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ALDA & Associates International, Inc. Newsletter

 2020 SPECIAL EDITION

Features & Articles in this issue


Reopening the Workplace During the COVID-19 Pandemic-What Employers Need to Know

Breaking News
 

The issues surrounding how we as a country reacted to COVID-19 are many and each introduces complications (legal and otherwise) that may not have been anticipated by employers, employees or even government officials. As the economy attempts to be restarted and employees brought back to work, these issues need to be addressed to cause the least amount of pain and least amount of legal ramifications. We decided that our clients and others deserve to have as many of them identified in one place along with potential recommendations to avoid legal and other problems.Consequently, we have devoted this entire issue to the subject matter.It has been prepared with sufficient detail that you can print the newsletter and use it as a guide to help move you though the issues.HOWEVER, you should work closely with your corporate counsel as we do not provide legal advice.

ALDA continues to add client engagements in the life science industry and is now working with several drug development companies to assist in refining their strategy, capital raising, getting their drug candidates through clinical trials and thus adding to their product pipeline and navigating the Food and Drug Administration. In consideration of the new client assignments involving drug development, we are adding additional resources. We are delighted to announce the newest addition to our team. 

R. Brent Miller, Ph.D., PMP, will be focused on advancing Chemistry, Manufacture, and Controls (CMC) activities of small molecules from discovery through development. Brent has more than 30 years of drug development experience. This includes working with start-ups, mid-size, and large pharma companies. Throughout this experience, he has led a wide variety of operational departments, including Technical Strategic Alliances & Due Diligence, Project Management Office, Pharmaceutical Sciences (Formulation Development/Analytical Development), Bioanalytical Development, Quality Control and Stability.  He is an invited speaker/panelist at conferences and has 29 publications in peer-reviewed journals. We are delighted to have secured an individual  with Bent's qualifications. Please join me in welcoming him to the ALDA team.

Book News

   Essentials of Corporate and Capital Formation
   by David H. Fater
   ISBN (13): 978-0-470-49656-5
   ISBN (10): 0-470-49656-8
   Cost: $39.95
   Paperback: 224 pages



 

 
Brief Description: A simple and effective guide to the mechanics of finance and corporate structure.

About ALDA:

ALDA & Associates International, Inc. is a business and financial consulting firm committed to assisting companies with:

We help physicians, scientists and entrepreneurs change the world. Our experienced professionals are dedicated to helping clients unlock inherent value and create new value. The real-world experience of the ALDA team is leveraged for each client's unique circumstances, challenges, and people.

Among ALDA's hallmark services:

Our experienced professionals can show you all the right steps. For additional information on how we can help, please contact us by email at dfater@alda-associates.com or rcohen@alda-associates.com.

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Reopening the Workplace During the COVID-19 Pandemic-What Employers Need to Know
 

As businesses commence the reopening process and many schools attempt to resume some semblance of normalcy, many employers (and possibly schools) may not be aware of the numerous issues that confront them and potentially manifest themselves via litigation. It is not as simple as unlocking the doors and inviting every one back. This voluminous article will identify many of the issues as well as suggest potential solutions. However, this article only scratches the surface and we want to remind everyone that it is always best to confer with and include legal counsel on the team. The issues we believe merit the most attention if they have not already been considered generally fall under several sub-headings which we will deal with in order. The second half of the issue will be presented in outline form in order to prevent the eyes from glazing over. We hope that this will be of sufficinet use to print and be a reference document for your organization.Despite the fact that we have been in various stages of lockdown since March, it would be naïve to believe that all the items outlined in sections 1 and 2 here have been considered by all employers so we believe they are worthy of being included here under the theory that late is better than never.
 
As we begin to reopen, the issues surrounding those decisions are timely and can be adopted.  This part of the “article” is presented in outline from to preserve your eyesight and enable you to stay awake.

 

Part 1
 

Developing and Properly Implementing Health and Safety Protocols and Screening of Employees for COVID-19

Each employer has an obligation under OSHA to furnish each worker “employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death of serious physical harm.” OSHA has provided guidance for employers to meet their obligations in response to this pandemic. There are state and local orders requiring compliance and it is helpful to follow CDC and WHO guidelines.
 
