As featured in #WorkforceWednesday: As employers continue to navigate the COVID-19 pandemic, many executives are taking pay cuts or forgoing pay to help businesses stay afloat. This is affecting executive contracts and compensation packages, and could result in significant changes in the future. Attorneys Gretchen Harders and Rina Fujii tell us more.
On May 6, 2020, New Jersey Governor Phil Murphy signed Executive Order 138, in which he extended the Public Health Emergency by 30 additional days, until June 5, due to the continuing need to protect the health, safety and welfare of New Jersians from COVID-19. Executive Order 138 also states that all Executive Orders and actions taken by any Executive Branch departments and agencies (including Administrative Orders) that were adopted in whole or in part based on the current Public Health Emergency will remain in full force and effect.
Gov. Murphy originally declared both a State of Emergency and a Public Health Emergency on March 9, 2020, in Executive Order 103. He has explained that the State of Emergency will stay in place indefinitely, but the Public Health Emergency automatically terminates after 30 days, absent an extension. Executive Order 138 is the second such extension, with the first having been issued on April 7, 2020, in Executive Order 119.
On May 5, 2020, and again on May 7, the Equal Employment Opportunity Commission (the “EEOC”) updated its technical assistance for employers, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws.”
The EEOC has updated its guidance multiple times since the beginning of the COVID-19 pandemic. Most recently, on April 17, the EEOC provided guidance on employers’ reasonable accommodation obligations under the Americans with Disabilities Act (the “ADA”) and included a section on “Return to Work” issues (discussed here). On April 23, the EEOC issued an update addressing COVID-19 testing by employers (discussed here).
In its latest update, the EEOC adds to its Return-to-Work guidance with Frequently Asked Questions (“FAQs”) addressing reasonable accommodation. The new FAQs will likely be particularly relevant with respect to employees who may be reluctant to return to the workplace because they are at higher risk for severe illness from COVID-19. Specifically, the newly-released guidance states:
G.3. What does an employee need to do in order to request reasonable accommodation from her employer because she has one of the medical conditions that CDC says may put her at higher risk for severe illness from COVID-19?
An employee – or a third party, such as an employee’s doctor – must let the employer know that she needs a change for a reason related to a medical condition (here, the underlying condition). Individuals may request accommodation in conversation or in writing. While the employee (or third party) does not need to use the term “reasonable accommodation” or reference the ADA, she may do so.
The employee or her representative should communicate that she has a medical condition that necessitates a change to meet a medical need. After receiving a request, the employer may ask questions or seek medical documentation to help decide if the individual has a disability and if there is a reasonable accommodation, barring undue hardship, that can be provided.
Note: This FAQ confirms that it is the employee’s obligation to ask for a reasonable accommodation because of a medical condition, but the employee need not use the phrase ‘reasonable accommodation’ when making such a request. (The CDC has posted a list of high risk factors for becoming severely ill from COVID-19). The request, which may be oral or in writing, entitles the employer to ask questions and to seek medical documentation as part of the interactive process for determining whether and what reasonable accommodation may be provided.
G.4. The CDC identifies a number of medical conditions that might place individuals at “higher risk for severe illness” if they get COVID-19. An employer knows that an employee has one of these conditions and is concerned that his health will be jeopardized upon returning to the workplace, but the employee has not requested accommodation. How does the ADA apply to this situation?
First, if the employee does not request a reasonable accommodation, the ADA does not mandate that the employer take action.
If the employer is concerned about the employee’s health being jeopardized upon returning to the workplace, the ADA does not allow the employer to exclude the employee – or take any other adverse action – solely because the employee has a disability that the CDC identifies as potentially placing him at “higher risk for severe illness” if he gets COVID-19. Under the ADA, such action is not allowed unless the employee’s disability poses a “direct threat” to his health that cannot be eliminated or reduced by reasonable accommodation.
The ADA direct threat requirement is a high standard. As an affirmative defense, direct threat requires an employer to show that the individual has a disability that poses a “significant risk of substantial harm” to his own health under 29 C.F.R. section 1630.2(r). A direct threat assessment cannot be based solely on the condition being on the CDC’s list; the determination must be an individualized assessment based on a reasonable medical judgment about this employee’s disability – not the disability in general – using the most current medical knowledge and/or on the best available objective evidence. The ADA regulation requires an employer to consider the duration of the risk, the nature and severity of the potential harm, the likelihood that the potential harm will occur, and the imminence of the potential harm. Analysis of these factors will likely include considerations based on the severity of the pandemic in a particular area and the employee’s own health (for example, is the employee’s disability well-controlled), and his particular job duties. A determination of direct threat also would include the likelihood that an individual will be exposed to the virus at the worksite. Measures that an employer may be taking in general to protect all workers, such as mandatory social distancing, also would be relevant.
Even if an employer determines that an employee’s disability poses a direct threat to his own health, the employer still cannot exclude the employee from the workplace – or take any other adverse action – unless there is no way to provide a reasonable accommodation (absent undue hardship). The ADA regulations require an employer to consider whether there are reasonable accommodations that would eliminate or reduce the risk so that it would be safe for the employee to return to the workplace while still permitting performance of essential functions. This can involve an interactive process with the employee. If there are not accommodations that permit this, then an employer must consider accommodations such as telework, leave, or reassignment (perhaps to a different job in a place where it may be safer for the employee to work or that permits telework). An employer may only bar an employee from the workplace if, after going through all these steps, the facts support the conclusion that the employee poses a significant risk of substantial harm to himself that cannot be reduced or eliminated by reasonable accommodation.
Note: The EEOC first posted a FAQ on this topic on May 5, but removed it the same day after certain information was, according to the agency, “misinterpreted in press reports and social media.” In reissuing this guidance on May 7, the EEOC clarified that the ADA does not allow exclusion of employees simply because they have an underlying medical condition that the CDC says might pose a higher risk of severe illness if the individual contracts COVID-19. This revised guidance makes it clear that employers must complete a “direct threat” analysis, which includes an individualized assessment based on factors relevant to the employee and the nature of the threat, and a determination of whether the threat can be eliminated or sufficiently reduced through a reasonable accommodation. In making this analysis, and considering potential reasonable accommodations, employers should refer to CDC guidance.
G.5. What are examples of accommodation that, absent undue hardship, may eliminate (or reduce to an acceptable level) a direct threat to self?
