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EMERGENCY RELIEF LEGISLATION

Families First Coronavirus Response Act – Emergency FMLA

Last updated 3.20.2020 New Federal Legislation Expanding FMLA Coverage During COVID-19 Pandemic The Emergency Family and Medical Leave Expansion Act (EFMLA), passed by Congress on March 18, 2020, expands the FMLA on a temporary basis and allows an eligible employee to take up to 12 weeks of job-protected leave to care for the employee's child if the child's school or place of care is closed, or the childcare provider is unavailable, due to the COVID-19 public health emergency. The EFMLA takes effect on April 2, 2020 and remains in effect until December 31, 2020. Under the EFMLA, the first 10 days of leave may be unpaid, and the employee may elect to use any accrued vacation leave, personal leave, or medical or sick leave to cover some or all of the 10-day period. After the 10-day period, an employer must pay full-time employees at two-thirds the employee's regular rate for the number of hours the employee would otherwise be normally scheduled, limited to $200 per day and $10,000 total per employee. Employers with 25 or more employees will have the same obligations as under traditional FMLA to return any employee who has taken emergency FMLA to the same or equivalent position upon the return to work. However, subject to certain requirements, employers with fewer than 25 employees are generally excluded from this requirement, if the employee’s position no longer exists following the Emergency FMLA leave due to an economic downtown or other circumstances caused by a public health emergency during the period of Emergency FMLA. Coverage The EFMLA covers employers with fewer than 500 employees. However, the EFMLA includes language allowing the Secretary of Labor to exclude healthcare providers and emergency responders (as defined FMLA regulations) from the definition of employees who are allowed to take such leave, and to exempt small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business. Definition of Eligible Employees Eligible employees include individuals who have been employed by the employer for at least 30 calendar days and who meets the "qualifying need related to a public health emergency" defined below. Definition of Eligible Leave The qualifying need related to a public health emergency “means the employee is unable to work (or telework) due to a need for leave to care for the son or daughter of such employee if the school or place of care has been closed or the child care provider of such son or daughter is unavailable due to a public health emergency.” “Public health emergency” has been defined as “an emergency with respect to COVID-19 declared by a federal, state, or local authority.” Calculating Pay During a Qualifying Leave Full-time employees. After the initial 10-day unpaid period, the employer generally must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled. The EFMLA limits this pay entitlement to $200 per day and $10,000 in the aggregate per employee. Part-time Employees. Employees who work a part-time or irregular schedule are entitled to be paid based on the average number of hours the employee worked for the six months prior to taking emergency FMLA under the EFMLA. Employees who have worked for less than six months prior to leave are entitled to the employee’s reasonable expectation at hiring of the average number of hours the employee would normally be scheduled to work. Impact on Paid Leave/Time Off Policies The new law impacts paid leave/time off policies only as to eligible employees with a qualifying need. In such a circumstance, an eligible employee has the right to take leave, regardless of what the employer’s time off policy requires. In addition, after the initial 10 days of leave taken under the EFMLA, the employer must provide paid leave for each additional leave day taken under the EFMLA, regardless of whether the employee has accrued PTO. A link to new legislation can be found here. 3.26.20 COVID-19 Employment Law Update Recording and Slides CONTACTS EMILY HOBBS T. 303.295.8584 Send Email BRIT MERRILL T. 801.799.5865 Send Email



Disaster Relief/Charitable Assistance for Employees

Last updated 4.6.2020 Employers may provide disaster relief payments and/or charitable assistance to employees in several ways.  The following includes brief descriptions of each scenario in the context of the COVID-19 pandemic and corresponding explanations of the tax consequences to employers and employees. 1. Direct Payments.  If the national pandemic caused by COVID-19 is a “qualified disaster” under Internal Revenue Code section 139, employers may make disaster relief payments directly to employees without having to include those payments in the employees’ taxable wages. Employers may also fully deduct these payments from their taxable income. Under section 139, qualified disaster relief payments include reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster. Although section 139 has not been implemented during a pandemic before, it is reasonable to assume that employers could make payments to or on behalf of employees to cover personal or family medical expenses not covered by insurance, costs of over-the-counter medicine, supplies needed to maintain a healthy living environment, and other personal expenses incurred as the result of the COVID-19 pandemic. On March 13, 2020, the President declared a nationwide “emergency” due to the pandemic. However, section 139 requires that a “disaster” must be federally declared. Over the last several days the President has made specific disaster declarations to numerous states and territories, all of which are listed on the FEMA website at www.fema.gov/coronavirus. Although several states and territories have not yet received a specific disaster declaration, in Revenue Ruling 2003-12, the IRS stated that for purposes of section 165(i) (concerning the deductibility of losses attributable to a disaster) a disaster includes an event declared a major disaster or an emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and the IRS commented further that a determination by the President that an area warrants assistance under the Stafford Act is also relevant to section 139 (regarding the exclusion from gross income of certain qualified disaster relief payments). In addition, the IRS referenced a “Federally declared disaster” in Notice 2020-18 (authorizing an extended due date for personal income tax returns due to the COVID-19 pandemic) referring at that time to the President’s declaration of a nationwide “emergency.” Finally, in a Q&A regarding the Families First Coronavirus Response Act, the IRS expressly stated that the COVID-19 pandemic is a “federally declared disaster” and that the COVID-19 outbreak is a “qualified disaster” for purposes of section 139 the Code It is clear that employers may make section 139 disaster relief payments to employees in locations that have received specific disaster declarations from the President and the IRS has now expressly stated that the COVID-19 pandemic is a qualified disaster for purposes of section 139, so employers may provide disaster relief to employees on a nationwide basis. 2. Employer-Sponsored Donor Advised Funds. Some charitable organizations establish funds to hold donations received from donors and permit the donors to retain advisory privileges over investment or distribution of the donated funds.  Ordinarily these funds, known as donor advised funds, cannot be used to make grants to individuals.  However, an exception exists for certain employer-related funds established to benefit employees and their families who are victims of certain disasters.  Such a fund must serve the single purpose of providing assistance to employees and their family members who are suffering from a “qualified disaster,” as defined in section 139. It must also meet certain other legal requirements, including a requirement that grant recipients be selected based on an objective determination of need and by an independent selection committee or using adequate substitute procedures to ensure that any benefit to the employer is incidental and tenuous.  As noted above, the COVID-19 pandemic has been federally declared to be a “disaster” in certain locations and the IRS has stated that the COVID-19 pandemic is a “qualified disaster” for purposes of section 139. Thus, donor advised funds organized exclusively to provide relief from COVID-19-related hardships may make distributions to employees nationwide who are suffering from the pandemic. 3. Employer-Sponsored Private Foundations. Following the September 11th, 2001 terrorist attacks, and subject to certain restrictions and requirements, an employer-sponsored private foundation may provide financial assistance directly to employees and their families affected by “qualified disasters,” as defined in section 139.  As noted above, the COVID-19 pandemic has been federally declared to be a disaster in certain locations and the IRS has stated that the COVID-19 pandemic is a “qualified disaster” for purposes of section 139. Thus, an employer-sponsored private foundation could provide financial assistance directly to employees and their families nationwidewhere such employees and their families been affected by the COVID-19 pandemic. The financial assistance payments can be made by the foundation to employees and their families as long as certain safeguards are in place to ensure that such assistance serves charitable purposes, rather than the business purposes of the employer. In addition, the payments can only be made to employees or their family members affected by qualified disasters, not in non-qualified disasters or in emergency hardship situations. If these and other requirements are met, an employer-sponsored private foundation’s payments in response to a qualified disaster (1) will be treated as made for its charitable purpose; (2) will not result in prohibited self-dealing merely because the recipients are employees; and (3) will not result in taxable compensation to the employees. 4. Employer-Sponsored Public Charities. Employee assistance funds that qualify as public charities may make payments to employees and their families to assist in a broad range of situations, not just “qualified disasters.”  As long as the employer does not exercise excessive control over the organization, an employer-sponsored public charity may establish a fund to assist employees and their family members in response to any type of disaster or hardship situation.  Other requirements must be met, including that (1) the class of beneficiaries must be large or indefinite; (2) the recipients must be selected based on an objective determination of need; and (3) the recipients must be selected by an independent selection committee or adequate substitute procedures must be in place to ensure that any benefit to the employer is incidental and tenuous. If these and other requirements are met, an employer-sponsored public charity’s payments in response to a disaster or emergency hardship are presumed (1) to be made in furtherance of the organization’s charitable purpose and (2) not to result in taxable compensation to the employees. CONTACTS HEIDI GLANCE T. 303.295.8534 Send Email ARTHUR HUNDHAUSEN T. 303.295.8548 Send Email



