DOL Announces Revisions to FFCRA That Will Seriously Impact Healthcare Providers

On September 11, 2020, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced revisions to regulations that implement the paid sick leave and expanded family and medical leave provisions of the Families First Coronavirus Response Act (FFCRA). Most significantly, the revised rule will require healthcare providers to provide FFCRA protected/paid leave to a broader range of employees than previously believed. The revisions also clarify other employers’ responsibilities regarding FFCRA paid leave. The revisions were issued in response to the U.S. District Court for the Southern District of New York’s August 3, 2020, decision invalidating portions of the FFCRA regulations and are slated to go into effect on September 16, 2020. You can read the revisions here: https://www.federalregister.gov/documents/2020/09/16/2020-20351/paid-leave-under-the-families-first-coronavirus-response-act In short, the revisions:

  1. Health Care Provider Definition Narrowed:
    • The FFCRA permits employers to exclude “health care providers” from the Act’s leave benefit provisions. The DOL initially defined the term broadly, excluding from FFCRA coverage “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.” as well as any individual employed by an entity that contracts with any of these institutions, as well as anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical supplies.
    • The New York Federal Court struck down this definition as too expansive. In response, the DOL has narrowed the exclusion to essentially track the definition provided in 29 CFR 825.102. Generally, this only includes those individuals capable of providing health care services, which include “diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care,” or otherwise meet the definition of the term found in the Family Medical Leave Act (FMLA). The FMLA definition includes “doctors of medicine or osteopathy” authorized to practice in their state or other medical professionals such as podiatrists, dentists, clinical psychologists, optometrists, many chiropractors, nurse practitioners, nurse midwives, clinical social workers, physician assistants, and other similar professionals.
    • Under the new rule, employers may also elect to exempt nurses, nurse assistants, medical technicians, and laboratory technicians who process test results as health care providers.
    • The revision also offers guidance on the type of employee who may not be exempted as a healthcare provider: information technology (IT) professionals, building maintenance staff, human resources personnel, cooks, food service workers, records managers, consultants, and billers. The revised rule states that while the services provided by these employees may be related to patient care – e.g., an IT professional may enable a hospital to maintain accurate patient records – they are too attenuated to be integrated and necessary components of patient care.
  2. Work Availability Reaffirmed. This revision reaffirms that paid sick leave and expanded family and medical leave may be taken only if the employee has work available from which to take leave. In other words, if there is no work available, the employee is not entitled to protected leave. This applies to all qualifying reasons for paid sick leave and expanded family and medical leave.
  3. Employer Permission Still Required for Intermittent Leave. The revision confirms that an employee must obtain employer permission in order to take paid sick leave or expanded family and medical leave intermittently under Section 825.50. If the employer refuses to approve the request, leave may not be taken intermittently.
  4. Documentation Timing Clarified. Initially, the DOL indicated that employees must provide the required documentation prior to taking leave. The revision clarifies this point, and establishes that employees must merely provide required documentation as soon as practicable.

Be Careful If You Allow Employees to Give Paid Leave to Each Other

Due to the pandemic some of your employees may have exhausted their paid leave and be in desperate need of more. Some of your other employees may have a surplus of accrued paid leave and want to assist their less-fortunate co-workers. While you can technically allow employees to “give” accrued paid leave to each other, the IRS says that you have to jump through some hoops if you don’t want the donor employees to take an unnecessary tax hit.  

IRS Notice 2006-59 addresses this issue. You can find the Notice here: https://www.irs.gov/pub/irs-drop/n-06-59.pdf. The IRS also recently also published a brief Q&A addressing such plans related to the COVID-19 pandemic. You can find the Q&A here: https://www.irs.gov/newsroom/leave-sharing-plans-frequently-asked-questions  

If the employer follows the IRS Notice, the employee who gives leave under such a plan will not have to include the donated leave in her income or wages. Conversely, the employee who receives the “given” paid leave will be taxed on the amount that she receives. Unfortunately, the employee giving the leave may not claim an expense, charitable contribution, or loss deduction for the amount of leave given. Please note that I said that this works “If the employer follows the IRS Notice.” If you fail to do so, your employees will face some unexpected taxes on the paid leave that they “gifted.”  

