Employers Now Have 2 Clear Options to Provide Vaccine Incentives Thanks to New EEOC Guidance

The EEOC kicked off the unofficial start of summer with a bang by clearing the way for employers to offer their employees incentives to get the COVID-19 vaccine in new guidance released on the eve of the Memorial Day weekend. The May 28 updates to the agency’s COVID-19 Technical Assistance guidance now provides employers with two clear options, drawing a key distinction based on who administers the shot:

1. If your employees voluntarily provide documentation confirming they have been vaccinated and got the shot on their own from a pharmacy, public health department, or other health care provider in the community, you can offer them any incentive you’d like with no apparent limitations.
2. If your organization (or an entity acting on your organization’s behalf) administers the vaccine, you can still offer incentives – but they cannot be so substantial in value as to be considered coercive.

Regardless of which path you travel, there are still hoops to jump through if you want to provide vaccine incentives – providing accommodations, ensuring confidentiality, etc. – but you now have a clear direction to take to encourage your workers towards vaccination. What do you need to know about this critical update?

Why Was This Guidance Necessary?

Before we take a deeper dive into discussing the options and other considerations, some employers may be wondering why this guidance was even necessary. Couldn’t you just offer some cash or PTO or some other reward to induce employee behavior without concern about the legal ramifications?

The main sticking point troubling employers for months concerned wellness program rules. Historically, the EEOC has indicated it didn’t want employers to force employees to make medical-related decisions through the use of incentives. Until this latest guidance, the EEOC believed that too significant of an incentive could coerce employees to participate, thus leading to legal violations if employees are “forced” to disclose protected medical information to gain the incentive. Through rules, guidance, and federal litigation, the EEOC has taken steps to ensure that any employment decisions in this regard were genuinely voluntary.

Earlier this year, the EEOC issued a proposed rule expressly permitting only de minimis incentives as passing muster under participatory wellness programs. The proposed rule contained language referring to a permissible incentive as a “water bottle” or something of equivalent value. However, the Biden administration withdrew the proposed rule under a regulatory freeze typically seen when new leadership takes charge at the White House. The proposed rule is still pending review and it is unclear when or what form it may re-emerge. Against the backdrop of this uncertainty, employers have been attempting to navigate the thorny path of vaccine incentives, concerned that offering robust incentives could bring about a higher legal risk. At the urging of business groups seeking clarity on the matter, the EEOC finally heeded the call and provided the certainty that employers have been craving.  

Option 1: Unlimited Incentives

Under the first option, you are seemingly permitted to provide unlimited incentives to your workforce so long as your employees voluntarily provide you with documentation or other confirmation they received the COVID-19 vaccine, and they received the vaccination on their own from a third-party provider that is not an “agent” of your organization. The EEOC describes such third parties as pharmacies, public health departments, or other health care providers in the community.

Option 2: Restricted Incentives

On the other hand, if employees are voluntarily vaccinated by you or your “agent,” you can offer only incentives that are “not so substantial as to be coercive.” Which leads to two questions: what is an “agent,” and how substantial is “substantial”?

Definition of “Agent” and How to Avoid This Designation

• The EEOC guidance defines “agent” as being an individual or entity having the authority to act on behalf of, or at the direction of, the employer (which could include an onsite nurse, onsite medical staff, and perhaps beyond).  
• The agency further notes that the purpose for this distinction is that it would prefer employers to stay as far away from employee medical examinations as possible, and administering vaccines requires necessary pre-shot screening questions that could reveal information it would rather you not obtain. “When an employer asks employees whether they obtained a COVID-19 vaccine from a third party in the community, such as a pharmacy, personal health care provider, or public clinic,” the EEOC says, “the employer is not asking a question that is likely to disclose the existence of a disability.” Of course, care should continue to be taken not to ask follow-up questions such as why the employee has not been vaccinated or whether the employee suffered side effects of the vaccine.
• Thus, to avoid the incentive limitation that arises in such a situation, you would want to do everything you could to keep a wall up between you and the healthcare provider offering the vaccines – especially if you are setting up a vaccine clinic at your worksite to make it as easy as possible for your workers to get inoculated. Unnecessary entanglements could arise if you gather medical information about your employees, assist with screening questions, or include an onsite nurse or other medical staff members to aid the healthcare provider in administering the shots. In a perfect world, you would limit your involvement to setting up a sign-up link to organize the schedule and giving your vaccine provider access to the information generated by the link. The “sign up” link and employee-facing communications should be self-serving in this regard. You could even state in the sign-up link that “Your responses cannot be shared with anyone, including your employer, without your authorization. This form is not such an authorization.” You may also want to consider an arms-length written agreement with the vaccine provider confirming that it does not have the authority to act on your behalf or at your direction.

