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Can Employers Ask Their Employees if They Have Been Vaccinated?

One of the biggest challenges of the past year for employers has been keeping up with the complex and constantly evolving employment law issues that have arisen during the COVID-19 pandemic. The roll-out of COVID-19 vaccines has been a welcome relief for employers hoping to create safe and productive workplaces, but issues related to vaccines create a new set of questions.

One of the most common is whether employers can inquire about whether their employees have been vaccinated. Employers are wise to seek legal counsel regarding this issue, as any medical inquiry by an employer could give rise to legal risks. In this case, one of the main risks is that such an inquiry could be interpreted as a prohibited disability inquiry under the Americans with Disabilities Act (“ADA”).

As with most legal issues, this one is nuanced. The U.S. Equal Employment Opportunity Commission (“EEOC”) has issued guidance stating that a mere inquiry of vaccination status does not constitute a disability-related inquiry under the ADA. The EEOC explains that there are many reasons that may explain why an employee has not been vaccinated, which may or may not be disability-related. Therefore, pursuant to the guidance, “simply requesting proof of receipt of a COVID-19 vaccination is not likely to elicit information about a disability and, therefore, is not a disability-related inquiry.”

However, the guidance suggests that delving further into vaccination status may be problematic. For example, asking why an employee did not receive a vaccination may elicit information about a disability. Such follow-up questions could implicate the ADA and must be considered in light of the ADA’s framework that requires such inquiries to be “job-related and consistent with business necessity.”

The EEOC’s guidance on these issues is just that—guidance—and it is subject to change. As with any workplace policy, before establishing rules concerning vaccines, employers should consult legal counsel in order to understand their rights and responsibilities. If you have any questions about these issues, please contact Klint Kesto or your Fraser Trebilcock attorney.

Fraser Trebilcock attorney and former Michigan State Legislator Klint Kesto has nearly two decades of experience working in both the public and private sectors. You can reach him at kkesto@fraserlawfirm.com or 517.377.0868.

Reopening Offices Under Michigan COVID-19 Executive Orders

Governor Whitmer’s various Executive Orders (“EOs”) have transitioned from shut-down to phased reopening. Those multiple EOs make the reopening process confusing. This article summarizes the requirements to permissible recall office workers for work outside of their own homes. However, the actual requirements are lengthy and all must be met by the employer. We have collected those requirements in a document that may be obtained HERE.

Office Workers – Phased Reopening

Executive Order 2020-77, since superseded, began the “reopening” process for businesses within the State of Michigan. Only employers in Regions 6 and 8 – the Traverse City quadrant and the Upper Peninsula – were conditionally permitted to recall office workers to return to work. However, it is likely that the conditions will be similar for the remainder of the state when office workers in other parts of the state are allowed to return on a Region-by-Region basis. There are two sets of rules for operating office businesses – one applicable to all employers using “in-person” services, and a second set applicable to office work specifically.

Requirements for Employers Allowing In-Person “Office” Work

Identification of Workers Who May Permissibly be Recalled

Only office workers specifically permitted to be recalled may work at the employer’s premises. Each employer that seeks to recall office workers is responsible to ensure that workers are recalled “only to the extent that such work is not capable of being performed remotely.” EO 96 Section 11.m.

Each employer “must determine which of their workers are critical infrastructure workers or workers who perform resumed activities and inform such workers of that designation … in writing, whether by electronic message, public website, or other appropriate means.” EO 96 Section 6.a.

Most importantly, “[b]usinesses and operations maintaining in-person activities must adopt social distancing practices and other mitigation measures to protect workers and patrons, as described in Executive Order 2020-97 and any orders that may follow from it.” EO 96 Section 6.c.

Workers may also be recalled to prepare the workplace to be in compliance with the various Executive Orders. Workers necessary to prepare a workplace to follow the workplace standards described in Executive Order 2020-97 and to otherwise ready the workplace for reopening. EO 97 Sec 11.o.

Executive Order 2020-97 – Mandatory Requirements

The rules set out in Executive Order 2020-97, as referenced, are extensive, mandatory, complex, and overly long for inclusion here. Rules governing office work are selected and available HERE.

Employers must note that the penalties for non-compliance may be significant. A “willful violation” of the Governor’s Executive orders “is a misdemeanor. See, EO 2020-96 section 22. Likely more concerning, EO 96 also states:

“Any business or operation that violates the rules in sections 1 through 10 has failed to provide a place of employment that is free from recognized hazards that are causing, or are likely to cause, death or serious physical harm to an employee, within the meaning of the Michigan Occupational Safety and Health Act, MCL 408.1011.”

