Brunini Law

Labor and Employment

New Stimulus Package and the Families First Coronavirus Response Act

by

On Sunday, December 27, 2020, President Donald Trump officially signed into law Congress’ most-recent major stimulus package, aimed at blunting the continuing economic effects of on-going COVID-19 pandemic.  Earlier this year, Congress passed a larger series of similar measures, including the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), as well as $104 billion Families First Coronavirus Response Act (“FFCRA”).  This most recent stimulus package totals $900 billion, and was signed in conjunction with a separate $1.4 trillion government funding bill.

The December 2020 stimulus package provides continued funding for a wide range of governmental assistance programs initiated earlier this year—including the Paycheck Protection Program and expanded unemployment assistance.  One question most HR and employment professionals had concerning the December 2020 stimulus package was what, if any, impact it would have on the fate of the FFCRA.

 

The Families First Coronavirus Response Act (FFCRA)

Signed into law on March 18, 2020, the FFCRA contained two principal mandates: (1) the establishment of new, paid sick leave rights for workers impacted by COVID-19 and those serving as caregivers for others with COVID-19; and (2) the establishment of new, enhanced leave entitlements under the Family Medical Leave Act (FMLA), including limited paid leave rights.  Over the past nine months, human resources professionals have worked hard to interpret and implement these new leave provisions.

 

The December 2020 Stimulus Package’s Impact on the FFCRA

One key feature of the FFCRA was the fact that it was set to automatically expire on Thursday, December 31, 2020.  Many experts felt that Congress would use the December 2020 stimulus package as an opportunity to extend the obligations/benefits of the FFCRA.  However, the final text of the December 2020 stimulus package does not extend the paid sick leave and paid family and medical leave requirements of the FFCRA. Therefore, an employer’s obligation to provide paid leave under the FFCRA will cease at the end of the year.  (Note: It is possible that the employee could be entitled to normal unpaid leave under the FMLA even after the FFCRA expires, if they still have weeks available under the FMLA.)

Congress did take the opportunity to extend the tax credit contained for both the Emergency Paid Sick Leave and the Emergency Family and Medical Leave contained within the FFCRA.  So, while employers are not required to provide paid leave under the FFCRA after December 31st, if they voluntarily elect to do so (and assuming covered employees have eligible leave remaining), these employers can continue to claim the payroll tax credit for those payments through March 31, 2021.

Despite Congress’ decision not to extend the FFCRA with the December 2020 stimulus package, we strongly encourage employers to continue to monitor this issue into early 2021, as President-elect Biden has already discussed plans to pass an even larger stimulus package once both he and the “new” Congress take office.  It is possible that this legislation could expand/enhance the FFCRA.

U.S. Department of Labor Provides Additional Guidance on Employers’ OSHA Recordkeeping Responsibilities During COVID-19

by

During the COVID-19 pandemic, employers have been forced to address the application of virtually every legal labor and employment obligation in the context of the pandemic.  One of these obligations includes an employer’s responsibilities under the federal Occupational Safety and Health Act (OSHA), which is administered by the U.S. Department of Labor (DOL).  The DOL previously published its Guidance on Preparing Workplaces for COVID-19, in which it outlined steps for employers to protect their employees.

On April 10, 2020, the DOL issued additional guidance addressing the agency’s enforcement of OSHA’s recordkeeping requirements amid the COVID-19 pandemic.  Generally, OSHA recordkeeping requirements command “covered employers” to record certain work-related injuries and illnesses on their OSHA 300 log. However, since the on-set of this pandemic, employers have wrestled with whether they are required to record an employee’s COVID-19 illness—and if so, when.

According to the DOL, COVID-19 is “recordable” and must be included on an employer’s OSHA 300 log, if:

  • The case is a confirmed case of COVID-19, as defined by Centers for Disease Control and Prevention (CDC);
  • The case is “work-related,” (as defined by 29 CFR § 1904.5); and
  • The case involves one or more of the general recording criteria, (as outlined by OSHA and set forth in 29 CFR §1904.7). Per OSHA, cases meet this recording criteria if it results in death, days away from work, restricted work or transfer to another job, medical treatment beyond “first aid,” or loss of consciousness.

