News & Events

American Rescue Plan Act 100% COBRA Subsidy

by Fenton & Keller

May 14, 2021

Question: Two of my employees were laid off over the last year because of the pandemic, and one employee resigned.  An employee I laid off in January 2021 just called me asking if I was going to pay his COBRA premiums.  Am I responsible for his premiums?

Answer: On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 ("ARPA"). Among other provisions, ARPA created a 100% COBRA premium subsidy and additional COBRA enrollment rights for certain employees (and their families) who lost group health plan coverage due to an involuntary termination of employment or a reduction of hours.

COBRA requires an employer-sponsored group health plan to give employees who otherwise would lose coverage due to termination (or another qualifying event) a chance to continue to buy coverage for themselves and any family members on the plan for a limited period after the qualifying event. The maximum coverage period is generally 18 months.  Under the ARPA, from April 1, 2021 through September 30, 2021, group health plans providing COBRA continuation coverage (or continuation coverage under state COBRA laws) must offer a 100 percent tax-free subsidy of COBRA premiums for “assistance eligible individuals” (AEIs) and their qualified beneficiaries.  AEIs who elect continuation coverage will not receive a payment for the premium assistance. Instead, the COBRA premium amount is advanced by the employer or plan, which will then be reimbursed by the federal government through a refundable credit against payroll taxes.

An individual is an AEI if he or she qualifies for COBRA coverage due to an involuntary termination of employment or reduction of hours.  Individuals who qualify for COBRA coverage due to other qualifying events, such as a voluntary termination of employment, are not AEIs and are not eligible for the premium subsidy. The subsidy does not apply to employees or family members who are or become eligible for other group health coverage or Medicare.

ARPA also provides a "second chance" election for individuals who did not initially elect COBRA or who let their COBRA coverage lapse prior to April 1, 2021 but are still within the 18-month COBRA eligible period.  Individuals who experienced an involuntary termination of employment or a reduction of hours so that COBRA would have started sometime within the 18 months prior to April 1, 2021, but who did not timely elect COBRA, may still elect subsidized COBRA coverage prospectively.  Additionally, individuals who had elected COBRA coverage but discontinued such coverage before April 1, 2021 are eligible to re-elect COBRA coverage if they would otherwise be AEIs and are still within their COBRA coverage period.

Employers or plan administrators must determine which employees/beneficiaries lost health plan coverage beginning on or after November 1, 2019 because of an involuntary termination of employment or reduction in hours.  For eligible individuals who become entitled to COBRA coverage from April 1 to September 30, 2021, the employer or plan administrator must include notice of the availability of premium assistance with its usual COBRA notice.  For other individuals who are still within their COBRA eligibility period who are receiving coverage or declined or dropped coverage, the employer or plan administrator must send notice of the availability of premium assistance and, if applicable, the extended COBRA election period.  The deadline to provide this notice is May 31, 2021.  Thereafter, the individual or beneficiary has 60 days after receiving a notice of the COBRA subsidy to make the election.

Additional guidance and model notices are available at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy.

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Expansion of Mandated Reporter Laws

by Fenton & Keller

April 30, 2021

Question:  My business employs minors, especially during the summer.  Do I need to be concerned about any of my employees being mandated reporters of child abuse or neglect?

Answer:  Potentially.  The Child Abuse and Neglect Reporting Act (“CANRA”) requires that certain individuals who work with children, known as “mandated reporters,” report to specified law enforcement or county social services departments whenever they, in their professional capacity or within the scope of their employment, have knowledge of or observed a child whom the mandated reporter knows or reasonably suspects has been the victim of child abuse or neglect.  Previously, there were about 49 different mandated reporters under the CANRA, including teachers, EMTs, and coaches. Assembly Bill (AB) 1963, effective January 1, 2021, expanded this list to include “human resource employees” of a business with 5 or more employees that employs minors, and, only for the purposes of reporting sexual abuse of children, any adult employee whose duties require direct contact with and supervision of minors in a business with 5 or more employees.

