• CARES Act Deadline Extension

    Recall that as part of the IRS/DOL response to COVID-19, multiple COBRA and health plan deadlines were extended until after the Outbreak Period (60 days after the end of the National Emergency) or until February 28, 2021 (whichever is earlier). When this legislation was passed, few expected the pandemic to still be impacting daily life into 2021. As the sunset date approached, the joint agencies were silent on whether the extended deadlines would actually expire given the continuing impact of COVID-19 and the fact that the Outbreak Period is still open. This left employers and plan participants alike wondering about how to administer the deadline extensions.

    Finally, Guidance!

    Finally, on February 26, 2021, The Employee Benefit Security Administration (EBSA) issued clarifying guidance. The guidance essentially redefined the deadline extension to the earlier of the following:

    • 60 days after the end of the Outbreak Period
    • One year after the initial deadline for any given individual.

    Fundamentally, the regulators stretched the interpretation of the law to the maximum extent possible with the intent of offering maximum flexibility and protection for plan participants. In doing so, they also created a veritable nightmare for plan administrators. Now, each individual has a personalized deadline extension (up to a maximum of one year) from the date of their initial election deadline.

    Examples

    Example #1: A qualified beneficiary would have been required to make a COBRA election by March 1, 2020. The new guidance delays that requirement until February 28, 2021. This is the earlier of one year from March 1, 2020 or the end of the Outbreak Period (which remains ongoing).

    Example #2: A qualified beneficiary would have been required to make a COBRA election by March 1, 2021. The new guidance delays that election requirement until the earlier of one year from that date (i.e., March 1, 2022) or the end of the Outbreak Period.

    Example #3: A plan would have been required to furnish a notice or disclosure by March 1, 2020. The new guidance delays the notice/disclosure deadline to February 28, 2021.

    In all circumstances, the delay for actions required or permitted does not exceed one year.

    Reasonable, Prudent, and in the Interest of Employees

    The DOL recognizes that affected plan participants may continue to encounter an array of problems due to the ongoing nature of the COVID-19. In fact, in an unprecedented statement, they went so far as to articulate the following:

    Plan administrators should act reasonably, prudently, and in the interest of employees to ensure their families maintain their health, retirement, and other employee benefit plans for their physical and  economic well-being.

    Here, the DOL has provided loose-but-real guidance that employers should make reasonable accommodations to prevent the loss of or undue delay in payment of benefits. In such cases, employers should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames.

    While always maintaining the commitment to plan compliance, the team at Vita has and will continue to support employers and plan participants in this spirit.

    Mind Your Insurance Contracts

    A very real quagmire is presented here for employers. To the extent that an employer takes actions “in the interest of preventing loss of benefits for employees” (and qualified beneficiaries) but outside the legislatively defined deadlines, they run the risk of extending coverage outside of the insurance contract they have secured with their carrier. Extreme care should be taken in such actions as insurance carriers are not under any obligation to extend such grace, especially when it might result in adverse selection.

    Reminder of Impacted Deadlines

    Following are the deadlines that remain impacted by this legislation and for which the new deadline extension framework applies.

    COBRA

    • The 60-day deadline for individuals to notify the plan of a qualifying event
    • The 60-day deadline for individuals to notify the plan of a SS determination of disability
    • The 30-day deadline for employers to notify plan administrators of a COBRA event
    • The 14-day deadline for plan administrators to furnish COBRA election notices (44 days when combined with 30 days above)
    • The 60-day deadline for participants to elect COBRA
    • The 45-day deadline in which to make a first premium payment
    • The 30-day deadline for subsequent premium payments.

    HIPAA Special Enrollment

    • The 30-day special enrollment period triggered when eligible employees or dependents lose eligibility for other health plan coverage (in which they were previously enrolled)
    • The 30-day special enrollment period triggered when an eligible employee acquires a dependent through birth, marriage, adoption, or placement for adoption
    • The 60-day special enrollment period triggered by changes in eligibility for state premium assistance under the Children’s Health Insurance Program or loss of Medicaid/CHIP eligibility.

    Group Health Plans (Including FSAs)

    • The deadline for individuals to file claims for benefits, for initial disposition of claims, and for providing claimants a reasonable opportunity to appeal adverse benefit determinations
    • The 180-day timeframe to appeal
  • Employers' Medicare Part D 2021 Creditability Disclosure Due March 1

    Summary: This applies to all employers offering medical plan coverage with a plan renewal date of January 1. The online disclosure must be completed by March 1, 2021 (assuming a calendar year medical plan contract).

    Overview

    Federal law requires that employers provide annual notification of the Medicare Part D Prescription Benefit "creditability" to employees prior to October 15th. However, that same law also requires plan sponsors to report creditability information directly to the Centers for Medicare and Medicaid Services (CMS) within 60 days of the first day of the contract year if coverage is offered to Part D eligible individuals. Many employers have a January 1 renewal plan year. So, for many employers, the deadline is in a couple of weeks! If your plan renews some time other than January 1, you have 60 days after the start of your plan year to complete this disclosure.

    Mandatory Online Creditable Coverage Disclosure 

    Virtually all employers are required to complete the online questionnaire at the CMS website, with the only exception being employers who have been approved for the Retiree Drug Subsidy (RDS). This disclosure requirement also applies to individual health insurance, government assistance programs, military coverage, and Medicare supplement plans. There is no alternative method to comply with this requirement! Please remember that you must provide this disclosure annually.

    The required Disclosure Notice is made through completion of the disclosure form on the CMS Creditable Coverage Disclosure web page. Click on the following link: CMS Disclosure Form.

    Employers must also update their questionnaire if there has been a change to the creditability status of their prescription drug plan, or if they terminate prescription drug benefits altogether.

    Detailed Instructions and Screenshots Available

    If you would like additional information on completing the online disclosure, a detailed instruction guide is available online. The instructions also include helpful screenshots so that you will know what data to have handy. More info here: CMS Notification Instruction Guide.


    Helpful Tip for Vita's Clients

    The Medicare Part D creditability status of your medical plans is outlined in the Welfare Summary Plan Description that we provide to all clients. Please refer to this document as you will need this information to complete the online disclosure. 

  • New 1095 Codes for Individual Coverage HRAs

    It’s 1095 season! The IRS has announced two new codes for the 2020 Form 1095-C for use with an Individual Coverage HRAs (ICHRA). The IRS website indicates that employers offering ICHRAs can use two previously reserved codes (from Code Series 1 on Form 1095-C, line 14) for reporting offers of coverage for 2020:

    Code 1T: This code indicates that an ICHRA was offered to an employee and spouse (not dependents) and that affordability was determined using the employee’s primary residence zip code.