In the same guidance, the DOL expressly stated that it will not require covered employers to make a determination regarding “work-relatedness” (Step # 2 above), except where:

  • There is objective evidence that a COVID-19 case may be work-related; and
  • The evidence was reasonably available to the employers.

The DOL expressly states that this limited recordkeeping waiver does not apply to employers in the healthcare industry, emergency response organizations (e.g., emergency medical, firefighting and law enforcement services), and correctional institutions.

The DOL’s stated goal of this limited enforcement is to “help employers focus their response efforts on implementing good hygiene practices in their workplaces, and otherwise mitigating COVID-19’s effects, rather than on making difficult work-relatedness decisions in circumstances where there is community transmission.”

Related Attorneys

Paid Leave & COVID-19: House Passes Temporary, Sweeping Expansion of FMLA

by

On Saturday (March 15, 2020), the U.S. House of Representatives passed H.R. 6201—the Families First Coronavirus Response Act  (“the Act”)—a sweeping economic stimulus plan aimed at addressing the on-going COVID-19 coronavirus outbreak and its continued impact on American workers and their families. The Act includes a variety of provisions, including:

  • Free COVID-19 testing
  • Multiple types of paid emergency leave (to be paid for by employers)
  • Enhanced unemployment insurance
  • Additional funding for nutritional programs
  • Protections for health care workers and employees responsible for cleaning at-risk places.
  • Additional federal funds for Medicaid

Among these provisions, the Act sets out several key mandates that impacts employers: (1) new, enhanced leave entitlements under the federal Family Medical Leave Act (“FMLA”), including paid leave under FMLA; and (2) new, separate paid sick leave rights for employees impacted by COVID-19 and those serving as caregivers for individuals with COVID-19.  Both of these emergency provisions would apply to all employers with less than 500 employees and would cover employees who have worked for the employer for at least 30 days.

At this point, the Act has not passed Congress.  While we expect the Senate to take quick action, key provisions could change, including those concerning employer coverage.  Brunini’s Labor & Employment Group is providing this report to let its clients know the current status of the legislation, as well as its potential effects.  However, we encourage readers to keep alert to further developments.

New FMLA Entitlements

Under the Act’s temporary expansion of FMLA, any individual employed by the employer for at least 30 days (before the first day of leave) may take up to 12 weeks of job-protected leave to allow the employee to:

  • Comply with a requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus;
  • Care for an at-risk family member who is adhering to requirement or recommendation to quarantine due to exposure to, or symptoms of, coronavirus; or
  • Care for the employee’s child if the child’s school or place of care (including if the childcare provider is unavailable) has been closed due to a public emergency.

The first two weeks of this leave can be unpaid, although employees may elect to use other paid benefits to cover (including vacation or sick leave) some or all of the unpaid period.  After the initial two week period, the employer must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled. (Part-time employees would be paid based on the average number of hours the employee worked for the 6 months prior to taking the leave, or the average number of hours the employee would normally be scheduled to work.) Employers with bargaining unit employees would apply the new FMLA provisions consistent with the bargaining agreement.

Of note, the Act also expands the definition of who is eligible as a “parent” under FMLA, to include a parent-in-law of the employee, a parent of a domestic partner of the employee, and a legal guardian or other person who served as the employee’s parent (also known as in loco parentis) when the employee was a child.

If enacted as written, thousands of employers not previously subject to the FMLA must provide job-protected leave to employees for a COVID-19 coronavirus-designated reason.  The Act allows subsequent regulations (to be crafted by the Secretary of Labor) to exclude certain healthcare providers and emergency responders from the definition of “eligible employee” and to exempt small businesses with less than 50 employees when it would jeopardize the viability of the business as a going concern.

New Paid Sick Leave Entitlement

In addition to the pay required under the expanded FMLA, covered employers (those with less than 500 employees) will be required to immediately provide employees (regardless of length of employment) with paid sick leave for use under the following circumstances:

  • To comply with a requirement/recommendation to quarantine due to exposure to, or symptoms of, COVID-19;
  • To self-isolate because the employee is diagnosed with COVID-19;
  • To obtain a diagnosis or care because the employee is exhibiting symptoms;
  • To care for or assist an at-risk family member who is self-isolating due to a diagnosis, who is exhibiting symptoms of COVID-19 and needs to obtain medical care, or who is adhering to the requirement or recommendation to quarantine due to a exposure to, or symptoms of, COVID-19; or
  • To take care of the employee’s child if the child’s school or place of care has been closed due to COVID-19 (including if the childcare provider is unavailable).

