Category: Uncategorized

Show All Categories

Labor Law

Mandatory COVID-19 Vaccinations and Testing Issued by Federal OSHA

Update 11/8/21 –  On Saturday, a three-judge panel in the U.S. Court of Appeals for the Fifth Circuit in Louisiana issued astay of enforcement of the OSHA rule mandating vaccines for employees of large businesses. The ruling blocks the OSHA rule as outlined below. We are following the situation and will keep you updated. On Thursday, November 4, 2021, Federal OSHA issued its emergency temporary standard (ETS) regarding mandatory COVID-19 vaccinations and COVID-19 testing.  The ETS will become effective on January 4, 2022.  The date by which employees must be vaccinated under the federal contractor rule was pushed back to the same date. The ETS requires employers to adopt mandatory vaccination policies for their workplaces.  The ETS does allow employers to also adopt a policy allowing employees to undergo regular COVID-19 testing and wear a face covering at work in lieu of vaccination.  The ETS makes it clear that OSHA prefers that employees be required to be vaccinated. A mandatory vaccination policy must require vaccination of all employees other than those employees: For whom a vaccine is medically contraindicated; For whom medical necessity requires a delay in vaccination; or Who are legally entitled to a reasonable accommodation because they have a disability or sincerely held religious beliefs, practices, or observances that conflict with the vaccination requirement. If an employer allows COVID testing in lieu of vaccination, employees who do not wish to be vaccinated must be tested for COVID-19 every 7 days.  Unvaccinated employees must begin wearing masks on December 5 and provide a negative COVID test beginning on January 4. The ETS does not apply to employers covered by the federal contractor rule requiring mandatory vaccinations.  However, if a federal contractor is not subject to the new federal contractor rule because their contract has not been renewed or extended, the contractor must comply with the ETS until they are covered by the federal contractor rule. The ETS also does not apply to employees while they are working from home, or who work exclusively outdoors. Beginning on December 5, the ETS requires employers to provide paid time off while an employee is being vaccinated or recovering from any vaccine side effects that prevent them from working.  Employers are not required to pay for the costs of the testing, or the time off for testing unless required by local or state law or a collective bargaining agreement. What Businesses are Covered The ETS applies to employers that have a total of at least 100 employees at any time the ETS is in effect.  OSHA determined that unvaccinated employees of these employers face a grave danger of exposure to COVID-19, including the Delta variant, while they are at work.  Because this grave danger applies to all unvaccinated employees who come into contact with other people in indoor settings as part of their employment, the ETS applies to all employers with 100 or more employees, regardless of industry. OSHA explained that the decision to limit the coverage of the ETS to employers with 100 or more employees is based on four reasons. OSHA is “confident” that employers with 100 or more employees can meet the ETS’ requirements promptly. OSHA is less confident that smaller employers can do so without undue disruption. The coverage threshold enables the ETS to reach two-thirds of all private-sector workers in the nation. The ETS will reach the largest facilities where the deadliest outbreaks of COVID-19 can occur. The 100-employee threshold is comparable with the size thresholds established by Congressional and agency decisions in analogous contexts. Who is included in the 100 employee threshold? For a company with multiple locations, all employees at all locations are counted for purposes of the 100-employee threshold for coverage.  The ETS states that in a traditional franchisor/franchisee relationship in which each franchise location is independently owned and operated, the franchisor and franchisees would be separate entities for coverage purposes. In situations where two or more related entities handle safety matters as one company, the employees of all companies making up the integrated single employer must be counted. In the case of employees of a staffing agency, only the staffing agency would count the jointly employed workers for purposes of the 100-employee threshold.  This means that the host employer does not count the staffing employees but would be covered by the ETS if it has 100 or more employees in addition to the staffing agency employees. In the construction context, each company working on a multi-employer worksite is treated differently in counting employees.  If a general contractor has more than 100 employees spread out over multiple construction sites, the employer is covered under the ETS even though it does not have 100 or more employees at any one worksite. In all regards, part-time employees are counted in calculating the 100 employees.  Remote workers are also counted. Legal Challenges Legal challenges to the ETS are expected.  The ETS states that it pre-empts any state or local laws that prohibit mandatory vaccination policies. Immediate Issues for Employers Employers will have to decide if they will require all employees to be vaccinated, or whether they will allow employees to be tested weekly in lieu of vaccinations.  Although the work involved in collecting and monitoring weekly test results can be burdensome, allowing employees to avoid vaccination by being tested may cause less disruption and turmoil than mandating vaccinations.  Employers should begin now to collect information about the vaccination status of their employees.  Employers must determine the vaccination status of each employee, collect acceptable proof of vaccination, and maintain records of each employee’s vaccination status. Responding to requests for a reasonable accommodation because of medical conditions or religious beliefs will also be time-consuming for employers.  Employers should develop forms and procedures for employees to request accommodations.  This process should be discussed in the written policy which OSHA requires.  Employees should be trained to review and decide on accommodation requests.  And as is the case with all medical information, employers should have protocols in place to preserve the confidentiality of vaccination status, requests for accommodation because of disabilities or other medical conditions. The ETS does not cover remote workers.  For employers who have struggled getting employees back into the office, the ETS may result in more requests to work from home. The fines for violating the ETS are high – $14,000 per violation.  Employers need to begin to consider these issues immediately. Please reach out to Phyllis if you have any questions regarding your labor and employment issues.  Phyllis can be reached at pkarasov@larkinhoffman.com or 952-896-1569.

