Author: DAR Law

Have You Checked Your Beneficiary Designation Lately?

Posted on by DAR Law

Remember that first day of your new job? Sitting anxiously and nervously as that kind human resource manager patiently walked you through endless stacks of “on-boarding” paperwork. Remember the beneficiary designation form you filled out for the company’s 401(k) that day? Remember who you named as the beneficiary of your 401(k)? Probably not, and not many people do. However, the beneficiary, or lack thereof, named on your retirement account not only affects who will receive those assets, but how and when they are taxed. If not done properly, the distribution of one of your largest assets could pass contrary to your intent with unnecessary tax implications.

Retirement assets, such as individual retirement accounts (“IRAs”), 401(k)’s and other qualified plans contain pre-tax dollars. Money you put away in a specific type of savings vehicle which allows you to avoid paying tax on that money until such time as it is withdrawn in the future. These types of accounts allow you to name a beneficiary who will receive the balance of the assets in that account upon your death. Simple, right? Well, not really. Since these accounts contain pre-tax dollars, the IRS is anxiously waiting for the money to come out of the account so they can collect income tax. How and when the retirement assets are taxed depends on a number of factors. Complicating matters was the passage of the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”) on January 1 st of this year. Prior to the SECURE Act, beneficiaries of retirement assets (with certain exceptions) were able to continue deferring taxes and take required minimum distributions over their life expectancy. The SECURE Act, however, changed that. Again, with limited exceptions, non-spouse beneficiaries now must withdraw all assets within a ten (10) year period. With retirement assets beginning to make up the largest percentage of an individual’s wealth portfolio, proper planning for succession of retirement assets is critical.

  • Putting Your Spouse First. You learn this rule the day you get married, but it also holds true for your retirement assets. When named as a beneficiary, spouses are afforded the unique ability to roll over those assets into their own IRA and treat them as their own. This maximizes tax deferral and provides the greatest amount of flexibility for planning. Keep in mind however, these assets will go outright to your spouse, so special circumstances, including blended families may require additional planning.

 

  • Giving it to the Kids. Besides our spouse, our children are the next natural beneficiaries of our assets. While your estate plan may provide for a trust to hold their inheritance until a certain age, or restrict their access to the assets until specific conditions are met, a standard beneficiary designation will distribute those assets outright. This means that if you name your child as a beneficiary of your retirement account, they will receive those assets regardless of their age or life circumstances. Take Jeff’s story for example. Jeff was a widower with one son, Peter, who just turned eighteen. Jeff passed away unexpectedly with his largest asset being an IRA naming his son Peter, as the primary beneficiary. Since Peter was eighteen, the IRA paid out directly to Peter – free of restrictions. Can you guess what Peter did? He did what any young eighteen year old would do; he withdrew from college, cashed out the IRA and bought the fastest, most expensive car he could find. Not only did Peter unnecessarily accelerate the income tax on the entire amount of the IRA, his inheritance is now fully invested in a depreciating asset.Each family is unique, so careful planning and consideration should be given when naming children as a direct beneficiary of your retirement account.

 

  • Maximize Your Retirement Assets with Charitable Intent. An often overlooked use of retirement assets is to carry out your charitable intent. If you intend for a portion of your estate to go to charities, consider naming those charities as direct beneficiaries of your retirement account. Distributions which go directly to charities are not taxed, therefore the charities receive one hundred percent of every dollar distributed. If you have both individual and charitable beneficiaries, consider setting up separate IRAs or coordinating your estate plan and assets in a way that directs the charities’ portion of your estate shall first come from your retirement accounts.

 

  • Make Sure Your Estate Plan and Beneficiary Designations are Consistent. A common misconception is that your estate plan documents control distribution of all of your assets, including your retirement accounts. Unfortunately, this often leads to inconsistent distribution of assets between an individual’s estate plan and retirement accounts, as well as an acceleration of taxes. Remember that beneficiary designation form? Well, by operation of law, that document controls how your retirement account is distributed, not your Will or Trust. It is not uncommon to fill out your beneficiary designation form and never look at it again. The problem? At the time you signed it, you were single with no children so you named your parents as the beneficiaries. Now, ten years later, you are married with three kids and your estate plan leaves all of your assets to your wife and children. Since the beneficiary designation on your retirement account, not your estate plan, controls that asset, your parents stand to receive that account, not your wife and children. Another common mistake is to designate your “estate” as the beneficiary of your retirement account. Seems reasonable, right? Unfortunately, naming your “estate” as the beneficiary only makes the IRS happy. While the account will eventually get distributed in accordance with your will, it significantly accelerates the payment of income taxes. Instead of your spouse being able to continue tax deferral for their lifetime, or your children having the ten (10) year tax deferral period, your estate is subject to a mandatory five (5) year withdrawal period.