    Code 1U: This code indicates that an ICHRA was offered to an employee and spouse (not dependents) and affordability was determined using the employee’s primary employment site zip code under an affordability safe harbor.

    This change corrects an oversight in the 2020 Form 1095-C code options. The existing code options did not address all the potential coverage options for an ICHRA. Specifically, codes for three coverage possibilities were available, but the scenario where ICHRA coverage was offered to an employee plus a spouse (without dependents) was not covered by the available code options. This update corrects that omission.

  • How Remote Work Has Changed Employer Posting Requirements

    Little has been said lately about how to handle required employment and legal notices in remote work arrangements. Historically, requirements for notification of employee rights have been satisfied by placing gigantic rights notification posters on bulletin boards, in break rooms, and where employees gather for lunch. This practice was put in place long before the digital age and is outdated for a substantial portion of today’s workforce, especially given the migration to remote work for many employees in the COVID era.

    Overview

    The DOL recently released guidance on complying with notice and posting requirements in remote work environments. Specifically, the guidance clarifies when employers may disseminate poster information exclusively in electronic form, when it can be simply “posted” electronically, and when it needs to be “pushed” directly to employees. Across the board, federal, state, and local laws require employers to post notifications “in a conspicuous location” as the means of notifying employees of their rights under various laws. Even recently passed laws have failed to define any electronic distribution alternatives.

    One-and-Done vs. Continual Posting

    The guidance to distinct categories of notification:

    • Notices that must be continually posted (FLSA and FMLA posters)
    • Notices that may be provided once to each employee individually (Service Contract Act posters), typically via email.

    Continuous Posting Requirements

    Several of the statutes require that employers “post and keep posted” these notices indefinitely and thus, do not permit employers to meet their notice obligations through a direct mailing or other single notice to employees. In this case, the regulations consider electronic posting an acceptable substitute for the continuous posting requirement if:

    • All of the employer’s employees exclusively work remotely,
    • All employees customarily receive information from the employer via electronic means, and
    • All employees have readily available access to the electronic posting at all times.

    This ensures the electronic posting satisfies the statutory and regulatory requirements that such postings be continuously accessible to employees.

    Where an employer has employees on-site and other employees teleworking full-time, hard copy posting is still required for on-site employees. The employer may supplement a hard-copy posting requirement with electronic posting. The guidance encourages both methods of posting.

    Posting Notices Electronically

    If an employer seeks to meet a worksite posting requirement through electronic means, such as an intranet software, website, or shared network drive, the electronic notice must be “as effective as” a hard-copy posting.

    As a number of the statutory provisions below require that affected individuals be able to readily see a copy of the required postings, where an employer chooses to meet a worksite posting requirement through electronic means, the same requirements apply in the electronic format. As a practical matter, a determination of whether affected individuals can readily see an electronic posting depends on the facts. The guidance outlines that electronic posting on a website or intranet is not a sufficient means of providing notice if an employer does not customarily post notices to affected employees or other affected individuals electronically.

    Posting on an unknown or little-known electronic location has the effect of hiding the notice, comparable to displaying a hard-copy of the required notice in a custodial closet or storage room. Such postings would be considered insufficient.

    Key E-Posting Requirements

    All posted notifications must be “readily available” for workers which means employees have direct and easy access to the notice. Specifically, employees should not have to request permission to access a web posting or a posting on a shared network drive. Lastly, employers must inform employees where the e-posts are located and provide instructions on how to access them electronically. In short, common sense rules the day for e-posting. An electronic post should as conspicuous and as easy for employees to access as a lunchroom poster.

    Job Applicants

    For laws that require posters be visible to job applicants (such as the Employee Polygraph Protection Act), electronic-only posting is permitted if the hiring process is conducted remotely, and applicants have readily available access to the electronic posting at all times.

    State and Local Laws

    The DOL guidance applies only to federal notice and posting requirements. However, there are many state and local posting requirements, as well. For example, California law requires employers to post information related to minimum wage laws, discrimination and harassment, and medical leave and pregnancy disability leave. While there is no specific state-law guidance at this time, employers would do well to mirror federal electronic posting standards for remote employees to assure that required access to information is maintained for remote workers.

    Resources

    Following is the link to the DOL Field Assistance Bulletin: https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/fab_2020_7.pdf

  • 401(k) Update: Q1 2021

    Administration

    2020 Year-End Census Information Due Now!
    It’s that time again! Perhaps one of the most pressing compliance matters is the submission of census data to begin compliance testing. Sponsors of calendar-year 401(k) plans subject to the Average Deferral Percentage (“ADP”) or Average Contribution Percentage (“ACP”) Tests (i.e. all Non-Safe Harbor Plans) must submit their 2020 census data now to ensure timely results.

    Be sure to submit your annual census data and compliance questionnaires to your recordkeepers by their specific deadlines. Typically, this information is due no later than January 31st, though we have seen due dates as early as January 15th. This allows the recordkeepers sufficient time to process the year-end tests and deliver results to you before March 15th, which is the deadline for employers to process corrective refunds (for failed ADP tests, if applicable) without paying a 10% excise tax. Please contact Vita Planning Group if you have questions regarding your recordkeeper’s year-end requirements.

    For other important dates on the horizon, download our online Compliance Calendar.

    2021 Contribution Limits1
    As a reminder, the employee contribution limits for 2021 are remaining the same as last year, with the standard limit set at $19,500 and the age 50+ catch up amount set at $6,500. For your convenience, we have illustrated below the maximum per pay period deferral amounts based on two common payroll cycles.

    • $19,500 max:
      26 pay periods - $750.00
      24 pay periods - $812.50

    • $26,000 max (age 50+):
      26 pay periods - $1,000.00
      24 pay periods - $1,083.33

    Plan Document Restatements
    Approximately every 6 years, the IRS requires employer-sponsored retirement plans to update their plan documents through a process called “restating” the document. Most 401(k) and 403(b) plans use an IRS-pre-approved plan document created by their recordkeeper or third-party administrator and this cyclical process ensures that documents are updated to incorporate regulatory changes from any mandatory or voluntary amendments that may have been adopted since the last time the document was restated.

    This process is owned by your plan’s recordkeeper or third-party administrator so be on the lookout for this task over the coming months. Generally, the restatement involves providing you with the updated plan document for review and adoption (i.e. signature). The deadline2 to restate plan documents is July 31, 2022, however we expect recordkeepers and third-party administrators to begin rolling out the process this year.

