supplemental leave ordinances. Employers should note that state and local COVID-19-related paid-leave laws may have different expiration dates.

“I think state laws will continue to trend upward in favor of paid-leave law mandates,” Jodka said. “The most typical is a paid-sick-leave mandate, and with COVID-19 cases rising, the need to value proper medical care and time away from work without risking losing a paycheck is at an all-time high.”

5 Things Florida Employers Need To Know About Vote To Increase Minimum Wage

November 04 - Posted at 11:19 AM Tagged:

Florida voters just approved a constitutional amendment that will gradually raise the state minimum wage to $15 per hour in 2026. What does this mean for employers? Here are the top five things you need to know about yesterday’s groundbreaking election result.

  1. It’s Not All Automatic
    Much of the media coverage on the amendment refers to it as increasing the minimum wage to $15. Although true, it is not the whole picture. Specifically, the amendment states that the Florida minimum wage will increase to $10 beginning September 1, 2021, up from the current $8.46. Every year after that, the minimum wage will increase by $1 until it reaches $15 in 2026 (i.e., $11 in 2022, $12 in 2023, etc.). Beginning in 2027, the minimum wage will resume being adjusted for inflation. Thus, the increases will be gradual.

    Because you will not need to start paying the $10 minimum wage until September 1, 2021, you should take advantage of that time to prepare for the increase. Given that many businesses are struggling with the economic fallout of COVID-19, it is even more important that you brace your organization and plan for the changes. Although it may not be immediately obvious, you will need to adapt to more changes than just an employee’s rate of pay.

  2. Know Where You Stand
    It is imperative that you forecast what your numbers look like a year out and plan ahead of time. You should thoroughly crunch your numbers to see where they stand now and what they will look like after a wage increase. Consider the differences and how your business can cover them. In doing so, you should also consider anticipated staffing needs.

    Many businesses believe that they simply need to sell extra product or service to cover the increased wages. This is not necessarily true. For example, if you only have one employee and they make an extra $2 per hour, you would think you only have to sell an extra $2 of product or service per hour to cover it. But there are more costs associated with employment than just wages. Payroll expenses such as unemployment, disability insurance, workers’ compensation, and Social Security will change. These rates will also increase as the employee’s wage does. You should keep these figures in mind when planning ahead.

  3. Increased Wages Will Send Ripple Effects
    Depending on your business, you may already have employees making $15 or more. When the minimum wage increases, these employees will not be happy to learn they are making the same as your lower- or entry-level employees. These employees will surely want an increase that matches their experience or value. Be sure you are ready to address these wage compression and related concerns, which may involve shifting your pay scale upward.

  4. Tip Credit Is Unchanged
    For employees who customarily earn tips, you can still take a tip credit. The amendment approved by voters does not change that. However, despite the increased minimum wage, Florida employers can still only take a $3.02 tip credit toward the minimum wage.

    Florida law specifically states that employers can take the tip credit that was available to them in 2003. This part of the law has not been amended. Thus, a customarily tipped employee in 2021 must be paid $6.98 in direct wages, while in 2026 they must be paid $11.98.

  5. Compliance Will Be More Important Than Ever
    Florida employers know all too well how expensive wage and hour lawsuits can be, often costing more than the wages allegedly owed. But as wages rise, so too does the risk. For example, an employee earning $15 an hour must be paid at an overtime rate of $22.50 an hour, higher than an employee making $10 with an overtime rate of $15 an hour. This means every hour of alleged unpaid overtime or minimum wage becomes that much more expensive.

    As always, proper recordkeeping is one of the strongest protections against wage and hour suits. It will be critical to implement detailed and consistent recordkeeping systems to make sure that, if a claim comes along, you have all the records you need to defend your business. You must keep accurate records of all hours worked, payments made, and job duties. You should consider auditing your payroll systems to ensure you have all the information you need. After all, an ounce of prevention is worth a pound of cure.

Conclusion

These changes come as employers continue to recover from the effects of COVID-19. However, with proper thought and proactive planning, you can get ahead of the changes and be ready as they come. We will continue to monitor developments related to this new law and its effect on Florida employers. 

2021 FSA Contribution Cap Stays at $2,750

October 27 - Posted at 2:42 PM Tagged: , , , , ,

For 2021, the dollar limit for employee contributions to health flexible spending accounts (health FSAs) through salary reductions remains unchanged at $2,750, the IRS announced on Oct. 27 when it issued Revenue Procedure 2020-45.