The same thought and planning that you have put into saving for retirement should be applied to the succession of those assets. Periodic review and updating of beneficiary designations is crucial to avoiding inconsistent distribution patterns, unintended omissions and unnecessary taxes. As Benjamin Franklin famously said, “By failing to prepare, you are preparing to fail.”

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Cortney Danbrook provides specialized counsel to individuals, families in the areas of estate planning and administration. She can be reached at (231) 714-0163 or cdanbrook@darlawyers.com.

Reality Check

Posted on by DAR Law

Workplace Culture Assessments an Eye-Opening Tool

Scroll through Indeed, Monster, or any other job site at the moment and you will find endless employers describing themselves as “a great place to work,” “like family” and “supportive.” When trying to attract new workers, businesses generally put their best foot forward.

However, when trying to retain and engage a talented workforce, and comply with applicable employment laws, actions often speak louder than words.

Given the current economy and expanding employment law protections, many proactive employers are completing workplace culture assessments, taking a look in the mirror and asking themselves hard questions, like “What kind of employer are we?” and “What is it honestly like to work here?”

A workplace culture assessment is a tool that offers a candid snapshot of an organization’s current work culture. The assessment is intended to evaluate the work culture from multiple perspectives, identify strengths and weaknesses, and ultimately assess how closely the actua culture tracks with the version the organization projects or intends.

The process can be reaffirming, but it can also be uncomfortable and eye-opening. The information learned can make a business stronger, help to drive change where needed, and lead to better risk mitigation strategies. However, as with any tool, employers should be fully informed when making the decision to conduct such an assessment.

Employers should consider the following when planning or conducting a workplace culture assessment:

Internal v. Third-party Assessment

The goal for the assessment is to obtain accurate information about the employer’s actual practices and culture. While a current employee may be able to conduct the assessment more economically and have a deeper understanding of the organization’s operations, employees may be too close to the source to provide an objective and unbiased assessment. Further, if the assessing employee’s duties already include managing employee satisfaction, engagement, or compliance, an inherent conflict may exist. On the other hand, a third-party assessor with proper distance should be able to provide an impartial evaluation.

Additionally, the assessor should have specific experience with employment law and compliance in order to accurately identify areas of potential risk and exposure. If legal advice and/or other privileged information will be a part of the process, the company may wish to utilize its legal counsel to conduct and/or man- age the assessment to preserve privilege where possible.

Backward- and Forward-Looking Components

The most effective workplace culture assessments generally include components that analyze not only the employer’s current work culture based on past practices, but also the employer’s vision for its work culture going forward. The goal is to equip the organization with the information it needs to bridge the gap between the two, if any.

The backward-looking component should include an analysis of whether the employer’s actions in practice have been consistent with its own representations of culture and values (i.e., what has the organization said about its own culture via its policies, statements, etc.? Does the organization follow its own policies?)

It should also ask whether the employer’s practices and policies actually foster the type of culture or behavior intended (i.e., what behaviors are rewarded or discouraged by the practices and/or policies? What traits or values are lifted up?) This part of the assessment would likely include some form of exchange with current employees about their work experiences, as well as an analysis of performance management and corrective action procedures, and related documentation.

The second component of the assessment generally relates to the employer’s vision for its work culture going forward. If the organization’s leadership does not already have a shared vision about work culture, the assessor may be able to help the company intentionally consider this vision. Based on the shared vision, a work culture assessment generally would identify steps to bridge the gap, if any, and address any potential risk and exposure related to compliance issues identified in the backward-looking component.

Commitment to Action

Employers should understand that numerous employment laws require action by an employer once the employer has knowledge of an issue (i.e. discrimination and harassment, etc.). As a workplace culture assessment may directly identify such compliance issues, employers who engage in the assessment should understand that they may be exposing themselves to obligations to take investigative and/ or corrective action as a result of the findings of the assessment. Failure to take such action after knowledge could result in willful violations of law and/or potential exposure to liability. Thus, employers choosing to start the assessment process should be fully committed to act on the results.

