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Campolo, Middleton & McCormick, LLP, a premier law firm with offices across Long Island, is thrilled to announce that that Senior Partner Christine Malafi has been recognized by her peers for the fifth year in a row to be featured in The Best Lawyers in America® in the category of Employment Law – Management (2022 edition). With this distinction, Malafi ranks among the top five percent of private practice attorneys nationwide as determined by a rigorous peer-review process.

For over three decades, the legal profession and the public have turned to Best Lawyers® as one of the most credible measures of legal integrity and distinction in the nation. Inclusion in Best Lawyers is based on over a million confidential evaluations by top attorneys. The Best Lawyers’ founding principle forms the basis of this transparent methodology: the best lawyers know who the best lawyers are. No fee to participate is permitted.

Malafi chairs the Corporate Department at CMM, which was recognized by Forbes as a Top Corporate Law Firm in America. Her practice focuses on mergers and acquisitions, corporate governance, routine and complex transactions, drafting and negotiating a wide range of agreements, and helping businesses navigate all types of human resources matters. She routinely represents buyers and sellers in multimillion-dollar transactions and serves in a general counsel role for many of the firm’s corporate clients. In addition to her legal work, Malafi serves on the Executive Board of Directors of Family Service League, among others. She also sits on the Board of Governors of Touro Law School and the New York State Pro Bono Scholars Task Force.

By Christine Malafi

As of this writing, more than 300 million COVID-19 vaccines have been administered in the United States, vaccinating about half of the population according to the CDC. 52.4% of people are fully vaccinated and 61.7% have received at least one dose. As vaccination efforts continue, more businesses are reopening, and more employers are returning to an in-person model of working. When the first vaccines were administered in December 2020, the U.S. Equal Employment Opportunity Commission (EEOC) issued guidance regarding employers’ obligations for mandatory COVID-19 vaccines. On May 28, 2021, the EEOC issued new guidance.

Here, we provide a refresher course on the earlier guidance, and a look at the new guidance.

Vaccine Mandates

The December EEOC guidance provided that employers can require that employees get vaccinated as a condition of returning to work if their vaccination policies comply with the Americans with Disabilities Act (“ADA”), Genetic Information Nondiscrimination Act (“GINA”), Title VII of the Civil Rights Act of 1964, and other workplace laws. This information still holds true.

The May 28 EEOC guidance now expressly allows employers to require all employees physically entering the workplace to be vaccinated. However, employers are still required to provide reasonable accommodations to employees due to medical disability or religious beliefs as long as the accommodations do not pose an “undue hardship” on the employer. Examples of reasonable accommodations include wearing a face mask at work, social distancing from other employees, or working from home. Read more about reasonable accommodation and the definition of “undue hardship” in our earlier article here.

On August 23, the Pfizer/BioNTech COVID-19 vaccine was granted full approval by the Food and Drug Administration for individuals 16 years of age and over (while for individuals 12-15 years of age the Pfizer vaccine is still under emergency use authorization). Following the full FDA approval, many employers and entities are now mandating the COVID-19 vaccine for their personnel. For instance, the Pentagon has mandated that the U.S. military receive the vaccine, and many universities, the State University of New York (SUNY) system among them, are mandating the same for their students.

These recent COVID-19 vaccine mandates demonstrates that the FDA’s full approval of the Pfizer vaccine for individuals 16 and over could (and is already) influencing employers, employees, and vaccine mandates. With the FDA’s review of the Moderna and Johnson & Johnson COVID-19 vaccines on the horizon (as Moderna has applied for full approval already), new guidelines on mandatory vaccines will start to come out as the vaccines move from emergency authorization to full approval by the FDA.

Vaccine Reporting

The updated May EEOC guidance clarifies that employers are legally allowed to request documentation of an employee’s vaccination status; however, this documentation is considered medical information, so it must be kept confidential. And, while an employer asking about vaccine status is not covered under the Health Insurance Portability and Accountability Act, it is a violation for employers to ask employees to disclose additional health information such as specific medical reasons or religious beliefs that prohibit their vaccination.

