Moving Forward in 2021
While many people are ready to step on the gas and put 2020 in the rearview mirror as fast as possible, it is clear that businesses will continue to face challenges with the COVID-19 pandemic as we enter into the new year. Social distancing, contact tracing, teleworking and quarantine/self-isolation protocols will likely remain part of the landscape for large portions of the year. Entertainment, food services, restaurants, catering, hospitality and travel industries will likely continue to struggle. We are hopeful that Congress’s $900 billion COVID relief package and the availability and distribution of two COVID vaccines will provide some assistance in the coming year.
To that end, this updates our clients and friends with some key information that may be beneficial as we start the year:
(1) What is the impact of the 2021 Consolidated Appropriations Act, which incorporates $900 billion to COVID relief efforts; and
(2) With the rollout and distribution of COVID-19 vaccines, may employers require employees to be vaccinated as a condition of continued employment?
New COVID Relief Package
On December 27, 2020, President Trump signed into law the bipartisan 2021 Consolidated Appropriations Act, which incorporates $900 billion to COVID relief efforts. The measure is the second-largest federal stimulus package after the $2 trillion CARES Act enacted by Congress in March 2020. The December Act includes appropriations provisions to keep the government funded through September 30, 2021, as well as a host of miscellaneous items. Highlights include:
• Another Round of Stimulus Checks Directly to Individuals. Individuals who earned less than $75,000 will receive a check for $600 and an additional $600 for each dependent child under the age of seventeen (17). The amount of the stimulus check decreases as income rises, with individuals earning more than $87,000 ineligible for stimulus checks. The income thresholds for couples are doubled. Eligibility is based on reported adjusted gross income in 2019.
• FFCRA. The mandated paid emergency sick and child-care leave under the Families First Coronavirus Response Act (FFCRA) expired December 31, 2020. However, the tax credits for such leave are extended through March 31, 2021 on a voluntary basis. In other words, FFCRA leave is no longer mandatory, but employers that provide FFCRA leave from January 1 to March 31, 2021 may take a federal tax credit for providing such leave. Note, however, the number of eligible hours for each employee in each category is not reset.
• Business Meal Deductions. Businesses may now deduct 100% (not just 50%) of business- related restaurant meals during 2021 and 2022.
• Rollover of FSAs. Employees are now allowed to roll over unused amounts in their health and dependent care flexible spending accounts (FSA) from 2020 to 2021 and from 2021 to 2022. Employers may also allow employees to make a 2021 mid-year prospective change in contribution amounts for their FSAs.
• Reauthorization and Additional Funding of the Paycheck Protection Program (PPP). Under the CARES Act, $659 billion was appropriated to fund the PPP, of which $134 billion remained undisbursed when the program expired August 8, 2020. The December Act reopened the PPP (with some changes). Notably, businesses can obtain a second PPP loan, under certain circumstances.
o The total loan amount for a second loan cannot exceed $2million (down from $10 million).
o Eligible borrowers are expanded to include 501(c)(6) non profits, local newspapers and broadcasters.
o Borrowers must have less than 300 employees (down from 500 employees, except that newspapers, stations and public broadcasting organizations may have up to 500 employees).
o Public companies are ineligible.
o Borrowers must show at least a 25% reduction in revenue during a quarter in 2020 (compared to the same quarter in 2019).
o A simplified forgiveness application for loans less than $150,000 is created.
o Clarified that business expenses paid out of PPP loans are tax deductible (even expenses paid with forgiven PPP loan proceeds).
For businesses that have not been approved for PPP loan forgiveness, we recommend waiting to apply for forgiveness until the SBA implements rules under this new program, particularly since more approved uses of PPP funds have been added and the forgiveness process for smaller-dollar loans is to be streamlined. It is also expected that some lenders will withdraw in this new round, so businesses should check with their existing bank or SBA-approved lender to see if they will be participating.
• Grants to Shuttered Venues. $15 billion is set aside for grants dedicated to theaters, museums and live venues that have lost 25% in revenues. The money must be used for specified expenses such as payroll costs, rent, utilities and personal protective equipment. Grants will be awarded first to those who have lost 90% in revenues, then to those who have lost at least 70% in revenues, and then to any other eligible businesses.
• Emergency Rental Assistance and Extension of Eviction Moratorium. The CDC’s current eviction moratorium is extended to January 31, 2021. In addition, $25 billion in rental assistance is allocated for direct financial assistance to eligible households.
• Expanded Unemployment Benefits. The Pandemic Unemployment Assistance program initially expanded jobless benefits to gig workers, freelancers, independent contractors, and the self-employed for up to thirty-nine (39) weeks. The Pandemic Emergency Unemployment Compensation program provided an additional thirteen (13) weeks of payments to those who exhaust their regular state benefits. Both programs were set to expire December 31, 2020, but were extended by the December Act. The programs will now close to new applicants on March 14, 2021, but continue paying benefits through April 5, 2021 for existing claimants who have not yet reached the maximum number of weeks.
