On April 27, 2020, USCIS released significant new changes made to the Handbook for Employers: Guidance for Completing Form I-9.  The Handbook is a valuable resource for employers regarding questions on I-9 completion and compliance and addresses many commonly asked questions by employers. Notable new guidance includes areas such as: Clarification on which documents may be used as List B and List C acceptable documents. An explanation on who may serve as an authorized representative of an employer to complete Section 2 of the I-9. How to handle document expiration dates based on automatic extensions of employment eligibility documents. How to complete the I-9 with EADs automatically extended by Federal Register notices. Other updates based on recent Form I-9 revisions, major guidance changes, new content, and clarifications are included in the new Handbook. A comprehensive employment verification system is a critical part of protecting a company from liability in the event of an ICE Worksite Inspection. Polsinelli attorneys are available to answer your questions regarding the changes to the Handbook for Employers or regarding Form I-9 compliance.

Due to the COVID-19 pandemic, schools in the United States have generally suspended brick-and-mortar operations nationwide and are almost exclusively conducting classes through remote learning for the remainder of the academic year. Providing learning support and other care to children staying home due to school closures necessitates a meaningful level of adult supervision by parents who would often otherwise be working. Relatedly, parents of younger children are grappling with a need to work while supervising their toddlers as many child care facilities, including before and after school care programs, are also closed. In light of the ongoing nature of the pandemic, various summer programs for children are following suit. As the pandemic continues without a vaccine or other effective drug therapies, federal, state, and local governments are attempting to develop more advanced infection control plans for re-opening public activities including schools, child care facilities, and summer programs. Whether those programs do, in fact, re-open, many families may opt to keep their children home to minimize the risk of COVID-19 infection. As children idle longer at home and parents struggle with an ongoing gap in child care, U.S. employers and their workforce face significant uncertainty in addressing child care matters during this unprecedented pandemic. Juggling child care and work will likely continue to affect workforce productivity and adversely impact employers of all sizes well into the summer. The federal government attempted to provide some relief to families through the passage of the Families First Coronavirus Response Act (“FFCRA”), which requires most employers with fewer than 500 employees to provide certain pandemic-related paid leave benefits to employees. Details regarding the benefits provided under the FFCRA can be found here, but they include paid leave benefits for employees who are unable to work due to the need to care for one or more minor children whose school or place of care [1] is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.  As it relates to child-care related leave connected to COVID-19, the FFCRA requires employers to foot the bill for up to 12 weeks of paid leave for eligible employees. The first two weeks of leave (up to 80 hours) may be paid under the Emergency Paid Sick Leave Act (“EPSLA”) [2].  After the initial two weeks of leave, an eligible employee may take up to an additional 10 weeks of paid leave under the Emergency Family and Medical Leave Expansion Act (“EFMLA”). The paid leave benefit is capped at $200 per day and $10,000 total for each eligible employee, and employers may take a dollar-for-dollar credit against their quarterly payroll tax payments. However, considering the pandemic may continue for many months, the paid leave provisions of the FFCRA are unlikely to be adequate in addressing the challenges employers and employees now face, and will continue to face as they head into summer. Unfortunately, the fact that the school year will be ending soon will not eliminate the need for child-care based leave if the pandemic persists. The FFCRA recognized this by including summer camps and summer enrichment programs. As a result, maintaining a flexible approach relating to the use of these paid leave benefits may prove crucial to allowing caregivers to effectively continue in the workforce into the summer.  Ultimately, however, it appears increasingly likely that employers need to prepare for longer term implications of children staying at home through the summer. While employees and employers must both agree for these paid leave benefits to be taken intermittently, reaching an agreement that allows for the pacing of a workforce’s utilization of EPSLA and EFMLA leaves may extend the benefit longer than it would otherwise be available. For example, an employee may be able to work half days over 20 weeks rather than take a full 10 sequential weeks off, or work two or three days a week, similarly extending the benefit. Where employers and employees can reach agreement on flexible scheduling, such staggering of leave may help struggling parents patch together a schedule that both allows productive time for their job every week as well as allows necessary supervision of their children while they are at home. However, unlike traditional FMLA, the Paid FMLA Leave is just that - a paid benefit, and therefore, employees may be less incented to stagger the use of this benefit. That said, staggering this benefit over the course of the remaining academic year and summer may be exactly what is required for employees to manage through what everyone hopes to be the worst of the pandemic. If your company has questions about the legal implications of their employees’ longer term child care challenges and those employees’ rights under the Families First Coronavirus Response Act, contact the authors of this article or the Polsinelli attorney with whom you regularly work. [1] “Place of care” is defined for purposes of the benefits described in this post as a physical location where care is provided for the child while the employee works for the employer.  Place of care is broadly defined as a physical location that does not have to be solely dedicated to such care and includes day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs and respite care programs. [2] This is provided the eligible employee has not already taken all or part of available EPSLA leave for a COVID-19 another qualifying reason.  If the eligible employee has exhausted such entitlement, the employee may utilize accrued but unused paid leave to cover the gap under EFMLA leave becomes available.

On April 17, 2020, OFCCP released three new directives that aim to advance outgoing Director Craig Leen’s longstanding focus on increasing the agency’s transparency and efficiency.  The new directives are: 1.      Directive 2020-02:  Efficiency in Compliance Evaluations 2.      Directive 2020-03:  Pre-Referral Mediation Program 3.      Directive 2020-04:  Ombuds Service Supplement Although these directives are agency policy statements that do not create binding legal rights or obligations, the issuance of these three directives is a promising sign to the contractor community that Director Leen’s agenda may continue following his eventual departure from the agency. Directive 2020-02 – Efficiency in Compliance Evaluations Directive 2020-02 is arguably the most important of the three new directives to contractors.  The directive seeks to build on prior efforts to reduce the number of aged audits and expedite the resolution of OFCCP compliance evaluations.  This has been one of Director Leen’s major priorities, and the directive notes that between FY 2018 and FY 2019 the agency reduced the average time to complete a compliance evaluation from 516 days to 399 days, a 23% reduction.  The directive defines “aged cases” as those that have not resulted in administrative closure, a conciliation agreement, or referral to the Office of the Solicitor within two years, and states OFCCP’s new goal of reducing the number of aged cases below 15% of the agency’s total case load. The new directive implements both internal and external measures to reach this goal.  Internally, the agency will seek to close compliance evaluations within 180 days of the issuance of a Scheduling Letter if there are no preliminary findings of discrimination and issue a Pre-Determination Notice (PDN) within one year of the Scheduling Letter if OFCCP finds discrimination.  OFCCP’s National Office will receive “detailed monthly reports” about the progress of aged evaluations.  Regional directors will required to implement an action plan to expedite the completion of these evaluations.  Compliance officers will also be required to provide monthly status reports to contractors on the progress of aged evaluations. Externally, the directive provides contractors with a mechanism to escalate aged evaluations to the National Office’s attention.  If an evaluation remains open for more than a year after the issuance of a Scheduling Letter without a PDN, or more than two years without referral to the Office of the Solicitor, contractors may petition the OFCCP’s Director and Ombudsman to review the evaluation.  Prior to submitting a petition, the contractor must first confer with the applicable Regional Director about the evaluation.  In response to a petition, the Ombudsman will review and report upon the status of the evaluation, and the Director will determine how to appropriately proceed. Directive 2020-03 – Pre-Referral Mediation Program Directive 2020-03 builds upon the Early Resolution Program created by Directive 2019-02 to seek amicably to resolve compliance evaluations short of enforcement actions.  The directive creates a new, additional alternative dispute resolution program that will take place before findings of discrimination are referred to the Office of the Solicitor for review.  Mediation will be conducted by members of the Ombudsman’s office or other neutral third parties agreed upon by the contractor and OFCCP.  Importantly, the new mediation program is not a substitute for the agency’s current conciliation procedure that occurs between the issuance of a Notice of Violation and a Show Cause Notice.  The directive reserves OFCCP’s right to dispense with the mediation requirement in cases where the alleged violations concern a contractor’s failure to provide OFCCP with access to records or information or in the “very rare case” where OFCCP elects to proceed directly to enforcement without the issuance of a Show Cause Notice due to the existence of “exceptional circumstances.” Directive 2020-04 – Ombuds Service Supplement This directive expands and clarifies the role of OFCCP’s Ombudsman.  The Ombudsman is generally responsible for understanding and addressing the concerns of OFCCP’s stakeholders, addressing those concerns with the agency, and identifying potential areas for improvement.  According to the directive, the Ombudsman is not a member of other OFCCP work teams and should not be influenced or incentivized based on other OFCCP divisions or the agency’s broader goals.  The directive implements a new Protocol for the Ombudsman’s operations.  The Protocol emphasizes the principles of confidentiality, neutrality, independence, and informality. Before contractors submit sensitive information or documents to the Ombudsman, however, they should consult with counsel to understand whether such materials may be subject to disclosure under FOIA or other applicable law. These directives should provide contractors with some hope that Director Leen’s reforms will be institutionalized within OFCCP and will survive his departure from the agency.  Contractors facing long-running, unresolved evaluations should consider whether the new procedures set forth in the directives may be effective in moving those evaluations towards a resolution.

Nearly every essential business that remains open during the Coronavirus Disease 2019 (COVID-19) pandemic is faced with the possibility that coronavirus could show up in the workplace, or that its employees are concerned that it will. This leaves employers with the potential to receive a complaint from the Occupational Safety and Health Administration (OSHA), the principle federal agency designed to ensure workplace safety, a sub agency within the U.S. Department of Labor (DOL).  Because these complaints require a written response within a week, employers must be ready. As of early April, nearly 4,000 complaints have already been filed with OSHA across the country. These complaints claim employers have not done enough to protect employees from COVID-19, including claims of insufficient personal protective equipment (PPE), a lack of COVID-19 response training, and the failure to maintain social distancing in the workplace. Of those complaints, just under 30% of them were from the health care industry, and the other 70% came from various sectors, including manufacturing and retail. So what do employers need to know? OSHA has now issued an Interim Enforcement Response Plan to guide its area offices and compliance safety and health officers in handling and responding to COVID-19 complaints. The enforcement plan includes instructions for regional offices to assess complaints, when inspections may be warranted, and to move certain claims to the top of the priority list. Importantly, OSHA is directing its officers to maximize their review electronically before attempting an inspection and will consider an employer’s “good faith efforts” to comply with OSHA standards. In response to an OSHA complaint, and to potentially avoid an on-site inspection, employers should be prepared to provide the following information to OSHA: A written pandemic plan as recommended by the CDC. Procedures in place for hazard assessment and protocols for PPE use with suspected COVID-19 employees. A summary of decontamination procedures. Recorded and maintained medical records related to worker exposure incidents and other OSHA required recordkeeping, including whether any employees have contracted COVID-19, have been hospitalized as a result of COVID-19, or have been placed on precautionary removal or isolation. Where applicable, information regarding the respiratory protection program, and respirator policies related to COVID-19, in compliance with 29 CFR § 1910.134. Training records, including records of training related to COVID-19 exposure and prevention. Documentation and provisions created regarding obtaining and providing appropriate PPE (though OSHA is instructing its field offices to exercise “discretion” when assessing PPE complaints, considering the nationwide shortage during the outbreak). Where applicable, information regarding airborne infection isolation rooms or areas and periodic testing procedures. (OSHA is referencing previously published Tuberculosis guidance). Employers should also keep in mind the relevant OSHA standards at play. There is no specific OSHA standard that covers COVID-19. However, the recent guidance has provided a list of OSHA standards that may be applicable: 29 CFR § 1904, Recording and Reporting Occupational Injuries and Illness. 29 CFR § 1910.132, General Requirements - Personal Protective Equipment. 29 CFR § 1910.133, Eye and Face protection. 29 CFR § 1910.134, Respiratory Protection. 29 CFR § 1910.141, Sanitation. 29 CFR § 1910.145, Specification for Accident Prevention Signs and Tags. 29 CFR § 1910.1020, Access to Employee Exposure and Medical Records. Section 5(a)(1), General Duty Clause of the OSH Act. Most commonly referenced is the General Duty Clause, 29 USC 654(a)(1), which requires employers to furnish to each worker: employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm. This clause has been interpreted to require employers to understand their industry and safety standards, provide information to employees regarding rights and duties, and to generally ensure that employees have available safe tools and equipment in their workplace.  A violation of the general duty clause exists when: (1) the employer failed to keep the workplace free from a recognized hazard that (2) caused or was likely to cause death or serious physical harm and (3) a feasible option existed that – had it been implemented – would have materially reduced the likelihood of the existence of the hazard. Overall, the guidance explains that the most recent CDC guidelines should be used to assess potential workplace hazards and – importantly – to evaluate the adequacy of an employer’s protective measures for its workers. This means employers should continue to monitor the CDC website and update their procedures and actions based on the most current CDC recommendations. Employers who receive a complaint from OSHA should seek advice from counsel to ensure a timely and thorough response is provided.

On April 11, 2020, Virginia Governor Ralph Northam signed the Virginia Values Act (“Act”), which significantly strengthens the Virginia Human Rights Act’s prohibition on employment discrimination.  Some of the major changes include: Greatly expanding the class of employers who can be sued under state law; Removing limitations on the relief employees may obtain; and Adding sexual orientation, gender identity, and status as a veteran as new protected classes. These changes show that Virginia’s new Democratic majority is not hesitant to flex its muscles in the area of employment law, and could herald additional changes that may further erode Virginia’s relatively pro-employer legal climate. The most important change is the Act’s dramatic expansion of employees’ rights to seek relief for employment discrimination under the Virginia Human Rights Act.  Prior to the Act, Virginia Code § 2.2-3903 limited employees to bringing claims against employers who employed five to fifteen employees, or five to twenty employees for claims of age discrimination.  These size limitations meant that employees could only bring a claim under the Virginia Human Rights Act if their employer was too small to be covered by the federal employment discrimination statutes.  Employees whose employers were large enough to be covered by the federal statutes could only bring a federal claim.  The remedies available to employees under the Virginia Human Rights Act were also limited.  Employees were limited to recovering twelve months of back pay in most circumstances, and could not recover punitive damages or obtain reinstatement to their former position.  Attorney’s fee awards were capped at 25% of the employee’s recovery. The Act repeals all of Section 2.2-3903’s limitations.  Now, employees may bring state law employment discrimination claims against any employer with more than fifteen employees.  If the employee claims unlawful discharge, that threshold is reduced to five.  Employees can now recover compensatory and punitive damages, as well as attorney’s fees, with no cap on recovery.  Virginia employees now have a state law employment discrimination claim that is more generous than the federal Title VII (which caps compensatory and punitive damages, but not back pay, at up to $300,000).  Virginia employees bringing claims under the new state law may also now be able in some cases to avoid federal court jurisdiction and thereby escape the “rocket docket” in the Eastern District of Virginia, which is regarded by some as pro-employer. The Act also broadens the Virginia Human Rights Act by adding “sexual orientation,” “gender identity,” and “status as a veteran” as new protected classes.  “Sexual orientation” is defined as “a person’s actual or perceived heterosexuality, bisexuality, or homosexuality,” which apparently incorporates an Americans with Disabilities Act-type “regarded as” analysis.  Notably, courts hold that such “regarded as” claims are not cognizable under Title VII.  “Gender identity” is defined as “the gender-related identity, appearance, or other gender-related characteristics of an individual with, or without regard to the individual’s designated sex at birth.” The Act’s dramatic expansion of the Virginia Human Rights Act may be a signal that Virginia’s Democratic majority intends to enact additional employment protections akin to those in neighboring Maryland and Washington, D.C.  Polsinelli will continue to monitor these developments.

