Author Archives: smithamundsen

COVID-19 Illinois Workers’ Compensation Amendment

Contributed by guest author Matthew Horn, May 26, 2020

After the Workers’ Compensation Commission withdrew its proposed Emergency Rule declaring that any employee in an “essential industry” contracting COVID-19 will be rebuttably presumed to have contracted COVID-19 at work, the legislature and business groups met and worked through a proposed amendment to the Workers’ Compensation Act addressing the issue.

Under the proposed amendment, which appears set to pass, first responders, frontline workers, and most “essential employees” will be rebuttably presumed to have contracted COVID-19 at work, if they have a confirmed case of COVID-19, and the presumption is not rebutted by any of the following: 1) the employee was not in the workplace for 14 days prior to the contracting COVID-19; or 2) the employer complied with all local and CDC guidance to protect its employees from COVID-19; or 3) the employee was exposed to COVID-19 by another source, such as a spouse.  Notably, even if an employee is successful in making such a claim: 1) the employer’s MOD rate will not be impacted; and 2) the employer is entitled to a credit against any TTD benefits for sick leave or other benefits paid to the employee.

Moving forward, employers should comply with all local and CDC guidance, and prepare a questionnaire to be filled out by employees with confirmed COVID-19 cases, inquiring as to the employee’s COVID-19 exposure—much like an accident report. Employers can use those questionnaires when evaluating a workers compensation claim.

Another Symptom of COVID-19: Union Organizing

Contributed by Beverly Alfon, May 26, 2020

Labor Law Lawyer Legal Business Internet Technology Concept.

If your “essential” workforce is not already organized, consider this your wake-up call. 

As this pandemic has worn on, and more “essential workers” have fallen ill to COVID-19, labor unions have become noticeably more active. Just last Monday, the AFL-CIO filed suit in federal court to compel the Occupational Safety and Health Administration (OSHA) to issue an emergency temporary standard, aimed at forcing the agency to mandate certain safety actions by employers. 

Noticeably, the rhetoric from the AFL-CIO has been focused on “all workers” as opposed to “their members.” Plagued by a continuing decline in membership, unions seemingly recognize that they cannot let this opportunity to organize more workers pass them by. In an April 30 opinion piece published by the Chicago Sun-Times, Gary Perinar, executive secretary-treasurer of the Chicago Regional Council of Carpenters, declared: “The importance of unions is more obvious than ever during the COVID-19 pandemic…Of all the injustices exposed by this public health crisis, the risks faced by non-union workers are the most apparent.” It was a direct call to non-union workers. 

Indeed, many of the headlines about labor activity during this pandemic have not involved unions. For example, there have been walkouts to protest unsafe work conditions in nonunion workplaces such as Amazon warehouses in Staten Island, New York; Amazon-owned Whole Foods grocery stores in Chicago and other locations; and McDonalds workers in Chicago have sued the corporation over safety concerns (albeit, this one was financially backed by the S.E.I.U.). Even gig workers delivering groceries for Instacart called for a work stoppage. Such activity, of course, confirms that some workforces are ripe for union organizing. 

As businesses begin to reopen (and essential businesses begin to move forward), they will be forced to deal with employee concerns and demands over personal protective equipment, wages, hazard pay, paid sick leave, disability accommodations, and the status of laid off employees.  These very matters – job insecurity, safety concerns, and benefits – are what unions rely upon to organize workers. 

So now what?  Get your union avoidance plan in place. 

  1. Identify who your “supervisors” are (as defined by the National Labor Relations Act) and get them trained on identifying and dealing with union organizing. A “supervisor” cannot be represented by a union. They are also agents of your company, so training is key. They should be directed on what their role should be in avoiding union organization and what they can and cannot do in the event that union organizing has already begun.
  2. Review policies for clarity, perceived unfairness, and employee relations. A union will often focus employees on unfair policies. 
  3. Benchmark wages and benefits. A union will often promise more money. So, it is best to be prepared with a response.
  4. Identify employee relations problems now and deal with them before employees turn to a union. Get feedback from the group of employees who are vulnerable to union organization. Sometimes, it is as simple as tweaking a supervisor’s management style.
  5. Train management on positive employee relations. Your supervisors need to know about the importance of providing regular feedback to employees and maintaining open communication with them.
  6. Get a communications plan in place in the event that union organizing begins or has begun. 

