The Washington Report
June 17, 2020
Note to subscribers: Due to the current environment, information is changing at a rapid rate. While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change or be revised after our publication deadline. Stay healthy and safe! ~The Washington Report team
Supreme Court Rules That Homosexual and Transgender Employees Are Protected by Title VII of Civil Rights Act
On June 15, 2020, the U.S. Supreme Court ruled 6–3 that Title VII of the Civil Rights Act, which prohibits discrimination in the workplace, protects homosexual and transgender employees from being disciplined or fired based upon sexual orientation. Justice Neil Gorsuch delivered the opinion of the court, issued as part of several combined cases (Bostock v. Clayton County, Altitude Express v. Zarda, and R.G. & G.R. Harris Funeral Homes v. Equal Employment Opportunity Commission). Justice Gorsuch stated: “Today, we must decide whether an employer can fire someone simply for being homosexual or transgender. The answer is clear. An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.”
The Supreme Court opinion is available here.
HHS Releases Final Rule on ACA Section 1557
On June 12, 2020, the Department of Health and Human Services (HHS) released a final rule implementing Section 1557 of the Affordable Care Act (ACA). Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs or activities. Among the many provisions, the final rule addresses protections for individuals with disabilities and individuals with limited English proficiency. Additionally, the final rule “omits overbroad provisions related to sex and gender Identity.” According to the news release, “under the final rule, HHS eliminates certain provisions of the 2016 Rule that exceeded the scope of the authority delegated by Congress in Section 1557. HHS will enforce Section 1557 by returning to the government’s interpretation of sex discrimination according to the plain meaning of the word ‘sex’ as male or female and as determined by biology. The 2016 Rule declined to recognize sexual orientation as a protected category under the ACA, and HHS will leave that judgment undisturbed.” The final rule becomes effective on August 18, 2020.
This summary is only meant to provide a brief overview of the final rule. Please refer to the final rule and Fact Sheet for details regarding provisions, cost reduction, and enforcement specifics. Also note that the recent Supreme Court decision may impact this final rule.
The HHS news release is available here.
The HHS Fact Sheet is available here.
The final rule is temporarily available here. (The final rule will be published in the June 19, 2020, Federal Register.)
EEOC Updates COVID-19 Technical Assistance Publication; Contains Q&A Section of Common Workplace Questions (Including Age and National Origin Discrimination)
On June 11, 2020, the Equal Employment Opportunity Commission (EEOC) posted an updated and expanded technical assistance publication addressing questions arising under the federal Equal Employment Opportunity (EEO) laws related to the COVID-19 pandemic. The publication, What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws, provides approaches employers may adopt as they plan for employees returning to the workplace, including providing information to all employees about whom to contact with requests for disability accommodation or other flexibilities, and inviting employees to make any requests in advance that the employer will consider on an individualized basis. (This information is provided in Question and Answer (Q&A) G.6.)
The updates also address requests for accommodation in the employer’s process for workplace screening, as well as frequently asked questions about COVID-19 and age discrimination, (e.g., that employers are prohibited from "involuntarily excluding" people over 65 who wish to return to work, (Q&A H.1)), pregnancy discrimination, and sex discrimination involving employees with caretaking or family responsibilities (Q&A Sections I and J). Additionally, there are new questions about steps employers may take to prevent and address harassment of employees who are or are perceived to be of Chinese or other Asian national origin, including reminding employers that workplace harassment may occur while employees are teleworking.
The updated What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws, is available here.
IRS Publishes Guidance on Employer Leave-Based Donations Programs That Aid Pandemic Victims
On June 11, 2020, the Internal Revenue Service (IRS) published Notice 2020-46, which provides guidance for employers whose employees forgo sick, vacation, or personal leave because of the COVID-19 pandemic. The Notice provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation, or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer. Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of either section. Please refer to Notice 2020-46 for specific details for employers with leave donation programs.
IRS Notice 2020-46 is available here.
