Phase 1 Reopening Requirements for 5/26/20

At 8:00 a.m. on May 26, Dane County will start Phase One of reopening under Forward Dane, (note 5/22/20 version updating 5/18/20 version). Public Health Madison and Dane County (PHMDC) have released Emergency Order #3 to coincide with Phase One. The order provides requirements for organizations as they gradually start to reopen. Emergency Order #3 is effective May 26 and will remain in effect until PHMDC determines that we can move into Phase Two.

Below is a summary outline of Emergency Order #3. Please note the following revisions to the previous emergency order:

  • Under Emergency Order #2, office, restaurant, bar, salon, store, gym, and other workspace capacity for Phase One had been “25% capacity,” but is now “25% of approved capacity.” Until we receive additional guidance from PHMDC, employers should check with their landlord or posted capacity for guidance on their “approved capacity” limits.
  • Forward Dane and Emergency Order #2 noted that employers must prepare workplace hygiene, cleaning and protective measure policies, and document employee receipt, acknowledgment or training. While the revised Forward Dane maintains the “or training,” Emergency Order #3 revised the language to state “document employee receipt, acknowledgment and training.” Given capacity and gathering restrictions, providing such training will be difficult, other than by virtual means.

As with Emergency Order #2, violations of Emergency Order #3 can be enforced by any law enforcement official and will be considered ordinance violations.

The attorneys and HR professionals at Lake Effect HR and Law can prepare a compliant workplace hygiene, cleaning, and protective measure policy. If you would like to schedule a meeting with us to prepare a customized policy for your organization, please contact us.

Please see Forward Dane and the accompanying legal requirements set forth in Emergency Order #3 for new details for your industry. Below is an outlined summary of Emergency Order #3.

Mass Gatherings

  • The following limited mass gathering are permitted so long as people maintain physical distancing of at least six feet
    • Inside a commercial facility with up to 50 people
    • Inside private property or a private home with up to 10 people
    • Outside with up to 50 people
  • Mass gatherings include concerts, festivals, sporting events, meetings, trainings, conferences, and religious services
  • These restrictions do not apply to drive-in movie theaters or other drive-in activities

Child Care, Education, Libraries, and Public Spaces

  • Childcare facilities must restrict groups and classrooms to no more than 15 children, and there can be no interaction between the groups or classrooms
  • K-12 schools remain closed for in-person instruction
  • Continuing education and higher education institutions may determine policies for safe operation, including how to safely open dorms and maintain physical distancing to the greatest extent possible
  • Public playgrounds and splash pads remain closed
  • Public courts and fields are open but people must maintain physical distancing

All Businesses, Libraries, Community Centers, and Religious Entities

  • Capacity must be limited to 25%
    • PHMDC previously indicated that each organization will use its best judgment to determine the appropriate metric for capacity. However, Emergency Order #3 limits capacity to “25% of approved capacity levels.” No guidance has been provided on this change. We will follow up with any guidance we receive.
  • Organizations must implement required policies, and document that your employees receive, acknowledge and are trained on these policies
    • Note that Emergency Order #2 required employers to document receipt, acknowledgment, or training on the required policies. The new Emergency Order #3 now requires employers to document all three: receipt, acknowledgment, and training.
    • The hygiene policy must
      • Ensure employees who have a fever or other symptoms of COVID-19 will not be allowed to work
      • Establish hand-washing expectations and ensure supplies are available to employees
      • Describe proper cough and sneeze etiquette
    • The cleaning policy must include guidelines for
      • Cleaning and disinfecting frequently touched surfaces multiple times a day
      • Frequently wiping down any shared equipment, such as work spaces, credit card machines, lunchroom items, carts, baskets, etc.
      • Cleaning common areas and equipment between use or shift changes
      • Cleaning and disinfecting in the event of a positive COVID-19 case on site
    • The protective measure policy must ensure
      • Individuals are at least six feet from others whenever possible
      • Employees are provided with and wear face coverings when unable to maintain at least 6 feet of distance from customers; however, if a transparent partition is in place, a face covering is recommended, but not required
  • Organizations must limit staff and customers on site, and continue to facilitate remote work to the greatest extent possible
    • To the greatest extent feasible, organizations should offer virtual services, hold virtual meetings, and/or alternate work teams or stagger shifts
  • When remote work is not possible, all organizations must:
    • Where possible, offer curbside pick-up and drop-off, and delivery
    • Where possible, provide a way for customers to pay, and make appointments and reservations online or over the phone
    • Cease door-to-door solicitation
    • Ensure physical distancing in waiting areas with appropriate spacing of chairs