Under AB 1963, “human resources employees” are defined broadly as any employee designated by the employer to accept any complaints of misconduct (i.e., discrimination, harassment, retaliation, etc.) made under California’s Fair Employment and Housing Act.  For example, if the employer’s harassment prevention policy directs employees to report harassment to their supervisor, human resources, or any manager, then all of those individuals are now mandated reporters as of January 1, 2021.  Human resources employees are required to report all types of child abuse or neglect, while employees whose duties require direct contact with employees who are minors are only required to report sexual abuse.

Reporting Requirements

Under CANRA, if a mandated reporter knows or suspects that a child has been the victim of abuse or neglect, he or she must make an initial report by telephone to a designated agency such as a police or sheriff’s department, or the county welfare department, immediately, or as soon as is practicable, and provide a written follow-up report within 36 hours.  In Monterey County, the Department of Social Services is a designated agency.  Reports of abuse and neglect can be reported to either of its 24-hour hotlines: (831) 755-4661 or (800) 606-6618.  Visit SS8572B (monterey.ca.us) CHILD ABUSE SUMMARY REPORT DEPARTMENT OF JUSTICE (DOJ) FORM SS 8583 (monterey.ca.us) to obtain the Suspected Child Abuse Report (SCAR) forms and instructions for submitting written reports.

Employer Training Requirements

Employers who employ minors are now required to provide training in child abuse and neglect identification and reporting to all mandated reporters.  This training requirement may be met by completing the general online training for mandated reporters offered by the Office of Child Abuse Prevention in the State Department of Social Services.  Information on this training may be found at https://mandatedreporterca.com/.

Employers should identify the employees within their business who are mandated reporters, notify these employees of their status, and begin coordinating training.  Employers must provide their mandated reporters with written notice that acknowledges their status as mandated reporters, their obligations under CANRA, and the confidentiality rights and obligations under CANRA.   The text of the new law can be found at Bill Text - AB-1963 Child abuse or neglect: mandated reporters. (ca.gov).

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New Guidelines for Reopening Businesses

by Fenton & Keller

April 16, 2021

Question: My employees have all been working remotely since March 2020.  I am now planning to reopen my office to the public.  What COVID-19 protocols do I need to follow?

Answer: As Monterey County continues to move into the less restrictive tiers, many businesses are making plans to have employees return to work in their offices.  Keeping up with the various local, state, and federal guidelines can be challenging.

On January 25, 2021, California ended its Limited Stay at Home Order and implemented the Blueprint for a Safer Economy.  Businesses preparing to reopen should visit California’s Blueprint for a Safer Economy website (https://covid19.ca.gov/safer-economy/), which includes industry-specific guidance on developing a workplace COVID-19 prevention plan, employee training, and protocols regarding testing, cleaning, and maintaining physical distancing in the workplace.  However, employers should note that California may end the Blueprint in the upcoming months.

In an April 6, 2021 press release, Governor Gavin Newsom announced that if California stays on pace with its COVID-19 vaccine distribution and keeps hospitalizations low, the state will “fully reopen” on June 15, 2021, and the Blueprint for a Safer Economy will end.  The press release indicates that while businesses may then return to usual operations, they must still comply with Cal/OSHA requirements and “common-sense public health policies,” such as mandated masking and encouraging vaccinations.

The California Department of Health (CDPH) has also indicated that if the state reopens on June 15, businesses listed in the Blueprint for a Safer Economy can return to usual operations, provided they comply with statewide agency guidelines.

Employers should remember that they must continue to comply with the Cal/OSHA Emergency Temporary Standards (COVID-19 Prevention Emergency Temporary Standards - Fact Sheets, Model Written Program and Other Resources (ca.gov)) in their workplaces.  These standards include implementing a written COVID-19 Prevention Program addressing topics including procedures for screening employees, identifying COVID-19 hazards, physical distancing, wearing masks, responding to COVID-19 cases, and recordkeeping and reporting requirements.

Furthermore, as the economy is re-opening, businesses must continue to implement many of the same procedures for protecting employees that have been in place prior to vaccinations including providing face coverings and maintaining six feet of physical distancing.  Cal/OSHA suggests other steps an employer may use to mitigate COVID-19 hazards including encouraging remote working; staggering arrival, departure, and break times; encouraging frequent handwashing; and reducing the number of employees and visitors in an area.  Employers must also implement procedures to minimize the sharing of tools and equipment, including vehicles.

