Legal Updates – October 2020

The Equal Employment Opportunity Commission’s COVID-19 Update

On September 8, 2020, the Equal Employment Opportunity Commission (“EEOC”) published an update to its guidance titled “What You Should Know About COVID-19 and the ADA, Rehabilitation Act, and Other EEOC Laws.”  The EEOC clarifies its position on common workplace issues as businesses begin to resume in person operations across the country.  Following are some highlights from the guidance.

Permissible workplace COVID-19 testing

The guidance reiterates that employer testing to determine whether employees entering the workplace have COVID-19 is generally permissible when “job-related and consistent with business necessity” to determine whether such employees may be a direct threat to others.  The updated guidance also confirms that employers who follow CDC recommendations regarding whether, when and for whom testing is appropriate will be considered as compliant with the “job-related and consistent with business necessity” standard.  Any employee who refuses permissible testing (or who refuses permissible inquiries, as discussed below) may be denied entry into the workplace.  However, the EEOC makes clear that employers may not condition employees’ return to the workplace on undergoing testing for COVID-19 antibodies.

Inquiries

Employers may ask all employees who will be physically present in the workplace if they have or had COVID-19 or symptoms associated with the virus, but may not ask whether the employee has a family member who has or had COVID-19 or its symptoms.  Any employee who reports symptoms may be denied entry into the workplace.  Additionally, if an employer wishes to make inquiries (or impose testing) on only one employee, the ADA requires the employer to have a “reasonable belief based on objective evidence” that employee may have COVID-19.

ADA confidentiality

The ADA requires that an employer keep all medical information about an employee confidential and store it separately from personnel files.  The exchange or receipt of medical information during remote work does not create an exception to this requirement.  Managers and supervisors who receive employees’ medical information while working remotely must continue to safeguard this information in accordance with the employer’s policies.

ADA confidentiality does not prevent co-workers or managers from making necessary and required internal reports of an employee who has symptoms of COVID-19 or who has tested positive for the virus.  ADA confidentiality also does not prohibit disclosure that an employee that an employee is working remotely or on leave, but the employer cannot disclose the reason for the leave.  After an employer learns that an employee has or may have COVID-19, the guidance states that employers may interview the employee to determine which other individuals may have been exposed.  The employer may then notify these people, so long as the employer does not reveal the employee’s identity.  Even if other employees are able to ascertain the employee’s identity based on the overall circumstances, the employer is prohibited from confirming this information.

Requests for accommodation

The ADA requires employers to provide reasonable accommodations to qualified employees with disabilities so that they can perform essential functions of the job, unless doing so would place an undue hardship on the employer.  However, employers are not required to grant every telework request as a “reasonable accommodation,” even if the employee has demonstrated the ability to perform their job remotely during the pandemic.  The EEOC states that if there is no disability-related limitation that requires teleworking, then the employer does not have to provide telework as an accommodation.  Additionally, if the employee has a disability-related limitation that can be effectively addressed with another form of accommodation in the workplace, the employer can choose the alternative to telework.  Because the “ADA never requires an employer to eliminate an essential function as an accommodation,” employers are not required to continue telework if doing so requires excusing the employee from performing an essential job function.  This is true even if the employer temporarily excused performance of one or more essential functions during the period of remote work.  If the employer selects teleworking as a reasonable accommodation, the guidance advises employers and employees to be “creative and flexible” to ensure that employees can telework effectively.

Absences from work

Employers are always permitted to ask an employee why he or she was absent from work, even if the reason may be health related.  An employer may ask an employee returning from personal travel where they have been and may require that employees comply with quarantine guidance before returning to work, depending on the location of their travel (e.g., if the employee has traveled to a COVID-19 “hot spot”).

Furloughs and layoffs

When planning furloughs and layoffs, employers are reminded that the laws enforced by the EEOC prohibit the selection of an individual on the basis of a protected characteristic (e.g., race, color, religion, sex, age) or in retaliation or for a protected activity.

Age discrimination

Employers may not provide flexibility (e.g., telework or modified schedules) to employees if it results in older, comparable employees being treated less favorably based on age.

Final Consideration

Employers should keep in mind that there may be state and local legislative developments that could impact the guidance provided by the EEOC.

