Jan 2022 – RISK REPORT – Stay on Top of New Laws, Rules in New Year


EVERY YEAR starts with a flurry of new laws and regulations that California employers have to contend with.
And 2022 is no different as the California legislature had a busy year and the stresses of the COVID-19 pandemic resulted in more activity. The end result is another round of new laws that employers need to stay on top of so they don’t run afoul of them.
With no further ado, here are the top regulations and laws affecting California businesses.

 

1. Big change to Cal/OSHA citations

SB 606 adds two new Cal/OSHA violation categories for purposes of citations and abatement orders: “enterprisewide” and “egregious” violations. Cal/OSHA can issue an enterprise-wide citation that would require abating the violation at all locations. And the employer can face a maximum penalty of $124,709 per violation.
The law also authorizes the agency to issue a citation for an egregious violation if it believes that an employer has “willfully and egregiously” violated a standard or order. Each instance of employee exposure to that violation will be considered a separate violation and fined accordingly.

 

2. Permanent COVID standard

On Sept. 17, 2021, Cal/OSHA released a draft text for proposed permanent COVID-19 regulations, which if adopted would be subject to renewal or expiration after two years and would replace the current emergency temporary standard, which is set to expire Jan. 14, 2022.
Adoption is expected in the spring of 2022. Here’s some of what the draft standard would do:

CDPH rules – It would require that employers follow California Department of Public Health COVID-19 prevention orders.
Masks for unvaxxed staff – Unvaccinated staff must wear masks. Employers must provide masks when the CDPH requires them.
Outbreak rules – During an outbreak in the workplace, all staff would be required to wear face coverings regardless of vaccination status. Employers would need to provide respirators during major outbreaks to all employees.

 

3. COVID exposure notification

On Oct. 5, 2021, AB 654 took effect, updating requirements for what an employer must do if there is an outbreak of COVID-19 cases at its worksites.
This law somewhat curtailed earlier outbreak-reporting requirements as well as other required notifications for certain employers, and updated several provisions of the 2020 outbreak notification law, AB 685.
Here are some highlights:

Employers have one business day or 48 hours, whichever is later, to report a workplace COVID-19 outbreak to Cal/OSHA and local health authorities.
• Employers do not need to issue these notices on weekends and holidays.
• When an employer has multiple worksites, it only needs to notify employees who work at the same worksite as an employee who tests positive for  coronavirus.
• The new definition of “worksites” for the purposes of the law has been changed to exclude telework.

 

4. Expansion of the California Family Rights Act

AB 1033 expands the CFRA to allow employees to take family and medical leave to care for a parent-in-law with a serious health condition.
More importantly, it adds a requirement that mediation is a prerequisite if a small employer (one with between five and 19 workers) is the subject of a civil complaint filed by one of its employees.

 

5. Workplace settlement agreements and NDCs

A new law took effect Jan. 1 that bars employers from requiring non-disclosure clauses in settlement agreements involving workplace harassment or discrimination claims of all types. This builds on prior law that barred NDCs only in cases of sex discrimination or sexual harassment.
The new law expands that prohibition to all protected classes, such as: race, religion, disability, gender, age, and more.
One important note: While employees can’t be prohibited from discussing the facts of the case, employers can still use clauses that prohibit the disclosure of the amount paid to settle a claim.

 

6. OSHA vaccine mandate

As of this writing, Fed-OSHA’s new emergency COVID-19 standard was set to take effect on Jan. 1, with the most contentious part of the rule mandating that employees who work for employers with 100 or more staff be vaccinated or submit to weekly testing.
Unvaccinated workers would also be required to wear masks while on the job under the new rules, which have faced fierce challenges in courts.
The U.S. Court of Appeals for the Sixth District recently reversed a stay of the order as challenges to it are litigated, meaning the order can take effect as scheduled as the legal process challenging the rule proceeds.
The U.S. Supreme Court will hear expedited arguments Jan. 8 on the U.S. Court of Appeals for the Sixth Circuit’s decision to lift the Fifth Circuit’s stay.

 

7. Wage theft penalties

AB 1003, which took effect Jan. 1, added a new penalty to the California Penal Code: Grand Theft of Wages. The new law makes an employer’s intentional theft of wages (including tips) of more than $950 from one employee, or $2,350 for two or more workers, punishable as grand theft.
The law, which also applies to wage theft from independent contractors, allows for recovery of wages through a civil action.
As a result, employers (and potentially managers and business owners) would be exposed to both criminal and civil liability for wage and hour violations like failing to pay staff accurately and in a timely manner.
Review your compensation policies and practices to make sure you are in compliance with current wage and hour laws.

