FEBRUARY 2021 LEGAL UPDATE

FUTURE COMPLIANCE DATES

MARCH 1, 2021: Medicare Part D to CMS

Employers offering prescription drug coverage must report to the Centers for Medicare and Medicaid Services (CMS) on or before March 1 (or within 60 days of the start of the plan year if on a non-calendar year plan). For additional details, see CMS disclosure form and article in the “Federal Compliance Updates” section below.

MARCH 1, 2021: MEWA Form M-1 Due to IRS

All participating employers must file a Multiple Employer Welfare Arrangement (MEWA) Form M-1 electronically with the IRS. In general, MEWAs are arrangements that offer health and other benefits to the employees of two or more different employers. See Form M-1. 

MARCH 1, 2021: Paper Forms 1094-B & 1095-B or 1094-C & 1095-C Due to IRS

Applicable Large Employers and employers who offer self-funded/level-funded plans must submit Forms 1095 and 1094 to the IRS by March 1, 2021 if filing by paper.

MARCH 2, 2021: OSHA Form 300A Accident Summary Filing Deadline

Employers with at least 250 employees (including part-time, seasonal, or temporary workers) in industries covered by the recordkeeping regulation must submit information from their 2020 Form 300A by March 2, 2021 to OSHA. Employers with at least 20 employees but fewer than 250 in certain identified high-hazard industries must also submit information from their 2020 Form 300 and 301 by March 2, 2021. For reporting requirements & electronic submission, click here: OSHA.

MARCH 2, 2021: ACA 1095 B/C Forms Due to Employees

Applicable Large Employers and employers who offer self-funded/level-funded plans must distribute Forms 1095 to employees by March 2, 2021. If mailed, forms must be postmarked by that date. (Some exceptions apply to B forms.)

March 31, 2021: Electronic ACA Filing Deadline

Applicable Large Employers and employers who offer self-funded/level-funded plans must submit Forms 1095 and 1094 to the IRS by March 31, 2021 if filing electronically. Any Applicable Large Employer (“ALE”) filing 250 forms or more must file electronically.

April 30, 2021: Form 941 Due

The employer’s quarterly tax return, form 941, is due April 30 for first quarter 2021. Credit for qualified paid sick leave wages and qualified paid family leave wages granted under the optional extension of FFCRA can be requested on this form.

APRIL 30, 2021 for new health plans on a calendar plan year: Summary Plan Description

Employers who offer a health insurance plan must provide a Summary Plan Description (“SPD”) to all participants within 120 days after a new plan is adopted. SPDs must also be provided to new participants no later than 90 days after the person first becomes covered under the plan. For assistance or information about our SPD Wrap service, contact HR Service at: (855) 447-3375.

FEDERAL COMPLIANCE UPDATES

W-2 FORMS MAY NEED TO BE CORRECTED IF FFCRA WAGES NOT INCLUDED

Employers who paid out qualified leave wages in 2020 for leave taken under the Families First Coronavirus Response Act (“FFCRA”) but did not report them on employees’ W-2 forms may need to issue corrected forms. IRS documentation is unclear whether employers who did not claim the FFCRA tax credit for the qualified leave wages are required to report the wages on employee W-2s.

Pay for FFCRA qualified sick-leave wages and family-leave wages should be reported separately from regular wages, on Box 14 of the W-2, or on a separate statement provided concurrently with the regular W-2. For additional details on how to report FFCRA wages paid under the FFCRA see IRS Guidance.

According to the guidance, corrections should be submitted on a Form W-2c, along with a Form W-3c Transmittal Form, if the Form W-2 has already been submitted to the Social Security Administration (“SSA”). For forms not yet sent to the SSA, corrections can be made via an amended original Form W-2.

WORK OPPORTUNITY TAX CREDIT EXTENDED THROUGH 2025

The Work Opportunity Tax Credit (“WOTC”), which provides an incentive for employers to hire from certain groups of people who may need assistance finding jobs, has been extended through the end of 2025.

