OCTOBER 2021 LEGAL UPDATE

FUTURE COMPLIANCE DATES

November 2, 2021: Voting Leave May Be Required

November 2, 2021 will be Election Day in many states. While there are no federal laws requiring time off to vote, many states require employers to provide voting leave as well as notification postings well in advance of Election Day. Check the “State Compliance Updates” section in our September Legal Update for specific state requirements. Employers should review voting laws in any state where they have remote workers.

November 11, 2021: Veterans’ Day Time Off  May Be Required

Employers in some states are required to provide eligible veterans with time off on Veterans Day. Employers in states where time off is not required may choose to implement a similar policy. See details below in the respective “State Compliance Updates” section. 

DECEMBER 31, 2021 (if on a calendar year plan): 125 POP & FSA Testing

Employers who offer a 125 Premium Only Plan or Flexible Spending Account must conduct nondiscrimination testing as of the last day of their plan year to ensure that benefits are available to all eligible employees under the same terms. A good practice is to test the plan after open enrollment is complete and again at the end of the plan year. Early testing allows for modifications in plan design should discrimination testing result in a fail.

FEDERAL COMPLIANCE UPDATES

OSHA VACCINATION MANDATE FOR  LARGE EMPLOYERS COMING SOON

On October 12, 2021, OSHA submitted for approval its Emergency Temporary Standard (“ETS”) for the COVID-19 vaccination and testing mandate ordered under President Biden’s “Path out of the Pandemic.” A finalized version of the ETS is expected soon but has not been released as of the time this Legal Update was published. The ETS will not go into effect until the final version is published in the Federal Register, the official journal of the federal government. States with their own OSHA entity may have delayed effective dates of up to 15 days after those under federal OSHA jurisdiction.

The ETS will require employers with 100 or more employees to mandate that their onsite employees provide proof of COVID-19 vaccination or undergo weekly or more frequent testing. Covered employers may also choose to require mandatory vaccinations and forego the option for weekly testing, if business necessity supports the requirement and they allow for religious and medical accommodations.

According to an OSHA representative, the 100-employee coverage threshold will be determined by the size of the overall employer and not the physical work site. Employees who work exclusively at home will not be covered by the mandate, but those who do spend time at the worksite or customer sites – even if not on a regular basis — will fall under the requirement.

Employers covered under both the large employer mandate and other federal, state, local, or industry-specific vaccine mandates must comply with the requirements of the more stringent law.

NEW FAQS REGARDING PREMIUM SURCHARGES OR DISCOUNTS

On October 4, 2021, the Departments of Labor, Health and Human Services, and Treasury jointly released guidance regarding group health plan premium discounts and surcharges based on COVID-19 vaccination status.

The guidance explains that any discount or surcharge based on vaccination status is limited to 30% of the coverage amount. In addition, any surcharge must be included in the calculation by applicable large employers (“ALEs”) when determining ACA affordability.

If implementing discounts or surcharges, an employer must give participants the opportunity to qualify for the incentive or avoid the surcharge at least once every year and provide a reasonable alternative standard to participants who are unable to become vaccinated.

A surcharge or discount program must be described in plan materials and communicated to participants at least 60 days before it is implemented.

For additional details, see Frequently Answered Questions. 

HHS RELEASES FAQS VACCINATION STATUS PRIVACY 

The Department of Health and Human Services recently released guidance regarding privacy issues regarding vaccination status.

The resource primarily focuses on the HIPAA Privacy Rule and its application only to covered entities regarding protected health information. It specifies that HIPAA does not regulate what information can be requested from employees as part of the terms and conditions of employment. The response to Question 3 of the document explicitly states that employers may inquire about the vaccination status of employees, as long as they comply with non-discrimination laws and maintain the confidentiality of any medical information obtained in the process.

For additional details, see the HHS Guidance.

GUIDANCE ISSUED ON VACCINE MANDATE FOR FEDERAL CONTRACTORS 

On September 24, 2021, the Safer Federal Workforce Task Force issued guidance regarding Executive Order 14042 that requires covered federal contractors and subcontractors to be fully vaccinated by December 8, 2021.

