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OSHA Issues New COVID-19 Guidance in Response to President Biden's Executive Order
On January 21, 2021, the day after being sworn into office, President Biden issued an Executive Order on Protecting Worker Health and Safety. You can access the Executive Order by clicking here. The Executive Order directed the Secretary of Labor to issue within two weeks of the date of the Order revised guidance to employers on workplace safety during the COVID-19 pandemic. Less than 10 days later, on Friday, January 29, OSHA released updated guidance for mitigating and preventing the spread of COVID-19 in the workplace. The updated guidance can be accessed here.
The guidance suggests that the most effective way to mitigate the spread of COVID-19 in the workplace is to implement a COVID-19 prevention program. The guidance includes suggestions for an effective COVID-19 prevention program, including but not limited to the following elements:
- Assignment of a workplace coordinator responsible for COVID-19 issues.
- Education and training workers on COVID-19 policies and procedures using accessible formats and in a language they understand.
- Providing face coverings to employees at no cost.
- Making a COVID-19 vaccine or vaccination series available at no cost to all eligible employees.
- Consider protection for workers at higher risk for severe illness through supportive policies and practices.
- Performing enhanced cleaning and disinfection after workers with suspected or confirmed COVID-19 have been in the facility (this includes closing areas, and cleaning and disinfecting all immediate work areas and equipment).
- Employers must implement protection from retaliation and set up an anonymous process for workers to voice concerns about COVID-19 related hazards.
- Not distinguishing between workers who are vaccinated and those who are not.
- Minimizing the negative impact of quarantine and isolation on workers (allow workers to use paid sick leave and the Families First Coronavirus Response Act paid leave).
- Implementing quarantine and isolation rules consistent with CDC guidance.
OSHA's updated guidance also includes links to industry-specific guidance. The guidance for the construction industry can be found here. The construction industry guidance suggests various engineering and administrative controls, as well as safe work practices, for in the workplace depending on the exposure risk level associated with construction work tasks. Notably, OSHA does suggest requiring construction workers to wear cloth face coverings in construction.
Importantly, the guidance does make it expressly clear that it is not a standard or regulations, and it creates no new legal obligations for employers. The guidance is intended to provide recommendations, as well as descriptions of existing mandatory safety and health standards. The recommendations are advisory in nature, informational in content, and are intended to assist employers in recognizing and abating hazards likely to cause death or serious physical harm as part of their obligation to provide a safe and healthful workplace.
If you have any questions regarding your compliance obligations as it concerns the COVID-19 hazard in the workplace, please call either Philip Siegel or Ben Lowenthal. Philip can be reached directly at (404) 469-9197, and you can reach Ben directly at (404) 469-9177.
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OSHA'S Penalty Amounts Increase for 2021
On November 3, 2015, President Obama signed the Bipartisan Budget Act of 2015 (Act) into law. The Act was a two-year deal that was negotiated quickly to avoid a default on our nation's debt. Budgets often contain obscure changes to laws that are not easily identified. However, this Act was unique because it contained a provision that allowed the Occupational Safety and Health Administration (OSHA) to increase its maximum penalties for the first time in 25 years. Importantly, the Act does allow OSHA to annually adjust the maximum penalty amounts to reflect inflation, similar to other government agencies.
For 2021, penalties for an other-than-serious violation, a serious violation, and a failure-to-abate violation increased to $13,653, which represents a $159.00 increase over these same penalties in 2020. Willful and repeat violations now have a maximum penalty amount of $136,532 per violation, which represents an increase of $1,626.00 over last year's maximum penalty amount for willful or repeat violations.
In light of this increase in OSHA penalty amounts, and the fact that the Biden administration promises increased enforcement efforts, it is a good time to revisit your company safety program to make sure you are taking those steps necessary to defeat a citation based on the unforeseeable employee misconduct defense. To establish the affirmative defense of unforeseeable employee misconduct, an employer must show that it (1) established work rules designed to prevent the violative conditions from occurring; (2) adequately communicated those rules to its employees; (3) took steps to discover violations of those rules; and (4) effectively enforced the rules when violations were discovered.