Employers should adopt Workplace Safety Protocols which should include a hazard and risk assessment. How could COVID-19 be introduced into and spread in the workplace? There the common (meetings, work stations) and also the mundane (copy machine, coffee station). There are also risks from outside like deliveries, repair services and other vendors.

Prepare infectious disease preparedness and a response plan. This should describe all potential sources of transmission and the controls implemented to address the hazards identified. The latter could be workplace engineering changes (those that promote social distancing) but also things like (i) HVAC Modifications, (ii) Erecting partitions between employees, (iii) reconfiguring common areas, elevators and bathroom usage and erecting handwashing stations and Purell dispensers as well as administrative changes to reduce exposure and the use of PPE such as temperature screening of employees and contractors as entry condition, diagnostic testing when available and reliable and staggering shifts and breaks to facilitate social distancing. There are numerous other items and it would be prudent to set forth the program in writing, distribute and post it. Furthermore, a responsible person should be appointed to administer and evaluate the program operation.
 
Having a good program alone will not overcome the rule of 6P’s. (Poor Prior Planning = Piss Poor Performance). Consequently, training must be conducted (together with written agenda and a documented attendance). Committee meetings should be held with periodic evaluations conducted and followed up on as appropriate.
 
Now we come to some serious and potentially legally hazardous areas—those of actually screening for illness. Employers may be required to or choose to screen employees and visitors for COVID-19 as a condition of entry. Any screening must be conducted in a non-discriminatory, safe and legally compliant manner. And here is where we come to the lawfulness issue. Medical inquiries are generally prohibited unless they are business related and consistent with job necessity. The EEOC has published disability related Guidance, including on medical inquiries and examinations so what do they have to say?

  • EEOC has advised that because CDC/local health authorities have acknowledged community spread employer’s may obtain information about COVID-19 symptoms.
    • During this pandemic, employers may have employees answer questions/survey as to if they have had COVID-19 symptoms (typically such as fever, chills, cough shortness of breath, sore throat, inability to smell/taste, gastrointestinal problems etc.
  • Inquiries should be limited to symptoms identified by the EEOC and/or the public health authorities and MAY CHANGE.

 
A corollary issue revolves around whether employers can ask employees about whether they have disabilities that will put them at higher risk for COVID-19. The answer to this is generally a big fat NO! There is an exception if the employee has requested a reasonable accommodation to the medical condition. The EEOC has stated that an employer has no accommodation burden unless the employee requests it; However, state or local law may require otherwise.
 
Can high risk employees be excluded from the workplace? The answer to this is only if the employee poses a direct threat to self. This is a high standard to achieve and will require much individualized assessment.

On the plus side, the EEOC has advised that temperature scans are permissible as job related and consistent with business necessity. However, there are screening steps required for temperature testing. They are:

  1. Designate an individual(s) to handle screening.
  2. Train Screener.
  3. Provide PPE.
  4. Ensure social distancing on a screening line.
  5. Compensate employees for waiting to be screened
  6. Keep medical information in a separate/private medical file. (Does that make it PHI or Protected Health Information under HIPAA?).
Suppose an employee has an adverse screen, i.e. a fever. Plans should be made as to how the Company will handle a positive test result. Firstly, discretion becomes the better part of valor.
  • Be discreet in communicating a positive test result.
  • Retest with same or different reading device?
  • Will the employee be paid if sent home? (This may bring FFCRA/state lease/employer policies in to play).
  • How can employee return (negative test result, other evidence, 72 hours free of fever without fever reducing medication?).
 
Other Screening Tests
 
COVID-19 screening has been indicated by the EEOC as permissible if it is job related and consistent with business necessity.  While this is true, the real determinant may be whether the test is available since we are experiencing issues on a national basis where demand far outstrips supply. Lastly, the Company should, much like temperature screening develop protocols etc.

 
On the other hand, COVID-19 antibody testing has not yet been endorsed by the EEOC because it has not demonstrated sufficient accuracy and/or whether the presence of antibodies provides immunity.
 
