Evaluating Work from Home Accommodation Requests: Will New EEOC Lawsuit Signal A Wave Of Similar Litigation?

Contributed by Steven Jados, September 17, 2021

Freelance. Remote work. Team working. Home Office. Flat design vector illustration.

Last week, the EEOC filed a federal lawsuit in Georgia against an employer that did not allow an employee with a medical condition to work from home.  Employers should carefully consider the circumstances at issue in this lawsuit when evaluating work-from-home accommodation requests as we anticipate litigation of this sort will arise more frequently in the coming months.

The employee at issue (“Moncrief”) worked as a Health Safety & Environmental Quality Manager at a pharmaceutical manufacturing facility.  She has a number of physical impairments, including chronic obstructive lung disease and hypertension, that limit her ability to breathe, walk, and work, among other things.  In March of 2020, Moncrief’s doctor recommended that she work from home.  And around the same time, the employer had Moncrief and many other employees work from home for COVID-19 related reasons. 

As the EEOC tells it, working from home improved Moncrief’s condition.  However, in June 2020, the employer required Moncrief and all other employees to resume working at the facility five days per week. The EEOC alleges that Moncrief then asked to work from home two days per week, but that request was denied and Moncrief was terminated shortly thereafter. 

Now, to be clear, this case is in its earliest stages, and the employer has not yet had the opportunity to tell its side of the story.

That said, the main take-away for employers is this:  Because so many companies were able to successfully transition employees to remote work arrangements during the pandemic, it will be harder than ever before to deny employee requests for medical accommodations in the form of work-from-home arrangements.

This does not mean that employers must allow employees with medical conditions to work from home.  The law does not require employers to always give employees the exact accommodation they request—and employers have considerable discretion to choose their preferred accommodation so long as it is effective in removing the workplace barrier that led to the accommodation request.

The bottom line is that employers—particularly employers who prefer to require employees to work on-site—must be creative in exploring reasonable accommodations that will effectively allow employees with medical conditions to perform the essential functions of their jobs.  Employers should keep in mind, too, that it is imperative that all reasonable accommodation discussions are documented in writing, particularly where an employer has not provided the employee’s preferred accommodation.  As always, questions regarding these issues should be directed to experienced labor and employment counsel.    

Wage and Hour Questions on the Vaccine Mandate: Pitfalls for Illinois Employers Covered by the Executive Order   

Contributed by Michael Wong and Sara Zorich, September 16, 2021

Medicine doctor and vaccine dose syringe

On August 23rd Governor Pritzker issued Executive Order 2021-20 requiring  health care workers, school personnel, higher education personnel and students, and state-employees and contractors who work at state-owned or operated congregate facilities to get their first dose of a two-dose COVID-19 vaccine series, or a single-dose COVID-19 vaccine, within 10 days and be fully vaccinated within 30 days, subject to applicable medical and religious exemptions under federal and state law.

Two weeks later on September 3rd Governor Pritzker issued Executive Orders 2021-22 extending the time to get the first dose of a two-dose vaccine to September 19, 2021, and the second dose of a two-dose COVID-19 vaccine series within 30 days following administration of their first dose in a two-dose vaccination series (October 19, 2021).

Following the issuance of Executive Order 2021-22, the Illinois Department of Public Health (IDPH) issued guidance on the Executive Order. This guidance clarified that even if an employee did not have a medical or religious exemption, that they could alternatively choose to be tested for COVID-19 on a weekly basis rather than be vaccinated, unless their employer implements a stricter requirement that they be vaccinated, subject only to the applicable medical and religious exemptions.

REMEMBER: Executive Order 2021-20 only covers health care workers, school personnel, higher education personnel and students, and state-employees, and contractors who work at state-owned or operated congregate facilities.

If you have workers subject to Executive Order 2021-20, there are a lot of questions and potential pitfalls ahead, especially in the wage and hour realm. The following are common questions that should be asked not only about the Illinois Governor’s vaccine mandate, but the President’s proposed OSHA rule on vaccines and other state vaccine mandates.

Do employers need to pay for the time employees spend getting vaccinated? The answer depends on whether the employer is simply complying with the Executive Order or taking it a step farther by requiring employees get the COVID-19 vaccine. 

