On Monday, August 3, 2020, U.S District Judge J. Paul Oetken of the Southern District of New York issued a Decision and Order striking down portions of the Department of Labor (“DOL”) regulations implementing the Families First Coronavirus Response Act (“FFCRA”). Particularly, the order vacated the following portions of the DOL regulations:

  • The requirement that work is available to the employee as a condition of eligibility for FFCRA leave;
  • the definition of “health care provider”;
  • the requirement that an employee secure employer consent for intermittent leave; and
  • the requirement that an employee provide documentation prior to taking FFCRA leave.

The Work-Availability Requirement

The Court first held that the DOL exceeded its rulemaking authority by excluding from eligibility those   employees for whom an employer does not have work available. The FFCRA grants paid leave to employees who are “unable to work (or telework) due to a need for leave because” of any one of six qualifying reasons related to COVID-19.  However, the DOL regulations provided that FFCRA leave was not available to an employee whose employer did not have work available at the time of the leave.  For example, if the employer conducted a temporary furlough due to a government shelter-in-place order or a lack of business, the DOL took the position that FFCRA leave would not be available.  In doing so, the DOL required that the FFCRA qualifying reason was the “but-for” cause of the employee’s inability to work – if the employee would not have had employment available, even in the absence of the qualifying reason, then “but-for” causation did not exist.

The Court found that the language of the FFCRA making leave available when the employee is “unable to work (or telework) . . . ‘because of’” a qualifying reason is ambiguous, since it could require “but for” causation, or it could permit leave when the qualifying reason is one of several reasons why the employee is unable to work.  Even though the Court seemed to acknowledge that the interpretation chosen by the DOL was a plausible interpretation of the statutory language, it struck down the DOL’s interpretation, finding that the agency had failed to adequately explain the basis for its interpretation during the rulemaking process.

Health Care Provider Definition

The FFCRA granted the DOL the authority to issue regulations permitting employers to exclude “health care providers” and emergency responders from the definition of employee under the FFCRA.  Although, for other purposes, the regulations incorporate the FMLA’s definition of health care provider (i.e., doctors and others who provide health care services), the DOL regulations defined health care provider for purposes of the exclusion from coverage to include anyone employed at any doctor’s office, hospital, nursing facility, retirement facility, medical school, medical testing laboratory, pharmacy, or any similar site where medical services are performed.

The Court held that the FFCRA’s statutory language requires that the healthcare provider exclusion is limited to employees who are capable of furnishing healthcare services, and that the definition in the DOL regulations was “vastly overbroad,” because it included “employees whose roles bear no nexus whatsoever to the provision of healthcare services.”  The Court noted that “an English professor, librarian, or cafeteria manager at a university with a medical school” would all be health care providers under the DOL regulation, and that such a result was inconsistent with the FFCRA.

Intermittent Leave

On the issue of intermittent leave, the Court first noted that the FFCRA did not address intermittent leave at all, and that the DOL’s regulatory powers permit the agency to fill the gap left by Congress through reasonable rulemaking, as necessary to carry out the purposes of the Act.  The Court upheld the DOL regulations insofar as they prohibit intermittent leave for on-site workers due to COVID-19 related illness, isolation or quarantine, because the prohibition of intermittent leave in those cases serves an important public health objective – reducing the risk of viral infection.

The DOL regulations permit intermittent leave for other qualifying reasons (such as COVID-19 related childcare) and for employees who can work remotely, but only if the employer and the employee agree to an intermittent leave arrangement. The Court held that the DOL had failed to offer any rationale for the requirement of employer consent to such intermittent leave and, therefore, vacated the DOL regulation insofar as it requires employer consent before an employee may take intermittent leave.

Documentation Requirements

Finally, the Court vacated the portion of the regulations imposing a requirement to provide documentation containing information about the need for leave prior to taking paid leave under the FFCRA. The Court found this requirement is inconsistent with the statute’s unambiguous notice provisions, neither of which require that documentation be provided by an employee in advance of taking paid leave under the FFCRA. Notably, however, the Court held that the documentation requirements are invalid only to the extent that they are a precondition to obtaining leave. The Court allowed the substance of the DOL’s documentation requirements to stand. In other words, employees still must provide the same documentation of the need for leave under the FFCRA, but they simply cannot be required to provide it in advance.

