A federal judge in Colorado has upheld the enforceability of Colorado’s pay transparency law, despite vigorous challenges from the business community. As previously reported here, in November 2020, Colorado passed sweeping new regulations regarding equal pay transparency under the state’s Equal Pay for Equal Work Act. Under that law, employers in Colorado have to issue compensation ranges in all job postings, including internal promotions. Critically, out-of-state employers with employees in Colorado are subject to the law’s requirements. The Colorado Department of Labor can impose hefty fines for any violations. Those regulations took effect on January 1, 2021.

In December, the Rocky Mountain Association of Recruiters challenged the law on constitutional grounds, arguing it violated both the First Amendment and the Dormant Commerce Clause. As to the First Amendment, the Association argued the requirement to post compensation information amounted to compelled speech, which was unduly burdensome and not reasonably related to the public interest. The judge disagreed, finding the state of Colorado had made a sufficient showing that the law is reasonably related to the government’s interest in reducing the persistent gender-based pay gap, and that its requirements do not impose undue burdens on Colorado employers.

As to the Dormant Commerce Clause, the Association argued the pay transparency regulations conflicted with the laws of other states and therefore burdened interstate commerce. The judge once again disagreed, finding the Association failed to establish that the law’s burden on interstate commerce outweighed the law’s benefits, including the attainment of gender pay equity.

Any companies who are not already meeting the obligations of Colorado’s pay transparency law should promptly examine their practices and come into compliance.

Today, the U.S. Equal Employment Opportunity Commission (EEOC) substantially augmented its technical assistance questions and answers related to the COVID-19 pandemic, and the application of the Americans with Disabilities Act (ADA) and other federal equal employment opportunity laws. It also released a new document targeted at employees and job applicants that explains how federal anti-discrimination laws apply during the COVID-19 pandemic. A summary of both documents appears below.

Technical Guidance

The EEOC stated that “[t]he updated technical assistance released today addresses frequently asked questions concerning vaccinations in the employment context.” It provides a wealth of information for employers that are navigating the decision-making process of reopening operations and addresses a number of common questions regarding vaccines. Here are a few highlights:

  • Employers may offer incentives to employees to voluntarily provide documentation or confirmation of vaccination status where the vaccine was administered by a third party, and not the employer.  The EEOC placed no limits on the size or nature of such incentives.
  • However, if employers themselves or their agents are providing the vaccine to employees and choose to offer incentives for vaccinations (rewards or penalties), those incentives should not be so substantial as to be This issue arises because vaccinations require employees to answer disability-related screening questions, so a “very large” incentive could make employees feel pressured to disclose protected medical information. The EEOC offered no guidance on when an incentive will be considered so large as to be coercive.
  • The EEOC addressed an unsettled question from its earlier guidance – whether information about vaccination status is confidential medical information.  The answer is yes.  If employers choose to request vaccination information from their employees, they must store that information separately from employee personnel files, because documentation or confirmation of vaccination status is considered confidential medical information pursuant to the ADA.  This raises further issues about whether employers can require employees to display in some manner whether or not they have been vaccinated without running afoul of this ADA confidentiality requirement.
  • Employers may also provide employees with resources about available COVID-19 vaccines and raise awareness about the benefits of vaccination. The technical assistance includes a list of sources.
  • The EEOC confirmed its earlier guidance that employers may require all employees physically entering the workplace to be vaccinated for COVID-19, so long as employers comply with the reasonable accommodation provisions of the ADA, Title VII, and other equal employment opportunity laws. The EEOC cautioned that employers should keep in mind that they “may need to respond to allegations” that a vaccine requirement has a disparate impact on, or disproportionately excludes, certain individuals or demographic groups who face greater barriers to receiving a COVID-19 vaccination than others.
  • In this guidance, the EEOC also expanded its discussion of accommodation to include pregnant employees who may be entitled under Title VII to accommodation if the employer is making modifications or exceptions for other employees who are similar in their ability or inability to work.

The EEOC noted that some of its guidance did not necessarily address the latest updates from the CDC on May 13, 2021, with respect to fully vaccinated individuals, and that it will continue to assess the potential impact of the CDC guidance on the newly issued technical assistance. Finally, the EEOC highlighted that its analysis was limited to federal EEO laws, stating that “it is beyond the EEOC’s jurisdiction to discuss the legal implications of EUA or the FDA approach.” The EEOC instead refers individuals to the FDA’s EUA page for additional information.

Federal Laws Protect You Against Employment Discrimination During the COVID-19 Pandemic

This notification, aimed at employees, provides information about how federal employment discrimination laws can help workers who (i) are being harassed; (ii) are high risk and need extra protection from getting sick; (iii) are not being allowed to work; or (iv) need a modification of an employer’s COVID-19 safety requirements or equipment.

