Page 1 of 3
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.
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.
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.
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 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).
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
President Biden’s latest COVID-19 stimulus package – the American Rescue Plan – has been passed by Congress and will become law once the president signs it into effect this Friday (3/12/21). The measure provides $1.9 trillion in economic relief, with many of the specific items directly affecting employers. What do businesses need to know about this finalized legislation?
What Is Not Included In The American Rescue Plan?
Before examining the areas of law that changed, it is just as important to review portions of the initial proposal which were not included in the final version signed by the president. The three most critical pieces NOT included:
What You Should Do: While these provisions did not make it into the final American Rescue Plan, the White House and Democratic leaders have stated their intent to introduce new legislation in the future to fulfill these campaign promises.
Extension Of FFCRA Tax Credits
The federal Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020 – and with it, covered employers’ obligation to provide emergency paid sick leave and emergency family and medical leave. Shortly before the end of the year, Congress extended the tax credit for employers who voluntarily continued to provide such paid leave through March 31, 2021.
President Biden’s original vision for the American Rescue Plan proposed to extend and expand emergency paid leave obligations in several key areas. However, the House version of the current COVID-19 relief bill does not extend the employer obligation to provide paid leave. Instead, the legislation merely extends the tax credit for voluntary provision of leave through September 30, 2021 and makes related changes. These provisions of the relief bill include the following:
Even though the current legislation does not extend the employer mandate to provide paid FFCRA leave, this is likely not the last conversation on this topic. There are indications that the Biden administration may attempt to resurrect pieces of the American Rescue Plan that did not make it into this bill into subsequent legislation in the near future.
What You Should Do: Determine which, if any, state and local paid sick leave laws may apply to you as many have been extended beyond the December 31, 2020 expiration of the FFCRA paid leave mandate. In addition, you should continue to monitor developments at the federal level. Although an extension of paid leave was not included in this stimulus package, it is still on the Biden administration’s and many members of Congress’s “to do” list. We could see new leave mandate proposals in the immediate future, so this will be one area to watch closely.
Boost For Vaccine Efforts
The American Rescue Plan provides over $15 billion aimed toward enhancing, expanding and improving the nationwide distribution and administration of vaccines, including the support of efforts to increase access, especially in underserved communities, to increase vaccine confidence and to fund more research, development, manufacturing, and procurement of vaccines and related supplies as needed. The upshot? We may see the widespread proliferation of vaccine availability even earlier than expected.
What You Should Do: Despite developments indicating that vaccines are likely to become much more widely available in the short term, many employers remain unprepared to deal with related issues. Those issues include not only the initial administration process, but also the extent to which the greater prevalence of vaccinated employees may (or may not) affect your safety protocols in terms of mask mandates, physical distancing, and related rules.
Relief For Small Businesses
The American Rescue Plan Act provides additional funding for small businesses, with a focused effort on those in hard-hit industries like restaurants and bars. The new bill provides $25 billion for a new Small Business Administration program focused on supporting restaurants and other food and drinking establishments. These grants are available for up to $10 million for those eligible and can be used to pay expenses like payroll, mortgage, rent, utilities, and food and beverages.
The bill provides an additional $7 billion for the Paycheck Protection Program, which provides small businesses with the potential for 100% forgivable loans. The additional PPP funding brings the total for the current round of the program to over $813 billion. Likewise, both bills expand PPP eligibility for certain nonprofit organizations.
The new law also provides $15 billion to the Economic Injury Disaster Loan (EIDL) Advance program designed to provide economic relief to businesses currently experiencing a temporary loss of revenue due to COVID-19. Like the PPP, the EIDL program is administered through the SBA to help qualifying businesses meet financial obligations and operating expenses that could have been met had the disaster not occurred. Priority funding is also allocated to businesses with less than 10 employees that the pandemic has severely impacted.
Finally, the law includes funding under the Shuttered Venue Operators Grant (SVOG) program, which had previously appropriated $15 billion in the December 2020 stimulus package. Eligible entities for the SVOG include live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, and talent representatives. Eligible entities for the SVOG program can also qualify for loans under the PPP.
What You Should Do: If you’re a small business operating in a hard-hit industry such as the hospitality sector, you should quickly determine eligibility for funding. Even if you’re not a bar or a restaurant, you might still be eligible for economic assistance through the various grants or loan programs detailed in the plan if the COVID-19 pandemic has severely impacted your business.
Unemployment Benefits
President Biden considers it imperative that workers impacted by the pandemic not lose out on emergency enhanced unemployment benefits, but the expanded unemployment assistance under the CARES Act and Stimulus 2.0 are set to expire soon in mid-March. Without an extension, millions of unemployed Americans impacted by the COVID-19 pandemic would be impacted. Luckily, both the House’s and Senate’s versions of the American Rescue Plan increase and further extend these unemployment benefits. However, there were some key differences between the two versions of the proposal, and the finalized version differs from the initial proposal.
The finalized legislation retains the $300 per week unemployment benefits, however, the version signed into law extends these benefits until September 6, which is more in alignment with Biden’s proposed outline for the American Rescue Plan.
