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Over 100 Employees? COVID-19 Vaccine Requirements are Coming

  • Ensure that 100% of their workforce is vaccinated against the COVID-19 virus, with any of the emergency or fully FDA-approved vaccines; OR
  • Receive a weekly negative COVID-19 test result from all unvaccinated employees prior to coming to work.

In addition to this vaccination and/or weekly testing requirement, employers must also provide paid-time off benefits for the time needed to get tested and post-vaccination recovery, if necessary. OHSA should release its ETS in the coming weeks, outlining the specifics of this new ruling and how to comply with its requirements, including information on payment responsibility for vaccinations and testing and the timeline for implementation.

There are many compliance concerns raised by this plan under ERISA, HIPAA, certain wellness program rules, and other regulations that will need to be contemplated by employers. Upon OSHA’s issuance of the ETS, we will provide further guidance and information on compliance with the requirements. We also recommend you reach out to your legal counsel for assistance. If you are a large employer and would like to discuss the above requirement in more detail or if you are a healthcare entity, federal contractor, or federal government employer and would like information on how the other pieces of this plan apply to you, please visit https://www.whitehouse.gov/covidplan/ or contact Launchways directly for additional HR and compliance support.

5 Key Points Employers Need to Know About EEOC’s New Guidance on LGBTQ+ Workplace Discrimination

In observance of LGBTQ+ Pride Month and the one-year anniversary of the landmark Supreme Court ruling over Bostock vs. Clayton County, the U.S. Employment Opportunity Commission (EEOC) has announced new resources to help employers understand the protection of applicants and workers against discrimination regarding sexual orientation and gender identity. Along with a new landing page summarizing information pertaining to sexual orientation and gender identity discrimination, they’ve released a new technical assistance document to “help educate employees, applicants and employers about the rights of all employees, including lesbian, gay, bisexual and transgender workers, to be free from sexual orientation and gender identity discrimination in employment.”

The EEOC’s new resources taken together with the Bostock ruling present wide-ranging implications for employers across the U.S. Before we dive into the key points of these changes, we need to take a closer look at how we got here.

Bostock v. Clayton County, a Brief Overview

The significance of the EEOC’s new guidance documents cannot be fully appreciated without understanding the consequences of last June’s Bostock v. Clayton County Supreme Court ruling. That 6-3 decision added discrimination on the basis of sexual orientation and gender identity to the list of practices deemed in violation of Title VII of the Civil Rights Act of 1964.

The Supreme Court consolidated 3 separate cases into this historic decision: two centered upon the firing of gay men due to their sexual orientation (Bostock v. Clayton County and Altitude Express Inc. v. Zarda) and another on the firing of a transgender woman due to her gender identity (R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment and Opportunity Commission). The question at hand was “whether an employer can fire someone simply for being homosexual or transgender.” The opinion of the court, authored by Justice Neil Gorsuch, was unambiguous: “An employer who fires an individual merely for being gay or transgender defies the law”. Gorsuch also noted that various caveats regarding religious liberty issues stemming from the First Amendment, exemptions provided to religious employers in Title VII, and the Religious Freedom Restoration Act were not addressed.

Bostock v. Clayton County has since been interpreted by the EEOC and other courts to prohibit all forms of harassment and discrimination based on sexual orientation and gender identity.

The EEOC’s New Guidance Explained

The new resources provided by the EEOC consolidate critical information concerning sexual orientation and gender identity discrimination along with links to fact sheets regarding recent EEOC litigation on this topic. Also included is a new Technical Assistance Document explaining the implications of the Bostock decision and reiterating that employers cannot:

  • Discriminate against individuals based on sexual orientation or gender identity with respect to terms, conditions, or privileges of employment, including hiring, firing, furloughs, reductions in force, promotions, demotions, discipline, training, work assignments, pay, overtime, other compensation, or fringe benefits.
  • Create or tolerate harassment based on sexual orientation or gender identity, including harassment by customers or clients. This may include intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee.
  • Use customer preference to fire, refuse to hire, or assign work.
  • Discriminate because an individual does not conform to a sex-based stereotype about feminine or masculine behavior (whether or not an employer knows the individual’s sexual orientation or gender identity).
  • Require a transgender employee to dress or use a bathroom in accordance with the employee’s sex assigned at birth. However, employers may have separate bathrooms, locker rooms, and showers for men and women, or may have unisex or single-use bathrooms, locker rooms, and showers.
  • Retaliate against any employee for opposing employment discrimination that the employee reasonably believes is unlawful; filing an EEOC charge or complaint; or participating in any investigation, hearing, or other proceeding connected to Title VII enforcement.