DOL Guidance for FFCRA

Last updated 4.7.2020 After days of uncertainty and looming deadlines created by the Families First Coronavirus Response Act (FFCRA), the DOL has finally issued some definitive regulatory guidance, as well as twenty new Q&As to its list of non-regulatory guidance. You can read the Q&As and access the final regulations at the DOL’s website. But, if you have had enough of the daily changes, we offer the following summary of the new Q&As and the regulations: Stay-at-Home Orders. A “Federal, state or local quarantine or isolation order” as used in the definitions of qualifying reasons for leave under the Paid Sick Leave Act, includes shelter-in-place or stay-at-home orders that cause an employee to be unable to work, and employees can take paid sick leave for this reason if the employer has work for the employee to do. The supplementary information DOL published with the final rules explains that quarantine and isolation orders include “a broad range of governmental orders.” The regulations also state a bright line rule that paid sick leave can be used only if the employee would have been able to perform work at the worksite or by teleworking but for the quarantine or isolation order. If the employer does not have work for the employee to do regardless of the shelter-in-place or stay-at-home order, the employee is not eligible for paid sick leave. Self-Quarantine Because of Vulnerability. The FFCRA clearly stated that paid sick leave is available if an employee’s health care provider directs or advises the employee to stay home, and the employee is therefore unable to work or telework, because the provider believes the employee may have COVID-19. The Act did not address situations when the employee was advised to self-quarantine due to the employee’s vulnerability to COVID-19 because of another condition. The regulations make it clear that an employee is entitled to paid sick leave if advised by a health care provider to self-quarantine because the employee is “particularly vulnerable” to COVID-19. Unfortunately, the new regulations do not define “particularly vulnerable,” but we doubt employers will have much to gain by arguing over this term. Self-Quarantine with Symptoms. The regulations confirmed an employee with COVID-19 symptoms is entitled to paid sick leave while self-quarantining but the leave is limited to time the employee is unable to work because he is “taking affirmative steps to obtain a medical diagnosis, including making, waiting for, or attending an appointment” for a test. On the other hand, an employee who has COVID-19 symptoms and decides to self-quarantine but does not seek diagnosis or advice from a health care provider is not eligible for paid sick leave. The employee may become eligible for paid sick leave if he later tests positive for COVID-19 or is advised by a provider to self-quarantine. Care for an Individual. The FFCRA states that paid sick leave is available for an employee to care for “an individual” who is subject to a quarantine or isolation order or who is self-quarantining under a health care provider’s advice. Employers reasonably questioned the breadth of this provision. Fortunately, the regulations have limited the scope of individuals under the Act to an employee’s immediate family member, someone who regularly resides in the employee’s home, or someone whose relationship with the employee creates an expectation that the employee would care for the person. And, according to DOL’s discussion with the regulations, the person must “genuinely need” the employee’s care. Employees cannot take paid sick leave to care for someone with whom they have no relationship or who does not expect or depend on the employee’s care. If the employer does not have work for the employee to do, the employee is not eligible for paid sick leave. Children. The Q&As and regulations provide several clarifications regarding when paid sick leave or family and medical leave is available under the FFCRA to take care of children. Children over age 18. An employee may take paid sick leave and expanded family and medical leave to care for a child over the age of 18 if the child has a disability and cannot care for him or herself, and the child’s school or place of care is closed or the child’s care provider is unavailable due to COVID-19 related reasons. Childcare definitions. The FFCRA states that child care leave is available when the school or “place of care” of the child is closed. The regulations define a “place of care” as a physical location where care is provided for the employee’s child, and can include day care facilities, preschools, before and after school programs, summer camps or enrichment programs, respite care programs, schools or homes. And, the regulations clarify that school is closed for the purposes of leave under the Act even if the school has instituted on-line instruction and homework for children. The FFCRA also provides leave when the “child care provider . . . is unavailable” because of COVID-19. The regulations define child care provider as a “provider who receives compensation for providing child care services on a regular basis” including child care centers, group homes, a family child care provider or other provider licensed, regulated or registered under state law. A child care provider need not be licensed or compensated if the provider is a family member, friend or neighbor who regularly cares for the employee’s child. The Q&A explains that this definition includes nannies and au pairs who are paid for their service, as well as relatives who provide care for the child without charge. Multiple Caregivers. Paid sick leave and expanded family and medical leave to care for a child is available only when the employee needs to and actually is caring for the employee’s child and is unable to work or telework as a result. The regulations direct that leave is available to care for a child “only if no other suitable person is available” to care for the child during the period of leave. Leave is not needed if a co-parent, co-guardian or usual child care provider is available to care for the child. Other People’s Kids. Employees can take leave under the FFCRA to care for their son or daughter, including biological, adopted, legal wards or foster children, and any child for whom the employee stands in loco parentis, meaning the employee has day-to-day responsibilities to care for or financially support a child. Expanded family and medical leave and paid sick leave is available only to care for children who meet this definition. An employee may be entitled to paid sick leave to care for other people’s children only if the situation meets the requirements for caring for another individual who is subject to a quarantine or isolation order as discussed above. Substantially Similar Conditions. Paid sick leave is available when an employee is experiencing a substantially similar condition to COVID-19 specified by the Secretary of Health and Human Services, but the regulations confirmed that no such conditions have been identified at this time. The regulations included detailed instructions for calculating how much leave employees are entitled to receive and the rate of pay during the leave. Paid Sick Leave Entitlement. Fulltime employees are entitled to 80 hours of paid sick leave. Fulltime employees are those who are regularly scheduled to work an average of 40 hours per week or more, or, if the employee’s schedule varies, the employee’s scheduled hours including any periods of leave, averaged more than 40 hours per week over the last six months, or the employee’s entire period of employment if less than six months. Employees who do not meet this definition are considered part-time. Part-time employees are entitled to paid sick leave equal to the number of hours the employees are regularly scheduled to work over a two-week period. For employees who do not have a regular schedule, the amount of paid sick leave is calculated as fourteen times the average number of hours the employee was scheduled to work or took any leave for each calendar day for the six-month period prior to paid sick leave. If the part-time employee has not been employed for six months, the number of hours is based on the average number of hours per day agreed to at the time of hire, or, if there was no such agreement, the average daily hours over the employee’s employment. Pay for Sick Leave. Pay for paid sick leave must be calculated based on an average of the employee’s regular rate as defined by the Fair Labor Standards Act. The regulations require the employer to calculate the regular rate for each workweek the employee has been employed for the lesser of the six months prior to paid sick leave or the employee’s entire period of employment. Then, the employer should calculate the average of the weekly regular rates weighted by the number of hours worked for each workweek. An employee using paid sick leave is entitled to pay at this average weekly regular rate but not less than the minimum wage required by federal, state or local law, and depending on the qualifying reason for leave, capped at $510 per day and $5,110 in total, or at the rate of two-thirds of this average weekly regular rate, capped at $200 per day or $2,000 in total. Expanded Family and Medical Leave Entitlement and Pay. Eligible employees are entitled to up to twelve weeks of expanded family and medical leave. After the initial two weeks of this leave, the employer should calculate the employee’s pay for leave as two-thirds of the employee’s average regular rate as calculated above times the employee’s scheduled number of hours for each day of leave taken, capped at $200 per day and $10,000 in total pay for expanded family and medical leave. The employee’s scheduled number of hours is based on the employee’s regular schedule, or, if the schedule varies such that the number of hours an employee would have worked on a given day is unknown, the employer should use the average number of hours the employee was scheduled to work each workday over last six months including any hours of leave. If not employed for six months, the scheduled number of hours should be based on the agreement at the time of hiring, or the daily average the employee has worked or taken leave during the entire period of employment. Intermittent Leave. Employees may take paid sick leave or expanded family and medical leave intermittently to the extent the employer and employee agree. A written agreement is not required, but advisable to limit disagreement later. For employees who are unable to telework and need to report to the worksite to work, intermittent leave is available only when the employee is taking leave to care for a child whose school is closed, or childcare is unavailable. If the employer and employee agree the employee can telework, the employee can take intermittent paid sick leave or expanded family and medical leave on an agreed schedule. Only the amount of leave actually taken counts against the employee’s leave entitlement. Concurrent Use of Paid Sick Leave, Expanded FMLA and Employer Leave. When an employee takes leave to care for a child whose school is closed or childcare is unavailable, the employee has the option to use FFCRA paid sick leave concurrently with the first two weeks of expanded family and medical leave. If the employee has used his FFCRA paid sick leave for another qualifying reason, the employee may elect to substitute accrued leave provided under his employer’s policies, which will run concurrently with expanded family and medical leave. However, when taking expanded family and medical leave, the employee may elect to use, and the employer may require the employee to use, only leave that would be available under employer policy for time off to take care of an employee’s child who is not ill. Also, the employee is limited to twelve weeks of FMLA leave in the twelve-month period defined by employer policy, whether taken as FFCRA expanded family and medical leave or traditional FMLA. An employee’s prior use of FMLA leave does not limit the employee’s use of FFCRA paid sick leave. Documentation. For all types of FFCRA leave, the regulations require employees to provide documentation of the employee’s name, dates of requested leave, qualifying reason for leave and a statement that the employee is unable to work because of the qualified reason. Additional requirements vary by the reason for the leave:

  • For leave due to a quarantine or isolation order, the employee must provide the name of the governmental entity that issued the order.
  • For leave based on the advice of a health care provider to self-quarantine, the employee must provide the name of the provider.
  • For leave to care for an individual who is subject to a quarantine or isolation order, or who is self-quarantined on the advice of a provider, the employee must provide the name of the governmental entity that issued the order or the provider that advised self-quarantine. The regulations do not directly require the employee to provide the name or relationship of the individual the employee will care for, but that information should be required as part of the explanation of the qualifying reason.
  • For leave to care for a child whose school is closed or child care provider is unavailable, the name of the child, the name of the school, place of care or childcare provider; and a statement that no other suitable person will be caring for the child during the leave period. Notably, the Internal Revenue Service’s Q&A about the documentation employers need to support a request for tax credits adds a requirement that the employer obtain a statement that “special circumstances exist” requiring the employee to provide care when an employee requests leave to care for a child over 14 years of age during daylight hours.”
The regulation also permits employers to require additional material as necessary to support the employer’s request for tax credits under the FFCRA and permits the employer to deny leave if the employee has not provided materials needed to support the tax credit request. Other Reasons for Leave. The regulations and the Q&A repeatedly reinforce the general rule that employees are entitled to paid sick leave or extended family and medical leave only if they would have been performing work or teleworking but for the COVID-19 related qualifying reason: Workers Comp/Temporary Disability. An employee cannot take paid sick leave or expanded family and medical leave while receiving workers compensation benefits or temporary disability benefits under an employer or state plan, unless the employee had been released to work light duty and a qualifying reason then prevented the employee from working and the employer had work for the employee to do. On a Leave of Absence. An employee on a mandatory leave of absence imposed by the employer cannot take FFCRA leave because the mandatory leave of absence, not any qualifying reason for leave, is the cause of the employee being unable to work. If the leave of absence is voluntary, the employee can end the leave of absence and begin taking paid sick leave or expanded family and medical leave if a qualifying reason prevents the employee from working or teleworking. DOL Enforcement. DOL will not bring enforcement actions for violations of the Act occurring through April 17, 2020 if the employer made reasonable, good faith efforts to comply with the FFCRA. But if the violation is willful, the employer fails to commit in writing to comply in the future or fails to remedy a past violation as directed by DOL, the DOL retains the right to fully enforce the law. Once it starts enforcement DOL’s enforcement actions will be retroactive in that DOL will require employers to remedy violations occurring on or after April 1, 2020. CONTACT BRAD CAVE T. 307.778.4210 Send Email NOTE: SINCE THE DATE OF THIS POST, THE DOL HAS ISSUED FORMAL REGULATIONS. PLEASE SEE THE 4.7.2020 POST ABOVE FOR UP TO DATE INFORMATION Last updated 3.27.2020 Q: What records should an employer keep when an employee takes paid sick leave or expanded family and medical leave? A: If an employee takes paid sick leave under the Emergency Paid Sick Leave Act, you must require the employee to provide the appropriate documentation in support of the reason for the leave, including:
  • the employee's name;
  • qualifying reason for requesting leave;
  • statement that the employee is unable to work, including telework, for that reason; and
  • the date(s) for which leave is requested.
Documentation of the reason for the leave will also be necessary, such as the source of any quarantine or isolation order, or the name of the health care provider who has advised the employee to self-quarantine. This documentation may include a copy of the Federal, State or local quarantine or isolation order related to COVID-19 applicable to the employee or written documentation by a health care provider advising the employee to self-quarantine due to concerns related to COVID-19. If one of your employees takes expanded family and medical leave to care for his or her child whose school or place of care is closed, or whose child care provider is unavailable due to COVID-19, under the Emergency Family and Medical Leave Expansion Act you must require your employee to provide you with appropriate documentation in support of such leave, just as you would for conventional FMLA leave requests. This could include a notice that has been posted on a government, school, or day care website, or published in a newspaper, or an email from an employee or official of the school, place of care, or child care provider. This requirement also applies when the first two weeks of unpaid leave run concurrently with paid sick leave taken for the same reason. If you intend to claim a tax credit under the FFCRA for payment of sick leave wages or payment under expanded family and medical leave, you should retain this documentation in your records. You should consult Internal Revenue Service (IRS) applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit, including any needed substantiation to be retained to support the credit. One of our tax attorneys can assist with these inquiries. Q: What does it mean to be unable to work, including telework, for COVID-19 related reasons? A: An employee is deemed unable to work if you have work for the employee and one of the COVID-19 qualifying reasons prevents the employee from being able to perform that work, either under normal circumstances at the normal worksite or by means of telework. Q: May an employee take paid sick leave or expanded family and medical leave intermittently while teleworking? A: If an employee is unable to telework their normal schedule of work hours due to one of the qualifying reasons in the Emergency Paid Sick Leave Act, you and the employee may agree that the employee will be permitted take paid sick leave intermittently while teleworking. Similarly, you and an employee may agree that the employee can take expanded family medical leave intermittently while telecommuting. The intermittent leave may be taken in any increment that is agreed upon by you and the employee. The Department of Labor encourages employers and employees to collaborate to achieve flexibility and meet mutual needs. Q: May an employee take paid sick leave intermittently while working at the employee’s usual worksite (as opposed to teleworking)? A: Unless the employee is teleworking, paid sick leave must be taken in full-day increments if the leave it taken 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 related to COVID-19;
  • the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • the employee is caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self- quarantine due to concerns related to COVID-19; or
  • the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
Unless the employee is teleworking, once the employee begins taking paid sick leave for one or more of these qualifying reasons, the employee must continue to take paid sick leave each day until the employee either (1) uses the full amount of paid sick leave or (2) no longer has a qualifying reason for taking paid sick leave. If the employee no longer has a qualifying reason for taking paid sick leave before he or she exhausts their paid sick leave, the employee may take any remaining paid sick leave at a later time, until December 31, 2020, if another qualifying reason occurs. However, if you and the employee agree, the employee may take paid sick leave intermittently if the employee is taking paid sick leave to care for the employee’s child whose school or place of care is closed, or whose child care provider is unavailable, because of COVID-19 related reasons. Q: If an employer closes its worksite before April 1, 2020, can employees still get paid sick leave or expanded family and medical leave? A: No. If, prior to the FFCRA’s effective date, you sent your employees home and stopped paying them because you do not have work for them, employees will not get paid sick leave or expanded family and medical leave. This is true whether you close the worksite for lack of business or because you are required to close pursuant to a Federal, State, or local directive, such as a “shelter in place” order. However, employees may be eligible for unemployment insurance benefits. Q: If an employer closes its worksite on or after April 1, 2020, but before an employee goes out on leave, can the employee still get paid sick leave and/or expanded family and medical leave? A: No. If you close after the FFCRA’s effective date (even if an employee requested leave prior to the closure), employees are not entitled to paid sick leave or expanded family and medical leave. This is true whether you close the worksite for lack of business or because you are required to close pursuant to a Federal, State, or local directive. However, employees may be eligible for unemployment insurance benefits. Q: If an employer closes its worksite while an employee is on paid sick leave or expanded family and medical leave, what happens? A: If you close while an employee is on paid sick leave or expanded family and medical leave, you must pay the employee any paid sick leave or expanded family and medical leave the employee used before you closed. As of the date you close your worksite, the employee is no longer entitled to paid sick leave or expanded family and medical leave. This is true whether you close the worksite for lack of business or because you are required to close pursuant to a Federal, State, or local directive. However, employees may be eligible for unemployment insurance benefits. Q: If an employer is open, but furloughs an employee on or after April 1, 2020, does the employee receive paid sick leave or expanded family and medical leave? A: No. If you furlough employees because you do not have enough work or business for the employees, the employees are not entitled to take paid sick leave or expanded family and medical leave. However, employees may be eligible for unemployment insurance benefits. Q: If an employer reduces an employee’s scheduled work hours, can the employee use paid sick leave or expanded family and medical leave for hours that the employee is no longer scheduled to work? A: No. If you reduce an employee’s hours because you do not have work for the employee to perform, the employee may not use paid sick leave or expanded family and medical leave for the hours they are no longer scheduled to work. Q: Can an employer supplement or adjust the pay mandated under the FFCRA with paid leave that the employee may have under the employer’s paid leave policy? A: If the employee chooses to use existing leave you have provided, yes; otherwise, no. Paid sick leave and expanded family medical leave under the FFCRA is in addition to employees’ preexisting leave entitlements. Under the FFCRA, the employee may choose to use existing paid vacation, personal, medical, or sick leave from your paid leave policy to supplement the amount the employee receives from paid sick leave or expanded family and medical leave, up to the employee’s normal earnings. Q: May an employer require an employee to supplement or adjust the pay mandated under the FFCRA with paid leave that the employee may have under the employer’s paid leave policy? A: No. Under the FFCRA, only the employee may decide whether to use existing paid vacation, personal, medical, or sick leave from your paid leave policy to supplement the amount your employee receives from paid sick leave or expanded family and medical leave. The employee would have to agree to use existing paid leave under your paid leave policy to supplement or adjust the paid leave under the FFCRA. Additional new guidance from the DOL can be found here. CONTACT TYSON HORROCKS T. 801.799.5923 Send Email