Another major change related to the unemployment benefits in the finalized version is the addition of a provision making the first $10,200 in unemployment received in 2020 non-taxable for households with incomes under $150,000. This provision will go a long way to address the looming concerns for the millions of Americans currently on unemployment insurance.
What You Should Do: There is not much for employers to do in response to this provision of the bill, as it is primarily geared toward workers. However, it is important to understand the lay of the land in terms of unemployment insurance, as certain industries may face obstacles in hiring for certain positions for the time being. You should be aware that the benefits will expire on September 6 and adjust your hiring plans accordingly.
Stimulus Payments
The American Rescue Plan means that the federal government will send $1,400 stimulus checks on top of the $600 payments issued through the December stimulus bill. Under the structure agreed to during lawmaking negotiations, the payments will phase out at a quicker rate for those at higher income levels compared with the initial proposal floated by President Biden. Those earning $75,000 per year and couples earning $150,000 will still receive the full $1,400-per-person benefit but those earning more than $80,000 and couples earning more than $160,000 will not be eligible.
Tax Credits And Benefits
The bill expands three important tax credits: the child tax credit, the earned income credit, and the employee retention credit. The bill also increases certain health and pension benefits.
The bill also provides for a 100% COBRA premium subsidy effective April 1 through September 2021 for those who are involuntarily terminated and want to remain on their employer’s health insurance. The employer would pass along the subsidy so that qualifying individuals would pay nothing for their COBRA coverage during this period.
Finally, the bill expands the class of those who are entitled to help with the cost of their insurance under the Affordable Care Act. Consumers would be able to receive assistance if their premiums exceed 8.5% of their incomes rather than the current income cutoff of $51,000. The bill provides over $24 billion to shore up childcare facilities which have been hit particularly hard by the pandemic. It provides help to childcare workers making less than $12 per hour.
Conclusion
We will keep a close eye on further legislative proposals and provide updates as warranted.
On January 29, 2021, the Occupational Safety and Health Administration (OSHA) published “Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace.” The Guidance incorporates much of the existing guidance from the Centers for Disease Control and Prevention (CDC), adds to guidance OSHA previously issued, and reflects strategies and practices familiar to many employers.
The Guidance, which is intended for non-healthcare employers, is not mandatory and does not have the same legal effect as an OSHA standard. Nevertheless, it provides insight into OSHA’s views and previews what the agency may include in an Emergency Temporary Standard (ETS), which the Biden administration has directed OSHA to consider and potentially implement by March 15, 2021.
OSHA’s Guidance provides all employers an important opportunity to review their COVID-19 prevention strategies. While most of the Guidance is not new, it provides a handful of new recommendations employers may want to consider adding to their current COVID-19 protocols. The new recommendations include:
1. Establish a system to communicate and provide training to all employees on the employer’s COVID-19 policies and establish an avenue for employees to report COVID-19-related concerns anonymously, without fear of retaliation. All such communications should be in languages employees understand and provided in a manner accessible to individuals with disabilities.
2. Make COVID-19 vaccines available at no cost to all eligible employees and provide information and training on the benefits and safety of vaccinations. While OSHA does not specify the information or training it suggests employers provide, the Guidance references CDC’s “Frequently Asked Questions About COVID-19 Vaccination.”
3. Don’t distinguish between workers who are vaccinated and those who are not. All vaccinated employees should continue to wear a mask, socially distance, and follow other COVID-19 protocols (e.g., exclusion from the workplace following COVID-19 exposure). This is necessary because, as OSHA explains, at this time, “there is not evidence that COVID-19 vaccines prevent transmission of the virus from person-to-person.”
4. Provide all workers with face coverings (i.e., cloth face coverings and surgical masks), unless their work task requires a respirator, at no cost.
OSHA recommends that employers provide all workers with face coverings, which include cloth face coverings and surgical masks, for use in the workplace with limited exception and unless their work tasks require a respirator (such as an N95 filtering facepiece respirator) or would present a hazard. OSHA also recommends that employers consider acquiring masks with clear coverings over the mouth for all workers to facilitate lip-reading for employees who are deaf or have a hearing deficit. OSHA further recommends that employers require all other individuals at the workplace over the age of two, such as visitors or customers, to wear face coverings. Where employees with disabilities cannot wear a certain type of face covering, employers should discuss the possibility of providing a reasonable accommodation using an interactive process. OSHA’s Guidance on reasonable accommodations for face covering requirements dovetails with guidance on reasonable accommodations previously provided by the Equal Employment Opportunity Commission (EEOC).
OSHA has explained in previous guidance that cloth face coverings are not personal protective equipment (PPE), but can be used as recommended by CDC as a preventive measure in an employer’s COVID-19 exposure control plan. The new Guidance acknowledges that cloth face coverings can reduce exposure for the person wearing the covering in some instances.
The rest of the Guidance reviews additional practices and protocols that OSHA suggests are necessary for an effective COVID-19 prevention program. These are as follows:
1. Assign a coordinator. OSHA recommends assigning a workplace coordinator to be responsible for COVID-19 issues. The coordinator should administer the COVID-19 prevention program on the employer’s behalf.
