COVID-19 and Masks: Updated Guidance from OSHA and Massachusetts

On the heels of the U.S. Centers for Disease Control and Prevention’s (“CDC”) revised guidance that fully-vaccinated people no longer need to wear masks in many indoor or outdoor settings, the Occupational Safety and Health Administration (“OSHA”) announced May 17th that it was reviewing the CDC’s guidance and would be updating its own materials accordingly.  Notably, OSHA advised that, until it updates its materials, employers should follow the CDC’s guidance for information “on appropriate measures to protect fully-vaccinated workers.”  In other words, as we predicted, OSHA is telling employers to follow the CDC’s mask guidance.

Here in the Commonwealth, Governor Baker announced Monday that the mask mandate will be rescinded on May 29th, and that the Department of Public Health will be issuing a new mask advisory consistent with the CDC’s guidance, which can be found here.  The new advisory makes clear that fully-vaccinated individuals may resume “all of the activities [people] engaged in prior to the pandemic without wearing a mask or staying 6 feet apart, except where otherwise required by federal, state or local laws, rules or regulations.”  Masks will still be mandatory for all individuals on public and private transportation systems, healthcare facilities and in other settings hosting vulnerable populations.  A complete list of places where masks will remain mandatory (regardless of vaccination status) can be found here.  Employers that fall under this umbrella should continue to require employees to wear masks.     

The guidance from the Commonwealth advises non-vaccinated individuals to continue wearing masks indoors and when they cannot socially distance.

In light of the updated guidance, here are a few additional considerations for employers in Massachusetts:

  • Can employers still require vaccinated employees to wear masks? Yes. Our answer to this question has not changed from our previous client alert.
  • Can an employer require only unvaccinated individuals to wear masks, as of May 29, 2021? Yes. Per the Commonwealth’s guidance, non-vaccinated individuals are advised to continue wearing masks indoors and when they cannot socially distance. 
  • Anything else we should consider? Yes, if you have not already done so, you should review our prior client alert, which answers important questions such as “What if someone misrepresents their vaccination status?” and “How will an employer know if an employee is fully-vaccinated?”

As we previously indicated, the guidance relating to COVID-19 and the workplace changes rapidly, so do not hesitate to reach out to your counsel if you are presented with any unique or complicated situations.  

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US Department of Labor Withdraws Independent Contractor Rule

On May 6, 2021, President Biden’s administration halted implementation of a rule published under the Trump administration which would have made it easier for businesses to classify workers as independent contractors instead of employees. The Trump regulation was supported by the “gig economy” industry, such as ride-share and delivery companies, who tend to classify their workforce as independent contractors. Treating workers as independent contractors rather than employees can avoid the application of employment laws, including the Fair Labor Standards Act (FLSA), which entitles employees to the payment of minimum wage, overtime pay, and other protections.

This regulation was set to implement a modified test for determining whether a worker is legally classified as an independent contractor. However, the U.S. Department of Labor issued a new rule withdrawing the previously-published regulation before it could take effect. The new rule does not provide a replacement analysis, but instead the Department of Labor will revert to the multi-factor analysis created by court precedent.

Under federal law, the Department of Labor and courts look to a variety of factors to determine whether a worker is an employee or an independent contractor under the totality of the circumstances, based on the “economic reality.” The test can involve a complex analysis to evaluate the nature of the relationship, and no one factor or combination of factors is necessarily determinative. Among the factors considered are the following:

  1. The extent to which the services rendered are an integral part of the employer’s business.
  2. The permanency of the relationship.
  3. The amount of the individual’s investment in facilities and equipment.
  4. The nature and degree of control by the employer.
  5. The individual’s opportunities for profit and loss.
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the individual.
  7. The degree of independent business organization and operation.

The Trump rule would have modified the analysis, placing primary consideration on two core factors: 1) the nature and degree of control over the work, and 2) the worker’s opportunity for profit or loss. Additionally, the analysis would consider 3) the amount of skill required for the work, 4) the degree of permanence of the working relationship between the worker and the potential employer, and 5) whether the work is part of an integrated unit of production.

