The IRS, in Notice 2021-61 has announced increased 401(k) plan limits for 2022. Here is what you need to know:

  • 401(k) Deferral Limit is increased to $20,500 from $19,500. Note this increase applies to 403(b) plans as well.
  • The Compensation which can be considered under a qualified plan is increased to $305,000 from $290,000.
  • The limit for Highly Compensated Employees is increased to $135,000 from $130,000.
  • The total contribution limit for a defined contribution plan is increased to $61,000 from $58,000.
  • The Catch-up contribution limit for individuals age 50 or over remains at $6,500.

Additionally, the IRS announced limits related to Health Flexible Spending Accounts:

  • The Health Flexible Spending Account contribution limit is now increased to $2,850 from $2,750.
  • The Health Flexible Spending Account Carry over limit is $570 for the 2022 Plan Year.
  • The Taxable Wage Base for Social Security Tax is increased to $147,000 from $142,800.

If you have questions about 401(k) plan limits or FSA, please contact a member of Carmody’s Labor & Employment group.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

On Monday, November 8, 2021, President Biden issued a proclamation entitled, “Advancing the Safe Resumption of Global Travel” (the “Proclamation”). The Proclamation revokes prior presidential proclamations that suspended and restricted the entry of noncitizen nonimmigrants from China, Iran, the Schengen Area, the United Kingdom, the Republic of Ireland, Brazil, the Republic of South Africa, and India in response to the COVID-19 outbreak. This is welcome news for businesses as these previous proclamations prevented many employers from hiring or retaining foreign talent unless the prospective employee qualified for a national interest exception. The new Proclamation adopts a less restrictive policy by suspending and restricting noncitizen nonimmigrants who are not vaccinated against COVID-19 from entering the United States by air, except in limited circumstances.

Noncitizen nonimmigrants excepted from the vaccination requirement include: (1) children under the age of 18; (2) individuals with medical contraindications to an accepted COVID-19 vaccine (e.g., a demonstrated anaphylactic reaction); and (3) individuals with a nonimmigrant visa (excluding a B-1 or B-2 visa) and who are citizens of a foreign country where less than 10 percent of the country’s total population has been fully vaccinated with any available COVID-19 vaccine. Individuals granted an exception must provide proof of a negative COVID-19 viral test taken no more than one day before boarding a flight to the United States and must wear a mask over their nose and mouth during air travel and while indoors at United States transportation hubs. Further, some categories of exempted individuals must agree and arrange to be vaccinated within 60 days of arriving in the United States, or as soon as is medically appropriate as determined by the Centers for Disease Control and Prevention, if they intend to remain in the United States for more than 60 days. Notably, objections to vaccination based on religious or moral convictions do not qualify under any exception.

Fully vaccinated noncitizen nonimmigrants entering the United States by air travel must provide proof of a negative COVID-19 viral test taken no more than three days prior to boarding a flight to the United States. Alternatively, if an individual has recently recovered from COVID-19, he or she may travel with documentation of recovery from COVID-19, i.e., a positive COVID-19 viral test result on a sample taken no more than 90 days before the flight’s departure from a foreign country and a letter from a licensed healthcare provider or a public health official clearing travel.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

The Occupational Safety and Health Administration (OSHA) recently issued new COVID-19 rules for most employers in the private sector with 100 or more employees. The OSHA Emergency Temporary Standard (ETS) on Vaccination and Testing became effective on November 5, 2021. However, just one day after on November 6, the Fifth Circuit Court of Appeals issued an emergency stay of the OSHA ETS that applies nationally. While the current fate of the OSHA ETS is uncertain, employers are well-advised to become familiar with the ETS and prepare now as if the standard will become effective.

In addition to the release of the OSHA ETS standard, the U.S. Centers for Medicare & Medicaid Services (CMS) issued another set of requirements for healthcare workers in facilities that participate in Medicaid and Medicare. The CMS’s interim final rule (IFR) is an emergency regulation that took effect on November 5, 2021.