Additional Industry Specific Requirements

  • Stores that sell food, groceries, and alcohol and non-alcoholic beverages must
    • Encourage pick-up and delivery options
    • Prohibit self-dispensing of bulk items and condiments, and sampling of food
    • Except for produce, prohibit any customer self-service of unpackaged food (e.g. salad bar, beverage station)
    • Limit dine-in capacity to 25% of approved seating levels; space tables at least six feet apart; and limit each table to no more than 6 guests, all of whom must live together
  • Restaurants and bars must
    • Encourage pick-up and delivery options
    • Prohibit any customer self-service of unpackaged food (e.g. salad bar, beverage station)
    • Prohibit self-dispensing of condiments, and sampling of food
    • Limit indoor dine-in capacity to 25% of approved seating limits; space tables at least six feet apart; and limit each table to no more than six guests, all of whom must live together
    • Space outdoor tables at least six feet apart; and limit each table to no more than 6 guests, all of whom must live together
    • Space bar stools at least six feet part
    • Close all play areas and lounge areas
  • Retail stores must
    • Limit the number of customers inside the business to no more than 25% of approved capacity levels
    • Offer at least two hours per week of dedicated shopping time for vulnerable individuals if your store is larger than 50,000 square feet
    • Establish lines outside to regulate entry, with markings so that customers can stand at least 6 feet apart; businesses should also consider alternatives such as allowing customers to wait in their cars for a text message or schedule specific times for entry
    • Prohibit sampling, including of food and any goods (e.g. make-up)
  • Malls may open but play areas and areas of congregation outside stores must be clearly marked as closed
  • Salons and spas (e.g. hair salons, day spas, barber shops, nail salons, waxing salons, tattoo parlors) must
    • Limit the number of customers to 25% of approved capacity (if capacity of four or less, 1 customer is permitted)
    • Space customer chairs, tables, and stations at least six feet apart
    • Provide services by appointment only
    • Require employees to wear face coverings at all times when customers are present
    • Require customers to wear face coverings to the greatest extent possible
  • Gyms and fitness centers must
    • Provide disinfecting materials for members to use on equipment
    • Limit the number of individuals on site (excluding employees) to 25% of approved capacity
    • Increase frequency of cleaning of equipment, common areas, locker rooms, and restrooms
    • Space equipment at least six feet apart to the extent possible
    • Use floor markings to indicate appropriate physical spacing, particularly in areas where people congregate or cluster
    • Offer group exercise classes only if physical distancing is maintained and there is no person-to-person contact
    • Prohibit all activities where physical distancing cannot be maintained
  • Places of amusement and activity must
    • Require payments and reservations only online or over the phone to the extent possible
    • Schedule events or the start of an activity (e.g. a tee time) to ensure physical distancing between all individuals who are not living together
    • Space seating, stations, or other areas to ensure at least at least at least six feet of physical distancing between individuals (individuals who live together are not required to be six feet apart)
    • Limit the number of individuals on site (excluding employees) to 25% of approved capacity
      • Outdoor venues (e.g. concerts) are limited to a maximum of 50 people (excluding employees)
    • Disinfect high touch areas (e.g. door handles, buttons) between each use (if this is not possible, the business may not open)
    • Disinfect all equipment between each use
  • Lodging facilities (e.g., hotels, campgrounds, AirBNB and VRBO rentals) must
    • Prohibit guests from congregating in lobbies or common areas
    • Implement cleaning protocols for guest rooms and common areas based on PHMDC guidelines
    • Provide personal protective equipment and training to housekeeping staff for proper handling of linens and cleaning/disinfecting supplies
    • Comply with all other guidelines, such as those that apply to restaurants bars, if applicable
  • Drive-In movie theaters and other drive-in activities must
    • Prohibit outdoor seating
    • Prohibit customers from leaving their car except to purchase or pick up food or drinks, or to use the restroom
    • Encourage pick-up and delivery of food and drinks, and prohibit any self-service of unpackaged food and self-dispensing of condiments

Other industries

  • Health care, public health, human services, infrastructure, manufacturing, and government operations are subject to limited restrictions under Emergency Order #3, namely these organizations must implement the required cleaning and hygiene policies, and comply with other applicable PHMDC requirements.

Leased Property

  • Landlords and rental property managers may enter leased residential properties if they are wearing face coverings and maintaining physical distancing

The Lake Effect team will continue to monitor important updates such as these from Dane County and other counties across the state. Please keep watching for blogs and emails from us for important legal updates and HR best practices. Contact us at info@le-hrlaw.com or 1-844-333-5253.

#bekind #staywell #grantgrace

For most of us, Memorial Day weekend has always served as the unofficial kick-off to the summer season, a long weekend spent with family and friends enjoying time together and creating memories. But the reality of life with COVID-19 has put many of these plans on hold and makes leaving the house feel like an act of bravery.

Over the past few months, the Lake Effect team has been sharing with you the latest government updates and guidance. Today, we would like to take a few moments to recognize the true meaning of Memorial Day and honor those who have lost their lives in active military service, a true act of bravery.

Next, we want to help you officially kick off the Summer of 2020 with some old school good vibrations! In March, when the reality of living in a world with COVID-19 became clear, our team came up with three phrases signifying how we wanted to face the uncertain times ahead:

  • Be Kind
  • Stay Well
  • Grant Grace

Be Kind: COVID-19 has impacted everyone in different ways. We will have good days and bad, but any act of kindness we can provide each other, even a stranger, goes a long way toward getting through these days together. This weekend, how can you make someone smile by sharing your kindness?

Stay Well: Not only should we monitor our temperatures, practice social distancing, and wash our hands frequently, but we should be mindful of our mental health as well. It is important that we stay aware of our current mental state, and care for ourselves and each other. There have been times when some of us had to take a personal” timeout,” and other times when we just needed to be there for each other (of course, via phone or Microsoft Teams). This weekend, soak up some sun, have an impromptu picnic with the family at one of our lovely parks, take advantage of the rain that is in the forecast and binge on Netflix all day, or make more bread – whatever fills your tank mentally and physically.

Grant Grace: The challenges we face today are many. For some, social distancing has led to feelings of isolation; for others, it has led to crowded homes with children home from school all day or college kids reluctantly returning home early; it has converted dining room tables or kitchen counters into unintended classrooms and home offices. We have cancelled weddings and graduations, and we have postponed memorials and funerals to say goodbye to loved ones. No matter how hard we try to stay strong, we are not perfect. This is a stressful time for all of us. Our quirks shine brighter than ever when we are stressed. Be gentle with yourself and with others. We’ll get through this together.

So, enjoy your holiday weekend in whatever form it takes. #bekind #staywell #grantgrace

OSHA reinstates normal reporting and investigation standards for COVID

On May 19, 2020, the Occupational Safety & Health Administration (OSHA) reversed an earlier enforcement policy for recording cases of COVID. As Lake Effect reported in April, OSHA had announced that it would not enforce its record-keeping requirements on employers to make COVID “work-relatedness” determinations, except when (1) there was objective evidence that an employee’s exposure to COVID-19 was work-related and (2) that evidence was reasonably available to the employer. At that time, OSHA noted that it may be difficult for employers to determine if an employee with COVID-19 contracted COVID-19 at work. Yesterday, OSHA revised that policy.

OSHA will now increase in-person worksite inspections and enforce COVID record-keeping requirements for all employers. Acknowledging the difficulty in determining where an employee may have contracted COVID, OSHA reminded employers that a case of COVID in the workplace is a recordable illness. Employers must record cases of COVID if all of the following are true:

  • An employee has a confirmed case of COVID-19;
  • The employee’s case of COVID is considered to be work-related*; and
  • The illness involves one or more of the recording criteria, including medical treatment beyond first aid or days away from work.

*Note that an illness is considered to be work-related “if an event or exposure in the work environment either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness. Work-relatedness is presumed for injuries and illnesses resulting from events or exposures occurring in the work environment” unless an exception applies.

Keep in mind that employers with 10 or fewer employees or in certain low hazard industries are exempt from OSHA reporting requirements unless the injury or illness results in hospitalization, amputation, or loss of an eye.

The legal and HR team at Lake Effect is closely monitoring the impact of COVID-19 on the workplace and will continue to provide our clients with updates as they are available. Please visit our COVID-19 resource page for all of our pandemic-related legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Dane County and Madison’s New Public Health Order

On May 18, Public Heath Madison and Dane County (PHMDC) issued Emergency Order #2 along with a guide for organizations to start planning a phased reopening under the Order, Forward Dane. We are currently in the Preparing for Safe Reopen Phase under Forward Dane and all individuals and organizations are required to follow the Emergency Order.

The Emergency Order is effective May 19 and will remain in effect until PHMDC determines that the outlined criteria to start Phase One toward reopening has been met. Note that no date is set for moving into Phase One. A new Emergency Order will be issued as Dane County moves into each new phase of the Forward Dane plan.

The Emergency Order and Forward Dane provide detailed requirements and guidance. Included below is an outline of the essential elements of each.

Emergency Order #2

Required Policies

Organizations must develop and distribute to employees the following written policies:

  • A hygiene policy that
    • Ensures employees who have a fever or other symptoms of COVID-19 will not be allowed to work
    • Establishes hand-washing expectations and ensures supplies are available to employees
    • Describes proper cough and sneeze etiquette
  • A cleaning policy that includes guidelines for
    • Cleaning and disinfecting frequently touched surfaces multiple times a day
    • Frequently wiping down any shared equipment, such as work spaces, credit card machines, lunchroom items, carts, baskets, etc.
    • Cleaning common areas and equipment between use or shift changes
    • Cleaning and disinfecting in the event of a positive COVID-19 case
  • A protective measure policy that ensures
    • Individuals are at least six feet from others whenever possible
    • Employees are provided with and wear face coverings when unable to maintain at least 6 feet of distance from customers; however, if a transparent partition is in place, a face covering is recommended, but not required
  • Employers must maintain documentation showing employees received, acknowledged, or were trained on these policies

All individuals are encouraged to continue staying stay at home and to maintain social distancing of at least 6 feet from any person unless you live together

  • All public and private gatherings are prohibited unless specifically permitted in the Emergency Order
  • Landlords may not enter rented residential premises unless emergency maintenance is required

Organizations must continue to follow Physical Distancing Requirements

  • Physical Distancing Requirements are defined as:
    • Maintaining physical distance of six feet between people
    • Washing hands with soap and water for at least 20 seconds as frequently as possible or using hand sanitizer
    • Covering coughs and sneezes
    • Regularly cleaning high-touch surfaces
    • Not shaking hands
    • Following all other PHMDC requirements
  • If Physical Distancing Requirements cannot be maintained, the organization must ensure that employees are provided with appropriate face coverings or protective shields
  • All organizations must avoid in person meetings to the greatest extent feasible, and no door-to-door solicitation is permitted

Essential Businesses and Operations

Essential Businesses and Operations that may remain open include Healthcare and Public Health Operations, Human Services Operations, Essential Infrastructure, Essential Governmental Functions, and the following businesses and operations:

  • Stores that sell groceries and medicine
  • Food and beverage production, transport, and agriculture
  • Restaurants but only for take-out or delivery service
  • Bars, breweries, distilleries, brewpubs, wineries, and alcohol beverage retailers but only for carryout or order pick-up
    • Wineries holding direct wine shippers’ permits may deliver wine
  • Childcare
    • Childcare and youth programming is limited to 50 children per program or per license
    • Childcare providers must prioritize care for (1) families working in health care and (2) families working in other vital areas
  • Organizations that provide charitable and social services
  • Weddings and funerals
    • Gatherings for weddings and funerals must be limited to 10 or fewer people in a room at any one time
    • Weddings and funerals that occur outside must comply with the Physical Distancing Requirements, unless the individuals live together
  • Religious entities
  • Funeral establishments
  • Media
  • Gas stations and businesses needed for transportation
  • Financial institutions and services
  • Hardware and supplies stores
  • Building and construction tradesmen and tradeswomen such as plumbers, fabricators, cleaning and janitorial staff for commercial and governmental properties, carpenters
  • Mail, post, shipping, logistics, delivery, and pick-up services
  • Laundry services
  • Suppliers of products to work from home
  • Suppliers for Essential Businesses and Operations and Essential Governmental Functions
  • Transportation such as airlines, taxis, car rental services
  • Home-based care and services for seniors, adults, children, or people with disabilities, substance abuse disorders, or mental illness, including caregivers or nannies who may travel to the child’s home to provide care, and other in-home services including meal delivery
  • Professional services such as legal, accounting, real estate, and insurance services
  • Manufacturing, distribution, and supply chain for critical products and industries
  • Critical labor union functions
  • Lodging including hotels, AirBNB, VRBO, motels, and campgrounds
    • Swimming pools, hot tubs, and exercise facilities must be closed
    • Guests may not be permitted to congregate in any common areas, and facility must comply with restrictions applicable to bars and restaurants where applicable
  • Higher education institution for the purposes of facilitating distance learning, performing critical research, or performing essential functions as determined by the institution
  • Auctions but only if necessary to preserve the value of property and the auction follows other requirements outlined in the Emergency Order
  • Any business or worker identified on the U.S. Department of Homeland Security, Cybersecurity & Infrastructure Security Agency List

Essential Businesses and Operations - Additional Requirements

In addition to complying with the Physical Distancing Requirements, Essential Businesses and Operations must also:

  • Restrict the number of workers on premises to no more than necessary
  • Increase standards of facility cleaning and disinfection, following guidance from PHMDC, the Department of Health Services, and the Centers for Disease Control and Prevention
  • Adopt policies to prevent workers from entering the premises if they have respiratory symptoms or have had contact with a person with a confirmed diagnosis of COVID-19

Non-Essential Businesses May Open for Minimum Basic Operations

Minimum Basic Operations include:

  • Basic functions, such as the minimum basic activities to maintain the value of inventory; preserve condition of the physical space and equipment; ensure security; process payroll and benefits; and related functions
    • Staffing must be limited to the minimum number of staff required
  • Preparation to open, including purchasing and stocking supplies, cleaning, and complying with PHMDC’s guidelines
    • Staffing must be limited to the minimum number of staff required
  • Facilitating remote work
  • Delivery and mailings, including of non-essential items but only under specified conditions
  • Curb-side pick-up and drop off
    • Services and items must be paid for online or by phone, and signatures cannot be required
    • The pick-up or drop off must be scheduled in advance to ensure compliance with Physical Distancing Requirements
  • In-person retail
    • Standalone or strip mall retail stores with an entrance to the outside may allow up to five customers at a time in the store
    • Retails shops must create a space for a line to form with markings six feet apart, or allow customers to wait in their cars for entry
  • Outdoor recreational rentals
    • Payment must be made online or by phone
    • Pick up and drop off must be scheduled in advance
  • Automatic and self-service car washes
    • High-touch surfaces must be cleaned between each use if feasible, or at least as frequently as possible
  • Arts and craft stores may offer curb-side pick-up, and may allow the minimum number of staff necessary in the store to make personal protective equipment (PPE)
  • Aesthetic or optional exterior residential construction and lawn care, so long as Physical Distancing Requirements are maintained
    • Aesthetic or optional interior work is not permitted

Facilities That are Closed or May Open with Restrictions

  • Schools are closed for all in-person instruction
  • Libraries are closed except for certain limited functions
  • Indoor and outdoor places of public amusement (including amusement parks, pools, water parks, splash pads, zoos, museum, arcades, parades, playgrounds, movie theaters, gyms, fitness centers, concert halls) are closed except to perform Minimum Basic Operations
    • Golf courses, disc golf ranges, tennis courts, and drive-in theatres may open under specified restrictions
  • Salons and spas (including spas, hair salons, barber shops, nail salons, waxing salons, tattoo parlors) may not provide any services to customers but can sell goods and perform Minimum Basic Operations

Forward Dane

PHMDC’s Forward Dane plan provides guidance on a gradual, phased reopening in Dane County broken down by industries. We are currently in the “Prepare for Safe Reopen” phase and subject to Emergency Order #2 outlined above. But if nine public health metrics are met, Dane County will move into Phase One, Phase Two, Phase Three, then full operations under a new normal can begin. Each phase will last for at least two weeks.

In general, each phase allows organizations to gradually open to a larger “capacity.” For example, in Phase One, gyms may open to 25% capacity; in Phase Two, 50% capacity; in Phase Three, 75% capacity. PHMDC has not defined capacity, and as of today’s date, does not plan to do so. Instead, each organization will use its best judgment to determine the appropriate metric for capacity. It may be the building code establish by your city or it could be an average number of customers or employees who would be at the worksite under normal, non-pandemic circumstances.

Forward Dane also outlines expectations and responsibilities of the community. The responsibilities of the business community include:

  • Protecting the health and safety of employees and customers
  • Developing flexible sick leave policies and creating a culture in which employees can stay home when they are sick
  • Monitoring staff for symptoms and working with local public health if an employee is diagnosed with COVID-19 or is a known contact to someone with COVID-19
  • Implementing infection control policies, such as disinfecting surfaces frequently, keeping both employees and customers 6 feet apart from others, and other prevention measures
  • Communicating to management, staff, and customers the importance of following prevention measures in order to prevent future outbreaks

The Lake Effect team will continue to monitor important updates such as these from Dane County and other counties across the state. Please keep watching for blogs and emails from us for important legal updates and HR best practices. Contact us at info@le-hrlaw.com or 1-844-333-5253.

SBA and Treasury Release PPP Loan Forgiveness Application

On May 15, 2020, the Small Business Administration (“SBA”), in consultation with the Department of the Treasury, released the PPP Loan Forgiveness Application and related forms and instructions. The application and forms instruct borrowers how to calculate and apply for loan forgiveness and specify the supporting documentation to be submitted to lenders. Key aspects of the application and instructions include the following:

  • Borrowers must calculate payroll costs over the course of a single, consecutive eight-week period, but they may choose to include those costs either:
    • During the “Covered Period,” which begins on the PPP loan disbursement date and ends 56 days later; or
    • During an “Alternative Covered Period,” which begins on the first day of the borrower’s regular pay period following the PPP loan disbursement date and ends 56 days later.
  • Borrowers may include eligible payroll and nonpayroll costs paid or incurred during the Covered Period or the Alternative Covered Period, as long as costs incurred during the period are paid by the next regular billing date, and any eligible cost is only counted once.
  • PPP loan forgiveness conditioned upon borrower’s retention of the same number of Full Time Equivalent (“FTE”) employees will not be reduced if:
    • Borrower meets the requirements of the FTE Reduction Safe Harbor by restoring FTE levels by no later than June 30, 2020; or
    • With respect to any position for which the Borrower made a good-faith, written offer to rehire an employee during the Covered Period or Alternative Covered Period which was rejected by the employee; or
    • With respect to any FTE employee who, during the Covered Period or Alternative Covered Period, was fired for cause, voluntarily resigned, or voluntarily requested and received a reduction in hours.
  • Borrowers must submit to their lender detailed documentation including bank account statements or payroll service provider reports, payroll tax forms, payment receipts documenting contributions to health insurance and other benefits, and documents supporting nonpayroll expenses such as mortgage interest payments, rent or lease payments and utility payments.
  • Borrowers must retain, but are not required to submit to their lender, all records relating to the PPP loan and forgiveness applications for 6 years after the date that the loan is forgiven or repaid in full.
  • There is specific guidance on calculating “Average FTE” from employees who work less than 40 hours/week (See Table Instructions of Schedule A Worksheet), reducing the amount of forgiveness by the amount of EIDL Advance (See line 11 of the Calculation Form), and limiting at eight weeks’ worth of 2019 compensation the amount of owner-employee’s or self-employed individual/general partner’s income, capped at $15,385 per person (See item 1 of the Representations and Certifications).

The PPP Loan Forgiveness Application is detailed and requires a substantial amount of specific, supporting documentation. Therefore, employers should work closely with their lenders, accountants, payroll providers, and tax advisors to ensure that the process is completed thoroughly and accurately.

The legal and HR team at Lake Effect is closely monitoring the impact of COVID-19 on the workplace and will continue to provide our clients with updates as they are available. Please visit our COVID-19 resource page for all of our pandemic-related legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

IRS Increases Flexibility for Employer Health Plans, FSAs and Dependent Care Programs

On May 13, 2020, the IRS released new guidance giving employers greater flexibility in the administration of sponsored Sec. 125 cafeteria plans (including health insurance, flexible spending and dependent care plans), whether insured or self-insured. Under the new rules, an employer may amend plan documents to permit employees to make new health care elections or change current elections mid-year on a prospective basis (outside of the customary open enrollment period). An employer may also give employees more time to apply unused medical flexible spending and dependent care account dollars, recognizing that cancellation of medical procedures and school/day care closures during the pandemic have dramatically affected employee balances in these accounts.

Under the new guidance, employers may permit eligible employees covered by a Sec. 125 cafeteria plan to do the following:

  • Employer Sponsored Health Plans:
    • Allow employees to enroll in health care insurance plan on a prospective basis, even if the employee initially declined to elect coverage under the employer-sponsored health coverage.
    • Revoke an existing election and make a new election to enroll in different coverage sponsored by the same employer on a prospective basis.
    • Revoke an existing election, provided that the employee attests in writing that they are enrolled, or will immediately enroll, in other health coverage not sponsored by the employer. (The guidance provides a sample attestation.)
  • Medical Flexible Spending Plans and Dependent Care Spending Plans:
    • Revoke an election, make a new election, or decrease or increase an existing election applicable to a health flexible savings account or dependent care assistance program. (Employers can limit the election changes to be no less than amounts already reimbursed to the employee.)
    • Revise their plans to provide options for employees who have unused amounts at the end of the 2020 calendar year in one of two ways:
      • Grace Period: Allows plan participants to incur expenses and use the remaining funds in the account no later than March 15, 2021.
      • Carry over: Allows plan participants to carry over amounts up to $550 into their plan for the 2021 year.
      • Note: An employer would need to choose either the Grace Period or the Carry Over option, they cannot do both.

