FFCRA Update: What the March 2021 Federal Stimulus Bill Means for COVID-19-Related Leave

On March 10, 2021, Congress passed its landmark $1.9 trillion COVID-19 relief bill, and President Biden signed the bill into law on March 11.  The bill does not require employers to continue offering Families First Coronavirus Response Act (“FFCRA”) leave, but it extends the FFCRA’s payroll tax credit provisions for employers who choose to offer such leave through September 30, 2021.  The bill also expands the qualifying reasons for FFCRA leave for employers who choose to offer it.

Here are the key FFCRA-related provisions in the March 2021 stimulus bill for employers to be aware of:

  • The requirement that employers provide emergency paid sick leave or expanded family medical leave under the FFCRA expired on December 31, 2020. The new law does not change that; providing FFCRA leave is now optional.
  • The new law expands the types of leave for which a payroll tax credit can be claimed to include leave taken when an employee is (1) obtaining a COVID-19 vaccine; (2) recovering from any illness or condition related to the COVID-19 vaccine; or (3) seeking or awaiting the results of a COVID-19 diagnosis or test if either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis.
  • The COVID-19-related Tax Relief Act of 2020 had extended through March 31, 2021 the tax credit to reimburse employers for the cost of providing paid FFCRA leave. The new law continues that payroll tax credit through September 30, 2021 for employers who voluntarily decide to provide employees with FFCRA leave.
  • The new law resets the 10-day limit for emergency paid sick leave under FFCRA, starting April 1, 2021. If an employer decides to continue to voluntarily provide emergency paid sick leave under FFCRA, the employer can claim a payroll tax credit to offset up to 10 days of wages paid as qualified emergency paid sick leave from April 1 to September 30, 2021, even if employees previously exhausted their emergency paid sick leave entitlement.

Unpaid leave remains a requirement for child care-related reasons in Oregon.

Note that under the Oregon Family Leave Act, Oregon employers are still required to provide up to 12 weeks of unpaid leave to eligible employees who need time off to care for a child whose school or childcare provider has been closed in conjunction with a public health emergency, including COVID-19.  We previously blogged about those requirements here.

If you have any questions, please contact us.

DOL Delays Roll-Out of New Independent Contractor Rule

Another day, another Trump-era Department of Labor (“DOL”) rule that’s been put on the shelf for 60 days.  Last week, we blogged about the Biden DOL’s decision to delay the rollout of the tip rules that the Trump DOL adopted in the final weeks of its administration from March 1, 2021 until at least April 30, 2021.  Yesterday, the Biden DOL announced that it was delaying the rollout of the Trump DOL’s independent contractor rule from March 8, 2021, until at least May 7, 2021.  The rule, which we blogged about here, codified the “economic realities” test that the DOL and the federal courts have long applied to determine whether a worker qualifies as an employee or an independent contractor.  Labor and progressive groups railed against the rule, arguing that it improperly expanded who would qualify for independent contractor status, particularly for gig-economy workers.

Their pleas appear to have been heard.  Just like the tip rules, it remains to be seen whether the Biden DOL will scrap the independent contractor rule entirely or simply make changes to it to better align with its priorities.  As always, we’ll keep you posted.

Utah Employers’ Ability to Use Non-Competes May Be Substantially Limited

The Utah State Legislature is currently considering legislation that would significantly limit the use of non-compete agreements in Utah.  Senate Bill 46 (SB 46) has passed the Senate and received a favorable recommendation from the Utah House Business and Labor Interim Committee.  The bill adds to restrictions the Utah State Legislature enacted in 2016, which limited post-employment enforcement of non-compete agreements to one year.  Under the proposed bill, the Legislature would also restrict the reasons for which an employer can seek a non-compete agreement.

Under current law, non-compete agreements in Utah must be no longer than one year, limited to a reasonable geographic area, and intended to protect only legitimate business interests of the employer.  Under common law, legitimate business interests supporting enforcement of a non-compete agreement have included a range of sensitive business information, like trade secrets, intellectual property, business plans, financial information, customer lists, and referral sources.  Courts have also found things like good will, customer relationships, and investment in employee training to be legitimate business interests supporting enforcement of a valid non-compete agreement.  The legislative history of SB 46 shows the Legislature’s intent to substantially limit an employer’s ability to protect many of these recognized legitimate business interests.