Accommodations may include additional or enhanced protective gowns, masks, gloves, or other gear beyond what the employer may generally provide to employees returning to its workplace. Accommodations also may include additional or enhanced protective measures, for example, erecting a barrier that provides separation between an employee with a disability and coworkers/the public or increasing the space between an employee with a disability and others. Another possible reasonable accommodation may be elimination or substitution of particular “marginal” functions (less critical or incidental job duties as distinguished from the “essential” functions of a particular position). In addition, accommodations may include temporary modification of work schedules (if that decreases contact with coworkers and/or the public when on duty or commuting) or moving the location of where one performs work (for example, moving a person to the end of a production line rather than in the middle of it if that provides more social distancing).
These are only a few ideas. Identifying an effective accommodation depends, among other things, on an employee’s job duties and the design of the workspace. An employer and employee should discuss possible ideas; the Job Accommodation Network (www.askjan.org) also may be able to assist in helping identify possible accommodations. As with all discussions of reasonable accommodation during this pandemic, employers and employees are encouraged to be creative and flexible.
Note: Here, the EEOC provides various examples of accommodations that may mitigate a “direct threat” to an employee who is at increased risk for severe illness from COVID-19, and reiterates its advice to employers to be “creative and flexible” in responding to accommodation requests related to the COVID-19 pandemic.
The new FAQs, like the EEOC’s prior guidance, are anchored in traditional ADA principles, i.e., having a covered disability, engaging in the interactive process, and demonstrating flexibility in assessing reasonable accommodations. While this guidance can help provide some parameters for employers to consider, employers will need to individually assess their own workspaces, business needs, employees’ duties and responsibilities, and how they can best attend to requests by employees for reasonable accommodations. In order to do so, employers should analyze how to create safe workspaces, consider what modifications are feasible, and create solid processes to handle the inevitable requests for accommodations.
Many more millions of employees have been working remotely as a result of the devastating COVID-19 virus than ever before. There is likely no going back. Employers have been relying on a remote workforce by necessity in the short term and are realizing that in the long term they can operate efficiently and productively with their staff largely out of the office. The public health risks will, for the foreseeable future, be the driver both on employers’ need for a remote workforce to achieve continuity of operations and employees’ demand for a safer work location. The increased numbers of remote workers will no doubt be lasting. But with this anticipated restructuring of work must come a comprehensive evaluation of the corresponding cybersecurity risks over the long term and how best to address them. As employers look forward to the future of securing remote work in their organizations, they should review the following top ten considerations as part of their defense in depth.
No. 1. Think in terms of people, information and machines. They are inseparable elements to accomplishing remote tasks and so are the associated cyber risks. Remote employees can only communicate through their machines (e.g., computers and mobile devices) and associated software and protocols (e.g., browsers). To be more secure, employers should think in terms of how information flows over the Internet from employee to employee, employee to customer, machine to machine, system to system throughout the communications process. The information needs to be secured from the time of the employee’s keyboard strokes, up the information stack, to the applications and browser. An employer must have confidence that the information will be securely exchanged between the remote workstations/mobile devices and servers and other computers, using different protocols and systems, over the Internet. Unless you have comprehensively considered the particular job responsibilities of each remote job title, the types and sensitivity of information handled, the methods of remotely accomplishing tasks and the connected hardware and systems, and how they all interact and will be protected on a daily basis, you are missing something. And if you are missing something, you are missing everything because one hole in your defenses is all that a hacker needs to deploy a devastating exploit.
No. 2. Develop a written risk assessment and information security plan for remote workers. If your organization has not conducted a thorough risk assessment and adopted a formalized information security program containing reasonable safeguards that has considered the threats to its remote workforce, depending on your industry, you are not in regulatory compliance with the applicable standards for safeguarding protected information (e.g., PII, PHI, financial information). Only by writing down and addressing the likely threats and circulating the risk considerations among stakeholders for input and decision, does an organization achieve regulatory compliance and improved cybersecurity. See, e.g., New York State Stop Hacks and Improve Electronic Data Security Act (SHIELD Act). Likewise, in order to effectively protect sensitive business information and trade secrets, the same planning tools should be used. Ad hoc meetings and crisis management will simply not suffice over the long term to address remote worker cyber risks.
No. 3. Implement multi-factor authentication as the default authentication method for remote user access from the home. Like Dorothy’s repeating “There’s No Place Like Home” in the Wizard of Oz, keep repeating “There’s Nothing Like Multifactor in the Home,” when it comes to the authentication of any user that remotely accesses sensitive information, or has remote administrative or privileged access. It should come as no surprise that phishing is rampant, including COVID-19 scams to compromise credentials. Personnel training is a preventative measure, but is not foolproof. Consequently, multi-factor authentication (MFA) should be the default method for authentication for remote home-based roles with access to sensitive or protected information. The same holds true for remote system or server maintenance. If your system administrators will be routinely performing remote maintenance using Remote Desktop Protocol (RDP) or have remote access to other privileged accounts, multi-factor authentication should be the default authentication method. Similarly, if more devices in your organization are now opening RDP to the Internet because of the increase in remote work, secure your RDP. Shodan reports, for example, that of 70,000 devices it recently scanned using RDP, 8% remain exploitable by the BlueKeep vulnerability present on older Windows versions.
No. 4. Consider and address the risks of allowing employees to access organizational resources using company computers/devices v. personal (BYOD) computers/devices. Organizations should limit access to its systems to only authorized devices. For example, are remote employees permitted to connect to organizational resources using their personal computers or by company computers or both? There are vastly different cyber risks with each mode of device access. Have you fully considered the risks of an employee who routinely handles sensitive information connecting to your network though a personal computer, if you lack the ability to scan the security posture of his or her computer? If an employee can use an unknown personal device to connect to the organization’s network, you may lack visibility into the device’s security unless you institute technical measures to authenticate the device and address those risks before network access is permitted. Organizations may want to consider implementing a mobile device management solution, network access control appliance or other technical tools to mitigate these risks.
No. 5. Consider and address the risk to permitting direct remote access to web based organizational resources. Nothing new here, but the frequency and volume of this direct out of network connectivity will certainly increase with more employees working from home. Employees may access web-based resources through credentials that do not require a connection through the organization’s network, but rather by directly accessing the hosting website. Have you addressed the risks of permitting employees to connect directly to cloud based resources outside of your network from their homes? If so, have you considered the sensitivity of the information they have access to and how to effectively monitor this access? What logging configuration does the hosted services permit, and have you implemented a logging and monitoring plan that is supported by rigorous personnel policies that provide notice to employees of the monitoring? Effective monitoring is critically important to be able to detect and respond to a breach of security involving a remote user with direct web based access. Given the risks, employers may want to consider regulating, screening and protecting this traffic, using a Secure Internet Gateway or other technical tools.