Conclusion

The Court’s decision modifies the DOL regulations by vacating those provisions discussed above.   The decision could have significant ramifications for employees who experience a qualifying reason for FFCRA leave, but are on temporary furlough for other reasons; for workers in the healthcare field; and for those who want to take intermittent leave for reasons permitted under the regulations.  However, the ruling does not include a nationwide injunction, so it leaves open the possibility that other courts might uphold the regulations.  To say the least, the decision creates significant uncertainty as to the validity of the portions of the regulations that have been vacated.  The DOL might also appeal the Court’s ruling, or the agency could engage in a new rulemaking to bolster its justification for those portions of the regulations that the Court found to be lacking support.

For now, employers who rely upon those portions of the DOL regulations that were vacated by the ruling will risk violating the FFCRA if courts within their jurisdiction eventually agree with Judge Oetken’s decision.  As such, pending further developments, we recommend that employers modify their FFCRA compliance processes to comply with the Court’s decision.

Should you have any questions or concerns about the impact of this decision on employer obligations, please contact any member of the McNees Labor & Employment Practice Group.

The National Labor Relations Board has restored a prior standard, one that had stood for about 80 years before being overturned in 2016, which governs an employer’s duty to bargain over employee discipline during the time period between when a new union is certified and a first contract is negotiated.  In 800 River Road Operating Company, LLC d/b/a Care One at New Milford, 369 NLRB No. 109 (2020), the Board reinstated the rule that employers have no duty to bargain before imposing discretionary discipline, which is consistent with the employer’s existing policy or practice, prior to bargaining a first contract with a newly certified union.

In reaching this conclusion in 800 River Road, the Board reversed its 2016 decision in Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (2016), which had required employers to bargain over employee disciplinary action upon commencement of a collective-bargaining relationship.  Specifically, Total Security required employers to provide a new union with notice and opportunity to bargain regarding the discretionary aspects of an existing disciplinary policy before issuing “serious discipline” to a bargaining unit employee.

In reversing Total Security, the Board was fairly critical of its holding.  The Board noted that the decision was inconsistent with United States Supreme Court and Board precedent, and created a “complicated and burdensome” scheme that was inconsistent with the general body of law surrounding bargaining practices.

Although the 800 River Road decision will be applicable to a limited number of cases, it is important for employers who have recently been forced to bargain with a new union.  It will allow those employers to continue to implement existing disciplinary policies and procedures consistently and without the need to bargain.  Also, the Board announced that its 800 River Road decision would be applied retroactively.

The National Labor Relations Board has traditionally applied separate tests to evaluate whether employee discipline violated the National Labor Relations Act, depending on the context of the underlying misconduct. This has resulted in heightened protection for employee misconduct that takes place during the course of protected activity, such as strikes.  However, in General Motors LLC, the Board abandoned the context specific analysis to apply one consistent standard.

Historically, the Board’s Wright Line standard is used to determine whether employee discipline was an unlawful response to employee protected activity.  In other cases, the Board presumed that discipline based on abusive conduct during Section 7 protected activity violates the Act, unless the Board determines that the abusive conduct lost the protection of the Act.  Two different standards have been used for evaluating these cases.

In evaluating employee misconduct that occurs in the workplace, the Board has applied the four-factor Atlantic Steel test, which considers “(1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.” In the case of social-media posts and most cases involving discussions among employees in the workplace, the Board has examined the totality of the circumstances to determine whether employee discipline was unlawful.

The Board has used yet another standard to evaluate employee misconduct during a strike.  In the context of a picket-line, the Board applies the Clear Pine Mouldings standard, which also considers all of the circumstances in determining whether non-striking employees reasonably would have been coerced or intimidated. If so, then the misconduct loses the protection of the Act.

In General Motors LLC, the Board held that these varied standards have failed to yield predictable, equitable results.  The Board cited to cases overturning employee discipline and requiring employers to reinstate employees accused of making threatening and racist comments toward coworkers and supervisors.  As a result, the Board concluded that the appropriate approach is to apply the Wright Line analysis in evaluating employee misconduct regardless of the context.

Under Wright Line, an employee must show that (1) the employee engaged in Section 7 protected activity, (2) the employer knew of that activity, and (3) there is a causal connection between the discipline and the Section 7 activity.  If this initial case has been made, the burden of shifts to the employer to prove it would have taken the same action even in the absence of the protected activity.