     

    401(k) News

    CARES Act COVID-19 Provisions End
    The COVID-19-related loan and distribution provisions of the CARES Act ceased at the end of December 2020.3 Any loan repayments that were suspended under the CARES Act will need to resume with the first payroll in January 2021. Please ensure that you receive an updated amortization schedule from your retirement plan recordkeeper and update your payroll records accordingly.

    While the CARES Act withdrawal provisions ended, FEMA has declared the COVID-19 pandemic a disaster in all 50 states, hence the hardship withdrawal provisions passed as part of the SECURE Act remain in force. It is important to note that disaster-related hardship distributions, in the context of the SECURE Act, do not provide the same tax relief that COVID-19-related distributions offered under the CARES Act and would be subject to normal hardship distribution rules.

     

    Consolidated Appropriations Act, 2021
    The Consolidated Appropriations Act, 2021 was signed into law on December 27, 2020. The comprehensive bill provides funding for the federal government and provides additional COVID-19 relief to individuals and businesses. Although the CARES Act was not extended as part of the passage of this legislation, the Act included retirement plan provisions that provide some relief to plan sponsors and participants.

    For example, the Act enables certain retirement plan sponsors that laid off or furloughed employees due to the COVID-19 pandemic to potentially avoid a partial plan termination.

    The bill4 states: “A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of the Internal Revenue Code of 1986) during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021, is at least 80% of the number of active participants covered by the plan on March 13, 2020.” Essentially this allows relief to companies who rehire previously laid off workers by avoiding a partial plan termination.

    The Act also allows for “qualified disaster distributions” from retirement plans for participants affected by disasters declared by the President under the Stafford Act, other than the COVID-19 pandemic. Participants in 401(k), 403(b), money purchase pension and government 457(b) plans may take up to $100,000 in aggregate from their retirement plan accounts without tax penalties. Income tax on those distributions may be spread over three years, and participants may repay them into a plan that is designed to accept rollovers within three years. The bill states that participants have until 180 days after enactment of the bill to take qualified disaster distributions.

     

    Market Update5

    Markets in the fourth quarter of 2020 were buffeted in by countervailing forces: between the upswing in COVID-19 cases around the globe and the delivery of a vaccine; between the result of the US Presidential election and the attempts to contest its validity; between the timing of continued governmental economic support and its scale. Despite several sharp declines during Q4 2020, asset markets finished up for the quarter and for the year overall. The S&P 500 rose nearly 12% in Q4, taking the index up over 18% for the year. The pace of US bond market appreciation slowed with the BarCap US Aggregate Bond Index up 0.64% in Q4, resulting in a rise of 7.5% for the year. Overseas, the MSCI All Country World ex US index surged 14% in Q4, leaving the index up 6.5% for the year. The rollout of COVID-19 vaccine programs as well as the expectation of continued fiscal and monetary support should be positive for asset markets in early 2021.

    At the end of 2020, US GDP and employment were struggling to regain their levels seen at the beginning of the year with progress being impeded by the spike upward in the number of COVID cases in the US and the resulting social distancing measures re-introduced to control their spread. 2020 Q3 US GDP was revised upward to 33.4% annualized rate, up from the record 31.4% plunge in Q2. Despite this strong bounce back, GDP is still about 3.5% below its 2019 Q4 level. Strong consumer spending in October and an increase in industrial production in November have resulted in estimates for GDP growth in Q4 2020 as high as 5%. At the end of November 2020, unemployment was at 6.7%, and 56% of jobs lost at the outbreak of the pandemic have been regained. The slower-than-expected nonfarm payroll increase of 245,000 in November may signal that job gains will moderate at the end of 2020 and into 2021.

    The rollout of COVID-19 vaccines continued governmental economic support and stimulus, and the release of pent-up consumer and corporate demand is leading to expectations of continued support for asset markets, both in the US and overseas in 2021. US equities in 2021 should benefit from increasing corporate earnings, due both to higher margins and improving GDP growth. However, the easy monetary policy and massive fiscal spending that helped bond markets appreciate in 2020 have pushed the 10 Yr US Treasury yield below 1% and compressed credit spreads making the outlook for bonds, in terms of either income or capital appreciation, more difficult to project. Even with the run up in overseas equity prices in Q4 2020, both overseas emerging and developed markets appear cheap relative to US equities, trading well below historical price-to-book and price-to-earnings ratios. The same health, economic support and demand factors that are supportive of US equities, appear as compelling overseas as we begin 2021.

            

    This commentary is provided for informational purposes only and does not pertain to any security product or service and is not an offer or solicitation of an offer to buy or sell any product or service. Nothing in this commentary constitutes investment, legal, accounting or tax advice or a representation that any investment strategy or service is suitable or appropriate to your individual circumstances.
    Securities are offered only by individuals registered through AE Financial Services, LLC (AEFS), member FINRA/SIPC. Investment advisory services offered through Liberty Wealth Management LLC, a Registered Investment Adviser with the SEC. Insurance offered through Vita Insurance Associates, Inc. CA Insurance License 0581175. DBA Vita Companies. AEFS is not an affiliated company with Liberty Wealth Management, or Vita Companies.

     

     

    Sources:

    1 IRS 401(k) Limits

    2 Cycle 3 DC Plan Restatements FAQ

    3 CARES Act Q&A

    4 Consolidated Appropriations Act, 2021

    5 JPMorgan Asset Management, Guide to the Markets – U.S. Economic and Market Update, 1Q 2021 December 31, 2020.

  • Extension of FFCRA Tax Credit Into 2021

    The Families First Coronavirus Response Act (FFCRA) requires employers with less than 500 employees to provide employees with 80 hours of paid sick leave for specified reasons related to COVID-19. In addition, employers are required to provide up to 10 weeks of paid, job-protected leave for employees who have worked for their employer for at least 30 days and who are unable to work due to the need to care for a son or daughter whose school is closed or the unavailability of a childcare provider due to COVID-19. The legislation was due to sunset on December 31, 2020.

    Extension

    President Trump signed a relief bill into law on December 27, 2020. While the full FFCRA law was not extended into 2021, employers can now elect to continue allowing employees to take unused FFCRA paid sick and family leave and receive the federal tax credit for through March 31, 2021.

