News & Articles

Know Your OSHA Obligations if COVID-19 Strikes Your Business

Posted on Wed, Apr 14, 2021

Not all employers are bound by the recordkeeping and reporting requirements established by the Occupational Safety and Health Administration (OSHA). Generally, an employer must have more than 10 employees to be subject to those legal obligations, unless OSHA specifically instructs you otherwise.

Your company also must be in an industry that's considered hazardous, such as manufacturing, construction, utilities, agriculture and wholesale trades. Examples of non-hazardous industries include retail, financial services, and real estate. OSHA classifies industries using the Census Bureau's North American Industrial Classification codes. If you're uncertain about your status regarding OSHA, contact the agency.

Reporting requirements can vary by each business establishment — defined as "a single location where business is conducted or where services or industrial operations are performed." That means if you have multiple locations with varied functions, it's possible that one location is subject to OSHA recordkeeping (maintaining an OSHA log) and reporting requirements, and another isn't.

OSHA "General Duties Clause"

Beyond administrative requirements, all employers large enough to be subject to regulations specific in the Occupational Safety and Health Act (regardless of industry) are covered by the law's "general duties clause." This clause specifies that employers must give employees a place to work "free from recognized hazards that are causing or likely to cause death or serious physical harm."

Also, 28 states have their own laws and regulations governing occupational health that might be more stringent than OSHA's. Perhaps you operate in one of them.

If you're subject to OSHA's recordkeeping and reporting requirements, how does COVID-19 fit into that picture? According to OSHA, the following conditions must be met before you are required to record an employee COVID-19 case:

  • Most basic: The employee's ailment is, indeed, proven to be COVID-19,

  • The case "involves one or more of the general recording criteria" laid out in OSHA regulations, including, for example, that the condition can't be remedied with basic first aid procedures, and

  • The disease was contracted in conjunction with the employee's work.

Determining What's "Work-Related"

OSHA concedes that "in many instances, it remains difficult to determine whether a COVID-19 illness is work-related, especially when an employee has experienced potential exposure both in and out of the workplace." With that challenge in mind, OSHA has laid out some "enforcement guidance" for its investigators to determine violations applicable to COVID-19 cases.

Here are three highlights included in that guidance:

  1. A discussion of the reasonableness of the employer's investigation into work-relatedness. "Employers, especially small [ones], should not be expected to undertake extensive medical inquiries, given employee privacy concerns."

  2. An examination of the evidence available to the employer. Employers shouldn't be penalized for good-faith determinations when limited evidence was at hand to draw an accurate conclusion about whether a COVID-19 case was work-related.

  3. A look at how available evidence is interpreted.

The OSHA enforcement guidance offers several illustrations of evidence that is likely to lead to a reasonable conclusion that a COVID-19 case was work-related. One example is when several employees who work closely together all come down with COVID-19 and there's no alternative explanation. Another involves the employee whose job duties "include having frequent, close exposure to the general public in a locality with ongoing community transmission."

Recordable vs. Reportable

As with other workplace-related illnesses and injuries, a work-related COVID-19 case may be "recordable" (and thus logged), but not "reportable" — that is, promptly reported to OSHA. To be recordable, an illness or injury must be too serious to be remedied with basic first aid and involves time away from work. COVID-19 cases often fit that description.

To be reportable, the case either involves in-patient hospitalization or, in the ultimate example, death. However, that standard isn't as clear-cut as it might appear with COVID-19. That's because to meet the "reportable" standard, the hospitalization must occur within 24 hours of the incident. In the COVID-19 case, the incident is exposure to the SARS-CoV-2 virus that leads to the disease. It's unlikely that someone who is exposed to the virus one day would be hospitalized within 24 hours.

You'd also need to know that the employee was hospitalized and that the COVID-19 case was work-related. Knowing both promptly may be improbable. However, as soon as you do determine that the case was work-related, you've got 24 hours to report it to OSHA.

When an employee dies of a confirmed COVID-19 case, and the death occurs within 30 days of exposure to the virus, you have an eight-hour window to report it to OSHA from the time you know "both that the employee has died, and that the cause of death was a work-related case of COVID-19," according to a Q&A provided by agency.