While most construction contractors have work rules, provide training, inspect their jobsites, and discipline employees who violate safety rules, it is absolutely imperative that documents are maintained that provide evidence of the same, and that the company's safety program, especially its disciplinary component, is effective such that violations are truly unforeseeable. Even verbal reprimands should be documented. All documents which would support the affirmative defense of unforeseeable employee misconduct should be well organized and stored in a safe place for easy access in the event the company is cited for an OSHA violation.
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Be Sure to Comply with OSHA's Form 300A Posting Requirement
Between February 1 and April 30, covered employers must post OSHA's Form 300A in a place easily accessible to employees, such as the break room. Form 300A summarizes the total number of work-related injuries and illnesses that occurred during the prior calendar year and entered into OSHA Form 300, which logs such injuries and illnesses. Whereas Form 300 should include details, such as the nature of the injury and where it occurred, Form 300A only lists information such as the total number of deaths, cases involving days away from work, and total number of days away from work for all recordable cases. Recordable cases are those that involve a death; days away from work; restricted work or transfer to another job; medical treatment beyond first aid; loss of consciousness; diagnosis of a significant injury or illness by a healthcare professional; or a needlestick or sharps injury involving contamination by another person's blood or other potentially infectious materials.
Construction employers must post Form 300A even if no recordable injuries occurred during the prior year, with zeroes entered in the spaces.
For the third consecutive year, employers also need to concern themselves with OSHA's Improve Tracking of Workplace Injuries and Illnesses regulation, often commonly referred to as OSHA electronic recordkeeping regulation. Construction employers with 20 to 249 employees are subject to the rule and must electronically submit their 2020 300A Annual Summary to OSHA no later than March 2, 2021.
Under current rules, injury and illness records must be maintained at the worksite for at least five years. Also, copies of the records must be provided to past and current employees, or their representatives, upon request.
If you have any questions about OSHA's recordkeeping requirements, or any other questions about OSHA, please contact Philip Siegel. You can reach Philip directly at (404) 469-9197, or you can e-mail him by clicking here.
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Changes to PPP Loan Program Under the Latest Relief Act
On December 27, President Trump signed a $900 billion COVID-19 relief bill. One major feature of the Act concerns modifications to Paycheck Protection Program ("PPP") loans. These changes consist of three major components: (a) establishing a fund for new PPP loans; (b) authorizing "second draw" loans under certain circumstances; and (c) clarifying tax treatment of PPP loans and expenses.
New PPP Loans. Under the Act, small businesses who qualify (and certain nonprofit and trade organizations) are eligible to borrow up to 2.5 times the borrower's average monthly payroll, up to a maximum of $2 million. Recall that under the original PPP rules, a borrower could receive a loan of up to $10 million. Borrowers must have 500 or fewer employees and otherwise be eligible for SBA loans under Section 7(a).
The Act adds additional permissible uses of the funds beyond payroll, mortgage and rent, and utilities. New PPP loans can also be used for certain software costs, repair to property damaged by public disturbances, PPE used to comply with public safety requirements, and group life, disability, vision and dental insurance expenses. However, to be eligible for forgiveness, at least 60% of the funds must be spent on payroll costs. The Act makes clear that an employer can elect a covered period for spending the funds that ends at any point between 8 weeks and 24 weeks.
"Second Draw" PPP Loans. Under the Act, employers who previously obtained a PPP loan may be eligible for a "second draw" loan. Permitted uses of the funds and forgiveness rules are the same as for new PPP loans. However, eligibility for second draw loans is more restrictive. The maximum loan amount is still reduced to $2 million. However, these second draw loans are only available for employers with 300 or fewer employees who have used or will use the full amount of the initial PPP loan. Most significantly, second draw loans are only available if the applicant can demonstrate a 25% decline in gross revenues for any quarter in 2020 as compared to the same quarter in 2019.
Tax Treatment of Expenses. The Act clearly reverses the much-criticized position of the IRS with respect to the deductibility of expenses paid with PPP loan proceeds. PPP loan funds received are not subject to income tax, but the IRS had taken the position that expenses (such as payroll, utilities and rent) paid with PPP loan funds were not tax deductible. The Act makes clear that in act these expenses are deductible as ordinary business expenses.
Further Questions? The PPP loan program continues to be important to small businesses but does require some careful compliance with specific requirements. If you have further questions about any requirement of the PPP loan program, please contact Scott Calhoun, who can be e-mailed by clicking here.