While you may already have much to consider during these unusual times, being aware of the potential threat of union organizing at your workplace is not enough. Assessment and planning are necessary so that if the need arises, response can be timely, effective, and within the parameters of the National Labor Relations Act.

Register Now! Complimentary Webcast: A Short Tutorial on the PPP Forgiveness Application

This brief 30-minute webcast covers highlights of the recently released application for forgiveness.

Join attorney Rebecca Dobbs Bush on Wednesday, May 27 at 1 PM CT for a complimentary webcast as she reviews the instructions for PPP loan forgiveness with attendees and points out items of special interest for all employers.

OSHA Revises COVID-19 Guidance….Again

Contributed by guest author Matthew Horn, May 22, 2020

Previously, OSHA issued guidance indicating that most employers only had to record or report confirmed COVID-19 cases when provided with objective evidence that an employee contracted COVID-19 at work.  In practice, this put the burden on employees to submit evidence to employers establishing that their COVID-19 cases were contracted at work.

OSHA recently issued revised guidance on this issue, which goes into effect on May 26, 2020. Under the revised guidance, OSHA puts the burden on the employer to make a “reasonable determination” as to whether a confirmed COVID-19 case was contracted at work. In order to make that determination, OSHA suggests that employers:

1) Question the employee as to how he/she believes he/she contracted COVID-19;

2) Discuss with the employee his/her out-of-work activities that may have resulted in exposure; and

3) Review the employee’s work environment for potential COVID-19 exposure.

If, after taking those steps, the only logical explanation is that the employee contracted COVID-19 at work, then the case should be recorded or reported to OSHA, as appropriate. 

Moving forward, employers should prepare a questionnaire to be filled out by employees with confirmed COVID-19 cases, inquiring as to the topics OSHA has identified in its guidance—much like an accident report. Employers can use those questionnaires to guide them in their OSHA-related decision making process, as well as if/when a workers’ compensation or civil suit is filed.

ON-DEMAND WEBCAST: COVID-19 in Skilled Care and Assisted Living: What You Must Do Now to Manage Risk and Impact

You CAN manage risk in senior living facilities during these trying times but understanding and following procedures is more critical now than ever to protect vulnerable residents and employees. In this recorded webcast, SmithAmundsen attorneys Betsy Ballek, Suzannah Overholt and Jennifer Stuart discuss how to most effectively ensure that the safety and health in your facility is not compromised. Topics include:

  • Overview of the state of long term care communities in the setting of COVID-19
  • Regulatory Impact and Potential Litigation
  • Immunity Laws and other Provider Protections
  • Employee Concerns and Testing

Can I go to Jail if My Business Violates a Stay-at-Home Order?

Contributed by Carlos Arévalo, May 18, 2020

How cities, counties and states are actively enforcing their COVID-19 orders is all over the map, but criminal and/or civil penalties are on the books in some areas.  For example, last Friday, May 15, the Illinois Governor directed the Illinois Department of Public Health (IDPH) to add an emergency rule called “Pandemic or Epidemic Respiratory Disease – Emergency Provisions.”  The emergency rule authorizes IDPH to “take means it considers necessary to restrict and suppress dangerously contagious or infectious diseases, especially when existing in epidemic form.”  This specifically includes the power to seek penalties pursuant to Section 8.1 of the Illinois Public Health Act, including seeking convictions of Class A misdemeanors that can result in up to 364 days in jail time and/or fines of up to $2,500.

The IDPH rule specifically restricts and greatly limits the following businesses:

  1. Restaurant and other food serving establishments (except those located in airports and hospitals);
  2. Fitness health clubs and non-medical wellness establishments; and
  3. Barbershops, hair and nail salons, and other establishments that provide non-medical personal care services.

