Employee Benefits Blog

Yesterday, the Equal Employment Opportunity Commission (EEOC) issued their seventh update to nearly 50 FAQs they have been publishing since March 18th, addressing how employers should comply with the Americans with Disabilities Act (ADA) while also observing all applicable emergency workplace safety guidelines during the coronavirus pandemic.

While their latest update primarily addresses antibody testing, the guidance, in its entirety, is quite informative, so much so that we wanted to share it here.

While it's a good idea for every employer to follow the CDC's latest guidelines for maintaining workplace safety, only employers with 15 or more employees are subject to the ADA (though smaller employers may be subject to similar rules under applicable state or local laws.)

Regardless, even smaller employers can benefit from the guidance provided in these EEOC FAQs about ADA compliance. 

Due to the coronavirus (COVID-19) pandemic, more employees are working remotely than ever before. And, even as businesses begin to reopen across the country, remote work will likely remain popular for the foreseeable future.

While remote work arrangements help keep employees healthy and safe in the midst of the COVID-19 pandemic, they create unique challenges for teams and managers. One of these challenges involves monitoring remote workers. Employers across the nation are leveraging various technologies and tools to monitor employee productivity, and active and idle time.

While these tools can help employers ensure employees are working while they’re at home, they come with their own set of legal risks. Moreover, the practice of using such tools to monitor employees may create tension between employees and managers, as employees may feel like they’re not being trusted.

There are benefits and drawbacks to monitoring remote employees, as well as a host of legal considerations. This article provides a general overview of the pros and cons of monitoring remote workers and outlines general best practices for doing so.

COVID-19 has brought massive upheaval upon the American workplace. Employers have found themselves drafting and implementing policies and procedures addressing a wide array of issues including remote work, layoffs, furloughs, pay cuts, workplace conditions and many more.

Not surprisingly, the uncertainty wrought by COVID-19 has left employers at an increased risk of exposure to employment-related claims alleging wrongful termination, discrimination, retaliation and many others.

In this post today we'll cover the most common potential causes of action related to COVID-19 that may lead to employment-related litigation. As is the case with all inherently legal issues, employers are strongly advised to seek the guidance of legal counsel when faced with any of the claims discussed here.

WORKPLACE HEALTH AND SAFETY

There have already been a multitude of safety violation claims filed under the Occupational Safety and Health Act (OSHA) and state equivalents. These safety violations typically allege that an unsafe workplace has caused sickness and/or death due to COVID-19, or that an employer failed to take appropriate measures to reduce COVID-19 exposure and spread within the workplace.

Such “appropriate measures” might include failure to provide hand-washing stations, sanitizers, masks, or adequate protective gear on location. Other claims have alleged that employees have been unable to practice social distancing due to the nature of their jobs.

With daycare centers closed and summer camps turning kids away, employees who socked away money in their Dependent Care Flexible Savings Accounts (DCFSAs) are worried their use-it-or-lose-it account balances are going down the drain.

This concern is also shared by those who tucked away pre-tax savings in Health Care Flexible Savings Accounts (HCFSAs) to cover eligible health care expenditures. With hospitals postponing elective procedures and patients skittish about entering health care facilities, savers simply aren't racking up enough receipts to deplete their FSA balances.

Both groups can now breathe a sigh of relief, since new guidance from the IRS will allow most employees to make midyear pre-tax contribution adjustments to their Health Care and Dependent Care FSAs, which typically aren't permitted once enrollment elections are set.

Historically, the only exception to this rule was if an employee experienced a Qualifying Life Event (QLE), defined by the IRS as a marriage, divorce, job change, birth or adoption of a child, or when a dependent child reaches age 26.

In addition to allowing midyear savings account adjustments, the IRS is also permitting midyear health plan enrollment changes.

As states begin to ease stay-at-home orders, businesses that shut down to minimize the spread of COVID-19 are starting to reopen. But as some employers are finding out, not every employee is ready to get back to work.

Companies that took out loans under the Paycheck Protection Program (PPP) are worried that their staffs' reluctancy to return to work will put their PPP loans in jeopardy of having to be paid back. (Loans under the PPP are only forgivable if employers rehire the same number of full-time employees they used to calculate their PPP loan amount in the first place.)

At the same time, employees who are turning down call-backs from their employers are worried they will no longer be able to collect unemployment benefits, made significantly richer under the CARES Act coronavirus stimulus bill. The New York Times estimates workers in more than half of states are receiving more in unemployment benefits than they did from their normal salaries.

Recognizing this quandary for employers and employees, here's what the Small Business Administration (SBA) and the Department of Labor (DOL) are doing to address this.

Employers are understandably confused when it comes to trying to predict how the coronavirus epidemic will impact their group health plans. Utilization is way down for preventive, elective, and non-emergent services, while expenses directly relating to the testing and treatment of COVID-19 are way up.

Employers aren't the only ones who are perplexed; many employee benefits experts are also in disagreement as to how all this will play out. Willis Towers Watson estimates that employer health care costs might increase by 4 to 7 percent for calendar year 2020, while Gallagher is predicting just the opposite, suggesting that a 15% decrease in medical expenses is possible. Others, as you'll read about later, are suggesting the potential for a staggering 40 percent increase in premiums next year. 

Employers, most notably those with self-funded group health plans, must be mindful of these wide swings in predictions. Regardless of which way things play out, they need to take careful steps to ensure the financial viability of their health plans during this crisis.

