Labor & Employment Archives - Page 38 of 155

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.

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:

It is work-related, which OSHA presumes if the vaccine is mandated by the employer;
It is a new case; and
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.

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.

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.

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.

ARTICLE BY Lara D. Compton and Bridgette A. Keller of Mintz

For more articles on vaccine passports, visit the NLR Coronavirus News section.

Executive Order Increases the Minimum Wage for Federal Contractors to $15

On April 27, 2021, President Biden signed Executive Order 14026, which increases the minimum wage for workers on or in connection with a federal government contract to $15.00 as of January 30, 2022. This Executive Order increases the minimum wage level set by President Obama’s 2014 Executive Order 13658, which has been set at $10.95 per hour since January 1, 2021.

The new minimum wage applies to most new federal contracts, contract-like instruments, solicitations, extensions or renewals of existing contracts or contract-like instruments, and exercises of options on existing contracts or contract-like instruments that are entered into or exercised on or after January 30, 2022. However, the Executive Order “strongly encourage[s]” agencies to ensure, to the extent permitted by law, that the wages paid under existing contracts are consistent with the Executive Order’s requirements. The Executive Order provides that compliance with the increased minimum wage will be a condition of payment on the government contract, raising the potential for False Claims Act liability if a government contractor accepts payment on a federal contract while failing to pay covered workers the required wage. The Executive Order’s requirements must, in many circumstances, be included in subcontracts.

Although the Executive Order does not elaborate on which employees work “on or in connection” with a federal contract, it is likely that the Department of Labor’s forthcoming regulations implementing the Executive Order will follow the lead of its previous regulations implementing Executive Order 13658. Under those regulations, workers perform services “on” a contract if they directly perform the services called for by the contract’s terms, and they perform services “in connection with” a contract if they perform work activities that, although not specifically called for by the contract, are necessary to the contract’s performance.

The Executive Order also addresses the cash portion of the tipped minimum wage for covered workers. The cash wage for covered workers who qualify as tipped employees will increase to $10.50 as of January 30, 2022. The wage will then increase as of 85% of the general minimum wage as of January 30, 2023, and 100% of the general minimum wage as of January 30, 2024, at which point the tip credit will be eliminated.

The Department of Labor is required to issue regulations implementing the Executive Order by November 24, 2021. Federal contractors and subcontractors should consider beginning preparations for the increased minimum wage now, in advance of the regulations, by identifying potentially covered workers whose wages may require adjustment. Polsinelli will continue to update the contractor community when regulations are issued.

ARTICLE BY Jack Blum of Polsinelli PC

For more articles on federal contractor minimum wage, visit the NLR Government Contracts, Maritime & Military Law section.

Chicago’s Vaccine Anti-Retaliation Ordinance – What Employers Need to Know

On April 21, the Chicago City Council (“City Council”) passed the Vaccine Anti-Retaliation Ordinance (the “Ordinance”) establishing protections for Chicago workers who take time off of work to receive the COVID-19 vaccine. The Ordinance broadly applies to individuals, including independent contractors, who perform work in the City of Chicago. It is effective immediately and remains in effect until further notice.

Overview of the Ordinance

Under the Ordinance, employers must allow workers to take time off to obtain the COVID-19 vaccine without retaliation against them in their terms and conditions of employment—whether the worker voluntarily chooses to get vaccinated or whether vaccination is mandated by the employer. Workers may either choose to take time off to receive the vaccine, or to do so outside of work. However, the Employer may not force employees to receive the vaccine outside of work if the employee opts to get the vaccine during working time.

Unless the employer mandates the vaccine, employers do not need to pay employees for the time off. However, employers must allow workers to use any accrued paid time off (“PTO”) for unpaid time required to receive the vaccine. Please note, it is at the option of the employee whether or not to use PTO to receive the vaccine: An employer cannot force the use of accrued PTO.

If an employer mandates the vaccine, the employer must pay the employee for the time spent getting vaccinated, if the vaccine appointment is during a shift, at their regular rate of pay, capped at four hours per vaccine dose. Employers that mandate COVID-19 vaccinations cannot require workers to use accrued paid time off as an alternative to compensating workers in accordance with the Ordinance.

Enforcement and Penalties for Violations

The Chicago Office of Labor Standards will enforce the Ordinance. Employers found to violate the Ordinance are subject to fines that may range from $1,000 to $5,000 per violation.

