Category: Labor & Employment

Santa Clara County Orders Businesses to Track Employees’ COVID-19 Vaccination Status

Santa Clara County wasted no time in altering its public health regulations in response to the county’s graduation to the ‘yellow tier’ of California’s Blueprint For a Safer Economy on May 18, 2021.  Within hours, the County announced a new Public Health Order that went into effect on May 19, 2021.

The Order retires several of the most burdensome requirements of the County’s October 5, 2020, Risk Reduction Order.  As a result, businesses are no longer required to (1) maximize the number of people who work remotely; (2) submit Social Distancing Protocols to the County Public Health Department; or (3) observe County-issued limitations on in-person capacity.

However, the Order imposes several new requirements on employers, including:

  1. Face Coverings: All businesses must require employees and customers to wear face coverings in accordance with the Mandatory Directive on Use of Face Coverings.
  2. Capacity limitations: Some businesses remain subject to State-issued COVID-19-related capacity limitations and must limit the number of people inside their facilities to a certain percentage of their usual maximum occupancy.
  3. Industry-Specific Requirements: Businesses must follow any industry-specific guidance from the State.
  4. Mandatory Reporting Regarding Personnel Contracting COVID-19: Businesses must require that all personnel immediately alert the business if they test positive for COVID-19 and were present in the workplace either:
    1. within the 48 hours before the onset of symptoms or within 10 days after onset of symptoms if they were symptomatic, or
    2. within 48 hours prior to the date on which they were tested or within 10 days after the date on which they were tested if they were asymptomatic.

If a business learns that any of its personnel have tested positive for COVID-19 and were at the workplace during the specified time frame, the business is required to report the positive case within 24 hours to the County Public Health Department at sccsafeworkplace.org.

Businesses must also comply with all case investigation and contact tracing measures directed by the County.

  1. Ascertainment of Vaccination Status: Businesses must ascertain the vaccination status of all personnel. Under the order, personnel includes employees, contractors, and volunteers. Until a person’s vaccination status is ascertained, they must be treated as not fully vaccinated.  Personnel who decline to provide vaccination status must also be treated as unvaccinated.

Businesses must complete their initial ascertainment of vaccination status for all personnel within 14 days of May 19, 2021, or no later than June 1, 2021.  Thereafter, businesses must obtain updated vaccination status for all personnel who were not fully vaccinated every 14 days (e.g., June 15, June 29, July 13, etc.).  Businesses must maintain appropriate records to demonstrate compliance with this provision.  The County has provided a template self-certification form for this purpose.

  1. Mandatory Rules for Personnel not Fully Vaccinated: Businesses must require all personnel who are not fully vaccinated to:
    1. comply with all applicable provisions of the Mandatory Directive on Use of Face Coverings, and
    2. comply with all applicable provisions of the Health Officer’s Mandatory Directive on Unvaccinated Personnel.

In announcing the new Order, the County’s Health Officer indicated additional changes will occur in conjunction with California’s “reopening” on June 15, 2021.  Dr. Cody predicted the future changes will even further differentiate between vaccinated and unvaccinated people.

Employers doing business in the County must act quickly to reconcile their new obligations under the Order with other California laws, chiefly the Fair Employment and Housing Act (“FEHA”), which is enforced by the state’s Department of Fair Employment and Housing (“DFEH”).  The DFEH previously issued guidance for employers that will assist in this endeavor.

Jackson Lewis P.C. © 2021

ARTICLE BY Patrick C. Stokes and Kate L. Brown of Jackson Lewis P.C.
For more articles on COVID-19 Vaccination Status, visit the NLRCoronavirus News section.

COVID-19: Returning to A Mask-Free Workforce? Not Quite Yet

On 13 May 2021, the Centers for Disease Control and Prevention (CDC) issued new guidance, stating that individuals who are fully vaccinated against COVID-19 “can resume activities without wearing a mask or staying 6 feet apart, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance.” This forced employers across industries to evaluate their existing face covering/mask policies absent additional guidance from the Department of Labor (DOL) or Equal Employment Opportunity Commission (EEOC). On 17 May 2021, the Occupational Safety and Health Administration (OSHA) announced its endorsement of the CDC’s new guidelines, but did not provide any additional guidance for employers. Specifically, OSHA stated that it “is reviewing the recent CDC guidance and will update our health materials on this website accordingly. Until those updates are complete, please refer to the CDC guidance for information on measures appropriate to protect fully vaccinated workers.” Given that OSHA has not formally revised its existing guidelines and recommendations related to face covering requirements in the workplace as a means of mitigating the spread of COVID-19 and the EEOC has not updated its COVID-19 guidance since December 2020, employers should tread carefully and closely consider the risks involved before relaxing any face covering workplace restrictions.

OSHA IS RESPONSIBLE FOR WORKERS; CDC PROVIDES GUIDANCE FOR THE PUBLIC

The CDC’s mission is to protect the American public from “health, safety, and security threats,”1 while OSHA’s mission is to “ensure safe and healthful working conditions for workers.”2 The Occupational Safety and Health Act (OSH Act) contains a general duty clause, which requires employers to provide workers with a workplace free from recognized hazards that are causing or are likely to cause death or serious physical harm. Throughout the pandemic, OSHA has interpreted this clause to mandate the use of masks in the workplace to limit the spread of COVID-19.

Although the CDC’s guidance throughout the pandemic has helped inform many employer decisions, it is important to keep the CDC’s guidance in context. First, the CDC’s guidance is just that—guidance. OSHA, on the other hand, is responsible for enforcing the requirements of OSH Act, promulgates rules and standards, and assesses penalties to ensure compliance with the OSH Act. Second, as noted above, the CDC’s recommendations are aimed at protecting the American public, while OSHA’s rules and standards are designed to ensure employers provide a safe working environment to their employees. While OSHA has apparently endorsed the new CDC guidance, OSHA may publish more detailed guidance concerning the relaxed use of masks for vaccinated individuals in the workplace. Until then, OSHA has not formally removed its most recent COVID-19 guidance for employers published on 29 January 2021, which includes mandating the use of masks by both employees and third parties in the workplace.