While much has been covered, it is apparent that there is still much yet to cover and life is not going to be as simple as opening the doors and welcoming the returning workers.  Serious consideration should be given to performing the following together with counsel:
  1. Conduct a Risk Assessment of your workplace.
  2. Develop a written and detailed infectious disease preparedness and response plan.
  3. Develop an employee training protocol for implementation of your preparedness and response plan.
  4. Prepare EEOC complaint employee questionnaire regarding COVID-19 symptoms, exposure and risky behavior.
  5. Prepare temperature testing policy and procedures.

Lastly, consideration of screening and safety protocols would not be complete at the end without questions:
 

  1. How do I handle a senior manager who is not taking our protocols seriously?
  2. Should our protocol build in a complaint procedure? If so, how would this work?
  3. What if an employee who fails a temperature scan insists they are not sick or didn’t have a fever on a home thermometer?
  4. Can I require an employee undergoing chemotherapy not to come into the office?

 
As you can see, the reopening of the workplace is not a simple endeavor and we have barely scratched the service.

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Part 2
 

Remote Work Policies, Changes in Compensation and FFCRA

With the magnitude of the employees who are now working remotely or at home, there is a necessity to have a Remote Work/Work from Home Policy. The elements of temporary remote work policy during COVID-19 would include:
  • Temporary nature of the policy
  • Non-Exempt Employees
    1. Schedule
    2. Compensable Time
    3. Breaks
    4. Overtime
  • Company rules and policies
  • Expenses
 
For non-exempt employees, the schedule should remain the same as it was prior to the remote work arrangement unless it is approved in writing. There should be a requirement to record all time worked. Compensable work time can be documented by logging on/off the company network as well as time spent waiting for assignments. This policy will also introduce a time tracking process for use at home which can either be electronic or manual. Obviously if it is manual it needs to be submitted to the employee’s supervisor and decide whether it should be twice a month or weekly.
 
While it is easy to walk to the kitchen to grab something to eat, these policies need to be somewhat uniform as well. There should be the same meal break as there was prior to the remote work arrangement. If the employer would like this to be unpaid under The Fair Labor Standards Act (FLSA), the meal period must be at least 30 uninterrupted minutes of duration and relieved of all work. Employees should be required to record their meal break using their time reporting system and affirm that they took 30 minutes of time and did no work. Rest breaks have similar requirements but also may have state imposed expectations. With respect to overtime, employees should not work before their usual start time, work during an unpaid meal break or work after the usual stop time. Communication with managers is essential and even more so with remote working. Managers should be prohibited from contacting non-exempt employees outside of scheduled working hours, having non-exempt employees have off the clock work with time sheets reviewed by them to ensure the employees are properly paid.

Copay policies should remain in effect during remote work arrangement as should policies regarding Equal Employment Opportunities.  There should be clear policies regarding the treatment of expenses, especially those expenses created by the necessity to work from home.

Compensation Reductions

There are Federal, state and local wage and hour law constraints. For non-exempt employees, hourly pay cannot be less than the minimum wage. Exempt employees have to meet salary basis requirement for exemption (which at the Federal level is $684 per week). Any and all potential contractual obligations need to be considered in determining whether to make an adjustment. The items that would factor into these decisions include:
 
  • Employment Contracts
  • Offer letters
  • Commission plans
  • Short and long term compensation plans
Care must be taken in conveying the message (both words and actions) and are pay cuts across the board and at the same level and how the reductions are explained.
 
Reductions in Hours Worked
 
Non-exempt hourly employees can have their hours reduced but it goes without saying that there needs to be an accurate record of all hours worked and paid. Adjustments to salaried workers pay should not be tied to hours worked or quantity/quality of work. Consideration should be given to reducing to writing expectations regarding duties and expected hour of work per week.
 
Vacation and Paid Time Off (PTO)
 
In dealing with PTO, exempt employees can be required to use their PTO during the period of shutdown. This applies whether it is for a full or partial day provided the employee receives a guaranteed salary. For non-exempt employees, it is permissible to require the use of PTO whether it is for a full or partial day.
 
