March 2021 Federal HR Updates

E-Verify Adds New myUploads Feature

Update Applicable to:
All employers utilizing E-verify.

What happened?
On March 10, 2021, the United States Citizenship and Immigration Services announced the new myUploads feature to be included in the use of E-verify.

What are the details?
myUploads is a new feature from myE-Verify that helps employees and individuals electronically resolve their E-Verify DHS Tentative Nonconfirmations (TNCs) by uploading images of their documentation as a JPEG, PNG, or PDF through a computer or smart device. This new free feature may help expedite employment eligibility confirmation and resolve TNCs. In the case of an E-Verify TNC, the E-Verify employer must privately notify the employee and provide a Further Action Notice (FAN) to help the employee understand the TNC process. The FAN will include information on how to use myUploads. Employees are required to contact DHS after uploading their documents, and E-Verify employers are still required to process and close DHS TNC cases within E-Verify’s timelines. 

myUploads requires users to have a myE-Verify account and to successfully pass a two-factor identity assurance process. Those logging into myE-Verify for the first time since April 28, 2019, must access myE-Verify with their USCIS online account. Fax is still available.

myUploads is a free service available to all users, however, employers may not require employees to use myUploads, myE-Verify or Self Check to resolve a TNC or to precheck their employment authorization.

What do employers need to do?
No action required. The use of myUploads is optional.

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The Department of Labor Establishes New Whistleblower Protocols

Update Applicable to:
All employers.

What happened?
On February 19, 2021, the U.S. Department of Labor announced that the Occupational Safety and Health Administration (OSHA) will oversee worker retaliation complaints filed under the Criminal Antitrust Anti-Retaliation Act (CAARA) and the Anti-Money Laundering Act (AMLA).

What are the details?
The CAARA, signed into law on December 23, 2020, prohibits employers from taking adverse employment action against covered individuals who report criminal antitrust violations to their employer or the federal government, or who participate in a federal governmental criminal antitrust investigation or proceeding.

The AMLA, enacted on January 1, 2021, as part of the National Defense Authorization Act, is the most expansive anti-money laundering statute since the USA Patriot Act of 2001. The statute bars employers from retaliating against employees who report money laundering and Bank Secrecy Act (BSA) violations to their employer or the federal government, or who participate in a Treasury Department or Justice Department investigation or proceeding based upon the information.

In addition to announcing that probes of whistleblower complaints under CAARA and the AMLA will fall under OSHA’s purview, the DOL advised that OSHA will process such complaints using the procedures outlined in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21)3 until the Agency issues interim final rules. AIR21 was enacted to protect employees who provide information relating to air carrier safety violations. Like the more than 20 other statutes whose whistleblower provisions are administered by OSHA, AIR21 has well-established complaint reporting and investigative mechanisms.

Applying the AIR21 framework to CAARA and AMLA whistleblower claims, employees who believe they were discharged or otherwise discriminated against for reporting a violation of either law may file a complaint with the secretary of labor within 90 days after the date on which the violation occurs.

Further reading can be found in this article.

What do employers need to do?
Employers should be aware of the changes to whistleblower-related laws to prevent violations. 

March 2021: New COVID-19 Stimulus Bill: The American Rescue Plan

Congress Passes American Rescue Plan

Update Applicable to:
All employers operating within the United States.

What happened?
The American Rescue Plan, the second COVID-19 related stimulus bill, has passed with multiple changes that will impact businesses across the country, with a focus on the Families First Coronavirus Response Act (FFCRA).

What are the details?
Signed into effect on March 11, 2021, the American Rescue Plan impacts many aspects of the previous stimulus bill. Included in this is a revamped FFCRA, an extension to tax credits related to paid leave, and discrimination protections for workers.

The FFCRA has been revamped to again provide employees 80 hours of COVID-19 related paid sick leave, as well as family leave, effective March 31, 2021. This leave is still optional for employers to provide and is not a mandatory requirement. If used, the additional 80 hours of leave provided allow employers the option to utilize the 80 hours for tax purposes. Additionally, the FFCRA will now cover individuals taking leave to attend vaccine appointments, as well as dealing with complications due to receiving the vaccine. Employers will again enjoy the tax benefits when utilizing the federal paid sick leave, extending their usage to September 30, 2021.

The updates to the FFCRA will also include protection for workers in the form of a non-discriminatory clause related to the denial of COVID-19 paid sick leave usage. Employers will no longer be able to claim the provided tax credit if they do not uniformly provide leave to all employees. Businesses will be barred from the tax credit if they are found to be providing the paid sick leave to only certain categories of workers instead of their entire workforce.

Additional reading on the American Rescue Plan can be found from multiple sources: Husch Blackwell, Fisher Phillips, HR Drive, Morgan Lewis, and SHRM.

What do employers need to do?
Employers utilizing the FFCRA leave should update their workplace leave policies to reflect the new requirements of the bill.  If you have any questions regarding this update, please contact your human resource or client relations representatives.

February 2021 Federal HR Updates

ICE Extends I-9 Verification Flexibility

Update Applicable to:
All employers with remote workforces.