COVID-19 Vaccines
With the FDA’s recent emergency approval of the Pfizer-BioNTech and Moderna COVID- 19 vaccines, businesses are wrestling with whether to implement a vaccination requirement for employees when the COVID-19 vaccines become generally available.
New EEOC Guidelines. On December 16, 2020, the EEOC issued guidelines on this topic, in the form of nine (9) new FAQ’s to its technical assistance publication addressing questions arising under the Federal Equal Employment Opportunity laws related to the COVID-19 pandemic. Notably, the EEOC indicated that employers can encourage or require its employees receive the COVID-19 vaccine, but their policies must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 (Title VII) and other workplace laws. In particular, employers must accommodate certain refusals, including for underlying disabilities or “sincerely held religious beliefs.”
If a disability-related issue prevents an employee from being vaccinated, the employer should do a case-by-case analysis to determine whether the individual poses a “direct threat” to workplace health and safety by being unvaccinated. The EEOC guidelines state that employers should consider four (4) factors: the duration of the risk; the nature and severity of the potential harm; the likelihood that the potential harm will occur; and the imminence of the potential harm. A direct threat includes a determination that an unvaccinated individual will expose others to the virus at the workplace.
If an employer determines that the unvaccinated individual poses a direct threat at the worksite, the employer must then engage in a “flexible, interactive process” to consider whether there is a reasonable accommodation to mitigate the health risk, that does not constitute an “undue hardship.” A reasonable accommodation may include working remotely or assigning the employee to an alternative job where vaccination is less critical. (If certain employees are capable of fully performing their current job duties remotely without the potential spread of the virus to co-workers or work-related third parties, it is doubtful an employer can require they be vaccinated.) Additionally, employers should consider the prevalence of other employees in the workplace who have already been vaccinated, the employee’s involvement with customers, and the rate of vaccination in the community. The EEOC cautioned that employers can only prevent employees from physically entering the worksite if the direct threat they pose to others “cannot be reduced to an acceptable level.”
For religious objectors to a vaccine, employers must similarly try to accommodate the person’s beliefs as long as it does not pose an “undue hardship.” Employers should be aware that under Title VII, the definition of protected religious beliefs is very broad and is not limited to traditionally recognized and organized religions. Employers should tread carefully when questioning an employee about the nature or sincerity of a particular belief. If an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance, the employer may request additional supporting information. However, the EEOC cautioned that an employer should ordinarily assume that an employee’s request for religious accommodation is based on a sincerely held religious belief.
Recommendations for COVID-19 Vaccination Policies. Recognizing that some individuals may have general (non-protected) objections to vaccines, employers should give careful thought before mandating COVID-19 vaccines. If a significant segment of an employer’s workforce refuses to comply (for non-protected reasons), the employer will be put in the very difficult position of either adhering to the mandate and terminating all of these employees, or deviating from the mandate for certain employees, which can increase the risk of discrimination claims. In some industries, such as hospitals, medical/dental offices, and long-term care facilities, mandatory COVID-19 policies make sense, while in other business sectors, encouraging (and even incentivizing) vaccines may be the better approach. We recommend the following:
Develop and implement a written COVID-19 vaccination policy, particularly if it will be mandatory. Include a process for referring accommodation requests and ensure management is adequately trained to recognize such requests. We can assist with this, if needed.
Encourage employees to be vaccinated and develop vaccination education campaigns.
Lead by example and ensure that key management are vaccinated.
Make it as easy as possible for employees to obtain the vaccine, including covering any
costs that might be associated with getting the vaccine.
Provide incentives to employees who are vaccinated.
Provide paid time off for employees to obtain the vaccine and recover from any potential side effects.
Use a qualified third-party to administer the vaccine to avoid inadvertent ADA violations in connection with pre-screening vaccination questions.
If employees are required to provide proof that they have received a COVID-19 vaccination from a pharmacy or their own healthcare provider, warn employees not to provide any medical information as part of the proof in order to avoid implicating the ADA.
As has been the case since the beginning of the COVID-19 pandemic, this is an evolving situation and businesses must remain flexible and prepared to adjust their responses as needed. The EEOC’s new guidance can be found in Section K, Vaccinations on the EEOC website. We expect the EEOC will continue to provide new guidance on these issues.
ABL will continue to monitor the latest developments and serve as a resource as needed. Please contact Karen Ibach Bowden kbowden@abelbeanlaw.com if you have any questions or would like additional information.