First and foremost, we hope everyone is doing well and taking all appropriate measures to safeguard the health and safety of employees, clients, visitors and others with whom you do business. You should be closely monitoring developments at the national, state and local level, communicating with your employees regularly, and making necessary adjustments in how you conduct your business. That is what we are doing at Carmody.

We know that many of you have received information about a Bill that Congress is expected to pass that would provide paid sick leave and paid FMLA for employees and that would provide a tax credit for employers. The Bill has been passed by the House and is expected to be passed by the Senate and signed into law as early as today. As soon as that occurs, we will send an e-alert summarizing the new requirements.

In the meantime, our attorneys have been fielding many questions from clients about a number of issues related to COVID-19. Here are some of the topics we have been addressing and are prepared to assist you with should you have any questions:

-Privacy Issues Related to Medical Inquiries, Testing and Sharing Information
-Implementing and Planning Reductions in Force
-Possible WARN Act Obligations
-Telecommuting/Remote Work Issues
-Discrimination and ADA Issues
-Unemployment Compensation, Furloughs, Shared Work and Partial Unemployment
-COBRA/Continuation of Benefits for Furloughed Employees
-Use of PTO, Sick Leave, FMLA and other leave laws and policies
-Wage and Hour Issues
-Labor Law Issues/Duty to Bargain
-OSHA/Workplace Safety Obligations
-Workers’ Compensation Issues
-Immigration Issues
-Imposing Travel Restrictions
-Social Distancing and Workplace Hygiene Policies
-First Amendment Issues
-Contractual Obligations/Force Majeure Issues

We are here to help you during this difficult period of uncertainty. Please feel free to contact any member of our Labor & Employment team.

D. Charles Stohler
(203) 575-2626; cstohler@carmodylaw.com

Giovanna T. Weller
(203) 575-2651; gweller@carmodylaw.com

Domenico Zaino, Jr.
(203) 578-4270; dzaino@carmodylaw.com

Alan H. Bowie
(203) 784-3117; abowie@carmodylaw.com

Stephanie E. Cummings
(203) 575-2649; scummings@carmodylaw.com

Maureen Danehy Cox
(203) 575-2642; mcox@carmodylaw.com

Pamela Elkow
(203) 252-2672; pelkow@carmodylaw.com

Vincent Farisello
(203) 578-4284; vfarisello@carmodylaw.com

Sarah S. Healey
(203) 578-4225; shealey@carmodylaw.com

Lauren M. Hopwood
(203) 784-3104; lhopwood@carmodylaw.com

Howard K. Levine
(203) 784-3102; hlevine@carmodylaw.com

Mark F. Williams
(203) 575-2618; mfwilliams@carmodylaw.com

Holly G. Wheeler
(203) 784-3158; hwheeler@carmodylaw.com

Sherwin M. Yoder
(203) 784-3107; syoder@carmodylaw.com

We have received many requests from clients on how to handle the various issues in the workplace stemming from the COVID-19 (the “Coronavirus”), including how and what to communicate to employees.  In response to the many requests, we have developed the following points you should be prepared to address with your employees.

While the situation is rapidly evolving, you should be prepared to discuss:

  1.  you have been closely following the developments of the pandemic, including any declarations of a state of emergency by the President, the Governor and the World Health Organization,
  2.  you are monitoring school closures,
  3. your primary goal is the health and safety of your employees, and
  4. you are planning for potential disruptions to your business, including any contingency plans such as employees working from home for temporary or extended periods.

Policies and Specific Measures

In addition, you should be prepared to discuss any policies and specific additional measures your company is implementing to respond to the pandemic.  Below is a summary of the common issues that employers are dealing with.

Sick Employees

You should encourage all employees who are feeling sick to stay home.  Employees should not report to work if they are experiencing a fever, cough, sore throat, runny nose, body aches, headaches, chills and/or fatigue.  You should inform your employees that anyone who reports to work with these symptoms will promptly be sent home.  Further, employees who have or may have been exposed to the virus or live with someone who has or may has been exposed to the virus, should be encouraged to stay home for at least 14 days.  Employees should be encouraged to use their reasonable judgment and rely on the advice of medical professionals in determining whether they have been exposed.

Meetings

In-person meetings of 10 or more people should be strongly discouraged.  If you have the technological capability, employees should be encouraged to use company video conferencing software and/or video conference rooms to conduct meetings.  If you allow non-employees to use your premises or conference space, you should consider disallowing this practice.  You should also strongly consider postponing or cancelling all nonessential activities until a later date.

