On July 26, 2021, California Governor Gavin Newsom announced that California state workers, workers in health care, and workers in high-risk congregate setting will be required to provide proof of Covid-19 vaccination or undergo weekly testing and wear appropriate PPE.  The publication issued by the Governor’s office, which is not considered a “mandate” (yet) has been published as a “measure” to encourage State Employees and Health Care workers to get vaccinated.  The measure applies to public and private facilities. The new directive will apply to three large groups of employees. First, the measure will apply to California state employees. The new policy for state workers will take effect August 2. The measure provides that testing will be “phased in over the next few weeks.” Second, the measure will apply to employees working at high-risk congregate settings. By way of example (but not limitation) the measure identifies adult and senior residential facilities, homeless shelters, and jails as “high-risk congregate settings.” Employees working at these locations will be subject to the measure beginning August 9. Third, the measure will apply to “health care workers.” Of note, the publication from the Governor separately references “health care workers” and employees at “health care facilities.”  This suggests that health care workers who work outside of health care facilities would be subject to the measure. Unfortunately, Governor Newsom’s directive does not define the term “health care workers.” In previous orders, California’s Public Health Office designated the Health Care and Public Health Sector as a “large, diverse, and open [sector], spanning both the public and private sectors.” (https://covid19.ca.gov/essential-workforce/). In its definition of “health care providers” it included the following:   physicians, dentists, psychologists, mid-level practitioners, nurses, assistants, and aids; infection control and quality assurance personnel; pharmacists; physical, respiratory, speech and occupational therapists and assistants; social workers and providers serving individuals with disabilities including developmental disabilities; optometrists; speech pathologists; chiropractors; diagnostic and therapeutic technicians; and radiology technologists. (https://covid19.ca.gov/essential-workforce/ - (1) Health Care/Public Health – Essential Workforce, Paragraph 1.)  This group of professionals will likely be considered “health care workers” for purpose of the measure.  Additionally, all employees working at health care facilities will likely be subject to the measure as well. California’s Public Health Office also includes within its Health Care and Public Health sector employees working in emergency medical services, inpatient and outpatient care workers, home care workers, and residential and community-based providers. (https://covid19.ca.gov/essential-workforce/ - (1) Health Care/Public Health – Essential Workforce, Paragraph 2.) Of note, while these employees are considered part of the Health Care and Public Health sector, they are not listed under the heading for “health care providers.”  As a result, it is unclear, at this time, whether this latter sect of employees, that do not work at health care facilities, as well as other type of employees listed within the Health Care and Public Health sector, will be considered “health care workers” for purpose of the measure. Employers of health care workers and congregate facilities will be required to follow the measure effective August 9.  Additionally, health care facilities will have until August 23 to come into full compliance. For a full copy of Governor’s Newsom’s statement please click here . Polsinelli attorneys will continue to provide updates, should and when further guidance is published.

On July 21, 2021, the Department of Labor issued a Notice of Proposed Rulemaking to implement President Biden’s Executive Order 14026 increasing the minimum wage for certain employees of federal government contractors and subcontractors to $15.00 per hour. As expected, the proposed regulations are generally consistent with the regulations previously issued by the Obama administration in 2014 to implement President Obama’s increase in the federal contractor minimum wage. Under the proposed regulations, the minimum wage for workers performing services on or in connection with a federal contract will increase to $15.00 per hour as of January 22, 2022, with inflation-based adjustments on January 1 of 2023 and each successive year. The increased minimum wage applies to contracts that are entered, renewed, or extended (including extensions through the government’s exercise of an option) after January 30, 2022. The regulations provide contractors with a short grace period, however, as contracts entered into between January 30, 2022 and March 30, 2022 that result from pre-January 30, 2022 solicitations are not covered by the regulations until the contract is renewed or extended. The regulations include a minimum wage of $10.50 per hour for tipped employees, but the ability to take a tip credit will phase out on January 1, 2024, after which point tipped employees will be entitled to the same minimum wage as other covered employees. Notable exclusions from the increased minimum wage include federal grants, contracts with Indian Tribes, procurement contracts excluded from the Davis-Bacon Act, service contracts excluded from the Service Contract Act, contracts that are not performed in the United States, and contracts for manufacturing or furnishing materials, supplies, articles, or equipment to the federal government. As in the previous regulations, employees perform services “on” a federal contract when they directly perform the services called for by the contract, which should be a relatively straightforward determination. Employees perform services “in connection with” a federal contract when they perform services that are not required by the contract, but are necessary to the performance of the contract’s services. Common examples of services “in connection with” a contract include custodial, security, or maintenance services at facilities that perform work on federal contracts. Workers who only perform “in connection with” a federal contract are not subject to the minimum wage requirement if they perform less than 20% of their work time on performing services “in connection with” the contract. Both prime contractors and subcontractors of any tier are covered by the higher minimum wage. The regulations do not create a private right of action for employees to sue contractors for unpaid wages, but instead provide for the Department of Labor’s Wage and Hour Division to investigate complaints of violations. Employers are prohibited from retaliating against employees who make such complaints. Possible sanctions for failing to pay the increased minimum wage include withholding of contract payments from the prime contractor, the termination of contracts, and debarment from federal contracting.

On the one year anniversary of the Supreme Court’s decision in Bostock v. Clayton County, the EEOC has issued new guidance to clarify whether employers can segregate workplace restrooms by gender or sex. While not law, this guidance instructs employers how the EEOC will handle sex discrimination charges under its purview. In Bostock, the Court held that the “because of sex” language in Title VII extends protections to sexual orientation and transgender status. However, in the majority opinion, Justice Gorsuch made clear that the Court was not taking a position on the use of “private spaces” and left unresolved the question of whether employers could segregate restrooms by gender or sex. The EEOC’s guidance seeks to clarify confusion stemming from the Bostock decision. The new guidance directs employers that they must allow employees to use the bathroom, locker room, and/or shower that corresponds with their gender identity. Employers may not use anxiety, confusion, or discomfort on behalf of other coworkers as grounds to justify discriminatory policies. If an employer has unisex or single-use facilities, then the individuals can continue to use those as they currently do.  The EEOC has also created a consolidated webpage for resources addressing sexual orientation and gender identity. Interestingly, the guidance was not issued by the full Commission. Rather, the guidance was issued by the Chair of the EEOC and is considered non-binding guidance at the moment. However, employers should expect that the guidance will likely become binding in July 2022 when President Biden will be able to nominate a Democrat to the Commission, thus tilting the ideological majority of the Commission. The new majority may even expand upon Chair Burrows’ guidance. Employers should consult their Polsinelli attorneys for assistance in interpreting and implementing the EEOC guidance.

On July 9, 2021, President Biden made good on a campaign promise to address non-compete agreements by issuing a sweeping executive order that specifically targets barriers to competition. Specifically, the executive order encourages the Federal Trade Commission and other federal agencies to ban or limit non-compete agreements. However, no specifics are offered as to the breadth of any restrictions the Biden Administration would ultimately like to see. And even assuming those agencies respond to this encouragement, we expect the rulemaking process will not yield actionable results for a considerable period of time and is unlikely to result in a complete ban on the use of non-competes. In a press conference, the President stated that the executive order is in response to the growing number of employers utilizing non-competes in recent years – estimating that between 35 million and 60 million private-sector individuals are subject to non-competition agreements. The Biden Administration believes limiting or banning the use of non-competition agreements will increase economic growth and increase wages to allow workers mobility to switch to better-paying jobs. The executive order could prove to be an accelerant for states to initiate their own legislation limiting the use of non-competes – a recent state-law trend that has been gaining traction across the country, in which we have been closely monitoring over the last few years. Regardless of how broadly the executive order is written or when federal agencies ultimately issue new rules, the writing on the wall for years has indicated that the broad use of traditional non-compete agreements will continue to be limited. Employers would be wise to revisit the protections they have in place to protect trade secret and confidential information and their investments in employee training to ensure such protections are narrowly tailored to obtain court enforcement if challenged. One solution has been to move away from traditional non-compete agreements toward customer-based restrictions for the majority of employees. Polsinelli attorneys continue to monitor actions taken by federal agencies to enforce President Biden’s executive order and are prepared to assist employers with navigating the evolving non-compete landscape.

As California moved forward with reopening most of its economy on June 15, 2021, many employers in the state were left wondering whether and when the California Division of Occupational Safety and Health (“Cal/OSHA”), the state agency tasked with regulating workplaces to protect public health and safety, would update its regulations to conform to the latest guidance from the Centers for Disease Control and Prevention (“CDC”) and the California Department of Public Health (“CDPH”) for vaccinated individuals.  Although Cal/OSHA had previously voted to adopt proposed revisions to the COVID-19 emergency temporary standards (“ETS”) which had been in effect since November 30, 2020, Cal/OSHA subsequently voted to withdraw the proposed revisions and offered to make further revisions in light of updated CDPH face covering guidance and other concerns raised by Board members. Relief finally arrived on June 17, 2021, in the form of revised Cal/OSHA regulations that track the state’s latest COVID-19 public health guidance and instruct California employers regarding rapidly changing state policies on requiring masks, proof of vaccination, and physical distancing in the workplace.  Following the Cal/OSHA Board’s adoption of the revised regulations, Governor Newsom issued an executive order allowing them to take effect immediately on June 17. Among the regulations’ biggest changes are the removal of physical distancing and physical partitioning requirements in the workplace, regardless of employees’ vaccinations status, with certain limited exceptions for COVID-19 outbreaks. In addition to greatly limiting physical distancing and physical partitioning requirements in the workplace, the revised ETS do away with face covering requirements for all employees working outdoors, regardless of vaccination status, with certain exceptions for outbreaks.  Fully vaccinated employees no longer need to wear face coverings indoors, with certain exceptions for public transit, classrooms, health care and long-term care settings, correctional and detention facilities, and homeless shelters.  Vaccinated employees who wish to go mask-less in the workplace must document their vaccination status in one of two ways: (1) by either providing proof of vaccination to their employer; or (2) by self-attesting to their vaccination status.  Employers are required to record the vaccination status of any employee not wearing a face covering indoors and must keep these records confidential. Face coverings continue to be required indoors and in vehicles for unvaccinated employees, and employers are now required, upon request, to provide unvaccinated employees with approved respirators for voluntary use when those employees are working indoors or in a vehicle with others.  When there is a major outbreak of COVID-19 in the workplace, employers must offer respirators to employees regardless of vaccination status and without waiting for a request from the employee.  Employers must also offer COVID-19 testing at no cost to any symptomatic, unvaccinated employees, regardless of whether there is a known exposure to COVID-19, in addition to unvaccinated employees after an exposure, vaccinated employees after an exposure if they develop symptoms, unvaccinated employees in an outbreak, and all employees in a major outbreak. Polsinelli attorneys will continue to monitor state and federal COVID-19 relief efforts and remain prepared to assist employers with navigating these evolving issues.

