As the world slowly returns to “normal” employers still are subject to a number of requirements and recommendations to address COVID-19. On March 24, 2021, by Executive Order 2021-06, Governor Ducey lifted mandatory restrictions or requirements that had previously been in place to prevent COVID-19 exposures, leaving companies to exercise their discretion in how best to comply with mandates to provide a safe workplace.
What precautions should employers keep in place? Does it matter if employees are vaccinated? What other issues do employers need to keep in mind? As if it is not challenging enough running a business, it seems that the guidelines relating to COVID-19 are changing daily. So what should companies do now?
I. GUIDANCE ON FACE COVERINGS AND PHYSICAL DISTANCING FOR FULLY VACCINATED EMPLOYEES.
A. OSHA Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace.
The Federal Occupational Safety and Health Administration (“OSHA”) issued guidance on January 29, 2021, that provides that face coverings should still be used in the workplace, along with other safety measures, such as physical distancing. The guidance also states that employers should not distinguish between workers who are vaccinated and those who are not vaccinated:
Workers who are vaccinated must continue to follow protective measures, such as wearing a face covering and remaining physically distant, because at this time, there is no evidence that COVID-19 vaccines prevent transmission of the virus from person-to-person. The CDC explains that experts need to understand more about the protection that COVID-19 vaccines provide before deciding to change recommendations on steps everyone should take to slow the spread of the virus that causes COVID-19.
Id. The guidance has not, however, been updated since January 29, 2021 to integrate updated guidance from the Centers for Disease Control (“CDC”).
B. CDC Guidance for Allowable Activities for Fully Vaccinated Individuals.
The CDC has relaxed its guidance for fully vaccinated individuals. Pursuant to the guidance issued on May 13, 2021, fully vaccinated people in a non-healthcare setting may:
- Resume activities without wearing masks or physically distancing, except where required by federal, state, local, tribal, or territorial laws, rules and regulations, including local business and workplace guidance;
- Resume domestic travel and refrain from testing before or after travel or self-quarantine after travel;
- Refrain from testing before leaving the United States for international travel (unless required by the destination) and refrain from self-quarantine after arriving back in the United States.
If vaccinated persons have been around someone diagnosed with COVID-19, they are not required to quarantine or be tested for COVID-19 unless they experience COVID-19 symptoms. If the workers experience symptoms of COVID-19, they should be tested. If the vaccinated worker is asymptomatic after exposure to a known case of COVID-19, he or she does not need to quarantine. CDC still recommends that fully vaccinated individuals wear face coverings and practice physical distancing when they go to a doctor, hospital or long-term-care facility, when they travel by bus, plane, train or another mode of public transportation, while they are in transportation hubs, such as airports and bus stations, and certain other situations.
C. Arizona Department of Health Services (ADHS) Recommendations.
The State of Arizona Department of Health Services generally has adopted the CDC recommendations for fully vaccinated individuals.
D. Options for Employers.
Companies in Arizona still have a duty to provide a safe workplace and must still take steps to mitigate and prevent the spread of COVID-19 in the workplace, such as excluding individuals who are ill or who have been exposed to COVID-19, regular sanitizing of high touch surfaces, encouraging employees to regularly wash their hands or use hand sanitizer, limiting unnecessary travel, meeting electronically instead of in person, etc.
It is likely however, that companies can loosen restrictions relating to employees who have been fully vaccinated, including not requiring face coverings or physical distancing, when everyone in the group has been fully vaccinated. Physical distancing and face coverings are, however, recommended when there are groups of both vaccinated and unvaccinated individuals or mass gatherings.
II. AMERICAN RESCUE PLAN ACT OF 2021 (ARPA).
On March 11, 2021, President Biden signed the latest COVID-19 relief bill, known as the American Rescue Plan Act of 2021 (“ARPA”). ARPA contained a number of provisions, but two are of special importance to employers. The first provision extends the payroll tax credits for employers who voluntarily provide leave under the terms of the Families First Coronavirus Response Act. The second requires that employers pay for COBRA premiums for a period of time, and be reimbursed through a tax credit.
A. Extension of Tax Credit for Paid Leave for COVID-19 Related Reasons.
- Tax Credits Extended through September 30, 2021.