We believe that the Board’s decision will result in fewer disciplinary decisions being overturned by the Board and will result in more predictability for employers.  Hopefully, it will eliminate some of the more extreme cases of the misconduct in and outside of the workplace.  Certainly, the Board’s General Motors decision will be a welcomed relief for employers evaluating possible disciplinary action for employee misconduct.

On July 16, 2020, the U.S. Department of Labor (“DOL”) released a series of new forms that can be used by employers and leave administrators related to the Family and Medical Leave Act (“FMLA”).  The DOL claims the new forms are simpler and easier to understand for employers, healthcare providers, and employees. Some of the more significant updates include the replacement of questions that require written responses with statements that can be completed by checking a box, and electronic signature features.  The new forms can be found through using the links below:

Employer FMLA Notice Forms:

  • Eligibility Notice (form WH-381) – This form is used to notify employees of their eligibility for FMLA leave (or the reason(s) they are not eligible).
  • Rights and Responsibilities Notice (form WH-381) – This form is used to notify eligible employees of the specific expectations and obligations associated with their FMLA leave request, including the requirement to provide a certification addressing the need for FMLA leave, if applicable.
  • Designation Notice (form WH-382) – This form is used to inform employees whether their FMLA leave request is approved or whether additional information is needed to approve or deny the requested leave.

FMLA Certification Forms:

These new forms, like prior versions of the DOL’s FMLA forms, can be used by employers to comply with their obligations under the FMLA.  However, employers are not required to use the new FMLA forms.

In a Q&A section addressing the newly released FMLA forms, the DOL states that the FMLA does not require the use of any specific form or format.  Thus, employers may use the DOL’s forms (either the older or newer versions) or they may create their own versions of the FMLA forms.  If an employer creates its own FMLA forms, however, the forms should be reviewed by legal counsel to ensure compliance with the FMLA regulations. The entire Q&A section addressing other aspects of the new FMLA forms can be found at the bottom of the page on the DOL’s website.

In addition to the new streamlined FMLA forms, the DOL also issued a Request for Information, which asks for feedback from the public regarding the effectiveness of the current FMLA regulations.  Through this process, employers can provide feedback and suggestions regarding issues they have experienced in administering the FMLA in their workplaces.  Employers have until September 15, 2020 to provide their feedback and suggestions.

If your organization needs assistance with FMLA compliance or submitting feedback through the DOL’s Request for Information process, please contact any member of the McNees Labor and Employment Group.

On July 8, 2020, in the consolidated cases of Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania et al. and Donald J. Trump, President of the United States, et al. v. Pennsylvania et al., the U.S. Supreme Court ruled that employers can exclude coverage for birth control from their health care plans if they oppose contraception on moral or religious grounds.

The Women’s Health Amendment to the Patient Protection and Affordable Care Act (“ACA”) requires ACA covered employers to provide women no-cost coverage for preventative care as defined by the Preventative Care Guidelines provided by the Health Resources and Services Administration.  “Contraceptive methods” are considered preventative care under the Guidelines.

In 2011,  the Departments of Health and Human Services, Labor, and Treasury (“Departments”) created a narrow exemption from the requirement to provide contraceptive coverage for houses of worship, their integrated auxiliaries, religious orders, and conventions or associations of churches.  In 2013, the Departments provided an accommodation for other religious organizations allowing for contraceptive coverage to be provided without cost-sharing directly to the employer’s participants, independent of the employer’s health plan.  To receive an accommodation, the religious organization had to self-certify that it opposed providing coverage for some or all of the contraceptive services on account of religious objections; it is a nonprofit entity; and it held itself out as a religious organization.  In 2015, the accommodation was expanded to include any for-profit entity that is not publicly traded and is owned by a small number of individuals who object to providing coverage based upon the owners’ religious beliefs.

In 2018, the Departments issued final rules, which significantly expanded the exemption (“2018 Rules”).  The 2018 Rules made the accommodation process voluntary and  expanded the exemption to include organizations which objected to the contraceptive mandate based on sincerely held religious beliefs that opposed contraceptive coverage and created a “moral exemption” for nonprofits and for-profit, non-publicly traded companies, with sincerely held moral objections to providing the coverage.

