In response to the recent Emergency Use Authorization granted by the U.S. Food and Drug Administration (“FDA”) for the COVID-19 vaccine, the Equal Employment Opportunity Commission (“EEOC”) published guidance today outlining employer compliance mandates under the Americans with Disabilities Act (“ADA”), Title VII of the 1964 Civil Rights Act (“Title VII”) and the Genetic Information Nondiscrimination Act (“GINA”). The EEOC’s guidance addresses a number of pressing questions posed by employers and employees alike regarding the vaccine. Some of the more important takeaways from today’s guidance include the following: The administration of an FDA-approved or authorized COVID-19 vaccine to employees is not a “medical examination” for purposes of the ADA, and, therefore, may generally be required by employers under federal law. Although the vaccine is not considered a “medical examination” under the ADA, pre-screening questionnaires given to employees by an employer in connection with a vaccination may implicate the ADA’s provision on disability-related inquiries. In such case, the employer would need to demonstrate that the pre-screening questions are “job related and consistent with business necessity.” If an employer requiring a COVID-19 vaccine determines that an employee who cannot be vaccinated due to a disability poses a direct threat at the worksite, the employer cannot exclude the employee from the workplace (or take any other action) unless there is no other way to provide a reasonable accommodation (absent an undue hardship) that would eliminate or reduce this risk. Under the ADA, “undue hardship” is defined as “significant difficulty or expense” incurred by the employer in providing an accommodation. Employers requiring the vaccine must also provide a reasonable accommodation for an employee’s sincerely held religious belief, practice or observance that prevents the employee from receiving the vaccination unless doing so would pose an undue hardship under Title VII. Notably, under Title VII, “undue hardship” is defined as having more than a de minimis cost or burden on the employer. Title II of GINA is not implicated when an employer administers a COVID-19 vaccine to employees or requires employees to provide proof that they have received a COVID-19 vaccination. However, if any pre-screening questions by the employer ask about genetic information (e.g., immune systems of family members), such inquiries could violate GINA. This new guidance sheds further light on how employers might best structure their employee policies and procedures relating to COVID-19 vaccinations in the coming months.  Employers who choose to mandate the vaccine should consider requiring vaccination from a pharmacy or other third-party health care provider to avoid the ADA implications associated with any pre-screening vaccination questions.  These employers will also want to educate and train their managers and supervisors so that they are prepared to field and appropriately respond to any requests for accommodation, and should carefully consider privacy laws surrounding the employer’s receipt and maintenance of employee medical information.  Further, employers must be prepared to consider all applicable state laws that may impact their ability to mandate COVID-19 vaccinations. Employers who are inclined to simply encourage employees to get vaccinated may want to consider certain measures to promote participation, including, but not limited to, making the vaccine convenient and accessible by providing vaccinations on-site or near the workplace, covering any cost associated with the vaccine, and/or ensuring that employees are compensated for time spent getting vaccinated. Polsinelli attorneys are prepared to assist with navigating these critical issues surrounding the arrival of the COVID-19 vaccine.

On December 7, 2020, the Office of Federal Contract Compliance Programs issued a Final Rule codifying an expansion of the agency’s exemption from Executive Order 11246’s nondiscrimination requirements for federal contractors who are religious corporations, associations, educational institutions, or societies.  The new rule, which goes into effect on January 8, 2021, defines certain key terms in a way that provides a broader scope of exemption than recognized by the EEOC under Title VII’s corresponding religious exemption. The pre-existing religious exemption in OFCCP’s regulations provided that certain of Executive Order 11246’s non-discrimination obligations did not apply to a contractor or subcontractor “that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on . . . of its activities.”  OFCCP’s Final Rule provides definitions of the previously-undefined terms “religious corporation, association, educational institution, or society” and “particular religion” that broadens the scope of the exemption. The new rule implements a four-part test for contractors to establish that they are a religious entity within the scope of the exemption. Contractors must establish that they: Are organized for a religious purpose, as typically shown by the entity’s governing documents (i.e., articles of incorporation, bylaws, or a mission statement); Hold themselves out to the public as carrying out a religious purpose; Engage in activity consistent with, and in furtherance of, the religious purpose; and Either (1) operate on a non-profit basis, or (2) present strong evidence that the entity’s purpose is “substantially religious.” The new regulation instructs that an organization’s satisfaction of these standards is to be measured by reference to the organization’s own sincere understanding of its religious tenets, and that religious entities may, but are not required to, be affiliated with a house or worship or composed of individuals sharing the same religious tradition. The regulation’s comments make clear that OFCCP should defer to the contractor’s view that an activity has religious meaning, providing the example of a drug rehabilitation center that sincerely believes that its work is a form of ministry. Although the regulation itself refers to an exemption “with respect to the employment of individuals of a particular religion,” OFCCP’s new definition of “particular religion” broadly construes the exemption.  The exemption applies not only to a particular employee’s religion, but also to the employee’s “acceptance of or adherence to sincere religious tenets as understood by the employer as a condition of employment,” even if the employee is not a member of the employer’s particular sect. Finally, the Final Rule adds a rule of construction provision to OFCCP’s regulations requiring that they be construed in favor of a broad protection of religious exercise. Even as expanded by the Final Rule, the religious exception will likely be inapplicable to the bulk of contractors, and does not fully exempt even religious contractors from OFCCP’s requirements. In addition, religious contractors will remain subject to other federal, state, or local non-discrimination laws not enforced by OFCCP that may not provide the same exemption. Nonetheless, contractors who believe they may qualify for the exemption should work with counsel to review its requirements and ensure they have documentary evidence clearly demonstrating the organization’s compliance with each of the four requirements for the contractor to obtain religious status under the regulation.

On November 3, 2020, California voters passed Proposition 22, a ballot measure that classifies certain app-based rideshare and delivery drivers as independent contractors. Under the new law, which will take effect immediately following the certification of California’s election results in mid-December, app-based drivers may be properly classified as independent contractors if the hiring entity: Does not unilaterally prescribe specific dates, times of day, or minimum number of hours during which the driver must perform services; Does not require the driver to accept any specific service request or assignment as a condition of maintaining access to the company’s application or platform; Allows drivers to perform rideshare or delivery services for any other company, including direct competitors; and Does not restrict the worker from performing any other kind of lawful work. Proposition 22 also provides certain benefits and protections to app-based drivers who are classified as independent contractors. These benefits and protections are similar to but less comprehensive than those provided to employees, including, but not limited to, a guarantee of 120% of the applicable minimum wage for “engaged time” spent on rides or deliveries, healthcare subsidies for workers driving 15 hours per week or more, certain vehicle expense reimbursements, and occupational accident insurance for on-the-job injuries. Proposition 22 also requires companies to adopt anti-discrimination and anti-harassment policies and practices, provide background checks and safety training, and enter into written agreements with their drivers that protect workers from termination for reasons other than those specified in the agreement. It remains unclear whether Proposition 22 will apply retroactively and/or whether it will render moot pending or future claims for misclassification or violation of AB 5 prior to the passage of Proposition 22. Although Proposition 22 has limited application to app-based drivers, California employers should pay close attention as courts grapple with these issues and others surrounding the recent amendments to AB 5, as these changes will no doubt continue to affect the classification landscape in California and nationally. Polsinelli attorneys will continue to monitor and analyze the evolution of these issues and remain prepared to assist clients with navigating the changes to come.

On November 10, 2020, OFCCP published its Final Rule on “Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination.”  We previously covered OFCCP’s Notice of Proposed Rulemaking on the subject, which promised to provide additional certainty to contractors regarding OFCCP’s standards for finding discrimination-based violations. In the Final Rule, OFCCP made significant changes to the Notice of Proposed Rulemaking, the most significant of which are described below: OFCCP replaced the concepts of “statistical evidence” and “nonstatistical evidence” from the Notice of Proposed Rulemaking with “qualitative evidence” and “quantitative evidence” in the Final Rule.  Qualitative evidence largely corresponds to the previous category of “nonstatistical evidence” and encompasses testimony and other documentary evidence giving rise to an inference of discrimination.  In a positive note for contractors, OFCCP has somewhat backed away from the Notice of Proposed Rulemaking’s classification of manager discretion or subjective decision making as qualitative/nonstatistical evidence of discrimination, and now considers the existence of discretion or subjectivity to be qualitative evidence only where there is additional evidence showing the discretion has been used in a discriminatory manner.  Given that subjectivity is an almost inherent aspect of performance evaluation, this is a welcome development.  The Final Rule also makes clear that an employee’s subjective belief that he or she has been discriminated against does not constitute qualitative evidence. The Final Rule’s new category of “quantitative evidence” is broader than the “statistical evidence” of the Notice of Proposed Rulemaking.  The prior category of statistical evidence focused on OFCCP’s preferred tool of linear regression analysis, and required OFCCP to find disparities of two standard deviations or greater in order to provide evidence of discrimination.  The Final Rule retains the two standard deviation threshold, but now also includes cohort analyses in which OFCCP compares the outcomes of specific employees as “quantitative evidence.”  Troublingly, the Final Rule does not provide standards for conducting cohort analyses, leaving the door open for OFCCP to pursue enforcement actions based on cherry-picked comparisons. The Final Rule establishes specific standards for findings of discrimination in disparate treatment and disparate impact cases.  For disparate treatment cases, OFCCP must provide quantitative evidence of discrimination, provide qualitative evidence that supports a finding of discriminatory intent and a finding that the discriminatory intent caused the disparate treatment, and show that the disparity is practically significant.  This move to require qualitative evidence in nearly all cases is a welcome development.  However, the Final Rule contains an exception to the qualitative evidence requirement in cases where the quantitative evidence is “extraordinarily compelling,” without defining that standard (as opposed to the Notice of Proposed Rulemaking’s three standard deviation threshold for purely statistical violations).  It remains to be seen how strictly OFCCP will apply the “extraordinarily compelling” standard in practice. For disparate impact cases, OFCCP must provide quantitative evidence of discrimination, identify the contractor’s specific policy or practice causing the adverse impact, and show that the disparity is practically significant.  The requirement for identification of a specific policy or practice is a positive development, as OFCCP previously brought claims based on statistical disparities without identifying how the contractor allegedly discriminated.  Again, however, the Final Rule contains an exception for situations where “the elements of a contractor’s selection procedures are incapable of separation for analysis.”  As with disparate treatment cases, it remains to be seen whether the exception will swallow the rule. The Final Rule codifies many aspects of OFCCP Director Leen’s 2018 directives in a form that will be more binding on the agency. Contractors facing preliminary findings of discrimination can evaluate OFCCP’s evidence against the Final Rule’s standards to seek to rebut the agency’s claims .As noted, however, the Final Rule does contain exceptions that lack specific standards for their application and could allow OFCCP to evade the Final Rule’s requirements. That said, OFCCP is likely to take a more aggressive approach to enforcement under a Biden administration, and the Final Rule provides contractors with tools to refute some OFCCP allegations of discrimination.

Among the 2020 ballot initiatives, California voters had the opportunity to weigh in on a 24-year ban on affirmative action in California.   In 1996, California voters approved the California Civil Rights Initiative (Proposition 209) which amended the California Constitution to prohibit the consideration of race, sex, color, ethnicity or national origin in public education, employment and contracting.  California became the first state to enact such a measure.   Proposition 16, which appeared on the 2020 ballot, would have repealed Proposition 209, meaning that public institutions could have considered race, gender or ethnicity as a positive element in admission, hiring, and contract decisions.   Californians voted against this measure, maintaining the current ban on affirmative action in the state. While Proposition 16 failed, California employers should bear in mind that the ballot measure applied to public employers and concerned the ability to use race, sex, color, ethnicity, or national origin as a positive factor.  The measure, whether or not it passed, did not alter the numerous safeguards in place, at both the state and federal level that protect against discrimination.  At the federal level, Title VII of the Civil Rights Act of 1964 specifically prohibits employers from discriminating on the basis of race, color, religion, sex, and national origin.  California has adopted even broader protections for employees, earning its title as the most employee-friendly state in the nation.  The California Constitution and state statutes offer a broad range of protections against arbitrary discrimination based on protected characteristics.  Arguably the strongest protection against employment discrimination comes from the California Fair Employment and Housing Act (“FEHA”), which applies to both private and public employers.  The FEHA prohibits employers from discriminating against job applicants and employees because of a protected category, or retaliating against them because they have asserted their rights under the law.  Additionally, for larger employers (50 or more employees) with qualifying federal contracts or subcontracts, there are additional affirmative action requirements under the Rehabilitation Act of 1973, Executive Order 11246, and the Vietnam Era Veterans’ Readjustment Assistant Act (“VEVRA”). Despite the defeat of Proposition 16, California remains an employee-friendly state with a host of broad protections and nuances that employers must carefully consider in making business decisions.