Vaccine Incentives

Under the new May EEOC guidance, employers may offer incentives to employees for receiving the COVID-19 vaccine and showing documentation. Employers should be careful when considering incentives so that their actions are not viewed as coercive and that incentives do not pressure employees to reveal protected medical information.

As new developments related to vaccination mandates occur, the EEOC will provide additional updates, which we will continue to report on as such guidance comes out.

If you are an employer or employee with any questions regarding a mandate of the COVID-19 vaccine, reporting, and incentives based on the new EEOC guidance, please contact us.

Pursuant to new legislation signed into law on March 12, New York employees are now entitled to paid time off to receive the COVID-19 vaccine.

The legislation, Senate Bill 2588-A/Assembly Bill 3354-B, grants up to four (4) hours of excused leave per injection to all employees.  If the time necessary to obtain an injection is less than four (4) hours, then an employee is entitled to paid leave only up to the time it takes to get the injection. This “vaccine leave” is in addition to any other leave to which the employee is entitled, such as paid sick leave.

The new law provides that the time must be paid at the employee’s regular rate of pay. Additionally, the law prohibits employers from discriminating or retaliating against employees who request to take a leave of absence to be vaccinated for COVID-19. The law expires on December 31, 2022.

If you have any questions regarding COVID-related time off or employment issues, please contact us at (631) 738-9100.

By Christine Malafi

Around the country, states have proposed legislation that would require insurers who provide property insurance to cover business interruption during the coronavirus pandemic. These pending laws have not seen much movement since being introduced; however, as the pandemic continues, state legislatures have focused more on this issue. These states are considering mandatory business interruption coverage laws and applying them retroactively: California, Louisiana, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, South Carolina and the District of Columbia introduced legislation that generally requires carriers insuring against loss or damage to property to cover business interruption during a declared state of emergency due to COVID-19, even if an exclusion applies, or declaring that the presence of a virus is a physical loss.

In New York,  A1937/S4711 are  currently pending bills, originally introduced as A10226/S8211 in late March 2020. These are the highlights of that proposed legislation:

1. Proposal requires certain perils to be covered under Business Interruption insurance coverage during the COVID pandemic.
2. This bill would apply to those business which had business interruption insurance in effect on March 7, 2020, the date of the Governor’s Executive Order 202, the declaration of a State of Emergency related to COVID-19.
3. It is limited to businesses with less than 250 full time employees.
4. It provides for automatic renewal of insurance, at the current rate, during the pandemic.
5. It provides that any policy of insurance with a virus exclusion permitting the insurer to deny coverage shall be deemed to have that exclusion deemed null and void.
6. Insurers would pay/indemnify their insureds who have filed business interruption claims and then the insurers would apply to the Superintendent of the Department of Financial Services for “relief and reimbursement from funds collected and made available for this purpose and pursuant to a special purpose assessment (to recover the expenses from insurance companies, other than life & health insurers).
7. Superintendent is to establish submission of procedures, qualification, and eligibility for reimbursement.

Other New York bills are pending on the issues, including A10327, which relates to providing such coverage to “insureds with coverage who operate programs and services including a mental health outpatient provider . . .  substance use disorder treatment provider . . . community-based program funded under the office of mental health . . .” and A5396/S4333 which establishes the temporary hospitality and business relief fund and creates a credit for certain hospitality businesses affected by the COVID-19 pandemic.

Pending bills, at both the State and Federal levels, attempt to mandate insurance coverage for risks that were, arguably, never intended to be assumed by the insurers, for which premiums were never collected.

If passed, this could pose serious solvency concerns for insurers, who have not set reserves for these losses. All policyholders would have claims at the same time. This could arguably end the existence of business interruption insurance in its entirety and could endanger other, clearly covered claims.

The Federal bill, the Business Interruption Coverage Act of 2020 is more expansive than the state proposals, as it mandates coverage for COVID, acts of terrorism, and extreme events be made available to insureds, but permits exclusion of such coverage if the insureds do not pay for the additional coverages This bill would preempt state law pursuant to the McCarran-Ferguson Act (1945).

This pending legislation, if passed, would be challenged, and legal challenges could hold up payments for years in any event, which would result in no payments to assist small businesses in their viability now. The bills will most likely be challenged under the contracts clause, the due process clauses, and the takings clause of the U.S. Constitution.

