McNees recently announced the creation of HR Influenced, a human resource management consulting firm offering a variety of HR solutions.  Led by Kristen Evans, a dynamic HR professional with decades of experience, HR Influenced will offer clients a full array of professional services including: recruiting, leadership coaching, compensation and benefits analysis and support, employee recognition program development, employee training, succession planning and more.

We are excited for the launch of HR Influenced!  You can learn more here.

Maryland and Delaware recently joined the growing list of states that have enacted legislation requiring employers to offer paid family and medical leave.  Both states are still working on implementing regulations for the new laws; but, in the meantime, below is a brief summary of what you need to know about these laws and when they will take effect.

Maryland

Maryland’s new law will cover all employers with at least one employee in the state.  To be eligible for the leave, employees must have worked at least 680 hours over the 12-month period before the leave begins.  Employees also must exhaust all voluntarily provided paid leave before taking paid leave under this law.

Beginning on January 1, 2025, all eligible employees may take up to 12 weeks of job-protected leave in an application year for the following reasons:

  • To care for a child in the first year following a birth, adoption, or foster care placement;
  • For an employee’s own serious health condition;
  • To care for a family member with a serious health condition;
  • To care for a service member with a serious health condition who is the employee’s next of kin; or
  • For a qualifying exigency relating to a family member on active duty.

Employees may also be eligible for an additional 12 weeks per year for their own serious health condition if the initial 12 weeks of leave was taken to care for a new child, and vice versa.

The paid leave will be funded by employee wage deductions and, for employers with 15 or more employees, employer contributions or the establishment of self-funded private employer plans to provide paid leave.  The benefit amount will be determined by the state average weekly wage and the employee’s current rate of pay, with the maximum benefit for 2025 being $1,000 per week and the minimum amount being $50 per week.  The amount of the benefit will be adjusted annually based on the consumer price index.

Delaware

Delaware’s new law creates a statewide insurance program for paid parental, family caregiving, and medical leave funded through employer and employee contributions.  Employers with at least 25 employees in Delaware during the prior 12-month period must provide eligible employees with a maximum of 12 weeks of job-protected leave.  Employers with 10 to 24 employees only need to offer parental leave.  Employer contributions begin on January 1, 2025, and eligible employees will be permitted to take leave beginning on January 1, 2026.

Similar to the federal FMLA, employees are eligible for this leave if they have worked 1,250 hours during the previous 12-month period and have worked for a covered employer for at least one year.  Eligible employees will be able to take leave for the following reasons:

  • To address their own serious health condition;
  • To care for a family member with a serious health condition;
  • To bond and care for a child during the first year following birth, adoption, or foster placement; or
  • To address a family member’s military deployment.

Employees can take up to 12 weeks in an application year for parental reasons and 6 weeks in a two-year period for their own health condition, to care for a family member, or for a family member’s military deployment.  Employers may require employees to use accrued paid time off to substitute for paid leave.

Eligible employees will receive 80% of their average weekly wage, with a minimum weekly benefit of $100 and a maximum weekly benefit of $900 for 2026 and 2027.  For each year thereafter, the state will adjust the contribution rate based on consumer price index.  The benefits are funded by employer contributions, but employers may deduct up to 50% of the premiums from employees’ wages.

Employers have some time to prepare for these new requirements, and now is a good time to start reviewing your existing policies to prepare for these changes.  For more information, or for assistance with policy drafting and training, please contact any member of the McNees Labor and Employment Group.

At our 31st Annual Labor and Employment Law Seminar, there was a panel discussion regarding the War for Talent.  As part of that presentation, we reviewed some of the new and creative application processes that employers are adopting to help attract, screen and onboard employees more effectively and efficiently. We also discussed the use of Artificial Intelligence, AI, in the applicant review process.

AI is being used to solve a number of problems for organizations of every size. More and more, AI is being used in Human Resources settings, and there is no doubt that we will continue to see a proliferation of AI tools.  These are great tools, so it’s all good, right?