    Employer Action Items

    1. Decide whether to offer continued paid sick leave and paid family leave until March 31, 2021.
    2. Communicate corporate decision and any process requirements to employees.
    3. Confirm any state or local laws that impact decision.

    Optional, Not Mandatory

    Employers are not required to provide paid leave after December 31, 2020 (as was the case under the FFCRA through December 31, 2020). However, as of January 1, 2021, employers may voluntarily offer such leaves and may continue to take the same payroll tax credit as was previously afforded under the FFCRA.

    The relief package does not change the qualifying reasons for which employees may take leave, the caps on the amount of pay employees are entitled to receive, or the FFCRA’s documentation requirements.

    Same Pool of 80 Hours

    The law also does not change the amount of leave that employees are entitled to take under the FFCRA. Under the FFCRA, full time employees are entitled to a one-time allotment of 80 hours of paid sick leave and 12 weeks of expanded family medical leave. Therefore, an employer is generally not entitled to a second tax credit for an employee taking leave in 2021, if that employee exhausted FFCRA leave in 2020.

    Local Regulations

    Despite the fact that employers are no longer required to provide FFCRA leave after the first of the year, employers should be mindful that some states and local governments have enacted COVID-19 leave laws, which may or may not expire at the end of the year. For example:

    • New York: The quarantine leave law requires that New York employers provide job-protected sick leave to employees who are subject to a mandatory or precautionary order of quarantine or isolation. This does not expire at the end of the year.
    • Colorado: The state-specific COVID-19 leave law sunsets on December 31, 2020. The state paid sick leave program begins phasing in on January 1, 2021.
    • California: The COVID-19 leave law expires on December 31, 2020 or upon the expiration of the paid sick leave provisions of the FFCRA. Although the federal relief bill allows employers to claim a tax credit for paid sick leave provided into 2021, it does not appear to change the expiration date of the specific paid sick leave provisions of the FFCRA. Therefore, unless the state amends the law or issues guidance to the contrary, California’s leave law will likely expire at the end of the year. However, unlike the federal FFCRA, the California law allows an employee who is on leave on the date that the law expires to complete their leave, even if this extends the leave period past the law’s expiration date.
  • COVID-19 Relief Package (Consolidated Appropriations Act, 2021)

    UPDATED 12-27-2020

    In a marathon push before the end of the year, Congress passed the Consolidated Appropriations Act of 2021, on Dec. 21, 2020. President Trump signed the bill on December 27, 2020. This legislation is a massive package that averts a government shutdown and provides $1.4 trillion to fund the federal government through September 2021. The bill also provides $900 billion in additional COVID-19 pandemic relief, funding a panoply of needs for individuals and businesses.

    The following summary outlines both general provisions of the COVID-19 relief package as well as provisions that directly impact employers and their benefit plans (listed first).

    FSA Plan Flexibility

    Under the bill, employers are allowed, but not required, to amend plans as follows:

    • Carryover unused FSA balance from plan year ending in 2020 to plan year ending in 2021.
    • Carryover unused FSA balance from plan year ending in 2021 to plan year ending in 2022.
    • Extend grace period to 12 months after the end of the plan year for plan year ending in 2020 and 2021 for both health and dependent care FSAs.
    • Provide employees who cease participation in a health FSA during calendar 2020 or 2021 the opportunity to receive reimbursements from unused benefits or contributions through the end of the plan year in which such participation ceased (including grace period if applicable). At this point it is not clear whether this permits reimbursement of expenses incurred after termination or is simply an extended run-out period. Additional clarification on this will likely be forthcoming.
    • Increase the maximum age (by one year) for dependent care beneficiaries who aged out during the pandemic. 
    • Prospective modification of election amount for health and dependent care FSAs (plan years ending in 2021).

    Employers have considerable flexibility in the timing for amending plan documents. Amendments must be made by the end of the first calendar year beginning after the end of the plan year in which the amendment is effective. For example, calendar year 2020 plan amendments must be adopted on or before December 31, 2021. Plans must operate consistently with the terms of the amendment retroactive to its effective date.

    FSA Plan Action Item for Employers

    Decide What to Adopt: Employers must decide which, if any, of the plan flexibility options offered by this legislation to adopt. While considerable time is allowed to actually execute formal plan amendments, decisions on these issues should be made reasonably quickly to clarify for plan participants exactly what their plans will allow.

    Expect Some Confusion: Employers can expect some measure of confusion in the marketplace and from plan participants. Some employers will adopt these enhanced flexibility provisions and others will not, adding a degree of variability that FSA plans do not typically have.

    Open Ended Plan Years: Employers should be aware that extending flexibility for plan participants, in terms of when claims can be incurred or submitted, comes with the consequence of not being able to close out plan years in a timely manner. For example, employers who adopted the grace period extension for 2019 plan years, technically, still cannot close out the 2019 plan year.

    Administration Platforms: Software platforms for FSA plan administration do not currently include mechanisms to allow the flexibility afforded by this legislation, such as rolling over balances. Suffice it to say, they will all be scrambling to modify their platforms to accommodate these changes. The changes will certainly be accommodated, but employers should expect potential delays while administration platforms are being updated.

    Clear Communication: After decisions are made, employers should distribute clear communication about any plan flexibility adopted so that plan participants understand exactly what, if any, additional flexibility is included in their plan.

    FFCRA Paid Leave Credits

    The FFCRA paid sick leave and expanded FMLA leave provisions have been extended for employers on a voluntary basis through March 31, 2021. The corresponding payroll tax credits for paid sick leave and expanded FMLA leave remain available for employers electing to offer the paid sick and family leave. As a reminder, employers are required to continue employee benefit plans through any such leave period.

    General Provisions of the Act

    Aid for Small Businesses: $325 billion in aid for small businesses struggling after nine months of pandemic-induced economic hardships. This breaks down as:

    • $284 billion to the SBA for first and second-draw PPP forgivable small business loans
    • $20 billion to provide Economic Injury Disaster Loan (EIDL) grants to businesses in low-income communities
    • $15 billion in funding available to shuttered live venues, independent movie theaters, and cultural institutions
    • $12 billion in funding available to help business in low-income and minority communities.

    Individual Stimulus Payments: $166 billion for a second round of economic impact payments of $600 for individuals making up to $75,000 per year and $1,200 for married couples making up to $150,000 per year. Each dependent child is also eligible for a $600 economic impact payment.