This article was co-written by Rosa M. Feeney of Lewis Johs Avallone Aviles, LLP.

By Christine Malafi

Ten months ago, in March 2020, NYS enacted legislation authorizing sick leave for employees subject to a mandatory or precautionary order of quarantine due to COVID-19. In January 2021, NYS recently issued updated guidance on the use of COVID-19 sick leave. Before diving into the updated guidance, here is a review of the initial legislation.

March 2020 NY COVID-19 Paid Sick Leave Legislation

January 2021 NY COVID-19 Paid Sick Leave Updated Guidance

On January 20, 2021, NYS updated its guidance on the use of COVID-19 sick leave. This guidance supplements the prior guidance on the application of COVID-19 sick leave; all prior guidance still remains in effect. The new guidance significantly expands on employers’ obligations set forth in the prior legislation.

If an employee tests positive for COVID-19 following a period of mandatory quarantine, the employee (1) cannot report to work, (2) is automatically deemed subject to a subsequent mandatory order of isolation from the NY Department of Health; and (3) is entitled to paid sick leave under the NY COVID-19 sick leave law (even if the employee already received NY COVID-19 sick leave for the first period of mandatory quarantine). However, to receive NY COVID-19 sick leave for a subsequent time, the employee is required to submit documentation of a positive COVID-19 test result from a licensed medical provider. Employees can qualify for COVID-19 sick leave for up to three orders of quarantine.

Additionally, the guidance appears to require employers to provide employees with paid leave if the employer mandates that the employee does not report to work due to potential exposure to COVID-19. If this happens, the guidance states that the employee must be paid at their regular rate of pay until the employer allows the employee to return to work or the employee becomes subject to an order of quarantine. If the employee is subject to an order of quarantine, then the employee would receive NY COVID-19 sick leave for the duration of that order.

The COVID-19 sick leave legislation passed in 2020 provided that leave was only available in the event an employee was subject to an order of quarantine. This new guidance seems to go beyond that statute. Consequently, this updated guidance may be subject to legal challenges because the NY Department of Labor cannot create obligations that go beyond statutory requirements; the DOL can only promote regulations that interpret a statute.

If you have any questions regarding the new COVID-19 paid sick leave guidance, please contact us.

UPDATE:

March 2021 NY COVID-19 Vaccination Leave

Beginning March 12, 2021, New York employees will receive paid time off to be vaccinated against COVID-19. Both public and private employees will receive up to four hours of paid leave per injection without having to use benefit time, including New York’s mandated sick leave. Employers must pay employees their regular rate of pay for the time off. Additionally, employers cannot discriminate or retaliate against employees who request to take a leave of absence to receive a vaccination. Learn more here.

By Christine Malafi

UPDATE: As of May 2021, this rule has been rescinded. Click here for updated guidance.

On January 6, 2021, the U.S. Department of Labor (“DOL”) issued a final rule changing the standard determining if a worker is an employee or an independent contractor under the Fair Labor Standards Act (“FLSA”).[1] According to the DOL, the purpose of this change is to make it easier to identify which workers are employees covered by minimum wage, overtime, and other provisions of the FLSA. This new rule reaffirms an “economic reality” test to determine whether an individual is in business for himself (e.g., independent contractor) or is economically dependent on a potential employer for work (e.g., FLSA employee).

Federal and State Issue

The determination of whether a worker is an employee or independent contractor is both a federal and state issue. The DOL views misclassification as denying access to critical benefits and protections to which employees are entitled by law. Employee misclassification also reduces taxes paid to federal and state governments and lowers contributions to state unemployment insurance and workers’ compensation funds.

New York State Guidance

According to the New York State Department of Labor, independent contractors must be free from supervision, direction, and control in the performance of their duties. They are in business for themselves, offering their services to the general public. Signs of independent contractor status include, but are not limited to, a person who has an established business, advertises in the electronic and/or print media, sets their own schedule, and pays their own expenses.