What happened?
On January 27, 2021, U.S. Immigration and Customs Enforcement (ICE) announced the extension of flexibilities in the rules related to Form I-9 compliance. 

What are the details?
On March 19, 2020, due to precautions implemented by employers and employees associated with COVID-19, the Department of Homeland Security (DHS) announced that it would exercise prosecutorial discretion to defer the physical presence requirements associated with the Employment Eligibility Verification (Form I-9) under section 274A of the Immigration and Nationality Act. This policy only applies to employers and workplaces that are operating remotely. If there are employees physically present at a work location, no exceptions are being implemented at this time for in-person verification of identity and employment eligibility documentation for Form I-9, Employment Eligibility Verification.

The current extension will apply through March 31, 2021.

The original announcement can be found here.

The current announcement can be found here.

What do employers need to do?
Employers with continued remote worksites may keep operating as they have.

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OSHA Issues New COVID-19 Guidance

Update Applicable to:
All employers.

What happened?
On January 29, 2021, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) released guidance for employers: “Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace.”

What are the details?
The guidance contains recommendations as well as descriptions of mandatory safety and health standards.  It does not create new legal obligations for employers.  Instead, as OSHA states, “he recommendations are advisory in nature, informational in content, and are intended to assist employers in providing a safe and healthful workplace.”

The resource touches on several aspects of COVID-19 prevention programs in the workplace. OSHA has noticed that programs that touch of some of these aspects are effective. The four key elements that should be included in these programs are:

  1. Identification of where and how workers might be exposed to COVID-19 at work by conducting a hazard assessment.
  2. Identification of a combination of measures that will limit the spread of COVID-19 in the workplace.  This includes a combination of eliminating the hazard, implementing engineering controls, establishing workplace administrative policies, and providing personal protective equipment (PPE), among other measures. Employers should prioritize controls from most to least effective to help protect workers from COVID-19 hazards.
  3. Instruct workers who are infected or potentially infected to stay home and isolate or quarantine to prevent or reduce the risk of transmission of COVID-19.
  4. Implement protections from retaliation and set up an anonymous process for workers to voice concerns about COVID-19-related hazards.

Other content covered in the resource includes return-to-work criteria, engineering controls, face coverings and PPE, sanitization, cleaning, and disinfecting practices.

The guidance may be found here.

What do employers need to do?
Employers should read the provided information and review it with their workplace policies in mind.

January 2021 Federal HR Updates

EEOC updates Compliance Manual on Religious Discrimination

Update Applicable to:
All employers.

What happened?
On January 15, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) issued an updated Compliance Manual on Religious Discrimination.

What are the details?
The update supersedes the EEOC’s Compliance Manual on Religious Discrimination issued on July 22, 2008. The EEOC noted that “the contents of the manual do not have the force and effect of law and are not meant to bind the public in any way. The manual is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.”

According to the EEOC, the prior version of the manual, last updated in 2008, “did not reflect recent legal developments and emerging issues.” Since 2008, several Supreme Court decisions, as well as decisions from the lower courts, “have altered the legal landscape.” The update includes discussions of recent U.S. Supreme Court decisions and lower court decisions rendered subsequent to the publication of the prior compliance manual.

The updated manual covers topics ranging from discrimination in employment decisions to harassment to reasonable accommodations in the workplace. The manual also discusses the interaction of Title VII of the Civil Rights Act of 1964 (Title VII) with the First Amendment and the Religious Freedom Restoration Act (RFRA).

The updated manual can be found here.

An article providing additional information can be found here.

What do employers need to do?
Employers looking to update workplace policies, or who simply wish to stay up to date on federal guidance should review the manual.

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CDC Expands Guidance on Workplace COVID-19 Testing to Require Informed Consent

Update Applicable to:
All employers.

What happened?
On January 21, the U.S. Center for Disease Control and Prevention (CDC) issued new guidance for businesses and employers on SARS-CoV-2 testing of employees, as part of a more comprehensive approach to reducing transmission of the virus in non-healthcare workplaces.

What are the details?
While the CDC had already released some guidance on the matter of workplace testing (last updated in October), the CDC’s more recent guidance places a new emphasis on informed consent prior to testing and measures an employer can take to ensure employees are fully supported in their decision-making.

Specifically, the CDC’s guidance states:

“Workplace-based testing should not be conducted without the employee’s informed consent. Informed consent requires disclosure, understanding, and free choice, and is necessary for an employee to act independently and make choices according to their values, goals, and preferences.”

While this new guidance may be seen as the CDC now requiring consent from employees, it does not appear to prevent employers from requiring testing as a condition of entering the workplace. Instead, the CDC recommends that employers make it very clear how the testing program may impact employees’ lives, including employment decisions that may result from testing positive or negative to COVID-19.

The CDC provides a list of key measures an employer should implement when developing an SAR-CoV-2 testing program in the workplace to ensure employee informed consent and a supportive environment:

  • Ensure safeguards are in place to protect an employee’s privacy and confidentiality.
  • As noted above, provide complete and understandable information about how the employer’s testing program may impact employees’ lives, such as if a positive test result or declination to participate in testing may mean exclusion from work.
  • Explain any parts of the testing program an employee would consider especially important when deciding whether to participate. This involves explaining the key reasons that may guide their decision.
  • Provide information about the testing program in the employee’s preferred language using non-technical terms. Consider obtaining employee input on the readability of the information. Employers can use this tool to create clear messages.
  • Encourage supervisors and co-workers to avoid pressuring employees to participate in testing.
  • Encourage and answer questions during the consent process. The consent process is active information sharing between an employer or their representative and an employee, in which the employer discloses the information, answers questions to facilitate understanding, and promotes the employee’s free choice.