This alert provides a summary of key requirements under the OSHA ETS and the CMS IFR.

OVERVIEW OF OSHA ETS REQUIREMENTS

Employers With 100 or More Employees Are Covered

The OSHA ETS generally covers private sector employers with 100 or more employees. Part-time workers, employees who work from home and temporary and seasonal employees directly employed by the company must be included in the headcount when determining whether the employer is covered. Independent contractors are not included. The ETS does not apply to federal contractors covered by the federal contractor mandate (i.e., federal contractors are covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors) or to healthcare employers covered by the Healthcare ETS issued by June in 2021.

Employees Must Be Vaccinated or Subject to Weekly Testing

The ETS requires employers to adopt, implement and enforce a written policy implementing one of the following:

1. A mandatory COVID-19 vaccination requirement for all employees; or
2. A requirement that employees must submit to weekly COVID-19 testing, show a negative test and wear masks while working.

The ETS vaccine or testing mandate does not apply to employees who work remotely from home or other locations where they are not in the presence of other employees or customers, and those who work exclusively outdoors. However, these employees are still included in the employee headcount in determining whether the ETS applies. Also, employees with legally recognized medical and religious exemptions may be excused from being vaccinated, but would be subject to the weekly testing requirement.

Employers Must Provide Employees Reasonable Paid Time Off

The OSHA ETS requires employers to provide reasonable paid time off (up to four hours) to enable employees to get the vaccine, and provide reasonable time and sick leave to recover from any negative side effects employees experience from the vaccine. Workers must complete the vaccination regimen by January 4, 2022.
Employees who are subject to weekly testing must be removed from the workplace if the employee cannot produce a negative COVID-19 test or tests positive for COVID-19.

Other Requirements

The ETS comes with significant recordkeeping, document retention and reporting requirements for covered employers. For example, employers must maintain employee vaccination records and COVID-19 test results for employees subject to weekly testing. Employers must also provide certain information to employees on vaccines and the requirements of the OSHA ETS. Additionally, employers must report any work related COVID-19 fatalities and hospitalizations to OSHA within a specified time. Employers may face significant penalties from OSHA for non-compliance with the ETA.

Deadlines for Compliance

Assuming the Fifth Circuit Court of Appeals stay is lifted and no changes are made to the OSHA ETS, employers must comply with most requirements by December 5, 2021. This includes establishing a written vaccination policy that: (1) requires employees to report positive COVID-19 tests; (2) removes from the workplace any employees who test positive; (3) require employees who are not fully vaccinated to wear a face covering at work; and (4) provide employees with information about the ETS and certain other information such as workplace policies and procedures, vaccination efficacy, and the possibility for criminal penalties for supplying false information. Employers must also determine the vaccination status of each employee, provide paid time off for employees to get vaccinated, and establish a reporting policy and recordkeeping policy for COVID-19 related records. The deadline for requiring full vaccination status and weekly testing of employees to begin is January 4, 2022. Employees who have received a full course of vaccination shots by January 4 are exempted from testing.

OVERVIEW OF CMS IFR REQUIREMENTS

The CMS IFR is estimated to effect 17 million workers and applies to healthcare workers at facilities that participate in Medicaid and Medicare including Ambulatory Surgery Centers, Community Mental Health Centers, Comprehensive Outpatient Rehabilitation Facilities, Critical Access Hospitals, End-Stage Renal 2 Disease Facilities, Home Health Agencies, Home Infusion Therapy Suppliers, Hospices, Hospitals, Intermediate Care Facilities for Individuals with Intellectual Disabilities, Clinics, Rehabilitation Agencies, and Public Health Agencies as Providers of Outpatient Physical Therapy and Speech-Language Pathology Services, Psychiatric Residential Treatment Facilities (PRTFs) Programs for All-Inclusive Care for the Elderly Organizations (PACE), Rural Health Clinics/Federally Qualified Health Centers, and Long Term Care facilities. Unless exempted due to medical or religious reasons, all workers employed by such facilities, except those whose work is 100% remote, must have their first dose of a two-dose COVID-19 vaccine or a one-dose COVID-19 vaccine by December 5, 2021.