Federal tax credits through the WOTC range from $2,400 to $9,600, depending on the worker category, number of hours worked and wages earned. The WOTC is available to employers that hire and retain individuals from designated groups that have been determined to have “significant barriers to employment.” These groups include:

• Unemployed or disabled military veterans
• People with criminal histories
• People with disabilities who have completed or are completing vocational rehabilitation
• Long-term unemployed
• Supplemental Nutrition Assistance Program (also known as food stamps) recipients
• Temporary Assistance for Needy Families recipients
• Residents living in designated economically struggling communities
• Supplemental Security Income recipients
• Teens from designated empowerment zones employed for summer work

The WOTC application process involves five steps. An employer must first request and receive certification from its state workforce agency stating that the new hire is a member of at least one of the WOTC target groups. The pre-screening notice and certification request, along with instructions and other resources, can be found here: WOTC Form 8850.

NOTE:  Wages used to calculate WOTC cannot be used to calculate other credits, such as the Employee Retention Tax Credit, Employer-Paid Family and Medical Leave Credit, other disaster retention credits, or forgivable Paycheck Protection Program loan proceeds.

DOL ISSUES GUIDANCE ON POSTING NOTICES FOR REMOTE WORKERS 

The U.S. Department of Labor (“DOL”) has provided guidance from the Wage and Hour Division on complying with its notice and posting requirements for employees who are working remotely.

Several federal laws require employers to notice of rights in a conspicuous location. The newly-issued guidance outlines when employers are permitted to distribute the posted information in electronic form instead. Employers with an entirely remote workforce may send notices electronically as long as recipients have readily available access to the electronic posters. Employers with some remote employees should post notices for onsite employees and send notices electronically to remote employees.

Posting notices required for job applicants, such as the Employee Polygraph Protection Act, can be sent electronically to applicants only if the hiring process is conducted remotely and the applicants have readily available access.

The DOL Guidance does not address posting rules that are enforced by other federal agencies such as the Equal Employment Opportunity Commission or National Labor Relations Board nor to state and local posting requirements.

DOL ISSUES GUIDANCE FOR LOCATING MISSING PARTICIPANTS AND BENEFICIARIES 

The Department of Labor (“DOL”) has issued guidance to assist plan fiduciaries in fulfilling their ongoing obligation to locate missing or non-responsive participants and to distribute benefits to such participants or beneficiaries. 

The recently issued guidance consists of three parts: Best Practices for Pensions Plans, a Compliance Assistance Release, and a Field Assistance Bulletin. 

The DOL has developed the following best practice guidance to assist plan fiduciaries in minimizing the missing participant problems in their plans:

• Maintain accurate and current census information on plan participants.
• Implement effective communication strategies to ensure messages and documents being sent are read.
• Search for missing participants through employment records, designated beneficiaries, and emergency contacts; search engines, public record databases, obituaries, and social media; and commercial locator services or creditor reporting agencies.
• Attempt to contact missing participants or beneficiaries via email, text, social media, and certified mail or other delivery service with a tracking feature sent to the last known mailing address.
• Reach out to former employees to ask if they have the contact information of missing participants.
• Publish a missing participant list on the company’s intranet or other employee communication channels.
• Register missing participants on public and private pension registries.

DOL REVOKES FINAL RULE REGARDING TIPPED EMPLOYEES 

Amendments to the Fair Labor Standards Act tip credit regulations that were set to take effect March 1, 2021 have been revoked by the Department of Labor (“DOL”). The amendments had established who may share tips and the circumstances under which employers may use a tip credit.

CMS DISCLOSURES DUE BY MARCH 1 FOR CALENDAR YEAR PLANS

Employers that provide prescription drug coverage to individuals 65 years or older or are otherwise eligible for Medicare Part D must disclose to the federal Centers for Medicare and Medicaid Services (“CMS”) whether their drug plan is creditable (at least as good as Medicare Part D’s prescription drug benefit) or non-creditable. Plans that do not offer drug coverage to anyone who is Medicare-eligible are exempt from the disclosure requirement.

In addition to the annual disclosure, plan sponsors must submit a new disclosure form to CMS within 30 days following a change in the creditable coverage status of a prescription drug plan.

OSHA RELEASES UPDATE CORONAVIRUS GUIDANCE

The Occupational Safety and Health Administration (“OSHA”) has released new guidance entitled, “Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace.” The new guidance primarily targets employers in non-healthcare settings and provides recommendations to keep employees safe from COVID-19 exposure.

The guidance can be accessed here: OSHA Guidance.

CDC PUBLISHES COVID-19 VACCINATION TOOLKIT FOR EMPLOYERS WITH ESSENTIAL WORKERS

The Centers for Disease Control and Prevention (“CDC”) has released a COVID-19 vaccination toolkit aimed at employers of essential workers designed to raise awareness about vaccination benefits and educate employees.