No. 6. Consider and plan for the most likely threats. Well, we have to admit this is currently a challenge because of the proliferation of the threat landscape during a pandemic: e.g., phishing; Advanced Persistent Threat (APT) attacks on healthcare and pharmaceutical companies, education and research institutions, and organizations that handle PII; cyber threats posed by North Korea.; and the ubiquitous ransomware. All the more reason to roll up your sleeves now and engage on this topic head on with a focus on those threats and threat groups relevant to your particular industry. The continued viability of your business and the health and safety of others may depend on it.
No. 7. If you use a VPN, make sure it is secure, properly configured and offers a sufficient number of connections for your business needs. Make sure your VPN is and remains patched, updated, and configured using secure baselines. Vulnerabilities in common VPN services recently have been highlighted. As with any patching and secure configuration process, there should be a written policy and procedure that is enforced and audited. Also, consider eliminating “split tunneling” – where employees can access their home printers and other resources, which may create a greater risk of compromise.
No. 8. Plan for the remote worker security incident. Plan and train for the inevitability of a remote cybersecurity incident and effective response. For example, does your organization have a breach response plan that considers how to handle a remote incident? How will the organization manage a security incident remotely where the employee and the company devices are not in the office? Frequently, by planning for the incident, an organization will institute changes that greatly improve preventative controls.
No. 9. Have employees sign strong confidentiality and acceptable use agreements and plan for the termination of remote workers. When an employee is in the office for an employment termination, it is much easier to collect credentials and company resources/devices at the time of termination than it is for a remote employee. To address the insider threat of remote workers stealing or keeping sensitive data after they learn of their employment termination, an organization should have written procedures that ensure that system access is cut off at or before the time of termination as a default. Remote workers should be signing strong confidentiality and acceptable use agreements that provide for the preservation, safeguarding and return of company material, and sanctions for failure to do so. A formalized insider threat program to include remote worker security issues should be a part of any effective information security management program.
No. 10. Encrypt laptops and mobile devices containing protected information or sensitive information. With full disc encryption, an organization can protect sensitive or protected information against loss or other physical compromise of the device. Indeed, statutes like New York’s SHIELD Act (N.Y. General Business Law §§899-aa, 899-bb) exclude encrypted information from the definition of protected “private information,” providing that the cryptographic keys are securely managed and have not been accessed or acquired. Thus, breach notification may be avoided in certain circumstances where the loss involves encrypted information. At the end of the day, an organization needs to consider whether a burglary, car theft, or accidental loss of the physical device are risks that should be protected against by encrypting protected or sensitive data in the hands of remote workers. Best practices strongly support these actions.
As we previously reported, the COVID-19 pandemic has significantly altered the global workplace and international employer-employee relations. Over the past several months, many countries have enacted nationwide orders requiring billions of people to stay at home in an effort to reduce transmission of COVID-19. While some countries remain locked down, others, have recently initiated progressive measures to re-open businesses and return employees to the workplace, with varying degrees of success:
- Germany: On April 27 Germany began allowing shops as large as 8,600 square feet to re-open, as well as book stores, car dealerships and bike shops, provided that they continue to adhere to strict social distancing and sanitation rules. Following a small spike in transmission, however, on April 30 German Chancellor Angela Merkel stated that Germany would postpone any decision to re-open fully schools until there is a greater understanding of the loosened restrictions’ effects on the spread of COVID-19.
- India: India has extended its lockdown until May 17. During this extended lockdown, India continues to suspend all domestic and international air travel, passenger trains, and interstate buses. Schools, hotels, gyms, theaters, and places of worship remain closed. Meanwhile, grocery stores and pharmacies are allowed to stay open. Face coverings are required in all public places, and gatherings of more than five (5) individuals are prohibited. India has announced a phased re-opening, under which health officials will designate areas as red, orange, or green zones, depending upon the concentration of COVID-19 cases in those areas.
- Malaysia: On May 1, Malaysian Prime Minister Muhyiddin Yassin announced a conditional re-opening of the country beginning May 4, under which almost all industry and business activities will be allowed to restart operations, provided that such activities comply with relevant authorities’ standard operating procedures. Employers are encouraged to continue to allow working from home or working on a rotating basis. Schools, entertainment facilities, religious events that draw crowds, and beauty services are among those that are not permitted to re-open. Some Malaysian states have elected not to participate in the re-opening measures.
- Spain: Beginning May 2-4, Spain initiated a multiphase plan to re-open by the end of June, in which each phase will be implemented over the course of approximately two (2) weeks. During the current first phase, individuals are allowed to exercise outside their home and to receive beauty services and restaurants may serve takeout, again provided that social distancing and sanitation measures remain observed. Spain’s next phase will allow outdoor sections of bars and restaurants to open at 50% capacity and groups of ten (10) or fewer people will be permitted in public places and residences.
Multinational employers that are preparing for employees to return to the workplace should be prepared to implement new practices and protocols to maintain a safe work environment while the COVID-19 pandemic continues. While there are no one-size-fits-all policies or practices when operating an international workforce, employers may begin to consider certain risk factors and precautionary measures in anticipation of employees returning to the office.
Mandatory Testing Upon Return to Work
Employers should consider whether to require employees to submit to precautionary COVID-19 tests and measures prior to entering the workplace. In addition to requiring employees to have their temperature taken, employers may consider requiring employees to take one of the many different diagnostic tests that are emerging on the market. Employers should be mindful of whether any tests that may be used have been approved by public health and safety agencies, such as the Food and Drug Administration or the European Medicines Agency. Additionally, before requiring COVID-19 testing, employers should be aware of many considerations, including but not limited to the following:
- Assess the type of COVID-19 test that may be most suitable for the workplace. A less-invasive diagnostic test that analyzes whether an individual currently is infected may be more suitable than a serologic (or antibody) test that indicates whether an individual previously has had an infection.
- Whether to limit any testing only to those employees who present symptoms of COVID-19. As a recent review by the Centers for Disease Control (“CDC”) suggests, COVID-19 may be spread from pre-symptomatic or asymptomatic individuals. As such, employers may consider testing all employees prior to their returning to the workplace.