A Little Perspective

OSHA's enforcement guidance — and common sense — indicate that proper recording and reporting take a back seat to a basic concern for employee health. "In all events," the guidance states, "it is important as a matter of worker health and safety, as well as public health, for an employer to examine COVID-19 cases among workers and respond appropriately to protect workers, regardless of whether a case is ultimately determined to be work-related."
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Tags: OSHA, Business Owner, COVID-19

Tips for Starting a New Business Today

Posted on Tue, Feb 23, 2021

When one door closes, another opens. The COVID-19 pandemic has forced many small businesses to permanently shutter. But it has also provided new opportunities, especially for gig economy workers and other sole proprietors who were laid off or furloughed during the pandemic. (See "Start-Up Hot Spots," at right.)

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Tags: Small Business, COVID-19

FAQs About Tax-Free Disaster Relief Payments During the COVID-19 Crisis

Posted on Mon, Dec 14, 2020

Many people are struggling to make ends meet during the COVID-19 pandemic. Fortunately, some individuals qualify for federal-income-tax-free disaster relief and disaster mitigation payments paid by some employers under Internal Revenue Code Section 139. Here are some FAQs and answers about how the rules work.

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Tags: COVID-19, Section 139

Consider WARN Act Legalities If You Need to Lay Off Employees

Posted on Mon, Nov 23, 2020

Protection against the harshness of sudden job loss was the purpose of a law passed back in 1988. The Worker Adjustment and Retraining Notification (WARN) Act was adopted to help employees prepare to find new jobs — particularly if some training is needed to expand their employment opportunities — when their employer is forced to let workers go. Companies that fail to comply with that law could find themselves in a legal hot spot.

Indeed, one large labor law firm that represents employers recently alerted clients that the rest of this year "may become a hurricane season of sorts as WARN Act litigation could flood the courts." What sparks litigation is a mass layoff that occurs without the required WARN Act notification delivered to impacted workers.

Who Is Impacted

While the most vulnerable employers are large ones with at least 100 full-time employees, even companies that aren't subject to the law should be acquainted with its requirements; they might be subject to it in the future. (Note: state and local laws may have lower thresholds; for example, Wisconsin, Tennessee, New York use a 50-employee threshold)

In addition, it's generally a good idea to be as transparent as possible with employees about your plans. Employees who can reasonably be expected to be laid off will appreciate any extra time they can get to prepare for that event. And employees not impacted may be comforted by the knowledge that they aren't in jeopardy of losing their jobs, at least not in the near future.

When notifications are required, they go to impacted employees and to local "rapid response" offices within state employment offices that collaborate with the U.S. Department of Labor's Employment Training Administration to assist laid-off workers. Such offices might also offer support for laid-off workers even if their employers aren't subject to the WARN Act.

Additional criteria (besides employer size) dictate when the WARN Act is applicable. Employees covered by the law, including not only hourly but salaried, managerial and supervisory workers), are those who:

    • Are terminated or laid off for more than six months or have their hours reduced 50% or more in any six-month period as a result of a plant closing or mass layoff,

    • May be "reasonably expected" to experience a job loss, and

    • Are part-time employees.

While the number of part-timers on your payroll doesn't determine whether you fall under the WARN Act's jurisdiction, part-timers who will or are expected to be laid off must also be notified.

According to the Department of Labor (DOL), workers not entitled to WARN Act warnings include those on strike or locked out in a labor dispute, workers "on temporary projects or facilities of the business who clearly understand the temporary nature of the work when hired," and "contract employees assigned to the business but who have a separate employment relationship with another employer and are paid by that other employer."

Triggering Events

As noted, a planned or anticipated layoff needs to be substantial to trigger WARN Act obligations. Layoff scope triggers include:

    • The closure of a facility or operating unit affecting at least 50 full-time employees,

    • A layoff over a 30-day period involving 50 to 499 employees who constitute at least one-third of the workforce (excluding part-timers),

    • A layoff of 500 or more workers at a single employment site, regardless of the proportion they represent of the entire workforce, and

    • A layoff that cuts at least 50 employee work hours by at least 50% each month over a six-month period.

