Category: Professional Liability

When Can Employees with COVID-19 Return to Work?

The likelihood of an employee testing positive for coronavirus disease 2019 (COVID-19) increases with every new case. By now, employers know that employees suspected or confirmed to have COVID-19 must be kept away from the workplace. But, when should they be allowed back?

The Centers for Disease Control and Prevention (CDC) provides two strategies for determining when an employee can stop home isolation and return to work: a symptom-based strategy and a test-based strategy. The CDC stresses that the decision on which strategy to use should be made in consultation with healthcare providers and local public health authorities knowledgeable about locally available testing resources

Symptom-Based Strategy. If it is determined that employees will not be tested to determine if they are still contagious, an employee can leave home and return to work only if:

  • the employee has had no fever for at least 72 hours (without the use of fever-reducing medicine);
  • the employee’s respiratory symptoms, like cough or shortness of breath, have improved; AND
  • at least 10 days have passed since their symptoms first appeared.

Test-Based Strategy. If it is determined that employees will be tested to determine if they are still contagious, an employee can leave home and return to work only if:

  • the employee no longer has a fever (without the use of fever-reducing medicine);
  • respiratory symptoms, like cough or shortness of breath, have improved; AND
  • the employee tested negative for COVID-19 in two consecutive tests taken at least 24 hours apart.

Employers should utilize these strategies in conjunction with other preventative measures designed to limit the spread of COVID-19 in the workplace, such as actively encouraging sick employees to stay home, social distancing, hand hygiene, respiratory hygiene, cough etiquette and the use of facial coverings.

Even though guidance issued by the CDC and other public health agencies typically comes in the form of recommendations rather than requirements, employers are strongly encouraged to follow applicable recommendations when it is reasonable to do so. Remember, under OSHA’s General Duty Clause, employers are required to furnish workplaces that are free from recognized hazards that cause or are likely to cause death or serious physical harm.

Please contact us for additional information about protecting your business during the COVID-19 pandemic.

Bostock v. Clayton County: Supreme Court Rules Title VII Protects LGBT Workers; Employers Must Now Adapt

The Supreme Court’s landmark decision in Bostock v. Clayton County is significant yet simple. “An employer who fires an individual merely for being gay or transgender defies the law.” Discrimination on the basis of an individual’s sexual orientation or gender identity (transgender status) is now considered an unlawful employment practice under Title VII of the Civil Rights Act. As of June 15, 2020, millions of LGBT workers may raise Title VII’s broad shield to resist unlawful workplace harassment and discrimination. They may also unsheathe its broad sword.

Bostock has immediate consequences for all employers subject to Title VII, including those in states that already prohibit LGBT harassment and discrimination. Bostock must be integrated into the workplace culture and reflected in workplace practices, policies and procedures. Employers must take action to ensure (or confirm) compliance with the Court’s decision.

Identify all employment-related documentation that involves “sex” or gender-based characterizations. Employee handbooks and existing harassment and discrimination policies are a good place to start, but employers must go beyond the obvious. Sex and gender-based characterizations can be found in other documents too, like dress code policies, job applications and benefits enrollment forms.

Update relevant documentation to include sexual orientation and gender identity (transgender status) among the list of protected categories. Some documents may require little more than adding sexual orientation and gender identity (transgender status) wherever the word “sex” appears. Others may require more extensive revisions.

Update equal employment opportunity (EEO) statements to include sexual orientation and gender identity (transgender status) among the list of protected categories. EEO statements are often posted on websites and included in job postings and marketing materials. They can also appear in non-employment related contexts as well, such as bids for contracts and project proposals.

Communicate policy changes to employees. Don’t assume employees know about the Supreme Court’s ruling or the resulting change in the law. Updated policies should be distributed to and acknowledged by all employees.

Train managers and supervisors. Don’t assume managers and supervisors grasp the dynamics of LGBT harassment and discrimination. Those in positions of authority must be trained to understand, recognize and address these new forms of unlawful conduct.

Train employees. Rules cannot be followed unless they are known. Rank and file employees need updated harassment and discrimination training to help them understand expectations and conduct themselves accordingly.

Claims of unlawful conduct often increase when laws change. Bostock’s limits will likely be tested for years to come. In addition to taking necessary remedial measures, employers should carry Employment Practices Liability Insurance to protect against the uncertainty that typically follows landmark decisions like Bostock. Please contact us if you would like to learn more about employment practices liability insurance.

How COVID-19 might change the Insurance Market

COVID-19 will change our world in many ways, some good and some bad. The same holds true for the insurance marketplace. While in the midst of the crisis, it is hard to predict, but the following considerations should be noted.