    Unemployment Benefits: $120 billion to provide workers receiving unemployment benefits a $300 per week supplement from Dec. 26, 2020 until March 14, 2021. This is a renewal of the federal unemployment benefits provided by the CARES Act which expired in July. This bill also extends the Pandemic Unemployment Assistance (PUA) program, with expanded coverage to the self-employed, gig workers, and others in nontraditional employment, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits.

    Rental Assistance: $25 billion in emergency rental aid directed to assist those affected by COVID-19 who are struggling to make rent. Assistance under this program will be administered by state and local governments and applies to past-due rent and future rent payment, as well as to pay utilities and prevent utility shut-offs. The national eviction moratorium was also extended through Jan. 31, 2021.

    Transportation Industry: $45 billion in transportation funding, including $16 billion for airlines, $14 billion for transit systems, $10 billion for state highways, $2 billion each for airports and intercity buses, and $1 billion for Amtrak.

    Colleges and Schools: $82 billion in funding for colleges and K-12 schools significantly impacted by the coronavirus pandemic. This includes support for HVAC repair and replacement to mitigate virus transmission and $10 billion in childcare assistance.

    Health-Related Expenses: $22 billion for health-related expenses incurred by state, local, Tribal, and territorial governments.

    Food Assistance: $13 billion for emergency food assistance, including a 15% increase for six months in Supplemental Nutrition Assistance Program benefits.

    Broadband Expansion: $7 billion for broadband expansion.

    100% Deductibility for Business Meals: Temporarily allows a 100% business expense deduction for meals (rather than the current 50%) for food or beverages provided by a restaurant. This provision is effective for expenses incurred after Dec. 31, 2020 (not retroactive to the 2020 tax year) and expires at the end of 2022.

    Student Loan Provisions: The law extends the provision allowing employers to contribute up to $5,250 tax-free toward an employee’s student loan debt. This provision was set to expire on January 1, 2021 but was extended to payments made prior to Jan. 1, 2026. Notably, the law does not further extend the student loan moratorium on federally-held student loans and does not extend the forbearance period, the pause in interest accrual, or the suspension of collections activity past Jan. 31, 2021.

    PPP Round Two

    The return of the PPP is of particular interest to small businesses. The first round of PPP loans helped millions of small businesses acquire $525 billion in forgivable loans during the five months the program was accepting applications. The new round of PPP, or PPP2 as some are calling it, contains many similarities to the first round of the PPP but also has several important differences. Details of the new second round of the PPP can be found in the reference section below.

    Tax Deductibility of PPP Expenses

    The bill also specifies that business expenses paid with forgiven PPP loans are tax-deductible. This supersedes IRS guidance that such expenses could not be deducted and brings the policy in line with what hundreds of other business associations have argued was Congress’s intent when it created the original PPP as part of the $2 trillion CARES Act.

    COVID-19 Payroll Tax Credits

    The Act also extends and expands the Employee Retention Credit (ERC) under the CARES Act. Eligible businesses may now take advantage of the ERC through July 1, 2021. The ERC program has been expanded and modified for calendar quarters beginning after December 31, 2020, as follows:

    • The ERC is expanded from a 50% refundable tax credit to 70%, and the $10,000 eligible wage limit per employee will be a quarterly limit (previously, this was an annual limit). So instead of a $5,000 credit per employee credit per year, the program will allow a credit of up to $7,000 per employee per quarter.

    • To be eligible for the expanded ERC in 2021, an employer must show that gross receipts for such calendar quarter are less than 80 percent of the gross receipts for the same calendar quarter in 2019, or it experienced a full or partial suspension of operations during the quarter due to a governmental order. There is also a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility.

    • The definition of a large employer for purposes of the ERC is modified to mean more than 500 employees (currently, this threshold is 100 employees). As such, for eligible small to midsize employers (those who averaged 500 full-time employees or fewer in 2019), qualified wages for purposes of the ERC will be wages paid to any employee during the quarter where the employer meets the gross receipts test or experienced a full or partial suspension of operations due to a governmental order. These employers also will be able to receive advances on the ERC at any point during the quarter based on wages paid in the same quarter in a previous year.

    In addition, employers who receive PPP loans may still qualify for the ERC with respect to wages that are not paid with forgiven PPP proceeds. This provision is effective retroactively to the enactment date of the CARES Act.


    PPP Details

    Eligibility

    PPP2 loans will be available to first-time qualified borrowers as well as to businesses that previously received a PPP loan. Specifically, previous PPP recipients may apply for another loan of up to $2 million, provided they:

    • Have 300 or fewer employees.
    • Have used or will use the full amount of their first PPP loan.
    • Can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

    Loan Terms

    As with PPP1, the costs eligible for loan forgiveness in PPP2 include payroll, rent, covered mortgage interest, and utilities. PPP2 also makes the following potentially forgivable: 

    • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
    • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
    • Covered operating costs such as software and cloud computing services and accounting needs.

    To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period of either eight or 24 weeks, the same parameters PPP1 had when it stopped accepting applications in August.

    PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year, the same as with PPP1, but the maximum loan amount has been cut from $10 million in the first round to the previously mentioned $2 million maximum.

    Simplified Application

    The PPP2 program creates a simplified forgiveness application process for loans of $150,000 or less. Specifically, borrowers will receive forgiveness if they sign and submit to the lender a certification that is not more than one page in length, include a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. The SBA must create the simplified application form within 24 days of the bill’s enactment and may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. Borrowers are required to retain relevant records related to employment for four years and other records for three years, as the SBA may review and audit these loans to check for fraud.

    Other Special Provisions

    The PPP2 also includes special allocations to support first-time and second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers that have recently been made eligible, and for loans made by community lenders.

  • COVID-19 Vaccination Policy Considerations for Employers

    COVID-19 vaccines are starting to be rolled out, so now it’s time for employers to think about their vaccination policy! Can vaccines be mandatory in the workplace? Should they be? Can policies differ for different employees/workplace arrangements? Should they? What are the pros and cons? What is the right answer?

    EEOC Guidance

    On December 16, 2020, the EEOC weighed in on this issue and published specific guidance for employers. The guidance affirmed the information presented in this article (which was written and posted prior to the guidance). In a sentence, the EEOC indicated that employers may encourage or possibly require COVID-19 vaccinations, but any such policy must comply with the ADA, Title VII of the Civil Rights Act, and other workplace laws.

    General Agreement

    Legal experts generally agree that employers have a strong case for requiring employee vaccinations for certain segments of their employee populations. That said, there is an equally compelling argument that employers do not have a strong case for requiring vaccination of all employees, especially those employees who do not work in a public facing role, do not interface with other employees, or who work from home. Whatever vaccination policy is ultimately implemented, it must allow certain exceptions, must be applied only to jobs that have a reasonable business necessity for vaccination, and must be applied in a non-discriminatory manner.