Office facilities to be reopened must comply with the threshold policy adoption, social distancing and safe-work requirements of section 11 of EO 2020-97, which are applicable to all businesses requiring “in-person work.” Those rules, which have been in effect in various forms since the initial stay-at-home order, include among other things:

Develop an OSHA-compliant COVID-19 preparedness and response plan
Make that plan available to workers and others by June 1, 2020, or within two weeks of resuming in-person activities,
Designate one or more worksite supervisors or employees, who must be on-site while workers are present, to implement, monitor, and report on implementation of that Plan
Provide COVID-19 training to employees that covers, at a minimum:

(1) Workplace infection-control practices.

(2) The proper use of personal protective equipment.

(3) Steps the employee must take to notify the business of any COVID-19 symptoms or of a suspected or confirmed diagnosis of COVID-19.

(4) How to report unsafe working conditions.

Conduct a daily entry self-screening protocol for all employees entering the workplace, including, at a minimum, a questionnaire covering symptoms and suspected or confirmed exposure to people with possible COVID19.
Keep everyone on the worksite premises at least six feet from one another to the maximum extent possible,
Provide non-medical grade face coverings to employees,
Require face coverings to be worn when employees cannot consistently maintain six feet of separation,
Increase facility cleaning and disinfection to limit exposure to COVID-19 and adopt protocols to clean and disinfect the facility in the event of a positive COVID-19 case in the workplace.
Make cleaning supplies and access to hand washing or sanitizer available to employees upon entry and at the worksite(k) When an employee is identified with a confirmed case of COVID-19, within 24
Establish a response plan for dealing with a confirmed infection in the workplace, including protocols for sending employees home and for temporary closures to allow for deep cleaning.
Promote remote work to the fullest extent possible.
Adopt any additional infection-control measures that are reasonable in light of the work performed at the worksite and the rate of infection in the surrounding community.

EO 2020-97 Section 1.

Again, there are additional, mandatory work safety requirements set forth in Executive Order 97.

This alert serves as a general summary, and does not constitute legal guidance. All statements made in this article should be verified by counsel retained specifically for that purpose. Please contact us with any specific questions.

We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.

Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.

Governor’s Executive Order Protecting Workers Exposed to Coronavirus From Discharge or Retaliation

Governor’s Executive Order Protecting Workers Exposed to Coronavirus From Discharge or Retaliation

Today, April 3, Governor Whitmer signed Executive Order 2020-36 (“EO-36”). Under the Governor’s prior “stay home” order, EO 2020-21. Employers were permitted to continue operations in essential industries and under other specified situations, see, Employer Actions to Comply with Michigan Stay-At-Home Order. The original stay home order did not address whether and under what situations employees permitted to work could refuse to report, and what actions employers were permitted to take to require those employees to report.

Today’s EO-36 addresses some of those questions. First, EO-36 prohibits any employer from discharging, disciplining, or retaliating against an employee who is otherwise permitted to work, but who stays home from work because the employee or a person in contact with the employee has symptoms of or tests positive for COVID-19.

The EO also expands on the Governor’s prior “stay home” order (EO 2020-21) by declaring as public policy that any person who has symptoms of the virus or tests positive, or who is exposed to someone symptomatic or positive, should remain at home. We interpret this Order to require an employee of a permissibly-continuing business performing in-person work to stay at home, and that the Employer of such persons will screen to prevent the reporting to work of such persons. Health care, first responder and other groups are exempted meaning that those employees are expected to continue to report to work.

Persons Addressed by EO-36

Key to the scope of this Order are the persons addressed. The Order identifies two groups of persons:

Positive Tested or Display Symptoms. Persons who themselves “test positive for COVID-19 or who display one or more of the principal symptoms of COVID-19″ are referenced in “Section 2” of the Order. These persons are subject to the longest-duration stay-home requirements.
Close Contact. Persons who “have had close contact with an individual who tests positive for COVID-19 or with an individual who displays one or more of the principal symptoms of COVID-19″ also are subject to specific stay home conditions.

For the purpose of this article, persons in these groups are here referred to as “Presumed Infectious.” Different and specific “stay home” periods are established for each Presumed Infectious group identified. Note that all key terms used in the Executive Order are defined there.

No Adverse Employment Action Against Presumed Infectious Employees

Presumed Infectious employees otherwise permitted to work who absent themselves to stay home are protected where their health status falls into either of the categories described in the immediately prior section of this article.

