The Occupational Safety and Health Administration (OSHA) has issued a final rule revising its procedures for accessing employee medical records, with specific requirements for safeguarding electronic medical records that are more consistent with current medical recordkeeping practices. The revisions also shift authority to manage the procedures from the OSHA Assistant Secretary to an OSHA Medical Records Officer (MRO), which OSHA views as a more “efficient” process. As a result of these revisions, employers may learn at an earlier point in the inspection process whether OSHA personnel will be authorized to review medical records and should have greater clarity about the protocols OSHA will follow when reviewing the information. The final rule was issued on July 30, it modifies 29 CFR § 1913 and is available here.

Background on OSHA’s Procedure for Medical Records Access

To carry out its statutory obligations, OSHA needs to review employee medical records from time to time. For instance, OSHA may review medical records to determine whether employers are in compliance with existing OSHA standards and regulations. OSHA may also review medical records to check whether employer voluntary safety and health programs are effective. Employee medical information may also be reviewed during an OSHA rulemaking to develop or revise OSHA standards.

In 1980, OSHA promulgated Rules of Agency Practice and Procedure Concerning OSHA Access to Employee Medical Records in an effort to preclude abuse of personally identifiable medical information. Under the 1980 rule, OSHA personnel were required to obtain a written access order to request and review medical information from employers. The order needed to include the statutory purpose for which access was sought, a general description of the kind of employee medical information that would be examined, and why there was a need to examine personally identifiable information. Additional explanation was required if medical information was to be examined on-site, and what type of information would be copied and removed off-site. In addition, the order needed to include the contact information for the Principle Investigator and the period of time during which employee medical information would be retained.

The 1980 rule also set forth several procedures for OSHA personnel to follow when accessing and reviewing personally identifiable medical information. For example, it required that all hard copy records that contained personally identifiable employee medical information be kept separate from other agency files, and, when not in use, stored in a locked cabinet or vault. OSHA personnel could photocopy such information, but duplication needed to be kept to the minimum extent necessary to accomplish the purpose for which the information was obtained. Protective means, including hand-delivery and U.S. mail, were required to be used for any inter-agency transfers. Personnel could not use inter-office mailing channels.

The procedural safeguards in the 1980 rule were developed at a time when employee medical records were maintained in hard copies, and until now, had not been updated to correspond with changes in recordkeeping practices, such as electronic medical records. According to the preamble of the revised rule, OSHA determined that it was necessary to make revisions in order to enhance employee privacy, clarify certain provisions, and to address the access and safeguarding of personally identifiable employee medical information maintained in electronic form.

Key Revisions

While keeping much of the 1980 rule in effect, the revised rule updates four significant aspects of the original rule.

First, the revised rule replaces the 1980 rule’s term “written access order” with the term “medical access order” or “MAO,” which is the term that is more commonly used by OSHA when requesting and accessing medical records. In conjunction with this revision, the revised rule also expressly clarifies that MAOs are not considered administrative subpoenas; rather, an MAO would need to be accompanied by an administrative subpoena, consistent with OSHA’s longstanding practice, to compel the production of medical records.

Second, the revised rule transfers responsibilities from the Assistant Secretary to the OSHA Medical Records Officer (MRO). The MRO is tasked with administering and implementing the rule: specifically, authorizing and monitoring OSHA access to personally identifiable medical information pursuant to an MAO, and inter-agency and public disclosure of personally identifiable medical information. The MRO is also authorized to issue written directives allowing OSHA personnel to review information in the absence of obtaining an MAO.

Third, the revised rule introduces measures to protect electronically stored medical records from unauthorized access at 29 CFR § 1913.10(n). It establishes new procedures for designating specific security roles and responsibilities for OSHA officials. It also creates measures to implement technology safeguards to protect against electronic breaches. The revision remedies out-dated provisions of the 1980 rule, which was issued when electronic medical records did not exist.