On October 21, 2020, the Office of Federal Contract Compliance Programs (OFCCP) continued to address the highly-controversial diversity and inclusion (D&I) training restrictions in Executive Order 13950.  Specifically, OFCCP issued a Request for Information (RFI) regarding contractor D&I training efforts, as required by the Executive Order, and also held a stakeholder call in which Director Craig Leen addressed several issues surrounding OFCCP’s response to the Executive Order. In the RFI, OFCCP provided some hints as to its enforcement and compliance assistance efforts for the Executive Order’s D&I training restrictions.  Echoing its prior guidance, OFCCP clarified that “training is not prohibited if it is designed to inform workers, or foster discussion, about pre-conceptions, opinions, or stereotypes that people – regardless of their race or sex – may have regarding people who are different, which could influence a worker’s conduct or speech and be perceived by others as offensive.”  As with prior agency guidance, this statement makes clear that while discussions of implicit bias are not absolutely prohibited, those discussions cannot single out specific racial or sex groups as being more likely to harbor biases than others, and must focus on the workforce as a whole. The RFI also invited federal contractors who are unsure about the compliance status of their D&I training materials to seek compliance assistance from OFCCP.  According to the RFI, if a contractor voluntarily submits materials to OFCCP for review, OFCCP will “exercise its enforcement discretion and not take enforcement action” if the contractor “promptly comes into compliance with the Executive Order as directed by OFCCP.”  However, OFCCP reserves the right to pursue enforcement action if it determines that the contractor refused to correct any identified issues.  The RFI also hints that OFCCP may begin requesting D&I training materials in its neutrally-scheduled compliance evaluations, though this request may require OFCCP to obtain approval to modify its OMB-approved Scheduling Letter.  As of October 21, 2020, OFCCP has not requested OMB approval to update its Scheduling Letter in light of the Executive Order. If a contractor wishes to respond to the RFI, the deadline is December 1, 2020. The RFI makes clear that responses are entirely voluntary and contractors may choose not to respond.  However, if someone other than a contractor representative authorized to submit the materials on behalf of the contractor provides information to OFCCP, for example an employee who attended a training session, OFCCP will not exercise its enforcement discretion and could pursue an enforcement action.  Accordingly, there is some risk that a contractor may be subjected to an enforcement action as a result of this RFI even if it does not choose to participate. Director Leen stated similar themes in the October 21, 2020 stakeholder call. Director Leen emphasized that there is overlap between Executive Order 13950’s restrictions on D&I trainings and the pre-existing non-discrimination obligations in Executive Order 11246.  Director Leen characterized Executive Order 13950 as clarifying Executive Order 11246’s prohibition of race or sex stereotyping in the specific area of training programs, and noted that OFCCP would act on any employee complaints it received under the new Executive Order.  This means that all federal contractors must comply with Executive Order 13950, even if they do not have a contract containing the Executive Order’s required clause.  Director Leen closed his remarks by expressing that every employee should feel “completely welcome and included” in contractor diversity efforts, and that “merit and merit alone” should govern contractors’ personnel actions. Although the RFI and stakeholder call provided some insight into OFCCP’s views and enforcement strategy on Executive Order 13950, they did not provide the specific guidance that contractors have sought.  Polsinelli has worked with several government contractor clients to assess their obligations and the compliance status of their D&I efforts under Executive Order 13950, and will continue to update the contractor community on developments regarding the Executive Order.

To make the platform more user friendly and conveniently accessible, the Office of Federal Contract Compliance Programs (OFCCP) has revamped the Employment Referral Resource Directory (ERRD). The OFCCP created the ERRD as a compliance tool to assist federal contractors in identifying job referral services for veterans, individuals with disabilities, women, and minority groups. Federal contractors can use the ERRD to find government and nonprofit organizations as references to assist in identifying and hiring qualified applicants. The agency desires to expand its directory as widely as possible and encourages referral organizations who are not in the directory to submit their information. The updates to the ERRD include: Search component and search results now merged on one page for a more seamless experience. Multi-selection now available when using the search fields. User friendly on mobile and desktop browsers. With the updates to the ERRD, federal contractors will be able to navigate the directory more easily to meet their compliance obligations. They will now be able to make more efficient and convenient searches for referral organizations on a variety of media, including mobile phones. These changes will help contractors more readily identify organizations that will help with recruitment efforts and assist them in meeting their regulatory obligations.

The September 22, 2020, issuance of Executive Order 13950 limiting federal government contractors’ ability to conduct diversity, inclusion, and unconscious or implicit bias training has roiled the contractor community. Although the Executive Order provided broad categories of themes that it prohibits as subjects of diversity training, it does not provide contractors with substantial guidance as to what specific types of training the Executive Order prohibits. On October 7, 2020, the Office of Federal Contract Compliance Programs (OFCCP) issued an FAQ guidance document regarding the Executive Order, which provides some, but far from sufficient, guidance to contractors. OFCCP’s FAQ guidance largely quotes directly from the Executive Order without providing additional insight into the Executive Order’s terms. That said, the FAQ does clarify two points: First, even if a federal contractor does not have a government contract subject to the Executive Order (generally, one issued after November 21, 2020), “OFCCP may investigate claims of sex and race stereotyping pursuant to its existing authority under Executive Order 11246.” To that end, OFCCP earlier established a hotline for employees of contractors to submit complaints of prohibited diversity training programs. Accordingly, all federal contractors should ensure their training programs comply with the Executive Order, regardless of whether their contracts contain the Executive Order’s prohibition. Second, OFCCP addressed the scope of unconscious or implicit bias trainings. The FAQ clarifies that such trainings are not necessarily prohibited. However, bias trainings cannot single out a single group as being unconsciously or implicitly racist, sexist, oppressive, or biased. Instead, the training must be “designed to inform workers, or foster discussion, about pre-conceptions, opinions, or stereotypes that people – regardless of their race or sex – may have regarding people who are different, which could influence a worker’s conduct or speech and be perceived by others as offensive.” Although OFCCP’s FAQ may not have provided the details sought by contractors, a September 28, 2020, memorandum from the Office of Management and Budget (OMB) regarding similar restrictions on federal sector diversity trainings provides some additional guidance. OMB emphasizes that trainings must promote “fair and equal treatment.” The memorandum advises agencies to search for concepts like critical race theory, white privilege, intersectionality, systemic racism, positionality, racial humility, and unconscious bias as potentially prohibited.  Although these are also broad concepts, the OMB memorandum provides some additional guidance on what contractors should look for and avoid. Notably, neither OMB nor OFCCP addresses the thornier question of what contractors must do if employees themselves discuss prohibited topics or themes during discussion portions of trainings. Given the lack of clear guidance to date from the Executive Order, OFCCP, OMB, or any other official source, contractors should conduct a close review of any diversity and inclusion training materials they use to ensure that they are consistent with the “fair and equal treatment” principle and do not include the themes described in the Executive Order. The effect of the Executive Order remains an evolving issue that contractors should closely follow.

On October 1, 2020, the Kansas City, Missouri City Council unanimously voted to enact the “Creating a Respectful and Open World for Natural Hair” Act (“CROWN Act”).  The CROWN Act addresses discrimination based on natural hair or particular hairstyles traditionally tied to race.  In short, the CROWN ACT sets forth that “hair discrimination targeting hairstyles associated with race is racial discrimination.” The CROWN Act, Ordinance No. 200837, modifies the definition of “Race” to include “traits historically associated with race including, but not limited to, hair texture and protective hairstyles.”  The CROWN Act further defines “protective hairstyles” to include, though not limited to, “such hairstyles as braids, locks, and twists.”  In its preamble, the CROWN Act also identifies afros, making it clear that they are a protected hairstyle as well. While Kansas City may be one of the first cities in the country to pass such an ordinance, it is just one of many jurisdictions passing similar expansions of race discrimination protections — including state laws in California, Virginia, New York, Colorado, Washington, and Maryland. The CROWN Act goes into effect on November 1, 2020.  If you have any questions regarding the CROWN Act or expanded race discrimination protections in other jurisdictions, please contact your Polsinelli attorney.

On September 22, 2020, President Trump issued an Executive Order Combating Race and Sex Stereotyping that will prohibit federal contractors and grantees from engaging in many forms of diversity, inclusion, and implicit bias training that have gained popularity in recent months. The new Executive Order announces a federal policy “not to promote race or sex stereotyping or scapegoating” and not to permit contractors to “inculcate such views in their employees.”  To that end, the order requires agencies to include in most new federal government contracts a clause prohibiting contractors from using any workplace training program that includes the concepts that: One race or sex is inherently superior to another race or sex; An individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously; An individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex; Members of one race or sex cannot or should not attempt to treat others without respect to race or sex; An individual’s moral character is necessarily determined by his or her race or sex; An individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex; An individual should feel discomfort, guilt, anguish, or any form of psychological distress on account of his or her race or sex; or Meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race. The Executive Order also prohibits trainings that “assign[] fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex.”  These prohibitions follow a previous Executive Order prohibiting similar trainings by federal agencies. Contractors are required to post a notice with the substance of the Executive Order in a conspicuous place in the workplace, and include the Executive Order’s prohibitions in any subcontracts.  The Office of Federal Contract Compliance Programs (OFCCP) is directed to establish a hotline and investigate complaints of prohibited training programs.  As sanctions for noncompliance, the Executive Order requires agencies to consider such drastic measures as terminating, suspending, or canceling contracts, or even debarring contractors.  The Executive Order does provide that it does not prevent contractors from promoting racial, cultural, or ethnic diversity and inclusiveness in a manner consistent with the Order. The Executive Order appears to target diversity and inclusion training programs like the popular White Fragility that focus on concepts of implicit bias.  These trainings have gained prominence in the wake of the George Floyd killing earlier this year.  New federal contracts or grants would prohibit contractors from implementing these types of efforts with severe consequences.  It is anticipated that the constitutionality and validity of the Executive Order will be challenged in litigation.  Federal contractors and grantees should keep close track of these developments due to the heavy potential penalties for noncompliance.

On September 22, 2020, President Trump issued an Executive Order Combating Race and Sex Stereotyping that will prohibit federal contractors and grantees from engaging in many forms of diversity, inclusion, and implicit bias training that have gained popularity in recent months. The new Executive Order announces a federal policy “not to promote race or sex stereotyping or scapegoating” and not to permit contractors to “inculcate such views in their employees.”  To that end, the order requires agencies to include in most new federal government contracts a clause prohibiting contractors from using any workplace training program that includes the concepts that: One race or sex is inherently superior to another race or sex; An individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously; An individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex; Members of one race or sex cannot or should not attempt to treat others without respect to race or sex; An individual’s moral character is necessarily determined by his or her race or sex; An individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex; An individual should feel discomfort, guilt, anguish, or any form of psychological distress on account of his or her race or sex; or Meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race. The Executive Order also prohibits trainings that “assign[] fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex.”  The Order also requires the Attorney General to consider whether these types of trainings violate Title VII by contributing to a hostile work environment.  These prohibitions follow a previous Executive Order prohibiting similar trainings by federal agencies. Contractors are required to post a notice with the substance of the Executive Order in a conspicuous place in the workplace, and include the Executive Order’s prohibitions in any subcontracts.  The Office of Federal Contract Compliance Programs (OFCCP) is directed to establish a hotline and investigate complaints of prohibited training programs.  As sanctions for noncompliance, the Executive Order requires agencies to consider such drastic measures as terminating, suspending, or canceling contracts, or even debarring contractors.  The Executive Order does provide that it does not prevent contractors from promoting racial, cultural, or ethnic diversity and inclusiveness in a manner consistent with the Order. The Executive Order appears to target diversity and inclusion training programs like the popular White Fragility that focus on concepts of implicit bias.  These trainings have gained prominence in the wake of the George Floyd shooting earlier this year.  New federal contracts or grants would prohibit contractors from implementing these types of efforts with severe consequences.  It is anticipated that the constitutionality and validity of the Executive Order will be challenged in litigation.  Federal contractors and grantees should keep close track of these developments due to the heavy potential penalties for noncompliance.