The Illinois Dept. of Labor (IDOL) guidance provides that if an employer requires employees to get vaccinated, the time spent obtaining the vaccination is likely compensable – even if it is non-working time. However, for optional vaccination programs, the IDOL states employees that choose to obtain the vaccine voluntarily should be allowed to utilize sick leave, vacation time or other paid time off. Based on the IDPH Guidance, there is an indication that compliance with the Executive Order is not considered a “mandatory vaccination program” for an employer, unless the employer imposes more stringent requirements. As such, unless an employer makes vaccinations mandatory, the current IDOL guidance indicates employers are not required to pay an employee for the time spent getting vaccinated.

The importance of local laws are highlighted here though due to Cook County Ordinance Sec. 42-122. Employers with a principle place of business in Cook County (which includes Chicago) must comply with Cook County Ordinance Sec. 42-122, which went into effect on July 1, 2021. The Ordinance provides that employers that have a primary business location in Cook County and who require their employees get the vaccine must compensate their employees for up to 4 hours of paid time per dose at the employee’s regular rate of pay if the employee chooses to get the vaccine during their work shift.  Further, regardless of whether a vaccination is voluntarily sought by an employee or required by an employer, employers cannot require that an employee get vaccinated only during non-shift hours and shall not take any adverse action against any employee for taking time during a shift to get vaccinated.

What about travel time and expenses to get the COVID-19 vaccine?  If an employer imposes a mandatory vaccine requirement, under federal and Illinois state law, employers would likely need to reimburse the travel time and expenses for the employee to get vaccinated.  Under the FLSA, the time spent traveling to undergo “special tests” required by the job (e.g. physical examinations, fingerprinting and drug testing) is compensable time. As such, if you put into place a mandatory vaccination policy, we would recommend employees report the time it took them to get to/from the vaccination site and such time would be compensable work time. In terms of travel expenses (e.g. mileage and tolls), Illinois law requires employers reimburse expenses that are required of the employee in the discharge of employment duties and inure to the primary benefit of the employer. Thus, it is recommended that employers also reimburse for the employee’s mileage to/from the vaccination site.

Is there a difference between Vaccinations vs. Testing? – YES! While the Executive Order indicates that vaccinations are optional, weekly testing if an employee is unvaccinated is not optional. As a result, under the FLSA and IDOL guidance, COVID-19 testing for covered employees under the Executive Order would likely be considered compensable time. Additionally, even though the IDPH guidance states that the Executive Order does not require employers to pay for testing, this does not take into consideration the FLSA and state laws that require employers to pay for the cost of business expenses, including medical tests that are required.

The vaccine mandate landscape is starting to heat up and will be continuously changing in the near  future. Employers are waiting on more information and guidance from the President’s proposed OSHA’s rule that will require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work. Illinois’ Executive Order vaccine mandate is a good primer on issues that employers throughout the United States will need to consider once the proposed OSHA rule is issued and in dealing with any state or local vaccine mandate. As these are new and complicated issues, employers should speak with experienced labor counsel in addressing vaccine mandates prior to implementing any policy requiring vaccinations.

Who is a Federal Contractor for Purposes of the Biden Vaccine Mandate?

Contributed by John R. Hayes, September 13, 2021

doctor hand wears medical glove holding syringe and vial bottle with covid 19 corona virus vaccine

On September 9, 2021 President Biden announced sweeping new vaccine mandates for federal employees, federal contractors, and an upcoming OSHA Emergency Temporary Standard Rule for companies with more than 100 employees. In light of this, already many employers are asking the question, “Am I a federal contractor subject to the vaccine mandate?” While the Executive Order regarding federal contractors is brand new, and we are awaiting more clarification from the Safer Federal Workforce Taskforce (Task Force), there is some language contained in the Order that can give employers an early roadmap.  The Executive Order applies to federal contracts that are:

  • Either a contract or contract-like instrument;
  • Entered into, extended, renewed, or has an option exercised on or after October 15, 2021; 
  • For any of the following:
    • services, construction, or leasehold interest in a property;
    • services covered by the Service Contract Labor Standards (formerly known as the Service Contracts Act);
    • concessions; and
    • work relating to federal property or lands and related to offering services for federal employees, their dependents, or the general public.

The Executive Order explicitly excludes:

  • Federal grants;
  • Contracts with Indian Tribes;
  • Employees who perform work outside of the United States;
  • Contracts equal or less than the simplified acquisition threshold (generally $250,000); and
  • Subcontracts solely for the provision of products.

