Just a quick update (as I recognize this likely doesn’t affect many reading this blog) – on May 14, 2020, the Federal Motor Carrier Safety Administration released a final rule that updates the hours of service rules. However, the amendment neither increases driving time, nor the requirement that a 30-minute break be taken within eight (8) consecutive driving hours.  In sum, the Final Rule:

  • Requires a 30-minute break after eight (8) hours of consecutive driving (versus on-duty time) and allows on-duty/not driving status to qualify as the break (rather than off-duty status).
  • Modifies sleeper berth exception to allow drivers to split the required ten (10) hours off duty into two periods (an 8/2 or 7/3 split), with neither period counting against the fourteen (14) hour window.
  • Extends the adverse driving conditions window by an additional two (2) hours.
  • Lengthens the maximum duty period for short-haul exception drivers to fourteen (14) hours and extends the distance limit to 150 air miles.

Due to COVID-19 and related delays in Federal reporting requirements across the government, the EEOC has recently announced that it is delaying collection of 2019 EEO-1 Component 1 data (employment data categorized by race/ethnicity, gender and job category) until the EEOC resumes normal operations, estimated to be in 2021. An EEO-1 must be filed by all companies with more than 100 employees or federal contractors or first-tier subcontractors with 50 or more employees and a prime contract in excess of $50,000. The EEOC expects the 2019 Component 1 data collection will be collected in March 2021, along with 2020 EEO-1 data. The new deadline will be posted when it is determined, and all EEO-1 filers should receive a notification letter. Finally, the EEOC has stated that it will not collect Component 2 data (employment data categorized by pay) at all in the future (at least under the current administration).

On Monday, May 18, 2020, the U.S. Department of Labor released a final rule, effective immediately, regarding retail and service industry exceptions from overtime for employees primarily paid on commissions. The new rule simply removes two (2) previous provisions which listed industries that the DOL then-viewed as having “no retail concept” or “may be recognized as retail”. Accordingly, a business may now qualify for the exemption if previously listed on the “no retail concept” list. Thus, the DOL will apply the same analysis to all establishments to determine if it is a retail or service establishment. This is great for employers!

On March 26, 2020, the U.S. Department of Labor (DOL) issued three new Opinion Letters, FLSA2020-3, FLSA2020-4, and FLSA2020-5 which all address various payments that may be excluded from the regular rate. This is important because the compensation that is included into the regular rate will increase the overtime rate. In a very short breakdown, here are the three clarifications:

Longevity Payments. FLSA 2020-3 clarifies that longevity payments made to employees as a part of a routine payment (i.e. you get $500 after 1 year, $5,000 after 10 years, etc.), are not excludable as gifts because the nature of the payment is non-discretionary. However, if a policy provides that a longevity payment “may” be made, in the employer’s discretion, that payment could be excluded from the regular rate as a “gift”.

Referral Bonuses. FLSA 2020-4 instructs us that a referral bonus does not need to be included in the regular rate if the referral program is voluntary, does not take significant time, and is limited to conversations as a part of employees’ social affairs outside of work hours. In other words, word-of-mouth referrals may be excluded from the regular rate (not spiffs for HR recruiters doing their job). However, if there is a referral bonus for longevity (i.e. the employee referred works for a year, the referring employee gets a bonus), then that payment would be part of the regular rate, because it is essentially a longevity bonus.

Employer Life Insurance Contributions. FLSA 2020-5 opines that employer contributions to a group term life insurance policy do not need to be included in an employee’s regular rate so long as the contributions meet the statutory and regulatory requirements (this is a lot more complicated, so if this is an issue, suggest you review the actual opinion letter and law).

 

Minnesota employers should be aware that, pursuant to Governor Walz’s Executive Order 20-29, effective April 6, 2020 until December 31, 2020, Minnesota employers “must notify separated employees that they can apply for unemployment insurance benefits.” In addition, the executive order confirms that there is no longer a waiting week for unemployment compensation, and that there will be no delays due to money received from vacation pay, sick pay, or personal time off (PTO) payouts upon termination.

Accordingly, if you are separating/termination/furloughing (whatever you want to call it) an employee, make sure you put in the termination notice or letter something to the effect of, “You may apply for unemployment insurance benefits either online at www.uimn.org, or by phone at (651)296-3644, toll free (877)898-900, or TTY (866)814-1252.”

The U.S. Department of Labor just issued its Temporary Rule regarding its interpretation of Paid Leave under the Families First Coronavirus Response Act (FFCRA). 29 C.F.R. Part 826. I’m still digesting this and the IRS guidance (I just blogged about) so stay tuned. For now, the link above will get you to the Rule.

