California Passes New COVID-19-Related Employment Laws

Since August, California Governor Gavin Newsom has signed many pieces of legislation into law on varied topics. (As reported in this blog, one law related to state paid sick leave requirements, while another defined worker classification determinations.) On September 17th, 2020, Governor Newsom continued this trend of signing new employment law legislation. These specific bills, however, expanded employee protections as they relate to COVID-19.

Notice Requirements for Potential COVID-19 Exposure

Effective immediately, California Assembly Bill (AB) 685 requires employers to provide employees with notice of possible exposure to COVID-19. These cases would meet the definition of a “serious occupational injury or illness.” Due to this definition, employers would also notify the California Division of Occupational Safety and Health (Cal/OSHA).

Under AB 685, Cal/OSHA is authorized to act when employees’ exposure to COVID-19 in the workplace is an “imminent hazard.” The agency may issue citations, bar access to the worksite, shut down operations, and require employer postings disclosing the hazard.

Employers must also contact their local public health department if the number of COVID-19 cases constitutes a COVID-19 outbreak. The California State Department of Public Health defines what that outbreak number is. In this situation, employers have 48 hours to notify the public health department. At that time, they must provide:

  • the number of COVID-19 cases at the workplace;
  • employee names;
  • and other pertinent information.

Employers must provide the written exposure notice within one business day to those affected. Notice to the employees’ representative (if any) is also required. Employers need to keep the records of written notifications for a minimum of three years.

Expanding Workers’ Compensation for Frontline Workers

Also effective September 17th, 2020, California Senate Bill (SB) 1159 expands first responders’ workers’ compensation access, due to COVID-19. The law presumes that a first responder’s COVID-19-related illness or death is due to the scope of their employment. This presumption applies to employees:

  • who test positive during a COVID-19 outbreak at their “specific place of employment”* and
  • whose employer has at least five employees.

*This excludes an employee’s home or residence (unless the employee performs home health care services at a home or residence).

In addition:

  • The employee must test positive for COVID-19 within 14 days after a day the employee worked.
  • The day of work must have been on or after July 6th, 2020.

An employer may dispute a claim with evidence that:

  • it implemented measures to reduce potential worksite COVID-19 transmission;
  • the employee had non-occupational risks of COVID-19 infection;
  • the employee made damaging statements; and
  • the employer has any other evidence that they would normally use to dispute an alleged work-related injury.

Employer Takeaways

Even though the laws discussed in this post are specific to California, employers in all states should be familiar with possible COVID-19 related local laws affecting them. California employers should review and revise their policies on illness reporting and workers’ compensation, if needed. Employers should also address any questions stemming from these new laws with their legal counsel.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Department of Labor Revises Family and Medical Leave Notices and Forms

As reported on this blog in July, the U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) announced that it was taking significant steps to streamline optional-use forms and notices. Workers could use the forms to request leave under the Family and Medical Leave Act (FMLA). Employers could also use these forms and notices to coordinate the FMLA leave used at their workplace.

Background on FMLA Documentation

After requesting employer feedback (due on September 15th, 2020), the DOL issued a final approval for the forms and notices. The agency states the revised documents (dated June 2020) are clearer and more user-friendly for invested parties. These parties include employers, leave administrators, health care providers, and employees. The new digitally fillable PDF forms feature a number of “check boxes” rather than requiring written responses. Additionally, certain topics are now more detailed, including employee eligibility and rights and responsibilities, leave designations, and medical information.

The DOL developed these “optional-use” forms so that employers can provide required notices to employees. In turn, employees can use the forms to provide certification of their need of FMLA-qualified leave.

Notice Forms

Employers covered by the FMLA have to provide their employees with certain critical notices. These notices insure that both the employee and the employer have a shared understanding of FMLA leave. Employers can find more information on FMLA notification requirements here.

The following are the revised Department of Labor notices:

  • Eligibility Notice, form WH-381. This notice informs the employee of his or her eligibility for FMLA leave. It could also include at least one reason why the employee is not eligible.
  • Rights and Responsibilities Notice, form WH-381 (combined with the Eligibility Notice listed above). This notice informs the employee of specific expectations and obligations associated with the FMLA leave request. It also includes the consequences of any failure to meet those obligations.
  • Designation Notice, form WH-382 – This notice informs the employee of their FMLA leave request status. It also informs the employee of the designated amount of leave counted against their FMLA entitlement. An employer uses this form to inform an employee that certification is incomplete and they need to provide more information.

