30 Sep

September 2020 Federal HR Updates

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Department of Labor (DOL) Joint Employer Rule Struck Down by New York Court

What happened?
On September 8, 2020, Judge Woods of the U.S. District County for the Southern District of New York vacated the DOL’s new test for joint employment. 

What are the details?  
The new rules created and implemented by the DOL identified four factors that indicate a joint employer situation. The four factors determine a joint employer situation when an employer:

  1. Hires or fires the employee
  2. Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree
  3. Determines the employee’s rate of pay and method of payment
  4. Maintains the employee’s employment records.

Subsequently, the DOL was challenged by 17 states and the District of Columbia, under the Administrative Procedure Act (APA). Judge Woods agreed with the complainants, striking down the new rules under Americans with Disabilities Act (ADA), holding that the rules violated the APA in two ways.

First, Judge Woods found the rules to be contradictory to law because they based the joint employer liability only on the Fair Labor Standards Act (FLSA) definition of “employer,” ignoring the FLSA’s text and Supreme Court and lower court precedent that defined joint employer liability under three interrelated definitions: employer, employee, and most significantly, “employ.” With that in mind, Judge Woods held that the FLSA definitions are an expansive definition that defines the employment relationship based on the economic dependence of the worker.

Second, Judge Woods found the rule to be arbitrary and capricious. He held that the DOL did not explain why it departed from prior guidance or why the rules conflicted with the regulations of a sister statute and did not adequately consider the costs to workers.

With the DOL’s new rule being struck down, the standard way of determining a joint employer situation will fall back to rules created in 1958.

Note: Judge Woods only struck down the rules as it applies to vertical joint employment. The changes made to horizontal joint employment were found to be nonsubstantive to the 1958 rule.

What do employers need to do?  
Employers should stay informed of potential regulations being released in the future by the DOL. The new rule was only implemented in March, so it is not likely major changes had occurred in the workplace of joint employers.

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DOL Proposes New Contractor Determination Rule

What happened?
On September 22, 2020, the DOL proposed a new regulation related to determining if a worker is an independent contractor or an employee.

What are the details?  
This new rule is to determine the employment status of a worker under the FLSA.

In this rulemaking, the DOL proposes to:

  • Adopt an “economic reality” test to determine a worker’s status as an FLSA employee or an independent contractor. The test considers whether a worker is in business for themselves (independent contractor) or is economically dependent on a putative employer for work (employee);
  • Identify and explain two “core factors,” specifically, (1) the nature and degree of the worker’s control over the work and (2) the worker’s opportunity for profit or loss based on initiative and/or investment. These factors help determine if a worker is economically dependent on someone else’s business or is in business for themselves;
  • Identify three other factors that may serve as additional guideposts in the analysis including (1) the amount of skill required for the work, (2) the degree of permanence of the working relationship between the worker and the potential employer, and (3) whether the work is part of an integrated unit of production; and
  • Advise that the actual practice is more relevant than what may be contractually or theoretically possible in determining whether a worker is an employee or an independent contractor.

This proposed regulation published by the Federal Register. The public will be allowed to comment on this regulation for the next 30 days (ending October 26, 2020).

The DOL’s press release discussing the new proposed regulation can be found here.

The full text of the new rule is available here.

The rule is available on the Federal Registers webpage, where the public may also submit comments, here.

What do employers need to do?  
Employers should keep an eye on the Federal Register to see the official rule once it is posted. Once it is posted, legal counsel may be needed if there is confusion on which workers at the company may now be considered independent contractors.

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EEOC Clarifies Employer Not Automatically Required to Allow Telework Post-COVID

What happened?
The Equal Employment Opportunity Commission (EEOC) has updated their FAQ to include clarification about teleworking practices post-pandemic.