It is unknown whether the Department of Labor will propose a new rule in the future, but there have been indications that any new rule issued by the Biden administration is likely to narrow the test to make it harder to classify workers as independent contractors.

Employers in Massachusetts should be mindful that notwithstanding the analysis under federal law, state law provides a stricter test for determining whether a worker is properly classified as an independent contractor for most purposes. In Massachusetts, in order to treat a worker as an independent contractor, the employer must show all three of the following factors:

  1. The individual is free from control and direction in the performance of the work.
  2. The service is performed outside the usual course of the business of the employer.
  3. The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as the work performed.

Misclassification of workers as independent contractors may have significant legal consequences for employers. Should you have any questions regarding the proper classification of your workforce, please contact one of the attorneys in the Labor, Employment and Benefits Practice Group.

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Employer Tax Credits for Employee Paid Leave Due to COVID-19 Applies to Government Entities

The Internal Revenue Service (IRS) recently published guidance defining “Eligible Employer” for purposes of the American Rescue Plan Act of 2021 (ARPA) tax credits.    

Under ARPA, certain employers can claim refundable tax credits that reimburse them for the costs of providing additional paid sick and family leave to employees due to COVID-19. These tax credits are available to employers that pay for sick and family leave between April 1 and September 30, 2021. 

The recent guidance clarified that the tax credits apply to municipalities, school districts, public charter schools, and other government entities.

Specifically, the IRS guidance defines eligible employers to include, “… a governmental employer, other than the federal government and any agency or instrumentality of the federal government that is not an organization described in section 501(c)(1) of the Internal Revenue Code.”

In order to claim the tax credit, employers can report their total paid sick and family leave wages for each quarter on their federal employment tax return.  In preparation for receiving the tax credit, employers can keep the federal employment taxes that they otherwise would have deposited. These federal employment taxes include federal income tax withheld from employees, and both the employees’ share and the eligible employer’s share of Medicare taxes up to the maximum amount of credit available. Legally, the tax credit also applies to social security taxes. However, public employers in Massachusetts do not withhold social security taxes because of the State’s mandatory state retirement program.

If an employer does not have enough federal employment taxes set aside to cover the paid sick and family leave wages, employers can request an advance of the credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. The eligible employer will account for the amounts received as an advance when it files its Form 941, Employer’s Quarterly Federal Tax Return for the relevant quarter. 

If you have any questions regarding the ARPA tax credits, please do not hesitate to reach out to any member of Mirick O’Connell’s Labor, Employment, and Employee Benefits Group.

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COVID-19 Mandates in the Workplace

As we pass the one year anniversary of the COVID-19 Pandemic, new rules regarding COVID-19 mandates in the workplace are imminent. The Occupational Safety and Health Administration (“OSHA”) is preparing an Emergency Temporary Standard (the “Emergency Standard”) to better protect workers from the virus. The Emergency Standard could be released as early as this week, and take effect soon thereafter. Employers should be aware of the imminent release of the Emergency Standard and know what to expect from it.

Although certain areas of the country are relaxing their mask mandates, the Biden Administration is expected to reinstate masking and other social distancing rules within the workplace. Specifically, employers should anticipate a strict face-covering requirement for indoor workers. The Standard could also include a requirement to make sure employees have free access to the vaccines, by paying for their time and reimbursing their expenses. This requirement would conflict with the current advice from the Equal Employment Opportunity Commission (“EEOC”), so employers should expect the EEOC to clarify its advice following the official release of the standard.

The need for the Emergency Standard resulted from OSHA and its state counterparts receiving over 60,000 complaints about COVID-19 safety issues. Recently, the U.S. Department of Labor cited a Massachusetts employer for neglecting COVID-19 protocol safeguards. An inspection revealed that the owner of a Massachusetts tax preparation service prohibited her employees and customers from wearing masks, did not enforce social distancing, failed to provide adequate ventilation in the workplace, and failed to implement controls such as physical barriers, pre-shift screening of employees, enhanced cleaning, and other methods to reduce transmission of the virus. The business now faces $136,532 in penalties. 

Employers should be aware that, even before the official release of the Emergency Standard, they must comply with state regulations regarding COVID-19 safety in the workplace. OSHA can and will conduct inspections after receiving referrals of employers not following protocols. 