The toolkit includes letter templates, a slide deck, posters, flyers, and sample language for social media messaging. The CDC states that more materials and languages will be added to the toolkit, so interested employers should check back frequently.

To access the toolkit, click here: COVID-19 Vaccination Toolkit.

DOWNLOAD HISTORIC E-VERIFY RECORDS 

E-Verify employers have until May 13, 2021 to download case information dated on or before Dec. 31, 2010 from the “Historic Records Report” if they want to retain E-Verify information that will be purged on May 14, 2021.

In 2014, the E-Verify system began to delete data more than 10 years old on an annual basis. 

REMOTE FORM I-9  DOCUMENT REVIEW APPROVAL ONCE AGAIN EXTENDED

U.S. Immigration and Customs Enforcement (“ICE”) has once again extended the approval to remotely review an employee’s identity and employment authorization documents for Form I-9 but only when that employee will be working remotely. These provisions are now set to expire March 31, 2021.

Employers may first inspect Section 2 documents via video, fax, email, or other appropriate means. Once normal operations resume, employers must inspect documents in person and note “COVID-19” as the reason for the delay in the “additional information” field, as well as “documents physically examined” with the date of inspection to that field or Section 3 as appropriate. Alternatively, the form also allows an employer to appoint a representative to review new hires’ documents. Examples of such a representative include a law firm, a vendor, a notary, or a local employee. Please note that some states or local jurisdictions may have specific restrictions for who is authorized to review the employee documentation.

Employers who make use of the exception must provide written documentation of their remote onboarding and telework policy for each employee. They must also conduct in-person verification within three business days of when the employer’s normal operations resume. This date may be different (earlier or later) from the date the government policy ends.

OUTBREAK PERIODS MAY BE ENDING ON FEBRUARY 28

In mid-2020, the Department of Labor and IRS issued a regulation extending certain timeframes for COBRA, Special Enrollment Periods, and filing and/or appeal of benefit claims for participants, beneficiaries, and plan administrators of employee benefit plans.

Under current law, the extension of these timeframes can be no more than one year, which would limit the extension to February 28, 2021. Therefore, unless these statutes are amended, the extensions will end on February 28, 2021. An announcement will be sent as updates become available.

STATE COMPLIANCE UPDATES

CALIFORNIA

Local Supplemental Leave Ordinances Extended

Several California municipalities have extended the expiration date and/or scope of supplemental sick leave benefits related to COVID-19 that had originally expired on December 31, 2020, in conjunction with the Families First Coronavirus Response Act (“FFCRA”).

Additional extensions, expansions, and exceptions are being considered, so check with your local jurisdiction for additional developments and details.

Employees who already exhausted their leave entitlements under one of the supplemental paid sick leave mandates, including the FFCRA, do not receive a new bank of hours for 2021.

“Hero Pay” for Grocery and Other Essential Workers Mandated in Some Areas

COACHELLA

Effective February 12, 2021, an emergency ordinance mandates certain grocery stores, retail pharmacies, restaurants, and agricultural operations to pay an extra $4 an hour to their workers in Coachella for four months. The mandate applies to employers with at least 300 workers nationally and at least six employees in the city. For additional details, see the Coachella Ordinance.

LONG BEACH

Effective January 22, 2021, Long Beach’s “Hero Pay” ordinance requires certain grocery stores to pay workers premium pay of an additional $4.00 per hour worked. The ordinance is expected to remain in effect for 120 days from enactment unless extended by the city council or blocked by legal injunctions. The California Grocers Association has filed a lawsuit challenging the ordinance.

The ordinance applies to grocery stores with more than 300 grocery workers nationally and more than 15 employees per grocery store within the City of Long Beach. Grocery stores are defined as businesses that devote seventy percent or more of their business to retailing a general range of food products (fresh or packaged).

Managers and supervisors are excluded from the premium pay requirement.

Applicable businesses must also provide written notice of the rights established by the ordinance, with the following information:

1. The right to premium pay guaranteed by the ordinance;
2. The right to be protected from retaliation for exercising in good faith the rights protected by the ordinance; and,
3. The right to bring a civil action for a violation of the requirements of the ordinance.

Records that document compliance with the ordinance must be retained for at least two years.

