E-Alerts

As a special service to our clients, Barran Liebman LLP provides valuable Electronic Alerts℠ free of charge. The Electronic Alerts℠ summarize new case law and statutes that may impact your business, and suggest methods to comply with new legal requirements.

If you would like a copy of an archived E-Alert emailed to you, please contact Traci Ray by email or phone at 503-276-2115.

Amy L. Angel 5/18/21 Amy L. Angel 5/18/21

5/18/21: Here’s What You Need to Know About OHA’s Updated Guidance Regarding Vaccinated Individuals

May 18, 2021

By Amy Angel & Natalie Pattison

Last week, the U.S. Centers for Disease Control issued guidance allowing fully vaccinated individuals to go mask-free and not have to adhere to physical distancing requirements in most situations. Importantly, the CDC’s guidance is merely guidance and does not preempt state or local authorities that may impose stricter public health rules. The CDC guidance itself states that fully vaccinated individuals do not need to wear masks or physically distance in most circumstances, “except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance.”

In the wake of the CDC’s guidance, many employers and businesses were left confused about how to navigate these changing rules and conflicts between state and federal guidance. Today, the Oregon Health Authority updated its Statewide Guidance on Masks and issued Interim Guidance for Fully Vaccinated Individuals to align with the CDC’s guidance.

Here’s what businesses need to know:

In its updated guidance, OHA requires all businesses, employers, and faith institutions to continue to apply and enforce mask and physical distancing requirements unless it:

Has a policy for checking for proof of vaccination status of individuals;
Requests proof of vaccination status from each individual; and
Reviews each individual’s proof of vaccination prior to entry or admission.

In other words, businesses, employers, and faith institutions may allow fully vaccinated individuals to forego wearing a mask and adhering to physical distancing requirements if they have a policy as described above. Importantly, OHA’s guidance makes clear that this is not required. Meaning, businesses, employers, and faith institutions may still require and enforce mask and physical distancing requirements at their discretion.

OHA defines proof of vaccination to mean “documentation provided by a tribal, federal, state or local government, or a health care provider, that includes an individual’s name, date of birth, type of COVID-19 vaccination given, date or dates given, depending on whether it is a one-dose or two-dose vaccine, and the name/location of the health care provider or site where the vaccine was administered. Documentation may include, but is not limited to, COVID-19 vaccination record card, or a copy or digital picture of the vaccination record card.”

It is recommended that businesses that choose to exempt vaccinated individuals from the mask and physical distancing requirements do not keep copies showing proof of vaccination status. Rather, if documentation is kept, it should be limited to a “yes” or “no” determination, the name of the individual verified, and who performed the verification. Similarly, employers should invite employees to submit proof of vaccination if they wish to be exempt from mask and physical distancing requirements but need not keep a copy of proof of vaccination. Employers should avoid asking employees why they are not vaccinated to avoid making a disability-related inquiry.

OHA’s updated guidance allowing businesses, employers, and faith institutions to loosen restrictions for fully vaccinated individuals does not apply in:

any setting where the owner or operator continues to require masks, face coverings, or face shields in accordance with the Statewide Mask, Face Coverings, Face Shields Guidance;
health care settings;
adult jails and correctional facilities;
youth detention and correctional facilities;
shelters and transitional housing;
K-12 schools (fully vaccinated individuals must comply with Ready School, Safe Learners (RSSL) guidance face covering requirements);
Planes, buses, trains, and other forms of public transportation traveling into, within, or out of the United States;
U.S. transportation hubs such as airports and bus stations.

Businesses that intend to allow fully vaccinated individuals and employees to enter their facilities without a mask or physical distancing should develop a policy describing the process for verifying vaccination status before doing so. It is recommended that businesses who choose to have a policy allowing fully vaccinated individuals into their facilities use signage and post updates on their websites to notify visitors of their policy.

Oregon OSHA

Oregon OSHA also released its own advisory memorandum to align with OHA’s updated guidance. Consistent with OHA’s guidance, Oregon OSHA provides that “an employer who requests and reviews verification of vaccination may permit fully vaccinated individuals with such proof of vaccination to go without a mask, face covering, or face shield, and does not need to enforce physical distancing requirements for such individuals.” Verification is key here—Oregon OSHA notes that an employer must continue to enforce the physical distancing and facial covering requirements for individuals who claim to be vaccinated but refuse to provide verification of vaccination status.

Other than this “vaccination exemption,” all OR OSHA requirements imposed by its permanent rule on COVID-19 safety measures for workers remain in place. More information on OR OSHA’s permanent rule can be found here.

For questions, contact Natalie Pattison or Amy Angel at 503-228-0500, or at npattison@barran.com or aangel@barran.com.

NOW, NEXT, & BEYOND: Barran Liebman’s E-Alert series covering the COVID-19 pandemic, helping employers identify what they need to do now, next, and beyond to stay in compliance, be responsive to employees, and best position their business for the future.

Click to access a PDF of this Electronic Alert.

Electronic Alerts are written by Barran Liebman attorneys for their clients and friends. Alerts are not intended as legal advice, but as employment law, labor law, and employee benefits announcements. If this has been forwarded to you, and you would like to begin receiving Electronic Alerts directly, please email or call Traci Ray at 503-276-2115. Copyright ©2021 by Barran Liebman LLP.

Amy L. Angel 5/4/21 Amy L. Angel 5/4/21

5/4/21: Just In: Oregon OSHA Releases Permanent Rule Addressing COVID-19 in All Oregon Workplaces

May 4, 2021

By Amy Angel & Natalie Pattison

Today, Oregon Occupational Safety and Health Administration (OSHA) released its long-awaited permanent rule “Addressing the COVID-19 Public Health Emergency in All Oregon Workplaces.”

In January 2021, Oregon OSHA proposed a permanent COVID-19 rule to replace the temporary rule, which expires today. The permanent rule is limited to addressing COVID-19 and will be repealed when it is no longer necessary for that purpose. To that end, Oregon OSHA will engage with the relevant agencies and advisory committees every two months to discuss whether all or part of the rule should be repealed.

The permanent rule largely tracks Oregon OSHA’s temporary rule that went into effect on November 16, 2020. The permanent rule includes the same general requirements related to sanitation, face coverings and physical distancing, but does strongly discourage the use of face shields. Notably, employers that completed the risk assessment, infection control plan, and infection control training under the temporary rule do not need to revise or repeat those requirements under the permanent rule. (Employers who have not completed these items should do so as soon as possible.)