In addition, in order to ensure informed consent, an employee must be provided certain disclosures regarding the workplace testing program. Of course, the disclosures must include those required in the U.S. Food and Drug Administration (FDA) emergency use authorization patient fact sheet external for the particular test, such as the type of the test, how the test will be performed, and known and potential risks.  Notably, these disclosures must be provided during the consent process, meaning employers will have to know this information and ensure it is provided employees prior to the employee agreeing to the test.

Employers will need to consider which aspects of the testing program may be more relevant than others to an employee’s decision whether to accept an offered test and include the appropriate disclosures. Areas to consider include the process for scheduling tests and how the cost of the tests will be covered, what employees should expect at the testing site (e.g., screening), recommended next steps if an employee tests positive, and what assistance is available should an employee be injured while the test is administered.

The CDC’s new guidance can be found here.

What do employers need to do?
Employers looking to utilize required COVID-19 testing programs should review the above information when looking to create relevant workplace policies.

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FFCRA 2021 – Now What?

Update Applicable to:
All employers.

What happened?
With the New Year many questions remain about the FFCRA and how it now impacts the workplace.

What are the details?
While covered employers will not be required to offer additional paid leave benefits under FFCRA after December 31, 2020, they may elect to voluntarily provide FFCRA leave and claim a corresponding payroll tax credit for any leave taken through March 31, 2021. If an employee has exhausted all their FFCRA sick leave as of December 31, 2020, they would not be eligible to receive any additional FFCRA sick leave in 2021. However, if an employee has not exhausted all their FFCRA sick leave as of January 1, 2021, a covered employer may elect to voluntarily extend the employee’s deadline to use any remaining FFCRA sick leave through March 31, 2021. In exchange, the employer could seek a payroll tax credit for the employee’s use of the original allotment of FFCRA leave.

FFCRA sick leave or expanded FMLA leave taken before December 31, 2020 will still count against the total amount of any tax credits covered employers may claim for leave taken through March 31, 2021. Employees who already have exhausted their 80 hours of emergency paid sick leave and/or 12 weeks of emergency family leave will not be afforded a new allotment. Keep in mind that employers with 15 or more employees are still required to abide with the ADA, and any more generous state laws with protections for disabilities that may trigger an interactive process and reasonable accommodations (such as the FEHA in California).

Employers should be mindful of how this interacts with their existing FMLA policy (and any equivalent state law such as the CFRA in California). Regardless of whether an employee tests positive or not for COVID-19, if the employer is a covered employer under the FMLA (or equivalent/more generous state law), eligibility verification must take place. Generally, the FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per every 12-month period for certain qualifying conditions. If an employer’s policy dictates that each employee’s 12-month FMLA period resets on January 1, 2021 as a calendar year method, an employee may be entitled to an additional 12 weeks of FMLA leave under the FFCRA – with the final 10 weeks paid – beginning on January 1, 2021, to use through March 31, 2021. However, most employers use the rolling 12-month period (look-back). And when it comes to the FMLA, nothing has changed. Determination of a serious health condition, as there may be an underlying medical condition the employee may assert leave for if COVID is also involved, is left to the employee’s physician to certify (although not required by law, most employers, including us, encourage use of a medical certification to determine whether or not the employee has a serious health condition under the statute so that we know whether or not the federal FMLA law will apply. When it does not, it then turns into looking at the ADA and other equivalent state laws, and an interactive process to review any reasonable accommodations will be required. Consult with our Leaves team for further discussion on this topic. I have also provided an example scenario at the bottom of this email given by a law firm or EFMLA and FMLA.

Jeff Nowak, a shareholder with Littler Mendelson PC in Chicago, who represents employers in employment law matters, said, “We don’t view this as a new bucket of time for employees come Jan. 1. To the extent that an employee had already exhausted paid sick leave or paid (Family Medical Leave Act), they’re not going to be entitled to a new bucket come Jan. 1. But to the extent they still have leave available,” employers can still voluntarily offer it. He added in regard to small employers, however, the new situation may put employers in the “rather uncomfortable position of telling their employees, ‘We could do this, but we’re not.’ Employees will have expectations,” and deciding to discontinue the program could mean companies “may face morale repercussions,”

Employers should make a plan on how they are going to proceed in 2021 as they have several choices, such as:

  • End all leave effective December 31, 2020. Employers are encouraged to communicate to all employees, including those currently on leave, of its decision to end the leave entitlement in advance of this deadline.
  • Continue to allow employees to use any unused, available FFCRA leave through some time in 2021. Providing another round of 10 days/12 weeks of paid leave is not encouraged as it is unlikely to qualify for the tax credits.
  • Only allow the continuation of Emergency Paid Sick Leave into 2021 so employees who contract or are exposed to the virus will not be at work but discontinue the entitlement to the much longer paid family leave

The CAA 2021 does not prohibit or require employers who choose to continue EPSL to also continue EFMLA. Thus, it appears the two decisions can be made separately and can differ.