The Commonwealth of Pennsylvania, joined by the State of New Jersey, challenged the 2018 Rules and the U.S. District Court for the Eastern District of Pennsylvania issued a nationwide injunction preventing the Departments from implementing the 2018 Rules.  In July 2019, the Third Circuit affirmed the District Court’s decision.  This week, the Supreme Court overruling the Third Circuit, held that the Departments had the authority to provide the exemptions to employers with religious and conscientious objections.

Therefore, if you are an employer who has a sincere religious or moral objection to providing contraception coverage to your employees, you will not have to include the coverage in your health plan.  The self-certification is no longer required.  However, if you would prefer that your employees have the opportunity to receive contraceptive coverage independent of your health plan, then the accommodation procedure remains available and you would follow the self-certification procedures.

If you would like more information on how to invoke the religious or moral exemption or complying with the accommodation procedure, please contact any member of our Labor and Employment Law Practice Group.

On June 15, 2020, the U.S. Supreme Court issued its long-awaited decision in Bostock v. Clayton County and two related cases that presented the same issue: whether employment discrimination on the basis of an individual’s sexual orientation or gender identity constitutes unlawful sex discrimination under Title VII of the Civil Rights Act of 1964.  In recent months, many Supreme Court observers refused to predict how the Court would rule, saying it was too close to call, but many predicted the outcome would turn on the vote of Justice Neil Gorsuch, a President Trump appointee.  Justice Gorsuch authored the 37-page majority opinion, and, in a 6-3 decision, the Court determined that employment discrimination on the basis of sexual orientation or gender identity is unlawful under Title VII.

The Court’s Reasoning.  Justice Gorsuch’s reasoning was straightforward: Title VII clearly prohibits discrimination on the basis of sex, and when an employer discriminates against an individual based on the gender of who he/she loves or which gender he/she identifies as, that individual’s “sex” is a factor in the decision.  Put another way, an employer who hires women who date men, but refuses to hire men who date men is ultimately differentiating between the candidates based on their sex.  While this reasoning drew criticism from three dissenting justices (Thomas, Alito and Kavanaugh) as violating the intent of the legislators who passed Title VII, Justice Gorsuch cited several prior Supreme Court decisions in which Title VII’s strict prohibition on “sex discrimination” was interpreted to reach results that the drafters may not have envisioned.  Indeed, some believed the Court’s 1998 decision in Oncale v. Sundowner Offshore Services, Inc. (holding that same-sex sexual harassment is an unlawful form of sex discrimination under Title VII) authored by Gorsuch’s predecessor,  Antonin Scalia, made the outcome in the Bostock case a foregone conclusion.

What the Decision Means for Employers.  Several federal courts sitting in Pennsylvania have in recent years reached the same conclusion that the Supreme Court did in the Bostock decision.  In addition, the Pennsylvania Human Relations Commission (PHRC) issued written guidance in 2018, advising that the Commission consider discrimination on the basis of sexual orientation and gender identity to be unlawful under the Pennsylvania Human Relations Act.  So, the risk of liability for such discrimination is not new to employers in the Commonwealth.  However, the Supreme Court’s decision brings a degree of finality to how Title VII must be interpreted and will likely increase the number of such claims filed with the PHRC, Equal Employment Opportunity Commission and in federal courts.  At a minimum, employers should consider revising their equal employment opportunity policies to clearly prohibit discrimination on these grounds – and to update non-discrimination/non-harassment training to ensure the scope of the law is understood by managers and employees alike. Likewise, human resources professionals would be well-advised to consider best practices for addressing internal complaints of discrimination on these grounds.

What the Decision Does Not Mean.  In his written opinion, Justice Gorsuch pointed out that the employers involved in the trio of cases before the Court were not asserting a religious basis under the Religious Freedom Restoration Act (RFRA) to justify the challenged discrimination.  It remains possible that an employer with a religious objection to homosexuality or transgender status could successfully defend a discrimination claim on that basis.  Likewise, Justice Gorsuch pointed out that the Court’s opinion in the Bostock case should not be construed to require any particular outcome pertaining to issues such as dress codes or use of locker rooms and rest rooms; those issues, according to the Court, would also need to be addressed in subsequent cases.  A closely related issue is whether employers commit unlawful discrimination by refusing to cover gender reassignment therapy and surgery in their health plans.  Three days prior to the Bostock decision, the Trump Administration rolled back an Obama-era regulation under the Affordable Care Act that required such coverage for certain employers; however, the question that remains is whether such coverage exclusions are now unlawful under Title VII (or the Americans with Disabilities Act).  Justice Gorsuch’s reminder of what his written opinion does not purport to address serves as a clear reminder that there are many related issues that have yet to be sorted out in court.  It may take years for a consensus to be reached on all of these issues; however, LGBTQ legal rights have advanced significantly over the past five years (starting with the Supreme Court’s recognition of same-sex marriage in June 2015) and odds are good that they will continue to do so.

