CARES ACT Section 1102 Paycheck Protection Program

The CARES Act amends the Small Business Act 15 USC 636 (a) to add the Paycheck Protection Program (“PPP”) to provide loans to small businesses, nonprofit organizations, veterans’ organizations, or Tribal businesses in an effort to keep workers employed during the COVID-19 pandemic.

Who is eligible? 

Small Businesses & Nonprofits.  Businesses, nonprofit organizations, veterans organizations, or Tribal businesses with less than 500 employees OR “the size standard in number of employees established by the Administration for the industry in which the business operates.” The SBA provides size standard tables, which may be located at: https://www.sba.gov/document/support–table-size-standards. The PPP provides that an “employee” for purposes of the program includes an individual employed on full-time, part-time, or other basis.

Sole Proprietors and Self-Employed Individuals. Sole proprietors, independent contractors, and eligible self-employed are eligible for PPP loans with documentation as determined necessary by the loan administrator, which will likely include:

  • Payroll tax filings reported to IRS
  • Forms 1099-MISC
  • Income and expenses reports

Accommodation and Food Service Industries. Businesses with less than 500 employees per physical location AND in the accommodation and food service industry are eligible.

 

Maximum Loan Amount   

Generally Based on Payroll Costs.  The lesser of (1) the average of the total monthly “payroll costs” incurred during the 1 year period before the date on which the loan is made multiplied by 2.5, and (2) $10,000,000. Under the PPP, “payroll costs” include:

  • Salary, wages, commissions and similar compensation
  • Payment of cash tip or equivalent
  • Payment for vacation, parental, family, medical, or sick leave
  • Allowance for dismissal or separation
  • Payment for the provisions of group health care benefits, including insurance premiums
  • Payment of any retirement benefit
  • Payment of state or local tax assessed on the compensation to employees

Payroll costs do NOT include:

  • Compensation for an employee in excess of an annual prorated salary of $100,000
  • Taxes imposed under Internal Revenue Code Chapters 21, 22, and 24 (i.e., Social Security, Medicare, and Medicaid taxes) for the covered period.
  • Compensation for an employee whose principal residence is outside of the US
  • Qualified sick leave for which a credit allowed is allowed under the Families First Coronavirus Response Act (the “FFCRA”)
  • Qualified family leave for which a credit is allowed under the FFCRA

Special Rules for Start-up and Seasonal Companies.

Allowable Uses for PPP Funds

PPP funds may be used for:

  • Payroll costs (see the definition above)
  • Costs related to the continuation of group healthcare benefits during paid sick, medical, or family leave and insurance premiums
  • Employee salaries, commissions and other compensation
  • Payments of interest on any mortgage obligation
  • Rent
  • Utilities
  • Interest on other debt obligation incurred during covered period

Shareholders, members, or partners of borrowers may have personal liability for non-payment of loan amounts to the extent such shareholder, member, or partner uses PPP loan proceeds for a purpose not described above. 

Requires Certification

To obtain a PPP loan, the borrower must certify in good faith that:

  • Uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the borrower;
  • Acknowledge that the funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments or to pay utilities;
  • Borrower does not have an application pending for a small business loan for the same purpose or duplicative of amounts applied for or received under a covered loan; and
  • During the period beginning Feb 15, 2020 and ending on Dec 31, 2020, the borrower has not received amounts under this subsection for the same purpose or duplicative of amounts applied for or received under a covered loan.

PPP Loans Are Different From Other SBA Loans

The CARES Act waives fees typically required for SBA loans for PPP loans made between February 15, 2020 and June 30, 2020. There is no requirement that the borrower is unable to obtain credit elsewhere. PPP loans also don’t require a personal guaranty or collateral requirements. PPP loans made between February 15, 2020 and June 30, 2020 are deferred and up to 100% forgivable.

Loan Deferment and Forgiveness

Deferral of Principal and Interest Payments.  The CARES Act requires that lenders provide complete payment deferment (including principal, interest, and fees) for at least 6 months and not more than 1 year.  Under the CARES Act all borrowers are presumed to have been adversely impacted by Covid-19, and need not show it. .

Forgiveness.  Borrowers of PPP loans are eligible for loan forgiveness. The amount which may be forgiven is the sum of:  (1) payroll costs, (2) interest payments mortgage obligations for real or personal property incurred before February 15, 2020, (3) rent payments for obligations incurred before February 15, 2020, and (4) utilities payments for electricity, gas, water, transportation, telephone, or internet for service which began before February 15, 2020, wherein all of such costs and payments are paid during the 8 weeks after receiving the loan. The amount forgiven may not exceed the principal of the loan. Information published by the United States Department of the Treasury has indicated that due to likely high subscription of the PPP, it will be required that at least 75% of the forgiven amount must have been used for payroll costs.

The amount forgiven may be reduced based on a reduction in workforce or wages and salary. An objective of the PPP is to provide funds to businesses to keep workers employed. Reducing the forgiveness amount if a business reduces its workforce reinforces that objective.

 

Loan Terms and Balance Repayment

The remaining balance after the amount forgiven shall continue to be guaranteed by the Administration. PPP loans shall be due within 2 years. Interest on PPP loans shall be 1.0%* and accrues through the deferral period.

Please note that additional rules and regulations relating to the program are expected and we intend provide applicable updates as more guidance is available.  Please contact a Shuttleworth & Ingersoll attorney if you have questions. *This article was updated on April 6, 2020 to reflect the most recent loan rate.

Betsy Souer represents companies and individuals in matters relating to intelletual property, real estate, and business as an associate attorney at Shuttleworth & Ingersoll. Betsy draws on her experience as an engineer in manufacturing and her real estate background. Betsy worked as a summer associate for Shuttleworth & Ingersoll in the summer of 2017. She earned her law degree from the University of Iowa College of Law in 2018.

IRS Guidance on FFCRA Tax Credits

Late yesterday, the IRS published a series of FAQs on tax credits for FFCRA/COVID-19 related leave. This guidance includes the documentation an employer must have in order to substantiate its eligibility for these tax credits. 

Questions 44-46 of the FAQs address the documentation requirements. While some of the documentation requirements are not unexpected, those associated with leave to care for a child are more specific than most expected.

Specifically, Question 44 indicates that an employee’s request for leave must be in writing and must include the following:

  1. The employee’s name;
  2. The date(s) for which leave is requested;
  3. A statement of the coronavirus related reason the employee is requesting leave and written support for such reason; and
  4. A statement that the employee is unable to work, including by means of telework, for such reason.

For leave requests based on a quarantine order or advice to self-quarantine, the employee’s request should include the name of the governmental entity ordering the quarantine or the name of the health care provider advising the employee to self-quarantine. Finally, if the person subject to quarantine or advised to self-quarantine is not the employee, the request must include that person’s name and relationship to the employee.  

For leave requests based on a school closing or child care provider unavailability, the employee’s request must include the following: 

  1. The name and age of the child (or children) to be cared for;
  2. The name of the school that has closed or place of care that is unavailable;
  3. A representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave; and
  4. If the employee’s leave is for the purpose of providing care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.

Question 45 addresses other records an employer must maintain in order to substantiate eligibility for a tax credit. These include: 

  1. Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.
  2. Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
  3. Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
  4. Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).

Finally, Question 46 states that employers must keep the above records for at least 4 years after the date the tax becomes due or is paid, whichever is later, and the records must all be available for IRS review.

Sara Sidwell is an Attorney with Shuttleworth & Ingersoll. Sara’s practice focuses on employment and labor law and is based out of the Coralville office. She has practiced employment law for nearly fifteen years, both in-house and in private practice, and has extensive experience counseling both large and small employers on all aspects of employment law, including discrimination, harassment and retaliation claims, wage and hour compliance, non-compete issues and workforce reductions.