2. Conduct a hazard assessment. It is important for employers to identify where and how workers may be exposed to COVID-19 and implement responsive COVID-19 hazard controls. As OSHA points out, it is important to consult with employees, especially those who are in the trenches, when conducting the assessment to understand the realities of the workplace.
3. Identify a combination of measures that will prevent and limit the spread of COVID-19. OSHA provides a hierarchy of controls, prioritizing engineering controls that eliminate the COVID-19 hazard entirely, followed by administrative policies and PPE to protect workers from COVID-19 hazards. OSHA lists several commonly recognized measures that employers should take and provides details to assist employers to implement these measures effectively:
a. Separate and send home infected or potentially infected people from the workplace.
The first step in any workplace safety hazard assessment is to eliminate the hazard. In the case of COVID-19, that means removing infected or potentially infected people from the workplace. We recommend that employers communicate clear expectations to employees and adopt employee and visitor screening practices consistent with state and local requirements and recommendations.
OSHA explains that most employers will follow a symptom-based strategy for identifying, separating, and sending workers home. OSHA also recognizes that there are some circumstances where “employers may consider a COVID-19 test-based strategy.”
b. Implement physical distancing in all communal work areas.
OSHA explains that the “best way to protect individuals is to stay far enough away so as not to breathe in particles produced by an infected person.” Keeping 6 feet of distance is generally recommended, but it is “not a guarantee of safety, especially in enclosed spaces or those with poor ventilation.” To increase physical distance, it is often important to limit the number of people in one place at any given time and increase physical space between people. OSHA recommends numerous strategies that many employers have adopted over the past 10 months, including telework, flexible work hours, staggered shifts, delivery of remote services, limiting the size of meetings, and using visible cues to encouraging distancing, to name a few.
c. Install barriers where physical distancing cannot be maintained. OSHA recommends installing transparent shields or other solid barriers at fixed workstations where workers cannot maintain 6 feet from other people.
f. Use applicable PPE to protect workers from exposure. When other measures cannot be implemented or do not protect workers fully, the Guidance concludes that current OSHA standards require that employers provide PPE as a supplement to other controls. (As discussed above, OSHA maintains that cloth face coverings are not PPE.) The standards referenced in the Guidance include OSHA’s PPE and respiratory protection standards, 29 CFR 1910, Subpart I, which require employers, at a minimum, complete a written hazard assessment to determine the need for PPE and PPE appropriate for the hazard and corresponding procedures and training. Therefore, employers are responsible for determining when and what PPE is necessary to protect workers while in the workplace. If an employer determines that an employee must wear PPE while at work and to perform a job safely, the PPE should be provided at no cost to workers and maintained in a safe condition. In application to COVID-19, CDC has addressed when PPE is necessary for job tasks that require interactions with individuals known or suspected of having COVID-19 and, depending on the task, recommends PPE consisting of surgical masks or respirators, such as the filtering facepiece respirators (e.g., N95) or personal air purifying respirators (PAPRs), with eye and face protection (i.e., face shields), protective gowns, and gloves.
4. Consider protections for workers at higher risk for severe illness. Workers with disabilities may be entitled to “reasonable accommodations” under state and federal law to protect them from the risk of contracting COVID-19. The EEOC discusses reasonable accommodations that could offer protection to an employee who is at higher personal risk from COVID-19 due to a pre-existing disability in D.1 of its “What You Should Know About COVID-19 and the ADA and Rehabilitation Act.” OSHA encourages employers to consider whether workers who have an increased personal risk of contracting a severe respiratory illness from COVID-19 (including older adults and anyone who has a serious medical condition) can do some or all of their work at home or in a less densely occupied, better ventilated workplace.
5. Establish a system for communicating effectively with workers. Employers should ask workers to report, without fear of reprisal, symptoms of COVID-19, possible COVID-19 exposures, and possible COVID-19 hazards at work. Similarly, employers should establish channels for communicating important information to employees and, of course, communicate with workers in a language they understand.
6. Educate and train workers on COVID-19 policies and procedures. OSHA recommends that, along with training workers on company policies, employers educate workers about the basic facts about COVID-19, including how it is spread. This can go a long way to helping workers understand why proper distancing, appropriate face coverings, and other measures are important to protect them. OSHA outlines a number of other topics that should be included in worker and supervisor training. OSHA recommends that the training be in plain language that workers understand (including non-English languages and American Sign Language or other accessible communication methods, if applicable).
7. Instruct workers who are infected or potentially infected to stay home and isolate or quarantine. OSHA recommends attendance policies that are non-punitive.
8. Minimize the negative impact of quarantine and isolation on workers. OSHA recommends that, “when possible,” employers allow workers to telework, use paid sick leave, if available, or consider implementing paid leave. Employers that were covered under the Families First Coronavirus Response Act (FFCRA), generally employers with less than 500 employees, can still take advantage of tax credits in connection with voluntarily providing paid leave for COVID-19 related reasons through March 31, 2021.
9. Isolate and send home workers who show symptoms at work.
10. Perform enhanced cleaning and disinfection after people suspected or confirmed to have COVID-19 have been in the workplace. Employers should follow CDC’s guidance, which includes increasing air circulation, cleaning, and disinfection using an EPA-registered disinfectant identified for use against SARS-CoV-2, the virus that causes COVID-19. Employers are required to comply with existing OSHA standards, including those related to hazard communication and PPE appropriate for exposure to cleaning chemicals.
