Employment Law Update – Fall 2021
VIRGINIA’S “VACCINATION CZAR” TO BE FEATURED SPEAKER AT K&C SEMINAR
Earlier this year, Gov. Ralph Northam appointed the Director of the Richmond City Health District, Dr. Danny Avula, as Virginia’s “Vaccination Czar” in charge of efforts to get all Virginians vaccinated. Now that the principal vaccines are gaining FDA approval and employees are returning to the workplace, more and more employees are getting vaccinated, leading to safer workplaces. However, now there are variant COVID-19 strains to deal with, vaccination mandates, and booster issues which may lead to new questions for many employers. Because of these evolving vaccination issues, Dr. Avula has been asked to participate in K&C’s virtual 37th Annual Employment Law Update to provide attendees the latest developments regarding vaccinations, variant strains, booster possibilities, and more. He will be one of a number of outside speakers who will help employers deal with the legal and practical changes they face with the changing pandemic workplace. In addition to the K&C Employment Team, seminar participants will include the new Charlotte District EEOC Director, Thomas Colclough, the Assistant Director of the Virginia Department of Labor Industry, Robert Armstrong, and Virginia Employment Commission Director, William Walton. In addition to these relevant government agency heads, dynamic diversity trainer Mauricio Velasquez and “Top Gun” plaintiff’s lawyer Josh Jewett will provide practical and legal insights to help reduce workplace risk.
As always, attendees will have choices to virtually attend timely workshops with an emphasis on answering any specific employment law questions they may have. In this regard, the popular K&C “Answer Booth” will be back in action. As a reminder, attendees can earn up to 6 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI) and 5 PPC’s toward SHRM-CP or SHRM-SCP. To learn more about the seminar or to register, visit www.kaufcan.com/events or call 757.624.3232.
FINAL COVID WORKPLACE STANDARD NOW IN EFFECT
Since July of last year, Virginia employers have been obligated to comply with COVID-19 mitigation rules referred to first as the Emergency Temporary Standard and then, in January of this year, as the Final Permanent Standard (FPS). The FPS has been supported by organized labor but questioned in part by business interests.
The extensive requirements of the FPS, which is enforced by Virginia Occupational Safety and Health (VOSH), were debated and revised over this summer in response to strong business opposition. On August 25th, a revised FPS was sent to the governor for final approval. Now fully approved, the revised FPS became effective September 8th as it appeared over five full-length pages in the Richmond Times-Dispatch. See full text here.
This newest version includes a business-requested safe harbor provision protecting employers from VOSH citations when acting in good faith reliance on CDC recommendations. This and other important requirements of the FPS will be discussed in a workshop during the K&C virtual Employment Law Update on October 27.
UNEMPLOYMENT COMPENSATION ENHANCEMENTS ENDED SEPTEMBER 4, 2021
Beginning in April 2020, the CARES Act brought Virginia employees pandemic-related enhancements to their unemployment claims. Most notable was the $600 federal “bump” added to the weekly benefit of any Virginia claimant who qualified for even the normal minimum of $54. The result was that qualified claimants received from $654 to $927 per week through July 2020. Work search requirements were suspended, and many employees preferred to just stay at home and collect unemployment, sometimes in an amount that exceeded their regular weekly pay.
As the pandemic continued, other federal unemployment programs began under the American Rescue Plan Act which paid less per week but extended the duration of a claim from the normal 26 weeks to as long as 79 weeks. Notably, all the pandemic-related federal additions to normal Virginia unemployment ended effective September 4, 2021. The job search requirement has been restored, and qualified Virginia claimants will again be eligible for between $54 and $327 for up to 26 weeks.
As employees return to work, employers continue to deal with unemployment compensation questions related to the pandemic. For example, as more employers consider implementing mandatory vaccination, testing, and mask policies, the question arises whether employees who are discharged for refusal to comply will qualify for unemployment comp benefits. A similar question is whether claimants who voluntarily quit because they are unwilling to be vaccinated, submit to testing in lieu of vaccination, and/or comply with mask requirements will be disqualified.
Although neither the VEC nor Virginia courts have yet issued binding decisions, existing unemployment comp principles provide practical pointers for employers. Formal creation and distribution of vaccination, testing, and mask rules will establish employer expectations which its employees must meet and the VEC will likely recognize. Willful failure to comply will likely result in a misconduct disqualification. Unless an employee establishes a medical or religious basis for failure to comply with a company rule, that employee’s voluntary quit will likely be without good cause and also result in a disqualification. To improve the chances of defeating an unemployment comp claim, an employer should allow sufficient time for employee compliance and require written acknowledgment of receipt of its rules.