Property policy and the corresponding business interruption coverage terms will be more restrictive, with insurers making certain to exclude (or make clear) that certain triggers to loss will not be covered. These excluded triggers will be viruses, contagious diseases, pandemics, epidemics, bacteria, pollution and as many more terms as needed to make it terribly clear that the policies will not cover biological damages. While many policies have these exclusions now, there are efforts on the part of a few states and attorneys to void the terms of the current contract. While any action to void contract language on a wholesale basis will be met with challenges, the states that have taken this position might find that insurers retreat from those states and offer limited property protections.

Specialty markets are already launching virus insurance in the form of indemnity and parametrics protections. This type of insurance was offered years ago, but the price tag caused the failure of these insurers. They will certainly try to find a market. Premiums will be 1 to 5 percent of the limit sought. So, metropolitan areas would possibly pay $50,000 for a $1 million limit in coverage.

Workers compensation insurance, if certain COVID-19 cases are determined to be occupational in nature, could modify pricing for certain industries, such as healthcare and assisted living facilities.

Commercial general liability, directors and officers and employment practices may see pricing increases due to the possibility of increased litigation—employers now have additional laws to comply with and errors will certainly occur. Even in the absence of errors, certain segments of the workforce will seek to recover their economic losses by finding a soft target.

Health insurance should increase due to the COVID claims.

Certain classes of products liability will see additional scrutiny in the underwriting process, as many products that are being rushed to market may cause damages. While there is a new federal law that ‘holds harmless’ the organizations that are building these products, this law may not have the impact it needs, as these products will age in the system and insurers may be faced with future claims. Perhaps we will see insurance exclusions for such products.

America was heading into a hard market with most insurance lines were increasing in cost. With the new financial/investment troubles, combined with underwriting losses, and possible future decreases in demand for insurance, the market may become soft again, despite performance. In the longer term—two years plus—the market should significantly harden.

Families First Coronavirus Response Act UPDATE: DOL Announces Effective Date of Paid Leave Laws and Releases Employee Notice Poster

The Families First Coronavirus Response Act was enacted March 18, 2020. Since then, employers have been anxiously preparing for the FFCRA’s two new paid sick leave laws—the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act. Many had questions, but few had answers. Fortunately, the Department of Labor has released much-needed guidance to help employers comply with these new paid leave laws.

Effective Date. The DOL announced that the FFCRA’s paid leave requirements will go into effect April 1, 2020, one day sooner than many expected. The FFCRA’s paid sick leave provisions had to become effective no later than 15 days after the law was enacted, so many assumed they wouldn’t begin until April 2nd. This is significant because employees may start taking paid sick time under the Emergency Paid Sick Leave Act immediately upon becoming effective.

Model Notice to Employees. Covered employers are required to notify employees of the FFCRA’s paid sick leave requirements. The DOL released a model notice (poster) that employers can use to satisfy this requirement. Click here to download the DOL’s Model Employee Rights Poster. The DOL also provided additional guidance to help employers better understand and comply with the FFCRA’s notice requirement.

  • Covered employers must post the required FFCRA notice in a conspicuous place on its premises and keep it posted. Employers may also provide this notice by email, direct mail or by posting it on an internal or external website that is used to provide information to employees.
  • Employers are not required to post this notice in multiple languages, but the DOL is working on translated versions.
  • The FFCRA’s notice requirement applies only to current employees, including new hires. Notice is not required for recently laid-off individuals or new job applicants.
  • All covered employers must post the required FFCRA notice, regardless of any state notice requirements. Employers must comply with both federal and state laws.
  • All private sector employers with fewer than 500 employees are required to post this notice.

Legislative efforts to curb the impact of COVID-19 are proceeding at an astonishing pace. FFCRA regulations are “expected April 2020,” and may not be available until after the law goes into effect. Consequently, employers have little time to understand these new laws and adapt their operations accordingly. Confusion and anxiety are to be expected, but will hopefully diminish in time. Until then, employers should continue efforts to control the spread of COVID-19 in the workplace and remain informed. Please contact us for additional information about protecting your business.

Mandatory Paid Coronavirus-Related Sick Leave Starts April 1, 2020

In a bipartisan effort, Congress passed the Families First Coronavirus Response Act to address the health and economic impacts of the coronavirus disease 2019 (COVID-19) pandemic. This federal law includes a new paid sick leave requirement to help employees who miss work due to COVID-19. It’s called the Emergency Paid Sick Leave Act (the Act).

When can employees start taking paid sick leave under the Act? April 2, 2020*, regardless of how long they have been employed.