Well, if AI perpetuates some of the same biases that have long been problematic for regular human intelligence, then employers will continue to face disparate treatment and disparate impact claims.  These are exactly the concerns that were recently noted by the Equal Employment Opportunity Commission.  On May 12, 2022, the EEOC issued guidance regarding the Americans with Disabilities Act and the use of software, algorithms and artificial intelligence to assess job applicants and employees.

The EEOC’s guidance outlines three areas where AI could potentially violate the ADA:

  1. The employer does not provide a reasonable accommodation to allow an applicant to be rated fairly by AI;
  2. The employer relies on AI that screens out qualified applicants with a disability, intentionally or unintentionally; or
  3. The employer utilizes an AI tool that makes an unlawful disability-related medical inquiry.

Employers adopting AI in the hiring process need to be aware of these risks and must be sure to discuss how they will be addressed with the vendors offering these products and services.

This same topic was discussed at a recent Employment Law Alliance conference, where Keith Sonderling of the EEOC offered some helpful insights.  Mr. Sonderling emphasized that the EEOC is trying to be proactive in providing guidance regarding the use of AI in this setting, noting that there are already thousands of AI tools available for use at every stage of employee life cycle and compliance is the goal for so many employers and service providers. Understanding the legal issues and how employers can work to ensure compliance on the front end is a better outcome for all involved.

Keep in mind that state laws may also impact your organization’s use of automated decision tools as well. We will be sure to keep you up to date as additional guidance is issued and as the use of AI in the hiring process continues to develop.

And, if you have any questions about rolling out AI to help some humans in Human Resources, please do not hesitate to give us a call.

Despite our best attempts to suppress the memory, we all remember it well.  Just over two years ago, the pandemic triggered state-ordered shutdowns.  Our economy obviously slowed to a crawl, and employers everywhere immediately found themselves with surplus workers.  The result was mass layoffs, flooding the labor market with available employees.  To get employees back to work, Congress passed the CARES Act to assist employers with wages and to encourage the rehiring of America’s workforce.  The ARPA followed in an attempt to stimulate a static economy.  The injection of this cash into the economy – along with our adjustment to living with the pandemic and the availability of vaccines – created high demand for goods and services.

The only problem was that during employees’ time in unemployed isolation, something happened.  People reevaluated their lives – particularly their work lives.  For myriad reasons (and reasons we have yet to fully understand), many chose to temporarily remain outside of the workforce or to exit the workforce permanently. As a result, despite the propellant applied to the economy, there remained a hole where the American workforce once was, and employers found themselves in need of labor, fast.

And so, the war for talent was born.  Employers have been competing with each other to secure the limited pool of available workers with ever-increasing and creative incentives.  They have tried everything from increases in pay, signing bonuses, remote work, increases in time off, tuition assistance, free food, and many, many other employer-specific perks.  For a great number of employers, the war for talent has been long, frustrating, and fruitless.  Just ask any entity looking for drivers with a commercial driver’s license.  Or a healthcare facility looking for registered nurses. Or a manufacturer looking for a factory worker. (All to say nothing of the skilled trades; they are in a league all of their own).

As employers are fully engaged on the battlefield for talent, they are also starting to notice a[nother] storm cloud on the horizon.  In November 2021, and again in January this year, investment strategist Jeremy Grantham was the first to sound the alarm that the economy was likely in a super bubble (three to be exact), and the economy was starting to show all the signs that the bubbles were about to pop (or at least deflate).  All that was unknown was the catalyst.  In February, Russia invaded Ukraine.  Last week, the first bank (Deutsche) warned that a major recession is coming.  Netflix’s share price dropped by a third.  Amazon reported a $4 billion loss.  On Friday, we learned that the economy shrank in Q1.

It certainly remains to be seen whether we will see a recession, and if so, how bad.  But it begs the question: could it be that employers are in a war to secure talent they will ultimately be unable to keep if the predictions of recession come true?  Should employers really be evaluating the affordability of the hiring incentives they are offering based on today’s demand?  Should employers be engaging in the war for talent at all?  The answer for each employer will be different. At a minimum, employers should reevaluate how they wage the battle.  They should reevaluate their plan, including the long-term sustainability of the incentives offered to prospective employees (i.e., are they recession proof).  My colleagues Adam Santucci and Bill Boak will be speaking about the war on talent at our upcoming seminar on May 13.  You can register here.