Travel

All nonessentials travel such as conferences and other forms of traveling regularly done for your business outside the state or country should be avoided, if possible.  Anyone who travels to an affected area, particularly a Level 3 area under the Centers for Disease Control and Prevention (“CDC”), should not be allowed to return to work until he or she has quarantined for at least 14 days.  The date of quarantine should begin on the first day that the employee returns from the affected area.  You should consider additional quarantines depending on the circumstances of travel or exposure, on a case-by-case basis.  You should request that visitors fill out a form disclosing recent travel and potential exposure.

Sanitizing the Workplace

We recommend that you place hand soaps and antibacterial sanitizers in common areas.  Following a report of employee exposure, you should have your business premises cleaned thoroughly to prevent possible transmission.

Working From Home

One of the most pressing concerns is the possibility of temporary or extended closures and the necessity of employees working from home.  Below are some key measures to consider regarding attendance and expectations for hours worked:

  1. Unless otherwise notified, normal attendance and leave policies should remain in place.
  2. Hourly non-exempt employees who are permitted to work from home should be advised to keep accurate records of all hours worked and reminded that they will be paid only for hours worked.
  3. Exempt employees who are permitted to work from home should be paid their full salary if they are working. If there are days that the employee cannot work, you should apply your leave policies and require exempt employees to use available leave time.

If capable, employees should be given the necessary equipment to work from home such as computers, iPads, tablets, etc.  Remind your employees to protect this equipment and to keep it sanitary to prevent possible transmission upon return.  You should also make available IT services so your employees can continue to work without interruption.

School Closures

The rapid spread of the Coronavirus has led to school closings at every level of education.  Employees may want to take time off as a result.  Employees should be advised that the attendance and leave policies remain in place and that they are required to use applicable leave if they are not working.  Exceptions to your leave policies should be made on a case-by-case basis considering all of the circumstances.

Unemployment

Employees are eligible for unemployment in certain circumstances.  Specifically, employees are eligible if they are asymptomatic for Coronavirus, but you require them to be quarantined and the employee is not working from home and also if they are temporarily laid off.  Employees are currently unable (absent a legislative change to the unemployment compensation system) to collect if they voluntarily decide to stay home (e.g., for fear, childcare, etc.)

Conclusion

We are continuing to monitor the developments associated with the pandemic and will continue to provide updates on best practices, as necessary.  Employers are encouraged to continue to exercise caution in maintaining a healthy and safe workplace.  If you have any questions, please contact one of the Labor and Employment Team members below.

If you have any questions, please contact any member of the Carmody Labor and Employment Practice Group for more information:

D. Charles Stohler
(203) 575-2626; cstohler@carmodylaw.com

Giovanna T. Weller
(203) 575-2651; gweller@carmodylaw.com

Domenico Zaino, Jr.
(203) 578-4270; dzaino@carmodylaw.com

Alan H. Bowie
(203) 784-3117; abowie@carmodylaw.com

Stephanie E. Cummings
(203) 575-2649; scummings@carmodylaw.com

Vincent Farisello
(203) 578-4284; vfarisello@carmodylaw.com

Sarah S. Healey
(203) 578-4225; shealey@carmodylaw.com

Howard K. Levine
(203) 784-3102; hlevine@carmodylaw.com

Mark F. Williams
(203) 575-2618; mfwilliams@carmodylaw.com

Holly G. Wheeler
(203) 784-3158; hwheeler@carmodylaw.com

Dear Clients,

We have heard from many of you about the ever-changing employment issues created by the COVID-19 pandemic and the effect it is having on your businesses. We are grateful that you have turned to us for advice and guidance, and we will continue to be here for you. We have prepared a separate e-alert on our suggestions on what employers should do now. We also sent an e-alert recently to our school clients, and it is linked here because the information may be applicable for employers generally.

As we monitor the evolving COVID-19 developments, we wanted to let you know what we are doing to assure you of our continued availability. Should any of our office locations close, all of our attorneys have the ability to work remotely, without interruption. To protect our staff, clients and visitors, our firm has limited nonessential business travel, restricted return to work for individuals who may have been exposed to the virus or are experiencing symptoms, and implemented sanitizing products and policies. We are also closely monitoring the guidance issued by the CDC, WHO and other federal, state and local authorities.

Should you have any questions or need any advice, please do not hesitate to contact us. For your convenience, here is the contact information, including cell phone numbers, for the heads of our Employment Team:

Chuck Stohler
(203) 575-2626; (203) 592-7818; cstohler@carmodylaw.com

Giovanna Weller
(203) 575-2651; (203) 217-6634; gweller@carmodylaw.com

Nick Zaino
(203) 578-4270; (203) 558-5111; nzaino@carmodylaw.com

Most importantly, we wish you, your family and your workplaces continued good health and safety.