Workers must be “fully vaccinated”, by January 4, 2022.

Similar to the OSHA ETS, covered facilities must develop, by December 5, 2021, a plan and procedure for requiring employees to obtain the COVID-19 vaccine, collecting and storing proof of vaccination status, reviewing medical and religious exemptions, and implementing additional precautions for any staff who are not vaccinated, in order to mitigate the transmission and spread of COVID-19. The CMS IFR, however, is not identical to the ETS. For instance, there is no weekly testing option for workers in these facilities.

For Connecticut employers, the CMS IFR comes off the heels of Governor Lamont’s Executive Order (EO 13G), which mandated certain workers to be vaccinated by September 27, 2021. You can find more information here.

For further information, please contact:

Nick Zaino
Partner
203.578.4270
nzaino@carmodylaw.com

Jasmine Cooper-Little
Associate (*Not yet admitted to practice in Connecticut)
203.784.3161
jcooper-little@carmodylaw.com

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

As some new laws became effective in 2021 and others take effect in 2022, it’s time for employers to update their employee handbooks. This article summarizes some developments that may require new policies or revisions to existing ones.

FMLA Policy: On January 1, 2022, Connecticut’s FMLA will be expanded to cover nearly all employers. The reasons why an employee may take job-protected leave also have been significantly expanded. Covered employers will need to either revise their FMLA policy or adopt a new policy if the employer was not previously covered under the state’s FMLA.

Salary Ranges: As of October 1, 2021, employers are required to provide the wage ranges for job positions to applicants prior to or when a conditional offer of employment is made, and to current employees upon their hiring or a change in the employee’s position. Employers must also provide wage ranges upon request. Employers should consider having a policy addressing this new requirement and noting that wage ranges may be periodically modified.

Drug and Alcohol Policy: Employers should review and update their drug and alcohol policy since adult recreational marijuana use is now legal in Connecticut. The new law includes some employment protections that will be effective on July 1, 2022 and generally restrict an employer from taking adverse action against an employee for using marijuana outside the workplace. However, the law exempts various employers and allows covered employers significant latitude to prohibit off-duty marijuana use provided the employer adopts and distributes a written policy.

Remote Work: With an increasing number of employees working remotely, employers are well-advised to revisit, or adopt, a policy setting forth the terms and conditions of remote work, including addressing the job positions that may be eligible for remote work and compliance with wage and hour laws.

Smoking Policy: As of October 1, 2021, employers must prohibit smoking and the use of electronic nicotine and cannabis delivery systems and vapor products in any area of any business under the employer’s control. Also, any outdoor smoking must be at least 25 feet away from the building. Employers should revise their smoking policy to address these changes and comply with new no-smoking signage requirements.

Non-Discrimination & Dress Code Policies: Connecticut’s passage of the CROWN Act changes the definition of the word “race” as it is used in anti-discrimination statutes to specifically include “ethnic traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.” Protective hairstyles include “wigs, headwraps and hairstyles such as individual braids, cornrows, locs, twists, Bantu knots, afros and afro puffs.” Employers should review their dress or appearance policy to ensure that it does not violate this law, either explicitly or by implication.

Age Inquiries of Prospective Employees: Employers with three or more employee are generally prohibited from requesting or requiring a prospective employee to provide their age, birthdate, or dates of attendance at or graduation from an educational institution. Employers should review their employment application form and hiring practices to ensure compliance.

Holiday Policy: Juneteenth (June 19th) is now considered a federal holiday. Employers may wish to revise their holiday policy to include this new federal holiday.

Voting Time: Employers must provide each employee two hours of unpaid time off to vote in any state election or special election for U.S. senator, representative in Congress, state senator or state representative. To be eligible, employees must request the time at least two working days in advance. Employer may wish to adopt a policy that addresses this new law.