- Whether to limit testing only to those employees who regularly work at the office, as opposed to those who regularly or exclusively work from home.
- Whether to require testing to be completed onsite or to provide employees with the option to be tested at their personal healthcare provider.
- Determine whether employees must consent to a COVID-19 test or whether labor unions or works councils must be consulted prior to implementing such a testing requirement.
- Implement procedures if and when employees refuse to consent to required tests. In addition, employers should consider appropriate responses in such circumstances, for example, progressive discipline or immediate termination.
- Develop a reporting and recordkeeping protocol. Employers should determine to whom positive COVID-19 test results will be disclosed, whether only to affected employees, other employees, and/or government entities. Employers should consider the privacy implications of reporting and recordkeeping practices and should ensure adherence to applicable local law.
Employee Health Certification
Employers may consider requiring that all returning employees certify certain health information regarding exposure to COVID-19. This may include requiring information as to whether employees have been diagnosed with COVID-19, whether they are exhibiting or have ever exhibited COVID-19 symptoms, and/or whether they have been in contact with someone who has been diagnosed with COVID-19 or exhibited COVID-19 symptoms. Depending on the jurisdiction, such inquiries may not be legal or recommended. Employers should develop processes to respond consistently to employees who respond to any COVID-19 health questions affirmatively (e.g., not allowing such employees to enter the workplace). Similarly, employers that request employees to certify certain health information also should consider what procedures to follow in the event that employees refuse to answer such health-related questions (e.g., progressive discipline or immediate termination). Employers also must comply with country-specific privacy requirements.
Wearing Face Coverings in the Workplace
Another measure that employers may consider is whether to require returning employees to wear face coverings in the workplace. Generally, such measures likely are permitted in most jurisdictions as a means to protect all employees’ health and safety. When implementing face covering requirements, employers again should consider processes to follow should employees refuse to wear such protective equipment. In some cases, terminating employees for an initial offense may not be reasonable. Instead, progressive discipline, beginning with an initial warning and escalating in the event of additional violations of workplace policies, may be appropriate.
Refusal to Return to Work
As businesses begin to re-open, employers may find that some employees may refuse to return to the workplace. As a best practice, employers should evaluate such instances on a case-by-case basis. Employers should consider whether employees refuse to return to work based upon personal preferences, government recommendations, and/or information from healthcare providers. Employers should also assess whether employees’ essential job functions require their working onsite or whether such employees may work remotely. In addition, employers should consider those disciplinary procedures that should be taken in the event that employees refuse to return to work. Depending on local law, as well as specific company culture, immediate termination may be too harsh a response, and progressive discipline may be more suitable. Alternatively, it may make the best business sense to accommodate employees’ wish to work remotely or not to return to work where telework is not feasible.
While many countries’ re-opening plans include loosening restrictions on local travel, many employees, particularly those who commute via mass transit, may be wary of returning to the office. As a practical matter, where workable, it may be best for employers to accommodate employees’ desire to work remotely, or not to return to work where remote work is not available. In addition, several jurisdictions are prohibiting international visitors and may require immediate quarantine upon arrival. Given this, employers should limit non-essential business travel and should consider prohibiting international travel.
In the end, when evaluating how to respond to the challenges presented by the COVID-19 pandemic, employers should be pragmatic and practical. The circumstances that have resulted from COVID-19 are, novel, and multinational employers of all sizes are attempting to cope with a complex, unpredictable and rapidly changing environment. During this difficult time, employers should remain cognizant that many governments have enacted legislation and have issued guidance to support employers and employees. As such, employers should contact legal counsel to localize policies and practices to ensure that best legal practices are maintained that still adhere to company culture and longstanding company practice.
We continue to monitor the global impact of the COVID-19 pandemic on employers, and we will provide updates as new developments emerge.
As we previously reported, on Monday, April 27, 2020, Texas Governor Greg Abbott announced Phase One of his much anticipated plan to reopen Texas while minimizing the spread of COVID-19. In response to this plan to reopen, at limited capacity, retail establishments, restaurants, movies, shopping malls, libraries and museums, starting on May 1, 2020, many Texas workers are weighing the option of returning to work and earning a paycheck against the potential risks of exposure to COVID-19 and forfeiting unemployment benefits.
On Thursday, April 30, 2020 Governor Abbot addressed this issue by announcing that the Texas Workforce Commission (“TWC”) has issued Guidance to unemployment benefits claimants concerning their continued eligibility should they choose not to return to work. While reinforcing that each claim is assessed on a case-by-case basis, the TWC Guidance outlines specific circumstances under which workers will still be granted unemployment benefits, even if suitable work is available.
Per the Guidance, a worker who refuses to return to work due to the following COVD-19 related reasons may retain unemployment benefit eligibility:
- High Risk—If a worker is at “high risk.” defined by the TWC as individuals 65 years and older, as they are at higher risk for becoming very sick from COVID-19;
- Household Member at High Risk—If a worker’s household member is at high risk. This includes household members 65 years or older;
- Diagnosed with COVID-19—If a worker has been diagnosed with COVID-19, having tested positive for the virus by a source that is authorized by the State of Texas, and they have yet to recover;
- Household Member Diagnosed with COVID-19—If a worker has a household family member with COVID-19, having tested positive for the virus by a source that is authorized by the State of Texas, the family member yet to recover, and 14 days have not yet passed;
- Quarantined—If a worker is currently in 14-day quarantine due to close contact exposure to COVID-19; or
- Childcare Needs—If a worker’s child’s school or daycare is closed, and there are no available childcare alternatives.
Many U.S. businesses are starting to prepare for phased returns to the workplace. Employers’ planning should consider the impact that various return-to-work approaches may have on their employee benefits and compensation programs and, in addition, how some innovative employee benefits and compensation programs may enhance workplace morale and productivity by assisting employees transitioning back to the workplace. The following summarizes some of the important benefits and compensation issues to keep in mind as employees return-to-work.