FFCRA DOL Healthcare Update

Healthcare Employers Spared Burden of FFCRA By Last Minute DOL Guidance Last updated 3.30.2020 The Families First Coronavirus Response Act created a bizarre contradiction for healthcare employers. While hospitals, clinics and other patient care providers worked under great strain to care for patients, with COVID-19 and other maladies, the Act would have permitted employees of health care providers to be absent from work, sometimes with pay, in some situations for up to 12 weeks. Saturday afternoon, the DOL issued new guidance to greatly expand the scope of employees that healthcare providers can exclude from the leave rights under FFCRA, sparing providers from crippling staff shortages during this pandemic. FFCRA permitted employers to elect to exclude health care providers and emergency responders from the leave rights created by the act. However, the act did not define emergency responder, and borrowed the FMLA’s narrow definition of health care provider. As the act was written, health care employers could exclude only doctors, nurse practitioners and physicians’ assistants, along with a handful of other licensed professionals, from the leave rights under the act. Notably, RNs, LPNs and CNAs were not on the list of employees that could be excluded, nor were pharmacists, pharmacy techs, any type of therapists, or any of the support staff necessary to operate a hospital, nursing home or medical practice. DOL’s Q&A greatly expanded the definitions of health care provider and emergency responder to permit employers to exclude a broad cross-section of employees from the leave rights: “a health care provider is anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. An emergency responder is now defined as: “. . . an employee who is necessary for the provision of transport, care, health care, comfort, and nutrition of such patients, or whose services are otherwise needed to limit the spread of COVID-19. This includes but is not limited to military or national guard, law enforcement officers, correctional institution personnel, fire fighters, emergency medical services personnel, physicians, nurses, public health personnel, emergency medical technicians, paramedics, emergency management personnel, 911 operators, public works personnel, and persons with skills or training in operating specialized equipment or other skills needed to provide aid in a declared emergency as well as individuals who work for such facilities employing these individuals and whose work is necessary to maintain the operation of the facility.” These definitions appear sufficiently broad to allow a health care employer to exclude any employee from the leave rights under FFCRA. Along with these expanded definitions, the DOL encourages employers of healthcare providers and emergency responders to be “judicious” when excluding employees from the leave rights under the Act because of the overarching need to minimize the spread of the virus. The new Q&A guidance did not inform employers how to elect to exclude categories of employees. We suggest that you notify employees individually via email or memo if you intend to exclude them from exercising FFCRA leave rights, and the sooner the better in advance of the April 1 effective date. However, a general communication that identifies categories of employees who are excluded should satisfy the act’s requirements for larger employers. Keep in mind, if you have 50 or more employees, or if your entity is a public agency, you are covered by the Family and Medical Leave Act, regardless of the FFCRA. As a result, some of your employees may be eligible for leave for their own serious health condition or to care for a family member with a serious health condition, even if you exclude them from the FFCRA. CONTACT BRAD CAVE T. 307.778.4210 Send Email



Families First Coronavirus Response Act – Sick Leave

Last updated 3.20.2020 New Federal Legislation Requires Employers to Provide Emergency Paid Sick Leave ​ The Emergency Paid Sick Leave Act ("EPSLA"), passed by Congress on March 18, 2020, requires private employers with five hundred (500) or fewer employees, and public agencies with at least one employee, to provide up to eighty (80) hours of paid emergency sick leave for certain qualifying coronavirus-related reasons. Covered employers must give emergency paid sick time to any employee, regardless of the length of employment, for a qualifying emergency related to the coronavirus. The EPSLA takes effect on April 2, 2020 and remains in effect until December 31, 2020. Emergency sick leave may be used by employees starting April 2, 2020 and running through the first pay period following the formal declaration of the end of the current coronavirus emergency. Coverage The EPSLA applies to private employers with five hundred (500) or fewer employees and public agencies with at least one employee. Eligible Employees Paid sick time is available for immediate use regardless of how long the employee has been employed. It applies to full time and part time employees, regardless of the employee’s FLSA exemption status. Qualifying Reasons for Paid Sick Leave An employee may only take paid sick time if the employee is unable to work or telework due to a need for leave because one of the following situations has occurred:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).
  5. The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Amount of Leave Available Full-time employees are entitled to 80 hours of emergency paid sick leave and part-time employees are entitled to a proportionately similar amount, based on the average number of hours they work in a two-week period. Sick leave provided under the EPSLA does not carry over from one year to the next and is not paid out upon the termination of an employee’s employment. Calculating Rate of Pay If the employee is taking leave for their own care (reasons 1, 2, and 3 above), then the paid sick time is compensated at the employee’s regular rate (but not less than the applicable federal, state, or local minimum wage) capped at $511 per day (which would apply to someone making more than $130,000 per year) or $5,110 in the aggregate. If the employee is taking leave to care for someone else or for a related condition specified by the Secretary of Health and Human Services (reasons 4, 5, and 6 above), then the paid sick time is compensated at two-thirds their regular rate capped at $200 per day or $2,000 in the aggregate. Regular rate is determined using the FLSA definition. Impact on Other Paid Leave The employee must be allowed to use paid sick time under the Act before using any other accrued paid time off. Emergency paid sick time is used in addition to any paid leave entitlement(s) already existing under an employer’s policies. The EPSLA does not interfere with benefits already provided under Federal Law, State Law, Local Law, Employer Policies, or an existing Collective Bargaining Agreement, it is simply a benefit provided in addition to existing benefits. Employers may not change their paid leave policies on or after the date of the Act’s enactment to avoid providing the additional two weeks of emergency paid sick time. A link to new legislation can be found here. ALERTS 3.26.20 COVID-19 Employment Law Update Recording and Slides CONTACTS EMILY HOBBS T. 303.295.8584 Send Email JORDAN WALSH T. 775.327.3040 Send Email



Families First Coronavirus Response Act – Tax Credits

Updated 4.7.2020 Employers required to provide paid emergency sick leave or paid extended family medical leave under the Families First Coronavirus Response Act are eligible for a refundable tax credit equal to 100 percent of qualified leave wages paid by the employer during the period from April 1, 2020 to December 31, 2020 for qualifying leave taken by employees during that same period. The amount of the tax credit is increased by the employer’s share of Medicare taxes on qualifying leave and the cost of providing group health plan benefits allocable to the employees receiving qualifying leave. While the original language of the FFCRA provided that the credit could be obtained by offsetting the employer’s portion of Social Security taxes owed for a quarter, the IRS has now issued guidance stating that the credit can be obtained by accessing all federal payroll taxes of the business for the relevant pay period as explained in more detail below. If the available credit for providing the required leave payments exceeds the amount of such payroll taxes, the employer may request a refund for the excess amount of the credit for the quarter. An employer with qualified leave wages may elect not to have the credit apply and may instead claim a deduction for the leave wages paid. Source of Funds – Details To mitigate cash flow concerns, the IRS announced guidance on March 31, 2020 that allows employers to recover a significant portion of the cost of paid leave simultaneously with paying the leave in that payroll period. IRS guidance now allows:

  • Employers to retain (and not deposit) all federal payroll tax deductions for the payroll period: the federal income tax withheld from all employee wages, employer Social Security and Medicare taxes, and employee Social Security and Medicare withheld from all employee wages.
  • If the amount of such payroll taxes is not sufficient to cover the cost of the qualifying leave paid for the period, employers may file a Form 7200 and request a refund of remaining tax credit from the IRS.
  • Employers may file several Forms 7200 during a quarter to claim an advance payment of the tax credit the employer will claim on the Form 941 for that quarter. Refunds should be issued within 2 weeks of filing the Form 7200.
Considerations To better assist employers substantiate the ability to claim a tax credit, provided below is a summary of the recordkeeping requirements associated with claiming tax credits:
  • Employers must satisfy significant recordkeeping requirements in order to substantiate the tax credits claimed for paying qualifying leave. Employers should retain these records for at least 4 years. These records include how the employer determined whether employees were entitled to qualifying leave, calculated the credit, and determined allocable health costs. Employers should retain copies of any Forms 7200 filed with the IRS and the Forms 941 upon which credits were claimed.
  • Employers claiming a tax credit must obtain a statement from the employee substantiating that the leave request constitutes qualifying leave. This statement should include the employee’s name, the applicable dates of the requested leave, the COVID-19 related reason the employee is requesting leave with written support for such reason, and a statement that the employee is unable to work, including by means of telework, for such reason.
    • If employees are requesting leave due to a quarantine, the employee must provide the agency or person requiring such quarantine.
    • If the employee is requesting leave due to a school closure, the employee must provide the name and age of the student, the name of the closed school, and a description of the circumstances that require the employee to take care of the student.
CONTACTS BRET BUSACKER T. 208.383.3922 Send Email KAREN DEAN T. 303.295.8550 Send Email ARTHUR HUNDHAUSEN T. 303.295.8548 Send Email