As always, although not specifically addressed in the legislation, employers who choose to offer EPSL only or EPSL and EFMLA in Q1 2021, should do so for all employees eligible for it, and should not make that decision on a case-by-case, employee-by-employee basis. Additional liability may arise under other laws if employers cherry-pick who gets to carryover EPSL and who gets EFMLA and who does not.

**Also, if any employer has 500 or more employees, please keep in mind any state or local supplemental paid sick leave laws. For example, Colorado, New Jersey, Oregon, the District of Columbia and several cities in California (Emeryville, Long Beach, Los Angeles, Oakland, Sacramento, San Diego, San Francisco, San Jose, San Mateo, and Santa Rosa) have extended FFCRA-like benefits to employers not covered by the federal law. Some of these laws also expire December 31, 2020, while some do not.

The IRS has not yet released anything definitive but the DOL has answered a couple of questions relative to the FFCRA’s application in 2021 below (https://www.dol.gov/agencies/whd/pandemic/ffcra-questions#104):

  • I was eligible for leave under the FFCRA in 2020 but I did not use any leave. Am I still entitled to take paid sick or expanded family and medical leave after December 31, 2020? (added 12/31/2020)

Your employer is not required to provide you with FFCRA leave after December 31, 2020, but your employer may voluntarily decide to provide you such leave. The obligation to provide FFCRA leave applies from the law’s effective date of April 1, 2020, through December 31, 2020. Any change to extend the requirement to provide leave under the FFCRA would require an amendment to the statute by Congress. The Consolidated Appropriations Act, 2021, extended employer tax credits for paid sick leave and expanded family and medical leave voluntarily provided to employees until March 31, 2021. However, this Act did not extend an eligible employee’s entitlement to FFCRA leave beyond December 31, 2020.

Employers with questions about claiming the refundable tax credits for qualified leave wages should consult with the IRS. Information can be found on the IRS website (http://www.irs.gov/coronavirus/new-employer-tax-credits).

  • I used six weeks of FFCRA leave between April 1, 2020, and December 31, 2020, because my childcare provider was unavailable due to COVID-19. My employer allowed me to take time off, but did not pay me for my last two weeks of FFCRA leave. Is my employer required to pay me for my last two weeks if the FFCRA has expired? (added 12/31/2020)

Yes. WHD will enforce the FFCRA for leave taken or requested during the effective period of April 1, 2020, through December 31, 2020, for complaints made within the statute of limitations. The statute of limitations for both the paid sick leave and expanded family and medical leave provisions of the FFCRA is two years from the date of the alleged violation (or three years in cases involving alleged willful violations). Therefore, if your employer failed to pay you as required by the FFCRA for your leave that occurred before December 31, 2020, you may contact the WHD about filing a complaint as long as you do so within two years of the last action you believe to be in violation of the FFCRA. You may also have a private right of action for alleged violations.

*EXAMPLE related to EMLA and FMLA in 2021:

Whenever there are two different leave clocks running, determining how much leave is available for each of the different reasons quickly gets complicated. Consider the following example.

Scenario Facts: ABC Company is both FMLA-covered (50 or more employees) and EFMLA-covered (fewer than 500 employees). ABC chose the popular rolling backward method for measuring the 12-month period in its regular FMLA policy. ABC also voluntarily chose to extend EFMLA to all of its employees for the first quarter of 2021, as allowed by the CAA 2021. Sally has a full-time job that cannot be performed remotely. Sally used six weeks of regular FMLA January 2, 2020 through February 11, 2020 to care for her spouse who was incapacitated due to a serious health condition. On March 17, 2020, she had to stay home to care for her school-age child because the Governor declared a pandemic and closed schools across the state. Sally used six weeks of EFMLA in spring 2020, until she exhausted her 12 weeks of combined FMLA and EFMLA on April 27, 2020. Sally worked the rest of 2020. On January 4, 2021, the school for Sally’s child went on a 100% virtual learning plan, meaning it was closed for purposes of EFMLA leave. Because ABC chose to extend EFMLA into Q1 2021, Sally requested EFMLA to begin on January 4, 2021.

Question: How much EFMLA is available to Sally? Does she have the same amount of regular FMLA if a need for that arises, too.

Answer: On January 4, 2021, Sally has six weeks available to use for EFMLA or for a regular FMLA purposes. If she needs it, she can use EFMLA or FMLA consecutively through about mid-February. If she does, she will have a gap in the availability of leave. Sally will not likely re-qualify to use EFMLA or FMLA until March 17, 2021. At that time, she should have six weeks of regular FMLA available to use, but only the first two weeks of that can be used for EFMLA purposes because the EFMLA voluntary extension sunsets on March 31, 2021. In this particular scenario, the clocks for both FMLA and EFMLA start at the same time, but the EFMLA clock runs out before the regular FMLA clock. Reference Dickinson.

Additional Resources: Hogan Lovells (Via JD Supra), SHRM, National Law Review.