The guidance provides details on vaccination, masking, and physical distancing requirements for employees of federal contractors and subcontractors who work on or in connection with covered federal contractor workplaces.

For additional details, see the Task Force Guidance.

UPDATED EEOC GUIDANCE ON VACCINATION POLICIES

On October 13, 2021, the Equal Employment Opportunity Commission (“EEOC”) updated its guidance and resources for employers developing mandatory or incentivized COVID-19 vaccine policies. The sections of the EEOC document include dates with when they were last updated, so readers can focus on the most current information. See the EEOC Guidance.

IRS CLARIFIES COBRA PAYMENT TIMEFRAME

In May 2020, the Department of Labor (“DOL”) and IRS issued guidance on how to toll various notices, claims, and election deadlines due to COVID-19, including COBRA elections. The Emergency Relief Notices state that COBRA timeframes are disregarded until the earlier of one year from when individuals and plans were first eligible for relief, or the end of the Outbreak Period.

Recently issued Notice 2021-58 clarifies the application of certain extensions for the election of COBRA coverage and payment of COBRA premiums. The guidance explains that the disregarded period for an individual to elect COBRA continuation coverage runs equal to the disregarded period to make the premium payment. Individuals generally have 60 days to elect COBRA and an additional 45 days to pay the premium. The Notices state that if an individual elects COBRA continuation coverage within the 60 days, the individual will have one year and 45 days after the date of the COBRA election to make the first COBRA premium payment.

If the individual elects COBRA continuation coverage outside of the initial 60-day COBRA election time frame, the individual will have one year and 105 days after the date the COBRA notice was provided to make the initial COBRA premium payment. An individual has a maximum period of one year from the date the payment initially would have been due, including any applicable 30-day grace period.

The guidance also offers transition relief to those individuals who made an election outside of the initial 60-day period and whose payment is due before November 1, 2021. Under transition relief, the premium payment is not required to be made before November 1, 2021, even if November 1, 2021 is more than one year and 105 days after the date the election notice was received. The transition relief applies if the individual makes the initial payment within one year and 45 days after the date of the election.

The Notice clarifies that the timeframes under the Emergency Relief Notice do not apply to the American Rescue Plan Act (ARPA). However, they do apply to COBRA premiums payments after the end of the ARPA premium assistance period, assuming the individual is still qualified for COBRA and the Outbreak Period has not ended.

NEW INTERIM FINAL RULE ISSUED ON “NO SUPRISES ACT”

The Departments of Health and Human Services, Labor, and Treasury recently issued a new interim final rule regarding the No Surprises Act provisions of the Consolidated Appropriations Act which take effect on January 1, 2022.

The No Surprises Act protects patients from most surprise bills for out-of-network services and air ambulance providers. Provisions of the interim rule include the following protections:

• Emergency services, regardless of where they are provided, must be treated on an in-network basis without requirements for prior authorization

• Patient cost-sharing, such as co-insurance or a deductible, cannot be higher than if such services were provided by an in-network doctor, and any co-insurance or deductible must be based on in-network provider rates

• Bans out-of-network charges for ancillary care such as for an anesthesiologist or assistant surgeon at an in-network facility in all circumstances
• Health care providers and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.

The new interim final rule details the federal arbitration process that providers, facilities, air ambulance services, and health plan issuers will use to determine final payment beyond allowable patient cost-sharing for certain out-of-network healthcare services.

For additional details, see the Interim Final Rule.

ACA OPEN ENROLLMENT PERIOD EXTENDED AND USER FEES INCREASED

The Centers for Medicare and Medicaid Services recently released a new final rule that extends the 2022 Affordable Care Act open enrollment period by 30 days to January 15, 2022 and increased user fees.

For 2022, the federally run marketplace user fee rate will increase by one-half percent to 2.75% of premiums. The user fee for state-run exchanges will also increase by one-half percent, to 2.25%.

DOL ISSUES FINAL RULE ON TIP SHARING

Effective November 23, 2021, the Department of Labor may fine employers in more circumstances when they violate federal tip-sharing regulations under a recently issued rule. The rule also clarifies when managers and supervisors can keep the gratuities they received.