POLICIES AND PROCEDURES

Work From Home

Last updated 3.15.2020 As required and self-imposed quarantine issues arise, as well as government directions to limit gatherings and shut down schools continue, employers are considering (or are being forced to consider) allowing or requiring portions of their workforce to work from home. Employers have significant discretion to structure these programs, from deciding which employees may be eligible, setting expectations related to work productivity, establishing different or revised work schedules, and maintaining system security. No policy is a one-size-fits-all, but below are highlights of the issues employers should consider and implement: Eligibility Considerations

  • Employers should consider what types of work positions are conducive to working remotely, considering job duties, access to systems or files, and ability to complete tasks by email or telephone.
  • Generally, only employees in good standing based on prior performance, attendance records, and ability to work without significant direct supervision are good candidates. Employees working remotely should be trustworthy and self-starters.
  • Employers can set a minimum tenure requirement, such as working for the employer for 90-days, in order to be eligible to work from home (otherwise, the employees who do not meet such a tenure requirement may be subject to other types of leaves or reductions in force).
  • Employees who do not maintain sufficient performance or comply with the work from home policy or requirements, may not remain eligible to work from home.
  • All eligibility decisions are made at the full discretion of the employer.
Home-based Working Conditions
  • Be clear that employees are expected to maintain the work performance requirements listed in their job descriptions or as outlined by their manager.
  • Set expectations (even if temporarily lowered to account for a shorter workday, lower production level, or the reality that if schools are shut down, there will be other distractions for the employee).
  • Be clear that employees are expected to dedicate a quiet, secluded, and disturbance free home-work “office” to the extent possible. Distractions from children, animals, or other disturbances should be minimized during the work from home-work schedule.
IT and Security Concerns
  • Employers should consider whether they will provide all necessary equipment; if they do, then employers can ensure that all required security, firewall, and other IT considerations are in place. A process for returning equipment when employment ends should be defined.
  • Consider whether employees will be required to have high-speed Internet or a dedicated land-line (if requiring a land-line on an emergency basis such as a COVID-19 shutdown, it may not be a realistic requirement depending on the relevant phone company’s availability).
  • If employees are allowed to use their own equipment and computer, the employer should set out specifically the data security requirements and programs that the employee must utilize, download, etc.
  • Determine what company systems the employees can and should be allowed access to while working remotely.
  • Implement increased security measures, if possible, to lock down the most mission-critical employer data from being accessed by any unauthorized individuals remotely.
CONTACT BRYAN BENARD T. 801.799.5833 Send Email



Pay Practices

Small Business Coverage Under the Paid Leave Provisions of the FFCRA Last updated 4.17.2020 As covered elsewhere in this site, under the FFCRA, all private employers that employ fewer than 500 employees must comply with the emergency paid sick leave (EPSLA) and paid family leave (EFMLEA) provisions of the coronavirus relief legislation. The statute does not distinguish between for-profit and non-profit entities; employers of both types must comply with the FFCRA if they otherwise meet the requirements for coverage. While small businesses typically have fewer than 500 employees, they may be exempted from these requirements due to US Department of Labor regulations promulgated at the beginning of April. Specifically, the DOL regulations clarify when small businesses that are affiliated with larger entities may be treated as a single employer for purposes of counting the 500 employee coverage threshold and when certain small businesses with less than 50 employees otherwise may be exempted from the paid leave requirements under the statute. As a general matter, all full-time and part-time employees in the United States (including all of its territories) are counted towards the 500 employee coverage threshold, regardless of whether the employees are currently on leave, supplied by a temporary placement agency, or are day laborers. It is clear that a corporation with multiple establishments or divisions is considered to be one employer and all of its employees count towards the 500 employee coverage marker. The trickier question is what happens when a corporation has an ownership interest in another corporation, such as a when a larger corporation has an ownership stake in a small business. In this circumstance, each corporation is considered a separate employer unless the two corporations (1) qualify as joint employers under the Fair Labor Standards Act (FLSA), or (2) satisfy the integrated employer test under the Family Medical Leave Act (FMLA). Joint Employer Rule Under FLSA The DOL’s new FLSA joint employer rule took effect on March 16, 2020. While the test is flexible, it typically looks at whether two (or more) entities share the power to: (1) hire or fire employees; (2) supervise and control employee’s work schedules or conditions of employment; (3) determine the employees’ rate and method of payment; and (4) maintain the employees’ employment records. If two separate entities are found to be joint employers, all of their common employees count towards the 500 employee threshold under the EPSLA and and EFMLEA. FMLA Integrated Enterprise Test The DOL’s integrated enterprise test under the FMLA considers the extent to which two (or more) entities have: (1) common management; (2) interrelation between operations; (3) centralized control of labor relations; and (4) the degree of common ownership/financial control. If the test is satisfied, then the multiple entities will be considered an “integrated employer” under the FMLA and all of their employees together will count towards the 500 employee threshold. The Small Business Exemption The FFCRA provides an exemption for employers with fewer than 50 employees from providing paid sick and family/medical leave. To qualify, the small business employer must keep a written record showing that:

  1. the paid leave would cause the employer’s expenses and financial obligations to exceed available revenues and cause the business to cease operating at a minimal capacity; or
  2. the absence of the employees requesting leave would pose a substantial risk to the financial health or operational capacity of the business because of the employees’ skills, knowledge, or responsibilities; or
  3. the small business cannot find enough other workers to perform the work of the employees requesting leave and this work is necessary to keep the business operating at minimal capacity.
For reasons (1), (2), and (3), the employer may deny paid sick leave or expanded family and medical leave to otherwise eligible employees. The business need only keep a written record in its own files of its denial of leave and its qualifying reasons; it need not submit anything in writing to the Department of Labor. In exercising its authority to exempt certain employers with fewer than 50 employees, the Department stated that it was trying to balance two potentially competing objectives of the FFCRA. “On the one hand, the leave afforded by the FFCRA was designed to be widely available to employees to assist them navigating the social and economic impacts of COVID-19 as well as public and private efforts to contain and slow the spread of the virus. On the other hand, the Department recognizes that FFCRA leave entitlements have little value if they cause an employer to go out of business and, in so doing, deny employees not only leave but also jobs.” CONTACT JEREMY MERKELSON
T. 303.295.8000 Send Email Pay Issues During COVID-19 Last updated 3.16.2020 What's the Problem? How should employers pay employees who have been sent home involuntarily – either because they display illness symptoms or as a preventative measure (e.g., quarantine after returning from travel to high-risk area). What to Consider Pay practices differ based on the specific issue and the employee’s exempt or non-exempt status. Can I send a non-exempt employee home without pay? As a general rule, non-exempt employees must be paid for all time actually worked, but need not be paid for time when they perform no work. If an employer sends a non-exempt employee home, the employer should make sure the employee is paid for all work performed while at home. If the employee is sent home because the employee displays signs of illness, the employer would generally be able to mandate that the employee use available paid sick time (subject to certain state law requirements). Employees should be allowed to use other available paid time off in accordance with the employer’s paid time off policies. A trickier question arises when an employer sends a non-exempt employee home when the employee does not display illness symptoms (e.g., in cases of potential exposure). In those cases, the EEOC may take the position that the employer is perceiving the employee as disabled and, if the employee is sent home without pay, an argument could be made that the employee has suffered damages as a result of perceived disability by the employer. There are counter-arguments, but employers should evaluate each case individually and seek counsel. Employers should bear in mind that some states have specific requirements about use of sick leave, which may vary from the above. Can I send an exempt employee home without pay? Exempt employees are typically entitled to payment of their full salary for any week in which they perform work, without deductions made for absences occasioned by the employer or the operating demands of the business. Certain exceptions from that general rule apply in circumstances delineated in the United States Department of Labor’s (USDOL) regulations. These exceptions include deductions in full-day increments for absences due to personal reasons, other than sickness or disability, and deductions in full-day increments for absences caused by sickness or disability if the deduction is made in accordance with a bona fide plan, policy, or practice providing compensation for loss of compensation caused by such sickness or disability, etc. Other exceptions apply. You can reference the USDOL Q&A on COVID-19 issues here. The USDOL just released the following guidance: The FLSA does not require employer-provided vacation time. Where an employer offers a bona fide benefits plan or vacation time to its employees, there is no prohibition on an employer requiring that such accrued leave or vacation time be taken on a specific day(s). This will not affect the employee’s salary basis of payment so long as the employee still receives in payment an amount equal to the employee’s guaranteed salary. An employee will not be considered paid “on a salary basis” if deductions from the predetermined compensation are made for absences occasioned by the office closure during a week in which the employee performs any work. Exempt salaried employees are not required to be paid their salary in weeks in which they perform no work. So, a private employer may direct exempt staff to take vacation or debit their leave bank account in the case of an office closure, whether for a full or partial day, provided the employees receive in payment an amount equal to their guaranteed salary. In the same scenario, an exempt employee who has no accrued benefits in the leave bank account, or has limited accrued leave and the reduction would result in a negative balance in the leave bank account, still must receive the employee’s guaranteed salary for any absence(s) occasioned by the office closure in order to remain exempt. For more information, see WHD Opinion Letter FLSA2005-41. Note of Caution: If an employer sends exempt employees home after the workweek has begun, and these employees have no paid time off available, this may be deemed an “absence occasioned by the demands of the business,” which would entitle the employee to payment for the full workweek. You should seek legal counsel if you encounter such circumstances. Do I have to pay employees if business shuts down because of a government mandate? As mentioned above, non-exempt employees are generally not entitled to be paid for periods of time during which they perform no work – even if the reason why the non-exempt employee is not working is a government-mandated shutdown. For exempt employees, the FLSA does not permit employers to make deductions from employees’ pay for partial or even full-day closures of less than an entire workweek, regardless of whether they are caused by the government. The only exception is when the employer’s facility is shut down for an entire workweek, and exempt employees do not perform any work at all during the shutdown. Employers should, however, assess how realistic it is that exempt employees performing no work at all for an entire workweek (e.g., checking e-mails or making phone calls). Do I have to pay employees their same hourly rate or salary if they work at home? According to USDOL, if telework is being provided as a reasonable accommodation for a qualified individual with a disability, or if required by a union or employment contract, then you must pay the same hourly rate or salary. If this is not the case, and you do not have a union contract or other employment contracts, under the FLSA employers generally have to pay employees only for the hours they actually work, whether at home or at the employer's office. The FLSA requires employers to pay non-exempt workers at least the minimum wage for all hours worked, and at least time and one half the regular rate of pay for hours worked in excess of 40 in a workweek. Salaried exempt employees generally must receive their full salary in any week in which they perform any work, subject to certain very limited exceptions. If the Service Contract Act (SCA) or state or local laws regulating the payment of wages also apply, nothing in the FLSA or its regulations or interpretations overrides or nullifies any higher standards provided by such other laws or authority. (See the U.S. Department of Labor, Wage and Hour Division for additional information on the SCA or call 1-866-487-9243.) What other pay-related issues should Employers consider? Although the FLSA does not require this, employers should consider any potentially-applicable state law requirements regarding reporting pay or predictive scheduling. CONTACT DORA LANE T. 775.327.3045 Send Email



