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Posted on February 27, 2020

SECURE 403(b) plans 1-20The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) made numerous changes to retirement plans, many of which apply to 401(k) plans. However, many of those changes also apply to 403(b) plans of nonprofit organizations. This article highlights the SECURE Act provisions that may affect 403(b) plans and is intended to be read with “SECURE Act Highlights for Employers” (https://www.nelsonmullins.com/idea_exchange/alerts/Comp-and-Benefits-Brief/all/secure-act-highlights-for-employers). Discussion of any tax credits has been omitted on the assumption that nonprofits do not have taxable income that could be reduced by tax credits.

Posted on January 30, 2020

By Mark A. Lies II and Daniel Birnbaum

INTRODUCTION
By now, the worldwide health authorities and media have publicized the 2019 Novel Coronavirus (2019-nCoV) (sometimes called Coronavirus) (the “virus” or “disease”) that has been first identified in Wuhan, Hubei Province, China. Although the United States has only experienced several cases of the virus, it is only a matter of time before the disease surfaces in more cases throughout the country. Given high density areas of human contact such as mass transportation systems, schools, hospitals and the workplace, the potential is great for this widely circulating virus to spread from human-to-human in a short period of time.

BACKGROUND
What is Coronavirus?
Coronavirus is a respiratory virus originating from China. An individual infected with Coronavirus will often suffer the following symptoms:

  • Mild to severe respiratory illness
  • Fever
  • Cough
  • Difficulty breathing
  • Death
  • Currently, it is believed that an individual’s symptoms may appear anywhere from 2 to 14 days after exposure to the virus. The virus has a mortality rate of less than 3% of individuals who become infected.
    The first infection in the United States was reported on January 21, 2020, with most cases on the west coast, but there has been a confirmed case in the Midwest. Currently, there is no known vaccine or treatment of the virus.

    How is Coronavirus Transmitted?
    Health authorities have not confirmed how Coronavirus is transmitted, but suspect it is spread person-to-person. There is also evidence that the virus has been spread by animal sources, including individuals with links to seafood or animal markets.
    Virus transmission may happen on a spectrum and authorities are not sure if the virus is highly contagious, or less so. For person-to-person transmission, health authorities suspect the virus is spread through coughing and sneezing, similar to how influenza and other respiratory pathogens are spread.

    WHAT ARE THE LEGAL RAMIFICATIONS THAT EMPLOYERS SHOULD CONSIDER?

    There are several employment and other laws which may be directly involved with this disease and must be considered by employers. These are as follows:
    Occupational Safety and Health Act
    General Duty Clause

    Under the Occupational Safety and Health Act (“Act” or “OSHA”), the employer has a legal obligation to provide a safe and healthful workplace. One of the agency’s enforcement mechanisms is the ability to issue citations with monetary penalties to employers. The “General Duty Clause” (Section 5(a)(1)) of the Act requires an employer to protect its employees against “recognized hazards” to safety or health which may cause serious injury or death.

    Given that OSHA does not have a specific regulation which deals with the virus, the Occupational Safety and Health Administration (the “Agency”) will utilize the General Duty Clause. In order to determine the scope of the employer’s obligation under the General Duty Clause, OSHA is empowered to utilize outside nationally recognized consensus standards or other authoritative sources. In this case, OSHA would rely upon recommendations issued by the Centers for Disease Control (“CDC”), the National Institute for Occupational Safety and Health (“NIOSH”), the World Health Organization (“WHO”) or other similar resources. If the Agency can establish that employees at a worksite are reasonably likely to be “exposed” to the virus (e.g., serving as healthcare providers, emergency responders, transportation workers, etc.), OSHA will require the employer to develop a plan with procedures to protects its employees.

    Multi-Employer Worksite

    Under the Act, the host employer may also have additional legal obligations to the employees of another employer who may come to the host employer workplace and may potentially be exposed to the hazard (in this case to virus carriers). OSHA can utilize its authority under the “multi-employer workplace doctrine” to issue citations to the host employer when personnel of another employer are exposed. In these instances, citations can be issued by the Agency to the host employer if another employer’s staff members are exposed or if the host employer created the hazard or exposed the other employees to the hazard. The host employer or the controlling employer at the site will ultimately be held responsible to correct the hazard.