On July 1, 2021, OFCCP issued its Corporate Scheduling Announcement List (CSAL) scheduling 750 federal contractor and subcontractor establishments for compliance evaluations in fiscal year 2021.  The CSAL identifies contractors and subcontractors that will receive a Scheduling Letter formally initiating an OFCCP audit.  Scheduling Letters are typically issued about 45 days after the CSAL’s publication. The FY2021 CSAL is limited to supply and service contractors, and does not include construction contractors, whose audits will presumably be scheduled pursuant to a separate announcement.  With OFCCP’s elimination of focused reviews and compliance checks earlier this year, significantly fewer contractors will be subject to OFCCP audits in fiscal year 2021 than in recent years.  Overall, the FY2021 CSAL schedules 668 contractor establishment for establishment-based reviews, 57 for functional affirmative action plan (FAAP) reviews, 19 for corporate management compliance evaluations (CMCE) focused on the contractor’s headquarters, and six (6) for university reviews.  In prior years, OFCCP has identified over 2,000 contractors for audits. The CSAL’s publication provides contractors with a valuable opportunity to prepare for the upcoming audit.  OFCCP’s Scheduling Letter requests over 22 categories of data and documents, including full employee-level compensation data, with a relatively short timeframe for response.  Contractors named in the CSAL can begin working immediately, in advance of receipt of the Scheduling Letter, to collect and analyze the requested data and documents in order to identify and, if possible, resolve any potential compliance vulnerabilities before they become more significant issues in the audit process. By identifying potential compliance vulnerabilities now prior to the issuance of a Scheduling Letter, contractors can ensure they are not caught flat-footed by OFCCP allegations arising from the contractor’s initial submission of documents and data.  Although contractors should take this opportunity to ensure that all aspects of their OFCCP compliance are in order, we anticipate that pay equity and gender pay gaps as well as potential race or gender based disparities in reductions in force undertaken during the COVID-19 pandemic will be areas of focus for OFCCP.

With so much of the workforce going remote this past year, there has been a huge shift in the way many people view pet ownership. In fact, the national pet adoption rate jumped more than 30% at the beginning of the pandemic, and animal rescue organizations reported an overall increase in adoptions of 30 – 50% in 2020. Not only has the spread of remote work helped match pets to homes, but we know that animals have been shown to reduce stress and provide much needed comfort and social support to many workers during the pandemic. The shift to work-from-home has also opened our doors to our colleagues’ pets, whether meeting them on Zoom or hearing them interrupt conference calls. This has made it seem more normal to have your pet – or your colleagues’ pets – around during the work day. With the potential for going back to the office seemingly closer, some offices are considering whether to go pet-friendly. Here are a few steps to consider before your office makes this decision: Consider Your Workforce and your Workplace Not every office will be the right place for pets, but it could be a perk your employees really appreciate (and could make it easier for employees to come back into the office). Consider if the office space allows for pets to stay in their own areas, out of the way of those who do not feel comfortable with animals around. Think about how easy your employees can take pets outside, or remove them from distracting other employees. Finally, take account of employee pet allergies, and determine what limitations would need to be in place. Require Authorization There should be a process for employees to receive authorization to bring their pet to work, and provide necessary information regarding their pet’s health and vaccine history. Any employee bringing a pet to work must agree to observe certain requirements or risk losing their pet-privileges. Establish Guidelines Employers need to determine what types of pets can come to work (e.g., dogs, cats, fish, etc.), and designate certain areas pet-friendly, and certain areas off-limits for animals. Strict cleaning guidelines should be in place to ensure the workplace remains clean and safe for all. There are also legal concerns when addressing pets at work. Beyond a full pet-friendly policy, employers must remember that pets may need to be allowed as a reasonable accommodation for employees with disabilities. The Americans with Disabilities Act (ADA) requires service animals be allowed in all areas of public access, and employers are required to engage in the interactive process with employees if a pet may be an appropriate accommodation for a disability. The ADA generally requires service animals be allowed in an employer setting, if doing so will not create an undue hardship for the business. This is not the case for emotional support animals, however, which are not necessarily trained for a specific service, but simply to provide comfort and companionship. Either way, when faced with the question, employers should consider whether a pet would be an appropriate accommodation that enables an employee to perform the essential functions of his or her job. For assistance with an office checklist, authorization forms, or general guidance, contact your Polsinelli attorney.

Over the weekend, the U.S. Southern District of Texas issued an order that provides employers—at least in Texas—with greater certainty about the legality of mandatory vaccination policies. In December 2020, the EEOC issued interim guidance that suggested employers may mandate COVID-19 vaccines (subject to reasonable accommodation and sincerely held religious belief considerations). Replying on the EEOC’s guidance, a Houston hospital implemented a mandatory COVID-19 vaccination policy earlier this year. This policy was met with resistance and more than 100 current and former employees joined in a lawsuit against the hospital, seeking to enjoin the enforcement of the policy, arguing that refusal to comply would equate to wrongful termination under various public policy causes of action. Central to the plaintiffs’ lawsuit, they argued that any such mandatory vaccination policy amounted to unlawful coercion (i.e., the threat of termination) for refusal to take an “experimental” vaccine that has only been approved under the FDA’s emergency use authorization. The Court rejected this argument and dismissed the case. The Court concluded that there was nothing illegal or against public policy about receiving the COVID-19 vaccine. While the Court stressed that vaccine safety and efficacy were not considered in adjudicating this case, it also acknowledged that the employer’s mandatory vaccination policy would, in its judgment, provide a safer work environment for employees and patients. Importantly, the Court also emphasized that a private employer’s mandatory vaccination policy does not amount to coercion: “[an employee] can freely choose to accept or refuse a COVID-19 vaccine; however if she refuses, she will simply need to work somewhere else.” While this case serves as an important bellwether, it’s application could be limited—particularly in other states that provide for more expansive public policy claims. The claim chiefly relied on by the Texas plaintiffs is extremely narrow in application and generally only applies in instances where an employee is terminated for the refusal to perform an illegal act that carries criminal penalties. In short, while the legal analysis could differ in other states, employers can now cite at least one legal opinion that has endorsed the use of mandatory vaccination policies. Polsinelli attorneys will continue to monitor COVID-related employment litigation and provide updates. If you have questions about this decision, contact your Polsinelli attorney.

On May 28, 2021, the Equal Employment Opportunity Commission (“EEOC”) provided long-awaited clarification on an employer’s ability to offer incentives to their employees for receiving COVID-19 vaccinations.  This new guidance provides welcomed direction to those businesses looking to encourage workers to get vaccinated rather than adopting a mandatory vaccine policy.  A summary of the EEOC’s guidance on vaccine incentives, as well as other new updates to the EEOC’s previous vaccine-related guidance, is provided below. Vaccine Incentives The EEOC identifies the following options for employers to offer their workers incentives for vaccination under the Americans with Disabilities Act (“ADA”): Employers can offer incentives to employees to voluntarily provide documentation or other confirmation of vaccination received from an independent third party (e.g., pharmacy, personal health care provider or public clinic).  However, any information or documentation collected should be maintained confidentially under the ADA. Employers can also offer incentives to employees for voluntarily receiving a vaccine administered by the employer or its agent, so long as the incentive is “not so substantial as to be coercive.”  Although the EEOC does not go so far as to define “substantial,” it explains that “a very large incentive could make employees feel pressured to disclose protected medical information” when responding to the employer’s pre-vaccination medical screening questions. Although employers can offer an employee’s family member an opportunity to be vaccinated if certain conditions are satisfied, employers cannot require family members to be vaccinated and should not offer employees incentives for family member vaccination. Confidential Medical Information In its updated guidance, the EEOC instructs that the ADA requires an employer to maintain the confidentiality of employee medical information, including documentation or other confirmation of COVID-19 vaccination, regardless of where the employee gets vaccinated.  Accordingly, while employers can require employees provide proof of vaccination (i.e., doing so is not a “disability-related inquiry”), this information must be maintained confidentially and separate and apart from the employee’s personnel file. Reasonable Accommodations The EEOC reiterated that if an employee cannot get vaccinated because of a disability or religious belief, the employer cannot require compliance with a mandatory vaccine policy unless it can demonstrate that the individual would pose a “direct threat” to the health and safety of the employee or others in the workplace.  This determination should be based on consideration of four factors previously-identified by the EEOC, and “should be based on a reasonable medical judgment that relies on the most current medical knowledge about COVID-19,” including the level of community spread, statements from the CDC and/or statements from the employee’s health care provider.  The employer must also take into account the employee’s specific work environment. If the employer determines that the individual would pose a direct threat, it must then consider whether a reasonable accommodation would reduce or eliminate that threat, unless doing so would present an “undue hardship” to the employer.  The EEOC provides specific examples of potential accommodations, including wearing a face mask, social distancing, working a modified shift, making changes in the work environment (e.g., increasing ventilation, limiting contact with others), teleworking, or, as a last resort, reassigning to a vacant position in a different workspace. Finally, the EEOC cautions that employers should consider all options before denying an accommodation request, and that the “undue hardship” consideration may be impacted by the vaccination rate of the workforce and the extent of employee contact with non-employees (whose vaccination status may be unknown). Pregnancy The EEOC’s guidance also clarifies that employees who are not vaccinated because of a pregnancy may also be entitled to certain accommodations under Title VII if the employer makes modifications or exceptions for other employees “who are similar in their ability or inability to work.” These modifications may be the same as the accommodations identified above for employees based on a disability or religious belief. Emergency Use Authorization The EEOC declined to offer any insight on the legal implications of the Emergency Use Authorization for the three available COVID-19 vaccines to date, indicating that “[t]he EEOC’s jurisdiction is limited to the federal EEO laws . . . .”  The EEOC reinforced, however, that federal EEO laws do not prevent an employer from requiring employees to be vaccinated as a condition of entering the workplace, subject to the reasonable accommodation requirements under Title VII and the ADA (and other EEO considerations discussed in its guidance). Updated CDC Mask Guidance The EEOC acknowledged the recently updated guidance from the CDC exempting fully vaccinated individuals from masking requirements, and indicated that the EEOC is considering the impact of this CDC guidance on the EEOC’s own COVID-19 guidance provided to date.  Accordingly, we may see further updates to the EEOC’s technical assistance soon.  For Polsinelli’s own guidance on responding to the CDC’s updated mask guidance, see here. Polsinelli attorneys will continue to monitor and report on any updated guidance from the EEOC and are available to answer questions about vaccine policies and related incentives.