Anti-Discrimination

Last updated 3.15.2020 ADA AND THE REHABILITATION ACT The ADA and the Rehabilitation Act, including the requirement for reasonable accommodation and rules about medical inquiries and examinations, continue to apply. Employers continue to have a duty to prevent stigma and discrimination in the workplace. However, these laws do not prevent or interfere with employers' ability to take steps to prevent workplace exposure to COVID-19. Direct Threat The ADA prohibits an employer from making disability-related inquiries and requiring medical examinations of employees, except under limited circumstances. During a pandemic, however, if an individual with a disability poses a direct threat despite reasonable accommodation, he or she is not protected by the nondiscrimination provisions of the ADA. A “direct threat” is “a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” Assessments of whether an employee poses a direct threat in the workplace must be based on objective, factual information, “not on subjective perceptions . . . [or] irrational fears” about a specific disability or disabilities. The EEOC’s regulations identify four factors to consider when determining whether an employee poses a direct threat: (1) the duration of the risk; (2) the nature and severity of the potential harm; (3) the likelihood that potential harm will occur; and (4) the imminence of the potential harm. Whether COVID-19 rises to the level of a direct threat depends on the severity of the illness. An assessment by the CDC or state or local health authorities that COVID-19 is significantly more severe than, for example, seasonal influenza, could mean it poses a direct threat. The assessment by the CDC or public health authorities provides the objective evidence needed for a disability-related inquiry or medical examination. Frequently Asked Questions (Also see EEOC’s Pandemic Preparedness in the workplace and the ADA) May an employer send employees home if they have influenza-like symptoms during a pandemic? Yes. Employees who become ill with symptoms of influenza-like illness at work during a pandemic should leave the workplace. Advising such workers to go home is not a disability-related action if the illness is akin to seasonal influenza. Additionally, the action would be permitted under the ADA if the illness were serious enough to pose a direct threat. During a pandemic, how much information may an ADA-covered employer request from employees who report feeling ill at work or who call in sick? Employers may ask such employees if they are experiencing influenza-like symptoms, such as fever or chills and a cough or sore throat. Employers must maintain all information about employee illness as a confidential medical record in compliance with the ADA. If COVID-19 is like seasonal influenza, these inquiries are not disability-related. If COVID-19 becomes severe, the inquiries, even if disability-related, are justified by a reasonable belief based on objective evidence that the severe form of pandemic influenza poses a direct threat. When an employee returns from travel during a pandemic, must an employer wait until the employee develops influenza symptoms to ask questions about exposure to pandemic influenza during the trip? No, because this is not a disability-related inquiry. If the CDC or state or local public health officials recommend that people who visit specified locations remain at home for several days until it is clear they do not have pandemic influenza symptoms, an employer may ask whether employees are returning from these locations, even if the travel was personal. May an employer encourage employees to work remotely as an infection-control strategy? Yes. In addition, employees with disabilities that put them at high risk for complications of pandemic influenza may request telework as a reasonable accommodation to reduce their chances of infection during a pandemic. May an employer require its employees to adopt infection-control practices, such as regular hand-washing, and wear personal protective equipment, such as face masks, gloves or gowns, at the workplace? Yes. These requirements do not implicate the ADA. However, if employers require protective equipment, employees with disabilities who need a reasonable accommodation (e.g., non-latex gloves), must be provided these, absent undue hardship. May an employer ask an employee why he or she has been absent from work if the employer suspects it is for a medical reason? Yes. Asking why an individual did not report to work is not a disability-related inquiry. An employer is always entitled to know why an employee has not reported for work. May an employer require employees who have been away from the workplace during a pandemic to provide a doctor’s note certifying fitness to return to work? Yes. Such inquiries are permitted under the ADA either because they would not be disability-related or, if the pandemic were truly severe, they would be justified under the ADA standards for disability-related inquiries of employees. Title VII Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against its employees based on race, color, religion, sex and national origin. State anti-discrimination laws may include additional protected classes. During the COVID-19 pandemic, anti-discrimination laws continue to apply. Employers cannot treat those employees who may be from parts of the world where COVID-19 is prevalent (e.g., those of Asian, Iranian, Italian descent), or any other race/national origin differently, due to fears about the virus. For example, an employer cannot compel all employees to take the influenza vaccine regardless of their medical conditions or religious beliefs. Under Title VII, once an employer receives notice that an employee’s sincerely held religious belief, practice, or observance prevents him from taking the vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship as defined by Title VII (“more than de minimis cost” to the operation of the employer’s business, which is a lower standard than under the ADA). Under the ADA, an employee may be entitled to an exemption from a mandatory vaccination requirement based on an ADA disability that prevents him from taking the influenza vaccine. This would be a reasonable accommodation barring undue hardship (significant difficulty or expense). CONTACT DORA LANE T. 775.327.3045 Send Email



Sick Leave

Last updated 3.16.2020 Colorado Temporary Rule Mandates Paid Sick Leave On March 11, 2020, the Colorado Department of Labor and Employment (CDLE) published emergency rules (“Help Rules”) which temporarily require employers in certain industries to provide paid sick leave to employees with flu-like symptoms while awaiting COVID-19 testing. The emergency rules took effect immediately and will remain in place for 30-days, or longer if the state of emergency declared by the Governor continues. The HELP Rules apply to select industries which include: leisure and hospitality; food services; child care; education, including transportation, food service, and related work at educational establishments; home health, if working with elderly, disabled, ill, or otherwise high-risk individuals; and nursing homes and community living facilities. Covered employers must offer at least four days of paid sick leave and provide up to four paid sick-leave days to employees with flu-like symptoms and who are tested for COVID-19. If an employer already provides paid sick leave, this requirement is not on top of sick leave an employer already provides. It also does not cover wage replacement should an employee test positive and require quarantine resulting in lost work time and wages. The HELP Rules provide that employees and employers should comply with FMLA procedures “[t]o the extent feasible” to pursue and provide paid sick leave under the HELP Rules, but the rules prohibit employers from terminating employees for failure or inability to provide FMLA-related documentation during an illness covered by the HELP Rules. Employees who take paid sick leave pursuant to the HELP Rules are entitled to their regular rate of pay (as defined under the recent COMPS Order, 7 C.C.R. 1103-1 § 1.8) for the employer’s regularly worked hours. Failure to provide paid sick leave required under the HELP Rules constitutes a failure to provide wages under, for example, Colo. Rev. Stat. § 8-4-109, and can subject the employer to penalties and possibly attorney fee awards. Retaliation against an employee for taking paid sick leave under the HELP Rules is likewise prohibited. CONTACT EMILY HOBBS T. 303.295.8584 Send Email



Retaining Employer Discretion to Modify Workplace Policies

Last updated 3.15.2020 With any emergency or new policy revisions or changes, it is important to retain employer discretion to modify policies going forward. Most employers have a written acknowledgment at the end of their current handbook or policies that indicates the policies do not create a contract and that retains employer discretion to modify all such policies. This is critical to retain as employers are updating or modifying policies during the Coronavirus outbreak and related circumstances. Employers may use or update their current acknowledgment form to address this. However, it is good practice to further update this form under the present circumstances where governmental emergency legislation, programs and guidelines are certain to continue. Employers should indicate that any interim or emergency policies are subject to change at any time based on company discretion and business needs and considerations, as well as based on any government-led issues, legislation, programs and guidance. Specifically, employers may want to suggest that any new employer benefits or policies provided specifically in response to the Coronavirus will be revised or offset by any potential government mandated or available plans and benefits. CONTACT BRYAN BENARD T. 801.799.5833 Send Email



I-9 Verification Policy and USCIS Signatures

Last updated 3.23.2020 DHS Announces Relaxed Standards for I-9 Verification and USCIS Signatures On Friday, March 20, 2020, the Department of Homeland Security announced several new and unprecedented changes intended to assist employers during the coronavirus pandemic. The new rules permit copies of employer and attorney signatures rather than originals on certain immigration forms submitted to the USCIS such as the forms associated with the H-1B visa, and more flexible standards in completing the I-9 Employment Eligibility Verification Form. Specifically, for the next 60 days, employers may remotely view I-9 identity and work authorization documents such as a driver’s license or Social Security card remotely by video conference or by e-mail. This applies only to new hires working off-site and on-site employees whose documents cannot be verified in-person due to quarantine or lockdown requirements. Please see the suggested policy below. Read more... CONTACT ROGER TSAI T. 303.295.8171 Send Email



Executive Order on Immigration

What is the Impact of President Trump's Temporary Immigration Suspension? Last updated 4.23.2020 In light of the impact of COVID-19 on the U.S. labor market, on Monday President Trump tweeted “I will be issuing a temporary suspension of immigration into the United States.” Yesterday, the President signed an Executive Order with a much more limited scope that only temporarily suspends U.S. Embassies from issuing green cards (permanent residency) for immigrants applying outside the U.S for 60 days. Because 90% of green card applicants are in the U.S. and apply through the US Citizenship and Immigration Service rather than U.S. Embassies, most green card applicants will not be affected. Even those applicants outside the U.S. who might have been impacted by the Executive Order already faced closures of U.S. Embassies around the world due to COVID-19. The Executive Order, as written, will not impact existing green card holders, permanent residency applicants with pending applications at USCIS, immigrant workers with temporary work visas such as the H-1B, L-1, or TN visas. The Executive Order also exempts healthcare professionals, spouses and children of U.S. citizens, and immigrant investors. The Department of State and the Department of Homeland Security may issue policy memos in the next few days which will explain how the Executive Order will be implemented. One of the more concerning aspects of the Executive Order is a request to the Department of Homeland Security, Department of State, and Department of Labor to “review nonimmigrant programs,” such as H-1B, TN, and L-1 visas, and recommend other measures to stimulate the U.S. economy and ensure the prioritization, hiring, and employment of United States workers. While no measures have been proposed yet, past recommendations have focused on elevating adjudication standards, raising immigration application fees, introducing requirements to conduct labor market tests to locate qualified U.S. workers before hiring foreign workers, or limiting the work authorization of dependent spouses. These federal agency recommendations will be provided to the President in 30 days, and may result in additional measures. Who this Order affects: From April 23, 2020 to June 22, 2020, immigratns currently outside the U.S. will be refused entry if they:

  • Do not have either an immigrant visa that is valid as of the effective date above, OR
  • Do not have an official travel document other than a visa (such as a transportation letter, an appropriate boarding foil, or an advance parole document) that is valid on the effective date above, or issued on any date thereafter that permits them to travel to the United States and seek entry or admission.
Who this Order does not affect:
  • Foreign nationals living and working in the United States who seek to become green-card holders
  • Additionally, the order will not affect the adjudication of PERMs, I-140s, or I-485s for these individuals
  • Foreign nationals currently in the United States on non-immigrant visas (such as H-1B, L-1, or TN visas)
  • Foreign nationals outside the U.S. seeking to enter the United States on non-immigrant visas (such as H-1B, L-1, or TN visas)
  • Agricultural H-2A guest workers
  • Lawful permanent residents or green card holders
  • Foreign nationals who seek to enter the United States on an immigrant visa for a position in the healthcare field (physician, nurse, medical research) or a related field that helps to fight COVID-19, and their spouse and unmarried children under 21 years old
  • Foreign nationals applying for the EB-5 Immigrant Investor Program
  • Foreign national who is the spouse of a United States citizen or who is under 21 years old and is the child of a United States citizen
  • Asylees, refugees, or Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment applicants
  • Foreign nationals in the United States Armed Forces and any spouse and children of a member of the United States Armed Forces
  • Foreign nationals entering for national interest purposes
What Happens Next:
  • The order indicates that no later than 50 days from April 23, 2020 (June 12, 2020) the Secretary of Homeland Security, Secretary of State, and Secretary of Labor will recommend whether the order will be continued or modified.
  • The order also states that within 30 days of April 23, 2020 (May 23, 2020) the Secretary of Homeland Security, Secretary of State, and Secretary of Labor will “review nonimmigrant programs” (such as H-1B, TN, and L-1 visas) and recommend other measures to stimulate the U.S. economy and ensure the prioritization, hiring, and employment of United States workers.
CONTACT ROGER TSAI T. 303.295.8171 Send Email