The Technical Assistance Document also notes that employers are prohibited from creating, or tolerating, harassment, or discriminating against straight or cisgender (those who identify with the sex assigned at birth) individuals. Additionally, the EEOC addresses the tension between protections provided to employers and employees with sincerely held religious beliefs and LGBTQ+ applicants and employees by noting, “Courts and the EEOC consider and apply, on a case by case basis, any religious defenses to discrimination claims, under Title VII and other applicable laws.”

5 Key Points for Employers

Title VII of the Civil Rights Act of 1964 now prohibits discrimination on the basis of sexual orientation or gender identity nationally, regardless of state and local laws. Many recurring questions regarding protections for LGBTQ+ employees have been clarified by the EEOC’s new guidance, and here are the 5 key points for U.S. employers to take away:

  1. Discriminatory action cannot be justified by customer or client preferences. “An employer covered by Title VII is not allowed to fire, refuse to hire, or take assignments away from someone (or discriminate in any other way) because customers or clients would prefer to work with people who have a different sexual orientation or gender identity.”
  2. Whether or not an employer knows an employee’s sexual orientation or gender identity, employers are not permitted to discriminate against an employee because that employee does not conform to sex-based stereotypes about traditional feminine or masculine behavior.
  3. Employers requiring transgender employees to dress in accordance with the employee’s sex assigned at birth constitutes sex discrimination.
  4. Employers may have separate bathrooms, locker rooms, and showers for men and women. However, “all men (including transgender men) should be allowed to use the men’s facilities and all women (including transgender women) should be allowed to use the women’s facilities.” Because the Supreme Court left this issue unaddressed in the Bostock ruling, stating: “Under Title VII… we do not purport to address bathrooms, locker rooms, or anything else of the kind,” this is a controversial issue that is still developing.
  5. Accidental misuse of a transgendered employee’s preferred name and pronouns does not violate Title VII. However, “intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee could contribute to an unlawful hostile work environment.”

The implications of the Bostock ruling and the EEOC’s new guidance are far-reaching and consequential, and they make it clear that any discrimination on the basis of sexual orientation or gender identity is now prohibited under Title VII. However, some matters remain unresolved, such as gendered bathrooms/locker rooms and potential conflicts with protections provided to private employers and employees with sincerely held religious beliefs. It is paramount for all U.S. employers to review the EEOC resources, assess their policies and practices to ensure that they are in compliance, and remain attentive to further developments regarding LGBTQ+ workplace discrimination law.

Are Your Employees Working as Digital Nomad? What They Need to Know About Tax Implications

The coronavirus pandemic has proven a broad and nearly universal view that American’s relationship with technology will deepen, including their ability to work from almost anywhere.

If you work remotely in the same state as your business location, you can follow the same state laws for income taxes and employment taxes. But as a remote employee, you need to weigh in the tax implications of cross-border work arrangements.

Below are the laws and taxes considerations to make as a remote employee working abroad:

Be Aware of Your Tax Obligations

You will want to consider your current tax situation and see how it may change if you leave the country. While the U.S. tax code applies to all tax citizens and green card holders no matter how long they live and work remotely outside the United States, some exclusions are available.

You may qualify for a foreign tax credit or the Foreign Earned Income Exclusion (FEIE), which lets you reduce or eliminate all or a portion of your foreign earned income (up to $108,700 from U.S. taxes). This exclusion is not valid for passive, or investment income such as interest and dividend and only includes earned income, such as:

  • Salary
  • Wages
  • Bonuses
  • Commissions
  • Self-employed income

Generally, many countries have bilateral tax treaties which prevent you from paying tax on the same thing twice.

Determine Your Primary Residence or Tax Home

Before you qualify using the credit or FEIE, it’s crucial to make sure your tax home is outside the United States.

For instance, countries like Portugal will let you claim to be their tax resident if your primary residence is registered there, and you stay for 183 days or more in any tax year. On the other hand, the U.K. implements a “Statutory Residence Test,” which considers the amount of time you spend and work in each tax year, separately.

According to the IRS,

  • Your tax home is the general area of your principal place of business, employment, or post of duty, regardless of where you maintain your family home
  • Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual.
  • Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes.
  • If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live.
  • If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant, and your tax home is wherever you work.