11. Provide guidance on screening and testing. Employers should follow state and local guidance for screening and viral testing (as distinguished from antibody testing) in workplaces. Employers that adopt workplace testing programs should inform workers of testing requirements. We recommend employers review recent guidance from the CDC placing a new emphasis on informed consent prior to testing.
12. Record and report COVID-19 infections and deaths as required by existing OSHA regulations. Employers must record work-related cases of COVID-19 illness on their Form 300 Logs if certain criteria are met. An employer has an obligation to record an employee’s COVID-19 illness if: the exposure is work-related, it results in a fatality, lost workdays, job restrictions or transfers, or otherwise requires medical treatment beyond first aid. Employers must report to OSHA a COVID-19 illness if an employee is admitted to the in-patient service of a hospital within 24 hours of a workplace exposure to COVID-19 or if an employee dies within 30 days of a workplace exposure to COVID-19. In the case of a hospitalization, an employer has 24 hours to report to OSHA from when the in-patient hospitalization occurs or when the employer learns of the hospitalization if the latter occurs later. In the case of a fatality, the employer must report a work-related COVID-19 death within 8 hours of the death or within 8 hours of learning of the employee’s death, if the death occurred within 30 days of the workplace exposure. These are fact-driven, often complicated, analyses and not every employee who tests positive for COVID-19 needs to be recorded on an employer’s OSHA 300 Log or reported to OSHA, for that matter.
13. Implement protections from retaliation and set up an anonymous process for workers to report COVID-19-related hazards. OSHA explains that the Occupational Safety and Health Act prohibits employers from discriminating against an employee for raising “a reasonable concern about infection control related to COVID-19.”
14. Comply with existing OSHA standards. OSHA reminds employers that all OSHA standards that apply to protecting workers from infection, including requirements for PPE, respiratory protection, sanitation, protection from bloodborne pathogens, and requirements for employees to access medical and exposure records, remain in place. As mentioned above, while there is no OSHA standard specific to COVID-19, employers still have an obligation under the General Duty Clause to “provide a safe and healthful workplace that is free from recognized hazards that can cause serious physical harm or death.”
Employers should consider the following next steps:
The year 2020 highlighted the need for all of us to be agile, adjusting and responding as our world shifted, science evolved, and best practices for responding to COVID-19 developed and changed. This year is shaping up in a similar manner.
Article courtesy of Jackson Lewis
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.
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:
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.
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.
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.
The bill also contains the following tax and benefit related provisions:
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.
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.
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.
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.
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.”
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.”
As the summer draws to a close, schools are announcing their re-opening plans, which vary widely across states and localities. Some schools plan to remain open several days a week and direct students to attend remotely the other days. Others will split classes into morning and afternoon sessions, allowing students attending in the morning to participate remotely at home for the rest of day and vice versa. Still others will require physical attendance at all times, while some will choose to operate entirely under a remote learning model.
In light of these different reopening plans, employers need to understand how the Families First Coronavirus Response Act (FFCRA) affects the leave rights of employees for each of these different types of school schedules. The below serves as a list of answers to frequently asked questions related to the issues you could face as schools begin to reopen.
The Basics: FFCRA Leave Benefits For Working Parents
Under the FFCRA, eligible employees are entitled to Emergency Paid Sick Leave (EPSL) and/or expanded family and medical leave (EFML) if they are unable to work or telework because they need to care for their son or daughter if (a) the child’s school or place of care is closed, or (b) the child care provider is unavailable, due to COVID-19-related reasons. The FFCRA regulations provide that an employee may take leave to care for their child only when the employee needs to, and actually is, caring for the child. The Department of Labor (DOL) has advised that “generally, an employee does not need to take such leave if another suitable individual — such as a co-parent, co-guardian, or the usual child care provider — is available to provide the care the employee’s child needs.”
Frequently Asked Questions
1. Is a child’s school or place of care deemed “closed” for purposes of the FFCRA if it has moved to online instruction or to another model in which children are required to complete assignments at home?
Yes. If the physical location where an employee’s child received instruction or care is closed, the school or place of care is deemed “closed” for purposes of the EPSL and EFML. The DOL has instructed that this is true even if some or all instruction is being provided online or whether, through another format such as “distance learning,” the child is still expected or required to complete assignments. But this seemingly does not contemplate a hybrid model (discussed below) and likely pertains only to those circumstances where the child is not reporting to a physical location. Also note that in order to be eligible for FFCRA leave, employees must still certify that there is no other suitable person that can care for the child.
2. Is an employee entitled to FFCRA leave if they choose to keep the child at home or have the child homeschooled even though the child’s school is open?
No. The DOL has stated that employees do not need to take leave if their usual child care provider is available to provide care. But if the school is operating on a reduced capacity due to COVID-19, which then necessitates remote learning for the child, FFCRA leave could be available. See DOL guidance on summer camps.