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The SSA is Back at It: Beware of the No-Match Letter
Our office has heard from a number of clients throughout the country that recently received "No-Match" letters from the Social Security Administration. A "mismatch" occurs when an employee's name and social security number provided on the W-2 form do not match with Social Security Administration records. These can result from typographical errors, unreported name changes, or incomplete records, and a mismatch does not necessarily mean that falsification of records or other misconduct has occurred. But when an employer receives a mismatch letter, it needs to act promptly to resolve the discrepancy.
When an employer receives a mismatch letter, it should follow the instructions provided within the letter. These will include procedures for registering with the Business Services Online ("BSO") database, where details can be located concerning the mismatch. Employers should also access the Social Security website to gain information and instructions on how to work through the issues. The website explains that the employer should review its own records to see if a typographical or other transmission error has occurred. The employer should then send a notice to the employee, a sample of which is on the website.
The current No-Match letters also provide advice on how to resolve the mismatch. The letter provides the following "helpful tips":
- Typographical errors can be corrected by submitting a Form W-2C.
- If an error in the company's records caused the mismatch, the corrected information can be provided by submitting Form W-2C.
- If the company's records and the employee's Social Security card match, ask the employee to check with any local Social Security office to resolve the issue. Once the employee has contacted the Social Security office, they should inform the company of any changes. Corrected records can be submitted through Form W-2C.
- If the company is unable to resolve the mismatch using these tips, the letter notes the company will not be able to correct the error, and no further action is needed.
Employers should be aware of a few important points. As noted in the letter, merely receiving a mismatch letter does not mean that any falsification, fraud, or other misconduct has occurred. Consequently, employers should not take any adverse employment action upon receipt of a mismatch letter. Employers should maintain communication with the affected employees until the issues are resolved, and we recommend documenting all these steps fully. Finally, if the process indicates that in fact falsification or misuse of Social Security information has occurred, employers should consult legal counsel prior to taking any action with respect to the affected employee.
Lastly, but importantly, while the No-Match letter purports not to raise an immigration or work authorization status issue, a typical Form I-9 audit begins with a request for documents, which includes a request for No-Match letters received by the company. Immigrations and Customs Enforcement ("ICE"), which conducts such audits, uses the No-Match letter in support of an argument that the employer had constructive knowledge its employees may not be authorized to work. Given this concern, companies that have employees who are not resolving the no-match issue after receipt of the No-Match letter need to revisit the Form I-9 for those employees. If the no-match issue is not being resolved, ICE argues the employer can no longer reasonably rely on a social security card produced for Section 2 purposes during the Form I-9 process. The company needs to meet with those employees who are not resolving the no-match issue and also relied on their Social Security card to prove work authorization status in Section 2 of the Form I-9. These employees need to be asked to provide either another List C document, other than the Social Security card, or a List A document, to prove employment authorization status. If another List C document or List A document is not promptly provided, the employee may not be authorized to be working, while leaving the company subject to penalties for employing unauthorized labor.
If you have any questions about the mismatch program or how to proceed if you have received a mismatch letter, contact Philip Siegel, who can be reached directly at (404) 469-9197, or you can e-mail him by clicking here.
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Firestone Building Products Company is Being Acquired by LafargeHolcim, Ltd.
Firestone Building Products Company is being acquired by LafargeHolcim Ltd., the world's largest cement supplier, with headquarters in Switzerland, it was announced on January 7, 2021.
In announcing in November that Bridgestone was looking to sell Firestone Building Products, Bridgestone parent CEO Shuichi Ishibashi said that Firestone "has decent profit margins," but "has poor synergy with our mainstay rubber business, even compared with other non-tire operations." Bridgestone acquired Firestone Building Products in 1988 when it purchased the parent Firestone. Firestone Building Products has been a leader in the U.S. commercial roofing market and works with an extensive network of roofing contractors throughout the country.
LafargeHolcim prides itself as a global leader in innovative and sustainable building solutions, "reinventing how the world builds to make it greener and smart for all" and seeking to becoming a net zero company. LafargeHolcim's acquisition of Firestone Building Products includes 15 manufacturing plants, 1,800 distribution points and three R & D laboratories. LafargeHolcim has announced that Firestone Building Products will continue to be headquartered in Nashville, TN and all 1,900 Firestone employees will transition to LafargeHolcim, which currently has 72,000 employees. LafargeHolcim operates in more than 70 markets through four business units: cement, ready-mix concrete, aggregates and solutions and products. The roofing business is expected to continue operating under the Firestone Building Products name for the foreseeable future.