Employers are prohibited from participating in a tip pool or otherwise keeping employees’ tips, regardless of whether the employer takes a tip credit. However, the final rule clarifies that managers and supervisors may contribute to mandatory tip pools.

Additionally, the rule explains that managers and supervisors may keep tips they receive directly from customers for services they “directly” and “solely” provide.

STATE COMPLIANCE UPDATES

California

Expanded Vaccine Mandate for Health Care Workers

On September 28, 2021, the California Department of Public Health expanded its health care worker vaccine mandate to apply to adult care facilities and direct care workers. Covered workers are now required to be fully vaccinated by November 30, 2021.

The following workers are covered by the order:

• All workers who provide services or work in Adult and Senior Care Facilities licensed by the California Department of Social Services;
• All in-home direct care services workers, including registered home care aides and certified home health aides except for those workers who only provide services to a recipient with whom they live or who are a family member of the recipient for whom they provide services;
• All waiver personal care services providers and in-home supportive services providers, except for those workers who only provide services to a recipient with whom they live or who are a family member of the recipient for whom they provide services;
• All hospice workers who are providing services in the home or a licensed facility; and
• All regional center employees, as well as service provider workers, who provide services to a consumer through the network of Regional Centers serving individuals with developmental and intellectual disabilities, except for those workers who only provide services to a recipient with whom they live or who are a family member of the recipient for whom they provide services.

Cal/OSHA’s ETS New Requirements Reflect CDPH Guidance

Cal/OSHA recently updated its Frequently-Asked Questions document regarding the emergency temporary standards (“ETS”) issued on September 21, 2021. The updated document incorporates new guidance from the California Department of Public Health (“CDPH”).

Corporate Boards Required to Meet Requirements to Increase Diversity

By the end of the 2021 calendar year, publicly held domestic or foreign corporations with their principal executive offices in California must have at least one director from an underrepresented community on its board. If the corporation has six or more directors, it must have a minimum of three female directors. If the corporation has five directors, it must have a minimum of two female directors. If the corporation has four or fewer directors, it must have a minimum of one female director.

Additional diversity requirements will go into effect by the end of 2022.

Counties Issue Vaccine Verification Rules for Hospitality Businesses

Effective October 7, 2021, Los Angeles County has issued an updated Order of the Health Officer that requires a vaccine mandate for many hospitality workplaces and large events. 

The new Order applies to outdoor mega-events as well as bars, wineries, distilleries, nightclubs and lounges for indoor services. It also includes strong recommendations for restaurants and food facilities.

Operators of “mega-events” — defined as events that have greater than 1,000 indoor or 10,000 outdoor attendees – are required to verify the full vaccination status or obtain a pre-entry negative COVID-19 viral test result for all attendees ages 12 or older. In addition, attendees are required to wear face masks at all times, except when eating or drinking. Effective November 1, 2021, operators of outdoor mega-events are required to cross-check proof of full vaccination or negative COVID-19 viral test result against a photo identification for all attendees who are 18 years of age or older.

The order applies to bars that have a low-risk food facility public health permit and breweries, wineries and distilleries with a #1, #2, #4, #23, and/or #74 state alcohol license that do not possess or that are not required to have a public health permit to operate and to nightclubs and lounges that are open only to persons 18 years of age or older.

Bars, wineries and distilleries must require patrons ages 12 and older to provide proof of their COVID-19 vaccination status for entry to their facilities to receive indoor services. Nightclubs and lounges must require patrons and on-site personnel to provide proof of their COVID-19 vaccination status for entry. In addition, all onsite employees of bars, wineries, and distilleries, nightclubs, and lounges must provide proof that they are fully vaccinated no later than November 4, 2021. 

Between October 7 and November 3, 2021, patrons of bars, wineries, and distilleries, nightclubs, and lounges must provide proof that they have received at least one dose of the COVID-19 vaccination for entry to receive indoor services. Beginning November 4, 2021, patrons must be required to show proof of full vaccination against COVID-19 for entry to receive indoor services.