If you have any questions regarding the Emergency Temporary Standard or any other COVID-19 related workplace issues, please do not hesitate to reach out to any member of Mirick O’Connell’s Labor, Employment, and Employee Benefits Group.

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American Rescue Plan Act of 2021 and the anticipated Massachusetts COVID-19 Emergency Paid Leave

In lieu of our annual Employment Law Seminar, Mirick O’Connell’s Labor, Employment and Employee Benefits attorneys are hosting a Spring Webinar Series focusing on hot topics in employment law.

Attorney Kim Rozak and I presented the second program in the series last week. We covered the American Rescue Plan Act of 2021 and the anticipated Massachusetts COVID-19 Emergency Paid Leave.

In case you missed the program, or if you would like to watch it again, we are pleased to share the webinar recording.

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DOL Publishes Model Notices for COBRA Subsidies

As we previously reported, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA”) into law, which includes a COBRA premium assistance program. Pursuant to ARPA, the Department of Labor (DOL) was instructed to issue model notices regarding the six-month subsidy period, the extended election period, the alternative coverage option, and the expiration of premium assistance. On April 7, 2021, the DOL published those notices, as well as a summary and FAQs regarding the COBRA premium assistance program, all of which can be found at COBRA Premium Subsidy | U.S. Department of Labor (dol.gov). Employers should review this information closely. 

Among other things, the FAQs clarify that an employee who experiences any reduction in hours, including via temporary leave or a change from full-time to part-time status, is eligible for the COBRA subsidies. The FAQs also make clear that the subsidy is available for group health insurance coverage under comparable state continuation coverage laws like Massachusetts mini-COBRA, which applies to employers with between 2 to 19 employees.

Employers have until May 31, 2021 to provide these notices to any employee who lost healthcare coverage because of an involuntary termination or reduction in hours on or after November 1, 2019. If you have any questions regarding the new COBRA subsidy or any other COBRA-related issues, please do not hesitate to reach out to any member of Mirick O’Connell’s Labor, Employment and Employee Benefits Group.

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American Rescue Plan Act Contains COBRA Subsidies

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA” or the “Act”) into law. The Act creates a six-month subsidy period, from April 1, 2021 to September 30, 2021, during which individuals who lost health insurance coverage because of an involuntary termination or reduction in hours may qualify for a 100% subsidy for COBRA coverage.  

This subsidy has no income threshold, but an employee or family member who is or becomes eligible for other group health coverage or Medicare is not eligible.  The employee has the obligation to notify their employer if the employee is not eligible or loses eligibility for the subsidy.   The Act suspends an eligible individual’s obligation to make the required COBRA premium payments for up to six months. Instead, the employer, plan, or insurer will be required to pay the individual’s premium payments during that period. To offset this cost and recover the cost of the coverage, the employer, plan, or insurer may claim a credit against Medicare payroll taxes or receive a refund of overpayment for credit amounts which exceed payroll taxes.  

ARPA also creates an extended COBRA election period for those who previously declined COBRA coverage, or whose coverage was terminated because of non-payment of premiums.  Those individuals will now have sixty days after receipt of the new COBRA notice to elect COBRA coverage. Furthermore, COBRA elections within this 60-day period will be forward looking, not retroactive to the date coverage was lost. However, the Act does not extend COBRA coverage; any COBRA coverage will still expire eighteen months after health insurance coverage was lost, which could potentially occur during the subsidy period.   

The enactment of ARPA creates new obligations for employers. Employers must determine which of their employees lost health care coverage because of an involuntary termination or reduction in hours on or after November 1, 2019.  The Act also creates required notices regarding the availability of the subsidy, the extended election period for COBRA coverage, and a notice of the expiration of the subsidy.  Employers or their third-party COBRA administrators will be required to send such notices to each qualified employee by May 31, 2021.  Pursuant to the Act, the U.S. Department of Labor is also required to issue model notices by May 1, 2021, that employers and third-party plan administrators may use. Employers who use third-party COBRA administrators for COBRA administration should confirm that those administrators are sending the new required notices to employees and providing the information employers need to claim the payroll tax credit.   