 

8. COVID cases may be included in X-Mods

The Workers’ Compensation Insurance Rating Bureau of California has proposed plans to start requiring COVID-19 claims to be included when calculating employers’ X-Mods.
The proposal, which would have to be approved by the state insurance commissioner, would bring to an end current rules that exclude the impact of COVID-19 workers’ compensation claims on X-Mods.
If approved, the new rule would take effect on Sept. 1, 2022. That means that employers will be held accountable for COVID19-related workers’ compensation claims and, if any employee needs treatment or dies from the coronavirus, it could result in higher premiums in the future.

 

9. Notices can be e-mailed

A new state law authorizes employers to distribute required posters and notices to employees via e-mail. SB 657 adds e-mail as a delivery option to the list of acceptable notification methods, which also includes mail.
Required posters and notices will still need to be physically posted in the workplace.

 

10. Warehouse quota rules

A new law that took effect Jan. 1 makes California the first (and only) state to regulate quotas used by warehouse employers.
While the bill was written with Amazon Inc. in mind, it affects all warehouses with 100 or more workers, and violations of the new law can be costly for an employer.
Under AB 701, warehouse employees must be provided with a written description of the quotas to which they are subject within 30 days of hire. Common quotas include the number of tasks the employee is required to perform, the materials to be produced or handled, and any adverse employment action that may result from a failure to meet the quota.

 

While employers may still implement quotas, employees are not required to meet a quota if it:

• Prevents them from taking required meal or rest periods,
• Prevents them from using the bathroom (including the time it takes to walk to and from the toilet), or
• Contravenes occupational health and safety laws. The law also bars employers from discriminating, retaliating or taking other adverse action against an employee who:
• Initiates a request for information about a quota or personal work-speed data, or
• Files a complaint alleging a quota violated the Labor Code.

 


October 2021 – WORKPLACE SAFETY- Permanent COVID-19 Standard Coming Soon


CAL/OSHA has taken the first step towards creating a semi-permanent COVID-19 standard to replace the emergency temporary standard that currently governs workplace coronavirus prevention measures in the state.

 

On Sept. 17, Cal/OSHA released a discussion draft for permanent COVID-19 regulations to give stakeholders the chance to comment on it before it starts work on writing the regs.  Even though they are “permanent,” the rules would be subject to renewal after two years from the effective date or they would expire if the threat has receded by that time.

Elements of the draft standard

Here’s what the draft standard would do:
Follow CDPH rules – Required that employers follow California Department of Public Health COVID-19 prevention orders.
Masks for unvaxxed staff – Unvaccinated staff must wear masks. Employers must provide masks when the CDPH requires them.
Outbreak rules – During an outbreak in the workplace, all staff would be required to wear face coverings regardless of vaccination status. Employers would need to provide respirators during major outbreaks to all employees.
No COVID-19 Prevention Plan – Employers would not need to have a COVID-19 Prevention Plan, as required in the temporary emergency standard. Instead, they would be required to address COVID-19 prevention strategies in their Injury and Illness Prevention Plan.
Masks for at-risk staff – Require employers to provide N95 respirators to employees who have been identified by a doctor as being at increased risk of severe illness from COVID-19, regardless of their vaccination status.
‘Fully vaccinated’ defined – Define a “fully vaccinated employee” to mean that the employer has a copy of their vaccination record that includes the vaccine maker and date of the last dose.
Retaining records – Require employers to keep COVID-19 vaccination records for two years after the period requiring them to keep the records ends. That means if the rule sunsets in a few years, employers would be required to keep those records for another two years.
Testing rules – Require that employers provide COVID-19 testing to all employees who have come into close contact with another team member who has tested positive for the virus. Testing must be provided at no cost to the employee.
No paid leave for infected staff – Eliminate the provision for paid leave for workers who contract the coronavirus.
Handwashing and cleaning – Eliminate rules regarding handwashing and cleaning and disinfecting procedures in the workplace.

The takeaway

If you have been following Cal/OSHA’s emergency temporary standard, you should continue to follow the current requirements. The new rules simplify the emergency standard, particularly concerning the requirement that COVID-19 prevention plans can be included in your IIPP rather than in a separate document.