While workplace culture assessments can provide an employer with a valuable unfiltered, introspective view of their organization, employers should be fully prepared for what they might see in the mirror.

Employers should consult their legal counsel prior to beginning such an assessment to ensure proper procedure is followed and privileged information is protected to the extent possible.

Lindsay Raymond specializes in employment law, represents employers in all aspects of employment-related matters, and defends employers in employment litigation matters. She can be reached at (231) 714-0161 or lraymond@darlawyers.com.

This article was featured in the September 2021 issue of the Traverse City Business News.

Covid-19 Whistleblower Litigation Is Surging:

Posted on by DAR Law

Workplace Safety Compliance Reduces Employer Exposure

In Michigan, an employee alleging whistleblower retaliation pertaining to COVID-19-related workplace safety issues may file an action in court pursuant to Michigan’s Whistleblower Protection Act (WPA) or a complaint with Michigan’s Occupational Safety and Health Administration (MIOSHA).

From Jan. 30, 2020 to March 17, 2021, whistleblower retaliation cases represented the largest category of COVID-19-related litigation filed in Michigan courts, accounting for 37% of such litigation and ranking Michigan sixth in the nation for whistleblower filings (fisherphillips.com/covid-19-litigation).

During the first six months of the pandemic, the U.S. Department of Labor Office of Inspector General found that approximately 30% more OSHA complaints were filed when compared with the same period in 2019, with 39% of such complaints directly linked to COVID-19.

A comparable increase in COVID-19-related complaints was also seen in state OSHA-certified programs. MIOSHA recently indicated that it plans to extend its COVID-19 Emergency Rules (effective Oct. 14, 2020 to April 14, 2021) through September 2021, which include requirements for a COVID-19 Preparedness and Response Plan, infection prevention and health surveillance, industry-specific protocols, training, and specific requirements for masking, social distancing, and remote work when feasible.

With more than 100 million COVID-19 vaccinations given and recent statistics showing a decline in the number of cases, hospitalizations and deaths, many employees remain concerned about their risk of exposure in the workplace, while others see such progress as a reason to relax masking, social distancing and other mitigation efforts. These varying perspectives create a unique challenge for employers who must continue to enforce the MIOSHA Emergency Rules and avoid the risk of exposure to liability from whistleblower complaints.

The Whistleblower Protection Act (WPA)

An understanding of how the WPA works will assist employers in reducing their exposure to retaliation claims. The purpose of the WPA is to protect the public by protecting the reporting employee from subjection to adverse employment actions. As such, the WPA is liberally construed to favor the reporting employee who it seeks to protect.

An employer with one or more employees is subject to the WPA. The circuit court has exclusive jurisdiction over WPA actions, regardless of the amount in controversy, and a plaintiff bringing a WPA claim has the right to a jury trial.

To establish a prima facie WPA case, the employee must that show that s/he: 1) engaged in a protected activity; 2) was subjected to an adverse employment action; and 3) a causal connection existed between the protected activity and the adverse employment action. A “protected activity” occurs when an employee reports or is about to report an employer’s violation or suspected violation of law, regulation, or rule to a public body, or participates in an investigation related to a whistleblower complaint held by a public body or in a court action.

The WPA protects employees who, in good faith, make or are about to make a report of a violation even if there is no actual violation of law, but does not protect employees who knowingly make a false report of a violation. The WPA defines “adverse employment action” more narrowly than other state discrimination laws, requiring the employee to demonstrate “termination, threats, or other discrimination against an employee regarding compensation, terms, conditions, location, or privileges of employment.”

To establish the existence of a “casual connection” between the protected activity and the adverse employment action, the employee must show that the employer knew of or believed that the employee engaged in a protected activity. Merely showing a close temporal connection between the two events, without more, will not establish a causal connection.

The remedies available to a prevailing plaintiff include “reinstatement of the employee, the payment of back wages, full reinstatement of fringe benefits and seniority rights, actual damages, or any combination of these remedies.” In addition, a prevailing plaintiff may collect emotional distress damages by proving they are related to the WPA violation, and be awarded the costs of litigation, which include attorney fees and witness fees.