Additional information about Coronavirus tax relief for businesses and tax-exempt entities is available here.
Treasury and IRS Invite Public Recommendations for 2020–2021 Priority Guidance Plan
On June 11, 2020, the Treasury Department and the IRS released Notice 2020-47, which invites the public to submit recommendations for items to be included on the 2020–2021 Priority Guidance Plan. The Treasury Department's Office of Tax Policy and the IRS use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The 2020–2021 Priority Guidance Plan will identify guidance projects that the Treasury Department and the IRS intend to actively work on as priorities during the period from July 1, 2020, through June 30, 2021. Public recommendations for possible inclusion in the original 2020–2021 Priority Guidance Plan are due by July 22, 2020.
IRS Notice 2020-47 is available here.
OSHA Issues FAQs About Face Coverings, Surgical Masks, and Respirators in the Workplace
On June 10, 2020, the Department of Labor’s Occupational Safety and Health Administration (OSHA) published a series of frequently asked questions (FAQs) regarding the use of masks in the workplace.
The new guidance outlines the differences between cloth face coverings, surgical masks, and respirators. It further reminds employers not to use surgical masks or cloth face coverings when respirators are needed. In addition, the guidance notes the need for social distancing measures, even when workers are wearing cloth face coverings, and recommends following the Centers for Disease Control and Prevention's (CDC’s) guidance on washing face coverings. The OSHA FAQs address:
- What are the key differences between cloth face coverings, surgical masks, and respirators?
- Are employers required to provide cloth face coverings to workers?
- Should workers wear a cloth face covering while at work, in accordance with the CDC recommendation for all people to do so when in public?
- If workers wear cloth face coverings, do employers still need to ensure social distancing measures in the workplace?
- If I wear a reusable cloth face covering, how should I keep it clean?
- Are surgical masks or cloth face coverings acceptable respiratory protection in the construction industry when respirators would be needed but are not available because of the COVID-19 pandemic?
These FAQs mark the latest guidance from OSHA addressing protective measures for workplaces during the coronavirus pandemic. For additional information, please refer to the resources provided below.
The latest OSHA FAQs are available here.
New Rules under ERISA for Electronic Disclosure for Retirement Plans
On May 27, 2020, the Department of Labor (DOL) published final rules offering a new safe harbor for retirement plans to provide certain disclosures to plan participants, beneficiaries, and other individuals entitled to the disclosures. These new rules offer an additional opportunity to use electronic communication for a broader group of participants in potentially more efficient ways for retirement plans. The new rules do not cover health and welfare plans. The DOL intends to work with other agencies to explore options for those plans.
These new rules apply to documents and notices required under ERISA such as the Summary Plan Description, the Annual Funding Notice, or blackout notices. The rules do not apply to the delivery of notices required by the Internal Revenue Code such as a qualified joint and survivor annuity notice or an eligible rollover distribution notice. Separate rules apply to those notices; however, the Internal Revenue Service indicated to the DOL they intend to issue new guidance on electronic delivery for participant notices.
An Aon bulletin, which provides a detailed summary of these rules, is available here.
Thole v. U.S. Bank: Supreme Court Ruling Decision—Good News for Defined Benefit Plan Fiduciaries
On June 1, 2020, the U.S. Supreme Court rendered a decision in Thole v. U.S. Bank, a case of particular interest to defined benefit plan fiduciaries. The Thole case is significant for defined benefit plan fiduciaries, as the Court held that participants in a well-funded defined benefit plan will not have a right to sue to allege a fiduciary breach without demonstrating a concrete injury (e.g., actual loss or reduction in pension payments to participants). While the case is focused on defined benefit plans, it may also serve to protect defined contribution plan fiduciaries from class action claims on behalf of participants who weren’t invested in allegedly imprudent investment funds and thus were not damaged by a fiduciary breach.
The Aon bulletin on the Thole Supreme Court decision is available here.
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