Pursuant to federal Centers for Disease Control (CDC) guidelines, employers must continue to conduct symptom and temperature screening or instruct employees how to self-screen at home.  Employers should still encourage workers who are sick or exhibiting COVID-19 symptoms to stay home.

It is important to note that even though increasing numbers of employees are receiving the COVID-19 vaccine, vaccinated employees must still follow an employer’s COVID-19 prevention measures.

At a local level, Monterey County continues to encourage the community to use masks, practice social distancing, and avoid crowds.  Monterey County requires businesses to adhere to state and local industry guidance for reducing the risks associated with COVID-19 and to have procedures in place to identify COVID-19 cases in the workplace, be ready to intervene quickly, and work with Monterey County Public Health to halt the spread of COVID-19.  Monterey County guidelines for businesses can be found at the following link: 2019 Novel Coronavirus (COVID-19) - For Businesses | Monterey County, CA.

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New California Supplemental Paid Sick Leave Law Applies to Employers with More Than 25 Employees and Expands Covered Reasons for Leave

by Fenton & Keller

April 2, 2021

On March 19, 2021, Governor Gavin Newsom signed into law SB 95 enacting a modified version of California’s COVID-19 supplemental paid sick leave (“SPSL”) law, which expired on December 31, 2020. Although SB 95 took effect on March 19, 2021, it provided a 10-day grace period until March 29, 2021 for employers to start providing this sick leave. The new law will remain in effect until September 30, 2021 and imposes many requirements, including the following:

Covered Employers. The SPSL law applies to employers with more than 25 employees.

Covered Reasons for SPSL.  Employees are permitted to take SPSL whenever they are unable to work or telework for any of the following reasons:

• The employee is subject to a quarantine or isolation period related to COVID-19;
• The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19;
• The employee is attending an appointment to receive a vaccine for protection against COVID-19;
• The employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework;
• The employee is experiencing symptoms related to COVID-19 and is seeking a medical diagnosis;
• The employee is caring for a family member who is subject to a quarantine or isolation order or has been advised to self-quarantine;
• The employee is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

Retroactive Payments. The requirement to provide SPSL applies retroactively to January 1, 2021. If an employer did not compensate an employee for absences that are covered by this new SPSL law, the employer is required to issue retroactive payments to employees who request such payments verbally or in writing, unless the employee received exclusion pay under the Cal/OSHA Emergency Temporary Standards or other pay.

Rate of Pay. For non-exempt employees, the compensation rate is normally the employee’s regular rate of pay for the pay period in which SPSL is taken. For exempt employees, compensation is calculated in the same manner as the employer calculates wages for other forms of paid leave time.   An employer is not required to pay more than $511 per day and $5,110 in the aggregate. SPSL must be reflected on itemized wage statements, set forth separately from regular paid sick days.

Amount of SPSL. Full-time employees and employees who were scheduled to work an average of 40 hours per week in the two weeks before requesting SPSL are entitled to 80 hours of SPSL. Part-time employees generally receive SPSL based on the total number of hours they are normally scheduled to work over two weeks. There is no length of service requirement for SPSL entitlement.

Employers cannot require employees to use PTO, vacation, or unpaid time off before using SPSL. Employers may require employees to first exhaust their SPSL before the employer will be required to pay exclusion pay under the Cal/OSHA Emergency Temporary Standards.

Notice Requirement. Employers must provide employees with notice of this new law, at the worksite and electronically for remote workers.  The Labor Commissioner’s office model notice can be accessed here: https://www.dir.ca.gov/dlse/2021-COVID-19-Supplemental-Paid-Sick-Leave.pdf.

The text of SB 95 can be accessed at Bill Text - SB-95 Employment: COVID-19: supplemental paid sick leave. (ca.gov).

The Labor Commissioner’s 2021 COVID-19 Supplemental Paid Sick Leave FAQs can be accessed here: https://www.dir.ca.gov/dlse/COVID19Resources/FAQ-for-SPSL-2021.html.

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