MIOSHA Retaliation Complaints

Under MIOSHA’s anti-retaliation provisions, an employee has the right to file an administrative complaint with the agency that is timely filed within 30 days of the event or occurrences, and stems from a safety and health issue. Specifically, MIOSHA protects an employee who “exercises a right afforded under the act on behalf of themselves or others and who files a complaint under, institutes a proceeding under, or testifies or is about to testify in a proceeding brought under the act from retaliatory action or discrimination.”

The agency will investigate the complaint and issue a determination, which is subject to appeal before an administrative law judge with the Michigan Office of Administrative Hearings and Rules, who issues the final decision.  An employee who seeks to file an action under the WPA when the employer’s wrongful conduct also violates the MIOSHA, is not required to file with MIOSHA.

Best Practices for Reducing Exposure to Whistleblower Claims

Employers can reduce their potential exposure to COVID-19-related whistleblower claims by ensuring their COVID-19 Preparedness and Response Plan is compliant and evenly enforced. In this regard, on March 12, 2021, OSHA published a National Emphasis Program in effect through March 12, 2022, focusing on workplace COVID-19 compliance, including increased announced and unannounced site inspections.

Additional employer best practices include encouraging employees to report health and safety concerns, training management on receipt of safety complaints and investigation, updating anti-retaliation policies, and working with legal counsel to ensure compliance and reduce risk of exposure to liability.

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Janis L. Adams of Danbrook Adams Raymond PLC is an experienced employment law attorney and business owner. You can reach her at jadams@darlawyers.com

This article was featured in the April 2021 issue of the Traverse City Business News.

COVID Catch-Up

Posted on by DAR Law

Michigan Employers’ Guide to MIOSHA Emergency Rules and COVID-19 Legislation

In the past few months, Michigan businesses have been impacted by rising COVID-19 cases, MIOSHA Emergency Rules, a package of COVID-19 statutes, and MDHHS orders. More business owners and employees are being personally impacted by the virus. COVID-19 found its way into my own home when my husband was exposed at his work this past October and then passed the virus to me. Thankfully, our children never showed any symptoms. However, it would be an understatement to say it was difficult to isolate with a 3- and 6-year-old when both parents are sick. When I finally emerged from our family’s quarantine, it was clear that COVID-19 fatigue is more than just a symptom of the virus. To provide some clarity in all of the COVID-19 chaos, I have summarized some of the most recent changes and requirements for employers:

MIOSHA Emergency Rules: On Oct. 14, the Michigan Occupational Safety and Health Administration (MIOSHA) issued emergency rules related to COVID-19, to
remain in effect for at least six months (through April 14, 2021). These rules require employers to:

• Conduct exposure determinations for all job tasks and procedures
• Prepare a COVID-19 preparedness and response plan with specific components
• Implement basic infection prevention measures (including a policy prohibiting in-person work to the extent work activities can feasibly be completed remotely)
• Carry out employee health surveillance (including daily screenings)
• Implement workplace controls
• Provide training
• Maintain required records MIOSHA issued FAQs to help explain some of the requirements. Employers can find the FAQs at www.michigan.gov

Among other subjects, the FAQs clarify that employers are required to keep records of the daily screenings of all employees and visitors to the workplace. At the very least, employers must keep a log containing the names of the individuals, date, and a pass/fail indicator. Because the log may reveal confidential medical information depending on its level of detail, it should be kept confidential and shared only with those who have a legitimate need to know.

Additionally, the FAQs address the requirement to conduct a remote work feasibility analysis. This requirement has been a source of contention for many employers as the emergency rules are vague on the subject and employers fear it requires 100% remote work, which may not be sustainable for their businesses. The FAQs indicate: “It is essential that businesses have a thoughtful, reasoned policy for why work that is completed in person cannot feasibly be completed remotely ... MIOSHA will not focus on evaluating the business’ judgment of feasibility, except for cases of obvious misapplication.”

The Michigan COVID-19 Workplace Safety Director echoed this approach in a live Q&A with employers on Nov. 16, stating that MIOSHA will give “deference” to the employer’s determination of feasibility when supported by a reasoned policy.

Thus, employers should evaluate each position and determine whether remote work is feasible. Some positions may require in-person work if such physical presence is necessary to:

• Facilitate the remote work of others
• Access certain equipment, networks, and/or data that cannot be sufficiently and securely accessed from home
• Maintain the security and value of the employers’ assets
• Efficiently and reliably respond to time-sensitive business and/or customer needs
• And/or meet other operational demands, including financial sustainability

No one factor should be determinative; the totality of the circumstances should be considered.