Certification Forms

Certification is an optional tool provided for employers to use to request information to support certain FMLA-qualifying reasons for leave. An employee can provide the required information contained on a certification form in any format. These formats include being provided on the letterhead of a healthcare provider, or any official documentation issued by the military.

The updated DOL forms were originally created for the certification of a healthcare provider for a serious health condition:

Employer Takeaways

Since all of these forms and notices are “optional-use,” it is not mandatory for employers to use these specific documents. Employers can use their own forms but the documents must provide the same basic FMLA notice information. Employers must also only require the same basic certification information as included on the FMLA certification forms. No matter the notice or form, however, employers must be sure they are following FMLA documentation standards.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Employers Need to Be Careful When It Comes to Flu Vaccinations

As fall and winter approach, it means that cases of seasonal flu will increase. This, in addition to the continuing COVID-19 pandemic, might cause concern for employers everywhere. Some employers might even consider requiring employee flu vaccinations as a way to protect workers from the contagious illness. According to the National Law Review, however, employers need to be cautious when implementing any mandatory vaccination policy.

 OSHA’s General Duty Clause

Under the Occupational Safety and Health Administration’s (OSHA’s) General Duty Clause, all employers need to provide a hazard-free workplace. To comply, employers have to establish job-related workplace safety policies and requirements based on business necessity. For example, OSHA recently released new guidance on returning to work during the coronavirus pandemic. Employers should use that guidance and adjust it based on their specific workplace needs.

When it comes to implementing policies that mandate vaccinations, usually it depends on the employer’s industry or location. Policies mandating vaccinations are more likely to be appropriate for the healthcare industry. Other industries involving individuals who are at a high risk of flu complications could have such a policy as well. Accordingly, numerous courts in different jurisdictions have labeled healthcare workers as required to receive vaccinations. This, as mentioned earlier, is permissible because the requirement is job-related and consistent with business necessity.

 Mandatory Vaccinations and the Equal Employment Opportunity Commission

Employers need to remember, however, that some employees may be considered exempt from complying with a mandatory vaccine requirement. The U.S. Equal Employment Opportunity Commission (EEOC) has identified situations when an employee can refuse to get vaccinated. Two of those possible exemptions fall under the Americans with Disabilities Act (ADA):

  • If an employee has a qualifying disability under the ADA. For example, people with life-threatening allergies to the vaccine or other disorders should not receive a flu vaccine. The Centers for Disease Control has released guidance on individuals who should not get specific vaccines.
  • Pregnant employees, as pregnancy and pregnancy-related impairments qualify as disabilities.

Similarly, Title VII of the Civil Rights Act of 1964 gives an employee the opportunity to refuse workplace required vaccinations. If the employee objects based on a sincerely held religious belief, practice, or observance, they are exempt getting the vaccine.

Employer Takeaways

In response to situations of general pandemic influenza, the EEOC created guidance in 2009 addressing non-healthcare-related employers. An updated version, released in March 2020, addressed the spread of the global COVID-19 pandemic. In the document, the EEOC recommends that in general “ADA-covered employers should consider simply encouraging employees to get the influenza vaccine rather than requiring them to take it.” In addition, numerous states have passed laws regarding the legality of workplace vaccination policies. Due to fines and lawsuits, incorrectly creating and enforcing a mandatory vaccine policy can become a costly issue. Before instituting one in your workplace, a legal expert should review your mandatory vaccine policy to ensure it is appropriate and legally complaint.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Department of Labor Revises FFCRA Paid Leave Requirements

On September 11th, 2020, the U.S. Department of Labor’s (DOL’s) Wage and Hour Division (WHD) issued revisions to the Families First Coronavirus Response Act (FFCRA). These updates clarify workers’ rights and employers’ responsibilities under the FFCRA’s paid leave provisions. The revisions are in response to the August 3rd, 2020, U.S. District Court for the Southern District of New York decision that found portions of the regulations invalid.

FFCRA Revisions

The revisions include:

  • Additional explanation for the requirement that employees may take FFCRA leave only if work would otherwise be available to them.
  • Reaffirm and provide additional explanation for the requirement that an employee have employer approval to take FFCRA leave intermittently.
  • Revise the definition of “healthcare provider” to include only employees who:
    • meet the definition of that term under the Family and Medical Leave Act regulations;
    • or provide diagnostic services, preventative services, treatment services, or other integrated services. These services are necessary to the provision of patient care which, if not provided, would adversely impact patient care.
  • Clarify that employees must provide required documentation supporting their need for FFCRA leave to their employers as soon as practicable.
  • Correct an inconsistency regarding when employees need to provide notice to take expanded family and medical leave to their employers.

