The Health Insurance Portability and Accountability Act (HIPAA) has been the subject of several major developments already in 2021. Healthcare providers, health plans, healthcare clearinghouses, and business associates subject to HIPAA must consider these developments to comply with HIPAA’s technical requirements through 2021 and beyond. For those entities subject to the HIPAA Privacy Rule and Security Rule, our team of HIPAA lawyers has penned an Alert describing these developments in detail. This post will summarize several highlights.

In the regulatory arena, the Department of Health and Human Services (HHS) Office for Civil Rights (OCR) released proposed changes to the HIPAA Privacy Rule in late January 2021. The proposed regulations include several modifications to HIPAA requirements, including changes that enhance individuals’ access to their own health information and require revisions to privacy notices. Although the rules were announced under the prior Administration, and are subject to President Biden’s Regulatory Freeze Pending Review, many of these rules were previously raised by President Obama’s Administration and are likely to be adopted.

A key legislative development to note is an amendment to Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) that requires HHS to consider a covered entity or business associate’s use of “recognized security practices” when conducting an audit, assessing penalties, or seeking corrective action for violations. Recognized security practices may include practices consistent with standards promulgated by the National Institute of Standards and Technology (NIST) or approaches under the Cybersecurity Act of 2015.

The courts have also recently weighed in on HIPAA privacy and security. The Fifth Circuit recently vacated a nearly $5 million penalty imposed by HHS against a university cancer center for three alleged HIPAA security breaches. The court determined that the agency’s action constituted an arbitrary and capricious enforcement of its regulations. The decision is a sharp reversal of HIPAA penalties previously upheld on appeal, but is not a basis for relaxing vigilance on privacy and security.

These wide-ranging developments demonstrate that entities subject to HIPAA need to monitor current developments and prepare to adapt quickly.

The Biden Administration announced further changes to the Payroll Protection Program (PPP). These changes are aimed at increasing lending to small business and independent contractors, removing barriers to borrowing, enhancing transparency, reducing fraud, and increasing the program’s engagement with other would-be borrowers.

Beginning this Wednesday, February 24, only businesses with fewer 20 employees can apply for PPP loans (first and second draw) for a period of 14 days (until March 10) to increase access by the smallest businesses.

The Administration also announced that it will implement a revised loan-calculation formula to allow sole proprietors, independent contractors, and self-employed individuals to access higher loan amounts. As of this writing, new regulations haven’t been issued with the new formulas.

Other changes announced by the Administration include elimination of the bars against borrowers with prior non-fraud felony convictions within the past year when the owner is not incarcerated and against borrowers who are delinquent on federal student loans. In an effort to help independent contractors and sole proprietors, many of whom do not have business entities, the announcement also clarifies that non-citizen lawful residents (such as green card holders) can apply using Individual Taxpayer Identification Numbers (ITIN). This is not a change of the law, but, instead, is designed to remove any confusion that exists under prior communications about the program.

The Administration also announced additional affirmative steps to investigate possible waste, fraud, and abuse and to increase transparency. To that end, it announced that the Small Business Administration (SBA) is doing manual loan reviews of the largest loans (no threshold is specified) and a random sampling of other loans. Note that the announcement is not specific, but this appears to be at the application stage, rather than the forgiveness stage, where SBA previously announced it is auditing all loans over $2 million and a sampling of other loans as well. The PPP application has been revised to encourage self-reporting of demographic data and better illustrate the impact of the loans. Borrowers who have not yet applied should use the Revised Application Form and Revised Second Draw Application Form. Finally, the Administration will be asking the SBA to improve its website and outreach efforts with lenders and others.

With changes to the program continuing, those who wish to participate in the program should continue to check for updates to the program requirements and guidelines. See our PPP Overview for a summary of program and forgiveness requirements and our Guide to Loan Forgiveness when you are ready to seek forgiveness.

In November, New Jersey voters said “yes” to the legalization of recreational marijuana.  On February 22, 2021, Governor Phil Murphy signed legislation that legalized and decriminalized recreational marijuana and established a system for a recreational marijuana industry in New Jersey.