Over the last several months, vaccination rates in the United States increased, COVID-19 cases decreased, and guidance from the Centers from Disease Control and Prevention (the “CDC”) regarding fully vaccinated individuals left employers wondering whether loosened COVID-19 face mask requirements were appropriate. While some state and local leaders took the leap and loosened face mask requirements, the CDC’s guidance still advised that fully vaccinated employees should be required to wear a mask, socially distance, and adhere to other mitigation strategies in the workplace even if they were around other fully vaccinated employees. Yesterday, May 13, 2021, much of the nation celebrated news that the CDC had “changed its tune” and face masks were simply no longer required if an individual is fully vaccinated. But is that what the CDC really said? The Guidance While the news headlines, social media posts, and radio snippets will simply communicate that “fully vaccinated people no longer need to wear a mask or physically distance in any setting” the latest guidance for fully vaccinated individuals actually provides: ·         Fully vaccinated people can resume activities without wearing a mask or physically distancing, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance. This distinction is important because EVEN if the CDC says it is okay not to wear a mask, employers CAN still require it. But should they? State/Local Laws While some states and municipalities have already loosened COVID-19 face mask requirements, others remain in place (though changes are likely to come in the next few days). If an employer opts to loosen their COVID-19 face mask requirement, they should ensure that the state/municipality where their workplace is located has no COVID-19 face mask requirements in place that would prohibit their less restrictive policies. What about OSHA? The Occupational Safety and Health Agency (“OSHA”) Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace still provides that employers should not distinguish between workers who are vaccinated and those who are not vaccinated when implementing and enforcing COVID-19 safety policies. While OSHA’s guidance may change in the near future, employers should be aware that OSHA’s position remains that employees “who are vaccinated must continue to follow protective measures, such as wearing a face covering and remaining physically distant.” Importantly, following an Executive Order signed by President Joe Biden on January 21 directing OSHA to consider an Emergency Temporary Standard (“ETS”) related to COVID-19, OSHA submitted a draft of an ETS related to COVID-19 to the White House Office of Information and Regulatory Affairs. The ETS will likely be issued soon and may very well implicate the use of face masks in the workplace. Enforcement If an employer is going to loosen COVID-19 safety policies based on the vaccination status of its employees, it becomes absolutely essential to know whether an employee is actually fully vaccinated. While the Equal Employment Opportunity Commission (“EEOC”) has determined that inquiring as to whether or not an employee is vaccinated and/or asking for proof of vaccination is not a disability-related inquiry, follow-up questions or voluntary explanations from an employee may trigger an employer’s liability under the Americans with Disabilities Act (“ADA”) or Title VII. Thus, employers considering whether to loosen their face mask requirements should work with legal counsel to determine the best way to verify whether or not an employee is fully vaccinated. Moreover, employers should be cognizant of applicable state laws that may impact their ability to reveal employee vaccination status. Returning to the Workplace Finally, an employer’s decision regarding COVID-19 face mask policies can have a significant impact on their ability to return employees to the workplace. Many businesses are just beginning to return to the workplace. While some employees may welcome the news that the CDC no longer requires fully vaccinated individuals to wear masks, others may be leery of eased restrictions after working remotely for over a year, even if fully vaccinated. Employers should carefully consider their workforce to determine whether it is practical to adopt policies allowing fully vaccinated individuals not to wear a mask while at work. Polsinelli attorneys will continue to monitor and report on any updated guidance from the CDC, EEOC, and other government agencies, and are available to answer your questions about vaccine-related policies.

This is part three of a 3-part series, and the second of several posts addressing remote work considerations arising out of the COVID-19 pandemic. This series explores tips from companies that have figured out how to run a business with a remote workforce, with advice on how to help re-engage your remote workforce, or, if you already have a good system in place, how to make sure you keep employees productive and satisfied.  Don’t miss Tip One and Tip Two. Tip Three: Decide on Communication Rules. And tell employees. If employers leave the choice of the communication venue - and the way employees should communicate with management and each other - up to employees, employers may be disappointed. If there is no set standard, and no one knows what is expected of them, there is likely going to be frustration from both sides. However, you can create a synchronous culture where your team is expected to communicate at regular intervals during the day, or via a certain platform when they need to share ideas, ask questions, or merely check-in. For some office cultures, that could mean employees know they must communicate with each other and share when they will be away, whether for lunch, a rest, or dealing with homeschooling (which is where flexibility comes in). Setting standards and executing communication strategies can easily be done through technology, by having employees change their status, or send a Teams message, or Slack their colleagues with updates throughout the day. This past year has shown that with remote work comes a lack of situational cues; we do not have the in person interactions that help us understand and see our colleagues’ efforts and output (reducing trust). This results in miscommunications, and a host of problems that follow. Therefore, drafting a well-designed remote work policy with communication as a key component will go a long way. If the remote work environment has been set up well, with expectations clearly defined, and continued and ongoing communication as a key component, there is no reason it cannot work just as good, or better, than an in-office set-up. The overall advice is to treat employees like professionals, and your workforce will thank you for it by making your organization more successful.

As expected, this week, the Biden administration has formally withdrawn a Trump administration rule that was set to change the standard applicable to independent contractors. Whether a worker is an independent contractor or an employee has long been determined by the “economic realities” of the relationship. Several factors are considered in this analysis: the nature and degree of the employer’s control and the permanency of the worker’s relationship with the employer; the worker’s investment in facilities, equipment or helpers; the amount of skill; the worker’s opportunities for profit or loss; the extent of the integration of the worker’s services into the employer’s business. The Trump administration’s proposed rule would have elevated two of the factors of the “economic realities” above the others by deeming the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss as “probative.” This would have been a marked departure from past practice as previously, none of the factors were dispositive or more probative. The Biden administration’s Department of Labor noted that the Trump administration rule had not been used by any court or any wage and hour agency. The Department further questioned whether the rule was fully aligned with the Fair Labor Standards Act’s text and purpose or case law describing the economic realities test. In withdrawing the rule promulgated under the Trump administration, the Department of Labor specifically said it “is not creating a new test, but is instead leaving in place the current economic realities test, which allows for determinations that some workers are independent contractors.” While not issuing a new test in this repeal, it is widely expected that the Biden Administration will eventually issue a new rule for evaluating independent contractor status. Secretary of Labor Marty Walsh recently has gone as far as to say “in a lot of cases, gig workers should be classified as employees.” Employers should continue to be cognizant of and comply with any applicable state and local laws regarding worker classification, which may not be identical to the economic realities test. Employers should consult with their Polsinelli attorney if they have any questions and should stay tuned to future blog postings with updates on future rule changes.

This is part two of a 3-part series, and the second of several posts addressing remote work considerations arising out of the COVID-19 pandemic. This series explores tips from companies that have figured out how to run a business with a remote workforce, with advice on how to help re-engage your remote workforce, or, if you already have a good system in place, how to make sure you keep employees productive and satisfied.  Don’t miss Tip One and Tip Three. Tip Two: Be Flexible and Trust. The companies that were working remotely before the pandemic have been teaching and guiding us through this past year, and one major lesson is the ability (and need) to be flexible in the remote environment. For most employers, there is less of a need to require employees to be “on” at all moments of the day. If nothing else, remote work during a pandemic - with home schooling and child and family responsibilities increased during the normal workday - has shown us that employees can manage their time to work best for them, and still get their work done. Flexibility depends on trust. The remote work environment presents us with the requirement to trust employees, yet building trust in a remote environment can be difficult. Without the opportunity to observe a coworker working diligently, or bringing notes to a meeting, or sharing insights with colleagues in the hallway, can make trust hard to embrace. But rapport between coworkers and interpersonal trust is what helps employees understand and ultimately help each other (which is critical to a successful enterprise). So how do you get it? Monitoring and micro-managing to ensure output does not tend to work (in fact, it never works). Employees under surveillance know they are not trusted, and that results in employees with higher levels of anxiety and stress. This, then, results in increased burnout and dissatisfaction, undermining the entire point of a company’s goal, which is to improve work product and output. The first step in building trust is for leadership to show, and put trust in, employees who will then in turn trust leadership; according to the Harvard Business Review this is called reciprocal leverage. The more trust your employees have in the leadership of the company, the more stability they feel, and the more likely they will be to work productively and seek to impress. But how do you know if they are doing the work?  Check-ins and a review of employee production will generally tell you what you need to know. Is your workforce producing work product and output? If it has declined, or is notably absent, there is a problem that must be addressed. If not, perhaps embracing flexibility and trust is working. Employers can and should take action through discussions or discipline when the remote work requirements are not being met. Trusting the employee to continue to perform and produce quality work does not mean remaining on the sidelines if that does not appear to be successful. The idea, however, is that it can be the exception, not the rule.