On September 14, 2020, the Office of Federal Contract Compliance Programs (OFFCP) requested approval from the Office of Management and Budget to require government contractors to certify on an annual basis that they are in compliance with their affirmative action program (AAP) obligations.  Under OFCCP’s proposal, federal contractors are required to certify on an annual basis that they have complied with applicable AAP requirements.  The certification would be done through a new Affirmative Action Program Verification Interface online platform developed by OFCCP. OFCCP’s request for approval is not completely clear about how the agency intends to use this information, but it appears reasonable to expect an uptick in enforcement activity against contractors who fail to certify compliance with their AAP obligations. In one portion of the request, OFCCP notes that its new platform will allow OFCCP to “run a comprehensive and informative report identifying the AAP status of covered federal contractors.”  The request does not address whether a contractor will face additional consequences, such as for false claims, if it certifies its AAPs are in compliance but OFCCP later determines that certification was incorrect. Also on September 14, 2020, OFCCP published a Comment Request in the Federal Register about the new certification requirement.  OFCCP expressed particular interest in comments addressing: 1.      The proposed frequency and level of the information collection; 2.      Whether the proposed collection of information is necessary for OFCCP’s enforcement and compliance assistance functions, including whether they will have practical utility; 3.      The accuracy of OFCCP’s estimate of the burden of the proposed information collection; 4.      Proposals to enhance the quality, utility, and clarity of the information to be collected; and 5.      Proposals to minimize the burden of the information collection to respondents. This new certification likely signals an increase in OFCCP enforcement activity, at least against the low hanging fruit of contractors who fail to certify their compliance with AAP requirements.  The impending requirement that contractors affirmatively certify AAP compliance only emphasizes the need for contractors to proactively review their AAPs and ensure compliance with all of OFCCP’s requirements.

In the last two weeks, the California Legislature has enacted numerous bills relating to employer obligations in light of COVID-19.  Five of these bills have already been signed into law by Governor Newsom.  The remainder may still be signed by Governor Newsom on or before September 30, 2020, which will trigger either an immediate or a January 1st effective date.  Below is a summary of the legislation signed into law by Governor Newsom. AB 2257 - AB 2257 modifies the statutory scheme of AB5. AB5 was itself enacted in 2019 and codified the strict “ABC Test” for classifying workers as independent contractors. AB 2257 adds over fifty categories of workers that are exempt from the “ABC Test” and instead are subject to the more moderate “Borello multi-factor test,” for purpose of determining independent contractor status.  For a detailed discussion regarding AB 2257, please click here. AB 1867 - AB 1867 touches on three areas of employment.  First, the bill provides 80 hours of paid supplemental sick leave for California employees of employers with 500 or more employees nationwide and for health care providers or emergency responders that have been exempted from paid sick leave under the federal Family First Coronavirus Response Act.  Second, the bill provides for hand-washing requirements and further leave entitlements for food sector employees. Third, the bill requires employers to update their wage statements or other written notice regarding the amount of supplemental paid sick leave.  For a detailed discussion regarding AB 1867, please click here. SB 1159 - Creates a disputable presumption, under specific circumstances, for an employee who suffers illness or death resulting from COVID-19 on or after July 6, 2020 through January 1, 2023, that the employee contracted COVID-19 in the course and scope of employment.  The disputable presumption is raised under the following circumstances: (1) the employee tests positive for COVID-19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment; (2) the day on which the employee performed labor or services at the employee’s place of employment at the employer’s direction was on or after July 6, 2020; and (3) the employee’s positive test occurred during a period of an outbreak at the employee’s specific place of employment. A more detailed discussion regarding SB 1159 is forthcoming on Polsinelli at Work. AB 685 – Requires employers to report an outbreak of COVID-19 to local public health officials. The new law also requires employers to report known cases to employees who may have been exposed to COVID-19 within one business day. Further, the new law expands Cal/OSHA’s authority to issue stop work orders for workplaces that pose a risk of an “imminent hazard” relating to COVID-19, i.e., hazards threatening immediate and serious physical harm. A more detailed discussion regarding AB 685 is forthcoming on Polsinelli at Work. SB 1383 - Expands the obligation to provide up to 12 workweeks of unpaid job-protected leave during any 12-month period for certain covered reasons to small employees (with as little as 5 employees) not covered before. Further, previously, leave for purposes of caring for a family member was available only if the family member was the employee’s child, a parent, spouse, or domestic partner.  SB 1383 permits eligible employees to care for grandparents, grandchildren, and siblings, unlike under the prior CFRA statute.  However, employees still need to meet eligibility requirements, predominantly - 12 months of service and 1,250 hours worked in the previous 12-month period, to qualify for family and medical leave.  A more detailed discussion regarding SB 1383 is forthcoming on Polsinelli at Work. These recent changes in California law overlay with the U.S. Department of Labor’s recently published regulatory guidance on September 14, 2020, relating to paid leave entitlements under the federal Family First Coronavirus Response Act (FFCRA), which, among other things, significantly narrows the definition of who is a “health care provider” that may be excluded from the FFCRA’s paid leave entitlement.  For a detailed discussion regarding the DOL’s new guidance, please click here.

As the nation battles the COVID-19 pandemic, California has been simultaneously grappling with one of the hottest employment law issue: the classification of workers as employees or independent contractors.  On September 4, 2020, California Governor Newsom signed into law AB 2257, a bill designed to clarify issues that arose from AB 5, which became effective January 1, 2020.  In light of the changes outlined below, companies should review their policies and agreements with independent contractors to ensure proper classification. AB 5 codified the California Supreme Court holding in Dynamex Operations West, Inc. v. Superior Court and adopted the “ABC” test to determine whether independent contractors should be treated as employees with various exceptions.  Under the “ABC” test, workers are presumed to be employees unless they satisfy three conditions: The worker is free from the employer’s control and direction in connection with the work performed, both under the contract and in fact; The work performed is outside the usual course of the employer’s business; and The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. AB 5 included an extensive list of exemptions for specific occupations and business relationships, resulting in confusion for many employers.  While AB 5 initially seemed to target the gig economy, its broad language has affected industries statewide.  In the nine months since AB 5 became effective, the bill has generated significant controversy as California businesses were forced to quickly develop strategies whilst combatting the litany of misclassification civil actions that emerged from AB 5.  Simultaneously, the Legislature immediately introduced dozens of stand-alone bills to amend the new law.  AB 2257 is the first of these post-AB 5 bills to become effective. AB 2257: The Latest Changes Occupation Exemptions: Under AB 5, certain occupations were excluded from the ABC test, including doctors, lawyers, dentists, licensed insurance agents, accountants, architects and engineers, private investigators, real estate agents, and hairstylists.  AB 2257 expands this list to include translators, appraisers, home inspectors and registered foresters.  AB 2257 also strikes the 35-assignments per year cap from AB 5, allowing freelance writers, translators, photographers, videographers and illustrators to work as independent contractors without regard to the number of assignments taken from one client. Entertainment Industry: AB 2257 also creates additional exemptions for the entertainment industry, with a particular focus on musicians and performers.  Recording artists, songwriters, lyricists, composers, proofers, managers of recording artists, record producers and directors, musical engineers, musicians, vocalists, music album photographers, independent radio promoters, and certain publicists are included in the exemptions.  Musicians who engage in a single-engagement live performance event are also exempt from the ABC test.  However, musicians who perform as a symphony orchestra, in a musical theater production, or at a theme or amusement park are not exempt from the ABC test.  Musicians who headline at a venue with more than 1,500 attendees or those who perform at a festival that sells more than 18,000 tickets per day are also not exempt from the ABC test.  For comedians, improvisers, magicians, and storytellers, AB 2257 does provide an exemption, but imposes the following conditions: (i) the individual performer performs original work they created and retains the intellectual property rights for such work; (ii) he or she is free from the hirer’s control; and (iii) the individual performer sets their own terms of work and negotiates rates. Referral Agencies: AB 2257 also makes significant expansions to the types of services that can qualify for the referral agency exemption.  AB 2257 adds to the list: consulting, youth sports coaching, caddying, wedding and event planning, and interpreting services.  AB 2257 clarifies that this exemption is not limited to those identified, leaving room for additional types of services to be added to this already expansive list.  AB 2257 does, however, make certain that the following services are not included: high-hazard industry services, janitorial, delivery, courier, transportation, trucking, agricultural labor, retail, logging, in-home care, or construction services other than minor home repair.  As a result, ride-share services, such as Uber or Lyft continue to be expressly excluded from the laundry list of exemptions. Business-to-Business Contracting Relationships: Importantly, AB 2257 expands the “business-to-business exemption” to apply to sole proprietors.  Previously, under AB 5, this exemption was only applicable to business entities that were incorporated.  AB 2257 provides a further exemption for sole proprietors under the “single-engagement exemption,” which provides the ABC Test will not apply for a single-engagement event, provided certain conditions are met.  AB 2257 also broadens the business-to-business exemption to include situations where a public agency or quasi-public corporation retains a contractor.  Another important amendment in AB 2257 is it no longer requires that a business service provider “actually contracts” with other businesses “without restriction form the hiring entity.”  Instead, AB 2257 merely requires that the business service provider can contract with other entities and maintain a clientele.  This amendment allows greater flexibility for entities which, for example, not have actually contracted with other businesses, so long as they have the opportunity to do so.  On that same front, AB 2257 also relaxes restrictions to allow business service providers to provide services directly to the customers of a contracting business. AB 2257 contains several additional significant amendments and nuances that California employers must carefully examine when navigating the ever-changing landscape of independent contractor law.  While further legislation and additional litigation is on the horizon, AB 2257 was made effective when signed and remains the current law in California.  Polsinelli attorneys are closely examining recent developments and remain prepared to assist you in developing business policies to comply with these measures.