Deadlines to File Taxes and to Pay Taxes Owed Extended – Updated March 26, 2020

Updated: March 26, 2020

In an effort to curb financial constraints caused by the COVID-19 pandemic, the Internal Revenue Service (IRS) has postponed the filing and payment due dates for Federal income tax returns until July 15, 2020. This extension allows individuals (including married individuals filing jointly) and companies to defer filing of their federal income tax return and payment of federal tax liabilities until July 15, 2020. The previous limitation on the amount of federal tax liability that could be postponed has been removed. Additionally, the IRS has also postponed the due date for Federal estimated income tax payments which were due on April 15, 2020.

The federal filing and payment due dates have automatically been postponed, so taxpayers do not need to do anything to advantage of the extension. Please note that interest and penalties will start to accrue as of the extended due date for payments made after July 15, 2020. Taxpayers will need to file 2019 income tax returns and pay 2019 federal tax liabilities on or before July 15, 2020.

If you are a taxpayer who is expecting a refund, we recommend that you file your taxes as soon as possible. At this point, federal refunds are still expected to be received within 21 days of submitting a return.

The Iowa Department of Revenue (IDOR) has also extended both payment and filing deadlines until July 31, 2020. This extension allows Iowa taxpayers to defer filing the following Iowa tax forms if they have not been filed already:

  • IA 1040, Individual Income Tax Return
  • IA 1040C, Composite Return
  • IA 1041, Fiduciary Return
  • IA 1120, Corporate Income Tax Return
  • IA 1120F, Franchise Tax Return for Financial Institutions
  • IA 1065, Iowa Partnership Return
  • IA 1120S, S Corporation Return
  • Credit Union Moneys and Credits Tax Confidential Report

Taxpayers who have filed or will file one of the above forms and owe or will owe a tax liability to the state can defer payment until July 31. The IDOR will waive any penalty and interest charges on taxes owed until that date. At this time, there does not appear to be a monetary limit on the amount of tax liabilities that can be deferred. Late payment penalties and interest will begin to accrue on August 1, 2020. Please note, that estimated tax payments due to the IDOR remain due on their normal due dates.

Please contact any of our tax attorneys if you need additional guidance regarding this topic.

* The information provided in this article reflects guidance as of March 26, 2020. Any subsequent government action will need to be considered. Shuttleworth and Ingersoll will continue to closely monitor federal and state tax updates as they are released. 

Individual Tax Attorneys Who are Here to Help

Sarah C. Thielen is an associate attorney whose practice focuses on business law, estate planning, and tax law. In 2018, Sarah graduated with her J.D. from the University of Iowa College of Law. Sarah started as a summer associate with Shuttleworth & Ingersoll in 2016, and returned for the summer in 2017. Sarah is an integral member of the business and individual law groups.

Jonathan Landon is an Attorney and Vice President with Shuttleworth and chair of the Business Law Practice Group. Jon advises individuals, businesses, and tax-exempt organizations in: Federal and state tax matters; general business transactions; deferred compensation and employee benefits; and estate and succession planning.

Don Johnson is an Attorney and Senior Vice President at Shuttleworth & Ingersoll, P.L.C.  Don has a general practice including but not limited to estate planning and estate administration (including the preparation of wills and trusts, probate and trust administration, and will contests), taxation (including tax return preparation and tax consulting), and business matters (including the formation of corporations and limited liability companies, contract drafting and review, and mergers and acquisitions).

Gary Streit’s practice focuses on estate and business succession planning, qualified plans and employee benefits, taxation, and other general business matters. Gary was president of the firm from 2002 through 2016, and was chair of the board in 2017 and 2018.

Department of Labor Publishes the Families First Coronavirus Response Act poster

Today, the Department of Labor published the Families First Coronavirus Response Act (FFCRA) posters and frequently asked questions surrounding the posters.  As with our previous update, the FFCRA requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. Please check out our previous updates for more detailed information regarding the FFCRA.

*The DOL updated these posters as of March 27, 2020

Mark Hudson is an Attorney and Senior Vice President at Shuttleworth & Ingersoll, P.L.C. Mark’s work focuses on labor and employment compliance and counseling (including personnel policies and decisions, workplace investigations, affirmative action program compliance, wage and hour advice, and general employment counseling), labor and employment litigation (including equal opportunity, wrongful discharge, discrimination, sexual harassment and defense of employment-related claims), workplace training (including sexual harassment, workplace civility, bystander intervention, and a myriad of other training topics for supervisor, employee, and human resource professionals), privacy and data security compliance and litigation, and fair housing litigation and compliance.

UPDATE – The DOL Issues Updated Guidance – The Families First Coronavirus Response Act

UPDATE – The DOL Issues Updated Guidance – The Families First Coronavirus Response Act is Effective April 1, 2020

 
On March 18, 2020, the U.S. Senate approved the House-passed Families First Coronavirus Response Act (“FFCRA”).  The bill was sent to and signed by the President on March 18, 2020 and will be effective April 1, 2020.  This revised date was announced yesterday afternoon, after the Department of Labor (“DOL”) issued new “Questions and Answers” (https://www.dol.gov/agencies/whd/pandemic/ffcra-questions) and is one day earlier than the originally anticipated April 2, 2010 effective date.
The DOL has indicated that it will issue a model notice for the new law no later than March 25, 2020.  The DOL has also indicated that it will publish regulations that address the application of certain provisions to employers with less than 50 employees; regulations which will establish the criteria used to assess if an under-50 employer will be exempt from the new law because its compliance would jeopardize the viability of the business.  These regulations are expected in April 2020, though the DOL has not indicated when in the month of April these regulations will be forthcoming. 
 

 

COVID-19 Legislation – Employer Obligations Under The Revised Families First Coronavirus Response Act

On March 14, 2020, the U.S. House of Representatives approved the Families First Coronavirus Response Act (“FFCRA”) in response to the COVID-19 pandemic and its impact on U.S. employees.  Just two days later, on March 16, 2020, the House revised the bill, modifying or eliminating entirely some of the earlier bill’s key provisions.  It was this version of the bill that was passed by the Senate and signed by the President on March 18.

The final bill provides two types of assistance, both of which will apply to the vast majority of employers.  First, FFCRA provides for 80 hours of paid sick leave for employees, for the reasons outlined below.  Second, it expands the scope of FMLA leave to provide for care of a child whose school or place of care is closed due to the COVID-19 public health emergency. 

Unlike the “traditional” FMLA, which defines a covered employer as having 50 or more employees, FFCRA applies to employers with fewer than 500 employees.  The bill does contain language allowing the Secretary of Labor to exclude health care providers and emergency responders from the definition of employees who are eligible to take such leave, and to exempt small businesses (defined as those with fewer than 50 employees), if the required leave would jeopardize the viability of their business.

Emergency Paid Sick Leave

FFCRA provides 80 hours of paid sick leave for full-time employees.  Part-time employees would receive paid sick leave on a pro-rated basis.  Under the final bill, employees would be eligible for paid sick leave if the employee is unable to work or telework, under the following circumstances:  

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. The employee has been advised by a health care provider to self-quarantine because of COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  4. The employee is caring for an individual ordered or advised to quarantine or isolate as described in (1) or (2) above;
  5. The employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
  6. The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Under the final bill, paid leave, where taken for reasons 1, 2, or 3 above is paid at the employee’s regular rate of pay (subject to a cap of $511 per day ($5,110 in total)); and when taken for reasons 4, 5, and 6, is paid at two-thirds the employee’s regular rate (subject to a cap of $200 per day ($2,000 in total)).  FFCRA paid sick leave is available immediately, regardless of length of employment.  Note that sick leave under FFCRA must be provided in addition to whatever paid sick leave, PTO or vacation pay the employer already provides.  And while an employer can allow an employee to use employer provided sick-leave or PTO before using leave under the FFCRA, the employer cannot require it.  Finally, employers may not retaliate against employees for taking paid sick leave under FFCRA. 