Definition of “Substantial” and How to Avoid Violations

• But if your organization or your agent is administering the vaccine, and you are interested in offering incentives, you will need to carefully thread the needle between offering a strong enough incentive to encourage employees but one not so strong that it could be considered coercive. You will want to tip the scale to help employees to choose to get vaccinated without twisting their arms.
• Unfortunately, the EEOC does not provide detail or a definition regarding what might be considered too substantial, leaving you to navigate this terrain based on your own comfort and risk tolerance level. And this is not a term of art that the EEOC has often – if ever – used in this context. It appears that the term “substantial” would permit you to offer incentives at some level higher than a de minimis amount – higher than the “water bottle or its equivalent” level typically associated with incentives – but there is no clear answer about where to draw the line.
• A rule of thumb to keep in mind: the higher the value, the greater the risk your program will be seen as unnecessarily coercive and therefore in violation of the EEOC’s rules. There are a number of factors to consider when making this determination, including your geographic location, your industry, the median pay of your workforce, and other relevant factors.

Other Considerations

Whichever path you take, there are several other considerations to keep in mind when offering vaccine incentives based on voluntary inoculations.

Accommodations

Some employees may have legitimate medical or religious reasons not to get vaccinated, and failure to provide them with the same types of incentives could lead to claims under the Americans with Disabilities Act (ADA) or Title VII. You will need to consider offering alternative means by which an employee can earn an incentive if they cannot be vaccinated due to a disability or sincerely held religious belief. Alternative ways to earn the incentive might be watching a workplace COVID-19 safety video or reviewing CDC literature on mitigating the spread of COVID-19 in the workforce.

Confidentiality

Once you gather information from employees about whether they have been vaccinated or not, you must maintain confidentiality. You should maintain the records as you would any other medical-related documentation (in a separate file, accessible to only those who need to know, etc.) and comply with all other state-specific privacy rules (such as in California).

Family Members

While you can offer an incentive to employees to provide documentation or other confirmation from a third party not acting on your behalf that their family members have been vaccinated, the EEOC confirmed that you may not offer incentives to your employees in return for their family members getting vaccinated by your organization or your agent. This would be considered a violation of the Genetic Information Nondiscrimination Act (GINA) Title II health and genetic services provision. Asking pre-screening medical questions would lead to you receiving genetic information in the form of family medical history of the employee, and GINA regulations prohibit employers from providing incentives in exchange for genetic information. However, you can still offer an employee’s family member the opportunity to be vaccinated by your organization or your agent if you take certain steps to ensure GINA compliance. 

Possible Incentives to Consider

If you are now considering what kind of incentives to offer your workforce in light of this new guidance, you might find comfort knowing that employers’ two most common incentive options include cash/gifts (38%) and paid time off (30%). This is according to an FP Flash Survey conducted earlier this year, which found that more than one in five employers were providing vaccine incentives. That number is bound to rise given that close to half of all respondents (43%) said they were unsure about whether to offer some form of incentive, many commenting that the then-current legal uncertainty fueled their hesitancy.

 

IRS Answers to Your American Rescue Plan Act COBRA Subsidy Questions

In much-anticipated guidance, the Internal Revenue Service has offered its insight on the implementation of the COBRA temporary premium subsidy provisions of the American Rescue Plan Act of 2021 (ARPA) in Notice 2021-31.

Spanning more than 40 pages, the IRS-answered frequently asked questions (FAQs) finally resolve many issues relating to temporary premium assistance for COBRA continuation coverage left unanswered in the Department of Labor’s publication of model notices, election forms, and FAQs.

The practical implications of the guidance for employers are many. Significantly, employers must take action prior to May 31, 2021, to ensure compliance with some of the requirements under ARPA and related agency guidance.