October 2021 – Worker’s Compensation – COVID-19 Payroll Reporting Rules Have Ended


THE WORKERS’ Compensation Insurance Rating Bureau’s two temporary payroll reporting rules to reflect changes brought on by the COVID-19 pandemic stay-at-home orders have sunsetted.

The move came after Gov. Gavin Newsom’s June 9 executive order which revoked the statewide stay-at-home order that had been in place since March 19, 2020.

You may recall that after the stay-at-home order took effect, the Rating Bureau issued new rules for classifying staff who were suddenly working remotely, as well as payroll reporting for staff who were at home but not working.

The Coronavirus Disease 2019 (COVID-19) rules that expired are:

A. Classifying remote workers in the Classification 8810 – Clerical Office Employees – As a result of the California stay-at-home order, many employers altered employees’ duties so they could be accomplished from home, and often those duties were clerical-like in nature.

Under the rule, an employee could be assigned payroll Classification 8810 if:
• Their duties met the definition of a “clerical office employee” while working from home,
• Their payroll for the balance of the policy period was not assignable to a standard classification that specifically excludes clerical office employees.

B. Salaries of non-working staff – Salaries paid to workers who were at home not working, yet still collecting a paycheck, would be excluded from payroll for workers’ comp premium calculation purposes when the payments were less than or equal to the employee’s regular rate of pay

Expiration: This rule expired 60 days after the end of the stay-at-home order, or Aug. 10. 

The takeaway

What this means is that if you have been classifying remote workers under Classification 8810, they will need to be returned to their original classification. Also, the rules still require that you maintain records that document any changes in duties for your staff during the period these rules were in effect and they were working from home.
The rules also require you to maintain records of their payroll during that period.


July 2021 – Masks for Vaccinated Staff No Longer Required


THE CAL/OSHA Standards Board has approved changes to the COVID-19 Emergency Temporary Standard that greatly loosen workplace restrictions that were implemented last year to protect California workers.

The biggest news in the changes is that workers who have been fully vaccinated are no longer required to wear face masks as protection or physically distance, regardless of the vaccination status of co-workers.

After the decision, Gov. Gavin Newsom issued an executive order enabling the revisions to take effect without the normal 10-day approval period by the state Office of Administrative Law. They came into effect when the office received the changes.

The main changes Here are the main changes affecting employers in California:

Physical distancing and barrier requirements – These are eliminated regardless of an employee’s vaccination status, except where an employer determines there is a hazard and for certain employees during major outbreaks.
Testing – Fully vaccinated employees do not need to be offered testing or be excluded from work after close contact with someone who has COVID-19, unless they have symptoms. Employees who are not fully vaccinated and exhibit COVID-19 symptoms must be offered testing by their employer.
Masks – Vaccinated workers are not required to wear face masks generally. For unvaccinated workers, masks will be required indoors or when in vehicles, with limited exceptions.

Employees are not required to wear face coverings when outdoors regardless of vaccination status, except for certain employees during outbreaks.

Document vaccination status
– Employers must document the vaccination status of fully vaccinated employees if they do not wear face coverings indoors.
No mask retaliation – Employees that choose to, are explicitly allowed to wear a face-covering without fear of retaliation from employers.
Respirator availability – Employees who are not fully vaccinated may request respirators for voluntary use from their employers at no cost and without fear of retaliation from their employers.
Businesses that need help in securing N95 respirators for unvaccinated employees can find distribution locations for state-provided N95 respirators here.
Review rules – Review the Interim Guidance for Ventilation, Filtration, and Air Quality in Indoor Environments.
Ventilation – Employers must evaluate ventilation systems to maximize outdoor air and increase filtration efficiency, and must evaluate the use of additional air cleaning systems.

What remains

Parts of the Emergency Standard still in effect include:
• Employers must maintain an effective written COVID-19 Prevention Program that includes:
» Identifying and evaluating your employees’ exposures to COVID-19 health hazards.
» Implementing effective policies and procedures to correct unsafe and unhealthy conditions.
» Allowing adequate time for handwashing and cleaning frequently touched surfaces and objects.
• Employers must provide training to employees on how COVID-19 is spread, infection-prevention techniques, and information regarding COVID-19-related benefits that affected employees may be entitled to under state or federal laws.
• Employers must bar from coming to work employees who have COVID-19 symptoms and/or are not fully vaccinated and have had close contact from the workplace if that close contact is work-related.