Individuals may also sue in court for remedies including reinstatement and triple damages.

Practical Considerations for Employers

At present, neither the Ordinance nor any accompanying guidance addresses what documentation, if any, may be required from a worker to verify the need for leave under the Ordinance. The Ordinance is also silent as to whether a covered worker is entitled to additional protected leave—or whether an employer may require the worker to use accrued PTO—in the event the worker is temporarily unable to return to work due to adverse effects/symptoms experienced as a result of receiving the vaccine. We anticipate that additional guidance for employers will be issued addressing questions left unanswered by the current language of the Ordinance.

We suggest that employers consider the following to maximize compliance and reduce legal risk:

Update COVID-19 leave policies to reflect the requirements of the Ordinance;
Train supervisors and managers on the requirements of the Ordinance;
Communicate updated vaccine leave policies with employees;
Determine whether vaccine mandation is appropriate for the business, consistent with state and federal labor and employment laws;
Establish policies for the documentation of the need for leave, consistent with other state and federal anti-discrimination and confidentiality laws.

©2021 von Briesen & Roper, s.c

ARTICLE BY Zachary J. Flood, John A. Rubin and Robert J. Simandl of von Briesen & Roper, s.c.

For more articles on vaccines, visit the NLR Coronavirus News section.

Goodbye COVID-19 Priority Phases and Tiers, Hello Battles With Vaccine Passports!

On Tuesday, April 6, 2021, while touring a vaccination site in Alexandria, Virginia, President Joe Biden imposed a deadline on every state to open up vaccination eligibility to all adults by April 19, 2021 (moving up the previous target date of May 1, 2021). The White House COVID-19 coordinator, Jeffrey Zients, told governors also on April 6, 2021, that more than 28 million doses of vaccines will be delivered to all of the states the week of April 4-12, 2021. The president’s directive matches Dr. Anthony Fauci’s estimate in November 2020 that the earliest a vaccine would be available for most nonprioritized Americans would be April 2021.

While it is unclear whether or how that deadline could be enforced—and vaccination eligibility and scheduling does not mean that shots will actually get into people’s arms by, or on, the end of April (that will take several more weeks for sure)—it appears that the country is on the verge of opening up the floodgates regarding vaccine availability.

More than a dozen states have already completely opened up eligibility to anyone 16 years old and older. Now that there are vaccines available from three pharmaceutical companies, and the first few priority phases and tiers have been exhausted in most states, it seems that anyone willing to get the vaccine will be able to do so in very short order. Of course, polls show that approximately 13 percent of individuals say they will “definitely not” get vaccinated and another 25 percent say they will either “wait and see” or get vaccinated “only if required.” This may help explain why supply has met (or quickly will meet and exceed) the current demand for the vaccine.

Texas is one of the states opening up eligibility to everyone over the age of 16, but Governor Greg Abbott on April 6, 2021, signed an executive order prohibiting governmental entities (and those private businesses receiving public funds) from requiring proof of vaccination for purposes of receiving any service or entering any place—whether through the use of “vaccine passports” or otherwise. According to the governor, he issued these prohibitions and protections in Texas because each person has “the option to accept or refuse administration of the product” under an emergency use authorization (like all three of the currently available vaccines) and vaccination “is always voluntary in Texas and will never be mandated by the government.” This executive order also classifies mere “vaccination status” as “private health information,” although the federal government has explained that asking or requiring employees to show proof of receiving a COVID-19 vaccination is not a disability-related inquiry under the Americans with Disabilities Act. Florida Governor Ron Desantis issued a similar Executive Order on April 2, 2021, but it prohibits all “businesses in Florida . . . from requiring patrons or customers to provide any documentation certifying COVID-19 vaccination . . . to gain access to, entry upon, or service from the business.” While the Executive Order does not reference “employers” or “employees,” it is not clear yet how broadly the prohibitions will be interpreted.