During this COVID-19 pandemic, many unions have argued their members are in a proverbial Catch-22.  While employees understand they should not go to work with symptoms of COVID-19, they also cannot miss a paycheck.  Complicating matters for those employees, especially those who work as health care providers or first responders, they are exempt from the sick leave benefits provided by the Families First Coronavirus Response Act (“FFCRA”), leaving them to either use their accrued PTO or take the leave unpaid.  In these situations, unions have demanded to negotiate paid sick leave or “hazard pay,” even though most collective bargaining agreements do not obligate employers to engage in such mid-term bargaining. Perhaps understanding this quandary, the Illinois Workers’ Compensation Commission (“Commission”) approved an emergency rule, effectively immediately and for the next 150 days, where health care providers and first responders with COVID-19 are assumed to have contracted it at work, and, hence, are eligible for workers’ compensation benefits.  These benefits include a portion of the employee’s compensation (typically 2/3s) and payment for all medical bills related to the diagnosis. It is likely that, even in the absence of this emergency announcement, employees who directly treat patients with COVID-19 would have access to workers’ compensation benefits.  What was unexpected was the emergency rule allows any employee who works for “essential businesses” to also claim these benefits without requiring proof they caught the virus at work.  Those who work at nursing homes, grocery stores, pharmacies, restaurants open for delivery/curbside service, marijuana dispensaries, etc. can file for comp benefits even if they were not treating COVID-19 patients in the discharge of their duties.  As of April 16, Illinois had over 25,000 confirmed cases of COVID-19; with this new rebuttable presumption, cost of workers’ compensation insurance may skyrocket. Employer organizations such as the Illinois Manufacturers’ Association, Illinois Retail Merchants Association, and the Associated Beer Distributors of Illinois have vowed to fight the emergency rule, including litigation.  At issue is the Commission’s authority to enact a policy outside the legislative process without providing more than 24 hours’ notice (and possibly violating the Illinois Open Meetings Act). Employers in Illinois should consult their in-house or outside counsel, their insurance carrier(s), and any attorneys appointed by those carriers to discuss any questions they may have regarding this development.

On April 7, 2020, Mayor Eric Garcetti signed into law the ordinance recently passed by the Los Angeles City Council mandating that certain large employers offer up to 80 hours of “COVID-19 Supplemental Paid Sick Leave” to employees working within the City of Los Angeles, with some notable modifications to the original ordinance.  The new law, which is effective immediately, was passed in response to the COVID-19 pandemic and to supplement the recently passed Families First Coronavirus Response Act (“FFCRA”).  Here are answers to key questions regarding the new law (which have been updated to reflect Mayor Garcetti’s modifications): Which employers must offer COVID-19 Supplemental Paid Sick Leave? Employers with (i) 500 or more employees within the City of Los Angeles; or (2) 2,000 or more employees nationally.  Some limited exceptions are noted below. Which employees are eligible for the COVID-19 Supplemental Paid Sick Leave? For an employee to be eligible, they: Must work within the geographic boundaries of the City of Los Angeles; Must have worked for the same employer from February 3, 2020 to March 4, 2020; Must experience one of the following qualifying events: A public health official or health provider requires or recommends the employee isolate or self-quarantine to prevent the spread of COVID-19; or The employee is at elevated risk because they are least 65 years old or has an underlying health condition such as heart disease, asthma, lung disease, diabetes, kidney disease, or weakened immune system; or The employee needs to care for a family member who is not sick but who public health officials or health providers have required or recommended  isolate or self-quarantine; or The employee needs to care for a family member because their senior care provider, school, or childcare provider is closed.  This is only applicable to an employee who is unable to secure a “reasonable alternative caregiver.” Employers may not require a doctor’s note for the employee to utilize the supplemental leave, and must grant upon the oral or written request of an eligible employee. How much sick leave must be provided to eligible employees under the new law? Full-time employees can take up to 80 hours of paid sick leave, which shall be calculated based on an employee’s average two week pay over the period of February 3, 2020 through March 4, 2020; Part-time employees can take to up to the average number of hours they worked in a two-week span over the period of February 3, 2020 to March 4, 2020; The total amount paid per day is capped at $511 and no more than $5,110 in the aggregate; If an employee is jointly employed by two or more employers, they are only entitled to the aggregate amount of leave specified for employees of one employer. Are there any exemptions? Yes, the following individuals are exempt: Emergency Personnel, including all first responders, gang and crisis intervention workers, public health workers, emergency management personnel, emergency dispatchers, law enforcement personnel, and related contractors and others working for emergency services providers; Health care providers, including those defined by the U.S. Secretary of Labor to be capable of providing health care services under the FMLA and those working at a licensed health care facility; Employees that provide global parcel delivery services; and Employees of government agencies working within the course and scope of their public service employment. Additionally, the following employers are exempt from the new law: Employers who have a paid leave or paid time off policy that provides a minimum of 160 hours of paid leave annually; New businesses that started in the City or relocated from outside the City on or after September 4, 2019 through March 4, 2020, and were not in business in the City in the 2018 tax year.  Certain construction businesses and film producers are excluded from this exemption; and Any business or organization that was closed or not operating for a period of 14 or more days due to a city official’s emergency order because of COVID-19 or provided at least 14 days of leave. A collective bargaining agreement in place on the effective date of the new law may also supersede the new mandate if it contains COVID-19 related sick leave provisions.  When the collective bargaining agreement expires or is open for renegotiation, COVID-19 Supplemental Paid Sick Leave can also be expressly waived if explicitly set forth in the agreement in clear and unambiguous terms. When is the program effective? The law is effective as of April 7, 2020 and will be effective until two calendar weeks after the expiration of the COVID-19 local emergency period. How does this program interact with the newly passed FFCRA? It does not.  This ordinance only impacts employers with greater than 500 workers in aggregate.  The FFCRA only applies to employers with fewer than 500 workers in aggregate.  Regardless, the two leaves would run concurrently. Is there any offset if our Company recently offered employees paid time off or other paid leave for these same reasons? An employer’s obligation to provide COVID-19 Supplemental Paid Sick Leave is reduced for every hour the employer allowed the employee to take leave, not including previously accrued hours, for any of the reasons listed above on or after March 4, 2020. COVID-19 Supplemental Paid Sick Leave is in addition to California or Los Angeles-mandated paid sick leave. What happens if an employer does not comply with the new law? Under the new ordinance, an employer must not retaliate against an employee for exercising their rights under the new law.  Any employee claiming a violation under this ordinance may file an action in the Superior Court of the State of California and may be awarded reinstatement, back pay and COVID-19 Supplemental Paid Sick Leave unlawfully withheld, and other equitable relief.  A court may also award reasonable attorneys’ fees to a prevailing employee. For questions relating to this new Los Angeles City law, please do not hesitate to reach out to a Polsinelli attorney.

On April 9, 2020, the Equal Employment Opportunity Commission issued supplemental guidance related to COVID-19.  The guidance discusses what questions an employer may ask employees when screening employees in the workplace, storing information about employees’ body temperatures, with whom an employer may share information about an employee who had COVID-19, and other important considerations.  The guidance for employers is set forth below in the question & answer format used by the Commission. Disability-Related Inquiries and Medical Exams When screening employees entering the workplace during this time, may an employer only ask employees about the COVID-19 symptoms EEOC has identified as examples, or may it ask about any symptoms identified by public health authorities as associated with COVID-19? As public health authorities and doctors learn more about COVID-19, they may expand the list of associated symptoms.  Employers should rely on the CDC, other public health authorities, and reputable medical sources for guidance on emerging symptoms associated with the disease. These sources may guide employers when choosing questions to ask employees to determine whether they would pose a direct threat to health in the workplace. For example, additional symptoms beyond fever or cough may include new loss of smell or taste as well as gastrointestinal problems, such as nausea, diarrhea, and vomiting. Confidentiality of Medical Information May an employer store in existing medical files information it obtains related to COVID-19, including the results of taking an employee's temperature or the employee's self-identification as having this disease, or must the employer create a new medical file system solely for this information? The ADA requires that all medical information about a particular employee be stored separately from the employee's personnel file, thus limiting access to this confidential information.  An employer may store all medical information related to COVID-19 in existing medical files.  This includes an employee's statement that he has the disease or suspects he has the disease, or the employer's notes or other documentation from questioning an employee about symptoms. If an employer requires all employees to have a daily temperature check before entering the workplace, may the employer maintain a log of the results? Yes.  The employer needs to maintain the confidentiality of this information. May an employer disclose the name of an employee to a public health agency when it learns that the employee has COVID-19? Yes. May a temporary staffing agency or a contractor that places an employee in an employer's workplace notify the employer if it learns the employee has COVID-19? Yes.  The staffing agency or contractor may notify the employer and disclose the name of the employee, because the employer may need to determine if this employee had contact with anyone in the workplace. Hiring and Onboarding May an employer postpone the start date or withdraw a job offer because the individual is 65 years old or pregnant, both of which place them at higher risk from COVID-19? No.  The fact that the CDC has identified those who are 65 or older, or pregnant women, as being at greater risk does not justify unilaterally postponing the start date or withdrawing a job offer.  However, an employer may choose to allow telework or to discuss with these individuals if they would like to postpone the start date. If a job may only be performed at the workplace, are there reasonable accommodations for individuals with disabilities absent undue hardship that could offer protection to an employee who, due to a preexisting disability, is at higher risk from COVID-19?  There may be reasonable accommodations that could offer protection to an individual whose disability puts him at greater risk from COVID-19 and who therefore requests such actions to eliminate possible exposure.  Even with the constraints imposed by a pandemic, some accommodations may meet an employee's needs on a temporary basis without causing undue hardship on the employer. Low-cost solutions achieved with materials already on hand or easily obtained may be effective.  If not already implemented for all employees, accommodations for those who request reduced contact with others due to a disability may include changes to the work environment such as designating one-way aisles; using plexiglass, tables, or other barriers to ensure minimum distances between customers and coworkers whenever feasible per CDC guidance or other accommodations that reduce chances of exposure. Flexibility by employers and employees is important in determining if some accommodation is possible in the circumstances. Temporary job restructuring of marginal job duties, temporary transfers to a different position, or modifying a work schedule or shift assignment may also permit an individual with a disability to perform safely the essential functions of the job while reducing exposure to others in the workplace or while commuting. If an employee has a preexisting mental illness or disorder that has been exacerbated by the COVID-19 pandemic, may he now be entitled to a reasonable accommodation (absent undue hardship)? (4/9/20) Although many people feel significant stress due to the COVID-19 pandemic, employees with certain preexisting mental health conditions, for example, anxiety disorder, obsessive-compulsive disorder, or post-traumatic stress disorder, may have more difficulty handling the disruption to daily life that has accompanied the COVID-19 pandemic. As with any accommodation request, employers may: ask questions to determine whether the condition is a disability; discuss with the employee how the requested accommodation would assist him and enable him to keep working; explore alternative accommodations that may effectively meet his needs; and request medical documentation if needed. In a workplace where all employees are required to telework during this time, should an employer postpone discussing a request from an employee with a disability for an accommodation that will not be needed until he returns to the workplace when mandatory telework ends? Not necessarily.  An employer may give higher priority to discussing requests for reasonable accommodations that are needed while teleworking, but the employer may begin discussing this request now.  The employer may be able to acquire all the information it needs to make a decision.  If a reasonable accommodation is granted, the employer also may be able to make some arrangements for the accommodation in advance. What if an employee was already receiving a reasonable accommodation prior to the COVID-19 pandemic and now requests an additional or altered accommodation? An employee who was already receiving a reasonable accommodation prior to the COVID-19 pandemic may be entitled to an additional or altered accommodation, absent undue hardship.  For example, an employee who is teleworking because of the pandemic may need a different type of accommodation than what he uses in the workplace.  The employer may discuss with the employee whether the same or a different disability is the basis for this new request and why an additional or altered accommodation is needed. Employers who have questions regarding the most recent EEOC guidance should seek advice from in-house or outside legal counsel.

On March 31, 2020, the U.S. District Court for the Southern District Court of California entered partial summary judgment in Erhart v. BofI Holding, Inc., a prominent, long-running whistleblower lawsuit under the Sarbanes-Oxley and Dodd-Frank Acts. The court’s decision provides welcome limitations on the scope of protected activity under these statutes, but also emphasizes the need for employers to be diligent in protecting their confidential data and documents against theft by internal actors. The plaintiff, Charles Erhart, was an internal auditor for the Bank of the Internet, a publicly-traded financial institution. Although Erhart claimed he battled upper management to confront illegality in a turbulent corporate environment, the Bank contended that he was, in the court’s words, an “auditor gone rogue - a loose cannon who recklessly handled confidential information and conducted unauthorized investigations.” Among other things, the Bank claimed Erhart instructed staff to run unauthorized due diligence reports to find “dirt” on another executive’s son, improperly accessed the Bank’s CEO’s personal tax returns, and disseminated confidential compensation data to other employees. Wherever the truth lies, Erhart ultimately filed a whistleblower lawsuit under Sarbanes-Oxley and Dodd-Frank, claiming he had been retaliated against for reporting illegal conduct. The next day, the New York Times ran a story about the lawsuit and the stock price of the Bank’s holding company fell by thirty percent. Numerous securities lawsuits asserting similar claims to those alleged in Erhart’s lawsuit followed. The Bank later filed its own lawsuit against Erhart, asserting contract and tort claims based on his alleged theft of confidential information. The court’s summary judgment ruling significantly narrowed both Erhart’s and the Bank’s claims. With respect to Erhart’s whistleblower claims, the court ruled that the bulk of his alleged internal and external reporting did not constitute protected activity under either Sarbanes-Oxley or Dodd-Frank. Erhart claimed he reported illegal or improper conduct spanning eleven categories of wrongdoing, including, among other things, late 401(k) contributions, the lack of Board approval of the Bank’s strategic plan, high deposit concentration risk, the failure to disclose to regulators the Bank’s receipt of subpoenas, and improprieties with respect to the CEO’s brother’s account. The court noted that Sarbanes-Oxley and Dodd-Frank do not generally protect alleged whistleblowers who report any type of wrongdoing, but only extend protection to certain types of reports of certain types of fraud and securities violations. Seeking to evade Sarbanes-Oxley and Dodd-Frank’s limitations on protected activity, Erhart advanced expansive arguments based on the SEC’s “Books and Records” and “Internal Controls” rules. The court rejected these arguments. The court found that the Books and Records rule implicated only the accuracy of records necessary to accurately and fairly reflect the transactions and dispositions of a corporation’s assets, not any and all corporate records. Similarly, the court limited the Internal Controls rule to procedures to assure accurate financial reporting and prevent unauthorized financial transactions, rejecting the argument that it required compliance with any and all laws or risk management objectives. Based on these narrow interpretations, the court granted the Bank summary judgment on Erhart’s claims based on reporting alleged illegal conduct and wrongdoing outside of the scope of the SEC rules, finding they did not constitute protected activity. Although the court’s narrow construction of the scope of Sarbanes-Oxley and Dodd-Frank protected activity is a welcome sign for employers, its rulings on the Bank’s claims against Erhart for document misappropriation are not. After previously ruling in the case that the Bank could not enforce Erhart’s confidentiality agreement with respect to confidential documents and information he removed that directly related to his whistleblowing activity, the court also struck down the bulk of the Bank’s tort claims relating to Erhart’s document misappropriation. The court ruled that California’s uniform trade secret act preempted the Bank’s tort claims for Erhart’s misappropriation of confidential business information. The Bank’s claims were limited to Erhart’s alleged misappropriation of confidential documents containing personally identifiable information of the Bank’s customers and employees. The court’s ruling emphasizes the need for employers to enforce the rigorous security measures required to obtain trade secret protection, such as marking documents as confidential, limiting internal distribution and access, maintaining and enforcing confidentiality agreements, and ensuring information is protected by information security best practices. Although the court’s decision limited the Bank’s ability to seek redress for Erhart’s misappropriation of confidential information, it continues a trend of employer victories on the scope of Sarbanes-Oxley and Dodd-Frank protected activity. Polsinelli will continue to monitor this trend and other developments in the whistleblower space.