EMPLOYEE BENEFITS

Health, Welfare, and Other Benefits

Extended Deadlines Last updated 4.20.2020 What's the Problem: COVID-19 has made it difficult to meet certain deadlines with respect to plan administration. Answer:The IRS granted limited relief to filing deadlines, including certain Form 5500 relief, under IRS Notice 2020-23 on April 9, 2020. A Form 5500 that is required to be filed between April 1, 2020 and July 14, 2020 is now due July 15, 2020. The relief does not impact calendar year plans as the normal due date for filing Form 5500 (July 31st) falls outside of the delay period. This extension helps some non-calendar year plans and potentially plans with short plan years that caused the Form 5500 deadline to occur during that period. Health Plan Coverage of COVID-19 Last updated 4.1.2020 What's the Problem: One potential barrier to getting people tested is the expense of medical treatment. For participants in employer-sponsored health plans, they may be reluctant to incur copay or deductible expenses. Answer: The Family First Coronavirus Response Act now requires (as of the date of the enactment of the Act, March 18, 2020) all group health plans (fully insured and self-insured) to provide COVID-19 testing to plan participants and their covered beneficiaries without cost sharing (i.e., co-pays, deductibles and coinsurance) and without imposing prior authorization requirements or other medical management requirements.The Families First Coronavirus Response Act is available here. Covered services include facility charges (including office visit, urgent care visit, emergency room visit) and the cost of all services (provided in person or by telemedicine) and all items used in administering the COVID-19 test as well as the costs associated with evaluating whether a COVID-19 test is required. The coverage requirements are limited in duration to the period of a national health emergency as declared by the Director of Health and Human Services. Failure to provide these benefits would constitute a violation of Part 7 of the Employee Retirement Income Security Act and other similar benefits laws. The CARES Act (signed on March 27, 2020) has modified and expanded on a permanent basis required coverage for COVID-19 testing without cost sharing to include COVID-19 tests that are in the process of being approved by the federal government, tests that have been approved by certain state labs, and other tests the Secretary of the Health and Human Services approves. In addition, group health plans (fully insured and self-insured) are also required to cover COVID-19 immunizations and similar mitigation services as preventive health services without cost sharing. These services must be made available under the plan within 15 days of the date the immunization is given an “A” or “B” rating by the United States Preventive Services Task Force or is recommended by the CDC as an appropriate immunization for the person considered. CONTACT BRET BUSACKER T. 208.383.3922 Send Email HSA Considerations Last updated 3.23.2020 What's the Problem: Can a health plan waive copay or deductible amounts for Coronavirus screening tests for individuals enrolled in a high deductible health plan or will these payments cause the plan to cease to qualify as a high deductible health plan and thereby make the enrollees ineligible to be making contributions to a health savings account? Answer: Yes. Even before the FFCRA, IRS Notice 2020-15 expressly confirms that an HDHP may eliminate or reduce the deductible for benefits received or items purchased associated with Coronavirus testing or treatment with no effect on the plan’s status as a high deductible health plan under Internal Revenue Code Section 223(c)(A). More generally, the HSA and HDHP rules allow for enrollees to receive “preventative care” services before reaching the deductible. The IRS notice that defines the scope of preventative care in this context is Notice 2004-23, which creates a safe harbor for preventative care screening services that are listed on the appendix to the notice. One of the screening services on the safe harbor list is “infectious diseases.” Thus, an HDHP can cover screening for infectious disease, such as Coronavirus testing, as a preventative service without cost-sharing. IRS Notice 2020-15 goes further than this, however, and allows lower (or no) deductibles to apply to benefits received or items purchased that are associated with treatment of COVID-19 and not merely associated with screening for the virus. CONTACTS GABE HAMILTON T. 208.383.3952 Send Email ​ KEVIN SELZER T. 303.295.8094 Send Email Telemedicine & HSAs Last updated 4.1.2020 What’s the Problem: To alleviate the risk that people would be exposed to COVID-19 during unrelated medical visits to medical facilities, some telemedicine providers are encouraging employers to offer telemedicine at no copay or deductible for any medical condition during the pandemic. But that is broader than Notice 2020-15 would allow. Does providing telemedicine with no cost sharing cause any problem? Answer: The CARES Act addresses this issue by temporarily amending the Tax Code to permit group health plans to provide any service with zero cost sharing through telemedicine (including services completely unrelated to COVID-19) without jeopardizing participant HSA eligibility. This special exception to the general HSA rules will remain in effect until the first plan year starting in 2022. CONTACT BETH NEDROW T. 406.896.4635 Send Email Cafeteria Plan Last updated 3.29.2020 Mid-Year Changes to Cafeteria Plan Elections Employees whose daycare and commuting circumstances have changed due to the COVID-19 outbreak may want to make mid-year changes to various benefit plans. Dependent Care Flexible Spending Accounts FSA elections for pre-tax accounts administered for commuter benefits—Qualified Parking and/or Qualified Transportation—and/or dependent care expenses may be eligible for mid-year change. Question: My child’s daycare center closed due to COVID-19, and I am now working from home. Can I decrease my dependent care FSA election amount as I do not need daycare services right now? Answer: Yes, if your expenses have decreased because your child’s daycare center has closed, you can temporarily change or cancel your deferral. Question: My child’s school is closed due to COVID-19. I now need to pay someone to watch my child in my home. Can I increase my dependent care FSA election? Answer: Yes, you may increase your election if your child being unable to attend school results in an increase in daycare expenses. Commuter FSA: You are always able to make changes to your Qualified Parking and/or Qualified Transportation election amount. IRS regulations permit you to increase or decrease your monthly election amount at any time, if you find that the amount you are contributing exceeds your spending. This includes for the time spent working from home during government-issued stay-at-home orders. Mid-Year Changes to Healthcare FSA and other Benefit Plans At this time, the IRS still requires a qualified change in status (e.g., birth, marriage, divorce, job change impacting coverage) before you can change your deferral election to a healthcare FSA. Your plan will have a deadline, often a 30-day window, to make qualified changes, and you must provide evidence of the reason for the change when you make the request. The same mid-year status change rules generally apply to other benefit elections, such as coverage under a medical plan. Employers should check their cafeteria plan document to confirm that midyear election changes are available under plan terms. If the cafeteria plan does not permit midyear changes, employers can consider amending the plan to provide eligible employees the opportunity to make changes to account for their changed circumstances. Once the employer confirms that these changes are permissible, the employer can communicate the employees’ options. CONTACT REBECCA HUDSON T. 303.295.8005 Send Email Qualifying Medical Expenses Under Health FSAs, HSAs, and HRAs Last updated 4.1.2020 Problem: COVID-19 symptoms may be mild and treatable with over the counter remedies, but these expenses aren't paid for by the health plan. How can the plan promote access to over the counter medications? Answer: The CARES Act provides that non-prescription and over the counter drugs constitute qualifying medical expenses and as such, the cost may be reimbursed from Health Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs). In addition, the CARES Act also provides that menstrual care products constitute medical expenses for Health FSA, HSA, and HRA purposes. CONTACTS BETH NEDROW T. 406.896.4635 Send Email KEVIN SELZER T. 303.295.8094 Send Email



HIPAA Privacy

Last updated 3.13.2020 HIPAA Considerations. Employer-sponsored health plans, as covered entities, and business associates are subject to restrictions under HIPAA with respect to protected health information. A bulletin from HHS provides background on HIPAA privacy and security rules as it relates to COVID-19, available here. CONTACT KEVIN SELZER T. 303.295.8094 Send Email



Retirement Plan

Extended Deadlines Last updated 4.20.2020 What's the Problem: COVID-19 has made it difficult to meet certain deadlines with respect to plan administration. Answer: The IRS granted limited relief to filing deadlines, including certain Form 5500 relief, under IRS Notice 2020-23 on April 9, 2020. A Form 5500 that is required to be filed between April 1, 2020 and July 14, 2020 is now due July 15, 2020. The relief does not impact calendar year plans as the normal due date for filing Form 5500 (July 31st) falls outside of the delay period. This extension helps some non-calendar year plans and potentially plans with short plan years that caused the Form 5500 deadline to occur during that period. We are hoping that additional guidance may be on the way. Notice 2020-23 also extended other plan-related deadlines to July 15, 2020 for deadlines occurring during the delay period, including deadlines related to:

  • plan loan repayments;
  • distributing excess deferrals; and
  • indirect rollovers.
Hardship Distributions Last updated 4.1.2020 What’s the Problem: Employers sponsoring 401(k) plans are preparing for an increase in hardship withdrawal requests. What issues should they be mindful of? Answer: COVID-19 is likely to present serious financial difficulties for individuals and employees. Employers and plan administrators should expect to receive inquiries from participants regarding access to retirement savings. COVID-19 could form the basis for a hardship distribution depending upon the terms of the employer-sponsored retirement plan. Most plans limit hardship distributions to the IRS for “safe harbor” reasons. The safe harbor definition of permissible hardship expenses includes expenses for medical care (for the employee, employee’s spouse, employee’s dependents or employee’s primary beneficiary) to the extent the care would be deductible under Code Section 213(d). The safe harbor definition also includes expenses and losses incurred by the employee as a result of a FEMA declared disaster. While President Trump’s declaration of national emergency did not constitute a FEMA disaster and therefore didn’t qualify as a hardship under the safe harbor definition, many states have now petitioned and been granted FEMA disaster status. Employers can access FEMA’s website for updates on each state’s disaster declaration: www.fema.gov Now might be a good time to consider the e-certify streamlined process for hardship distributions. This process has been available for several years under existing IRS guidance, and permits the TPA to accept limited documentation from participants. Don’t forget, however, that the employer will have an obligation to spot-check audit the hardship process on a quarterly if not annual basis. In the event that the situation leads to unpaid leaves of absence, there could be other issues such as problems making loan repayments, or needs for hardships under provisions for other permitted types of hardship expenses such as tuition or payments to prevent eviction from the participant’s principal residence. Employers may also see a corresponding uptick in participants taking plan loans. Coronavirus-Related Distributions and Loan Relief What's the Problem: Employees are facing financial difficulties due to COVID-19 and looking to access retirement account balances to help supplement or replace lost income. What options are available? Answer: The CARES Act increases available retirement plan distributions and the amount of loans available retirement plans to participants. Coronavirus-Related Distributions Plan sponsors may now offer participants the option to take coronavirus-related distributions (CV distributions) of up to $100,000 from their accounts in qualified retirement plans, 403(b) plans, and governmental 457(b) plans.
  • CV distributions will be available to participants who become ill (or whose spouses or dependents become ill) from COVID-19 or who experience adverse financial consequences from being furloughed, laid off, or quarantined; losing childcare; losing work hours; or other impacts identified by the U.S. Department of Treasury. Participants will be able to self-certify their eligibility for a distribution.
  • CV distributions are available effective immediately and may be taken up until December 30, 2020.
  • CV distributions are not subject to the 10% early withdrawal penalty for distributions to made participants under age 59.5. While the distributions otherwise remain taxable (unless repaid, as discussed below), participants may include the income from the distribution ratably over a 3-year period.
  • Participants are permitted to repay CV distributions within 3 years of the distribution. If the distribution is repaid within the 3-year period, it will be treated as a rollover.
Changes to Plan Loan Rules The Internal Revenue Code was amended to increase the maximum plan loan amount available from $50,000 to $100,000 (or 100% of a participant’s vested account if less than $100,000) for loans taken within the 180-day period following the enactment of the CARES Act for participants who become ill (or the participant’s spouse or dependents become ill) from COVID-19 or experiences adverse financial consequences as a result of being furloughed, laid off, or quarantined; losing childcare; losing work hours; or other impacts identified by the U.S. Department of Treasury in connection with COVID-19. Additionally, effective for both existing loans made prior to the CARES Act and new loans taken prior to December 31, 2020, loan repayment dates are permitted to be delayed for 1 year if a participant with a loan becomes ill (or the participant’s spouse or dependents become ill) from COVID-19 or experiences adverse financial consequences as a result of being furloughed, laid off, or quarantined; losing childcare; losing work hours; or other impacts identified by the U.S. Department of Treasury in connection with COVID-19. Waiver of Required Minimum Distributions What's the Problem: Participant retirement plan accounts have been impacted by the turmoil in the financial markets and required distributions could cause investments to be sold at a loss. Does the plan have to process required minimum distributions (RMDs) during this time? Answer: The CARES Act eliminates RMDs for 2020. Participants who are required to take RMDs from their retirement plans (generally those over age 72) are not required to take RMDs for 2020 or 2019 RMDs that were to be made by April 1, 2020 for participants age 70.5 and older. The RMD waiver applies to all qualified defined contributions plans, 403(b) plans, governmental 457(b) plans, and individual retirement accounts (IRAs). Further, the year 2020 will be disregarded for purposes of determining the 5-year period for the required depletion of inherited retirement plan accounts and IRAs. Finally, distributions of amounts that would have otherwise been subject to RMDs in 2020 may be rolled over. Partial Plan Terminations What's the Problem: A company that terminates a substantial portion of its workforce might be required to fully vest accounts in its 401(k) plan. What does the IRS look for in determining whether a partial plan termination has occurred? Answer: Companies in industries that will be particularly hard hit by the financial impact of COVID-19 should be mindful of the partial plan termination rules when considering layoffs. The IRS regulations require that on a complete termination of a retirement plan, participants must be fully vested in their accounts. The IRS has long had a practice of extending this principle to partial plan terminations. The IRS requires retirement plans to 100% vest all participants who are affected by a partial plan termination. There are no bright line rules for determining when the tipping point has been reached, but previous rulings from the IRS have made clear that a partial plan termination might occur as a result of one or a chain of group layoffs. If an employer will be making layoffs and has unvested amounts in its 401(k) plan, they should consult with their advisors to see if vesting might be required. Plan Investments What's the Problem: What steps should a fiduciary take in monitoring employer retirement plan investment lineups? Answer: The financial turmoil is also causing investment performance in retirement plans to sag. While experts may advise plan fiduciaries to “stay the course,” those fiduciaries should continue to monitor investment performance, ask experts questions as to prudent actions, and properly document the steps taken by the fiduciaries to monitor the situation. Fiduciaries should check their plan investment policies to determine whether any actions are required at this time and consult with their plan financial advisors about proper actions, if any. Valuation Issues What's the Problem: Can an employee stock ownership plan continue to use its December 31, 2019 valuation of company stock? Answer:For “balance forward” plans like private company employee stock ownership plans (where plan assets are not valued on a daily basis), market volatility is particularly challenging. Many ESOPs are in the process of or have just completed their December 31, 2019 valuations. Most likely that process will continue on course, but the question immediately becomes whether the product is now stale. Most plans allow for an interim valuation date. It is important to follow the fiduciary delegations in each plan document when determining whether an interim valuation date will be set, and what the impact is on participant distributions, diversification, and other plan administrative processes. CONTACTS BRENDA BERG T. 303.295.8029 Send Email KEVIN SELZER T. 303.295.8094 Send Email BETH NEDROW T. 406.896.4635 Send Email BEN GIBBONS T. 208.383.3981 Send Email BECKY ACHTEN T. 406.896.4615 Send Email