So how can employers forecast and prepare for these shifts in cost? It's especially difficult because the impacts of this pandemic are highly dependent on the geographic, demographic, and economic risks which impact every employer quite differently.

Here are some steps self-funded employers should take, along with some predictions on what might happen to various cost-drivers of medical plans.

Americans are suffering from "cabin fever." That's how both New York Governor Andrew Cuomo and President Trump described the American psyche this past weekend, with much of the country growing weary of spending so much time at home. President Trump went even further when he sent out Tweets encouraging citizens of three states to push for more immediate reopenings than planned.

Governors of those states, Minnesota, Michigan, and Virginia, were left confused, having been told just days earlier by the President that the decision to reopen would be left up to them, though just days prior they were told the opposite by the President, who claimed the decision to reopen the country rested solely with him.

Governors are understandably feeling a bit whipsawed by this flip-flopping. Still, it's fair to say that there isn't a governor across the country who isn't eager to ease restrictions that have crippled state economies. The vast majority of Governors, however, are balancing their decisions to reopen with local public health concerns and the White House's very own Guidelines for Opening Up America.

Reopening Means Renewed Opportunities for The Virus to Spread

American workers are also anxious to get back to work, and business owners are desperate to see the wheels of commerce turn again. But the fact of the matter is this - businesses are going to reopen before there is widespread testing for COVID-19, much less general availability of antibody testing, which will indicate if an employee was previously infected and has now mounted an immune response to the disease.

This is to say nothing of the 12-to-18 month roadmap to developing an actual vaccine for the virus, nor the manpower required to do meaningful contact tracking. This means that the coronavirus will have renewed opportunities to spread as workers return to the job.

Without Formal Guidance, Businesses Are Essentially Winging It

Without common and well-defined safety procedures for reopening, businesses are implementing ad hoc procedures with vastly mixed results and constant changes. OSHA is stressing that its guidance isn't regulation, but rather advisory.

Many frustrated business leaders are looking to "essential businesses" that never shut down for guidance, while others are looking for inspiration from companies in overseas markets where the curve of the pandemic subsided weeks ago.

So what should employers do to prepare for reopening? What actions can they take to make workplaces safe? What steps can they take to test workers and keep them healthy?

Here are some suggestions;

Employees who take qualifying leaves of absence are provided multiple protections by way of the Family and Medical Leave Act (FMLA), the Uniformed Services Employment and Reemployment Act (USERRA), and many state laws.

The most well-known protection is the guarantee of the same or an equivalent job when employees return to work, but there are also other protections. For example, many of these laws stipulate employers’ obligations regarding health insurance during employees’ qualifying leaves of absence.

The following is a breakdown of FMLA, USERRA, and some general state laws with regards to employer-provided health insurance coverage.

FMLA and Health Insurance

In order to meet the requirements for an FMLA-qualifying leave of absence, employees must meet four criteria.

With funds reportedly running dry overnight in the $350 billion Paycheck Protection Program, it was with great trepidation that I read an article in the Wall Street Journal this morning suggesting that a second round of coronavirus-related layoffs is already underway, and that very few industries will be spared this time around.

This prediction was further bolstered when the Labor Department announced, just a few hours ago, that 5.24 million more weekly jobless claims were filed last week, exceeding the 5 million expected from most economists. This brings total unemployment claims to just over 22 million, virtually wiping out ten years of spectacular U.S job growth in less than a month. 

It would be an understatement to say that that the damage to the U.S labor market has been profound. And economists say there's more to come. But there's also been considerable discussion recently about markets "opening back up", perhaps as early as the end of this month.

So which industries are next to be hit, can this be avoided, and how long might it take for things to bounce back once we return to what is sure to be a "new normal"?

Many employers hit hard by COVID-19 are wondering if they should cut payroll expenses through furloughs and layoffs. These temporary actions quickly reduce payroll expenses, while providing affected employees with access to the greatly enhanced unemployment benefits now available, thanks to the CARES Act.

Most furloughed and temporarily laid-off employees can also maintain their health benefits while collecting these unemployment benefits. However, the extent can vary based on medical carrier contracts with employers, and variations in state laws.

Just this morning, a piece in the Wall Street Journal discussed how more and more employers are going this route, though many are doing so on a voluntary basis since these richer unemployment benefits help some workers more than others. (In some cases, which we'll address a bit later, certain employees can actually make more on unemployment, at least for the moment.)

Complicating an employer's decision to pare back payroll expense in this way is another provision in the CARES Act called the Paycheck Protection Program (PPP). This program, which I covered extensively in my last blog post, is designed to encourage employers to maintain staff by providing forgivable loans to employers who resist cutting their workforce.

The PPP has already proven to be so popular that Congress is already moving to approve additional funding for the program. Congress has thus far approved $350 billion in potentially forgivable small-business loans, but early demand suggests the program may run dry. Treasury Secretary Steven Mnuchin confirmed in a tweet yesterday afternoon that his department will ask for an additional $250 billion for the small business program.

Which of these options is better for your employees, and which option is better for you as an employer? A lot depends on additional operating expenses incurred by an employer, employee income, duration of benefits, accessibility of each relief program, and the long-term impact of both decisions. And of course this dilemma is predicated on an employer not planning on ceasing operations altogether.  

Let's take a look at each option in greater detail.