On April 27, 2021, President Biden signed Executive Order 14026, which increases the minimum wage for workers on or in connection with a federal government contract to $15.00 as of January 30, 2022.  This Executive Order increases the minimum wage level set by President Obama’s 2014 Executive Order 13658, which has been set at $10.95 per hour since January 1, 2021. The new minimum wage applies to most new federal contracts, contract-like instruments, solicitations, extensions or renewals of existing contracts or contract-like instruments, and exercises of options on existing contracts or contract-like instruments that are entered into or exercised on or after January 30, 2022.  However, the Executive Order “strongly encourage[s]” agencies to ensure, to the extent permitted by law, that the wages paid under existing contracts are consistent with the Executive Order’s requirements.  The Executive Order provides that compliance with the increased minimum wage will be a condition of payment on the government contract, raising the potential for False Claims Act liability if a government contractor accepts payment on a federal contract while failing to pay covered workers the required wage.  The Executive Order’s requirements must, in many circumstances, be included in subcontracts. Although the Executive Order does not elaborate on which employees work “on or in connection” with a federal contract, it is likely that the Department of Labor’s forthcoming regulations implementing the Executive Order will follow the lead of its previous regulations implementing Executive Order 13658.  Under those regulations, workers perform services “on” a contract if they directly perform the services called for by the contract’s terms, and they perform services “in connection with” a contract if they perform work activities that, although not specifically called for by the contract, are necessary to the contract’s performance. The Executive Order also addresses the cash portion of the tipped minimum wage for covered workers.  The cash wage for covered workers who qualify as tipped employees will increase to $10.50 as of January 30, 2022.  The wage will then increase as of 85% of the general minimum wage as of January 30, 2023, and 100% of the general minimum wage as of January 30, 2024, at which point the tip credit will be eliminated. The Department of Labor is required to issue regulations implementing the Executive Order by November 24, 2021.  Federal contractors and subcontractors should consider beginning preparations for the increased minimum wage now, in advance of the regulations, by identifying potentially covered workers whose wages may require adjustment.  Polsinelli will continue to update the contractor community when regulations are issued.

On April 27, 2021, President Biden signed Executive Order 14026, which increases the minimum wage for workers on or in connection with a federal government contract to $15.00 as of January 30, 2022.  This Executive Order increases the minimum wage level set by President Obama’s 2014 Executive Order 13658, which has been set at $10.95 per hour since January 1, 2021. The new minimum wage applies to most new federal contracts, contract-like instruments, solicitations, extensions or renewals of existing contracts or contract-like instruments, and exercises of options on existing contracts or contract-like instruments that are entered into or exercised on or after January 30, 2022.  However, the Executive Order “strongly encourage[s]” agencies to ensure, to the extent permitted by law, that the wages paid under existing contracts are consistent with the Executive Order’s requirements.  The Executive Order provides that compliance with the increased minimum wage will be a condition of payment on the government contract, raising the potential for False Claims Act liability if a government contractor accepts payment on a federal contract while failing to pay covered workers the required wage.  The Executive Order’s requirements must, in many circumstances, be included in subcontracts. Although the Executive Order does not elaborate on which employees work “on or in connection” with a federal contract, it is likely that the Department of Labor’s forthcoming regulations implementing the Executive Order will follow the lead of its previous regulations implementing Executive Order 13658.  Under those regulations, workers perform services “on” a contract if they directly perform the services called for by the contract’s terms, and they perform services “in connection with” a contract if they perform work activities that, although not specifically called for by the contract, are necessary to the contract’s performance. The Executive Order also addresses the cash portion of the tipped minimum wage for covered workers.  The cash wage for covered workers who qualify as tipped employees will increase to $10.50 as of January 30, 2022.  The wage will then increase as of 85% of the general minimum wage as of January 30, 2023, and 100% of the general minimum wage as of January 30, 2024, at which point the tip credit will be eliminated. The Department of Labor is required to issue regulations implementing the Executive Order by November 24, 2021.  Federal contractors and subcontractors should consider beginning preparations for the increased minimum wage now, in advance of the regulations, by identifying potentially covered workers whose wages may require adjustment.  Polsinelli will continue to update the contractor community when regulations are issued.

This is part one of a 3-part series, and the second of several posts addressing remote work considerations arising out of the COVID-19 pandemic. This series explores tips from companies that have figured it out, and have advice on how to help re-engage your remote workforce, or, if you already have a good system in place, how to make sure you keep employees productive and satisfied. For employers that did not have much experience with remote work pre-pandemic, 2020 was a steep learning curve. Part of this change has been how to manage – and maintain – office culture and employee engagement when everyone is behind a screen. Because employee engagement and productivity are so directly linked, it is imperative that employers consider both. Leadership should keep in mind that it matters – and is worth the effort – to ensure that workers are in an environment (whether remote or otherwise) where they can thrive, are appreciated, and feel they are providing value. Employee engagement also coincides with better communication, lower absenteeism, fewer health and safety issues, and ultimately, reduced legal risk. Tip One: Make Small Talk a Part of Your Meetings. This idea may make many cringe, considering a large number of employees are suffering from “Zoom fatigue,” and the endless work day that bleeds into home and family time. But a small act of deliberately making space for colleagues to just talk, on a more personal level, can increase a team’s connection and bring a bit of levity to what can become overly structured, endless, meetings. This can be as simple as starting a team meeting with a check-in, or an icebreaker, or perhaps including an agenda item that requires participants to share opinions and conjecture. What we have learned over this year of increased remote work environments is that maintaining and growing a company’s culture should not – and does not have to – stop because we are not all in the same room. Casually chatting with a colleague while grabbing coffee, or stopping to talk in the hallway, or catching up over lunch, leads to feeling part of something bigger, sparks ideas, and helps increase happiness and satisfaction at work. Now we just have to do it a little differently, and be more purposeful to ensure that it happens. Click here to read Tip Two. Click here to read Tip Three

As more businesses prepare to return to the workplace, employers everywhere are evaluating whether to mandate COVID-19 vaccination as a condition of employment or simply encourage vaccination. For many employers, this decision hinges on the company’s ability to offer employees incentives to take the vaccine – including paid time off, cash, or gifts. However, offering incentives can implicate a variety of legal issues under state and federal statutes, including the potential for such incentives to violate wellness program rules. With so much legal uncertainty surrounding vaccine incentives, many employers have been reluctant to offer incentives that might otherwise encourage vaccination and expedite the process of safely returning employees to work. In early February, over 40 organizations from a wide array of industries submitted a letter to the Equal Employment Opportunity Commission (“EEOC”), requesting that the EEOC quickly provide clarity “on the extent to which employers may offer their employees incentives to vaccinate without running afoul of the Americans With Disabilities Act and other laws enforced by the EEOC.” On April 15, 2021, the EEOC finally answered the call of these businesses, announcing that it “expects to update its technical assistance about COVID-19 to address these [vaccine incentive] issues, among others, and that work is ongoing.” The EEOC did not go so far as to provide a date by which this guidance would be issued, but businesses will be eagerly awaiting. Polsinelli attorneys will continue to monitor and report on any updated guidance from the EEOC and are available to answer questions about vaccine policies and related incentives.

On March 31, 2021, in United States ex rel. Felten v. William Beaumont Hospital, the Sixth Circuit Court of Appeals held that an employer’s allegedly retaliatory conduct directed at an employee after the employee’s termination can give rise to a False Claims Act (FCA) retaliation claim.  In doing so, the Sixth Circuit embraced a minority position among courts nationwide and created a split with the Tenth Circuit, which held in 2018 that only retaliation against someone who is a current employee at the time can support an FCA claim. The facts of Felten are relatively straightforward.  Mr. Felten believed that his employer, a hospital, was violating the FCA and an analogous Michigan statute by paying kickbacks to physicians and physicians’ groups in exchange for referrals of Medicare, Medicaid, and TRICARE patients.  Mr. Felten filed a qui tam action against his employer, and also asserted that his employer retaliated against him by threatening and marginalizing him for insisting on compliance with the law. After the federal and state governments intervened and settled the qui tam claim, Mr. Felten amended his complaint to add new claims that he was terminated from his employment and, after termination, had been unable to obtain a comparable position because his now-former employer disparaged him to nearly 40 institutions in retaliation for his reports of unlawful conduct.  The district court granted the hospital’s motion to dismiss Mr. Felten’s claims based on the alleged post-termination disparagement, finding that the FCA’s anti-retaliation provision only applied to retaliatory conduct occurring during the employment relationship, and not to disparagement of an employee occurring after his employment has ended. The Sixth Circuit reversed this ruling, finding that an “employee,” for purposes of the FCA, includes both current and former employees of a government contractor.  The court noted that the Tenth Circuit held otherwise in its 2018 Potts v. Center for Excellence in Higher Education, Inc., 908 F.3d 610 (10th Cir. 2018) decision, but departed from its sister circuit’s reasoning.  Instead, the Sixth Circuit relied heavily on the Supreme Court’s decision in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), holding that under Title VII former employees may bring retaliation claims for actions occurring after the termination of their employment.  The court explained that some of the retaliatory actions prohibited by the FCA – such as, threatening, harassing, and discriminating – can refer to actions against former employees, and that some “terms and conditions of employment” persist after an employee’s termination.  The court also explained that a contrary result would incentivize employers to rush to fire employees who the employees believe may engage in FCA protected activity, undermining FCA’s purpose. Because of the circuit split the Sixth Circuit’s decision created, this may be a decision to watch for future developments.  Regardless of what may happen next, the Felten decision is a useful reminder that when an employee engages in potentially protected activity, whether under the FCA, other whistleblower statutes, or anti-discrimination laws, employers must act with care in personnel actions involving that employee.  In some cases, employers may win the battle but lose the war, showing that the “concerns” the employee reported were non-issues, but facing retaliation liability because of how managers or others treated the employee after he or she made the reports.  Felten emphasizes that this care must continue even after the employee departs the organization.