Update – On April 8, 2020, the NLRB delayed the effective date of the Election Protection Rule 60 days, to July 31, 2020. The Board cited “the ongoing national emergency caused by the coronavirus” for its decision. The National Labor Relations Board (“NLRB” or “Board”) has issued its Election Protection Rule which makes changes regarding three important aspects of its representation election process and procedures.  These changes, which take effect June 1, 2020, will remove “unnecessary barriers to the fair and expeditious resolution” of employees’ right of free choice regarding union representation through an NLRB-conducted secret ballot election, the Board stated. Blocking Charge Policy.  The Board’s new policy will change a process by which a union can prevent employees from voting whether they wish to have new union representation (representation election) or if they wish to continue being represented by the incumbent union (decertification election).  The NLRB’s current practice allows a party—usually a union—to file an unfair labor practice charge which results in the postponement or denial of a secret-ballot election.  Under the new rule, the Board will impound election ballots when a party files an unfair labor practice charge that alleges a party has interfered with the conduct of the election or has unlawfully coerced employees related to the election.  In those situations, the Board will conduct a secret-ballot election then impound the ballots for  up to 60 days after the election if (1) the charge has not been withdrawn or dismissed, or (2) if a complaint has not issued, prior to the conclusion of the election.  If a complaint issues with respect to the charge at any time prior to expiration of that 60-day post-election period, the ballots shall continue to be impounded until there is a final determination regarding the charge and its effect, if any, on the election petition. In addition, the 60-day impound period will not be extended, even if additional charges are filed, and although the filing of a blocking-charge request will not delay the conduct of an election it may delay the vote count or certification of the election results. Voluntary Recognition Bar.  This rule applies when an employer voluntarily recognizes a union instead of the more common situation where employees vote to have the union represent them.  The old rule permitted an employer and a union to enter into an agreement for the union to represent employees even though there may be no evidence a majority of employees supported the union, much less voted for union representation.  The new rule requires an employer to provide notice to employees that it has recognized the union.  In addition, the rule requires: The employer and/or the labor organization must notify the Regional Office that recognition has been granted; The employer must post, in conspicuous places, including all places where notices to employees are customarily posted, a notice of recognition (provided by the Regional Office) informing employees that recognition has been granted and that they have a right to file a petition during a 45-day “window period” beginning on the date the notice is posted; The employer must distribute to all employees in the petitioned-for unit the Board-approved notice; and 45 days from the posting date must pass without an election petition, with proper evidence of support by voting unit employees, being filed. If all of these requirements are met, the voluntary recognition will be valid. Section 9(a) Recognition in the Construction Industry.  Finally, in a victory for construction contractors, the Board reversed its decision in Staunton Fuel & Material, 335 NLRB 717 (2001), holding that language alone cannot convert a Section 8(f) construction contract, terminable upon expiration, into a Section 9(a) agreement, where a presumption of majority support exists. The majority of collective bargaining agreements are considered Section 9(a) agreements.  Upon expiration of those agreements, employees who no longer desire union representation must file a decertification agreement with the Board.  In contrast, construction agreements are Section 8(f) agreements.  There, contractors can voluntarily recognize a labor union, even if they do not have employees and irrespective of their employee wishes.  However, upon expiration of a Section 8(f) collective bargaining agreement, employers can terminate the agreement and simply walk away. In Staunton Fuel, the Board held that language alone could convert a Section 8(f) construction agreement to a Section 9(a) agreement.  To do so, there must be language where employers agreed that, upon a demonstration of support by the majority of bargaining unit employees, the employer has granted voluntary recognition to the union.  For almost two decades, construction unions have engaged in “top down” organizing, where under the threat of a picket, they have forced contractors to sign a collective bargaining agreement with this language, even in the absence of authorization cards or other objective evidence of majority support by employees.  When employers tried to walk away upon expiration (like they would with typical construction contracts), the Board did not allow them to do so, because the Section 8(f) contract was converted to a 9(a) agreement by that language.  Employers were left with little choice; since they cannot persuade employees to decertify the union, they often were harnessed with collective bargaining agreements that none of their employees ever supported. With this new rule, should a construction contractor try to walk away from a collective bargaining agreement upon expiration, a union will need to demonstrate that it had majority support from employees at the time that voluntary recognition was extended.  In the absence of that affirmative proof, the Board no longer will convert these construction agreements to Section 9(a) agreements.  This will impede Union efforts to engage in “top down” organizing, forcing them to obtain authorization cards from the majority of the proposed bargaining unit and/or petition for a union election so that it can enjoy the protections afforded by Section 9(a) agreements.  While the new rule does not help contractors who have previously signed collective bargaining agreements with 9(a) language (since the rule does not become effective until June 1st), after that date unions will need to actually organize bargaining unit employees in the construction industry. Employers seeking guidance regarding the specific impacts of these new rules on their employees and workplaces should consult their in-house or outside labor counsel.

A growing number of states, along with Puerto Rico, the Navajo Nation and a significant number of counties and municipalities, have issued mandatory “shelter in place” or “stay at home” orders. To read more about these orders, click here. Many other states, counties, and municipalities have ordered that all nonessential work stop in their areas. Although the shelter in place orders are more restrictive (significantly limiting the movement of residents and the operation of businesses in each affected jurisdiction), the essential work only orders are also incredibly disruptive to employers and employees alike. For more information about shelter in place and other orders, please see our COVID-19 resource library. While there is a distinct chance the federal government will issue similar restrictions for the entire country in the near future, at this time no federal agency has mandated the closure of businesses. There are, however, many federal agencies actively involved in managing the pandemic crisis. Particularly, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency issued guidance to state and local “critical infrastructure” workforce of multiple industries: in other words, the employees whose services are essential for certain businesses that must remain open during the COVID-19 pandemic. This guidance will advise employers along with additional jurisdictions as they develop their “red alert” orders. It will also guide all jurisdictions in interpreting their own orders as they make enforcement decisions or otherwise interpret their orders based on the circumstances as they unfold. Every business needs to prepare for the possible imposition of such orders regardless of the current situation in their state. While the shelter in place orders have some differences, they typically have the following common characteristics: Businesses not deemed “essential” are ordered to cease operations or greatly restrict operations to work that can be completed by employees remotely in their homes. Only essential employees or employees needed for minimum basic operations may leave their homes to support “essential businesses.” Residents must stay in their homes except to engage in “essential activities,” when they are qualifying employees of an essential business, or for outdoor exercise during which social isolation practices must be practiced. Travel is greatly restricted with a handful of exemptions. Both the shelter in place and nonessential business restriction orders have significant implications for all businesses, which is why we have created a devoted team to assist businesses with the following steps: Interpret the specific requirements of each applicable order. Determine if the business qualifies as an essential business. If the business qualifies as an essential business, determine the minimum basic operations of the business and which workers qualify as essential employees. Develop notices to employees regarding the essential status of the business, and written confirmation or certifications for essential employees to present when stopped by or dealing with police or public agencies charged with enforcing the order. Review staffing needs and placement options, including paid and unpaid leaves, furloughs, and layoffs. Develop effective notices to suppliers, vendors, and customers regarding the status of the business under the order. Consider possible support and assistance offered at the state and federal level to support businesses impacted by these orders. Given how quickly this situation is evolving, it is imperative that all businesses develop a clear strategy for dealing with these orders and limitations. Please call your Polsinelli attorney or email COVID19Questions@Polsinelli.com for immediate assistance. *This post was originally published on March 22, 2020

As the COVID-19 pandemic continues, health care workers on the front-lines continue to risk their own health to provide care for patients suffering from or who may have been exposed to COVID-19.  With growing worries regarding the availability of Personal Protective Equipment (PPE) (e.g., N95 masks, face shields, medical gowns and gloves), health care workers across the country are increasingly speaking out. In doing so, though, some health care employers have run into additional problems from an employment law perspective.  Workers are alleging they have been ordered by their employers not to speak out about insufficient PPE—or even more serious, they have been terminated for speaking to the media about the problem.  With these concerns looming and more medical professionals speaking out, hospitals, doctors’ offices, and the like must take care to not violate workers’ rights or take actions that could be construed as retaliatory against those employees.  Health care workers who are terminated or disciplined for raising concerns about inadequate PPE or COVID-19 exposure may have viable wrongful discharge claims under applicable state laws.  The majority of states have explicitly recognized some version of a common-law claim for wrongful discharge in violation of public policy, created to protect workers from termination based on public policy designed to ensure the health, safety, or welfare of the public.  In fact, some states such as California, Illinois, Massachusetts, Michigan, New York, Texas, Washington, and Wisconsin have statutory provisions specifically prohibiting retaliation against health care workers who take certain steps to report health, safety, and/or patient care concerns. Employers of health care professionals should take the following steps to help reduce or eliminate risk. Reviewing the applicable social media and media policies to ensure they include, among others, simple and clear provisions on: a. Patient privacy and posting of patient images; b. Mutual respect; c.  Using disclaimers such as “The views expressed on this [blog, website, post] are my own and do not reflect the view of my employer”; d.  Professionalism; e.  Not allowing social media activity to interfere with work commitments; f. Encouraging workers to talk with the media through public relations offices; g. Not speaking or posting on behalf of the institution, unless pre-approved. Enforcing social media and other applicable policies consistently and in line with past precedent. Not enforcing policies more harshly against those who speak out regarding COVID-19. Focusing on the violation of the policy, not the content of the employee’s speech, when disciplining an employee for violating social media or media policies. Avoiding negative comments about filing administrative complaints (e.g., OSHA) reporting health and safety concerns. Not discouraging such administrative complaints related to COVID-19 concerns. On the federal level, various laws may also give rise to a potential whistleblower complaint arising from PPE-related comments including, for example, OSHA’s whistleblower provisions.  In addition, government-related health care institutions face additional potential liability due to “free speech” concerns.  Employers should also keep in mind that Section 7 rights under the National Labor Relations Act apply equally to union and non-union employees.  Section 7 prohibits employers from interfering with, restraining, or coercing employees exercising their rights to engage in concerted activity for mutual benefit and to discuss working conditions, including through social media policies.  Health care entities should keep these additional considerations in mind when addressing employee conduct. If you have any questions or need assistance related to employment decisions pertaining to your health care workers, contact your Polsinelli attorney.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the “Act”), requiring employers with fewer than 500 employees to provide paid leave benefits related to the COVID-19 pandemic under the Emergency Family and Medical Leave Expansion Act (“Paid FMLA Leave”) and Emergency Paid Sick Leave Act (“Paid Sick Leave”). The details of the Act are set out in our earlier Blog post here. Since the Act was passed, there has been much discussion about how employees across related companies should be counted for purposes of coverage. Today, the Wage and Hour Division of the Department of Labor issued a “temporary regulation” or rule that clarifies this issue, which can be found here.[i]  The temporary rule remains in effect through December 31, 2020 when these provisions sunset.  In evaluating this issue, it is important to note that the two leave requirements arise in different portions of the Act. The right to Paid FMLA Leave is set forth in Division C of the Act, which amends the existing statutory text of the Family and Medical Leave Act (“FMLA”). The right to Paid Sick Leave is set forth in Division E of the Act. While both Divisions of the Act set the threshold for covered employers at “fewer than 500 employees,” neither provides express direction on how this number should be calculated across related entities. Today’s rule specifically addresses this issue. Pursuant to § 826.40 of the rule, which addresses issues related to employer coverage, aggregation of employees will occur in relation to both benefits when an employer meets either the “Integrated Employer” or “Joint Employer” tests. As a general matter, the legal entity which employs the employee is the “employer.” Where one corporation has an ownership interest in another corporation, it is a separate employer unless it is an “Integrated Employer” or a “Joint Employer.”[ii] To determine whether separate entities are considered an “Integrated Employer,” the Department of Labor considers “the entire relationship” between the parties “reviewed in its totality” based on the following four factors: (i) Whether there is common management; (ii) Whether the entities’ operations are interrelated; (iii) Whether there is centralized control of labor relations; and (iv) The degree of common ownership/financial control of the entities. If the factors indicate the entities are an Integrated Employer, the employees of all entities making up the Integrated Employer are counted to determine employer coverage and eligibility for Paid Sick Leave and Paid FMLA Leave. Even if separate entities are not considered an Integrated Employer, the Department of Labor may consider separate entities a “Joint Employer” if the entities each exercise some control over the work or working conditions of an employee. Notably, the joint employer test does not require common ownership. Joint employers may be separate and distinct entities with separate owners, managers, and facilities. Nevertheless, if an employee performs work that simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, the separate entities may be considered a Joint Employer. To evaluate whether an employee’s work simultaneously benefits two employers, the DOL applies a four-factor balancing test assessing whether the potential joint employer: (i) Hires or fires the employee; (ii) Supervises and controls the employee’s work schedule or conditions of employment                              to a substantial degree; (iii) Determines the employee’s rate and method of payment; and (iv) Maintains the employee’s employment records. The potential joint employer must actually exercise—directly or indirectly—one or more of these indicia of control to be jointly liable under the Act; however the potential joint employer’s maintenance of the employee’s employment records alone will not lead to a finding of joint employer status.  DOL guidance on the Joint Employer test can be found here. If two entities are found to be joint employers, all of their common employees must be counted in determining whether the Paid Sick Leave and Paid FMLA Leave obligations apply. Employers should exercise caution in oversimplifying the Integrated Employer and Joint Employer analyses to avoid coverage under the Act. An employer who takes the position that they are an Integrated Employer or Joint Employer for purposes of avoiding coverage under the Act may later find they waived their ability to assert they are separate entities in litigation or other disputes. Employers are encouraged to consult with counsel to determine coverage under the Act. [i] This rule is different from guidance the DOL provided recently in the form of FAQs. [ii] 29 CFR 825.104(c)(1).

