COBRA changes under the American Rescue Plan Act of 2021

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (ARPA). Among the most significant changes for employers are the provisions related to COBRA. The ARPA provides assistance-eligible individuals (AEI) with the opportunity for a 100 percent subsidy for COBRA premiums between April 1, 2021 and September 30, 2021 (the Subsidy Period).

AEI include all COBRA qualified beneficiaries who are eligible for COBRA continuation coverage due to an involuntarily termination (or a reduction of hours) during the Subsidy Period and individuals who would have been AEI, but previously dropped or declined such coverage (i.e., their maximum COBRA coverage period would have extended beyond April 1, 2021). This is true regardless of whether their termination was related to the pandemic. In other words, any individual who qualified for COBRA because of an involuntary termination or reduction in hours with a coverage period that would have extended beyond April 1, 2021, is now eligible to elect coverage and take advantage of the subsidy. Employers (or their plan administrators) must provide updated COBRA notices to AEI. The Department of Labor is required to issue a model notice within the next thirty days. AEI will have sixty days from receipt of the notice to elect COBRA coverage, which will be retroactive to April 1, 2021. Continue Reading

COVID-19 in New York one year later: An overview of employer obligations still in-effect

As we approach the one-year anniversary of COVID-19’s upheaval of “business as usual,” we continue to field inquiries from Empire State employers regarding their pandemic-related workplace obligations.  Given that many of the pandemic-related regulations remain fully in effect, we have summarized in this blog post the primary employer obligations that remain in-effect in New York:

  • Employers remain required to screen employees prior to, or upon entry, to the physical workplace for symptoms of COVID-19.
  • Employees must continue to wear face coverings in situations where social distancing is not possible. As supplemental guidance on the face covering mandate details, employers are required to provide employees with sufficient face coverings, though employees may use their own face coverings and may be eligible for accommodations where they are not otherwise able to don face coverings due to medical reasons.
  • All employers, whether considered “essential” or not, are still required to comply with guidelines for their industry (e.g., office, construction), as set forth in New York Forward’s phased reopening guidance, and affirm such compliance on the New York Forward website.
  • Relatedly, all employers with in-person operations must develop a written business safety plan covering certain protocols to minimize the risk of COVID-19 transmission in the workplace.
  • New York’s travel advisory, last updated in November 2020, remains in-effect. Employers should ensure that employees traveling for both work or non-work purposes comply with the advisory – and, specifically, its testing and quarantine/isolation requirements – before returning to the workplace from travel.
  • New York employers remain obligated to provide paid sick leave to employees who are quarantined or isolated due to the exposure to, and/or infection with, COVID-19. Since the leave was enacted in March 2020, supplemental guidance has been issued further clarifying how employers can comply.

We will continue to monitor employer obligations and vaccine updates related to COVID-19 in New York.  If you have any questions about how these measures impact your workforce, Reed Smith’s experienced Labor & Employment Group is ready to speak with you.

Labor law under the Biden administration: A preview of the PRO Act

At a union event on Labor Day in 2020, President Biden vowed to be “the strongest labor president you have ever had.”  Although he has only been in office a short time, his administration is already taking steps to honor that pledge.  Specifically, on February 4, 2021, House and Senate Democrats introduced the Protecting the Right to Organize (PRO) Act.   The PRO Act previously passed the House in February 2020 and President Biden has committed to sign it into law if passed in this Congress.  If enacted, the PRO Act will fundamentally reshape the American workplace. Continue Reading

Employers face challenges as states lift COVID-19 safety measures

The recent decline in COVID-19 infections has led numerous states to begin contemplating a roll‑back of mask mandates and related COVID-19 restrictions. Most recently, on Tuesday, March 2, 2021, Governor Greg Abbott and Governor Tate Reeves announced the imminent elimination of mask mandates in Texas and Mississippi, respectively. Both Governors also removed all capacity limits for the businesses within their states. However, these changes pose a serious challenge to employers. On the one hand, they shift employee and customer expectations about the types of restrictions that are appropriate. On the other hand, they do nothing to reduce employer risks associated with potential outbreaks in the workplace. As a result, employers will now need to engage in a careful campaign to maintain workplace safety in the face of increased employee and customer resistance to masking and other similar precautions. Continue Reading

California Supreme Court rejects rounding time for meal breaks

On February 25, 2021, the California Supreme Court decided Donohue v. AMN Services, LLC[1] (Donohue).  In that case, the court held that (1) employers cannot round time in the meal period context and (2) time records showing noncompliant meal periods raise a rebuttable presumption of a meal period violation.  Accordingly, the court’s decision has significant implications for employers who rely on time keeping systems that round time during employee meal breaks.

California’s meal period laws are governed primarily by California Labor Code section 512 and the Industrial Welfare Commission Wage Order No. 4.  Pursuant to these regulations, an employee is entitled to a 30 minute meal break no later than the end of the fifth hour of work and another 30 minute meal break no later than the end of the tenth hour of work.  An employer must provide the opportunity for a compliant meal period, but need not police it.  If an employee voluntarily chooses not to take a meal break, then there is no meal period violation.  However, if an employer fails to provide a compliant meal break and an employee does not voluntarily waive it, then the employer must provide that employee a premium pay, or one additional hour of pay at the employee’s regular rate of compensation for each workday a meal period is not provided.  To avoid such penalties, an employer must provide its employees with complete and timely meal breaks whenever required by law. Continue Reading

IR35 changes – Are you ready?

With 6 April 2021 quickly approaching, the IR35 reforms are now back on the agenda and fast becoming a priority. Affected businesses need to have their implementation process in place before the IR35 reforms take effect.

IR35 is designed to ensure that appropriate income tax and national insurance contributions (NICs) are paid by contractors who provide their services through an intermediary company. In a nutshell, the IR35 rules bite where, but for that intermediary company, the individual contractor would be deemed an employee of the client. The IR35 reforms are important as they require medium and large businesses to carry out status determinations to assess whether IR35 applies. Where they conclude that IR35 applies (i.e. that there is deemed employment), the IR35 reforms shift responsibility to the client for making tax and NICs deductions through PAYE.

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New Jersey legalizes recreational marijuana use: What this means for employers

On February 22, 2021, New Jersey Governor Phil Murphy signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (NJCREAMMA) and other related bills into law which legalize and regulate recreational cannabis use and possession for adults over the age of 21.  With the enactment of NJCREAMMA, New Jersey now prohibits employers from discriminating against employees for off-duty recreational marijuana use (or decision not to use).  These requirements are effective immediately.

Prior to the enactment of NJCREAMMA, New Jersey employers were prohibited from discriminating against individuals who are certified to use medical marijuana and required to engage in the interactive process with employees who request accommodations for medical marijuana use.  NJCREAMMA extends the discrimination prohibitions to recreational marijuana users and prohibits employers from refusing to hire, discharging, or taking “any adverse action against an employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items.”  In addition, these prohibitions extend to positive drug tests where solely cannabinoid metabolites are present in the employee’s system. Continue Reading

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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