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Archive for the ‘Coronavirus – Employment Law Blog’ Category

The Third Round Of COVID-19 Relief And How It Could Impact Employers

Posted on: March 19th, 2021

By: Bill Catto and Brittany Kurtz

While most Americans are checking their bank accounts for a stimulus check, employers should be aware of the extensions and expansions of the latest COVID-19 legislation allowing for additional tax credits for voluntarily providing COVID-19 paid sick and family leave.

On March 11, 2021, the President signed the American Rescue Plan Act into law and with it extended potential tax credit for employers. The 2021 Consolidated Appropriations Act (CAA) gave employers the option to decide whether their company would provide paid leave, which was originally mandated under the Families First Coronavirus Response Act (FFCRA) and expired December 31, 2020.  The American Rescue Plan Act extends CAA’s voluntary decision allowing employers to offer paid leave and receive tax credits for employees leave between March 31, 2021 and September 30, 2021. In addition to providing paid sick and family leave related to COVID-19 symptoms, the American Rescue Plan Act expands qualifying reasons for leave, including receiving immunization related to COVID-19 and recovering from any injury, disability, illness or condition related to receiving that vaccination. The latest law also allows tax credit for paid leave when an employee is seeking or awaiting the result of a diagnostic test or medical diagnosis for COVID-19 or if their employer has requested such a test or diagnosis.

In addition to the expansion for potential voluntary tax credits to the employer, the American Rescue Plan Act includes non-discrimination language and disqualification for receiving the credits should an employer discriminate and withhold paid leave to its employees based upon compensation level, full-time employee status or employees on the basis of tenure with the company. Employers must uniformly provide paid sick and family leave related to COVID-19 symptoms, testing and immunization to all employees to be eligible for the associated tax credits. The Act calls for an all or nothing approach as it relates to the paid leave and receipt of tax credits.

Another potential tax credit for employers includes voluntarily providing an additional ten (10) days of FFCRA paid sick leave beginning April 1, 2021. While employers are not required to provide the additional ten (10) days, they would be eligible for additional credits by doing so.

The American Rescue Plan Act provides voluntary tax credits for employers. However, they should remain on alert for new legislation focused on mandating additional protections for employees related to COVID-19 as referenced during the campaign of the current Administration.

For more information, please contact Bill Catto at [email protected].

Should Employees’ Workplace Exposure to COVID-19 Lead to Liability of Employers to Families and Others? The Northern District of California Says “No.”

Posted on: February 25th, 2021

By: Jennifer Markowski, R. Victoria Fuller and Kevin Kenneally

A year into the pandemic, the legal landscape facing employers arising out of the COVID-19 continues evolving. In a recent federal case in California, the Court was asked to consider whether employers could be held liable to family members and others who contract COVID-19 from employees infected in the workplace. In Kuciemba et al v. Victory Woodworks, Inc., 3:20-cv-09355-JCS (N.D. Cal. 2020), the plaintiffs allege that the husband’s employer is liable to the wife for physical injury caused by her COVID-19 infection and subsequent hospitalization. Although the husband’s claim for occupational exposure to COVID-19 is unquestionably prohibited by the workers’ compensation exclusivity bar, the question presented in Kuciemba was whether the wife’s claims were similarly barred.   

The employer raised solid arguments that a family member cannot recover for derivative claims arising from the worker’s occupational injury or illness. More specifically, in its motion to dismiss, the employer analogizes the wife’s claims to a spousal claim for negligent infliction of distress, which the California Court of Appeals had previously held was prohibited by the exclusivity bar because it was derivative of the employee’s work-related injury.

The plaintiff, on the other hand, argued that the injury at issue was not derivative of the spouse’s occupational injury, but instead the illness from COVID-19 is a separate, direct injury caused by negligence of the defendant company in protocols in the workplace that exposed her and others to harm and is therefore not barred by the workers compensation laws. The plaintiff also argued that established California law recognizes a duty on the part of employers to protect employees’ families from workplace exposure to pathogens.  The plaintiff relied on precedent in which a daughter was permitted to assert a claim against an employer for physical injury from exposure to carbon monoxide caused by her mother’s occupational exposure while pregnant with the daughter. The plaintiff also analogized the employer’s liability to household members to prevent COVID-19 infection to recognized causes of action in other toxic tort claims. For instance, it is a frequently-litigated claim in asbestos matters whether a workplace exercised reasonable care to prevent transmission of asbestos to an employee’s household members, often by asbestos fibers on work clothes brought home to be laundered, which is an actionable claim recognized by the California Supreme Court.

The U.S. District Court for the Northern District of California, however, decided this week that the wife’s claims are barred by the workers’ compensation statute’s exclusivity provision.