On April 1, 2020, the Wage and Hour Division of the Department of Labor (“DOL”) issued temporary regulations (“Regulations”) to implement the Public Health Emergency Leave (“Emergency FMLA Leave”) and Emergency Paid Sick Leave (“Paid Sick Leave”) benefits available under the Families First Coronavirus Response Act (“the “Act”). The Regulations took immediate effect, on the effective date of the Act, and remain in effect through December 31, 2020, when the Act expires. The Regulations expand on the DOL’s guidance or “Families First Coronavirus Response Act: Questions and Answers,” which were issued late the week of March 23 and updated over the following weekend.  In some instances, the Regulations are inconsistent with the DOL’s former guidance – particularly with regard to: (1) The reasons an employee may take Paid Sick Leave, (2) The applicability of the integrated employer and joint employer tests which are used to determine the number of employees for purposes of coverage under the Act, and (3) The documentation employers may request to determine an employee’s eligibility for leave under the Act. The DOL updated its previous guidance or Questions and Answers on April 1, 2020 (here), to conform to the Regulations. A brief summary of several sections that (1) depart from the DOL’s former guidance or (2) provide new information the DOL did not previously address is below. Government Orders The Regulations expand the qualifying reasons for Paid Sick Leave to include containment, shelter-in-place and stay-at-home orders.  However, an employee is only entitled to Paid Sick Leave if the order “cause[s] the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order.” Significantly, the Regulations further broaden “Subject to a Quarantine or Isolation Order” to include: when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them. Advice to Self-Quarantine The Regulations state that an employee has been “advised by a health care provider to self-quarantine due to COVID-19 concerns” for purposes of Paid Sick Leave if: (i) A health care provider advises the Employee to self-quarantine based on a belief that— (A) the Employee has COVID-19; (B) the Employee may have COVID-19; or (C) the Employee is particularly vulnerable to COVID-19; and (ii) following the advice of a health care provider to self-quarantine prevents the Employee from being able to work, either at the Employee’s normal workplace or by Telework. Similarly, the Regulations provide that an employee may take Paid Sick Leave to care for another who has received any of the same recommendations.  On that point, the Regulations explain that to qualify for Paid Sick Leave, the other person must be: an Employee’s immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined. For this purpose, ‘individual’ does not include persons with whom the Employee has no personal relationship. Seeking a Diagnosis With respect to people who suspect that they are ill, the Regulations clarify that if an employee is taking leave because they are “experiencing COVID-19 symptoms and seeking medical diagnosis,” the employee’s Paid Sick Leave “is limited to the time the Employee is unable to work because the Employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test.” Employer Coverage The Regulations provide that all common employees of joint employers or all employees of integrated employers must be counted together to determine coverage under the Act.  We have covered this issue in more detail here. Notice of Need for Leave and Documentation of Need for Leave The Regulations regarding documentation of the need for leave are a departure from the DOL’s former guidance, which suggested that an employer could require a variety of documents with a request for Paid Sick Leave or Emergency FMLA Leave.  The Regulations provide that an employer may not require a notice of the need for leave to include documentation beyond what is listed below. Before taking either Paid Sick Leave or Emergency FMLA Leave, all employees must give their employers documentation that includes: (1)  The employee’s name; (2)  The date(s) for which leave is requested; (3)  The qualifying reason for the leave; and (4)   A written or oral statement that the employee is unable to work because of the qualifying reason for leave. Before taking a Paid Sick Leave or Emergency FMLA Leave, some employees must additionally provide: o   For an employee subject to a federal, state or local quarantine or isolation order related to COVID-19: the name of the government entity that issued the Quarantine or Isolation Order o   For an employee advised by a health care provider to self-quarantine due to COVID-19 concerns: the name of the health care provider who advised the employee to self-quarantine due to concerns related to COVID-19. o   For an employee caring for an individual subject to a federal, state or local quarantine or isolation order or a health care provider’s advice to self-quarantine due to COVID-19 concerns: either (a) the name of the government entity that issued the Quarantine or Isolation Order to which the individual being cared for is subject or (b) the name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19. o   For an employee caring for the employee’s child whose school or place of care is closed or the child’s care provider is unavailable due to a public health emergency) or Emergency FMLA Leave: the name of the employee’s child (or children), the name of the closed or unavailable school or child care provider, and a representation that no other suitable person will care for the employee’s child when the employee takes Paid Sick Leave or Emergency FMLA Leave. In addition to the information specifically identified, the Regulations generally state that an employer may request that an employee provide additional material as needed to support the employer’s request for tax credits pursuant to the Act.  And, the Regulations state that employers are not required to provide an employee’s request for leave if the employee fails to provide materials sufficient to support the applicable tax credit.  With respect to documents required for tax credits, the Regulations refer to https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs (“IRS FAQs”) for more information. Significantly, neither the Regulations nor the IRS FAQs specify any additional information employees must provide an employer to take Paid Sick Leave based on experiencing COVID-19 symptoms and seeking medical diagnosis or for employees experiencing any other substantially similar condition specified by the federal government. While the Regulations answer questions about the process of requesting leave under the Act, the Regulations leave open questions about: Whether employers can require additional documentation substantiating the need for leave after a Paid Sick Leave or Emergency FMLA Leave is approved. Whether the DOL will issue additional Regulations or the IRS will issue additional guidance on the documentation process in the coming weeks. Recordkeeping Finally, under the Regulations, an employer must: Retain all documentation related to an employee’s request for or entitlement to Paid Sick Leave or Emergency FMLA Leave for four years, regardless of whether the leave was granted or denied. Document and keep any oral statements an employee provided to support a request for Paid Sick Leave or Emergency FMLA Leave for four years. Have an authorized officer document that the employer is eligible for the small employer exemption to the Act when the employer denies an employee’s request for Paid Sick Leave or Emergency FMLA Leave (and keep such documentation for four years). Notably, the Regulations provide that a small employer must post a notice regarding the Act, even if the employer determines that it is exempt.

On March 20th, the National Labor Relations Board (“NLRB”) suspended all representation elections, including those by mail ballot, through April 3, due to concerns related to the coronavirus. In its announcement, it indicated it was taking this unprecedented action to protect the “health and safety of its employees, as well as members of the public.” Many NLRB regional offices are closed, and the majority of NLRB investigators are working remotely. In an April 1 notice on its website, the NLRB opted not to extend this deadline, and it announced it will resume elections beginning on Monday, April 6.  NLRB Chairman John Ring explained, “The Board determined that a two-week suspension would provide the General Counsel…the opportunity to fully review the logistics of the election procedures in light of the unprecedented situation. The General Counsel now has advised that appropriate measures are available to permit elections to resume in a safe and effective manner, which will be determined by the Regional Directors.” The Chairman did not expand on what are the “appropriate measures…available to permit elections to resume in a safe and effective manner.”  Regardless, employers whose facilities were being unionized prior to the COVID-19 pandemic are on notice that the global pandemic no longer will indefinitely suspend the processing of election petitions and scheduling of elections.  Considering the NLRB has postponed the implementation of its revised election rules through May 31, 2020, elections over the next two months will be occurring pursuant to the current “quickie” election rules and will likely occur very quickly. Employers should consult in-house or outside labor counsel immediately following any signs of a union organizing campaign.

Update – On April 8, 2020, the NLRB delayed the effective date of the Election Protection Rule 60 days, to July 31, 2020. The Board cited “the ongoing national emergency caused by the coronavirus” for its decision. The National Labor Relations Board (“NLRB” or “Board”) has issued its Election Protection Rule which makes changes regarding three important aspects of its representation election process and procedures.  These changes, which take effect June 1, 2020, will remove “unnecessary barriers to the fair and expeditious resolution” of employees’ right of free choice regarding union representation through an NLRB-conducted secret ballot election, the Board stated. Blocking Charge Policy.   The Board’s new policy will change a process by which a union can prevent employees from voting whether they wish to have new union representation (representation election) or if they wish to continue being represented by the incumbent union (decertification election).  The NLRB’s current practice allows a party—usually a union—to file an unfair labor practice charge which results in the postponement or denial of a secret-ballot election.  Under the new rule, the Board will impound election ballots when a party files an unfair labor practice charge that alleges a party has interfered with the conduct of the election or has unlawfully coerced employees related to the election.  In those situations, the Board will conduct a secret-ballot election then impound the ballots for  up to 60 days after the election if (1) the charge has not been withdrawn or dismissed, or (2) if a complaint has not issued, prior to the conclusion of the election.  If a complaint issues with respect to the charge at any time prior to expiration of that 60-day post-election period, the ballots shall continue to be impounded until there is a final determination regarding the charge and its effect, if any, on the election petition. In addition, the 60-day impound period will not be extended, even if additional charges are filed, and although the filing of a blocking-charge request will not delay the conduct of an election it may delay the vote count or certification of the election results. Voluntary Recognition Bar.  This rule applies when an employer voluntarily recognizes a union instead of the more common situation where employees vote to have the union represent them.  The old rule permitted an employer and a union to enter into an agreement for the union to represent employees even though there may be no evidence a majority of employees supported the union, much less voted for union representation.  The new rule requires an employer to provide notice to employees that it has recognized the union.  In addition, the rule requires: The employer and/or the labor organization must notify the Regional Office that recognition has been granted; The employer must post, in conspicuous places, including all places where notices to employees are customarily posted, a notice of recognition (provided by the Regional Office) informing employees that recognition has been granted and that they have a right to file a petition during a 45-day “window period” beginning on the date the notice is posted; The employer must distribute to all employees in the petitioned-for unit the Board-approved notice; and 45 days from the posting date must pass without an election petition, with proper evidence of support by voting unit employees, being filed. If all of these requirements are met, the voluntary recognition will be valid. Section 9(a) Recognition in the Construction Industry.  Finally, in a victory for construction contractors, the Board reversed its decision in Staunton Fuel & Material, 335 NLRB 717 (2001), holding that language alone cannot convert a Section 8(f) construction contract, terminable upon expiration, into a Section 9(a) agreement, where a presumption of majority support exists. The majority of collective bargaining agreements are considered Section 9(a) agreements.  Upon expiration of those agreements, employees who no longer desire union representation must file a decertification agreement with the Board.  In contrast, construction agreements are Section 8(f) agreements.  There, contractors can voluntarily recognize a labor union, even if they do not have employees and irrespective of their employee wishes.  However, upon expiration of a Section 8(f) collective bargaining agreement, employers can terminate the agreement and simply walk away. In Staunton Fuel, the Board held that language alone could convert a Section 8(f) construction agreement to a Section 9(a) agreement.  To do so, there must be language where employers agreed that, upon a demonstration of support by the majority of bargaining unit employees, the employer has granted voluntary recognition to the union.  For almost two decades, construction unions have engaged in “top down” organizing, where under the threat of a picket, they have forced contractors to sign a collective bargaining agreement with this language, even in the absence of authorization cards or other objective evidence of majority support by employees.  When employers tried to walk away upon expiration (like they would with typical construction contracts), the Board did not allow them to do so, because the Section 8(f) contract was converted to a 9(a) agreement by that language.  Employers were left with little choice; since they cannot persuade employees to decertify the union, they often were harnessed with collective bargaining agreements that none of their employees ever supported. With this new rule, should a construction contractor try to walk away from a collective bargaining agreement upon expiration, a union will need to demonstrate that it had majority support from employees at the time that voluntary recognition was extended.  In the absence of that affirmative proof, the Board no longer will convert these construction agreements to Section 9(a) agreements.  This will impede Union efforts to engage in “top down” organizing, forcing them to obtain authorization cards from the majority of the proposed bargaining unit and/or petition for a union election so that it can enjoy the protections afforded by Section 9(a) agreements.  While the new rule does not help contractors who have previously signed collective bargaining agreements with 9(a) language (since the rule does not become effective until June 1st), after that date unions will need to actually organize bargaining unit employees in the construction industry. Employers seeking guidance regarding the specific impacts of these new rules on their employees and workplaces should consult their in-house or outside labor counsel.

The COVID-19 crisis challenges unionized employers in unique ways. They are mandated under the National Labor Relations Act (NLRA) to bargain with unions over wages, hours, and working conditions, including schedule changes, safety protocols, furloughs and layoffs. They cannot act unilaterally to implement changes in these areas and instead must either reach an agreement, or reach an impasse, following good faith bargaining. These unprecedented times demand greater flexibility in order to keep workers safe and businesses operating.  Both the rapid spread of COVID-19, as well as the onslaught of ever-changing legislation such as new paid leave requirements and government stay-at-home orders, are devastating workplaces. Employers need latitude to make immediate and substantial changes, including reduced hours, schedule changes, new safety protocols, furloughs, and layoffs. How can unionized employers respond appropriately to this emergency situations while complying with the NLRA and its prohibition on unilateral changes? On March 27, 2020, the National Labor Relations Board (“NLRB”) General Counsel issued a memorandum GC 20-40 addressing the issue. The memorandum discusses prior NLRB decisions regarding the duty to bargain during emergency situations, both public and employer specific. In public emergencies (e.g., hurricanes and post-September 11, 2001 situations) as well as employer-specific crises, the Board has upheld the employer’s unilateral implementation of changes where “economic exigencies” resulted from “extraordinary events which are an unforeseen occurrence, having a major economic effect requiring the company to take immediate action.” However, the employer must first notify the union of the changes and offer to bargain, even on an expedited basis. Employers with unionized workforces who are impacted by the COVID-19 crisis are not without options as far as responding swiftly and in the best interest of their workers and their operations. Employers should not limit their COVID-19 response options based on the typical bargaining framework. But, carefully crafted communications with the union and the opportunity for expedited bargaining are critical. Our labor team can guide you through this process so you can avoid unfair labor practice charges, while making the best decisions to protect your company.

Since the Families First Coronavirus Response Act was signed on March 18, 2020, employers of health care providers have wondered how much of their workforce would be eligible for paid sick leave and emergency FMLA leave. (Our prior blog post on this topic is available here.) Just in time for the April 1 effective date of the FFCRA, the Department of Labor has provided new guidance. (The guidance is available here) While existing FMLA regulations provided exemptions for a number of specific provider types, many employees of health care facilities would not have been exempt. Under the DOL’s updated guidance, the health care exemption applies to everyone employed at a: doctor’s office hospital health care center health clinic pharmacy post-secondary educational institution offering health care instruction medical school nursing facility retirement facility nursing home home health care provider facility that performs laboratory testing facility that performs medical testing local health department or agency The guidance also includes a catch-all category for employers similar to the listed employers. Further, the guidance allows exemptions for employees of entities that provide services to or maintain the operations of any of the employers listed above. Accordingly, all clinicians and non-clinical staff members working for health care employers or their contractors / vendors are exempt – they do not qualify for either paid sick leave or emergency FMLA leave under the FFCRA. While the definition of health care provider is quite broad, the DOL urges employers to “be judicious” in exempting workers apparently based on its concern that employees could spread COVID-19 if leave is not available. This guidance is an important reminder to employers to consider how their policies may influence whether an employee who is sick will feel incentivized to come to work.