There are a few important differences in the permanent rule that all Oregon employers should note. Specifically, the permanent rule:

Encourages employers to consider alternatives to transporting multiple persons, but does not require employers to use multiple vehicles to transport multiple employees;
Slightly modifies the ventilation rules to include a requirement that all employers check the ventilation system at least quarterly and includes a requirement that employers with more than 10 employees attest that they are running their ventilation system in accordance with the rule;
Clarifies that recordkeeping provisions may apply when written COVID-19 exposure records are created;
Requires written notification of return-to-work rights when employees must quarantine (note that the rights are the same, but the written notification is new);
Requires certain exceptional risk employers to have a written PPE supply and crisis management plan; and
Requires health care employers to provide respirators to employees working with known or suspected COVID-19 positive patients unless such respirators are unavailable.

Oregon OSHA rules currently do not distinguish between vaccinated and unvaccinated employees. Accordingly, employers should not differentiate between vaccinated and unvaccinated employees with respect to following Oregon OSHA workplace rules, such as requirements for masks and physical distancing.

The final rule related to respiratory protection for direct patient care has a delayed effective date of May 17, 2021. The rule has a delayed effective date of June 6, 2021, for ventilation, transportation, employee notification, and the PPE supply and crisis management plan requirements.

Employers should ensure that their workplaces are in compliance with the rules and reach out to counsel with any questions or concerns regarding Oregon OSHA’s new rule.

For questions about OSHA’s permanent COVID-19 rule, contact Natalie Pattison or Amy Angel at 503-228-0500, or at npattison@barran.com or aangel@barran.com.

NOW, NEXT, & BEYOND: Barran Liebman’s E-Alert series covering the COVID-19 pandemic, helping employers identify what they need to do now, next, and beyond to stay in compliance, be responsive to employees, and best position their business for the future.

Click to access a PDF of this Electronic Alert.

Josh M. Goldberg 4/29/21 Josh M. Goldberg 4/29/21

4/29/21: EEOC Releases EEO-1 Reporting Form & Sets Deadline for EEO-1 Reporting

April 29, 2021

Many large employers who ordinarily report workforce demographic information to the EEOC received an extension to file their EEO-1 reports last year. Earlier this week, the EEOC announced it plans to collect both 2019 and 2020 EEO-1 reports and released the necessary forms. Employers have until July 19, 2021, to file their 2019 and 2020 EEO-1 reports, and employers prepared to file earlier may do so after May 26, 2021.

For the purposes of EEO-1 reporting, large employers are either (1) those with 100 or more employees, or (2) are federal contractors or first-tier subcontractors with 50 or more employees and a contract of $50,000 or more.

Employers may recall collecting compensation information for the EEO-1 Component 2 in years past. Employers should not be surprised that this form is not available through the EEOC’s new website, EEOCdata.org/eeo1. These compensation reporting requirements were subject to litigation, and after some back and forth with the U.S. District Court for the District of Columbia, the EEOC under the Trump administration rescinded these compensation reporting requirements. There are some indications that the Biden administration may restore compensation reporting of some type, but not at this time for the 2019 and 2020 EEO-1 reports.

Employers who have received their notification letter through the U.S. mail containing their account information can now log in. Covered employers that have not received their notification letter can contact the EEOC’s Filer Support Team at FilerSupport@eeocdata.org for assistance with creating an account.

For employers with questions about their voluntary self-identification forms, handling demographic information, or EEOC reporting requirements, contact the Barran Liebman team at 503-228-0500.

Click to access a PDF of this Electronic Alert.

Josh M. Goldberg 4/28/21 Josh M. Goldberg 4/28/21

4/28/21: Federal Contractors, Are You Up to Speed on Your Compliance Obligations? President Biden Enacts $15.00 Minimum Wage

April 28, 2021

Employers take note, on Tuesday, April 27, 2021, President Biden signed an Executive Order raising the minimum hourly wage for federal contractors and subcontractors to $15.00 and tying future automatic increases to the Consumer Price Index. President Obama last raised the minimum wage for federal contractors to $10.10 in 2014 and, indexed to inflation, the current minimum wage is $10.95.

By January 30, 2022, contract solicitations, renewals, and extensions will include the $15.00 minimum wage, but do not be surprised if agencies start incorporating these minimum wage requirements sooner. Additionally, seasonal, recreational, and equipment rental services operating on federal lands will no longer enjoy an exemption from minimum wage requirements for federal contractors, and workers with disabilities are subject to the $15.00 minimum wage.

The Executive Order also gradually sunsets tip credits for tipped employees. Starting on January 30, 2022, employers may take an hourly tip credit of $4.50 and will be required to make up for any shortfall in tips to ensure tipped employees earn at least a minimum wage of $15.00 an hour. In 2023, employers will be able to take a smaller tip credit in the amount of 15 percent of the minimum wage and, by 2024, the tip credit will be completely eliminated.

Employers should watch for implementing regulations that will be issued no later than November 24, 2021.

This is just one of the first of what we anticipate are many new considerations for federal contractors as the new Administration gets settled in. The Biden Administration has shown a keen interest in federal contractor compliance and enforcement, including annual verification that a contractor has satisfied the written affirmative action plan requirement through the Affirmative Action Plan Verification Interface (AAP-VI).

Employers who are federal contractors or who believe that they may be federal contractors, should take the time to ensure that they are properly in compliance with the laws that apply to them and are up to date on legal changes.

For questions related to compliance with the laws affecting federal contractors or with wage and hour laws, contact the Barran Liebman team at 503-228-0500.

Click to access a PDF of this Electronic Alert.

Amy L. Angel 4/27/21 Amy L. Angel 4/27/21

4/27/21: Not So Fast: Office Workers in Newly Announced “Extreme Risk” Counties Must Continue Teleworking

April 27, 2021

By Amy Angel & Natalie Pattison

Today, Governor Brown announced 15 counties will move to the “Extreme Risk” category on Friday, April 30, including counties in Portland, Salem, and Eugene.

The 15 counties that will move to Extreme Risk are: Baker, Clackamas, Columbia, Crook, Deschutes, Grant, Jackson, Josephine, Klamath, Lane, Linn, Marion, Multnomah, Polk, and Wasco. The Governor is canceling the “warning” week, meaning those counties that qualify will move to Extreme Risk on Friday, April 30.

Importantly, businesses and non-profits with offices in an Extreme Risk county are required to utilize telework and work-at-home “to the maximum extent possible.” Work in offices is specifically prohibited if telework or work-at-home measures are available, in light of position duties, availability of teleworking equipment, and network adequacy. Additionally, businesses including gyms and restaurants in Extreme Risk counties must drastically reduce capacity, and indoor dining is prohibited.