Under the Act, full-time employees would receive up to eighty (80) hours of paid sick leave at the employee’s regular rate of pay for reasons 1, 2 and 3.  For reasons 4 and 5, paid sick leave will be provided at 2/3 the employee’s regular rate of pay.  (Part-time employees would be paid based on the average number of hours the employee worked for the 6 months prior to taking the leave, or the average number of hours the employee would normally be scheduled to work.)

Importantly, this paid sick leave must be provided IN ADDITION to whatever the employer already provides.  An employer may not change its current paid leave policy after enactment of the Act to avoid the obligations of the additional mandated leave. At his/her request, an employee can seek this new paid sick leave in place of the initial 14 days of unpaid leave required by the new FMLA paid leave entitlements.

Tax Credits for Paid Sick Leave & Paid Family and Medical Leave

In order to mitigate the cost of the Paid Sick Leave mandate, the Act grants to employers a credit against their federal payroll tax obligations of up to 10 days of Paid Sick Leave pay each quarter, at a maximum rate of $511 per day for each employee that is directly impacted by the COVID-19 or up to $200 per day for each employee that is caring for a family member impacted by COVID-19 or a child whose school is closed or for whom childcare is unavailable due to COVID-19.  If the amount of the allowable credit exceeds the employer’s payroll tax liability, the excess will be refunded.   Employers are also entitled to a payroll tax credit for Paid Family & Medical Leave of up to $200 per day per employee, up to $10,000 in the aggregate for all calendar quarters.

Self-employed individuals are granted a similar refundable credit against their federal income tax liability based upon their average daily self-employment income, subject to the same $511 and $200 daily limits.

Based on its plain language, the Act does not provide paid leave coverage to employees who are not able to report to work solely due to business determinations or closures.  Under the Act, to qualify for paid sick leave pay or family and medical leave, employees must fall into one of the above leave situations. If an employer prohibits employees from reporting to work on-site due to Coronavirus/COVID-19 concerns, and employees are unable to work remotely and do not otherwise fall within the leave reasons discussed above, it appears they would not be eligible for benefits under the Act. In such circumstances, leave will be governed by state or local statutory sources and the company’s policies or collective bargaining agreements.

As mentioned above, the Senate is expected to pass the legislation, in some form or fashion, and the President is expected to sign it shortly thereafter.  However, commentators expect that there may be changes made by the Senate before the legislation is finalized. In addition, many states are proposing similar emergency legislation to enact or expand their own paid sick leave or family and medical leave laws to cover Coronavirus-related issues—in addition to any new requirements at the federal level.

Both the new FMLA entitlement and the new Paid Sick Leave entitlement will take effect 15 days after enacted.  As written, the Act is slated to remain in place until the end of 2020.  We will continue to monitor this rapidly evolving situation and provide updates as appropriate.

Related Attorneys

Employment and HR Law Brunch & Learn Presented by Chris Fontan and Lauren Lawhorn

by

Chris Fontan and Lauren Lawhorn spoke at the Employment and HR Law Brunch & Learn Workshop given by Rankin County Chamber and TempStaff in Flowood on July 17, 2019.   Their presentations provided to attendees may be viewed in the links below.

Rankin County Chamber 2019 – Employment Verification Then and Now

Rankin County Chamber 2019 – Mississippi Employment Laws

Rankin County Chamber 2019 – FLSA New OT Rule

Related Attorneys

BREAKING: Take 2 – U.S. Department of Labor Unveils Updated Attempt to Expand Employee Overtime Eligibility

by

On Thursday, March 7, 2019, the United States Department of Labor (the DOL) released its newest Proposed Rule that, if implemented, would broaden federal overtime pay regulations to cover millions of additional workers who are currently exempt from overtime eligibility.  Under the Proposed Rule, the DOL seeks to update the regulations governing which executive, administrative, and professional employees (the so-called “white collar” workers) are entitled to minimum wage and overtime pay protections under the Fair Labor Standards Act (the FLSA).