 

A Brief Look at Ruth Bader Ginsburg’s Impact on Gender Equality in the Workplace

September 18, U.S. Supreme Court Justice Ruth Bader Ginsburg passed away at age 87.  Justice Ginsburg was not only greatly respected and admired throughout her twenty-seven years on the Court, but she was also a tireless advocate for gender equality work, which began decades before she joined the bench.  As Justice Ginsburg saw it, “the gender line helps to keep women not on a pedestal, but in a cage.”

Ginsburg faced gender discrimination throughout her life and knew firsthand what if felt like to be discriminated against purely on the basis of her gender.  Though she was one of only nine female students at Harvard Law in 1956, she was the first female member of the Law Review and was at the top of her class.  She later transferred to Columbia Law School and graduated first in her class.  Ginsburg had worked for a top law firm in New York during the summer of her second year in law school.  “I thought I had done a terrific job, and I expected them to offer me a job on graduation,” Justice Ginsburg recalled.  Despite her performance, there was not job offer.  Nor was there an offer from any of the twelve firms with which she interviewed.  In fact, only two gave her a follow-up interview.

Several years later, while on faculty of Rutgers Law School in 1963, Ginsburg discovered that her salary was lower than that of her male colleagues.  Upon this discovery, she joined an equal pay campaign with other women teaching at the university, which resulted in substantial increases for all the complainants.  Because of her own experiences of being discriminated against because of her gender, Ginsburg began to take sex discrimination complaints.  She believed that men and women would “create new traditions by their actions, if artificial barriers are removed, and avenues of opportunity held open to them.”  In order to remove these barriers and open opportunities to women, Ginsburg started the ACLU Women’s Rights Project in 1972.  That same year, she became the first women to be granted tenure at Columbia Law School.

Frontiero v. Richardon was the first case Ginsburg argued before the Supreme Court.  She argued for the application of strict scrutiny to gender discrimination just as the concept applied to race discrimination.  Four Justices supported this view, just one vote shy of a majority.  Through a series of decisions in the wake of Frontiero, an intermediate standard of review was established, a standard that required the government to show that any sex classification it defended had a “substantial relationship” to an “important state interest.”

Ginsburg’s strategy was to occasionally use male plaintiffs in equal protection cases, including Frontiero, to demonstrate that sex-based distinctions harm men and women.  Sharron Frontiero’s husband, Joseph, wasn’t eligible for spousal benefits from her work in the uniformed forces because he failed to prove economic dependency on his wife, a condition not required for wives of male members to qualify for the same benefits.

In Weinberger v. Wiesenfeld, Ginsburg successfully argued against a provision in the Social Security Act that denied to widowed fathers benefits afforded to widowed mothers.  She made the case that the classification discriminated against working women, whose social security taxes garnered fewer family benefits than the taxes paid for working men.  She also argued that the law denied men the same opportunity as women to care personally for their children.

Later, as a Supreme Court Justice, she authored the opinion in United States v. Virginia et al., which rejected the notion that the Virginia Military Institute could exclude women from admissions because there was a women’s leadership academy at another Virginia college.  Just as “separate but equal” was rejected in Brown v. Board of Education, Justice Ginsburg rejected the idea that there was a “separate but equal” opportunity for women at another school.  The Court held that Virginia Military Institute’s male-only admissions policy violated the Equal Protection Clause of the Fourteenth Amendment.

One of Justice Ginsburg’s most well-known dissents, which she read from the bench, was Ledbetter v. Goodyear Tire & Rubber.  The conservative majority ruled in Goodyear’s favor and held that Ledbetter needed to bring her lawsuit withing 180 days of her initial discriminatory performance evaluations.  The fact that her most recent paychecks were lower because of discriminatory actions years before didn’t matter.  Justice Ginsburg wrote a blistering dissent where she strongly disagreed with the majority court’s decision.  She criticized the majority opinion as a “cramped interpretation of Title VII.”  Justice Ginsburg argued that pay disparities often happen over time and may be “hidden in plain sight,” unlike other immediate forms of workplace discrimination.  She called on lawmakers for a legislative fix and Congress reacted quickly with the Lilly Ledbetter Fair Pay Act of 2009.  This law amended Title VII so that unlawful employment practices could include not just the actual discrimination, but also events where an employee is affected by an earlier act of discrimination.  Therefore, if a discriminatory act from twenty years earlier results in lower pay today, the 180-day deadline to bring suit would reset every time the employee received a paycheck.