However, the Executive Order leaves several unanswered questions that will hopefully be answered by the Task Force, which must issue its guidance by September 24, 2021.  For example, it is not clear if the mandate will be for onsite contractors only, but initially it appears to also cover employees working at the contractor’s facility.  It specifically states it applies to “workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.”  Thus, the Executive Order is phrased to apply to any workplace locations where contract work is performed, rather than to employees performing the work.  Also, it appears to eliminate the option for federal contractor employees, provided for in the July 29, 2021 federal employee vaccination mandate, that allowed those workers to choose to wear a mask, socially distance, and subject themselves to regular testing instead of getting vaccinated.

As with all vaccine mandates, there will likely be exceptions for disabilities or sincerely held religious beliefs.  Each employer will have to make individual determinations regarding these exemptions. 

Some general takeaways at this time are that if you are a business operating under an existing federal contract that is not being renewed or has options exercised, you are not subject to the Executive Order.  Similarly, if your contract is for less than $250,000 you are likely not subject to the mandate.  However, it appears as if it is not limited just to onsite contractors (such as those in the construction industry), and so the vaccine mandate could expand to many more businesses (such as banks) that are operating under a federal contract yet not providing onsite work to federal agencies. 

Of course, all this is very preliminary given the lack of guidance from the Task Force. But for now, employers can at least get an idea of whether or not they are a contractor for purposes of the Executive Order.  While the specific details of the mandate are still to come, businesses who have new or renewed federal contracts (greater than $250,000) coming up can expect some sort of vaccine mandate on at least part of its workforce, and should begin to plan accordingly. We will be monitoring this situation closely and will provide updates as they occur.

OSHA to Issue Mandatory Vaccination and Testing Rule for Certain Employers

Contributed by guest author Matthew Horn, September 9, 2021

In a purported effort to increase vaccinations, the Biden Administration just announced its plan to have OSHA issue an Emergency Temporary Standard requiring employers with one hundred or more employees to ensure their employees are either fully vaccinated or tested for COVID-19 on a weekly basis. The Emergency Temporary Standard will also require mandatory vaccinations for: 1) federal employees; 2) employees of federal contractors; and 3) employees at healthcare facilities receiving Medicare or Medicaid. The Emergency Temporary Standard will impact approximately 100 million American workers. 

Since the announcement was made today, and not many details were provided, applicable employers will have some time—possibly a few months—to process and comply with the new requirements. Additionally, while the rule making process is taking place, there will be no shortage of legal challenges to the planned rule. Moving forward, we will keep you advised as to any and all updates on this issue.

What to Consider Before Implementing a Health Insurance Surcharge for Unvaccinated Employees

Contribute by Kelly Haab-Tallitsch, September 7, 2021

stethoscope wrapped around health insurance policies, soft focus

The recent announcement that Delta Airlines will begin imposing a $200 per month health insurance surcharge on unvaccinated employees has prompted many employers to consider whether a similar surcharge may be an alternative to mandating COVID-19 vaccinations for employees.

But the myriad of laws governing group health plans require that employers tread carefully. This is an approach that comes with a multitude of regulatory requirements and may carry legal risks. Employers implementing a health insurance surcharge must comply with federal anti-discrimination laws requiring exceptions for medical conditions or a sincerely-held religious belief, and should consider the impact of a surcharge on the health plan’s affordability under the Affordable Care Act (ACA).

Exceptions for Medical Conditions and Religious Beliefs

Premium surcharges or other incentives tied to a group health insurance plan trigger the Health Insurance Portability and Accountability Act’s (HIPAA) wellness program rules.  HIPAA prohibits employers from charging employees different premiums based on a health factor; however, an exception exists for wellness programs, allowing employers to charge higher premiums or offer incentives to get employees to take certain actions or meet specific health-related goals, provided the wellness program meets certain requirements.

The requirements for wellness programs are different depending on whether a program is “participatory” or “health contingent.”  It is unclear whether a COVID-19 vaccination surcharge would be considered a “participatory” or “health contingent” wellness program. In order to avoid potential penalties for noncompliance, an employer should assume it is a health-contingent wellness program, similar to smoking cessation programs that impose a surcharge on smokers. Under a health-contingent wellness program an employer must offer a “reasonable alternative standard” to employees that are unable to receive the COVID-19 vaccine due to a medical condition. This means that these employees must be allowed to avoid the surcharge by meeting a different requirement. One example would be allowing an employee to avoid the surcharge by undergoing weekly or biweekly COVID-19 testing or by watching a video on vaccine safety and the dangers of remaining unvaccinated.