The FLSA requires employers to pay its “non-exempt employees” overtime (1 ½ the workers’ “regular rate of pay”) for all hours worked in excess of forty (40) per week.  See 29 U.S.C. § 207.  The DOL’s regulations implementing the FLSA sets forth a variety of employment classifications that are “exempt” from the FLSA’s overtime requirement—including employees performing executive, administrative, and/or professional job duties.  Since the 1940’s, in order for an employee to qualify as an exempt “white collar” employee, he/she had to meet three “tests”:  (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed; (2) the amount of salary paid must meet a minimum specified amount; and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties (as defined by the regulations).  The DOL last fully updated these regulations in 2004, setting the current minimum salary threshold at $455 per week (or $23,660 per year).

In May 2016, the Obama-era DOL attempted change to the overtime rule that would have doubled the minimum salary level for the so-called “white collar” exemption from $23,660 to nearly $48,000 per year.  This proposal would have also increased the total annual compensation requirement needed to exempt “highly compensated employees” to $134,004 annually (previously set at $100,000), established a mechanism for automatically updating the minimum salary level every three years and allowed employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the new standard salary level.

Ultimately, the May 2016 proposal was challenged in court. On November 22, 2016, the U.S. District Court for the Eastern District of Texas enjoined the DOL from implementing and enforcing the proposal. On August 31, 2017, the court granted summary judgment against the DOL, invalidating the May 2016 proposal.  Currently, the Department is enforcing the regulations that have been in place since 2004, including the $455 per week standard salary level.

While an appeal of that decision to the United States Court of Appeals for the Fifth Circuit is pending, the current DOL seeks to formally rescind the Obama-era DOL’s 2016 proposal with this Proposed Rule.  In its place, the new Proposed Rule would raise the minimum salary level for exempt employees to only $679 per week, or $35,308 annually.  The Proposed Rule does have many similarities to the 2016 proposal, including:

  • Allowing employers to count nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level test (provided such bonuses are paid annually or more frequently);
  • Increasing the total annual compensation requirement needed to exempt “highly compensated employees” to $147,414 annually (currently set at $100,000 annually); and
  • Not proposing any changes to the standard duties test for the white collar exemptions.

If the Proposed Rule is adopted, the DOL estimates that over 1.3 million workers who are currently classified as “salaried exempt”—and thus, not eligible for overtime—will become eligible for overtime pay.  While an increase, this figure is lower than the estimated 5 million workers who would have become eligible for overtime under the 2016 proposal.  As with the prior proposal, observers feel the number could rise well above the projected increase.  If implemented, the Proposed Rules will undoubtedly result in greater expense or operational change for many employers as they struggle to deal with a shrinking pool of workers who are eligible for an exemption from the overtime pay.

The Proposed Rule is still subject to a lengthy comment period before implementation.  The DOL encourages any interested members of the public to submit comments about the proposed rule electronically at www.regulations.gov (Rulemaking docket RIN 1235-AA20).

Though the Proposed Rule has not yet been finalized, employers are encouraged to be proactive and engage their legal counsel to begin planning for the change now.  Preparations should include auditing current practices and projecting the cost of change and FLSA compliance under the anticipated new framework. This includes evaluating the possibility and effects of significantly higher operating costs.

U.S. EEOC Challenges Standard Severance Agreements

by

Recently, the U.S. Equal Employment Opportunity filed suit against CVS Caremark—the nation’s second largest drugstore chain, challenging the company’s standard severance agreement.  In the lawsuit, the EEOC specifically challenged six (6) separate provisions contained in CVS’ severance agreements:

(1)    A Cooperation Clause – a clause requiring the former employees to promptly notify the company of any subpoena, deposition notice, interview request or other process relating to any administrative investigation;

(2)    A Non-Disparagement Clause – a clause in which the former employees promise not to make any statements that would “disparage,” or harm the business reputation of the company and the company’s officers/directors (even if the statements are true);

(3)    A Non-Disclosure Clause – a clause in which the former employees agree to not disseminate information about staff, wages and benefit structures, succession plans and affirmative action plans (without the prior written authorization of the company);

(4)    An Attorneys’ Fees Clause – clause in which the former employees promise to promptly reimburse the company for any legal fees it incurs as a result of a breach of the agreement by the former employee;

(5)    A Covenant Not to Sue – a promise from the former employees no to sue (including the filing of any company with any agency); and

(6)    A General Release – a release by the former employees of any claim, including claims of unlawful discrimination.