A Presumed Infectious protected employee must be treated by the Employer “as if he or she were taking medical leave under the Paid Medical Leave Act” (“PMLA”). Leave used may be debited and may be unpaid if the worker has exhausted paid leave entitlement. Significantly, we conservatively interpret EO-36 to mean that the length of such leave is unlimited by the amount of leave that a protected employee has accrued under the PMLA or any leave provision of the employer’s policy. EO-36 expressly states that the leave right extended to the employee under that Emergency Order “must extend, whether paid or unpaid, as long as the employee remains away from work within the time periods” specifically set forth in the two situations identified above.

Employers are prohibited from discharging, disciplining, or otherwise retaliating against a protected employee during the period of their protected status. The details of the duration of protected status are set out in Sections 2 and 3 of the Executive Order.

Workers Who are Not Protected Who Fail to Report

EO-36 does not expressly sanction discipline or discharge for employees who are permitted and expected by their Employer to work, but who fail or refuse to report. However, the Executive Order does so indirectly. The EO states:

“Nothing in this [EO-36] shall be taken to prevent an employer from discharging or disciplining an employee (1) Who is allowed to return to work … but declines to do so … or (3) [f]or any other reason that is not unlawful.”

Workers Exempted from Protections of EO-36

The following are expressly exempted from EO-36, with the result that they cannot refuse to report to work even if they meet the criteria set out in the Order:

“(a) Health care professionals.

(b) Workers at a health care facility…

(d) Child protective service employees.

(e) Workers at child caring institutions…

(f) Workers at correctional facilities.”

Specification of Further Stay-at-Home Provisions For Those Possibly or Actually Infected, Including Employer Screening of In-Person Workers

EO-36 expands non-employment provisions of the prior stay home order. Under EO-36, no person who meet the criteria as “Presumed Infectious Persons” (test positive, display symptoms, or were exposed to someone meeting these criteria) should leave their home except to “the extent absolutely necessary to obtain food, medicine, medical care, or supplies that are needed to sustain or protect life” or for permitted recreational purposes. Further, Presumed Infectious persons who elect to leave home “should wear some form of covering over their nose and mouth, such as a homemade mask, scarf, bandana, or handkerchief.”

There is no qualification limiting the scope of this section of EO-36 other than the exempt industry groups identified above. Thus, we conservatively interpret this enhanced stay home directive to mean that Presumed Infectious employees providing in-person services to Employers whose businesses are otherwise permissibly continuing to operate must not report to work. Similarly, while EO-36 does not expressly so provide, we conservatively conclude that Employers who continue to operate must take reasonable measures to screen employees continuing to provide in-person services and bar them from entering the Employer’s premises for any reason.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Employer Actions to Comply With Michigan “Stay-at-Home” Executive Order 2020-21

Employer Actions to Comply with Michigan “Stay-at-Home” Executive Order 2020-21

Effective Tuesday March 24, 12:01 am, Employers are with certain exceptions, ordered by Governor Whitmer to cease all operations that cannot be performed by employees working remotely from their homes. “Individuals” residing in Michigan, including employees, are similarly ordered to “stay at … their residence,” again with certain exceptions. To emphasize the importance of the order and to give it the most broad effect, it is to “be construed broadly to prohibit in-person work that is not necessary to sustain or protect life.“[1] EO 2020-21 §1 (referred to as the “EO”). This article focuses on the obligations of Employers employing workers in Michigan. The Order is available here.

EMPLOYER OBLIGATIONS

Fundamental Prohibition on In-Person Work

The specific prohibition on in-person work in EO Section 4 states in its entirety:

“No person or entity shall operate a business or conduct operations that require workers to leave their homes or places of residence except to the extent that those workers are necessary to sustain or protect life or to conduct minimum basic operations.”

Thus, all in-person work must be:

Necessary to sustain or protect life, or
Necessary to conduct the minimum basic operations of the Employer.

Workers expected to perform “minimum basic operations” as permitted under Section 4 are those “whose in-person presence is strictly necessary to allow the business or operation to maintain the value of inventory and equipment, care for animals, ensure security, process transactions (including payroll and employee benefits), or facilitate the ability of other workers to work remotely.” EO §4.b.

Critical Infrastructure Workers are Permitted to Perform In-Person Work

Employees permitted to engage in in-person work are referred to as “critical infrastructure workers,” adopting the terms used in federal Coronavirus enactments. EO §4.a. Critical infrastructure workers include workers so designated under federal guidance issued March 19, 2020, available here. Federal guidance adopted in the EO limits critical infrastructure workers to those “who conduct a range of operations and services that are essential to continued critical infrastructure.” Id p. 1. This federal guidance includes an industry-specific discussion, “Identifying Essential Critical Infrastructure Workers.” Id., pp. 4 et seq. Thus, workers in the identified sectors may or may not be allowed to engage in in-person work, and it remains the responsibility of the Employer to determine that each “critical infrastructure worker” is properly so categorized. The Michigan EO adopts the following sectors as identified in the federal guidance:

Health care and public health.
Law enforcement, public safety, and first responders.
Food and agriculture.
Energy.
Water and wastewater.
Transportation and logistics.
Public works.
Communications and information technology, including news media.
Other community-based government operations and essential functions.
Critical manufacturing.
Hazardous materials.
Financial services.
Chemical supply chains and safety.
Defense industrial base.