I would recommend that you refer to Notice 2006-59 if you are considering implementing such a leave-sharing plan. I have summarized some of the key criteria below:  

  • The plan must allow a leave donor to deposit accrued leave in an employer-sponsored leave bank for use by other employees who have been “adversely affected by a major disaster” as defined by the Notice.
  • The plan cannot allow a leave donor to deposit leave for transfer to a specific leave recipient. (This has been a major point of contention with the plans that I have assisted clients to implement. Most employees want to give leave to a particular co-worker, not to all eligible co-workers in general. Consider this before you spend your time and money drafting a plan.)
  • An employee cannot take more leave in a year than the maximum amount that she accrued in the year.
  • A leave recipient must use this leave for purposes related to the major disaster.
  • The plan must have a reasonable limit on the period of time that leave may be deposited and received from the bank.
  • A leave recipient cannot convert leave received into cash. (This is another common point of contention.)
  • The employer must make a reasonable determination, based on need, as to how much leave each approved leave recipient may receive under the leave-sharing plan. (Ouch! This will undoubtedly lead to cries of favoritism.)
  • Leave deposited on account of one major disaster may be used only for employees affected by that major disaster. (If you implement a plan for COVID-19, it could not also be used for our next hurricane.)
  • Unused leave must be returned to the donor.

 Don’t hesitate to call me directly if you have any questions or would like assistance in drafting and implementing your own COVID-19 Leave Sharing Plan. 

DOL Issues New Q&As

In July, the DOL issued a couple of new Questions and Answers regarding the FMLA. One of them addresses the issue of whether a remote or telemedicine visit with a health care provider can qualify as an “in-patient” visit. As a rule, in order for a condition that does not require in-patient care to qualify as a serious health condition one must receive in-person treatment by a health care provider.  

29 CFR Section 825.115(a)(3) provides: 

(3) The requirement in paragraphs (a)(1) and (2) of this section (which require ‘treatment by a health care provider’) for treatment by a health care provider means an in-person visit to a health care provider.  

Since the regulations clearly require an in-person visit, my initial thought was that the answer to this question would be “No.” Well, I was wrong.  Q & A number 12 states: 

12. Due to safety and health concerns related to COVID-19, many health care providers are treating patients for a variety of conditions, including those unrelated to COVID-19, via telemedicine. Telemedicine involves face-to-face examinations or treatment of patients by remote video conference via computers or mobile devices. Under these circumstances, will a telemedicine visit count as an in-person visit to establish a serious health condition under the FMLA?

Yes. Until December 31, 2020, the WHD will consider telemedicine visits to be in-person visits, and will consider electronic signatures to be signatures, for purposes of establishing a serious health condition under the FMLA. To be considered an in-person visit, the telemedicine visit must include an examination, evaluation, or treatment by a health care provider; be performed by video conference; and be permitted and accepted by state licensing authorities. This approach serves the public’s interest because health care facilities and clinicians around the nation are under advisories to prioritize urgent and emergency visits and procedures and to preserve staff personal protective equipment and patient-care supplies.  

So, until at least December 31, 2020, remote or telemedicine visits that meet the requirements above will qualify as in-person visits under the FMLA.  All HR professionals who manage the application of their company’s FMLA program (and lawyers who think they know a thing or two about the FMLA), should make note of this change since it is going to expand the number of situations in which an employee will be eligible for FMLA leave.

Don’t Inadvertently Create COBRA Liability

As the COVID-19 crises continues, I am receiving more and more calls to assist businesses in downsizing, either through layoffs or significant reduction in hours.

There are so many moving parts in that process that it can be easy to lose sight of your obligations under COBRA, and that can lead to expensive mistakes. 

Both the Department of Labor and Internal Revenue Service have the authority to impose civil penalties if employers fail to provide compliant COBRA notices. The DOL can impose civil penalties up to $110 per day per person and the IRS can impose an excise tax of $100 a day per beneficiary and $200 a day per family, until employees receive an adequate notice.  

In addition, employers can face literally millions of dollars in damages in class action litigation. Just last week, a Fortune 500 company settled a class action lawsuit relating to deficient COBRA election notices for US$1.6 million dollars. More than two dozen class action COBRA notice lawsuits have been filed year to date, and we expect many more to be filed as the courts open up for business.  

You will notice that I refer to compliant, adequate and deficient notice. That is because merely providing notice is not enough; employers must provide the specific notice required in the Act.  

The COBRA notice requirements are fairly clear. An employer subject to COBRA is required to notify its group health plan administrator within 30 days after an employee suffers a qualifying event. Within 14 days of that notification, the plan administrator must notify the individual of his COBRA rights. If the employer is also the plan administrator and issues COBRA notices directly, the employer has 44 days to issue the COBRA notice.