Given the endless opportunities for exposure to COVID-19 from employees to family members, similar suits are likely to follow in other jurisdictions.  As vaccines are becoming available to certain sectors of the workforce, employers should continue to ensure that they are appropriately following and enforcing all applicable federal, state, and local health and safety guidelines and determine if mandatory vaccination programs are advisable for its workforce.  If a court should decide that the workers’ compensation exclusivity bar is not applicable to such claims by family members and others, it could lead to wide-ranging exposure for an employer to civil litigation and possible tort liability to claimants who never entered the business premises. 

If you have questions or would like more information, please contact Jennifer Markowski at [email protected], R. Victoria Fuller at [email protected], Kevin Kenneally at [email protected].

Additional Information:

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement. We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you. We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

A Mandatory COVID-19 Vaccination Program in the Workplace: Will It Open An Employer To Liability?

Posted on: January 29th, 2021

By: Kevin G. Kenneally and Janet R. Barringer

With the development of vaccines that have been determined to be effective against COVID-19, both employers and employees are asking when it is appropriate or safe to return to the office. One recurring question is whether a business can require its workers to be vaccinated in order to return to work. While there is much recent written guidance suggesting that the employer can require employees to be vaccinated, there remain questions about the potential legal liability of a business either for requiring or failing to require employees to undergo vaccination. For this reason, some employers—other than those in the health care or on the frontlines fighting this scourge– believe the preferred path to take might be encouraging – rather than mandating – the vaccine for its employees.

The Equal Employment Opportunity Commission (EEOC) issued guidance in December 2020, located on its website at www.eeoc.gov, that employers can mandate that employees receive COVID-19 vaccinations. Employers who require the vaccine, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 (Title VII) and other federal and state workplace laws. Federal employment laws require employers to make exceptions to any mandatory vaccination policy, including under the ADA, which protects employees with disabilities who may be vulnerable to side effects, and Title VII, which protects any employee with sincerely held religious beliefs that prevent the employee from receiving the vaccination.

The ADA allows an employer to include as a workplace policy “a requirement that an individual shall not pose a direct threat to the health or safety of individuals in the workplace” which permits a mandatory vaccine policy.  If an employer’s vaccination requirement impacts a worker with a disability, however, the employer must show that unvaccinated disabled employee would pose a “direct threat” due to a “significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.”  The EEOC has said employers should evaluate four factors to determine whether a “direct threat” exists: 1) the duration of the risk; 2) the nature and severity of the potential harm; 3) the likelihood that the potential harm will occur; and 4) the imminence of the potential harm. If an employee who cannot be vaccinated poses a “direct threat” to the workplace, the employer must consider whether a reasonable accommodation can be made, such as allowing the employee to work remotely or take a leave of absence.

There are two exceptions where disability-related screening questions can be asked without satisfying the “job-related and consistent with business necessity” requirement.  First, if an employer has offered a vaccination to employees on a voluntary basis, the ADA requires the employee’s decision to answer pre-screening disability-related questions to also be voluntary.  If an employee chooses not to answer these questions, the employer may decline to administer the vaccine and may not retaliate against the employee for refusing to answer any questions. Second, if an employee receives an employer-required vaccination from a third party that does not have a contract with the employer, such as a pharmacy or other health care provider, the ADA “job-related and consistent with business necessity” restrictions on disability-related inquiries would not apply to the pre-vaccination medical screening questions. 

FMGlaw BlogLine previously discussed the vaccine manufacturers’ immunity from products liability suits conferred by federal law for illness, injury or complications caused by the vaccine. An employer, however, may find itself liable for an employee’s injury resulting from a mandatory vaccine, which could be considered a workplace injury under state workers compensation laws. Such injuries and illnesses resulting from required vaccines may be covered by the employer’s workers’ compensation insurance. Employers considering a mandatory vaccination program should check with their broker or business insurance provider to determine whether there is coverage.

Employers that choose not to require employee vaccinations separately may find themselves liable to customers or vendors exposed to COVID-19 at a business that could have been prevented by a vaccination program. Depending on the business and the nature of interaction with the public, a vaccination program may be advisable.

If vaccination is mandatory for employees, the business could encounter wrongful termination or other legal issues when the requirement is enforced in the workplace. Adverse action, such as termination, change of shifts or hours, demotions or transfers involving workers who refuse the COVID-19 vaccine could expose the company to litigation. Thus, many businesses and employers may opt to encourage employees to be immunized rather than implement company-wide mandatory vaccination programs.  The EEOC, for example, previously suggested such a voluntary approach for the seasonal flu vaccine in certain instances: “Generally, ADA-covered employers should consider simply encouraging employees to get the influenza vaccine rather than requiring them to take it.”  Such encouragement – as opposed to a workplace-wide requirement – might be prudent for some employers for the COVID-19 vaccine. Many employers may opt to encourage their workers to obtain the COVID-19 vaccine, including by offering the following: make the vaccine readily available to the employees, cover the cost of the vaccine, provide workplace incentives to those who receive the vaccine, and pay for time off to obtain the vaccine.