*EFFECTIVE DATE UPDATE: Pursuant to the Act, the paid sick leave requirements “shall take effect not later than 15 days after the date of enactment.” On March 24, 2020, the Department of Labor announced that the Act will become effective April 1, 2020, which is only 14 days after the date of enactment.

Which employers are required to provide paid sick leave? The Act applies to employers with fewer than 500 employees. However, the Secretary of Labor has the authority to exempt businesses with fewer than 50 employees if paying sick leave would jeopardize the viability of the business as a going concern.

Which employees are eligible for paid sick leave? Employees who are unable to work or telework because they:

  • are subject to a Federal, State or local quarantine or isolation order related to COVID–19;
  • have been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
  • are experiencing symptoms of COVID–19 and seeking a medical diagnosis;
  • are caring for an individual who has been ordered to quarantine or advised to self-quarantine;
  • are caring for a son or daughter whose school or child care provider is closed or unavailable due to COVID–19 precautions; or
  • are experiencing any other substantially similar condition specified by the Departments of Health and Human Services, Treasury and Labor.

How many hours of paid sick time does the Act provide? Full-time employees are entitled to 80 hours of paid sick time. Part-time employees are generally entitled to the average number of hours worked over a 2-week period, though special rules are used for part-time employees who work irregular hours.

How much must employees be paid while out on sick leave? Employees must be paid no less than their regular rate of pay or the applicable minimum wage, whichever is greater. Those taking leave for reasons 4, 5 or 6 above are entitled to two-thirds of such amount. Employees taking leave for reasons 1, 2 or 3 above cannot be paid more than $511 per day ($5,110 in the aggregate). Those taking leave for reasons 4, 5 or 6 cannot be paid more than $200 per day ($2,000 in the aggregate).

What are some other significant provisions in the Act?

  • Employers cannot require employees to use other types of paid leave before using the paid leave provided by the Act.
  • Employers may not retaliate or discriminate against employees who take leave pursuant to the Act.
  • Violations of the Act will be enforced like violations of the Fair Labor Standards Act’s minimum wage requirement.
  • The Secretary of Labor is required to create a model notice about the Act’s requirements that employers will be required to post in a conspicuous place.
  • The Act automatically expires December 31, 2020.

Employers and employees alike are awaiting the Secretary of Labor’s regulations, particularly those pertaining to potential exemptions from the Act’s paid sick leave requirements for employers with fewer than 50 employees. Until then, employers are encouraged to get familiar with the Act’s requirements and consult with legal counsel if necessary.

Coronavirus Disease 2019 and Insurance Matters

The economic impact of coronavirus disease 2019 (COVID-19) is spreading like the virus itself. As the financial effects trickle down from global organizations to regional and local businesses, many are asking whether losses caused by COVID-19 are or will be covered by insurance. This isn’t an easy question because standard commercial insurance policies are not generally designed to protect against people getting sick. However, standard policies may provide limited coverage under the right circumstances.

Scenario 1: Employee contracts COVID-19

Workers’ Compensation Insurance generally covers occupational injuries and illnesses that arise out of work performed in the course and scope of employment. Employees contracting COVID-19 may be covered by workers’ compensation insurance if they were initially exposed to the virus in the workplace or while working. But, an employee’s employment, and the resulting exposure, must be the major contributing cause of contracting COVID-19.

Workers’ compensation coverage would likely turn on whether an employee could establish a causal link between their employment and their exposure to COVID-19. This may be harder for some employees than others. Those working in the healthcare industry, for example, may find it easier to establish the causal link than those whose employment does not clearly subject them to a greater risk of exposure than that to which the general public is exposed.

Scenario 2: Business operations interrupted due to COVID-19

Closed manufacturing facilities, quarantined workers, travel restrictions and the temporary suspension of imports and exports are just a few ways that a pandemic can disrupt crucial supply chains. The resulting disruption or interruption of operations poses perhaps the greatest financial risk to many businesses. Business Interruption Insurance, which replaces lost business income when a covered property loss causes a business to reduce or suspend its operations, may sound like the perfect solution, but it really isn’t.

Business interruption coverage is triggered when a covered peril causes damage to covered property. The damage must be sufficient to render the property unusable in its current state. A standard policy, for example, would cover lost business income if operations are interrupted because the manufacturing facility is destroyed by fire. Coronavirus-related claims are unlikely to cause the property damage needed to trigger business interruption coverage. Even if facilities (offices, warehouses) or inventory (raw materials, fish, produce) are rendered unusable by COVID-19 contamination, business interruption coverage would be unlikely because standard policies typically contain exclusions for bacteria, viruses and other pollutants.