In January, we wrote about Allegheny County’s paid sick leave regulations that took effect in December 2021.  Now, we write to tell you that the regulations have changed.  The change will affect only one key industry – construction.

When the Allegheny County Board of Health drafted its paid sick leave regulations, it clearly modeled them after Pittsburgh City’s Paid Sick Leave Act.  Except for the number of employees that trigger the sick leave requirement, Allegheny County’s draft regulations were nearly identical to the City’s.  Ostensibly, the County drafted its regulations so similarly to the City’s to allow for ease of administration.  With nearly identical ordinances, employers did not need to try to administer two materially different ordinances depending on whether their employees were working in the City or the County.  But, when Allegheny County enacted the final version of its regulations, it had one significant difference compared to the City’s Act – the definition of “employee.”

The City’s definition of employee explicitly excludes any member of a construction union covered by a collective bargaining agreement.  The County’s regulations left out that explicit exclusion.

Almost immediately, there was surprise and pushback in the construction industry in Allegheny County.  On the heels of that pushback came rumors that the omission was an oversight, and that the County was going to amend its regulations to exclude construction unions, too.  Those rumors proved to be true.

At its March meeting, the County’s Board of Health unanimously approved an amendment to the definition of “employee” within the paid sick regulations.  The County’s paid sick leave now excludes any member of a construction labor union covered by a collective bargaining agreement.  The amendment goes one step further and defines “construction labor union.”  That is defined as “a labor union that represents, for purposes of collective bargaining, employees involved in the work of construction, reconstruction, demolition, alteration, custom fabrication or repair work and who are enrolled or have graduated from a registered apprenticeship program.”

With this revision, unionized construction employers should review the language and scope of their paid sick leave policies.  Such policies should be tailored to cover only non-unionized employees.

A recent report from a Pennsylvania Department of Labor & Industry task force describes the economic impact of worker misclassification in Pennsylvania and makes several significant recommendations to the legislature.  These recommendations, if implemented, could dramatically impact how some Pennsylvania employers manage their workforce, particularly those employers in the construction industry.

The report was issued on March 1 by the “Joint Task Force on Misclassification of Employees.”  The Task Force looked at the frequency and extent to which workers in Pennsylvania are classified as “independent contractors” when the nature, type, and oversight of their work would suggest they should actually be classified as an “employee.”

In its report, the Task Force estimated that 49,266 Pennsylvania employers currently have at least one misclassified worker, and that 389,000 workers are misclassified annually in Pennsylvania.

The report makes several important recommendations to the legislature.  Most notable are the recommendations that relate to construction industry employers and Act 72.  Currently, Act 72, or the Construction Workplace Misclassification Act, prohibits employers from misclassifying workers as independent contractors and provides for a three-part test to determine whether a worker is an independent contractor.  The Task Force recommends that Act 72 be amended to include stiffer penalties for employers who misclassify workers, including enhancing the criminal penalties for “knowing” violations.  It also recommends giving the Department of Labor & Industry resources to hire additional investigative personnel and support staff, and, notably, to give L&I subpoena power to collect employer records as part of misclassification investigations.

The Task Force also recommends that L&I be given the authority to issue stop-work orders against companies or individuals found to have employed misclassified workers, and even to debar those companies who knowingly or repeatedly violate Act 72.  This would eliminate L&I’s obligation to petition the court for issuance of a stop-work order.  The Task Force also recommends imposing liability on a general contractor for subcontractor misclassifications if the general had clear evidence of a “knowing” misclassification violation.

Finally, the Task Force recommends that Act 72 be extended beyond the construction trades to cover other industries in Pennsylvania.  It also recommends that the legislature adopt the “ABC Test” as a baseline standard in Pennsylvania to delineate between an employee and independent contractor.