Under Title VII, employers must also provide an accommodation to an employee that is unable to receive the COVID-19 vaccine due to a sincerely-held religious belief.

ACA Affordability and Surcharge Limits

Under the HIPAA wellness plan rules, a surcharge cannot exceed 30 percent of the cost of employee-only coverage under the health plan. This is a fairly high limit and typically does not present an issue. But employers subject to the ACA employer mandate and considering surcharges should also confirm that the cost of the health plan including the surcharge still meets the ACA affordability requirements. In order to avoid triggering a penalty under the ACA, the cost for employee-only coverage under the lowest cost health plan option can be no more than 9.83% of the employee’s income. Depending on current health plan premiums, even a small surcharge can cause premiums to exceed the affordability threshold for lower wage employees.

Next Steps

An employer considering implementing a vaccine surcharge should consider the alternative standard(s) the employer is willing and able to offer employees who cannot receive the vaccine due to a medical condition or sincerely-held religious belief, taking into account the administrative requirements of the alternative standard (i.e., monitoring of weekly COVID-19 test results), and analyze the impact of the proposed surcharge on the employer’s compliance with the ACA affordability requirements. Employers should consult with employee benefits counsel before implementing a health insurance surcharge to ensure compliance.

Mandating Vaccines in the Workplace: How to Implement a COVID-19 Vaccine Policy

Contributed by Suzannah Overholt, August 26, 2021

Syringe and vial bottle with COVID-19 corona virus vaccine drug

Now that the Delta variant is surging, employers are venturing into the arena of mandating that their employees take the COVID-19 vaccine. But deciding to mandate vaccination and actually implementing such a requirement is no easy feat.

Rolling out a vaccine requirement involves a delicate balancing act. Employers are gauging the overall vaccine hesitancy in their workforce, the number of employees who may resign rather than be vaccinated, and the difficulty of filling the vacancies. Those considerations have led some employers to wait to impose a vaccine requirement until their competitors do so.

The realities of these considerations are apparent in nursing homes’ response to the announcement that their facilities will be required to mandate the vaccine for their employees or risk losing federal funding. Nursing homes are now concerned that, if the rest of the health care industry is not subject to the same requirement, they will lose even more employees than they have already. 

So how should an employer face this issue?  Some employers have chosen to use an incremental approach. First, they ask employees to let them know if they are vaccinated or plan to get vaccinated. As we reported previously, the EEOC has authorized such inquiries, but the information regarding an employee’s vaccination status must be kept confidential. 

Some employers offer incentives before mandating the vaccine.  As we noted in our previous blog, offering incentives for employees to be vaccinated has been approved by the EEOC. The amount of the incentive depends upon whether the employer is administering the vaccine (lower incentives allowed to avoid coercive effect of incentive) or whether it is being administered by an entity independent from the employer (higher incentives allowed). If the first round of incentives does not achieve the desired effect, some employers have increased the incentive.

Another approach is to implement an education campaign to increase awareness about the benefits and actual risks of the vaccine. This is generally done by directing employees to web sites and other resources with objective information about the vaccines.

Finally, if the incentives and education efforts are not sufficient, employers may mandate the vaccine. The concepts that apply to fostering positive employee relations are a good guide for how to do this. 

First, employers should develop a clear policy that lays out the following: 

  • A definition of what constitutes being vaccinated. Generally speaking, this would be receiving both doses of a two-dose vaccine or a dose of a single-dose vaccine. 
  • A clear deadline for being vaccinated.
  • A requirement that any booster doses also be taken and a timeline for those. 
  • The availability and process for requesting a disability or religious based exemption.
  • Whether PTO will be allowed for time spent taking the vaccine and for any potential side effects.
  • What disciplinary action will be taken for failure to comply.

Once the policy is established, communication is key. Employers should reiterate the benefits of the vaccine and explain the risk to everyone if someone is not vaccinated. A written communication should be distributed to all employees stating the basis for the policy and the expectations.