Equity Incentives

Equity Incentive Considerations During COVID-19 Crisis Last updated 3.31.2020 Underwater Employee Stock Options An unprecedented period of price volatility and general decline for many companies has left employee stock options with exercise prices below the current fair market value of the underlying stock. It is possible to reprice, exchange, or supplement employee stock options with new awards. Each approach has differing levels of legal complexity, there are pros and cons for each approach, and it is important to plan and execute these steps so that they are effective and not done repeatedly (repricing or making new awards at a value that shortly after goes underwater defeats the purpose). While employee stock options are generally intended to serve as mid- to long- term incentives, projections for how the COVID-19 situation will affect business models and stock prices are very difficult if not impossible at this time, and the extreme volatility means that new awards made today could be substantially underwater tomorrow. Now might be a good time to review the equity incentives for key employees including identifying the organization’s key service providers, reviewing the equity incentives held by the key service providers (as well as the overall compensation package), and planning for what adjustments might be needed for price projections when possible. In previous downturns—2001-2002 and 2007-2008—there was a period of shock soon followed by a shopping period as cash rich acquirers realized their leverage and began to acquire talent and companies. Performance Metrics for Incentive Bonus and Equity Award Vesting The historic change in the economy and company performance has made many performance goals set as incentive vesting or payout measurements unattainable. Companies can look to adjust goals to match attainable metrics where those metrics can be identified. In some cases, shifting from absolute or company specific metrics to metrics that are measured relative to an index or a peer group may allow improved goal setting. In other cases, it may simply make sense to communicate that the company is aware of the issue and looking to address it when the situation stabilizes. Share Reserves Companies with ESPPs and equity incentive plans may find that share reserves are used sooner than expected with the need for additional grants or larger purchases at lower prices. Projecting share use for equity plans at a range of new stock price estimates can help project whether share reserves are adequate for the time periods the reserves are expected to cover. If likely shortfalls are identified, company directors can plan for conserving share reserves or obtaining additional shares in equity plans which often involves shareholder approval. Valuation Issues Extreme changes to the business environment have greatly impacted company stock prices, and while public companies have a market price to use for establishing fair market value on the date of grant as required under Code Section 409A for employee stock options, private companies typically rely on a board determined fair market value or an independent valuation. In each case for a private company, the valuations must be updated when there is a material change to the business, and in periods of extreme volatility, it can be difficult to obtain a value that lasts for long enough to grant employee stock options. In some cases, private companies can have independent valuations updated and make awards quickly enough to rely on the valuation, but in other cases, it might make sense to promise employees cash incentives based on a certain number of shares (phantom or synthetic awards) or other cash retention incentives as a surrogate for employee stock options. CONTACT JOHN LUDLUM T. 801.799.5953 Send Email



WORKPLACE SAFETY

OSHA

OSHA Guidance Relaxes Recordkeeping for Some Employers Last updated 4.14.2020 On April 10th, OSHA released updated guidance regarding compliance with recordkeeping standards and related requirements during the current COVID-19 pandemic. Unlike influenza, contraction of COVID-19 may be recordable and reportable under OSHA’s recordkeeping requirements set forth in 29 CFR § 1904. However, OSHA’s April 10 guidance, Enforcement Guidance for Recording Cases of Coronavirus Disease 2019 (COVID-19), states that OSHA will not enforce 29 CFR § 1904 for recording or reporting alleged work-related cases of COVID-19, effective immediately and until further notice, except when:

  • There is objective evidence that a COVID-19 case is work related, such as a cluster of cases developing among workers in close proximity and no other alternative explanation to the outbreak exists; and
  • The employer has readily available evidence confirming a COVID-19 case, such as information provided by an employee or information obtained by the employer during daily operations.
These exemptions do not apply to employers in health industries, emergency response organizations, or correctional institutions. These employers are required to continue making work-relatedness determinations pursuant to OSHA’s standards. OSHA intends for this enforcement guidance to allow employers to focus response efforts on implementing good hygiene in the workplace. Employers operating in state plans must confirm with their respective administrator whether the jurisdiction is enforcing federal guidance or more restrictive requirements. CDC Issues Interim Guidance for Critical Infrastructure Workers Last updated 4.10.2020 In an attempt to keep critical infrastructure from being crippled by worker shortages as a result of the COVID-19 outbreak, the CDC issued new interim guidance on Wednesday, April 9, 2020, directed at workers in critical industries who may have been exposed to the virus. The new advice allows potentially exposed workers to continue working, rather than self-isolate, provided that they remain asymptomatic and adhere to additional protective measures. The guidance pertains to 16 workforce sectors including workers in energy, transportation, and government facilities. The guidance defines “potential exposure” as being in the same household or having close contact with an individual who has been confirmed as having or is suspected to have COVID-19. This includes contact in the 48 hours prior to the individual become symptomatic. Despite the precautions listed below, the CDC confirms that any employee who has direct contact with an individual with suspected exposure will also be considered to have been exposed. Critical workers who have been exposed to COVID-19 but remain asymptomatic are advised to undergo the following:
  • daily pre-screening for temperature and other related symptoms prior to entering any facility;
  • undergo continuous monitoring during their shift
  • wear a mask at all times for 14 days following their last exposure
  • maintain social distancing; and
  • routinely disinfect offices, bathrooms, shared electronic equipment and common areas.
Additionally, employers should increase the frequency of office cleaning, attempt to increase air exchange in confined rooms, and stagger work schedules. Recent OSHA Guidelines for COVID-19 Last updated 3.19.2020 On March 12, 2020, OSHA issued guidance to assist employers in preparing for the impact of COVID-19, “Guidance on Preparing for Workplaces for COVID-19” (“ OSHA C-19”). OSHA C-19 is based on traditional infection prevention and industrial hygiene practices and it does not create new legal requirements or alter existing requirements. See also https://www.osha.gov/SLTC/covid-19/ and https://www.osha.gov/SLTC/covid-19/standards.html Though COVID-19 has not created new regulatory requirements, employers should review existing regulations to help mitigate possible exposure to workers. Relevant OSHA standards can be found here. Employers should be aware of OSHA’s General Duty Clause, Section 5(a)(1) of the Occupational Safety and Health (OSH) Act of 1970, 29 USC 654(a)(1). The GDC requires employers to furnish to each worker "employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm." To that end, we recommend that employers review existing internal policies and expectations to ensure the following requirements are met: Personal Protective Equipment (PPE): If applicable, OSHA'S PPE standards (in general industry, 29 CFR 1910 Subpart I), require using gloves, eye and face protection and respiratory protection.

Bloodborne Pathogens standard (29 CFR 1910.1030) applies to occupational exposure to human blood and other potentially infectious materials that typically do not include respiratory secretions that may transmit COVID-19. However, the provisions of the standard offer a framework that may help control some sources of the virus, including exposures to body fluids (e.g., respiratory secretions) not covered by the standard.

Cleaning and Disinfection Chemicals: Employers must also protect their workers from exposure to hazardous chemicals used for cleaning and disinfection. Employers should be aware that common sanitizers and sterilizers could contain hazardous chemicals. Where workers are exposed to hazardous chemicals, employers must comply with OSHA's Hazard Communication standard (in general industry, 29 CFR 1910.1200), Personal Protective Equipment standards (in general industry 29 CFR 1910 Subpart I) and other applicable OSHA chemical standards. OSHA provides information about hazardous chemicals used in hospitals in the Housekeeping section of its Hospital eTool.

Practical Tips for Routine Environmental Cleaning:

  • Routinely clean all frequently touched surfaces in the workplace, such as desks, doorknobs, railings, computer keyboards, phones, and toys. Use the cleaning agents that are usually used in these areas and follow the directions on the label.
  • No additional disinfection beyond routine cleaning is recommended at this time.
  • Provide disposable wipes so that commonly used surfaces (for example, doorknobs, bathroom locks, menus and napkin dispensers) can be wiped down by employees before each use.
  • Encourage employees to do additional and responsive cleaning if they notice someone that appears sick has touched a frequently touched surface.
  • Where possible instruct employees to open doors for customers when possible to avoid multiple people touching doors and knobs. Doors and knobs should be cleaned as many times as possible, throughout each shift.
OSHA State Standards for COVID-19 There are twenty-eight OSHA-approved State Plans operating state-wide occupational safety and health programs. State plans are required to have standards and enforcement programs that are at least as effective as OSHA's and may have different or more stringent requirements. The California Division of Occupational Safety and Health (Cal/OSHA) Aerosol Transmissible Diseases (ATD) standard is aimed at preventing worker illness from infectious diseases that can be transmitted by inhaling air that contains viruses (including COVID-19), bacteria or other disease-causing organisms. While the Cal/OSHA ATD standard is only mandatory for certain healthcare employers in California, it may provide useful guidance for protecting other workers exposed to COVID-19. Enforcement Directives Worker's Rights No-Cost On-Site Safety and Health Consultation Services for Small Business: OSHA offers no-cost, confidential advice to small and medium-sized businesses in all states, with priority given to high-hazard worksites. On-Site consultation services are separate from enforcement and do not result in penalties or citations. For more information, find an On-site Consultation office in your state, or call 1-800-321-OSHA (6742). CONTACTS ROBERT AYERS T. 307.734.4514 Send Email TREY OVERDYKE T. 307.734.4505 Send Email



Best Practices for Safe and Healthy Workplaces

Last updated 3.16.2020 Below are some practical tips for employers to stay current with workplace safety protocols and best protect their employees as the COVID-19 pandemic evolves: Provide Effective Communication and Ongoing Employee Training Understandably, there is significant fear and disinformation circulating related to COVID-19, and, the spread of COVID-19 is changing daily. Thus, it is important that employers effectively communicate accurate information to their employees, on a regular basis. It is also important that companies provide proper and ongoing information related to the company’s policies and practices related to COVID-19, including respiratory etiquette and personal hygiene. Regularly check the CDC website for updated information. Follow Safe Workplace Practices Emphasize staying home when sick, respiratory etiquette, and personal hygiene by all employees. Place posters that encourage staying home when sick, cough and sneeze etiquette, and hand hygiene at the entrance to your workplace and in other workplace areas where they are likely to be seen.