    Response Plan

    OSHA will expect the responsible employer to develop a program based upon a “hazard assessment” of potential exposure at the worksite (hygiene and decontamination), including:
    conduct employee awareness training regarding the hazard;develop procedures requiring the issuance and use of personal protective equipment (PPE) (e.g., masks, gloves) if necessary to prevent infection and transmission; develop a means of reporting infection and providing medical surveillance for employees who contract the disease; maintain appropriate documentation of the foregoing actions; preserve medical records; record on the OSHA 300 Log any illnesses which are occupationally related.

    Whistleblower Protection
    Because of the significant health hazards associated with this disease, it is possible that an employee could refuse to work because s/he believes that his/her health is in imminent danger at the workplace due to the actual presence or reasonable probability of the disease at the workplace. An employee who make such a complaint is engaging in “protected activity” under Section 11(c) of the Act and is not subject to adverse action by the employer for refusal to work until the employer can establish through “objective” evidence that there is no hazard or that the employer has developed a response plan that will reasonably protect the employee from exposure to the disease.
    Worker’s Compensation – Disability Benefits

    In the event that an employee contracts the virus as a result of occupational exposure, (in other words, the illness “arises out of and in the course of employment” which the employee must prove with competent medical evidence), the employee is entitled to receive temporary total disability benefits in lieu of wages, reasonable and necessary medical treatment and an award for any resulting permanent disability (e.g., reduced respiratory capacity, etc.). An employer should evaluate whether it has adequate worker’s compensation insurance coverage and coverage limits that include occupational diseases.

    If an employee contracts the disease and it is not occupationally related, the employee may be entitled to disability benefits if the employer provides such benefits. Again, the extent of such benefits and any exclusions should be carefully evaluated by the employer. The employer must consider that the virus is going to involve significant medical issues, such as determining (1) whether the employee is infectious, (2) what type of treatment is necessary, (3) whether the employee presents a health risk to others and, (4) when the employee can safely return to work. Therefore, it is essential that the employer identify a competent medical professional with expertise in infection control who can advise it on all medically-related issues, including worker’s compensation.

    Family and Medical Leave Act

    Under the Family and Medical Leave Act (“FMLA”), employers who have more than 50 employees are required to provide up to twelve (12) weeks of unpaid leave to a qualified employee who has a “serious health condition.” An employee is also eligible under the FMLA in the event of a “serious health condition” affecting its spouse, child or parent(s).

    If an employee contracts the virus, this disease will most likely be considered a “serious health condition” under the FMLA warranting the unpaid leave. Similarly, if an employee’s parent, spouse or a child contracts the disease, this will likely be a qualifying event entitling the employee, with physician’s documentation, to utilize leave time to care for such an immediate family member.

    It is certain that issues may arise if the employee contracts the disease but is able to continue working while potentially exposing other employees to infection. Since the CDC appears to recommend removal of such individuals from the workplace during the incubation period of the disease (2-14 days) to prevent transmission of the disease, the employer may have to consider placing the employee on an FMLA leave or providing some other form of leave despite the employee’s desire to continue working.

    If the employee exhausts the entire twelve weeks of FMLA leave, and is unable to return to work at that time, the employer may wish to consider additional unpaid leave for the employee, although such leave would be outside of the FMLA required reinstatement rights.
    In addition to the Federal FMLA, the employer may have obligations to provide leave to employees where the employee does not qualify for a leave under the Federal FMLA.

    Americans with Disabilities Act
    The Americans with Disabilities Act (“ADA”) provides certain protections to employees who may have physical, mental or emotional “disabilities” but who are otherwise qualified to perform the essential functions of their jobs. Typically, a disability is an impairment which substantially limits one or more of the major life activities of an individual (e.g., breathing, working, speaking) which is chronic in nature. Because of the fact that the virus has resulted in serous illness, even though it is temporary in nature, it is very conceivable that it would be considered to qualify as a “disability”.