General Matters

The American Rescue Plan Act Subsidizes 100% of COBRA Premiums

On March 11, 2021, President Joseph R. Biden signed the American Rescue Plan Act of 2021 (“ARP”).  Among other provisions, the ARP makes COBRA coverage more affordable by subsidizing 100% of the COBRA premiums during the period beginning April 1, 2021, until September 30, 2021, for an employee or dependent who is a COBRA “qualified beneficiary” due to an involuntary termination of employment or an involuntary reduction in hours. This subsidy will not count towards an individual’s gross income. Eligibility The COBRA subsidy is only available to individuals: (1) who are involuntarily terminated or had their hours reduced; and (2) who are enrolled in COBRA coverage (or will elect such COBRA coverage) on or after April 1, 2021, and before the subsidy ends on September 30, 2021. The ARP simply suspends the eligible individual’s obligation to make COBRA premium payments for up to 6 months. Extension of Election Period – Second Opportunity to Elect COBRA The ARP also provides a second opportunity to elect COBRA coverage for certain qualified individuals through the extended election period. An individual who fits the eligibility criteria and who did not initially elect COBRA coverage or discontinued COBRA coverage before April 1 but would otherwise be within his or her 18-month COBRA coverage period between April 1 and September 30, 2021, can elect COBRA coverage from April 1 until 60 days after the plan administrator of the applicable group health plan notifies such individual of the extended election period. COBRA coverage for any COBRA election by these individuals during the extended election period will commence on and after April 1. An individual electing COBRA during the extended election period may maintain the coverage only until the expiration of the COBRA coverage period (which is most often 18 months) he or she would have had if they had elected COBRA when first eligible. For example, an individual first eligible for COBRA on January 1, 2021, who did not elect COBRA until April 1, 2021, will be eligible for COBRA through June 30, 2022. Plan Enrollment Option Employers may allow eligible individuals to switch the coverage option that the individual initially elected at the time of their COBRA qualifying event. With some exceptions, an individual who is currently enrolled in COBRA continuation coverage has up to 90 days after the receipt of notice of the plan enrollment option to enroll in a different coverage option with that employer, provided that (1) the premium of such different coverage is not more expensive than the premium for the coverage in which the individual was enrolled at the time of such termination or reduction of hours, and (2) the different coverage is also offered to similarly situated active employees at the time the assistance eligible individual elects to enroll. If the individual elects the different coverage and such employer permits it, the COBRA subsidies shall apply towards the different coverage. Again, employers are not required by the ARP to make such plan enrollment options available. Reimbursement If an eligible individual makes a COBRA premium payment, “the person to whom such payment is payable” (including a multiemployer plan, employer, and insurer) will reimburse the individual for the amount of the premium paid not later than 60 days after the date on which the individual made the premium payment. Limitation on Subsidy The subsidy terminates if the individual becomes eligible to enroll in any other group health plan or Medicare program. Individuals who fail to notify their employer or health plan that they are no longer eligible for the subsidy may face a financial penalty equal to the greater of $250 or 110% of the premium subsidy after termination of eligibility under the ARP. The subsidy does not extend beyond the period of COBRA continuation coverage itself (which is most often 18 months) so if an individual’s COBRA coverage is set to expire, even if that is in the middle of the subsidy period, the ARP does not require the coverage to be extended through the end of September. For example, if an employee and dependents lost benefits as of March 1, 2020, 18 months of COBRA eligibility would expire at the end of August 2021 and premiums would be subsidized only for 5 months, namely, April through August 2021. Tax Credit The multiemployer plan, employer, or insurer must provide COBRA subsidies to eligible individuals and pay or incur the COBRA premium cost. The ARP provides that the above-mentioned entities can recover the cost of the COBRA premiums that are subsidized by claiming a credit against its quarterly payroll tax liability. If the amount of the credit exceeds the employment taxes due for any calendar quarter, such excess will be treated as an overpayment that would be refundable. The credit, including the refundable portion, may be advanced under rules that will be set out by the Treasury Department. The amount of these credits will constitute the gross income of any entities allowed a credit under the ARP. Notices to Individuals The ARP includes specific notification requirements for employers to amend existing COBRA notice forms or send an additional written notice describing the availability of premium subsidies (along with other specific requirements) to all eligible individuals. The ARP also requires the plan administrator to provide to each individual no more than 45 days but no less than 15 days before the expiration of the subsidy, a written notice that includes clear language regarding the premium subsidies, the expiration date, and how such individual may be eligible for coverage without any premium subsidies through COBRA coverage or a group health plan. The Departments of Treasury, Labor and Health and Human Services are directed to issue regulations and guidance, including model notices for these notification purposes within 30 to 45 days of enactment. What an Employer Should Do Now All multiemployer plans, employers, or insurers subject to the ARP should have a compliance plan in place while awaiting further guidance and model notices from federal agencies. Employers may wish to consult their plan administrators to confirm they will be performing the notification obligations. This article does not encapsulate all of the details required by the ARP, and additional or different regulations and guidance may be issued by federal agencies. For further information please contact Phyllis Karasov at pkarasov@larkinhoffman.com.