April 2021 – Risk Management – Supply Chain Disruption Lessons from Pandemic


BESIDES THE health and economic devastation that the COVID-19 pandemic has left in its wake, it has also caused supply chain disruptions that have affected a number of industries.

The fallout for companies of all types illustrates the fragility of most businesses’ supply chains. The pandemic has left retailers with half-empty shelf space because product manufacturers couldn’t keep operations going due to raw material or personnel shortages, while a number of carmakers and other manufacturers have had to suspend operations because of a global semiconductor shortage.

But it’s not only large companies that suffer, and small businesses are especially vulnerable. That’s why it’s important that you have in place a solid plan for averting and dealing with disruptions to your supply chain if you rely on materials and inputs from outside vendors.

Here’s what you can do to manage this growing risk.

Understand your supply chain

Start by identifying risks in your supply chain and develop ways to mitigate them.

FOUR MAIN EXTERNAL SUPPLY CHAIN RISKS

  • Flow interruptions – Problems with the movement of goods and materials.
  • Environmental risks – Economic, social, political, terrorism threat and weather-related factors that affect facilities and infrastructure. The pandemic falls into this category.
  • Business risks – Problems caused by factors like a supplier’s poor financial or general stability, or the purchase or sale of supplier companies by other entities.
  • Physical plant risks – Problems at a supplier’s facility. For example, a key supplier could have a machinery breakdown and/or regulators may shut the facility down.

 

Develop a plan

The best way to manage a supply chain disruption is to prepare for it. Start by undertaking a business impact analysis to prepare your company.

Form a team of key personnel to:

  • Identify alternatives to key suppliers. One option is to contract with an alternative vendor in advance, so you can certify them and ensure they can ramp up if you lose a critical supplier.
  • Model the impact of disruptions on your production and inventory for the four supply chain risks listed to the left. Think about how non-delivery of a key item
    would affect your operations.

Using that information, you can build contingencies for supply chain failures:

  • Plan for how you would respond to all “what if” scenarios that could affect your operations. Be realistic about assessing your capacity to respond to these scenarios.
  • Create a contingency plan for failure of any supply chain pillars. Identify the points at which you would need to execute risk-mitigating measures, like sourcing from other vendors or using new distribution channels.
  • In advance, amass a contingency management team that will bridge the divide between your departments during disruptions. This team must include senior
    staff who are influential with top company decision-makers.
  • Make sure your supply chain is flexible enough to deal with risks. Look at opportunities to address current supply chain bottlenecks; investigate alternative transportation network configurations or production systems.

 

The final backstop: insurance

You can address supply chain risks with business interruption insurance or contingent business interruption insurance.

Business interruption insurance.
This coverage, which is often included in a commercial property policy, covers lost profits after a company’s own facility is damaged by an insured peril.

Contingent business interruption insurance. This is often a policy rider that you can purchase. It covers lost profits if an insured peril shuts down a critical supplier, part of the transportation or distribution chain, or a major customer.

This coverage is triggered if there is:
1. Damage to property that prevents one of your suppliers from making products or delivering them.
2. Damage to property that prevents your customers from receiving your products.


April 2021 – Stimulus Plan Expands Business Assistance


THE $1.9 TRILLION American Rescue Plan Act (ARPA) that President Biden signed into law on March 11 contains a number of provisions intended to help small businesses and other organizations hurt by the pandemic.

Foremost, it includes additional Paycheck Protection Program (PPP) loans to struggling businesses, and a number of special grants to companies in industries that have been especially hard hit, including restaurants, movie theaters, concert spaces, and museums.

The measure also includes provisions extending a number of tax credits to employers affected by the pandemic, in order to make it easier for people laid off during the health emergency to access COBRA coverage after they lose their jobs and their health coverage.

ARPA opens up a new opportunity for businesses that have been hurt by the pandemic to access financial aid to keep their doors open and stay viable. Many of the programs build on ones introduced earlier in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and extended by the Consolidated Appropriations Act of 2021 (CAA).

PPP extended

The law authorizes another $7.25 billion for the Paycheck Protection Program, which offers forgivable loans to small firms and other organizations that have been hit by the pandemic.

These loans are forgivable if 60% of the funds are used on payroll and the rest pays for mortgage interest, rent, utilities, personal protective equipment or certain other business expenses.