Education Assistance Program: Connecticut now requires employers with 100 or more employees to notify their Connecticut resident employees if the employer offers an education assistance program and provide details of the plan. Covered employers should ensure that their policy is compliant.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

Premium discounts and surcharges on employee contributions to employer-sponsored health plans based on COVID-19 vaccination status has become a hot topic. On October 4, 2021, the Departments of Labor, Health and Human Services, and Treasury issued FAQs regarding the application of the HIPAA wellness program rules to vaccine-related premium surcharges and discounts.

HIPAA prohibits group health plans from discriminating against participants with respect to eligibility, premiums or contributions based on any “health factor”. However, the HIPAA rules specifically allow employers to provide premium discounts, rebates or modification of cost-sharing requirements for wellness programs that meet certain requirements.

Here are a few key takeaways from the FAQs:

Wellness Program: The FAQs clarify that vaccine premium surcharge or discount programs are “activity-only” wellness programs that must comply with the five criteria for activity-only programs.  Among these requirements, the reward or surcharge must not exceed 30% of the total cost of employee-only coverage.  The program must also provide a reasonable alternative to qualify and notice of its availability to employees. Based on the example provided in the FAQs, an acceptable alternative to vaccination is to allow individuals to qualify if they attest to complying with the CDC’s mask guidelines for unvaccinated individuals because it is unreasonably difficult due to a medical condition or medically inadvisable to obtain a COVID-19 vaccination.

The FAQs also note that the alternative standard is not overly burdensome and is designed to prevent infection with COVID-19. In addition, the plan in the example maintains a toll-free hotline to provide information about the vaccine, assist in scheduling vaccine appointments and/or fulfilling the reasonable alternative standard (which demonstrates that the program is designed to promote health or prevent disease by ensuring that the program is not overly burdensome).

Other Laws: Although compliance with the HIPAA guidance is important, the guidance reminds us that such compliance is not determinative of compliance with any other State or Federal law, including the Americans with Disabilities Act (ADA).  For example, compliance with the HIPAA wellness program rules does not relieve an employer from the ADA’s limits on conducting medical examinations or making disability-related inquiries to employees in connection with a wellness program (previously covered here).

Limitation on Eligibility or Coverage Not Permitted: Finally, the FAQs clarify that plans may not discriminate when it comes to eligibility for benefits or coverage based on whether an individual obtains a COVID-19 vaccination.  There is no wellness plan exception for eligibility or coverage based on a health factor.

Affordable Care Act (ACA) Issues: Note that for purposes of determining affordability of coverage under the ACA, employers must assume that no one qualified for the premium discount or that everyone was surcharged. Thus, if the employer’s lowest cost coverage was just meeting the ACA standards for affordability, a wellness program could negatively impact this ACA requirement.

If you have questions about vaccine incentive and surcharges in health plans, the FAQs, or the  Affordable Care Act, please contact a member of Carmody’s Labor & Employment group.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

Connecticut Governor, Ned Lamont recently issued a new Executive Order (EO 13G) that requires certain employees be vaccinated for COVID-19 by September 27, 2021. The mandate applies to: current and future state employees, state hospital employees, public and non-public pre-K to grade 12 school system employees and child care center, group child care home, family child care home, or youth camp employees, as well as certain contractors conducting business in state, school, or child care facilities (“subject employees”). The Connecticut Department of Public Health (“DPH”) recently issued a guidance that provides clarifications.

Carmody’s Labor and Employment team has received many inquiries from covered employers. We share below some frequently asked questions. It is important to note that the following questions do not cover guidance for state agency or state hospital employees, which have more rigid requirements.

1. Must all current employees be vaccinated by September 27, 2021?

No. Subject employees may choose weekly testing in lieu of vaccination. Employees choosing testing must submit weekly PCR or antigen SARS-CoV-2 test results from a test administrated and reported by a licensed clinical laboratory, pharmacy-based provider, or other healthcare provider. The test results must be submitted within 72 hours of the test being administered.