For any employer that has gone through it, receiving news that one of your employees has been diagnosed with or was exposed to COVID-19 is a scary and revealing experience. What was once – even just 10 days ago – remote and hypothetical, immediately becomes real; raising urgent questions that require immediate, potentially-life-saving answers and actions. Perhaps the most urgent of these questions involves “contact tracing” – the required process of identifying every individual who came into close or direct contact[1] with the infected individual in the workplace within the last 14 days so those individuals may self-quarantine, closely monitor themselves for possible symptoms, and otherwise take steps to help prevent setting off entirely new chains of transmission. As employers look to implement critical mitigation strategies in accordance with guidance from the CDC (e.g., social distancing, limiting travel, staggering work schedules, regular health checks), employers must also give serious thought now to how contact tracing will be handled if, and when, an employee contracts (or likely contracted) COVID-19. Delay or uncertainty in creating a reliable and accurate “contact list” will delay efforts to notify employees that they should self-quarantine and closely monitor themselves for possible symptoms of COVID-19. In this crisis, employees are looking to their employers for information to help them make informed decisions about how they can protect themselves, their families and their communities. It’s an unprecedented moment for employers. Employers who are not prepared to generate a comprehensive and accurate “contact list” immediately following a possible exposure have limited options. They are left with issuing vague exposure notices that provide little actionable information to employees and potentially exacerbate the fear and anxiety many workers are already experiencing. Such employers also face the risk that health authorities will recommend or require a prolonged closure of operations pending completion of a contact tracing investigation. Current retroactive contact tracing efforts also suffer significant practical limitations – they depend on the collection of information after the fact, with all of the fallibilities that human memory and time can bring. Sorting through these challenges with relatively low level outbreaks may be manageable, but not so in the current global pandemic. The strain on already strained health authority resources is a recognized problem. In the healthcare setting, the CDC has already suspended its valuable, but resource consuming contact tracing efforts, with one CDC official recently explaining that “Dedicating resources to contact tracing and ‘retrospective risk assessment’ takes resources away from other critical infection prevention and control measures…” So what can an employer do? One answer is surprisingly simple: set social distancing rules and then identify, limit, trace and audit employee contacts that do not comply with those social distancing rules before any diagnosis. A well-developed Advance Contact Tracing (“ACT”) program incorporated into an employer’s overall Pandemic Response Plan puts employers and employees in a rare position of control in these seemingly uncontrollable times. Here is one possible approach to rapidly establishing an ACT Now program: Set Social Distancing Rules. First, consider whether your operation is subject to and able to comply with strict social distancing requirements. In some environments, it may be possible to achieve perfect compliance with rules such as those prohibiting employees from coming within 6 feet of each other for any prolonged period. (See, CDC’s “Consider establishing policies and practices for social distancing.”)  However, it would be a potentially serious error to simply rely on the hope that individuals have perfectly adhered to strict social distancing as part of your pandemic response plan. Even in those workplaces where it is theoretically possible to achieve perfect compliance, human error, emergencies and unforeseen situations may lead to close or direct contact between coworkers and should be expected. An effective ACT Now program will take this into account. Identify. Based on a careful assessment of your company’s physical sites, layout(s), organizational structure and processes, identify the expected or “presumptive” list of likely close or direct contacts that an employee may be expected to have throughout the day. The exercise need not be overly complicated. For most employers, the data needed to perform this exercise already exists in a readily sortable format; namely, in the company’s HR Information System (HRIS), which can be filtered by location, function, immediate supervisor or team lead. This exercise will also help identify administrative controls (e.g., policies or procedures) and engineering controls (e.g., partitions or barriers) that could be implemented to further enhance social distancing efforts. Engaging in this exercise before any exposure will also save valuable time if a future diagnosis occurs – providing an immediately available potential contact list that can be used in support of initial self-quarantine recommendations. Limit. For those workplaces where direct or close contact is necessary and unavoidable (e.g., to safely perform a task), contacts should be limited to the smallest possible team. In establishing these teams, consider the potential impact of a positive diagnosis within the team --- all members of the team would be required to self-quarantine, so define teams with redundancy and continuity in mind. Don’t put everyone who can perform a critical function on the same team. Expect the Expected --- Create Daily Exception Reporting: Establish an easy to use exception reporting process to trace contacts outside of the contact team or that otherwise violate the employer’s social distancing rules. A daily form (paper or electronic) at the end of the work day (for supervisors and/or individual employees) could work. A dedicated email box or even hotline number could be especially helpful. If done properly, employers need not roll out new or complex technological solutions, though such solutions could be effectively utilized (e.g., card swipe, security camera or other tracking or security systems). Foster Voluntary Contact Reporting. Successful voluntary contact reporting depends on creating an environment where employees do not fear retaliation or adverse consequences to themselves or others for fully disclosing their contacts (See, the CDC’s “Maintain Healthy Business Operations”). Do not use voluntarily reported contacts as a basis for discipline (e.g., for violating social distancing rules). Consider how reports can be kept as confidential as possible to eliminate potential barriers to full disclosure (for example, an employee may be reluctant to tell a direct supervisor about contacts during the day with friends). Consider implementing comprehensive COVID-19 related leave benefits so employees will not worry that voluntary reporting will result in friends and colleagues being forced into leave without pay if an exposure occurs. For some employers (i.e., those with fewer than 500 employees), the cost of such benefits may be reimbursed under the Families First Coronavirus Act. Communicate & Train. ACT Now is easy to communicate and train as part of an employer’s overall pandemic response program. The message is simple: (1) Maintain Social Distancing; and (2) Keep Calm and Track Close Contacts. Provide manager and supervisor training so they understand their roles and responsibilities in the process and can help effectively re-enforce the steps individual employees can and should take to reduce their risks of exposure. Audit & Improve. Advance contact tracing data will be valuable on rolling 14-day day periods. The information should be reviewed regularly to ensure accuracy, including by conducting periodic interviews with supervisors and employees to validate the accuracy of the information. Of course, an effort should also be made after a diagnosis to also attempt to confirm the accuracy of the contact list with the patient (if they are available). The audit process will also help identify opportunities for improvement --- i.e., by identifying possible ways to reduce each employee’s direct or close contacts in the workplace, as recommended by the CDC. Finally, the audited ACT data may be helpful in determining whether a COVID-19 diagnosis resulted from a workplace exposure (triggering potential OSHA reporting obligations under 29 CFR 1904). Polsinelli can assist in rapid implementation of an ACT Now program, including by helping to rapidly (in 24 hours) create and implement the needed policies, communications, exception reporting processes, training and audit procedures. This is something that employers can do now and improve on a rolling basis. Given the “slow, staged progression back to normalcy” expected in the current pandemic, an ACT Now program can be a valuable tool in the coming months as employers work toward an orderly return to daily life. [1] Close contact is defined as:  a) being within approximately 6 feet (2 meters), of a person with COVID-19 for a prolonged period of time (such as caring for or visiting a patient; or sitting within 6 feet of a patient in a healthcare waiting area or room); or b) having unprotected direct contact with infectious secretions or excretions of the patient (e.g., being coughed on, touching used tissues with a bare hand). https://www.cdc.gov/coronavirus/2019-ncov/hcp/guidance-risk-assesment-hcp.html?deliveryName=FCP_8_DM21038

Last week, the National Labor Relations Board (“NLRB”) delayed the implementation of its revisions to the representation election process. In a Notice published on its website, it stated, “[T]o facilitate the resolution of legal challenges, it is postponing the effective date of its final rule modifying the Agency’s Representation Case Procedures from April 16, 2020 to May 31, 2020.” Currently, the NLRB is defending itself in a lawsuit filed by the AFL-CIO, challenging its right to implement these changes. While there is no mention of COVID-19 in the decision to delay the application of the new election rules, the NLRB recently postponed all elections, including mail ballots, until April 3rd, due to the global pandemic. Employers were excited about the new election procedure, as it undid many of the “ambush election” rules that were implemented under the Obama Board in 2014, all of which inured to the benefit of employers seeking to engineer a pro-employer campaign. These modifications to the current election process include, among other things: Pushing back the pre-election conference to 14 days (from the current 8 days). Pushing back the obligation to post a Notice of Petition for Election to 5 days (from the current 2 days). Allowing parties to litigate, and the Regional Offices to decide, issues related to unit scope, voter eligibility and supervisory status. Giving parties the right to file post-hearing briefs after pre-election hearings. Scheduling elections no earlier than 20 days following the pre-election hearing. Polsinelli will keep you posted on the latest developments on this litigation and the rollout of the new election rules, whether on June 1st or later.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a $2 trillion stimulus package aimed to benefit both individual taxpayers and businesses. This update provides a summary of those provisions of the CARES Act directly impacting employer sponsored health and welfare benefit plans, retirement plans and limitations on executive compensation. Expansion of Telehealth Services With very limited exceptions, prior to the CARES Act, a high deductible health plan (“HDHP”) that provided coverage below fair market value for services incurred prior to satisfying the plan’s minimum deductible would jeopardize a participant’s eligibility to make contributions to a health savings account (“HSA”). The CARES Act creates a safe harbor allowing an HDHP to provide free or discounted coverage of telehealth services prior to the participant otherwise satisfying the applicable minimum deductible and still allowing the HDHP participant to remain HSA eligible. Note, that although this safe harbor became effective immediately upon enactment of the CARES Act, it only applies for plan years beginning prior to December 31, 2021 and is not mandatory. This new safe harbor will be a critical component of employer sponsored medical plans as officials continue to advocate for the use of telehealth services in order to limit exposure to the coronavirus. Reimbursement of Over-the-Counter Drugs and Products The CARES Act once again makes over-the-counter drugs includable as qualified medical expenses for purposes of payment and/or reimbursements from HSAs, Flexible Spending Accounts, Health Reimbursement Accounts, and Archer Medical Savings Accounts. Not only does the CARES Act unwind this change that had been made by the Affordable Care Act in 2010 to exclude over-the-counter drugs as qualified medical expenses, but it goes one step further by adding that the costs for menstrual care products are likewise a qualified medical expense which is reimbursable. Under the CARES Act, this change as to what is included as a qualified medical expense is effective for expenses incurred after December 31, 2019. Payment of Employee’s Student Loans With respect to payments made by an employer (or holder of student loan) beginning on March 27, 2020 and ending December 31, 2020, the CARES Act amends Internal Revenue Code Section 127 to permit employers to contribute up to $5,250 toward the payment of certain employees’ student loans. This is an expansion of the otherwise qualified education expenses already permitted to be paid by an employer on a tax-favored basis under Code Section 127. Retirement Plans Penalty–Free Coronavirus Related Distributions. At any time during 2020, retirement plans and IRAs may permit distributions of up to $100,000, free of the otherwise applicable 10% early distribution penalty, for plan participants (1) who themselves have been diagnosed with SARS-CoV-2 or COVID-19 by a test approved by the Centers for Disease Control (CDC), (2) have a  spouse or dependent who has been diagnosed by such a test, or (3) who experience adverse financial consequences as a result of being quarantined, furloughed, laid off, or suffered reduced working hours, or who is unable to work due to lack of child care. The CARES Act allows a plan administrator to rely on a certification provided by the participant that he or she satisfies the above-described criteria. Unlike typical hardship distributions, this special coronavirus-related distribution may be repaid to the plan, or contributed to another eligible retirement plan, at any time over the three-year period commencing on the date the distribution was received (and there is no requirement that the repayment occur in a single payment). Further, Federal income tax withholding is not required at the time of distribution, and the participant may spread the taxation of the amount distributed over a three-year period to the extent that he or she does not otherwise repay the amount to the plan during that three-year period. Retirement Plans and IRAs are not required to permit coronavirus-related distributions, therefore plan amendments will be required in order to provide for such distributions. Under the CARES Act, such amendments will not be required any earlier than the end of the 2022 plan year. Plan Loan Relief and Increases. The CARES Act increases the limit on new loans from eligible retirement plans and provides for an up to one-year extension on the repayment of existing loans. With respect to new loans, the current maximum dollar limit of $50,000 is replaced with $100,000, while the maximum loan percentage is increased from the current 50% account balance limit to 100% of the account balance. These optional loan provisions are applicable only to the same participants who are eligible for the coronavirus-related distributions described above, and are available for the 180 day period following enactment of the CARES Act. With respect to loans already in repayment status, the CARES Act allows repayments otherwise due from the date of enactment through December 31, 2020 to be delayed for one year from the original due date. Subsequent loan repayments must be adjusted to reflect the delay in the 2020 repayment, including the accrual of any interest during that time. The individuals to whom this provision applies are the same as those covered by the provision permitting coronavirus-related distributions. As with the coronavirus-related distributions, employer’s wishing to implement the loan relief provisions of the CARES Act will need to amend their plans accordingly, but no amendments are required to be adopted prior the end of the 2022 plan year. Delayed Required Minimum Distributions. Employers with defined contribution plans (e.g., 401(k), 401(a), 403 (a) and (b), and 457(b) plans) may elect to implement a one-year delay on required minimum distributions (“RMDs”). Note, this optional delay does not apply to defined benefit plans.  The delay applies to both 2019 RMDs that needed to be taken by April 1, 2020 and 2020 RMDs. Employers should begin working with their third party plan administrators as soon as possible in order to implement this optional delay with respect to any 2019 RMDs. Delayed Minimum Funding Requirements. The CARES Act postpones the timing of minimum funding contributions for single-employer retirement plans that would otherwise become due during 2020. As a result, all quarterly payments due with respect to the 2020 plan year, as well as final payments for the 2019 plan year, are all due January 1, 2021. An Employer should take into consideration, when deciding whether to delay funding of its contributions, that interest will accrue from the original due date through the payment date of January 1, 2021. Compensation Limits Tied to Government Loans The CARES Act provides for loans and loan guarantees to business and nonprofit organization, and while those loans and loan guarantees are critically needed to provide liquidity to companies, they come with tight restrictions on compensation paid to certain officers and employees. Specifically, in order to receive such a loan, the company must agree to cap all compensation of employees receiving more than $425,000 per year to the amount of compensation paid in 2019, and any severance pay or other benefits payable upon termination cannot exceed twice the 2019 compensation amount. Further, any officers or employees receiving total compensation of $3 million or more cannot receive total compensation in excess of (i) $3 million plus (ii) 50% of the excess over $3 million. For example, an officer who was paid $5 million in 2019 may only receive $4 million during the period in which the restrictions apply. Under the CARES Act, these restrictions remain in place until one year after the date the loan or loan guarantee is no longer outstanding. For air carriers or contractor that receives financial relief under the air carrier worker support provisions of the CARES Act, the same limits on compensation apply but such limits remain in effect during the two-year period beginning on March 24, 2020 and ending on March 24, 2022. Affected companies are also restricted from making stock repurchases and issuing dividends. There are many unanswered questions related to what must be taken into account as “compensation” for purposes of the above restrictions, as well as whether amounts may be made-up once the restrictions lapse. Further guidance from the Treasury Secretary is anticipated and will guide decisions related to the affected employees’ compensation. In the meantime, organizations and businesses that intend to take advantage of the new loans programs should begin to identify employees and officer impacted by the compensation restrictions and plan accordingly. In addition to the compensation restrictions discussed above, organizations and businesses that employ between 500 and 10,000 employees that receive loans or loan guarantees will be required to “make a good-faith certification that the business or organization will remain neutral in any union organizing effort for the term of the loan.” The CARES Act does not define “neutral” or provide guidance on what exactly is a “union organizing effort.”  Neutrality agreements involving union organizing attempts typically require the employer to refrain from urging its employees to oppose union representation.  Other neutrality agreements require employers to accept unionization of its employees without a secret ballot election.