Individuals who do not provide proof of vaccination may be allowed to enter the indoor portions of the facility while wearing a well-fitted mask for only the following reasons:

• as part of their employment to make a delivery or pick-up
• to provide a service or repair to the facility
• for an emergency or regulatory purpose
• to get to the outdoor portion of the facility
• to use the restroom
• to order, pick-up, or pay for food or drink “to go”

The order strongly recommends but does not require, that operators of restaurants and food facilities reserve and prioritize indoor seating and service for patrons who are fully vaccinated against COVID-19. According to the order, patrons who do not provide proof that they are fully vaccinated should be served in outdoor portions of the facility. 

For additional details, see the Order of the Health Officer.

COLORADO

Veterans’ Hiring Preference Allowed

As a reminder in light of the upcoming Veterans’ Day holiday, Colorado employers are allowed to give preference in hiring to certain eligible individuals including veterans of the armed forces, members of the military reserves, veterans of the National Guard, or spouses of a disabled veteran or a service member killed in the line of duty.

Any veterans’ preference hiring policies must be in writing and implemented at least 14 days before it is applied to a posting or hiring decision, must be applied uniformly to all hiring decisions, must require certain proof that the individual is eligible, and must be applied to eligible individuals who are “as qualified as other applicants for employment.”  

DISTRICT OF COLUMBIA

Expand Benefits under Paid Leave Program

Effective October 1, 2021, the Universal Paid Leave Emergency Amendment Act of 2021 (“PLEAA”) expands paid leave benefits for covered individuals in the District of Columbia.

Under the new law, eligible individuals may now take up to two workweeks of pre-natal leave for newly-added qualifying reasons:

• routine and specialty appointments, exams, and treatments associated with a pregnancy provided by a health care provider, including pre-natal check-ups and ultrasounds;
• treatment for pregnancy complications;
• bedrest that is required or prescribed by a health care provider; and
• pre-natal physical therapy.

This leave is in addition to the parental leave that had already been available under the program — up to a combined maximum of 8 workweeks of paid leave within a 52-workweek period for parental leave, personal medical leave, and family leave to care for a sick family member.

The PLEAA now allows a maximum of six workweeks of qualifying paid leave for an individual’s personal medical needs that begin on or after September 26, 2021 through September 30, 2022, up from the previous 2 workweeks. Parental leave and family care leave remain at their previous eight-week and six-week maximums, respectively.

The PLEAA also amends the definition of a “qualifying medical leave event” for which personal medical leave may be taken to include medical care related to miscarriage (defined as loss of a pregnancy before 20 weeks gestation), and stillbirth (defined as loss of a pregnancy after 20 weeks gestation).

The PLEAA also expands the wages that are subject to Paid Family Leave (“PFL”) calculation for claims filed after October 1, 2021 but before the 365th day after the end of the COVID-19 public health emergency. During this period, the calculation of an individual’s average weekly wage subject to contribution for PFL benefits will be based on the four quarters with the highest wages from the preceding 10 quarters, as opposed to the preceding 5 quarters.

The PLEAA also includes a temporary suspension of the one-week waiting period before individuals are eligible for PFL benefits for a qualifying event for claims filed after October 1, 2021, but before the 365th day after the end of the COVID-19 public health emergency.

IOWA

Veterans Day Off Requirement and Notice Reminder

Iowa employers are required to provide holiday time off on Veterans Day for employees who are veterans if the employee would normally be required to work that day. House File 2197 gives employers the discretion of providing the time off as either paid or unpaid. Eligible employees must provide at least one month’s prior written notice of his or her intent to take time off for Veteran’s Day and must also provide the employer with a federal certificate or other federal document showing proof of veteran status.

At least ten days prior to Veterans Day, the employer must notify the employee whether the leave will be paid or unpaid. If providing time off for Veterans Day for all the employees who request it would cause undue operational disruption, the employer may deny the time off to the minimum number of employees needed for the employer to protect maintain minimum operational capacity.

MASSACHUSETTS

Emergency Paid Sick Leave Extended

On September 29, 2021, Emergency Paid Sick Leave (“EPSL”) benefits were extended to April 1, 2022 or until the $75 million in program funds is exhausted, whichever is earlier.

Effective October 1, 2021, employees may use EPSL to care for a family member who needs to obtain or recover from a COVID-19 immunization, as well as for the following previous qualifying reasons.

