DOL Withdraws Final Rule on Independent Contractor Status under FLSA

On May 5, 2021, the Department of Labor (“DOL”) announced a new final rule withdrawing the “Independent Contractor Status Under the Fair Labor Standards Act” final rule (Independent Contractor Rule) that had been published on January 7, 2021, to take effect on March 8, 2021. Of note, the DOL is not issuing new federal guidance on independent contractor status with this new rule. The DOL indicated that the January 2021 rule “is inconsistent with the FLSA’s text and purpose, and would have a confusing and disruptive effect on workers and businesses alike. . . .” The new Rule will be published on May 6, 2021.

Employers should keep in mind that many states, including Wisconsin, have adopted their own tests for independent contractor status. These state laws 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.

Major Provisions of Final Tip Pool Rule Become Effective April 30, 2021

Three main provisions of the US Department of Labor’s final tip pool rule take effect April 30, 2021. Other parts of the rule are delayed and could be further revised by the Biden Administration. For a complete discussion of the final rule, issued on December 22, 2020, please see Lake Effect’s prior blog on this topic.

The following provisions of the final tip pool rule take effect April 30, 2021:

  • Employers, managers, and supervisors are prohibited from sharing or keeping any portion of tips received by employees; this prohibition applies regardless of whether the employer takes a tip credit and regardless of the type of tip pool implemented.
  • Employers who do not take a tip credit have two options for tip pooling. Employers may create a “traditional tip pool” and/or a “nontraditional tip pool,” which includes employees who do not regularly receive tips, such as cooks and dishwashers. Employers who take a tip credit can only create a traditional tip pool.
  • An employer who takes a tip credit or creates either type of tip pool must identify on its payroll records each employee who receives tips and maintain records of the weekly or monthly amount of tips reported by each employee.

The effective date of the remaining provisions of the final tip pool rule has been delayed until December 31, 2021. Those delayed provisions address:

  • The assessment of civil monetary penalties against employers who “willfully” or otherwise violate the FLSA’s prohibition against keeping employee tips.
  • The application of the FLSA tip credit to tipped employees who perform tipped and non-tipped duties. The effective date of these provisions is delayed until December 31, 2021.

Lake Effect is here to answer your questions about federal and state wage and hour laws that impact employers across all industries.  We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please watch 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.

Call to Action: New COBRA Notices Due Soon

On April 12, 2021, Lake Effect HR & Law posted a blog notifying our readers about new COBRA provisions under the American Rescue Plan Act of 2021 (ARPA). We encourage employers who are federal or state COBRA covered employers to take prompt action, as deadlines for notices are upon us.

  • Starting April 1, 2021, employers are required to send a new ARPA COBRA summary fact sheet and new required COBRA notice to covered employees and their dependents who have had qualifying events.
  • By May 31, 2021, employers are required to send a new ARPA COBRA summary fact sheet and new extended COBRA election notice to covered employees and their dependents who had certain qualifying events between October 1, 2019 and April 1, 2021.

Please see our prior blog for live links to the required ARPA COBRA summary fact sheet and new COBRA notices. As always, if you need assistance or advice on administering these new COBRA notices, please reach out to the HR professionals and attorneys at Lake Effect HR & Law. Please know that employers and plans may be subject to an excise tax under the IRS Code for failing to satisfy the new COBRA requirements. The tax may be as much as $100 per qualified beneficiary.

We continue to monitor developments and guidance relating to the American Rescue Plan Act of 2021 and other legislative efforts to address the continuing impact of the COVID-19 pandemic. We will provide you with employment-related updates on these topics as they arise.

Dane County Public Health Emergency Order #15

Public Health Madison & Dane County (PHMDC) has issued a new public health order, Emergency Order #15, effective April 7, 2021. The new order includes significant changes to the face covering requirements, capacity limits for outdoor gatherings, and the requirements applicable to several industries including schools and childcare centers, gyms, and grocery stores. The new order also includes changes to the mandatory policy and procedure requirements for all employers in Dane County. The loosened requirements are a response to the continued decrease in COVID-19 cases and hospitalizations in Dane County. in Dane County.

Face Coverings

  • Face coverings are no longer required outdoors, although PHMDC continues to “strongly recommend” face coverings outdoors when six feet physical distancing is not possible.