There is no question that the Bostock case is a monumental decision for the LGBTQ community.  However, many employers in Pennsylvania have already adjusted their practices to prohibit discrimination on the basis of sexual orientation and gender identity.  For those employers that have not done so, the Bostock decision removes any question that it is now necessary to do so.  If you have any questions regarding the decision, this article or best practices for updating your policies and training programs, please contact any member of our Labor and Employment Law Practice Group.

Nearly one month after Pennsylvania shut down in March to slow the spread of COVID-19, Governor Wolf announced a three-phase plan to reopen the Commonwealth.  Counties were to be classified in to red, yellow, and green phases with each step carrying progressively easing restrictions.  As more counties approach the least-restrictive green phase, employers should consider several factors as Pennsylvania emerges from the shutdown and workers begin returning to their regular jobsites.

Masks or No Masks

One decision nearly every employer will have to make during the green phase is whether to excuse any employees from wearing masks as they return to work.  There is no one-size-fits-all answer to this question.  Employees who work physically demanding jobs or in high temperature environments may face health risks if required to wear a mask while working – and guidance from the Pennsylvania Department of Health does not require masking in any situation where a mask would cause a safety or health risk.  By contrast, workers whose jobs are less physically demanding or are located in climate controlled environments will typically be able to safely wear face masks while at work.  Likewise, public-facing employers whose employees have regular, in-person customer contact will have a heightened need for protection regardless of whether they work in heat; in these situations some employers may opt to require face shields in lieu of masks.  Whatever an employer decides regarding the use of masks in its facility, its decision should be based on applicable government guidance and sound reasoning that considers employee and public safety alike.

Cleaning Up and Keeping Clean

Before COVID-19, employers probably gave little thought to the cleaning regimens in place at their facilities.  With employees returning to work,  businesses should examine their cleaning practices and protocols.  Areas that are commonly occupied by multiple employees or customers (think lobbies and break rooms) should be cleaned and disinfected nightly, as should commonly touched surfaces and objects.  Broad-spectrum cleaning agents that kill viruses and bacteria are best.  Individual workstations and whole-office cleanings should also take place regularly.

Complying with State and Federal Guidelines

Governor Wolf and the federal Centers for Disease Control have each issued guidance for employers.  As green phase approaches, employers should regularly consult these resources to ensure that they are complying with applicable guidelines.  Where compliance is not feasible, employers should be prepared to support their actions through sound reasoning and by complying to the extent possible.

Educating Employees

As Pennsylvania moves from yellow phase to green, employers should formulate a strategy to educate employees on return to work protocols and procedures, and ongoing efforts to mitigate risks associated with COVID-19.  Education and communication ensures that employees are mindful of, and understand, new policies and procedures.  Their awareness of ongoing mitigation efforts not only helps to lower anxiety about returning to work, but also increases the likelihood that employers’ mitigation efforts are successful.

Expect Some Bumps in the Road and Have a Plan for Handling Them

What should an employer do about workers who refuse to come back to the jobsite?  Should employees travel out of state on business?  What if an employee develops COVID-like symptoms upon returning to work?  Employers should consider these and other issues that are likely to arise as their workforces return to the job and have plans in place to address them.  When the answer to a problem is not clear, businesses should seek legal counsel to avoid making mistakes that could prove costly.

If you have any questions about preparing your Pennsylvania business for operation in the green phase, contact any member of our Labor & Employment Group.