Finally, the policy must be implemented. Proof of vaccination provided by employees must be kept confidential. Requests for exemptions must be reviewed and acted upon.  Employees who do not comply with the vaccine requirement or accommodations granted pursuant to an exemption must be disciplined. 

Obtaining the advice of qualified counsel before embarking on this process is advisable.

Wisconsin Coffee Retailer’s Employees Vote to Join the Electrical Union!?!?!

Contributed by Peter Hansen, August 25, 2021

Wisconsin employers discounting the possibility of organizing campaigns and unionization in their workplace, take note: the International Brotherhood of Electrical Workers’ (IBEW) recent victory at Colectivo Coffee Roasters Inc. demonstrates that unions are desperate to increase their membership, targeting industries and workers outside their typical areas – and winning.  Following a hotly-contested organizing campaign that saw multiple elections, a tie, and challenged votes, the IBEW will now represent a bargaining unit comprised of baristas, roasters, and bakery and warehouse workers.

The IBEW’s involvement in this hospitality/service industry organizing campaign is itself noteworthy. The IBEW, which typically targets workers in the construction, telecommunications, and manufacturing industries and is not exactly associated with food service workers, will now be representing the largest unionized coffee chain workforce in America.  This pivot to targeting workers in other industries signals, at the very least, an aggressive drive to increase membership — even in a Right-to-Work state. The construction trades unions (such as the IBEW) can have much greater resources than some of the more traditional unions focused on the hospitality and service industry, and if this is in fact the initial stages of a push into industries less familiar with their aggressive organizing campaigns, employers would be wise to contact experienced labor counsel immediately.

The fact that a food retailer employer is unionized is also generally surprising, given the industry is historically resistant to unionization.  Whether this result portends an increase in organizing campaigns in the industry remains to be seen, but it wouldn’t be all that surprising to see a renewed push in light of this relatively high-profile victory.

The Colectivo Coffee election results are a lesson and a warning for all employers in general and those in Right-to-Work states (e.g., WI).  If you think unionization can’t happen to you, think again.  Any employer preferring to remain union-free not only must have a counter-organizing plan developed and in place, but management in all levels must be working that plan every day.

The Fight for Restroom Rights – Illinois Courts Follow National Trend in Prohibiting Sex Discrimination of Transgender Employees and Requiring Equal Access to Bathrooms

Contributed by Michael Wong, August 19, 2021

16306823 – 3d illustration of scales of justice and gavel on orange background

On August 13, 2021, the Illinois Second District Appellate Court upheld the Illinois Human Rights Commission’s determination that Hobby Lobby violated the Illinois Human Rights Act (IHRA) by refusing to allow a transgender employee to use the restroom that matched her gender identity and awarded $220,000 in emotional distress damages against Hobby Lobby.

In this case, Hobby Lobby’s policy was to limit employees and customers to using the restroom that matched their designated sex at birth. The plaintiff was born a male, but during her employment with Hobby Lobby transitioned to a female. She underwent medical treatment to transition and began using a female name and coming to work in feminine dress and makeup.  She also obtained a court order legally changing her name to her female name and obtained an Illinois drivers’ license and social security card which identified her by her female name and as being a female.

Hobby Lobby changed her personnel records and benefits information to reflect that the plaintiff was a female, rather than a male.  However, Hobby Lobby continued to refuse to allow her to use the women’s restroom.  When the plaintiff used the women’s restroom, Hobby Lobby disciplined her by issuing her a written warning and ordering other employees to report her if she tried using the women’s restroom. 

While the case was being litigated, Hobby Lobby did install a unisex restroom, and allowed employees and customers to use either the bathroom corresponding to their sex or the unisex bathroom. However, Hobby Lobby continued to prohibit the plaintiff from using the women’s restroom that matched her gender identity.

The court found that the IHRA’s definition of “sex” as “status of being male or female,” is not limited to an individual’s sex at birth or genitalia.  Rather, the use of the term “status” indicates a “state of being that may be subject to change.” The court further held that by defining “sex” broadly as a status, without any reference to anatomy, birth certificates, or genetics, the Act allows for the consideration of gender identity as one of the factors that may be used to determine sex.  Based on that reasoning, the court upheld the determination that Hobby Lobby’s actions had discriminated against the plaintiff based on her “sex,” as well as gender identity.