Subject employees, in the process of becoming fully vaccinated must provide documentation of a first dose (of a two dose vaccine) and proof of appointment to receive the second vaccine.

Subject employees may also obtain medical or sincerely held religious belief exemptions.

2. What must I collect from my current employees by September 27, 2021?

On or before September 27, 2021, covered employers must receive from each and every subject employee proof of vaccination and a signed declaration of authenticity. Vaccination proof includes the valid CDC vaccination card, vaccine provider record, Vaccine Administration Management System certificate, or immunization record from CT WiZ.

If a subject employee requests a medical exemption, the employer must receive a medical exemption form that is signed by either the employee’s MD, DO, PA, or APRN. A sincerely held religious belief exemption must also be documented in writing.

If a subject employee chooses to be tested in lieu of receiving the vaccine, the employee must submit weekly testing results in accordance with the information in Question 1.

Covered employers must develop a secure method for employees to submit their testing results, vaccination documentation, certificate of authenticity, and/or medical or sincerely held religious exemption documentation.

3. Are employees subject to a medical or sincerely held religious exemption required to be tested weekly? 

Yes. The Executive Order requires that any subject employee who is not fully vaccinated as of September 27, 2021 complete weekly testing in accordance with the procedure described in Question 1. The DPH guidance further clarified by specifically stating that subject employees with medical or sincerely held religious belief exemptions must comply with testing requirements.

4. Do the requirements change for employees hired after September 27, 2021? 

Yes. Employees hired after September 27, 2021 may not choose testing as an alternative. However, employees hired after September 27, 2021 with medical or sincerely held religious belief exemption remain subject to testing requirements.

5. What happens if my current employee has not submitted required documentation by September 27, 2021 or fails to submit timely testing results? 

An employee bears the responsibility of providing required documentation. A covered employer may not allow a non-compliant subject employee on premises.

6. If an employee chooses testing, who pays? 

While neither the Executive Order nor the DPH guidance directly address this issue, it appears that the employee would bear the cost of testing. This is a costly requirement as insurers are not required to provide free testing when an employee is not experiencing symptoms or has not been exposed to COVID-19. We anticipate further guidance on this issue to combat the potential conflict with wage and hour laws. There also is no guidance on payment for testing for employees subject to a medical or sincerely held religious belief exemption.

7. Are there any testing requirement waivers? 

Yes. Unvaccinated subject employees who were diagnosed with COVID-19 in the past 90 days may receive a waiver from testing signed by their healthcare provider. Upon expiration of the waiver, the subject employee will immediately be required to complete weekly testing if not fully vaccinated.

8. How am I required to document employee compliance? 

Employers are required to maintain a master roster of all subject employees and the vaccination status of each employee. If a subject employee has chosen the testing alternative, the master roster must contain the weekly results. Valid waivers and exemptions must also be documented on the roster. See Appendix A-E of the DPH guidance for sample forms.

9. Is this requirement the same as President Biden’s requirement? 

No. President Biden’s “Path out of the Pandemic” vaccination requirement (only effective on the publication of an Emergency Temporary Standard) applies to employers with more than 100 employees.

10. How long will this requirement last? 

At the time of this publication, Governor Lamont’s executive authority is scheduled to end on September 30, 2021, however, it is anticipated that this executive authority will be extended to February 9, 2022 pursuant to a legislative vote occurring in the Connecticut House of Representatives on Monday, September 27, 2021 and the Connecticut Senate on Tuesday, September 28, 2021.