The current wave of “shelter in place” and other similar orders has triggered concern among many businesses – large and small – about their own business continuity. The lack of clarity around what such restrictions require (and don’t require) and when they will be fully lifted has created considerable and understandable confusion and anxiety. Polsinelli has been assisting clients with navigating the rules around who is and is not “essential” and, therefore, able to work (at least outside of their home). Thought needs to be given now, however, to where employers should be by April 7th(ish) – when employees in some states may be able to start returning to work. The CDC has made clear that while strict containment measures are critically important at the moment - to help “flatten the curve” - they are not indefinite. The CDC refers to these efforts as a “15 day pause.”  Most of these orders are set to expire between April 7 and April 21.  The CDC cautions, however, that “15 days may not be long enough and will depend on a variety of factors from community to community.” But what comes next? The CDC describes a “slow, staged progression back to normalcy” and urges communities to “begin planning for an orderly return to daily life.” The CDC further offers ample guidance as to the steps that employers can take to help prepare for that “slow, staged progression back to normalcy.” Employers have a rare opportunity now to “retool” for the return to normalcy. We will offer further guidance in the coming days and weeks, but here is a rough blueprint: Expect the Expected. The return to normalcy will be slow. When restrictions ease, it is likely that some significant containment measures will remain, including with respect to identifying and isolating individual cases and restricting travel to and from regions that are experiencing on-going community transmission. Review your contingency plans. Can production, distribution or operations be transferred between locations to minimize disruption when necessary? Are workers cross-trained in critical functions? Have you diversified your global supply chain or begun planning to do so mitigating the risks posed by any one region? Reconfigure your physical facilities. Move work stations; move tables; space them out; mark lanes; develop user-friendly signs; plan to add hand sanitizer stations (at least when supplies catch up). Reconfigure administrative safeguards. Many employers have had a crash course in remote work. Don’t expect remote work to end on April 7. Improve and refine it. Use it whenever possible to reduce workplace congestion and enhance physical distancing efforts. Moving beyond remote work – review your hours of operations and consider new approaches. Stagger or create new shifts.  Reduce congestion and allow for increased environmental cleaning. Design a robust COVID-19/Pandemic Response Plan. It’s not too late to develop (or improve) your response plan. The current pandemic is not likely to end soon, though it will hopefully be improved by the 15 day pause effort around the country. Again, look to the CDC for guidance. An effective playbook should be: Flexible and involve substantial employee input. Tested against (1) your experience to date and (2) a focused discussion or exercise testing whether the plan has gaps or problems that need to be corrected. Transparent – share your plan with employees and explain what human resources policies, workplace and leave flexibilities, and pay and benefits will be available to them.  Employees will need to be and feel safe at work if they are to be productive. Rooted in best practices – talk to other businesses in your communities (especially those in your supply chain), chambers of commerce, and associations to improve community response efforts. Polsinelli will help facilitate these efforts. Begin now. April 15 is no longer tax filing day. April 7th(ish), however, is fast approaching and is just as important a deadline.

The $2 trillion stimulus package that the House of Representatives approved on March 27—and President Trump is expected to sign—contains a provision that may provide a significant stimulus to labor unions. One provision of the bill provides new loans to businesses affected by the pandemic.  Companies with 500 and 10,000 employees that apply for a direct loan from the Treasury Department would be required to “make a good-faith certification that the recipient will remain neutral in any union organizing effort for the term of the loan.” The legislation does not define “neutral” or provide guidance on what exactly is a “union organizing effort.”  Neutrality agreements involving union organizing attempts typically require the employer to refrain from urging its employees to oppose union representation.  Other neutrality agreements require employers to accept unionization of its employees without a secret ballot election. Loan recipients would also be required to use loan proceeds to retain at least 90 percent of their workforce at full compensation and benefits until Sept. 30, 2020. In addition, these loan recipients would be banned from moving jobs offshore for the term of the loan plus an additional two years after repayment. The legislation also places limits on compensation for officers and other employees of the organization.  An officer or employee whose total compensation exceeded $425,000 in calendar 2019 cannot receive any increase in compensation until 1 year after the loan is repaid.  Employees who received total compensation of $3,000,000 or more in calendar 2019, cannot receive total compensation greater than $3,000,000 plus 50% of any amount in excess of $3 million.

Employers have faced many questions as they prepare for the effective date of the Families First Coronavirus Act (FFCRA).  Many of those questions remained unanswered after the Department of Labor issued its “Families First Coronavirus Response Act: Questions and Answers” on Tuesday, February 23, 2020.  The DOL added to its guidance late Thursday, February 25, addressing some of these outstanding issues: What does it mean to be “unable to work” to qualify for leave under the FFCRA?  An employee is unable to work if the employer has work available for the employee to perform, either at a worksite or remotely, and the employee is unable to perform that work because of a COVID-19 qualifying reason.  A common example is if an employer has telework available, but the employee cannot perform the telework because the employee has a young child who needs supervision because the school is closed due to COVID-19. On the other hand, if the employer’s worksite is shut down, for example under a stay at home order, and the employee’s work cannot be performed remotely, the employee likely does not qualify for leave—the employee is able to work, the work is just not available.  Note, though, that a stay at home order is different from a quarantine or self-isolation order.  Employees under a quarantine/isolation order might be entitled to leave. Do laid off or furloughed employees qualify for leave?  No.  Once an employee is laid off or furloughed, whether before or after April 1, that employee is no longer eligible for leave under the FFCRA.  The same is true even if the employee is laid off or furloughed while on leave provided by the FFRCA.  The same is also true if an employer closes the worksite, before or after April 1, even for a brief or temporary period.  In sum, an employee is not entitled to leave under the FFCRA during the period while the business is closed, even if the closure was caused by a federal, state, or local order.  Similarly, an employee cannot use leave under the FFCRA for hours reduced by an employer, even if the reduction in hours was related to COVID-19. Can an employer require documentation showing an employee’s need for leave?  Yes.  An employer can and should require an employee to provide documentation showing the COVID-19 qualifying need for leave, such as a closure notice on a school website or a copy of a government order placing the employee under quarantine.   Indeed, an employer must require and retain documentation to claim for the tax credit available under the FFCRA.  There are no designated FFCRA forms.  However, an employee requesting emergency FMLA for a COVID-19 qualifying reason that rises to the level of a “serious medical condition” must continue to provide the medical certifications required under the FMLA. Click here for the fact sheet. Can FFCRA leave be used intermittently?  It depends.  If an employee is teleworking, the employee may use emergency FMLA or paid sick leave in any increment the employer agrees to.  If an employee is performing work at the employer’s worksite, the employee may use emergency FMLA or paid sick leave intermittently to care for the employee’s child(ren) whose school is closed or childcare is unavailable because of COVID-19 related reasons with the employer’s permission.  However, an employee must use emergency paid sick leave continuously in full day increments if the employee is subject to an isolation or quarantine order, has been advised by a healthcare professional to self-quarantine, is experiencing COVID-19 symptoms, or is caring for someone isolated because of or suffering from COVID-19 symptoms.  In these situations, the employee must use the emergency paid sick leave continuously until the employee exhausts the leave available or no longer has a qualifying reason for the leave.  Note the DOL’s guidance encouraged flexible, voluntary arrangements when the employee needs leave to care for a child who is out of school or does not have childcare due to COVID-19. Can FFCRA leave be used in conjunction with unemployment benefits?  Not under federal law.  Under federal law, an employee receiving paid leave under the FFCRA is not eligible for unemployment insurance benefits.  However, benefits may be available under state law as states have the authority to offer unemployment benefits to workers whose pay has been reduced. The full text of the DOL’s Q&A is available here.

E-Verify has announced that it is temporarily extending the timeframe to take action to resolve Tentative Nonconfirmations (TNC) from the Social Security Administration or Department of Homeland Security due to office closures to the public. Under the new temporary policies, employers are still required to create E-Verify cases for new hires within three business days from the date of hire.  If the E-Verify case creation is delayed due to the employer’s office closure or other COVID-19 precautions, the employer should select “Other” in E-Verify and enter COVID-19 as the reason. If an employee receives a TNC, the employer must still notify the employee of the TNC result as soon as possible.  If the employee decides to take action to contest the TNC, the employer should notify E-Verify of the employee’s decision. E-Verify works by comparing the information employees provide for Form I-9, Employment Eligibility Verification, against records available to SSA and DHS.  If the information provided by the employee does not match, the case will receive a TNC result, and the employer must give the employee an opportunity to take action to resolve the mismatch.  Employees who choose to take action on a TNC are referred to SSA or DHS. In ordinary times, an employee taking action to resolve a TNC must visit the SSA or DHS office within eight (8) federal government workdays to begin resolving the discrepancy.  Provided the employee has timely visited an SSA field office or contacted DHS, the E-Verify case will be in interim status until a final result is issued. Because of government office closures due to COVID-19, an employee contesting a TNC may not be able to visit an SSA or DHS office within eight business days.  Under the new temporary guidelines, the E-Verify case will then be in an extended interim status.  Once government offices reopen, the employee must then visit the appropriate office to resolve the TNC, ultimately leading to a result that either the employee is authorized or a final noncofirmation result that the employee is not authorized to work. DHS reminds employers not to take any adverse action against an employee because the E-Verify case is in an interim status, including while the employee’s E-Verify case is in an extended interim case status due to COVID-19 precautions. Employers should consider these rapidly developing changes and consult Polsinelli counsel for updated guidance for specific issues related to immigration compliance. Visit Polsinelli’s COVID-19: What Your Business Needs to Know blog for more updates.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the “Act”), requiring employers with less than 500 employees to provide Public Health Emergency Leave and Paid Sick Time to employees impacted by the Coronavirus pandemic.  The details of the Act are set out in our earlier Blog post here. Health care providers and first responders on the frontline of the pandemic have a critical need to understand how this requirement impacts their operations during this critical moment.  In evaluating this issue, it is important to note that the two leave requirements, one for child care and the other for illness, arise in different portions of the Act.  The right to Public Health Emergency Leave is set forth in Division C of the Act, which amends the existing statutory text of the Family and Medical Leave Act (“FMLA”).  The right to Paid Sick Time is set forth in Division E of the Act, which creates a new statute known as the Emergency Paid Sick Leave Act. Both of these Divisions address the application of leave provisions to health care providers.  Specifically, the FMLA amendment provides that the Secretary of Labor may issue regulations excluding certain health care providers from the definition of “Eligible Employee”.  The Emergency Paid Sick Leave Act provides that the Secretary of Labor may issue regulations “to exclude certain health care providers and emergency responders from the definition of employee under section 5110(1) including by allowing the employer of such health care providers and emergency responders to opt out.” Additionally, both the FMLA amendments and the Emergency Paid Sick Leave Act allow an employer of an employee who is a health care provider or an emergency responder to elect to exclude a health care provider from coverage under these expanded worker benefits.  The Act provides that the term “health care provider” as it is used in the FMLA amendments shall have the same meaning given to the term under Section 101 of the FMLA.  There is no similar provision in the Emergency Paid Sick Leave Act.  However, employers may look to the FMLA for guidance. The term “health care provider” is defined in Section 101(6) of the FMLA to mean (A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or (B) any other person determined by the Secretary to be capable of providing health care services. The Secretary of Labor subsequently issued regulations expanding this definition to include the following: Podiatrists, dentists, clinical psychologists, optometrists, and chiropractors (limited to treatment consisting of manual manipulation of the spine to correct a subluxation as demonstrated by X-ray to exist) authorized to practice in the State and performing within the scope of their practice as defined under State law; Nurse practitioners, nurse-midwives, clinical social workers and physician assistants who are authorized to practice under State law and who are performing within the scope of their practice as defined under State law; Christian Science Practitioners listed with the First Church of Christ, Scientist in Boston, Massachusetts. Where an employee or family member is receiving treatment from a Christian Science practitioner, an employee may not object to any requirement from an employer that the employee or family member submit to examination (though not treatment) to obtain a second or third certification from a health care provider other than a Christian Science practitioner except as otherwise provided under applicable State or local law or collective bargaining agreement; Any health care provider from whom an employer or the employer's group health plan's benefits manager will accept certification of the existence of a serious health condition to substantiate a claim for benefits; and A health care provider listed above who practices in a country other than the United States, who is authorized to practice in accordance with the law of that country, and who is performing within the scope of his or her practice as defined under such law. The phrase “authorized to practice in the State” means that the provider must be authorized to diagnose and treat physical or mental health conditions. Based on these definitions, it is clear that a large number of employees in the health care industry may be excluded from coverage under the Act at the employer’s discretion. Less clear is whether the Secretary of Labor will adopt regulations excluding all health care providers or allowing health care employers to opt out of Emergency Paid Sick Leave. To date, the Secretary of Labor has not issued express guidance on this issue.

On March 20, the Department Homeland Security (DHS) announced procedures to provide flexibility for companies navigating Form I-9 compliance in light of the Covid-19 national emergency. All U.S. employers must continue to complete the Form I-9, Employment Eligibility Verification form, as mandated by the Immigration Reform and Control Act of 1986 (IRCA), for all newly-hired employees. Normally the Form I-9 process requires the employer to physically meet with the new hire to conduct an in-person inspection of original identity and employment authorization documents to confirm they appear reasonably genuine and relate to the new hire. However, the emergency DHS guidance allows employers who are implementing distancing precautions to temporarily forego the requirement to physically inspect the employee’s identity and employment authorization documents until May 19, 2020, 60 days from the date of the DHS announcement, or 3 business days after the termination of the National Emergency, whichever occurs first. Completion of Form I-9 for Employers with Closed Offices To avail themselves of this exception, employers with closed offices, must: Inspect the identification and employment authorization documents for Section 2 remotely, using video conferencing technology, fax, email, or other available method. Provide written documentation of their remote onboarding and telework policy for each employee. Employees who are onboarded using remote verification must provide documentation for in-person verification within 3 business days, once normal business operations resume. Companies should note that this flexibility is only provided to those with no employees physically present at the work location. Form I-9 completion for newly hired employees or existing employees subject to COVID-19 quarantine or lockdown protocols will be considered for compliance on a case-by-case basis by DHS. The Form I-9 should be completed via remote verification of documents. At the time that the physical documents can be inspected, the employer representative should enter the text as follows in the additional information box of Section 2 of the Form I-9. In addition to the above procedures for remote verification, employers continue to have the option to designate an authorized representative to conduct verification. The U.S. Citizenship and Immigration Services (USCIS) explains in its M-274 Handbook for Employers: You may designate or contract with someone such as a personnel officer, foreman, agent, or anyone else acting on your behalf, including a notary public, to complete Section 2. Note that anyone else who completes Form I-9 on your behalf must carry out full Form I-9 responsibilities. It is not acceptable for the designated person to physically examine the employee’s employment authorization and identity documents, and leave Section 2 for you to complete. You are liable for any violations in connection with the form or the verification process, including any violations of the employer sanctions laws committed by the person designated to act on your behalf. Employers in California should continue to abide by State law which authorizes employers to only use licensed attorneys, individuals authorized under federal law to provide immigration services, and individuals who are qualified and bonded as immigration consultants under California law (Business & Professions Code, Sections 22440, 22441). Immigration and Customs Enforcement (ICE) Grants Additional Time to Employers for I-9 Audits and Notices of Inspection DHS, through the March 20 announcement, has also granted a 60 day extension to employers issued a Notice of Inspection (NOI) in March of 2020. If the employer has not already responded, the employer has an additional 60 day to respond. At the end of the 60 day period, DHS will assess whether another extension is warranted. Continuing employment verification compliance is a critical part of protecting a company from future liability in the event of an ICE Inspection. Employers must retain I-9 forms for inspection for all current employees, as well as for terminated employees for at least three years past the start date or one year past the termination date, whichever is later. Polsinelli attorneys are available to answer questions regarding Form I-9 compliance.

E-Verify has announced that it is temporarily extending the timeframe to take action to resolve Tentative Nonconfirmations (TNC) from the Social Security Administration or Department of Homeland Security due to office closures to the public. Under the new temporary policies, employers are still required to create E-Verify cases for new hires within three business days from the date of hire.  If the E-Verify case creation is delayed due to the employer’s office closure or other COVID-19 precautions, the employer should select “Other” in E-Verify and enter COVID-19 as the reason. If an employee receives a TNC, the employer must still notify the employee of the TNC result as soon as possible.  If the employee decides to take action to contest the TNC, the employer should notify E-Verify of the employee’s decision. E-Verify works by comparing the information employees provide for Form I-9, Employment Eligibility Verification, against records available to SSA and DHS.  If the information provided by the employee does not match, the case will receive a TNC result, and the employer must give the employee an opportunity to take action to resolve the mismatch.  Employees who choose to take action on a TNC are referred to SSA or DHS. In ordinary times, an employee taking action to resolve a TNC must visit the SSA or DHS office within eight (8) federal government workdays to begin resolving the discrepancy.  Provided the employee has timely visited an SSA field office or contacted DHS, the E-Verify case will be in interim status until a final result is issued. Because of government office closures due to COVID-19, an employee contesting a TNC may not be able to visit an SSA or DHS office within eight business days.  Under the new temporary guidelines, the E-Verify case will then be in an extended interim status.  Once government offices reopen, the employee must then visit the appropriate office to resolve the TNC, ultimately leading to a result that either the employee is authorized or a final nonconfirmation result that the employee is not authorized to work. DHS reminds employers not to take any adverse action against an employee because the E-Verify case is in an interim status, including while the employee’s E-Verify case is in an extended interim case status due to COVID-19 precautions. Employers should consider these rapidly developing changes and consult Polsinelli counsel for updated guidance for specific issues related to immigration compliance.