COBRA election notices must be written in a manner calculated “to be understood by the average plan participant” and include: 

  • The name of the plan and the name, address, and telephone number of the plan’s COBRA administrator; (Several class action suits have been filed recently arguing that providing the general HR telephone number does not satisfy this element.)
  • Identification of the qualifying event;
  • Identification of the qualified beneficiaries (by name or by status);
  • An explanation of the qualified beneficiaries’ right to elect continuation coverage;
  • The date coverage will terminate (or has terminated) if continuation coverage is not elected;
  • How to elect continuation coverage;
  • What will happen if continuation coverage isn’t elected or is waived;
  • What continuation coverage is available, for how long, and (if applicable), how it can be extended for disability or second qualifying events;
  • How continuation coverage might terminate early;
  • Premium payment requirements, including due dates and grace periods;
  • A statement of the importance of keeping the plan administrator informed of any new addresses of qualified beneficiaries; and
  • A statement that the election notice does not fully describe COBRA or the plan and that more information is available from the plan administrator and in the summary plan description.

 Keep in mind that the use of a third-party administrator to issue COBRA notices does not mitigate an employer’s risk of noncompliance. You will be liable for the TPA’s failure. Ideally, employers should draft their agreements with their TPA’s to provide for indemnification of the employer for the TPA’s failure to comply with the current COBRA requirements.

If you act as your own plan administrator, the DOL has provided a model COBRA notice and considers use of the model notice to be good faith compliance with the general notice content requirements of COBRA.

As always, stay safe and don’t hesitate to call if you have any questions.

Supreme Court Rules Title VII Prohibits Discrimination Based Upon Sexual Orientation and Transgender Status – Part II

On Monday I sent out an update that the U.S. Supreme Court had ruled that an employer who fires an employee for being gay or transgender violates Title VII. There are a few key aspects about this ruling that I want to point out.

  1. This is not new law. Unlike a new statute, this ruling is actually the Supreme Court telling us how Title VII should have been interpreted all along. And, many courts have been ruling that Title VII prohibits discrimination based upon sexual orientation and transgender status for years. However, the Fifth Circuit (covering Louisiana, Mississippi and Texas) has traditionally not construed Title VII in this manner. So, although this ruling is not technically “new law”, it will change the way the courts in the Fifth Circuit construe these types of cases in the future.
  1. This is effective immediately. When a statute is passed, it takes effect on a specific date in the future. Unlike a statute, the Supreme Court’s ruling is effective immediately.
  1. Change your policies now. The employee handbooks and manuals used by some employers contain a list of the types of characteristics that the employer will not discriminate against (age, race, sex, color, religion….). Although the Supreme Court ruling means that sexual orientation and transgender status are subsumed in “sex” employers should consider specifically listing sexual orientation and transgender status as protected characteristics in their handbooks and employee manuals.
  1. Train! We are all familiar with the fact that we must periodically train our employees on the application of our policies and procedures, and especially on our harassment/discrimination policies. Employers need to ensure that they revise their training to include sexual orientation and transgender status as protected classes when it comes to harassment and discrimination. We are going to see an increase in these types of cases, and our ability to prove that we provided adequate training will be a key element of our defense.
  2. As odd as it sounds, treating men and women the same can be discriminatory. The Supreme Court stated it this way: “An employer cannot escape liability by demonstrating that it treats males and females comparably as groups….An employer who intentionally fires an individual homosexual or transgender employee in part because of that individual’s sex violates the law even if the employer is willing to subject all male and female homosexual or transgender employees to the same rule.” The fact that you don’t hire either gay females or gay males is not a defense; it still amounts to discrimination based upon sex.

EEOC Updates COVID-19 Technical Assistance Q&A

In its updated Q&As, the EEOC addresses some significant and current issues such as reasonable accommodation, hiring and onboarding, pandemic-related harassment, return to work, age discrimination, pregnancy discrimination, and sex discrimination regarding employees with caretaking/family responsibilities. I would recommend that you read the entirety of the Q&As. You can find them here: https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term

Addressing an issue that has been presented to me several times in the past few weeks, the EEOC specifically addresses whether an accommodation is required for an employee who is not disabled, but whose family member may be at high risk for contracting COVID-19 due to underlying health or condition. Q&A D.13 states:

D. 13 Q: Is an employee 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?

D. 13 A.: No. Although the ADA prohibits discrimination based on association with an individual with a disability, that protection is limited to disparate treatment or harassment. The ADA does not require that an employer accommodate an employee without a disability based on the disability-related needs of a family member or other person with whom she is associated.