On March 31, 2021, in United States ex rel. Felten v. William Beaumont Hospital, the Sixth Circuit Court of Appeals held that an employer’s allegedly retaliatory conduct directed at an employee after the employee’s termination can give rise to a False Claims Act (FCA) retaliation claim.  In doing so, the Sixth Circuit embraced a minority position among courts nationwide and created a split with the Tenth Circuit, which held in 2018 that only retaliation against someone who is a current employee at the time can support an FCA claim. The facts of Felten are relatively straightforward.  Mr. Felten believed that his employer, a hospital, was violating the FCA and an analogous Michigan statute by paying kickbacks to physicians and physicians’ groups in exchange for referrals of Medicare, Medicaid, and TRICARE patients.  Mr. Felten filed a qui tam action against his employer, and also asserted that his employer retaliated against him by threatening and marginalizing him for insisting on compliance with the law. After the federal and state governments intervened and settled the qui tam claim, Mr. Felten amended his complaint to add new claims that he was terminated from his employment and, after termination, had been unable to obtain a comparable position because his now-former employer disparaged him to nearly 40 institutions in retaliation for his reports of unlawful conduct.  The district court granted the hospital’s motion to dismiss Mr. Felten’s claims based on the alleged post-termination disparagement, finding that the FCA’s anti-retaliation provision only applied to retaliatory conduct occurring during the employment relationship, and not to disparagement of an employee occurring after his employment has ended. The Sixth Circuit reversed this ruling, finding that an “employee,” for purposes of the FCA, includes both current and former employees of a government contractor.  The court noted that the Tenth Circuit held otherwise in its 2018 Potts v. Center for Excellence in Higher Education, Inc., 908 F.3d 610 (10th Cir. 2018) decision, but departed from its sister circuit’s reasoning.  Instead, the Sixth Circuit relied heavily on the Supreme Court’s decision in Robinson v. Shell Oil Co., 519 U.S. 337 (1997), holding that under Title VII former employees may bring retaliation claims for actions occurring after the termination of their employment.  The court explained that some of the retaliatory actions prohibited by the FCA – such as, threatening, harassing, and discriminating – can refer to actions against former employees, and that some “terms and conditions of employment” persist after an employee’s termination.  The court also explained that a contrary result would incentivize employers to rush to fire employees who the employees believe may engage in FCA protected activity, undermining FCA’s purpose. Because of the circuit split the Sixth Circuit’s decision created, this may be a decision to watch for future developments.  Regardless of what may happen next, the Felten decision is a useful reminder that when an employee engages in potentially protected activity, whether under the FCA, other whistleblower statutes, or anti-discrimination laws, employers must act with care in personnel actions involving that employee.  In some cases, employers may win the battle but lose the war, showing that the “concerns” the employee reported were non-issues, but facing retaliation liability because of how managers or others treated the employee after he or she made the reports.  Felten emphasizes that this care must continue even after the employee departs the organization.

On March 30, 2021, the Office of Federal Contract Compliance Programs (OFCCP) announced that it was lowering the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark again this year.  Effective March 31, 2021, the new benchmark is 5.6 percent, down from 5.7 percent in 2020.  This marks the seventh consecutive year that the benchmark has been lowered since its inception in March 2014, when it was set at 7.2 percent. VEVRAA is designed to provide equal opportunity and affirmative action for Vietnam era veterans, special disabled veterans, and veterans who served on active duty during a war or in certain campaigns.  Contractors are required to establish annual hiring benchmarks for protected veterans and assess their progress against that benchmark. Contractors have the option of establishing their own benchmark or adopting OFCCP’s annual national benchmark. Additional information regarding VEVRAA compliance and the national benchmark can be found on the OFCCP website.

On March 19, 2021, California Governor Gavin Newsom signed into law S.B. 95, which requires covered California employers to provide qualifying employees with up to 80 additional hours of COVID-19-related paid sick leave through September 30, 2021, upon oral or written request by the employee.  The new state law, which goes into effect beginning March 29, 2021, applies to all California employers with more than 25 employees.  Some of the more notable features of the new state law include: Establishing a new “bank” of 80 hours of COVID-19-related supplemental paid sick leave for covered employees Expanding the qualifying reasons for COVID-19-related sick leave under state law, including the addition of a COVID-19 vaccination appointment and recovery from COVID-19 vaccination-related symptoms as qualifying reasons for leave Requiring employers to provide employees with notice of their rights to expanded COVID-19-related leave Providing special COVID-19-related leave for providers of in-home supportive services and waiver personal care services Authorizing retroactive payments to employees who took unpaid leave for qualifying COVID-19-related reasons on or after January 1, 2021 The provisions of the new state law providing for retroactive payments to employees who took qualifying leave on or after January 1, 2021 are likely to cause problems for employers, who may find it difficult to question employee requests for such retroactive payments in the absence of detailed record-keeping that memorialized these employees’ stated reasons for having taken leave.  However, employers should note that they are not required to make such retroactive payments unless and until they receive an oral or written request from a covered employee. Additionally, employers should note that SB 95 allows for employers to offset any COVID-19 related leave provided to employees on or after January 1, 2021 that was payable for the same reasons and at the same rate as provided in SB 95. As COVID-19-related sick leave and other employment-related issues regarding COVID-19 continue to evolve, Polsinelli attorneys continue to monitor new developments in this area and remain prepared to assist employers with navigating these issues.

Illinois employers have long been prohibited from using arrest records as the basis for employment decisions under Section 103 of the Illinois Human Rights Act (“IHRA”).  On March 23, 2021, Illinois Governor J.B. Pritzker signed Senate Bill (SB) 1480 (the “Amendment”) into law, which added a new Section 103.1 to the IHRA that severely restricts the ability of employers to rely on conviction records in making employment decisions.  Section 103.1 is effective immediately, and prohibits use of a conviction record as the basis for an employment decision unless (1) there is a “substantial relationship” between one or more of the candidate’s prior convictions and the job at issue; or (2) employment would involve an “unreasonable risk to property or to the safety or welfare of specific individuals or the general public.” To determine whether a “substantial relationship” exists, employers are required to evaluate six factors set forth in the Act: (1) the length of time since the conviction; (2) the number of convictions that appear on the conviction record; (3) the nature and severity of the conviction and its relationship to the safety and security of others; (4) the facts or circumstances surrounding the conviction; (5) the age of the employee at the time of the conviction; and (6) evidence of rehabilitation efforts.  If an employer determines that such a relationship exists, it must then engage in an interactive process comparable what is required under the federal Fair Credit Reporting Act (“FCRA”). The Illinois Department of Human Rights has provided additional guidance through an FAQ, but it still leaves a number of open questions.  Ultimately, an employer will need to be prepared to offer a thoughtful, well-reasoned explanation for why it considered a conviction disqualifying. One final point for consideration is the opening clause of Section 103.1, which prefaces the prohibition with the words “Unless otherwise authorized by law….”  There may be other legal obligations that require an employer to disqualify an employee based on certain convictions.  For example, the Illinois Health Care Worker Background Check Act establishes a number of “disqualifying offenses” that would likely fall within the parameters of the Amendment’s prefatory language. Ultimately, the legal pitfalls for Illinois employers seeking background information regarding applicants and employees continue to multiply.  In addition to the Amendment and the FCRA, Illinois employers should remember that the Illinois Employee Credit Privacy Act places restrictions on an employer’s ability to take action based on an employee’s credit history.  As this landscape continues to get more complex, it is wise for employers to get legal assistance both in terms of developing background check processes and navigating next steps following receipt of a negative background check.

This is the first of several posts addressing remote work considerations arising out of the COVID-19 pandemic. We are now well into 2021 and more and more employers are considering the return to office plan. But what if you don’t? There are many reasons why you might be considering keeping most, or all, of your employees remote. Many employees want this option, for all the reasons you might expect: flexibility, no commute, meetings are actually easier and quicker via video, the wardrobe becomes much simpler, and the list goes on. A recent Gallup poll found "three in five U.S. workers who have been doing their jobs remotely from home during the coronavirus pandemic would prefer to work remotely as much as possible…" But what are some of the biggest concerns employers have with a more permanent remote workforce? Here are a few important considerations: Properly paying employees when you cannot see them come and go. Employers are required to pay employees for all hours worked, including work not requested but permitted; this of course includes work performed at home outside of the normal workday. This past summer, the Department of Labor provided guidance, reiterating that if an employer knows or has reason to believe that work is being performed, the time must be counted as hours worked. Courts will assess whether the employer should have acquired knowledge of hours worked through reasonable diligence. Therefore, employers must ensure they are properly accounting for their employees’ hours, even emails or messages that come through after hours. Managers should be aware of these rules, and ensure that work is not happening outside of normal hours (unless it is accounted for). Privacy and confidentiality. With a larger number of employees handling employers’ information from the comfort of their homes, the way data is stored and shared needs to be reassessed. If your employer policies that cover confidentiality and security have not been updated to address the work-from-home environment, take time to review those and make necessary changes. Include training for employees on how to transfer data, how to recognize when information is confidential or highly sensitive, and make sure you know what devices employees are using (and where they are storing company information). There are many software solutions available for employers to allow them to monitor their networks and flag suspicious activity or receive alerts if large amounts of data is being downloaded. Employees living…anywhere and everywhere. One of the big surprises some employers faced with a new remote workforce was finding out some employees moved (and sometimes without telling their employer). Employees’ ability to live anywhere is, generally speaking, a great perk to the remote work option, but employers need to be aware of the issues.  There are different tax and payroll concerns when you live in a different state and, as an employer, you have to be prepared to handle the insurance and benefit issues in that new location. For example, in New York, after only two weeks of working there, an employer will be subject to payroll tax implications, and will need to address business license fees. Employers are required to register and obtain workers’ compensation and unemployment insurance in the state where the employee is working. Typically, these state rules are based on where the employee is working, even if at home, and not where the business is located. Therefore, it is important for employers to draft policies to ensure employees alert the employer to their intention – or desire – to relocate. To avoid headaches in new states, employers can implement policies that require employees stay within a certain vicinity of the employer’s location. If you have questions or would like more detailed information regarding remote work considerations, Polsinelli’s Labor & Employment team is here to assist.