It is important to remember that these are only recommendations to the legislature, and it remains to be seen whether any of these proposals will ever become law.  But this report highlights a trend we have seen elsewhere – an increased emphasis on enforcement of worker classification laws and greater efforts to revise classification schemes that would make “employee” a worker’s default status unless the employer could prove otherwise.

With more aggressive enforcement of worker misclassification on the horizon, there’s no time like the present to take a close look at your workforce and to make any necessary adjustments to the ways in which workers are classified.

For any questions about these issues, contact any member of the McNees Labor & Employment group.

Historically, the Office of Federal Contract Compliance Programs (“OFCCP”) has not required federal contractors to submit proof that their written affirmative action plans were completed.  The only time that a contractor had to produce evidence of its plan was during an OFCCP audit.  As many federal contractors now know, that is about to change.

In December, OFCCP announced the creation of an online Contractor Portal.  Through the Contractor Portal, federal contractors (assuming jurisdictional thresholds are met) will be required to certify they have complied with affirmative action plan requirements.  Registration for the Contractor Portal opened on February 1, 2022.  Starting on March 31, 2022, contractors will be able to use the portal to certify compliance.  Existing contractors will have until June 30, 2022 to complete the certification process.

Even though the certification process begins in less than a month, there are lots of unanswered questions about the new requirement.  As federal contractors begin to contemplate registration and certification, here are a few things to consider:

  1. Do All Federal Contractors Have to Certify?

No.  First, only service and supply contractors (and subcontractors) are required to certify compliance.  Construction contractors do not have a certification requirement (yet).  Further, service and supply contractors only have written affirmative action plan requirements when certain thresholds are met.  Contractors with 50 or more employees and a contract of $50,000 or more have plan requirements (under Executive Order 11246 and Section 503 of the Rehabilitation Act).  Contractors with 50 or more employees and a contract of $150,000 or more have additional plan requirements under Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).  It is service and supply contractors who meet either of these jurisdictional thresholds that would have certification requirements.

  1. What Does “Certification” Mean?

No one knows, exactly.  OFCCP has released information on the Contractor Portal itself, including registration and user permissions.  It has not, however, identified exactly what the certification process will entail.  More information on certification is expected at the end of March, as the certification mechanism in the portal opens.  Regardless of form, a contractor can expect to certify (under penalty for providing false information) either: (1) it has a written plan for its current plan year; (2) it does not have such a plan; or (3) it does not believe it is subject to any plan requirements. Stay tuned for more information on this at the end of the month.

  1. How Often Is Certification Required?

Consistent with the obligation to prepare written affirmative action plans on an annual basis, OFCCP will require annual certification.  Contractors should add certification to their annual compliance checklist and complete it as part of its written plan process.

  1. I am Considering Becoming a Federal Contractor. When Would I Need to Certify?

New federal contractors have 120 days from the start of the contract to create their plans.  Under the certification requirement, a new contractor will have 90 days from the development of the plan to certify compliance.

  1. How Will This Impact OFCCP Audit Activity?

This remains to be seen.  One thing is for sure – certification is not meant to replace compliance audits.  So, contractors should not expect to avoid closer scrutiny simply by certifying themselves as compliant.  Many commentators have predicted just the opposite.  There are a few reasons why this may be true.  First, by registering and certifying, each contractor is identifying itself as being under the jurisdictional authority of OFCCP.  For contractors that have flown under OFCCP’s radar to date, that is about to end.  Second, contractors that certify they have not complied with the plan requirements (or otherwise indicate they believe they are not subject to the plan requirements), should certainly not be surprised to find themselves on OFCCP’s scheduling list for audits.

With a June 30th deadline, existing federal contractors need not rush to register and certify.  The best approach may be to wait until after the end of March to initiate the process, when more information is available on what “certification” actually entails.  However, contractors should begin to contemplate compliance and prepare accordingly – including updating any outdated plans.

Many employers require their workers to sign arbitration agreements at the outset of employment, and it’s no wonder why.  These agreements allow employers to require arbitration of many employment-related disputes, rather than participate in lengthy, expensive lawsuits.