    When CAN vaccinations be required?

    Employers may require employees to be vaccinated before returning to an onsite workplace if the failure to be vaccinated constitutes a direct threat to the public or to other employees in the workplace, specifically if an argument can be made that the virus could be easily transmitted in the workplace. The more likely it is that non-vaccinated employees might put customers, other employees, and/or the general public at risk, the more compelling the case will be for a vaccination mandate.

    When can vaccinations likely NOT be required?

    Employers who have office-based business and/or who have a remote workforce will have a more difficult time arguing the necessity of a vaccine mandate in the face of employees who value personal choice over a mandate. Even in an office environment that enables appropriate social distancing, some employees will value a vaccine mandate as they see it as important for personal safety. Other employees may find such a stance unpopular if they feel differently about personal choice. Employers will need to balance issues of personal choice, workplace safety, and attitudes toward public health safety when considering their workplace mandate policy.

    Potential Liability for Not Requiring Vaccination

    Facing liability for not requiring vaccination in the workplace is a potential conundrum for employers. It is possible that employees might allege that an employer has failed to provide a safe and healthy work environment if vaccination of all workers is not required. Providing a safe and healthy workplace is an Occupational Safety and Health Act (OSHA) requirement for all employers.

    It would certainly be groundbreaking to hold employers liable for not requiring vaccination, but it is equally groundbreaking to hold employers responsible for potentially hosting a work environment that could incubate or create the possibility of spreading the disease. Much of this discussion hinges on whether public health authorities (federal or local) take an aggressive or conservative stance in their future guidance to employers regarding whether unvaccinated employees may be allowed in the workplace.

    Current Guidance

    Available guidance indicates apparent support by several government agencies for mandatory vaccination policies. For example, based on the findings of the CDC, the EEOC has determined that COVID-19 meets the "direct threat" definition. During the pandemic, employers have relied on this guidance to justify asking employees more in-depth health-related questions and performing medical screening of employees before allowing them to report for work. However, the EEOC has yet to issue guidance for how it will view mandatory vaccine policies.

    For some employers, implementing a mandatory vaccination policy will be an important business consideration. For example, employers with employees in positions that provide direct health care, caretaking of children and the elderly, or serving other populations at elevated risk from COVID-19. However, it is generally thought that it will be difficult to apply a mandatory vaccine policy to ALL employees, especially those who may work at home or not be at particularly high risk for either contracting or spreading the disease.

    Because of the reality that rarely do all employees of an employer face the exact same personal risk, job risk, and work circumstances, it is generally thought that it will be difficult to apply a blanket vaccination mandate for all employees. In addition, there are also several important and necessary exceptions to a mandatory vaccine policy. These exceptions require that employers offer reasonable accommodation necessary for certain employees. Thus, adopting a policy that encourages and enables, but does not require, vaccination will be easier to administer for many employers.

    Reasonable Accommodations

    Federal laws prohibit employers from applying a mandatory vaccination policy without allowing exceptions for disability status or religious belief. While nothing prohibits an employer from adopting a policy that requires vaccination for all employees, certain accommodations must be allowed for employees needing a disability or religious exception.

    It should go without saying, but any accommodation for disability or religious reasons must be applied in a non-discriminatory manner and without retaliatory practices.

    Disability: In the context of flu vaccines, the EEOC considers that employers who are subject to the Americans with Disabilities Act (ADA) generally must provide reasonable accommodations to employees with disabilities that prevent them from receiving a vaccine. Under the ADA, an employer may request information including the nature of the limitation or disability and the difficulty or issue that vaccination would cause. An employer may also require an employee to provide documentation from the worker's medical provider to confirm the employee's specific limitation or disability and the need for accommodation.

    Sincere Religious Belief: Employers that are subject to Title VII of the Civil Rights Act of 1964 must reasonably accommodate individuals who notify them of sincerely held religious beliefs that prevent them from receiving the vaccine. Such accommodations can be more complicated. It should be noted that the EEOC has made it clear that protected religions are not limited to major, well-recognized faiths. Employers should note that the EEOC has indicated, "an employee's belief or practice can be 'religious' under Title VII even if no religious group espouses such beliefs or . . . the religious group to which the individual professes to belong [does] not accept such beliefs." As a rule, employers should accept that requests for religious accommodations are based on sincerely held beliefs. However, if an employee requests such an accommodation and an employer has an objective basis for questioning the sincerity of that belief or practice, the employer can request supporting information from the employee.

    This information could be a first-hand explanation from the employee or may be verified by third parties. It should be noted that “sincerity” can be difficult to measure, but generally such third-party verification can be provided by others who are aware of the employee's religious practice or belief. Employers should be careful not to pry for too much information as such practices may bring rise to a claim of requiring unnecessary evidence and thus risking liability for denying a reasonable accommodation request, at best, or a discrimination claim, at worst.

    Undue Hardship for Employer

    If an employee requests accommodation for disability or religious reasons, the employer has an obligation to provide one unless and until doing so would impose an undue hardship. Importantly, the meaning of "undue hardship" differs under the ADA and Title VII as follows:

    • ADA - Disability Accommodation: Undue hardship means "significant difficulty or expense" when considered in light of the accommodation's net cost, the employer's overall financial resources, the employer's type of operation, and the impact of the accommodation upon the employer's operation.
    • Title VII - Religious Accommodation: Undue hardship has been interpreted by the Supreme Court as meaning anything more than a de minimis burden.

    In either case, when such an accommodation is requested, employers should engage in an interactive dialogue with the employee to determine the nature of the disability or religious conflict, its impact on the individual's ability to perform the essential functions of the job (without compromising the safety of other employees, patients, or customers), the ability to meet the work requirements, and whether a reasonable accommodation exists that would not impose an undue hardship. Potential accommodations could include (but are not limited to) use of personal protective equipment (PPE), moving the employee’s work station or work location, a temporary reassignment, teleworking, or a leave of absence.

    What about those who just don’t want the vaccine?

    It is important to note that employers are not required to accommodate personal beliefs that do not fall under the ADA or Title VII. Examples include:

    • Secular Beliefs: Employers are generally not required to accommodate secular beliefs about the vaccine.
    • Personal Medical Beliefs: Employers are not required to accommodate personal medical beliefs, concerns, or fears about the vaccine.