Employer obligations to provide paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) ended on December 31, 2020. On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021 (CAA), extending the payroll tax credits available to employers who voluntarily decided to continue to provide FFCRA-type leave through March 31, 2021. Last week, President Biden signed the American Rescue Plan Act of 2021 (Rescue Plan). Among other things, the Rescue Plan extends the availability of the payroll tax credits to employers through September 30, 2021. Additionally, for those employers who opt to continue to provide FFCRA-type leave, the Rescue Plan makes several significant changes to how the FFCRA is to be implemented with regard to both Paid Sick Leave (two weeks/up to 80 hours of paid leave) and Emergency Family and Medical Leave (originally up to 10 weeks of paid Family and Medical Leave). Changes to Paid Sick Leave The Rescue Plan resets the 10-day/80-hour limit for Paid Sick Leave starting April 1, 2021.  This means, if employees have previously exhausted their entitlement to Paid Sick Leave under the FFCRA, they now have another 10-days/80-hours for use. The Rescue Plan also adds three additional qualifying reasons for Paid Sick Leave.  These include: Obtaining a COVID-19 vaccine; Recovering from any illness or condition related to the COVID-19 vaccine; or Seeking or awaiting the results of a COVID-19 diagnosis or test if either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis. Changes to Emergency Family and Medical Leave A major change is the Rescue Plan’s elimination of the requirement that the first two weeks of Emergency Family and Medical Leave (EFML) be unpaid.  Now, if an employee qualifies for EFML, they are eligible for a full 12 weeks of paid leave (assuming they have not previously used any EFML or other leave under the Family and Medical Leave Act (FMLA)).  Consistently, the Revenue Plan increases the total cap for EFML from $10,000 to $12,000. Another important change is the expansion of qualifying reasons to use EFML. Currently, employees can only use EFML if they need time off to care for a child whose school or daycare is closed due to COVID-19 related reasons. Under the Rescue Plan, however, EFML can be used for any of the qualifying reasons found under Paid Sick Leave.  This means, if an employee qualifies for Paid Sick Leave and needs leave beyond the 10-day entitlement for Paid Sick Leave, the employee could take up to an additional 12 weeks of EFML (assuming they have not previously used any EFML or time off under the FMLA).  In practical terms, after April 1, 2021, an employee could potentially take up to a total of 14 weeks of paid FFCRA leave. Finally, the Rescue Plan contains non-discrimination language for both Paid Sick Leave and EFML. The penalties come in the form of losing the tax credit option. If an employer opts to voluntarily provide FFCRA leave and discriminates with respect to leave: (1) in favor of highly compensated employees; (2) in favor of full-time employees; or (3) on the basis of employment tenure, the employer will not be able to obtain tax credits for any leave paid under the FFCRA framework. With this new benefit comes a big question for employers – whether to extend these FFCRA credits to employees? It is worth considering, given the benefit of providing paid time off to encourage employees to get vaccinated and to ensure the safety and health of their workforce by supporting COVID-related absences due to exposure and illness. (And being able to do so without such a financial hit to the business is a big plus). What employers must be prepared for, however, is being ready to provide potentially 14 weeks of leave to employees.  At this time, it is not clear whether employers can pick and choose what types of paid leave they will provide under the FFCRA; for example, some employers may want to offer the two weeks of Paid Sick Leave but not offer the 12-weeks of EFML.  We know that failure to comply with any requirement of the Emergency Family and Medical Leave Expansion Act or the Emergency Paid Sick Leave Act disqualifies the employer from obtaining tax credits for leave paid under either Act. When that rule is coupled with the non-discrimination language, it appears an employer could arguably choose to provide Paid Sick Leave or Emergency Family and Medical Leave, or both. But in doing so, employers need to understand that they must follow the entirety of the provisions related to each leave option. This means, while employers can choose to provide only one type of leave, employers cannot change the rules; they cannot pick and choose the qualifying reasons for leave, or make other changes to how the leave should be applied. The Rescue Plan’s provisions related to the FFCRA become effective April 1, 2021.  We anticipate the Department of Labor and/or Internal Revenue Service will issue additional guidance or FAQs to assist employers with some of these open questions, and we will continue to provide updates as we learn more. If you have questions or would like more detailed information regarding these recent changes, Polsinelli’s Labor & Employment team is here to assist.

The American Rescue Plan that was sent to President Biden’s desk on March 11, 2021 includes an $86 Billion aid package that provides financial assistance to underfunded multiemployer pension plans facing critical or declining financial status. Upon signature, the bill will provide eligible underfunded plans with “special financial assistance.” The special financial assistance is designed to cover the payments of accrued pension benefits through the 2051 plan year and is not subject to any repayment obligations. Multiemployer pension plans eligible for special financial assistance include plans meeting any one of the below criteria: Plans in critical and declining status in any plan year from 2020 through 2022. Plans that have had a suspension of benefits approved under the provisions of the Multiemployer Pension Reform Act of 2014 as of the date the new American Rescue Plan becomes law. Plans certified by an actuary to be in critical status in any plan year from 2020 through 2022, have a modified funded percentage of less than 40 percent, and a ratio of less than 2 active participants to 3 inactive participants. Plans that became insolvent after December 16, 2014 that have not been terminated by the date the American Rescue Plan is signed into law. The Pension Benefit Guaranty Corporation (“PBGC”) has 120 days to issue regulations or guidance setting forth application requirements for special financial assistance. Because eligible plans have through December 31, 2025 to apply for special financial assistance, plans may not receive any special financial assistance for several years. Prior to sending the bill back to the House of Representatives, the Senate removed a significant provision concerning employer withdrawal liability. The original language drafted by the House of Representatives provided that an employer’s withdrawal liability would be calculated without taking into account the special financial assistance received by a pension plan for 15 calendar years following the receipt of such assistance. While the removal of this language may allow for quicker relief for employers, they are left without clarity as to how and when the special financial assistance will impact their withdrawal liability, if at all. Instead, employers must wait for the PBGC to issue regulations or guidance on the issue. The legislation provides extensive assistance to pension plans that were suffering long before the COVID-19 pandemic and ensures that many retirees will receive their full benefits. However, it does not freeze accruals, curtail the practices that led to the pension plans’ current underfunding problems, or otherwise provide guidance as to how the plans will function financially in 30 years when the special financial assistance ends. Polsinelli attorneys will continue to monitor the PBGC’s issuance of regulations and other developments and remain prepared to assist with any questions.

Warning/Apologies: This video contains multiple references to poop and may be offensive to fans of the Dave Matthews Band or Governor Andrew Cuomo of New York. Workplace bullying has not diminished during the pandemic. The Workplace Bullying Institute (WBI) recently released its 2021 U.S. Workplace Bullying Survey: https://workplacebullying.org/2021-wb... . Promoting civility in the workplace - and interrupting jerk behavior - is critical to building a respectful workplace culture and to our having a healthy return to normal life after the pandemic. The 2004 Poopgate bridge incident in Chicago is a vivid example of how one jerk can impact others.

On March 2, 2021, the Office of Federal Contract Compliance Programs (OFCCP) amended its Corporate Scheduling Announcement List (CSAL) for supply and service contractors for fiscal year 2020 to remove all of the contractor establishments previously selected for Section 503, accommodation, and promotions focused reviews and compliance checks. This leaves only the 500 compliance evaluations listed in the previous CSAL scheduled for audit at this time. OFCCP also published an amendment to its scheduling methodology. Although this amendment reduces the number of contractor establishments selected for OFCCP audits in fiscal year 2020 from 2,250 to 500, we anticipate that the amendment may turn out to be the first step in an increase in OFCCP audit activity this fiscal year. It appears OFCCP may be refocusing its resources towards the more extensive compliance evaluations and away from the more limited focused reviews and compliance checks, and may issue another CSAL scheduling additional compliance evaluations at some point later in the year. According to FAQ guidance released by OFCCP in connection with the amended CSAL, the changes will not affect pending focused reviews from CSALs issued prior to fiscal year 2020.  In addition, as confirmed by OFCCP’s FAQs, the amendment to the supply and service CSAL will not affect construction contractors who were scheduled for compliance checks or other reviews on the fiscal year 2020 construction CSAL. The amendment to the supply and service CSAL appears to forecast a reversal of former OFCCP Director Craig Leen’s initiative to refocus OFCCP’s enforcement activity on disability and veteran-related compliance issues, as the focused review program had been an important part of Director Leen’s initiatives.  It appears that OFCCP will now instead conduct more compliance evaluations that review the full range of the contractor’s personnel activity and practices and also expose contractors to greater monetary costs and potential liability.