Notice 2021-31 Topics

Notice 2021-31 provides comprehensive guidance on the ARPA subsidy and tax credit implementation issues (although it acknowledges there are many issues that still need to be addressed). Some of the key topics addressed include:

• Clarifying that COBRA premium assistance is available for COBRA continuation coverage under vision-only plans, dental-only plans, and health reimbursement arrangements;
• Describing the circumstances in which retiree coverage can be considered COBRA coverage and qualify for the subsidy and when non-COBRA retiree coverage will constitute other coverage for purposes of disqualifying an individual from the subsidy;
• Defining what constitutes an “involuntary termination”;
• Confirming that employers may rely on employee attestations regarding eligibility for premium assistance and record retention requirements;
• Addressing the impact of employer-provided COBRA premium subsidies on the availability of the tax credit;
• Providing instructions on how the ARPA COBRA premium subsidy notice and election rights are coordinated with the previously issued COVID-19 relief extending deadlines for certain actions; and
• Addressing eligibility for the tax credit for church plans, small employer plans, and professional employer organization or other third-party payer arrangements.

Immediate Next Steps

For employers, there are some immediate takeaways:

1. Review Your Lists of Potential Applicable Eligible Individuals (AEIs) Before May 31, 2021.

As expected, the IRS expansively defines an “involuntary termination.” For purposes of the ARPA COBRA subsidy, involuntary terminations include employee-initiated terminations due to good reason as a result of employer action (or inaction) resulting in a material adverse change in the employment relationship.

The guidance provides helpful COVID-19-specific examples. Employees participating in severance window programs meeting specified regulatory requirements could qualify. Voluntary employee terminations due to an involuntary material reduction in hours also could qualify. Further, voluntary terminations due to daycare challenges or concerns over workplace safety may constitute an involuntary termination, but only in the narrow circumstances in which the employer’s actions or inactions materially affected the employment relationship in an adverse way, analogous to a constructive discharge.

Employer action to terminate the employment relationship due to a disability also will constitute an involuntary termination, but only if there is a reasonable expectation before the termination the employee will return to work after the end of the illness or disability. This requires a specific analysis of the surrounding facts and circumstances. The guidance notes that a disabled employee alternatively may be eligible for the subsidy based on a reduction in hours if the reduction in hours causes a loss of coverage.

A number of the circumstances that meet the involuntary termination definition in the guidance may not be coded in payroll or HRIS systems as involuntary terminations. As employers have an affirmative obligation to reach out to employees who could be AEIs, employers will need to look behind the codes to understand the circumstances of the terminations.

Further, to identify all potential AEIs, employers may need to sweep involuntary terminations or reductions in hours occurring prior to the October 1, 2019, date referenced in the Department of Labor’s FAQs. The IRS makes clear that COBRA-qualified beneficiaries who qualified for extensions of COBRA coverage due to disability (up to 29 months), a second qualifying event (up to 36 months), or an extension under state mini-COBRA potentially can qualify for the subsidy if their coverage could have covered some part of the ARPA COBRA subsidy period (April 1, 2021–September 30, 2021).

An involuntary termination is not the only event that can make an employee potentially eligible for the subsidy. Employees who lose coverage due to a reduction in hours (regardless of the reason for the reduction) can be eligible for premium assistance as well. This can include employees who have been furloughed, experienced a voluntary or involuntary reduction of hours, or took a temporary leave of absence to facilitate home schooling during the pandemic or care for a child.

2. Re-Evaluate Employee Exit Strategies, Severance Plans to Assess Eligibility for the Tax Credit

The IRS explains that, if an employer subsidizes COBRA premiums for similarly situated covered employees and qualified beneficiaries who are not AEIs, the employer may not be able to claim the full ARPA tax credit. In this case, the amount of the credit the employer can receive is the premium that would have been charged to the AEI in the absence of the premium assistance and does not include any amount of subsidy the employer would otherwise have provided. For example, if a severance plan covering all regular full-time employees provides that the employer will pay 100 percent of the COBRA premium for three months following separation, this employer could not take a tax credit for the subsidy provided during this three-month period.

Notice 2021-31 does not elaborate on this issue beyond providing specific examples involving a company severance plan. Thus, ambiguity remains as to whether this guidance would prohibit an employer from claiming a tax credit where an employer has agreed to provide a COBRA subsidy in a negotiated separation or settlement agreement and not pursuant to an existing severance plan or policy. Further IRS guidance on this point may be forthcoming. In light of this guidance, employers should re-evaluate their COBRA premium subsidy strategies.

CDC Removes Mask Requirement For Fully Vaccinated In Some Settings – What Should Your Business Do?

In a surprise move today, CDC followed the lead of the various states that have lifted their masking and physical distancing recommendations. However, CDC’s new recommendations come with a twist. The CDC’s recommendations only apply to fully vaccinated people in non-healthcare settings.  Here’s what your business should consider as it decides whether to “unmask.”