The U.S. Supreme Court announced on Monday, March 2, that it will again review the constitutionality of the Affordable Care Act’s (ACA) individual mandate, and whether, if the mandate is unconstitutional, it can be separated from the rest of the ACA.

In January’s blog, we reported that in Texas v. U.S., the individual mandate of ACA, the requirement for all individuals to be covered by health insurance, was found by the Fifth Circuit Court of Appeals to be unconstitutional. Originally, the district court found that since the individual mandate was essential to ACA, the entire Act was unconstitutional.  On December 18, 2019, the court of appeals affirmed that the individual mandate was unconstitutional, but it did not uphold the decision to strike down the entire ACA.  The court remanded that aspect of the case back to the federal district court to determine whether the mandate can be severed from the rest of ACA.

On January 3, certain Democratic states’ attorneys general and the U.S. House of Representatives, defending ACA, filed petitions requesting that the Supreme Court weigh in on the constitutionality of the mandate, as well as the viability of the remainder of ACA.

The Republican states’ attorneys general, along with the Trump administration, filed a petition with the Supreme Court requesting that the Court not hear the case.  The petition also requested that if the Court does hear the case, that it affirm the district court’s decision overturning the entire ACA.

While the timing of when the Court will hear the case is not completely clear, it is likely to be in the next term, beginning in October. Earlier in the current term, the Court declined to hear the case on an expedited basis. Therefore, any decision in the case is unlikely to come until after the Presidential election this fall.

As we previously stated, employers should continue to comply with ACA, including the requirement for large employers (over 50 full-time employees) to provide affordable insurance to its full-time employees and report such coverage to the IRS (Form 1095-C). All other ACA provisions, such as guaranteed issue, no annual or lifetime limits, age 26 coverage for adult children, etc., remain in effect.

Stay tuned!

This week, the National Labor Relations Board (“NLRB”) published its long-awaited rule regarding joint-employer status under the National Labor Relations Act.

The final rule provides:

  • to be a joint employer, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment (“terms and conditions”) of another employer’s employees.
  • a business who exercises direct control over another employer’s workers will not be considered a joint employer if such control is only “limited and routine.”
  • indirect and contractually reserved control over essential terms and conditions and control over mandatory subjects of bargaining should only be considered to the extent they supplement and reinforce evidence of the business’s exercise of direct and immediate control.
  • definitions of key terms. Under the finale rule, terms and conditions are defined as “hiring, firing, discipline, supervise, direction, wages, benefits, and hours of work.”  Substantial means that such control is not exercised on a “sporadic, isolated, or de minimis basis.”  Substantial direct and immediate control means direct and immediate control that has a regular or continuous consequential effect on an essential term or condition of employment of another employer’s employees.
  • what does and does not constitute “direct and immediate” control of terms and conditions.

The final rule reverses the Obama-era standard set forth in the Browning-Ferris decision, which dramatically expanded joint-employer status.  The new rule is more employer-friendly and returns to a standard more consistent with the NLRB’s interpretation of joint-employer status prior to Browning-Ferris.

The final rule will take effect on April 27, 2020.  We expect that there may be lawsuits challenging this rule and will update you with further developments.

The California Supreme Court (“Court”) recently ruled that Apple, Inc. is required to pay its workers for time spent waiting for and undergoing security screenings before leaving the workplace.  The Court found that the company’s policy requiring employees to clock out before undergoing two daily bag checks added up to approximately 90 minutes of unpaid work per week and was illegal.

Apple employees are required to go through a security bag check every time they leave the store to detect and prohibit theft.  The search can range from five to 45 minutes, depending on the availability of security guards and number of employees trying to leave.  If the bag contains personal technology, the device must be verified as belonging to the employee.  California law requires employers to pay their employees for all “hours worked.”  The Court determined that time spent waiting for and undergoing those required searches of personal bags is compensable by state law.

The ruling will have economical and practical impacts on California employers.  In order to mitigate the effects, employers will need to make any bag checks as expeditious and efficient as possible or consider removing them altogether.  Employers could also offer off-site storage for personal items to eliminate bringing bags into work or set a size limit on items brought to work.  Similar to airport and sports events security checks, employers could require employees to use clear bags for easier searches.

Stay tuned!

On January 31, 2020, the United States Citizenship and Immigration Services (USCIS) published a new version of the Form I-9, Employment Eligibility Verification. Employers may begin using this version of the form immediately and are required to begin using it by April 30, 2020.