In making this finding the court rejected a number of arguments made by Hobby Lobby including that its bathroom ban was necessary to protect other women from the plaintiff.  While Hobby Lobby made assertions regarding a complaint by a women against the plaintiff for verbal disparagement and unwanted touching, such as side hugging and touches on the arm, back and leg, and alleged complaints by two female employees that they would feel uncomfortable with the plaintiff using the women’s restroom, the court held that Hobby Lobby failed to provide any evidence to support those assertions, such as discipline or written statements, or any evidence that the plaintiff’s use of the women’s restroom would pose a safety risk to other women. Indeed, the court held that if Hobby Lobby were employing someone who genuinely posed a safety threat to others, its employees and customers would certainly demand a more effective safeguard than preventing that person from using the restroom. The court further recognized that courts have firmly rejected the argument that the fears or discomfort of others may serve as adequate justification for a discrimination policy (i.e. the presence of a transgender person in a bathroom poses no greater inherent risk to privacy or safety than that posed by anyone else who uses the restroom).

While the court’s decision could be appealed and argued along the line of Hobby Lobby’s religious beliefs, the 2020 United States Supreme Court decision that transgender employees are protected from workplace discrimination and 2021 United States Supreme Court decision to decline to hear a case in which lower courts had upheld an employee’s right to use the restroom matching their gender identity would likely support the Appellate Court’s decision.

It is noteworthy that in upholding the Illinois Human Rights Commission’s award of $220,000 for emotional distress damages, the court also remanded the matter back to the Commission for a determination of any additional damages and attorneys’ fees that may be due – thus potentially increasing the plaintiff’s damage award.

This ruling makes clear to Illinois employers that the IHRA requires employees be allowed to use the restroom that matches their current gender identity.  Additionally, it makes clear that providing a unisex restroom does not excuse an employer from still allowing an employee to use other restrooms matching their current gender identity.

It also serves as a reminder to review and consider the following actions:

  • Revising anti-discrimination policies to make clear it prohibits discrimination based on sex, gender identity (including transgender and transitioning), and sexual orientation;
  • Ensuring dress code and restroom policies are not discriminatory;
  • Implementing procedures to address when an employee discloses they are transitioning or have a different gender identity, including changing an employee’s gender on personnel records and benefit information, maintaining confidentiality of personal medical information, recognition of different pronouns, and working with the employee on what, if any, communication is made to other employees regarding the employee’s transition or gender identity;
  • Ensuring that diversity and inclusion training addresses sex, gender identity (including transgender and transitioning), and sexual orientation.

To avoid potential missteps and pitfalls, it is advised that employers consult with experienced legal counsel in addressing these issues. 

OSHA Revises Its Mask Guidance and Encourages Vaccination of Employees

Contributed by Rebecca Dobbs Bush and Matthew Horn, August 17, 2021

Blue medical face masks isolated on white

Following the Centers for Disease Control’s updated mask and COVID-19 guidance dated July 27, 2021, OSHA finally updated its own mask and COVID-19 guidance on August 13, 2021. The updated guidance can be viewed here.  

Under the new guidance, OSHA recommends that employers require their employees—even those who are fully vaccinated—to wear masks when indoors in areas of substantial or high transmission of COVID-19.  Areas of substantial or high transmission are determined by county and updated by the CDC daily. The CDC’s updated map showing transmission rates by county can be viewed here.  As of today, the vast majority of the counties around the country are considered areas of substantial or high transmission, thereby implicating the updated guidance. 

The new guidance also recommends that fully vaccinated individuals with known or suspected exposure to COVID-19 be tested 3-5 days after exposure, and wear a mask while indoors for 14 days or until they receive a negative test result. Additionally, OSHA emphasizes that vaccination of individuals is the best way to prevent severe illness or death from COVID-19, and recommends that employers consider adopting policies that require workers to get vaccinated or to undergo regular COVID-19 testing – in addition to mask wearing and physical distancing. Prior to this updated guidance, OSHA had only published this recommendation for healthcare employers.

If your business operates indoors in an area of substantial or high transmission, we recommend that you require all employees and visitors to wear a mask regardless of vaccination status. However, given the language of its press release and updated guidance, OSHA appears hesitant to enforce this updated guidance—likely acknowledging that many employers will struggle with the implementation of ever-changing mask rules based on local transmission rates.