The May 13, 2021 CDC Interim Public Health Recommendations for Fully Vaccinated People states that fully vaccinated people no longer need to wear a mask or physically distance in any non-health care setting (except prisons and homeless shelters and public transportation), except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance. According to the CDC, prevention measures (including masks and physical distancing) are still recommended for unvaccinated people.

Employers who are interested in relaxing mask requirements in the workplace should first consider the following.

• Check state and local laws and orders.  If a state executive order or local order requires employers to have employees wear masks or impose physical distancing requirements, employers should follow those rules.  In addition, keep in mind that some states have their own OSHA rules (e.g., VA, MI, CA, OR) or recently enacted laws such as New York’s Hero Act.  Employers must follow all applicable state and local laws and standards regardless of CDC’s relaxed recommendations.
• OSHA has yet to come out with new guidance and currently recommends that all employees must continue to follow protective measures such as wearing a face mask and remaining physically distant regardless of vaccination status.  However, this guidance was issued on January 29, 2021, so it is now several months old.  It is unclear whether OSHA will change this guidance given the CDC’s position.
• Determine whether removing mask and physical distancing requirements makes sense given your employee populations and preferences.  Many employees may be reluctant to return to work without masking and physical distancing rules in place.  Assess whether removing such requirements is likely to help or hurt the effort to return employees to work.  Generally, employers can choose to continue to require masks and physical distancing regardless of vaccination status.
• Consider how removing mask and physical distancing requirements will impact your customers.  You may also want to maintain a consistent practice across all your locations so that you are not dealing with a patchwork of state and local COVID-19 requirements.  To the extent you decide not to relax your requirements, you may need to accommodate customers who have medical conditions that make wearing a mask unsafe.
• Consider whether it makes sense to continue to require or encourage physical distancing (regardless of masking) until more is learned, for everyone’s comfort and to avoid isolating unvaccinated individuals who may have protected reasons for being unvaccinated or who may fall into a protected classification, or where any isolation or exclusion may set back diversity efforts.  And, of course, if an individual needs an accommodation in connection with masking for religious or medical reasons, engage in the interactive process.
• Clarify that fully vaccinated employees and customers are permitted to wear masks or face-coverings.
• Reinforce that employees must respect employee and customer decisions to wear masks and engage in physical distancing regardless of their vaccination status.
• Avoid actions that would suggest a correlation between vaccination status and mask wearing and/or employee observance of other COVID-19 safety practices.
• Consider whether and how the company will monitor whether unvaccinated employees are properly wearing masks and engaging in physical distancing practices.  It is lawful to ask employees if they are vaccinated, however, asking employees why they are not vaccinated may implicate the Americans With Disabilities Act.  To enforce such a rule, employers will need to know who is vaccinated. If such information is gathered, the best practice is to treat this information as confidential. Make sure it is securely maintained with limited access.  Employers may also consider having all employees certify that if they are not fully vaccinated they will continue to wear masks and physical distance.
• If you choose to relax your mask and physical distancing requirements, make clear that fully vaccinated employees should make their own personal decision regarding whether to wear a mask and physically distance at work.  In this manner, if an employee chooses not to wear a mask, it will be the employee who is disclosing his or her vaccinated status.
• Consider adopting a formal policy or issuing a communication clarifying the company’s policy and position on these issues so that everyone knows your expectations.
• If you have a union, consider whether you need to bargain with the union over changes to your COVID-19 policy and practices.

 

 

IRS Announces 2022 Limits For HSAs, HDHPs AND Excepted Benefit HRA’s

The Internal Revenue Service (IRS) recently announced (See Revenue Procedure 2021-25) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs), high-deductible health plans (HDHPs) and excepted benefit health reimbursement arrangements (HRAs) for 2022. Many of the dollar limits currently in effect for 2021 will change for 2022. The HSA catch-up contribution for individuals ages 55 and older will not change as it is not subject to cost-of-living adjustments.

The table below compares the applicable dollar limits for HSAs, HDHPs and excepted benefit HRAs for 2021 and 2022.

4 Tips for Beating Work-From-Home Burnout

Zero commute time, savings on transportation costs and takeout lunches, more time for mid-day workouts—there’s no doubt that working from home (WFH) has its benefits. But with many organizations choosing to stay remote for longer to protect their workforce from COVID-19, employees are finding this situation to be less than ideal.