 

Emergency Family and Medical Leave Expansion

FFCRA’s FMLA expansion will allow covered employees to take 12 weeks of FMLA leave between enactment and December 31, 2020 for “a qualifying need related to a public health emergency.”  This “qualifying need” is now limited to instances where an employee is unable to work or telework due to the need to care for a child if the child’s school or place of child care has been closed or the child care provider is unavailable, due to a public health emergency.  This is a substantial departure from the original version of the bill.

Key provisions under the revised bill include:

  • A covered employee includes anyone employed by the employer for 30 days or more.
  • The first 10 days of any coronavirus-related family leave may be unpaid, but subsequent time must be paid in an amount that is not less than two-thirds of an employee’s regular rate of pay. Unlike the original bill, the amended legislation limits the amount of required pay for leave to no more than $200 per day and $10,000 total.
  • Employees can elect to substitute any accrued paid vacation, parental, medical or sick leave for unpaid leave, but employers cannot require employees to substitute paid leave for unpaid leave.
  • The leave is job-protected, meaning an employer must return the employee to the same or equivalent position upon return, with limited exceptions, including an exception that will apply to employers with fewer than 25 employees, when the individual employee’s position no longer exists due to economic conditions or operational changes related to the COVID-19 public health emergency and the employer makes reasonable efforts to restore the employee to an equivalent position. In order to qualify for the exception, the employer must make reasonable efforts to contact the displaced employee for up to one year after they are displaced.  

 

Enforcement

The DOL will observe a temporary period of non-enforcement for the first 30 days after the Act takes effect, so long as the employer has acted reasonably and in good faith to comply with the Act.  Given the Act’s effective date of April 1, 2020, this non-enforcement period should extend until May 1, 2020.  The DOL has indicated that “good faith” will exist when violations are remedied and the employee is made whole as soon as practicable by the employer, the violations were not willful, and the employer provides the DOL with a written commitment to comply with the law going forward.   

 

Tax Credits

Sick Leave Credit

Employers may receive tax credits for amounts paid to an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis.  Eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

Employers may receive tax credits for amounts paid to an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus.  Eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credits outlined above, an employer may receive a tax credit for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the coronavirus.  Eligible employers may receive a refundable child care leave credit.  This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate.  Up to 10 weeks of qualifying leave can be counted towards the child care leave credit.  Eligible employers are also entitled to a tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers are then required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 Series) with the IRS.

Per the Department of Treasury and the IRS, under guidance that is expected this week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.  The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS.  The IRS expects to process these requests in two weeks or less.  The details of this new, expedited procedure will be announced next week.

*Example Provided by the IRS/Department of Treasury

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Shuttleworth & Ingersoll will continue to closely monitor this and other legislative activity. Please contact any of our employment attorneys if you need additional guidance regarding this update or COVID-19 in general.

Sara Sidwell is an Attorney with Shuttleworth & Ingersoll. Sara’s practice focuses on employment and labor law and is based out of the Coralville office. She has practiced employment law for nearly fifteen years, both in-house and in private practice, and has extensive experience counseling both large and small employers on all aspects of employment law, including discrimination, harassment and retaliation claims, wage and hour compliance, non-compete issues and workforce reductions.

Don’t Let Your Guard Down during the COVID-19 Pandemic

Scammers are trying to take advantage of individuals during this historic time. There has been an uptick of emails with malicious attachments or links preying on COVID-19 and the desire to have more information. These emails are drafted in an effort to trick victims into revealing sensitive information or donating to fraudulent charities or causes. This is a reminder to be extra caution when handing any communications with COVID-19 in the subject line, as part of an attachment or as a hyperlink. One should also be careful of calls related to COVID-19 or economic scams preying on individuals who are facing employment and economic hardships. Watch for these scams in phone calls, texts or social media posts.

The Cybersecurity and Infrastructure Security Agency has released the following reminders and precautions:

  1. Avoid clicking on links in unsolicited emails and be wary of email attachments.
  2. Use trusted sources-such as legitimate, government websites. One trusted source for up-to-date, fact-based information about COVID-19 is:
  3. Do not reveal personal or financial information in email, and do not respond to email solicitations for this information.
  4. Verify a charity’s authenticity before making donations.
  5. Review CISA Insights on Risk Management for COVID-19:

Tricia Hoffman-Simanek is an Attorney and Senior Vice President at Shuttleworth & Ingersoll, P.L.C. Her legal work focuses on the area of litigation, which includes but is not limited to, professional malpractice, long term care litigation, insurance defense, and other health law litigation. Tricia also provides advice and representation on HIPAA compliance, training, and investigations, professional licensure matters, and risk management.

What Employers Should Know About the ADA, the Rehabilitation Act, and COVID-19

On March 17, 2020, the EEOC finally released updated guidance on how to navigate the ADA now that spread of the coronavirus/COVID-19 has been declared a pandemic (What You Should Know About the ADA, the Rehabilitation Act, and COVID-19). It answers a number of key questions employers have had in the last two weeks, including if they can take an employee’s temperature and what questions they may ask employees about COVID-19 exposure or symptoms. The follow is a summary of the EEOC’s guidance, as well as our recommendations regarding some of that advice:

  • During a pandemic, employers may ask employees if they are experiencing symptoms of coronavirus, including fever, chills, cough, shortness of breath, or sore throat.  Employers must continue to maintain all information about employee illness, including COVID-19 illness, as a confidential medical record in compliance with the ADA.
  • While measuring an employee’s body temperature is generally considered a medical examination, because the CDC and state/local health authorities have acknowledged community spread of the virus and issued recommended precautions, which may include taking an employee’s temperature, the EEOC advises that employers may now measure employees’ body temperature, but should be aware that some people with coronavirus do not have a fever.
  • The CDC has indicated that employees who become ill with symptoms of coronavirus should leave the workplace.  The EEOC has indicated that the ADA does not prohibit employers from following this advice. 
  • When employees who have been out for COVID-19 health related reasons return to work, employers are allowed to require doctors’ notes certifying their fitness for duty. However, as a practical matter, the healthcare system is likely to be overwhelmed during the COVID-19 pandemic and employees may be unable to procure the typical fitness for duty documentation employers would normally ask a returning employee to provide.  As a result, the EEOC recommends that employers be flexible and consider accepting “a form, a stamp, or an e-mail to certify that an individual does not have the pandemic virus.”  It is also worth noting that the CDC has asked employers to not require such a note, for the same reasons the EEOC cites. Employers confronted with this question should attempt to treat returning employees consistently.  However, depending on an employee’s reason for leave and his/her healthcare provider’s willingness or capacity to provide information, employers may need to be flexible and work with the individual employee to get confirmation of fitness for duty in a practical and efficient way.

We are actively monitor this ongoing situation and will continue to provide updates as things change.

Sara Sidwell is an Attorney with Shuttleworth & Ingersoll. Sara’s practice focuses on employment and labor law and is based out of the Coralville office. She has practiced employment law for nearly fifteen years, both in-house and in private practice, and has extensive experience counseling both large and small employers on all aspects of employment law, including discrimination, harassment and retaliation claims, wage and hour compliance, non-compete issues and workforce reductions.