Fourth, given the existing security procedures in 29 CFR § 1913.10(i) and the new safeguards to protect private medical information in electronic medical records, the revised rule eliminates the requirement to remove direct personal identifiers from medical records that were formerly set forth in 29 CFR § 1913.10(g).

Discontinuing Employment

(i) Dismissal

As previously discussed, the employment-at-will doctrine allows an employer to terminate an employment relationship for any lawful reason, without cause or notice. However, the doctrine may not apply when, for example, the employee has a specified term of employment, or the employer’s policy or an employment contract provides for discharge for specified reasons, sets forth a progressive disciplinary policy, or contains a notice period requirement.

There is no statutory right to severance or separation pay upon termination of employment, but an employer may agree to provide severance in individual contracts or via a severance policy or plan.

Typically, CBA’s contain just cause provisions or other contract clauses that limit the reasons why, or the process by which, an employer may dismiss an employee. Most CBAs have a dispute mechanism often referred to as the grievance and arbitration, and the parties must work within that contractual framework to resolve disputes regarding employment actions, including terminations.

(ii) Redundancies

The Federal Worker Adjustment and Retraining Notification (WARN) Act require that employers provide notice for certain group lay-offs and plant closures. Specifically, employers with 100 or more full-time employees must provide 60 days’ notice to affected employees and certain State and Local government agencies when there is a qualifying mass lay-off or plant closure, as those terms are defined by the statute. Some States have mini WARN laws that cover additional events or contain more stringent notice requirements. For instance, New Jersey’s WARN Act now requires employers to pay severance.

If an employer provides severance pay in connection with a reduction in force (pursuant to a contract or otherwise), it is likely to require the employee to sign a release of claims in exchange for severance benefits. If an employee is aged 40 or older, employers must follow the review and revocation periods for releases, as set forth in the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act.

In a unionised workplace, the CBA may dictate the notice, actions or bargaining that must take place before a group lay-off, plant or site closure, or reduction in force may occur.

Six months into the pandemic, with many employees still working from home, teleworking is far more common than ever, some employers are encouraging or permitting many employees to work remotely for the rest of 2020 (and beyond). Today’s situation is far different from five years ago when the EEOC lost in its attempt at the Sixth Circuit to expand telecommuting as a reasonable accommodation under the ADA.

Nowadays, employers are preparing for a potential tidal wave of reasonable accommodation requests for telework after they resume onsite work. Employees may wonder whether the employer has to continue the telework arrangement after the worksite reopens, and other employees may seek to renew previously denied, pre COVID-19 telework reasonable accommodation requests. Finally, the EEOC has stepped in to address this issue in its September 8, 2020 updates to its “Technical Assistance Questions and Answers” on issues dealing with COVID-19 and the ADA and other equal employment opportunity laws.

The EEOC’s answers provide useful guidance for employers. As a baseline, the EEOC notes that any across the board treatment like a presumption is inconsistent with the EEOC’s oft-repeated maxim that reasonable accommodation inquiries must be addressed on an individual basis. Instead, “any time an employee requests a reasonable accommodation, the employer is entitled to understand the disability-related limitation that necessitates an accommodation” and then proceed through the Interactive process accordingly regarding a potential reasonable accommodation.

The EEOC also reiterates another fundamental perception that “the ADA never requires an employer to eliminate an essential function as an accommodation for an individual with a disability.” Relying on the percept, the EEOC makes a common-sense determination that employee advocates may tend to ignore or de-emphasize: “The fact that an employer temporarily excused performance of one or more essential functions when it closed the workplace and enabled employees to telework for the purpose of protecting their safety from COVID-19, or otherwise chose to permit telework, does not mean that the employer permanently changed a job’s essential functions.” In other words, temporarily making the best out of necessity and compassion does not tie an employer to forever deeming this a successful means for fulfilling all of the long-term essential functions.