On September 9, 2020, California Governor Newsom signed AB 1867. The new law provides for “gap” paid sick leave coverage for California employees who are otherwise exempt from emergency paid sick leave coverage provided under the federal Families First Coronavirus Response Act (“FFCRA”). In addition to providing paid leave, the law requires employers to comply with urgent-notice and posting requirements. General Requirement The new law is intended to act as “gap” paid leave for California employees who are employed by employers that are exempt under the federal Family First Response Care Act. The new California law applies to (1) employers with 500 or more employees; or (2) health care providers or emergency responders (working for a public or private entity of any size). The law provides for up to 80 hours of COVID-19 Supplemental Paid Sick Leave (“CSPSL”) for covered workers. Covered Employers The Act applies to private employers with 500 or more employees in the United States. For purposes of calculating the number of employees, “employees” includes: (i) all employees currently working, (ii) employees on leaves of any kind, (iii) employees of temporary placement agencies who are jointly employed under the Fair Labor Standards Act, and (iv) day laborers. Alternatively, the obligation to provide CSPSL applies to public and private entities of any size with respect to any health care providers or emergency responders which the entity employs, which have been excluded from sick leave under the FFCRA. Qualifying Reasons for Paid Sick Time A covered employer must provide an employee supplemental paid sick leave under the Act for any of the following reasons: The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; The employee is advised by a healthcare provider to self-quarantine or self-isolate due to concerns related to COVID-19; or The employee is prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19. Note that unlike the federal leave requirement, this new law does not provide for paid leave for reasons related to school closures. Additionally, the law does not expressly provide for paid leave to take care of a family member who may have contacted Covid-19. However, the law obligates an employer to provide CSPSL if an employer has a policy or practice of requiring that an employee self-isolate from the employer’s physical workspace due to risk of potential transmission after close contact with an individual diagnosed with Covid-19. The law is silent with respect to employees who are required to self-isolate but are capable of telecommuting. This analysis will have to be undertaken on a case-by-case basis. Covered Full-Time Employees An employee qualifies for the full 80 hours of CSPSL if the employee satisfies either of the following criteria: The employer considers the employee to work “full time”; or The employee worked or was scheduled to work, on average, at least 40 hours per week for the employer in the two weeks preceding the date the employee took CSPSL. Covered Part-Time Employees For part-time employees the minimum amount of CSPSL is calculated as follows: If the employee has a normal weekly schedule, the total number of hours the employee is usually scheduled to work for the employer over two weeks; If the employee works a variable number of hours, 14 times the average number of hours the employee worked each day in the six months prior to taking COVID-19 supplemental paid sick leave or, if the employee has been employed for less than six months, over the entire period the employee has worked for the employer; or If the employee works a variable number of hours and has worked for the employer over a period of 14 days or fewer, the total number of hours the employee has worked. Supplemental to Regular Paid Sick Leave Already Provided/ Retroactive Designation CSPSL must be provided in addition to any paid sick leave the employer already provides to employees. An employer may not require an employee to first use other paid leave provided by the employer. However, if an employer previously provided employees with leave for CSPSL reasons described above (separate or in addition to regular paid-sick leave), and which compensated the employee at an amount equal to or greater than what CSPSL requires, the employer may count the hours of the other paid benefit or leave towards the total number of hours CSPSL. If an employer provided non-compensated COVID-19 related leave separate or in addition to regular paid-sick leave), the employer will have the option of retroactively compensating the covered worker to satisfy the Act’s compensation requirements. Upon compensation, an employer will be able to credit these hours towards CSPSL requirements. Compensation for Paid Sick Time Employees using COVID-19 supplemental paid sick leave must be compensated at their regular rate of pay for their last pay period. Notice Requirements The Labor Commissioner has posted the following model notices that an employer must display that explains the nature of CSPSL. Food Sector Workers - https://www.dir.ca.gov/dlse/COVID-19-Food-Sector-Workers-poster.pdf Non-Food Sector Workers - https://www.dir.ca.gov/dlse/COVID-19-Non-Food-Sector-Employees-poster.pdf The Bill requires that the notice must be posted at workplaces before September 19, 2020.  Therefore, applicable companies that have not done so yet must do so as soon as practicable. Alternatively, the bill provides that if an employer’s employees do not frequent the workplace, then it may disseminate the notice through electronic means, such as by email. Employers must also provide notice in a wage statement (or a separate writing provided on pay day) of an employee’s available CSPSL each pay period. That requirement takes effect in the first pay period following the date of enactment. Expiration of the Law The requirement to provide COVID-19 supplemental paid sick leave expires on December 31, 2020, or upon the expiration of any federal extension of the Emergency Paid Sick Leave Act (whichever is later). Food-Sector Employers In April of 2020, Governor Newsom signed Executive Order (EO) N-51-20, which provided CSPSL for food sector workers. In large part, AB 1867 codifies the executive order’s language. However, AB 1867 differentiates from the prior Executive Order in a couple of ways. First, AB 1867 provides the aforementioned expiration period whereas the executive order was to be applicable only during the pendency of the statewide stay-at-home order. Additionally, AB 1867 clarified that that “food facilities” are defined as all entities codified under California Health and Safety Code section 113789. Additionally, AB 1867 codifies food-sector employer’s obligation to permit employees to wash their hands every 30 minutes. Polsinelli attorneys are closely examining recent developments and remain prepared to assist you in developing business policies to comply with these measures.

On September 11, 2020, the United States Department of Labor (DOL) issued revisions to the Rule implementing the Families First Coronavirus Response Act (FFCRA) to clarify workers’ rights and employers’ responsibilities regarding FFCRA paid leave.  The revised Rule will take effect on September 16, 2020. The Ruling The revised Rule is the DOL’s response to a ruling entered on August 3, 2020, by the United States District Court for the Southern District of New York (District Court) in a lawsuit filed by the State of New York challenging certain provisions of the Rule.  As previously reported, the District Court granted partial summary judgment in favor of the State of New York and ruled that four parts of the Rule were invalid:  (1) the requirement that paid sick leave and expanded family and medical leave are available only if an employee has work from which to take leave (the “work-availability requirement”); (2) the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption; (3) the requirement that an employer consent in order for an employee to take intermittent leave under the FFCRA; and (4) the requirement that an employee submit documentation to their employer as a pre-condition to leave.  Following the District Court’s ruling, employers in New York faced uncertainty as they evaluated whether and how to apply the FFCRA. The Revised Rule In recognition of the “pressing need for clarity in light of the District Court’s decision,” the DOL issued the revised Rule “to reaffirm its regulations in part, revise its regulations in part, and further explain its positions.” Work-Availability Requirement The revised Rule first reaffirms the work-availability requirement, explaining that an employee may only take paid sick leave or expanded family and medical leave under the FFCRA to the extent that any qualifying reason is a but-for cause of his or her inability to work.  Thus, if an employer has no work for the employee to perform, the employee is not entitled to paid sick leave or expanded family and medical leave under the FFCRA. Employer Approval for Intermittent Leave Likewise, the revised Rule reaffirms that employer approval is needed to take intermittent FFCRA leave in all situations in which intermittent FFCRA leave is permitted.  On this point, the DOL explained that the employer-approval condition balances the employee’s need for leave with the employer’s interest in avoiding disruptions to operations. According to the DOL, the employer-approval condition allows both employers and employees flexibility in agreeing upon telework and scheduling arrangements that may reduce or even eliminate an employee’s need for FFCRA leave by reorganizing work time to accommodate the employee’s needs related to COVID-19. The Definition of “Health Care Provider” With regard to the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption, the revised Rule adopts an amended regulatory definition including: (1) the FMLA definition of “health care provider” (any employee who is a health care provider under 29 CFR 825.102 and 825.125), and (2) any other employee who is capable of providing health care services, meaning he or she is employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated and necessary to the provision of patient care and, if not provided, would adversely impact patient care. While the DOL’s expanded definition of “health care provider” is broader in scope than the classic FMLA definition of “health care provider,” the DOL made clear that it is not enough that an employee works for an entity that provides health care services.  Certainly the revised definition includes nurses, nurse assistants, medical technicians, and any other persons who directly provide patient services, and would also include individuals whose work impacts diagnostic, preventative, and treatment services, such as lab technicians.  Other employees covered by the revised definition include those who provide services that if not provided would adversely affect patient care.  The Supplementary Explanation that precedes the revised Rule explains that examples include, individuals who bathe, dress, hand feed, or take vital signs of patients, individuals who set up equipment for medical procedures, and individuals who transport patients and samples.  The DOL also provided a non-exhaustive list of employees who are excluded from the definition of “health care provider,” including IT employees, building maintenance staff, human resources personnel, cooks, food services workers, records managers, and billers.  According to the DOL, the services provided by these employees may be related to patient care but they are too attenuated to be integrated and necessary components of patient care.  As such, healthcare employers should immediately evaluate the revised Rule and its impact on their leave decisions. Timing of FFCRA Documentation Finally, the revised Rule clarifies that an employee is not required to submit documentation concerning the need for leave prior to taking paid sick leave or expanded family and medical leave, but rather should submit documentation as soon as practicable.  The DOL notes that in most cases, the requirement to submit documentation will be when the employee provides notice of the employee’s need for leave.  However, when the need for expanded family and medical leave is foreseeable, such as when an employee receives advance notice of a school closure, the employee is likewise required to provide notice as soon as practicable, which would occur before taking leave. Updated FAQs In addition to issuing the revised Final Rule on September 11, 2020, the DOL updated its FAQs to reflect its new guidance concerning the application of the FFCRA. Next Steps for Employers It is yet to be determined whether the revised Rule will satisfy the concerns addressed in the District Court’s ruling, or whether the DOL will face additional challenges by the State of New York or other jurisdictions.  Regardless, employers should apply the FFCRA consistent with the revised Rule and should consult counsel with any questions.  Importantly, health care employers who may have exempted some or all of their employees from the FFCRA based on the DOL’s prior definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption should consult with counsel to determine the new scope of exempted employees and the proper path forward for their organization.

On September 11, 2020, the Office of Federal Contractor Compliance Programs (OFCCP) released its Corporate Scheduling Announcement List (CSAL) online for public access.  The CSAL identifies contractors who will be receiving an audit scheduling letter. This CSAL includes 200 construction contractors and 2,200 supply and service contractors.  The supply and service list includes multiples different types of reviews.  A full copy of the lists can be found here. Historically, contractors receiving a CSAL received a scheduling letter formally initiating the audit after about 45 days.  The advance notice provided by the CSAL can be a valuable opportunity for contractors to prepare for an upcoming audit, collect the data and documents the contractor will be required to submit to OFCCP within a relatively short period after receipt of the scheduling letter, and identify any potential compliance vulnerabilities that may need to be addressed during the audit process.  As we raised in an earlier blog post here, OFCCP plans to review and evaluate any reductions in force during the time period under audit so contractors should in particular be prepared to defend selection decisions in any layoffs. Contractors named in the CSAL should consider consulting with experienced counsel to assist in preparing for the forthcoming audit scheduling letter.

The Office of Federal Contract Compliance Programs (“OFCCP”) recently issued new FAQ guidance on how federal government contractors should treat non-binary employees (i.e., those who do not exclusively identify as either male or female) in their affirmative action programs (“AAP”).  OFCCP instructs that contractors should include non-binary employees in AAP documents, but should exclude their data when conducting the gender-based analyses required by OFCCP’s AAP rules.  This means that non-binary employees should not be considered when determining gender-based placement goals and analyzing potential gender-based disparities in personnel activity and compensation systems. The new guidance also reminds contractors that they may not ask applicants or employees for documentation to prove their stated gender identity.  As a refresher, some other gender identity-related guidance from prior FAQs include that: OFCCP does not require contractors to collect data about the non-binary gender identification of applicants or employees, but contractors may voluntarily choose to do so. Contractors’ AAP obligations do not require outreach activities towards LGBT applicants or employees, but contractors may voluntarily choose to do so. If an employee self-identifies their gender, including as non-binary, the contractor may not override that identification based on its visual observation or other records. Under EEOC guidance, data regarding non-binary employees may be separately reported in EEO-1 form submissions. The new OFCCP FAQ provides some certainty for contractors and helps alleviate the conflict between OFCCP’s prior gender-binary framework and society’s rapidly-advancing understandings – often reflected in state, and now federal Title VII, law – of gender identity.  However, many thorny questions about the treatment of non-binary employees for AAP or other OFCCP compliance purposes remain unaddressed.  Because OFCCP accepts gender identity-based complaints from employees, and those complaints can now potentially be raised in a federal lawsuit under Title VII, contractors should take care in addressing these evolving issues.

The Office of Federal Contract Compliance Programs (“OFCCP”) recently issued new FAQ guidance on how federal government contractors should treat non-binary employees (i.e., those who do not exclusively identify as either male or female) in their affirmative action programs (“AAP”).  OFCCP instructs that contractors should include non-binary employees in AAP documents, but should exclude their data when conducting the gender-based analyses required by OFCCP’s AAP rules.  This means that non-binary employees should not be considered when determining gender-based placement goals and analyzing potential gender-based disparities in personnel activity and compensation systems. The new guidance also reminds contractors that they may not ask applicants or employees for documentation to prove their stated gender identity.  As a refresher, some other gender identity-related guidance from prior FAQs include that: OFCCP does not require contractors to collect data about the non-binary gender identification of applicants or employees, but contractors may voluntarily choose to do so. Contractors’ AAP obligations do not require outreach activities towards LGBT applicants or employees, but contractors may voluntarily choose to do so. If an employee self-identifies their gender, including as non-binary, the contractor may not override that identification based on its visual observation or other records. Under EEOC guidance, data regarding non-binary employees may be separately reported in EEO-1 form submissions. The new OFCCP FAQ provides some certainty for contractors and helps alleviate the conflict between OFCCP’s prior gender-binary framework and society’s rapidly-advancing understandings – often reflected in state, and now federal Title VII, law – of gender identity.  However, many thorny questions about the treatment of non-binary employees for AAP or other OFCCP compliance purposes remain unaddressed.  Because OFCCP accepts gender identity-based complaints from employees, and those complaints can now potentially be raised in a federal lawsuit under Title VII, contractors should take care in addressing these evolving issues. Federal government contractors can find additional updates on OFCCP and other contractor-specific compliance developments at Polsinelli’s Government Contractor Update blog.