Bonuses for Non-Exempt Employees

 
Discretionary bonuses are excludable from the regular rate of pay. They are discretionary only if all the statutory requirements are met; those being:
  • Employer has sole discretion, until at or near the end of the period that corresponds to the bonus, to determine whether to pay the bonus;
  • Employer has sole discretion, until at or near the end of the period that corresponds to the bonus, to determine the amount of the bonus; and
  • Bonus payment is not made according to any prior contract, agreement or promise causing an employee to expect such payments regularly.
     
  • Nondiscretionary bonuses are included in the regular rate of pay, unless they qualify as excludable under another statutory provision.
     
    Families First Coronavirus Response Act (FFCRA)
     
    This bill has two components-
     
    The first is the Emergency Paid Sick Leave Act (EPSLA).
  • This relates to Covered Employers--those with less than 500 employees
  • Covered Employees—All employees under the FLSA
  • Effective Dates are April 1, 2020-December 31, 2020.
  • The second component is the Emergency Family and Medical Leave Expansion Act (EFMLEA).
  • Covered Employers—those with less than 500 employees
  • Covered Employees—employee must have worked at least 30 days
  • Effective Dates are April 1, 2020-December 31, 2020.
 
There is a requirement under FFCRA (and the Department of Labor’s Wage and Hour Division) to post a notice. This should have been complied with by April 1 so if you have not done so by now you are already in non-compliance. This notice should have been:
 
  • Posted in a conspicuous place
  • Distributed if employees don’t have online access and
  • Posted in other languages, if appropriate based on the composition of the work force.
     
  • The Notice can be found at:
     

    https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Po ster_WH1422_Non-Federal.pdf

     
    What are some Qualifying Reasons for coverage under the Emergency Paid Sick Leave Act (EPSLA)?
     
    Paid Sick Leave May Be Used If Employee Is Unable to Work (or Telework) because:
  1. Employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. Employee has been advised by a health care provider to self- quarantine due to concerns related to COVID-19;
  3. Employee is experiencing symptoms of COVID-19 and seeks a medical diagnosis;
  4. Employee is caring for an individual who is subject to an order described in (1) or has been advised as a person in (2);
  5. Employee is caring for a child of such employee if the school or place of care of such child has been closed, or the child care provider of such child is unavailable, due to COVID-19 precautions or
  6. Employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and Secretary of Labor.
The Paid Benefits for Emergency Paid Sick Leave Act do have limitations.
  • Full-time employees are entitled to 80 hours of paid sick leave (10 work days) and part-time employees are entitled to a number of hours equal to the number of hours that such employee works, on average, over a 2-week period
  • For uses under (1), (2), or (3), paid sick leave calculated at employee’s regular rate capped at $511 per day and $5,110 in the aggregate
  • For uses under (4), (5), and (6), paid sick leave is calculated at two-thirds the employee’s regular rate capped at $200 per day and $2,000 in the aggregate.
 
Qualification for EFMLEA actually expand paid leave allowing usage of FMLA for a new purpose(s):
 
  • To care for a child under 18 if the school or place of care has been closed, or the child care provider is unavailable due to COVID-19
  • After first 10 days (for which employee may elect paid leave), employer must provide paid leave for remaining 10 weeks of FMLA (if full FMLA allotment remains available)
  • Can be taken intermittently with employer approval
 
The paid benefit under this provision would amount to:
  • 2/3 of employee’s regular rate of pay multiplied by the number of hours the employee would otherwise normally be scheduled to work and
  • Capped at $200 per day and $10,000 in the aggregate.
 
As with many benefits such as these conflicts arise as to what employers want to know and what can be reasonably be provided to protect privacy. So what information and documentation can an employer request? According to the Department of Labor, an employer may ask:
  1. The employee’s name,
  2. The date or dates for which leave is requested,
  3. A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason and
  4. A statement that the employee is unable to work, including by means of telework, for such reason.
There may be additional documentation required dependent on the reason for the employee’s leave. For example:
  1. Where employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19
    • Employee must provide:
      • the name of the government entity that issued the quarantine or isolation order
 
  1. Employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
    • Employee must provide:
      • The name of the health care provider who advised employee to self- quarantine for COVID-19 related reasons
      • If employee has requested FMLA leave due to employee’s own serious health condition, employee must submit an FMLA Certification of a Health Care Provider for Employee’s Serious Health Condition
 