What do employers need to do?
Employers with concerns about the FFCRA in 2021 should review the above information.

January 2021: New DOL Guidance on Mandated Notices in a Virtual Workplace

Update Applicable to:
All employers.

What happened?
On December 29, 2020, the DOL issued Field Assistance Bulletin 2020-7, which provides guidance to the DOL’s field staff on enforcing posting requirements in circumstances here there is no traditional workplace.

What are the details?
Bulletin 2020-7 covers many requirements over its five pages. Here are the key points:

  • Notice requirements generally appear in one of two varieties: (1) one-time notice and (2)
  • continuous posting.
  • Employers may satisfy one-time notice requirements (e.g., as required by the Service Contract Act) by email delivery if employees customarily receive emails from the employer.
  • For continuous-posting requirements (e.g., FLSA, FMLA, EPPA, and the Davis-Bacon Act), the guidance makes a distinction between employers with only some remote employees and employers with an entirely remote workforce.
  • For employers with some remote workers, physical posters are required for on-site employees, and the DOL “encourages” electronic posting for the teleworking employees.
  • Employers with an entirely remote workforce may satisfy continuous-posting obligations using electronic-only means if they meet the following requirements:
    • All employees exclusively work remotely;
    • All employees customarily receive information from the employer via electronic means;
    • All employees have “readily available access” to the electronic posting at all times, e.g., via an internal or external website or a shared network drive or file system. The DOL notes that whether access is readily available is fact-specific and requires, for example, that employees be able to access the notice without having to request permission.
    • The employer must take steps to inform employees of where and how to access the notice(s) electronically.
  • If the employer has multiple groups of employees to whom different notices apply, the employees must be able to “easily determine” which posting is applicable to them.
  • For laws that require posters be visible to applicants (e.g., EPPA), virtual-only posting is permitted if the hiring process is itself conducted remotely and the applicants have readily available access to the electronic posting at all times.
  • The DOL’s guidance only applies to federal posting requirements enforced by the DOL. It does not address posting requirements enforced by other federal agencies (e.g., EEOC) or state-mandated posting requirements.

The U.S. Department of Labor issued Field Assistance Bulletin 2020-7 can be found here.

What do employers need to do?
Employers who have moved to virtual workplaces should review any necessary posting requirements. If employers have any concerns or questions they should reach out to their CRS or CRM.

January 2021: DACA Employees Can Use Form I-765 and Their EAD for Form I-9

Update Applicable to:
Any employers utilizing workers abroad who utilized Form I-765.

What happened?
The DHS has announced that employers may use unexpired Form I-765, Employment Authorization Documents to temporarily complete Form I-9s.

What are the details?
When completing Form I-9, employees may choose to present their unexpired Form I-765, Employment Authorization Document (EAD) with Category code of C33 that was issued on or after July 28, 2020, along with an I-797 Extension Notice issued by USCIS that shows a one-year extension of their deferred action and work authorization under Deferred Action for Childhood Arrivals (DACA). In Section 1, employees may enter the end validity date from the notice in the “Authorized to Work Until” field. If an employee presents this document combination, the employer must enter the end validity date from the employee’s notice in the Expiration Date field in Section 2. Enter “DACA Ext. in the Additional Information field.”

Employers may re-verify a current employee before reverification is required if they present this document combination to you. Enter the end validity date from their notice as the Expiration Date in Section 3. Enter DACA Ext. in the Additional Information field in Section 2.

The official announcement can be found here.

What do employers need to do?
An employer’s HR department should follow the above directions from the DHS when filing Form I-9s for the applicable employees.

January 2021: USCIS Modifies H-1B Selection Process

Update Applicable to:
Any employers looking to utilize the H-1B visa program.

What happened?
U.S. Citizenship and Immigration Services has announced a final rule that will modify the H-1B cap selection process, amend current lottery procedures, and prioritize wages.

What are the details?
Previously the H-1b visa program awarded the visa to companies on a lottery basis, where companies would all have a relatively equal chance of winning the award. The new system will instead award the H1b visas with a focus on higher paid wages, making the visas much more competitive in respect to wages.

These rule changes will only affect H-1B registrations (or petitions, if the registration process is suspended) submitted by prospective petitioners seeking to file H-1B cap-subject petitions. It will be implemented for both the H-1B regular cap and the H-1B advanced degree exemption, but it will not change the order of selection between the two as established by the H-1B registration final rule.

The final rule can be found here.

What do employers need to do?
Employers looking to utilize the H-1b visa program should keep in mind the new selection process when submitting petitions for the visa program.

December 2020 Federal HR Updates

COVID-19 Relief Bill: What It Means for PEOs & Small Business

What happened?
On Monday December 21, the House passed an omnibus spending bill that included $1.4 trillion to fund the federal government and $900 billion of additional COVID relief by a vote of 399-53. The Senate then passed the legislation by a vote of 92-6. 

What are the details?
Below is a summary of the key provisions in the bill impacting PEOs. 

Tax Provisions
The omnibus spending bill – which is almost 5,600 pages long – contained many tax provisions that impact PEOs. Randy Hardock and Courtney Zinter of Davis & Harman (NAPEO’s outside tax counsel) have prepared this document which contains the details of these provisions and how they apply to PEOs.