3. Would an employee qualify for FFCRA leave if their child’s school is open but the employee chooses remote learning based on a doctor’s recommendation due to the child’s vulnerability to COVID-19?
EFMLA is likely not available to the employee because the child’s school is not closed. The employee might be eligible for EPSL if they can demonstrate that they are taking leave to care for a person who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 (permitted reason #4 under EPSL). It is unclear however, whether a recommendation for remote learning is the same as a recommended self-quarantine for purposes of the FFCRA.
4. Will employees be eligible for FFCRA leave if a child’s school is operating on a hybrid model (whereby children are to alternate between physical attendance and remote learning)?
Likely yes. While this scenario is not specifically addressed in the statute or DOL guidance, one would argue that the child’s school is technically “closed” to that child on the days when the child is required to participate via remote learning. Thus, if the employee cannot work or telework during those days, they should qualify for FFCRA leave.
It is uncertain, however, whether a parent may take the leave consecutively or intermittently to coincide with the days and times the child is home remote learning. If the child’s school requires them to attend school daily (e.g., child attends school half of the day and spends the other half remote learning), leave is likely to be taken consecutively. If, on the other hand, the child’s schedule requires the child to physically attend school only on certain days of the week, leave is likely to be taken intermittently. Note that while the DOL regulations mandate employer consent for intermittent leave, a New York federal court recently struck out this requirement as unreasonable.
5. Would an employee qualify for FFCRA leave if the child’s school is open but the child’s before or after school program is closed?
Yes. The DOL defines a “place of care” as a physical location in which care is provided for the child. The physical location does not need to be solely dedicated to such care. Examples include day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs, and respite care programs.
6. Can an employer deny FFCRA leave to an employee who previously teleworked while the child’s school was closed but intends to request leave if the child’s school remains closed for the fall?
No. The DOL has made clear that simply because an employee has been teleworking despite having their children at home does not mean the employee is prevented from now taking leave to care for the child whose school is closed for a COVID-19-related reason.
7. Can more than one parent take paid sick leave or expanded family and medical leave simultaneously to care for a child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons?
No. An employee may take EPSL or EFML leave to care for their child only when they need to, and actually are, caring for the child if they are unable to work or telework as a result of providing care. Generally, employees do not need to take such leave if a co-parent, co-guardian, or the usual child care provider is available to provide the care the child needs.
8. Can an employee take paid FFCRA leave to care for a child who is 18 years old or older?
It depends. EPSL and EFML leave may only be taken to care for an employee’s non-disabled child if they are under the age of 18. If the employee’s child is 18 years of age or older with a disability and cannot care for themselves due to that disability, the employee may take EPSL and EFML leave to care for the child if their school or place of care is closed or the child care provider is unavailable due to COVID-19-related reasons and the employee is unable to work or telework as a result. Additionally, EPSL is available to care for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19. If an employee has a need to care for a child age 18 or older who needs care for these circumstances, the employee may take EPSL if they are unable to work or telework as a result of providing care. But in no event may the employee’s total paid sick leave exceed two weeks.
9. Can an employee use EPSL for child care purposes if the employee already used up their 80 hours of EPSL for other permitted purposes?
No. The DOL regulations state that employees are entitled to only a one-time use of 80 hours of EPSL, regardless of the reason. However, if an employee has not exhausted their full EPSL allotment, they may use the remaining time for other permitted reasons.
10. If a new employee has used up their EPSL leave allotment while employed at their previous employer, are they entitled to another 80 hours of EPSL leave with the new employer?
No. The DOL regulations specify that any person is limited to a total of 80 hours of EPSL. An employee who has taken all such leave and then changes employers is not entitled to additional EPSL from their new employer. However, an employee who has taken some (but fewer than 80 hours of) EPSL and then changes employers is entitled to the remaining portion of such leave from their new employer, but only if the new employer is covered by the FFCRA.
11. Can employees use EFML leave if they have already exhausted all of their FMLA leave allotment for the benefit year?
No. An employee may only take a total of 12 workweeks for FMLA or EFMLA reasons during the employer’s designated benefit year.
12. Does EFML contain the same limitation contained in the FMLA that requires spouses who work for the same employer to share the 12 weeks of leave (instead of each getting 12 weeks)?
No. Under 29 CFR 201(b), spouses who work for the same employer can be required to share a combined 12 weeks of FMLA leave to bond with their new child or care for their own parent with a serious health condition. The EFMLA does not provide for the same carveout. But keep in mind that while both employees who work for the same employer would each be eligible for EFMLA leave, they would likely not be able to both take leave to care for their child since they have to certify that there is not alternative suitable caregiver.
13. What supporting documents must employees provide to their employers for FFCRA purposes?
When requesting EPSL or EFML leave, employees must provide the following information to their employers, either orally or in writing:
If the employee requests leave because they are subject to a quarantine or isolation order or to care for an individual subject to such an order, they should additionally provide the name of the government entity that issued the order. If the employee requests leave to self-quarantine based on the advice of a health care provider or to care for an individual who is self-quarantining based on such advice, they should also provide the name of the health care provider who gave the advice.