Considerations for Tweaking Vaccination and “Return to Office” Policies

Even if an employer may legally require full vaccination before employees return to its offices or facilities, requiring employees to choose between a vaccine and all previously existing aspects of their jobs could still breed resentment, and risk legal action. But there is a good business case to be made for requiring full vaccination of all employees working at a worksite with other employees. The U.S. Centers for Disease Control and Prevention (CDC) recently provided guidance—Interim Public Health Recommendations for Fully Vaccinated People—and explained that fully vaccinated people need not wear masks or observe social distancing during private indoor visits with a small group of other fully vaccinated individuals (although even fully vaccinated individuals should “[a]void medium- and large-sized in-person gatherings” and continue to practice other preventative measures “in public settings”). The CDC guidance does not specifically address how to manage fully vaccinated employees in the workplace, and for the time being, existing state and local regulations regarding face coverings and other mitigation measures may still apply.

Given the above-referenced statistics and relatively high percentage of those who will oppose vaccination or receive it only begrudgingly, employers may want to consider alternatives such as continuing to allow remote working arrangements or allowing unvaccinated employees to return to their worksites under continued health and safety protocols, such as strict social distancing, masking, and quarantining.

However, other employers cannot (or may prefer not to) allow remote working arrangements indefinitely. For those employers, slowly phasing in a mandatory vaccination requirement may make sense, but such employers may also want to keep in mind reasonable accommodation requests from employees based on sincerely held religious beliefs or covered disabilities. Potential accommodations include granting exemptions from the vaccination requirement, waiting for alternative vaccine products without objectionable ingredients, or requiring additional mitigation measures, such as increased social distancing, continued use of face coverings, or reassignment to a different position or area of the workplace. Reviewing accommodation requests and engaging in the interactive process is a fact-intensive process, which often require careful consideration.

If a workplace is only open for those who have been vaccinated, knowing who is vaccinated is easy—everyone is! But, for those workplaces that allow both vaccinated and unvaccinated employees to return to their worksites, how do employees know who among them has been vaccinated—color-coded name badges, stickers, or other accessories? Will coworkers care if those working closely around them all day long have been vaccinated? How should employers track vaccination status, and can they? Currently, other than the Texas governor’s executive order, nothing prohibits employers from requiring proof of vaccination and (confidentially) keeping records of such vaccinations (e.g., seeing and maintaining a copy of employees’ CDC COVID-19 vaccination record cards). However, labeling (or branding) employees as either vaccinated or unvaccinated might lead to shaming, bullying, or harassment in the workplace if not properly implemented, monitored, and controlled.

The debate continues regarding whether “vaccination passports” or other types of identification should be used to distinguish between those who have been vaccinated and those who have not. Many restaurants, bars, concert venues, fitness centers, movie theaters, theme parks, and other businesses and organizations have said they will likely start requiring proof of vaccination (or proof of the need for an accommodation) in order for people to enter their facilities and enjoy their food, products, entertainment, and services. And, currently, most employers can start doing the same (subject to prohibitions that exist in Texas, Florida, and other states that follow suit).

Current Considerations for Employers

Employers may want to continue to communicate with employees (and continuously update them) regarding the organization’s position on vaccination, remote working arrangements, and safety protocols.

Employers may want to take this opportunity to implement a voluntary vaccination policy or convert a currently voluntary policy into a mandatory policy (whether for all employees or for those subsets of employees who are allowed or required to return to work in-person). And, if the ability to return to work in-person is not sufficient to reach a desired level of vaccinations in their workforces, employers might want to consider providing further incentives to vaccinate, such as monetary bonuses, gift cards, extra paid time off, or other rewards, if they have not already. However, a vaccination requirement for returning to an office or facility might incentivize employees to refuse vaccinations (or not tell their employers that they have been vaccinated) in order to continue their remote working arrangments—thus, ironically, creating a disincentive for getting vaccinated.

Either way, employers no longer have to worry about figuring out which employees might qualify for vaccinations under all the vague, confusing, and conflicting phases and tiers initially set up by the CDC and implemented with various tweaks by each of the states. And that is certainly great news and progress!

ARTICLE BY James M. Paul of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more articles on vaccine passports, visit the NLR Coronavirus News section.

Help! We Think Our Employee Is Lying About COVID-19 Exposure or Symptoms

Does this fact pattern sound familiar?

Employer has a COVID-19 policy requiring employees with COVID-like symptoms or exposure to a COVID-positive (or suspected COVID-positive) person to report the same to Human Resources. If reported, the employee is required to not come to work (or go home) and to self-isolate or quarantine for 14 days, consistent with CDC Guidance.