As previously reported here, under the American Rescue Plan Act, certain employers have until May 31, 2021 to notify eligible individuals of their potential right to subsidized COBRA coverage. Eligible individuals are those who lost group health plan coverage due to a reduction of hours or an involuntary termination of employment and who are still within the possible maximum COBRA coverage period, even if they never elected COBRA or initially elected it and let it lapse. For more information on this deadline and employer obligations, see our full Legal Alert.

Just in time for Memorial Day weekend, New Jersey Governor Phil Murphy has signed Executive Order 242, removing many of the state’s remaining COVID-19 restrictions. This Executive Order recognizes the marked progress New Jersey has made in combatting the COVID-19 pandemic, both in the declining number of COVID-19 cases and the percentage of State residents who are fully or partially vaccinated.  These changes will take effect in two phases:

Effective May 28

  • Statewide indoor mask mandate for public spaces will be lifted
  • Six feet social distancing requirements will be eliminated
  • Dance floors at bars and restaurants may reopen

Effective June 4

  • The current 50 person limit on general indoor gatherings will be lifted
  • The current 250 person limit on large indoor gatherings, like weddings, performances, political gatherings, and other commercial events, will be lifted
  • The current 30% capacity limit for large, indoor venues with a fixed-seating capacity over 1,000, will be lifted

As written, the new rules do not apply to indoor worksites that are not open to the public, including manufacturing businesses. However, on May 26, Governor Murphy signed Executive Order 243 to clarify this apparent contradiction. Under that Executive Order, beginning June 4, employers may allow employees who can verify that they are vaccinated to forego masking and social distancing requirements within an office space. Additionally, the Executive Order will rescind the telework requirement for all who can do so and reduce on-site staffing to the minimum necessary, which were instituted under the first stay at home order.

Philadelphia City Council enacted an ordinance, effective immediately, requiring all Philadelphia taxpayers to report any changes to their federal taxable income (as a result of a resolution of an audit, agreement with the IRS or court proceeding) to the Philadelphia Revenue Department (the Department). See our Tax colleagues’ more detailed alert on this ordinance here.

After a final determination that results in a change to a taxpayer’s federal taxable income, the taxpayer has 180 days to file a form with the Department reporting the change or face penalties for failing to do so. The City may then assess additional taxes or refunds based on the changes reported. The new ordinance is applicable to all individuals and entities subject to City taxes.

Individuals and entities should be aware of this new requirement and report any changes in federal taxable income in order to avoid facing penalties.

The whirl of changes in employee benefits rules that have resulted from the pandemic include the temporary opportunity for employees to carry over unused amounts contributed to a dependent care flexible spending account from one year to another. The IRS has issued a new notice on these rules that clarifies how these rules apply in view of the increase in the maximum limit on dependent care assistance for 2021 to $10,500. The new Notice 2021-26 offers particular guidance to plans that operate on a plan year that is not the calendar year. Our colleagues in the Employee Benefits and Executive Compensation group are up-to-date on these developments and have written a full alert on the subject.

On May 18, the IRS released Notice 2021-31. The notice contains detailed guidance on subsidies employers must provide COBRA beneficiaries pursuant to the American Rescue Plan Act (“ARP”), and uses a Q&A format to illustrate several specific examples and potential issues regarding the subsidies. For employers, one of the many issues of interest addressed in this notice is the determination of which employee departures qualify as involuntary terminations triggering COBRA assistance. For example, resignations due to impending material geographic change in employment location or to accept severance prior to an impending layoff are involuntary departures, while retirements (of the employee’s own volition) and terminations for gross misconduct are not. Another issue is the “lookback” for individuals who are on COBRA, or still eligible for a subsidy. For example, an individual that is single at the time of termination and later gets married (or otherwise accrues dependents) is only eligible to receive a subsidy for him or herself, not other individuals that may be added to their plan. Ballard Spahr has a comprehensive summary of the IRS notice here.

For a discussion of the ARP’s initial impact on employers please see our alert here, and the Department of Labor’s guidance here. Employers should consult with their employment and employee benefits counsel to make sure that their company’s policies and practices with regard to COBRA subsidies comply with the ARP and federal government directives.

Employers with employee health plans subject to the Affordable Care Act (ACA) should take note that, earlier this week, the U.S. Department of Health and Human Services (HHS) announced that its Office for Civil Rights (OCR) will begin enforcing Section 1557 of ACA to prohibit discrimination based on sexual orientation and gender identity. Section 1557 prohibits many health care providers and certain health plans from discriminating against individuals on the basis of race, color, national origin, age, sex, or disability. In setting these prohibitions, the Section makes reference to grounds established under other civil rights statutes. For sex discrimination, those grounds are found in Title IX of the Education Amendments to the Civil Rights Act of 1964 (Title IX). Our team of ACA experts wrote an Alert describing this announcement and its impact in detail.