• An employee’s need to self-isolate and care for themselves because of their COVID-19 diagnosis, to obtain a medical diagnosis or treatment for their COVID-19 symptoms, or to obtain or recover from their COVID-19 vaccination;
• An employee’s need to care for a family member who is self-isolating due to a COVID-19 diagnosis or obtaining a medical diagnosis or treatment for COVID-19 symptoms;
• A quarantine order, or other determination by a public official, health authority with jurisdiction, or a health care provider that the employee’s attendance at work would jeopardize the health of others due to the employee’s COVID-19 exposure or symptom;
• To care for a family member subject to a quarantine order or other determination by a public official, health authority with jurisdiction, or a health care provider that the family member’s attendance at work would jeopardize the health of others due to the employee’s COVID-19 exposure or symptoms; or
• The employee has been diagnosed with COVID-19 and is experiencing symptoms that inhibit their ability to telework.

Employees who already have used their 40 hours of EPSL are not eligible for any additional time because of this extension or as a result of the addition of a new reason for using EPSL.

Employers are still eligible for reimbursement of the cost of providing EPSL benefits through the COVID-19 Massachusetts Emergency Paid Sick Leave Fund. To be eligible for reimbursement, a business must require its employees to submit requests for EPSL in writing. A sample leave request form is available here: Sample Employee Leave Request Form. 

Paid Leave for Veterans Day Activities

Under the “HOME Act,” an Act Relative to Housing, Operations, Military Service, and Enrichment, employers in Massachusetts with 50 or more employees are required to grant a paid leave to qualifying veterans to participate in a Veterans Day exercise, parade, or service as long as reasonable notice is provided. Previous legislation requires all employers to provide paid or unpaid leave to qualified veterans to participate in Veterans Day and Memorial Day exercises, parades, or services.

NEVADA

Restrictive Covenant Banned for Hourly Employees

Effective October 1, 2021, non-compete agreements are prohibited between Nevada employers and employees paid solely on an hourly wage basis, exclusive of any tips, commissions, or gratuities.

NEW JERSEY

Expanded Protections against Age Discrimination

Effective October 5, 2021, Assembly Bill No. 681 expands protections against age discrimination for employees over 70 in New Jersey.

The new law eliminates a provision of the New Jersey Law Against Discrimination (“NJLAD”) that permitted employers to refuse to hire or promote any person over 70 years old. The removal of the upper age limit primarily impacts employers with fewer than 20 employees, since the federal Age Discrimination in Employment Act of 1967 that applies to employers with 20 or more employees does not have an upper age limit.

The amended law also imposes a higher standard for setting a mandatory retirement age for government employees requiring public employers to show that the employee “is unable to adequately perform the person’s duties.” The new law also expands the remedies available to employees forced to retire.

Hiring Preference Now Required for Previously Injured Employees

Effective September 24, 2021, Bill A-2617/S-2998 requires employers with at least 50 employees to provide a hiring preference to any employee who has reached maximum medical improvement (“MMI”) following a work-related injury and is unable to return to the position they held before that injury.

An employer must grant a qualifying employee preference for any open positions for which the employee can perform the essential duties of the position. However, employers are not required to create new positions for injured employees or remove current employees from existing and filled positions to accommodate injured employees.

NEW YORK

Vaccination Mandate Expanded for Health Care Workers

In our September 2021 Legal Update, we announced a new vaccine mandate for many types of health care providers in New York that went into effect on August 26, 2021.

At the time they were issued, the emergency regulations expressly prohibited employers from considering any religious exemptions to the vaccination mandate. Since then, a preliminary injunction has been issued that bars the Department of Health from prohibiting employers from considering religious exemption requests in regards to the vaccine mandate. The injunction now allows hospital and nursing home employers to consider religious exemption requests, but these requests could still be denied if appropriate based on the specific circumstances.

OHIO

E-Cigarettes Banned in Places of Employment

Effective September 30, 2021, HB 110 prohibits the use of an electronic smoking device and vapor products in places of employment.

OREGON

Veterans Day Off Law Reminder

Under Senate Bill 1, employers in Oregon must provide time off – either paid or unpaid — for Veterans Day to eligible veterans who provide at least three weeks’ notice that he or she intends to take time off for Veterans Day and provides proof that he or she is a veteran as defined by Oregon statute.