    The ADA may also become a factor if an employee develops a disability as a result of the disease and cannot return to their former work duties because of such impairment. The employer must then be prepared to engage in an “interactive process” with the employee which involves a case-by-case dialogue regarding the employee’s ability to return to work, any work restrictions, what accommodations may be available which do not cause undue hardship to the employer or whether the employee’s disability presents a direct threat to the health or safety of the employee or other employees. Again, it is recommended that employers engage competent medical advice regarding any accommodations which may be warranted as a result of the long term effects of this disease.

    Premises Liability
    Under general common law principles in most jurisdictions, a landowner (sometimes the employer) who allows third parties to enter upon its premises for business or related purposes (such as clients, vendors, contract employees), owes these individuals a duty of “reasonable care” to protect them against hazards at the premises which are not “open and obvious.” In the case of the virus, if the landowner (for example, a healthcare provider, emergency responder, transportation related company) is (or should be) aware that there are infectious persons at the premises (whether its own employees or tenants) who may create a health hazard to these third party entrants, there may be a duty to warn such third parties, or to prevent access to certain facility areas. In the event that the building ventilation system or washroom facilities may become contaminated with the virus, the landowner may have an obligation to prevent such contamination through enhanced sanitation measures.

    In many cases, the legal duty of the landowner for site security and sanitation will be defined by contractual documents, such as leases. The landowner should make sure to review such documents to confirm its obligations regarding third parties who may have access to the property.

    RECOMMENDATIONS
    It is recommended that employers become knowledgeable about this disease by accessing recognized sources of information (identified below). In addition, employers should determine, based upon a “hazard assessment,” whether a virus response plan is required. For example, does the employer employ individuals
    (a) in industries where exposure may be likely (healthcare, emergency response, transportation) or
    (b) who have or are expected to travel to/from China or other geographical areas where the disease has been identified.
    If so, the employer may need to consider:
    (1) means and methods to protect employees before they travel to areas known to have experienced the virus,
    (2) what procedures will be followed when these employees return to the United States from such areas (e.g., possible quarantine, fitness for duty medical examination if the employee exhibits the symptoms of the virus). In some cases, the employer may be able to offer employees the option of remote work to isolate these employees from the general working populace during the incubation period.
    Finally, in the event that the employer engages in activities where there is a possibility of employee infection, the employer should consider consulting with its local Department of Public Health to obtain guidance, as well as engaging with a medical provider who has particular expertise with infectious diseases of the magnitude of the virus.

    WHERE CAN I FIND ADDITIONAL INFORMATION ON THE CORONAVIRUS?
    Informational Websites
    Center for Disease Control – www.cdc.gov
    U.S. Department of Health & Human Services – www.flu.gov
    OSHA – www.osha.gov
    The World Health Organization – www.who.int
    CDC Emergency Response Hotline for health employers – (770) 488-7100
    Local Department of Public Health

    NOTE: If you wish to receive complimentary copies of this article and future articles on OSHA and employment law related topics, or is interested in training on these topics, please contact Mark A. Lies, II at mlies@seyfarth.com or Daniel Birnbaum at dbirnbaum@seyfarth.com to be added to the address list.

    Mark A. Lies, II, is a partner with the law firm of Seyfarth Shaw LLP, 233 S. Wacker Drive, Suite 8000, Chicago, IL 60606 (312) 460-5877, mlies@seyfarth.com. He specializes in occupational safety and health and related employment law and civil litigation.
    Daniel R. Birnbaum is an associate with Seyfarth Shaw, (312) 460-5129, dbirnbaum@seyfarth.com. His practice focuses on occupational safety and health, traditional labor matters, and related employment law and civil litigation.

    Posted on January 30, 2020

    This article presents general guidelines for Georgia nonprofit organizations as of the date written and should not be construed as legal advice. Always consult an attorney to address your particular situation.

    By Kathryn B. Solley, Nelson Mullins Riley and Scarborough, LLP

    In the past, employers, including nonprofits, were prohibited from reimbursing employee health care premiums. With the institution of ICHRAs, which are explained in more detail below, beginning on January 1, 2020, employers are once again permitted to reimburse employees for health care premiums under certain circumstances.