While the legislation set the deadline to apply for March 31, the deadline was extended until June 30 after Congress passed supplemental legislation.

Other assistance

There are a number of other provisions of the new law aimed at providing financial aid:

  • $10 billion for state governments to help leverage private capital and make low-interest loans and other investments to help their small businesses recover.
  • $15 billion to the Economic Injury Disaster Loan grants program to be given to small businesses in underserved areas, especially minority-owned enterprises.
  •  $29 billion for financial relief grants to restaurants. The maximum grant size will be $5 million for restaurants and $10 million for restaurant groups. The Small Business Administration will administer these grants.
  •  $15 billion will be added to the Shuttered Venue Operators Grants program, which was launched by the CARES Act. More funds will be made available to
    museums, theaters, concerts, and other venues that had to shut down due to COVID-19-induced restrictions. This program has not yet launched.

Tax credits

Originally enacted under the CARES Act and CAA, the Employee Retention Credit (ERC) lets certain employers take advantage of a tax credit for qualified wages paid to employees.

The CARES Act capped the ERC at $5,000 per employee for 2020. The CAA, passed in late 2020, expanded the ERC to apply to qualified wages made between Jan. 1 and June 30 this year. It also increased the maximum amount of the credit to $7,000 per employee per quarter.

The new stimulus law extends the ERC through the end of this year. That means that eligible small firms can take a tax credit of up to $28,000 per employee for 2021.

Who is eligible: Businesses that were either fully or partially suspended as a result of COVID-19-related government orders that restricted their ability to operate and generate sales. Also, any business that has gross receipts that are less than 80% of gross receipts for the same calendar quarter in 2019.

ARPA also makes eligible for the tax credit for any start-up businesses that also suffered revenue losses as a result of the pandemic. In addition, ARPA extends through September the availability of paid leave credits to small and midsize businesses that offer paid leave to employees who may take leave due to illness, quarantine, or caregiving due to the pandemic and any closure orders.

Employers that offer paid leave to workers who are sick or in quarantine can take dollar-for-dollar tax credits equal to wages of up to $5,000.


December 2020- EMERGENCY REGULATIONS – COVID-19 Workplace Safety Rules Take Effect


THE CAL/OSHA Standards Board has approved new emergency regulations that will impose strict rules on employers to implement safeguards in order to reduce the risk of COVID-19 spreading in the workplace.

The sweeping rules extend the reach of protections to employer-provided housing and transportation, as well as THE CAL/OSHA Standards Board has approved new emergency regulations that will impose strict rules on employers to implement safeguards in order to reduce the risk of COVID-19 spreading in the workplace.

The sweeping rules extend the reach of protections to employer-provided housing and transportation, as well as imposing new reporting requirements on employers who have workers that contract the coronavirus. The new rules took effect Nov. 30, so employers need to ramp up immediately to comply with them.

HIGHLIGHTS OF THE NEW REGULATIONS

  • Physical distancing and mask-wearing are required unless it is not possible to Wear masks on the job. If physical distancing is not possible, the employer would have to explain why.
  • Employers must provide face coverings and ensure they are worn by employees over the nose and mouth.
  • At fixed work locations where it is not possible to maintain physical distancing, the employer shall install cleanable partitions that effectively reduce aerosol transmission between employees.
  • Employers must implement cleaning and disinfecting procedures for frequently touched surfaces and objects, such as doorknobs, elevator buttons, equipment, tools, handrails, handles, controls, bathroom surfaces and steering wheels.
  • Employers will be required to have a written COVID-19 prevention program. Cal/OSHA will allow the program to be incorporated into an existing injury and illness prevention plan or be stand-alone.
  • Employers must identify and evaluate COVID-19 hazards with participation from employees, and then correct those hazards.
  • Employers must investigate cases among their employees. If they discover one of their staff has contracted COVID-19, they must notify all employees at a worksite who might have been exposed, within one day. Workers who may have been exposed must be offered COVID-19 testing at no cost.
  • Employers must report coronavirus cases in their workplaces to local health authorities.
  • Employers must maintain medical records related to COVID-19 and provide those records to the local health department, the California Department of Public Health, Cal/OSHA, and the National Institute for Occupational Safety and Health (upon request).
  • Employers must implement a system of record-keeping to track all COVID- 19 cases in the workplace.
  • Employees with COVID-19 symptoms may not return to work until at least 10 days since symptoms first appeared, and not until after 24 hours have passed since the employee had a fever of 100.4 or higher and after all symptoms have passed.