On February 10, 2022, the United States Senate passed a bill that will prohibit this practice with respect to claims of sexual assault or sexual harassment in the workplace.  The bill, known as the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, was passed by the House of Representatives on February 7, and now heads to President Biden’s desk for signature. Prior to its passage in Congress, the President expressed support for the measure and he is expected to sign it into law.

The bill amends the Federal Arbitration Act for disputes involving sexual assault and sexual harassment in order to stop employers and businesses from forcing employees and customers out of the court system and into arbitration.  Under the law, employees who file claims of workplace sexual harassment or sexual assault are no longer bound by agreements compelling them to arbitrate.  Instead, they can choose whether to pursue their claims in court or arbitrate the matter under the arbitration agreement.  This option is available regardless of whether the claims are brought under federal, tribal, or state law.

As its name implies, the Act applies only to claims of sexual assault and sexual harassment. Employers will still be able to compel arbitration under agreements with employees for claims involving other forms of workplace harassment.  Employers can still enforce arbitration agreements as to claims of sex-based disparate treatment.

With the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 set to become law, employers and businesses that use arbitration agreements should take note and plan accordingly.  Those agreements no longer guarantee that sexual harassment and sexual assault claims can be forced into arbitration.

As explained in our previous post, on January 13, 2022, the United States Supreme Court blocked the OSHA vaccination or testing Emergency Temporary Standard (“ETS”) pending full consideration of the matter by the Sixth Circuit Court of Appeals.  In  response to the Supreme Court’s decision, OSHA is withdrawing the ETS, effective January 26, 2022.

Although OSHA is withdrawing the ETS as an “emergency temporary standard,” the ETS also serves as a proposed final rule, and OSHA made clear that its action does not affect the ETS’s status as such.  Therefore, it is possible that OSHA could issue a final vaccination or testing rule.  In response to the Supreme Court’s decision, OSHA could issue a narrower vaccine or test mandate limited to workplaces where the virus poses a special danger due to the nature of the work.

According to a statement on OSHA’s website, “[t]he agency is prioritizing its resources to focus on finalizing a permanent COVID-19 Healthcare Standard.”  A permanent COVID-19 standard for healthcare workers could be similar to the COVID-19 Healthcare ETS, which OSHA issued in June 2021 and which we summarized in a previous post.  The Healthcare ETS was in effect for six months until it expired and was withdrawn by OSHA in December 2021.  OSHA’s statement also “strongly encourages vaccination of workers against the continuing dangers posed by COVID-19 in the workplace.”

In the meantime, OSHA will enforce workplace safety issues related to COVID-19 under its existing authorities, including the COVID-19 National Emphasis Program and General Duty Clause.  The National Emphasis Program targets businesses in “high-hazard industries” whose employees have an increased risk of exposure to COVID-19.  Under the General Duty Clause, employers have a duty to furnish their employees “employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to [their] employees.”

For more information, or if you have any questions, please contact any member of the McNees Labor and Employment Group.

Yesterday, the United States Supreme Court issued hotly anticipated decisions on two federal government vaccine requirements in response to the ongoing COVID-19 pandemic.

In a 6-3 decision, the Court blocked the Emergency Temporary Standard (“ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) that required employees of larger employers (i.e., those with 100 or more employees) to provide proof of full COVID-19 vaccination status or submit to weekly testing.  In a separate 5-4 decision, the Court permitted an interim rule issued by the Centers for Medicare & Medicaid Services (“CMS”) that requires COVID-19 vaccination for workers in hospitals, nursing homes, and other healthcare facilities that receive Medicare and Medicaid funding.