As a reminder, in early December 2020, the Governor issued a new Executive Order that replaced the “Stay Home, Save Lives” Executive Order and introduced the county risk level concept. The EO stated that, “although utilizing telework options to the extent possible is recommended at all Risk Levels during the pandemic, requirements around telework will vary based on the Risk Level where the county is located.” The EO goes on to provide that all businesses with offices in Oregon must comply with the following:

When a county is at Extreme Risk: Businesses with offices in that county shall facilitate telework and work-at-home by employees, to the maximum extent possible. Work in offices is prohibited whenever telework and work-at-home options are available, in light of position duties, availability of teleworking equipment, and network adequacy.
When a county is at High or Moderate Risk: All businesses with offices in that county are strongly recommended to facilitate telework and work-at-home by employees, to the maximum extent possible. It is strongly recommended that work in offices be avoided whenever telework and work-at-home options are available in light of position duties, availability of teleworking equipment, and network adequacy.
When a county is at Lower Risk: Businesses with offices in that county may make limited return to work available. Businesses are encouraged to consider continuing to make telework and work-at-home options available.
For all Risk Levels: Businesses with offices in Oregon must comply with any applicable OHA guidance, including but not limited to applicable sector-specific guidance, the guidance for employers, and the face coverings guidance.

Employers looking to bring employees back to the office, when permissible, should ensure compliance and enforcement of all applicable OR-OSHA requirements and COVID-19 protocols.

For any questions about navigating COVID-19 in the workplace, contact Amy Angel or Natalie Pattison at 503-228-0500, or at aangel@barran.com or npattison@barran.com.

NOW, NEXT, & BEYOND: Barran Liebman’s E-Alert series covering the COVID-19 pandemic, helping employers identify what they need to do now, next, and beyond to stay in compliance, be responsive to employees, and best position their business for the future.

Click to access a PDF of this Electronic Alert.

Paula A. Barran 4/22/21 Paula A. Barran 4/22/21

4/22/21: Nonprofit Health Care Medical Centers or Hospitals: Proposed BOLI Rule Open for Public Comment

April 22, 2021

By Paula Barran

The Oregon Bureau of Labor and Industries has posted a proposed rule which, if finalized, will allow nonprofit medical centers or hospitals to modify the very strict rules for the scheduling of meal and rest periods which are currently in place.

If adopted, the proposed rule would add two sections which would state:

(8) The provisions of this rule regarding meal periods and rest periods may be modified by the policies of a nonprofit health care medical center or hospital which provides patient care.

(9) The provisions of this rule are subject to the requirements of any licensing, standard of care, or patient care obligations or responsibilities of a nonprofit health care medical center or hospital which provides patient care.

These proposed changes are now open for public comment; comments must be submitted no later than close of business May 21, 2021, to erin.seiler@state.or.us.

If you have any questions about this rule, which we believe to be a valuable development for providers, please contact Paula Barran at 503-276-2143 or pbarran@barran.com.

Click to access a PDF of this Electronic Alert.

Amy L. Angel 4/22/21 Amy L. Angel 4/22/21

4/22/21: OSHA Recording Requirements for Adverse Reactions to COVID-19 Vaccines

April 22, 2021

The Occupational Safety and Health Administration (OSHA) recently issued guidance on when employers need to record adverse reactions to COVID-19 vaccines. OSHA’s guidance indicates adverse reactions to the COVID-19 vaccine are recordable on the OSHA recordkeeping log if it is:

Work-related;
A new case under 29 CFR 1904.6 (the employee has not previously experienced a recorded injury or illness of the same type that affects the same part of the body or the employee previously experienced a recorded injury or illness of the same type that affected the same part of the body but had recovered completely and an event or exposure in the work environment caused the signs or symptoms to reappear); and
Meets one or more of the general recording criteria in 29 CFR 1904.7 (it results in death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, loss of consciousness, or involves significant injury or illness diagnosed by a physician or other licensed health care professional).

If an employer requires employees to be vaccinated as a condition of employment, then any adverse reaction to the COVID-19 vaccine is work-related. The adverse reaction is therefore recordable if it is also a new case and meets one or more of the general recording criteria.

Employers do not need to record adverse reactions to recommended vaccines based on current OSHA guidance; however, the vaccine must be truly voluntary. This means, an employee who chooses not to receive the vaccine cannot suffer any repercussions from this choice. If employees are not free to choose whether or not to receive the vaccine without fearing adverse action, then it would be recordable if it is also a new case and meets one or more of the general recording criteria.

Employers (particularly those with employees in California) should also monitor state specific reporting requirements, which may differ from and be more stringent than the federal OSHA guidance detailed above.

UPDATE: OSHA reversed this guidance and employers are no longer required to record adverse reactions to the COVID-19 vaccine. More information about this update is available here.

For questions about vaccination and navigating COVID-19 in the workplace, contact the Barran Liebman team at 503-228-0500.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 4/7/21 Jeffrey G. Robertson 4/7/21

4/7/21: The American Rescue Plan Act COBRA Subsidy Has Been Here Since April 1. Are You Ready?

April 7, 2021

By Jeff Robertson & Iris Tilley

It’s April 7, and the American Rescue Plan Act COBRA subsidy was effective April 1.

The Department of Labor (“DOL”) had promised, and has now delivered model templates for compliance with the notice requirements in the American Rescue Plan Act (“ARPA”). We advise employers to ensure that any notice is tailored to their particular health plan, but these notices provide a useful template. The DOL model notices also include helpful information on some frequently asked questions, including the effect of a leave of absence on eligibility and when notices must be provided.

The subsidy changes an employer’s usual compliance with COBRA in various ways, including:

Requiring a notice to employees who, within a certain timeframe were previously eligible to continue their coverage through COBRA, and who may have not elected or elected and then later declined COBRA coverage;
Requiring employers to provide notice to employees when their subsidy period is ending; and
Adding an additional layer of complexity to the fact that each COBRA qualified beneficiary has an independent COBRA election right, and now may have an additional opportunity to elect COBRA.

Employers who would like assistance with administering these new notices, or who have questions about how the ARPA subsidy applies to a specific situation are welcome to contact Iris Tilley or Jeff Robertson at 503-228-0500 (or itilley@barran.com or jrobertson@barran.com).