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Virginia's Emergency Temporary Standard for COVID-19 is Now Permanent
On January 13, 2021, the Virginia Safety and Health Codes Board adopted a Permanent Standard for COVID-19 safety regulations in the workplace. The full Permanent Standard is available here.
Back in July 2020, Virginia became the first state in the nation to adopt an Emergency Temporary Standard in order to control, prevent, and mitigate the spread of COVID-19 in the workplace. The Emergency Temporary Standard was the first statewide mandate for COVID-19 safety rules for employers, which required Virginia employers to conduct COVID-19 workplace hazard assessments, implement employee COVID-19 prevention and screening procedures, and construct specific workplace modifications to ensure sufficient social distancing, among many other requirements.
The Permanent Standard supersedes the Emergency Temporary Standard. Although many of the provisions stay the same, the Permanent Standard has several changes, including providing for a more robust definition of "face covering" (making neck gaiters acceptable face coverings), scaling back the requirement to report every single employee testing positive for COVID-19 (now only requiring employers to report positive employees when a worksite has two or more positive cases), and eliminating the test-based return to work requirement for employees (now just a time-based return to work requirement for employees).
The Permanent Standard continues to apply to all employers subject to the Virginia Occupational Safety and Health ("VOSH") Program, Virginia's State Plan and version of the Occupational Safety and Health Administration ("OSHA"). Further, the Permanent Standard continues to classify construction activities as "medium risk," bringing with it additional requirements such as ensuring that air-handling systems are able to address COVID-19 related hazards.
The Permanent Standard will take effect upon review the review and approval by Governor Ralph Northam.
Although Virginia is the first state to adopt a permanent standard, other states followed Virginia in adopting temporary standards to address COVID-19 in the workplace, including Michigan, Oregon, and California.
In the event that other states adopt further temporary and/or permanent standards, we will let you know.
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The Department of Labor Publishes Final Rule on Independent Contractor Status
On January 6, 2021, the Department of Labor ("DOL") announced its final rule intended to address and clarify what is commonly known as the Misclassification issue under the Fair Labor Standards Act. The Misclassification issue concerns whether an individual is an employee or independent contractor. In its final rule, published in the Federal Register on January 7, the DOL reaffirms that the "economic reality" test will determine whether an individual is an employee or an independent contractor under the law. The final rule takes effect on March 8, 2021. The analysis has significant consequences for the construction industry.
The DOL's final rule on employee or independent contractor classification under the Fair Labor Standards Act notes that the law defines an employee as an individual whom an employer suffers, permits, or otherwise employs to work. An employer suffers or permits an individual to work as an employee if, as a matter of "economic reality", the individual is economically dependent on that employer for work. In contrast, an individual is an independent contractor if the individual is, as a matter of "economic reality", in business for himself or herself.
The rule notes that there are two core factors that determine the individual's economic independence. These two core factors are deemed to have greater probative value than other factors provided in the final rule. Indeed, the final rule expressly states that if the two core factors both point towards the same classification, whether employee or independent contractor, there is a substantial likelihood that is the individual's accurate classification.
The first of the two core factors is the nature and degree of control over the work. Where an individual sets his or her own schedule, selects his or her own projects, and works for others (including the potential employer's competitors), this factor weighs toward the individual being an independent contractor, according to the final rule.
Important for the construction industry, the final rule notes that, with regard to this first core factor, requiring the individual to comply with specific legal obligations, satisfy healthy and safety standards, carry insurance, meet contractually agreed-upon deadlines or quality control standards that are typical of contractual relationships between businesses do not constitute control that makes the individual more or less likely to be an employee.
The second of the two core factors concerns the individual's opportunity for profit or loss. To the extent the individual has an opportunity to earn profits or incur losses based on his or her exercise of initiative (such as managerial skill or business acumen or judgment) or management of his or her investment in or capital expenditure on, for example, helpers or equipment or material to further his or her work, this factor weighs in favor of independent contractor status. On the other hand, if the individual is unable to affect his or her earnings or is only able to do so by working more hours or faster, the factor will weigh in favor of the individual being classified as an employee. Consider your workers who are paid by the hour or by the piece and whether you are properly classifying them as employees under this factor.