Supply Chain Insurance is an option for businesses wanting broader business interruption coverage. Policies can be written to name specific suppliers, manufacturers, etc. and to cover negotiated perils, including pandemics. Unfortunately, the breadth of coverage provided by supply chain insurance comes at a cost. Policy premiums are often cost prohibitive, particularly for smaller businesses.

Scenario 3: Cancellation of business-related travel

Pandemics naturally stifle travel abroad, particularly to high-risk areas. Travel Insurance is designed to limit financial losses caused by various travel-related risks. Trip cancellation coverage, for example, reimburses pre-paid, non-refundable travel expenses if a trip is cancelled for a reason that is covered under the policy, such as an injury, illness or death involving you, a family member or a travel companion. Some insurers offer “cancel for any reason” coverage that should respond to pandemic-related cancellations. However, it’s important to note that travel insurance does not cover “disinclination to travel” cancellations caused by fear or concern over what might happen while travelling abroad.

Scenario 4: Cancellation of business function or special event

Event Cancellation Insurance, as its name implies, is designed to cover circumstances beyond your control that necessitate the interruption, abandonment or cancellation of a business-related function or event. Unfortunately, it’s too late now to purchase coverage for cancellations prompted by COVID-19. Policies issued prior to the outbreak, however, may cover cancellations, at least for now. Insurers are expected to add exclusions for pandemics and communicable disease as policies renew.

Scenario 5: Liability for negligently exposing others to COVID-19

Standard commercial general liability policies would likely respond to third-party claims regarding negligent release of or exposure to COVID-19.

Despite the potential for limited insurance coverage, it’s worth noting that standard commercial insurance policies are not designed to cover the spread of contagious diseases like COVID-19 or the flu. And, depending on the severity and duration of the COVID-19 outbreak, insurance companies are likely to add exclusions that eliminate the possibility of any coverage for COVID-19 claims. As a result, most businesses will not be able to rely on their standard insurance policies to adequately protect against coronavirus-related losses.

FLSA Update: Department of Labor Revises Joint Employment Regulations under the Fair Labor Standards Act

The Fair Labor Standards Act’s regulations are changing again. These changes involve joint employment under the FLSA, which is important because joint employers are individually and jointly responsible for FLSA compliance and legally liable for violations. According to the Department of Labor, the revised regulations will reduce uncertainty over joint employer status and reduce litigation.

Assume Susan, a non-exempt employee, worked 35 hours for Acme and 35 hours for Globex in a single workweek. If Acme and Globex are deemed joint employers, each would be individually and jointly responsible for the 30 hours of overtime compensation that Susan is due. Otherwise, Susan could sue Acme, Globex or both for violating the FLSA.

The revised regulations continue to recognize two potential scenarios in which an employee may have joint employers. The first involves an employee who performs work for Employer A that simultaneously benefits another individual or entity (Employer B). The DOL adopted a four-factor balancing test to determine whether Employer B exercises sufficient direct or indirect controls over the employee to qualify as a joint employer. The four factors are whether Employer B:

  • hires or fires the employee;
  • supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  • determines the employee’s rate and method of payment; and
  • maintains the employee’s employment records.

Employer B must actually exercise direct or indirect control over the employee. Indirect control is exercised if Employer B gives mandatory directions to Employer A that directly controls the employee. The appropriate weight to give each factor will vary depending on the circumstances. Additional factors may need to be considered in some cases, but some factors are not relevant, such as whether a potential joint employer is franchisor or whether there is a contract between potential joint employers.

No substantive changes were made for determining joint employment status in the second scenario, which involves employees who work one set of hours for one employer and a separate set of hours for another. If the employers are acting independently with respect to an employee’s employment, they are not joint employers. If they are sufficiently associated with respect to an employee’s employment, they are joint employers and must aggregate all hours worked to determine FLSA compliance.

The revised regulations, which are effective March 16, 2020, include examples for determining joint employment in various factual circumstances. Employers should pay attention to circumstances that may create a joint employment relationship and should consult their attorney to avoid costly FLSA violations. Employers should also consider Employment Practices Liability Insurance to protect against various employment-related claims. Please contact us to learn more about EPLI coverage.

Supreme Court Considering Whether Title VII Prohibits LGBT Harassment and Discrimination

Does Title VII of the Civil Rights Act prohibit discrimination on the basis of sexual orientation, transgender status or sex stereotyping? We don’t know…yet. Three cases currently pending before the United States Supreme Court should give us an answer. Two of these cases involve sexual orientation discrimination. The third involves discrimination based on transgender status.

The Supreme Court heard oral arguments in October 2019, but we don’t know exactly when the Court will issue its highly-anticipated rulings. In the meantime, here is a brief summary of where things currently stand.