As U.S. citizens, the foreign income exclusion comes into effect only if you spend at least 330 days of the tax year abroad, not including time on planes. Then, if you qualify, you can use Form 2555 to figure your foreign earned income exclusion and your housing exclusion or deduction.

Comply With Foreign Reporting Requirements

Many digital nomads and expats may also be subject to additional tax reporting, such as filing a Foreign Bank Account Report (FBAR).

An FBAR reports your money that resides in offshore bank accounts. Any U.S. tax resident with a foreign account balance of $10,000 or more during a specific tax year needs to file an FBAR.

This account balance is calculated in its totality, which means it is a sum of all your foreign bank accounts. Individuals who have signing authority for an overseas account or a joint account also need to file an FBAR.

FBAR is filed individually to the Dept. of Treasury and submitted electronically through the BSA e-filing site.

Know Regulations Around State Taxes

Certain U.S. states require ‘verified’ state residents who work outside to pay state taxes, or they have to prove they are no longer state residents. For example, the state of Colorado requires proof of non-resident status, and other places such as California need you to pay state taxes even if the federal government has certified you as a foreign resident.

If you plan to work abroad, this can be a problem for many reasons. In some cases, owning personal property such as a car or even a library card can make you liable to pay state income tax.

That’s why know more about state taxes and/or relocate to a low or no-tax state before you depart, rather than being caught unaware by years of unpaid penalties.

Self-Employment Taxes

Whether in the U.S. or abroad, if you have an employer, they are required to pay social security and Medicare for you. But as a self-employed digital nomad, you may be liable for SECA (Self-Employed Contributions Act), based on your country of residence.

However, you may be exempt from SECA tax if the U.S. has a Totalization Agreement with the country you are residing in. Under this agreement, SSA will account for your periods of U.S. coverage that qualify for benefits under the social security program of an agreement country.

Depending on your situation and the period spent in a foreign country, you may have freed yourself of commutes, but knowing your tax obligations will help you navigate through the complexities of U.S. taxes no matter where your work takes you.

A New Normal for the Modern Workplace

We are now more than a year since major news organizations first began sounding the alarm for the emerging COVID-19 pandemic and looking back on articles from that time can be quite jarring. In mid-March of 2020, Pennsylvania Governor Tom Wolf gave a speech asking for “two weeks to flatten the curve”. That optimism was echoed in American workplaces, with expectations of employees needing to work from home for perhaps a few short months. Over a year later, and companies are only now announcing plans to bring employees back into their physical workplaces. As we watched the pandemic stretch from weeks into months, and from months to years, it became evident that the changes brought about in the business world were here to stay.

A long year of uncertainty and upheaval has left many organizations without a sense of clarity regarding what their employees want and need.

Options Galore

Perhaps the most consequential topic of conversation and debate within the workplace going forward will revolve around how to manage the changing expectations and demands of employees. The general trend is toward a growing number of options for handling schedules, workplace flexibility, and benefits. If the changes brought about by the pandemic were short lived, one might expect a relatively quick and graceful return to normal routines and procedures. We all would have happily returned to our physical workplaces and continued with business as usual.

That obviously is not what happened. It took many of us months to become acclimated to remote work, and enough time has gone by now that these changes are quickly becoming a durable part of the modern world. After more than a full year, many of us have become quite accustomed to working from home, and some have even made drastic changes to their lifestyles and are now dependent upon the flexibility of these new work arrangements. Because of this, it is impractical, perhaps untenable, for us to expect the workplace to return to pre-pandemic norms.

Many organizations are already realizing this, marking an incredible transformation in the perception of remote and hybrid workforces. In the early stages of the pandemic, very few organizations would have taken seriously the notion that these changes would become permanent. Only a small percentage of companies were utilizing remote work at scale, but the experiment of the last year has proven its feasibility, and now there really is no going back.

This subject is complex and multi-faceted, but the primary concern on most people’s minds is scheduling. Of course, not every organization is going to make remote work the norm going forward, but it will likely remain an option in the vast majority of them even after physical workplaces reopen. Many of the world’s largest companies have already announced plans to embrace remote work as at least part of their plans going forward, such as Microsoft, Spotify, Dropbox, and Uber, among others. It is not uncommon to hear of companies that have decided to end their leases and get rid of their physical offices altogether. This trend has spawned office vacancy crises in major cities throughout the US and, considering that more than half of employees currently working remotely would like to continue to do so, this is not expected to be a short-lived phenomenon. If organizations want to remain competitive in the labor market and retain their talented employees, they need to embrace the hybrid workforce transformation.