If the employee requests leave to care for a child whose school or place of care is closed, or child care provider is unavailable, they must also provide:
Notably, a New York federal court recently held that supporting documentation may not be required as a precondition for FFCRA leave. Thus, employers should ensure documentation is not required to commence the leave under the FFCRA. Supporting documentation can be submitted after the leave has commenced.
The U.S. Department of Labor just released a Field Assistance Bulletin (FAB) to provide employers with guidance regarding their wage and hour obligations to track the hours of employees working remotely or teleworking. Importantly, while the August 24 FAB directly speaks to employers’ Fair Labor Standards Act (FLSA) requirements under remote work arrangements that have arisen amid COVID-19, it also applies to all other telework or remote work arrangements. This guidance may be especially useful to employers who are new to the remote work world.
The Basics: What Does Federal Law Require?
As a reminder, the FLSA requires that an employer compensate employees for all hours it “suffers or permits” them to work. This means that employees must be compensated for time that may be unscheduled, but during which the employee still performs work. Thus, if an employer knows or has reason to believe that work is being performed, the time must be counted as hours worked.
A challenge for employers is preventing work that it does not want performed. Notably, the employer cannot rely exclusively on its stated policy. Indeed, the guidance notes that it is not easy to define when an employer “has reason to believe that work is being performed.” The FAB reinforces that employers are not required to compensate employees for work they do not know about and have no reason to know about.
New Challenges Raised By Remote Work
Rather, employers are only required to compensate employees for hours worked that are based on “actual knowledge” or “constructive knowledge” of that work. Employers will be deemed to have “actual knowledge” of employees’ regularly scheduled hours and through employee reports or other notification “actual knowledge” of the hours worked. Employers might be deemed to have “constructive knowledge” if it could have acquired information regarding additional work done through the exercise of “reasonable diligence.”
Importantly, the FAB clarifies that “reasonable diligence” is limited to what the employer should have known, not what it “could have known.” This means employers are not necessarily required to “cross-reference” phone records or otherwise review other non-payroll records to determine whether or not employees were working beyond their scheduled hours, especially during these remote work times.
What Should Employers Do?
Instead, you should provide employees with a process and procedure to report hours worked, particularly to ensure that unscheduled hours also are recorded. If the employee fails to utilize the process or procedure, you might be able to make an argument that the employee has prevented you from satisfying your obligation to compensate employees and thwarted your efforts to prevent unwanted work. Thus, you may be able to avoid FLSA liability for failing to compensate employees for work performed that you did not know about and that the employee didn’t advise you about.
You should review your remote work and telework policies to ensure that they provide clear guidance to employees about your expectations regarding schedules and working hours. You should also implement a policy or procedure by which employees can report work that was performed outside their regularly scheduled time frames or their recorded hours.
Conclusion
Overall, you should exercise reasonable diligence to ensure that you capture all hours worked (whether scheduled or not, just as they must for employees working onsite). But you can take some solace in the USDOL’s guidance reminding us all that “constructive knowledge” is not without limits.
Throughout the COVID-19 pandemic, the Centers for Disease Control and Prevention has issued constantly changing guidance for employers that many view as complex, confusing, and impractical. In its perplexing web of guidelines, the CDC recommends that companies take several actions to protect workers from contracting COVID-19, like self-isolating sick employees, quarantining exposed employees, screening employees for symptoms prior to work, and installing partitions to protect public-facing employees.
Given their complexity, some of these directives are often not fully understood by companies. Further complicating matters, many of the recommendations have never been previously undertaken by employers, leading to misapplication. Worst of all, other guidelines are simply not feasible for some employers, leaving them with the tough decision of not following the CDC directive in order to stay in business.
Unfortunately, ignoring or misunderstanding these confusing guidelines, like the four commonly misinterpreted guidance listed below, could lead to legal risks for your company.
1. Returning Exposed Employees To Work Too Early After A Negative Test
Of the innumerable companies that have sought our assistance during the COVID-19 pandemic, the most common misunderstanding of CDC guidance we see involves returning to work employees who have been directly exposed to COVID-19 too early following a negative test. Employers falling under the CDC’s general business guidance (not critical infrastructure employers) should quarantine employees for 14 days since their last direct exposure to a confirmed or suspected COVID-19 case, defined as being within 6 feet of the infected person, for 15 minutes or more, within the 48 hours prior to the sick individual showing symptoms, until the infected person is released from self-isolation (“6-15-48”).
Critically, the 14-day quarantine period cannot be cut short by a negative test due to the lengthy incubation period of COVID-19. This is an often-misunderstood CDC guideline, which even the agency has recognized:
Note that recommendations for discontinuing isolation in persons known to be infected with SARS-CoV-2 could, in some circumstances, appear to conflict with recommendations on when to discontinue quarantine for persons known to have been exposed to SARS-CoV-2. CDC recommends 14 days of quarantine after exposure based on the time it takes to develop illness if infected. Thus, it is possible that a person known to be infected could leave isolation earlier than a person who is quarantined because of the possibility they are infected.
Thus, an exposed employee cannot return to work during the 14-day quarantine period following a negative COVID-19 test received on, for example, day three, seven, or 12 of that period. Returning exposed employees too early due to a negative test could lead to preventable COVID-19 infections if co-workers are exposed to individuals who should be quarantined and develop the virus after a negative test.