The Form I-9 is used by employers to verify the identity of employees (both citizens and non-citizens) and confirm that the employee is authorized to work in the United States.  USCIS has made the following minor changes to the form and its instructions:

  • Added Eswatini (formerly the Kingdom of Swaziland) and North Macedonia (formerly Macedonia) to the Country of Issuance field in Section 1 and the foreign passport issuing authority field in Section 2 because those countries recently changed names (these changes are only visible when completing the fillable Form I-9 on a computer);
  • Clarified who can act as an authorized representative on behalf of an employer;
  • Updated the USCIS website addresses;
  • Provided acceptable document clarifications;
  • Updated the process for requesting the paper Form I-9; and
  • Updated the DHS Privacy Notice.

Although the new form must be used beginning in April, it is marked “(Rev. 10/21/2019).”  Employers can download the new form here.

The novel coronavirus first appeared in Wuhan, China in December 2019. Since then, approximately 430 individuals have died as a result of the virus and over 20,700 people have been infected.  Eleven individuals in the United States (as of the date of this writing) have been diagnosed with the virus, including a Massachusetts resident and student who recently traveled back from Wuhan, China.

The World Health Organization (WHO) and the Trump administration declared a public health emergency over the outbreak. The United States also stated that it would temporarily bar entry to the United States of foreign nationals who have recently traveled to China, and U.S. citizens returning from China’s Hubei province will be subject to a mandatory 14-day quarantine. The State Department has issued a Level 4 travel advisory stating, “Do not travel to China due to the novel coronavirus first identified in Wuhan, China.”

Should employers be worried? How should employers respond? The federal Occupational Safety and Health Administration (OSHA) has stated that, “most American workers are not at significant risk of infection.” Therefore, employers should not “worry” or overreact, but should be well informed, take steps to minimize risks, and be prepared to respond based on the circumstances.

The Basics About the Coronavirus

According to the Centers for Disease Control (CDC), symptoms of the virus may appear in as few as two days or up to 14 days after exposure. Symptoms include fever, cough, and shortness of breath. The virus can be spread from person-to-person, similar to how the flu spreads, such as through sneezing and coughing. The CDC has stated that it currently is not clear if people can get the virus by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes.

What Employers Can Do to Minimize Risks

Promote Good Workplace Hygiene. There is currently no vaccine to prevent coronavirus. Therefore, the CDC recommends taking everyday preventive actions to help prevent the spread of respiratory viruses such as:

  • Wash hands often with soap and water.
  • Use an alcohol-based hand sanitizer with at least 60% alcohol.
  • Avoid close contact with people who are sick.
  • Stay home when sick.
  • Cover a cough or a sneeze with a tissue.
  • Clean and disinfect frequently touched objects and surfaces.

Employers should provide hand-sanitizers in the workplace and should advise employees on best hygiene practices and prevention measures.

International Travel. OSHA’s general duty clause requires employers to furnish to each worker “employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.” Given the State Department’s Level 4 warning, employer should not require (or permit) employees to travel to China for business until further notice. Employers should also carefully evaluate employee business travel to any country that has been affected by the virus and consider other options, such as conducting meetings by video conference.

Personal Travel. While an employer can control work-related travel, an employer’s legal ability to restrict an employee’s personal travel is much less clear. However, an employer should consider requiring an employee returning from travel to China or other affected areas to stay out of work, or to work from home, during the incubation period.

Conclusion

This issue, like prior issues related to SARS and the Swine flu, requires employers to balance their legal obligation to provide a safe workplace with their obligation to avoid violating privacy and discrimination laws. The best way for employers to walk this tightrope is to be well-informed about the facts, as published by official government agencies like the CDC and OSHA, and not act on assumptions or misinformation. Employers should continue to closely monitor this situation as it evolves. 

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 January 12, 2020, the United States Department of Labor (“DOL”) announced a final rule revising its regulations interpreting joint-employer status for purposes of the Fair Labor Standards Act (“FLSA”).  The final rule will take effect on March 16, 2020.

Background

Under FLSA, employers are required to pay employees at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 in a workweek.  Employers are defined under the FLSA as “any person acting directly or indirectly in the interest of an employer in relation to an employee.”  Thus, an employee may have one or more joint employers.

New Rule

The DOL’s final rule continues to recognize two scenarios under which the agency identifies joint employer status. In the first scenario, employers are considered joint employers where an employee performs work for one employer that simultaneously benefits the other employer.  In the second scenario, employers are considered joint employers where one employer employs the employee for one set of hours in a workweek and the other employer employs the same individual for a separate set of hours in the same workweek.