After the September 16 publication of this initial temporary rule in the Federal Register, the revisions will go into effect. The FFCRA will expire on December 31st, 2020.

Background of the FFCRA

The FFCRA helps the U.S. combat the workplace effects of the coronavirus by giving tax credits to businesses with fewer than 500 employees. The credits compensate employers for providing paid leave for an employee’s health needs or to care for family members. This ensures that workers do not have to choose between their jobs and health measures needed to combat the virus.

Employer Takeaway

Just as they needed to previously learn about the FFCRA, employers now need to become familiar with the recent updates to the same law. To assist, the WHC has created a Quick Benefits Tips handout, This poster includes information on how much leave qualified workers can take and the wages employers must pay.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Two States Announce New Paid Sick Leave Laws

On April 1st, 2020, the Families First Coronavirus Response Act (FFCRA) went into effect nationwide. Under that law, businesses with less than 500 employers provide workers with up to two weeks of paid sick leave. Employers also need to provide additional emergency family and medical leave. This leave, however, must be related to the COVID-19 health crisis. The paid sick leave provided goes back to the employer through a dollar-for-dollar refundable tax credit. In addition to the FFCRA, two states recently released information about new paid sick leave laws.

California Paid Sick Leave

On September 9th, 2020, California Governor Gavin Newsom signed AB 1867 into law. This bill adds additional paid sick day coverage to the time already provided under the FFCRA. Now, employers with over 500 employees must offer paid sick leave to workers exposed to COVID-19. Employers must also grant paid sick leave to those who test positive for the virus. Public and private employers of first responders and health care employees are also now subject to those requirements. AB 1867 went into effect immediately after the Governor’s signing of the bill.

 New York Paid Sick Leave

In addition to the FFCRA, New York State will require all employers to provide sick leave to their workers. The New York State Sick Leave (NYSSL) law goes into effect September 30th, 2020. Employees, however, are not entitled to use NYSSL until January 1st, 2021.

The NYSSL law includes the following stipulations:

  • The amount of NYSSL time employees receive vary by employer size and income:
  • Employers with at least 100 employees must provide 56 hours of paid sick leave.
  • Employers with fewer than 100 employees must provide 40 hours of paid sick leave.
  • Employers with fewer than 5 employees and a net income in excess of $1 million in the previous tax year must provide 40 hours of paid sick leave.
  • Employers with fewer than 5 employees and a net income of less than $1 million in the previous tax year must provide 40 hours of unpaid sick leave.
  • NYSSL accrues at a rate of 1 hour of every 30 hours worked. This is unless an employer elects to frontload all sick time at the beginning of the year.
  • Employers may set a reasonable minimum increment for use, which cannot exceed 4 hours.

NYSSL provides time for:

  • Employee’s mental or physical illness, injury, diagnosis, care, treatment, or preventive care for employee’s mental or physical illness or injury;
  • Covered family member’s mental or physical illness or injury or diagnosis, care, treatment, or preventive care for a covered family member’s mental or physical illness or injury;
  • Absences related to employee’s status as a victim of domestic violence, family offense, sexual offense, stalking, or human trafficking; or
  • Absences related to a covered family member’s status as a victim of domestic violence, family offense, sexual offense, stalking, or human trafficking.

The complete text of the NYSSL law is within this bill. Employers in New York City and Westchester County, however, already have their own sick leave laws. The state will be providing guidance as to how the NYSSL will interact with these existing requirements.

Employers also need to be aware that NYSSL is separate from the New York State Quarantine Leave Law. The Quarantine Leave Law went into effect on March 18st, 2020 and is set to expire December 31st, 2020.

Employer Takeaways

Even though the majority of the laws discussed in this post are specific to New York and California, employers with less than 500 employees need to remember that the FFCRA is in effect until December 31st, 2020. Additionally, all employers in every state should check with their local labor offices to see if there are additional paid sick leave laws they need to follow.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

OSHA Continues to Fine Businesses for COVID-19 Violations

In July 2020, the U.S. Occupational Safety and Health Administration (OSHA) cited a workplace for failing to protect employees from the coronavirus. This was the first coronavirus-related fine levied by OSHA. According to the agency, the healthcare company was in violation of two respiratory protection standards:

  • failing to develop a comprehensive written respiratory protection program; and
  • failing to provide medical evaluations to determine employees’ ability to use a respirator in the workplace.