STATE AND LOCAL LAW

Many state and local laws, executive orders, and other guidance continue to require masks in the workplace (and inside public places). Indeed, the CDC does not have authority over state or local governments that may impose stricter requirements, and its recent guidance explicitly defers to state and local laws. Importantly, although some State Executive Orders across the country have been changed since the most recent CDC guidance went into effect, some other State Executive Orders remain in effect and some require mask wearing and social distancing. Therefore, employers should consult state and local restrictions before lifting any mask wearing policies.

Further, some jurisdictions also have employer liability statutes and specific workers’ compensation standards that mandate employer compliance with certain health and safety guidelines, which may include state and local regulations. These statutes often provide that when employers adhere to safety standards designed to prevent the spread of COVID-19, the employer is able to limit exposure or reduce liability when and if an employee contracts COVID-19 in the workplace.

INDUSTRY GUIDANCE

Employers must also consider whether the CDC’s new guidance actually changes anything for them, as the guidance does not apply to all industries or to all settings. For example, vaccinated individuals are still required to wear a face covering on airplanes and in healthcare facilities. Employers who work in or regularly interact with these industries should be mindful that requirements may differ. Any changes to a mandatory face covering policy should be made with those considerations in mind.

CONTRACTUAL OBLIGATIONS

In addition to government regulations, some employers may be contractually obligated under a lease or other agreement to maintain a mask mandate, regardless of the new CDC guidance. Therefore, prior to implementing any relaxed mask-related policies, employers should evaluate whether contractual or landlord restrictions may apply. Employers also should consider consulting any applicable insurance policies before modifying mask mandates.

EQUAL EMPLOYMENT OPPORTUNITY CONSIDERATIONS

Finally, the EEOC has not updated its “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws” (WYSK) to account for the widespread availability of vaccines or the impact of vaccinations on mask wearing in the workplace. However, the current WYSK guidance provides some helpful information for employers considering lifting mask mandates in the workplace. For example, as discussed in our December 2020 alert on workplace vaccination considerations, asking for an employee’s vaccination status is not a prohibited medical inquiry under the Americans with Disabilities Act. Thus, if an employer elects to lift mask restrictions in the workplace, it should consider whether it will require employees to show proof of vaccination before allowing the employee to be present in the workplace without a mask, balancing risk avoidance with considerations of workplace culture and morale. If an employer chooses to require proof of vaccination, such proof should be limited to (i) an employee’s CDC vaccination card and a (ii) corresponding identification card, such as a driver’s license. Further, employers should ensure that employees do not bring an entire medical file or unrelated medical documents as proof of vaccination. Limiting who has access to information regarding employee’s vaccination status is advisable and employers that choose to inquire about vaccination status should develop a written protocol for collecting such information and keeping it confidential. Such employers requiring proof of vaccination should maintain information related to an employee’s vaccination status separate from the employee’s general personnel file. Employers also may consider designating a human resources contact to administer the policy and maintain the list of vaccinated employees.

Keeping anti-discrimination laws in mind, employers should carefully consider how they will enforce a revised face covering policy in a non-discriminatory manner and while awaiting further guidance from the EEOC. Whether or not an employee is wearing a mask may inadvertently reveal the employee’s vaccination status. Thus, the risk for employers will be in how employees are treated in response to unavoidable disclosure. Managers and supervisors should be reminded of company equal employment opportunity policies and should be trained to not exclude masked individuals (or vice-versa) from employment opportunities. While distinguishing between unvaccinated and vaccinated employees may seem non-discriminatory, employers must remember that many individuals will remain unvaccinated because of a medical disability or a sincerely held religious belief and others may simply be more comfortable continuing to wear a mask in the workplace.

KEY TAKEAWAYS

  • Employers should consider a number of factors before implementing a revised face covering/mask policy in the workplace.
  •  Employers should work with their counsel to ensure their workplace policies are compliant with the OSH Act and all applicable state and local laws, including anti-discrimination laws.
  • Employers should expect an increase in employee concerns related to wearing a mask in the workplace and should prepare responses to anticipated questions and develop a plan for messaging the changes to their workforce before making any policy changes.
  • Employers should consider requiring proof of vaccination before allowing an employee to go without a mask in the workplace. If an employer chooses to do so, proof of vaccination should be in the form of the CDC vaccine card and government issued identification.
  • Employers who are lifting mask restrictions for vaccinated employees should have a clear reporting procedure for employee concerns. Such a reporting procedure should not involve employee-to-employee communications.
  • Employers who are lifting mask restrictions for vaccinated employees should consider identifying for employees’ scenarios where mask wearing still may be expected such as visiting customer locations that mandate mask wearing, visiting industries excluded from the CDC’s relaxed mask guidance, traveling and/or meeting with third parties, or attending events (where vaccine status of visitors cannot be ascertained).
  • Employers should consider how a revised face covering policy may affect return-to-work plans. Employees, especially those who are immunocompromised or those who have children or individuals who are at high-risk of COVID-19 in their residences, may be more reluctant to return to a physical location with relaxed mask wearing policies.
    Copyright 2021 K & L Gates

For more articles on CDC mask guidance, visit the NLR Coronavirus News section.

100 Days of the Biden Administration, Part II: Key Labor and Employment Policy Developments

In its first 100 days in office, the Biden administration has advanced its policy priorities, many of which have involved repealing the policy accomplishments of the previous presidential administration. The Biden administration can be expected to advance its own proposals soon.