On August 31, 2020, the Department of Labor’s Wage and Hour Division published its annual update to the minimum wage for federal government contractors.  As of January 1, 2021, employees performing services on or in connection with certain types of government contracts will be entitled to a minimum wage of $10.95 per hour.  The minimum cash wage for employees who are eligible for the tip credit will increase to $7.65 per hour.  The current minimum wages for 2020 are $10.80 and $7.55 per hour, respectively. The increased minimum wage stems from Executive Order 13658, which in 2014 established a special minimum wage for certain federal contractors.  Each year, the Wage and Hour Division is required to update the contractor minimum wage levels based on the CPI-W consumer price index for urban wage earners and clerical workers.  Employees are entitled to the heightened minimum wage if they work on or in connection with a construction contract covered under the Davis-Bacon Act, a service contract covered under the Service Contract Act, a concessions contract, or a contract to provide services to federal employees or the general public on federal lands or property. Contractors should ensure that any employees covered by Executive Order 13658 are paid the required amounts.  Polsinelli is available to assist contractors in determining whether specific contracts or employees are subject to the Executive Order.

Missouri Governor Mike Parsons recently signed Senate Bill 591, which impacts Missouri employers by significantly restricting the availability of punitive damages.  Beginning August 28, 2020, plaintiffs in Missouri will face a higher pleading requirement and standard of proof for claims of punitive damages. Key Changes To recover punitive damages, plaintiffs must now prove “by clear and convincing evidence that the defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.”  This change represents a departure from the previous burden which required only a showing of “complete indifference to or conscious disregard for the safety of others.” In addition to raising the punitive damages standard, plaintiffs will now face a more onerous pleading standard related to punitive claims.  Claims for punitive damages are no longer permitted in initial pleadings.  To assert a claim for punitive damages, a party must seek leave of the court no later than 120 days before the final pre-trial conference or trial date.  Only if the court then determines that the trier of fact could reasonably conclude standards for awarding punitive damages are met, can a party file a pleading seeking punitive damages.  Likewise, discovery of an employer’s assets is only allowed if the court grants plaintiff leave to seek punitive damages. S.B. 591 also contains specific provisions that limit employer exposure where a plaintiff seeks punitive damages against an employer because of an employee or agent’s actions.  Punitive damages are now only recoverable for an employee’s conduct if (1) the principal or a managerial agent of the principal authorized the doing and the manner of the act; (2) the agent was unfit and the principal or a managerial agent of the principal was reckless in employing or retaining him or her; (3) the agent was employed in a managerial capacity or was acting in the scope of employment; or (4) the principal or a managerial agent of the principal ratified or approved the act. Employer Takeaways Missouri’s new limitations on punitive damages will greatly impact if, when, and how claims for punitive damages in employment cases filed under Missouri law are pursued.  Plaintiffs now face a standard that makes them work to not only prove, but even to seek punitive damages.  And these changes come shortly after the new damage caps now in place under the Missouri Human Rights Act.  If you have questions about S.B. 591’s new limitations on punitive damages in Missouri, contact your Polsinelli attorney.

Today marks 57 years since the August 28, 1963 March on Washington for Jobs and Freedom. The March has become a touchstone in American history and helped bring about the passage of the landmark Civil Rights Act of 1964, prohibiting discrimination in the American workplace against millions of Americans. With this year's United States Supreme Court ruling in the case of Bostock v. Clayton County, the Civil Rights of 1964 continues to help move the American workplace from exclusion to inclusion. One month after the Bostock ruling, the last surviving speaker at the March, John Lewis, passed away. He left behind a final essay that offers a message of hope in a challenging time for how Americans can continue the work he dedicated his life to and which is embodied in the 1963 March. Our latest video, “August 28, 1963: Continuing the March from Exclusion to Inclusion,” was created for employers and employees to share to help support their inclusion efforts and mark the anniversary of the 1963 March.

The Department of Labor (“DOL”) settled a claim of gender pay discrimination against Boehringer Ingelheim Animal Health USA Inc., a pharmaceutical company, on August 18, 2020. The Office of Federal Contract Compliance Programs (“OFCCP”) investigated allegations that Boehringer paid female scientists and technicians less than males in the same positions at a facility in St. Joseph, Missouri where the Company manufactures biological animal vaccines. To resolve the claim, the Company agreed to pay 75 current and former scientists and technicians $379,089 in back pay and interest. The OFCCP noted that Boehringer “worked cooperatively” with the agency during its compliance review to resolve the claim and prevent future discrimination. In addition to the monetary penalty, the Company agreed to revise its policies and procedures to ensure they are not discriminatory. Specifically, the Company agreed to ensure that its pay schedules did not discriminate against women and to train managers and supervisors who are involved in determining compensation.  Carmen Navarro, the OFCCP Midwest Regional Director, stated that the DOL “is committed to combating pay discrimination and ensuring fair compensation of all employees.” Federal contractors must constantly evaluate their pay practices to ensure that they are not discriminating against women. In addition, they should maintain accurate records and document voluntary efforts to correct pay disparities. When faced with an OFCCP compliance evaluation, contractors must consult with legal counsel to ensure that their rights are fully protected. UPDATE - After our original posting, Boehringer Ingelheim requested that we include with our post the following statement regarding the settlement: “Boehringer Ingelheim provides a workplace free of discrimination and harassment to all employees and equal employment opportunity is a core principle at the Company. We are committed to ensuring that our employees are fairly compensated, based on business-related factors and regular market survey analyses. The current settlement relates to an Office of Federal Contract Compliance Programs (OFCCP) audit of 2014 data of the then Boehringer Ingelheim Vetmedica employees in St. Joseph, MO. Boehringer Ingelheim does not agree with the OFCCP’s allegations that, while unintentional, there was a gender-based wage discrepancy for a limited number of employees. Given the age of this matter, the Company decided to resolve in a collaborative manner with the OFCCP. The settlement discussions have now concluded, and both parties have come to an amicable resolution. The OFCCP has not made any additional allegations against Boehringer Ingelheim since 2014.”

It seems everything in the world right now somehow revolves around COVID-19. Stay-at-home orders; the debate over students returning to the classroom; “essential” versus “non-essential” workers; college and professional sports; and the list goes on. In the legal world, one coming boom caused by the pandemic should not be overlooked: trade secret litigation. Consider how much of the workforce is working remotely. Recent statistics show that in the past few months alone, even after many businesses have begun reopening, 70% of the workforce reported working remotely at least one day a week, and 59% reported working remotely more than half of the week. Some businesses have planned for their workforce to work remotely through the end of year and beyond, even permanently. What does this mean in terms of trade secret protection for employers? Just think of all information that has been shared electronically as a result of the new “work from home” normal. How many shared drives have been accessed remotely? How many documents have been sent to and downloaded in home offices? How many employees have accessed their employer’s data using a shared home or personal device? And in some instances, the uncertainty caused during the initial days of the pandemic caused companies to roll out programs and grant access to their information under rushed conditions, with concerns for privacy taking a backseat to the urgency of ensuring continuity of operations using a remote workforce. As if that is not enough reason for concern regarding the protection of trade secrets, consider also how many remote workers had access to trade secrets but have since been laid off or furloughed? What precautions, if any, were taken to ensure trade secrets and confidential information were guarded from theft by these former and furloughed employees? If a laid off employee had access to their employer’s competitive information, what will prevent them from opening their own business and competing directly with their former employer, using its methods and client information? To the extent they have not already done so, employers should immediately: Ensure access to shared files is on a need-to-access basis only; Limit access to client information to only those clients whom a particular employee services; Limit access to research and development information to only those individuals in research and development who are working on the particular project; Republish policies forbidding use of personal email accounts for business purposes; Implement safeguards for the electronic mailing and sharing of confidential documents; Have employees acknowledge/reaffirm their understanding that company competitive information is owned by the company and only certain people are allowed access; Ensure computer systems are only accessed through private, reliable and secure WiFi networks. A trade secret litigation boom is coming – are you ready?

On April 1, 2020, the United States Department of Labor (DOL) issued a Final Rule implementing the Families First Coronavirus Response Act (FFCRA).  Shortly thereafter, the State of New York filed suit against the DOL, arguing that several features of the Final Rule exceeded the DOL’s authority under the FFCRA. Yesterday, the United States District Court for the Southern District of New York granted partial summary judgment in favor of the State of New York and “vacated” four aspects of the Final Rule. Specifically: (1) the “work-availability requirement”; (2) the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption; (3) the requirement that an employer consent in order for an employee to take intermittent leave under the FFCRA; and (4) the requirement that an employee submit documentation to their employer as a pre-condition to leave. The Court’s ruling could have a significant impact on how FFCRA leave is administered in New York, and potentially across the Country if other states follow in New York’s footsteps. First, without the “work-availability requirement,” an employee is entitled to paid FFCRA leave even if an employer is temporarily closed or they are placed on furlough because the employer does not have work.  The Court analogized a furloughed employee to a teacher on paid parental leave who would still be considered to be on “leave” even if school is called off for a snow day. Although the Court invalidated the requirement, on this issue the Court acknowledged that the statutory language on this point was ambiguous, and that the DOL has the authority to issue guidance on the matter.  Further, while the Court held that the DOL’s “barebones explanation for the work-availability requirement is patently deficient,” it did not find that the conclusion was inconsistent with the statute.  As a result, even leaving aside the possibility of a different outcome on appeal, the DOL may be able to address the Court’s concern through a more thoroughly reasoned explanation of its interpretation. Second, the Court’s Order dramatically narrows the scope of the “health care provider or emergency responder” exemption, which allows an employer of an employee who is a health care provider or emergency responder to exclude the employee from taking leave under the FFCRA.  The DOL’s Final Rule defined a “health care provider” much more broadly than the statute as: anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity.  This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. The DOL’s broad definition provided many health care related employers the option to apply the exemption to virtually all of their employees. By vacating the Final Rule’s definition of “health care provider,” the only positions clearly included within the definition are those identified in the Family and Medical Leave Act’s (FMLA) definition of “health care provider,” which is limited to “a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate)” or “any other person determined by the Secretary to be capable of providing health care services.” (A listing of those other persons is available here).  In rejecting the DOL’s definition, the Court acknowledged that the DOL, though the Secretary of Labor, has authority to expand the definition of the term beyond what is set forth in the statute.  However, it required that there be “at least a minimally role-specific determination” with respect to the application of the exemption.  As a result, even absent an effective appeal, the DOL could take steps to refine this definition, in which case it will be more likely to receive deference from a reviewing court. The Final Rule permits employees to take FFCRA leave intermittently only if the employer and employee agree, and even then, only for a subset of qualifying reasons where there is a minimal risk that the employee will spread COVID-19 to other employees. On this point, the Court agreed with the limitation on the reasons for which employees may take intermittent leave but vacated the requirement that an employer must consent to intermittent leave. Accordingly, the ruling would not require employers to grant intermittent leave when there is a risk of spreading COVID-19 to other employees. However, this decision indicates that employers who do not currently permit intermittent leave under circumstances where there is not a risk of spreading COVID-19 may be at risk if they do not do so going forward. Finally, the Court found that the requirement that an employee submit documentation concerning the need for leave as a condition precedent to taking FFCRA leave was inconsistent with the notice provisions contained in the FFCRA. At this point, it is unclear whether the DOL will move to stay the order pending appeal to the Second Circuit.  What is clear, unfortunately, is that employers are once again faced with uncertainty as they evaluate whether and how to apply the FFCRA.  The Court’s opinion does not apply beyond New York, and it does not mean that the problems with the DOL’s Final Rule cannot be remedied, but employers should take notice and consult with counsel to determine the proper path forward for their organization.