With respect to the first scenario, the final rule adopts a four-factor balancing test for determining joint employer status. The DOL will consider whether the potential joint employer:

  • hires or fires the employee;
  • supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  • determines the employee’s rate and method of payment; and
  • maintains the employee’s employment records.

The final rule also provides clarity on the four-factor analysis.  It provides:

  • no single factor is dispositive, and each factor is to be weighed based on the circumstances of the case;
  • mere maintenance of an employee’s employment records alone will not establish joint-employer status; and
  • additional factors may be relevant to the analysis but only when they show whether the potential joint employer is exercising significant control over the terms and conditions of the employee’s work or is otherwise acting directly or indirectly in the interest of the employer in relation to the employee.

The final rule also identities several factors that are not relevant to the determination of joint employer status.  The factors are:

  • operating as a franchisor or entering into a brand and supply agreement, or using a similar business model;
  • the potential joint employer’s contractual agreements with the employer requiring the employer to comply with its legal obligations or to meet certain standards to protect the health or safety of its employees or the public;
  • the potential joint employer’s contractual agreements with the employer requiring quality control standards to ensure the consistent quantity of the work product, brand, or business reputation; and
  • the potential joint employer’s practice of providing the employer with a sample employee handbook, or other forms, allowing the employer to operate a business on its premises (including “a store within a store” arrangements), offering an association health plan or association retirement plan to the employer or participating in such a plan with the employer, jointly participating in an apprenticeship program with the employer, or any other similar business practice.

The final rule also provides several examples of how the DOL’s joint employer guidance should be applied in various circumstances.

Takeaways

Employers should view the new rule as a positive development as the new standard is clearer and narrowly defines joint employer status.  Employers should note, however, that the final rule applies only to the FLSA and does not apply to the Occupational Safety and Health Act, the National Labor Relations Act, Title VII of the Civil Rights Act, or state wage and hour laws.

On December 20, 2019, President Trump signed into law, as part of the 2020 Appropriations Bill, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. This is the first major legislation affecting retirement plans since the Pension Protection Act of 2006.

The Act contains provisions to encourage the growth of 401(k) plans. Perhaps the most significant change is the increased ability of unrelated employers to join a multiple employer plan, referred to as a “Pooled Employer Plan”. Previously, an employer was not permitted to participate in a multiple employer plan unless the employer had a “commonality of interest” (e.g., the same industry or geographic area) with the other employers. The Act eliminates the commonality of interest requirement. The Act requires the appointment of a “Pooled Plan Provider” to be the administrator and fiduciary under ERISA, and requires registration of the Pooled Plan Provider with the Internal Revenue Service and the Department of Labor.  A Pooled Employer Plan facilitates economies of scale that can result in lower administrative costs thereby making it easier for employers to offer retirement plans for their employees. The Pooled Employer Plan provisions are effective for plan years beginning in 2021.

A partial list of other changes includes:

  • Increase in Automatic Enrollment Limit. Under current law, 401(k) plans are permitted to enroll participants automatically, with a limit of 10%. The limit is increased to 15% for plan years beginning in 2020.
  • Small Employer (under 100 employees) Tax Credit for Starting a Plan. The credit, limited to 50% of qualified costs, is increased. The credit is available for 3 taxable years beginning with 2020 plan years.
  • Increase in Required Beginning Date. The new law increases the age of the required beginning date for IRAs and qualified plans from 70½ to 72. This is effective for distributions required to be made after December 31, 2019 for employees and IRA owners who attain age 70½ after December 31, 2019.
  • Long Term Part-Time Employees Permitted to Participate in 401(k) Plans. A 401(k) plan must permit an employee to make elective deferrals if the employee has worked at least 500 hours per year for at least 3 consecutive years and is age 21 by the end of the 3-year period. This rule does not require participation in matching or employer contributions unless the employee otherwise satisfies the conditions for such participation. This provision applies to plan years beginning in 2021 with respect to service beginning in that year.
  • Lifetime Income Disclosure. ERISA is amended to require a defined contribution plan benefit statement to include an estimate of the monthly lifetime retirement income at least once in a 12-month period. This new rule will not apply until 12 months after regulations and a model notice are issued.
  • 5500 Penalties. Penalties are increased for failing to file a Form 5500 from $25 per day to $250 per day, not to exceed $150,000. This increase applies to 5500s required to be filed after December 31, 2019.
  • Plan Amendments are not required until the end of the 2022 plan year.

The law includes changes that not only affect employer-sponsored retirement plans, but also impact individual retirement estate planning, due to changes regarding the commencement and distribution of post death distributions. These changes generally eliminate “stretch” payments to beneficiaries, other than “eligible designated beneficiaries,” such as a spouse.

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.