An employer-employee relationship may exist (rather than an independent contractor relationship) if the employer: (1) chooses when, where, and how workers perform services; (2) provides facilities, equipment, tools, and supplies; (3) directly supervises the services; (4) sets the hours of work; (5) requires exclusive services; (6) sets the rate of pay; (7) requires attendance at meetings and/or training sessions; (8) asks for oral or written reports; (9) reserves the right to review and approve the work product; (10) evaluates job performance; (11) requires prior permission for absences; and (12) has the right to hire and fire.

Federal Guidance

The new federal guidance describes two “core factors” that are most probative to this question: (1) the nature and degree of control over the work; and (2) the worker’s opportunity for profit or loss based on initiative and/or investment. Further, the test identifies three other factors that serve as additional guidelines in the analysis: (3) the amount of skill required for the work; (4) the degree of permanence of the working relationship between the worker and the potential employer; and (5) whether the work is part of an integrated unit of production.

1. Nature and Degree of Control Over the Work
   • Whether the worker exercises substantial control over key aspects of the performance of the work (e.g., setting their schedule, selecting certain projects, working with little or no supervision, and performing work for others). The DOL states that requiring a worker to comply with health and safety standards, specific legal mandates, contractually agreed-upon deadlines, and insurance policies does not constitute the type of control under this factor.
     
     
2. Worker’s Opportunity for Profit/Loss
   • Whether the worker has an opportunity for profit or loss based on their initiative (e.g., managerial skill and business judgment) or their investment (e.g., managing investments in, or capital expenditure on, equipment, materials, or helpers).
     
     
3. Amount of Skill Required for the Work
   • Whether the work requires specialized skill or training that the employer does not provide.
     
     
4. Degree of Permanence of the Working Relationship Between the Worker and Employer
   • Whether the duration of the work relationship is definite or sporadic. It should be noted that seasonal work does not necessarily show independent contractor status.
     
     
5. Part of an Integrated Unit of Production
   • Whether the work is an element of the employer’s integrated production process for a good or service (e.g., if the work is analogous to a production line).

These factors are not exhaustive, and no single factor is dispositive. However, the DOL stated that if the core factors point toward the same classification (whether the worker is an employee or independent contractor), then the weight of those factors will most likely outweigh the additional factors.

The final rule was published in the Federal Register on January 7, 2021 and the effective date of the final rule is March 8, 2021. However, the Biden administration does not favor this rule and it is possible that they will delay its implementation. The Biden campaign’s labor platform included a commitment to restore the Obama administration’s aggressive wage-hour misclassification agenda. This would create a more rigid test for qualifying workers as independent contractors than this rule.

What if a Business Does Not Comply?

If a business is discovered to have improperly treated an employee as an independent contractor, the business will be held accountable for employment taxes for that worker, as well as unemployment insurance and workers’ compensation contributions, with associated fines and penalties.

If you have any questions regarding the classification of employees versus independent contractors, please contact us.

Learn more about this issue here.

Thank you to Daniel Axelrod for his research and writing assistance with this article.

[1] This rule is different from the prior factors used to distinguish employees from independent contractors. The prior factors were: (1) the nature and degree of the potential employer’s control; (2) the permanency of the worker’s relationship with the potential employer; (3) the amount of the worker’s investment in facilities, equipment, or helpers; (4) the amount of skill, imitative, judgment, or foresight required for the worker’s services; (5) the worker’s opportunities for profit or loss; and (6) the extent of integration of the worker’s services into the potential employer’s business.

On January 15, 2021, Christine Malafi joined Gettry Marcus, CPA, P.C. for their continuing webinar series on the recently passed Economic Aid Act (“EAA”), which has amended the Paycheck Protection Program (“PPP”) and now includes an Employee Retention Credit (“ERC”). 

Some of the key areas that were discussed include:

• SBA deadlines to apply for PPP 1 and PPP 2 loans through March 31, 2021
• Business type eligibility (and ineligibility) including certain non-profit organizations
• Calculating the maximum PPP loan borrowing amount
• PPP loan terms, maturity date, and loan forgiveness application deadlines
• Updated definition of the “Covered Period” to utilize a PPP loan
• Expanded permittable uses of a PPP loan, including new eligible “Covered” expenses such as: 
  • Operations expenditures
  • Property damage costs
  • Supplier costs
  • Worker protection expenditures
• Reapplying for a PPP 1 loan if all or a portion of the loan was originally returned or the borrower did not accept the full eligible loan prior
• Employee Retention Credit (“ERC”)
• and more.