Gatherings

  • Outdoor gatherings are no longer subject to specific capacity limits.
  • Instead, outdoor gatherings are limited to a capacity that ensures individuals maintain at least six feet physical distancing.

Schools and Childcare

  • PHMDC has removed most of the requirements for schools and childcare centers.
  • PHMDC continues to require schools and organizations providing childcare to develop certain COVID policies. However, the mandatory content of two of the policies has changed.
  • The following policies and procedures are required:
    • A written hygiene policy and procedure.
      • The requirements for this policy have not changed.
    • A written cleaning policy and procedure that includes guidelines from the Centers for Disease Control and Prevention for cleaning.
      • This is a change from previous orders that delineated specific items that must be included in the cleaning policy and procedure.
    • A written protective measure policy and procedure that includes ensuring employees are provided with and wear face coverings when required, and ensuring procedures for “distancing for students, children, and employees.”
      • This is a change from previous orders that included, among other things, six feet physical distancing between students.
  • Employers should ensure their policies and procedures are compliant and distribute revised policies to employees. Employers must also document employees’ receipt, acknowledgement, or training on any revised policies.

Sports

  • The only change in the requirements for sports is a minor change to the mandatory written cleaning policy and procedure.
  • The following policies and procedures are required:
    • A written hygiene policy and procedure.
      • The requirements for this policy have not changed.
    • A written cleaning policy and procedure that includes guidelines from the Centers for Disease Control and Prevention for cleaning.
      • This is a change from the previous orders that delineated specific items that must be included in the policy.
    • A written protective measure policy and procedure that includes physical distancing requirements.
      • The requirements for this policy have not changed.
  • Employers should ensure their policies and procedures are compliant and distribute revised policies to employees. Employers must also document employees’ receipt, acknowledgement, or training on any revised policies.

Businesses

  • The only change in the requirements for businesses is a minor change to the mandatory written cleaning policy and procedure.
  • The following policies and procedures are required for all businesses:
    • A written hygiene policy and procedure.
      • The requirements for this policy have not changed.
    • A written cleaning policy and procedure that includes guidelines from the Centers for Disease Control and Prevention for cleaning.
      • This is a change from the previous orders that delineated specific items that must be included in the policy.
    • A written protective measure policy and procedure that includes physical distancing requirements.
      • The requirements for this policy have not changed.
  • Employers should ensure their policies and procedures are compliant and distribute revised policies to employees. Employers must also document employees’ receipt, acknowledgement, or training on any revised policies.

Stores that Sell Food or Groceries

  • PHMDC has removed the prohibitions on customer self-dispensing of bulk food, customer self-service of unpackaged foods (e.g. salad bars), and food sampling.

Restaurants and Taverns

  • PHMDC has removed the prohibitions on customer self-service of food (e.g. salad bars, buffets) and food sampling.

Gyms and Fitness Centers

  • Gyms and fitness centers are no longer required to provide materials for members to disinfect equipment or to increase their cleaning of equipment, common areas, locker rooms, and restrooms.
  • Saunas and steam rooms may open if their capacity is limited to individuals from the same household.

Places of Amusement and Activity

  • Organizations are no longer required to clean equipment in between each customer’s use.
  • The prohibition on food sampling has been removed.

Fully Vaccinated Individuals

  • Fully vaccinated individuals do not need to maintain six feet physical distancing or wear a face covering when indoors with:
    • with other fully vaccinated individuals.
    • with individuals from a single household or living unit who are not fully vaccinated but are not at an increased risk for severe COVID-19 disease, and who do not live with anyone is not fully vaccinated and at an increased risk for severe COVID-19 disease.

The other requirements from previous PHMDC emergency orders remain in place. You can find Lake Effect’s summaries of the previous orders here.

Lake Effect is here to answer your questions about how local and state public health orders apply to employers. 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.

Leave for Employees to Donate Bone Marrow or an Organ

Wisconsin employers with 50 or more employees are required to provide up to six weeks of leave for employees who choose to donate their bone marrow or an organ under the Bone Marrow and Organ Donation Leave Act. The law counts employees nationwide, meaning the leave requirement covers, for example, employers with one employee in Wisconsin and 49 employees in another state. However, only the employee working in Wisconsin is eligible for the leave. Wisconsin employees are eligible for the leave after they have worked for the employer for 52 consecutive weeks and at least 1000 hours over that 52-week period. Employees are not entitled to pay during the leave but no changes may be made to an employee’s insurance or other benefits. Employees who use the leave are generally entitled to their position when they return to work.