Practical Tips for Families during COVID-19 & Social Distancing

During these unconventional times, families committed to being good co-parents and putting the interest and safety of their children first should consider these practical tips:

  1. Stay Informed: Get your information regarding COVID-19 from reliable sources such as the CDC at:  cdc.gov/coronavirus  or for Iowa information:  https://idph.iowa.gov.  Make sure you and your children are implementing all the recommendations to reduce the risk of spreading the virus, including frequent handwashing and daily cleaning with appropriate products of door knobs, phones, remotes, keypads, etc.
  1. Following Court Orders:  As much as possible try to follow any existing Court orders regarding care schedules.  However, remember that you can change the care schedule so long as you and the other parent agree to the change.

The Court system is also being impacted by the virus.  All trials and hearings scheduled to start before May 4 will be rescheduled or conducted by telephone, depending on the choice of the judge.  Courts may approve attendance at an on-line course for required children-in-the-middle classes.  You should contact us if you plan to attend a course online.

  1. Effective Co-Parenting is Critical: Now is the time where good co-parenting is critical.  Make sure you put your children first.  If you have symptoms, you should tell the other parent and not exercise your care time until you have been tested and cleared for contact by your health care provider. 

Share any test results, positive or negative, with the other parent.

If in person visitation is not possible, offer visitation through Facetime, Skype or other similar applications.

Work with the other parent to come up with a consistent plan for the children that will be followed in both homes.  Your plan might include how to handle education while schools are closed, social interactions, and appropriate activities for the children during the period of social distancing.

If you have not previously used an app for co-parenting this would be a good time to try one.  Here are some suggestions:

    • AppClose
    • 2houses
    • Our Family Wizard
  1. The non-compliant parent: If you have a co-parent that is not complying with CDC recommended social distancing and hygiene practices, you should first try to talk to them about following the recommendations.  Remember in your communications to use a BIFF Response®: make sure the communication is brief, informative, friendly and firm.

If the parent still will not comply, you should contact your lawyer.  However, keep in mind that right now Court access is limited to emergency matters.

  1. Economic Consequences: You should still plan to pay your support obligations as required by Court orders.  However, if your income or expenses have been dramatically impacted by COVID-19, start by having a conversation with the other parent.  If it is not possible for you to pay all of your support because of a reduction or loss of pay, pay as much as you can.  If you are suddenly faced with increased expenses such as medical bills, you should pay your support obligation first and your medical bills second.  Most health care providers will allow you to set up a payment plan based on your ability to pay.  

You can learn more about what type of financial help may become available under the Families First Coronavirus Response Act (“FFCRA”) here:

https://shuttleworthlaw.com/articles/2020/covid19-legislation-ffcra/

The keys to managing the current situation will be staying informed, flexible and respectful. If you have specific concerns that are not addressed above, please call us.  The attorneys in the Family Law Group is available to help you in whatever way you need.

Blog Co-Authors

Allison M. Heffern is an Attorney and Senior Vice President of Shuttleworth & Ingersoll, P.L.C. Allison’s practice focuses on family law and litigation. Typical family law work for Allison includes dissolution of marriage (divorce), both traditional and collaborative, child custody and visitation disputes, among many other family legal services.

Caitlin L. Slessor is an Attorney and Vice President at S&I whose practice focuses on Family Law.  Caitlin represents clients from the beginning to the end of their family law disputes.  This may include high conflict custody cases or complicated business division dissolutions.

Elizabeth J. Craig is an attorney at Shuttleworth & Ingersoll, P.L.C. Her work is primarily focused on appellate law. Liz works out of the Coralville office and is an integral member of the Shuttleworth team.

UPDATED – COVID-19 Legislation: FFCRA is Now Law

UPDATE –
The Families First Coronavirus Response Act is Now Law

On March 18, 2020, the U.S. Senate approved the House-passed Families First Coronavirus Response Act (“FFCRA”).  The bill was sent to and signed by the President on March 18, 2020 and will be effective 15 days from signing – April 2, 2020.

 

Employer Obligations Under The Revised Families First Coronavirus Response Act

On March 14, 2020, the U.S. House of Representatives approved the Families First Coronavirus Response Act (“FFCRA”) in response to the COVID-19 pandemic and its impact on U.S. employees.  Just two days later, on March 16, 2020, the House revised the bill, modifying or eliminating entirely some of the earlier bill’s key provisions.  Please note that the revised bill is not yet law. The bill must still be taken up by the U.S. Senate and while we expect the Senate to move quickly, key provisions of the bill face resistance in the Senate and may change. 

As updated by the House, the revised bill provides two types of assistance, both of which will apply to the vast majority of employers.  First, FFCRA provides for 80 hours of paid sick leave for employees to recover from and/or prevent the spread of coronavirus.  Second, it expands the scope of FMLA leave to provide for care of a child whose school or place of care is closed due to the COVID-19 public health emergency. 

Currently, FFCRA’s provisions would take effect no later than 15 days after the date of enactment.  Unlike the “traditional” FMLA, which defines a covered employer as having 50 or more employees, FFCRA would only apply to employers with fewer than 500 employers.  The bill does contain language allowing the Secretary of Labor to exclude health care providers and emergency responders from the definition of employees who are eligible to take such leave, and to exempt small businesses (defined as those with fewer than 50 employees), if the required leave would jeopardize the viability of their business.

Emergency Paid Sick Leave

FFCRA provides 80 hours of paid sick leave for full-time employees.  Part-time employees would receive paid sick leave on a pro-rated basis. Under the revised bill, employees would be eligible for paid sick leave if the employee is unable to work or work from home, under the following circumstances:  

  • The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine because of COVID-19;
  • The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  • The employee is caring for an individual subject or advised to quarantine or isolation;
  • The employee is caring for a son or daughter whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 precautions; or
  • The employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Under the amended bill, paid leave is capped at $511 per day ($5,110 in total) where leave is taken for reasons 1, 2 and 3 above; and $200 per day ($2,000 in total) where leave is taken for reasons 4, 5 or 6.  FFCRA paid sick leave is available immediately, regardless of length of employment.  Note that sick leave under FFCRA must be provided in addition to whatever paid sick leave, PTO or vacation pay the employer already provides.  In other words, if an employer already provides employees with two weeks of paid sick leave, the FFCRA leave must be provided in addition to the existing paid sick leave.  Finally, employers may not retaliate against employees for taking paid sick leave under FFCRA. 

Emergency Family and Medical Leave Expansion

FFCRA’s FMLA expansion will allow covered employees to take 12 weeks of FMLA leave between enactment and December 31, 2020 for “a qualifying need related to a public health emergency.”  This “qualifying need” is now limited to instances where an employee is unable to work or telework due to the need to care for a child if the child’s school or place of child care has been closed or the child care provider is unavailable, due to a public health emergency. This is a substantial departure from the original version of the bill.

Key provisions under the revised bill include:

  • A covered employee includes anyone employed by the employer for 30 days or more.
  • The first 10 days of any coronavirus-related family leave may be unpaid, but subsequent time must be paid in an amount that is not less than two-thirds of an employee’s regular rate of pay. Unlike the original bill, the amended legislation limits the amount of required pay for leave to no more than $200 per day and $10,000 total.
  • Employees can elect to substitute any accrued paid vacation, parental, medical or sick leave for unpaid leave, but employers cannot require employees to substitute paid leave for unpaid leave.
  • The leave is job-protected, meaning an employer must return the employee to the same or equivalent position upon return, with limited exceptions.

To help offset the cost of paid leave, the bill provides employers with a tax credit for amounts paid for both Emergency Sick Leave and Emergency FMLA. However, this tax credit is only available to employers who are required to provide the leave, not those that do so voluntarily. 