IRS guidance, Notice 2020-29 and 2020-33, issued on May 12, 2020 addresses unanticipated changes in health and dependent care expenses because of the 2019 Novel Coronavirus (COVID-19) pandemic by  providing for increased flexibility with respect to mid-year elections under a Section 125 cafeteria plan during calendar year 2020 related to employer sponsored health coverage, health Flexible Spending Arrangements (health FSAs), and dependent care assistance programs.  It is also providing increased flexibility with respect to grace periods to apply unused amounts in health FSAs, and dependent care assistance programs incurred through December 31, 2020 and has increased the $500 limit for unused amounts remaining in a health FSA that may be carried over into the following year to $550.

Mid-year Elections Under a Section 125 Cafeteria Plan
For mid-year elections made during calendar year 2020, a Section 125 cafeteria plan may be amended to permit employees who are eligible to make salary reduction contributions under the plan to:

  1. make a new election for employer sponsored health coverage on a prospective basis, if the employee initially declined to elect employer-sponsored health coverage;
  2. revoke an existing election for employer sponsored health coverage and make a new election to enroll in different health coverage sponsored by the same employer on a prospective basis (including changing enrollment from self-only coverage to family coverage);
  3. revoke an existing election for employer-sponsored health coverage on a prospective basis, provided that the employee attests in writing that the employee is enrolled, or immediately will enroll, in other health coverage not sponsored by the employer;
  4. revoke an election, make a new election, or decrease or increase an existing election regarding a health FSA on a prospective basis; and
  5. revoke an election, make a new election, or decrease or increase an existing election regarding a dependent care assistance program on a prospective basis.

An employer utilizing this relief is not required to provide unlimited election changes but may determine the extent to which such election changes are permitted and applied, provided that any permitted election changes are applied on a prospective basis only, and the changes to the plan’s election requirements do not result in failure to comply with the nondiscrimination rules applicable to cafeteria plans.

Extended Claims Period for Health FSAs and Dependent Care Assistance Programs

An employer may also amend its Section 125 cafeteria plan to permit employees to apply unused amounts remaining in a health FSA or a dependent care assistance program as of the end of a grace period ending in 2020 or a plan year ending in 2020 to pay or reimburse expenses incurred for the same qualified benefit through December 31, 2020.  The guidance also increased the $500 limit for unused amounts remaining in a health FSA that may be carried over into the following year by making the carryover amount 20 percent of the maximum salary reduction amount under Section 125(i), which is indexed for inflation.  For a plan year starting in 2020, the maximum unused amount allowed to be carried over to the immediately following plan year beginning in 2021 is $550 (20 percent of $2,750, the indexed 2020 limit under Section 125(i)).

An amendment for any of the above provisions for the 2020 plan year must be adopted on or before December 31, 2021, and may be effective retroactively to January 1, 2020, provided that the Section 125 cafeteria plan operates in accordance with Notice 2020-29 or Notice 2020-33 or both, as applicable, and the employer informs all employees eligible to participate in the Section 125 cafeteria plan of the changes to the plan.

For more information on these changes and other employee benefit law changes, contact a member of our Labor and Employment or Employee Benefits Group.

Employers who have had to implement mass layoffs and facility closures in response to the ongoing COVID-19 pandemic must ensure that they comply with the requirements of the federal Worker Adjustment and Retraining Notification Act (WARN Act).  A failure to comply can result in significant potential liability in the form of class-based litigation.

The U.S. Department of Labor (DOL) recently issued a series of Frequently Asked Questions regarding the WARN Act in the context of the COVID-19 pandemic.  While the DOL’s guidance is not binding on courts, it provides useful compliance assistance for employers during these unprecedented times.

As background, the WARN Act requires employers with 100 or more full-time employees (not counting workers with fewer than six months on the job) to provide at least 60 calendar days of advance written notice of a worksite closing affecting 50 or more employees or a mass layoff affecting at least 50 employees and 1/3 of the worksite’s total workforce or 500 or more employees at the single site of employment during any 90-day period.  The WARN Act contains exceptions to its notice requirements when employers can show that mass layoffs or worksite closings occurred due to faltering companies, unforeseen business circumstances, and natural disasters.  In such instances, the WARN Act requires employers to provide as much notice to their employees as possible.  An employer who violates the provisions of the WARN Act may be liable for an amount equal to the amount of wages and benefits for each affected employee for each day of the period of violation, up to 60 days, and the affected employees’ costs and attorneys’ fees.

