New OSHA COVID-19 Workplace Guidance
On January 29, 2021, the U.S. Department of Labor announced that its Occupational Safety and Health Administration (OSHA) issued new worker safety guidance to:
The guidance recommends several essential elements in a prevention program:
The guidance is not a standard or regulation, and it creates no new legal obligations. It contains recommendations as well as descriptions of existing mandatory safety and health standards. The recommendations are advisory in nature, informational in content, and are intended to assist employers in recognizing and abating hazards likely to cause death or serious physical harm as part of their obligation to provide a safe and healthful workplace.
Form I-9 Flexibility Extended to March 31, 2021
On January 27, 2021, the U.S. Immigration and Customs Enforcement (ICE) announced the Employment Eligibility Verification (Form I-9) flexibility rule will be extended to March 31, 2021 because of COVID-19 and the need for precautions. This flexibility rule, applicable only to remote workplaces, defers the physical presence requirement for in-person verification of the Form I-9 identity and employment eligibility documentation. However, the flexibility rule does not apply if there are employees physically present at the workplace. If there are employees physically present, then an employer must verify their Form I-9 identity and employment eligibility documentation in-person.
On March 19, 2020, the DHS first announced that the physical presence requirements were deferred due to COVID-19. The DHS and ICE websites provide additional updates about when the extensions will end and when normal operations will resume.
Law Extends COVID-19 Tax Credit for Employers That Keep Workers on Payroll
On January 26, 2021, an Internal Revenue Service press release (IR-2021-21) reminded employers to take advantage of the extended employee retention credit for businesses that choose to keep their employees on the payroll despite the challenges posed by COVID-19. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, changed the employee retention tax credits previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including modifying and extending the Employee Retention Credit (ERC), for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021.
As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70 percent of the qualified wages they pay to employees after December 31, 2020 and through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021.
Employers can access the ERC for the 1st and 2nd quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers, those with an average of 500 or fewer full-time employees in 2019, may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to COVID-19, after reducing deposits. In 2021, advances are not available for employers larger than this.
Effective January 1, 2021, employers are eligible if they operate a trade or business during January 1, 2021 through June 30, 2021, and experience either:
Employers that did not exist in 2019 can use the corresponding quarter in 2020 to measure the decline in their gross receipts. In addition, for the first and second calendar quarters in 2021, employers may elect (in a manner provided in future IRS guidance) to measure the decline in their gross receipts using the immediately preceding calendar quarter (the fourth calendar quarter of 2020 and first calendar quarter of 2021, respectively) compared to the same calendar quarter in 2019.
In addition, effective January 1, 2021, the definition of qualified wages was changed to provide:
Retroactive to the March 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan.
Read more about COVID-19-related employee retention credits and how to claim the employee retention credit here.
CDC COVID-19 Workplace Testing Guidelines Emphasize Consent and Disclosure
On January 21, 2021, the Centers for Disease Control and Prevention (CDC) updated its guidance on COVID-19 workplace testing. The guidance emphasizes that workplace-based testing should not be conducted without an employees informed consent so they understand the testing process and may act independently to make choices that align with their values, goals, and preferences.
The guidance details the disclosures that an employer must provide to its employees, for instance:
The guidance also addresses topics employers should be prepared to discuss with their employees, such as test scheduling and payment, testing sites, communication and interpretation of results, employee privacy, and how to get assistance.
The CDC also provides a SARS-CoV-2 Testing Strategy: Considerations for Non-Healthcare Workplaces website, updated October 21, 2020, which identifies additional, important disclosures that employers should give to employees contemplating testing.
DOL Opinion Letters Addressing FLSA Exemptions and Worker Classification
On January 19, 2021, the U.S. Department of Labor released the following new opinion letters addressing Fair Labor Standards Act (FLSA) compliance:
*2021-8 and 2021-9 were withdrawn. They were determined to be issued prematurely because they were based on rules that were not in effect. These withdrawals are an official ruling of the Wage and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. § 259, and these letters may not be relied upon as statements of agency policy as of their withdrawal date.
DOL Releases Opinion Letters for Two FLSA Topics: Tipped Workers and Establishment Workers
On January 15, 2021, the U.S. Department of Labor released the following Fair Labor Standards Act (FLSA) opinion letters:
*2021-4 was withdrawn. It was determined to be issued prematurely because it was based on a rule that has not taken effect. The withdrawal is an official ruling of the Wage and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. § 259, and the letter may not be relied upon as a statement of agency policy as of the withdrawal date.
EEOC and Religious Discrimination Clarifications
On January 15, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) approved revisions to its Compliance Manual Section on Religious Discrimination. The updated guidance describes how Title VII of the Civil Rights Act of 1964 protects against religious discrimination in the workplace and details legal protections available to religious employers. Importantly, the EEOC states that “the manual does not have the force and effect of law and is not meant to bind the public in any way. It is intended to provide clarity to the public on existing requirements under the law and how the EEOC will analyze these matters in performing its duties.”
Replacement Sticker Extending Permanent Resident Card (Green Card) Validity and Form I-9
On January 12, 2021, the U.S. Citizenship and Immigration Services (USCIS) announced that it is replacing the currently issued sticker that extends the validity of a Form I-551, Permanent Resident Card (PRC), or Green Card, with a revised Form I-797, Notice of Action, receipt notice of Form I-90, Application to Replace Permanent Resident Card. The revised notice will extend the validity of a PRC for 12 months from the “Card Expires” date on the front of the PRC. This change ensures that certain lawful permanent residents have documentation for completing Form I-9, Employment Eligibility Verification.
Employees may present their expired PRC together with this notice as an acceptable List A document that establishes identity and employment authorization for Form I-9 purposes. When completing a Form I-9, employers should enter the information from this document combination in Section 2, under List A:
Employers who retain copies of documents should retain copies of both the PRC and Form I-797 with the employee’s Form I-9. Employers may not reverify Lawful Permanent Residents who present this document combination.
Read more about acceptable documents at I-9 Central or in The Handbook for Employers, Guidance for Completing Form I-9.
FLSA Opinion Letters: Administrative Employee Exemption and Ministerial Exception
On January 8, 2021, the U.S. Department of Labor announced the following new opinion letters that provide compliance assistance related to the federal Fair Labor Standards Act (FLSA):
OSHA Penalty Amount Increases
On January 8, 2021, the U.S. Department of Labor announced the following 2021 adjustments to the Occupational Safety and Health Administration (OSHA) civil penalty amounts:
These increases apply to penalties assessed after January 15, 2021.
Final Rule Clarifies Independent Contractor Status under the Fair Labor Standards Act
On January 6, 2021, the U.S. Department of Labor, Wage and Hour Division announced a final rule clarifying whether an individual is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The rule:
If those two primary core factors do not point to the same classification, then the rule identifies the following additional factors to determine status:
The rule also:
The rule is effective March 8, 2021.
COVID-19 Relief for Employers Using the Automobile Lease Valuation Rule
On January 4, 2021, the Internal Revenue Service released Notice 2021-07 which provides temporary relief in response to the ongoing COVID-19 pandemic for employers using the automobile lease valuation rule to value an employee’s personal use of an employer-provided automobile for:
Due solely to the COVID-19 pandemic, if certain requirements are satisfied, employers and employees using the automobile lease valuation rule to determine the value of an employee’s personal use of an employer-provided automobile may instead use the vehicle cents-per-mile valuation rule beginning March 13, 2020.
2021 IRS Forms
On December 31, 2020 and January 5, 2021, the federal Internal Revenue Service released the following new forms and publications, among many others, for use in 2021: