DOL Issues Final Rule on Independent Contractor Status under FLSA

On January 6, 2021, the US Department of Labor announced a final rule establishing the test for whether a worker will be classified as an independent contractor or an employee under the Fair Labor Standards Act (“FLSA”). The final rule adopts the “economic reality” test, which was set forth in the DOL’s proposed rule published in September 2020. Under that test, the two core factors are the nature and degree of control over the work and the worker’s opportunity for profit or loss. For a full discussion of that test, these key factors, and other relevant considerations, please review Lake Effect’s September 22, 2020 blog on the DOL’s proposed rule. The final rule also reiterates that the actual practice of the employer and the worker will govern the inquiry, not contractual language or theoretical possibilities.

The final rule will be published in the Federal Register on January 7, 2021 and take effect on March 8, 2021.

Keep in mind that DOL’s final rule is unlikely to fully resolve this challenging issue for most employers. Many states have adopted their own tests for independent contractor status, and these can vary widely from state-to-state, and even within a state, depending upon the issue being addressed (i.e., unemployment eligibility, wage and hour, tax liability). Lake Effect continues to monitor federal and state laws and guidance relating to independent contractor status, and we will keep you apprised of developments in this area.

Lake Effect is here to answer your questions about independent contractors, FLSA, and labor laws. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Lake Effect HR & Law is in business to maximize each client’s workplace potential with a commitment to kindness, true partnership, and exceptional service.

‘Tis the Season

This year has taught us lessons we could not have imagined a year ago: lessons on time management, work-life integration, and overcoming professional and personal hurdles. Even in the best of times, the end of the calendar year can be extremely busy for many organizations. For individuals, this time of year also brings hectic schedules and other stressors, both emotional and financial. Additional challenges presented by the pandemic, social unrest, and the recent contentious election will likely make December 2020 a uniquely difficult time.

As we head into this month, we encourage you to take a step back and think about what you expect from your teams, and what you can offer them in return.

  • As more organizations continue with a remote work force, it becomes easy to assume someone is available and checking in at all hours of the day. Learn to respect employees’ off-hours by honoring their boundaries and implementing strategies that allow them to disengage and focus on other aspects of their busy lives:
    • Empower employees to honor their own boundaries by committing to not working during their off hours.
    • Set clear expectations for employees and supervisors about work hours and non-work hours and encourage all to respect these times.
      Encourage employees to use their “out of office” messages in email or voice mail during non-working hours.
    • Consider whether your emails to staff who are on vacation need to be sent immediately. Does the email involve an issue that can wait until they return to work? Even if you don’t expect them to respond to you at that time, sending a message during non-working hours can have a negative effect on employees trying to disengage.
    • Use the Delay Delivery option on email. This tool allows you to draft a message while it is fresh in your mind but delays an employee’s receipt of that email until they resume work hours.
    • Make sure your non-exempt employees and their managers understand that all work time – even checking and responding to quick emails at night – is work time that must be tracked and compensated.
  • Think about other ways you can support your employees individually and collectively at this time:
    • If your benefits plan comes with an Employee Assistance Program (EAP), now is a good time to share the information again with employees to remind them of the services that are available to them. If employees do not have access to an EAP, consider partnering with local non-profit agencies that may be able to provide different resources and support. For example, United Way 2-1-1 is a national hotline that connects people with resources in their own communities and is available 24 hours a day, 7 days a week.
    • Does your organizational have a culture that encourages mental and physical wellness? Consider organizing a challenge to incentivize self-care or arrange for group exercise times.
    • Coordinate fun group activities such as cookie recipe exchanges, secret gift exchanges, or donations to a non-profit your organization supports.
  • Show support for your employees in tangible and intangible ways:
    • If your organization has a budget for it, consider sending a “Thank you for getting us through 2020” gift, gift card, or bonus with a personal message written to each employee.
    • Surprise employees with an extra half day off one afternoon; encourage them to take the time to do something nice for themselves.
    • Check in with your employees individually; ask them “Are you OK?” and mean it. Listen to their concerns.

By necessity, you spend most workdays focused on the needs of your organization, clients, and other stakeholders. This month, we encourage you to take some time to focus on your employees, one of your most important assets. It’s been a hard year for so many. Let’s grant each other some grace to finish out the year strong, and together we can welcome 2021 with renewed strength.

Employee Holiday Travel during COVID-19

Traditionally, November and December are months when employees take more time off to travel and/or spend time with family and friends for holidays. This year, employers and employees need to consider the health risks involved in traveling and group gatherings due to the COVID-19 pandemic. The reality is that employees’ increased exposure to COVID-19 can present risks to co-workers, customers, and the overall reputation of an organization.

We encourage employers to review current policies regarding time off during the holidays to see if they reflect current practices and current COVID risk mitigation measures. As with any issue related to the pandemic, employees and employers should adhere to current guidance provided by the CDC, as well as local and state guidelines in their home area and in any areas they may visit. The CDC website has valuable information related to Travel During the COVID-19 Pandemic, as well as a page specifically related to Holiday Travel. Although employers cannot dictate whether or not an employee travels during non-work time, employers are well-advised to share this information with employees so they fully appreciate the risks involved with travel and gatherings.

In the event that employees are exposed to or test positive for COVID-19 during the holiday season, employers should consult this helpful resource provided by PHMDC.

Lake Effect is here to answer your questions about protecting your workforce and complying with state and local public health orders. We continue to monitor important legal and HR developments, including COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

UI Notice Required at Time of Separation of Employment

Beginning November 2, 2020, Wisconsin employers must notify employees at the time of separation from employment of the availability of Unemployment Insurance (UI) benefits. Notice of unemployment rights can be given to employees by email, text message, letter, or by providing the DWD printed poster in person or by mail.

The content of the notice should include when and how an employee can file for unemployment, unemployment resources, and UI contact information. The DWD provides suggested language to include in end of employment communications to employees, including the digital poster. We encourage employers to use the suggested language and the customizable digital poster. This poster needs to be posted at all times in your workplace or electronically in the case of remote workers.

Note that providing the notice does not necessarily mean that employees will meet the requirements of the Wisconsin UI eligibility laws and/or receive benefits.

Lake Effect is here to answer your questions about employee onboarding, offboarding, or compliance with applicable state and federal employment laws. We continue to monitor important legal and HR developments, as well as COVID-related updated from federal, state, and local authorities. Please keep watching our 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.

Career Coaching Services

In response to continuing financial challenges caused by the COVID-19 pandemic, employers may be compelled to consider layoffs, furloughs, or terminations. Even when faced with such difficult decisions, employers can take steps to care for their workers and help them transition to new opportunities. Organizations might consider offering career coaching and outplacement advisory services to affected staff. These services provide support, help and guidance to workers as they initiate new job searches or contemplate career changes.

Lake Effect can be a valuable partner in these efforts. Our experienced HR advisors and coaches can assist by meeting individually with staff, reviewing their skills, interests, and goals, and rebuilding confidence to explore new opportunities. Lake Effect’s coaches can also help displaced employees develop or update a resume and cover letter, improve interview techniques, or apply the most effective job search methods best suited to the employees’ desired career path. By applying DiSC training to the tailored coaching, employees receive personalized insights that deepen their understanding of their own preferences and tendencies in the workplace. These personalized insights can help workers be more effective interviewers and strengthen future workplace interactions.

At Lake Effect, we are committed to helping organizations maximize their workplace potential with a commitment to kindness, true partnership, and exceptional service. During challenging times, this means supporting clients as they strive to boost morale, maintain a positive culture, and help current and former employees achieve success. Our career coaching and outplacement advisory services may provide one way to help outgoing employees secure a bright future.

Your partners at Lake Effect HR & Law are ready to answer your questions about career coaching and outplacement advisory services. Contact us at info@le-hrlaw.com or 1-844-333-5253.We are also closely monitoring the impact of COVID-19 on all aspects of the workplace. Keep watching for blogs and emails for important legal updates and HR best practices.

DOL Updates FMLA Forms

On July 16th, the Department of Labor (DOL) updated Family and Medical Leave Act (FMLA) forms which employers may use to administer FMLA leaves within their organizations. The FMLA does not require the use of any specific form or format but using the forms can simplify leave administration and facilitate compliance for employers.

In the press release, the DOL announced that the forms collect the same information but are “simpler and easier to understand for employers, leave administrators, healthcare providers, and employees seeking leave.” Among the changes announced are boxes that can be checked instead of requiring written responses and electronic signature features. As the DOL stated, “[t]he changes reduce the amount of time it takes a healthcare provider to provide information, and help leave administrators review and communicate information to employees more directly and with greater clarity, reducing the likelihood of violations.”

The DOL also updated its guidance related to FMLA leave related to COVID-19. The two updates are:

  • Telemedicine visits are considered in-person visits for purposes of establishing a serious health condition (Guidance, Question #12)
  • Employers may require an employee returning from FMLA to get a COVID-19 test as long as all employees returning to the office are also required to get a test (Guidance, Question #13)

Note: The FMLA covers employers with 50 or more employees for at least the past 20 weeks. It also applies to public agencies, regardless of the number of employees, and to elementary and secondary schools, both public and private. The federal FMLA only applies to employees who have worked for a covered employer for a minimum of 12 months, although these 12 months do not need to be consecutive. Additionally, the employee must have worked at least 1,250 hours for the employer during the previous 12 months at a site where the employer has 50 or more employees within a 75-mile radius. See the differences between federal and WI FMLA here. If you are unsure if you are an FMLA covered employer, please contact us as noted below.

Lake Effect is here to answer your FMLA questions and/or help administer this process within your organization. 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

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.

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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