Keep in mind that the increased flexibility allowed by the new IRS guidance is optional, not required. To implement any of the above changes, an employer must adopt amendment(s) to applicable Sec. 125 cafeteria plans on or before December 31, 2021, and those amendments may be effective retroactively to January 1, 2020. The employer must also inform all eligible employees of any changes to the Sec. 125 cafeteria plans. Employers should work closely with their benefits brokers and health plan providers to make any of these changes.

The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

DWD’s Work-Share Program: Another Option to Avoid Layoffs

As employers evaluate options to address the impact of COVID-19 on their organizations, Wisconsin’s Department of Workforce Development (DWD) is encouraging participation in its Work-Share Program.

The Work-Share Program is designed to help employers avoid layoffs of at least two employees by reducing employees’ hours during slow business periods of up to six months. The state has adopted legislation relaxing some of the program’s requirements to make it more accessible for employers during the pandemic. Through December 31, 2020, the thresholds for work-share plans have been simplified and lowered, as follows:

  1. the plans are no longer restricted to a particular work unit;
  2. the plans normally apply to the greater of 20 positions or 10% of the employees in a work unit, but now the plans may cover at least two employees; and
  3. the participating employees’ reductions in hours previously could not exceed 50%, but now the participating employees’ hours may be reduced by 10-60%.

The intent of the program is to keep employees working and covered on employee benefit plans, while also allowing them to receive unemployment benefits. Participating employees are eligible for state and federal unemployment benefits, including employees earning more than $500/week from any employer/s who would otherwise be ineligible for unemployment. In addition, employers are required to maintain the participating employees’ health insurance coverage and coverage under any defined benefit or defined contribution retirement plan under the same terms and conditions that applied before participation in the work-share plan.

To participate, employers must submit an application to the DWD. The application must outline, among other things, information about the employees who will participate in the plan and the reduction in the employees’ hours. DWD has dedicated staff to handle questions about the Work-Share Program and is expediting the review of work-share applications.

The legal and HR team at Lake Effect is closely monitoring the impact of COVID-19 on the workplace and will continue to provide updates as they are available. Check out our COVID-19 resource page for all of our pandemic-related legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Evers Administration Releases Specific Guidance to Prepare for Reopening

On May 8, 2020, the Evers administration released specific guidance on “turning the dial” toward reopening. The guidelines cover such issues as employee health and hygiene; social distancing and other protective measures in the workplace; cleaning and disinfection practices; physical distancing of employees and equipment; employee training, support and communication; and customer/public health and safety considerations. There is general guidance for all organizations to follow, as well as specific guidance for the following industries:

The legal and HR team at Lake Effect is closely monitoring the impact of COVID-19 on the workplace. Please keep watching for blogs and emails from your Lake Effect team for important legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

EEOC Updates ADA Accommodations and EEO Reporting

On May 7, 2020, the EEOC updated an existing technical assistance publication, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and other EEO Laws.” New questions and answers on “Return to Work” address an employer’s obligations to accommodate employees with underlying medical conditions as they begin to return to the workplace during the ongoing COVID-19 pandemic. The EEOC also provided updated guidance on EEO reporting.

The new guidance confirms that if an employee has a medical condition that may create a higher risk for severe illness from COVID-19 (as identified by the CDC) and is in need of a reasonable accommodation, the employee must inform their employer either verbally or in writing about the medical condition and the potential need for an accommodation. The employer may then ask questions or seek medical documentation to determine whether the employee has a disability that can be reasonably accommodated without undue hardship. Notably, if an employee does not request an accommodation, the employer is not required to take action. If the employer knows and is concerned that an employee has a medical condition that increases the risk of severe illness from COVID-19 (as identified by the CDC), the employer may not exclude that employee from the workplace or take any other adverse action solely on that basis unless (1) the employee’s disability poses a “direct threat” to their health that (2) cannot be eliminated or reduced by reasonable accommodation.