Seems easy enough. But then an employee calls work exactly two weeks prior to a company-paid holiday, and reports not feeling well (fever, slight cough, and muscle fatigue) – typical COVID-19 symptoms. The employee is told to stay home and “get better,” but not to come to work for 14 days consistent with CDC guidance and company policy.

Employee returns to work after the 14-day quarantine and the four-day holiday weekend and works for two weeks. But then, the employee reports to Human Resources that he was just informed by a friend, with whom he was at a bar the previous night (and with whom he was in close contact), that the friend has COVID-like symptoms. Consistent with company policy, employee is told to go home and quarantine/monitor for symptoms. Fourteen days later, employee returns.

The next month, employee informs Human Resources that he was told that yet another friend with whom he was in close contact suspects he may have COVID-19. Employee reports the friend had been helping him move, told him the next day he had been feeling really ill, and was just told that his roommate had COVID-19. Employee is sent home and told to quarantine for 14 days and monitor for symptoms. Fourteen days later, employee returns to work.

There have now been three instances in which employee has been away from work for 14-day periods. His reliability is in serious question. And worse, the company suspects he may not have been telling the truth, just so he could get off work. In fact, Human Resources was informed that the employee is a “big-time skier” and often skis during the winter. So what can you do? Here are some options (and you can go with more than one) for consideration.

Question the employee about the circumstances of the symptoms or “close contact.” For instance, on a form, have employee describe in writing all facts supporting his claim that he has experienced COVID-19 symptoms within the past 48 hours.
Ask employee to describe all facts supporting his claim that within the past 14 days, he or any member of his household has been in close contact with someone who has recently tested positive for COVID-19 or has suspected COVID-19 symptoms.
Require the employee to sign an attestation form stating that the claims of symptoms/close contact are true and accurate: I certify that the above information is true and accurate and that any misrepresentation of the information provided could subject me to potentially adverse employment action, including but not limited to discipline and discharge.
As employers often do in suspected worker’s compensation fraud matters, you can hire an investigator to “follow” or investigate the employee while supposedly quarantining. Is he, in fact, quarantining? Or is he spending his days on the ski slopes?

Unfortunately, there are no “perfect” fixes to these challenging situations. However, because the situation involves COVID-19 does not mean that the employer is handcuffed. Just like other situations where an employee may be suspected of being dishonest, you can investigate and take action based on upon any dishonesty. The world may have changed significantly since March 2020, and workplaces may have also changed since the onset of the pandemic; however, employee honesty will continue to be a legitimate work expectation – the lack of which may lead to a legitimate, nondiscriminatory adverse employment action.

ARTICLE BY Daniel A. Kaplan of Foley & Lardner LLP

For more articles on coronavirus policies, visit the NLR Labor & Employment section.

EEOC Will Issue Guidance on COVID-19 Vaccine Incentive Programs Offered by Employers

Lawmakers and many employer organizations have urged the Equal Employment Opportunities Commission (EEOC) to issue guidance to companies that are considering providing incentives to employees who get the COVID-19 vaccine. Specifically, Sen. Richard Burr and Rep. Virginia Foxx stressed the importance of guiding employers that want to protect their employees stating,

“Employers actively working to protect their employees by increasing the number of workers receiving vaccinations through incentive programs are seeking assurance this action is allowable and does not violate important labor laws such as the Americans with Disabilities Act…”

In response, just a few days ago Carol Miaskoff, the EEOC’s acting legal counsel, stated that the agency expects to update its technical assistance to address these issues, but that the work is still ongoing. She did not indicate when the EEOC would issue its guidance.

Even without the promised guidance, many employers have offered incentives to their employees who receive the COVID-19 vaccine, including paid time off and cash bonuses, but the concern is the legality of the incentive programs. Do these incentives violate federal anti-bias laws? Do they violate the Americans with Disabilities Act (ADA)? If an employee cannot receive the vaccine for medical or religious reasons, how are those employees being treated?

Employers should be careful when offering incentives to employees prior to the EEOC’s guidance. Things to consider before offering incentives are to look at the size of the incentive, meaning if the incentive is too large, it may lose its “voluntary” status, the value of the incentive, and to ensure there isn’t a disability-related inquiry of the employees.

ARTICLE BY Amanda M. Connelly of Roetzel & Andress LPA

For more articles on the COVID-19 vaccine, visit the NLR Labor & Employment section.