Specific tax provisions of interest to PEOs include:

  • Paid Sick and Family Leave Credits
    • Extends the paid sick and family leave credits against employment taxes from the Families First Coronavirus Response Act (FFCRA) for three additional months to March 31, 2021.
    • The bill does not extend the FFCRA’s mandate to provide paid sick leave or paid family and medical leave beyond December 31, 2020.
  • Changes to the Employee Retention Tax Credit (ERTC)
    • Repeals the provision denying the ERTC to employers receiving a PPP loan. Instead, mechanisms would be created to prevent the same wages from being used for both PPP loan forgiveness and the ERTC.
    • Extends the ERTC to apply to wages paid before July 1, 2021 (instead of January 1, 2021).
    • Increases the credit percentage from 50 percent to 70 percent of applicable wages.
    • Increases the per-employee limitation on applicable wages from $10,000 total to $10,000 per calendar quarter. In combination with the increased credit percentage, this would increase the maximum credit per employee from $5,000 to $7,000 per quarter (up to $14,000 for the first two quarters in 2021).
    • The following language was added to the ERTC provisions that specifically addresses PEOs: Any forms, instructions, regulations, or guidance described in paragraph (2) shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional employer organization or other third-party payer to accurately report such tax credits based on the information provided by the customer.
      It is not clear whether this provision applies retroactively or just towards new credits taken in 2021.
    • Makes the ERTC available if the business experienced a decline of at least 20 percent in gross receipts (instead of a 50 percent decline) as compared to the same calendar quarter in the prior year.
    • Modifies the small employer definition of qualified wages to apply to employers that have 500 or fewer employees (instead of 100 of fewer employees).
  • Creates a temporary employee retention credit of 40 percent of qualified wages up to $6,000 (maximum credit of $2,400 per eligible employee) for eligible employers affected by certain qualified disasters. This credit is retroactive and does not apply to COVID-related disasters.
  • The bill also extends the Work Opportunity Tax Credit for five years.

Paycheck Protection Program and Other Small Business Assistance
In addition to the tax provisions, the COVID-19 relief portion of this legislation contains additional assistance for small businesses, which NAPEO has been lobbying Congress in support of. Specifically, it contains the following provisions designed to assist small businesses:

  • Creates a second loan from the Paycheck Protection Program, called a “PPP second draw” loan for smaller and harder-hit businesses, with a maximum amount of $2 million.
  • Creates a simplified application process for loans under $150,000.
  • Expands the expenses that can be covered by a PPP loan.
  • Makes 501(c)6 organizations that do not lobby eligible for PPP loans.
  • Makes the expenses covered by PPP loans tax deductible.

Details on these provisions can be found on this document provided by the Community Banker’s Association.

Unemployment Insurance
The COVID-19 relief provisions also make the following changes to unemployment insurance:

  • Unemployed individuals get an additional $300 per week from December 26, 2020 to March 14, 2021.
  • Extends and phases out Pandemic Unemployment Assistance (PUA), a temporary federal program covering self-employed and gig workers, to March 14, 2021 and extends benefits from 39 to 50 weeks with all benefits ending April 5, 2021.
  • Extends and phases out Pandemic Emergency Unemployment Compensation (PEUC) which provides additional weeks when state unemployment runs out, to March 14, 2021 (after which no new applications) through April 5, 2021.
  • Extends provisions to March 14, 2021, including interest-free loans to the states.

No federal money was provided to shore up the short falls in state unemployment funds.

Miscellaneous Provisions
The omnibus spending bill contained so-called “tax extenders,” which are temporary provisions in the tax code that are designed to support specific economic activities. There are two provisions of interest to PEOs that have been extended for five years. They are: 

  • The employer credit under section 45S for paid family and medical leave, originally enacted as part of tax reform in 2017.

The expanded exclusion for employer-provided educational assistance, including student loan repayment benefits as enacted as part of the CARES Act. NAPEO has lobbied in support of this provision.

What do employers need to do?
PEOs and small businesses working with them should review the above information to know what benefits may be available to them.

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EEOC Releases FAQs on the COVID-19 Vaccine / Considerations for Employers

What happened?
The Equal Employment Opportunity Commission, or EEOC, has provided guidance in the form of Frequently Asked Questions to employers regarding the practice of employers requiring employees to be vaccinated for COVID-19.

What are the details?
As the COVID-19 vaccines are administered around the country many employers were starting to wonder what the outlook was on if they would be able to require employees to have the COVID-19 vaccine before coming into the workplace. The EEOC is the first of the federal agencies to chime in with specific guidance, with the DOL only providing information in the form of references to previous stances. The FAQ covers many questions regarding how employers may go about administering this requirement. For example:

“For any COVID-19 vaccine that has been approved or authorized by the Food and Drug Administration (FDA), is the administration of a COVID-19 vaccine to an employee by an employer (or by a third party with whom the employer contracts to administer a vaccine) a “medical examination” for purposes of the ADA?”