Other states have taken a variety of similar approaches.  For instance, in Indiana, businesses that violate state and local orders will receive a verbal warning first, a cease and desist letter second, a removal of their license or permit, and then finally, criminal charges, namely a Class B Misdemeanor resulting in a $1,000 fine and up to 180 days in jail.  A violation of Michigan’s stay-at-home order can result in a civil penalty of up to $1,000, as well as criminal fines and up to 90 days of jail time.  In Ohio, a violation can lead to a second-degree misdemeanor, a $750 fine and up to 90 days in jail.  While Wisconsin’s state-wide order has been struck down by the Wisconsin Supreme Court, local orders are still in effect in some cities and counties.  In some localities, a violation may result in 30 days in jail time and a $500 fine pursuant to the Wisconsin statute on Communicable Diseases.  Missouri’s state-wide order ended on May 4th, but some local cities and counties have extended its application to accommodate a phased reopening.  Pursuant to Missouri Revised Statutes, a violation of law or quarantine is a Class A misdemeanor punishable by 1-year in prison and a $2,000 fine.  Restaurants in Pennsylvania face suspension of their retail licenses and fines up to $10,000 per day.   Pursuant to Maryland’s amended order on May 6th, violations can result in $5,000 fines and jail for up to 1-year. Finally, in Texas, the initial COVID-19 order provided for fines up to $1,000 and 180 days in jail or both. However, in light of inconsistent and “overzealous” enforcement by some local agencies, particularly the arrest of a Dallas hair salon owner, Governor Greg Abbott announced he would ban cities from arresting individuals and would retroactively nullify any prosecutions.

Whether hard line enforcement will occur remains to be seen. In the interim, legal battle lines are being drawn. Any business that is not 100% certain of its rights and responsibilities in operating during the current crisis should consult with experienced legal counsel. The stakes are just too high.

Key Takeaways for PPP Borrowers: The Forgiveness Application is Finally Out!!

Contributed by Rebecca Dobbs Bush, May 18, 2020

Late Friday, May 15th, the SBA released long overdue guidance on how to determine and apply for forgiveness of loans received under the Paycheck Protection Program. The application and corresponding instructions can be found here on the SBA website.

Within the application and instructions, several common questions have finally been answered:

  1. How do we calculate payroll costs?  Do we go by pay period date or pay date?  What if the 8-week covered period doesn’t match up with our payroll?

A payroll cost must be either incurred OR paid. Initially, the CARES Act indicated that it had to be both incurred and paid during the 8-week period. You look to costs paid or incurred during the 8-weeks (or 56 days) counting the date you received the loan proceeds. You can also adjust your 8-week period to an “alternative” covered period if your payroll is at least bi-weekly or more frequent.  In that case, you can begin the 8-week period starting with the first pay period that begins immediately following the date you received the loan proceeds.

Payroll costs are considered “incurred” on the day that the employee’s pay is earned.  Payroll costs are considered “paid” on the day paychecks are distributed or the date the borrower originates an ACH credit transaction.

This is not exactly a windfall that will allow you to randomly payout money in order to maximize forgiveness.  In terms of cash compensation, no individual employee can account for more than $15,385 (i.e., $100,000 prorated over 8-weeks).  This cap operates to limit the amount of cash payroll costs that you can account for.

2. Can we pay non-payroll costs early and use PPP loan proceeds for those?

The answer to this is: maybe. Again, this is better than expected with the original language in the CARES Act indicating the cost had to be both incurred and paid.  Instead, the forgiveness application indicates that a permissible non-payroll cost must be either incurred or paid during the covered period.  Going a bit further, the instructions permit borrowers to account for those non-payroll expenses “paid on or before the next regular billing date, even if the billing date is after the Covered Period.”

For example: A borrower’s eight-week “Covered Period” ends on May 31st. The borrower’s internet bill is paid on the 15th of each month.  That borrower can use PPP loan proceeds to pay the bill due on May 15th and also pay the bill that would otherwise be due on June 15th as long as three things apply: 1) the internet service being paid is one that began before February 15th; 2) the June 15th bill is paid before the expiration of the 8-week period on May 31st; and 3) the additional payment is not going to cause the borrower to have total non-payroll costs that exceed 25% of the total forgiveness amount.

3. What is an FTE?  And how do we count part-timers?

Full-Time has been clarified to mean 40 hours per week.  To account for part-timers, a borrower has two options.  The borrower can take weekly hours worked and divide by 40 to determine a percentage FTE for anyone working less than 40 hours/week.  Alternatively, and at a borrower’s election, employees working 40 hours/week or more can be counted as 1 and employees working on a part-time basis can be counted as a .5. 

4. In determining FTE headcount, do we have to account for people who can’t, or don’t want to, work?

No!  This is a big relief for those employers that have been struggling with natural attrition of their employees.  The instructions recognize certain circumstances where a borrower can claim an exception and account for an individual as a FTE even though they are no longer employed with the company as of the date of the forgiveness application.  These are: 1) an employee that was “fired for cause;” 2) an employee who voluntarily resigned; or 3) an employee who  voluntarily requested and received a reduction of his or her hours.