As initially introduced, SB 46 appeared to be an attempt merely to codify the common law recognition of legitimate business interests recognized by the Utah courts.  While some observers expressed concern about limiting the list of legitimate business interest to only those currently recognized, greater limitations soon followed.  The Utah State Senate amended SB 46 to remove most of the classes of intangible property currently protectible by non-compete agreements, leaving only trade secrets and intellectual property as the legitimate business interests allowed to support enforcement of a non-compete agreement.  Trade secrets and intellectual property already receive substantial protection under state and federal law.  Utah employers seeking to protect other types of information or their investment in good will, customer relationships, or employee training may find themselves with few tools if SB 46 is enacted.

DOL Delays Rollout of New FLSA Tip Rules

As we previously blogged about here, in the final days of the Trump Administration the Department of Labor (“DOL”) announced a series of new rules regarding how and to whom employers can distribute tips.  The new rules were scheduled to go into effect on March 1, 2021.  We predicted that the Biden Administration might seek to modify or at least halt the rollout of the rules once it assumed power following the inauguration.  And so it has come to pass: this week, the DOL announced that it was postponing the rollout for 60 days while it reviews the new rules further.  We will continue to monitor the fate of the rules and keep you updated about their status. In the meantime, if you have questions about the treatment of tips (e.g., who can and cannot receive them) please reach out to any of our attorneys.

Temporary Workers in California After Sullivan, Ward, and Oman

The California Supreme Court’s 2011 decision in Sullivan v. Oracle Corp. (“Sullivan”) and its more recent decisions in Ward v. United Airlines (“Ward”) and Oman v. Delta Air Lines, Inc. (“Oman”) provided employers with a certain amount of clarity in regard to non-California residents working within the State on a temporary basis.  Sullivan made clear that nonresident employees working in California for extended periods of time – “entire days or weeks” – for California-based employers are entitled to overtime pursuant to California Labor Code section 511.  As for Ward and Oman, they made clear that nonresident employees are entitled to the protections of Labor Code sections 226 and 204 if California is their principal place of work  or if California serves as the base of their work operations.

What these cases also made clear, however, is that what is true for Labor Code sections 226, 204, and 511 may not necessarily be true for other portions of the Labor Code.  Specifically, the California Supreme Court made clear in all of these cases that the application of California wage and hour protections to nonresident employees could vary on a statute-by-statute basis.  While this ambiguity and clarity keeps California labor and employment attorneys busy, it is not especially helpful for employers looking to properly navigate the law and avoid litigation. Continue Reading

Ninth Circuit Rules That Per Diem Payments Must Be Included in Regular Rate Under the FLSA

It’s common knowledge that an employee’s overtime rate is “time and a half” the regular rate of pay.  But that truism begs the question: what exactly is the regular rate of pay?  Earlier this week, the Ninth Circuit analyzed whether the Fair Labor Standards Act (“FLSA”) required a company to include per diem payments that it made to its employees (ostensibly for the purpose of reimbursing them for travel expenses) in the regular rate, in addition to the workers’ ordinary hourly pay.

The case is Clarke v. AMN Services, LLC, No. 19-55784 (9th Cir. Feb. 8, 2021), and like many wage and hour cases it arose quite innocuously.  AMN Services is a staffing company that places health care workers (primarily nurses and technicians) on short-term assignments.  Sometimes the assignments are in the health care workers’ local areas, but frequently they require the workers to travel some distance from where they usually reside.  In addition to their hourly rates, AMN Services pays the traveling health care workers per diems that reimburse them for the cost of meals, housing and other incidental expenses when they travel more than 50 miles away from their residences on assignment.  AMN Services did not include the per diem payments in the traveling workers’ regular rates when calculating their overtime.

The general rule under the FLSA is that “all remuneration” has to be included in the rate calculation.  Among other exceptions, the FLSA allows employers to exclude from the regular rate “payments to an employee which are not made as compensation for his hours of employment.”  Expense reimbursements are among the most common types of payment that can be excluded from the regular rate under this provision.  So were the per diem payments “compensation for . . . employment” or reimbursement? Continue Reading

Oregon OSHA Proposes Final, Permanent COVID-19 Safety Rules for Oregon Employers

As many of you know, effective November 16, 2020, the Oregon Occupational Safety and Health Administration (“OR OSHA”) adopted a comprehensive set of workplace safety rules designed to address the COVID-19 pandemic.  (More information about the rules is available here, here and here). These temporary rules remain in effect until May 4, 2021. Late last week, OR OSHA published its final draft of proposed permanent COVID-19 safety rules, which, as of May 4, 2021, will replace the temporary rules.