While the six-week leave requirement only applies to Wisconsin employers with 50 or more employees, all employers with 25 or more employees must post a notice stating the employer’s policy on bone marrow and organ donation leave. This means that employers with 25-49 employees must post their policy on bone marrow and organ donor leave, even if the policy states that no leave is provided or that employees should reach out to HR to discuss their leave options. Employers with 50 or more employees must also post the Department of Workforce Development’s poster.

The notice and poster must be posted with other employment law posters, such as an intranet site or a bulletin board in a break room. We also recommend employers include their bone marrow and organ donation leave policy in their employee handbook.

Organizations with employees outside of Wisconsin should also note that each state has its own mandatory leave laws, many of which apply to all employees working – remotely or at an employer worksite – in that state.

American Rescue Plan Act Extends and Expands Voluntary Employer-Provided FFCRA Leaves

Under the American Rescue Plan Act of 2021 (ARPA), employers who opt to continue paid leaves originally required under the Families First Coronavirus Response Act (FFCRA) can provide a greater amount of paid leave for a broader range of reasons and still receive tax credits to cover 100% of costs related to those leaves.

FFCRA originally required employers with fewer than 500 employees to provide employees with 2 weeks of Emergency Paid Sick Leave (EPSL) and up to 12 weeks Emergency Family and Medical Leave (EFML) (if employees satisfied one of the reasons set forth under FFCRA. For a complete review of FFCRA leaves and requirements, see Lake Effect’s prior blogs on this topic. These mandatory leaves expired December 31, 2020. The stimulus bill passed on December 22, 2020, permitted employers to voluntarily allow employees to use any remaining EPSL or EFML by March 31, 2021 and still receive the related tax credits.

The ARPA further extends and expands original FFCRA leave allowances and related employer tax credit provisions as follows:

  • Time period extended: Covered employers can continue to provide employees with EPSL and EFML through September 30, 2021 and receive tax credits to cover 100% of costs associated with such leaves. Covered employers can decide to offer both EPSL and EFML, only one of them, or neither.
  • Additional 10 days of EPSL: Covered employers may provide employees with an additional 10 days of EPSL between April 1, 2021 and September 30, 2021 and receive tax credits to cover 100% of related costs.
  • New reasons for EPSL: In addition to the previous qualifying reasons set forth in FFCRA, employers may provide employees EPSL for time spent awaiting COVID-19 test results, obtaining a COVID-19 vaccine, or recovering from “any injury, disability, illness or condition related to such” vaccine. Pay for these new leave reasons will be at 100% (up to a max of $511/day or $5,110 for 10 days).
  • Additional 12 weeks of EFML: Covered employers may provide employees with an additional 12 weeks of EFML (all at 2/3 pay, up to a maximum of $12,000) between April 1, 2021 and September 30, 2021. Note this is an increase from 10 to 12 weeks of paid leave, and from $10,000 to $12,000 in maximum pay per employee.
  • New reasons for EFML: Employers may provide employees EFML for all the qualifying reasons permitted for use of EPSL, including time spent awaiting COVID-19 test results, obtaining a COVID-19 vaccine, or recovering from the effects of such vaccine.
  • New non-discrimination requirement: Employers will not receive tax credits for costs associated with voluntary EPSL or EFML if it discriminates in favor of highly compensated employees, full-time employees, or longer-tenured employees in providing leaves.

We continue to monitor developments and guidance relating to the American Rescue Plan Act of 2021  and other Biden Administration efforts to address the continuing impact of the COVID-19 pandemic. We will provide you with employment-related updates on these topics as they arise.

Twelve Months Later: How Has Your Organization Evolved?

The past 12 months have been a time like no other, forcing organizations to pivot quickly to accommodate a new reality. Now is the time to review handbook policies and internal processes that may have been revised on the fly in response to changing circumstances.

You can start by reviewing the ways your organization has changed since the start of the pandemic in terms of policy and process changes:

  • Did employees’ transition to work remotely?
  • Will they continue to do so? Did they start or expand use of personal devices for business purposes?
  • Have schedules or reporting relationships changed to adapt to new circumstances?
  • Have employees performed remote work from other states? (If they intend to remain there, you may need to register for general business, payroll, and/or unemployment tax purposes in that state. You may also need to review your current benefits offerings, as well specific employment laws for that state or local area. See our blog on state employment laws to consider with remote employees.)
  • Has your brand or business model changed in response to the pandemic? Do you need to update position descriptions or organizational charts?