For example, an employee without a disability is not entitled under the ADA to telework as accommodation in order to protect a family member with a disability from potential COVID-19 exposure.

Of course, an employer is free to provide such flexibilities if it chooses to do so. An employer choosing to offer additional flexibilities beyond what the law requires should be careful not to engage in disparate treatment on a protected EEO basis.

So, it is the EEOC’s position that you do not have to accommodate an employee’s concerns about returning to work because they have a family member who is at an elevated risk of a negative outcome from a COVID-19 infection. Regardless of how you respond to such a request, you should consider your previous responses to similar requests and make sure that you do not inadvertently discriminate against an employee with a disabled family member.

OSHA Suggestions Regarding Coronavirus

You are all no doubt aware that OSHA does not yet have a specific standard addressing viral pandemics. Rather, the General Duty Clause will be applied to this situation.  The GDC requires that “Each employer shall furnish each of [its] employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to its employees.”

Despite the wording of the GDC, it does not make employers absolute guarantors that their employees will not be injured or exposed to hazards on the job. Rather, OSHA must prove four elements in order to establish a violation of the GDC. One of those elements is that the employer failed to implement feasible and useful methods to correct the hazard.

OSHA recently issued “Ten Steps All Workplaces Can Take to Reduce Risk of Exposure to Coronavirus.” You can find it here: https://www.osha.gov/Publications/OSHA3994.pdf . Most of these are common-sense steps that we are familiar with. OSHA may construe a failure to follow these ten steps as a failure to implement “feasible and useful methods to correct the hazard” should an employee contract the virus in your workplace.

If you are not already doing so, I would suggest that you strongly consider implementing as many of the ten steps recommended by OSHA as possible, and that you maintain records showing that you were aware of OSHA’s recommendations and followed them. Complying with the recommendations is not enough; you must be able to prove that you did so.

As always, don’t hesitate to reach out to me if you have any questions.

Stay safe.

The IRS Tells Us What Information We Must Obtain From Employees On FFRCA Leave In Order To Qualify For The Tax Credit AKA: This Is What Your Forms Should Look Like

THIS IS IMPORTANT! If you want to take advantage of the tax credit available for paid leave provided to your employees under the EPSLA and EFMLA of the FFCRA, you need to read this. The IRS has given us an outline of what some of the FFRCA-related forms should look like.

This outline is contained in the IRS’s new list of Frequently Asked Questions related to the documentation requirements of the tax credit provisions of the FFCRA. For those of you who want to wade through the original document, you can find it here https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs Continue reading “The IRS Tells Us What Information We Must Obtain From Employees On FFRCA Leave In Order To Qualify For The Tax Credit AKA: This Is What Your Forms Should Look Like”

We Have Far Less Time Left On The DOL’s Thirty Day Non-Enforcement Period Than We Originally Thought

You may recall that the United States Department of Labor indicated that so long as an employer attempted in good faith to comply with the FFCRA, it would allow a thirty-day “non-enforcement” grace period. We originally believed that that meant that we had thirty days from the effective date of the FFCRA of April 1, 2020; meaning that the non-enforcement period would run until April 30, 2020.

Unfortunately, the Wage and Hour Division of the DOL has issued a Field Assistance Bulletin indicating that the non-enforcement period actually begins on date of enactment of the FFCRA (March 18). This means that the thirty-day grace period will expire two weeks sooner than we originally thought, on April 17, 2020. You can read the Bulletin here: https://www.dol.gov/agencies/whd/field-assistance-bulletins/2020-1

The Bulletin does give us some useful guidance by defining what an employer must do in order to act in good faith for purposes of the thirty-day grace period.

  • The employer remedies any violations, including by making all affected employees whole as soon as practicable.
  • The violations of the Act were not “willful”; meaning that the employer “either knew or showed reckless disregard for the matter of whether its conduct was prohibited…”. This is where getting guidance from your employment counsel can provide you with a defense for honest mistakes.
  • The Department receives a written commitment from the employer to comply with the Act in the future.

Being able to prove that you did not show reckless disregard means that you take objective, concrete steps to comply with the law.

As always, call me if you need assistance and stay safe,

Jay