Nevertheless, the EEOC recognizes a scenario under which the pandemic telework experience of an employee could be relevant to telework as a reasonable accommodation post-pandemic. If an employee renews a pre-COVID-19 request for teleworking as a reasonable accommodation, the EEOC suggests that this prior teleworking experience could be relevant in considering the renewed request. The pandemic telework could serve as a trial period that showed whether or not this employee with a disability could satisfactorily perform all essential functions while working remotely, and the employer should consider any new requests in light of this information.

Another consideration for employers is how the November elections may impact the EEOC moving forward. EEOC appointees under a new administration might be more inclined to resume the efforts of Obama-era appointees to expand the circumstances under which telework is required as a reasonable accommodation.

The U.S. Equal Employment Opportunity Commission (EEOC) updated its COVID-19 guidance, offering additional instruction regarding the potential clash between teleworking accommodation requests and office reopening procedures. The updated guidance also addresses the EEOC’s position on COVID-19 screening and testing of employees. The new guidance comes in the form of additional questions and answers in the EEOC’s. “What you should know about COVID-19 and the ADA, the Rehabilitation Act, and other EEO laws” document.

Teleworking Requests

Under the Americans with Disabilities Act (ADA), employers must provide reasonable accommodations to employees who need them to perform their job, unless the requested accommodation poses an undue hardship. As businesses begin reopening after months of some employees working from home, many employers will encounter employee requests to continue telecommuting as an accommodation.

The EEOC’s guidance explains that employers need not “automatically” grant telework accommodations to every employee who requests them. As an initial matter, if no disability-related limitation necessitates telework, the employee is not entitled to the accommodation. An employer has the right to know what the disability-related limitation is and how it impacts the employee’s ability to perform his or her job in the workplace. Additionally, employers are not required to provide an employee’s preferred accommodation. If a limitation can be addressed with an accommodation other than telework, an employer may provide it instead.

Further, employers are never required to eliminate an essential function of a job to grant accommodation to an employee. An employer’s decision to temporarily excuse an essential function of a job to keep its operations running as normal as possible during COVID-19 does not mean that the change is permanent, that it does not pose an undue hardship, or that telework is always a feasible accommodation. However, the EEOC explains this is a fact-specific inquiry, so employers should continue evaluating requests on a case-by-case basis.

As for employees who were denied a telework accommodation prior to the pandemic, employers could treat their work from home during COVID-19 as a trial period in evaluating renewed requests for telework accommodations when they return to the workplace. Employers should consider an employee’s success – or failure – with telework over the past few months in evaluating renewed requests.

In many areas, employees continue to telework. For accommodation requests that arise in the meantime, the EEOC guidance states that COVID-19 related disruptions in business operations could result in an excusable delay to the interactive process because of the unexpected and increased requests for accommodations. Additionally, accommodations that existed pre-pandemic may or may not be reasonable when employees are teleworking. For example, an employee might already have at home the modified tools needed to work effectively. On the other hand, a previously feasible reasonable accommodation may now pose an undue hardship to the employer.

COVID-19 Screening and Testing

In addition to telework accommodations, the EEOC guidance addresses COVID-19 screening and testing. Specifically, it provides that employers may ask all employees physically entering the workplace if they have COVID-19 symptoms. However, an employer may not ask employees whether they have family members with COVID-19 symptoms, as this could violate the Genetic Information Non-discrimination Act (GINA). Instead, employers may ask employees if they have had any close contact with individuals with COVID-19 symptoms, including household members.

Days before the upcoming deadline, ICE has announced it is extending the remote virtual verification option for completion of I-9 employment verification an additional 60 days (instead of just 30 days), until November 19, 2020, due to continued precautions related to the COVID-19 pandemic.

According to the original guidelines for virtual verification, eligible employers may continue to inspect section 2 documents without an actual in-person physical inspection (e.g., over a video link, fax, or email). As before, the policy applies only to employers and workplaces that are in fact operating remotely. The latest announcement States that if any employees are physically present at the worksite, an in-person physical inspection of the I-9 documentation must occur. In past announcements, however, ICE has indicated that it would use a case-by-case analysis to determine if the virtual I-9 review was reasonable. How and whether ICE will be reasonable is yet to be seen. Rather than using virtual inspection, employers still have the option of using agents or authorized representatives to review I-9 documentation at remote locations.