The Michigan EO adds to the above list the following sectors:

Child care workers serving dependents of critical infrastructure workers.
Workers in designated supply and distribution centers, including workers needed to supply or distribute to other such centers. There are specific criteria for this category and “[b]usinesses … that abuse their [supplier/distributor] designation authority shall be subject to sanctions to the fullest extent of the law.” EO 9.b.6.
Insurance industry.
the provision of “food, shelter, and [life] necessities” to persons who are (a) economically disadvantaged, (b) otherwise needy, (c) disabled, or who (d) need assistance due to the Coronavirus emergency. The Governor, in guidance issued after the EO, clarified that hotels and places of lodging provide critical infrastructure to the extent that the customers of those businesses are providing mitigation or containment efforts or are themselves critical infrastructure workers of other employers.
Labor union officials including benefit fund administrators.

Obligations of Employers Intending to Continue Operations

Duty to Designate Critical Infrastructure Workers

Most employers that continue to conduct in-person operations under the EO must designate and inform those workers. Designations must be in an ordinary or electronic writing after March 31, until that date, designations may be oral. EO §5.a.

Employer operations involving the following situations are exempt from required designations:

“health care and public health” services;
“necessary government activities;” and,
community shelter, food and life necessities operations as described above.

Duty to Suspend Other Operations

An Employer that continues to operate with permitted in-person workers must suspend all other operations. EO § 5.b.[2] As an example, a hotel providing lodging to persons who are themselves critical infrastructure workers of other employers must suspend all non-lodging services and amenities such as in-service restaurant and gym access.

Since compliance with EO § 5.b. is a requirement of permissibly performing any in-person work, the improper continuation of “other operations” would appear to put at risk the permissibility of otherwise-allowed in-person work performed by critical infrastructure workers.

Adoption of Workplace Social Distancing Practices

The operating Employer must adopt social distancing procedures including adoption of the most restrictive practices on workplace access, promoting remote work “to the fullest extent possible,” screening and requiring symptomatic workers and workers with possible exposure to COVID-19 to remain away from the workplace, and engaging in robust workplace hygiene and disinfectant practices. Stringent and aggressive fulfillment of this duty may predictably be expected under the General Duty clause of the Occupational Safety and Health Administration Act (OSHA) in later review actions.

We recommend in addition to the EO requirements that the Employer immediately (1) adopt these required social distancing policies in writing, (2) where workers have public contact, adopt policies that apply social distancing requirements to the public persons coming in contact with workers, including pre-access screening for travel, exposure and other risk factors, and (3) post, publicize, and train all workers of all such policies and requirements.

Additional Workplace Safety Guidance and Advice

The Centers for Disease Control and Prevention (CDC) are maintaining and updating a useful website, Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease. Topics include “Maintaining Healthy Business Operations” and “Maintaining a Health Work Environment.”

PENALTIES AND DURATION

The stated penalty for violation is minor, specifically, a “willful violation” is designated as a misdemeanor – criminal – violation.

The Order as presently issued expires April 13, 2020 at 11:59 pm.

[1] All italicized language when quoting the Executive Order is added as assistance to the reader.

[2] Note while EO § 5.b. literally references, and thus permits, only activities “to sustain or protect life,” we interpret this provision, which applies to employment of critical infrastructure workers, also to include and permit the employment of workers designated as necessary to conduct minimum basic operations of the Employer.

Employers & COVID-19: New Legal Requirements under the Families First Coronavirus Response Act

These are unprecedented times and ensuring health and safety of the world’s population is certainly on everyone’s mind. For those running and operating businesses, a whole separate challenge exists.

Due to the various orders and advisories to self-quarantine, school closings, and far-reaching spread of the COVID-19 pandemic, employers are faced with a rapidly changing workforce. They are grappling with how to continue business while dealing with the safety of their workers. It is a moral and financial dilemma. As employers of all sizes must consider how to manage this ever changing situation, new laws, requirements, and relief are being released just as quickly.