2. Miscalculating The Appropriate Quarantine Period For Those Exposed To An Infected Household Member
Along those same lines, employers often misunderstand CDC guidance when calculating the length of the quarantine period for a worker who has been exposed to an infected spouse or household member. The key here is that the 14-day quarantine period does not begin until the last day the employee was directly exposed, using the 6-15-48 analysis above, to the spouse or household member prior to the infected person being released from self-isolation. Thus, if the employee is directly exposed to the spouse or household member on days one through 10, the quarantine period does not begin until day 10.
Accordingly, the worker may ultimately miss 24 days of work, instead of 14, if directly exposed to the spouse or household member every day until the spouse is released from self-isolation. The CDC addresses this confusing guidance here, noting that the exposed employee should stay home until 14 days have elapsed after the last exposure.
3. Not Notifying Employees Of A Confirmed COVID-19 Case In Your Workplace
The Fisher Phillips COVID-19 litigation tracker has been following closely the number of lawsuits filed with COVID-19-related claims. The prevalence of claims relating to an employer’s failure to notify employees of a confirmed case of COVID-19 in the workplace is a troubling trend. Throughout the pandemic, transparency by employers has been a critical tool in maintaining positive employee morale. Failure to do so can lead to negative consequences, including not only lawsuits, but Occupational Safety and Health Administration (OSHA) complaints and employees refusing to work, as well.
Although it may not be clear to some employers, the CDC recommends not only informing directly exposed employees (6-15-48) of a confirmed COVID-19 case in the workplace, but also to inform other “employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA).” The CDC defines “possible exposure” to COVID-19 as those who do not meet the 6-15-48 parameters. Thus, when a confirmed COVID-19 case occurs in your workplace, remember to inform those employees who worked near the infected worker (e.g., the same hallway, area, or corridor), even though they weren’t directly exposed.
4. Incorrectly Believing That Wearing Face Coverings Trumps The 6-15-48 Analysis
When analyzing whether an employee has been exposed to an infected co-worker, employers often misconstrue the impact of wearing face coverings to prevent the spread of the virus. Although the CDC recommends wearing masks to slow the spread of COVID-19, whether employees are wearing masks while directly exposed (6-15-48) to an infected person does not change that analysis. The determination of whether someone should be quarantined for 14 days does not change if the individuals at issue are wearing masks, another point of confusion specifically clarified by the CDC:
Note: This is irrespective of whether the person with COVID-19 or the contact was wearing a mask or whether the contact was wearing respiratory personal protective equipment (PPE).
To ensure the safety of your workers, remember to quarantine all employees who meet the 6-15-48 analysis, even if they were wearing a face covering while exposed.
Legal Risks For Not Following CDC Guidelines
Although CDC guidance is not a law or regulation, such guidelines can be construed by OSHA and the courts as the legal standard that defines what actions a company should take to protect its workers during this unprecedented time. In fact, the Assistant Secretary for the U.S. Department of Labor has already indicated that OSHA could rely upon the general duty clause, which the agency can enforce in the absence of a standard on point, to enforce the CDC’s guidelines for employers on COVID-19.
If your company fails to follow a CDC guideline, it could receive a citation under OSHA’s general duty clause and, if classified as willful (e.g., reckless disregard for, or deliberate indifference towards, employee safety), the maximum penalty for each citation would be $134,937. Keep in mind that state OSHA plans, not regulated by the federal government, can adopt emergency COVID-19 regulations, which have the same impact as any other OSHA regulation, and enforce those against employers who fail to comply with them. Virginia recently became the first state adopt such a regulation, which includes notification requirements that vary from those of the CDC.
Although it is an evolving area of the law, claimants’ counsel will argue to courts that the violation of a CDC guideline is evidence of negligence, willfulness, or intent on behalf of the employer. Plaintiffs’ counsel will assert that the CDC guideline has established the level of care or duty owed to an employee or other claimant, and that the duty was breached by the company.
This argument will be made regardless of the jurisdiction, venue, or type of claim, including workers’ compensation claims, claims filed directly by an employee seeking recovery above and beyond workers’ compensation benefits, and those filed by third-parties (e.g. visitors, employee spouses) against companies. To protect your company from such claims, remember to follow these steps to minimize your exposure.
With employees returning to work and companies reopening their doors to customers, employers are looking for ways to limit liability related to potential COVID-19 cases contracted in the workplace. To do so, many are considering waivers for not only their employees, but also for customers. Such waivers, however, are somewhat limited in their effectiveness and employers should consider the pros and cons before attempting to implement them. You may also want to consider an alternate strategy that may offer you some of the assurances you seek without many of the negatives associated with waivers.
No waiver or other attempt at limiting liability can replace the need to maintain a safe workplace. You should start by ensuring you are in strict compliance with local orders, state regulations, and guidance from government agencies like the Centers for Disease Control and Prevention (CDC), Occupational Safety and Health Administration (OSHA), Equal Employment Opportunity Commission (EEOC), and local health authorities.
What Are Waivers?