If you have any questions regarding the new COBRA subsidy or any other COBRA-related issues, please do not hesitate to reach out to any member of Mirick O’Connell’s Labor, Employment, and Employee Benefits Law Group. 

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The American Rescue Plan and Paid Leave: What Employers Need to Know

On March 10, 2021, Congress passed the American Rescue Plan Act of 2021.  President Biden is expected to sign the Act into law by March 14, 2021. Employers are rightfully eager to learn whether the Act extends the Families First Coronavirus Response Act (the “FFCRA”).  The short answer is “no, but your voluntary policies should be updated.”  The longer answer is below.

As explained in a prior post, employer obligations under the FFCRA expired on December 31, 2020.  While employers were subsequently not obligated to provide FFCRA-eligible leave, Congress extended the tax credit for employers who voluntarily continued to provide such paid leave through March 31, 2021. 

The Act does not resurrect the FFCRA or impose upon employers an obligation to provide paid leave for COVID-19 related reasons.  However, the legislation extends the tax credit for voluntary provision of leave through September 30, 2021. The tax credit, however, is not available to government entities.

In addition, employers must be aware that the legislation:

  • Provides that the tax credits are available for paid sick leave for three additional following qualifying reasons:
    1. the employee is obtaining a COVID-19 vaccination;
    2. the employee is recovering from any injury, disability, illness or condition related to such vaccination; and
    3. the employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 as requested by the employer.
  • Adds a non-discrimination provision designed to encourage the uniform application of COVID-19 paid leave across an employer’s workforce.  Specifically, the provision provides that the tax credit is not available if the employer – in determining the availability of paid leave – discriminates in favor of highly compensated employees, full-time employees, or employees on the basis of their tenure with the employer.  
  • Re-sets the 10-day count for paid sick leave beginning April 1, 2021.  Accordingly, employers are eligible for a tax credit if they voluntarily provide employees an additional 10 days of FFCRA sick leave beginning on April 1, 2021.  

In light of the above, employers who elect to voluntarily provide paid leave should review and update their related policies to incorporate the new provisions and ensure that the application of voluntary leave does not violate the non-discrimination provision.  

In addition, while the Act does not extend the obligation of employers to provide paid COVID-related leave, employers must continue to watch for additional legislation regarding such leave from both the federal and state governments.  Indeed, we are closely monitoring proposed legislation in Massachusetts that could impose new paid leave requirements on employers.

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Massachusetts Federal Court Denies Motion to Dismiss Defamation Claim After Employee is Escorted Out of Work Following Termination

By: Jonathan Sigel, Esq. and Ashlyn Dowd, Esq.

The Federal District Court of Massachusetts recently denied a defendant company’s motion to dismiss a defamation claim following the termination of the company’s Vice President.  The plaintiff former employee, Sandra Madden, was terminated from Ascensus College Savings Recordkeeping Services (“Ascensus”) and subsequently filed suit alleging several claims such as breach of contract, violation of Federal Equal Pay Act, and gender discrimination.  ACS moved to dismiss the following claims for failure to state a claim upon which relief can be granted: (1) breach of contract, (2) breach of implied covenant of good faith and fair dealing, and (3) defamation.  The Court granted the motion to dismiss in part, but allowed the defamation claim to proceed.

Madden’s defamation claim was based on the way Ascensus treated her at the time of her discharge.  Specifically, after Ascensus informed her that she was being terminated, Ascensus personnel escorted her out of ACS’ offices in front of her co-workers and suspended her email access.  Madden alleged that her treatment in that regard was unusual and that no prior Vice President or President of Ascensus had ever been treated in that manner when they were terminated.  In her Complaint, Madden further alleged that the conduct was a “false statement” that “suggest[ed] that [she] had engaged in criminal activity” and “discredited her in a respectable class of the community.”