The first part of this two-part blog series focused on the Biden administration’s first 100 days and reviewed the administration’s legislative plans. The second part of the series addresses policy developments occurring at the executive branch agencies and independent agencies.

U.S. Department of Labor

Personnel Is Policy

On March 22, 2021, the U.S. Senate confirmed former Boston mayor and union official Martin Walsh as secretary of labor. While it is still early, many in the business community remain optimistic about Walsh’s willingness to listen to their concerns. As for other leadership positions at the U.S. Department of Labor (DOL), the deputy secretary of labor nominee, Julie Su, and solicitor of labor nominee, Seema Nanda, have had their confirmation hearings but have not been voted on by the full Senate. Su runs California’s Labor and Workforce Development Agency, while Nanda is an Obama-era DOL vet and former chief executive officer of the Democratic National Committee. If Su and Nanda are confirmed by the Senate, they will work with Walsh as the top three officials dictating policy at the DOL.

OSHA and Workplace Safety

  • Assistant secretary nominee. In early April 2021, President Joe Biden announced his intention to nominate Douglas L. Parker to be the assistant secretary of labor for the Occupational Safety and Health Administration (OSHA). Parker currently serves as chief of California’s Division of Occupational Safety and Health (Cal/OSHA).
  • OSHA emergency temporary standard. For months, workers’ advocates and Democrats have been calling on OSHA to issue an emergency temporary standard (ETS) to protect workers from COVID-19. On January 21, 2021, President Biden doubled down on these demands when he issued an executive order instructing the DOL and OSHA to consider issuing an emergency temporary standard by March 15, 2021. On April 26, 2021, more than a month past the deadline, OSHA sent its draft ETS to OIRA for approval. Any final ETS could be impacted by recent guidance from the U.S. Centers for Disease Control and Prevention, which recently eased mask requirements.
  • COVID-19 vaccine reactions. On April 20, 2021, OSHA issued new guidance on when an employer must record in its injury and illness logs an employee’s adverse reaction to a COVID-19 vaccination. In short, if an employer requires employees to get vaccinated, then any adverse action is “work-related” and, therefore, recordable.

Wage and Hour

  • Independent contractor rule. On May 6, 2021, the DOL rescinded its independent contractor rule, which had set forth a test for independent contractor status that focused on “the worker’s opportunity for profit or loss” due to individual initiative and investment. Although the rule was finalized on January 7, 2021, it never became effective.
  • Joint-employer rule. On March 12, 2021, the DOL proposed to rescind the Fair Labor Standards Act joint-employer rule that took effect in March 2020, but was subsequently vacated by a district judge in New York. The rule had set forth a four-factor test for determining joint-employer status.
  • Tip rule. While portions of the 2020 final tip rule went into effect on April 30, 2021, the Wage and Hour Division (WHD) delayed until December 31, 2021, the effective date of the provisions concerning civil money penalties and employees who perform tipped and non-tipped work.
  • Liquidated damages. On April 9, 2021, the WHD “return[ed] to pursuing pre-litigation liquidated damages” in lieu of litigation, after temporarily halting the practice in order to encourage economic recovery during the pandemic.
  • PAID program. The DOL discontinued the Payroll Audit Independent Determination (PAID) program, which the Trump administration initiated in 2018 to encourage employers to voluntarily correct certain underpayments to employees.

Federal Contractors and the Office of Federal Contract Compliance Programs (OFCCP)

  • OFCCP director. Jenny R. Yang, former chair of the U.S. Equal Employment Opportunity Commission, is now the director of the OFCCP. Expect her to focus the agency on increased enforcement, particularly around compensation discrimination.
  • Minimum wage increase. On April 27, 2021, President Biden issued an executive order that will require covered federal contractors and subcontractors to pay employees a minimum of $15 per hour by January 2022.
  • Diversity and inclusion training. President Biden revoked Executive Order 13950, relating to federal contractors’ diversity and inclusion training efforts.
  • Religious exemption. The OFCCP proposed to rescind a December 2020 regulation that is intended to provide protections for religious organizations to “hire employees who will further their religious missions, thereby providing clarity that may expand the eligible pool of federal contractors and subcontractors.”

Office of Labor-Management Standards

The DOL subagency that “promotes labor-management transparency as well as labor union democracy and financial integrity” proposed to rescind a Trump-era rule that required increased financial disclosures from labor organizations.

Labor-Management Relations

Unprecedented Firing of NLRB GC

Within hours of being inaugurated, President Biden fired Peter Robb, the National Labor Relations Board’s general counsel. Robb’s term wasn’t scheduled to expire until November 2021. This was an unprecedented decision, as NLRB general counsel are traditionally permitted to serve out their terms during changes in administrations. The move sends a message to stakeholders that the administration is going to be very aggressive in the traditional labor arena. It also allows the administration to begin “teeing up” cases in anticipation of taking full control of the Board by fall 2021.

A Republican Board. For Now.

Republicans will hold a majority on the NLRB through August 2021 because Board members’ terms are staggered. Expect a lot of political activity surround the Board during the late summer and early fall as President Biden tries to get his Board member nominees confirmed. The administration hopes that a Democratic-controlled Board can start enacting policy changes by the second half of the year.

Graduate Students

On March 15, 2021, the Board withdrew its regulatory proposal to exempt from the coverage of the National Labor Relations Act students who, in connection with their undergraduate and graduate studies, are financially compensated for the services they provide to private colleges or universities.

Contract Bar

On April 21, 2021, a bipartisan Board upheld its contract-bar doctrine, which bars union elections during the term of a collective bargaining agreement for up to three years.

Pending Matters

  • Uniform policies. The Board is reviewing the public feedback that it requested on its standard regarding employer uniform policies and whether they interfere with employees’ wearing of union insignia.
  • Employer investigations. The Board is also reviewing public feedback it requested on the issue of the proper standard to apply in situations in which employers question employees in the course of preparing defenses to unfair labor practice allegations.