I.     The OSHA ETS

A.  The Background and the Supreme Court’s Decision

Issued in November, the ETS was met with a flurry of swift legal challenges. The Fifth Circuit Court of Appeals issued a temporary stay of the ETS on November 12, finding that the ETS exceeded OSHA’s limited authority to establish emergency temporary standards. Shortly thereafter, the Sixth Circuit Court of Appeals was selected via lottery to hear the consolidated challenges to the ETS.  On December 17, a three-judge panel of the Sixth Circuit, in a 2-1 decision, dissolved the Fifth Circuit’s stay and allowed the ETS to take effect. OSHA then moved forward with implementing the ETS and set new compliance dates for January 10, 2022, and February 9, 2022, and challengers quickly filed applications for emergency relief with the Supreme Court.  The Supreme Court held oral argument on the emergency applications on January 7, 2022, and the Court handed down its ruling yesterday.

The Court found that the applicants seeking a stay were likely to prevail on their argument that the ETS exceeded OSHA’s statutory authority and was otherwise unlawful.  The Court began its analysis noting that the ETS would have required most employees working for large employers to get vaccinated or test weekly at their expense, and this was “no everyday exercise of federal power”. The Court went on to conclude the Occupational Safety and Health Act (the “Act”) did not clearly authorize OSHA to issue such a vast public health requirement.

OSHA’s authority under the Act is limited to regulating workplace safety.  Because COVID-19 can and does spread in many settings, the Court found that it was a universal risk – not an occupational hazard in most workplaces.  The Court explained that “[p]ermitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA’s regulatory authority without clear congressional authorization.”

The Court clarified that OSHA has the authority to regulate occupation-specific risks related to COVID-19 “[w]here the virus poses a special danger because of the particular features of an employee’s job or workplace.”  However, OSHA’s “indiscriminate approach” with the ETS exceeded its statutory authority.

Justice Gorsuch wrote a separate concurring opinion, which was joined by Justices Thomas and Alito.  In his concurring opinion, Justice Gorsuch discussed the major questions doctrine, separation of powers, and Constitutional issues and concluded that the power to respond to the pandemic rests with the States and Congress, not OSHA.

In their dissenting opinion, Justices Breyer, Sotomayor, and Kagan noted the toll COVID-19 has taken on the citizenry, particularly its workers, and its transmission in confined indoor spaces.  After asserting that the virus poses a “grave danger” to employees and that the ETS is necessary to address the dangers, the dissenting Justices maintained that the Occupational Safety and Health Act grants OSHA the authority to issue the ETS.

B.  What’s Next?

The Court granted the emergency stay applications pending the disposition of the matters before the Sixth Circuit and the applicants’ petitions for writs of certiorari if such writs are timely sought.  In other words, the stay will remain in place, even if the Sixth Circuit formally rejected the challenges, unless and until the Supreme Court either denied subsequent petitions for writs of certiorari by the challengers, the challengers failed to petition for writ of certiorari after an adverse decision by the Sixth Circuit (which would be very unlikely), or the Court ultimately issued a final decision after a final decision by Sixth Circuit.  Practically speaking, unless the Supreme Court dramatically reverses itself later in the proceedings (which seems extremely unlikely), the ETS is and will remain blocked.

In response to the Supreme Court’s decision, the Secretary of Labor issued a statement indicating that: “OSHA will be evaluating all options to ensure workers are protected from this deadly virus.” The question remains whether OSHA will attempt to issue a narrower rulemaking that might survive judicial scrutiny under the guide rails provided by the Court.  Measures that are unique to the workplace (such as mask requirements) or a vaccine or test mandate limited to workplaces where the virus poses a special danger due to the nature of the work, could arguably pass muster. However, the rulemaking process takes time, and it is unlikely that OSHA could issue a more narrow rule in the near term. In the meantime, the Secretary of Labor also made clear that OSHA will “do everything in its existing authority to hold businesses accountable for protecting workers, including under the Covid-19 National Emphasis Program and General Duty Clause.”

II.     The CMS Vaccine Rule

A.  The Background and the Supreme Court’s Decision

In November, CMS issued an interim final rule requiring certain health care facilities participating in federal Medicare and Medicaid programs to mandate that their covered staff are fully vaccinated against COVID-19.  The CMS vaccine mandate applies to 15 different kinds of healthcare facilities and provides employee exemptions for medical and religious reasons.