Plan Service Crediting, Eligibility and Vesting
Many employers that faced business interruptions because of the pandemic were required to reduce employees’ hours – in some instances to zero for employees placed on furlough. Reduction of hours may have affected employees’ benefit plan eligibility (such as for retirement and health and welfare plans) and vesting (such as for retirement plans). Employers, as plan sponsors, must pay careful attention to service crediting calculations, which might not be straight forward, under applicable plan terms. For benefits that are being reinstated, any applicable waiting periods (including potential waiver of waiting periods) must be administered. In some instances, employers may wish to consider plan amendments to address service crediting issues, especially where employees will be returning in phases or on a reduced hours basis through job sharing arrangements. Any amendments modifying eligibility and vesting service provisions, however, must be made in a nondiscriminatory manner and must comply with anti-cutback rules (as applicable).
Compensation Adjustments and Retirement Plan Contributions
Employers that have implemented compensation reductions (and that are considering future adjustments) will need to account for these changes in retirement plan contributions in accordance with applicable plan terms. Proper application of plan compensation definitions is often an area of benefit plan noncompliance and any repeated mid-year adjustments will add complication. For returning employees whose contributions had ceased, employers must be careful to resume the employees’ plan contributions on a timely basis and, in addition, to be attentive to the resumption of any plan loan repayments, if the employees are not eligible for a continued suspension for the plan year. Further, employers, as plan sponsors, should monitor the administration of any changes in employer contributions, including any matching or non-elective contributions to ensure they have been adjusted properly, if applicable. In addition, plan administrators must be mindful to properly apply the relevant definition of “compensation,” for determining the amount of such contributions.
Modifications to Performance Targets and Incentive Programs
For some employers, return-to-work planning may include revising their financial projections for the remainder of the year. Such modifications will often impact performance targets for incentive programs. Employers may therefore wish to revisit their fiscal year program targets, and as permitted under the applicable plan documents or agreements, prepare program amendments, and revised award agreements. Any such changes must also include preparation of participant communications to advise affected employees of the revised targets that must be achieved to receive an award, as well as any desired deferral or pro ration of such awards.
Employers that have made significant changes to their business strategies may find that key employee roles may have changed significantly during the pandemic. For key employees who have employment agreements, their agreements may no longer reflect the actual work being performed or that will be performed upon the employees’ return to work. Employers therefore should review their executive employment agreements to ensure that provisions on duties, compensation and severance triggers, such as “good reason” resignation clauses, are appropriately amended or waived to reflect any changes to the role or compensation of those key employees. It may also be necessary to review and revise contractual commitments as to benefits, compensation arrangements, bonuses and perquisites (such as travel, housing, health coverage, technology, auto reimbursement and similar items).
Employers that offer reimbursement account programs to employees, such as for dependent care expenses or commuting expenses, may find that their employees have made numerous adjustments to their contributions from salary to these accounts during periods of telecommuting or temporary leave of absence. These adjustments may change again after employees’ return to work. Employers should monitor these adjustments to ensure that payroll remittances for these (and any future) changes have been properly implemented.
COBRA and Leave Policies
Leaves of absence may not result in a termination of employment and loss of health coverage. In addition, depending on the arrangement, a reduction in hours may not result in a loss of coverage under a group health plan or give rise to a COBRA qualifying event, such as during an FMLA leave, paid leave of absence, or as the employer may provide under the group health plan. See Benefits Guidance in the Time of Covid-19 Continuing Employer Group Health Coverage During Temporary Layoffs and Video/Benefits Guidance in the Time of COVID-19: Continuing Health Coverage During Leave, Furlough or Temporary Layoff . Employers will need to navigate and administer coordination of health plan premium payments with the various types of leaves of absence that may have been taken by employees, or taken again during the plan year, as well as those which may have given rise to COBRA qualifying events. The employer’s approach must be consistent with the written plan documents, any insurance carrier requirements, and COBRA administration procedures.
As they analyze return to work options, employers may wish to revise their severance programs to address the level or scope of their severance plans and programs. Some employers may decide to re-hire employees who had been involuntarily terminated and paid severance. In such cases, employers should review whether there are any repayment requirements or whether amendments should be considered to address or waive prior payments. Coordination with leave programs and federal and state WARN obligations also should be considered.
New Benefits Programs
Employers may wish to consider new and innovative employee benefits and expanded services, to assist employees with the various career and personal challenges brought on by the pandemic. Such programs may include, for example, employee assistance programs to provide anxiety and stress counseling, telehealth services, on-site medical arrangements, on-site day care or expanded child care options, on-site meal services, provision of personal protective equipment in the workplace (even if not required), tuition reimbursement and upskill training, financial wellness programs, and re-design of retirement plan programs to better secure retirements. There may also be certain temporary benefits programs that remain relevant with a phased return-to-work approach (for additional program considerations, see Temporary Benefit Strategies to Immediately Help Workers: Benefits Guidance in the Time of COVID-19).
In planning returns to work, employers may find that they also need to consider reductions in force or other involuntary terminations. In such cases, employers may need to address benefits issues such as providing severance and outplacement benefits, voluntary retirement programs, and other workforce reduction strategies (see Benefits Guidance in the Time of COVID-19: RIFs, Furloughs, Layoffs, and Leaves of Absence).
Employers should consider the foregoing as they plan their return-to-work strategies and take proactive steps now to specifically review the potential impact to each of their employee benefits and compensation programs so that they can be timely addressed.
Effective April 17, 2020, the Connecticut Department of Economic and Community Development (DECD) significantly revised its recently issued Safe Workplace Rules for Essential Employers (the “Rules”). Specifically, the Rules have been updated to include a requirement that all employees of essential businesses wear masks while working. The DECD’s original rules did not contain any provision regarding masks. Now, the DECD has significantly modified the mask requirements as follows:
- Employees of essential businesses are required to wear a “mask or other cloth material” that covers his or her mouth and nose while in the workplace, except while on break time to eat or drink.
- Employees who work alone in segregated spaces (e.g. cubicles with walls and private offices) may remove their masks while at their cubicle, office or work station. These employees, however, must still wear a mask from the time they enter the building until the time they arrive at their workstation, and any time they leave their workstation and move around common areas, such as going to the restroom.
- Employees who work in congregate settings (e.g., open manufacturing floors, warehouses, areas open to the public, shared offices or similar settings), must wear a mask while at their workstations.
- Continuous wearing of masks is not required in outdoor workspaces where employees do not regularly come within six feet of each other.
- An employee is not required to wear a mask when doing so would be “contrary to his or her health or safety because of a medical condition.” If an employee declines to wear a mask due to a medical condition, an employer cannot require medical documentation.