Importantly, the new legislation addresses many issues of significance affecting the employer-employee relationship.  For example:

  • Employers may not take adverse actions in the application or hiring process or against current employees because they are cannabis users;
  • An employee or applicant may not be subject to an adverse action solely due to a positive drug test finding the presence of cannabis in the employee’s system;
  • Employers may require employees to undergo drug tests:
    • based upon a reasonable suspicion of an employee’s usage of a cannabis item while engaged in the performance of work responsibilities;
    • upon finding any observable signs of intoxication related to usage of a cannabis item;
    • following a work-related accident subject to investigation by the employer;
    • randomly (where consistent with other state law);
    • as part of a pre-employment screening; or
    • regular screening of current employees to determine use during work hours.
  • The drug tests permitted above shall include scientifically reliable objective testing methods and procedures (blood, urine, or saliva) and a physical evaluation in order to determine an employee’s state of impairment. The physical evaluation must be conducted by an individual with the necessary certification to opine on the employee’s state of impairment (Workplace Impairment Recognition Expert). The Workplace Impairment Recognition Expert certification standards have not yet been established.
  • Employers may continue to have policies in place prohibiting the use, possession and transfer of cannabis items in the workplace and may continue to have drug and alcohol free workplace policies in place.
  • Employers may also continue to comply with federal law, rules and regulations where they are subject to such laws or regulations due to employment of individuals covered by Department of Transportation requirements or in order to comply with federal laws if the business is a federal contractor.

The legislation is effective immediately, but only becomes operative upon the adoption of initial rules and regulations by the Commission established by the legislation. Based on the legislation, employers should:

  • Review and revise workplace drug and alcohol policies including those related to drug testing procedures;
  • Ensure that they have certified “Workplace Impairment Recognition Experts” employed or engaged, as required under the law once that certification training becomes available; and
  • Be sure to consider each hiring, discipline and discharge decision related to drug testing and workplace impairment carefully so as not run afoul of the new legislation.

Keep an eye out in the days to come for our more detailed publication on marijuana laws in the state, both medical and recreational, and how those laws affect New Jersey employers.


The Occupational Health and Safety Administration (“OSHA”) will now investigate workers’ complaints of retaliation for reporting antitrust and money laundering-related violations under new whistleblower statutes.

On February 19, 2021, the Department of Labor announced that OSHA would oversee whistleblower claims alleging retaliation under two laws – the Criminal Antitrust Anti-Retaliation Act and the Anti-Money Laundering Act.

Under the Anti-Money Laundering Act, OSHA will investigate individual whistleblowers’ retaliation complaints for reporting money laundering-related violations to their superiors or the federal government; or for showing cause, testifying or participating in, or otherwise assisting an investigation or proceeding related to a violation of anti-money laundering laws. The amendment to the Anti-Money Laundering Act has the potential to create a wave of litigation and government settlements, similar to what was seen in the wake of the creation of the Dodd-Frank whistleblower program. For more information on the significance of the amendments, see our Money Laundering Watch blog article – AMLA Adds Robust New Whistleblower Provisions for Anti-Money Laundering Violations (available here).

Under the Criminal Antitrust Anti-Retaliation Act, OSHA will investigate individual whistleblowers’ complaints of retaliation for reporting criminal antitrust violations to their superiors or the federal government; or for showing cause, testifying or participating in, or otherwise assisting an investigation or proceeding related to antitrust law violations.

Whistleblower protection is typically not limited to just those who report actual violations. Rather, DOL and court precedent extends protection to whistleblowers’ reasonable but mistaken beliefs that the conduct reported violated relevant law. To take advantage of such protection, complainants must show that their beliefs that the conduct they reported violated a law were “objectively reasonable.”

Until OSHA issues interim final rules governing the new investigations, it will process whistleblower complaints related to these statutes using procedures under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century.

On February 19, 2021, the U.S. Department of Labor’s Wage and Hour Division (WHD) withdrew two FLSA opinion letters, further signaling a return to more employee-friendly policies.

The first, FLSA2019-6, addressed the status of independent contractors for an unnamed virtual marketplace company (VMC) and took a more expansive view of independent contractors than the WHD’s approach during the Obama Administration. This letter was withdrawn consistent with the Department’s February 5, 2021 announcement of its delay of the final rule on the same subject: “Independent Contractor Status Under the Fair Labor Standards Act.” The withdrawal of the letter and the delay of the proposed final rule are intended to allow WHD additional opportunity to review and consider the final rule.

The second, FLSA2019-10, related to whether time spent sleeping is compensable time for truck drivers. The letter opined that time truckers spend sleeping is presumptively non-compensable, as long as it is for a sufficient length in adequate facilities and the employee is relieved of all duties. The WHD withdrew the letter, stating that it was inconsistent with the Division’s longstanding position that, under certain conditions, employees could go a maximum of eight hours of sleep time without compensation. Prior letters consistent with the WHD’s longstanding interpretations which were withdrawn by FLSA2019-10 are reinstated.

The withdrawal of these letters means that employers can no longer rely on them for purposes of a defense to DOL or private enforcement action, including a good faith defense to liquidated damages.  Employers may still be able to cite them for actions taken during the period when they were in effect.  Companies that have been relying on the DOL’s approach under the Trump Administration in these areas should reexamine their practices to minimize their risk of liability.