Given the economic downturn spurred by the recent turn of events, additional legal requirements are undoubtedly daunting for employers who face uncertainty or are weighing difficult decisions regarding their workforce. To help provide some clarity on these new obligations, this Client Alert discusses the emerging laws affecting employers and their health plans, including expanded benefits under FMLA, as well as additional required paid sick days.

Families First Coronavirus Response Act (“FFCRA”)

This past Wednesday, March 18, 2020, the Families First Coronavirus Response Act (“FFCRA”) was signed into law. The FFCRA applies numerous requirements and obligations to employers. In addition to expanding unemployment benefits, lessening financial obstacles for COVID-19 testing, and setting forth funding to assist with domestic nutrition programs, the FFCRA’s affects employers by amending the Family and Medical Leave Act (FMLA) to provide a new type of leave relating to the COVID-19 pandemic and separately requiring that employers provide paid sick days to employees for COVID-19 related matters.

The FFCRA becomes effective on April 1, 2020. Therefore, employers must understand its provisions and act quickly.

Emergency Family and Medical Leave Expansion Act

The FFCRA modifies FMLA under the Emergency Family and Medical Leave Expansion Act (“FMLA Expansion Act”). While the FMLA, in general terms, applies to employers with 50 or more employees and protects employees who have worked at least 12 months with that employer, the FFCRA now changes that with respect to COVID-19 related issues and adds a new section titled “Public Health Emergency Leave.”

In summary, FMLA leave now also applies to employees who have been employed at least 30 days by employers who employ fewer than 500 employees (and public agencies) if those employees are unable to work (or telework) because they need to care for their under age 18 children due to the closure of schools or unavailability of day care due to a government declared COVID-19 public health emergency. The first 10 days of the 12-week job-protected leave is unpaid; however, subsequent days must be paid leave in an amount of not less than two-thirds of regular pay, capped at $200 per day with a maximum cap of $10,000 per employee.

Effective Dates:

The FMLA Expansion Act is applicable from April 1, 2020 to December 31, 2020.

Qualifying Leave:

Specifically, the FMLA Expansion Act applies to qualifying needs related to a public health emergency, as set forth below:

“Qualifying need related to a public health emergency” is when an employee is “unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed, or the child care provider … is unavailable, due to a public health emergency.” The terms “child care provider” and “school” are also defined.
“Public health emergency” is an emergency with respect to COVID-19 declared by a Federal, State, or local authority.

Affected Employers:
The leave requirements apply to employers with fewer than 500 employees, as well as public agencies.

Exemptions may apply for employers with less than 50 employees if complying would jeopardize the viability of the business as a going concern and if regulations are so issued. See: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus. We expect such regulations to be issued in April of 2020.

Special rules apply in cases of employment under multi-employer bargaining agreements.

Eligible Employees:

Employees who have been employed for at least 30 calendar days by the employer are eligible for the leave if they have a qualifying need related to a public health emergency. Certain health care providers and emergency responders may be excluded from this additional protection, if regulations are so issued. Additionally, an employer of an employee who is a health care provider or an emergency responder may elect to exclude such employee.

Employees must provide the employer with notice of leave as practicable.

Special rules apply in cases of employment under multi-employer bargaining agreements.

Unpaid and Paid Leave Components:

The 12-week FMLA leave has both unpaid and paid components.

Unpaid leave applies for the first 10 days; however an employee may substitute accrued vacation, personal, medical or sick leave time.

Paid leave must be provided by the employer for days in excess of 10 days, calculated based on at least two-third’s of an employee’s regular rate of pay and the number of hours the employee would otherwise be scheduled to work.

The amount shall not exceed $200 per day and $10,000 in the aggregate. However, for an employee whose schedule varies from week to week and an employer is unable to determine with certainty the number of hours the employee would have worked, the employer must instead average the number of hours the employee was scheduled per day over the 6-month period ending on the date the employee took such leave (or if the employee did not work, the employer must use a reasonable expectation the employee’s average hours at the time of hiring).

Small Employer Partial Exception:

FMLA’s restoration to work provisions will not apply to employers with fewer than 25 employees if:

The employee takes leave pursuant to a public health emergency;
The position held by the employee no longer exists due to economic conditions or operation changes that affect employment and are caused by a public health emergency during the leave;
The employer makes reasonable efforts to restore the employee to an equivalent position (with equivalent benefits, pay, and other terms and conditions of employment); and
If the above efforts of the employer to restore the employee fail, the employer makes reasonable efforts to contact the employee if an equivalent position becomes available for a period of 1 year beginning on the day the qualifying need related to the public health emergency concludes (or the date that is 12 weeks after the date the employee’s public health emergency leave starts).