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 3/26/21 Jeffrey G. Robertson 3/26/21

3/26/21: California Retroactively Renews COVID-19 Paid Sick Leave

March 26, 2021

Starting next Monday, California employees of many Oregon businesses will become eligible for additional state-mandated COVID-19 sick leave. Specifically, California Senate Bill 95 takes effect on March 29, 2021, expanding California COVID-19 Supplemental Paid Sick Leave (SPSL).

California’s COVID-19 leave is modeled after the federal Emergency Paid Sick Leave created by the Families First Coronavirus Response Act (FFCRA). Eligible employees are entitled to up to 80 hours of additional paid sick leave for COVID-19-related qualifying reasons, not to exceed $511 per day or $5,110 total. However, unlike federal FFCRA leave, which is now voluntary, SPSL is mandatory for eligible employees. Only California employees are eligible for SPSL, but employers are subject to the law if they have 26 or more employees anywhere in the country and at least one of them is a California employee.

To comply by the deadline of Monday, March 29, 2021, employers must give notice to their California employees by posting or providing them with this required poster from the California Department of Industrial Relations. Eligible employees have until September 30, 2021, to use their leave. Employees may request compensation for COVID-19-related leave already taken between January 1 and March 29, 2021, if that leave was unpaid or paid at a lower rate than required for SPSL, which would reduce the remaining allotment of SPSL leave available to them.

What Employers (of California Employee(s)) Need to Do:

Post the required poster in a conspicuous place where employees will see it or otherwise ensure the poster reaches California employees (e.g., by email for teleworking employees).
Recognize an oral or written request for leave for one of the qualifying reasons as a SPSL leave request.
Be prepared for retroactive employee wage requests from unpaid sick leave taken earlier in 2021.
Know how to calculate the rate of pay and hours of eligibility for your California employees.
Determine whether voluntarily provided FFCRA leave or locally-mandated COVID leave counts against the SPSL requirements.

For questions about the retroactive COVID-19 Supplemental Paid Sick Leave or for assistance with other issues related to your California employees, contact the Barran Liebman team at 503-228-0500.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 3/18/21 Jeffrey G. Robertson 3/18/21

3/18/21: COVID-19 Benefits Update

March 18, 2021

By Jeff Robertson & Iris Tilley

Things are changing fast, and time is flying by as we move into the second year of the coronavirus pandemic. In fact, it’s hard to believe that some of the relief previously issued has expired and that new laws are being passed, with the American Rescue Plan Act of 2021 (ARPA) being signed into law by the President last week. Below is a highlight of what has expired and what is new.

Expired:

Coronavirus-Related Distribution from a Qualified Retirement Plan: Coronavirus-related distributions were available until December 31, 2020.

Coronavirus-Related Loan from a Qualified Retirement Plan: Coronavirus-related loans were available until September 22, 2020.

New:

Optional Provisions for Section 125 Plans: For plan years ending in 2020 or 2021, employers may lengthen the grace period or increase the carryover limit to allow employees to utilize otherwise unused 125 Plan funds. Implementing these changes requires a plan amendment.

Increase in the Limit for DCAP Benefits: For years beginning after December 31, 2020, and before January 1, 2022, employers may amend their 125 Plan to increase the limit of the amount that an employee can exclude from their income for dependent care assistance from $5,000 to $10,500 and from $2,500 to $5,250 for taxpayers who are married filing separately.

Premium Assistance for COBRA Continuation Coverage: Beginning April 1, and until September 30, 2021, there is a 100% COBRA continuation coverage subsidy for assistance eligible individuals. The term assistance eligible individual means, with respect to a period of COBRA coverage during the period beginning April 1, 2021, and ending September 20, 2021, an individual who is eligible to elect COBRA coverage for any reason other than voluntary termination of their employment and who elects to continue their group health plan coverage through COBRA.
- Employers also have the option to allow assistance eligible individuals to enroll in different employer-sponsored coverage at the time that the individual elects to continue their group health plan coverage under COBRA.
- Employers who sponsor group health plans to which this relief applies must comply with detailed notice requirements.
Assistance for Single & Multiemployer Pension Plans: There is new relief for single and multiemployer plans. For single employer plans, this includes spreading the amortization period for funding shortfalls from 7 years to 15 years. For multiemployer plans, this includes establishing a special funding assistance program for multiemployer plans in critical and declining status.

Employers who have questions about any of these changes may contact Barran Liebman benefits team members Jeff Robertson or Iris Tilley at 503-228-0500 (or jrobertson@barran.com or itilley@barran.com, respectively).

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 3/17/21 Jeffrey G. Robertson 3/17/21

3/17/21: New E-Verify Tools Expedite Employment Eligibility Confirmation

March 17, 2021

By Paula Barran

There are new, free resources available from the federal government for resolving issues with confirming employment eligibility through E-Verify. When the E-Verify system detects that an employee’s information submitted from the Form I-9 does not match government records, often referred to as a “mismatch,” the employer will receive a Department of Homeland Security Tentative Nonconfirmation (TNC).

E-Verify employers are required to take action on TNCs for their employees within 10 federal government working days of receiving the notice. The TNC is accompanied by a Further Action Notice, explaining the specific cause of the TNC and what actions must be taken by the employee to resolve the issue.

Employers’ I-9 protocols should be updated to include these two new resources for resolving TNCs:

The myUploads feature on the E-Verify portal allows employees to electronically upload images of their documentation as a JPEG, PNG, or PDF; and
Employees now have the option to call the Department of Homeland Security, instead of wait for an appointment at a Social Security field office, if the Further Action Notice indicates that a SSA “citizen mismatch” is the cause of the TNC.

Both tools are expected to help resolve TNCs more efficiently and help employers avoid keeping E-Verify cases open for significant periods of time.

Beware of the common misperceptions about TNCs when taking steps to respond. Making the assumption that the employee is undocumented might lead you to take steps or make statements that create legal liability under state and federal anti-discrimination statutes. The best practice is to privately notify the employee of the TNC and provide them with the Further Action Notice and the new free resources above to resolve the inconsistency.

For questions about the new E-Verify tools or for any other questions related to employment eligibility, contact Paula Barran at 503-228-0500 pbarran@barran.com.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 3/11/21 Jeffrey G. Robertson 3/11/21

3/11/21: What Employers Need to Know About the American Rescue Plan Act of 2021

March 11, 2021

Today, President Biden signed the American Rescue Plan Act of 2021 (“ARPA”) into law. This comprehensive stimulus package contains a number of provisions aimed at supporting the supply chain of vaccinations and immunization funding and alleviating the harsh effects of the pandemic. While some key employment provisions were removed from the final bill (such as the minimum wage hike and elimination of the tip credit), here are the key provisions that are relevant to employers.