  1. Employee is caring for an individual who is either subject to a federal, state or local quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19-
    • Employee must provide:
      • Name of the person employee is caring for and that person’s relationship to the employee,
      • Name of governmental entity that issued the quarantine or isolation order or the name of the health care provider who advised the individual to self quarantine.
      • If FMLA is requested, employee must submit an FMLA Certification of a HealthCare Providerfor Family Member’s Serious Health Condition.
  2. Employee is caring for employee’s child(ren) whose school or place of care has been closed, or whose child care provider is unavailable, due to COVID-19 precautions
    • Employee should provide:
      • The name and age of the child (or children) to be cared for
      • the name of the school, place of care, or child care provider that closed or became unavailable due to COVID-19 reasons
      • a statement that no other suitable person is available or will be providing care for the child(ren)
      • a statement that special circumstances exist requiring the employee to provide care (per IRS)
The employee is entitled to maintain their health insurance coverage during this FFCRA Leave as continued coverage under the group health plan and on the same terms as if leave was not taken.

Homework Items to ensure compliance
 
1.         Review and update remote work policies
2.         Track min wage (non-exempt) and min salary (exempt) in all jurisdictions
3.         Revise template employment agreements to permit wage reductions
4.         Vacation and PTO policies
a.         Revise to provide company flexibility
b.         Consider offering emergency sick leave
5.         FFCRA
a.         Confirm posting and distribution to employees
b.         Assess coverage under FFCRA
c.         Prepare FFCRA leave form for employees to fill out
d.         Ensure FFCRA documentation for tax credit

 
 
 

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Part 3

Returning Employees to the Workplace-What You Should Ask and When You Need to Ask It.

Planning for Bringing People Back to the Office
 

1.   Opportunity to bring employees back to work creates logistical, health and legal  concerns
2.      Obtaining employee information regarding status prompted by:
a.        Operational planning/attendance concerns
b.        Preventing and/or responding to COVID-19 exposures
c.        Legal compliance with state and local orders, CDC, OSHA

 
Policy/Protocol to Report Circumstances
 

  1. To Whom Should the policy/protocol apply?
    1. Employees who report to work/client locations in-person
    2. Contractors who enter the workplace
  1. Policy/Protocol should establish employee’s duty to self-monitor
    1. COVID-19 symptoms and warning signs
    2. temperature (subject to state/local order or advisory for employer- conducted temperature testing)
3.    What should the policy/protocol require employees to report?
Employee should report if the following has occurred
[within the last 14 days/since the last day the employee worked]:
  1. COVID-19 diagnosis
  2. COVID-19 symptoms (based on current CDC guidance)
  3. Close contact with someone who has been diagnosed with COVID-19 or has symptoms of COVID-19 (even if it becomes symptomatic after close contact).
  4. Travel
    1. International
    2. Domestic
    3. Cruise/Riverboat
  5. If employee was directed by public health or government authority/healthcare professional to isolate or quarantine
  6. If employee has not complied with any governmental or public health advisories or orders applicable to employee’s community including re: masks, face coverings, mass gatherings 
4. Process
  1. Instructions on what to do if an employee has a circumstance while at home and while at work
  2. Confidentiality
  3. Reserve right to request additional information
  4. Subject to legal and public health orders and advisories
Special considerations for contractors
  1. a.Same circumstances trigger reporting as employees
    b.Consider whether employer will conduct temperature testing of contractor’s employees or will rely upon contractor to screen its employees as condition of employees coming into employer’s workplace
    c.Establish process for contractor to assess and recommend whether employees who have symptoms due to diagnosed medical condition unrelated to COVID-19 are able to come into workplace
    d.Consider glove and face-covering protocols and training for same

Certification for Employee Return to Work From Remote Work/Furlough/Layoff
 
1.Consistent with policy/protocol to report circumstances, implement a certification process in connection with employee’s re-entering in-person operations from remote work/furlough/layoff
2.Employer determines whether this is an initial certification or a periodic (maybe even daily) certification*
3.Certification categories track the categories of reportable circumstances:
[Within the last 14 days/since the last day the employee worked] the following has NOT occurred:
a.COVID-19 diagnosis
b.COVID-19 symptoms
c.Close contact with someone who has been diagnosed with COVID-19
d.Business/personal travel

e.Directed by public health or government authority or healthcare professional to isolate or quarantine
f.Failed to comply with any governmental or public health advisories or orders applicable to employee’s community including re: masks, face coverings, mass gatherings
4.Employer should review information provided on certification to make determination of employee’s ability to return to in person operations
 