The DOL’s FAQs begin by addressing the issue of temporary layoffs and furloughs.  WARN Act notices must be given when there is a triggering “employment loss,” as defined under the Act.  Any temporary layoff or furlough that lasts less than six months is not considered an employment loss.

However, the FAQs explain that a temporary layoff or furlough without notice that initially is expected to last six months or less, but later is extended beyond six months, may violate the WARN Act unless:

  1. The extension is due to business circumstances (including unforeseeable changes in price or cost) not reasonably foreseeable at the time of the initial layoff; and
  2. Notice is given when it becomes reasonably foreseeable that the extension is required.

In other words, an employer who previously announced and carried out a short-term layoff or furlough (i.e., six months or less) and later extends the layoff or furlough beyond six months due to business circumstances not reasonably foreseeable at the time of the initial layoff is required to give notice at the time it becomes reasonably foreseeable that the extension is required.

The FAQs also discuss the unforeseeable business circumstances exception to the WARN Act’s 60-day advance notice requirement.  The DOL makes clear that, when invoking an exception to the 60-day notice requirement, a covered employer still must provide as much notice as practicable and include in that notice a brief statement of the reason(s) for giving less than 60 days of notice (along with the other required elements of a WARN Act notice).  Also, in the event of a legal challenge, the employer will bear the burden of proving that the requirements of the unforeseeable business circumstances exception are met.

For situations where the employer has email addresses for affected employees, the FAQs confirm that WARN Act notices may be sent via email, so long as the notices are specific to the individual employee and comply with all requirements of the WARN Act and its regulations regarding written notifications.

As we begin to enter the third month of large-scale disruptions caused by COVID-19, employers must remain vigilant to ensure WARN Act compliance.  Covered employers in Pennsylvania who temporarily laid off or furloughed employees at or near the time of the Governor’s business closure order in March should determine whether it is possible that such layoffs/furloughs may extend for more than six months and, if so, whether these actions may require WARN Act notices.  With the situation continuing to evolve and an unclear future ahead, the DOL’s FAQs are a timely reminder of the need to remember the WARN Act and its requirements.

For more information regarding the potential impact of the WARN Act and other related employment law issues, contact a member of our Labor and Employment Group.

On April 30, 2020, the Internal Revenue Service and the Department of Labor extended certain time frames for special enrollment in a health plan, COBRA coverage, claims procedures, and external reviews for all welfare and pension plans.  Under the Rule, all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Internal Revenue Code must disregard the time period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency (or such other date that the IRS or DOL may announce), in determining the following deadlines:

  • The 30-day period (or 60-day period, if applicable) to request special enrollment;
  • The 60-day election period for COBRA continuation coverage;
  • The date for making COBRA premium payments;
  • The date for individuals to notify the plan of a qualifying event or determination of disability;
  • The date within which individuals may file a benefit claim under the plan’s claims procedure;
  • The date within which individuals may file an appeal of an adverse benefit determination under the plan’s claims procedure; and
  • The date within which a group health plan must provide a COBRA election notice.

For example, if a participant had a special enrollment event on February 29, 2020 and the end of the National Emergency is June 1, 2020, then the participant has thirty days after July 31, 2020 to request special enrollment.

The DOL also posted a  separate notice relaxing the time frames for plans to  furnish notices, disclosures, and documents, including black out notices, that must be furnished between March 1, 2020 and 60 days after the announced end of the National Emergency, if the plan acts in good faith and furnishes the document as soon as administratively practicable under the circumstances.

The DOL is also relaxing retirement plan loan and distribution procedural requirements during the National Emergency.  If an employee retirement plan fails to follow procedural requirements for plan loans or distributions imposed by the plan, the DOL will not treat it as a failure if the failure to follow procedures is solely attributable to the COVID-19 outbreak; there was a good-faith diligent effort under the circumstances to comply with the requirements; and there is a reasonable attempt to correct any procedural deficiencies as soon as administratively practicable.

The DOL emphasized that plans must “act reasonably, prudently, and in the interest” of the participants and should make “reasonable accommodations” to prevent the loss of benefits.

Lastly, on May 1, 2020, revised COBRA notices to be used by health care plans and employers were published by the DOL.  The revised notices provide additional information for employees who are eligible for Medicare.

For more information on these changes and other employee benefit law changes, contact a member of our Labor and Employment or Employee Benefits Group.