ARPA extended the tax credits that were originally provided under the Families First Coronavirus Response Act for employers who voluntarily provide paid leave to employees for covered reasons related to COVID-19. The tax credits are extended for leave through September 30, 2021. No employer is required to provide leave, but those covered employers who voluntarily provide leave for qualifying reasons may claim the tax credit through September 30, 2021.
- Expanded Reasons for Taking Emergency Paid Sick Leave.
ARPA expanded the qualifying reasons for taking Emergency Paid Sick Leave (EPSL) beginning April 1, 2021, to include three additional reasons for employee absences which were not previously covered by the FFCRA:
- obtaining a COVID-19 immunization;
- recovering from an injury, disability, illness or condition related to the immunization (i.e. side effects of the vaccine); or
- seeking or awaiting the result of a COVID-19 test or diagnosis when the employee has either been exposed to COVID-19 or the employer has requested the test or diagnosis.
ARPA also reset the two weeks of Emergency Paid Sick Leave as of April 1, 2021. Therefore, anyone who used EPSLA leave in the past may take an additional two weeks of paid leave for covered reasons.
- Expanded Reasons for Taking Leave under the Emergency Family and Medical Leave Expansion Act (EFMLA).
ARPA also expanded the qualifying reasons for which an employee may take leave under the Emergency Family and Medical Leave Expansion Act to include the original EFMLA qualifying reason (caring for a child whose school or place of care is closed), and it now includes any of the qualifying reasons for taking Emergency Paid Sick Leave. In addition, ARPA also removed the requirement that the first 2 weeks of EFMLA leave be unpaid. Therefore, the entire twelve weeks may be paid and the employer may receive the related payroll tax credit. ARPA also increases the cap on the aggregate paid leave from $10,000 to $12,000, so that employers can now take an additional $2,000 in payroll tax credits per employee for qualifying EFMLA leave.
- Non-Discrimination Requirements.
ARPA prohibits discrimination in the provision of leave in favor of highly compensated employees, full-time employees, or based on an employee’s tenure with the employer. The paid leave needs to be provided on an equal basis.
B. COBRA Premium Assistance Requirement.
- Employees Eligible for COBRA Premium Assistance.
ARPA requires employers to cover 100% of the employee’s cost of continuing group health coverage under COBRA for up to six months between April 1, 2021 and September 30, 2021, if:
- an employee has lost coverage under their employer’s health care plan due to a reduction in hours or involuntary termination (for reasons other than gross misconduct) and
- the employee elects COBRA continuation of health care.
The premium assistance does not apply to employees who are terminated for gross misconduct or employees who voluntarily quit their employment. Those eligible to receive the COBRA premium assistance include eligible employees and covered dependents who:
- are already enrolled in COBRA;
- did not elect COBRA when it initially became available to them, or
- elected COBRA initially, but let the coverage lapse.
ARPA creates special enrollment provisions for eligible individuals who either did not originally elect COBRA or who let their COBRA coverage lapse. The special enrollment period began on April 1, 2021 and ends 60 days after the delivery of the COBRA notification to the eligible individual. Employers must provide notice to eligible employees by May 30, 2021. Individuals enrolled in COBRA automatically qualify for the subsidy.
- Tax Credit for Employer’s Payment of COBRA Premiums.
The employer pays the COBRA coverage, but then IT IS entitled to a dollar-for-dollar tax credit on ITS quarterly payroll tax filings, similar to the credit for the FCCRA leave. The IRS has not yet issued guidance on claiming the tax credit.
- Required Notices to Employees.
Health Plans must provide three types of notices to qualifying individuals. Some of the notices are the same as the general COBRA notices, but the timing requirements may be different. The Department of Labor has created model notices available here. Notices must be provided by May 30, 2021.
III. ARIZONA OPTED OUT OF EXTRA $300 UNEMPLOYMENT BENEFIT AND OFFERS $2,000 RETURN TO WORK BONUS.
On May 14, 2021, Governor Ducey announced that the State of Arizona will cease paying the $300 per week unemployment supplement, returning the weekly unemployment benefit to $240 per week for most employees. Arizona will continue to participate in the extended eligibility period and allow independent contractors to receive unemployment benefits.
Eligible individuals returning to the workforce will receive payment of $2,000 for a full-time job and $1,000 for a part-time job. The bonuses are awarded after the individual completes at least 10 weeks of work and off of the unemployment system. Up to $300 million will be available to pay the return to work incentive.