What are the details?  
The EEOC updated their FAQ on September 8, 2020 to include more content from previously hosted webinars. This content includes multiple questions regarding Americans with Disabilities Act (ADA) requirements for accommodation as it relates to teleworking. Many employers are concerned that because they are offering teleworking now, they will be required to offer it in the future when an employee seeks accommodations under the ADA. Importantly, the EEOC provided this Q&A:

Q: Assume that an employer grants telework to employees for the purpose of slowing or stopping the spread of COVID-19. When an employer reopens the workplace and recalls employees to the worksite, does the employer automatically have to grant telework as a reasonable accommodation to every employee with a disability who requests to continue this arrangement as an ADA/Rehabilitation Act accommodation?

A: No. Any time an employee requests a reasonable accommodation, the employer is entitled to understand the disability-related limitation that necessitates an accommodation. If there is no disability-related limitation that requires teleworking, then the employer does not have to provide telework as an accommodation. Or, if there is a disability-related limitation but the employer can effectively address the need with another form of reasonable accommodation at the workplace, then the employer can choose that alternative to telework.

To the extent that an employer is permitting telework to employees because of COVID-19 and is choosing to excuse an employee from performing one or more essential functions, then a request—after the workplace re-opens—to continue telework as a reasonable accommodation does not have to be granted if it requires continuing to excuse the employee from performing an essential function. The ADA never requires an employer to eliminate an essential function as an accommodation for an individual with a disability. 

The fact that an employer temporarily excused performance of one or more essential functions when it closed the workplace and enabled employees to telework for the purpose of protecting their safety from COVID-19, or otherwise chose to permit telework, does not mean that the employer permanently changed a job’s essential functions, that telework is always a feasible accommodation, or that it does not pose an undue hardship. These are fact-specific determinations. The employer has no obligation under the ADA to refrain from restoring all of an employee’s essential duties at such time as it chooses to restore the prior work arrangement, and then evaluating any requests for continued or new accommodations under the usual ADA rules.

The FAQ may be found here.

Note: Other questions posted recently may be found using the “Find” function on your browser and searching “9/8/20.”

What do employers need to do?  
Employers who offer teleworking to their employees may wish to read some of the newer questions, as they go in depth when discussing the future expectations that employers will be held up to.

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The COVID-19 Vaccine Is Coming. Can Employers Require Employees to Receive It?

What happened?
It has become clear that a COVID-19 vaccine will be developed in the near future with many predicting a feasible vaccine being developed before the end of this year.

What are the details?  
This upcoming decision that employers will need to make is very complex. Two important federal agencies have since weighed in.

Occupational Safety and Health Administration (OSHA)

OSHA has taken the stance that employers can require employees to take influenza vaccines (there is no current COVID-19 vaccine). However, they emphasize that employees “need to be properly informed of the benefits of vaccinations.” OSHA also explains that “an employee who refuses vaccination because of a reasonable belief that he or she has a medical condition that creates a real danger of serious illness or death (such as a serious reaction to the vaccine) may be protected under Section 11(c) of the Occupational Safety and Health Act of 1970 pertaining to whistleblower rights.”

In the past, OSHA has also held this position when dealing with H1N1 (Swine Flu), seen here.

Equal Employment Opportunity Commission (EEOC)

In March 2020, the EEOC issued COVID-19 guidance specifically addressing the issue of whether employers covered by the ADA and Title VII of the Civil Rights Act of 1964 (Title VII) can compel all employees to take the influenza vaccine (noting that there is not yet a COVID-19 vaccine). In responding to this question, the EEOC explained that an employee could be entitled to an exemption from a mandatory vaccination under the ADA based on a disability that prevents the employee from taking the vaccine, which would be a reasonable accommodation that the employer would be required to grant unless it would result in undue hardship to the employer.  Under the ADA, “undue hardship” is defined as “significant difficulty or expense” incurred by the employer in providing an accommodation. Additionally, Title VII provides that once an employer receives notice that an employee’s sincerely held religious belief, practice, or observance prevents the employee from taking the vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship to the employer as defined by Title VII, a lower standard than under the ADA.  Under Title VII, employers do not need to grant religious accommodation requests that result in more than a de minimis cost to the operation of the employer’s business.  However, analogous state laws may impose stricter standards. With this all in mind, the EEOC has advised that it is best practice to simply encourage employees to take the influenza vaccine rather than to mandate it.