There are even rules for disinfecting and cleaning employee housing and  transportation if the company provides them. The regs also include provisions that are beyond the scope of workplace safety regulations, such as requiring employers to maintain employees’ earnings, seniority and benefits when they are off work because of COVID-19.

Key takeaways

The new rules took effect Nov. 30, so you will need to immediately prepare.  You should:

  • Prepare for new record-keeping requirements,
  • Write COVID-19 prevention program guidelines,
  • Implement testing protocols according to the
    regulations, and
  • Prepare policies and procedures for notifying affected staff and others of possible COVID-19 exposure.

New Law Creates COVID-19 Claim Framework – OCTOBER 2020


GOVERNOR GAVIN Newsom has signed legislation that creates a new framework for COVID-19- related workers’ compensation claims. SB 1159 replaces an executive order that Newsom made on March 18 that required all employees working outside the home who contracted COVID-19 be eligible for workers’ compensation benefits if they file a claim. The new law expands that rebuttable presumption” that a coronavirus case is work-related to front-line workers, as well as employees in workplaces that have had an outbreak of cases. The new law is retroactive to July 6, the day after Newsom’s executive order expired, and is set to expire Jan. 1, 2023.  Employers with fewer than five employees are exempt under the statute.

SB 1159’s three parts

Part 1. The law codifies Newsom’s prior executive order that provided a “rebuttable presumption” that COVID-19 was contracted in the scope and course of work by employees working outside of the home who get infected.

Part 2. The law provides a rebuttable presumption that firefighters, law enforcement officers, health care workers and home care workers who contract COVID-19, contracted it in the workplace.

Part 3. The law creates a rebuttable presumption that a worker’s COVID-19 diagnosis is work-related within 14 days of a company outbreak. Under SB 1159, an outbreak is defined as when four employees test positive at a specific place of employment with 100 or fewer employees and, for larger places of employment, when 4% of the employees test positive. It’s also deemed a workplace outbreak if the employer had to shut down due to the coronavirus.

Rebutting a claim

Employers can rebut the presumption that COVID-19 was contracted at work if they have:
• Proof of measures they put in place to reduce potential transmission of COVID-19,
• Evidence of the employee’s nonoccupational risks of contracting COVID-19,
• Statements made by the employee, or
• Any other evidence normally used to dispute a work-related injury.

REPORTING REQUIREMENTS

When an employer learns of an employee testing positive, they must report to the insurer the following information within three business days:
• The date the employee tested positive.
• The address or addresses of the employee’s specific place(s) of employment during the 14-day period preceding the date of their positive test.
• The highest number of workers who reported to work in the 45-day period preceding the last day the employee worked at each specific site.

Filing False Information Can Result in a $10,000 Fine

The Rossi Law Group has the following recommendations for employers in California:
• Keep track of all locations each employee works at, the number of employees on each day at each location, as well as a log of those that test positive (including the date the specimen was collected).
• If you are aware of any staff who have tested positive between July 6 and Sept. 17, you have 30 days after Sept. 17 to report the positive test to the claims administrator.
• You must also report to the insurer positive COVID-19 results for employees that are not filing claims. In that case, you must omit personal identifying information of the employee.
• Provide any factual information to the claims administrator that could help rebut any claim of work-relatedness.

The law also has some teeth: Anyone who submits false or misleading information shall be subjected to a civil fine up to $10,000.

One last thing…

The governor also signed into law AB 685, which requires employers to report an outbreak to local public health officials. Employers must also report known cases to employees who may have been exposed to COVID-19 within one business day.


Ten Employee Lawsuit Risks During Covid-19 – July 2020


THE NOVEL coronavirus that broke out in the winter has caused immeasurable suffering, both physical and economic. For employers struggling to stay in business, this is a fraught time where mistakes in managing their workforces could lead to employee lawsuits. Here are 10 potential trouble spots to watch for.

1. Workplace safety – Businesses that still have employees working on-site run the risk that a single infected worker may send the virus ripping through the entire workforce. While workers’ compensation laws may prevent employees from suing, their family members who become ill or suffer through a worker’s illness face no such constraints.