The “freedom” of working from home comes with its challenges. Working parents are struggling to balance childcare and distance learning during working hours, pets are demanding attention at all hours and the constant interruptions of family or roommates can break focus and
productivity. Additionally, many employees have fallen into unhealthy habits and lifestyles—late nights, poor ergonomic set up, reduced physical activity and the inability to disconnect. Exacerbated by the lack of communication experienced in the physical workplace environment, an increasing number of people are suffering high stress, anxiety and burnout. Your workforce needs help and fast, before the effects of employee burnout begin to impact your business.

Included is a free brochure with information on how to recognize symptoms of employee burnout as well as tips to help employees prevent WFH burnout.

What Employers Need to Know About Vaccine Passport Ban and Updated Mask Requirements

Declaring that the state is “no longer in a state of emergency,” Florida Governor Ron DeSantis signed a bill on Monday, May 3rd,  banning vaccine passports while issuing two executive orders immediately suspending and invalidating local government COVID-19 restrictions, including mask mandates. But the news doesn’t necessarily mean you should rush to ease up on your facemask requirements for workers or visitors, nor impact your decision to mandate vaccines for your workers. Below is a summary of the implications for Florida businesses.

Vaccine Passports Banned

As the vaccine rollout progresses, businesses and employers nationwide have been wondering if a “vaccine passport” – an official document certifying that an individual has been vaccinated against COVID-19 – can lead to a path back to normalcy. A Florida law now prohibits businesses operating in Florida from implementing those measures with respect to customers. The new law does not come as a surprise to most Floridians. On April 2, Governor DeSantis signed Executive Order 21-81 prohibiting vaccine passports. This new law, however, solidifies the ban and provides more guidance for businesses.

Specifically, the new law says that “business entities,” including for-profit and not-for-profit entities, cannot require that patrons or customers provide documentation certifying that they received the COVID-19 vaccine or certifying that they have recovered from the virus to enter or receive a service from the business. Licensed health care providers are exempt from this provision.

The law also provides that educational institutions, including both public and private schools, cannot require students or residents to provide documentation certifying that they received the COVID-19 vaccine or have recovered from the virus.

Importantly, the law does not prohibit private businesses from requiring that their own employees show proof of vaccination or certification that they recovered from the virus. Of note, recent guidance from the Equal Employment Opportunity Commission clarifies that it is generally permissible for employers to ask employees about whether they have been vaccinated, but employers should avoid further inquiries.

Further, the new law permits covered entities to continue to use screening protocols (such as temperature checks) in accordance with state or federal law to protect public health.

Governor Eliminates Current Local Restrictions After Florida Surgeon General Discourages Masks

On April 29, Florida State Surgeon General Dr. Scott Rivkees issued a Public Health Advisory rescinding prior public health advisories. Notably, the advisory states that fully vaccinated people should no longer be advised to wear face coverings or avoid social and recreational gatherings except in “limited circumstances.” Those limited circumstances are not defined, but the advisory appears to cover masking both indoors and outdoors.

Noticeably, the Surgeon General’s advisory is less restrictive than CDC guidance. Although the CDC recently announced that fully vaccinated people can forego masks in certain situations (for example, if they are indoors with other vaccinated people, indoors with unvaccinated people from the same household, or outdoors in spaces that are not crowded), the CDC generally recommends that fully vaccinated people continue to wear masks or face coverings in other scenarios.

To follow the Surgeon General’s advisory, Governor DeSantis issued a pair of executive orders on May 3 suspending and invalidating local government COVID-19 restrictions, including mask mandates. These orders effectively eliminate all existing coronavirus-related restrictions imposed by local governments. This means that local orders requiring, among other things, masks, sanitizing, and capacity limits are no longer effective. The orders do not affect restrictions issued by school districts.

Noticeably, the governor’s orders only prohibit local governments from issuing and enforcing COVID-19 restrictions using their emergency procedures. They specifically allow local governments to enact ordinances under regular enactment procedures. Thus, it is possible that local governments will counter the governor’s orders by enacting ordinances continuing to require such measures as masking and distancing.

However, the state’s guidance does not mean that private businesses cannot – or should not – enforce their own policies. The orders only prohibit local governments from issuing and enforcing restrictions on individuals or businesses using emergency powers. Local governments may still enact such procedures using regular procedures. Businesses can still generally enforce their own measures, including mask mandates, if they choose to.

What Should Employers Do Now?

Pushing forward to a new normal, Florida employers should be aware of how to proceed. Despite the state’s guidance, you should continue to enforce safety measures.