If these provisions sound familiar, there’s a good reason—virtually all employers rely on these provisions to end the threat of potential lawsuits.  In exchange, the departing employees receive money or other consideration.  According to CVS, more than 650 former employees entered into separation agreements with the company based on the challenged severance agreement.

The EEOC claims that CVS’ severance agreement contracts interfere with a worker’s rights to bring charges with the agency.  But CVS said the EEOC’s suit is “unwarranted” because its severance agreement includes language “to state that it does not prohibit employees from doing so.”  It is too soon to predict the outcome of this litigation—so the suit is definitely worth monitoring.

President Obama Signs Executive Order Establishing Minimum Wage for Federal Contact Employees

by

bigstock-Minimum-Wage-Word-Cloud-6561851-01772689-227x300Following through on a promise made in his State of the Union Address, President Barack Obama formally signed an Executive Order on February 12, 2014, establishing a separate minimum wage for employees of federal contract workers.  Effective January 1, 2015, the minimum wage for most Federal contractor employees shall be set at $10.10 per hour.  “Tipped workers,” employed pursuant to a Federal contract, are to be paid a minimum of $4.90 per hour, with incremental increases to begin in 2016.  Additionally, beginning January 1, 2016, the Executive Order allows for the Secretary of Labor to modify this separate minimum wage (after providing at least 90 days’ notice of such modification).  The Executive Order expressly incorporates existing definitions and regulations under the Fair Labor Standards Act (29 U.S.C. 201 et seq.), the Davis Bacon Act (40 U.S.C. 3141 et seq.) and the Service Contract Act (40 U.S.C. 6701 et. seq.).

While this increase does not impact employers of non-governmental contractors, President Obama stated that his ultimate goal is for passage of legislation increasing the federal minimum wage for allworkers to levels commensurate with this Executive Order.

Click here to read entire order.

Treasury Issues Employer Mandate Regulations

by

On Monday, February 10, the Treasury Department and Internal Revenue Service issued long-awaited final regulations implementing the Affordable Care Act’s employer shared responsibility rules.  Commonly known as the “employer mandate,” the Act provides that applicable large employers may be penalized for failing to offer their full‐time employees an opportunity to enroll in health coverage, or if the coverage offered is unaffordable or does not provide minimum value.  (Applicable large employers are those who employed an average of at least 50 full-time employees on business days during the preceding calendar year, and employers with fewer employees are not subject to the employer mandate rules.)

Originally slated to become effective January 1, 2014, the Treasury Department and IRS issued proposed regulations in December 2012.  A few months later, though, the White House announced a one-year delay in enforcement of the employer mandate.  For the most part, the 227-page final regulation should adopt the earlier proposed rules, though not without a few notable changes:

  • One-year delay for midsize employers.  The employer mandate will only apply to employers with 100 or more full-time employees in 2015.  Employers with between 50 and 99 full-time employees won’t have to comply with the employer mandate until 2016, although they will have to certify that they are not cutting employees or reducing hours for purposes of falling below the 100 employee mark.
  • Relaxed requirement for very large employers.  The proposed regulations required applicable large employers to offer coverage to at least 95 percent of full-time employees to be considered compliant with the employer mandate.  The final regulations relax the requirement, phasing in the percentage of full-time employees that must be offered coverage from 70 percent in 2015 to 95 percent in 2016 and beyond.
  • Volunteers not counted as full-time employees. There had been some debate in Washington over whether volunteers (particularlyvolunteer firefighters and emergency responders) would count as full-time employees.  Commenters explained that volunteer service would be discouraged if employers were required to count volunteer hours when determining whether individuals are full-time employees.  Therefore, the final regulations clarify that service hours do not include hours worked as a “bona fide volunteer.”
  • Other.  There are several smaller adjustments.  Many of the fine-tunings relate to how employers are required to calculate employee work hours.  Seasonal employees, student work-study programs, adjunct faculty, and other employment situations present unique challenges, which the final regulations address.

Click here for the Treasury Department’s press release.