In the event a borrower is going to rely on one of the exemptions, they will want documentation for the file to substantiate the basis of the exemption in the event they are subject to an audit by the SBA at a later date.

Register Now! Complimentary Webcast: BACK IN BUSINESS: Returning Workers to the Workplace – May 29, 2020

“Business as usual” will be anything but for the foreseeable future. Business owners need to evaluate the issues and risks as they prepare to return workers to the workplace.
 
Join attorneys Jeff Risch and Suzannah Overholt on May 29th at 11:00 AM CT as they discuss how employers can get back to business as effectively as possible, including:

  • The latest guidance from local, state, and federal government on phasing in workers
  • Screening employees, including temperature checks at the door, and related privacy concerns
  • Protecting employees, including identifying appropriate PPE
  • Public transportation and commuting issues
  • Managing childcare issues
  • Avoiding discrimination claims and related pitfalls
  • Diminishing the threat of workers compensation claims
  • Supporting subcontractors/independent contractors without making them employees
  • Managing public relations
  • And more!

We hope you can join us for this timely webcast!

The SBA and Treasury Issue Safe Harbor for Necessity Certification and Extend Deadline to Repay PPP Loan

Contributed by guest author Andrew Podgorny, May 15, 2020

On May 13, 2020, the SBA and Treasury issued additional guidance with respect to the necessity certification that borrowers must make when applying for a PPP loan. FAQ #46 provides a safe harbor for borrowers receiving loans which are less than $2 million and also indicates that, in the event the SBA determines that a borrower receiving a loan in excess of $2 million lacks an adequate basis for making the necessity certification, such borrower will be afforded the opportunity to repay the loan. Specifically, FAQ #46 states:

Question: How will SBA review borrowers’ required good-faith certification concerning the necessity of their loan request?

Answer: When submitting a PPP application, all borrowers must certify in good faith that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

Moreover, in light of the timing of FAQ #46’s release, the SBA extended the deadline for borrowers to repay its PPP loan from May 14, 2020 to May 18, 2020.

Wisconsin Strikes Down Stay-at-Home Order: Non-essential Businesses Prepare to Reopen

Contributed by Peter Hansen, May 14, 2020

State of Wisconsin

The Wisconsin Supreme Court struck down Emergency Order 28, the Safer at Home Order, for failing to follow emergency rulemaking procedures in a lengthy 161-page opinion – effective immediately.  So, what does this mean for Wisconsin employers?

Local Orders Still Apply

Local officials may enact their own stay-at-home orders – and indeed, some already have.  Dane and Kenosha counties each issued orders adopting the majority of Emergency Order 28’s provisions, effective immediately and continuing to May 26, 2020.  Brown County issued a similar order in effect until May 20, 2020, the City of Racine issued an order in effect until May 26, 2020, and Milwaukee’s Mayor has taken the position that the city’s prior stay-at-home order in still in place.

More local orders will follow, so any employer planning on reopening or changing their practices as a result of the Wisconsin Supreme Court’s decision must verify that they are not violating any local order.

Preparing the Workplace

Non-essential businesses preparing to reopen can take a number of steps recommended by the Wisconsin Department of Health Services to prevent and reduce COVID-19 transmission among their workforce, including:

  • Whenever possible, maintain a distance of at least 6 feet from others
  • Require employees who have symptoms of respiratory illness to stay home and do not come to work until they are free of fever (>100.4°F) AND/OR respiratory symptoms (for example, cough, shortness of breath) for at least three days (72 hours) without the use of fever-reducing medicine AND ten days have passed since symptoms first appeared
  • Provide tissues and no-touch disposal receptacles for use by employees and customers
  • Encourage employees to wash their hands often with soap and water for at least 20 seconds or to use hand sanitizer with at least 60% alcohol if soap and water are not available
  • Routinely clean and disinfect frequently touched objects and surfaces such as workstations, keyboards, telephones, handrails, and doorknobs
  • Advise employees to avoid touching their eyes, nose, and mouth with unwashed hands

Employers should also consider implementing the Centers for Disease Control and Prevention’s guidance for responding to COVID-19, including:

  • Conducting daily health checks
  • Conducting a hazard assessment of the workplace
  • Encouraging employees to wear cloth face coverings in the workplace, if appropriate
  • Implementing policies and practices for social distancing in the workplace
  • Improving the building ventilation system