As you identify changes that have occurred and adjustments that will be necessary, review your employee handbook and update relevant policies to reflect your decisions(Note: We do not recommend changing the handbook for policies that are temporary in nature, such as allowing employees to work remotely only until worksites open again. Temporary policies can be freestanding.)

In addition, consider the impact that the past year had on your employees and your organization’s culture:

  • Some employees may have been working onsite throughout the pandemic. Others may be excited to return to the workplaceand still others may be cautious to returnThis can result in actual or potential conflicts between employees who may judge or simply not understand another’s perspective.
  • Some employees may be experiencing mental health issues resulting froisolation or other challenges encountered over the past year, while others are thrilled to be out of the house and back in the office.
  • Some employees may feel the stress of changing family routines and expectations, and they may need additional time to adapt or help family members adapt.
  • Some employees may be grieving the loss of a loved one during the pandemic, while others have experienced minimal personal impact.
  • Some employees may need more time than others to reacclimate to their commute and former schedule at a worksite.

As your employees and you address these difficult issues, you   can reaffirm a culture of inclusion, acceptance, and respect with effective planning, clear communication, flexibility, and empathy.

Lake Effect is here to answer your questions about how to handle these important workplace transitions and evolution, while maintaining your culture and supporting your mission and vision. 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.

Dane County Public Health Emergency Order #14

Public Health Madison & Dane County (PHMDC) has issued a new public health order, Emergency Order #14, effective March 10, 2021. The new order includes significant changes to the indoor and outdoor capacity limits for gatherings, restaurants, taverns, and sporting events. The order also modifies the protective measure policy required for schools. The primary changes are summarized below and are outlined in PHMDC’s summary of Emergency Order #14.

Gatherings

  • As a reminder, gatherings include exercise classes, meetings, conferences, trainings, sporting events, parties, and other planned events.
  • Indoor gatherings with food or drink are permitted with up to 150 individuals. Indoor gatherings without food or drink are permitted with up to 350 individuals.
  • Outdoor gatherings with or without food or drink are permitted with up to 500 individuals.
  • The capacity limits for indoor and outdoor gatherings do not include employees.
  • Individuals must maintain 6 feet physical distancing at indoor and outdoor gatherings.

Sports

  • All sports must follow the gathering limitations outlined above.

Indoor Capacity Limits at Restaurants and Taverns

  • Indoor capacity at restaurants and other dining facilities is increased to 50% of approved seating capacity.
  • Indoor capacity at taverns is increased to 25% of approved seating capacity.
  • Tables and chairs must still be spaced so that 6 feet physical distancing can be maintained between customers who are not members of the same household.

Mandatory School Policies

  • Schools may need to modify their required protective measure policy and procedure. Under the new order, the protective measure policy and procedure must:
    • Ensure employees are provided with and wear face coverings as required under the general face coverings requirements in the emergency order.
    • Ensure employees maintain 6 feet distancing at all times to the extent possible.
    • When 6 feet distancing is not possible for students, ensure that students and employee groupings are as static as possible. Mixing between groups must be restricted as much as possible.
    • Commons areas such as cafeterias, auditoriums, and gyms can be used as classrooms, to provide food, as childcare and youth settings, and for government functions. Student grouping should be in distinct spaces. Student groupings may not mix with other student groupings.
  • Schools must document employee receipt, acknowledgment, or training on any revised protective measure policy.
  • The requirements for the hygiene policy and procedure and the cleaning policy and procedure have not changed.

The other requirements from previous PHMDC emergency orders, including face coverings, remain in place. You can find Lake Effect’s summaries of the previous orders here.

Lake Effect is here to answer your questions about how local and state public health orders apply to employers. 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.