As noted above, what is outlined here is only the House’s (second) version of the bill.  The Senate must still take up the bill and additional changes are likely.  Given the rapid, and changing, legislative response to the COVID-19 crisis, Shuttleworth & Ingersoll will continue to closely monitor this and other legislative activity. Please contact any of our employment attorneys if you need additional guidance regarding this update.


Sara Sidwell advises and represents clients in all aspects of employment law, including discrimination and harassment, disability management, workforce reductions or restructuring, employment contracts, wage and hour compliance, background checks and FCRA compliance, performance management, noncompetition claims, commission agreements and claims, safety issues, workers’ compensation, and whistleblower claims. As a former in-house attorney for two large, multi-state corporations, Sara has significant counseling experience associated with all aspects of the employment relationship, from hire through termination, as well as conducting complex workplace investigations and providing manager and employee training. Sara handles charges before federal and state administrative agencies as well as all aspects of employment litigation, from the initial investigation through trial.

Limited Waiver of HIPAA Sanctions and Penalties

Effective as of March 15, 2020, HHS Secretary Alex Azar has exercised the authority to waive sanctions and penalties against a covered hospital that does not comply with the following provisions of the HIPAA Privacy Rule:
• the requirements to obtain a patient’s agreement to speak with family members or friends involved in the patient’s care. See 45 CFR 164.510(b).
• the requirement to honor a request to opt out of the facility directory. See 45 CFR 164.510(a).
• the requirement to distribute a notice of privacy practices. See 45 CFR 164.520.
• the patient’s right to request privacy restrictions. See 45 CFR 164.522(a).
• the patient’s right to request confidential communications. See 45 CFR 164.522(b).
 
The waiver only applies:
(1) in the emergency area identified in the public health emergency declaration; 
(2) to hospitals that have instituted a disaster protocol; and 
(3) for up to 72 hours from the time the hospital implements its disaster protocol. 
 
A hospital must comply with all the requirements of the Privacy Rule for any patient still under its care, when the Presidential or Secretarial declaration terminates – even if 72 hours have not elapsed since implementation of its disaster protocol.

Read more here: https://www.hhs.gov/sites/default/files/hipaa-and-covid-19-limited-hipaa-waiver-bulletin-508.pdf

 

 
View the Waiver or Modification of Requirements under Section 1135 of the Social Security Act as the result of the consequences of the 2019 Novel Coronavirus at: https://www.phe.gov/emergency/news/healthactions/section1135/Pages/covid19-13March20.aspx
 

For information about how the HIPAA Privacy Rule applies in an emergency, visit the OCR’S HIPAA Emergency Preparedness, Planning, and Response page<https://www.hhs.gov/hipaa/for-professionals/special-topics/emergency-preparedness/index.html> or you may use the HIPAA Disclosures for Emergency 

Preparedness Decision Tool<https://www.hhs.gov/hipaa/for-professionals/special-topics/emergency-preparedness/decision-tool-overview/index.html>

For more information on COVID-19, please visit:  https://www.coronavirus.go

Tricia Hoffman-Simanek is an Attorney and Senior Vice President at Shuttleworth & Ingersoll, P.L.C. Her legal work focuses on the area of litigation, which includes but is not limited to, professional malpractice, long term care litigation, insurance defense, and other health law litigation. Tricia also provides advice and representation on HIPAA compliance, training, and investigations, professional licensure matters, and risk management.

CMS & CDC Publish Guidance about COVID-19 for Healthcare Providers

CMS & CDC Publish Guidance for Various Types of Healthcare Providers (Long-Term Care Facilities, Hospice, Nursing Homes) about COVID-19

According to the most recent data from the Centers of Disease Control and Prevention (CDC), seniors are at the greatest risk for serious illness due to the Coronavirus (COVID-19).  The Centers of Medicare & Medicaid Services (CMS) recently published information for healthcare workforces in Hospice and Nursing Home settings to protect staff and vulnerable patients. In addition to the CMS guidance, the CDC has also published guidance for long-term care facilities and nursing homes as well. For workplaces in these specific areas or similar healthcare settings, please find the related guidance below:

These guidance documents provide critical information and recommendations regarding the COVID-19 outbreak in these healthcare settings.  We will continue to monitor this ongoing situation and provide updates as things change.  Please feel free to contact us if you need additional guidance.

Mark Hudson is an Attorney and Senior Vice President at Shuttleworth & Ingersoll, P.L.C. Mark’s work focuses on labor and employment compliance and counseling (including personnel policies and decisions, workplace investigations, affirmative action program compliance, wage and hour advice, and general employment counseling), labor and employment litigation (including equal opportunity, wrongful discharge, discrimination, sexual harassment and defense of employment-related claims), workplace training (including sexual harassment, workplace civility, bystander intervention, and a myriad of other training topics for supervisor, employee, and human resource professionals), privacy and data security compliance and litigation, and fair housing litigation and compliance.

HIPAA Privacy & Coronavirus (COVID-19)

As healthcare providers begin to see cases of COVID-19, more commonly known as Coronavirus, and prepare to treat patients who test positive, the Department of Health and Human Services’ Office for Civil Rights is reminding organizations about HIPAA compliance duties involving patient privacy. The bulletin published in February serves as a reminder that the protections of the Privacy Rule are not set aside during an emergency.

The Office for Civil Rights reminds covered entities about the “balance” under HIPAA in protecting patient privacy while ensuring appropriate uses and disclosures of patients’ protected health information “to protect the nation’s public health and for other critical purposes.”

The full release can be read by visiting the U.S. Department of Health & Human Services website or seen below. If you are a healthcare provider that has questions or concerns about how HIPAA regulations and the Coronavirus impact your organization, Shuttleworth’s Health Law Group can help you navigate this complex issue. 

February 2020

Office for Civil Rights, U.S. Department of Health and Human Services BULLETIN: HIPAA Privacy and Novel Coronavirus

In light of the Novel Coronavirus (2019-nCoV) outbreak, the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) is providing this bulletin to ensure that HIPAA covered entities and their business associates are aware of the ways that patient information may be shared under the HIPAA Privacy Rule in an outbreak of infectious disease or other emergency situation, and to serve as a reminder that the protections of the Privacy Rule are not set aside during an emergency.

The HIPAA Privacy Rule protects the privacy of patients’ health information (protected health information) but is balanced to ensure that appropriate uses and disclosures of the information still may be made when necessary to treat a patient, to protect the nation’s public health, and for other critical purposes.

The U.S. Centers for Disease Control and Prevention (CDC) has advised: if you were in China within the past 14 days and feel sick with fever, cough, or difficulty breathing, you should get medical care. Call the office of your health care provider before you go and tell them about your travel and your symptoms. They will give you instructions on how to get care without exposing other people to your

illness. While sick, avoid contact with people, don’t go out and delay any travel to reduce the possibility of spreading illness to others. More information from the CDC available at: https://www.cdc.gov/coronavirus/2019-ncov/downloads/2019-ncov-factsheet.pdf.

Sharing Patient Information

Treatment Under the Privacy Rule, covered entities may disclose, without a patient’s authorization, protected health information about the patient as necessary to treat the patient or to treat a different patient. Treatment includes the coordination or management of health care and related services by one or more health care providers and others, consultation between providers, and the referral of patients for treatment. See 45 CFR §§ 164.502(a)(1)(ii), 164.506(c), and the definition of “treatment” at 164.501.