A: “No.  The vaccination itself is not a medical examination.  As the Commission explained in guidance on disability-related inquiries and medical examinations, a medical examination is “a procedure or test usually given by a health care professional or in a medical setting that seeks information about an individual’s physical or mental impairments or health.”  Examples include “vision tests; blood, urine, and breath analyses; blood pressure screening and cholesterol testing; and diagnostic procedures, such as x-rays, CAT scans, and MRIs.”  If a vaccine is administered to an employee by an employer for protection against contracting COVID-19, the employer is not seeking information about an individual’s impairments or current health status and, therefore, it is not a medical examination.”

To read all of the information provided by the EEOC see the guidance provided here. This new guidance can be found by clicking the link and using the find function in your browser (usually ctrl + f) and searching for 12/16.

Additional reading related to this issue can be found in this article. Note: this article was released prior to the EEOC FAQs update. However, it includes some very helpful considerations for employers in regard to deciding whether or not a vaccination program is a good choice for your company.

Additional articles on this subject can be found here: From SHRM, From Jones Walker LLP, and from Dickinson Wright.

What do employers need to do?
Employers who are thinking of implementing a policy requiring or encouraging employees to be vaccinated for COVID-19 should review the information about and review the articles listed to get a complete understanding of all the laws and administrative bodies that play a role here.

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Proposed Changes to HIPPA Relax Requirements

What happened?
On December 10, 2020, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) released a proposed rule that would revise the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

What are the details?
In its news release, the OCR noted that the changes “seeks to promote value-based health care by examining federal regulations that impede efforts among healthcare providers and health plans to better coordinate care for patients.” The proposed changes come on the heels of the recently delayed Information Blocking Rule, which seeks to prohibit interferences with access, exchange, or use of electronic health information (EHI). The key proposed changes are below:

Relaxing Requirements:
The HHS is proposing some changes that would loosen the standards for disclosing PHI in certain instances and for technical compliance with HIPAA. For example, the privacy standard currently permits covered entities to make certain uses and disclosures of PHI based on their “professional judgment.” This standard permits such uses or disclosures based on a covered entity’s good faith belief that the use or disclosure is in the best interests of the individual. The proposed standard is more permissive and would presume a covered entity’s good faith; however, this presumption could be overcome with evidence of bad faith.

Strengthening Individuals’ Right to Access:
Consistent with the underlying objectives of the Information Blocking Rule, the proposed rule seeks to increase the ability of individuals’ access to their PHI. This could be achieved by allowing individuals to take notes, videos, and photographs using personal resources after arranging a mutually convenient time and place at no cost to the covered individual. Additionally, the proposed changes reduce the time frame allowed for covered entities to response to requests for access, from the previous 30 days, to instead be as soon as practicable but no longer than 15 days.

Disclosures to Social Service Organizations:
The proposed rule would modify 45 CFR 164.506(c) and add a new subsection 164.506(c)(6), which would expressly permit covered entities to disclose PHI for certain social services. Specifically, it would allow covered entities to disclose PHI to social services agencies, community based organizations, home and community based service providers, and other similar third parties that” provide health-related services to specific individuals for individual-level care coordination and case management, either as a treatment activity of a covered healthcare provider or as a healthcare operations activity of a covered healthcare provider or health plan.”

The proposed changes can be found here.

An article providing additional summaries, can be found here.

What do employers need to do?
Employers dealing with electronic health information should keep an eye on these rules and begin making preparations to adjust workplace practices to accommodate these changes, should they be implemented.

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IRS Announces New Standard Mileage Rates for 2021

What happened?
The Internal Revenue Service (IRS) issued the 2021 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

What are the details?
Beginning on Jan. 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56 cents per mile driven for business use, down 1.5 cents from the rate for 2020,
  • 16 cents per mile driven for medical or moving purposes for qualified active duty members of the Armed Forces, down 1 cent from the rate for 2020, and
  • 14 cents per mile driven in service of charitable organizations, the rate is set by statute and remains unchanged from 2020.

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

The full notice covering these changes can be found here.

What do employers need to do?
Employers should review the above mileage rates and update their internal policies regarding business travel, if needed.

December 2020: COVID-19 Distribution Expiring December 31, 2020

The CARES Act provided an opportunity for employers to offer the option of allowing qualified individuals to take a distribution (up to $100,000) from their IRA, 401K or 403B without penalty, and spread the tax impact over a three-year period.
Qualifying individuals must meet one of the following criteria:

  • Diagnosed with COVID-19 by an approved CDC test
  • Spouse or dependent was diagnosed with COVID-19 by an approved CDC test
  • Experience adverse financial consequences as a result of:
    • Being quarantined, furloughed or laid off due to COVID-19
    • Unable to work due to lack of child care as a result of COVID-19
    • Closing or reducing hours of a business that you own or operate as a result of COVID-19

If you offered this opportunity to your employees, the deadline to take advantage of this opportunity is Thursday December 31, 2020. To read more about this distribution click here.

November 2020 Federal HR Updates

Department of Labor (DOL) Issues New COVID-19 Guidance for Employers

What happened?
On November 7, 2020, the DOL released two documents outlining common workplace inspection citations regarding COVID-19.

What are the details?
The first document (Common COVID-19 Citations) provides a robust list of all frequent employer citations pertaining to onsite inspections by the DOL. This document includes a thorough breakdown of each violation.