Government Loans and Grants to Businesses – Beware of the “Fine Print”

Contributed by John R. Hayes, August 13, 2021

25983831 – hand giving money to other hand hands giving receiving money

Starting from the early days of the COVID-19 pandemic both federal and state governments have provided assistance to businesses struggling with the economic impact of the pandemic.  Specifically, federal, state, and public assistance in the form of grants and forgivable loans have proliferated to provide much needed financial support to businesses negatively affected by the pandemic. For example, on August 11, 2021 Governor Pritzker and the Illinois Department of Commerce and Economic Opportunity (DCEO) announced the $250 million Back to Business (B2B) grant program, its second grant program for businesses, which aims to deploy small business recovery grants for businesses hit hardest by the COVID-19 pandemic. This is just one of many grants and forgivable loan programs implemented by the government (both state and federal) to assist businesses that have been adversely impacted by the COVID-19 pandemic.

But, before jumping at that public money, businesses should be aware of the “fine print” found in government-sponsored grant or loan programs. For example, some of the stipulations required of a business accepting a B2B grant are:

  • A recipient of the grant may be required to participate in an audit of the program at a future date;
  • A recipient must maintain financial records required for tax and regulatory compliance;
  • The grant proceeds are taxable; and
  • A recipient must have complied, and will continue to comply, with all relevant laws, regulations and executive orders from the state and federal government, including the social distancing guidelines as promulgated by the Executive Orders of the Illinois Governor.

The application for the B2B grant is not available at this time (applications will open on August 18, 2021) but the previous grant program from Illinois, the Business Interruption Grant (BIG) Program provides a roadmap as to what a business must “certify” in order to receive the grant.   Some of the requirements for BIG were:

  • The recipient will continue to comply, as applicable, with the provisions of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), the Copeland Act (40 U.S.C. 276c and 18 U.S.C. 874), the Davis-Bacon Act (40 U.S.C. 276a-276-1), the Drug-Free Workplace Act of 1988 (44 CFR, Part 17, Subpart F), the Fair Labor Standards Act (29 U.S.C. 201), and the Illinois Prevailing Wage Act (820 ILCS 130/1);
  • The recipient is not presently suspended, debarred, proposed for debarment, or declared ineligible by any state or federal department or agency, and will not enter into a contract with a contractor who is on any federal or state debarred contractor list;
  • The recipient will prohibit employees, contractors, and subcontractors from using their positions for a purpose that constitutes or presents an appearance of personal or organizational conflict of interests or personal gain;
  • The recipient has no lawsuits, claims, suits, proceedings or investigations pending, to the knowledge of the subrecipient and its authorized representative, threatened against or affecting the recipient (or its officers and directors) in respect of the assets or the subrecipient nor, to the knowledge of the recipient and its authorized representative, is there any basis for any of the same, and there is no lawsuit, suit or proceeding pending in which the recipient is the plaintiff or claimant which relates to the recipient or its assets;
  • The recipient has no action, suit or proceeding pending or, to the knowledge of the recipient or its authorized representative, threatened which questions the legality or propriety of the grant moneys to be received;
  • The recipient has not received any notice of any investigation conducted or charges, complaints or actions brought by the State of Illinois or any governmental body within the State of Illinois regarding the business or its officers and directors; and
  • Neither the recipient nor its officers and directors have received any notice that it is the subject of any criminal investigations or charges.

The above is just a sampling of some of the certifications that Illinois required in order for businesses to receive the BIG funds. We would expect the B2B grant program (and other programs providing grants or forgivable loans to businesses) to have similar certifications and requirements by businesses receiving grants or loans from the state.

Another certification that has popped up – specifically in the CARES Act loan program for medium sized businesses – is that of labor neutrality. One of the certifications there requires businesses to “remain neutral in any union organizing effort for the term of the loan.”  While the legality of this has yet to be challenged, and to date it is found only in the CARES Act, businesses should be on alert for similar terms in other assistance programs offered by the government.

Of course, all this is not meant to scare businesses away from the B2B grant program, or any other COVID-19 business relief program implemented by the government. Rather, businesses should be aware of the myriad requirements they are expected to adhere to in return for receiving a loan or grant, and of the “certifications” they are making as part of the agreement to accept the loan or grant.  Businesses, and their legal counsel, should always read the “fine print” before accepting any governmental assistance.