Employers should work with their legal counsel to develop a policy that explains how the remote work feasibility analysis for job tasks and/or positions is conducted and designates which
positions and duties must be performed in-person, via a hybrid arrangement, or fully remote. The policy should be a part of the employer’s COVID-19 preparedness and response plan.

Additionally, the policy should reserve the right of the employer to modify the designations to comply with any subsequent federal, state, or local governmental orders and directives, including but not limited to MDHHS Epidemic Orders, which are now being used in place of Gov. Gretchen Whitmer’s Executive Orders.

COVID-19 Legislation Package:
Four new Michigan statutes designed to support Michigan businesses dealing with COVID-19 went into effect on Oct. 22. House Bill 6030 provides immunity to employers from COVID-19 claims provided the employers comply with all applicable laws, regulations, orders, and requirements relating to COVID-19 precautions.

Thus, if employers are complying with CDC guidance and all federal, state, and local required mitigation measures, they are generally protected from employee tort and personal injury lawsuits if employees are potentially or actually exposed to COVID-19, or otherwise damaged as a

Lindsay Raymond specializes in employment law, represents employers in all aspects of employment-related matters, and defends employers in employment litigation matters. She can be reached at (231) 714-0161 or lraymond@darlawyers.com.

This article was featured in the December 2020 issue of the Traverse City Business News.

Reopening Your Business Part II

Posted on by DAR Law

Practical Considerations For The Post-Shutdown Workplace

Now that your business is reopened, what happens if an employee contracts COVID-19? Are you required to grant an employee’s request for leave related to COVID-19? Are you still required to accommodate requests to telework?  In Reopening Your Business – Part II, we focus on preparing employers to properly respond to these novel issues, and avoid liability.

Investigating Whether COVID-19 Is Work-Related

An employee contracting COVID-19 does not necessarily mean there has been an OSHA violation. Understanding that COVID-19 can be acquired both inside and outside of the workplace, on May 26, 2020, OSHA issued enforcement guidance requiring employers with more than 10 employees (certain low-risk industries are exempted) to reasonably investigate whether COVID-19 infections are “work-related.”  A condition is “work-related” if an event or exposure in the work environment caused or contributed to the condition or significantly aggravated a pre-existing condition.

In accordance with OSHA’s recording requirements, a confirmed COVID-19 case that is work-related and results in death, days away from work, restricted work or job transfer, medical treatment beyond first aid or loss of consciousness, must be recorded by the employer in its OSHA Form 300 log.  Importantly, employers are also required to annually post a summary of the log. Employers with 250 or more employees and certain smaller employers in designated hazardous industries are further required to electronically file their summaries with OSHA each year. Failure to comply with these recording requirements may result in OSHA citations and financial penalties.

In order to properly complete the Form 300 log, employers are now required to conduct a reasonable investigation to determine whether a confirmed COVID-19 case is “work-related.”  This should include asking the employee his or her belief as to how the virus was contracted, discussing work and out-of-work activities that may have led to the illness (being cognizant of privacy concerns), and reviewing the work environment for potential exposures to the virus, such as evaluating whether appropriate mitigation measures were in place, and determining if other individuals also contracted COVID-19. Factors weighing in favor of or against a finding of “work-relatedness,” when there is no other alternative explanation, include, but are not limited to:

  • Infection develops among employees working closely together;
  • Contraction of the virus occurs shortly after prolonged exposure to customer/employee with a confirmed case;
  • Job duties require frequent close exposure to public in an area with on-going community transmission;
  • Employee associates with someone outside of work with COVID-19 during the infectious period; and
  • Evidence of causation provided by a medical provider or health authority, if any.

The final determination of work-relatedness must be based on information reasonably available to the employer at the time of the decision; however, if additional, relevant information is subsequently discovered, the determination must be supplemented. If after a reasonable and good faith investigation the employer cannot determine whether it is more likely than not that the exposure was work-related, the employer is not required to record the COVID-19 case in the Form 300 log. However, the employer must document and maintain records of the investigation to support its determination.