 Immigration

USCIS Director Nominee

In mid-April 2021, President Biden announced his intent to nominate Ur Jaddou to be director of U.S. Citizenship and Immigration Services (USCIS). Jaddou previously served as USCIS chief counsel.

H-4 Work Authorization

On January 25, 2021, USCIS withdrew a Trump administration proposal that would have rescinded work authorization permits for dependent H-4 spouses.

“Executive Order on Restoring Faith in Our Legal Immigration Systems and Strengthening Integration and Inclusion Efforts for New Americans”

On February 2, 2021, President Biden issued an executive order to begin unwinding Trump-era immigration policies by directing the secretary of state, the attorney general, and the secretary of homeland security to “review existing regulations, orders, guidance documents, policies, and any other similar agency actions” that do not, among other things, “promote integration, inclusion, and citizenship, and … embrace the full participation of the newest Americans in our democracy.”

Public Charge Rule

The administration will no longer defend the public charge rule in the courts as it begins the process of repealing the regulation.

H-1B Wage Allocation Rule Postponed

On February 4, 2021, USCIS announced that it would postpone the effective date of its H-1B wage allocation selection rule until December 31, 2021. Published in the Federal Register on January 8, 2021, the rule was originally scheduled to go into effect on March 9, 2021.

H-1B Prevailing Wage Rule

The DOL’s Employment and Training Administration (ETA) proposed to delay the effective date of the rule entitled “Strengthening Wage Protections for the Temporary and Permanent Employment of Certain Aliens in the United States.” The original regulation was finalized in the final days of the Trump administration and was set to go into effect on March 15, 2021. The ETA postponed the rule’s effective date until May 14, 2021, and is seeking a further delay to November 14, 2022.

Trump-Era Visa Bans

On February 24, 2021, President Biden revoked Proclamation 10014, issued in April 2020, which banned individuals from seeking entry to the United States on immigrant visas. In addition, the Trump administration’s Proclamation 10052, which banned individuals from entering the United States on certain nonimmigrant visas (such as H-1B and L-1), expired on March 31, 2021.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more articles on the Biden administration, visit the NLR Administrative & Regulatory section.

In-N-Out Burger Served with COVID-19 Workplace Safety and Wage Violation Lawsuit

This week’s spotlight among COVID-19 related workplace litigation involves a common trend of employees alleging retaliation for reporting workplace COVID-19 safety hazards along with unrelated wage and hour allegations.

In Becerra v. In-N-Out Burger, a former butcher for the burger joint filed a Private Attorney General Act (PAGA) complaint alleging various violations of the California Labor Code and unfair business practices. According to the complaint, In-N-Out failed to enforce COVID-19 safety measures, including social distancing and requiring employees to wear personal protective equipment (PPE). The plaintiff claims the meat department was full of sick employees, many of whom exhibited COVID-19 symptoms, but In-N-Out did not place them on medical leave.

The plaintiff filed a report with the L.A. Public Health Department regarding the meat department’s alleged failure to observe safety protocols, and he informed other butchers of their right to report workplace safety concerns. The plaintiff contends that, as a result of his reporting workplace conditions and encouraging other employees to report, In-N-Out retaliated against him by giving him a “final warning” for attendance violations.

In-N-Out reports that it terminated the plaintiff’s employment because he provided false documentation about an absence and exhausted his sick leave. The plaintiff alleges that his previous absences were excused, and that he and similarly aggrieved employees were terminated for attempting to use sick leave. He also claims that In-N-Out failed to pay separated employees their final wages and provide accurate wages statements.

The plaintiff’s allegations are based in the early months of the pandemic when PPE was sparse and employers grappled with how to adjust their workplaces.  However, the alleged wage-related claims will cover a larger time frame.

Employers have learned a lot over the past year in terms of COVID-19 workplace safety.  Employers should remain vigilant, focusing on proper safety protocols and keeping potentially sick employees out of the workplace.

© 2021 BARNES & THORNBURG LLP

ARTICLE BY Colleen Naumovich and Kathleen M. Anderson of Barnes & Thornburg LLP
For more articles on COVID-19 Workplace Safety and Wage Violations, visit the NLR Coronavirus News section.

Recent OSHA Update Targets Restaurant Industry

Occupational Safety and Health Administration (OSHA) has recently updated its COVID-19 response plan. Last year, OSHA focused much of its COVID-19 related attention on healthcare, elderly care, and prisons. This new Updated Interim Enforcement Response Plan for COVID-19 and National Emphasis Program — Coronavirus Disease 2019 (COVID-19) guidance shifts its focus to other industries where OSHA feels there could be spread of COVID-19. As part of the guidance, OSHA specifically targeted full-service and limited-service restaurants for inspections.

Restaurants should be prepared for on-site or virtual OSHA inspections. To prepare, restaurants should:

  • Ensure all OSHA recordkeeping (OSHA 300, 300A, and 301s) is in order and up to date.
  • Ensure any contact tracing for COVID-19 illness is properly documented.
  • Ensure a COVID-19 response plan is documented and in place-include relevant Federal, state and local guidance.
  • Ensure compliance with OSHA standards, specifically Personal Protective Equipment and Blood Borne Pathogens.
  • Ensure employees are trained on COVID-19 related hazards, reporting of COVID-19 symptoms, prevention of COVID-19, and document this training.
  • Ensure employees are trained that they will not be retaliated against for raising concerns regarding safety, specifically COVID-19 related safety.

Note that we are still waiting for OSHA’s Emergency Temporary Standard to be issued. OSHA has provided its proposed standard to the White House where it is currently being reviewed. Once that is issued, there will likely be more requirements for all industries with respect to COVID-19 related employee safety and health.

This article was written by Jane H. Heidingsfelder at Jones Walker law firm. For more information on OSHA guidance, please visit our Labor and Employment news page.