The WARN Act includes three important exceptions to notification requirements. One is a natural disaster that forces a halt in operations. A second one applies to companies that are "faltering," are "actively seeking capital in good faith" and believe that giving a heads-up of an impending mass layoff would preclude their ability to secure financing.

The third exception has come into sharp focus during the COVID-19 pandemic but may be slipping away. It's when you need to conduct a mass layoff due to "unforeseeable business circumstances" that are "sudden, dramatic, unexpected and outside of the employer's control."

The COVID-19 Factor

The forced shutdown of businesses in many parts of the nation during the early phase of the pandemic would come under this heading. Its applicability today, however, around eight months after COVID-19-induced shutdowns began, is less clear. The DOL has issued a set of questions and answers about the applicability of the WARN Act today,

Here's one revealing inquiry: "For permanent layoffs, may I claim an exception to the WARN Act because of COVID-19?"

The DOL's answer was a recommendation that employers give a careful reading of its regulations that describe "unforeseeable business circumstances." One key sentence is as follows: "The test for determining when business circumstances are not reasonably foreseeable focuses on an employer's business judgment."

If challenged, that assessment ultimately will be made by a federal judge, as "the WARN Act is enforced by private legal action," the DOL explains, not the agency whose job is limited to "providing guidance and information" about the WARN Act.

The law firm predicting a spike in litigation offers the following warning: "With every passing day, the viability of the unforeseen business circumstances exception becomes weaker." This could apply to you if you laid off employees expecting to bring them back within six months and therefore didn't give them the WARN Act warning. Now with the six-month mark rapidly approaching, if you can foresee that you won't be bringing your workers back soon, you may need to take quick action to minimize your exposure to litigation.

If this describes your situation, carefully consider what the future holds. Contact your legal advisor to ensure your bases are appropriately covered.
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Tags: Employers terminating, COVID-19, WARN Act, Layoff

Beware: Several CARES Act Tax Provisions Will Soon Expire

Posted on Mon, Nov 16, 2020

The CARES Act granted several valuable federal tax breaks for individuals and businesses. But most will expire at the end of 2020 or at the end of tax years that begin in 2020. Here's a roundup of tax breaks scheduled to go off the books soon, unless Congress extends them.

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Tags: Tax Break, COVID-19, cares act

Tax Implications When Lenders Cancel Debts in the COVID-19 Era

Posted on Wed, Sep 23, 2020

In the COVID-19-ravaged economy, debts can pile up beyond a borrower's ability to repay. Lenders sometimes may be willing to forgive (or cancel) debts that are owed by certain borrowers. While debt forgiveness can help struggling borrowers survive financially, it can sometimes trigger negative tax consequences. Here's what borrowers need to know about the tax implications of so-called "cancellation of debt" (COD) income. 

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Tags: Forgiveness of Debt, COVID-19

Paying Employees While They Put on Safety Gear?

Posted on Thu, Aug 20, 2020

The current focus on keeping employees safe at work amid the COVID-19 pandemic may prompt broader questions of workplace safety, including what's compensable time for hourly employees. Although it's improbable that such issues would arise in connection with simply putting on masks and gloves, it's still important to be mindful of the latest legal interpretations concerning more significant gear.

Periodically, courts are brought in to rule on whether employees must be compensated for time spent putting on or taking off protective equipment for work. (In legalese, this is referred to as "donning" and "doffing.")

Portal to Portal Act

The legal foundation of rules governing when employees must be paid for the time it takes them to don and doff specialized safety gear was laid by the Portal to Portal Act of 1947. It clarified provisions of the Fair Labor Standards Act of 1938.

In a nutshell, the Portal to Portal Act requires that employees be compensated for "all time during which an employee is necessarily required to be on the employer's premises, on duty, or at a prescribed workplace," according to the statute. This rules out, for example, the time it takes an employee to commute to work in a typical commuting scenario.