Remote work is not for everyone, however, and it is important to keep in mind that many are eager to return to their physical workplaces. Pandemic related safety measures are relaxing in many parts of the country, but where they remain in place organizations are exploring creative strategies to keep occupancy to recommended maximums. Staggered schedules and compressed workweeks have emerged as popular approaches because they allow employees to return to the workplace if they wish by rotating who is coming in at various times. Flextime, a strategy that allows employees to work at the times that work best for them, is another option to keep an eye on as it is likely to be in high demand as physical offices and workplaces reopen.

Despite their hesitation, organizations are realizing that strategies like flextime and remote work come with tangible benefits, such as increased employee productivity, retention, and engagement.

Organizational Challenges Incoming

            It is no secret that at the top of the list of any business’s concerns is ensuring that the policies they follow protect and benefit their bottom line, and this topic is no different. It simply is not feasible to expect every company to accommodate 100% of their employees working remotely going forward, but expectations have changed, and the smart move will be to try to meet those expectations where possible.

            Many of the changes we have seen in easily adapted work like IT and Human Resources are generally here to stay, as are video conferencing tools like Zoom and Skype. We should also expect to see new tools emerge to better meet the needs of the new hybrid workforce. Solving the major pain points of remote work, like communication and organization, will be a new frontier in software development going forward. Because of these changes, companies are likely to start aggressively seeking out management and staff that have experience working with distributed teams.

            As the pendulum swings in the direction of remote work, we should all be wary of a potential pitfall: overcompensation. The desire to be at the leading edge of this transition is understandable, but we currently only have a year of data to verify the feasibility of hybrid workforces, and the practicality of it is likely to vary widely from organization to organization. Many will be drawn to the promise of lower expenses and reduced complexity, but the results are sure to be mixed.

            Organizations should be leery of changing too much too quickly despite the pressures that they are likely to face. The first order of business should be to get those who want to work in a physical workplace and those who want to continue to work remotely set up to do so as quickly and efficiently as possible. It is important to let the dust settle and a sense of normalcy to return before any further drastic changes are made. Given where much of the country remains regarding COVID-19 precautions, simply reopening workplaces to any degree is going to be a significant enough challenge already.

            Many employees will prefer to continue working from home, but that does not mean that it should become the new standard just yet. The importance of the social component of life and work is not to be underestimated, as we have seen over the last year, so it comes as no surprise that many of us yearn to see their coworkers and customers in person again.

            As companies make decisions about how to handle the emergence of remote work, the key will be for them to focus on providing options to their employees, not requirements. Regardless of what they decide, it is important that their decisions are calculated and deliberate. Most organizations spent the last year simply trying to ride the wave and not drown amid the chaos – leaving aside, of course, the companies that were already working remotely before the pandemic.

            Now that the experiment has been run and the results are coming in, everyone is starting to look toward the future. This should be considered a great opportunity to evaluate the success and failures of what was tried and make decisions based on those results through the lens of what is best for that particular organization going forward. We are no longer improvising on the fly. Companies are going to start learning from what has happened and it is the companies that are deliberate about their decisions regarding remote work and carefully develop their plans that will be most competitive.

            The first step in making such a plan should be to collect and analyze as much data as possible from your employees about their interests and expectations regarding remote work. This could take the form of interviews, group discussions, company-wide surveys, one-on-one conversations, or some combination of these options. Regardless of the method, management needs to get a scope on what their employees want before they will be able to assess what is feasible to offer them.

            Tough compromises are almost inevitable because, in most situations, neither the employer nor the employee is going to come away with everything that they want. Consider more complex situations, like the companies that will not be able to offer the same remote work options to all their employees because of differences in the type of work that they do. Ford recently offered 86,000 of their employees the option to continue working from home permanently, but this is not possible for its 100,000 plus factory workers. The cost of workforce infighting can be substantial, so to prevent conflict, organizations may consider offering other benefits to the employees who work in roles that cannot be adapted to remote work. Whatever they do, it is imperative that they reaffirm the importance of those workers.

Taking all of this into consideration is going to be overwhelming for a lot of organizations, especially small businesses. Management should remind themselves that they are not going to be able to please everyone. All that can be reasonably expected is that they make good-faith efforts to meet the needs of as many of their employees as possible.

            The knock-on effects from the pandemic, such as the emergence of remote work, have forced organizations and employees to completely re-evaluate their priorities and needs. Tough decisions are going to be made and, in many cases, both employers and employees are going to have to look elsewhere to have those needs met. Disruptions like this are undoubtedly stressful, but if the situation is managed strategically, at the end of the day we might all be better off.