Florida recently passed a new COVID-19 liability protection law for businesses. Although very favorable to businesses, the law requires that businesses make a “good faith effort to substantially comply with authoritative or controlling government-issued health standards” to gain its protection. If there are different sources of guidance in effect, a business may follow any of them. This means that although they are different, a business can likely be protected from liability by following either Florida or CDC guidance. However, an employer may have stronger defenses and be able to undercut possible claims earlier by following CDC guidance, which takes a more conservative approach than current Florida guidance.

Further, OSHA requires that employers maintain a workplace free of recognized hazards. COVID-19 is such a recognized hazard. By not following CDC guidance, a Florida employer may open themselves to exposure under OSHA’s General Duty Clause, even in the absence of a state mandate.

Employers should also consider the business realities of having unmasked employees. Among other things, customers and vendors may not feel comfortable entering your business if they see employees unmasked, even if they are vaccinated.

Finally, because the Surgeon General’s recommendations only apply to fully vaccinated people, your business may have an inconsistent patchwork of some employees wearing masks while others are not. This may result in a situation where different standards apply to different employees depending on their vaccination status. Employers should avoid this, as OSHA has issued guidance stating that businesses should not treat unvaccinated employees differently than vaccinated employees. Additionally, inconsistency among employees wearing masks may inadvertently reveal who is and is not vaccinated, which may be disruptive and may unintentionally single out employees who do not get the vaccine, including for medical or religious reasons.

 

3 Strategies to Help Your Remote Employees Battle Isolation

The sudden and prolonged isolation brought on by COVID-19 has greatly impacted the normal routines and activities of the entire workforce. While the ongoing vaccine rollout inspires hope for a COVID-free future, the emerging virus variants and the harsh winter weather experienced across the United States after over a year of social distancing have raised further concerns about employee mental health issues and engagement in 2021.  

As many employers continue to manage a partially or entirely remote workforce – some of which may shift to a permanent off-site or hybrid workplace model – they’re faced with the challenge of keeping employees connected. Since social health plays an important role in determining an overall sense of wellbeing and a large number of individuals aren’t socializing with coworkers, peers and friends like they used to, it’s important for workplace leaders to provide their people with opportunities to make meaningful connections. The wellbeing of your workforce depends on it.  

Offer Opportunities for Social Connections 

The mental wellbeing of your workforce is best supported by positive social interactions. Remote workers who have struggled with feelings of loneliness and social isolation are more likely to feel lonely, anxious and depressed, which is why it’s important for organizations to provide plenty of opportunities to engage with their co-workers. Encouraging employees to work together on collaborative tasks, scheduling weekly team meetings (they don’t have to focus on work!) and empowering employees to create and interact with interest-based groups within their digital wellbeing platforms are just a few easy ways to help your people feel connected. 

Prioritize Mental Health in the Workplace  

Providing employees with mental health resources is a must. Beyond offering up mental health benefits like mindfulness tools and live health coaching, remote workers can also engage through activities like guided team meditation or virtual yoga sessions. According to MetLife, 79% of employees who report good mental health are less likely to feel detached from their organization. Additionally, 86% of workers who feel that they are mentally healthy are more likely to be productive at work. Rather than simply considering workplace mental health resources as an addition to an employee benefits package, putting an emphasis on mental health as a main component of a company’s culture is an essential business move in 2021. 

Strengthen Remote Company Culture 

Countless employees are missing the bustling workplace environment. The constant Zoom meetings and digital interactions lack the sense of social connectedness once accustomed to. Finding unique ways to make regular meetings and virtual communication more engaging is critical for maximizing employee performance. Casual video chats and remote social happy hours are a great way to use technology as an advantage and initiate a stronger connection among employees while working remotely. Additional ways to promote more social interactions among employees include scheduling group exercise breaks or starting a workplace wellbeing challenge. To ensure everyone is able to participate, consider designating employees who really know their way around the virtual world as leaders for a multigenerational workforce. By opening more channels of communication, the remote work environment will improve for everyone and increase employee engagement as well as productivity.  

Around 66% of workers are struggling to stay socially connected, which is negatively affecting their wellbeing. Fortunately, by encouraging your remote workforce to prioritize their mental health and social wellbeing, organizations are likely to see a significant increase employee engagement and productivity as employee wellbeing improves.   

IRS Fact Sheet: Employer Tax Credits for Employee Paid Leave Due to COVID-19

The American Rescue Plan Act of 2021 (ARP) allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through September 30, 2021.