Public Health Activities The HIPAA Privacy Rule recognizes the legitimate need for public health authorities and others responsible for ensuring public health and safety to have access to protected health information that is necessary to carry out their public health mission. Therefore, the Privacy Rule permits covered entities to disclose needed protected health information without individual authorization:

  • To a public health authority, such as the CDC or a state or local health department, that is authorized by law to collect or receive such information for the purpose of preventing or controlling disease, injury or disability. This would include, for example, the reporting of disease or injury; reporting vital events, such as births or deaths; and conducting public health surveillance, investigations, or interventions. A “public health authority” is an agency or authority of the United States government, a State, a territory, a political subdivision of a State or territory, or Indian tribe that is responsible for public health matters as part of its official mandate, as well as a person or entity acting under a grant of authority from, or under a contract with, a public health agency. See 45 CFR §§ 164.501 and 164.512(b)(1)(i). For example, a covered entity may disclose to the CDC protected health information on an ongoing basis as needed to report all prior and prospective cases of patients exposed to or suspected or confirmed to have Novel Coronavirus (2019-nCoV).
  • At the direction of a public health authority, to a foreign government agency that is acting in collaboration with the public health authority. See 45 CFR 512(b)(1)(i).
  • To persons at risk of contracting or spreading a disease or condition if other law, such as state law, authorizes the covered entity to notify such persons as necessary to prevent or control the spread of the disease or otherwise to carry out public health interventions or investigations. See 45 CFR 512(b)(1)(iv).

Disclosures to Family, Friends, and Others Involved in an Individual’s Care and for Notification A covered entity may share protected health information with a patient’s family members, relatives, friends, or other persons identified by the patient as involved in the patient’s care. A covered entity also may share information about a patient as necessary to identify, locate, and notify family members, guardians, or anyone else responsible for the patient’s care, of the patient’s location, general condition, or death. This may include, where necessary to notify family members and others, the police, the press, or the public at large. See 45 CFR 164.510(b).

  • The covered entity should get verbal permission from individuals or otherwise be able to reasonably infer that the patient does not object, when possible; if the individual is incapacitated or not available, covered entities may share information for these purposes if, in their professional judgment, doing so is in the patient’s best
  • For patients who are unconscious or incapacitated: A health care provider may share relevant information about the patient with family, friends, or others involved in the patient’s care or payment for care, if the health care provider determines, based on professional judgment, that doing so is in the best interests of the patient. For example, a provider may determine that it is in the best interests of an elderly patient to share relevant information with the patient’s adult child, but generally could not share unrelated information about the patient’s medical history without
  • In addition, a covered entity may share protected health information with disaster relief organizations that, like the American Red Cross, are authorized by law or by their charters to assist in disaster relief efforts, for the purpose of coordinating the notification of family members or other persons involved in the patient’s care, of the patient’s location, general condition, or It is unnecessary to obtain a patient’s permission to share the information in this situation if doing so would interfere with the organization’s ability to respond to the emergency.

Disclosures to Prevent a Serious and Imminent Threat Health care providers may share patient information with anyone as necessary to prevent or lessen a serious and imminent threat to the health and safety of a person or the public – consistent with applicable law (such as state statutes, regulations, or case law) and the provider’s standards of ethical conduct. See 45 CFR 164.512(j). Thus, providers may disclose a patient’s health information to anyone who is in a position to prevent or lesson the serious and imminent threat, including family, friends, caregivers, and law enforcement without a patient’s permission. HIPAA expressly defers to the professional judgment of health professionals in making determinations about the nature and severity of the threat to health and safety. See 45 CFR 164.512(j).

Disclosures to the Media or Others Not Involved in the Care of the Patient/Notification In general, except in the limited circumstances described elsewhere in this Bulletin, affirmative reporting to the media or the public at large about an identifiable patient, or the disclosure to the public or media of specific information about treatment of an identifiable patient, such as specific tests, test results or details of a patient’s illness, may not be done without the patient’s written authorization (or the written authorization of a personal representative who is a person legally authorized to make health care

decisions for the patient). See 45 CFR 164.508 for the requirements for a HIPAA authorization. Where a patient has not objected to or restricted the release of protected health information, a covered hospital or other health care facility may, upon request, disclose information about a particular patient by name, may release limited facility directory information to acknowledge an individual is a patient at the facility, and may provide basic information about the patient’s condition in general terms (e.g., critical or stable, deceased, or treated and released). Covered entities may also disclose information if the patient is incapacitated, and if the disclosure is believed to be in the best interest of the patient and consistent with any prior expressed preferences of the patient. See 45 CFR 164.510(a).

Minimum Necessary For most disclosures, a covered entity must make reasonable efforts to limit the information disclosed to that which is the “minimum necessary” to accomplish the purpose. (Minimum necessary requirements do not apply to disclosures to health care providers for treatment purposes.) Covered entities may rely on representations from a public health authority or other public official that the requested information is the minimum necessary for the purpose, when that reliance is reasonable under the circumstances. For example, a covered entity may rely on representations from the CDC that the protected health information requested by the CDC about all patients exposed to or suspected or confirmed to have Novel Coronavirus (2019-nCoV) is the minimum necessary for the public health purpose. In addition, internally, covered entities should continue to apply their role-based access policies to limit access to protected health information to only those workforce members who need it to carry out their duties. See 45 CFR §§ 164.502(b), 164.514(d).

Safeguarding Patient Information

In an emergency situation, covered entities must continue to implement reasonable safeguards to protect patient information against intentional or unintentional impermissible uses and disclosures. Further, covered entities (and their business associates) must apply the administrative, physical, and technical safeguards of the HIPAA Security Rule to electronic protected health information.

 

HIPAA Applies Only to Covered Entities and Business Associates

The HIPAA Privacy Rule applies to disclosures made by employees, volunteers, and other members of a covered entity’s or business associate’s workforce. Covered entities are health plans, health care clearinghouses, and those health care providers that conduct one or more covered health care transactions electronically, such as transmitting health care claims to a health plan. Business associates generally are persons or entities (other than members of the workforce of a covered entity) that perform functions or activities on behalf of, or provide certain services to, a covered entity that involve creating, receiving, maintaining, or transmitting protected health information. Business associates also include subcontractors that create, receive, maintain, or transmit protected health information on behalf of another business associate. The Privacy Rule does not apply to disclosures made by entities or other persons who are not covered entities or business associates (although such persons or entities are free to follow the standards on a voluntary basis if desired). There may be other state or federal rules that apply.

Business Associates A business associate of a covered entity (including a business associate that is a subcontractor) may make disclosures permitted by the Privacy Rule, such as to a public health authority, on behalf of a covered entity or another business associate to the extent authorized by its business associate agreement.

Other Resources
For more information on HIPAA and Public Health, please visit: https://www.hhs.gov/hipaa/for-professionals/special-topics/public-health/index.html

For more information on HIPAA and Emergency Preparedness, Planning, and Response, please visit: https://www.hhs.gov/hipaa/for-professionals/special-topics/emergency- preparedness/index.html

General information on understanding the HIPAA Privacy Rule may be found at: https://www.hhs.gov/hipaa/for-professionals/privacy/index.html

For information regarding how Federal civil rights laws apply in an emergency, please visit:

https://www.hhs.gov/civil-rights/for-individuals/special-topics/emergency- preparedness/index.html

Tricia Hoffman-Simanek is an Attorney and Senior Vice President at Shuttleworth & Ingersoll, P.L.C. Her legal work focuses on the area of litigation, which includes but is not limited to, professional malpractice, long term care litigation, insurance defense, and other health law litigation. Tricia also provides advice and representation on HIPAA compliance, training, and investigations, professional licensure matters, and risk management.

Coronavirus (COVID-19) Pandemic – What it Means for Employers and Businesses

As the Coronavirus (COVID-19) continues to spread internationally and many U.S. states now have confirmed cases, it is increasingly important for employers to consider the impact the virus may have on the workplace and develop a response plan.