For health FSA plans that permit the carryover of unused amounts, the maximum carryover amount for 2021 is $550, an increase of $50 from the original 2020 carryover limit.

The guidance also includes annual cost of living adjustments (COLAs), if any were made, for other employee benefit plans. For instance, for tax year 2021, the monthly limit for qualified transportation benefits remains $270, as is the monthly limit for qualified parking.

The IRS a day earlier announced 2021 contribution limits for 401(k) and similar defined contribution plans and annual limit adjustments for defined benefit pension plans.

The IRS released 2021 HSA contribution limits in May, giving employers and HSA administrators plenty of time to adjust their systems for the new year. The individual HSA contribution limit will be $3,600 (up from $3,550) and the family contribution limit will be $7,200 (up from $7,100).

Increased Carryover Cap

IRS Notice 2020-33, issued on May 12 as part of COVID-19 relief, raised the amount of funds that health FSA plans can carry over for 2020 to $550, up from $500. For 2021, the maximum carryover amount remains $550.

There are two options for FSA extensions; employers can adopt either or neither, but can’t offer both:

  • Carryover. If an FSA plan has the carryover feature, participants can roll over up to $550 of unused FSA dollars to the next year but will forfeit any excess over $550 at year-end.
  • Grace period. An optional grace period gives employees an additional two-and-a-half months to incur new expenses using prior-year FSA funds. At the end of the grace period in mid-March, all unspent funds must be forfeited.

New CDC Guidance Makes Contact Tracing More Difficult for Employers

- Posted at 2:38 PM Tagged: , , , , ,

Employers will have to revise their COVID-19-related safety policies and practices to meet new guidelines from the U.S. Centers for Disease Control and Prevention (CDC) on what it means to have been in “close contact” with an infected person.

Under prior guidance, the CDC defined a close contact as someone who spent at least 15 consecutive minutes within six feet of an infected person, thus putting the individual at higher risk of contracting the virus.

The CDC updated its guidance to define a close contact as:

Someone who was within six feet of an infected person for a cumulative total of 15 minutes or more over a 24-hour period starting from two days before illness onset (or, for asymptomatic patients, two days prior to test specimen collection) until the time the patient is isolated.

“We are now looking at cumulative rather than consecutive,” said Jonathan A. Segal, an attorney with Duane Morris in Philadelphia. So a person who was exposed three times in a 24-hour period—for five minutes during each encounter—would meet the definition.

“This broader definition most likely will have a big impact on schools, hospitals and workplaces where individuals have several separate interactions with others—totaling 15 minutes or more—over the course of a day,” said Catherine Burgett, an attorney with Frost Brown Todd in Columbus, Ohio.

What should employers do in light of the new guidelines? “Revise your current policies and forms based on the new definition of close contact and … wear a mask,” Burgett said.

Taking Action

An important consequence of this revision is the impact it will have on employers’ ability to maintain staffing because it establishes a much lower threshold trigger for required quarantine.

Employers should have infected employees identify others who worked within six feet of them, for 15 minutes or more, within the 48 hours prior to the sick individual showing symptoms. This is being called this the “6-15-48 analysis.”

This new guidance will make contact tracing using the CDC’s 6-15-48 analysis even more difficult. When determining whether an employee has been exposed to an infected worker for 15 minutes or more, employers will now need to look at brief interactions between employees and infected workers that may occur several times a day, instead of one or two prolonged exposures.

The CDC advises most employers to send home any employees who have had a risk of exposure under this analysis. Those employees should maintain social distancing and self-monitor for 14 days from the exposure.

All industries will be impacted, but the most significant impact will be to those businesses that are not considered to be critical infrastructure workplaces. Those businesses will find that more employees will be required to be quarantined under this new rule, and thus will have fewer employees available to work in their facilities.

If a business is considered essential, however, CDC guidelines say exposed employees can continue to work onsite while self-monitoring and wearing a face mask. Employers that are considered critical infrastructure will be less impacted, because even their directly exposed employees can still work, as long as they are asymptomatic and the company takes the steps required by the CDC.

Revising Policies

As a result of the new definition of close contact, employers should review their COVID-19-related infection-control plans with this new definition in mind and, at a minimum, update their contact-tracing questionnaires.

Instead of simply asking infected workers who they were near for a prolonged period of time, employers may want to view surveillance video, documents that show when an employee clocked in and out, and other items that will help determine workers’ interactions.

Employers may also want to consider obtaining a waiver from the infected worker in order to share his or her diagnosis. This will allow the employer to interview employees about their interactions with the worker to determine who was exposed to the infected individual.

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