Here are some basic facts from the IRS website about the employers eligible for the tax credits and how these employers may claim the credit for leave paid to employees who take leave to receive or recover from COVID-19 vaccinations.

Eligible Employers

An eligible employer is any business, including a tax-exempt organization, with fewer than 500 employees. An eligible employer also includes a governmental employer, other than the federal government and any agency or instrumentality of the federal government that is not an organization described in section 501(c)(1) of the Internal Revenue Code. Self-employed individuals are eligible for similar tax credits.

Paid sick and family leave for which tax credits can be claimed

Eligible employers are entitled to tax credits for wages paid for leave taken by employees who are not able to work or telework due to reasons related to COVID-19, including leave taken to receive COVID–19 vaccinations or to recover from any injury, disability, illness or condition related to the vaccinations. These tax credits are available for wages paid for leave from April 1, 2021, through September 30, 2021.

The amount of the tax credits and how they are calculated

The paid leave credits under the ARP are tax credits against the employer’s share of the Medicare tax. The tax credits are refundable, which means that the employer is entitled to payment of the full amount of the credits if it exceeds the employer’s share of the Medicare tax.

The tax credit for paid sick leave wages is equal to the sick leave wages paid for COVID-19 related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100 percent of the employee’s regular rate of pay. The tax credit for paid family leave wages is equal to the family leave wages paid for up to twelve weeks, limited to $200 per day and $12,000 in the aggregate, at 2/3rds of the employee’s regular rate of pay. The amount of these tax credits is increased by allocable health plan expenses and contributions for certain collectively bargained benefits, as well as the employer’s share of social security and Medicare taxes paid on the wages (up to the respective daily and total caps).

Claiming the credit

Eligible employers may claim tax credits for sick and family leave paid to employees, including leave taken to receive or recover from COVID-19 vaccinations, for leave from April 1, 2021, through September 30, 2021.

Eligible employers report their total paid sick and family leave wages (plus the eligible health plan expenses and collectively bargained contributions and the eligible employer’s share of social security and Medicare taxes on the paid leave wages) for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return PDF. Form 941 is used by most employers to report income tax and social security and Medicare taxes withheld from employee wages, as well as the employer’s own share of social security and Medicare taxes.

In anticipation of claiming the credits on the Form 941 PDF, eligible employers can keep the federal employment taxes that they otherwise would have deposited, including federal income tax withheld from employees, the employees’ share of social security and Medicare taxes and the eligible employer’s share of social security and Medicare taxes with respect to all employees up to the amount of credit for which they are eligible. The Form 941 instructions PDF explain how to reflect the reduced liabilities for the quarter related to the deposit schedule.

If an eligible employer does not have enough federal employment taxes set aside for deposit to cover amounts provided as paid sick and family leave wages (plus the eligible health plan expenses and collectively bargained contributions and the eligible employer’s share of social security and Medicare taxes on the paid leave wages), the eligible employer may request an advance of the credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. The eligible employer will account for the amounts received as an advance when it files its Form 941, Employer’s Quarterly Federal Tax Return, for the relevant quarter.

Self-employed individuals may claim comparable tax credits on their individual Form 1040, U.S. Individual Income Tax Return 

AAG’s 2021 Educational Seminar Recording Available

The recorded presentation of AAG’s 2021 Educational Seminar held on April 22, 2021 is now available for viewing.

Guest Speaker and attorney Keith Hammond, with Hammond Law Center, covered changes in employment law that have occurred under the new administration as well as expected future changes.

This seminar is also approved for 2 Professional Development Credits (PDCs) with SHRM for all attendees.

Please contact our office for the link to view the presentation or the Activity ID for the PDCs.

How To Ask Employees If They’ve Been Vaccinated Without Having To Call Your Lawyer First

Now that the country is on course to see all adult Americans eligible for COVID-19 vaccination in a matter of days, and an increasing number of employees are returning to the workplace, vaccination status is likely to be an increasingly common topic over the coming weeks and months. Which leads to these inevitable questions: when and how can employers ask their workers whether they’ve been vaccinated without getting into hot water? Whether it’s an innocent question asked while trying to make conversation or an inquiry posed to determine whether someone can return to normal duties, you need to understand your legal rights and obligations regarding this serious topic. Missteps can easily lead to legal complications.