FFCRA Leave: In the ARPA, Congress has chosen not to revive the expired mandatory FFCRA leave requirements. Although new mandatory leave requirements will likely be subject to further Congressional debate, for now, the ARPA extends the tax credit for qualified wages employers voluntarily provide for up to ten days of leave for qualifying absences. These tax benefits are cumulative and allow employers who have previously taken the tax credit to use it again for wages paid for leave taken on or after April 1, 2021.

In addition to paid leave for absences originally covered by FFCRA, this tax credit will also be available for sick leave wages paid to an employee (1) seeking or waiting for the results of a COVID-19 diagnosis because of exposure to COVID-19 or an employer requested COVID-19 test, (2) receiving a vaccination for COVID-19, and (3) recovering from a medically diagnosed injury or illness resulting from vaccination for COVID-19. The daily $200 cap on qualified wages remains the same, but the overall cap on tax credits employers can claim for an individual has increased from $10,000 to $12,000.

Employers should be wary that policies that vary from FFCRA and FMLA requirements could result in the loss of the tax credit. Additionally, ARPA has adopted non-discrimination rules, so that if the employer, in determining availability of the paid leave, discriminates in favor of highly compensated employees, full-time employees, or employees on the basis of tenure, the employer may lose the tax credit.

These new provisions will be in effect starting April 1, 2021, and sunset on September 30, 2021.

Paycheck Protection Program: Congress has appropriated a relatively modest amount of $7.25 billion for the Paycheck Protection Program, and has decided not to extend the March 31, 2021, deadline to apply for assistance. In lieu of more robust PPP funding, the ARPA has substantially expanded other business assistance programs. For example, the ARPA appropriates an additional $15 billion for the Small Business Administration to assist struggling businesses, more than $25 billion specifically for the restaurant industry, and $1.25 billion for the Shuttered Venue Operators Grant.

Employee Retention Tax Credit: The Employee Retention Tax Credit that provides a refundable tax credit for up to 70% of qualified wages is extended from July 1, 2021, to December 31, 2021. Additionally, the ARPA makes additional changes effective June 30, 2021, by allowing startup businesses with gross receipts of up to $1 million to claim a tax credit limited to $50,000 each quarter. Severely financially distressed employers can claim a larger tax credit and small employers may receive an advance of their tax credit.

Unemployment Insurance: The ARPA extends the “add-on” $300 weekly federal unemployment funding and other unemployment insurance benefits set to expire on March 14, 2021. These benefits will now expire on September 6, 2021. Governmental and non-profit entities (including many higher education institutions) will also receive a more favorable reimbursement rate for unemployment insurance benefits. Between March 31, 2021, and September 6, 2021, they will receive reimbursements for 75% rather than 50% of the covered unemployment insurance benefits.

A forthcoming E-Alert will separately address COBRA assistance subsidies in greater detail, as well as other changes to benefits plans. Barran Liebman will also keep you abreast of key guidance as it is released.

For questions relating to the American Rescue Plan Act of 2021 or your policies related to COVID-19, contact the Barran Liebman team at 503-228-0500.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 3/10/21 Jeffrey G. Robertson 3/10/21

3/10/21: Investigation Takeaways for Public & Private Employers

March 10, 2021

Oregon Representative Diego Hernandez’s resignation effective this month followed allegations of sexual harassment, an investigation into those claims, Committee hearings regarding the findings, and a lawsuit by Rep. Hernandez regarding the investigation and process. Of course, allegations of harassment are not confined to political offices, and the investigation and process provides important lessons for all workplaces, including those at public and private employers.

Background

In the spring of 2020, allegations of harassment came to light regarding Rep. Hernandez’s relationship with women who had business before or worked with the Oregon Legislature. The allegations prompted an investigation, conducted by experienced attorneys who acted as outside independent investigators, into potential violations of the Oregon Legislative Branch’s workplace harassment policy (Rule 27). The investigative report was submitted to the House Conduct Committee to consider whether the conduct alleged in the final report violated Rule 27. The Committee heard testimony from five anonymous subjects of the investigation and heard evidence and arguments disputing the allegations and contesting the investigative process through counsel for Rep. Hernandez. Rep. Hernandez also filed a lawsuit against the Oregon Legislature, the Oregon House of Representatives, and other named defendants alleging claims for due process and equal protection violations under the Fourteenth Amendment, a claim for First Amendment retaliation, and seeking a declaratory judgment that Rule 27 of the Oregon House of Representatives is facially unconstitutional and unconstitutional as applied to him. His motion for a temporary restraining order and emergency stay was denied on February 20, 2021.

1. Choose the proper investigator.

With respect to Rep. Hernandez, a formal complaint alleging inappropriate conduct by a legislator requires appointing an experienced attorney who is not an employee of the Legislative Assembly to act as an independent investigator and conduct the investigation into the allegations.

Similarly, public and private employers must also carefully consider the appropriate investigator for workplace investigations. In some situations, employers should work with an external investigator, while internal investigators may be appropriate in other situations. Note, Oregon employers cannot use an outside investigator unless they are a licensed attorney or licensed private investigator.

This decision to work with an external or internal investigator depends on a variety of factors, including the nature and complexity of the claim, the position held by the respondent, and the Company’s internal capacity to efficiently investigate the complaint. An experienced attorney will provide specialized experience, the ability to address complex factual and legal issues, and greater impartiality, which is especially important for particularly sensitive matters or complaints involving senior management. There are additional considerations if there is a possibility the complaint could eventually lead to litigation: work conducted by an internal Human Resources representative may become discoverable, and an in-house attorney cannot be the same attorney who conducts the investigation and represents the company in subsequent litigation.

The chosen investigator should always be neutral, well-trained, respectful, and available to conduct a thorough investigation.

2. Conduct a prompt investigation, and keep the complainant informed about delays.

Delays in investigations risk the appearance of fairness, and in some cases, may deprive the employer of the ability to impose discipline or comply with timeliness requirements in a collective bargaining agreement or policy. In his complaint, Rep. Hernandez alleged the investigation was delayed by nearly 200 days for improper reasons and that investigators did not tell him why it was being delayed. In essence, he claimed the investigation deprived him of due process. This sort of claim undermines confidence in the fairness of the process.

Regardless of the underlying facts and truth to these allegations, complaints about undue delays raise important considerations for all workplace investigations. First, workplace investigations must be prompt. This is one of the key touchstones of an effective workplace investigation as unnecessary delays could affect liability in future litigation or the ability to take disciplinary measures. In addition, the complainant should be reasonably informed about the status of the investigation, and delays or other deviations from standard investigation process should certainly be explained in the investigation report. All employees must be treated fairly throughout the investigation process, and the complainant should have confidence that the employer takes the concerns raised seriously.