- Essential employers are required to issue masks or cloth face coverings to employees. If an essential business cannot do so, due to shortages or supply chain difficulties, it must provide employees with materials and the CDC’s tutorial on how to create a cloth face covering. Alternatively, an essential business can compensate employees for the reasonable and necessary costs of materials used to make a mask or face covering. There is no requirement for a N95 face mask to be provided.
Essential employers must also require its customers and visitors to wear masks or face coverings while on the premises. Essential businesses can, if they chose, provide face coverings to customers or other visitors upon, or prior to, entering the essential business. An essential business, however, may not require a customer or visitor to use a mask or face covering when doing so would be contrary to their health or safety due to a medical condition; and the essential business may not require a customer or visitor to produce medical documentation. In addition, an essential business may not require a child in a childcare setting or a child under two years old to wear a face mask or covering. Further, it may not require an older child to wear a face mask or covering if the child is unable to safely place the mask on its face; or, if the parent or person responsible for the child is unable to safely place the mask on the child’s face.
Essential businesses should modify their existing policies regarding face masks while the COVID-19 pandemic continues. Also, since the Rules have changed in the short time since they have been issued, there may be further changes and adjustments. Epstein Becker & Green, P.C. will continue to monitor these developments and will alert you to any changes or adjustments. In the meantime, if you have any questions or need assistance drafting or modifying your existing COVID-19 policies so that they are legally compliant, please contact Peter M. Stein, Deborah Cannavino, Carol J. Faherty, or your Epstein Becker & Green, P.C. attorney.
On April 29, 2020, the Los Angeles City Council simultaneously passed two ordinances in response to COVID-19 that could potentially have long lasting and far reaching impacts on applicable businesses: the Right of Recall Ordinance and the Worker Retention Ordinance. The Mayor has until May 11, 2020, to act on both of the ordinances. These ordinances, pending approval of the Mayor, will be effective 31 days from their publication date.
Right to Recall Ordinance:
While the true impact of the ordinance remains to be seen, the City Council’s claimed purpose behind the Right of Recall Ordinance (“Recall Ordinance” was to enact, for employees of certain limited employers, “legal protections for workers laid off due to the pandemic.” Essentially, the Recall Ordinance requires the specified businesses to attempt to rehire laid off workers before offering open positions to new employees. However, while the Recall Ordinance was ostensibly passed as a measure against the impacts of COVID-19 and the various stay-at-home orders which shuttered these businesses, the Recall Ordinance does not have a sunset clause and will remain law until the City Council repeals it.
The Recall Ordinance applies to Airport Employers, Commercial Property Employers, Event Center Employers, and Hotel Employers. The Ordinance provides specific definitions for each type of employer:
- Airport Employer: Any employer, regardless of size, that provides any service at the Airport or provides any service to any employer servicing the Airport, and is required to comply with the Los Angeles Living Wage ordinance, Los Angeles Administrative Code Section 1-.37 et seq. However, this does not include (1) an airline; or (2) an employer that is party to an agreement with the airport that contains a worker rehire requirement. The “Airport” is defined under the Recall Ordinance as the City of Los Angeles Department of Airports and each airport which it operates in the city.
- Commercial Property Employer: An owner, operator, manager or lessee, including a contractor, subcontractor or sublessee, of a non-residential property in Los Angles that employs 25 or more janitorial, maintenance or security service workers. However, only the janitorial, maintenance, and security service workers who perform work for a Commercial Property Employer are covered by the Recall Ordinance.
- Event Center Employers: An owner, operator, or manager of a publicly or privately owned structure in Los Angeles of more than 50,000 square feet or with a seating capacity of 1,000 seats or more that is used for public performances, sporting events, business meetings or other similar events.
- Hotel Employer: An owner, operator or manager of a residential building in the City designated or used for public lodging or other related service for the public and either contains 50 or more guestrooms or has earned gross receipts in 2019 exceeding $5 million. A Hotel Employer includes the owner, operator, manager or lessee of any restaurant physically located on hotel premises.
Laid Off Worker Defined
The Recall Ordinance defines laid off worker as any person (1) who performs at least two hours of work, “in a particular week,” within the geographical boundaries of Los Angeles for an employer, (2) has a length of service with the employer of six months or more, and (3) whose most recent separation from active employment by the employer occurred on or after March 4, 2020, as a result of a lack of business, a reduction in work force or other economic, non-disciplinary reasons. Employees of an Event Center Employer who are in managerial, supervisory or confidential positions are excluded from coverage.
Rebuttable Presumption of Non-Disciplinary Termination
The most striking provision in the Recall Ordinance, outside the possibility of punitive damages, is that it creates a rebuttable presumption that any termination occurring on or after March 4, 2020, was for a non-disciplinary reason. This means that the burden rests on the employer, if challenged, to show that an employee was terminated for disciplinary reasons and does not have a right to recall. This is a significant modification of the at-will standard long codified under California Labor Code section 2922. The Recall Ordinance therefore essentially imposes on covered employers a just cause termination standard, long advocated by labor unions and plaintiffs’ lawyers.
Right of Recall
The Recall Ordinance establishes that there shall be a priority made for certain workers laid off during the COVID-19 pandemic. A laid off worker is qualified if that worker (1) held the same or similar position at the same site of employment at the time of the laid off worker’s most recent separation from active service with the employer; or (2) is or can be qualified for the position with the same training that would be provided to a new worker hired into that position.
If more than one laid off worker is entitled to preference for a position, the employer must offer the position to the laid off worker with greater seniority at the employment site.
The employer is required to make an offer of recall to a laid off worker for any position which is or becomes available after the effective date of the Recall Ordinance for which the laid off worker is qualified. The offer must be made in writing to the last known mailing address of the employee, by electronic mail, and by text message. A laid off worker who is offered a position pursuant to the Recall Ordinance must be given at least five (5) business days to respond to the offer. Unlike similar recall rights which may be contained in employer policies or collective bargaining agreements, the Recall Ordinance does not have a time limitation in which the laid off worker maintains these rights. Consequently, an employee laid off in March 2020 may need to be reoffered a similar position that becomes available years later.