Due to the violations, OSHA proposed a fine of over $40,000. Since this initial case, OSHA has continued on the quest to make sure employees are being protected from COVID-19. This is evident in the fact that in the first half of September, OSHA has cited an additional five workplaces claiming coronavirus protection failures.

Latest Enforcement Cases

On September 10th, 2020, OSHA announced the following citations:

  • Smithfield Packaged Meats Corp. in Sioux Falls, South Dakota, for one violation of OSHA’s General Duty Clause. The employer failed to provide a workplace free from recognized hazards that can cause death or serious harm. At least 1,294 Smithfield workers contracted coronavirus, and four employees died from the virus in the spring of 2020. Much of the cases were due to spread at the workplace facilities. The company faces a penalty of $13,494.
  • Christus Shreveport-Bossier Health System in Shreveport, Louisiana, for failing to provide proper protective equipment. The agency found that emergency facility employees often shared or did not have protective gowns. Professionals need to wear these gowns to treat COVID-19-positive patients. The business also faces a penalty of $13,494.

OSHA continued citing employers on September 11th, 2020:

  • JBS Foods Inc. in Greeley, Colorado, for violating the General Duty Clause involving the coronavirus. The business was also fined for failing to provide the company’s authorized employee representative with injury and illness logs in a timely manner following a May 2020 OSHA inspection. OSHA has proposed $15,615 in penalties.
  • Hackensack Meridian Health Residential Care Inc. in North Bergen, New Jersey, for failure to provide respirators to resident-care employees for a period of time in March 2020. These employees were caring for residents who were exhibiting symptoms of coronavirus. OSHA also cited the employer for failure to conduct respirator fit testing, effective training, and compliant medical evaluations. OSHA also cited the facility for failure to establish a fit-test record for qualitative fit tests. The agency has proposed $28.070 in penalties.
  • CarePlus Bergen Inc., in Paramus, New Jersey, for violating respiratory protection standards. Based on a coronavirus-related inspection, OSHA cited the facility for failing to fit test tight-fitting face piece respirators on required employees. The hospital also failed to train employees on proper respirator use and ensure employees understood when to wear a respirator. These violations have a proposed penalty amount of $9,639.

Employer Takeaways

As explained by OSHA in guidance released in May, the agency issued two revised policies for enforcing their requirements with respect to COVID-19. First, OSHA has increased in-person inspections at all different types of workplaces. Secondly, the agency is enforcing their recordkeeping requirements of standard 29 CFR 1904 for employee coronavirus illnesses for all employers. To avoid OSHA fines and penalties, and to keep all employees safe, employers need to be familiar with required OSHA safety and health protocols not only during the pandemic, but for when the pandemic has also passed.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Federal Agency Updates COVID-19 Guidance Including Testing Guidelines

In March 2020, the Equal Employment Opportunity Commission (EEOC) released guidance addressing various Frequently Asked Questions (FAQs) concerning COVID-19 issues. Since the original release, the FAQs have been updated on a near-monthly basis with new additions. Overall, the guidance has focused on disability-related inquiries, confidentiality, hiring, and reasonable accommodations under the Americans with Disabilities Act (ADA), as well as issues under Title VII of the Civil Rights Act and the Age Discrimination in Employment Act (ADEA). In its latest FAQ update, posted on September 8th, 2020, the EEOC covers some more practical questions employers have on several COVID-19 issues, such as testing, telecommuting, and sharing employee medical information.

Workplace COVID-19 Testing

As overall COVID-19 testing has expanded, many employers have been working on establishing testing protocols to keep employees and the public safe. There are still questions, however, if employers are permitted to test, particularly considering the general ADA requirement that any mandatory medical test of employees has to be “job related and consistent with business necessity.”

In previous guidance, the EEOC has already confirmed that employers may opt to administer COVID-19 testing to employees before initially permitting them to enter the workplace. In the updated FAQs, released in September 2020, the EEOC clarifies that periodic COVID testing to determine if an employee poses a direct threat to others is permissible. Also, in the most recent FAQs, the EEOC addresses updates to guidance as released by the Centers for Disease Control and Prevention (CDC). Specifically, the EEOC states that employers who administer COVID-19 viral testing under current CDC guidance will meet the ADA’s “business necessity” standard. Employers, however, also need to follow recommendations by the CDC or other public health authorities regarding whether, when, and for whom testing or other screening is appropriate.