The term waiver has more than one meaning. In this context, employers may look to a waiver and releases of liability agreement consisting of a series of contractual provisions to mitigate certain risks of liability. Such an agreement not only includes a waiver clause, but also includes additional protective provisions like clauses for assumption of risks, covenants not to sue, and identification. If enforceable, they would eliminate liability for the risks discussed within.
Employee Waivers
Waiver agreements between employers and employees are traditionally disfavored due to the unequal bargaining power between them, as employers typically have superior bargaining power. In most states, such waivers do not apply to gross negligence or willful, intentional, or wanton conduct, as employers cannot waive such liability.
Employee waivers are even further limited due to workers’ compensation statutes, where states generally require medical expenses, lost wages, and rehabilitation costs be provided to employees injured in the course and scope of their employment. For work-related injuries, employees generally cannot waive their worker’s compensation claims. Although it may be difficult for employees to prove they contracted COVID-19 at work, some states (like California) have created a rebuttable presumption that workers who contract COVID-19 are presumed to have a workplace injury covered by the workers’ compensation system.
Waiver agreements with employees do not protect employers from OSHA complaints or enforcement action when a workplace is dangerous. However, the president recently signed an executive order directing federal agencies, like OSHA, to make exceptions for employers who attempt in good-faith to follow agency regulations during the COVID-19 pandemic, which may ease some concerns about agency actions.
Practically speaking, waivers may discourage employees from returning to work and hinder restarting operations as a result. They may also result in negative reactions and publicity concerns, as has occurred in several instances across the country already.
But due to the COVID-19 pandemic, it remains unclear whether courts and states will allow employers to enforce waiver agreements in this unprecedented time. Regardless of whether you decide to institute COVID-19 waivers to your returning workforce, you should develop return-to-work plans including steps to train employees on any exposure danger, how to eliminate those dangers, and best practices to stay safe.
Customer Waivers
Waivers for your customers may limit your company’s liability associated with COVID-19, but they may also hurt your business. Employers must carefully decide if the benefits of liability waivers for customers outweigh their drawbacks for their business. Some positives aspects of customer waivers include that they:
However, customer waivers have downsides too, as they:
Evaluating how a waiver will affect your business requires you to look at your industry, business, and geographic area, as well as how your customers or the public will react. Customers generally do not expect to sign a waiver before shopping or dining in a restaurant. But waivers are common in potentially dangerous activities, like extreme sports, where adding a COVID-19 clause may go unnoticed. Overall, customer waivers could impact businesses in more ways than simply mitigating their liability, so businesses must first consider potential unintended consequences.
Other Strategies: Notices And Questionnaires
Alternate routes to limiting liability may be more beneficial than waivers for many businesses. Businesses may avoid the potentially ominous effect of forcing customers to sign waivers by using questionnaires or notices.
A questionnaire asks entrants to the premises questions about whether they have any of the symptoms of COVID-19 or were exposed to it. A questionnaire could also communicate the employer’s reasonable actions to comply with government guidelines for sanitation, social distancing, mask wearing, and other efforts that the employer uses to keep their guests and employees safe. This strategy could allow the employer to show it took affirmative steps to exclude sick people from its workplace.
But businesses still need to consider how their customers will react to such a questionnaire. Implementing a questionnaire may deter some customers who find it an impediment or feel it invades their privacy, while others may feel safer coming to your business because you screen everyone who enters.
Notices provide a more streamlined approach, communicating the same information as a questionnaire about the business’ steps to keep its premises safe, without requiring the individual to physically sign away any perceived rights. Communicating the rules and restrictions without asking questions or for a signature, notices require fewer steps from employers and customers than waivers and questionnaires.
Either approach requires employers to provide a handout or post signage at all entrances to the building that broadcast safety information and reasonable actions and prohibit sick or exposed persons from entering the building. These strategies allow people to feel safer and accept the risks when they enter the workplace.
Choosing A Strategy
Waivers have limited but potentially valuable benefits if enforceable. Employers should weigh those benefits against the potential impact on their business and carefully consider all their options, such as questionnaires or notices that communicate information and allow guests to assume risk.
No strategy can eliminate a company’s obligation to take reasonable actions to protect its employees and customers. The CDC, OSHA, and state or local authorities publish guidelines and guidance that businesses should follow. Demonstrating you followed such guidance will be the best proof your company acted reasonably in responding to COVID-19 risks.
Whether an employer institutes employee or customer waivers, they should develop written plans to reopen that include training for their employees on these guidelines and that document their efforts to comply. Ignoring these guidelines will make workplaces less safe and potentially expose employers to civil suits and government enforcement actions.
What Should Employers Do?
As you begin the process of reopening, you should familiarize yourself with several alerts from a national labor law firm: 5 Steps To Reopen Your Workplace, According To CDC’s Latest Guidance. You should also keep handy the 4-Step Plan For Handling Confirmed COVID-19 Cases When Your Business Reopens in the event you learn of a positive case at your workplace. For a more thorough analysis of the many issues you may encounter from a labor and employment perspective, we recommend you review our FP BEYOND THE CURVE: Post-Pandemic Back-To-Business FAQs For Employers and our FP Resource Center For Employers.