Significantly, small employers who are not accustomed to FMLA must now comply with the FMLA Expansion Act for COVID-19 related leaves. However, in a joint news release issued late in the day of Friday, March 20, 2020, the U.S. Treasury Department, Internal Revenue Service, and the U.S. Department of Labor stated that small businesses with fewer than 50 employees will be eligible for an exemption in cases where the viability of the business in threatened. See: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus.
Additionally, unless otherwise specified, all covered employers must apply FMLA’s typical protections for these public health emergency leaves, including job-protection and restoration, and the continuation of group health plan coverage with employer contributions during such leaves.

Emergency Paid Sick Leave Act

The FFCRA also requires employers to provide up to 80 hours of paid sick time for COVID-19 related issues under the Emergency Paid Sick Leave Act (“EPSLA”).

Effective Dates:

The EPSLA is effective from April 1, 2020 to December 31, 2020.

Affected Employers:

The EPSLA applies to virtually all private employers with fewer than 500 employees and to virtually all public agencies employing 1 or more employees. Exemptions may apply for employers with less than 50 employees if complying would jeopardize the viability of the business as a going concern and if regulations are so issued. Additionally, future regulations may allow an employer of an employee who is a health care provider or an emergency responder to opt out.

Eligible Employees:

The EPSLA requires no hour or service requirement to receive paid leave, which may be immediately used. However, employers of employees who are health care providers or emergency responders may elect to exclude these employees from the above.

Special rules apply for multi-employer bargaining agreements.

Reason for Paid Sick Leave:

Under EPSLA, employers shall provide employees with paid sick time if they are unable to work (or telework) due to a need for leave because:

The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
The employee has been advised by a health care provider to self-quarantine due to concerns relating to COVID-19;
The employee has COVID-19 symptoms and is seeking a medical diagnosis;
The employee is caring for an individual subject to quarantine or isolation or advised to self-quarantine as described in paragraphs (1) or (2) above;
The employee is caring for his/her child if the school or place of care has been closed or the child care provider is unavailable due to COVID-19 precautions; and
The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

Amount of Paid Sick Time:
Paid sick time is calculated based on the employee’s required compensation and the number of hours the employee would otherwise be scheduled to work capped at:

$511 per day and $5,110 in the aggregate for reasons (1)-(3) under Reason for Paid Sick Leave above; and
- For Reasons (1)-(3), compensation shall not be less than the greater of the employee’s regular rate of pay under the Fair Labor Standards Act (“FLSA”), minimum wage rate under the FLSA, or the minimum wage rate in the applicable State or locality (whichever is greater) in which the employee is employed.
$200 per day and $2,000 in the aggregate for reasons (4)-(6) under Reason for Paid Sick Leave above
- For Reasons (4)-(6), compensation shall be two-thirds of that described for Reasons (1)-(3).

However, for any part-time employee whose schedule varies from week to week and an employer is unable to determine with certainty the number of hours the employee would have worked, the employer must instead average the number of hours the employee was scheduled per day over the 6-month period ending on the date the employee took such leave (or if the employee did not work, the employer must use a reasonable expectation the employee’s average hours at the time of hiring). The Department of Labor is expected to issue additional information and guidelines regarding calculation of this paid sick time.

Duration of Paid Sick Leave:
For full-time employees, 80 hours of paid sick time must be provided. For part-time employees, paid sick time will be the number of hours that the employee works, on overage, over a two-week period. There will not be a carryover from one year to the next. Paid sick time is terminated with the employee’s next scheduled work shift immediately following the point when leave is no longer needed as defined under EPSLA.

Notice Requirement:

Employers must post, in conspicuous places where employer notices are customarily posted, an approved notice describing the requirements of the EPSLA. The Secretary of Labor will make a model notice availability no later than March 25, 2020. It must be posted by April 1, 2020.

Prohibited Acts:

Employers cannot discharge, discipline, or otherwise discriminate against employees who take leave under the EPSLA or have filed a complaint, instituted (or caused to be instituted) any proceeding or has testified or is about to testify in any proceeding related to the EPSLA.

Additionally, the EPSLA states that employers cannot require that an employee be involved in a search or find a replacement to coverage his/her hours during the leave.

Employers also cannot require that an employee use other employer provided paid leave prior to using leave under the EPSLA.

Enforcement:

Employers who fail to comply will be subject to stiff penalties under the Fair Labor Standards Act.

Tax Credits for Paid Sick and Paid Family and Medical Leave

While the FFCRA requires employers to comply with additional paid FMLA and sick leave relating to the COVD-19 pandemic, it also provides some relief for employers in the form of tax credits.