The State of Arizona will also provide $7.5 million for community college scholarships for unemployment workers, as well as $6 million for GED test prep.
The Department of Economic Security has been reminding employers that if an employee refuses an offer to return to work, the employer should notify DES through its fraud referral portal by selecting “I would like to report an individual that I suspect of fraud,” and then complete the form including the “Failure to Accept Suitable Work for Employers” section. DES will review the information and the individual may be disqualified from eligibility for unemployment benefits.
IV. SENATE BILL 1377 – PROTECTION AGAINST TORT LIABILITY FOR ENTITIES TAKING REASONABLE STEPS TO PREVENT COVID-19.
On April 4, 2021, Arizona Governor Doug Ducey signed Senate Bill 1377, legislation providing limited immunity from lawsuits related to COVID-19. Under the law, most businesses cannot be held liable for damages for injury, death, or loss to a person or property caused by the company’s alleged failure to protect the individual from “a public health pandemic” as long as the company acted in good faith to protect the customer, student, tenant, etc. from injury relating to the pandemic. A company acts in good faith if it “adopted and implemented reasonable policies related to a public health pandemic.” A person filing a tort claim has to prove by “clear and convincing evidence” that the company acted (or failed to act) with gross negligence or willful misconduct.
To take advantage of the protections of the new law, companies need to continue to keep in place procedures to protect customers, vendors, and others from COVID-19 to demonstrate that the company acted “in good faith.”
This law provides tort liability protections for the healthcare industry, businesses providing goods, services, or entertainment, educational institutions, nonprofits, religious institutions, property owners and managers, service providers for people with disabilities, and local and state government entities. The law is retroactive to March 10, 2020, and provides relief only through December 31, 2022.
The law, however, does not apply to claims from employees that they acquired COVID-19 at work. Such claims are subject to the workers’ compensation system. Many of the COVID-19-related claims have been denied, but under current Arizona guidance the insurance companies are required to do a case-by-case assessment to determine the work-relatedness of the COVID-19 and cannot just deny the claim outright.
V. CONCLUSIONS AND RECOMMENDATIONS.
It is important that companies continue to enforce measures to mitigate and prevent the spread of COVID-19 in the workplace. As the number of vaccinated Americans continues to increase, the necessary protective measures may continue to change. Companies should keep up to date with the ever-changing guidance from the CDC, OSHA, and State of Arizona, and seek legal guidance when changing its pandemic prevention protocols.
Julie Pace’s practice handles employment law, handbooks, drug and alcohol policies, I-9 and E-Verify compliance, OSHA, independent contractor and alleged misclassification issues with DES and other government agencies, and defends claims of sexual harassment, employment discrimination, retaliation, whistleblower, and wrongful discharge, and against charges by the EEOC or ACRD. She handles matters involving OSHA, ICE, OFCCP, DOL, NLRB, ADA, FMLA, ERISA, PPA, CARES Act, SIGPR Audits, COVID-19, ACA, Davis-Bacon, wage and hour laws, FAR, SCA, and government contracts. She regularly provides training to companies and assists with investigations. Julie can be reached at 602.256.4488 or email@example.com
Dave Selden’s practice focuses on defending employers in employment and commercial litigation relating to the full range of employment issues, including but not limited to wrongful termination, non-competes, independent contractor and alleged misclassification issues with DES and other government agencies, defends claims of sexual harassment, employment discrimination, retaliation, whistleblower, and breach of fiduciary duties, and against charges by the EEOC or ACRD. He handles matters involving OSHA, ICE, OFCCP, DOL, NLRB, ADA, FMLA, Davis-Bacon, FAR, SCA, PPA, CARES Act, SIGPR Audits, COVID-19, government contracts, and wage and hour laws. Dave can be reached at 602.256.4490 or firstname.lastname@example.org
Heidi Nunn-Gilman’s practice focuses on employment litigation and human resource matters. She advises clients on matters relating to labor and employment law, including I-9 and immigration compliance strategies, E-Verify, ICE and worksite enforcement, EEOC, Title VII, FLSA, FMLA, ADA, drug and alcohol, NLRB, PPA, CARES Act, SIGPR Audits, COVID-19, wrongful discharge, non-competition and confidentiality agreements, wage and hour laws/DOL for both public and private employers, paid sick leave, employee handbooks, and executive agreements. Heidi can be reached at 602.256.4455 or email@example.com.