Just this summer, Justice Ginsburg joined the majority opinion in Bostock v. Clayton County, a landmark decision where the Supreme Court concluded that the sex discrimination prohibition from Title VII of the Civil Rights Act of 1964 (“Title VII”) also applied to sexual orientation and gender identity discrimination.  The decision has been hailed as one of the most important legal decisions regarding LGBTQ rights in the United States.

Above are only a small sample of the cases Ruth Bader Ginsburg argued in front of the Supreme Court or ruled on as a Justice of the Court which enhanced gender equality in the workplace.  Over the course of her legal career, which spanned more than six decades, Justice Ginsburg worked tirelessly to break down gender discrimination in America.  The advancements she made possible have impacted generations and will continue to do so for generations to come.  Because of her work, “we are at last beginning to relegate to the history hooks the idea of the token woman.”

 

Potential Employment Issues the Court Will Face without Justice Ginsburg In Coming Years

Worker classifications – Most employment laws, especially those concerning wages and discrimination protections only apply to employees.  However, more and more of the workers in the workforce today are independent contractors.  Currently, there is no consensus as to what determines if an individual is an employee or not within the context of employment rights.

Unions – In 2018, the Supreme Court concluded that forcing non-union public employees to pay union dues was a violation of their First Amendment rights.  Though this issue is settled, there are two cases where the workers argue that they should be reimbursed for the union dues they paid before the Supreme Court declared in 2018 that they no longer had to pay them (Mooney v. Illinois Education Association and Janus v. AFSCME)

Bostock – There is uncertainty as to how far the Bostock decision goes in terms of the religious rights of employers.  In the Bostock case, the Supreme Court specifically left open the issue of how the religious beliefs of an employer would come into play when it came to sexual orientation and gender identity protections of employees under Title VII.

Equal Pay – One of the hurdles to equal pay among men and women is salary history.  An employer will often use a job applicant’s salary history as a basis for deciding what the employer should pay them if they are hired.  This access to an individual’s salary history has resulted in the perpetuation of the gender pay gap.  There is a remaining legal dispute over whether an individual’s salary history can be a defense to an accusation that an employer violated the Equal Pay Act of 1963 (“EPA”).  The lower federal courts have come to conflicting conclusions as to whether salary history can play a factor in deciding if an EPA violation exists.

 

Trump Administration Issues Executive Order on “Combating Race and Sex Stereotyping”

On September 22, 2020, President Trump issued an Executive Order that will impact workplace training programs used by Government Contractors, recipients of Federal Grants, U.S. Uniformed Services, and Federal Agencies in important ways.  The Order, titled “Combating Race and Sex Stereotyping” will:

1. Prohibit employment training that implicates race or sex stereotyping, “scapegoating” or “divisive concepts” like unconscious bias;
2. Implement new notice and posting requirements;
3. Instruct the Office of Federal Contract Compliance Programs (“OFCCP”) to create a complaint hotline for violations of the order; and
4. Instruct the OFCCP to initiate a process for collecting employee training materials and related information used by contractors relating to diversity and inclusion efforts.

The stated purpose of the Executive Order is to combat the ideology that the United States of America is “inherently sexist and racist,” which, the Order suggests is currently promoted in workplace diversity training.  The Order also criticizes the idea that any race or sex are afforded certain privileges as beliefs that are “designed to divide us and to prevent us from uniting as one people in pursuit of one common destiny for our great country.”  This Order comes at a time when many employers have increased their diversity, equity and inclusion efforts, some with a particular focus on concepts of unconscious bias and reflections on whether certain majority groups have benefited and continue to benefit from privilege.

The Executive Order prohibits workplace training that includes the following concepts:

1. One race or sex is inherently superior to another race or sex;
2. An individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
3. An individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
4. Members of one race or sex cannot and should not attempt to treat others without respect to race or sex;
5. An individual’s moral character is necessarily determined by his or her race or sex;
6. An individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;
7. Any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or
8. Meritocracy or traits, such as hard work ethic, are racist or sexist, or were created by a particular race to oppress another race.

In addition to the requirements noted above, the Executive Order:

• Prohibits the U.S. military from instructing service members to believe any divisive concepts.
• Mandates that federal agencies identify programs for which the agency may condition receipt of grant funds on certification that federal funds are not used to promote divisive concepts.
• Requires federal agencies to ensure that training provided to federal employees does “not teach, advocate, act upon, or promote in any training to agency employees any of the divisive concepts.”
• Directs the Attorney General to determine whether “workplace training that teaches the divisive concepts. . . contributes to a hostile work environment in violation of Title VII of the Civil Rights Act of 1964.”
• Suggests that the Attorney General and the Equal Employment Opportunity Commission “issue guidance to assist employers in promoting diversity and inclusive workplace without violating Title VII.”