Why Not Just Make Everybody Hourly?

For more than 80 years, federal law has provided a general right to premium pay for working overtime hours, originally just for covered employees, then later for employees of covered enterprises.  The laws of more than 30 states contain a comparable requirement, though in some instances differing in the particulars.

This presumptive right to the overtime premium is, of course, subject to the familiar exemption construct whereby individuals whose employment satisfies one or more of the dozens of exempted categories fall outside the premium pay requirement.  Many of the most significant employment law battles over the past three decades have focused on whether certain groups of workers satisfied the criteria for an overtime exemption, resulting in businesses spending billions of dollars on judgments, settlements, and defense costs.  Think pharmaceutical sales representatives, insurance claims adjusters, financial advisors, mortgage loan officers, insurance and bank underwriters, automotive service advisors, various types of drivers, and more.  Hardly a week goes by without reports of seven-figure verdicts or settlements involving challenges to exempt status.

A separate set of disputes has arisen during that same time period regarding whether employers have correctly paid overtime premiums to their salaried non-exempt employees.  There are several different ways to pay overtime to salaried workers, and questions regarding the availability of the fluctuating workweek method have spawned numerous class and collective actions, as well as regulatory and statutory modifications, including a Pennsylvania Supreme Court decision in late 2019 and a federal final rule issued within the past year.

Apart from the lawsuits, employers have devoted countless hours of internal legal, human resources, and executive time—and expended countless millions of dollars on outside counsel fees—weighing the risks posed by classifying workers as exempt or maintaining the salaried non-exempt classification.

Given the risk, the time, and the expense, it’s tempting to ask: Why not just make everybody hourly?  Why do businesses continue to treat some employees as overtime-exempt, or pay non-exempt employees a salary, rather than just pay everyone on an hourly basis?

In our experience helping clients navigate these issues—and we emphasize that these are our own observations and not the result of any formal surveys or other quantitative assessments—the answer seems to be at least three-fold: (1) employee preference for exempt status, (2) employee preference for receiving a salary, and (3) the business advantage of predictable labor costs.

On balance, employees seem to prefer being exempt if given the choice.

In most organizations, exempt status tends to correlate with positions with higher pay, more generous benefits, and greater prestige than non-exempt roles.  People who have the option of moving from a non-exempt position to an exempt role ordinarily choose to take the exempt position—and make that choice with no hesitation.

This is so because, in addition to higher pay, exempt positions often offer access to further training and development opportunities, which in turn make further promotion and career progression possible.  Employers are more willing to provide these opportunities when doing so does not involve an hourly expense.

Another aspect of exempt status that many workers value quite highly is the freedom from punching a clock or otherwise having one’s working time scrutinized on a minute-by-minute basis.  Being accountable for one’s overall job performance, without having to worry about clocking in too early or too late, or taking a mandatory rest period, or eating a meal at the required time and for the required duration, makes people feel respected and valued.

Hourly pay reinforces two unfortunate perceptions in the workplace.  First, it serves as a reminder that one’s work is, at least to a certain extent, fungible with the work of others, and that a worker functions as just a cog in the machine.  Second, it functions as a divider between the “workers” who get hourly pay and the “bosses” who do not.  These perceptions can be especially corrosive with respect to individuals performing the types of work that at least arguably fall within the scope of the overtime exemptions built into federal and state law.

We certainly do not mean to suggest that employee choice trumps legal requirements.  Where the law dictates that an employee is overtime-eligible, compliance is not optional.  But where exempt classification is a plausible option, far more often than not the worker will prefer to be treated as exempt.  At least until the employee encounters trouble, retains a lawyer, and decides to seek additional money for work already performed.

The reality is that nobody ever has to take an exempt job.  There are a lot fewer exempt positions than non-exempt positions in our economy, and it is usually much easier for a worker to qualify for and to obtain a non-exempt role than an exempt one.  Yet workers continue to seek out exempt jobs.  Worker preference for exempt status is an important consideration for employers in hiring and retaining talent, and it is a big part of why exempt status remains a popular choice for employers notwithstanding the potential legal headaches.

Employees ordinarily prefer receiving a salary rather than hourly pay.

As a general matter, hourly workers receive pay for only the specific amount of time that they work, while salaried employees receive the same fixed amount of pay regardless of fluctuations in their hours.  Salaried non-exempt workers also receive additional pay if their hours cross an overtime threshold.

For workers, this difference between hourly pay and salary relates to overall economic security.  Most salaried workers seem to take comfort in knowing what their cash flow will be from month to month.  This consistent pay stream allows salaried workers to engage in more effective budgeting and retirement planning.

Hourly workers, by contrast, are subject to fluctuations in workload from week to week.  This can mean room for significant financial upside if work gets particularly busy, but it can also mean lighter paychecks for slow weeks.  The potential for pay to fluctuate downward puts hourly workers at greater risk of facing a temporary inability to pay current bills.

Of course, salaried workers also face the risk of job loss, furloughs, pay cuts, and the like in the even that their employer faces hard times.  But because of the rules governing salaried employment, employers are ordinarily quicker to reduce working hours for hourly employees than to take steps that reduce pay for salaried individuals.  If anything, during hard times employers that find themselves having to cut hours for hourly employees may nevertheless look for ways to assign some of the work those people would have performed to the salaried staff.

Particularly for risk-averse employees, the knowledge that there will be a constant, knowable stream of income each month eliminates a source of stress and worry.  Payment on a salary basis provides a measure of economic security lacking in hourly pay, and it operates as a kind of buffer protecting workers from suffering economic hardship in the face of short-term workload reductions.  The peace of mind that a salary provides to employees increases employee demand for salary pay, which in turn exerts pressure on employers to pay employees a salary when possible.

Exempt status and, to a lesser extent, salaried non-exempt status help employers plan better for labor costs.