Employers need to strike the proper balance during the pandemic and when assessing the competing objectives of protecting employees’ rights under the ADA and freedom of religion, limiting their own exposure to legal liability, and protecting employees and customers from the COVID-19 virus.

If you have questions or would like more information, please contact Kevin G. Kenneally at [email protected], Janet R. Barringer at [email protected].

PPP is Back with Second Draws and Favorable Tax Treatment

Posted on: December 22nd, 2020

By: Justin Boron

The Paycheck Protection Program is set to return in 2021. 

As part of the $900 billion COVID-19 relief bill passed yesterday, Congress renewed the popular small business relief program administered by the Small Business Administration to allow certain qualifying businesses to take out a second draw on their forgivable loan, re-opened PPP to first-time borrowers that qualify, and set tax law to allow businesses to take advantage of tax deductions associated with PPP-funded expenses.

To qualify for a second draw loan, the business must have 300 or fewer employees, exhaust their current loan proceeds before the second loan is issued, and show a 25 percent decline in gross receipts in any 2020 quarter compared to the same quarter in 2019.  These are new requirements that apply only to second loans.

The loan comes with some of the same conditions as the PPP loans issued in the first two rounds of funding in 2020—such as requirement that 60 percent of the funds be spent on payroll.  But it also eliminated a disfavored IRS ruling that effectively diminished the value of forgiveness by prohibiting deductions for expenses using PPP funds.  The new provision expressly states that the forgiveness amount will not be treated as income and the expenses may be deducted.

Additionally, the new law expands the list of forgivable expenses to include certain personal protective equipment needed to comply with federal COVID-19 guidelines, certain operations expenses such as HR and payroll accounting software, and certain property damage costs caused by public disturbances in 2020.

The amount of the loan will remain the same—2.5 times the business’s average monthly payroll costs in the year prior to the loan or the calendar year—unless the business has a NAICS code beginning with 72, such as restaurant and hospitality businesses.  Congress upped their loan amount to 3.5 times the monthly payroll cost calculation.  But it lowered the cap on all loans to $2 million.

The new law also opened forgivable loans up to 501(c)(6) organizations, such as chambers of commerce or certain industry associations as long as they don’t exceed certain lobbying activities.

It will take some time for the SBA to be set up for new loan applications.  But the law requires it to issue regulations within 10 days after the legislation is signed into law.

FMG’s Coronavirus Task Force is reviewing the entire stimulus bill passed by Congress to advise clients on the benefits and obligations it creates. Please check back for additional posts on this topic.

If you have questions or would like more information, please contact Justin Boron at [email protected].

Additional Information:

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement. We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you. We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

CDC Issues Relaxed Alternatives to Previous Quarantine Guidelines

Posted on: December 2nd, 2020

By: Margot Parker

Today, the Centers for Disease Control and Prevention (CDC) announced new quarantine guidelines for people exposed to Covid-19, reducing the previous two-week quarantine time to seven to ten days in asymptomatic cases.

While a 14-day quarantine is still “the best way to reduce the risk of spreading Covid-19,” the CDC said it is approving “two acceptable alternatives.” First, if a person has not developed any symptoms, their quarantine can end ten days after being exposed to the virus. Further, if the asymptomatic person tests negative for the coronavirus, quarantine can end even sooner at seven days. The CDC notes the sample for the negative test result should be collected within 48 hours of the final quarantine day. 

The CDC’s quarantine recommendations apply to those deemed “close contacts” of Covid-19 patients, defined as someone “who was within 6 feet of an infected person for a cumulative total of 15 minutes or more over a 24-hour period starting from 2 days before illness onset” or who received a positive test result.

The new guidelines are based on CDC models showing a minimal one to five percent risk of spreading the virus to others using seven to ten-day quarantine periods in asymptomatic people. Public health officials believe the shortened alternatives may promote greater compliance among the public while reducing the economic and public health burden caused by a longer quarantine. 

Notably, local health officials can adjust the CDC’s recommendations to fit the situations of their jurisdictions, and the CDC encourages people to monitor their own symptoms for a full 14 days after exposure, regardless of the length of quarantine. 

If you have questions or would like more information, please contact Margot Parker at [email protected].

Additional Information:

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**