The final rule identifies the following non-core factors as part of the analysis: the amount of skill required for the work; the degree of permanence of the working relationship between the individual and the potential employer; whether the work is part of an integrated unit of production; and a catch all for factors relevant to the analysis of whether an individual is in business for himself or herself, as opposed to being economically dependent on the potential employer for work.
Interestingly, the final rule does provide several examples of scenarios involving the Misclassification analysis. One of the examples does involve the construction industry. The example concerns the opportunity factor in the context of the construction industry and clarifies the concept of economic independence. In the example, an individual worker works full time performing home renovation and repair services for a residential construction company. In performing the construction work, the worker is paid a fixed hourly rate, and the company determines how many and which tasks she performs. Perhaps to nobody's surprise, the final rule concludes this individual is an employee. In reaching the conclusion, the final rule notes that the worker does not have a meaningful opportunity for profit or loss based on her exercise of initiative or investment because the company determines the assignment of work and she is paid a fixed hourly rate.
Under President Obama, the Misclassification issue was under the microscope. Under President Biden, we can expect much of the same. Misclassifying an employee as an independent contractor can result in significant financial consequences. In light of the DOL's final rule and the change in administration, now is as good a time as ever to revisit whether you are properly classifying your workers as either independent contractors or employees.
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Covid Economic Relief and Preventing and Combating Discrimination Executive Orders
In the first week of the Biden-Harris Administration, President Biden has issued a series of Executive Orders, many aimed at core policies of the Administration, such as addressing the Covid-19 pandemic and equality initiatives. The following is an overview of two of those Executive Orders.
First, on January 20, 2021, the President signed an Executive Order on Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. Citing the Supreme Court's 2020 decision in Bostock v. Clayton County, the Executive Order states that all laws that prohibit sex discrimination and their implementing regulations prohibit discrimination on the basis of gender identity or sexual orientation, so long as the laws do not contain sufficient indications to the contrary. Thus, to implement the holding of Bostock, the President ordered the heads of all federal agencies to consider whether to revise, suspend, or rescind all agency actions, or promulgate new agency actions to implement statutes that prohibit sex discrimination to protect against gender identify and sexual orientation discrimination within 100 days, i.e, by May 1, 2021. This Executive Order will undoubtedly result in expanded protections under federal law for the LBGTQ+ community.
Second, on January 22, 2021, the President issued a Covid Economic Relief Executive Order, which was described by the White House as an all-of-government effort to provide equitable relief to working families, communities, and small businesses across the nation. Through this Executive Order, the President is asking U.S. Department of Agriculture (USDA) to consider actions to expand access to nutrition and food assistance to address the growing hunger crisis affecting Americans. The President is also asking the Department of Treasury to consider taking actions to expand and improve delivery of direct payments and getting those payments to eligible individuals who have not received the financial assistance they are entitled. Finally, and most notably for employers and employees, the President requested that the Department of Labor consider clarifying that workers have a federally guaranteed right to refuse employment that will jeopardize their health and if they do so, they will still qualify for unemployment insurance.
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Firm News
Hendrick, Phillips, Salzman & Siegel was recently named the Construction Projects Law Firm of the Year for the State of Georgia by the Global Law Experts.
Hendrick, Phillips, Salzman & Siegel was also recently named General Counsel for the North/East Roofing Contractors Association.
Ben Lowenthal's article, "Trademarks - What Subcontractors Need to Know to Protect Their Brand" was recently published in the American Subcontractors Association's Contractor's Compass magazine. The article can be found here.
On February 4, Philip Siegel is presenting a webinar to the Chicago Roofing Contractors Association on the legalities of implementing a COVID-19 vaccine policy in the workplace. Philip is also scheduled to speak at the Georgia Utility Contractors Association Safety Forum on OSHA issues on March 18.
On May 12, Philip is scheduled to speak in Kansas City to the Firestop Contractors International Association on legal issues surrounding COVID-19 in the workplace.
Philip was also awarded the honor of presenting two of the 24 educational sessions at this year's Western States Roofing Expo, on June 28 and 29, in Las Vegas, and one session at this year's International Roofing Expo, also in Las Vegas, on August 10.
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