Employers will be allowed a quarterly tax credit equal to 100 percent of the qualified sick leave wages paid under the EPSLA and equal to 100 percent of the qualified family leave wages paid under the FMLA Expansion Act, subject to limitations and requirements. For example, the sick leave wages taken into account shall not exceed $200 per day (or $511 per day for leaves associated government order quarantine or isolation due to COVID-19, self-quarantine as advised by a health care provider due to COVID-19 concerns, or if an employee has COVID-19 symptoms and is seeking a diagnosis) up to a limited number of days. The family leave wages taken into account shall not exceed $200 per day or up to $10,000 in the aggregate and is limited to certain employment taxes.

The credits also include a portion of the health plan cost allocable to the paid leave.

Tax credits are also available for eligible self-employed individuals.

However, these tax credits are subject to additional restrictions and requirements. As the law continues to evolve and new guidance is to be issued this week, an in-depth discussion is beyond the scope of this Client Alert.

Concluding Thoughts:

While aspects of the FFCRA are not completely clear, we certainly hope to see more guidance from the Department of Labor prior to the law’s April 1st effective date.

Current actions for employers include analyzing the interplay between the FFCRA’s new leave and paid sick time requirements, their own policies, as well as other federal, state, and local laws. Questions to ask include whether the employer’s leave of absence provisions should be amended and whether paid time off polices need to be rewritten.

Benefits are also a key component in this analysis. Depending on potential layoffs or leaves of absence, even if unaffected by the FFCRA, will benefits be continued? What do the applicable employee benefit plans, insurance policies, and/or other governing documents provide? How will monthly payments by the employee continue? Is there a risk of insurers denying continued benefits? Does COBRA apply? What are the Affordable Care Act or Pay or Play consequences if coverage is terminated, or if coverage is continued but the employer contribution ceases for non-FMLA leaves? Do benefit documents require amendments to comply?

A plethora of questions are mounting and the rapid nature of legal changes is not helping. However, as always, careful consideration of options and benefits is paramount.

Of some relief, good faith efforts toward compliance will be considered. In a subsequent IRS News Release issued on Friday, March 20, 2020, the Department of Labor stated that it will be issuing a temporary non-enforcement policy in order for employers to come into compliance with the Act. “Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.” See https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus.

Again, the law and guidance are rapidly evolving in this area. Please check with your Fraser Trebilcock attorney for the most recent updates.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Employers Take Note – IRS Extends Deadline for 2016 ACA Information Reporting For Individuals!

The Internal Revenue Service (“IRS”) has extended the deadline for 2016 Information Reporting by employers (and other entities) to individuals under Internal Revenue Code sections 6055 and 6056 by just over one month. However, the deadline for these entities to file with the Internal Revenue Service (IRS) remains the same.

IRS Notice 2016-70 extends the due dates for the following 2016 information reporting Forms from January 31, 2017 to March 2, 2017:

2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
2016 Form 1095-B, Health Coverage

However, the due dates for filing these Forms and their Transmittals with the IRS remains unchanged. Specifically, the due date for filing the following documents with the IRS is February 28, 2017; however, if filing electronically, the due date is March 31, 2017 (employers who are required to file 250 or more Forms must file electronically):

2016 Form 1094-B, Transmittal of Health Coverage Information Returns, and the 2016 Form 1095-B, Health Coverage
2016 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

As a result of these extensions, individuals might not receive a Form 1095-B or Form 1095-C by the time they file their 2016 tax returns. In such case, IRS Notice 2016-70 explains that individual taxpayers may instead rely on other information received from their employers or other coverage providers for purposes of filing their tax returns and do not need to wait to receive Forms 1095-B and 1095-C before filing. Once they do receive their forms, the individuals should keep it with their tax records. You can find the full Notice here.

Please note that no further extension beyond the March 2, 2017 deadline is allowed. Therefore, this deadline for furnishing the Forms to individuals must be met. However, additional extensions may still be available for filing these Forms with the IRS.

Background

As provided in previous Client Alerts, information reporting requirements are applicable under two Internal Revenue Code (“Code”) sections as follows:

Section 6055 for insurers, self-insuring employers, and certain other providers of minimum essential coverage; and
Section 6056 for applicable large employers.

By way of background, the IRS requires applicable large employers and sponsors of self-insured health plans to report on the health coverage offered and/or provided to individuals beginning calendar year 2015. Although the reporting requirements extend to other entities that provide “minimum essential coverage” (such as health insurance issuers), this Client Alert focuses on the requirements imposed on employers.