Granting Leave Related to COVID-19

When employees know they have a job to return to after taking leave for COVID-related reasons, they are more likely to report potential exposure and remove themselves from the workplace. OSHA’s new “Guidelines for Opening Up America” (June 2020) recognize this, advising employers to “evaluate existing policies and, if needed, consider new ones that facilitate appropriate use of…sick or other types of leave, and other options that help minimize worker’s exposure risks.”

Several state and federal leave laws support this goal. The FFCRA provides for paid leave to employees experiencing specific, identifiable COVID-19 issues.  If an employee’s request for leave under the FFCRA does not meet its specific requirements, or if such leave has been exhausted, employers may still be obligated to provide other leave related to COVID-19.

For instance, an employer with 50 or more employees would also need to consider whether an employee’s COVID-related leave request would qualify for leave under Michigan’s Paid Medical Leave Act or unpaid leave under FMLA based on the employee’s own serious medical condition or need to care for a family member.  An employer with 15 or more employees must also consider whether the employee would be entitled to unpaid leave as a reasonable accommodation for a disability of the employee under the ADA, absent undue hardship or direct threat. Finally, employers must consider whether they have leave policies beyond those required by law, such as a discretionary unpaid leave policy, that is applicable to the employee’s COVID-19-related situation, and if so, must apply such policies consistently to all eligible employees.

Teleworking Allows for Workplace Flexibility

Teleworking has also been shown to be an effective method of combating the spread of COVID-19 in the workplace. For this reason, in each Executive Order (EO) issued by Governor Whitmer regarding temporary workplace restrictions, employers have been ordered to use teleworking when in-person work is not necessary.  Thus, employers remain obligated to provide telework for their employees post-shutdown.

The OSHA Opening Guidelines, likewise, provide that telework should be considered at all phases of business recovery, and encourage employers to “consider additional policies that facilitate telework…to help minimize worker’s exposure risks.” Consistent with this direction, post-shutdown, employers will need to assess whether “in-person” work should remain an essential function of a particular job position: If an employee performed effectively while teleworking during the shutdown, why would telework no longer be offered post-shutdown?  If “in-person” work is no longer an essential function of a job position, employers may also need to consider telework as a reasonable accommodation for a disability. With that in mind, employers who utilize teleworking should have a teleworking policy that sets forth clear criteria regarding tracking of hours and supervisor monitoring to ensure performance standards are being met.

Reopening your business requires compliance with countless laws, administrative regulations, and state executive orders. Employers can mitigate their risk of potential penalties and liability by working with legal counsel to ensure compliance.

Janis L. Adams and Lindsay J. Raymond are experienced employment law attorneys and business owners. You can reach them at jadams@darlawyers.com and lraymond@darlawyers.com.

This article was featured in the July 2020 issue of the Traverse City Business News

Reopening Your Business

Posted on by DAR Law

Implementing Required COVID-19 Mitigation Measures

The northern Michigan regions are the first regions in Michigan to be granted broader permission to reopen businesses due to their low numbers of COVID-19 cases and deaths, as compared with other Michigan regions.

This welcome news for business owners and employees comes amidst several grim statistics: The U.S. recently surpassed 100,000 deaths; Michigan has 54,881 confirmed cases; and 5,240 Michiganders have lost their lives to COVID-19. Against this backdrop, employees returning to work may feel anxious and concerned about exposure to the virus in the workplace. By implementing required mitigation measures and establishing good channels of communication with their employees on issues of safety, employers will better position their business for a successful reopening.

Required Mitigation Measures

On May 7, 2020, Governor Whitmer released “MI Safe Start: A Plan to Re-Engage Michigan’s Economy.” The governor’s plan establishes a six-phase continuum of restrictions and mitigation measures that relax incrementally over time as COVID-19 infections decrease and treatments develop.

The final post-pandemic phase permits all businesses to open only after there is a “high uptake of an effective therapy or vaccine” while continuing to require certain safety guidance and procedures and social distancing rules. As a vaccine to COVID-19 may not be available until mid-2021 or later, employers cannot simply wait it out. Thus, businesses should move quickly and proactively with all mitigation measures as soon as they are permitted to reopen.

The Grand Traverse region and Upper Peninsula have entered phase 4 of the plan due to their declining COVID-19 numbers while the rest of Michigan remains in phase 3. Executive Order 2020-96 (EO-96) extended the general shelter-in-place order through May 28, 2020, but increased limited exceptions for certain critical infrastructure workers, workers performing minimum basic operations, and workers performing a subset of resumed activities.