Carmody’s Labor & Employment attorneys are available to help you with developing policies, procedures and notices to address and comply with this executive order and any upcoming directives.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

On September 9, 2021, President Biden announced a series of proposals to combat the uptick in the COVID-19 pandemic more aggressively. The Plan outlines six main components, some of which will impose new requirements on employers. Included is a plan for “Vaccinating the Unvaccinated,” a rule that will require private employers with 100 or more employees to mandate that their workers be vaccinated (subject to medical and religious exemptions) or undergo weekly testing. The new rule will also require vaccination for most federal employees, federal contractors’ employees and most healthcare workers, without a testing option. The U.S. Department of Labor Occupational Safety and Health Administration (OSHA) is tasked with issuing an Emergency Temporary Standard (ETS) to implement these rules.

Employers will also be required to provide paid time off for employees to be vaccinated or recuperate from any vaccine-related adverse effects. Employers who fail to comply with the vaccination mandate or the need for paid time off face penalties of up to $14,000 per violation.

While these proposals will have significant impacts – particularly on employers – there are a number of unknowns. In particular, it is unclear whether employers or employees will be responsible for paying for the weekly testing required for employees who cannot be vaccinated. The parameters of the paid time off is similarly unclear.

In addition to reducing the number of unvaccinated through employer mandates, the proposals also include:

  • Preparation to roll out booster shots in two weeks;
  • Pressure for states to adopt vaccination requirements for all school employees;
  • Strengthening the COVID Economic Injury Disaster Loan (EIDL) program, which provides long-term, low-cost loans, and is estimated to help 150,000 small businesses; and
  • Streamlining the Paycheck Protection Program (PPP) loan forgiveness for small loans.

Formal regulations are expected to be issued in the coming weeks. Carmody will continue monitoring these developments.

In the meantime, if you have any questions about President Biden’s proposals, complying with the requirements or would like more information about mandating vaccination, please contact a member of the Labor & Employment group.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

Plan administrators have until September 15, 2021 to distribute notices of the approaching end of the COBRA subsidy period under the American Rescue Plan Act (“Rescue Plan Act”), which by law expires after September 30, 2021.

As we previously discussed in March and April of this year, the Rescue Plan Act requires that Assistance Eligible Individuals receive a Notice of Expiration of Period of Premium Assistance between 15 and 45 days before the end of their subsidized COBRA under the Rescue Plan Act.  With the conclusion of the subsidy program on September 30th just around the corner, this means that September 15th is the latest possible day that a plan administrator may distribute the Expiration Notice to individuals receiving the subsidy through the end of the month.

A copy of the model notice from the U.S. Department of Labor (“DOL”), which administrators can use to fill in the applicable information and send to eligible individuals, can be found here.

If you have questions about the approaching end of the COBRA subsidy period on September 30th, or completing the model notice published by the DOL, please contact a member of Carmody’s Labor & Employment group.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

As the Delta variant has caused another wave of COVID cases and hospitalizations, employers are again asking whether they can mandate that their employees become vaccinated against COVID-19 and what other steps should be taken to protect those who are immunocompromised or who remain unvaccinated. Recently, the U.S. Department of Justice (“DOJ”) and the Occupational Safety and Health Administration (“OSHA”) issued guidance on these issues.

As most employers are aware, in May 2021, the Equal Employment Opportunity Commission (“EEOC”) issued guidance that employers may require their employees to be vaccinated for COVID-19 before physically entering the workplace, so long as the employer continues to provide reasonable medical and religious accommodations.

However, when the Food and Drug Administration (“FDA”) approved the COVID-19 vaccines under its “emergency use authorization” (“EUA”), it required that COVID-19 vaccine recipients receive a fact sheet specifically stating that receiving a vaccine is a choice. This was in the context of clarifying that an individual’s choice of whether or not to receive the vaccine would not impact the medical care he or she might later need. However, the statement caused confusion among employees whose employers had mandated vaccination for work-related purposes.

To resolve the confusion, the Department of Justice (“DOJ”) recently issued a Memorandum Opinion concluding that the fact sheet only ensures that receipts are “‘informed’ of certain information, including ‘the option to accept or refuse administration of the product’” and “does not prohibit public or private entities from imposing vaccination requirements for vaccines that are subject to EUAs.”  The full DOJ Memorandum can be found here.

