The Biden Administration has directed a number of changes that impact employers under Administrative Agency action as well as the passage of the American Rescue Plan Act (ARPA). We are highlighting a few of those here to alert employers and will cover them more in-depth in later blogs or our seminars.
The ARPA gives employers the option of extending FFCRA benefits to September 30, 2021 (as opposed to March 31, 2021) and extends the available tax credits during that time as well. For those employers doing so, there are new benefits added to the FFCRA leave that employers must provide. Specifically, employees are eligible for new EPSL 10-day benefits and EFMLEA 10-week benefits, which reset effective March 31, 2021. Two additional reasons will qualify for EPSL leave – vaccine appointments and complications due to receiving the vaccine. The EFMLEA paid leave cap is increased to $12,000. Note the tax credit only applies to employers who uniformly provide the FFCRA leave to all categories of workers.
The federal government will cover 100% of COBRA insurance premiums for employees on their employer’s healthcare plan through COBRA from April 1 through September 20, 2021. The employees who are eligible are those who lost their jobs because of the pandemic or lost coverage due to a reduction in hours. The relief is not available to any employee voluntarily departing employment. Employers will obtain the subsidy and pass it along to their COBRA enrollees through the employers’ quarterly payroll taxes. The process was used in 2009 for the COBRA premium subsidies issued under the American Recovery and Reinvestment Act. It caused much frustration and confusion for employers due to the complexity of the subsidies.
The Department of Labor (DOL) will issue model notices by April 9, 2021. Plan sponsors need to prepare the separated notices to assistance-eligible individuals when their periods of premium assistance are due to expire. Updated COBRA Notices will be issued.
Independent Contractors and Joint Employers
Not surprisingly, the DOL is walking back two rules issued during the Trump Administration, one regarding independent contractors issued January 7, 2021 and another applicable to joint employers that went into effect March 16, 2020.
Both rules offered greater protections for employers and businesses when any misclassification issues arose regarding their independent contractors or temporary staffing.
- Independent Contractor Final Rule
- The rule stated the “economic reality” test would govern any analysis of whether an individual is an independent contractor or an employee, identifying two core factors considered most probative to the analysis – nature and degree of control over the work and the worker’s opportunity for profit or loss based on the work.
- The DOL will not apply the “economic reality” test to determine if an independent contractor relationship exists because it has not been used by the DOL or courts, nor does the DOL believe the FLSA supports use of the test.
- Joint Employers
- The rule outlined two situations where a joint employer may be created. The first occurred when an employee works for one employer but the work benefits another employer and the employee is acting directly or indirectly in the best interest of the employer. The analysis required consideration of who supervises and controls the employee’s work schedule, determines the pay rate and method of payment, maintains employment records and hires or fires the employee. The second method required proof that the intended joint employer actually exercised direct or indirect control over the employee under the indicia of control standard.
- If promulgated, the regulation at 29 C.F.R. §791 will be rescinded.
Many employers are facing questions from employees as to whether they have to wear masks once they’ve been vaccinated. The CDC issued guidance for vaccinated people on March 9, 2021. However, the guidance does not pertain to mask use in public or gathering with other unvaccinated people, both of which may well be the situation in workplaces and businesses. The new guidance clarifies that employees should continue to follow their employer’s work policies.
Many employers are considering making vaccinations mandatory. Check out our blogs on this topic:
The PRO Act was passed in the House of Representatives on March 6, received in the Senate on March 11 and referred to the Committee on Health, Education, Labor and Pensions. The most disconcerting issue is the Bill removes employee choice in joining a union and requires all employees to pay union dues for any unionized group of employees. This could then mean all employees are covered under the Collective Bargaining Agreement, thereby possibly eroding the at-will nature of the employment relationship. The Bill broadens the definition of who is an employee, supervisor and employer to contemplate employment relationships in those relationships not traditionally seen as such. Employers are not permitted to require employees to hear messaging against unionization and labor organizations are permitted to encourage employees to join unions represented by a different labor organization.