    What is an ICHRA?
    ICHRA stands for Individual Coverage HRA or Health Reimbursement Account. Pronounced “Ick-rah”.

    What does an ICHRA do?

    An ICHRA allows an employer to reimburse employees for individual health insurance premiums on a tax-favored basis.

    Which employees can be offered an ICHRA?

    An ICHRA is offered only to employees who are not offered group health insurance; an employee cannot choose between an ICHRA or group health insurance.
    If all employees are offered an ICHRA, the size of the employer does not matter.
    However, employers are permitted to offer an ICHRA to one class of employees and a traditional group health plan to another class of employees. In that case, there is a minimum class size for those offered an ICHRA:

    Total Number of Employees: Less than 100, Minimum Class Size: 10
    Total Number of Employees: 100 – 200, Minimum Class Size: 10% of total employees
    Total Number of Employees: More than 20 Minimum, Class Size: 20
    (more…)

    Posted on December 17, 2019

    Description:Many nonprofit employees who are not eligible for overtime pay will become eligible on January 1, 2020 when new regulations under the Fair Labor Standards Act go into effect. This webcast will provide important information to help nonprofits prepare for the new overtime regulations, including an overview of wage and hour law requirements and practical information about complying with the impending changes to the law.

    Presenter: Valerie Barney, Deputy General Counsel, Litigation and Employment, Mohawk Industries, Inc.

    View the webcast here.

    Posted on October 16, 2019

    Many nonprofits in Georgia, particularly those that work with vulnerable populations including children, the elderly, and victims of violence, do not permit weapons on their premises. On July 1, 2014, the laws of Georgia changed significantly to further limit one’s ability to restrict gun-carrying by licensed gun-holders. These changes may affect nonprofits that currently have such restrictions, particularly those that are located in government buildings or lease property from a municipality, county or the State of Georgia.

    The Safe Carry Protection Act (SCPA) became law in the State of Georgia on July 1, 2014. With the passage of the SCPA, many Georgia nonprofits face a new set of rules regarding weapons in and around their workplaces or operating locations.

    The SCPA permits an expansion of rights of licensed gun-holders to carry guns and other weapons in public places.

    Posted on September 26, 2019

    Many employees who are not eligible for overtime pay, including employees of nonprofit organizations, will become eligible on January 1, 2020 because of a new final overtime rule issued by the Department of Labor on September 24, 2019. The salary threshold for overtime eligibility will increase from $455 per week to $684 per week. Nonprofit employers should start planning now to address the obligation to pay overtime to employees who are not eligible for overtime under the current rules as these new rules may lead to significant additional costs.

    Posted on September 20, 2019

    An employee handbook can be an important tool in clarifying roles, enhancing performance management, and reducing legal risk in a nonprofit organization. A clearly drafted and comprehensive employee handbook that contains policies the organization actually follows, can help ensure not only that managers, supervisors and employees understand the rules and guidelines that govern their employment, but also that the organization is in compliance with legal requirements.

    Posted on May 1, 2019

    Nonprofits often overlook the importance of timely, properly and thoroughly investigating employee complaints, but a nonprofit’s effective response to a complaint may limit the organization’s liability in a lawsuit. Accordingly, nonprofit organizations must ensure that they have effective mechanisms in place to identify, investigate and resolve employee complaints. This article lays out best practices in investigating employee complaints

    Posted on March 29, 2019

    If your nonprofit organization has 100 or more employees, or if it is a federal government prime contractor or first-tier subcontractor with 50 or more employees and a prime contract or a first-tier subcontract amounting to $50,000 or more, the organization is required to file an EEO-1 report with the Equal Employment Opportunity Commission (EEOC). This article provides important information about upcoming new requirements for your EEO-1 report filing, including the reporting of pay data.

    Posted on March 21, 2019

    On March 7, 2019, the United States Department of Labor (DOL) released proposed revisions to the overtime regulations that, if issued as final regulations, will increase the number of employees who are eligible for overtime pay. This article summarizes the proposed changes.