On August 3, 2020, President Trump issued an Executive Order titled “Aligning Federal Contracting and Hiring Practices with the Interests of American Workers,” signaling that the administration may seek to limit the ability of federal government contractors and subcontractors to use H-1B visa holders and other temporary foreign laborers on federal government contracts. The Executive Order requires the head of each federal government agency and executive department to study the contractors’ use of temporary foreign labor on the contract as well as the “offshoring” of services previously performed in the U.S. to foreign countries.  Through this study, the agency and department heads must review the performance of contracts and subcontracts awarded in fiscal years 2018 and 2019 to assess: (i)   whether contractors (including subcontractors)  used temporary foreign labor for contracts performed in the United States, and, if so, the nature of the work performed by temporary foreign labor on such contracts; whether opportunities for United States workers were affected by such hiring; and any potential effects on the national security caused by such hiring; and (ii)  whether contractors (including subcontractors) performed in foreign countries services previously performed in the United States, and, if so, whether opportunities for United States workers were affected by such offshoring; whether affected United States workers were eligible for assistance under the Trade Adjustment Assistance program authorized by the Trade Act of 1974; and any potential effects on the national security caused by such offshoring. As part of this study, agency and department heads must assess the impact of contractors’ foreign labor hiring and offshoring practices on (1) the economy; (2) the efficiency of federal procurement; and (3) national security.  The agencies must report back to the Office of Management and Budget within 120 days if they have recommendations for corrective action. Separately, the Executive Order launches the Trump administration’s latest attack on the H-1B visa program for specialized foreign professionals.  It directs the Department of Labor and Department of Homeland Security, within 45 days of the Executive Order, to take action to protect U.S. workers from adverse effects caused H-1B visa holders: Within 45 days of the date of this order, the Secretaries of Labor and Homeland Security shall take action, as appropriate and consistent with applicable law, to protect United States workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites (including third-party job sites), including measures to ensure that all employers of H-1B visa holders, including secondary employers, adhere to the requirements of section 212(n)(1) of the Immigration and Nationality Act (8 U.S.C. 1182(n)(1)). Although both of the initiatives in the Executive Order are preliminary in nature, they suggest that the administration intends to prohibit or substantially limit the use of non-American labor on federal contracts, whether through prohibitions on foreign labor sources or by favoring American labor sources in the procurement process.  Contractors and subcontractors should closely follow any developments as the federal agencies with which they contract complete their studies.  Contractors should also make certain that their subcontractors are prepared to comply with any resulting prohibitions on the use of foreign labor, whether through offshored services or H-1B and other temporary labor providers.

The Families First Coronavirus Response Act (FFCRA) requires covered employers – those with 500 or fewer employees – to provide eligible employees with up to two weeks of paid sick leave and up to twelve weeks (ten of which are paid) of expanded family and medical leave for specific coronavirus related issues. Included is leave for employees if they are unable to work or telework due to a need to care for their child whose school or place of care is closed due to COVID-19 related reasons.[1] However, what is considered “closed” for purposes of the law? What if school will resume but be completely or partially virtual? The Department of Labor has provided an answer. If a school or place of care has moved online – where children are expected to complete assignments at home – then it is indeed considered “closed” for purposes of the FFCRA, and employers are required to provide leave to eligible employees. Employees must provide an explanation for the reason for leave; for purposes of a school or daycare closing this includes the name of the child, the name of the school, and a statement that no other suitable person is available to care for the child.[2] Under rules governing certain other labor laws, school is considered open and in session even if it is being taught virtually. For purposes of the FFCRA, however, an employee will qualify for leave because the physical location where the child receives instruction is closed, even where some or all instruction is being provided online. Importantly, the IRS will consider the documentation sufficient to substantiate the employer’s eligibility for the tax credits if the documents indicate that the school is closed only physically but is still in session. The IRS has provided the following instruction with respect to the documentation needed for this type of leave request: In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care. Finally, employers should take note that even where an employee has been working remotely despite having his or her child at home over the summer does not mean that the employee cannot now take leave as schools resume virtual learning. As the DOL explains, there may be many different legitimate reasons an employee did not take leave previously, but now will seek to do so. “While you may ask the employee to note any changed circumstances in his or her statement as part of explaining why the employee is unable to work, you should exercise caution in doing, lest it increase the likelihood that any decision denying leave based on that information is a prohibited act.” [1] 29 C.F.R. § 826.20(a)(v)(b). [2] 29 C.F.R. § 826.100(e).

As clinical trials continue across the world for a COVID-19 vaccine, many employers are asking whether they will be able to require employees to take the vaccine when it becomes available in the United States. Like with so many questions surrounding COVID-19, the answer is not entirely clear.  In general, employers can require vaccination as a term and condition of employment, but such practice is not without limitations or always recommended. The U.S. Occupational Safety and Health Administration (“OSHA”) has taken the position that employers can require employees to take influenza vaccines, for example, but emphasizes that employees “need to be properly informed of the benefits of vaccinations.”  OSHA also explains that “an employee who refuses vaccination because of a reasonable belief that he or she has a medical condition that creates a real danger of serious illness or death (such as a serious reaction to the vaccine) may be protected under Section 11(c) of the Occupational Safety and Health Act of 1970 pertaining to whistleblower rights.” In March 2020, the Equal Employment Opportunity Commission (“EEOC”) issued COVID-19 guidance specifically addressing the issue of whether employers covered by the Americans With Disabilities Act (“ADA”) and Title VII of the Civil Rights Act of 1964 (“Title VII”) can compel all employees to take the influenza vaccine (noting that there is not yet a COVID-19 vaccine). In responding to this question, the EEOC explained that an employee could be entitled to an exemption from a mandatory vaccination under the ADA based on a disability that prevents the employee from taking the vaccine, which would be a reasonable accommodation that the employer would be required to grant unless it would result in undue hardship to the employer.  Under the ADA, “undue hardship” is defined as “significant difficulty or expense” incurred by the employer in providing an accommodation.   Additionally, Title VII provides that once an employer receives notice that an employee’s sincerely held religious belief, practice, or observance prevents the employee from taking the vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship to the employer as defined by Title VII, a lower standard than under the ADA.  Under Title VII, employers do not need to grant religious accommodation requests that result in more than a de minimis cost to the operation of the employer’s business.  However, analogous state laws may impose stricter standards. In light of these exemptions and the risk of discrimination, the EEOC has advised that it is best practice to simply encourage employees to take the influenza vaccine rather than to mandate it.   Although we can presume that the EEOC will issue similar guidance when a COVID-19 vaccine is approved, the threat imposed by COVID-19 to the health and safety of others may make employers more inclined to require vaccination. Moreover, this threat and the necessary safety measures required of employers with unvaccinated employees may render exemptions to the COVID-19 vaccine more burdensome.  However, employers must also consider that employees may respond negatively to a vaccination requirement, and adverse reactions to the vaccine could lead to workers’ compensation claims. Accordingly, employers contemplating any policy mandating a COVID-19 vaccine should be prepared to carefully consider the threat posed to the health and safety of their employees, the risk of future claims, and employee morale.  Moreover, employers must be prepared to carefully consider the reasons for any employee requests for exemptions.

On July 8, 2020, the United States Supreme Court expanded the “ministerial exception” – a legal doctrine that exempts religious employers from certain discrimination laws in Our Lady of Guadalupe School v. Morrissey-Berru.  The decision broadened the reach of the exception, which was previously validated by the Court in 2002 in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC.  Given the broad reach of the recent decision, various religious institutions will now have a strong defense against discrimination claims brought by employees who perform faith-based functions. By way of background, in 2012, the U.S. Supreme Court held in Hosanna-Tabor that the First Amendment barred a court from entertaining an employment discrimination claim brought by a teacher against her religious school employer.  The Court held that the school’s First Amendment right protected religious institutions from state interference on matters of church government as well as those of faith and doctrine. Adopting the “ministerial exception,” the Supreme Court articulated factors for when the ministerial exception should apply. These factors included: whether the employer held the employee out as a minister with a formal religious title; whether the employee’s title reflected ministerial substance and training; whether the employee held herself out as a minister; and whether the employee’s job duties included “important religious functions.” In Morrissey-Berru, two elementary school teachers at Roman Catholic schools in the Archdiocese of Los Angeles filed claims of discrimination.  Agnes Morrissey-Berru sued her employer under the Age Discrimination in Employment Act of 1967 and Kristen Biel sued her employer under the Americans with Disabilities Act.  Both religious employers asserted the ministerial exception and prevailed on summary judgment at the district court level.  However, the Ninth Circuit reversed both decisions, reasoning that, the employers did not satisfy the Hosanna-Tabor factors.  The Ninth Circuit found that the religious entities could not invoke the ministerial exception against these teachers because the teachers did not maintain the title of “minister,” had limited religious training, and only sporadic experience in ministerial activities. On appeal, the Supreme Court held that the Ninth Circuit misapplied the Court’s Hosanna-Tabor ruling.  The Court explained that the previously promulgated four factors were not meant to impose a “rigid formula.”  The Court further held that in deciding whether the ministerial exception is to be applied, a court must “take all relevant circumstances into account and determine whether each particular position implicate(s) the fundamental purpose of the exception.” In finding that the two teachers fell within the ministerial exception, the Supreme Court looked at the teachers’ employment agreements and handbooks.  The respective records unambiguously showed that the teachers were expected to carry out the school’s mission of developing and promoting the Catholic faith. Further, the record showed that the religious employers imposed commitments regarding religious instruction, worship, and personal modeling of the faith and explained that their performance would be reviewed on those bases. Lastly, the Court looked at the fact that the teachers taught religion in the classroom and worshipped and prayed with the students.  Given these circumstances, the Court held that the employers were covered by the ministerial exception, and therefore, their discrimination claims were barred. The Morrissey-Berru decision provides religious organizations a valuable defense that may apply in employment claims alleging discrimination, harassment, or retaliation. Religious organizations should review and update their policies, employee handbooks, and employment offers in light of the ruling and work with counsel to understand the nuanced use of the defense. If you have any questions or need assistance related to the ministerial exception, contact your Polsinelli attorney.

As part of Polsinelli’s efforts to help employers and employees maintain a healthy workplace during the pandemic, we have released the third video in our “Work Together, Healthy Together” series: “Stay Healthy As America Reopens.” This video is aimed demonstrating the importance of social distancing and mask wearing by showing how COVID-19 spreads through respiratory droplets in the air. The video features new data, images and video from recent studies, along with remixed vintage film footage to help keep the content entertaining. As COVID-19 continues to surge in communities across the country, it is critical that employers and employees work together to safely navigate the return to work by paying attention to three simple things that can help people avoid potentially infected respiratory droplets: Time, Barriers and Distance (TBD). The video includes practical tips for navigating TBD in the workplace and in day-to-day life. We hope that you will find this video helpful and encourage employers to share it with their workforce.