On August 13, 2021, OSHA updated its workplace COVID guidance suggesting that “employers consider adopting policies that require workers to get vaccinated or to undergo regular COVID-19 testing – in addition to mask wearing and physical distancing – if they remain unvaccinated.”

OSHA specifically recommends that employers adopt policies that fully vaccinated individuals experiencing a close COVID-19 contact be allowed to remain in the workplace but be tested “3-5 days after exposure and be required to wear face coverings for 14 days” following the close contact or until the employee receives negative COVID-19 test results. OSHA further recommends that employees who are not fully vaccinated be removed from the workplace, and subject to a 14 day quarantine, following a close COVID-19 contact.  These unvaccinated employees may be permitted to return to work after seven days only if they have tested negative immediately after the exposure and then again five days later.

The takeaway for employers is that the DOJ and OSHA have joined the EEOC in taking the position that in most cases, employers can mandate vaccination for employees working on-site.

If you have any questions about the DOJ or OSHA guidance or would like more information about mandating vaccination, please contact a member of the Labor & Employment group.

 

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.

In 49 out of 50 states (Montana being the exception) the default status of employment arrangements between employers and employees is “at will.” This ostensibly means what it sounds like it means—i.e., employees can quit whenever and for whatever reason they choose, and employers can fire an employee for any reason so long as it’s not illegal. For employees, this is generally true. There is not much that an employer can do to prevent someone from quitting (although, depending on the jurisdiction, they can implement policies requiring proper notice be given or accrued paid time off will be forfeited). However, for employers, the situation is more complicated. There are a host of reasons why terminating an employee could be deemed improper, and an employer who is not aware of them opens themselves up to potential legal liability.

An employer cannot fire someone based on that employee’s status as a member of a protected class. Some examples of protected classes include race, religion, national origin, gender, sexual orientation, gender identity or expression, disability status, pregnancy, marital status, age, and veteran status. Employers sometime underestimate the scope of these protected classes. For example, let’s say that you want to fire your long-time employee John, who is 60 years old. If you had no reason to fire John and you retained a younger female employee, Jane, who is 40 years old performing a similar function, John may be able to bring a claim against you for age or gender discrimination.

Similarly, an employer cannot fire an employee if it would violate public policy. For example, an employer cannot fire an employee for reporting illegal activity or refusing to violate workplace safety guidelines. Additionally, an employer cannot fire an employee for exercising various rights, such as the right to serve on a jury, perform military duty, or take reasonable time off work for a disability or a covered health condition.

Finally, an employer cannot fire an employee “at-will” if they have a specific contract in place stating their scope and term of employment. These types of contracts are generally in writing and most common among union employees and executives. In the absence of a written contract, an employer may still open themselves up to liability if they represented to an employee that the employee would not be fired for a certain amount of time and the employee reasonably relied on that promise. For example, let’s say you hired Sally to be a new project manager and during the hiring process you said “Don’t worry, this role takes a little getting used to. You won’t have to worry about being fired for the first year while you learn the ropes.” If you then terminate Sally’s employment after three months for poor performance, Sally could bring a lawsuit alleging breach of contract.

So, when can you terminate an employee’s employment? Again, while not strictly legally necessary, it is certainly a best practice to terminate an employee’s employment for cause. Acceptable causes would be poor work performance, misconduct, a downturn in business, or a consistent failure to improve based on past performance reviews. If you want to terminate an employee, having a process in place that creates a documented record showing why that employee was fired will be helpful in limiting potential legal exposure. Ideally, the disciplinary process would involve written warnings, performance reviews, and opportunities for improvement. If the employee fails to achieve the goals set forth through this process (and those goals are clear and fair), termination would then be appropriate. Of course, there are common sense exceptions to this general rule of thumb if an employee’s conduct is especially egregious.

Ultimately having a clear, fair disciplinary process in place which creates a record that the employer can retain will provide the best protection against employer liability, but potential liability can never be eliminated entirely.

This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.