As with the ETS, legal challenges were filed to the interim rule in various federal courts, and multiple federal courts ultimately issued preliminary injunctions blocking the rule’s enforcement.  In November, a Louisiana federal court issued an injunction prohibiting the rule’s enforcement nationwide. However, in mid-December, the Fifth Circuit Court of Appeals issued a decision upholding the injunction only in the 25 states that were party to the underlying litigation (Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia and Wyoming). The interim rule was enforceable in Pennsylvania and the remaining 24 states and U.S. territories. As with the ETS, these challenges quickly made their way to the Supreme Court.

In a 5-4 per curiam decision, the Court stayed the existing preliminary injunctions and allowed the CMS vaccine mandate rule to take effect.  (Chief Justice Roberts and Justice Kavanaugh joined the three dissenting Justices in the ETS decision to form the 5-4 majority here.)  The Court found that CMS had the statutory authority to issue the interim rule and its vaccine mandate, citing the long list of conditions that CMS previously has established for healthcare providers to participate in the federally funded Medicare and Medicaid programs.

The Court focused on CMS’s core function of ensuring that “the healthcare providers who care for Medicare and Medicaid patients protect their patients’ health and safety.”  The Court also cited federal statutory language that gave the Secretary of Health and Human Services the authority to promulgate such conditions.

Because the vaccine mandate for healthcare workers was designed to facilitate and protect the health and safety of patients, the Court found that this rule was consistent with the language of the statute and with prior conditions established by CMS for participation in the Medicare and Medicaid programs, including requirements for healthcare workers.

Justices Thomas and Alito authored separate dissenting opinions, which were joined by Justices Gorsuch and Barrett.  The dissenting Justices rejected the conclusion that CMS had the statutory authority to issue a vaccine mandate, finding no express language in the relevant statutory language granting such authority.  Justice Alito also focused on the delays in issuing the vaccine mandate and described CMS’s actions to be an “extraordinary departure from ordinary principles of administrative procedure.”

B.  What’s Next?

As a result of the Court’s decision, Medicare and Medicaid-certified facilities regulated under the Medicare health and safety standards, known as Conditions of Participation, will need to establish plans and procedures to ensure that their staff and contractors who provide care, treatment, or other services are fully vaccinated unless they are entitled to a religious or medical exemption. CMS has not yet indicated whether a new timeline for compliance will be issued for the 25 states that had been covered by the prior injunctions.

On December 28, 2021, CMS updated its guidance concerning implementation of the vaccine mandate.  The guidance requires all covered facilities to develop a policy and process for tracking staff vaccinations and ensure that covered staff receive at least the first dose of the vaccine by January 27, 2022, unless the staff member has a pending request for, or has been granted a qualifying exemption to accommodate a disability or sincerely held religious belief.  Covered staff must then be fully vaccinated by February 28, 2022. CMS defines “fully vaccinated” as having completed the primary series of the vaccination – one dose of J&J or both doses of Moderna or Pfizer-BioNTech – even if the 14-day waiting period has not yet been completed. Staff at all health care facilities covered by the mandate cannot provide any patient care, treatment, or other “services” within the covered facility unless they comply with the mandate.

The interim rule applies to staff working at nearly all CMS-certified facilities that participate in the Medicare and Medicaid programs including employees, licensed practitioners, students, trainees, and volunteers. It does not, however, apply to staff who provide 100% of their services remotely and do not have any contact with patients or other staff. It further does not apply to visitors, Assisted Living Facilities, group homes, Home and Community-based Services, schools who receive Medicaid funding, or EMS providers as they are not subject to the health and safety standards of CMS.

Companies performing construction at covered facilities or providing other non-health care services may additionally be excluded if they are considered infrequent, or “one off” vendors. CMS surveyors will look at the frequency that such non-health care contractors enter or visit facilities to determine whether they fall within the ad-hoc or “one off” exception.

Enforcement of the interim rule will begin January 27, 2022, through state survey agencies, accrediting organizations and CMS-contracted surveyors checking for compliance as part of initial certifications, recertifications or reaccreditations, and in response to complaints.

For more information, contact any member of the McNees Labor & Employment Group.