The question of whether the time employees spend donning and doffing protective equipment should be compensated was later clarified by the courts. The answer hinges on issues that include whether the:

  • Gear is "integral and indispensable" to the employer's "principal activity,"

  • Equipment is required by the principal work performed by the employee, and

  • Employer benefits from the employee's act of donning and doffing the protective gear.

Splitting Hairs

Inevitably, new questions have arisen concerning how the basic principle of the law would apply in various work scenarios. Courts typically consider three factors in deciding whether donning and doffing time is compensable. The first two are fairly straightforward:

  1. Is the equipment required by the employer?

  2. How many minutes are involved?

If less than ten minutes in total are needed, courts have tended to rule that the time involved is insignificant and not compensable.

The third factor gets a little more complicated: The nature of the gear itself. For example, if it's relatively generic and easy to put on and take off — such as a hard hat, safety glasses or ear plugs —the time will generally be considered noncompensable. But more specialized and cumbersome equipment — for instance, safety harnesses and shin guards — might tilt the scales in the other direction.

Supreme Court Decision

One dispute that was decided by the U.S. Supreme Court in 2005 (IBP Inc. v. Alvarez) involved time spent by employees at their employer's location waiting to don their protective equipment, putting on and taking off the gear, and walking to and from their workstations from the place where they donned and doffed the gear.

In that case, which involved a meat packing plant, the protective gear was extensive. It included hardhats, hairnets, earplugs, gloves, sleeves, aprons, leggings and boots. Because the safety gear was integral to the job, the court unanimously ruled that the employees were entitled to compensation for all time involved — except for the time they had to wait before they were handed clean safety gear to don. That time segment was excluded because, according to the Court, it was a "preliminary activity" that, as described in the Portal to Portal Act, isn't compensable.

However, the Court could have also ruled that the waiting time was compensable if employees had been required to arrive at work at a specific time and the waiting period to receive their safety gear began at that specific time. If, instead, employees were required only to begin their shift at a particular time, it wouldn't have been compensable.

Protecting Your Organization

Despite the various rulings that have fleshed out the details of questions left unanswered by the Portal to Portal Act, the law in this area seems to remain in flux. As a practical matter, you don't want your compensation practices to be the subject of the next court interpretation. If any of your employees need to use specialized safety equipment that takes more than a brief period to put on and take off, there might be ways you can streamline that process to minimize the elapsed time.

For example, if the location where employees do their donning and doffing is relatively distant from their workstations, consider moving it closer to minimize time spent getting from one place to the other. Also, make it as convenient as possible for employees to put the safety gear where it needs to go when their shift is over.

Finally, sometimes it's better to err on the side of caution when it comes to interpreting the meaning of "work." Using a liberal definition of the term, and paying workers accordingly, may enable you to avoid a dispute whose cost would greatly exceed whatever you might have saved by using a narrower definition. When in doubt, consult a labor attorney to learn the latest legal standards on this issue — including laws in your state that might favor employees more than federal standards.
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Tags: COVID-19

Midyear Tax Planning Ideas for Individuals

Posted on Wed, Jul 29, 2020

The extended July 15 deadline for filing your 2019 federal income tax return is behind us. Now it's time to think about your current federal tax situation. Tax planning is especially complicated for 2020. There are a lot of moving pieces: The COVID-19 pandemic has caused some people to lose their jobs or take pay cuts. Many investors have suffered financial losses during the crisis — while other people have prospered by taking advantage of COVID-related business and investment opportunities. So, depending on your situation, you may have less (or possibly more) taxable income in 2020 than you did in 2019.

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Tags: Tax Planning, Charitable Giving, RMD, COVID-19, Midyear

Kent County Small Business Recovery Program

Posted on Mon, Jun 29, 2020
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Tags: Michigan, Small Business, COVID-19

COVID-19 Crisis May Affect Tax Angles for Rental Property Losses

Posted on Mon, Jun 29, 2020

Economic fallout from the COVID-19 crisis will cause many rental real estate properties to run up tax losses in 2020 — and possibly beyond. Here's a summary of important federal income tax rules for such losses.   

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Tags: Section 179 Deductions, Rental Property, COVID-19