As the Alert explains, this is the latest in a series of developments rejecting revisions made last year to Section 1557 regulations that had been primarily aimed at narrowing the meaning of sex discrimination. Others include the landmark 2020 Supreme Court decision in Bostock v. Clayton County, GA, 140 S. Ct. 1731 (2020), ruling that Title VII’s prohibition of employment discrimination “because of sex” includes discrimination based on sexual orientation and gender identity, and President Biden’s Executive Order 13988, directing federal agencies to review laws (beyond Title VII) that prohibit discrimination on the basis of sex to determine whether they should also prohibit discrimination based on sexual orientation and gender identity. More such developments are likely from other federal agencies soon.

HHS’s announcement does not mean that OCR will seek to enforce all of the Section 1557 regulatory provisions as if the revisions made last year never took place. There were changes in the regulations that addressed matters other than sex discrimination (for example, narrowing the scope of when Section 1557 applies generally). With respect to sex discrimination, the announcement says that OCR will enforce the rules in a manner consistent with other laws and existing court orders, which sets the stage for future litigation, including a district court’s reconsideration of its injunction against the enforcement of certain sex discrimination provisions in the pre-2020 regulations.

All health care providers subject to Section 1557 should take immediate note of HHS’s latest action and ensure their practices comply with the law as the Department plans to interpret it going forward. Employers also should work with their plan administrators to ensure the plans are being interpreted and applied consistent with HHS’s mandates.

On May 17, 2021, the Occupational Safety and Health Administration (OSHA) advised employers to follow the new CDC mask guidance for people fully vaccinated against COVID-19.  Although this provides some guidance for employers, it is important that businesses continue to practice workplace safety protocols that reflect the unique characteristics of each workplace, and account for the fact that many workers and others who visit their businesses are not fully vaccinated.

On May 13, 2021, the CDC announced its revised guidance that fully vaccinated people may resume most of their pre-pandemic activities without wearing a mask or social distancing.  Although this guidance addressed a number of circumstances where fully vaccinated people gather, it did not end the need for employers to continue to assess their abilities to provide safe work environments, or risk citation by OSHA for failing to do so.

On May 17, OSHA announced in an update to its website that it is “reviewing the recent CDC guidance and will update our materials on this website accordingly.”  Until then, OSHA instructed employers and workers to “refer to the CDC guidance for information on measures appropriate to protect fully vaccinated workers.”  https://www.osha.gov/coronavirus

Employers should be aware that the CDC’s and federal OSHA’s guidance is still subject to state and local orders, as well as the unique requirements of businesses and workplaces.  Therefore, businesses should continue to monitor the state and local orders and guidance in effect where they are located.  Businesses should be purposeful in how they track which of their workers are fully vaccinated and stay updated with the law limiting or prohibiting the use of “vaccine passports” when considering how to maintain a safe workplace environment for employees, customers and visitors.

On May 13, 2021 the CDC overhauled its guidance, stating that fully vaccinated people can resume most of their pre-pandemic activities without wearing a mask or social distancing. This includes indoor and outdoor gatherings, regardless of size. The CDC does still recommend that fully vaccinated people wear a mask while using public transportation and in health care settings, correctional facilities, and homeless shelters. People are generally considered fully vaccinated two weeks after their second dose of a Pfizer or Moderna vaccine or two weeks after the single dose of a Johnson & Johnson vaccine. People who are not fully vaccinated should continue to wear a mask and practice social distancing.

The new guidance allows life to return to normal in most situations for fully vaccinated individuals, subject to state and local orders and the requirements of businesses and workplaces. Most likely, however, the new guidance will trigger state and local authorities to follow suit in their mitigation orders. Indeed, shortly after the CDC guidance was announced, Pennsylvania amended the state masking order to align with the CDC’s guidance. A number of other states have changed their policies as well.  Philadelphia and New Jersey, on the other hand, along with a number of other states, are still reviewing the CDC’s new guidance and have not yet lifted masking and social distancing requirements. Businesses should continue to monitor state and local orders and guidance where they are located. Businesses should also keep an eye on legislation limiting or prohibiting the use of “vaccine passports” when considering how to bring employees and visitors back to the office.   Finally, businesses should be aware that OSHA has not yet changed its guidance on the use of masking and social distancing in the workplace and a mandatory OSHA COVID protection standard is still pending review by the White House, so employers should continue to assess their ability to provide a safe workplace or risk citation by OSHA for failing to do so.