Biden Administration Impact on the Workplace

Just one week into his administration, President Biden has signaled that he will take a fresh look at current issues affecting American workers and workplaces. His recent executive orders and memoranda include the following actions:

  • Halt Final Rules governing tip pools and independent contractors: This Executive memorandum stays pending final rules that have been published but which had not yet taken effect to allow the Biden Administration to review their impact. This also directs that any rules which had been sent to the Federal Register but had not yet been published must be immediately withdrawn for review. This results in a stay of the Independent Contract Final Rule and the new Tip Pooling Rule. As a result, the Department of Labor has withdrawn 3 opinion letters related to those rules. See Lake Effect’s previous blogs on the Independent Contractor Final Rule, the Tip Pooling Final Rule, and two of the tip pool opinion letters.
  • Expand COVID-related unemployment benefits: This Executive Order permits employees who refuse work based on COVID health-related concerns to receive unemployment benefits.
  • Promote racial equity: This Executive Order directs the Biden administration to conduct equity assessments of its agencies and reallocate resources to “advanc[e] equity for all, including people of color and others who have been historically underserved, marginalized and adversely affected by persistent poverty and inequality.”
  • Reaffirm gender equity: This Executive Order expands protections against discrimination based on sex in federal agencies to explicitly include sexual orientation, gender identity, and gender expression. This does not have a direct impact on private employers, but does follow the U.S. Supreme Court decision in Bostock v. Clayton County, Georgia (see Lake Effect’s blog here).
  • Enhance COVID-related workplace safety: This Executive Order requires administrative agencies to take “swift action to reduce the risk that workers may contract COVID-19 in the workplace.” This will most likely result in action from OSHA setting forth “science-based guidance to help keep workers safe from COVID-19 exposure, including with respect to mask-wearing; partnering with State and local governments to better protect public employees; enforcing worker health and safety requirements; and pushing for additional resources to help employers protect employees.”

The attorneys and HR professionals at Lake Effect will continue to closely monitor the Biden administration’s executive actions, legislative developments, and their impact on workplaces.

New CDC Guidance Requires Informed Consent for Workplace COVID-19 Testing

On January 21, 2021, the U.S. Center for Disease Control (CDC) issued new guidance for non-healthcare employers who conduct workplace COVID-19 testing. While the CDC previously confirmed that workplace testing is permissible as part of a comprehensive approach to reducing virus transmission, the new guidance clarifies that it should not be conducted without employees’ informed consent. According to the CDC, “informed consent requires disclosure, understanding, and free choice, and is necessary for an employee to act independently and make choices according to their values, goals, and preferences.”

According to the CDC, employers should adopt at least the following measures to promote free decision-making and informed consent to COVID-19 testing in the workplace:

  • Implement safeguards to protect employee privacy and confidentiality.
  • Provide complete and understandable information about how a testing program may impact employees’ lives, such as whether a positive test result or refusal to participate in testing may mean exclusion from work for any period of time.
  • Explain parts of the testing program that would be particularly important to employees as they decide whether to participate (i.e., key reasons that may guide their decision).
  • Inform employees about the testing program in their preferred languages using clear, non-technical terms. Solicit employee input on the readability of the information.
  • Train supervisors and managers on their roles and responsibilities regarding testing and encourage them to avoid pressuring employees to participate in testing.
  • Consider the consent process as an active information-sharing process between the employer and the employee. Throughout the process, encourage and answer employees’ questions, facilitate their understanding, and promote their free choice.

In addition, employers must ensure the disclosures listed below are made to employees:

  • The manufacturer and name of the test.
  • The type of test and its purpose.
  • How the test will be performed.
  • The known and potential risks of harm, discomforts, and benefits of the test.
  • What it means to have a positive or negative test result, including test reliability and limitations and any public health guidance triggered by a particular result.

Many of these are contained in the FDA’s emergency use authorization patient fact sheet for each approved COVID-19 test (scroll down on the linked page to find the test-specific fact sheet), which must be provided to any party receiving that test.

Employers who conduct workplace COVID-19 testing must develop plans to address a host of other testing-related topics and questions, including:

  • Their reasons for testing, frequency of testing, and consequences to employees of testing/non-testing.
  • Locations, scheduling, procedures, and payment for testing.
  • Communication and interpretation of test results, applicable leaves and/or benefit policies.
  • Personal information needed to test and privacy of results.
  • Internal resources for employees who need additional information, assistance, treatment after test procedure.

Given the CDC’s detailed requirements for informed consent and disclosures relating to workplace-based COVID-19 testing, employers in non-healthcare settings should proceed cautiously when considering the implementation of testing programs or protocols. Rather than conduct workplace testing, some employers may be well-advised to minimize administrative burdens and legal exposure by strongly encouraging employees to undergo frequent COVID-19 testing administered by reliable, unrelated third parties.

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

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