The COVID-19 National Emergency has brought a host of challenges to employers in the United States, including travel, compliance with employment verification processes, and hiring and maintaining immigration status for foreign national employees. In the past two weeks we have seen a flood of interim policy changes. We expect the various immigration and enforcement agencies will continue to adapt and provide further guidance. Form I-9 Compliance for Employers with No On-Site Employees The Department of Homeland Security (DHS) announced flexibility for verification of identification and employment authorization documents for completion of Form I-9. DHS has provided remote verification procedures to allow an employer with no employees on-site due to the COVID-19 National Emergency, to review Section 2 documents using virtual review methods such as video conference, fax or email. The remote verification policy is in effect for the next 60 days. ICE Immigration and Customs Enforcement (ICE) has provided a 60 day document production extension for any employer issued a Notice of Inspection (NOI) for Form I-9s during the month of March 2020. ICE will determine if additional extensions are warranted at the end of the 60 day period. United States Citizenship and Immigration Services (USCIS) has suspended in-person services at USCIS Service Centers around the country until at least April 1. This suspension includes final interviews for permanent residency and naturalization. Applicants with interview notices during this time will be automatically rescheduled. Those with InfoPass appointments or other appointments at a field office must reschedule through the USCIS Contact Center. USCIS has suspended premium processing service for I-129 and I-140 petitions filed directly with USCIS until further notice. Form I-129 is utilized for employment-based non-immigrant petitions, including, but not limited to, the H-1B, L-1A/B, E-1, E-2, O-1, and TN statuses. Form I-140 is utilized for employment-based permanent residency applications. USCIS will continue to accept and process all applications in accordance with regular processing guidelines, including filings for those selected in the FY 2021 H-1B lottery, expected to occur before April 1, 2020. USCIS will temporarily accept copies of original signatures. USCIS has provided employers and their legal counsel much needed relief, by accepting reproduced copies of original signatures for filing of benefit forms with USCIS, including Form I-129. For forms that require an original signature, USCIS will accept the reproduced original for the duration of the COVID-19 National Emergency. Originals of the forms must be retained and provided to USCIS at a later date if requested. The Department of Labor (DOL) has issued a FAQ on complying with regulations related to immigration processing services provided by the DOL in light of COVID-19. Notably, companies who sponsor foreign national employees for H-1B, H-1B1 and E-3 visas may need to move their sponsored employees to a different worksite that was stated on the Labor Condition Application (LCA) included in the work visa filing. Companies must still comply with certain posting obligations but will be considered compliant as long as the posting is done within 30 days of the move. In addition, DOL is providing additional time to meet recruitment requirements for the first step of the green card process, the Program Electronic Review Management (PERM) labor certification. Companies will have temporary extensions for recruitment and filing timelines, to allow additional time for the physical posting requirement. The U.S. Department of State (DOS) announced a temporary suspension of routine visa services at all U.S. Embassies and Consulates around the world. All immigrant and non-immigrant visa appointments will be cancelled as of March 20. The DOS will resume visa processing as soon as possible and will continue to provide emergency services as possible. Travel Restrictions continue. Foreign national travelers who have been present in the following countries within the past 14 days are currently restricted from entering the U.S. (U.S. Citizens, Lawful Permanent Residents and their immediate family members are allowed entry to the U.S. with additional screening.) Countries currently impacted by the travel bans include: China, Iran, Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. Canada and Mexico travel restrictions. Further, the U.S. has announced joint border closures with Mexico and Canada, for at least 30 days, limiting cross-border traffic to “essential travel” in an effort to reduce the spread of COVID-19. Both countries have confirmed that truck and train traffic carrying supplies are considered essential travel and will continue. U.S. Citizens warned to not travel. The U.S. Department of State has issued a Level 4: Do Not Travel Warning and Global Health Advisory warning United States citizens to avoid all international travel due to COVID-19. U.S. employers should consider these rapidly developing changes and consult Polsinelli counsel for updated guidance for specific issues related to immigration compliance.

The National Labor Relations Board (“Board”) announced today that it will suspend all representation elections, including mail ballot elections, effective immediately through April 3, 2020 because of the COVID-19 pandemic. The Board stated that the election suspension is necessary to ensure the health and safety of its employees, as well as members of the public who would be involved in the election process. Another factor in the Board’s decision was its potential inability to effectively conduct elections due to the closure of several Regional Offices caused by staff exposure to the virus, and the significant number of Board employees who were required to work remotely because of COVID-19. The Board did not disclose how many representations will be affected, how the elections will be rescheduled, or the impact on recently filed election petitions.

Unemployment benefits are a joint federal-state program. While the federal government provides some guidelines, every state has its own rules on unemployment benefits, making navigation of the rules challenging for employers who have employees in multiple states. Complicating the unemployment process are quickly evolving changes to state unemployment standards in response to COVID-19. The general questions that determine unemployment eligibility are: A. Is the employee out of work or did the employee experience a reduction in work income through no fault of the employee? B. Is the employee ready and able to work? C. Does the employee meet qualifying work and wage requirements? (Each state has requirements for wages earned or time worked during an established period of time referred to as a “base period.”) D. Is the employee receiving income replacement such as sick, disability, or severance pay that offsets or replaces unemployment? (Some states reduce unemployment benefits for qualifying employees by other income replacement the employee may be receiving.) In operation, the availability of unemployment benefits will depend on the circumstances surrounding the employee’s unemployment and state law: If an employee is on leave by choice, such as to care for himself/herself or others, self-quarantine, or FMLA, then unemployment benefits are generally not available because the employee is unable to work. Note that some states are making exceptions here for absences related to caring for oneself or others who have tested positive for or have been exposed to COVID-19. If there is a layoff or furlough (temporary or otherwise), then unemployment benefits are typically available to affected employees because the affected employee is able to work. If an employer reduces an employee’s hours, then unemployment benefits are typically available depending on the state and the amount of the reduction in hours. In many states, benefits are available under a “work share” program if certain criteria are met. If there is forced leave by an employer, such as a 14-day quarantine, the availability of unemployment benefits will depend on the jurisdiction. The United States Department of Labor (“DOL”) has clarified in published guidance that individual states have the authority to make changes to unemployment based on COVID-19, concerns such as extending the availability of unemployment benefits to eligible employees when: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; or (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19. A majority of states have taken action to modify their usual unemployment rules. For example, California has stated it will remove the waiting week period that usually applies to unemployment, meaning that employees will receive benefits starting on day one. Missouri has specifically stated that it would allow benefits for a forced quarantine by the employer. In light of the global pandemic, unemployment benefits rules may rapidly change in coming weeks. Pending federal legislation proposes further relief including additional money for unemployment benefits and relief to employers for charges related to unemployment benefits paid due to COVID-19. In addition, states continue to monitor their processes and institute changes to respond to the current economic landscape. Employers are free to offer employees information on filing for unemployment, but should note that state unemployment agencies are making frequent changes that may provide for unemployment benefits for COVID-19-related issues. Below is a list of resources for states that have taken action in response to COVID-19 issues and, for states where action has not yet been taken, a link to the general unemployment site:

COVID-19 continues to have far-reaching implications for global mobility and the international workforce in the United States. Polsinelli attorneys are closely monitoring travel restrictions and Department of Homeland Security policy implementations for its impact on workforce mobility and immigration status. Travel Restrictions On March 16, the United Kingdom and Ireland were added to the list of countries with entry restrictions to the United States. The travel restrictions, originally enacted on Friday, March 13 for the Schengen area countries is expanded to include the United Kingdom and Ireland. Entry is suspended for most foreign nationals who have been present in one of the countries listed below at any time within the 14 days prior to their scheduled departure to the U.S. As with the initial ban, U.S. citizens, legal permanent residents, and immediate family members will be exempt from the ban on entry. Travelers should review the restrictions carefully to determine their eligibility for re-entry. Countries currently impacted by the travel bans include: China, Iran, Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland and the United Kingdom. American citizens, legal permanent residents and their immediate family members returning to the U.S. from the countries impacted will be required to travel through 13 airports within the U.S., including: Boston-Logan International Airport (BOS) Massachusetts Chicago O’Hare International Airport (ORD) Illinois Dallas/Fort Worth International Airport (DFW) Texas Detroit Metropolitan Airport (DTW) Michigan Daniel K. Inouye International Airport (HNL) Hawaii Hartsfield-Jackson Atlanta International Airport (ATL), Georgia John F. Kennedy International Airport (JFK), New York Los Angeles International Airport, (LAX), California Miami International Airport (MIA), Florida Newark Liberty International Airport (EWR), New Jersey San Francisco International Airport (SFO), California Seattle-Tacoma International Airport (SEA), Washington Washington-Dulles International Airport (IAD), Virginia The DHS, is advising that all travelers to the U.S. from the impacted countries may be subject to heightened screening and must self-quarantine for 14 days after arrival. ESTA Warning U.S. Customs and Border Protection announced that any traveler with a valid ESTA who is covered under the Presidential Proclamation on travel restrictions and who attempts travel or entry to the United States during this time will have their ESTA authorization suspended. ESTA (Electronic System for Travel Authorization) is an automated system that determines the eligibility of visitors to travel to the United States from the 39 visa waiver countries. USCIS Cancellations and Closures United States Citizenship and Immigration Services (USCIS) announced closure of all field offices to the public for the period March 18 to at least April 1. All in-person services will be unavailable during this time. Anyone who has an appointment scheduled during this time, including naturalization ceremonies, biometrics appointments, and final permanent residency interviews, will be rescheduled by USCIS for a later date once normal operations resume. USCIS will continue its non-public facing case processing. Department of State Consulate Closures and Visa Appointment Cancellations U.S. Embassies and Consulates around the world are actively cancelling visa non-immigrant and immigrant visa appointments. The U.S. Department of State is maintaining a webpage to the embassy and consulate announcements regarding COVID-19 restrictions in each country.

Since negotiations began last week, people across the country have been anxious to know how Congress’s response to the COVID-19 pandemic would impact them. The Senate has just passed the Families First Coronavirus Response Act (“Act”). The Act will impact how employers address the pandemic and how health care providers are paid for some of the services associated with COVID-19. Unemployment Benefits The Act provides $500 million dedicated to providing immediate, additional funding to states for staffing, technology, and other administrative costs, so long as the state meets certain claim processing requirements. For states with a 10% or more increase in their unemployment rate (over the previous year) that comply with all beneficiary access provisions, the federal government will provide 100% of the funding for Extended Benefits, as opposed to the usual 50%. Emergency Paid Sick Leave Act Employers with fewer than 500 employees and government employers must provide employees with an additional two weeks of paid sick leave for certain COVID-19-related instances. Employers must provide paid sick leave to an employee who is unable to work (or telework) due to a need for leave because: 1. The employee is subject to or is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19. 2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 or is caring for an individual who has been so advised. 3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis. 4. The employee is caring for their child due to the closure of their child’s school or place of care, or the unavailability of the child’s care provider, due to COVID-19 precautions. 5. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor. Employees would receive the following amounts of paid sick leave: 1. Full-time Employees – 80 hours 2. Part-time Employees – hours equal to the number of hours that such employee works, on average, over 2 weeks For employees on leave due to being placed in isolation or experiencing COVID-19 symptoms, paid sick leave is paid at their full regular rate, capped at $511 per day and $5,110 in the aggregate. For employees on leave due to the other reasons provided in the Act, paid sick leave is at 2/3 the employee’s regular rate, capped at $200 per day and $2,000 in the aggregate. If an employee works varying hours week to week, the number of hours paid is based on the average number of hours scheduled per day over a 6-month period ending on the date when an employee took leave, or if such information is unavailable, the employee’s reasonable expectation at the time of hiring of the average hours per day the employee would be scheduled to work. After the first day an employee receives paid sick leave, an employer may require the employee to follow reasonable procedures to continue receiving paid sick leave. Sick leave under the Act expires if not used in 2020. State and local paid leave entitlements are not preempted by the Act. Employers are prohibited from discharging, disciplining, or discriminating against an employee who takes leave under this Act or complains or institutes a complaint related to this Act. Employers violating this Act will be considered to have violated the Fair Labor Standards Act (“FLSA”) and will be subject to the respective penalties. The Secretary of Labor may exempt employers with less than 50 employees from the paid sick leave requirements if compliance would jeopardize the business’s viability as a going concern and may also exclude certain health care providers and emergency responders from the definition of eligible employee. The sick time requirements go into effect 15 days after the bill is enacted and expire December 31, 2020. Emergency Family and Medical Leave Expansion Act Employers with fewer than 500 employees must provide 12-weeks of job-protected, partially paid FMLA leave to certain employees prevented from working due to COVID-19. Employees are eligible if they have been employed for at least 30 calendar days (not the 12 months typically required under FMLA). Employers must provide 12 weeks of FMLA leave if an employee is unable to work (or telework) due to the need to care for their minor child because of the closure of the child’s school or care facility, or unavailability of the child’s care provider, due to a declared Federal, State, or local COVID-19 emergency. Employers are not required to provide paid leave during the first 10 days of leave under this section of the Act. Accordingly, pay for the first 10 days would be under paid sick leave. After the first 10 days of FMLA leave, employers must pay an employee no less than 2/3 of the employee’s regular rate of pay under the FLSA for the number of hours the employee would have normally been scheduled to work, up to $200 per day and $10,000 in the aggregate. If an employee works varying hours week to week, the number of hours is based on the average number of hours scheduled per day over a 6-month period ending on the date when an employee took leave, or if such information is unavailable, the employee’s reasonable expectation at the time of hiring of the average hours per day the employee would be scheduled to work. Employees must provide the employer with notice of leave as is practicable. At the end of the leave period, employers must generally reinstate employees to the same or a reasonably equivalent position upon availability. Employers with fewer than 25 employees are not required to reinstate employees under certain conditions. The Secretary of Labor may exempt employers with less than 50 employees from the emergency leave requirements if compliance would jeopardize the business’s viability as a going concern and may also exclude certain health care providers and emergency responders from the definition of eligible employee. The emergency leave requirements go into effect no later than 15 days after enacted and expires December 31, 2020. Employer Tax Credits In order to defray costs, the Act provides a payroll tax credit to employers for “qualified sick leave wages” (i.e., wages required to be paid under the Emergency Paid Sick Leave Act) and “qualified family leave wages” (i.e., wages required to be paid by the Emergency FMLA Expansion Act), subject to certain caps. Employers may claim a credit against Social Security tax liability for each calendar quarter. If the credit exceeds an employer’s social security taxes for a calendar quarter, the excess is generally refundable. Health Care Costs The Act includes several notable provisions aimed at providing coverage for COVID-19 related health care services. Private group and individual health plans must cover COVID-19 diagnostic testing, including the cost of a provider, urgent care, or emergency room visit to obtain the testing, without any patient cost-sharing (this includes deductibles, copayments, and coinsurance). Medicare Part B already covers the cost of a COVID-19 diagnostic test, but the Act expands that coverage to include COVID-19 testing-related services, with no cost-sharing. A “testing-related service” is an outpatient, hospital observation, emergency department, nursing facility, or home service furnished during the COVID-19 emergency that relates to and results in an order for a COVID-19 diagnostic test. Medicare Advantage plans must also cover COVID-19 diagnostic testing and testing-related services without any cost-sharing or prior authorization requirements. Medicaid and CHIP plans are similarly required to cover COVID-19 diagnostic testing and the related visit without any patient cost-sharing. Individuals covered under TRICARE, veterans, and federal civilian workers cannot be charged for any cost-sharing for COVID-19 diagnostic testing and the associated visit. The same is also true for individuals receiving care through the Indian Health Service. During the COVID-19 emergency period, states are permitted to expand Medicaid to uninsured individuals for COVID-19 diagnostic testing and the associated provider visit. Medicaid costs for these individuals will be matched 100% by the federal government. For the period of the public health emergency, the federal government will increase Federal Medical Assistance Percentages (FMAP), the federal funding portion of all Medicaid programs, by 6.2%. Allotments to U.S. territories will also increase. Conclusion Employers, payors and health care providers will need to take immediate steps to adapt to the requirements of the Act. Polsinelli’s Cross-Disciplinary COVID-19 Response Team is at the forefront of these efforts and stands ready to assist.