Significant Legal Remedies
The Recall Ordinance provides significant legal remedies to laid off workers who believe that a former employer has violated it. A laid off worker may bring an action against an employer for violating the Recall Ordinance and may be entitled to: (1) hiring and reinstatement rights, (2) actual damages suffered by the laid off worker or statutory damages in the sum of $1,000, whichever is greater, (3) punitive damages, and (4) attorneys’ fees and costs. Any employer who has litigated any type of employment discharge case in Los Angeles is unfortunately aware that the plaintiff’s attorneys’ fees award is often in the high six figures and Los Angeles juries frequently hand out seven figure punitive damages awards. Conversely, however, the Recall Ordinance provides that a prevailing employer is only entitled to recover its attorney’s fees and costs if a court determines that the laid off worker’s lawsuit was frivolous.
The Recall Ordinance does, however, provide a limited safe-harbor provision and internal remedies exhaustion provision. Specifically, before filing a civil action a laid off worker must provide written notice to the employer of the provisions of the article alleged to have been violated and the facts supporting the alleged violation. The employer then has 15 days from receipt of the notice to cure any alleged violation.
Exemption for Collective Bargaining Agreements
If a collective bargain agreement (“CBA”) already contains a right of recall provision on the effective date of the Recall Ordinance, then the recall provision within the CBA shall supersede it. However, when the CBA expires or is open for renegotiation, the provisions of the Recall Ordinance may only be waived if a waiver is explicitly set forth in the CBA in clear and unambiguous terms.
If a CBA does not include a right of recall provision at the time the Recall Ordinance becomes effective, then it applies. Nonetheless, a CBA may be amended at any time to explicitly waive with clear and unambiguous terms the provisions of the Recall Ordinance.
No Waiver of Rights
Except for in a CBA provision as described above, any waiver by a worker of any or all of the provisions in the Recall Ordinance will be deemed void and unenforceable. This is significant as it essentially requires an employer to provide the recall rights to a terminated or laid off employee even if they provide them severance or otherwise reach an amicable resolution of the employee’s separation.
Rules and Regulations
While the final version of the Recall Ordinance may leave employers with ample questions, the Los Angeles Office of Wage Standards of the Bureau of Contract Administration will eventually promulgate Rules and Regulations, which will hopefully clear up any confusion with the Recall Ordinance or limit some of its impact.
Worker Retention Ordinance
The COVID-19 Worker Retention Ordinance “Retention Ordinance”) subjects certain businesses within Los Angeles to worker retention provisions when a change of ownership or control occurs within two years following the declaration of emergency resulting from the COVID-19 pandemic. While ostensibly tied to the impacts of the pandemic, labor unions have been pushing the City Council to provide these exact same restraints on the covered businesses for many years.
The Retention Ordinance applies to the same employers covered by the Recall Ordinance: Airport Businesses, Commercial Property Businesses, Event Center Businesses, and Hotel Businesses. These businesses are defined the same way they are defined in the Recall Ordinance other than the term “employer” is replaced by “business.”
Under the Retention Ordinance, a “worker” is defined as an individual who was employed by the incumbent business employer and:
- who has a length of service with the incumbent business employer for six months or more;
- whose primary place of employment is a business subject to a change in control,
- who is employed or contracted to perform work functions directly by the incumbent business employer, or by a person who has contracted with the incumbent business employer to provide services at the business subject to the change in control; and
- who worked for the incumbent business employer on or after March 4, 2020, and prior to the execution of the transfer document.
The Retention Ordinance excludes from coverage all managerial, supervisory, or confidential position employees of any covered employer (as opposed to just the Event Center Business exclusion in the Recall Ordinance).
Responsibilities of the Incumbent Business Employer
The incumbent business employer is required to provide to the successor business employer the name, address, date of hire, and occupation classification of each worker, within 15 days after the execution of a transfer document.
The incumbent business employer must post written notice of the change in control of the business at the location of the affected business within five business days following the execution of the transfer document. This notice must remain posted during any closure of the business and for six months after the business is open to the public under the successor business employer. The notice must contain, at a minimum, (1) the name of the incumbent business employer and its contact information, (2) the name of the successor business employer and its contact information, and (3) the effective date of the change in control. The notice must be posted in a conspicuous place at the business that is visible to all employees and applicants for employment.
Responsibilities of the Successor Business Employer
The successor business employer must maintain a preferential hiring list of workers and is required to hire from that list for a period beginning upon the execution of the transfer document and continuing for six months after the business is open to the public under the successor business employer.
If the successor business employer extends an offer of employment to a worker, the successor business employer must retain written verification of that offer for at least three years from the date of the offer. This verification must include the name, address, date of hire, and occupation classification of each worker.
90 Day Transition Period
A successor business employer is required to retain each worker hired pursuant to the Retention Ordinance for a minimum of 90 days, and a worker can only be discharged for cause during this 90 day period. The successor business is required to provide a worker with a written offer of employment for this transition period and the offer must remain open for at least 10 business days from the date of the offer. At the end of the 90 day period, the successor business employer must perform a written performance evaluation for each worker retained pursuant to the Retention Ordinance. A record of this written performance evaluation must be retained for a minimum of three years.
If the worker’s performance during the 90 day period is satisfactory, then the successor business must consider offering the worker continued employment. Notably, the Retention Ordinance only mandates that the business “consider” offering the worker, but does not state that it is required.
If during the six months that the successor business employer is required to maintain a list of workers identified by the incumbent business employer, the successor business employer determines that it requires fewer workers than the incumbent business employer did, then the successor business employer must offer the position to the worker in the same occupational classification with the greatest seniority with the incumbent business employer.
A worker who believes their rights pursuant to this Ordinance have been violated may bring an action against either the incumbent business employer or the successor business employer. The available remedies include (1) hiring and reinstatement rights, (2) front or back pay for each day of the violation, and (3) value of the benefits the worker would have received under the successor business employer’s benefits plan. Similar to the Recall Ordinance, a court may also award attorneys’ fees and costs to a worker who prevails, but only to a business if it obtains a court determination that the worker’s lawsuit was frivolous.
Also similar to the Recall Ordinance, the worker must take certain steps before filing an action: (1) the worker must provide written notice to the incumbent business employer and/or the successor business employer of any alleged violations, and (2) the business must be given 15 days from the receipt of the written notice to cure the alleged violations.
Exemption for Collective Bargaining Agreements and No Waiver of Rights
The same provisions in the Recall Ordinance regarding CBAs and No Waiver of Rights are found in the Retention Ordinance.
Rules and Regulations
As with the Recall Ordinance, the Los Angeles Office of Wage Standards of the Bureau of Contract Administration will eventually promulgate Rules and Regulations on the Retention Ordinance.