On February 25, 2021, in In Donohue v. AMN Services, LLC (2021) San Diego Superior Court, Case No. 37-2014-00012605-CU-OE-CTL, the California Supreme Court weighed in on two important issues pertaining to meal periods.  First, the Court held that California employers cannot round time punches for meal periods (although it is arguably permissible for work start and stop times).  Second, the Court held that employee time records showing non-compliant meal periods raise a rebuttable presumption of meal period violations and are sufficient to defeat a defendant’s dispositive motion for summary judgment. The Court emphasized that California’s meal period requirements are designed to prevent even minor infringements on employees’ meal periods and that rounding employees’ meal period time punches for even a de minimus amount violates state law. In Donohue, the defendant-employer, a healthcare services and staffing company, used a timekeeping system that rounded employees’ time punches for meal periods to the nearest 10-minute increment.  For example, if an employee punched out for lunch at 11:03 a.m. (rounded back to 11:00 a.m.) and punched back in at 11:24 a.m. (rounded forward to 11:30 a.m.), the system recorded a 30-minute meal period (even though only 21 minutes had actually elapsed).  The Court found that this rounding policy resulted in many employees not taking their full 30-minute meal breaks. The Court also noted that employees were paid a premium payment only if the employee proactively indicated that their meal period was missed, short, or late.  As a result, the Court found that there was sufficient evidence to suggest that employees worked over five hours before taking their meal break in violation of California Labor Code § 512 and Industrial Welfare Commission Wage Order No. 4-2001.  The case now heads back down to the Court of Appeals where the parties will submit further briefing on the plaintiffs’ meal period claims. Additionally, in reversing the defendant’s motion for summary judgment win, the Court ruled that records that demonstrate a non-compliant meal period raise a rebuttable presumption of labor code violations, which, the Court clarified, can be overcome by presenting evidence that either (1) the employees were compensated for noncompliant meals or (2) the employees were provided compliant, 30-minute, duty-free meal periods during which time the employee voluntarily chose to work. The Donohue decision serves as helpful guidance on two fronts.  First, it should be used as a warning for employers who use rounding policies for recording meal periods.  Employers who apply time rounding policies in the meal period context likely need to suspend these practices.  Moreover, based on the court’s guidance, employers that utilize general rounding practices should be wary of the potential problems that rounding policies may cause.  Second, employers should utilize paper or electronic acknowledgement forms from employees that confirm that employees are taking their meal breaks and rest breaks on a daily basis or, to the extent they are not, that this is documented as either a voluntary decision by the employee, or if it is not voluntary, that the employee is paid their statutory premium payment. Polsinelli attorneys will continue to monitor developments in this area and remain prepared to assist with any questions regarding timekeeping policies or other employment law issues.

This is the first in a new “rethink work” video series. This video aims to rethink how we approach sexual harassment training. As with our prior COVID videos, this is a video that employers can share with their broader workforce. The EEOC’s Task Force on Harassment found that employer harassment training programs are often ineffective and “too focused on simply avoiding legal liability.” These programs tend to dwell on legal claims and costs while simply walking employees through a checklist of things that they should not do (and which most people already know are wrong). There is little evidence that such training programs have a significant impact on employee attitudes --- people who engage in harassing conduct do not generally suffer from a lack of knowledge about what is right or wrong, they have a behavior problem that needs to be confronted and stopped. Fortunately, there is evidence that training programs can boost internal reporting and complaints, giving employers the chance to confront and stop bad behavior. That is the focus of this video. This initial, 5-minute video is not intended to be a comprehensive harassment training video, but can be incorporated into a larger training effort. Future videos in this series will address other challenges employers face in stopping workplace harassment. Please feel free to pass along this video to your workforce and do not hesitate to contact us if you should have any questions. Polsinelli’s L&E Department offers a full range of counseling, training and investigation services to help employers with workplace harassment issues.

On February 9, 2021, the Biden administration took another step towards reversing the priorities of the Trump-era Office of Federal Contract Compliance Programs (OFCCP), by notifying the U.S. District Court for the Southern District of New York that it intended to rescind the Trump-era OFCCP January 2021 regulation broadening the religious exemption from Executive Order 11246’s nondiscrimination requirements. The notice came in litigation filed by 14 states and the District of Columbia challenging the issuance of the religious exemption regulation.  The notice indicates that OFCCP “intends to propose rescission of the rule,” and that this process will require notice-and-comment rulemaking that will take “several months.”  Beyond that statement and timeline, the notice did not provide insight into OFCCP’s intentions with respect to the religious exemption.  Contractors will have to await the issuance of a Notice of Proposed Rulemaking to learn if OFCCP intends to simply restore the religious exemption to its pre-January 2021 language, or propose a different, middle-ground approach. This early shift indicates that the new administration will not prioritize issues of religious liberty to the same extent as the Trump OFCCP.  It remains to be seen whether the Trump OFCCP’s focus on disability and veterans issues will also be lessened under the new administration.  Contractors should expect additional changes at OFFCP as the new administration continues to pursue its priorities.

On January 27, 2021, the Commonwealth of Virginia became the first state in the country to adopt permanent COVID-19 workplace safety and health standards. As we noted in a previous article, Virginia adopted an emergency temporary workplace safety and health standard in July 2020 to aid in preventing the spread of the pandemic. With Governor Ralph Northam’s approval on January 27, 2021, the permanent standard superseded the July 2020 emergency temporary standard. The permanent standard applies to all employers in the Commonwealth of Virginia that fall within Virginia Occupational Safety and Health’s (“VOSH”) jurisdiction. Accordingly, most private employers in Virginia and employees of the Commonwealth and local governments must comply.  Private and public institutions of higher education are deemed to be in compliance if they have established plans certified by the State Council of Higher Education in Virginia and are acting in compliance with those plans, provided that the certified plans ensure an equivalent or greater level of protection for employees than the VOSH standard. Like the emergency standard, the permanent standard classifies occupations based on “exposure risk level” and requires adherence to various practices based on the risk level of a given occupation. An occupation can have a “very high,” “high,” “medium,” and “lower” exposure risk level based on the risk of transmission. In determining exposure risk levels, employers must consider: (1) the job tasked performed; (2) whether the workplace is indoors or outdoors; (3) the presence of the virus in the workplace; (4) the presences of a person known or suspected to have the virus; (5) the number of employees in relations to the size of the workplace; (6) working distance between employees; and (7) the frequency and duration of close contact employees have with co-workers and other people. The permanent standard further requires employers to ensure that employees practice social distancing in the workplace by making announcements, posting signs, decreasing the density of employees, and adhering to Virginia’s occupancy limits. Employers must also provide employees access to hand sanitizer and cleaning supplies, develop procedures for sanitation, and train employees on ways to prevent the spread of COVID-19. If employees must share a vehicle for work, they must wear the appropriate personal protective equipment (“PPE”). While the permanent standard resembles the July temporary standard, the standards differ in important ways. Under the permanent standard, employers must report to the Virginia Department of health if two or more employees test positive for COVID-19 within a 14-day period instead of reporting each positive COVID-19 test as required by the temporary standard. In addition, the permanent standard prohibits employers from requiring employees who are absent due to the pandemic to provide a negative test before returning to work. Rather, employers must use the symptom-based method based on the Centers for Disease Control and Prevention’s guidelines. The standard also regulates how face masks must be worn, sets limits on the use of face shields, and requires employers to implement ventilation controls in the workplace. Notably, the standard does not contain any provisions regarding how employers can manage employees with vaccine-related issues. Employers in Virginia should prepare and follow comprehensive infectious disease preparedness and response plans to address the requirements in the standard. When preparing the plan, employers should consider including all required training, safe conduct in the workplace, policies and expectations regarding what employees must do if they experience symptoms and receive a positive test, and provisions for returning to work. Although the standard does not address it, employers should also consider ways to handle vaccine-related employee issues in accordance with applicable law. Please feel free to contact us for general advice regarding compliance with the standard or assistance in preparing a complaint plan.

On January 19, 2021, the EEOC issued its second Annual Performance Review (or report card), evaluating the agency’s accomplishments in FY20 in comparison to the EEOC’s Strategic Plan for Fiscal Years 2018-2022. The Plan describes three strategic objectives and goals on which the EEOC must focus. The Plan also identifies 12 performance measures for use each year in gauging the EEOC's progress through fiscal year 2022. For 2020, the EEOC found that it fully met 10 of the 12 performance measures, and partially met two performance measures. Thus, in 2020, the EEOC’s grade fell slightly to an A- from the A+ it awarded itself in the first Annual Performance Review released in early 2020 for FY19. Practically, the EEOC’s Annual Performance Review allows employers a very important peek behind the curtain for insights into areas on which the EEOC may focus its enforcement efforts.

The new Biden administration wasted no time implementing changes at the Office of Federal Contract Compliance Programs (OFCCP).  On January 20, 2021, the day of President Biden’s inauguration, the administration moved promptly to appoint Jenny Yang to serve as the OFCCP’S Director. This appointment does not require Senate confirmation, and went into effect immediately.  The Government Contractor Update previously predicted that contractors should expect heightened pay equity enforcement from OFCCP under the Biden administration, and Director Yang’s appointment appears to be the first step towards the fulfillment of this prediction. Director Yang previously served in the Obama administration on the Equal Employment Opportunity Commission (EEOC) from 2013-2018 and as the EEOC’s Chair from 2014-2017. During her EEOC tenure, Ms. Yang was a fierce advocate for pay equity and closing the gender wage gap, as she spearheaded the Obama administration’s effort to collect pay data from federal contractors and other employers through Component 2 of the EEO-1 form. Although the Trump-era OFCCP disclaimed any intention to review Component 2 data, the Biden OFCCP under Director Yang can be expected to scrutinize this data in search of potential gender-based, or other, pay disparities. Notably, the OFCCP Director serves in the Department of Labor’s hierarchy, and the appointment of Director Yang prior to the Secretary of Labor’s confirmation appears to indicate that the Biden Administration strongly supports her priorities. Additional insight on Director Yang’s potential priorities can be found in her 2019 testimony before the House Committee on Education and the Workforce in support of the Paycheck Fairness Act. In her testimony, Director Yang emphasized her view that existing federal law is insufficient to redress the longstanding gender pay gap. In a point of particular concern for contractors, Director Yang expressed her belief that market compensation rates are not an appropriate justification for salary differentials. This belief is consistent with the views of many OFCCP enforcement personnel, who frequently push back against the use of market compensation studies in contractor compensation systems, even though such studies are widely used by corporate employers in setting salary ranges. OFCCP collected a record amount of settlements from contractors in 2020, but Director Yang’s appointment signals that federal contractors can expect more to come in 2021 and beyond. Contractors should begin preparing now to defend their compensation systems from potential OFCCP evaluations.  Some important steps federal contractors can immediately take include retaining legal counsel to conduct a privileged pay equity audit that will be protected from disclosure in the event of an OFCCP audit or employee lawsuit, bolstering written compensation policies to identify all relevant factors the contractor may seek to rely upon in the event of an audit, and reviewing the use of market compensation studies to ensure they are appropriately conducted and used in a way that does not perpetuate gender-based pay gaps.