*subject to legal and public health advisories and orders


Certification for Employee Return to Work From Quarantine
 

  1. Consistent with policy/protocol to report circumstances, implement a certification process in connection with employee’s re-entering in-person operations from quarantine or isolation after a diagnosis or exposure.
  2. Employee identifies basis for absence (including anything else that may have occurred during the absence)
  3. COVID-19 diagnosis
  4. COVID-19 symptoms 
  5. Close contact with someone who has been diagnosed with COVID-19 or has symptoms of COVID-19
  6. Business/personal travel
  7. Voluntary self quarantine or isolation
  8. Directed by public health or government authority to isolate or quarantine
  9. Additional circumstances as recommended by healthcare professional to isolate.
  10. Employer should review information provided on certification to make determination of employee’s ability to return to in person operations.
    *to be updated for CDC changes to strategies

Part 4
MANAGING DECISIONS ABOUT WHO TO RECALL, NOTIFICATIONS, AND EMPLOYEE REFUSAL TO RETURN


Planning for Bringing People Back to the Office
1. Potential goals of business may include:
a. Matching size and structure of workforce to business needs.
b. Cost reduction
c. Protecting employees from COVID-19 risks
d. Compliance with government reopening requirements
e. Maintaining flexibility to rapidly return workforce to needed level
f. Setting compensation and benefits at levels consistent with financial constraints.


Overview-Recall Process
What does a successful recall look like?
a.          Staffing level, structure and skill-set fit business needs
b.          Workplace health and safety is addressed
c.          Consideration of requests for accommodation
d.          Decisions about who returns, to what role, and when, are made in a principled and defensible manner
e.          Employees are aligned with business goals
f.           Those not recalled are treated with dignity

Key principles for the recall decision-making process
a.          Establish clear roles
b.          Develop approach prior to implementation
c.          Obtain management buy-in
d.          Implement consistent with EEO and HR principles
e.          Document legitimate business reasons for decisions
f.           Be prepared to modify approach and decisions in principled manner
g.          Any WARN obligations are met

Overview-Recall Selection Process
1.          Define New Organization
a.          Business values and vision
2.          Define Skills/Abilities Needed
a.          Business needs
3.          Set Rules of the Road
a.          Who is considered for what job and bumping
b.          Surplus employees
c.          Business needs
d.          People values

4.          Set Evaluation System and Criteria
a.          Review - Legal – Business
b.          Mid-level management buy-in
5.          Apply Criteria and System
a.          Review - Legal – Business
6.          Notification to those recalled and those not recalled
a.          Terms and conditions
b.          People values
7.          The Survivors
a.          Business values and vision
b.          People values

Selection Criteria

 
The ‘next door neighbor test’ for decision-making – is the termination based upon legitimate business reasons or some built in bias that will surely result in litigation? In order to avoid this, ensure that there are:
 
a.          Objective, business focused criteria
b.          Relationship between criteria and process
c.          Contemporaneous documentation supporting the selection
d.          Use of performance evaluations
e.          Organization values
f.           Teamwork
g.          Service
h           Demonstrated performance
i.           Use and weighing of skills page
j.           Thesis statement and examples
 
Evaluation Process
 
1.          Only Persons with Knowledge
2.          Performance Evaluations and Other Existing Documentation
3.          Continuity = Consistency
4.          Consensus
Recall
Key points for recall notice
a.          Timing and reporting----require response by stated date
b.          Position and scheduling
c.          Any changes in compensation/benefits
d.          Reiterate previous instruction not to report to work if COVID-19 symptomatic or exposure and employer     notification
e.          Health/safety approach in conformance with CDC guidance and applicable governmental orders
f.           Consider whether/when to invite requests for accommodation
 