The IRS has finally issued much-awaited FAQ on Families First Coronavirus Response Act (FFCRA). Notably, the IRS has taken a much stricter interpretation of the FFCRA than many practitioners (including me!) were when attempting to interpret the law without any guidance. I highly encourage businesses to review the website and FAQ – because the FFCRA is a tax credit act, HR may usually shy away from reading IRS guidance. However, it does provide important guidance about eligible employees, ages of children, amount of parents that can take the leave at one time, etc.

The guidance also provides that employers must retain records and documentation related to and supporting each leave request as well as Form 942, Employer’s Quarterly Federal Tax Reurn and Form 7200, Advance of Employer Credits Due To COVID-19, and any other filings made to the IRS. In order to get the news out quickly, I’m going to keep this short and sweet for now and encourage all employers (both HR and finance side) to start by reviewing the IRS FAQs on COVID-19 and FFCRA.  Combine that guidance with the DOL guidance and I think we’re starting to get a much better handle on this than a few days ago!

The DOL has finally issued the poster that employers must post notifying employee of their rights under the FFCRA in both English and Spanish. This must be posted and kept posted, “in conspicuous places on the premises of the employer where notices to employees are customarily posted.” This requirement can be met, however, by e-mailing the notice poster to employees, or by posting it on your external or internal website.

On Saturday, March 28, the U.S. Department of Labor updated its Families First Coronavirus Response Act: Questions and Answers.  While this is still not the regulations that we are all waiting for, it does provide compliance assistance to employers until the regulations are issued. I’ll write about more issues later, but probably the single most question I get asked is related to whether a small business is exempt from the Families First Coronavirus Response Act (FFCRA). Here is the DOL’s current position (and what I expect the regulations will support):

A small business (less than 50 employees) is exempt from the FFCRA when “doing so would jeopardize the viability of the small business as a going concern”. Sounds subjective right? Well, here’s where the regs will come in handy. Until then, the DOL has stated that a small business is exempt if the following conditions are met:

  1. It employs less than 50 employees;
  2. Leave is requested due to school/day care closure due to COVID-19 reasons; and
  3. An authorized officer of the business has determined that one of the following 3 conditions are met:
    1. The application of the FFCRA would result in expenses and financial obligations exceeding available business revenues and cause the business to cease operating at a minimal capacity;
    2. The absence of of employee(s) requesting leave would entail a substantial risk to the financial health or operational capabilities of the business because of their specialized skills, knowledge of the business, or responsibilities; or
    3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee(s) requesting leave, and these labor or services are needed for the business to operate at a minimal capacity.

So, for now, if you are a small employer and can answer yes to the above three criteria, until we get better guidance from the DOL, the President/CFO/CEO should document that the above conditions are met prior to denying leave to employees under the FFCRA.

Additionally, keep in mind that if you determine you are exempt for one, you are exempt for all. It is a business exemption – not an individual exemption. Thus, if you determine your business is exempt, you also cannot take advantage of the tax credits. It’s the you can’t-have-your-cake-and-eat-it-too theory.

And finally, if you do continue business as usual, keep in mind that you must still follow Governor Walz’s stay-at-home order until April 10, and those that can work remotely, must.

Those that cannot work remotely, should be given social distance opportunities (i.e. skip the handshakes, open up new spaces for breaks), PPE where appropriate, sanitized work space, etc. however possible. Per the EEOC’s guidance, yes, you can take temperatures of those reporting to work during a pandemic, so long as you follow appropriate guidelines.

Wow – how fast things can change in a day! Following up to my post yesterday, as all of Minnesota is well aware now, Governor Walz issued his Stay-At-Home Executive Order 20-20 effective March 27 at 11:59 pm to April 10, 2020. I’ve barely had time to write this post as I’ve been on the phone constantly helping employers navigate whether they are exempt from the order as a critical business. So, apologize for the delay, but here you go…

  1. Read the order.  If your business is listed there as exempt – you’re good to go.
  2. Check the CISA list. As I blogged about yesterday, if your business is on the list, it is exempt.
  3. Check DEED’s NAICS list. Minnesota Department of Employment and Economic Development (DEED) issued a list by NAICS code as to whether a business is considered “critical”. Note – the list changed between last night and this morning, so if you were “NO” before you may be “YES” – so if you are a “NO” today, keep checking it.
  4. Ask for an Exemption Clarification. If you are unsure, you may send a request for clarification to DEED for your business.

Finally, I’m being asked a lot about providing employees “proof” of their work status to get to and from work during the shutdown.  I’m not aware of any such requirement. However, I am aware that employers are voluntarily providing each employee with a letter that confirms they are exempt and need to travel to work – while not necessary this is not a bad idea for employers to confirm to employees that they are exempt and need to come to work.

And finally, don’t forget that even exempt businesses do not have carte blanche to continue to operate as normal – it is only the jobs that cannot be done remotely that are exempt; if employees can work remotely, they must. If employees must come to work, to the extent possible, provide for social distancing (if possible, add staggered break and lunch times, multiple shifts, reduce workforce presence, etc.).