In denying the motion to dismiss, the Court emphasized that, under Massachusetts law, conduct alone can support a defamation claim, citing the cases Phelan v. May Dep’t Store Co., 443 Mass. 52 (2004) and Craig v. Merrimack Valley Hosp., 45 F. Supp. 3d 137 (D. Mass. 2014).  Because a plaintiff has a relatively low threshold to defeat a motion to dismiss (which is filed prior to the discovery process), Madden was only required to allege a plausible claim that third parties would have reasonably understood Ascensus’ conduct to be defamatory. Madden’s complaint included three allegations supporting her claim that being walked out of the building after she was terminated constituted defamatory conduct.  Thus, the Court denied Ascensus’ motion to dismiss her defamation claim.

The Court made it clear that its decision to allow the defamation claim to survive did not mean that Madden’s defamation claim would survive a motion for summary judgment (which is filed after discovery is completed), but that Madden had alleged sufficient facts regarding her defamation claim to survive a motion to dismiss that claim. So, what can employers learn from the court’s denial of Ascensus’ motion to dismiss Madden’s defamation claim?  The case and the court’s ruling provides employers with a cautionary tale about how employees should be treated when they are being discharged – even when the discharge itself is lawful.  When terminated employees are treated with dignity, respect and as much privacy as practicable, they often do not consider taking any legal action against their former employers.  However, as the Madden case reflects, when such employees are treated in a harsh, disrespectful or embarrassing manner, they frequently obtain legal counsel and pursue legal claims which can be extremely costly for the former employer – even if the company can ultimately prevail on the merits of the case.  Following the “golden rule” is the best approach – that is, management should treat such individuals the way management would want to be treated in similar circumstances.  While that may not guaranty that the terminated employee will not file a lawsuit, it will certainly help reduce the chances of that happening.

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EEOC Opinion Letter: Older Workers Benefit Protection Act (OWBPA)

On January 14, 2021, the Equal Employment Opportunity Commission (EEOC) finally issued an opinion letter addressing the long standing issue of whether information about non-U.S. citizen employees working outside of the United States must be included in the information disclosure to a covered individual as otherwise required by the Older Workers Benefit Protection Act (OWBPA).  The EEOC concluded that non-citizen information is not required to be included in the disclosures.

What is the ADEA and OWBPA?

The Age Discrimination in Employment Act of 1967 (ADEA) makes it “unlawful for an employer … [to] discriminate against any individual [at least 40 years of age] with respect to his [or her] compensation, terms, conditions, or privileges of employment, because of such individual’s age.” 29 U.S.C. §§ 623(a), 631(a).  The OWBPA, which imposed specific requirements for releases of ADEA claims, states that any waiver under the ADEA must be “knowing and voluntary.”  If a waiver is part of a group termination or exit incentive program, the employer must provide employees with a description of the “decisional unit” and the eligibility factors for inclusion in the program, the job titles and ages of all individuals within the decisional unit who were eligible for the program, and those within the decisional unit who were not selected.

The EEOC’s Opinion Letter

The Commission concluded that employers subject to the requirements of the ADEA are not required to include employees working outside the United States who are not U.S. citizens in OWBPA disclosures because such individuals are not “employees” for purposes of the ADEA. 

According to 29 U.S.C. § 626(f)(1)(H), only covered employees within the applicable “decisional unit” must be included in an OWBPA disclosure.  The ADEA does not protect non-U.S. citizens working for companies outside of the United States.

The EEOC further explained one of the main purposes of the OWBPA is to ensure covered employees are provided sufficient information to evaluate exit incentive or termination programs before waiving their rights under the ADEA.  If employers were to include non-covered employees in these OWBPA disclosures, it would likely mislead employees or “mask potentially unlawful discrimination”.

Further, employers may apply different selection criteria or eligibility requirements when administering the domestic and international components of a separation program.  The regulations provide that “[w]hen identifying the scope of the ‘class, unit, or group,’ and ‘job classification or organizational unit,’ an employer should consider its organizational structure and decision-making process.”  An employer may be required to offer different separation benefits to employees working in countries outside the United States to comply with the foreign country’s requirements governing separations.

The Commission Opinion Letter clarifies that employers are not required to include non-U.S. citizen international employees in the OWBPA disclosure, but if employers choose to voluntarily include non-U.S. citizen employees in the disclosures, they must make sure they do so without misleading other covered employees.

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