Employee Health Screenings

Since the beginning of the COVID-19 pandemic, many workplaces have instituted screening programs to keep people safe and healthy. These programs normally consist of temperature checks and asking questions about COVID-19 symptoms and travel prior to allowing them entry to the facilities. The EEOC, however, has received questions as to whether or not they can flat out ask an employee if they have been tested for COVID-19. According to the recent guidance, yes, employers may ask that question. The EEOC, however, has not clearly stated if an employer may ask if the test was positive or negative.

Due to the fact that COVID-related requests are based on the theory of a “direct threat,” asking employees about COVID-19 testing does not extend to employees who are teleworking and not physically interacting with coworkers or the public. Asking employees about COVID-19 testing also does not extend to whether the employee’s family members have COVID-19 or symptoms associated with COVID-19. The EEOC did clarify though that employers may ask employees whether they have had contact with anyone diagnosed with COVID-19 or who may have symptoms associated with the disease.

Focusing on a Single Employee

 The EEOC also addressed whether employers may focus screening efforts on a single employee. In this case, the employer must have a reasonable belief that this person might have the disease, such as a display of COVID-19 symptoms. However, employees working regularly or occasionally onsite and who report feeling ill or who call in sick may be asked questions about their symptoms as part of workplace screening for COVID-19, according to the EEOC.

Some employees may refuse to participate in employer-administered screening programs. In that case, the EEOC states that the ADA allows employers to bar employees from physical presence in the workplace if they refuse to have their temperature taken or refuse to confirm whether they have COVID-19, symptoms associated with COVID-19, or have been tested for COVID-19.

Confidentiality

According to the latest guidance, employers need to remember that the ADA requires all employee medical information to be maintained confidentially. If an employer discovers that an employee has COVID-19, the EEOC FAQs make clear that managers may report this information to appropriate persons in the organization in order to comply with public health authority guidance. It also would not be a violation of the ADA if a worker reports to his or her manager the COVID-19 status of a coworker in the same workplace. Employee health confidentiality also extents to those who are teleworking and not necessarily in the physical workplace.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

California Expands List of Independent Contractor Classifications

On September 4th, 2020, California Governor Gavin Newsom signed Assembly Bill (AB) 2257 into law, modifying AB 5, which was originally created to determine who can be considered a contractor and who can be considered an employee.

The new, modified version of the law took effect immediately and provides flexibility to such employment fields as freelance writers, musicians, film support crews, and visual artists, who can now continue working under the designation of independent contractors.

Background of AB 5

AB 2257 originated from Assemblywoman Lorena Gonzalez, D-San Diego, who also wrote the 2019 law known as AB 5. The initial bill was designed to support a 2018 California Supreme Court ruling that classified more workers as employees, which entitled them to benefits and other perks denied to independent contractors. Those protections included a minimum wage, overtime pay, unemployment insurance, and health benefits. AB 5 became law earlier this year.

The passage of AB 5 caused immediate problems, however, for the large freelance and independent contractor community in California. It featured items that restricted freelance writers from accepting more than 35 assignments from a single outlet and stopped musicians from regular gigs at venues.  It also affected businesses who felt they needed to stop using California-based freelancers out of fear of liability for retroactive fees and fines.

AB 5 continues to face challenges in court by gig economy companies like Uber and Postmates who want app-based drivers exempted from the new law. AB 2257 only allows exemptions specifically for freelance writers, photographers, translators, and musicians. Gig economy companies still need to follow AB 5.

Features of AB 2257

Some of the new regulations found in AB 2257 include the following:

  • The amendment eliminates the 35-submission cap for freelance writers and photographers. Previously AB 5 dictated that California-based freelancers who contribute more than 35 submissions to an outlet per year qualified as employees instead of independent contractors.
  • Translators, appraisers, and registered foresters now qualify for the “professional services” exemption. AB 5 only covered graphic designers, travel agents, and marketers, among others.
  • Music industry workers can continue to work as freelancers. The list of exemptions includes recording artists, songwriters, producers, promoters, and many others.

Employer Takeaways

The signing of AB 2257 once again signals changes in worker classification not only for California-based employers but also out-of-state employers who may use California-based freelancers. In order to avoid claims of misclassification, which can lead to lawsuits, fines, and penalties, all employers should not only become familiar with the language included in AB 2257, but also revisit AB 5 to remind themselves of the regulations that will still be in place.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Fifth Circuit Court of Appeals Rules on Regular Rate of Pay Burden

On September 2nd, 2020, the Fifth Circuit Court of Appeals ruled that employees, not employers, bear the burden of proof on whether bonuses should be included in the “regular rate of pay” for purposes of calculating overtime compensation under the Fair Labor Standards Act (FLSA).