To be eligible to take leave under the law, a veteran must have served on active duty in the armed forces for at least six months and received an honorable discharge. If the individual served in a reserve or National Guard unit, the employee is not qualified for leave unless he or she was deployed or served on active duty for at least six months.

The company must notify the employee at least 14 days before Veterans Day whether the leave request will be granted and whether the time off will be paid or unpaid. A leave request can be denied if it would cause significant economic or operational disruption or undue hardship. If a leave request is denied because it would cause operational disruption, the employer must allow the worker to take an alternate day off within one year of that holiday in order to honor the employee’s military service.

PENNSYLVANIA

New Salary Threshold for Overtime Exemptions

Effective October 3, 2021, the minimum salary threshold to qualify for overtime exemption in the state increases to $780 per week, or $40,560 annually.

Threshold amounts will continue to increase over the next three years and then every three years thereafter. For additional information about these new rules click here: PA Overtime Rule.

Where differences exist between federal and state law, employers must follow the provision that is most favorable to the employee.

 Allegheny County Paid Sick Leave Law

With an expected implementation date of December 1, 2021, the Allegheny County Paid Sick Days Ordinance requires employers with 26 or more employees to provide paid sick time to eligible employees. Employees must accrue a minimum of one hour of paid sick time for every 35 hours worked within Allegheny County, up to 40 hours in a calendar year unless an employer designates a higher limit. Accrued time balances less than 40 hours must be carried over into the following calendar year.

Employees may begin using accrued paid sick time after their first 90 days of service. The sick leave may be used for the following purposes:

• The employee’s or a family member’s mental or physical illness, injury or health condition or need for medical diagnosis, care or treatment or preventive medical care
• Closure of the employee’s place of business or child’s school or place of care due to a public health emergency
• Care for a family member whose presence in the community would jeopardize the health of others because of exposure to a communicable disease

 Philadelphia Extends Vaccination Deadlines

The City of Philadelphia has extended deadlines for healthcare workers and staff, volunteers, and students at higher education institutions in the city to receive the COVID-19 vaccine that was mandated in August. However, employers may choose to continue enforcing the original mandatory vaccination deadlines. 

The previous deadline for all covered individuals to be fully vaccinated or have a medical or religious exemption was October 15, 2021. That date is now the deadline for health care workers in hospitals and long-term care facilities and higher education staff and students to receive their first dose of the COVID-19 vaccine. These individuals must receive a second dose by November 15. Until fully vaccinated, health care workers in hospitals and long-term care facilities must undergo testing twice per week. Higher education staff and students have the option of one PCR test or two antigen (rapid) tests each week.

Healthcare workers outside of hospitals and long-term care facilities had until October 22 to receive their first dose of the COVID-19 vaccine and have until November 22 to receive their second dose. They must be tested using rapid or PCR testing twice per week until fully vaccinated.

TEXAS

Governor’s Executive Order Prohibits Vaccine Mandates

Effective October 11, 2021, Executive Order GA-40 issued by the governor prohibits any entity in Texas from requiring any individual — including an employee – to receive a COVID-19 vaccine. The Executive Order includes language the expands the basis for objecting to a vaccine to include personal conscience, a religious belief, or for medical reasons including prior recovery from COVID-19.

Additional Military Member Protections Provided

Effective September 1, 2021, military members in Texas have additional rights and protections.

Individuals may not be disqualified for unemployment insurance benefits if their separation from employment was caused by their being called to provide service in the uniformed services (as defined by federal law) or in the Texas military forces. Further, state-activated Texas military force members must be returned to the same job they held prior to being placed on orders, with no loss of seniority, vacation time, or any other benefit that they would have had if they not been ordered to duty.

WASHINGTON

Compensable Travel Time

In the recent court case Port of Tacoma v. Sacks, the Washington Court of Appeals, Division II ruled that four hourly employees who traveled to China for company business had to be paid for all travel time to and within China — not just the eight hours per day the employer had negotiated with the workers’ union.

This ruling makes the state’s interpretation of compensable travel time much broader than federal law, under which employers generally do not have to pay hourly employees for travel outside of normal working hours.