The ADA “direct threat” requirement is a high, fact-specific standard. The direct threat assessment may not be based solely on a condition being on the CDC’s list; rather, an employer must make an individualized assessment based upon a reasonable medical judgment about the employee’s specific disability. In most cases, the employer will have to consider such factors as: the severity of the pandemic in the geographic area of the worksite; employee’s specific health condition; the employee’s job duties; likelihood of exposure to the virus at the worksite; and measures being taken by the employer to protect all workers.

Even if an employer determines that an employee’s disability poses a direct threat to the employee’s own health, the employer still cannot exclude or take adverse action against the employee unless there is no way to provide a reasonable accommodation absent undue hardship to the employer. Potential reasonable accommodations may include: providing enhanced protective gear or equipment; erecting protective barriers in the workplace; eliminating marginal functions; and temporarily modifying an employee’s work location or schedule.

This means that an employer may only bar such an employee from the workplace if, after going through all necessary steps and considering all potential accommodations, the facts demonstrate that the employee poses a significant risk of substantial harm to herself that cannot be eliminated by reasonable accommodation.

In a separate action today, the EEOC announced that it will delay collection of 2019 and 2020 EEO-1 (Employer Information Report), 2020 EEO-3 (Local Report) and 2020 EEO-5 (Elementary-Secondary Staff Information Report) due to the COVID-19 public health emergency. The EEOC expects to begin collecting 2019 and 2020 EEO-1 reports in March 2021, and it expects to begin collecting 2020 EEO-3 and EEO-5 reports in January 2021. The EEOC will notify filers of the precise dates the surveys will open as soon as those dates are available.

The legal and HR team at Lake Effect is closely monitoring the continuing impact of COVID-19 on the workplace and will continue to provide timely updates. Please visit our COVID-19 resource page for all of our pandemic-related legal updates and HR best practices. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Updated Cobra Forms

On May 4, 2020, the Department of Labor and the Internal Revenue Service jointly provided updates to the notification and elections deadlines set forth in the Consolidated Omnibus Budget Reconciliation Act (COBRA) intended to protect the participants and beneficiaries in employee benefit plans during the National Emergency caused by the COVID-19 pandemic. The final rule, effective immediately, includes the following:

New “Outbreak Period” defined: The final rule defines a new “Outbreak Period” as the period from March 1, 2020 until 60 days after the end of the declared National Emergency. Note that the Trump Administration has not yet specified the end date of the National Emergency. Thus, we do not yet know when the Outbreak Period will end.

COBRA elections period extended: Normally, after a qualifying event (i.e. employment termination, reduction in hours, or other loss of coverage), employees have 60 days after receipt of a COBRA Election Notice to elect COBRA coverage. Under the new rule, employees will have until 60 days after the end of the Outbreak Period to elect COBRA coverage and return the form to the employer. Again, since we do not know the end of the Outbreak Period, we do not know when the 60-day extension ends.

Deadline to pay COBRA premiums extended: Normally, employees have a grace period of 45 days after making their COBRA election for their initial COBRA premium payment and a grace period of 30 days each month to pay their COBRA premiums for each subsequent month of COBRA coverage. Under the new rule, employees will have 45 days following their COBRA election, which is extended as noted above. Furthermore, for any COBRA premiums due during the Outbreak Period, employees will have 30 days following the end of the Outbreak Period to make catch-up payments (i.e. payments for at least March, April and May). Again, since we do not know the end of the Outbreak Period, we do not know when the 30-day extension ends.

For COBRA notices that have been sent out since March 2020, employers should communicate the new extended deadlines to all recipients. This can be done by a simple letter to the address of record for each employee. Employers should also consider supplementing or modifying COBRA notices provided to employees between May 4 and the end of the Outbreak Period to reflect the revised deadlines set forth in the new final rule.

Employers can download the updated forms in Word format on this page by clicking on the appropriate icons. The new language is highlighted in yellow and areas to be customized are highlighted in green. Employers will then need to insert information about their benefits plan/s, premium/s, COBRA deadlines, and COBRA administrator. Alternatively, the attorneys and HR professionals at Lake Effect HR & Law can help you tailor the forms for your organization. We can also assist and advise on overall COBRA administration.

The attorneys and HR professionals at Lake Effect HR & Law can help you draft the employee communication or update the COBRA forms for your organization. We recognize the administrative struggles this will present for your COBRA administrator and your health plan. Our team is also available to assist and advise on this COBRA administration.

Lake Effect HR & Law, LLC
(844) 333-5253 (LAKE)
info@le-hrlaw.com

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