Budgets are, of course, important not only for workers but for businesses.  Anticipating and planning for labor costs can be among the most important activities a business undertakes.  In particular, failing to budget sufficient funds for payroll can put a company into a severe financial crisis, just as failing to pay a worker’s earned wages can create serious hardship for the worker.

With salaried employees, a business knows in advance what it will have to spend on those employees over the course of a month, a quarter, or a year.  There may be opportunities to provide raises, bonuses, or other incentives if the employee or the company perform particularly well.  But the salary ordinarily defines the minimum financial commitment that the business will have to the employee, and this enables the employer to plan for that expense.

Pay for hourly employees can vary considerably, particularly if workloads change significantly throughout the year.  In theory, this type of challenge should work itself out in the long run, as a period of high workload typically results in higher revenue, at least at some point down the road.  But there is often a significant lag between when an employer experiences a spike in demand for hourly labor and when the business receives dollars in the door relating to that specific labor.  This can cause cash shortages for the business that, depending on the financial well-being of the employer, can strain resources, choke off other business opportunities, or even result in insolvency, including job losses for the workers.

Being able to set and to adhere to a labor budget, whether at the level of an individual manager or department or for an entire division or enterprise, is critical for many businesses.  Having workers on salary, especially when those workers are exempt, provides the sort of cost stability that businesses typically seek.

*  *  *

Critics of exempt status normally paint a picture of a greedy employer trying to cheat its employees by demanding more work without more pay, caricaturing exempt roles as a scam for businesses to bully workers into laboring for free rather than earning overtime pay for their hard work.  But that criticism misses the mark as it fails to explain why exempt roles remain in such high demand, even as non-exempt positions remain available and unfilled.  If exempt status were such a bad deal for employees, why would so many of them choose exempt roles?  Ultimately, the benefits to workers and employers alike will continue to make exempt status an attractive classification.

The same is true for salaried non-exempt work.  The employees who hold these roles are, in our experience, normally office workers, many of whom have a college degree, who may just miss the cut for exempt status.  These individuals value the safety net that a salary provides, as well as the status associated with being salaried rather than hourly.

In the end, not everybody wants the work experience to feel like a factory assembly line.  Those workers who want to be hourly, and who desire overtime eligibility, will have ample opportunity to obtain that type of employment.  But for the rest of us, exempt status and payment on a salary basis are here to stay.

©2021 Epstein Becker & Green, P.C. All rights reserved.

ARTICLE BY Paul DeCamp and Michael S. Kun of Epstein Becker & Green, P.C.

For more articles on hourly pay, visit the NLR Labor & Employment section.

 

Are Adverse Reactions to COVID-19 Shots Recordable to OSHA? It Depends.

The Occupational Safety and Health Administration (OSHA) has determined that it will consider an adverse reaction to the COVID-19 vaccine “work-related” recordable illnesses if an employee is required to take the vaccine as a condition of employment.

In its online Frequently Asked Questions (FAQs) about COVID-19, on April 20, 2021, the agency stated that an adverse reaction to the vaccine would be recordable if the reaction meets the definition of a recordable injury or illness:

  1. It is work-related, which OSHA presumes if the vaccine is mandated by the employer;
  2. It is a new case; and
  3. The illness meets at least one of the general recording criteria in 29 CFR 1904.7 (e.g., days away from work, restricted work or transfer to another job, or medical treatment beyond first aid).

OSHA distinguishes between mandatory vaccines and those that are recommended by an employer. If the vaccine is truly voluntary, the agency does not require the employer to record an adverse reaction on the employer’s OSHA 300 log. On the other hand, if the employer mandates the vaccine, the employer must record it if it otherwise meets recording criteria. OSHA states that this current position on vaccines is an exercise of its enforcement discretion, but it means the agency could change course in the future.

The FAQs detail factors OSHA will consider in determining whether an employee’s vaccination is truly voluntary. Primarily, the choice to accept or reject the vaccine cannot affect the employee’s employment or professional advancement and they cannot suffer any negative repercussions from choosing not to receive the vaccine. On the other hand, if employees are not free to make this decision and would face adverse action if they do not take it (e.g., the employee cannot return to work or is terminated for refusing vaccination), then OSHA would not consider it as merely recommended. In that case, an employer would need to follow the guidance in terms of assessing recordability for any adverse reactions to the vaccine.

OSHA clarifies situations in which employers recommend but do not require vaccination. For example, the agency will view a vaccination as voluntary and recommended even if the employer makes the vaccine available at work, if the employer makes arrangements for employees to get the vaccine at an offsite location (e.g., pharmacy, hospital, or local health department), or if the employer offers the vaccine as part of a voluntary health and wellness program at the workplace.

Unfortunately, the FAQs do not address employer incentive programs to encourage employee vaccination, such as offering financial incentives, eligibility for raffle drawings to win prizes, or paid time off to receive or recover from the vaccine. At times, OSHA has viewed incentive plans as potentially punitive to employees who miss out on benefits offered to others. At this point, it is unclear what enforcement position OSHA will take in these situations. Interestingly, Chicago enacted an ordinance to protect employees from adverse employment actions if they take and recover from vaccines during working hours.

As businesses continue to reopen and employees return to work, employers will have to decide whether to mandate or simply encourage vaccination for its workforce. Based on OSHA’s FAQs, employers should assess whether they are requiring vaccination or whether they are making it truly voluntary for their employees, as this will determine whether they will need to record adverse reactions on OSHA 300 logs.

Jackson Lewis P.C. © 2021

ARTICLE BY Courtney M. Malveaux of Jackson Lewis P.C.
For more articles on COVID-19 shots, visit the NLR

Coronavirus News section.

Making Time for Small Talk: And Other Tips for Making Remote Work a Success – Part II

This is part two of a 3-part series, and the second of several posts addressing remote work considerations arising out of the COVID-19 pandemic.