It’s no secret that environmental, social, and governance (ESG) factors are at the forefront of the national conversation surrounding social equity.  These same factors are influencing decisions by institutional investors.  A new Ernst & Young survey reports that, when making investment decisions, institutional investors are closely analyzing diversity, equity, and inclusion efforts in the board room, amongst the workforce, and in recruitment initiatives.  Because of the push by investors, many public and private companies are re-evaluating internal policies and considering whether to oblige investors’ interest by making diversity a priority internally, as well as publicly.  

 For more details, read the Alert published by our colleagues in the Diversity and Inclusion Counseling Team.

As employers wrestle with whether to require vaccines for employees or how to encourage employees to get vaccinated voluntarily, many companies are implementing incentive programs that provide gifts, paid time off and even cash payments to employees who get vaccinated.  In doing so, employers need to consider whether their vaccine programs should be treated as employee wellness programs.  Wellness programs, particularly those that offer incentives for participation, may be subject to nondiscrimination requirements.  Concern about these nondiscrimination requirements arose in the final days of the Trump Administration, when the EEOC released proposed nondiscrimination regulations for wellness plans under the Americans with Disabilities Act.  Under these proposed regulations, the incentives that could have been offered would generally be limited to no more than de minimis value, on the order of a water bottle or small gift card, but the proposed regulations were caught in the freeze on publication instituted by the Biden Administration and never actually appeared in the Federal Register.

The EEOC has now withdrawn the proposed regulations and removed them from its website.  As a result, many vaccination programs will come and go before any new EEOC wellness program nondiscrimination requirements take effect.  Although some nondiscrimination requirements still apply to certain wellness programs, the particularly limiting constraints in the withdrawn EEOC guidance will not present issues for the vaccination programs that employers are implementing at this time.

The registration period for the Fiscal Year 2022 H-1B visa lottery will open at noon Eastern Time (ET) on March 9 and run through noon ET on March 25, 2021. Employers seeking to employ H-1B workers must electronically register with the U.S. Citizenship and Immigration Services (USCIS) and create an online account to be eligible for FY 2022 H-1B lottery.

The H-1B specialty occupation visa classification is reserved for occupations that require theoretical and practical application of a body of highly specialized knowledge and a bachelor’s degree or higher in the specific specialty, or its equivalent.

Every year, USCIS grants 65,000 new H-1B visas. In addition, USCIS grants 20,000 new H-1B visas for individuals with advanced degrees from U.S. universities. H-1B visas are granted for three-year periods to eligible foreign workers and are renewable for up to six years. Employees with H-1B visas are authorized to work only for the petitioning employer. Employers pay a $10 non-refundable H-1B registration fee for each foreign worker/beneficiary and can submit registrations for up to 250 beneficiaries as part of one payment and submission.

USCIS uses a random computer selection process, or “lottery,” to determine which registration will be selected to file an H-1B visa petition. At the close of the registration period, USCIS notifies employers with selected registrations via their USCIS online accounts by March 31, 2021. The USCIS selection notice invites the employer to file an H-1B cap-subject petition on behalf of the named individual within the filing period indicated on the notice.

Employers who have not created an account and registered for the visa lottery by 12:00 p.m. ET on March 25, 2021 will not be considered for selection and invited to submit visa petitions.

Employers interested in filing an H-1B petition, or who are uncertain whether the March 25, 2021, registration deadline applies to them, should contact an experienced immigration attorney representing employers in the H-1B process and review the details of the FY 2022 H-1B visa lottery process. Employers intending to petition for an H-1B worker for the upcoming lottery window should plan ahead and gather all the necessary documents prior to March 9, 2021.


Group health plan sponsors and administrators may soon need to introduce changes to their offer of continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The House Education and Labor Committee has proposed temporary COBRA subsidies and other modifications as part of the current COVID-19 stimulus package that is working its way through Congress.

These proposals include a reduced COBRA premium for workers eligible for COBRA due to involuntary termination of employment or reduction in hours; a plan enrollment option to allow eligible individuals to elect a different coverage option sponsored by the employer; an extension of the election period; and new employer notice requirements. If included in the final bill, these changes could take effect as early as April 1, 2021.

For more details, read the Alert published today by our colleagues in the Employee Benefits and Executive Compensation Group.

Louis Chodoff leads a discussion with his Labor and Employment colleagues Karli Lubin and Tara Humma. The group discusses the various liability issues that may arise as employers work to bring employees back to the physical workplace, including claims about workplace safety, vaccination policies, overtime claims arising from work from home, and activity created by the new Biden administration’s Labor and Employment Policies.

View a transcript of the recording here.