Under Executive Order 2020-97 (EO-97), all businesses utilizing permitted in-person work under EO-96 are required to take specific measures to protect their employees and mitigate the spread of COVID-19. It is expected that any similar executive orders in the near future will require at least these same mitigation measures, which include but are not limited to:

  • Developing and maintaining an OSHA-compliant COVID-19 preparedness and response plan by June 1, 2020, or within two weeks of resuming in-person activities, whichever is later.
  • Designating supervisor(s) to implement, monitor, and report COVID-19 control strategies.
  • Providing COVID-19 training to employees.
  • Conducting a daily self-screening protocol for all employees entering the workplace, including at a minimum a questionnaire covering symptoms and suspected exposure.
  • Enforcing visible six-foot social distancing and requiring masks (provided by the employer) when such distance cannot be consistently maintained.
  • Increasing facility cleaning and disinfecting standards.
  • Making cleaning supplies available to employees upon entry and providing time to frequently wash hands or use hand sanitizer.
  • Implementing a plan for notification and action subsequent to identification of a confirmed case of COVID-19 in the workplace.
  • Promoting remote work to the fullest extent possible.

Under EO-97, an employer’s failure to comply with these mitigation measures constitutes a violation of Michigan’s OSHA under MCL 408.1011, subjecting the business to possible penalties. If found to be willful, the violation could constitute a misdemeanor under EO-96, potentially affecting a business’s continued operations. Failing to comply with mitigation measures could also result in workers’ compensation claims if employees become sick while at work and a decrease in employee productivity and morale.

Creative Mitigation Strategies

As each business is unique, mitigation strategies that work in one work environment will not necessarily work in another work environment. In deciding what additional mitigation measures may be necessary to achieve your primary goals of maintaining six-foot social distancing, ensuring effective cleaning and disinfecting, and conducting daily employee health screenings – all of which are designed to limit virus transmission – employers should consider:

  • Adopting a gradual plan for returning employees to work.
  • Implementing staggered employee work schedules for days and/or times worked.
  • Reorganizing cubicles and other work areas to accommodate six-foot social distancing.
  • Developing clear, visible six-foot markings on the floor and signage for social distancing.
  • For businesses with patrons, posting an entering office sign regarding required social distancing and/or wearing of masks.
  • Closing common areas to employee use, such as break rooms.
  • Implementing staggering of employee break times.
  • Replacing community-use glasses, coffee mugs, plates and silverware with disposable paper/plastic products.
  • Turning off water fountains.
  • Identifying high-touch surfaces with color-coded stickers.
  • Replacing door knobs with hook openers or removing doors.
  • Replacing trash receptacles requiring hand touch with no-touch foot pedals.
  • Planning for anticipated supply shortages of high demand items: no-touch thermometers, soap, disinfectant, paper towels, hand sanitizer, face masks, gloves, and other PPE.
  • Using stickers, hand-stamping or other visible markings to confirm employees’ completion of daily health screenings and hand-washing/sanitizing upon entry into work environment.

An employer’s social distancing, cleaning and disinfecting, and daily health screening policies will only be effective if they are uniformly applied to everyone in the work environment, including the owners and management, and are transparent to all employees. By taking a “we are all in this together” approach to safety in the workplace, employers can help alleviate their employees’ trepidation about possible exposure in the workplace. Through this shared confidence in the measures taken to ensure the safety of all during these difficult times, employers can better position their business for success upon reopening. We owe that to those no longer with us today.

*NOTE: We will have a second article appearing in the July edition of TCBN focusing on the issues faced by businesses during their first month of reopening. 

Janis L. Adams is an experienced employment law attorney and business owner. You can reach her at jadams@darlawyers.com.

This article was featured in the June 2020 issue of the Traverse City Business News

Employment Law Countdown

Posted on by DAR Law

Legal developments to consider ahead of 2020

The holiday season is a time to reflect on the past and plan for the future. However, making resolutions for your business can be overwhelming, especially with the ever-evolv- ing legal landscape of employment law. To make the process a bit easier, below is a count- down of a few developments to keep in mind as 2020 approaches.

1. Minimum Wage Increase

Effective Jan. 1, 2020, Michigan’s minimum wage will increase to $9.65/hour (up from the current $9.45/hour). Under Michigan’s Improved Workforce Opportunity Wage Act, incremental increases will take effect each year, reaching $12.05/hour by January 2030.