One of the most challenging aspects of addressing an epidemic or pandemic is that all employers and workplaces are different and there is no easy, ‘one size fits all’ approach. Employers have drastically different operational models and workspaces and what may work for one company will not be effective for another. Employers must consider the size of their business, numbers of employees, work environment or workspace, type of work performed, and operational needs. Employers must also consider the many laws that are implicated by illness in and absences from the workplace, including the Americans with Disabilities Act (“ADA”), the Family Medical Leave Act (“FMLA”), the Fair Labor Standards Act (“FLSA”), OSHA, and workers’ compensation laws.

ADA Considerations

What Can Employers Do?

  • Ask employees to use recommended hygiene practices while at work, such as washing hands frequently, covering coughs and sneezes with tissues or an arm, if a tissue is not available, and ensuring that employees properly dispose of tissues.
  • Employers can (and should) ask an employee who is ill to go home, regardless of whether or not the employee wishes to do so. Ask employees who are able to work from home to do so.  Employees who cannot work from home can be required to use available sick time or PTO consistent with the employer’s leave policies and/or state sick leave laws.
  • Ask employees returning to work following an illness to provide a doctor’s note certifying their fitness for duty.
  • Contact the Centers for Disease Control and Prevention (“CDC”) and/or their local health department if they are notified that an employee has tested positive for the virus.
  • If an employee has tested positive for the coronavirus, employers may tell other employees, clients or the public that they may have been exposed, without specifically identifying the employee who has been diagnosed.
  • Take direction from the CDC or their local health department. Given the fast moving nature of the COVID-19 crisis and the continued spread throughout most states, employers may be asked, or required, to take new or different steps than those outlined here.  If employers are uncertain about what steps to take, they should contact their local or state health department.  

What can you NOT do?

  • You cannot take employees’ temperatures (unless ordered to do so by the CDC or other applicable public health agency).
  • If an employee has been diagnosed with the virus, you cannot provide other employees, clients or the public with the name of the employee or otherwise share information about the specific employee’s medical condition.
  • You cannot ask an employee if he or she has a compromised immune system or other chronic health condition that would make the employee more susceptible to illness. This is considered a disability-related medical inquiry under the ADA and is not permitted.  

FMLA Considerations

The FMLA provides job protected leave for an employee’s own serious health condition or to care for specific family members with a serious health condition.  Employees who have been diagnosed or have family members who have been diagnosed with the coronavirus would be entitled to FMLA leave (provided the employee is otherwise FMLA eligible).

If an employer asks an employee who does not appear ill and/or has not been diagnosed with the virus to remain off work for 14 days (for example, an employee who has just returned from China, Italy or another area with an identified higher infection rate), the employer should not designate this or require the employee to take this leave as FMLA leave because it does not qualify as a serious health condition.   

OSHA Considerations

Although there is no specific OSHA standard that addresses the Coronavirus and its spread, OSHA’s General Duty Clause – which requires employers to furnish workers with a workplace that is free of recognizable hazards that are likely to cause death or serious physical harm – always applies, as does OSHA’s Personal Protective Equipment (“PPE”) requirements, if applicable for your workplace.

OSHA has currently identified certain workers as being at heightened risk for infections, such as those working in healthcare, deathcare, labs, airlines, waste management or work requiring travel to high risk areas such as China.  OSHA has also provided general advice on how employers can best prepare to respond to COVID-19 in the workplace, including developing infectious disease preparedness and response plans (https://www.osha.gov/Publications/OSHA3990.pdf). However, this and other guidance may rapidly change as the virus spreads, so this is an important resource to continually monitor. 

Workers’ Compensation Considerations

If an employee is diagnosed with the Coronavirus and an employer believes that he/she may have contracted it in the workplace or as a result of work performed in the course of employment (such as required business travel), employers should consult with their workers’ compensation administrators or insurers, or an attorney, to determine if the diagnosis could be considered a covered injury. 

Wage and Hour Considerations

Non-Exempt Employees

  • Non-exempt employees are only paid for hours actually worked. Unless subject to a collective bargaining agreement, employers can generally reduce employees’ hours and/or rate of pay.  However, if a company must make the difficult decision to reduce employees’ rate of pay, it should check if state law requires written notification of the change or requires a specific notice period prior to making the change.

Exempt Employees

  • As a general rule, exempt employees are entitled to the same base weekly salary regardless of how many hours they work in a given week.
  • There are two exceptions to this requirement:
    • Full week reductions – If a salaried employee takes an entire week off of work, the employer is not required to pay for that week. However, the employee can perform no work during that week, including answering emails or taking calls, however brief. Unless an exempt employee can be completely relieved of work for the week, the employer must pay the employee.  Employers can require employees to use PTO or vacation pay for a furlough period, so employers who provide PTO or vacation time and cannot relieve exempt employees from work entirely may require those employees to use PTO or vacation pay for non-working time and then pay them for actual time worked.
    • Partial-week reductions – As a general rule, partial week reductions in pay are not allowed. The DOL and some courts have concluded that a partial week reduction may be permissible if the reduction is the direct result of a bona fide reduction in work (such as that resulting from an economic downturn) and the partial week reduction occurs infrequently. There is no bright-line rule for what qualifies as infrequently but courts have upheld reductions that occur one or two times a year.

Pay Timing Requirements

The potential for a pandemic does not relieve employers of the obligation to follow federal and state laws governing wage payment, including the timing of payments.  This is yet another reason for employers to make sure they have a contingency plan in place and will be able to pay employees on time.

Travel Considerations

  • While each employer has to determine its own position on travel, employers should pay close attention to the CDC and World Health Organization travel alerts and consider limiting all non business-critical travel. The U.S. is also taking steps to limit travel to and from Europe and while the scope of those restrictions are not yet clear, they may further impact business travel.  
  • Given that it is spring break in many parts of the country, employers may have multiple employees traveling for personal reasons. Employers can, and should, ask employees about the location of recent travel, even if the travel was personal in nature.  If employees have traveled to areas where the virus is present or are designated as high risk areas, the employer should consider asking the employee to work from home for a 14 day period.

Other KEY Considerations

  • Develop a Communication Plan – Clear communication to employees regarding changes to workplace expectations or policies is crucial. Providing employees with information from trusted sources, such as the CDC, WHO or state public health agencies, will ensure that employees are receiving information that is consistent with directions it is receiving from you as an employer. 
  • Policies – Review policies governing absences, sick and/or other leave, and telecommuting. If your existing policies need to be altered or changed in order to address employees’ need for leave, consider updating your policies or creating a separate “emergency leave” policy that can be used now and in response to future pandemic/mass illness situations.  
  • Take stock of your physical workspace and determine if you are providing employees with the tools they need to remain healthy, such as soap or hand sanitizer and disinfectant. If employers do not have the necessary supplies or believe they may run out, they should identify what resources are available and how they intend to procure necessary items and supply them to employees.
  • Talk to your cleaning service. If an employee is diagnosed with the virus, is your cleaning company aware of and equipped to handle any deep cleaning protocol that will be recommended or required by your relevant public health agency?  If they are not, take steps to identify an alternative service option, in the event it becomes necessary. 
  • Test your technology now. While your employees may already have the ability to log in remotely, they likely do not all log in remotely at the same time. Does your server and system have the capacity to handle all employees working remotely? Testing now and identifying server or system issues will allow you to address those issues before you ask your employees to work remotely.
  • Beware of potential discrimination as you are making decisions about requiring employees to take leave or work from home. In order to avoid discrimination claims, employers should treat all similarly situated employees the same and enforce any new or existing policies in a consistent fashion.
  • Review your business continuity plan to ensure you are prepared to meet staffing and supply issues, as well as other unexpected operational demands or changes that may come up.
  • Designate responsibility for the plan and ensure that responsible team members are monitoring the plan and updating and changing as necessary to respond to the rapidly changing nature of the epidemic.
  • Identify trusted sources of information. Monitor guidance from the CDC, WHO and your county or city public health agency.  If you are an employer in a regulated industry, identify and follow guidance from applicable regulatory authorities.
  • Understand that things are changing rapidly. Several states and cities throughout the country have declared a public emergency. What this means for employers may depend on state law, as well as specific actions state or local governments may be taking. It is important that employers monitor these developments and are prepared to react to actions or declarations that apply to employers or the workplace. 