A Simple Vaccine Question is Okay, But Be Wary of Going Further

The Equal Employment Opportunity Commission has indicated in recent guidance that it is generally permissible for employers to ask employees about COVID-19 vaccination status. That’s because this simple question alone is not likely to elicit information from the employee about possible medical conditions, an inquiry that otherwise would invoke federal or state disability laws.

And in many cases, the answer to that question alone may be all you really need. If you don’t really need to know anything beyond a simple “yes” or “no” to the question of whether they have been vaccinated – and in most cases, you won’t – the EEOC suggests warning employees not to provide any other medical information in response to your question to make sure you don’t inadvertently receive more information than you want.

If you require proof of vaccination, you should ask the employee to provide documentation from the immunization source showing the date(s) the vaccine was administered. To avoid potential legal issues related to this process, you should affirmatively inform employees that they do not need to provide any additional medical or family history information. The documentation you receive should be treated as a confidential medical record.

But issues could arise if you venture further than asking this simple question. Asking follow-up questions could trigger obligations under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) depending on a variety of factors, so you need to tread cautiously if you take the questions any further.

Going Further with Your Inquiries

That’s not to say you can’t or shouldn’t ask anything further than eliciting a simply yes-or-no answer. There may be circumstances where it is advisable or even necessary to ask more. In those cases, the key considerations relate to the kinds of questions posed and the kinds of responses provided. These are the situations that raise potential legal issues that will likely require you to confer with your lawyer.

Questions about why the employee isn’t vaccinated

If you need information about why the employee has not yet been vaccinated, you might end up eliciting information about the employee’s medical status. Therefore, you can only pose such questions if they are “job-related and consistent with business necessity.” As the EEOC has said, you meet this standard if you have a reasonable belief, based on objective evidence, that an employee who is not vaccinated would pose a direct threat to the health or safety of themselves or others. This can be a challenging and complicated hurdle to clear. You should coordinate with legal counsel to determine whether you can meet this standard in your situation.

If you are treating workers differently based on vaccination status – for example, not allowing them to participate in certain work activities, work in certain locations, interact with the public or other employees, etc. – and you have confirmed with counsel that you have a valid justification for doing so, you may need to ask additional questions to assist with an interactive process. It may be that you need to provide reasonable accommodations to those workers unable to be vaccinated due to underlying medical conditions or sincerely held religious justifications. Each situation will require a case-by-case, fact-specific analysis, and you should be prepared to engage in substantive interactive process discussions related to any accommodation requests.

Questions about how the vaccination process went

If your managers are asking follow-up questions to find out how the employees fared after vaccination – especially after the second dose of Moderna and Pfizer vaccines – you need to recognize that this can be a slippery slope. Such questions could reveal information related to disability status (see above) that you would otherwise not want to know about. Caution your managers to tread carefully when asking such questions, even if their intent is innocent, and train them to know what to do if they receive information that should lead to human resources involvement.

Questions to help with an employee leave program

It is always permissible for your managers to ask about the medical status of an employee in order to help administer an employee leave program that includes absences for vaccine side effects, whether due to federal or state law or due to company policy. As with any such inquiries about medical status, however, make sure your managers know that they need to keep the information confidential to protect the privacy of any medical records received, and to only ask questions that lead them to gather the type of information necessary.

What Steps Should You Take Right Now?

• Decide as a company if you need to know workers’ vaccination status, and if so, who will responsible for this inquiry.
• Train your managers not to casually ask your workers about their vaccination status unless there is a specific work-related reason for the question. There may be a natural curiosity or concern on the part of your managers in posing such questions, but you need to let them know about the possible risks involved.
• Keep information you receive as confidential as you would any medical-related information in order to comply with privacy obligations.
• Ask employees to be respectful of other employees’ privacy. Not all employees are comfortable sharing their personal information, and silence should not be interpreted as approval or disapproval of vaccines.
• Even if you learn that an employee has been fully vaccinated, don’t let up on your social distancing, mask-wearing, and other safety precautions that you already have in place. While federal guidance allows you to ease up on quarantine procedures for vaccinated workers, that is currently the extent to which you should relax your protocols.
• If your business is subject to California’s broad data privacy law – the CCPA – you need to recognize that collecting information from employees about their vaccination status triggers the “notice at collection” requirement. While you may not have to provide a different or new CCPA notice every time you ask for or receive such information, you may need to ensure that the broader notice you have already provided to all employees (i.e., the notice to inform the employee of all categories of personal information your company collects about or from the employee, along with all the business purposes for which the information is used) covers this type of data collection. Check with your legal counsel to ensure you are in compliance with California law.