On March 12, 2020, the California Supreme Court broadened the scope of who can bring a representative action claiming penalties under the 2004 Private Attorneys General Act (PAGA).  (Kim v. Reins International California, Inc.) By way of background, in a PAGA action the named plaintiff must be an “aggrieved” employee or former employee who alleges that the defendant committed one or more California Labor Code violations against him or her.  This permits the employee to bring a “representative” PAGA claim against the defendant on behalf of other “aggrieved” employees for other alleged Labor Code violations.   In its ruling, the Supreme Court held that an employee who settles his or her own individual claims against their employer may still bring a PAGA action on behalf of other “aggrieved” employees. Until recently, an employee who settled their individual claim(s) against the employer could no longer maintain a PAGA action on behalf of other “aggrieved” employees.  The courts reasoned, prior to the instant decision, that because the plaintiff was made whole he or she was no longer “aggrieved.”  With the Kim decision, however, the Supreme Court stated that “[t]he statutory language reflects that the Legislature did not intend to link PAGA standing to the maintenance of individual claims… .”  Rather, the Court ruled that independent of any individual settlement an employee has PAGA standing if “…one or more of the alleged violations was committed against him [or her]… .” The Court’s decision that an employee’s individual claims are no longer linked to PAGA standing will affect the strategies employers utilize in litigating PAGA actions.  For example, companies with arbitration agreements may be unable, and may not want to, arbitrate named plaintiffs’ individual claims.   This is because even if the employer is successful in its arbitration against an employee on his or her individual claims, the employee may still bring a separate PAGA action.  Moreover, employers will need to consider PAGA exposure when settling wage and hour claims with employees on an individual basis.  The Labor and Employment Department of Polsinelli is of course ready to provide you further guidance on this ruling and all of your California and Federal labor and employment questions.

Despite many politicians and employers discussing the option for employees to work at home, there are millions of employees who simply cannot do that. Bartenders, restaurant servers, cashiers, and many others have no one to serve and nothing to ring up when they work at home. Employers of such employees accordingly have a difficult decision to make when business is at an all-time low or they have been shut down. Most cannot afford to pay employees during this time period and hope employees will qualify for unemployment benefits. The question for these employers thus becomes–to fire, or not to fire. This is where a work furlough comes into play. A work furlough is essentially a temporary layoff that qualifies for unemployment benefits. Furloughs rose in popularity some years ago when businesses had to cut costs. Most employers knew employees who worked from paycheck to paycheck would suffer a financial hardship if the employees lost their jobs. Employers did not want to terminate employment. These employers wanted to minimize the negative impact, psychologically and monetarily, a termination brings, and the hard feelings an employee may carry following termination. Employers wanted employees who were already-trained to return to work at the end of a furlough, rather than having to start the hiring process from scratch. Work furloughs generally have a set beginning and end date, similar to the 15-day shut-down ordered in many cities. The employer does not pay the employee during the furlough. Employees, however, generally qualify for unemployment compensation benefits. Employers who want to maintain better relations should tell their employees to apply for unemployment benefits on the first day of the furlough. This ensures the employees will receive the maximum compensation possible. Even an employee who uses vacation time or personal time may qualify for unemployment benefits. Usually there is a one week waiting period before an employee is eligible to receive any unemployment benefits. Many states have benevolently waived this one week waiting period for job losses suffered due to the pandemic. In these states, employees will receive benefits beginning “day 1.” The employee will receive compensation during the second week and any later weeks during which the employee is not working. Any employee who files after the first week of the furlough must use the second furlough week as the waiting period. The employee, therefore, loses a week of unemployment compensation. Even if the furlough period is only one week in length, employees should file for benefits. This helps the employee if the employer is forced to extend a furlough or put employees on furlough again later that same year. The one-week waiting period only applies to the first week when the employee did not work during the first furlough. The employee does not have to wait yet another week to receive benefits (compensation) during any furloughs that take place within 12 months of the first furlough. While furloughs are an excellent option for employers to consider, any employer considering termination or a furlough must carefully consider all state and local laws; the state emergency declarations and laws issued, given the pandemic; and federal law, including any relief package or whether the number of employees furloughed triggers obligations under WARN.

As you are aware from various updates this past weekend, certain cities have closed their schools (bars and restaurants, etc.), and are encouraging or requiring employees to work from home. People who return from risky travel or learn they may have been exposed are self-quarantining. These are certainly signs that many more employees will be working from home or telecommuting regardless of where they are located. A few tips you may send to employees. We hope they may help you and your employees prepare for and, ultimately, work from home for a period of time. Take home, each day, everything you need for telecommuting in case (1) we move to a “telecommuting” or a “work at home” recommended or required policy, (2) your child’s school is closed, (3) you wake up feeling ill (in any way), (4) a loved one wakes up feeling ill and needs your help or you prefer to self-quarantine, (5) you are in a high-risk health category, or (6) you decide at some point you prefer to telecommute. Consider whether meetings of any size, internal or external, might or should be postponed or handled by telephone or videoconference (rather than in person). Use the terms “working from home,” “telework,” or “telecommuting,” rather than we closed our office. The office may be physically empty or mostly empty, depending on what is needed, but “we closed our office” sounds like we are not working. We want to avoid giving anyone that impression. Treat your day like a normal work day to the greatest extent possible. Get up at your regular time, shower, get dressed for work, set up a desk or office area for yourself if you do not already have such an area. End work when you normally stop. Contrary to popular belief, individuals who telecommute often over-work in the beginning, which leads to burn out. Try to remove or limit distractions, including children, puppies, laundry, etc. Having a specified desk / work area, especially one where you can shut a door, will help set boundaries around working time and “no distractions.” If two parents or adults are working from home, work together to share all responsibilities. Try to schedule your most mentally intensive work during, for example, the early morning before anyone else is awake, during your child’s nap time, when your kids are engaged doing something, etc. Synchronize breaks with your children’s or pets’ schedule. (We all know some of this is not as easy as it sounds, especially when children are involved.) Make sure your working area is safe, clean, comfortable (in an ergonomically correct manner), well ventilated, and well-lit. You should have enough electrical outlets to safely power all equipment needed with all wires and electrical cords secured and out of the way. Prepare in advance for periods during which there may be a lack of focus or motivation. This is natural when the energy around your work is not as high as it might be when numerous others are working around you. Use one of many productivity methods available, including the Pomodoro Technique, or my favorite – Eating Live Frogs: Do the Worst Thing First, to help maintain periods of focus and streamline productivity. Anticipate technical problems, which are a huge hassle in the office but even more frustrating when out of the office. Make sure you have a good WiFi or MiFi connection (or both available). Call the Help Desk as often as needed. Arrange for your equipment to be swapped out if the problem is severe. Beware of feelings of isolation or loneliness. The statistics support that people who telecommute tend to lose their sense of community, belonging, etc. Reach out to co-workers in a meaningful, professional AND social way via phone, FaceTime, Zoom, etc. Send funny stories, jokes. In other words, stay in touch as human beings. Working from home or telecommuting is not an ideal situation. We accordingly hope this is a SHORT experience for each of you and your employees. Please do not hesitate to reach out to your Polsinelli contacts if you have additional questions or issues.

In response to the Coronavirus (“COVID-19”), the Internal Revenue Service advised that a health plan that otherwise satisfies the requirements to be a High Deductible Health Plan (“HDHP”) under section 223(c)(2)(A) will not fail to be an HDHP merely because the health plan provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible. As a result, the individuals covered by such a plan will not fail to be eligible individuals for purposes of whether their contributions to HSAs are deductible. The notice provides HDHPs the flexibility to provide health benefits for testing and treatment of COVID-19 without application of a deductible or cost sharing. The notice directs individuals to consult their particular health plan regarding the plan’s coverage of testing and treatment of COVID-19, including the potential application of any deductible or cost sharing. As a result TPAs and employers should be prepared to provide such information.

On Wednesday, March 11, 2020, President Trump signed an Order that prohibits foreign nationals from traveling to the U.S. if they have the have been physically in the European countries making up the Schengen area within the 14 days prior to departure.  These countries include: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.   It should be noted that the United Kingdom is currently excluded from the list of countries.  The ban will take effect on Friday, March 13, at 11:59 P.M EDT. Exceptions to the travel ban include: U.S. Citizens, U.S. Permanent Residents (LPR), and Spouses of U.S. Citizens and LPRs. However, they may be subject to additional screening upon arrival.  Additional exceptions are included in the Proclamation, and we encourage anyone who is or has been present in the Schengen area in the previous 14 days and needs to return to the U.S. to read the Proclamation carefully to determine the applicability of the exceptions and restrictions.  Travelers should contact their airline regarding return to the U.S. Those planning to return to the U.S. must be traveling on a flight that departs before 11:59 P.M. EDT on Friday. Companies with foreign workers based in the U.S. who may be traveling overseas should take action immediately to assess the legal status of the workers and determine if emergency relocation back to the U.S. is needed.  Those returning from overseas should be advised to expect additional screening upon re-entry, and if necessary, heightened monitoring or quarantine for a period of at least 14 days after re-entry. Polsinelli attorneys are closely monitoring the effects of the Covid-19 virus spread on the global mobility needs of U.S. employers.  Should you have any questions, please reach out to your Polsinelli immigration attorney.

On February 21, 2020, OFCCP announced the launch of its new Contractor Compliance Institute as part of its ongoing efforts to provide guidance and training to aid federal government contractors in meeting their compliance obligations.  The Institute provides free, interactive tools and courses to educate contractors about their compliance obligations and help them evaluate the sufficiency of personnel practices and affirmative action efforts.  At its launch, the Institute offered one course providing a two-hour basic overview of the legal authority governing OFCCP’s enforcement activities, required job listings, postings, and notices for federal contractors, and applicant tracking. Along with other OFCCP compliance assistance efforts, such as its issuance of opinion letters and technical assistance guides, the Institute is a sign of OFCCP leadership’s focus on transparency and cooperation with contractors.  Polsinelli will continue to track and report on developments at OFCCP.

Polsinelli attended the February 18, 2020 Compensation Roundtable jointly hosted by OFCCP and the National Industry Liaison Group (NILG).  The event provided valuable insight into the thought processes of senior OFCCP officials as they fielded questions from federal contractor compliance professionals.  The frank discussion during the roundtable highlighted contractors’ ongoing concerns regarding OFCCP’s approach to the evaluation of the compensation of small groups of specialized employees and smaller AAP groups. OFCCP’s preferred method of evaluating compensation and other personnel practices is the regression analysis, a statistical tool that seeks to control for various non-discriminatory factors and identify statistically-significant disparities that may be based on race, gender, or other protected characteristics.  Regression analyses can be effective for evaluating large groups of employees performing the same job, such as entry-level or line employees at larger organizations, but is an ineffective tool for addressing employees in higher-level, specialized positions, which may have only one or a small handful of employees or smaller AAP establishment groups consisting of relatively few employees.  Two common contractor complaints regarding OFCCP’s statistical analysis were highlighted in the Roundtable: (1) OFCCP’s combination of groups of employees across job titles, salary grades, job functions, or other relevant groupings into pay analysis groups (PAGs), and (2) OFCCP’s failure to properly consider and control for non-discriminatory factors relied on by the contractor in setting compensation. Both of these concerns stem from OFCCP’s reliance on the regression tool, which OFCCP contends requires a large number of data points to provide reliable results.  It is OFCCP’s position that valid PAGs must contain at least 30 employees.  For specialized or higher-level positions, this rule can result in PAGs containing numerous different positions having different job functions in different departments.  The contractor advocates at the Roundtable urged OFCCP to drop its insistence on 30-member PAGs in every case and instead analyze more focused “similarly-situated employee groups” (SSEGs) that do not consolidate employees in dissimilar positions. Although OFCCP indicated that it will control for differentiating factors among PAG members, two other statistical principles relied upon by the agency hinder its ability to effectively do so.  First, OFCCP requires that for each control factor, the PAG contain at least 10 employees (i.e., to control for 5 different factors requires a PAG of at least 50 employees).   This creates a Catch-22 in which the creation of a PAG requires consolidating dissimilar positions, but including additional controls necessary to account for the dissimilarity requires adding still more employees in other positions to the PAG.  The second rule applied by OFCCP is that any variable must have at least 5 observations or data points or OFCCP will combine that variable with the next closest variable.  For example, if an employer’s performance evaluation system rates employees into three categories – Needs Improvement, Meets Expectations, and Exceeds Expectations – and only four employees in the PAG are rated as “Needs Improvement,” those four employees will be combined with the employees in the “Meets Expectations” category, eliminating consideration of a factor that is likely significant to the employer’s decisions.  Although the OFCCP officials at the Roundtable expressed some openness to considering small group analysis techniques, they showed little willingness to move away from the agency’s current approach to these principles. In addition to recommending that OFCCP adopt a more flexible approach and reduce its rigid adherence to these statistical principles, the contractor advocates at the Roundtable also criticized the agency for failing to consider two factors commonly relied upon by employers in setting compensation: job grades and market rate.  The contractor representatives noted that an employer’s salary or job grades represent the employer’s holistic business judgment about the relative value of each position within its organization. OFCCP, on the other hand, contended that if the agency has data regarding the underlying factors that inform the assignment of employees to grades (i.e., job responsibilities, seniority, etc…) then the agency should more reliably analyze those underlying factors.  As the contractor representatives noted, however, OFCCP’s independent assessment of those factors to the exclusion of the grades actually used by the employer may be inconsistent with OFCCP Directive 2018-05’s emphasis on conducing compensation evaluations using the same factors relied upon by the employer. The Compensation Roundtable provided a forum for a frank discussion of OFCCP’s compensation evaluation practices.  Although there is a wide gulf between the views of OFCCP officials and contractor advocates regarding OFCCP’s analytical techniques, the agency’s consideration of contractors’ concerns is a step in the right direction.  OFCCP’s apparent reluctance to move away from some of its current practices identified as contractor concerns highlights the need for contractors to rigorously self-audit their compensation practices to identify potential agency concerns and address them prior to being selected for a compliance evaluation.