MONTEBELLO

Effective January 29, 2021, Montebello’s “Hero Pay” ordinance requires certain grocery and drug stores to pay workers premium pay of an additional $4.00 per hour worked. The ordinance is expected to remain in effect for 180 days from enactment unless extended by the city council or blocked by legal injunctions. The California Grocers Association has filed a lawsuit challenging the ordinance. 

The ordinance applies to grocery stores operating within Montebello that are publicly traded or have at least 300 employees nationwide and more than 15 employees per store in the city.   

OAKLAND

Effective February 2, 2021, Oakland’s “Hero Pay” ordinance requires certain grocery stores to pay workers premium pay of an additional $5.00 per hour worked. The ordinance is expected to remain in effect for 120 days from enactment unless extended by the city council or blocked by legal injunctions.

The ordinance applies to grocery stores more than 15,000 square feet in size and with 500 or more employees nationwide.   

SANTA MONICA

On February 13, 2021, the Santa Monica City Council unanimously approved a “Hero Pay” ordinance that requires certain grocery and drug stores to pay workers premium pay of an additional $5.00 per hour worked.

WEST HOLLYWOOD

The City of West Hollywood approved a “Hero Pay” ordinance that requires certain grocery and drug stores to pay workers premium pay of an additional $5.00 per hour worked for the next 120 days. The California Grocers Association has filed a lawsuit challenging the ordinance. 

Other California municipalities, including Berkeley, the City and County of Los Angeles, San Francisco, San Jose, and Santa Clara County, are currently considering similar ordinances. Check with your local jurisdiction for updates.

Additional Guidance Issues for Cal OSHA’s COVID-19 Emergency Temporary Standards

California’s Division of Occupational Safety and Health (“Cal OSHA”) recently published additional guidance on the COVID-19 Emergency Temporary Standard (“ETS”) that was issued in November.                                                                

The guidance includes answers to more than 70 frequently-asked questions on topics including the scope of coverage, effective date, enforcement, the COVID-19 Prevention Program, communication with employees, COVID-19 hazards, prevention controls, vaccines, training, testing, recordkeeping and reporting, and additional resources.

The FAQs can be found here: ETS FAQs. The guidance states that additional resources are forthcoming and will be posted and updated on Cal/OSHA’s COVID-19 webpage.

LOUISIANA

New Orleans Passes CROWN Act to Prohibit Hairstyle Discrimination

Effective December 22, 2020, the CROWN Act prohibits employment discrimination by New Orleans employers based on hairstyles.

The CROWN Act, modeled after legislation passed in other states and municipalities, is an acronym for Creating a Respectful and Open World for Natural Hair. Under the law, New Orleans employers are prohibited from making employment decisions based on protected cultural hairstyles. The ordinance defines a protected cultural hairstyle as “any hairstyle or hair texture commonly associated with a particular race or national origin, including locs, cornrows, twists, braids, Bantu knots, Afros, and any hairstyle in which hair is tightly coiled or tightly curled.”

MASSACHUSETTS

Massachusetts Paid Family Medical Leave Law Updated

The Department of Family and Medical Leave (“DFML”) has issued emergency regulations incorporating the definitions for personal care attendants and family childcare providers into the existing definitions of Covered Individual, Employee, and Employer. The DFML also provided additional guidance on bonding leave and implemented new rules for employees of acute care hospitals.

For more information, go to the Department of Family and Medical Leave.

OHIO

Employment Discrimination Law Reformed

Effective April 15, 2021, H.B. 352 reforms the state’s employment discrimination statute with several significant amendments to the current law.

1. Employees alleging workplace discrimination in Ohio will be required to file a charge of discrimination with the Ohio Civil Rights Commission (“OCRC”) before initiating litigation in court. 
2. The new law eliminates individual supervisor and co-employee liability, so an employee cannot make a claim of employment discrimination against a supervisor, manager, or coworker, unless that supervisor, manager, or coworker qualifies under the amended law as “the employer.”
3. The new law aligns the statutes of limitations for all types of employment discrimination claims to two years from the alleged unlawful discriminatory practice.
4. The amended law mandates the “affirmative defense,” requiring an employer to show it “exercised reasonable care to prevent or promptly correct any sexually harassing behavior” and that the complainant “unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.”
5. The new law mandates a cap for discrimination claims under Ohio’s Tort Reform Act.

For additional details, see the full text here: House Bill 352.