While the Order is effective immediately, the key provisions that impact federal contractors will only be applicable to contracts signed after November 21, 2020.  If fully implemented, the requirements of the Executive Order could require significant modifications to the content of trainings on race and sex, including, diversity and inclusion and unconscious bias, that have become the mainstay for many employers.  Some of these trainings are, or may be, required by other federal or state requirements, which could pose a conflict for contractors.

 

IRS Guidance on the Social Security Tax Deferral

August 8, 2020, President Trump issued a presidential memorandum allowing employee-side social security tax deferral from September 1^st through December 31^st of 2020.  Subsequently, the Internal Revenue Service (“IRS”) released Notice 2020-65 (“Notice”) on August 28, 2020, to provide guidance on how to implement the President’s Order.

Background

Both employers and employees are generally required to pay a Social Security tax at a flat rate of 6.2%, for a total of 12.4%, on all wages.  President Trump’s Memo directed the Secretary of the Treasury to use his authority pursuant to section 7508A of the Internal Revenue Code to defer the withholding, deposit and payment of the employee’s portion of Social Security tax obligations.  It should be noted that the CARES Act allows employers to delay paying the employer’s portion of Social Security taxes.  The intent of this Notice is to allow employers to delay collecting the employee’s portion of Social Security taxes, thereby temporarily putting money back into the pockets of employees during difficult times.  The pragmatic effect, however, is that employees are offered an interest-free loan, with employers likely on the hook in the event of a default.

The guidance leaves many questions unanswered, but it clarifies that:

• Only employees earning less than $2,000 a week (or the equivalent over other pay periods) may participate in the deferrals;
• Deferral eligibility is determined on a pay-period to pay-period basis, therefore, an employee with fluctuating wages (for example, due to overtime or bonuses) may be eligible for some payroll periods, but not others;
• The deferred taxes subsequently must be withheld from an employee’s pay for the period from January 1 through April 30, 2021. Therefore, the employee will have double withholdings during that time period;
• Employers will be responsible for paying the deferred taxes and may be subject to penalties if they fail to do so; and
• Employers may make “arrangements” with employees who elect to defer their withholdings in order to ensure repayment. The guidance does not explain what such “arrangements” consist of, but presumably this includes repayment agreements with deferring employees to address situations such as where an employee is terminated prior to full repayment.

Administrative Issues

The employer must calculate the dollar threshold each pay period.  This could be a challenge for the employer’s HR and payroll departments in having to monitor the $2,000 per week threshold.  Additionally, the deferral of payroll tax relates only to the 6.2% old-age survivor and disability insurance (“OASDI”) tax, which is capped to $137,700 of wages received in 2020.  The deferral does not apply to the 1.45% Medicare tax.

The guidance is clear in one respect, it is the responsibility of the employer to remit any deferred amounts prior to April 20, 2021.  Specifically, the Notice states that “An Affected Taxpayer must withhold and pay the total Applicable Taxes that the Affected Taxpayer deferred under this notice ratably from wages and compensation paid between January 1, 2021 and April 30, 2021 or interest, penalties, and additions to tax will begin to accrue on May 1, 2021, with respect to any unpaid Applicable Taxes.”  Importantly, the Notice defines “Affected Taxpayer” as employers.

Uncertainty Remains

The Notice does not address what happens with employees who terminate employment prior to the due date of the deferred amounts.  Would the employer as the Affected Taxpayer be responsible?  It looks as though this conclusion is likely.

Conclusion

The “tax holiday” began September 1, 2020.  However, with the Notice not being published until late on August 29^th, many employers have not had time to make a decision regarding their participation in the deferral of these taxes.  Regardless of what the employer decides, it is vital that they communicate their plans to employees.  If an employer decides to participate, the employer should detail the terms of what will occur and what will be required of the employee in the coming months.  Employees must understand that while they will not pay Social Security taxes for the rest of 2020, they will have to pay double in the beginning of 2021.  Employers should continue to monitor these developments over the coming months, as additional guidance and clarity may address many of the outstanding questions that employers may have.