3. Allow the complainant to provide a meaningful response.

In the lawsuit, Rep. Hernandez also alleges that he was not given an opportunity to rebut evidence presented by other witnesses since the investigator contacted him about a second interview, but the interview never occurred.

Again, regardless of the truth to this allegation, it raises another important consideration for investigations generally in highlighting the importance of the follow-up interview with the complainant. Generally, after interviewing the complainant, the respondent, and other witnesses, the investigator will conduct a follow-up interview with the complainant in order to provide an opportunity to explain additional or contradictory evidence. Sometimes this will result in a perfectly logical explanation for factual discrepancies, and other times it will involve credibility determinations due to contradictory factual accounts. Either way, it is important to maintain neutrality throughout the investigation process.

Ultimately, all workplace investigations must be prompt, thorough, and impartial, and issues raised about Rep. Hernandez’s investigation highlight some of the essential considerations for all workplace investigations.

For questions about workplace investigations, contact the Barran Liebman team at 503-228-0500.

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Jeffrey G. Robertson 3/8/21 Jeffrey G. Robertson 3/8/21

3/8/21: New CDC Guidance Provides Recommendations for Fully Vaccinated People

March 8, 2021

By Wilson Jarrell

This morning, the Centers for Disease Control and Prevention put out its first set of public health recommendations for people who have been fully vaccinated. This guidance can help provide direction not only to vaccinated individuals in their personal actions, but may also help guide employers in how to safely incorporate vaccinated individuals back into the workplace.

For the purposes of the guidance, a person is considered “fully vaccinated” after it has been at least two weeks after that person received the second dose in a 2-dose series (currently, the Pfizer-BioNTech or Moderna vaccine) or at least two weeks after that person received a single-dose vaccine (the Johnson and Johnson/Janssen vaccine).

Under the new recommendations, fully vaccinated people can:

Visit with other fully vaccinated people indoors without wearing masks or physical distancing;
Visit with unvaccinated people from a single household who are at low risk for severe COVID-19 disease indoors without wearing masks or physical distancing; and
Refrain from quarantine and testing following a known exposure if asymptomatic (unless employed in a high-density workplace, such as a correctional and detention facility, group home, or meat processing or manufacturing plant).

However, the CDC still recommends that fully vaccinated people take precautions like wearing a well-fitted mask and physical distancing when in public or while visiting unvaccinated people who have an increased risk for severe COVID-19 disease or when visiting with unvaccinated people from multiple households.

For employers, this may sound like a free pass for fully vaccinated employees to return to work as normal, but caution should still be exercised. The CDC specifically states that fully vaccinated people should follow previous guidance while in public spaces, including following any applicable workplace guidance.

Until updated, employers must still follow the requirements under Oregon’s Executive Orders, Oregon OSHA’s rules, and OHA guidance. Any changes to an employer’s COVID-19 protocols should be done with the advice of counsel.

However, employers should consider revising their Infection Control Plan and Exposure Risk Assessment to allow for fully vaccinated individuals with no COVID-like symptoms to avoid quarantine or testing following exposure (note that testing is still recommended if employed in a high-density workplace).

For help with revising Infection Control Plans and Exposure Risk Assessments, or for any questions regarding COVID-19 guidance, contact Wilson Jarrell at (503) 276-2181 or wjarrell@barran.com.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 3/5/21 Jeffrey G. Robertson 3/5/21

3/5/21: Multnomah County Employers: Are Your Employees Ready for the Preschool for All Income Tax? Is Your Payroll System Ready?

March 5, 2021

By Jeff Robertson

Employers whose employees work in Multnomah County take note: a new personal income tax measure took effect on January 1, 2021. This measure was quickly passed in the 2020 election, and likewise, quickly becomes effective. The measure was passed as one that seemingly required Multnomah County residents to file and remit the special Income Tax yearly, similar to the Arts Tax.

Two important points have arisen from the limited guidance available:

The Income Tax appears to be effective for anyone performing work in Multnomah County, as well as residents of Multnomah County who work in other counties; and
Multnomah County is attempting to require employers to withhold the tax in 2022 and asking employers to begin withholding in 2021. The tax funds Preschool for All (PFA), which will provide free preschool for 3 and 4 year-olds in Multnomah County starting in September 2022. PFA is funded by a personal income tax of 1.5% on Oregon taxable income over $125,000 for individuals and over $200,000 for joint filers, and an additional tax of 1.5% on Oregon taxable income over $250,000 for individuals and $400,000 for joint filers. The tax applies to all Oregon taxable income earned by Multnomah County residents and income of nonresidents whose income is derived from Multnomah County.

Employees whose income is over the thresholds above will owe the tax starting in 2021.

There has been very little public discussion on the tax, its impact on employees, or the payroll requirements on employers, and this may be an unwelcome surprise to many higher wage earning employees. We do not have any guidance on how an employer is supposed to withhold on joint income thresholds, liability on failure to withhold or an employee’s failure to remit the tax, work-from-home implications, or other considerations. Many payroll and HR departments may not even know there are any employer requirements for 2022 on withholding.

We remain available to help answer questions to the extent possible.

Employers who have questions about PFA withholding or other similar issues may contact Barran Liebman benefits team members Iris Tilley or Jeff Robertson at 503-228-0500 (or itilley@barran.com, jrobertson@barran.com, respectively).

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 3/1/21 Jeffrey G. Robertson 3/1/21

3/1/21: California Family Rights Act Expanded to Include More Northwest Employers

March 1, 2021

On January 1, 2021, California Senate Bill 1383 went into effect, expanding the California Family Rights Act (“CFRA”) – the California counterpart to the Oregon Family Leave Act (“OFLA”). If you are a Northwest employer, why should you care? Now, employers with 5 or more employees anywhere in the country need to comply with CFRA for their California employees, even if they have only one California employee. To comply, employers with one or more California employees must have a written CFRA policy and provide up to 12 weeks of unpaid protected CFRA leave to those California employees with qualifying reasons to take family or medical leave.

More Employers Now Covered by CFRA

CFRA previously applied to companies with 50 or more employees. Because the law applied to larger operations with employees in California, it was not usually a compliance concern for most companies based in the Northwest (even those with a California employee or two). However, because the coverage size is now much smaller and because non-California-resident employees are included in the threshold employee count, many more employers may be affected by the law.