Tax Credits Available to Provide Paid Leave for Receiving COVID-19 Vaccines

In a recent announcement from the IRS and the Treasury Department, the American Rescue Plan (ARP) is issuing tax credits to help small businesses, including providing paid leave for employees receiving COVID-19 vaccinations.

Eligible employers (businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers) can receive a tax credit for providing paid time off for any employees receiving and/or recovering from the COVID-19 vaccine.

“This new information is a shot in the arm for struggling small employers who are working hard to keep their businesses going while also watching out for the health of their employees,” said IRS Commissioner Chuck Rettig. “Our work on this issue is part of a larger effort by the IRS to assist the nation recover from the pandemic.”

Small, midsize, and specific government employers are now able to claim refundable tax under the American Rescue Plan Act of 2021 (ARP). These refundable tax credits reimburse employers for the expenses of providing paid sick and family leave to their employees due to COVID-19. This includes any paid leave taken by employees to receive and/or recover from COVID-19 vaccinations. The ARP tax credits are available for leave from April 1, 2021 – September 30, 2021 and are available to any eligible employer that provides sick and family leave.

The ARP tax credits are against the employer’s share of the Medicare tax and they are refundable. This means that eligible employers are entitled to payment of the full amount of the credits as long as it exceeds their share of the Medicare tax.

Eligible employers can keep the federal employment taxes that they otherwise would have deposited in anticipation of claiming the credits on the Form 94. This includes federal income tax withheld from employees, the employees’ share of social security and Medicare taxes, and the eligible employer’s share of social security and Medicare taxes with respect to all employees up to the amount of credit for which they are eligible. For eligible employers that do not have enough federal employment taxes set aside for deposit to cover amounts provided as paid sick and family leave wages, the eligible employer may request an advance of the credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Employer Tax Credits for Paid Leave Under the American Rescue Plan

Small, midsize, and specific government employers are now able to claim refundable tax under the American Rescue Plan Act of 2021 (ARP). These refundable tax credits reimburse employers for the expenses of providing paid sick and family leave to their employees due to COVID-19. This includes any paid leave taken by employees to receive and/or recover from COVID-19 vaccinations. The ARP tax credits are available for leave from April 1, 2021 – September 30, 2021 and are available to any eligible employer that provides sick and family leave. Below is the information you need to know about eligibility and how employers can claim the credit.

Eligible Employers

Any business with fewer than 500 employees, including tax-exempt organizations, is considered an eligible employer. This also included government employers, with the exception of the federal government and any agency of the federal government not described in section 501(c)(1) of the Internal Revenue Code.

Employers deemed eligible are entitled to tax credits for wages paid to employees for leave taken due to COVID-19. This includes leave taken to receive and/or recover from COVID–19 vaccinations. The ARP tax credits are available for wages paid for leave from April 1, 2021 – September 30, 2021.

Tax Credits Amounts

The ARP tax credits are against the employer’s share of the Medicare tax and they are refundable. This means that eligible employers are entitled to payment of the full amount of the credits as long as it exceeds their share of the Medicare tax.

The credit amount for sick leave is equal to the sick leave wages paid for COVID-19 related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100 percent of the employee’s regular rate of pay. The credit amount for paid family leave wages is equal to the family leave wages paid for up to twelve weeks, limited to $200 per day and $12,000 in the aggregate, at 2/3rds of the employee’s regular rate of pay.

Claiming the Credit

To claim credits, eligible employers must report their total paid sick and family leave wages for each quarter on their federal employment tax return, usually Form 941, Employer’s Quarterly Federal Tax Return. Form 941 is used by most employers to report income tax and social security and Medicare taxes withheld from employee wages, as well as the employer’s own share of social security and Medicare taxes.

 Eligible employers can keep the federal employment taxes that they otherwise would have deposited in anticipation of claiming the credits on the Form 94. This includes federal income tax withheld from employees, the employees’ share of social security and Medicare taxes, and the eligible employer’s share of social security and Medicare taxes with respect to all employees up to the amount of credit for which they are eligible.

For eligible employers that do not have enough federal employment taxes set aside for deposit to cover amounts provided as paid sick and family leave wages, the eligible employer may request an advance of the credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. The eligible employer will account for the amounts received as an advance when it files its Form 941, Employer’s Quarterly Federal Tax Return, for the relevant quarter.