This series explores tips from companies that have figured out how to run a business with a remote workforce, with advice on how to help re-engage your remote workforce, or, if you already have a good system in place, how to make sure you keep employees productive and satisfied.  Don’t miss Tip One.

Tip Two:

Be Flexible and Trust

The companies that were working remotely before the pandemic have been teaching and guiding us through this past year, and one major lesson is the ability (and need) to be flexible in the remote environment. For most employers, there is less of a need to require employees to be “on” at all moments of the day. If nothing else, remote work during a pandemic – with homeschooling and child and family responsibilities increased during the normal workday – has shown us that employees can manage their time to work best for them, and still get their work done.

Flexibility depends on trust. The remote work environment presents us with the requirement to trust employees, yet building trust in a remote environment can be difficult. Without the opportunity to observe a coworker working diligently, or bringing notes to a meeting, or sharing insights with colleagues in the hallway, can make trust hard to embrace. But rapport between coworkers and interpersonal trust is what helps employees understand and ultimately help each other (which is critical to a successful enterprise). So how do you get it?

Monitoring and micro-managing to ensure output does not tend to work (in fact, it never works). Employees under surveillance know they are not trusted, and that results in employees with higher levels of anxiety and stress. This, then, results in increased burnout and dissatisfaction, undermining the entire point of a company’s goal, which is to improve work product and output.

The first step in building trust is for leadership to show, and put trust in, employees who will then in turn trust leadership; according to the Harvard Business Review this is called reciprocal leverage. The more trust your employees have in the leadership of the company, the more stability they feel, and the more likely they will be to work productively and seek to impress.

But how do you know if they are doing the work?  Check-ins and a review of employee production will generally tell you what you need to know. Is your workforce producing work product and output? If it has declined or is notably absent, there is a problem that must be addressed. If not, perhaps embracing flexibility and trust is working. Employers can and should take action through discussions or discipline when the remote work requirements are not being met. Trusting the employee to continue to perform and produce quality work does not mean remaining on the sidelines if that does not appear to be successful. The idea, however, is that it can be the exception, not the rule.

© Polsinelli PC, Polsinelli LLP in California

ARTICLE BY Mary Kathryn Curry of Polsinelli PC
For more articles on remote work, visit the NLR Coronavirus News section.

Twisting Arms to Get Jabbed, White House Says: ‘Vaccination Incentives All Around!’

On April 21, 2021, in a further push to encourage COVID-19 vaccinations for those individuals who have been hesitant, the White House issued a fact sheet titled, “President Biden to Call on All Employers to Provide Paid Time Off for Employees to Get Vaccinated After Meeting Goal of 200 Million Shots in the First 100 Days.” This announcement further signals the administration’s dedication to vaccinating the U.S. population and its willingness to offer incentives to employers that support their employees in becoming vaccinated. Employers that have remained neutral on this issue could be persuaded to “take up arms” and join the fight against COVID-19.

Specifically, the fact sheet calls on employers “to offer full pay to their employees for any time off needed to get vaccinated and for any time it takes to recover from the after-effects of the vaccination.” To aid in this, the fact sheet announces a new tax credit for nonprofits and businesses with fewer than 500 employees. This tax credit is an extension and expansion of the tax credits initially provided by the Families First Coronavirus Response Act (FFCRA) in 2020 and that were subsequently extended until September 30, 2021, by the recent passage of the American Rescue Plan Act of 2021 (ARPA). The tax credit as amended by the ARPA allows qualifying businesses to recoup the costs of providing paid leave to employees who cannot work or telework as a result of “obtaining immunization related to COVID-19 or recovering from any injury, disability, illness, or condition related to such immunization,” in addition to the other qualifying reasons for emergency paid sick leave.

IRS Guidance on ARPA Tax Credits

Also on April 21, 2021, the Internal Revenue Service (IRS) issued a news release elaborating on the White House’s fact sheet. The IRS news release largely summarizes its earlier April 2021 guidance, which details the procedural aspects of the tax credit. As the IRS explained in its earlier guidance, the “refundable” tax credits under the ARPA provide an offset “against the employer’s share of the Medicare tax.” This means that “the employer is entitled to payment of the full amount of the credits if it exceeds the employer’s share of the Medicare tax.” The IRS guidance further explains:

The tax credit for paid sick leave wages is equal to the sick leave wages paid for COVID-19 related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100 percent of the employee’s regular rate of pay. The tax credit for paid family leave wages is equal to the family leave wages paid for up to twelve weeks, limited to $200 per day and $12,000 in the aggregate, at 2/3rds of the employee’s regular rate of pay. The amount of these tax credits is increased by allocable health plan expenses and contributions for certain collectively bargained benefits, as well as the employer’s share of social security and Medicare taxes paid on the wages (up to the respective daily and total caps).

According to the IRS guidance, to claim the tax credits, eligible employers must “report their total paid sick leave and family leave wages (plus the eligible health plan expenses and collectively bargained contributions and the eligible employer’s share of social security and Medicare taxes on the paid leave wages) for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return.” The IRS guidance further provides:

In anticipation of claiming the credits on the Form 941, eligible employers can keep the federal employment taxes that they otherwise would have deposited, including federal income tax withheld from employees, the employees’ share of social security and Medicare taxes and the eligible employer’s share of social security and Medicare taxes with respect to all employees up to the amount of credit for which they are eligible.

For additional information, interested employers can review the Form 941 instructions.

Finally, the guidance states the following:

If an eligible employer does not have enough federal employment taxes set aside for deposit to cover amounts provided as paid sick and family leave wages (plus the eligible health plan expenses and collectively bargained contributions and the eligible employer’s share of social security and Medicare taxes on the paid leave wages), the eligible employer may request an advance of the credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. The eligible employer will account for the amounts received as an advance when it files its Form 941, Employer’s Quarterly Federal Tax Return, for the relevant quarter.