The final provisions of Oregon’s Workplace Fairness Act (OWFA) go into effect on October 1, 2020 – less than a month away. All employers doing business in Oregon will need to make changes to their harassment policies and settlement, severance, and separation agreements to be compliant with the OWFA. Below are the highlights of the law’s sweeping changes:

Non-Discrimination and Non-Harassment Policies

The OWFA mandates that employers adopt a written anti-discrimination and anti-harassment policy containing procedures and practices for the reduction and prevention of discrimination under the Oregon’s protected categories, which include race, color, religion, sex, sexual orientation, national origin, marital status, age, expunged juvenile record, performance of duty in a uniformed service, or physical or mental disability. At a minimum, the policy must:

·         Describe the process to report prohibited conduct, including suspected discrimination harassment or sexual assault;

·         Identified an individual and an alternate to who such reports can be made (for example the Store Manager or HR Director);

·         Notify employees that they have five years from the date of the prohibited conduct to pursue legal action;

·         State that an employer may not require or coerce an employee to enter into a nondisclosure, nondisparagement or no-rehire clauses, but has seven days to revoke the agreement; and

·         Includes a statement that advises employers and employees to document any incidents involving unlawful discrimination and sexual assault.

Employers must also ensure that all employees have access to the final policy, as well as provide a copy to all new hires and at the time an employee reports information regarding discrimination, harassment, or sexual assault.

Enforcement of Nondisclosure, Nondisparagement, and No-Rehire Provisions in Employment, Settlement, Separation, and Severance Agreements

Employers cannot require an employee to enter into any agreement that contains a nondisclosure, nondisparagement provision if it has the purpose or effect of preventing the employee from disclosing or discussing conduct constituting discrimination, harassment, or sexual assault.

However, an employer may enter may enter into a settlement, separation, or severance agreement that contains a nondisclosure, nondisparagement, or no-rehire provision if an employee claiming to be aggrieved by discrimination, harassment, or sexual assault requests to enter into an agreement with such provisions, so long as it allows at least seven days to revoke the agreement, and it does not become effective until after the revocation period has expired.

Employers may void severance agreements for manager who violate discrimination or harassment policies if those violations were a substantial contributing factor in causing the separation from employment.

Statute of Limitations

Most employers reimburse their employees for money spent on meals, hotels, and other expenses during work trips as business expenses, but few have given thought to reimburse employees for employee costs incurred at home, including for internet, electricity, printer, ink, etc., because those have traditionally been considered personal expenses. Employers who are requiring their workforce to remain remote in response to the COVID-19 pandemic should revisit their business expense policies if they have not so already.

Under the Fair Labor Standard Act (FLSA), employees are entitled to reimbursement of expenses paid for the benefit of their employer if that expense would bring an employee’s earnings below the federal minimum wage. Many states, such as California, Illinois, Pennsylvania, Montana, Iowa, and New Hampshire, impose other expense reimbursement requirements on employers as well. For example, California requires that employees be reimbursed for all “necessary expenditures or losses incurred by the employee in direct consequence or discharge of his or her duties.”

Now that many workforces are fully remote, expenses that could previously be considered “personal” in nature may now be considered business expenses, at least in part to the extent that the employer derives benefits from those expenses. Depending on the circumstances, this may include office supply expenses (e.g., pencils, paper, ink, printers, etc.), utilities (e.g., internet, phone), or any other expenses required by the employer during a remote work period.

To the extent that any covered expenses are reimbursed pursuant to an “ accountable plan” (as defined by the IRS), the amounts are not treated as wages and are not subject to income, social security, Medicare, or unemployment taxes. To be an accountable plan, an employer’s reimbursement arrangement must comply with the following: (1) the expenses must have a business connection, (2) the expenses must be substantiated within a reasonable period, and (3) any amounts reimbursed in excess of substantiated expenses must be returned to the employer within a reasonable period.