The proposed final rules are very similar to the temporary rules. Key provisions of the proposed final rules are:

COVID-19 Vaccines. This is the most significant difference between the temporary rules and the permanent rules, as the vaccine was not available at the time OR OSHA published the temporary rules. Under the draft permanent rules:

  • The employer must make its employees and adequate space available whenever a local public health agency or the Oregon Health Authority determines that it is necessary to administer the vaccine in the workplace.
  • If the employer mandates the vaccine, it must cover costs associated with the vaccine and pay employees for time associated with receiving it. Otherwise, the cost belongs to the employees and the employees need not be paid for the time.
  • Unless a local public health agency or the Oregon Health Authority directs otherwise, employers are not required to mandate the vaccine. The proposed rules state that if the employees decline the vaccine, the employer must document the declination. It is unclear whether this obligation applies when the vaccine is mandated by the employer only, and not by a local public health agency or the Oregon Health Authority.

Continue Reading

Comment Period For Round Two of Proposed Paid Family and Medical Leave Rules Closes Friday

The Oregon Employment Department (“OED”) has posted its second set of proposed administrative rules implementing the Oregon Paid Family and Medical Leave Act (“PFMLA”). A link to the proposed rules is here and our blog about the first set of proposed rules is here.  The second set of proposed rules covers such critical topics as how to determine whether the employer meets the 25-employee threshold for PFMLA coverage, the definition of a “serious health condition” that will entitle the employee to use paid leave, and details about how employers can apply to have their existing paid leave programs qualify as “equivalent” alternative plans by the OED.  If you are interested in commenting on the proposed rules, you can do so on the OED’s website.  Comments must be submitted by this Friday, January 29.  The final rules will be published in September 2021, and there may be additional opportunities to comment on the rules before they become final.

Out with the Old, in with the New: Employers Should Expect Changes Under a Biden Administration

In case you missed it (did anyone miss it?), President Joe Biden was sworn into office yesterday.  Although workplace issues are hardly the only pressing item on the new President’s agenda, employers should be prepared for the rollout of additional employee protections under the Biden administration.

Priorities That President Biden Has Already Announced

Extending and Expanding FFCRA Leave

The paid time off provisions of the Families First Coronavirus Response Act (“FFCRA”), which required most employers to provide employees with protected leave for COVID-19-related reasons, expired on December 31, 2020.  (Tax credits have been extended through March 31, 2021, however, for employers who opt to continue providing the leave.)  President Biden has already announced that he will ask Congress to reinstate the FFCRA’s paid leave provisions through September 30, 2021.  The Biden plan further contemplates that nearly all employers – including businesses with fewer than 50 or more than 500 employees, along with the federal government – will be required to provide FFCRA leave, and that healthcare workers and first responders will be entitled to FFCRA leave going forward.  Finally, both the amount and the potential duration of FFCRA benefits would increase under President Biden’s plan – up to $1,400 per week for “over 14 weeks” of leave.

Expanding and Supplementing Unemployment Continue Reading

DOL Publishes Final Independent Contractor Rule to Take Effect in March

The U.S. Department of Labor (“DOL”) published a final rule addressing independent contractor status under the Fair Labor Standards Act (“FLSA”).  Independent contractor status is a critical question under the FLSA because eligible employees are entitled to the law’s protections (for example, minimum wage and overtime for non-exempt employees) but independent contractors are not.  Incorrectly classifying workers is a common cause of expensive class action lawsuits and can lead to payment of back wages and substantial penalties.  The final rule seeks to clarify the test that courts use to determine a worker’s employment status, which should facilitate predictability for employers.

The final rule is scheduled to become effective on March 8, 2021 (60 days after its publication in the Federal Register).  Here are the most critical aspects of the new rule:

Economic Realities Test Codified.  The DOL has long used the multi-factor “economic realities” test to determine whether an individual is an employee or an independent contractor.  Generally, the economic realities test considers whether the individual is dependent on a particular business or organization for work (and is therefore an employee) or instead is in business for themselves (and is therefore an independent contractor).  The DOL has historically relied on the economic realities test as a matter of administrative practice; the new rule represents the first time that it has been formalized in a rule.  Per the DOL, it chose to codify the economic realities test in a rule because courts and enforcement agencies have long applied it inconsistently, leading to confusion for employers trying to predict whether a worker is an employee or independent contractor under the FLSA. Continue Reading