The Biden Administration did not waste time in rescinding former President Trump’s controversial Executive Order 13950, which limited the ability of federal government contractors and grantees to conduct certain types of diversity and inclusion training. On January 20, 2021, the first day of the new administration, President Biden issued a new Executive Order on Advancing Racial Equity and Support for Underserved Communities Throughout the Federal Government. Among other initiatives, the new Executive Order rescinds Executive Order 13950 and requires federal agencies to review and consider rescinding any agency actions arising out of or relating to Executive Order 13950.  Executive Order 13950’s prohibitions had previously been paused by a preliminary injunction issued by the U.S. District Court for the Northern District of California on December 22, 2020. Executive Order 13950 had created much uncertainty among federal contractors about the types of diversity and inclusion training that can permissibly be provided. With the order’s rescission, contractors that had suspended or limited their training efforts can now comfortably proceed without facing a risk of OFCCP enforcement.

On January 14, 2021, the California Supreme Court held that the “ABC Test” for classifying workers as independent contractors applies retroactively.  The high court first articulated this standard, which makes it tougher for businesses and employers to classify their workers as independent contractors, in its 2018 decision in Dynamex Operations West, Inc. v. Superior Court.  Under the ABC Test, a worker is presumed to be an employee unless the employer can show that all three of the following conditions are satisfied: 1) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, 2) the worker performs work that is outside the usual course of the hiring entity’s business, and 3) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. Last week, in Vazquez et al. v. Jan-Pro Franchising International, the California Supreme Court considered the question of how to classify workers in suits that were pending at the time that the Court first articulated the ABC Test in Dynamex.  The Court declined to depart from the general rule that judicial decisions are given retroactive effect unless stated otherwise, holding that the ABC Test applies to workers in all cases that were pending at the time Dynamex was decided.  Notably, the Court declined to take up the issue of whether an employer’s use of franchising arrangements with its workers has any effect on the applicability of Dynamex and the ABC Test.  The Ninth Circuit has previously determined that it does not.  The case now returns to the Ninth Circuit where the court will determine whether the Jan-Pro franchisees were employees or independent contractors using the ABC Test. The Vasquez decision does not, however, apply to AB 5, which codified and expanded the ABC Test by integrating the standard into California’s Labor Code and Unemployment Insurance Code. Polsinelli attorneys are continuing to monitor the evolution of worker classification issues in California and remain prepared to assist with navigating these critical matters.

Between now and June of 2021, most Americans will have the chance to be vaccinated against COVID-19.  For vaccination to bring the pandemic to an end, a large percentage of Americans will need to get vaccinated.  Employers will play a key role in helping to educate the general public about the new vaccines as they encourage (and, in some cases, require) employees to get vaccinated.  As part of our ongoing effort to assist employers during the pandemic, we have prepared a new video to help employers educate employees about the new vaccines and the benefits of vaccination.  This video summarizes key information from recent guides prepared by the CDC, Johns Hopkins University and the U.S. EEOC.  The video also includes instructions on how individuals can sign up for more information and/or register for vaccination with their local county or city health department.  Please feel free to use and share this video with your workforce. You may watch by clicking here.

On January 8, 2021, the Office of Federal Contract Compliance Programs (OFCCP) issued an opinion letter on “Legal Protections for Religious Liberty in the Workplace.” The opinion letter builds on OFCCP’s recent regulations regarding the religious exemption to provide broad protection to employees against discrimination based on their religious practices. The opinion letter appears to signal that OFCCP leadership is concerned that certain aspects of religious faith may be deemed controversial, leading to adverse employment actions against employees who hold these views. Although LGBTQ issues are not directly addressed in the opinion letter, the opinion letter’s principles could conflict with the increasing protections that federal and state employment discrimination laws provide to LGBTQ employees. The primary guidance provided by the opinion letter comes in the form of answers to several hypothetical questions. These answers state that a federal contractor violates OFCCP’s non-discrimination regulations if it subjects an employee or applicant to an adverse employment action because: The contractor assumes the individual holds beliefs that others may find offensive; The individual is a member of a religion that has taken public policy positions that others may find offensive (providing, as examples, support or opposition for Israel and opposition to abortions); The individual supports or attends a religious-related cause or event that others may find offensive (providing, as examples, an anti-war rally, the March for Life, or a rally opposing anti-Semitism); The individual states to co-workers that he or she holds religious views others may find offensive (providing, as examples, a belief in traditional marriage). The opinion letter does limit this principle by noting that the individual’s statement could be unprotected if he or she has been told such comments are unwelcome, the comments are objectively hostile, or the comments constitute harassment. The opinion letter also states that as part of the “duty” federal contractors carry to provide equal employment opportunities to individuals of different religious faiths, contractors “should develop reasonable internal procedures” to ensure that religious accommodations are being “fully implemented.” The letter encourages contractors to “voluntarily” implement best practices such as centralized accommodation request systems, collaboration with employee resource groups, and training for managers and employees. It is unclear how lasting this OFCCP guidance will prove, given that it was issued less than two weeks before President-Elect Biden’s inauguration. The OFCCP Director position does not require Senate confirmation, so it can be filled immediately by appointment, and sub-regulatory guidance like opinion letters can be immediately withdrawn or changed by a new Director. To the extent the opinion letter creates tension between contractors’ obligations to employees of faith and other protected groups, contractors must keep in mind that other, non-OFCCP federal, state, and local non-discrimination laws continue to apply.  Still, the opinion letter emphasizes that federal contractors are subject to an additional layer of scrutiny with respect to their employment actions, and must consider OFCCP implications when making personnel decisions.

The Equal Employment Opportunity Commission (EEOC) announced this week that it will open the EEO-1 Component 1 Report in April 2021.  The EEO-1 requires covered employers to report by job category the race, ethnicity and gender of its employees.  Because the EEOC postponed the filing deadline for the EEO-1 in 2020, covered employers will be required to file both the 2019 and 2020 EEO-1 Component 1 Reports beginning in April 2021. Covered employers include those with 100 or more employees and federal contractors with 50 or more employees and a federal contract of $50,000 or more.  Note that employers with less than 100 employees who are owned or affiliated with another entity such that the combined employee count is over 100 employees may also be required to file this report. Covered employers are encouraged to confirm that all employees have had the opportunity to voluntarily self-identify their gender, ethnicity and race.  If an employer identifies employees who have not responded to this voluntary invitation, employers may re-extend the invitation and/or rely on employment documents such as an I-9 or visual observation.  If an employer needs to rely on visual observation, it will be easier to gather this information now rather than waiting until April 2021. Polsinelli will continue to monitor developments with the EEO-1 report.

The Equal Employment Opportunity Commission (EEOC) announced this week that it will open the EEO-1 Component 1 Report in April 2021.  The EEO-1 requires covered employers to report by job category the race, ethnicity and gender of its employees.  Because the EEOC postponed the filing deadline for the EEO-1 in 2020, covered employers will be required to file both the 2019 and 2020 EEO-1 Component 1 Reports beginning in April 2021. Covered employers include those with 100 or more employees and federal contractors with 50 or more employees and a federal contract of $50,000 or more.  Note that employers with less than 100 employees who are owned or affiliated with another entity such that the combined employee count is over 100 employees may also be required to file this report. Covered employers are encouraged to confirm that all employees have had the opportunity to voluntarily self-identify their gender, ethnicity and race.  If an employer identifies employees who have not responded to this voluntary invitation, employers may re-extend the invitation and/or rely on employment documents such as an I-9 or visual observation.  If an employer needs to rely on visual observation, it will be easier to gather this information now rather than waiting until April 2021. Polsinelli will continue to monitor developments with the EEO-1 report.

Employers now have a clearer picture of how to determine whether a worker is classified as an employee or independent contractor under the Fair Labor Standards Act (FLSA) thanks to a new final rule from the U.S. Department of Labor (DOL), effective March 8, 2021. This test is significant for employers because under the FLSA, independent contractors are not eligible for minimum wage or overtime compensation. Many state courts and agencies have already adopted tests similar to this “economic reality” test codified by the DOL’s new rule. The “economic reality” test is a multi-factor test that has been used by the DOL in the past to determine whether a worker is an employee or independent contractor. This final rule is similar to the initial rule proposed by the DOL last September. Ultimately, the key question is whether the worker is dependent on the employer, indicating the worker is an employee, or is in business for the worker’s benefit, indicating the worker is an independent contractor. This final rule “sharpens” the economic reality test by enumerating five factors to determine whether a worker is considered an employee under the FLSA: The nature and degree of the worker’s control over the work (e.g., the worker’s ability to set a schedule, select projects and work for others). The worker’s opportunity for profit or loss (e.g., through the exercise of personal initiative, skill or business acumen, and through investments or capital expenditures). The amount of skill required for the work (e.g., whether the work requires a specialized skill or the worker depends on the employer for training). The degree of permanence of the working relationship between the worker and the potential employer (e.g., whether the work is definite or indefinite in duration). Whether the work is part of an integrated unit of production (or is segregable from the employer’s production process). The first two factors are given the most weight. If both of these “core factors” indicate the same classification, then there is a “substantial likelihood” that the resulting classification is correct. However, if the application of the first two factors leads to different conclusions, the remaining three factors should be considered, as well. With this additional guidance, employers have more information to help structure their relationships with workers and define which workers qualify as independent contractors, though it may not necessitate many immediate practical changes.  Employers should continue to be cognizant of and comply with any state and local laws regarding worker classification, which may not be identical to the DOL’s rule. It is also possible that the Biden administration will affect changes to this new rule or its implementation.  Please contact your Polsinelli attorney if you have any questions about the new final rule.