    Action Items

    As COVID-19 vaccinations start to become available, employers will want to consider the following:

    1. Policy on vaccinations for some or all segments of their employee population.
    2. Anticipate requests for reasonable accommodation and think through how such accommodations will need to be adopted and the impact in workplace environments.
    3. Communication plan about new vaccination policies to employees.
    4. The COVID-19 public health and safety guidance from authorities is ever-changing as the pandemic evolves. As such, the EEOC has provided a robust resource page for employers.
  • New COVID-19 Workplace Exposure Requirements for Employers

    California Governor Gavin Newsom signed into law AB 685. The law aims to thwart exposure to COVID-19 in the workplace and protect employees from any such exposure. Specifically, it outlines important employer notice, reporting, and accountability measures to protect employees. It also authorizes the California Division of Occupational Safety and Health to prohibit entry into a place of employment if it is deemed to pose an Imminent Hazard Risk to employees.

    Important Steps for Employers

    Employers should be aware of these new legal requirements and ensure that they have a solid COVID-19 exposure response plan in place. Being adequately prepared to meet the quick employee and government agency notice requirements will be important for employers.

    Effective Date and Termination Date

    This law will be in effect from January 1, 2021 through December 31, 2022.

    Requirement #1: Notice of Possible Exposure to Employees

    If an employer has notice that a COVID-19 Qualifying Individual was present in the workplace, the employer must, within one business day of the notice, provide written notice of possible exposure to all employees who were onsite at the same workplace as the qualifying individual within the infectious period (as defined by the California Department of Public Health). This employee notice must include the following:

    • That employees may have been exposed to COVID-19 at the worksite
    • Information about COVID-19-related benefits and options for which they may be eligible under applicable law (local, state and federal), including workers’ compensation, COVID-19-related leave and sick leave, as well as employee anti-retaliation and anti-discrimination protections
    • Centers for Disease Control and Prevention-compliant disinfection and safety plan details that the employer plans to implement and complete

    Employee representatives (unions) and employers of subcontracted employees must be included in the above notices.

    Employers are required to keep records relating to any notices they provide to employees for at least three years.

    * A COVID-19 Qualifying Individual is defined as someone who has a laboratory-confirmed case of COVID-19, who has a positive COVID-19 diagnosis from a licensed health care provider, who is subject to a COVID-19-related order to isolate by a public health official, or who died due to COVID-19.

     

    Requirement #2: Notification to Local Public Health Agencies

    If an employer has a COVID-19 outbreak** at a worksite, it must take the following steps:

    • Notify the local public health agency within 48 hours of the outbreak
    • Data reported must include:
    • Number, names, occupations, and worksites of any qualifying individuals
    • Business address where the outbreak occurred
    • NAICS industry codes of the worksites where the qualifying individuals work and
    • Continue to notify the local health department of subsequent laboratory-confirmed cases of COVID-19 at the worksite.

    ** COVID-19 Outbreak is currently defined by the California Department of Public Health as three or more laboratory-confirmed cases of COVID-19 among employees who live in different households within a two-week period of time.

     

    Requirement #3: Imminent Hazard Notice at the Workplace

    The law empowers the California Division of Occupational Safety and Health to prohibit the entry into or operation of a workplace that exposes employees to the risk of infection with COVID-19. It allows the OSH to impose such a prohibition to the extent that it constitutes an “imminent hazard” to employees. Lastly, employers are required to post a notice at the workplace if such a closure is mandated.

    Need More Info?

    The California Department of Industrial Relations has published FAQs to help employers navigate the requirements of this new law.

  • New Cal/OSHA COVID-19 Requirements

    Cal/OSHA adopted COVID-19 regulations to protect workers from hazards related to COVID-19. The new standards impose significant requirements on employers. Key provisions require most companies with California-based employees to maintain certain standards, provide specific benefits, and follow certain protocols. Following are the key standards:

    1. Paid Leave (for individuals with COVID exposure)
    2. Written Prevention Plan
    3. Outbreak Requirements
    4. Testing
    5. Exclusion and Return to Work Parameters
    6. Training and Instruction for COVID safety

    Effective Date and Duration

    The temporary standards are effective on November 30, 2020 (pursuant to the anticipated approval by the Office of Administrative Law). If approved, the emergency standards will remain in effect for at least 180 days and may be extended.

    Covered Employers

    Generally, all California employers are subject to the new standards. There are three specific exceptions:

    1. Employees working from home
    2. Employers with one employee who does not have contact with other individuals
    3. Employees covered by Cal/OSHA’s Aerosol Transmissible Diseases standard, which is generally applicable to work at certain health care facilities, laboratories, etc.

    #1. Paid Time Off Requirement

    In General: Any employee excluded from the workplace due to a workplace-related positive COVID-19 test must be provided paid sick leave for the duration of the period of exclusion. There are two exceptions:

    1. If the employee is unable to work for reasons other than needing to protect other persons at the workplace from possible COVID-19 transmission
    2. The employer can demonstrate that the COVID-19 exposure is not work-related. Note that this exception is narrow given the California presumption clause under Workers Compensation law that an employee who was working at a facility and contracted COVID-19 contracted that infection at work.

    Compensation and Benefits: Employers must continue and maintain an employee’s earnings, seniority, and all other employee rights and benefits, including the employee's right to their former job status, as if the employee had not been removed from their job.

    Integration with Other Leave Benefits: Employers may use employer-provided employee sick leave benefits for this purpose and may consider benefit payments from social sources in determining how to maintain earnings, rights and benefits when not covered by workers’ compensation.

    Open COVID Paid Leave Questions: There are several important questions that are not addressed in the regulations:

    1. Multiple COVID Leaves: The proposed standards do not specifically address whether employees are limited to only one such COVID leave. The absence of such a specific limitation would lead to a likely interpretation that paid leave benefits must be provided for any workplace exposure, even if an employee is excluded from the workplace on more than one occasion.
    2. Existing PTO Integration: Employers can satisfy the paid time off obligations through existing employer-provided employee sick leave benefits and/or supplemental paid sick leave offered in response to COVID-19. However, it is unclear what paid leave must be provided when an employee has exhausted his or her regular employer-provided paid leave entitlements. This scenario is occurring more regularly now as employees have used their paid sick leave and FFCRA earlier in the year.