VIEW WEBINAR REPLAY HERE.

As of May 28, 2021, the EEOC has released updated guidance. Visit our updated article here.

Since the first vaccines were administered in mid-December, employers and employees alike have questioned whether the workplace can require vaccination as a condition of employment. It will likely be months before the vaccine is available to most Americans, and thus it may be premature for private sector employers to propose a “vaccination for return-to-work” policy. However, on December 16, 2020, the U.S. Equal Employment Opportunity Commission issued guidance regarding employers’ obligations for mandatory COVID vaccination programs.

Essentially, the EEOC guidance provides that employers can require that employees get vaccinated as a condition of returning to work if their vaccination policies comply with the Americans with Disabilities Act (“ADA”), Genetic Information Nondiscrimination Act (“GINA”), Title VII of the Civil Rights Act of 1964, and other workplace laws.

If an employee declines to get vaccinated based on a disability[1] or a “sincerely held religious belief,” the employer must offer a reasonable accommodation to the employee, such as working remotely.[2] If no accommodation is possible, [3] then an employer may prohibit the employee from entering the business if that employee presents a direct threat to the health and safety of persons in the workplace, but the employer may not necessarily terminate the employee. Employers should evaluate these four factors to determine whether a direct threat exists: (1) duration of the risk, (2) nature and severity of the potential harm, (3) likelihood that the potential harm will occur, and (4) imminence of the potential harm.

An employer does not have to provide a particular reasonable accommodation if it poses an “undue hardship,” which means “significant difficulty or expense.” An accommodation that would not have posed an undue hardship prior to the pandemic may pose one now.[4] Prior to the pandemic, many accommodations did not pose a significant expense when considered against an employer’s overall budget and resources. However, the sudden loss of some or all of an employer’s income stream because of the pandemic is a relevant consideration. Also relevant is the amount of discretionary funds available at this time and whether there is an expected date that current restrictions on an employer’s operations will be lifted (or new restrictions will be added or substituted).

Additionally, EEOC guidance provided that the administration of a COVID vaccine by an employer is not a “medical examination” for purposes of the ADA and administering the vaccine or requiring employees to present proof of vaccination does not implicate GINA.

If you have questions regarding mandatory COVID vaccines in the workplace, please contact us. 

Thank you to Daniel Axelrod for his research and writing assistance with this article.

[1] Title VII as amended by the Pregnancy Discrimination Act specifically requires that women affected by pregnancy, childbirth, and related medical conditions be treated the same as others who are similar in their ability or inability to work. This means that a pregnant employee may be entitled to job modifications, including telework, changes to work schedules or assignments, and leave to the extent provided for other employees who are similar in their ability or inability to work.

[2] On November 8, 2020, the New York State Bar Association passed a resolution urging the state to consider enforcing mandatory COVID vaccination, even if people object for “religious, philosophical or personal reasons.” The EEOC, however, did not issue any guidance on that resolution.

[3] If a job may be performed only at the workplace, there may be reasonable accommodations that could offer protection to individuals whose disability puts them at greater risk from COVID and who therefore request such actions to eliminate possible exposure. Even with the constraints imposed by a pandemic, some accommodations may meet an employee’s needs on a temporary basis without causing undue hardship on the employer. If not already implemented for all employees, accommodations for those who request reduced contact with others due to a disability may include changes to the work environment such as designating one-way aisles; using plexiglass, tables, or other barriers to ensure minimum distances between customers and coworkers whenever feasible per CDC guidance or other accommodations that reduce chances of exposure.

[4] For example, it may be significantly more difficult in this pandemic to conduct a needs assessment or acquire certain items, and delivery may be impacted, particularly for employees who may be teleworking. Or, it may be significantly more difficult to provide employees with temporary assignments, to remove marginal functions, or to readily hire temporary workers for specialized positions.