Key Takeaways

The expansion of qualifying reasons to provide paid sick leave and obtain tax credits is an important development for all eligible employers because it provides another tool for many employers seeking to incentivize employees to get vaccinated. Now employers are not fighting this incentive battle alone when trying to encourage employees to become vaccinated; the government is upping the ante to incentivize employers to provide further relief and rewards to employees for getting vaccinated.

Of course, there are numerous other ways that both eligible and ineligible employers can incentivize employees to get vaccinated, and there are both pros and cons to mandatory vaccination policies. While a thorough discussion of these issues is beyond the scope of this brief update, employers interested in learning more about the legal and practical considerations for implementing vaccination policies (whether mandatory for an entire workforce, mandatory for a subset of employees based on job duties and exposure risk, or completely voluntary), can review our articles on vaccination policies and vaccine passports.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

ARTICLE BY Michael K. Mahoney,  James M. Paul  and Colin H. Hargreaves of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
For more articles on coronavirus vaccinations, visit the NLR Coronavirus News section

The Ongoing US Vaccine Passport Debate

One main principle among public health measures is to use the least restrictive method necessary to protect the population, or to do the greatest good. From the public health perspective, requiring COVID status credentials (“Credentials”) makes sense because it allows people who present a low risk to others to not be subject to unnecessary restrictions. However, implementation and use of Credentials will require careful consideration of individual privacy concerns, as well as the ethical questions related to access and additional privilege.

In late March, the Biden administration announced that vaccination credentials or “passports” would not be mandated at the federal level and that there would be no centralized universal federal vaccinations database. Instead, the federal government’s role will be to develop standards for such solutions so they are designed to protect people’s privacy and are “simple, free, open source, and accessible both digitally and on paper,” according to White House coronavirus coordinator Jeff Zients.

To date, federal standards for the interoperability, security, or privacy of Credentials have not been published. Despite this fact, smartphone apps are already popping up that allow individuals to upload their COVID-19 test results and vaccinations that create a digital QR code, which can be scanned to validate a person’s COVID status.  A few companies are also developing a “smart card” option that does not require a smart phone.

Despite the lack of federal standards, these digital Credential solutions are already being implemented by health care providers administering the vaccine and others who are looking to meet “reopening” requirements. Reason being, while federal and state governments are not willing to require vaccination, proof of COVID status will otherwise be required in order for people to enter certain places. For example, in California the rules for reopening indoor live events require proof of vaccination or a negative test result from individuals before they are allowed to enter the venue. In New York, some state employees reportedly are required to use the state’s Credential solution, the Excelsior Pass, when returning to work.

While Credentials make sense from a public health perspective, concerns remain. Politicians in multiple states have proposed anti-passport legislation, citing privacy and civil liberty violations created by public and private entities requiring proof of vaccination.

One concern is the lack of comprehensive federal legislation that would protect the information that could be collected from individuals in connection with digital Credentials. While health care providers, health plans, and their contracted technology providers are generally subject to the Health Insurance Portability and Accountability Act (HIPAA) and its implementing regulations – which impose certain security requirements and limit how health information may be used without a patient’s consent – HIPAA may not always apply to the data involved. For example, a patient could authorize their health care provider to disclose their test results and/or vaccine record to the Credentials vendor, who would then generate and maintain the passport credentials. The customer in this case is the patient, not a health care provider or health plan, which means that HIPAA would not apply.

While it seems like HIPAA applicability is a minor distinction, the privacy and security implications can be significant. Under HIPAA, patients may share their health information however they choose, and health care providers and plans are required to send records to third parties upon a patient’s request. The sending of such records does not, in itself, make the third party recipient subject to HIPAA.  Digital Credential vendors and the public and private entities verifying testing/vaccination status thus may bypass HIPAA’s privacy and security requirements.

Businesses who collect COVID status and other consumer information may still be regulated by the Federal Trade Commission (FTC). However, generally speaking, fewer privacy protections apply in this kind of situation, and the applicable security standards are less specific. At the state level, digital Credential vendors may be subject to laws that are similar to, or even more stringent than, HIPAA, but this is not always the case.

As a result, the door is potentially left open for companies to collect substantial amounts of electronic health and other data without the privacy and security protections that exist in a traditional health care environment. Due to the potential value of the data and the fact that the Credentials will be offered for free, some skeptics believe companies will want to monetize the data collected to the fullest extent possible. Additionally, the potential for government agencies to collect data using Credentials and utilize it for other purposes beyond public health (e.g. monitoring and law enforcement) is a legitimate concern.  If either of these things happen, there will still be a “cost” to people in using these Credentials, and in the absence of a reasonable alternative people may have little choice but to pay it.

The use of Credentials raises ethical concerns as well. Ultimately, Credentials should be available and accessible by all, via a variety of mechanisms. In practice, the use of Credentials raises the question of equal access and the further divide that could be created in society.  Reports indicate that vaccine availability still varies greatly among communities, and that the rate of vaccination among racial minorities and low-income populations remains low. As a result, requiring or allowing use of a Credential becomes a privilege for those who have been vaccinated, which could lead to significant bias toward anyone without a Credential. Implementation and use of Credentials also needs to account for the subset of the population who are unable to receive a vaccine for medical reasons and those who may object to a vaccine based on religious or philosophical beliefs. Without some form of accounting in the implementation of Credentials, these groups may be unnecessarily penalized.

For the moment, individual users of digital Credentials are trusting the recipients of their data. Private and public entities are left to make tough decisions about the development and use of Credentials from a legal and ethical perspective while trying to anticipate the guidelines that might be articulated by the Biden administration.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

ARTICLE BY Lara D. Compton and Bridgette A. Keller of Mintz
For more articles on vaccine passports, visit the NLR Coronavirus News section.