    #2. Written COVID-19 Prevention Plan

    In General: The new standards set forth that employers must provide a written COVID-19 Prevention Plan, the elements of which mirror the requirements of California’s Injury and Illness Prevention Plan. Required elements include:

    • A system for communicating with employees about COVID-19 prevention procedures, testing, and systems for reporting potential exposure without fear of retaliation
    • Identifying, evaluating, and correcting any COVID-19 hazards
    • Procedures for investigating and responding to positive COVID-19 cases in the workplace
    • Training and instruction for employees
    • Procedures for physical distancing and face coverings
    • PPE evaluation
    • Cleaning and disinfecting standards
    • Engineering and administrative controls
    • Recording positive COVID-19 cases and informing public health departments of any outbreaks
    • Exclusion of COVID-19 cases from workplace
    • Return to work criteria

    Details: The regulations contain significant detail on all of the elements that must be addressed in a prevention plan. From physical distancing, use of face coverings, cleaning and disinfecting protocols, ventilation, walkway usage, to employee training, investigations, and non-retaliation. The list is extremely comprehensive, and employers should be prepared to address all potential aspects of mitigation and prevention when creating a prevention plan.

    Standalone or Integrated: The COVID-19 Prevention Plan may be developed as a standalone document or be incorporated into an employer’s existing Injury and Illness Program. Due to the specific language that must be included in a prevention plan under these emergency standards, employers are strongly encouraged to carefully examine language if incorporating these Cal/OSHA requirements into existing plans.

    #3. Outbreak Requirements

    Workplace Outbreak Defined: A Workplace Outbreak is defined as three or more COVID-19 cases within a 14-day period at a single location or when a local health department identifies a place of employment as the location of a COVID-19 outbreak.

    Workplace Outbreak Requirements: If an employer experiences a Workplace Outbreak, the standards impose numerous requirements:

    • Immediately provide testing (as outlined below)
    • Exclude from the workplace all employees who test positive for or were exposed to COVID-19
    • Investigate the outbreak and implement any necessary corrective action
    • Document the investigation pursuant to the standards and any corrective action implemented as a result and
    • Notify the local health department within 48 hours of notice of the outbreak.

    Major Outbreak Defined: A Major Outbreak is defined as 20 or more COVID-19 cases in an exposed workplace within a 30-day period. If an employer experiences a Major Outbreak, additional requirements are imposed.

    Major Outbreak Requirements: In addition to the requirements outlined above for a Workplace Outbreak, employers must also:

    • Increase COVID-19 testing to at least twice a week for all exposed employees within the 30-day period and who remain at the workplace and
    • Investigate the outbreak and implement any necessary corrective action, including potential stoppage of operations until corrections are made.
    • The proposed regulation also includes requirements for notification of potential COVID-19 exposure within one business day to exposed employees, their authorized representatives, independent contractors, or employers at a worksite.

    #4. Testing

    Employers must offer COVID-19 testing at no cost, during working hours (with compensation), to all employees who were exposed to COVID-19 in the workplace. All such employees must be provided a follow-up test one week later and as well as continued testing at least once a week during the quarantine period of 14 days from the date of the COVID-19 outbreak. Testing requirements are triggered by any workplace exposure, not just a Workplace Outbreak or a Major Outbreak.

    #5. Exclusion from and Return to Work Parameters

    In General: If an order to isolate or quarantine is issued to an employee by a local or state health official, the employee cannot return to work until the specified period is completed or the order is lifted. If no period is specified in the order, the period is assumed to be 10 days from the time the order to isolate was effective or 14 days from the time the order to quarantine was effective.

    Any employees diagnosed with COVID-19 and any exposed to COVID-19 within the past 14 days must also be excluded from the workplace until they have satisfied specific return-to-work criteria. One exception exists for circumstances when the employee is reassigned to work in an area where they do not have contact with other individuals until the return-to-work criteria has been met.

    Asymptomatic Employees: Employees who test positive for COVID-19 but do not develop any symptoms may not return to work for a minimum of 10 days from the date of the first positive COVID-19 test.

    Symptomatic Employees: Employees who test positive for COVID-19 and develop symptoms may not return to work until:

    • At least 24 hours have passed since a fever of 100.4 or higher has resolved without the use of fever-reducing medications
    • COVID-19 symptoms have improved and
    • At least 10 days have passed since COVID-19 symptoms first appeared

    Benefits and Pay Continuation: During the exclusionary period, however, employers are obligated to continue providing and maintaining the employee’s earnings, seniority, and benefits.

    Cannot Require a Negative Test: The new standards prohibit employers from requiring a negative COVID-19 test for an employee to return to work. Return to work criteria are based solely on time, rather than tests.

    Notice Requirements

    Employee Notice Requirements: Employers must provide employees with information regarding COVID-19-related benefits, including those available as workers’ compensation, under the federal Families First Coronavirus Response Act (FFCRA), the California Labor Code, and any leave guaranteed by contract.

    Health Department Notice Requirements: Employers must notify their local public health department agency and provide complete case information within 48 hours after three or more COVID-19 cases are known (for guidance on preventing further spread).

    Interaction with County Protocols

    In addition to these new statewide requirements, many California counties have begun announcing their own revised COVID-19 protocols. As examples:

    • Los Angeles County: Under a stay-at-home order to remain in effect through December 20, 2020. The order requires that certain businesses abide by restricted occupancy limits – specifically, essential retail stores may only operate at 35% maximum occupancy, while non-essential retail is restricted to 20% maximum occupancy.
    • Santa Clara County: Issued a more restrictive protocol which, among other things, prohibits contact sports at all levels, including pro football franchises.

    Employers should keep apprised of updates to local county orders and consider allowing employees to work remotely whenever possible.

    California Leading the Way?

    Employers can expect increased OSHA enforcement under the Biden administration and possibly emergency temporary standards to combat COVID-19. California is one of a few states leading the way with emergency COVID-19 workplace regulations. Employers can expect that federal standards may be forthcoming and may be modeled after the California regulations.

    Key Takeaways

    The newly issued standards require that California employers evaluate their current COVID-19 protocol to ensure compliance. Suggested next steps include the following actions:

    • Implement COVID PTO benefit requirements
    • Draft and implement COVID-19 Prevention Programs
    • Consider implementing the testing protocols
    • Start preparing for the new recordkeeping requirements
    • Outline a COVID-19 exposure notification process (in contemplation of a final requirement for notification to be passed in the regulation).

    While many employers likely already have some protocols in place, the specific requirements provided by these new Cal/OSHA standards may require that employers update their existing procedures and/or documentation to remain compliant with the rapidly changing landscape.

    Employer Resources

    Cal/OSHA has provided the following resources for employers: