Brief refresher for California employers: 2021 updates to local COVID-19 paid sick leave requirements

The Families First Coronavirus Response Act (FFCRA), requiring employers with 50-500 employees[1] to provide supplemental paid sick leave and paid family leave to their employees, and California’s statewide COVID-19 supplemental paid sick leave requirement expired on December 31, 2020.  While employers may voluntarily continue to provide FFCRA and receive tax credits through March 31, 2021, the FFCRA mandates are now voluntary for employers to continue absent federal legislative action.  Despite this, numerous California counties and cities have extended their COVID-19 paid sick leave ordinances and imposed additional requirements for employers.  To date, these include: Los Angeles (City and County), City of Long Beach, Sacramento (City and County), San Francisco, City of Oakland, San Mateo County, Sonoma County, Santa Rosa, and San Jose.

City of Los Angeles. Los Angeles Mayor Eric Garcetti recently revised an order requiring an employer to provide COVID-19 Supplemental Paid Sick Leave (SPSL) if it has 500 or more employees in the city or 2,000 or more employees nationally. The February 10, 2021 revised order expanded coverage and provides SPSL benefits to employees employed with the same employer for 60 days, and expanded coverage to employees hired on or after March 5, 2020. Most importantly, the revised order mandates that employers calculate SPSL based on the employee’s respective two-week average pay over the last 60 days of employment. The order remains in effect until two calendar weeks after the expiration of the County of Los Angeles local emergency period. Continue Reading

Managing the risks of incentivizing COVID-19 vaccines for employees

The release of the COVID-19 vaccine came as welcome news for employers. With it, however, employers will now confront myriad new questions about how the vaccine will affect workplace terms and conditions. The foremost question across all sectors has been simple: Can and should employers mandate that their employees get vaccinated? While issuing a mandate may seem appealing, doing so creates a variety of both legal and practical risks that, for many businesses, may militate in favor of a voluntary compliance program.

Faced with this reality, many employers have begun exploring incentive-driven voluntary programs, including offering additional PTO, gift cards, and even cash “bonuses” to employees who provide proof of vaccination.  While such a voluntary system avoids many of the pitfalls of a mandatory system, it also carries its own complexities and risks in an already complicated and unsettled area of law.  This post examines some of those risks while also highlighting the unique uncertainty surrounding this emerging issue.  Continue Reading

EEOC proposes new rules on permissible incentives for employer-sponsored wellness programs

On January 7, 2021, the EEOC proposed two rules, under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), designed to clarify what incentives employers may offer employees and their family members for joining employer-sponsored wellness programs.  In the 2017 case AARP v. EEOC, the then-existing regulations on employer-sponsored wellness programs were revoked.  Since then, employers have lacked guidance on how to structure wellness programs without violating the requirements of both the ADA and GINA that individuals’ disclosures of health information be voluntary.  The EEOC’s new rules seek to balance the competing interests.  However, given the Biden Administration’s recently issued freeze on proposed rules that have not yet been enacted, employers should not act on the EEOC’s proposed rules yet.

Legal framework

Under the ADA, employers cannot require employees to disclose medical information that might enable employers to discriminate against them.  Similarly, under GINA, the disclosure of the health information of a family member of an employee must also be voluntary.  In 2016, the EEOC finalized rules that outlined how employers could incentivize employees and their family members to participate in wellness programs that required the disclosure of health information without violating the ADA or GINA.  Under the 2016 rules, an employer could offer an incentive of up to 30 percent of the total cost of self-coverage without the wellness program running afoul of the ADA and GINA.  However, in AARP v. EEOC, the United States District Court for the District of Columbia held that the EEOC had failed to provide a reasoned explanation for its 30 percent incentive limit, and as a result, the EEOC removed the incentive sections from the ADA and GINA regulations.

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Virginia enacts first in nation permanent COVID-19 workplace safety standard

Virginia is the first state in the nation to enact a permanent workplace safety standard for COVID-19.  This permanent COVID-19 standard became effective Wednesday, January 27, 2021 upon publication after review and approval earlier in January by Governor Ralph Northam and the Virginia Department of Labor and Industry’s (DOLI) Safety and Health Codes Board.  While the permanent COVID-19 standard leaves in place the bulk of requirements contained in the previous temporary emergency COVID-19 workplace safety regulations, there are a number of key revisions of which employers should take note.  Specifically, the permanent standard: Continue Reading

New York State provides supplemental guidance for its paid quarantine leave

As we previously reported, on March 18, 2020, New York State passed a law providing job protection and benefits to certain employees quarantined or isolated due to exposure to and/or infection with COVID-19. On January 20, the New York State Department of Labor issued supplemental guidance clarifying some important points for employers about complying with the leave’s requirements.

Since the Leave was enacted, a frequent question from employers has been whether employees are entitled to use the Leave multiple times – e.g., if they are subject to mandatory quarantine or isolation on more than one occasion. The guidance addresses this question by confirming that an employee shall not qualify for more than three quarantine/isolation orders. In other words, an employee will only be eligible to use the Leave three times. The guidance, however, does not specify whether this limitation applies on an annual basis.

Additionally, the guidance sets forth the following protocols for returning employees to work after completing a period of quarantine/isolation under the Leave:

  1. Employees are not required to be tested for COVID-19 before returning to work (except for nursing home staff);
  2. If an employee tests positive for COVID-19 after returning to work, they must not report to work;
  3. If an employee continues to test positive for COVID-19 after finishing a period of quarantine/isolation, but before returning to work, they must not report to work; and
  4. Employees meeting the criteria of scenarios two or three above will be deemed subject to a mandatory order of isolation and must be provided with the Leave, regardless of whether the employee already received such Leave. However, the employee must submit documentation from a medical provider or testing facility to attest that they tested positive for COVID-19 (except where the employer is the entity that conducted the test)

The guidance also states that employers that require an employee to remain out of work due to actual or potential exposure to COVID-19 (where the employee is not otherwise subject to a quarantine/isolation order) must continue paying the employee their regular rate of pay until the employee is permitted to return to work. If the employee subsequently becomes subject to an isolation/quarantine order, they will then be eligible for the benefits provided under the Leave.

Employers should ensure that they are aware of the job protections and benefits provided for by the Leave and should immediately ensure their compliance with its requirements, based on this new guidance. If you have any questions about your obligations under the Leave, Reed Smith’s experienced Labor & Employment Group is ready to speak with you.

DOL stops enforcing Executive Order 13950 on diversity training

The Biden administration issued new guidance immediately following his Jan. 20 inauguration abrogating former U.S. President Trump’s Executive Order 13950 on Combating Race and Sex Stereotyping (the Order). Implementation of EO 13950 had previously been stayed by a preliminary nationwide injunction entered Dec. 22, 2020, in California federal court. As a result, federal contractors or organizations with a federal contract currently have no obligation to revise their diversity and equity training to omit the prohibited training topics set forth in EO 13950.

As previously discussed, EO 13950 sought to reshape the way government contractors performed diversity and equity training. It prohibited, among other things, restrictions on training about affirmative action, discussion of reparations and implicit bias, and guidance regarding limiting micro aggressions. Further, the Order mandated employer postings in the workplace as well as compliance communications with organized labor groups.

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New York employers may be “exposed” to COVID-19 workers’ compensation claims

In September 2020, the New York Workers’ Compensation Board (WCB) issued guidance related to COVID-19 claims and their compensability under the State’s workers’ compensation laws. This guidance is especially noteworthy because workers’ compensation claims are expected to increase substantially as a result of COVID-19.

By way of background, New York is one of the few states that statutorily requires employers to obtain workers’ compensation insurance.  This insurance provides benefits to workers who become ill or injured due to their employment, i.e. a work-related illness or injury. The recently-released guidance, therefore, is particularly significant because it states that Empire State employees who contract COVID-19 while working will generally be eligible for workers’ compensation benefits. Compensable claims entitle an employee to payment of an injured worker’s medical treatment for the work-related illness, wage replacement benefits if the illness prevents the employee from working, benefits to an employee’s surviving dependents in the event of death, and reimbursement of funeral expenses. Continue Reading

Implications of Brexit for UK employment law

2021 marks the start of a new era for the UK, the Brexit transition period having ended at 11pm on 31 December 2020. After endless rounds of negotiation, the parties reached a last-minute agreement over the ongoing relationship between the UK and EU, and the European Union (Future Relationship) Act 2020 (which gives legal effect in the UK to the agreements reached) received royal assent on 30 December 2020. But what impact does this have on UK employment rights derived from the EU?