Key points for non-recall notice (if still planned recall)
a.          Changes in anticipated recall date
b.          Changes in benefits coverage
c.          Any other changes in terms of furlough or temporary layoff

 
Voluntary Reductions
 

Employers may seek to achieve departures from the workplace on a voluntary  basis in exchange  for severance benefits. Three rea
sons in favor of voluntary workforce reductions are:
a.       Loyalty to dedicated employees who are often performing at a satisfactory level or better
b.          The negative impact involuntary terminations may have upon the morale of those employees who remain after the reduction in force, and
c.          Avoiding lawsuits challenging the lawfulness of involuntary terminations


Involuntary Reductions
 
Benefits of Funding Severance Payments through a Severance Plan Governed by ERISA
 
a.          Maximize potential for favorable standard of review in the event of claim for severance
b.          Eliminate potential for individual liability in claim for severance
c.          Requirement that administrative remedies be exhausted
d.          Federal jurisdiction
e.          No right to jury trial
f.           Preemption of state law claims
g.          No individual liability
 
Recall-Employees who do not wish to Return
 
1.          Determine availability of reasonable accommodation
2.          Engage in an interactive process with the employee
3.          Make an individualized determination rather than applying a pre-determined rule
4.          Accommodations may include
a.          Working remotely
b.          Change of schedule, environment or practices
5.          If not resolved by working with accommodation, determine if the employee is entitled to leave under federal, state or local law
a.          FFCRA emergency paid sick leave
b.          FMLA or state or local leave laws
c.          ADA or state disability law (beyond periods under leave laws)
6.          Even if not entitled to leave by law, consider providing an unpaid leave
a.          When willing to return, return the employee to their former position if available or other suitable vacancies
b.          If no suitable vacancies, terminate due to a lack of work
7.          COVID-19 related factors to consider in evaluating response include:
a.          Ability to work remotely in light of past-practice
b.          Membership in a CDC higher-risk group
c.          Acting in concert with other employees
d.          Working conditions that arguably present an imminent risk of death or serious illness physical harm
 WARN
 
Be Mindful of Notice obligations under WARN and/or state or local laws.
 
a.       Larger companies (100 or more employees under federal law) may have notice obligations under the federal WARN Act
b.       60 days advance notice of a “plant closing” or “mass layoff,” as those terms are defined in the statute
c.       Look at employment losses that occurred or are planned within 90 days forward and backward to see if they reach the 50-employee threshold within any one 90 day period
d.       Limited exceptions to the 60-day notice requirement, including for unforeseeable business circumstances
e.       Evaluate potential obligations under applicable state or local mini warn.
 
Other  considerations to think about.
 
1.       What is an “employment loss”?
a.       The term “employment loss” means
i.         an employment termination, other than a discharge for cause, voluntary departure, or retirement
•         (Note termination/constructive discharge)
ii.        a layoff exceeding 6 months, or
iii.       a reduction in hours of work of individual employees of more than 50% during each month of any 6-month period.
 
2.      What is a “plant closing”?
a.      Permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment
b.      Resulting in an employment loss at the single site of employment during any 30-day period for 50 or more employees
i.        §2101(a)(2)
ii.       Exclude part-time employees from the calculation
3.      What is a “mass layoff”?
a.      A RIF that is not a plant closing
b.      Results in an employment loss at a single site of employment for any 30-day period for either:
i.        At least 50 employees constituting at least 33% of the employees; or
ii.       At least 500 employees
•       
            §2101(a)(3)
            iii.      Exclude part-time employees from the calculation
 
4.      What is the 90 day look-back and look-forward period?
a.      If the aggregate employment losses in any 90-day period meet the threshold for a plant closing or mass layoff, than notice must be given—UNLESS
i.        The employer can prove that the employment losses that cause the threshold to be met are the result of separate and distinct actions and causes are not an attempt to evade the purposes of WARN.
§2102(d); 20 C.F.R. § 639.5(a)(1)(ii)
 
 
5. When must notice be given?
 
a. At least 60 days prior to any planned plant closing or mass layoff-- UNLESS an exception applies
b. A worker’s last day of employment is considered the date of that worker’s layoff
i.        So unless an exception applies, if notice is due, it is to be provided at least 60 days before the mass layoff begins

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