Employers who are deemed applicable large employers, as well as employers of any size who offer self-funded health coverage, must carefully review and study these instructions, which set forth numerous details, definitions and indicator codes which must be used to complete the requisite forms. The instructions address the “when, where and how” to file, extensions and waivers that may be available, how to file corrected returns, and potential relief from penalties imposed for incorrect or incomplete filing.

The IRS utilizes information from these returns to determine which individuals were offered minimum essential coverage, whether individuals were eligible for premium tax credits in the Marketplace, as well as to determine penalties to be imposed on employers under Pay or Play (Code section 4890H; Shared Responsibility for Employers Regarding Health Coverage, 26 CFR Parts 1, 54, and 301, 79 Fed. Reg. 8543 (Feb. 12, 2014)). Due to the impact of proper reporting, a clear understanding of these forms and instructions is essential.

Code section 6056 applies to applicable large employers (generally employers with at least 50 full-time employees, including full-time equivalent employees). Information with respect to each full-time employee (whether or not offered coverage) must be reported on Form 1095-C. Transmittal Form 1094-C must accompany the Forms 1095-C; all the Forms 1095-C together with the Transmittal Form 1094-C constitute the Code section 6056 information return that is required to be filed with the IRS. For applicable large employers who self-insure, there is a separate box to complete which incorporates the information required under Code section 6055.

Code section 6055 applies to employers of any size who self-insure. Non-applicable large employers with self-funded plans must report their information on Form 1095-B, as well as on transmittal Form 1094-B. All of the Forms 1095-B together with the Transmittal Form 1094-B constitute the Code section 6055 information return that is required to be filed with the IRS. Again, if the employer who self-insures is also an applicable large employer, the employer will instead use Forms 1095-C and 1094-C, which include a section for self-insured plans.

Employers subject to these requirements must report in early 2017 for the entire 2016 calendar year.

Additionally, employers must provide informational statements to the individuals for whom they are reporting. Form 1095-C or Form 1095-B (as applicable) may be used as this informational statement.

The links to the Final Forms and Instructions are below:

2016 Forms for Applicable Large Employers (Code Section 6056)

2016 Instructions for Forms 1094-C and 1095-C: click here.

Form 1095-C, Employer Provided Health Insurance Offer and Coverage: click here.

Form 1094-C, Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns: click here.

Additionally, the IRS has posted numerous Questions and Answers regarding Code section 6056 on its website, here.

2016 Forms for Employers who Self-Fund (Code Section 6055)

2016 Instructions for Forms 1094-B and 1095-B

Form 1095-B, Health Coverage

Form 1094-B, Transmittal of Health Coverage Information Returns

The IRS’ Questions and Answers regarding Code section 6055 can be found here.

Change in Forms for 2016

The changes to the 2016 forms are reflected in the above Instructions but are relatively minor in scope. The most noteworthy changes are to Form 1094-C with the removal of the Line 22 box for “Qualifying Offer Method Transition Relief” as it was only applicable for 2015; as well as two new Line 14 codes (1J and 1K) added to Form 1095-C which are available to reflect conditional offers of coverage to an employee’s spouse. As explained in the instructions, a conditional offer of coverage to a spouse is “an offer of coverage that is subject to one or more reasonable, objective conditions (for example, an offer to cover an employee’s spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer).” See 2016 Instructions for Forms 1094-C and 1095-C.

Penalties Imposed

Both sets of Instructions (for Forms 1094/1095-B and Forms 1094/1095-C) set forth the following penalty information for failure to comply with the information reporting requirements for 2016:

The penalty for failure to file a correct information return is $260 for each return for which the failure occurs, with the total penalty for a calendar year not to exceed $3,193,000.

The penalty for failure to provide a correct payee statement is $260 for each statement for which the failure occurs, with the total penalty for a calendar year not to exceed $3,193,000.

Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to file the returns and furnish the required statements.

However, the IRS has continued the good faith transition relief from penalties for 2016. Indeed, IRS Notice 2017-70 states:

Specifically, this notice extends transition relief from penalties under sections 6721 and 6722 to reporting entities that can show that they have made good-faith efforts to comply with the information-reporting requirements under sections 6055 and 6056 for 2016 (both for furnishing to individuals and for filing with the Service) for incorrect or incomplete information reported on the return or statement. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. No relief is provided in the case of reporting entities that do not make a good-faith effort to comply with the regulations or that fail to file an information return or furnish a statement by the due dates (as extended under the rules described above).

Thus, it is imperative to timely distribute and file the forms; otherwise penalties may ensue.

This correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Questions? Contact us to learn more.

Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, she was selected as the 2015 “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.
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