Background on Court Case

In Edwards v. 4JLJ, L.L.C., the plaintiffs alleged that their employer failed to account for certain bonuses in calculating the regular rate of pay. Section 7(e) of the FLSA excludes eight categories of remuneration from the regular rate calculation, including bonus compensation if “both the fact that payment is to be made and the amount of the payment are determined at the sole discretion of the employer at or near the end of the period and not pursuant to any prior contract, agreement, or promise causing the employee to expect such payments regularly.”

Court Decision

The Court of Appeals, considering the statutory language as well as the interpretive regulation at 29 C.F.R. § 778.211 – Discretionary Bonus, noted that “[f]or a bonus to be excepted from the regular rate under § 207(e), the employer must maintain discretion over whether to give the bonus and the amount given.” Sighting an issue of “first impression,” the court considered whether the plaintiffs or the employer bears the burden of proof on whether bonuses are discretionary and therefore excluded from the regular rate. The court ruled that the burden is on the plaintiffs.

“Section 207(e) does not exempt employers from compliance with [the overtime pay requirement in 29 U.S.C.] § 207(a)(1); it provides instruction for compliance with § 207(a)(1), where “regular rate” is used without definition. Section 207(e) provides that definition, which is crucial for employers if they are to understand what must be included in the regular rate — in order to comply with § 207(a). It was the [e]mployees’ burden to show that they “performed work for which [they were] not properly compensated.” And to do so, they must show that [their employer] ought to have included the remuneration in question in the regular rate. Because § 207(e)(3) is merely a definitional element of the regular rate — and therefore merely a definitional element of the [e]mployees’ claim — it was their burden to show that bonuses were not discretionary according to the statute’s terms.”

In their final ruling, the court was in direct opposition to the regular rate definitions in § 207(e) regarding the defense of exemption from overtime requirements, which places the burden of proof on the employer.

 Employer Takeaways

The Fifth Circuit Court of Appeals only has jurisdiction over Louisiana, Mississippi, and Texas, and the decision regarding the burden of proof, as of the publication of this blog post, is not scheduled to be reviewed by the U.S. Supreme Court. Even if an employer does not fall under the jurisdiction of the Fifth Circuit, they should assess all forms of compensation provided to non-exempt employees and determine if they should be included in the regular rate of pay. Employers also need to ensure that the determination is being done consistently. Regarding bonuses, employers should review any written communications provided to employees that describe any conditions necessary to earn them and how they will be calculated. This will help to ensure that if a bonus is intended to be at the employer’s discretion, those communications do not eliminate the discretionary nature.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

IRS Issues Guidance on Social Security Tax Withholding Deferral

On August 28th, 2020, the Department of Treasury and Internal Revenue Service (IRS) issued guidance implementing a Presidential Memorandum (Memo) issued on August 8th, 2020. Created in response to the COVID-19 pandemic, the Memo allows employers to defer withholding and payment of the employee’s portion of the Social Security tax if the employee’s wages are below a certain amount.

Background of IRS Notice 2020-65

After President Donald J. Trump issued his Memo, the Secretary of the Treasury determined that employers who are normally required to withhold and pay the employee share of the social security tax under section 3102(a) of the Internal Revenue Code (Code), or the railroad retirement tax equivalent under section 3202(a) of the Code, are affected. In response to the Memo, IRS Notice 2020-65 was created. Under this guidance, for employers, the due date for the withholding and payment of social security taxes on applicable wages is postponed until the period beginning January 1st, 2021, and ending April 30th, 2021.

Applicable Wages

As defined in the new IRS guidance, “applicable wages” constitute wages or compensation paid to an employee on a pay date between September 1st, 2020, and December 31st, 2020. The amount of such wages or compensation paid for a bi-weekly pay period, however, must be less than $4,000, or the equivalent amount with respect to other pay periods. The determination of applicable wages also must be made on a pay period-by-pay period basis, as some employees may earn different amounts based on hours worked.

Payment of Deferred Taxes

As mentioned earlier, employers must pay the total deferred applicable taxes out of any wages and compensation that will be earned between January 1st, 2021, and April 30th, 2021, Any unpaid applicable taxes to the IRS will begin to accrue interest and penalties starting on May 1st, 2021. Under IRS Notice 2020-65, if necessary, the employer may make arrangements to otherwise collect those applicable taxes directly from the employee.

Additional tax relief related to the COVID-19 pandemic can be found on IRS.gov.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top