More Employees Now Covered by CFRA

The amendments also eliminated the requirement for employees to be working at a site with 50 or more employees within a 75-mile radius. This mileage requirement used to exclude from coverage remote California employees because their worksite was their home or a small satellite office. Even California employees of large, out-of-state employers who were previously excluded from coverage may be newly covered under this expansion.

All CFRA Policies Need Updates

If your CFRA knowledge is old hat, be aware that the updates also expanded qualifying reasons and eliminated previous exceptions. All CFRA policies will need a refresh to include the correct eligibility requirements.

What this Means for Northwest Employers

Leave obligations to out-of-state employees are usually informed by the jurisdiction where the employee works. This means that an Oregon or Washington employee working remotely in California during the pandemic might now be a covered worker for CFRA purposes.

Employers should evaluate whether they are (1) a covered employer under the California leave law; and (2) whether the individual employee is eligible for leave. The expansion of the California Family Rights Act could mean your California employees can use CFRA leave for the first time, if:

You have 5 or more employees anywhere in the U.S.; and
You have one or more California employees who have worked for you at least 12 months and worked 1250 hours or more in the 12 months prior to requesting leave.

If this applies to you, you should:

Create a CFRA policy for your California employees to comply with the CFRA requirement for a written policy; and
If you already have a CFRA policy, ensure that it reflects the expanded qualifying reasons.

For questions about the expanded California Family Rights Act or for assistance in updating your employee handbook, contact the Barran Liebman team at 503-228-0500.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 2/26/21 Jeffrey G. Robertson 2/26/21

2/26/21: Flurry of Personnel & Policy Changes at the NLRB

February 26, 2021

By Natalie Pattison

Significant personnel and policy changes are afoot at the National Labor Relations Board (“NLRB”). The Biden administration has wasted no time in overhauling the NLRB’s personnel in order to reverse many of the policies put in place under the previous administration.

New Administration Moves Swiftly on NLRB Personnel Changes

Hours after the inauguration, President Biden fired the NLRB’s General Counsel, Peter Robb, and has since nominated Jennifer Abruzzo to serve as NLRB General Counsel. Abruzzo previously served as Special Counsel for the Communications Workers of America (“CWA”), the largest communications and media labor union in the United States. In her new position as NLRB General Counsel, Abruzzo will have broad discretion to determine labor policy.

Before Abruzzo was nominated, the Acting General Counsel of the NLRB, Peter Sung Ohr, made some significant policy changes by rolling back a slew of memos issued by former General Counsel Robb, that provided guidance regarding the National Labor Relations Act (“NLRA”). According to Ohr, he rescinded the memos because they were “inconsistent” with the NLRA’s purpose of encouraging collective bargaining and protecting workers’ rights, or because they were obsolete or contrary to Board law.

General Counsel Memoranda Rescinded

One of the most significant directives rolled back by Ohr was a memo issued by his predecessor that provided guidance on employee handbook rules and policies following the NLRB’s decision in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017). As a reminder, the decision in Boeing afforded employers more deference in their handbook polices by announcing a new balancing test by which workplace rules would be judged. The Boeing test determines lawfulness of a workplace rule by weighing the business justifications for the rule against the rule’s potential impact on employees’ rights. Following Boeing, former General Counsel Robb issued a memo providing examples and explanations to help employers determine whether certain polices are permissible under the NLRA. Ohr’s stated rationale for rescinding the memo was that it was no longer necessary given the number of Board decisions interpreting Boeing since it was issued.

Other memos Ohr rescinded that are worth noting include the following: a memo that put new restrictions on agency investigations and lawyers receiving recorded or documentary evidence; a pair of memos that lowered the bar for prosecuting unions; memos that increased the level of detail unions had to include in financial notes and called for imposing new rules on collecting member dues and nonmember fees; and a memo seeking new limitations on union-employer neutrality agreements.

Employers Should Expect Continued Changes by the NLRB

Employers should expect more policy changes and guidance in the near future and take into consideration that prior NLRB guidance has been or may be rescinded. All workplaces will be affected by the shifting tide of traditional labor law, regardless of whether the employer’s workforce is unionized. Barran Liebman will continue to publish E-Alerts on changes at the NLRB so that employers can stay informed of changes on the labor law horizon, and reach out to counsel when needed to ensure compliance with the new guidance and policies.

For questions about recent NLRB changes, contact Natalie Pattison at 503-228-0500 or npattison@barran.com.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 2/8/21 Jeffrey G. Robertson 2/8/21

2/8/21: What the Consolidated Appropriations Act of 2021 Means for an Employer’s Ability to Make Pre-Tax Student Loan Payments for Their Employees

February 8, 2021

By Iris Tilley

As employees join the workforce with more and more student loan debt, employee benefit programs that help employees chip away at this debt have become of increased interest to employees. However, the employer side of this equation has remained complicated, with few options available to those employers wishing to assist employees with debt they incurred prior to their hire date.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily expanded these options, and the Consolidated Appropriations Act of 2021 (CAA 2021) extended the time period of this temporary expansion. As the law stands now, employers are permitted to include student loan assistance of up to $5,250 per year in their Educational Assistance Plans until December 31, 2025.

Practically, this means that employers can pay up to $5,250 annually toward employee’s student loan debt on a tax-free basis, so long as they structure the payments in compliance with IRS rules governing Educational Assistance Plans, which come from IRS Code Section 127.

In particular, in order to qualify as an Educational Assistance Plan and provide tax-free student loan payments, the employer must (or in some cases, should):

Have a written plan document describing the group of eligible employees, the types of benefit offered, and a statement that employees cannot chose between the benefit and cash compensation;
Provide notice to employees that the benefit exists;
Obtain expense substantiation for amounts to be paid under the plan; and
Perform nondiscrimination testing.

For questions on employee benefit programs aimed to address student loan debt, the effects of COVID-19, or for any other benefits matters, contact Iris Tilley at 503-228-0500 or at itilley@barran.com.

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Jeffrey G. Robertson 1/22/21 Jeffrey G. Robertson 1/22/21

1/22/21: Should Employers Require COVID-19 Vaccinations? Considerations & Best Practices for Employers

January 22, 2021

By Natalie Pattison

Many employers are deciding whether they can—or should—require employees to receive a COVID-19 vaccine. Here’s what we know so far:

Employers Can Legally Require Vaccination, With Some Exceptions.