2. New DOT Drug and Alcohol Testing Database

Effective Jan. 6, 2020, the new Department of Transportation's Clearinghouse Database must be used by employers who are subject to DOT's drug and alcohol testing regulations via the rules of the Federal Motor Carrier Safety Administration (FMCSA). These regulations apply to employers who employ drivers who hold commercial driver’s licenses and drive commercial motor vehicles (CMV).

A CMV includes, but is not limited to, a vehicle with a gross weight rating of at least 26,001 pounds, one designed to transport 16 or more passengers, including the driver, or one that is used in the transportation of hazardous materials.

Under current rules, covered employers must make pre-employment requests to previous and current employers regarding each driver’s accident and drug and alcohol testing history. The new database must be used to supplement these information requests until Jan. 6, 2023, at which time the database will replace almost all such requests.

Additionally, covered employers must use the database to conduct annual queries on all covered drivers, and to report specific violations and return-to-duty/follow-up testing within three business days of the occurrences.

Covered employers should register with the database at https://clearinghouse.fmcsa.dot.gov and work with legal counsel to create or update their FMCSA Drug and Alcohol Testing Policy to ensure compliance.

3. FLSA Salary Threshold Increase

Effective Jan. 1, 2020, the federal Fair Labor Standards Act (FLSA) salary threshold for white-collar exemptions will increase from $455/week to $684/week, or an increase from $23,660/year to $35,568/year. Additionally, the salary threshold for highly compensated employees will increase from $100,000/year to $107,432/year. Certain non-discretionary bonuses and incentive payments, including commissions, are allowed to satisfy up to 10% of the threshold.

When workers are paid a salary at or above the salary threshold and meet certain duties tests, the employees are exempt from receiving overtime compensation for hours worked beyond 40 in a workweek. However, as of the New Year, if those employees are not being paid at the new salary threshold level, they will lose their exemption and become entitled to overtime compensation.

Employers still have time to work with legal counsel and evaluate their workforce to determine what changes, if any, are necessary. For those affected employees, employers should weigh the costs of increasing their salaries to preserve an exemption or reclassifying them as non-exempt and paying overtime. Position descriptions and budgets may need to be revised, and any reclassified employees will need to be trained on timekeeping policies and procedures.

In late October, Governor Gretchen Whitmer indicated that she did not believe the salary level set by the new federal rule was “good enough.” Thus, she directed the state labor department to consider an appropriate level and draft a proposal. Finalizing such a rule could take up to a year. However, if Michigan’s final rule increases the threshold beyond the FLSA threshold, employers would need to be ready to comply with the higher amount.

4. Employee Handbook Updates

Whether your employee handbook was updated 20 years ago or this past January, several developments in employment law in the last year would most likely impact current policies and procedures, including, but not limited to:

– Paid Medical Leave Act (PMLA): The PMLA applies to employers with 50 or more employees, and gives eligible employees up to 40 hours of paid leave for specified purposes. Subject to certain exceptions, generally non-exempt employees working an average of at least 25 hours per week each year are eligible for paid leave. The PMLA was effective in March this year, but many employers have not yet fully updated their policies to account for this change. Some common oversights include the requirement that eligible employees begin accruing paid leave on the first day of employment, that the waiting period for the use of such leave cannot be longer than 90 days, and that employees who accrue the leave (as opposed to being awarded it in one lump sum) must be able to carry over up to 40 hours of unused leave into the following year. Policies should be thoroughly reviewed for compliance.

– Legalization of marijuana:

In December 2018, the private recreational use and possession of limited amounts of marijuana and marijuana plants was legalized for persons at least 21 years of age. With a year under their belts, employers should consider the impact this legalization has had on their workforce and recruiting efforts, if any, and work with legal counsel to revise and/or refine their drug and alcohol policies to address any pressing needs, including, but not limited to, testing requirements and disciplinary actions, if not already mandated by other law.

By keeping these developments in mind and taking proactive steps to prepare, your business’ New Year will be looking merry and bright.

Lindsay Raymond specializes in employment law, represents employers in all aspects of employment-related matters, and defends employers in employment litigation matters. She can be reached at (231) 714-0161 or lraymond@darlawyers.com.

This article was featured in the December 2019 issues of the Traverse City Business News.