On July 15, 2020, the Virginia Department of Labor and Industry’s Health and Safety Codes Board (“Board”) voted 9-2 to adopt emergency temporary standards designed to prevent the spread of COVID-19 in the workplace. As businesses slowly reopen around the U.S., Virginia is the first jurisdiction in the country to adopt a COVID-19 workplace health and safety standard. The standard applies to every employer within the Commonwealth that falls under the Virginia Occupational Health and Safety Program (“VOSH”). The standard classifies occupations based on “exposure risk level” and requires adherence to various practices based on the risk level of a given occupation. Based on the potential of contracting and spreading COVID-19, an occupation can have a “very high,” “high,” “medium,” and “lower” exposure risk level. In determining exposure risk level, the factors employers must consider include, but are not limited to: (1) the job task performed; (2) whether the workplace is indoors or outdoors; (3) the presence of the virus in the workplace; (4) the presence of persons known or suspected to have the virus; (5) the number of employees in relation 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 standard makes clear that the use of face coverings alone does not establish a “lower” exposure risk level. What does the standard require Virginia employers to do? Employers within every exposure risk levels must assess their workplaces for hazards and job tasks that could expose employees to COVID-19, inform employees of methods for self-monitoring, and encourage employees constantly to monitor their health. The standard also requires employers to develop policies for employees who experience COVID-19 symptoms to report their statuses when no alternative diagnosis has been made. Employers may not allow employees known or suspected to have COVID-19 to report to work until they are cleared to return to work, unless teleworking is an option. The standard also requires employers to ensure that their sick leave policies are flexible and compliant with public health standards and other applicable law, including the Families First Coronavirus Act (“FFCRA”). To track COVID-19 exposures, employers must develop a HIPAA-compliant procedure for receiving positive COVID-19 test results for employees, temporary employees, and the employees of subcontractors in the workplace within the previous 14 days from the date of the positive test. Employers must notify potentially exposed employees and the Virginia Department of Health within 24 hours of the potential exposure, ensuring that the names of the individuals who contracted the virus remain confidential. Employers that rent workspace must notify the building owner within 24 hours of discovering two or more positive results. If there are three or more positive results, the employer must notify the Virginia Department of Labor and Industry with 24 hours. Moreover, employers must implement policies and procedures for allowing employees known or suspected to have COVID-19 to return to work. These policies must require employees to first consult with appropriate healthcare professionals. Although the standard allows employers to use a “symptom-based” system to determine if employees are eligible to return to work, employers may require employees and contractors to also undergo a test under the “test-based” system before employees are permitted to return. For asymptomatic employees, the employer may use a “test-based” system or a “time-based” system.  Employers must pay for all testing required by its policies. To comply with the standard, employers must 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. In addition, employers must eliminate or restrict employees’ access to breakrooms and common areas. If access to the common areas is restricted, the employer must post guidelines outside of the entrances that encourages social distancing and provide instructions on sanitizing shared surfaces. If employees are required to share a vehicle for work, they must wear the appropriate personal protective equipment (“PPE”). Employees with medical conditions that would be exacerbated by wearing a surgical mask can be excluded. When do Virginia employers have to comply with the standard? Most of the standard takes effect 60 days after its effective date. The requirement that employers train employees on infectious disease preparedness and response plans, however, becomes effective within 30 days of the effective date. The emergency standard will automatically expire within six months. If the Governor lifts the State of Emergency in the Commonwealth, the Board passes a permanent rule, or the Board repeals this standard, the standard will no longer apply. Practical Tips for Compliance Virginia employers should consider preparing a comprehensive infectious disease preparedness and response plan that covers all of the required information to ensure compliance with the standard. The plan should include all required policies and expectations regarding what employees must do if they experience symptoms and receive a positive test, and provisions for returning to work. Please feel free to contact us for assistance in developing a comprehensive plan that complies with the standard or general advice on compliance with the standard.

Craig Leen, Director of the Office of Federal Contract Compliance Programs (OFCCP) at the U.S. Department of Labor spoke on Monday, July 6, 2020 to lead off the National Industry Liaison Group’s 2020 Virtual Conference.  Director Leen spoke extensively on OFCCP’s upcoming plans and areas of focus in compliance reviews.  Highlights of Director Leen’s presentation include: 1.       During compliance reviews contractors should be able to show efforts to work with Historically Black Colleges and Universities (HBCUs) and members of the Hispanic Association of Colleges and Universities (HACU). 2.       Contractors should explore and understand OFCCP’s Indian and Native American Employment Rights Program (INAERP), which allows contractors to give preference to Indians and Native Americans if the contractor is working on or near an Indian Reservation. 3.       Audit scheduling letters for Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) Focused Reviews are scheduled to be released in the next couple of weeks.  OFCCP released a list of contractors who can expect to receive an audit scheduling letter in November 2019. Practice tip:  Contractors on OFCCP’s audit scheduling list should contact counsel as soon as possible to pre-audit their VEVRAA compliance to evaluate, and fix, potential compliance deficiencies, and prepare to assemble the documentation and data that OFCCP will request. 4.       During OFCCP audits contractors should be prepared to defend impacts of any recent layoffs, furloughs and pay reductions. Practice tip:  To proactively defend decisions, contractors should consider performing a disparity analysis and making sure documentation is in order to defend selections that may have an adverse impact on protected groups. 5.       Accommodations will be a big focus for OFCCP this fiscal year.  OFCCP plans to initiate Accommodation Focused Reviews to evaluate both disability and religious accommodation efforts.  OFCCP also plans to publish guidance on accommodation best practices. Practice tip: Contractors should continue to document all requests for accommodations and the contractor’s response to each such request. 6.       OFCCP will prioritize evaluating discrimination based on sexual orientation and gender identity.  While both sexual orientation and gender identity have been protected under Executive Order 11246 for several years, following the Supreme Court’s decision in Bostock, OFCCP plans to engage with EEOC on enforcing these protections. 7.       OFCCP plans to begin Construction Contractor Compliance Reviews by the end of 2020 or the beginning of 2021. Practice tip:  Construction contractors should prepare accordingly now to identify potential compliance issues and fix them before facing an OFCCP review. 8.       OFCCP will continue to focus on disability discrimination and accommodation.  Director Leen recommends contractors focus not just on activity recruiting individuals with disabilities, but also promoting and supporting employee resource of affinity groups for individuals with disabilities. 9.       Director Leen believes OFCCP is on pace this year for its second highest total settlement recovery as the agency prioritizes Early Resolution Programs. 10.   Director Leen encouraged contractors to keep in mind all ten areas of protection under the laws enforced by OFCCP:  sex, race, color, religion, national origin, sexual orientation, gender identity, disability, veterans and compensation.

While elected-officials determine the feasibility of reopening America’s classrooms and workplaces, there is little certainty as to what life will look like in the fall for employers and employees alike. Will students be in classrooms? Will all or most workplaces be open? If the year begins with remote learning, how will working parents juggle personal and professional obligations? As the school year approaches, employers should be prepared to address work-from-home, employee leave, childcare, and related issues. Issues Facing Working Parents As COVID-19 cases currently surges in the West and South, it appears likely that some school districts and universities will implement remote learning, staggered schedules, or a hybrid of in-person and remote learning for the upcoming school year. Under any of these scenarios, working parents may need to work from home (sometimes called “telework” or “working remotely”) or arrange for child care. To further complicate matters, many child care programs have been closed for safety or business reasons. Work From Home To ensure fair, consistent, and equal treatment for all employees, employers should develop or revise their work from home policies to reflect the current environment (depending on the scenario, a separate “COVID-19” work from home policy may be necessary). Many local and state governments have passed executive orders requiring employers to allow work from home arrangements to promote social distancing. As such, employers should consider which job duties need to be conducted on-site and how to arrange for other duties to be conducted off-site. Additionally, the work from home policy should include information such as: wage and hour issues (scheduling, break periods, etc.), break periods, productivity standards, responsiveness, connectivity and data security issues, protection of confidential information, and other related issues. Most importantly, employers must draft and implement the policy in a way that does not discriminate against employees based on a legally protected characteristic. Leave Requirements Whether working from home or on-site, employees may be entitled to paid or unpaid leave to care for a child. As such, employers should be aware of the various leave laws that could be triggered. Under the Families First Coronavirus Response Act, certain employers are required to provide paid sick leave (at two-thirds the employee’s regular rate of pay) to an employee who cannot work because the employee has to care for a child due to school or child care provider closure. Additionally, several cities and states have passed paid leave laws which could be triggered depending on the particular circumstances of the employee’s need for leave. The Family Medical Leave Act (FMLA) entitles eligible employees of covered employers to take up to 12 weeks of unpaid, job-protected leave for specified family and medical reasons. If an employee’s child is sick, the employee may be entitled to FMLA leave. If the child is not sick, employers are not required to provide FMLA leave to employees caring for dependents who have been dismissed from school or child care, according to the Department of Labor’s guidance on COVID-19 issues. Employers should check their state’s FMLA laws for relevant provisions. Other Options Family-friendly employment practices improve recruitment, retention, diversity, and productivity. In addition to work from home arrangements and complying with leave laws, employers can implement other family-friendly practices to support the workforce and improve employee engagement, including: Implement staggered or split shifts to allow parents to care for children during normal working hours and complete their assignments through the remainder of the day Allow for “compressed weeks” (longer, four-day weeks) or “expanded weeks” (five-day weeks encompassing the weekend) Ensure each employee has a “back-up” to take over assignments in cases of emergency Provide equipment necessary to work from home or reimburse related expenses Provide child care onsite, contract with nearby childcare facilities for discounted childcare costs, or circulate information about child care in your community Allow employees to take voluntary furloughs as needed, or to work reduced hours for reduced pay. Productivity Concerns Employers should take steps to prevent, and if necessary address, employee abuse of remote work policies. In some industries, companies can track employee engagement – regardless of where the work is being performed – through simple metrics such as billable hours, sales figures, or quotas. Other companies may find it more difficult to determine whether their employees are actually “working” from home. Regardless, the easiest way to determine what your employees are doing is through communication, such as weekly group chats or individual check-ins. In addition to checking the status of various projects, business leaders can hold employees accountable before major issues arise and assess employee morale in these uncertain times. Moreover, there are a variety of technology solutions to evaluate productivity. Project management software provides visibility into when tasks are completed, who completes the task, and whether it is completed on time. There are also more “opaque” methods to analyze productivity such as checking an employee’s VPN log or use of employee software. Employers should ensure that they not make any promises they may not be able to keep the longer the virus and school or child care closures exist. Employers may, at some point, be required to evaluate the need for involuntary furloughs or layoffs. Employers also should ensure that their telework policies include the corrective action that will follow for policy violations, and issue corrective action in a consistent, fair, and nondiscriminatory fashion.

To increase its efficiency in ensuring the regulatory compliance of supply and services contractors, the OFCCP implemented Early Resolution Procedures (ERP) in 2018. The ERP allows contractors to proactively correct violations during compliance evaluations and quickly enter into agreements with the OFCCP without incurring the time and expense of a full compliance evaluation. The ERP requires compliance officers to resolve non-material violations that can be corrected immediately during a desk audit if there are (1) no additional indications of discrimination violations; (2) no evidence of a lack of good faith; and (3) no immaterial technical violations. For material technical violations, including recordkeeping violations and applicant tracking deficiencies, the agency resolves audits by offering an Early Resolution Conciliation Agreement with Corporate-Wide Corrective Action (ERCA). The ERCA requires contractors to review all of their establishments, correct any violations, and submit progress reports with the results of their efforts. Contractors agreeing to the terms of the ERCA will avoid a new compliance evaluation for five years. If a compliance officer discovers material violations involving discrimination during a desk audit, the OFCCP will prepare a refined analysis to confirm the results of the desk audit and offer an ERCA. Since the implementation of the ERP in 2018, the agency has signed 18 ERCAs, covering about 312,000 employees under monitoring and reporting at over 850 contractor establishments. The ERCAs have resulted in the payment of $31 million in back pay, and an additional $5 million in salary adjustment commitments. The agency projects that it will have an additional 30 ERCAs signed by September 2020, securing more than $50 million in back pay. Moreover, the ERP contributed to a reduction in the aged case rate from 22.8% in 2018 to 18.1% in 2019 and to 12% in March 2020, which met the agency’s efficiency goal. The success of the ERP has positive implications for contractors. Contractors have an opportunity to correct violations quickly during desk audits and, if they enter into an ERCA, may provide assurance against compliance evaluations for five years.  It also allows contractors to avoid the process of having to receive Predetermination Notices or Notices of Violation and proceed directly to conciliation, minimizing the potential impact of multiple violations. Contractors should consider taking advantage of these procedures to quickly resolve any compliance irregularities.