New Jersey Governor Phil Murphy and Superintendent of the State Police Colonel Patrick Callahan (who also acts as the State Director of Emergency Management) issued orders this week lifting some closures and reiterating or clarifying others, as follows.
Administrative Order 2020-10
On April 27, 2020, in Administrative Order 2020-10 (“A.O. 10”) , Col. Callahan clarified and amended Executive Order 107 (which we wrote about here). A.O. 10, which became effective immediately, permits the reopening of certain business operations now deemed “essential retail business,” provided they adhere mandated precautions, but reiterates others that certain others must remain closed, as follows:
- Pet grooming, pet daycare, and pet boarding businesses shall be considered essential retail businesses and be permitted to open, if they adopt in-person operation policies that include, at a minimum, the enhanced social distancing practices detailed in previously-issued Executive Order No. 122 (which we wrote about here), including limiting occupancy, allowing for contactless methods of payment, and requiring workers and customers to wear cloth face coverings while on the premises;
- Stores that principally sell items necessary for religious observation or worship shall be considered essential retail businesses if they adopt in-person operation policies that include, at a minimum, the enhanced social distancing practices detailed in Executive Order 122;
- Car dealerships may permit customers that have ordered and/or purchased a vehicle online or by phone to test drive the vehicle at the time of pick-up or prior to delivery, if the dealership adopts in-person operation policies that (a) include, at a minimum, the enhanced social distancing practices detailed in Executive Order 122; (b) permit the individual to access the vehicle alone; and (c) provide that the dealership is to appropriately clean and sanitize the vehicle after such test drive, if the customer does not purchase the vehicle;
- Licensees, owners, operators, employees, or independent contractors of personal care services facilities (which were ordered to be closed to the public in Executive Order 107), are not permitted to provide personal care services in their own homes, the homes of others, or in any facility or business setting unless the individual personal care service provider is providing the service to their household members, immediate family or other individuals with whom the personal care service provider has a close personal relationship, such as those for whom the personal care service provider is a caretaker or romantic partner. A prior business relationship alone does not qualify as a close personal relationship, for purposes of this paragraph;
Executive Order 133
On April 29, 2020, Gov. Murphy issued Executive Order 133, which allows the reopening of golf courses and state parks, with specific recommendations and policies to enhance social distancing and to protect the public from the spread of COVID-19, as described below. All prior applicable Executive and Administrative Orders are superseded to the extent inconsistent with the following new rules. Executive Order 133 takes effect at 6:00 a.m. on Saturday, May 2, 2020.
Executive Order 133 allows all state parks and forest to open to the public for the following passive recreational activities in which social distancing can be readily achieved:
- Running or jogging;
- Birding; and
- Horseback riding.
The following, however, are to remain closed at all state parks and forests:
- Picnic areas;
- Exercise stations and equipment;
- Chartered watercraft services and rentals;
- Restrooms; and
- Other buildings or facilities, including, but not limited to, visitor centers, interpretive centers, and interior historical sites.
The following recommendations and policies shall apply to all state parks and forests:
- Employees and visitors should wear cloth face coverings while in the park or forest in all settings where other social distancing measures are difficult to maintain, except where doing so would inhibit that individual’s health or where the individual is under two years of age;
- Available parking must be limited to 50% of the maximum capacity at one time, and visitors are prohibited from parking in undesignated areas, including in roadways and other undesignated areas;
- No picnicking is allowed, and no picnic blankets, chairs, coolers, and other such personal property may be carried into any state park or forest;
- Visitors must practice social distancing and stay six feet apart whenever practicable, excluding immediate family members, caretakers, household members, or romantic partners;
- No organized or contact activities or sports are allowed; and
- Gatherings of individuals, including in parks, are prohibited.
In addition, Executive Order 133, mandates that all recreational campgrounds and transient camp sites at campgrounds must remain closed. Residential campgrounds, which includes mobile home parks, “condo sites,” and existing/renewing 2020 yearly seasonal contract sites, however, may remain open.
Finally, county parks which were closed by Gov. Murphy’s Executive Order No. 118 issued on April 7, 2020 are permitted to be open. Those parks that were closed by county order before April 7, 2020, may be reopened by order of the county of jurisdiction. All county and municipal parks must adhere to the social distancing restrictions applicable to state parks summarized above, In addition, counties and municipalities may impose additional restrictions at their respective parks in response to COVID-19. Counties and municipalities may also impose additional restrictions on the ability of residential campgrounds, including mobile home parks, to accept new transient guests or seasonal tenants.
Executive Order 133 allows golf courses to reopen, but such businesses must adopt policies that at minimum:
- Require that reservations, cancellations and pre-payments be made via electronic or telephone reservation systems to limit physical interactions. Such policies shall, wherever possible, consider populations that do not have access to internet service or credit cards;
- Stagger tee times so that they are 16 minutes apart, and limit tee times to two players, except for immediate family members, caretakers, household members, or romantic partners;
- Limit use of golf carts to single occupant only, excluding an individual’s immediate family members, caretakers, household members, or romantic partners;
- Require frequent sanitization of high-touch areas, following CDC guidelines;
- Ensure cleaning procedures following a known or potential exposure at the golf course in compliance with CDC recommendations;
- Ensure that the golf course is sufficiently staffed to perform the above protocols effectively and in a manner that ensures the safety of players and staff;
- Restrict players’ ability to touch common surfaces when retrieving golf balls by installing pins, placing cups upside down or partly above ground, or utilizing a shallow cup;
- Close all golf center buildings, pro shops, and other buildings and amenities to the public;
- Remove bunker rakes and other on-course furniture like benches, water coolers, and ball washers;
- Ensure that the flagstick remains in the golf hole at all times, and instruct players to avoid touching the flagstick or hole;
- Discontinue club and equipment rentals;
- Prohibit the use of caddies;
- Place additional restrictions on areas of the golf course, as necessary, to limit person-to-person interactions and facilitate appropriate social distancing, including but not limited to, specific holes, putting greens, FootGolf courses, and short game areas;
- Employees, players, and other individuals should wear cloth face coverings in all settings on the golf course where other social distancing measures are difficult to maintain, except where doing so would inhibit that individual’s health, or where the individual is under two years of age; and
- Require players to always maintain appropriate social distancing by remaining six feet apart from each other.
Executive Order 133 makes clear that miniature golf courses and driving ranges, as well as other places of public amusement, remain closed pursuant to Executive Order 107.