A federal district court in New York has struck down a significant portion of the recently promulgated Final Rule issued by the U.S. Department of Labor (DOL) regarding the standard for establishing joint-employer liability under the Fair Labor Standard Act (FLSA). State of New York v.Scalia, 2020 U.S. Dist. LEXIS 163498 (S.D.N.Y Sept 8, 2020). As a result, at least for now in the Southern District of New York, the joint-employer analysis will continue to be guided by the varying standards that have developed among the federal courts over the years.

Background

Since 1939, regulations interpreting the FLSA have recognized that two or more “employers” can be jointly and severally liable for a single employee’s hours worked under the Act. In April 2019, the DOL issued a Notice of Proposed Rulemaking (NPRM) to update its interpretation of the standard for establishing joint-employer liability under the FLSA, Following a review and comment period, in January 2020, the DOL announced a Final Rule became effective in March 2020.

Final Rule

Under the Final Rule, the DOL stated that the proper focus is on “the potential joint employer’s exercise of control over the terms and conditions of the employee’s work.”

Derived from the decision of the U.S. Court of Appeals for the Ninth Circuit in Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir,1983), the new Final Rule adopted a four-factor balancing test accessing whether the purported joint employer:

·         Hires or fires the employees;

·         Supervises and controls the employee’s work schedules or condition of employment;

·         Determines the employee’s rate and method of payment; and

·         Maintains the employee’s employment records.

Moreover, the DOL concluded that an entity may qualify as a joint employer only if it actually “[takes action] with respect to the employee’s terms and conditions of employment,” rather than merely possessing the “theoretical ability” to do so.

The Suit

In February 2020, attorneys general on behalf of 18 states filed suit seeking to have the Final Rule vacated. These plaintiffs claimed that the Final Rule was promulgated in violation of the Administrative Procedure Act (APA), improperly narrowed who is considered a joint employer, and will harm their states in multiple ways, including by lowering wages, decreasing compliance with worker protection laws; reducing their tax revenue, and increasing the administrative and enforcement costs their comparable state law equivalents to the FLSA.

Court’s Decision

The New York district court agreed with the plaintiffs, granting summary judgment in their favor and abrogating the more controversial portion of the Final Rule.

In the Final Rule, the DOL recognized that joint employment may exist in two basic organizational formats: “horizontal” joint employment, where the employee has employment relationships with two or more employers and the employers are sufficiently associated or related with respect to the employee such that they jointly employ the employee; and “vertical” joint employment, where the employee has an employment relationship with one employer (such as a staffing agency or subcontractor) that provides work for a second employer and, as a practical reality, the employee is employed by that second employer as well.

The court took no issue with the Final Rule as it pertains to horizontal joint employer liability, but concluded that the Final Rule’s interpretation of vertical joint employer liability conflicts with the broad definitions of “employer,” “employee,” and “employ” set forth in the FLSA. Those definitions must be construed in tandem with each other, the court held, so in establishing the standard for (vertical) joint employer liability, the Final Rule’s reliance solely on the Act’s definition of “employer” was improper. In addition, contrary to the Final Rule, there is no distinction between whether an entity is an “employer” and whether it is a “joint employer,” the court concluded; an entity is an employer or it is not. In these respects, the Final Rule contradicts the text of the FLSA. The DOLs own previous interpretations, and longstanding case-law, without adequately explaining or justifying why.

Moreover, the court agreed that the plaintiffs had sufficiently demonstrated that the Final Rule will increase the enforcement costs of their analogous state-based laws. As the states with broader standards for joint employer liability will continue to enforce those diverging standards and will have to increase the number of investigators and person-hours necessary to do so. Even those states whose wage and hour laws generally follow the FLSA will have to expand additional time and money on re-training employees responsible for enforcing and administering the DOL’s new interpretation of joint employer liability.