  • Practice social distancing, namely keeping 6-feet between you and other individuals.
  • Employees must wash hands after each contact with another person, using soap and water for at least 20 seconds, or if soap and water are unavailable, they clean hands with an alcohol-based hand sanitizer that contains at least 60% alcohol.
  • Employees should wear gloves when required by local and state health departments.
  • Employees should avoid touching eyes, nose, and mouth with unwashed hands.
  • Employees should cover mouth and nose with a tissue when coughing or sneezing and throw the tissue in the trash after use, OR, if they cannot easily reach a tissue, cover mouth and nose with an elbow or hand and immediately wash your hands and/or arms without touching anything before reaching the sink.
How to Handle Sick Employees
  • Employees should notify their supervisor and stay home if they are sick.
  • If an employee is exhibiting any symptoms of Coronavirus, supervisors should inquire if the employee is feeling well, or if the employee should be sent home.
  • If an employee is sent home, do not identify the name of the employee to other employees, unless directed to do so by your local health department or the CDC.
  • CDC recommends that employees who appear to have acute respiratory illness symptoms (i.e. cough, shortness of breath) upon arrival to work or become sick during the day should be separated from other employees and be sent home immediately.
  • Employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of fever (fever means a body temperature of 100.4° F [37.8° C] or greater using an oral thermometer), signs of a fever, and any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom-altering medicines (e.g. cough suppressants).
  • Sick employees should cover their noses and mouths with a tissue when coughing or sneezing (or an elbow or shoulder if no tissue is available).
What to Do If an Employee Is Suspected to Have COVID-19 Direct any employees who have come in close contact with persons with a confirmed or suspected diagnosis of COVID-19 to (1) notify his or her supervisor; and (2) not report to work until the employee has discussed this with his or her supervisor and certain precautions have been taken. This includes employees who are well but who have a sick family member at home with COVID-19. Employers should refer to the CDC site for how to conduct a risk assessment of their potential exposure and general CDC guidance. If any employee notifies you of a presumptive positive or confirmed COVID-19 diagnosis, you should immediately contact your local health department. Maintain Confidentiality If an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace, but not use the employee’s name and maintain confidentiality as required by the Americans with Disabilities Act (ADA), and other applicable privacy laws. The name and other identifying information of the confirmed patient should not be disclosed to other employees or the public. Employees exposed to a co-worker with confirmed COVID-19 should refer to CDC guidance for how to conduct a risk assessment of their potential exposure. Sick Leave Policies Consider providing flexible sick leave policies or relaxing your leave policies.
  • Employers should be aware that more employees may need to stay at home to care for sick children or other sick family members than is usual.
  • Talk with companies that provide your business with contract or temporary employees about the importance of sick employees staying home and encourage them to develop non-punitive leave policies.
  • Do not require a healthcare provider's note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
  • ADA NOTE: The ADA allows employers to request medical information or order a medical examination when an employer has a reasonable belief (based on objective evidence) that an employee poses a "direct threat" because of a medical condition.
  • EEOC NOTE: The Equal Employment Opportunity Commission directs employers to take direction from the CDC or state/local public health authorities in determining whether an illness is a direct threat.
Best Practices for Travel
  • Non-essential business travel should be suspended, particularly in those geographic locations where the CDC has issued a Warning - Level 3, Avoid Nonessential Travel.
  • While all non-essential business travel is discouraged, some geographic areas are categorized by the CDC as Alert - Level 2, Practice Enhanced Precautions.
  • Check the CDC's Traveler's Health Notices for the latest guidance and recommendations for each country to which you will travel.
  • Advise employees to check themselves for symptoms of acute respiratory illness before starting travel and notify their supervisor and stay home if they are sick.
  • Ensure employees who become sick while traveling or on temporary assignment understand that they should notify their supervisor and should promptly call a healthcare provider for advice if needed.
  • If outside the United States, sick employees should follow your company's policy for obtaining medical care or contact a healthcare provider or overseas medical assistance company to assist them with finding an appropriate healthcare provider in that country. A U.S. consular officer can help locate healthcare services. However, U.S. embassies, consulates, and military facilities do not have the legal authority, capability, and resources to evacuate or give medicines, vaccines, or medical care to U.S. citizens overseas.
CONTACT MICKELL JIMENEZ T. 801.799.5860 Send Email



Workers Compensation

Last updated 3.17.2020 Employees who believe they have been exposed to COVID-19 at work, or who are diagnosed with COVID-19, may pursue workers’ compensation claims for post-exposure testing or the treatment of the disease and related periods of disability. Such claims will be governed by the workers’ compensation or occupational disease laws of the state of employment. A couple of general principles apply. First, for disease claims, workers’ compensation laws usually require that the employee prove the disease arose out of and in the course and scope of employment. Often, the statutes include additional requirements that the employee prove the disease was uniquely related to the hazards of his employment, or that the employment increased the risk of exposure to the disease. As a result, transmission of a communicable disease like COVID-19 among employees is likely not to be covered by workers’ compensation, as the disease is not uniquely related to any occupation or industry. However, employees in healthcare, emergency response or retail pharmaceutical fields may have stronger claims because interacting with sick individuals may be part of their duties. Second, employees who believe they have been exposed to COVID-19 in the workplace may file workers’ compensation claims for the cost of testing, even if not diagnosed with the disease. Some states do not address the costs of testing when the employee is not diagnosed with the disease. Other states will cover the costs of testing as long as the employee can prove a work-related exposure. Ultimately, employees will be required to prove it is more likely than not that any exposure is work-related and they acquired the disease from a work-related exposure, rather than some other source. CONTACT BRAD CAVE T. 307.734.4514 Send Email



HIPAA PRIVACY

Information for Employers

Last updated 3.17.2020 What is the issue?

Employers are wondering about their responsibilities related to the protection of the health information of their employees, particularly if the business has reason to suspect that a particular employee has been exposed to or is symptomatic for COVID-19.

The information below outlines how the Health Insurance Portability & Accountability Act (“HIPAA”) applies to health information obtained or maintained by general employers. It does not cover state-specific privacy laws or employment-specific confidentiality laws. For example, the ADA, FMLA, and workers compensation laws all have confidentiality aspects that will impact employers. Employers must be aware of and comply with those laws in addition to HIPAA.

Do I have to comply with HIPAA?

  • HIPAA protects the privacy and security of individually identifiable health information (or “PHI”) that is obtained or maintained by “covered entities” and their business associates.

    • Covered entities include (1) healthcare providers, (2) health plans, including most employee benefit plans; and (3) healthcare clearinghouses.

  • Unless an employer falls into one of those three categories, HIPAA will not apply to the employer and the employer will not be prevented from using or disclosing health-related information under HIPAA (but other employee confidentiality laws may still apply).
If you are a covered entity, what records must you protect under HIPAA?
  • Employers that are “covered entities” MAY NOT share information about employees that they have received in their capacity as a covered entity without the individual’s authorization or unless an exception applies.
    • For more information about the obligations of covered entities and applicable exceptions, visit the post HIPAA: Information for Covered Entities under Healthcare on the Your Business page.
    • For example, employers that are health care providers or who have self-funded health plans must protect an employee’s PHI that they obtain for purposes of rendering medical treatment or administrating the health plan.
  • Employers that are “covered entities” MAY share information about employees that they have received in their capacity as an employer, as that information is not protected by HIPAA.
    • For example, if an employee provides test results to an employer to satisfy conditions for employment, that information will be part of the employee’s employment record, which is not protected by HIPAA.
How can employers gain access to an employee's health information?
  • Employer attempts to gain access to an employee’s PHI from a source other than the employee (e.g., the patient’s provider) will likely be met with that covered entity’s insistence on HIPAA compliance.
    • Employers can ask for information from the employee.
    • Employers can ask the employee for a signed HIPAA-compliant authorization that would allow covered entities to share the employee's PHI with the employer.
    • Covered entities may be persuaded to rely on an exception allowing them to share information with the employer without the patient's authorization. See Exceptions at HIPAA: Information for Covered Entities under Healthcare on the Your Business page.
CONTACTS LISA CARLSON T. 208.383.3910 Send Email KRISTY KIMBALL T. 801.799.5792 Send Email



LEAVES AND ABSENCES

Employer Provided Leave

FMLA Last updated 3.20.2020 Notice to employers with fewer than 500 employees see Emergency Legislation FFCRA. What’s the Problem: Employees are asking about their non-FMLA leave options given the Coronavirus outbreak. The Law: Recent guidance from the U.S. Department of Labor (“DOL”) about the Family Medical Leave Act (“FMLA”) requires employers covered under the FMLA to provide up to 12-weeks job-protected, unpaid leave for family and medical reasons. These protections may include the flu or flu-like diseases like the Coronavirus where complications arise—either when the employee contracts the disease or one of the employee’s family members contracts the disease and the employee must care for the family member. Remember, individual states may also have family medical leave laws with either expanded coverage for smaller employers, greater rights for employees, or both, and Colorado has implemented emergency paid leave rules for employees in certain industries in response to the Coronavirus outbreak. See Colorado rules here. Employer leave policies, such as paid time off, vacation, sick pay, disability, etc., are governed by the terms and conditions of the policies themselves, so long as they do not run afoul of any conflicting federal or state law requirements. Nothing in the FMLA prohibits employers from adopting leave policies that are more generous than those required by the FMLA. Intersection of FMLA Leave and Paid Leave As discussed above, regarding an employer’s own leave policies, such as paid time off, vacation, sick pay, disability, etc., such policies are governed by the terms and conditions of the policies themselves, so long as they do not run afoul of any conflicting federal or state law requirements, and nothing in the FMLA prohibits employers from adopting leave policies more generous than those required by the FMLA. If an employee must take leave for an FMLA-qualifying reason (such as complications resulting from the Coronavirus), typically under federal law, employers can require employees to use accrued paid leave to cover any part of the unpaid FMLA leave entitlement period (different requirements under applicable state law may apply.) However, the DOL recently issued an opinion letter stating that any qualifying leave under the FMLA must run concurrently with an employee’s use of paid leave under the employer’s own policies. This means that employers can no longer permit employees to use up their accrued paid leave (without the benefit of the FMLA’s job protections) prior to tapping into their unpaid FMLA leave. Once an eligible employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave and, hence, the leave counts against the employee’s 12-week entitlement under the FMLA, even if it is also paid leave under a PTO policy, sick leave policy, etc. Things to Consider:

  • Consult with a labor and employment attorney to ensure that your leave policies and practices are compliant with both the FMLA and any additional state law requirements.
  • Apply any employer-sponsored leave policies uniformly and in a non-discriminatory manner.
  • Maintain flexibility with work schedules, accommodations, and employee requests to work remotely whenever feasible or practicable.
CONTACT ROBERT THOMAS T. 303.295.8381 Send Email