Littler, a large law firm, has provided a beautifully prepared rundown of this issue as well, available for download here.

Another article covering this issue can be found here.

What do employers need to do?  
Employers should wait to make a decision regarding if they want to require employees to receive the vaccine when it does eventually release. Employers likely should seek legal advice from their employment attorney when they do decide to make this decision.

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Furloughed Employees Can Trigger WARN Requirements

What happened?
When the United States first began temporarily shutting down various industries, many places of business put their employees on a temporary furlough, roughly six months ago. 

What are the details?  
Employers who were forced to furlough their employees back in late March and early April will be approaching the six-month deadline set by the Worker Adjustment and Retraining Notification (WARN) Act. Under the WARN Act, an employer with at least 100 employees who is laying off 50 or more full-time employees at one location must make a notice 60 days in advance. There is an exception to the notice requirement if the business can prove there was “unforeseeable business circumstances” leading up to the layoffs. While COVID-19 is most definitely an unforeseeable business circumstance by itself, it would be unlikely that four months after the initial business closures, employers would consider an additional two more months of economic downturn an unforeseeable circumstance in any way.

An additional part of the furloughs to keep in mind is that once the six months has passed, the layoffs are considered to have happened at the starting date of the furlough. A business may have only laid off 25 people in March and put another 25 on furlough. Normally, this would not trigger WARN requirements. However, if after six months those employees are not brought back from their furlough, the business will be considered to have laid off 50 employees total. The penalty for a WARN violation can vary. Major penalties can result in the employer being liable for 60 days of employee backpay, plus civil penalties of up to $500 per day and reasonable attorney’s fees.

Read more about how the WARN Act behaves with furlough here and here.

What do employers need to do?  
Employers with 100 or more employees should read the articles and summary above. Employers who have furloughed 50 or more employees at one time should be aware of the risks if they are not brought back within six months and seek legal counsel on how to best move forward.

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President Trump Issues Executive Order Forbidding “Divisive” Concepts in Contractor Training

What happened?
On September 22, 2020, President Trump issued an order forbidding federal contractors from training on “divisive” concepts regarding race and sex.

What are the details?  
The executive order creates a new contract clause to be inserted in all government contracts and subcontracts to which Executive Order (EO) 11246 applies. (EO 11246 prohibits federal contractors from discriminating against employees or applicants on the basis of race, color, religion, sex, sexual orientation, gender identity, and national origin, and requires contractors to take affirmative action to employ females and minorities.)

Under the EO, organizations entering into federal contracts or subcontracts must agree that they will not use any workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating, including the concepts that:

  • one race or sex is inherently superior to another race or sex;
  • an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
  • an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
  • members of one race or sex cannot and should not attempt to treat others without respect to race or sex;
  • an individual’s moral character is necessarily determined by his or her race or sex;
  • an individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;
  • any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or
  • meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race.

In addition, the EO defines “race or sex stereotyping” as “ascribing character traits, values, moral and ethical codes, privileges, status, or beliefs to a race or sex, or to an individual because of his or her race or sex.” “Race or sex scapegoating” is defined as “assigning fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex. It similarly encompasses any claim that, consciously or unconsciously, and by virtue of his or her race or sex, members of any race are inherently racist or are inherently inclined to oppress others, or that members of a sex are inherently sexist or inclined to oppress others.”

An article doing going more in depth about this executive order can be found here.

What do employers need to do?  
Federal contractors should review the training provided to employees and adjust to accommodate these special requirements. Additionally, employers may seek legal counsel from their employment attorney to ensure compliance.

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OFCCP Announces Fiscal Year 2020 Audit Schedule

What happened?
On September 11, 2020, the Office of Federal Contract Compliance Programs (OFCCP) published its Fiscal Year (FY) 2020 Corporate Scheduling Announcement List (CSAL).