The second document is a one page summary of the first document with concise violation details.

The announcement also includes a reminder that the Occupational Safety and Health Administration (OSHA) conducts on-site consultations that are zero cost and confidential for small to medium-sized businesses. This program helps identify workplace hazards, provides advice for OSHA compliance, and assists in establishing and improving safety and health programs.

As of November 19, 2020, the amount of complaints filed in the healthcare industry is more than the combined total for all complaints filed by the Retail Trade, Grocery Store, Construction, General Warehousing and Storage, and Automotive Repair industries. Overall, OSHA citations have totaled $2,496,768 since the end of October. The largest individual employer fine is around $20,000.

Resource Links

What do employers need to do?
Employers should review the provided guidance to guide their decisions in the workplace. This guidance is extremely useful for employers who are worried about OSHA inspections and citations. As a recommended best practice, employers should review this resource for further knowledge and awareness.

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CDC Modifies Guidance for Critical Infrastructure Employers

What happened?
On November 16, 2020, the Centers for Disease Control (CDC) modified its guidance for “critical infrastructure” employers on whether they can permit asymptomatic workers to continue to work after exposure to an individual with a suspected or confirmed case of COVID-19.

What are the details?
Since the start of the pandemic, the CDC had allowed critical infrastructure employers the ability to keep employees working in the workplace if they were asymptomatic, given the employer adhered to specific practices. The CDC has since modified its stance to reflect the option to have asymptomatic employees working as a last resort. Asymptomatic employees should only be working if a cessation of operation of a facility may cause serious harm or danger to public health or safety. Serious harm to a business’s ability to continue to operate is not adequate justification.

The CDC is recommending employers cross-train employees to eliminate single points of failure by relying on trained employees to fill in as needed, while spreading out critical functions among equally skilled and available workers.

An article going over these changes in more detail can be found here.

What do employers need to do?
Employers working in any of the industries identified as critical infrastructure should review the above guidelines and update their workplace policies to ensure the absence of key employees will not devastate company operations.

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Office of Federal Contract Compliance Programs Issues Final Rule Regarding Procedures for Resolving Employment Discrimination

What happened?
On November 10, 2020, the Office of Federal Contract Compliance Programs (OFCCP) issued a final rule on procedures to resolve potential employment discrimination.

What are the details?
The Department of Labor published this final rule to codify procedures that the OFCCP will use to resolve potential discrimination and other material violations of the laws and regulations administered by the OFCCP that applies to federal contractors and subcontractors, add clarifying definitions to specify the types of evidence OFCCP uses to support its discrimination findings, and correct the title of the OFCCP’s agency head.

The final rules include new information and changes to the following subjects:

  • Predetermination notices;
  • Notice of violation;
  • Expedited conciliation options;
  • Evidentiary standards;
  • Disparate treatment and disparate impact; and
  • Practical significance

The changes to the “evidentiary standards” is significantly impactful as identified by the OFCCP. The use of two standard deviations to identify potential discrimination in hiring practices. Law firms like Littler Mendelson P.C. have argued that federal contractors can reasonably operate with their hiring practices showing a standard deviation of up to three, by showing supporting evidence. This has happened in cases of disparities in selection rates.

An article by Littler Mendelson P.C. going over each of the changes in depth can be found here.

Find the final rule in the Federal Register here

What do employers need to do?  
Federal contractors should review these changes and hiring data to ensure compliance with the new OFCCP standards.

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Immigration and Customs Enforcement Announces Extension to I-9 Compliance Flexibility.

What happened?
On November 18, the U.S. Immigration and Customs Enforcement (ICE) announced an extension of the flexibilities in rules related to Form I-9 compliance.

What are the details?

On March 19, 2020, due to precautions implemented by employers and employees associated with COVID-19, the Department of Homeland Security (DHS) announced its goal to exercise prosecutorial discretion to defer the physical presence requirements associated with the Employment Eligibility Verification (Form I-9) under section 274A of the Immigration and Nationality Act. This policy applies to employers and workplaces that are operating remotely. If employees are physically present at a worksite location, no exceptions are being implemented at this time for in-person verification of identity and employment eligibility documentation for Form I-9, Employment Eligibility Verification.

This extension will end on December 31, 2020.

The extension announcement can be found here.

The original announcement of the I-9 flexibility can be found here.

What do employers need to do?
Employers who have been using the provided flexibility may continue to do so.

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The DHS Proposes New H-1B Visa Rule

What happened?
On November 2, 2020, the Department of Homeland Security (DHS) issued a notice of proposed rule making to replace the random selection process with a one that prioritizes H-1B petitions with the highest wage levels.

What are the details?
Should this rule be implemented it would drastically change the way that H-1b visas are selected. DHS is promoting the idea that elimination of the random selection process will make it possible for petitioners to improve their chances of selection by agreeing to pay higher wages to H-1B workers. The rules are open to public comment until December 2, 2020.

An article going over this proposed rule can be found here.

The proposed rule can be found here.

What do employers need to do?
Employers who utilize this visa should monitor this proposed rule, as it may affect their ability to use the visa in the future.