We are actively monitor this ongoing situation and will continue to provide updates as things change. Please feel free to contact Sara Sidwell, Mark Hudson or Terri Davis if you need additional guidance. 

Sara Sidwell is an Attorney with Shuttleworth & Ingersoll. Sara’s practice focuses on employment and labor law and is based out of the Coralville office. She has practiced employment law for nearly fifteen years, both in-house and in private practice, and has extensive experience counseling both large and small employers on all aspects of employment law, including discrimination, harassment and retaliation claims, wage and hour compliance, non-compete issues and workforce reductions.

Mark Hudson is an Attorney and Senior Vice President at Shuttleworth & Ingersoll, P.L.C. Mark’s work focuses on labor and employment compliance and counseling (including personnel policies and decisions, workplace investigations, affirmative action program compliance, wage and hour advice, and general employment counseling), labor and employment litigation (including equal opportunity, wrongful discharge, discrimination, sexual harassment and defense of employment-related claims), workplace training (including sexual harassment, workplace civility, bystander intervention, and a myriad of other training topics for supervisor, employee, and human resource professionals), privacy and data security compliance and litigation, and fair housing litigation and compliance.

Terri Davis is an Attorney and Senior Vice President at Shuttleworth. She focuses her practice in Employment Law and Litigation, including employment related litigation, commercial litigation, product liability, and the handling of administrative trials, including utilities cases and workers compensation. She advises employers on employment matters, and assists with policy review and development, as well as handling of investigations and complaints, both internal and before civil rights commissions. She serves as chair of the firm’s Labor & Employment Law Practice Group.

A New Version of the Form I-9

Client Alert:  Employers Must Begin Using Updated Form I-9 by May 1, 2020

On January 31, 2020 U.S. Citizenship and Immigration Services (USCIS) published a new version of the Form I-9 that was approved by the Office of Management and Budget on October 21, 2019.  While USCIS has indicated employers may start using the updated form as of January 31, 2020, employers can continue using the old form through April 30, 2020.  However, employers must begin using the updated form by May 1, 2020.  This notice period provides employers with three months to update the form within their onboarding processes.

Now that you know there is a new Form I-9, you may be wondering if the revised form contains any substantive changes.  Thankfully, it does not. The relatively minor changes include adding Eswatini and North Macedonia to the “Country of Issuance” and “Foreign Passport Issuing Authority” fields in Sections 1 and 2 respectively.  USCIS did provide additional clarification for the Form I-9’s instructions regarding who can act as an authorized representative; specifically,   “[a]n authorized representative can be any person you designate to complete and sign Form I-9 on your behalf.”  USCIS also provided clarification regarding “acceptable document[s],” indicating that employers do not need to insert “N/A” on unused lines in the List A, B and C columns.  Finally, USCIS issued clarification regarding several types of identification; specifically, that the “identification card issued by a federal, state or local government agency” listed as a qualifying document for List B is not the same as a “driver’s license or ID card issued by a State or outlying possession of the United States as described in B1 of the List of Acceptable Documents”  and for List C qualifying documents, an “Employment authorization document issued by DHS” does not include the Employment Authorization Document (Form I-766) from List A. Last but not least, USCIS updated the process for requesting the paper Form I-9 and updated its Privacy Notice. 

Takeaway: While the changes in the new form are minimal, failure to use the new form after April 30, 2020 is a violation of Section 274A of the INA, 8 U.S.C. 1324a and employers failing to use the new form may be subject to applicable penalties. And as always, employers should continue to follow compliant completion, storage and retention practices.


Sara Sidwell advises and represents clients in all aspects of employment law, including discrimination and harassment, disability management, workforce reductions or restructuring, employment contracts, wage and hour compliance, background checks and FCRA compliance, performance management, noncompetition claims, commission agreements and claims, safety issues, workers’ compensation, and whistleblower claims. As a former in-house attorney for two large, multi-state corporations, Sara has significant counseling experience associated with all aspects of the employment relationship, from hire through termination, as well as conducting complex workplace investigations and providing manager and employee training. Sara handles charges before federal and state administrative agencies as well as all aspects of employment litigation, from the initial investigation through trial.

The DOL Sets the Stage for an Active 2020

On January 16, 2020, the U.S. Department of Labor (“DOL”) issued its final rule regarding joint employment under the Fair Labor Standards Act (“FLSA”).  The new rule will go into effect on March 16, 2020 and creates a four-factor balancing test for determining joint employer status.  The question of joint employer status can become an issue when a company contracts to use the services of another company’s employees, such as a staffing agency, or when a company is a franchisor whose franchisees have employees. The four factors the DOL will examine are: 

Does the potential joint employer: 

  • Have the ability to hire or fire the employee; 
  • Supervise and control the employee’s work schedule or conditions of employment to a substantial degree; 
  • Determine the employee’s rate and method of payment; and 
  • Maintain the employee’s employment records. 

No single factor is determinative and the weight given to each factor will vary depending on the facts in each situation.  However, the rule does make clear that merely maintaining employment records will not, in the absence of other factors, establish joint employer status.  The final rule also makes it clear that the potential joint employer must actively exercise one or more of the four control factors.  The ability to control these factors, if not actually exercised, is not enough to establish a joint employer relationship. 

The final rule also indicates that the use of a franchise model does not make it more or less likely that a corporate franchisor will be considered a joint employer of its franchisees’ employees. Finally, the fact that a business requires a subcontractor, personnel provider, or franchisee to maintain policies that encourage legal compliance, such as requiring a personnel provider to maintain workplace safety or harassment policies, does not make joint employer status more likely, so long as the primary employer, not the contracting employer, is responsible for enforcing those policies. 

The final rule replaces an aggressive and expansive standard used by the prior administration, so this change is a win for the business community. While Iowa employers should continue to be cautious and use best practices when using contracted personnel, the new rule reduces one area of risk associated with a franchise model or the use of staffing agency personnel. 

In other DOL news, the agency continues issuing opinion letters at a rapid pace.  We are only a month into 2020 and the DOL has already issued letters addressing: (1) the calculation of overtime pay for a non-discretionary lump sum bonus paid at the end of a multi-week training period; (2) if per-project payments satisfy the salary basis test for the administrative, executive and professional exemptions and (3) if a combined general health district must count employees of the County where the district is located for purposes of determining FMLA eligibility.  Stay tuned for more as we get further into 2020!

About Sara G. Sidwell

Sara Sidwell recently joined Shuttleworth & Ingersoll, P.L.C. after spending six years as in-house employment counsel for a large financial services company and a multi-national furniture manufacturer and retailer.  Sara advises and represents clients in all aspects of employment law, including discrimination and harassment, disability management, workforce reductions or restructuring, employment contracts, wage and hour compliance, background checks and FCRA compliance, performance management, noncompetition claims, commission agreements and claims, safety issues, workers’ compensation, and whistleblower claims. As a former in-house attorney for two large, multi-state corporations, Sara has significant counseling experience associated with all aspects of the employment relationship, from hire through termination, as well as conducting complex workplace investigations and providing manager and employee training. Sara handles charges before federal and state administrative agencies as well as all aspects of employment litigation, from the initial investigation through trial.