DOL ISSUES FIRST ERISA CYBERSECURITY GUIDANCE
In the first release of its kind, the Department of Labor (DOL) has issued cybersecurity guidance directed at employers, participants, and service providers who sponsor, participate in, or provide services to, ERISA-governed retirement and welfare plans. Interestingly, the recent guidance comes in the form of “tips” and “best practices,” not legally binding regulations. This is probably due in part to dynamic and evolving cybersecurity standards that may not be well-suited for permanent rules. In any event, employers should not let the informal nature of the guidance cause them to ignore its principles though, as the DOL also made it clear that employers who sponsor plans subject to ERISA have a fiduciary duty to take appropriate precautions to minimize cybersecurity risks. The DOL has also begun audits seeking specific information on cybersecurity practices based on the recent guidance.
Helpfully, the DOL has broken down the guidance into three separate pieces, one directed at employers, one at plan participants, and another at plan service providers (for example, 401(k) plan online recordkeepers). All three may be found on the DOL website. The participant-focused guidance provides basic information about online account and password security. Although not explicitly directed at employers, they may be well-served by reminding employees and plan participants of the basic online security recommendations the DOL describes. The employer-focused guidance, in contrast, lays out what employers should do when hiring and interacting with its online service providers, including questions to ask potential vendors and service contract terms that should be used (or avoided) to ensure the employer is adequately addressing potential cybersecurity issues. Finally, if they have not done so already, employers should coordinate with their online service providers to ensure the service providers are meeting the best practices described by the DOL.
Of course, cybersecurity is a complex topic not easily reduced to a one-time list of best practices, so ongoing monitoring and oversight by employers will remain important as circumstances evolve.
NEW STATE OVERTIME LAW CREATES HEADACHES FOR VIRGINIA EMPLOYERS
Effective July 1, 2021, the Virginia Overtime Wage Act (VOWA) gave employees another avenue to sue Virginia employers for failure to pay overtime. Like the federal Fair Labor Standards Act (FLSA), the VOWA requires that a non-exempt employee receive overtime at the rate of 1.5 times the employee’s regular rate for each hour he or she works over 40 in a workweek. Before the VOWA was enacted, overtime claims were litigated primarily in federal court, but now employees will have an incentive to sue in state courts where a summary judgment before trial is much more difficult to obtain. This new law also provides additional remedies for employees who are not paid correctly. So employers are well-advised to pay close attention to key distinctions between the VOWA and the FLSA, which include the following:
- An employee may bring a lawsuit against an employer, individually, jointly with other employees, or on behalf of similarly situated employees as a collective action in line with the collective action procedures in the FLSA, for unpaid wages and be awarded the wages owed, an equal amount in liquidated damages, prejudgment interest, and reasonable attorney’s fees and costs. An employee may also be awarded treble damages should the court find a knowing violation.
- Calculating the regular rate for an employee paid on an hourly rate is the same as the FLSA; however, under the VOWA, the regular rate for a non-exempt employee receiving a set salary per week or by some other basis will be 1/40th of all wages paid that week. Thus, employers might have to pay more to salaried non-exempt employees under the VOWA than under the FLSA.
Certain exemptions and exceptions available to employers under the FLSA are not available under the VOWA.
- Employers failing to pay wages properly under the VOWA can be guilty of a Class 1 misdemeanor if the wages earned and unpaid are less than $10,000. On a second offense or if the amount of unpaid wages is $10,000 or more, the court can find the employer guilty of a Class 6 felony. Employers violating VOWA may also be subject to a civil penalty of $1,000 per violation.
- The statute of limitations under the VOWA is three years in contrast to the normal two-year statute of limitation under the FLSA (a three-year limitation exists for willful violations).
Following its initial enactment, employers had numerous questions regarding how the VOWA changed some of the long-standing FLSA federal requirements. Effective August 9, 2021, the VOWA was amended to clarify that compensatory time is still available for local government and public agencies and certain exemptions like the “computer” exemption will be recognized under this state law, in addition to the well-known “white collar” exemptions recognized under the FLSA. However, some questions remain and employers need to understand how the VOWA has changed risks faced by Virginia employers. Accordingly, the Assistant Director of the Virginia Department of Labor and Industry, Robert Armstrong, will join K&C Employment Team member Neil Talegaonkar on October 27th to present a workshop on new wage-payment/overtime rules at the 37th Annual Employment Law Update to be presented virtually on October 27, 2021.
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2022.