The short answer is that while Brexit provides the UK with some freedom to deviate from EU derived employment law, we should not expect to see any radical changes to UK employment laws or employment rights.

The Trade and Cooperation Agreement reached between the UK and EU incorporates level playing field commitments that seek to prevent either the UK or the EU gaining a competitive advantage in a variety of contexts. These include rights at work, namely fair working conditions, employment standards (including in respect of workplace health and safety), information and consultation rights and the restructuring of undertakings. The commitments given by both the UK and EU are intended to ensure that neither will weaken or reduce labour or social rights and standards below the levels in place at the end of the transition period where this affects trade or investment between the UK and EU, including by way of a failure to enforce those laws and standards. Continue Reading

Virginia set to enact permanent COVID-19 workplace safety standard

On January 13, 2021, the Virginia Department of Labor and Industry’s (DOLI’s) Safety and Health Codes Board voted 9-4 to approve a permanent COVID-19 workplace safety standard, setting the stage for Virginia to become the first state in the nation to do so. In July 2020, DOLI’s Virginia Occupational Safety and Health Program (VOSH) adopted temporary emergency COVID-19 workplace safety regulations, which are currently set to expire January 27, 2021.

The Board conducted virtual meetings on January 12-13, 2021 to consider the final language of the permanent COVID-19 standard in light of a flood of public comment. The proposed permanent regulations now go to Governor Ralph Northam for review and possible revision, which would require further consideration by the Board. The final standard will take effect upon publication in a newspaper of general circulation in Richmond, VA.

Overall, these workplace safety regulations are intended to supplement and enhance existing state and federal occupational safety and health requirements. Failure to comply with the VOSH standards may result in potential criminal penalties as well as civil penalties ranging from approximately $13,000 per violation to more than $130,000 per violation if willful and/or repeated. As of December 30, 2020, VOSH indicated it had conducted nearly 100 workplace COVID-19 inspections and expects to pursue more enforcement actions after the permanent standard goes into effect.

Upon final publication, Virginia employers should immediately review these regulations to determine how their operations may be impacted. If you have any questions on these requirements, need assistance developing policies and procedures to comply with these regulations, or have other questions regarding your workforce related to COVID-19, please contact Betty Graumlich at bgraumlich@reedsmith.com, Mark Passero at mpassero@reedsmith.com, Noah Oberlander at noberlander@reedsmith.com, or the Reed Smith lawyer with whom you normally work.

U.S. Department of Labor finalizes rule creating a new “reality” for classifying independent contractors

As we previously reported, this past September the U.S. Department of Labor (DOL) proposed a new rule that would create a uniform approach to the way companies classify workers as independent contractors or employees under the Fair Labor Standards Act (FLSA). More specifically, in the proposed rule, the DOL adopted the “economic reality” test, which uses five main factors to determine whether workers are in business for themselves (as an independent contractor), or whether they are economically dependent on a potential employer (as an employee).

On January 6, the DOL announced the final rule (anticipated to be published on January 7), which further clarifies these new standards. The final rule reaffirms the use of the “economic reality test” to distinguish between independent contractors and employees and cements the previous proposal to place a greater probative weight on two of the five factors considered in a traditional “economic reality” analysis. The remaining three factors will serve as guideposts, in the event that the two core factors lead to differing classification determinations.

Importantly, the final rule provides additional guidance with respect to the two core factors, which are the nature and degree of the worker’s control over the work (the “control factor”) and the worker’s opportunity for profit or loss (the “profit and loss factor”). First, the final text explains that an analysis of the control factor must examine both the control exerted by the individual worker as well as by the potential employer. Second, the DOL explains that an individual worker’s “meaningful capital investments” and a worker’s initiative (such as managerial skill and business acumen or judgment) should be considered as part of the profit and loss factor, whereas a comparison of the relative investments of the individual worker to the potential employer should not.

Finally, the final rule reiterates that this test should maintain a focus on the actual practices of both parties, as opposed to any theoretical or contractual agreements.

The effective date of the final rule is March 8, 2021.

The DOL’s final rule has important consequences for employers when classifying their workers under FLSA. If you have any questions or concerns about the new rule, or how it affects your company, Reed Smith’s experienced Labor & Employment Group is ready to speak with you.

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