What are the details?  
CSALs give contractors at least 45 days’ notice of an impending OFCCP compliance evaluation (audit).  Thus, FY 2020 scheduling letters will not be sent prior to October 26, 2020. Once a contractor receives the scheduling letter, it will have 30 days to submit its Affirmative Action Program (AAP) and supporting data, but the OFCCP will grant an automatic 30-day extension on the data portion of an audit submission as long as the contractor timely submits the non-data portion of the AAP and requests the extension prior to the initial due date.  Further, it is OFCCP’s practice, at the time of this publication due to the COVID-19 pandemic, to provide an additional 30-day extension on desk audit submissions and supporting data as a matter of course.

The FY 2020 CSAL includes 2,250 supply and service establishments as well as 200 construction contractors.  The review types are broken down as follows: 700 Compliance Checks (including all 200 construction contractors), 500 Accommodation-Focused Reviews, 500 Promotion-Focused Reviews, 402 Establishment Reviews, 250 Section 503-Focused Reviews, 67 Corporate Management Compliance Evaluation (CMCE) Reviews, and 31 Functional Affirmative Action Program (FAAP) Reviews.  This is the first time OFCCP has included construction contractor compliance evaluations in a CSAL.  In addition, the new CSAL marks the first time that the list has included Accommodation-Focused Reviews and Promotion-Focused Reviews, both of which are new types of compliance evaluations about which OFCCP has not yet released specific guidance.  In yet another new development, the Section 503-Focused Reviews are no longer limited to contractors’ headquarters.

With respect to supply and service establishments, the OFCCP utilized the following criteria to select contractors for compliance evaluations: (1) no more than 10 establishments of any parent company; (2) no more than five full compliance reviews for any parent company; (3) no more than two functional units of a company with an FAAP; (4) no more than two CMCE reviews allocated to each district office; and (5) no more than four university reviews assigned to any region.  However, despite the five compliance review limitation, parent companies may have additional establishments scheduled for Focused Reviews and Compliance Checks.

The OFCCP’s website can be found here.

What do employers need to do?  
Federal contractors should review their workplace policies to ensure compliance with standards set by their contracts. If there is any confusion these employers should see their employment attorney.

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Employment Authorization Document Delays Due to COVID-19

What happened?
Issuance of certain Employment Authorization Documents (Form I-766) (EADs) may be delayed due to the COVID-19 global pandemic.

What are the details?  
To complete Form I-9, new employees who are waiting for their EAD and current employees who require reverification may present certain Forms I-797, Notice of Action, as a List C #7 document issued by the Department of Homeland Security that establishes employment eligibility, even though the notice states it is not evidence of employment authorization. 

For the notice to be acceptable, it must include a Notice Date from December 1, 2019, through and including August 20, 2020, and indicate that U.S. Citizenship and Immigration Services has approved the employee’s Form I-765, Application for Employment Authorization. Both new and current employees may present this notice to complete Form I-9 until December 1, 2020. New employees will also need to present an acceptable List B identity document.

By December 1, 2020, employers must reverify employees who presented this notice as a List C document. These employees must present new evidence of employment authorization – either their new EAD or any other acceptable documentation they choose – from either List A or List C.

What do employers need to do?  
Employers should be sure they are re-verifying documents in a timely manner (December 1, 2020) for employees who had to use Forms I-797.

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Form I-9 Remote Verification Extended

What happened?
U.S. Immigration and Customs Enforcement (ICE) has once again extended the duration of rule allowing employers to remotely verify Section 2 documents.

What are the details?  
ICE has continued to renew their rules about the I-9 remote verification, this time through November 19, 2020. The rules, refreshed on September 14, 2020, allow employers who are limiting psychical interactions in the workplace to remotely verify the Section 2 documents over video link, fax, or email, etc. Once these extensions finally end there is an expectation that employers will then physically inspect the documents when operations return to normal. Employees who were onboarded during these extensions will have three business days to provide their in-person identification documents, once operations are back to normal. Keep in mind this extension only applies to employers who are working remotely. If employees are present in the workplace, these rules do not apply.

The most recent extension announcement can be found here.

The original announcement announcing the rule can be found here.

What do employers need to do?  
Employers who are working remotely and utilizing the remote I-9 verification should be aware of the deadline, and keep in mind that it is not guaranteed to be continued.

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