The general rule, with some exceptions, is, yes, employers can require employees to be vaccinated. There are three main exceptions to the general rule: disability accommodations, religious accommodations, and healthcare workers in Oregon. Current guidance from both the U.S. Equal Employment Opportunity Commission (“EEOC”) and the Oregon Bureau of Labor & Industries (“BOLI”) confirm this position. See our previous E-Alert on the EEOC’s guidance for more details.

Here are the exceptions:

Disability Accommodations: Employers must provide reasonable accommodations for employees who object to being vaccinated due to a disability, unless it would impose undue hardship.
Religious Accommodations: Employers must provide reasonable accommodations for employees who object to being vaccinated due to sincerely held religious beliefs, unless it would impose undue hardship.
Healthcare Workers in Oregon (ORS 433.416): Oregon law provides that healthcare workers may not be required to receive immunization as a condition of work unless the immunization is otherwise required by federal or state law, rule, or regulation. See our previous E-Alert on this Oregon statute for more information, including who is a healthcare worker under this statute.

However, There Are Additional Considerations.

Even though employers generally can require employees to be vaccinated, there are other important considerations.

Impact of the FDA’s Emergency Use Authorization: So far, the approved vaccines were processed under the U.S. Food and Drug Administration Emergency Use Authorization (EUA) process. That process requires vaccine recipients to be notified that they have the option to accept or refuse the vaccine. It is not yet clear whether this right-to-refuse might limit an employer’s ability to require vaccinations. For example, Oregon recognizes public policy wrongful termination claims to the extent an employer terminates an employee for pursuing statutory rights directly related to employment, so a kind of wrongful termination theory might be asserted by an employee who refuses to be vaccinated based on the EUA “right-to-refuse.”
Workers’ Compensation: An employee who has a negative reaction to a mandatory vaccine may well have a compensable injury resulting in a workers’ compensation claim, or may seek to avoid the exclusivity of workers’ compensation by asserting a deliberate injury. This is one consideration employers may evaluate in deciding to offer any vaccination through a third-party provider.
Unionized Workplaces: Requiring vaccination is a mandatory subject of bargaining under the National Labor Relations Act, and may be something already addressed in a Collective Bargaining Agreement.
Wage & Hour Considerations: Employers who require their Oregon employees to receive a COVID-19 vaccine may need to compensate them for the time spent getting vaccinated. BOLI’s recent guidance suggests that time spent getting vaccinated falls under the broad category of “medical attention,” which triggers Oregon wage and hour requirements. Under those requirements:
- If an employee is required to get a vaccine and receives the doses on-site or off-site when they would otherwise be working, their employer must treat that time as hours worked in payroll.
- If the employee gets their required vaccine at an off-site location and outside of their working hours, their employer is not required to pay them for their time spent getting vaccinated.

Pending Oregon OSHA standards may require payment for the out-of-pocket costs an employee incurs in getting vaccinated as well as travel.

Proof of Receipt of Vaccination: Asking for proof of receipt of vaccination is not itself a disability-related inquiry under the ADA. However, employers should be cautious when requesting proof of vaccination, even if the employer is only asking to collect information and not as part of a mandatory vaccine requirement. Employers should only ask for a “yes” or “no” and not why an employee did or did not receive the vaccine or ask for any medical-related information to avoid triggering ADA standards.
Incentive Programs: Employers who offer an incentive to encourage employees to receive the vaccine must analyze whether the incentive is permissible. Depending on the structure of the incentive, it could constitute a “wellness program” governed by the ADA, HIPAA, or GINA, in which case the program will need to be designed with these laws in mind, including limits on the incentive that may be offered. However, even where these laws do not apply, incentive programs must be carefully crafted to avoid potential employment law issues, including pay equity concerns, that could be raised by employees who refuse to receive the vaccine.

Employer-mandated vaccines have become a complicated issue in Oregon. As the law on COVID-19 vaccines continues to develop and change, employers should remain diligent and flexible when making decisions about their vaccine policies. Employers should consult with counsel to determine whether they can legally require vaccines and analyze other important considerations for their particular workplace, including wage and hour, pay equity, wellness program, and other considerations.

For any questions about navigating COVID-19 in the workplace, contact Natalie Pattison at 503-228-0500 or npattison@barran.com.

Click to access a PDF of this Electronic Alert.

Jeffrey G. Robertson 1/8/21 Jeffrey G. Robertson 1/8/21

1/8/21: New Year, New Classification Rules: Department of Labor Updates Economic Realities Test for Wage Claims

January 8, 2021

Appropriately classifying a worker as an independent contractor or an employee has always required a fact-intensive assessment about the economic realities of the individual’s work and weighing a long list of overlapping factors. On January 7, 2021, the United States Department of Labor (“DOL”) published a final rule that simplifies the legal standards under the Fair Labor Standards Act for classifying workers as independent contractors to provide greater predictability and flexibility for companies and workers alike.

Core Factors

The DOL’s new rule reaffirms that the central importance of the economic realities test assesses whether the individual is economically dependent on the potential employer for work or the worker is in business for themselves. Under the new rule, two “core factors” take center stage: (1) the nature and degree of the worker’s control over the work, and (2) the worker’s opportunity for profit or loss based on initiative, investment, or both. If these factors point toward the same classification, it is likely that they will determine a worker’s classification.

Additional Considerations

The DOL will also consider the following factors to a lesser degree: (1) the amount of skill required for the work, (2) the degree of permanence of the working relationship between the individual and the potential employer, and (3) whether the work is part of an integrated unit of production.

This final factor has undergone notable revisions. The DOL will no longer consider the importance or centrality of the individual’s work to the potential employer’s business or the “line of business” test.

Instead, this factor considers whether the worker depends on the overall production process to perform work duties, such as, for example, a programmer who works on a software development team. The final rule further illustrates this factor by comparing an editor and a freelance journalist. An editor is part of an integrated unit of production because they are involved in the entire production process, from assigning articles to determining layout, and their work is dependent on the constant coordination with other employees. By contrast, a freelance journalist, who only writes discrete articles, does not communicate with employees other than the editor, and provides discrete services to the company. Therefore, the freelance journalist’s work can be completely segregated from the other parts of the newspaper’s production process, suggesting the worker is properly classified as an independent contractor.

The new rule comes into effect on March 8, 2021, but employers should be aware that this new rule is limited to resolving worker classification issues under federal wage and hour law. It does not preempt or directly affect the tests that are applied under state law or federal discrimination, harassment, or retaliation laws, as those statutes have their own worker classification tests.

For any questions relating to classifying workers, contact the Barran Liebman team at 503-228-0500.

Click to access a PDF of this Electronic Alert.