On June 24, 2020, a Department of Labor Administrative Law Judge (ALJ) denied J.P. Morgan Chase & Co.’s motion for summary judgment seeking to dismiss an OFCCP enforcement action.  The ALJ’s decision was preliminary in nature, but contains important guidance on the temporal scope of OFCCP’s compliance reviews and the agency’s ability to prosecute alleged pay discrimination that allegedly occurred years after the two-year compliance review period. The enforcement action arose from a 2012 compliance evaluation into J.P. Morgan’s Investment Banking, Technology, and Market Strategies functional affirmative action program (FAAP).  J.P. Morgan provided OFCCP with compensation data based on a 2012 snapshot of the FAAP’s employees, as well as a data file listing compensation changes during the two-year review period preceding the snapshot.  J.P. Morgan refused to provide post-2012 compensation data in response to OFCCP’s request.  J.P. Morgan contended that it disbanded the FAAP at issue in 2012 in a corporate reorganization, with the FAAP’s employees dispersed into 18 different business units and their corresponding FAAPs.  In 2017, without receiving additional post-2012 data, OFCCP issued a Notice of Violation and filed an Administrative Complaint asserting that J.P. Morgan discriminated against female employees in the FAAP from 2012 and that the discrimination “continues to the present.” J.P. Morgan challenged OFCCP’s post-2012 findings based on the agency’s failure to reasonably investigate the impact of the reorganization or use available mechanisms to obtain the post-2012 data J.P. Morgan had refused to provide.  J.P. Morgan also argued that OFCCP’s regulations limit a contractor’s liability in an OFCCP evaluation to the two-year period preceding the start of the evaluation.  Although the ALJ agreed with prior decisions holding that OFCCP may prosecute violations that begin in the review period and continue unremedied into the future, he expressed concern about the scope of OFCCP’s open-ended discrimination findings.  The ALJ noted that contractors have a due process right to fair notice of OFCCP’s claims against them, and an enforcement action with no established end-date to the violation period infringed due process.   He also explained that J.P. Morgan’s corporate reorganization could impact OFCCP’s ability to pursue alleged violations occurring after the reorganization.  Because OFCCP had not sought discovery about the reorganization and elimination of the FAAP, however, the ALJ declined to issue a firm decision. This decision continues an ongoing trend of ALJ rulings permitting OFCCP to seek and rely upon alleged evidence of discrimination outside of the review period.  Because OFCCP can take years to complete complex audits, a contractor’s potential post-review period liability can extend longer than its liability for the actual review period.  Although this evidence should only have possible relevance if OFCCP first (and independently) establishes a violation during the period under review, OFCCP frequently seeks to use post-review evidence to bolster its evidence for the review period.  Contractors should carefully consider events like reorganizations or changes to their compensation structures that cut off continuing violation allegations and limit the contractor’s potential liability.

In Bostock v. Clayton County, Georgia, the United States Supreme Court heldthat “an employer who fires an individual merely for being gay or transgender violates Title VII.”  With its decision, however, the Supreme Court left unanswered the question of how protections for religious beliefs and expression intersect with its expansion of Title VII’s protections. Notably, the employer in R.G. & G.R. Harris Funeral Homes, Inc. (one of the three cases consolidated by the Court in the Bostock decision) abandoned its defense based on the Religious Freedom Restoration Act of 1993 (RFRA) at the Supreme Court.  In doing so, the Sixth Circuit’s opinion regarding the RFRA claim remains the only circuit court of appeals decision to have addressed the application of the RFRA in this setting. The RFRA protects an individual’s sincerely held religious beliefs by prohibiting the federal government from substantially burdening an individual’s free exercise of religion, unless it establishes that doing so is the least restrictive means of furthering a compelling government interest.   In Harris Funeral Homes, the Sixth Circuit determined that the EEOC enforcing a transgender employee’s Title VII rights did not substantially burden sincere religious exercise because “tolerating [an employee’s] understanding of her sex and gender identity is not tantamount to supporting it.” In other words, complying with Title VII did not endorse the employee’s transgender status.  The Sixth Circuit also ruled that presumed customer biases could not constitute a substantial burden.  Finally, the Sixth Circuit held that enforcing Title VII was the least restrictive means of achieving the compelling goal of eradicating workplace discrimination. For now, the Sixth Circuit’s opinion will continue to apply in Kentucky, Michigan, Ohio, and Tennessee, and suggests that, at least under certain sets of facts, the RFRA may not shield employers from liability for claims of discrimination based on homosexuality or transgender status in suits brought by the federal government.  If and when a different circuit court of appeals answers the question differently, it is possible this issue could be addressed by the Supreme Court.  The question of whether the RFRA may be asserted as a defense by a private (i.e., non-governmental) party may also eventually arrive at the Supreme Court because there is currently a split of opinion by the circuit courts of appeals on that issue. Outside of the RFRA, the “religious organization exemption” provision of Title VII, 42 U.S.C. § 2000e–1(a), precludes liability for religious organizations and schools from denying employment to workers of other faiths.  This exception has been extended to allow a religious organization to terminate an employee who was no longer in good standing with the church.  With certain religions having sincere beliefs on sexuality, it is likely that courts will have to decide how this specific provision applies to employment decisions based on sexual orientation or transgender status, which is now protected under Title VII. The Supreme Court recognized in Bostock that certain employers may feel burdened by its decision and fear that compliance may require them “to violate their religious convictions.”  Recognizing the questions left open by its decision and the likelihood of such cases, the Supreme Court noted that “other cases may raise free exercise arguments that merit careful consideration.”  Until these cases come to fruition, however, employers should consult counsel and be cautious when relying on largely untested and narrow religious-based exceptions.  Employers should also be cognizant of the potential impact such defenses may have on public and workforce perceptions of the organization. If you have questions regarding the Supreme Court’s expansion of Title VII protections and its implications, contact your Polsinelli attorney.

The National Labor Relations Board has overruled a previous Board’s 2016 Decision and reset an employer’s ability to discipline union-represented employees before reaching a first contract with the union. In 2016, a Democratic-dominated Board created an obligation for employers, whose employees were newly represented by a union, to bargain with the union over disciplinary action even though no collective bargaining agreement had been negotiated. Total Security Management Illinois, 364 NLRB No. 106 (2016).  For 80 years prior to Total Security Management, the Board and the U.S. Supreme Court recognized an employer’s right to impose discretionary discipline on employees, consistent with the employer’s policy or practice, without first negotiating with the union.  In a 3-0 decision issued June 23, 2020, the Board overruled Total Security Management.  800 River Road Operating Company, d/b/a Care One at New Milford, 369 NLRB No. 109 (2020).  The Board acknowledged the U.S. Supreme Court has ruled that once a union has certified as the representative of a group of employees, an employer cannot make material changes to employees’ wages, hours, and working conditions without first giving the union notice of the contemplated change, and bargaining with the union over the change if the union demands to do so.  However, the Board held the pre-discipline bargaining obligations created by Total Security Management conflicted with prior Supreme Court and Board precedent, misconstrued the Supreme Court’s unilateral-change doctrine concerning what constitutes a material working conditions change and imposed a too-complicated and too-burdensome scheme irreconcilable with the general body of law governing statutory bargaining practices. The Board’s Decision applies retroactively to all pending cases. If you have questions regarding this Board decision or matters relating to labor relations and collective bargaining duties and negotiations, contact your Polsinelli attorney.

President Trump has issued a new Executive Order extending the current ban on immigrant visas for those outside the United States, as well as barring entry of new classes of nonimmigrant visas, namely H-1B, H-2B, L, and J visas (and their family members). The stated reason for the order is the unemployment of US workers in the United States due to the COVID-19 outbreak. The latest order extends an earlier Executive Order banning the issuance of new immigrant visas to those outside the United States seeking permanent entry to the United States (or a “green card”). The latest order’s provision regarding immigrant visas takes effect immediately, and extends the bar until December 31, 2020 (and allows for a continuation after such date as necessary). In addition, and importantly, the newest order suspends the entry of certain classes of nonimmigrants seeking to work in the United States as well.  The visa suspension applies to individuals outside the US as of June 24, 2020 and not in possession of a current US visa or travel document.  This includes foreign nationals seeking work visas in the H-1B, H-2B, L intracompany transfer, and certain J exchange visitor visa categories.  The spouses and children accompanying such nonimmigrants or following to join in the respective derivative visa categories, i.e., H-4, L-2, and J-2, are also banned (though children who “age out” due to the restriction can be exempted). This nonimmigrant work visa ban will be effective until December 31, 2020, and may be renewed. Under the terms of the Executive Order, the ban will not apply to certain workers including: Food supply chain workers Those “critical to the defense, law enforcement, diplomacy, or national security of the United States” Certain medical professionals who are involved with the provision of medical care to individuals who have contracted COVID-19 and are currently hospitalized COVID-19 Medical researchers at U.S. facilities Those “necessary to facilitate the immediate and continued economic recovery of the United States;” and Others whose entry would be deemed in the U.S. national interest (such determinations will be made in sole discretion of DOS, DHS, or their designees) Beyond the immediate ban on work visas, President Trump also directs the Department of Homeland Security and Department of Labor to promulgate new regulations with regard to the H-1B program, as well as EB-2 and EB-3 employment-based green cards “as soon as practicable,”  to ensure these programs do not disadvantage US workers. Although the new order does not apply to individuals presently in the US, employers may want to discourage employees on work visas from traveling internationally for the time being, particularly if an employee needs to renew a visa to return to the US. Polsinelli attorneys are available to answer your questions regarding the Executive Order and potential impacts on your business or employees.

On June 16, 2020, the Colorado Legislature passed the Healthy Families and Workplaces Act which becomes effective on January 1, 2021 for employers with 16 or more employees and on January 1, 2022 for employers with 15 or more employees and creates paid sick leave in Colorado.  Specifically, upon hire, employees begin accruing paid sick leave at the rate of one hour for every 30 hours worked, up to 48 hours and employers have the option of granting paid sick leave in one lump sum up front.  Unlike other jurisdictions that require a “waiting period” before employees may begin using paid sick leave, the Colorado Act entitles employees to use paid sick leave immediately upon accrual.  Accrued sick leave carries over from year-to-year up to a maximum of 48 hours, and employers can limit usage of the basic paid sick leave to 48 hours per year. Paid sick leave can be used for paid sick days for illness, injury, or condition of, or preventative care for, the employee or, as needed, the employee’s family member and for specific circumstances involving domestic violence, sexual assault, or stalking.  The request from the employee can be written or verbal. Additionally, there is a one-time allotment of two weeks of additional paid sick leave during a public health emergency.  Unused basic paid sick leave may be counted towards the two weeks.  Subject to certain time constraints, employees may take additional paid sick leave for various reasons similar to those under the Families First Corona Virus Response Act.  Upon termination, there is no payout of accrued but unused sick leave.  Like other statutes affecting employee rights, there is both a notice and posting requirement. Colorado employers should review and update their leave policies in light of the Healthy Families and Workplace Act.  For questions relating to the Act or paid sick leave compliance generally, please do not hesitate to reach out to your Polsinelli attorney.

In light of CDC Interim Guidelines stating antibody test results “should not be used to make decisions about returning persons to the workplace,” the EEOC released guidance on June 17, 2020 indicating that employers should not require antibody tests before permitting employees to return to the workplace. According to the EEOC, an antibody test constitutes a medical examination under the Americans with Disabilities Act (ADA), and employers can only require ADA medical examinations of employees if the examination is “job related and consistent with business necessity.”   Consistent with the CDC’s Interim Guidelines, the EEOC has determined an antibody test is not “job related and consistent with business necessity”, and therefore, any such testing required by an employer violates the ADA.  However, the EEOC was quick to note that a viral test, i.e. testing for an active case of COVID-19, is permissible, and the prohibition on antibody testing could be revised in the future if the CDC’s recommendations change. The EEOC’s COVID-19 guidance continues to evolve.  For example, the EEOC recently updated its guidance to address other topics and provided the following: Employees are not entitled to an accommodation under the ADA in order to avoid exposing a family member who is at higher risk of severe illness from COVID-19 due to an underlying medical condition. Employers should be diligent in responding to and addressing pandemic-related harassment, such as demeaning, derogatory, or hostile remarks directed to employees who are, or are perceived to be, of Chinese or other Asian national origin. Employers may send a general notice to all employees designated to return to the workplace noting that the employer is willing to consider requests for accommodation or flexibilities on an individualized basis. Requests for an alternate method of screening before entering the worksite due to a medical condition are reasonable accommodation requests, and should be handled as such. Employers cannot involuntarily exclude older workers from the workplace, even if for benevolent reasons such as protecting employees at a higher risk of COVID-19. Employers should evaluate sex discrimination considerations when providing flexibilities, such as telework or modified schedules to employees with school-aged children. A full text of the most current “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws” can be found here.  COVID-19 continues to create new and unique situations for employers, especially as businesses begin to reopen.  Polsinelli’s Labor and Employment team is available to help navigate these challenges and ensure compliance with the numerous laws that apply to employers managing a workforce during these unprecedented times.