  • Title VII prohibits discrimination “because of…sex,” but it does not expressly prohibit discrimination on the basis of sexual orientation or transgender status.
  • Federal appellate courts are split on whether “sex” under Title VII should be interpreted to include sexual orientation, sexual identity, transgender status or sex stereotyping.
  • The Equal Employment Opportunity Commission has taken the position that Title VII prohibits employment discrimination based on gender identity and sexual orientation. 
  • The Department of Justice has taken the position that Title VII does not prohibit discrimination because of sexual orientation.
  • Some states have enacted laws that expressly prohibit LGBT-related employment discrimination. Others have not.

Since the EEOC began tracking LGBT-related discrimination in 2013, there has been a steady increase in the number of charges filed by employees and the amount of monetary benefits recovered from employers. Depending on how the Supreme Court rules, these numbers may increase dramatically or disappear altogether.

Changing laws and uncertain legal obligations substantially increase the likelihood of claims involving unlawful harassment or discrimination. Employers should carry Employment Practices Liability Insurance to protect against any number of employment-related claims. Employers should also provide sexual harassment training to employees, particularly those in managerial and supervisory positions. Please contact us if you would like to learn more about employment practices liability insurance.

It’s Office Holiday Party Time! Don’t Let Your Celebration Lead to Litigation

Holiday celebrations provide an excellent opportunity for coworkers and management to mingle and interact with one another. They can create a positive work environment, increase employee morale and promote teamwork. They can also expose employers to potential liability if something goes wrong.

Holiday parties often involve alcohol, which can lead to lines being crossed. Off-color comments, racy jokes or inappropriate flirty behavior may lead to claims of unlawful discrimination or harassment. Alcohol-related car accidents caused by those attending the party may lead to claims of negligence.

To reduce these risks, employers can:

  • Appoint monitors to watch alcohol service and consumption.
  • Limit alcohol service with “drink coupons” (i.e., two drinks per person).
  • Close the bar once dinner begins.
  • Use professional bartenders.
  • Offer plenty of non-alcoholic beverage options.
  • Serve foods rich in starch and protein that stay in the stomach longer and slow the absorption of alcohol in the bloodstream.
  • Provide designated drivers, taxis or Ubers for anyone who is too impaired to drive.
  • Prior to the party, make it clear to employees that a) employees who arrive intoxicated will not be allowed in; b) employees are not permitted to bring their own alcohol; c) excessive drinking will not be tolerated; and d) intoxication and inappropriate behavior at the party will be grounds for discipline.

To reduce the likelihood of a workers’ compensation claim, attendance should not be mandatory or perceived as being mandatory. Tell employees the holiday party is purely a voluntary social event, and mean it. Employers should also consider a Special Events insurance policy with liability coverage, including host liquor liability coverage, to protect against bodily injury or property damage suffered during the event.

Please contact us if you would like to learn more about protecting your holiday party with Special Events Insurance.

FLSA Update: New White-Collar Exemption Rules Permit “Catch-Up” Payment to Satisfy Minimum Salary Requirement

The Fair Labor Standards Act’s new white-collar exemption regulations did more than increase the minimum salary requirement for exempt executive, administrative and professional employees from $455 to $684 per week. They also let employers use nondiscretionary bonuses, incentives and commissions to satisfy up to 10 percent of the minimum salary requirement.

In other words, if an exempt employee’s annual salary, including nondiscretionary bonuses, incentives and commissions, is less than $35,568 at the end of the year, employers may make one final payment of up to $3,556.80 to satisfy the minimum salary requirement for that employee. These “catch-up” payments are subject to the following rules.

  • Employers may only use nondiscretionary bonuses, incentives and commissions that are paid annually or more frequently.
  • Employers may utilize any 52-week period as the year (calendar year, fiscal year, hire-date anniversary, etc.).
  • If an employer does not identify a specific 52-week period in advance, the calendar year will apply.
  • The “catch-up” payment must be made no later than the next pay period after the end of the year.
  • If the “catch-up” payment is made after the end of the 52-week period, it may count only toward the prior year’s salary amount and not toward the salary amount in the year it was paid.

According to the Department of Labor, this change was made in recognition of evolving compensation practices in a growing number of workplaces. “Catch-up” payments are not required, but many employers are expected to take advantage of the new rule. The new white-collar exemption regulations are effective January 1, 2020, so employers don’t have much time to evaluate their current payroll practices and take corrective actions if necessary.

Regulatory changes often create uncertainty, so employers should carry Employment Practices Liability Insurance that includes limited wage & hour coverage. Please contact us if you would like to learn more about employment practices liability insurance.