2. Sick time and paid leave – Congress enacted the Families First Coronavirus Response Act in March, guaranteeing full-time employees of small businesses 80 hours of sick leave (part-timers get a prorated amount.) Mistakes in administering these benefits could prompt lawsuits.

3. Workplace discrimination – Because the coronavirus originated in China, there have been reports of Asian-Americans being targets of racist actions. Employers must take care to avoid the appearance of making workplace decisions based even partly on employees’ race.

4. Americans with Disabilities Act – The ADA prohibits discrimination against disabled individuals and requires employers to make reasonable accommodations for these workers. Employees who become ill from COVID-19 (the illness caused by the virus) may suffer after-effects that include trouble breathing, speaking, and working at their former pace. Employers must accommodate these workers to the extent that is practical.

5. Wage and hour violations – Non-exempt employees working remotely may be working more than their regular hours, missing rest and meal breaks, and using their own equipment. Employers must keep careful records, reimburse employees for their use of personal equipment where warranted and remind employees to take mandatory breaks.

6. Battered retirement plans – Stock markets have cratered since the beginning of the year, taking retirement account balances down with them. Questions may be asked about whether fund managers did enough to limit the damage. Employees who are not satisfied with the answers may go to court.

7. Health information privacy – Employee health information privacy is protected by law. Employers must secure the records of infected employees from unauthorized access by individuals within and outside the company.

8. Union contracts – Collective bargaining agreements may contain provisions that go beyond federal requirements for breaks, paid leave, layoff notices, and workplace safety. Employers must keep their CBAs in mind and work with their unions to avoid contract violations.

9. Disparate impact from layoffs – If layoffs are necessary, employers must take a thoughtful approach when deciding which employees to part company with. An appearance of singling out older workers or other protected classes under discrimination laws could invite lawsuits.

10. WARN Act – The Workers Adjustment and Retraining Notification Act requires some employers to provide at least 60 days’ notice before layoffs. Many businesses’ revenues fell off the cliff so quickly that they were unable to provide that much notice.

A final thought
The pandemic is a crisis that few businesses foresaw. The effects, including the litigation, may haunt them for a long time to come.


Workers’ Compensation – New Telecommuter Class Code in the Works – July 2020


DUE TO the COVID-19 pandemic, California’s workers’ compensation rating agency plans to implement a new class code for telecommuting employees on Jan 1, 2021. The Workers’ Compensation Insurance Rating Bureau of California started work on the new classification as companies ordered employees to start working at home after stay-at-home orders were issued to contain the spread of the coronavirus.
The new code for telecommuting workers will be 8871. Under a prior emergency rule, the Rating Bureau had recommended that employees who were thrust into telecommuting because of the COVID-19 outbreak be assigned the 8810 “Clerical Office Employee” code.
This is a major change in the class code structure and will affect employers throughout the state. If you have telecommuting staff, you should prepare for this change now.

The specifics
Until now, telecommuting employees whose duties meet the definition of clerical employees in the California Workers’ Compensation Uniform Statistical Reporting Plan have been assigned class code 8810 “Clerical Office Employees,” or their employers’ standard classification if that classification specifically includes clerical office staff.
Rating Bureau staff has proposed that class code 8871 be the code for clerical employees who work more than 50% of their time at their home or other office space that is not on the employer’s premises.
As mentioned, the class code will be used only if the class code for the employer does not include clerical employees. Currently, there are 41 class codes that include clerical staff. There are also two codes that specifically exclude them. If a company includes all of its staff in the same code, any clerical staff on its payroll are not assigned the 8810 “Clerical Employee” class code and instead assigned the code for the company as a whole.
For the sake of continuity, the Rating Bureau staff has recommended that those 43 class codes be amended to specifically include or exclude clerical telecommuting staff.

What you should do
If you have staff on your payroll who are telecommuting, you should start preparing your accounting or bookkeeping software to add in this code for when your policy comes due in 2021.
Starting work on this now can help your insurer more accurately price your future policies, or when they decide to audit your payroll.
Conversely, you should not attempt to change the class code for your currently telecommuting employees now or at any time before Jan. 1, 2021, as the final rules have not yet been written, approved or promulgated. They also need to be approved by the state insurance commissioner.
The Rating Bureau plans to apply the rate for the class code for clerical employees to the new class code for the first few years, and until it can gather enough data to set a unique rate for the code. That could take a few years as the Rating Bureau typically uses a window of the past three years of claims experience and costs when setting class code rates.


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