Posts filed under ‘COVID-19’

Are You Responsible for “Take Home” Covid?

Although the decision by the Supreme Court to block OSHA’s implementation of an emergency vaccine mandate/ testing requirement for businesses with 100 or more employees has understandably gotten a lot of attention, all employers should remain mindful of their ongoing responsibility to ensure a safe workplace during the pandemic. A case pending in California demonstrates precisely what I am talking about.

Rose Gomez vs LOGIX Federal Credit Union, et al. involves a credit union employee who is suing the credit union for negligently protecting its employees against Covid resulting in the death of her relative after she contracted the virus. The plaintiff alleges that despite the known risks of Coronavirus spreading after the declaration of local, state, and national emergencies, the Credit Union continued to group employees close together. This case and another in California dealing with a closely related issue are being scrutinized nationally as courts begin to examine employer responsibilities in responding to the pandemic.

Among the issues that are being litigated in New York and other states are the extent to which Worker’s Compensation laws block employees from making claims such as the one being brought against the California credit union and the extent to which these laws also shield employers against the claims of third parties who claim to have been made ill after an employee “took home the Coronavirus.”

And of course because New York is New York there are increased legislative and regulatory requirements of which New York credit unions should be aware. As I have explained in previous blogs, New York’s HERO Act mandates that employers promulgate baseline protocols in response to airborne infectious diseases and authorizes employees to sue over the violation of these protocols.

In other words, if you think yesterday’s decision by the Supreme Court made your life easier you are sadly mistaken. Employers have an ongoing obligation to respond to the Covid pandemic and the courts will be defining the contours of those obligations for years to come.

January 14, 2022 at 9:23 am Leave a comment

Use This Flexibility While You Have the Chance

Yours truly has been under the weather, but now that I’m back in the saddle, there’s a lot to talk about. 

My sleeper pick for the most important regulatory amendment that no one is talking about is the NCUA’s decision to extend for another year the increased flexibility given to credit unions during the pandemic to purchase eligible obligations and loan participations. 

Loan participations, which allow credit unions to purchase parts of loans they did not originate, and eligible obligations, which permit credit unions to purchase entire loans, provide an essential means of liquidity for the industry.  When used properly, they allow credit unions to avoid excessive concentration risk by selling all or portions of some loans and permitting other credit unions to get into the action by purchasing these loans. 

There are, of course, important restrictions on both of these products.  First, when it comes to loan participations, federal regulations limit the amount of participations that can be purchased from any one lender.  Secondly, when it comes to eligible obligations, the borrower must either be a member of the purchasing credit union or the loan must be refinanced within 60 days of purchase so that the borrower is a member. There are exceptions to this rule for qualifying credit unions purchasing the assets of liquidating credit unions. 

Let’s not forget that in March 2020 the economy was put into a self-induced economic coma.  The NCUA responded by, among other things, temporarily raising the maximum aggregate amount of loan participations that a FICU may purchase from a single originating lender to the greater of $5,000,000 or 200% of the credit union’s net worth and temporarily suspending certain limitations on the types of eligible obligations that a FICU may purchase and hold. In one of its last acts of 2021, the Board concluded that the continued economic uncertainty justified continuing these regulations for another year.  This conclusion has already been vindicated as the economy continues to produce contradictory smoke signals on a weekly basis. 

These temporary amendments provide potential benefits that go beyond the immediate economic situation.  The existing eligible obligation regulations are too restrictive now that more and more platform lenders are getting into the business of facilitating loan participations and eligible obligations.  While the explosion of these services offers expanded opportunities, particularly for smaller credit unions looking for a way to use all those deposits, credit union membership requirements continue to place restrictions on the use of these platforms by the industry.  By extending flexibility for another year, credit unions can further demonstrate that traditional regulations are needlessly restrictive and actually inhibit safety and soundness.

On that note, stay warm and enjoy your day.

January 10, 2022 at 9:31 am Leave a comment

OSHA Mandate Alive and Well, For Now

Usually I dedicate my last blog of the year to highlighting what’s best about the credit union movement, but recent events have made me feel like an extra in a movie where Scrooge meets Groundhog Day. Here’s more news on the OSHA mandate with which employers of 100 or more individuals must be in compliance with, starting January 10th.

On November 5th OSHA issued an Emergency Temporary Standard (ETS) generally requiring employers with 100 or more employees to either mandate all of their employees wear masks and agree to get tested on a weekly basis or mandate all of their employees get vaccinated.

Groups opposed to this standard ran to court quicker than the Omicron variant is spreading. The Court of Appeals for the Fifth Circuit issued an order banning OSHA from enforcing the emergency standard. On Friday, the Court of Appeals from the Sixth Circuit reversed this ruling meaning that you should be preparing to comply with OSHA’s mandate. The next stop is the Supreme Court.

Remember that the core legal issue that the courts are ultimately deciding is not whether employers can mandate that their employees get vaccinated or wear a mask but whether OSHA has the legal authority to issue health and safety standards related to a pandemic. In the meantime none of this has any impact at all on New York City’s mandate requiring employers to mandate that employees working in an office be vaccinated starting December 27th.

This is not a very merry note on which to end my last blog of the year, so Merry Christmas, Happy New Year, thanks for reading and let’s hope that 2022 is a heck of a lot better than the last two years that have preceded it.

December 22, 2021 at 9:09 am Leave a comment

The Direct and Immediate Impact of New York’s COVID Mandate

Yours truly gives himself a wide scope to delve into when it comes to material for this blog. But, I never thought I’d be delving into New York’s Public Health Law as part of my research. But then again we live in strange times, don’t we?

As I’m sure you know, on Friday Governor Hochul announced that businesses are required to either insist that individuals show proof of vaccination or require everyone to wear a mask before entering a building.  This has a direct and immediate operational impact on your credit union.

Most importantly, it applies to your credit union regardless if it is state or federally chartered. In addition, unlike the proposed OSHA mandate which is currently being litigated, it applies to all businesses regardless of how many employees they have.  It also applies to all credit union branches.  You can comply with this new mandate by either requiring all persons entering a branch to show prove that they have been vaccinated or, more realistically, by requiring all persons entering a branch to wear a face mask. 

The new mandate can be enforced by the Department of Health and also by the Department of Labor. Remember that under New York Law, your employees have an explicit right to bring issues regarding the spread and prevention of airborne infectious diseases to your attention and sue you in the event that you fail to take appropriate remedial action.

What I am getting at is that New York’s new mandate will have a more direct impact on your credit union than the proposed OSHA mandate. And whereas the OSHA mandate may never make it through the legal gauntlet, states such as New York have long had the statutory and regulatory framework needed to directly address public health issues. Remember, pandemics have been around for hundreds of years but states and localities have historically had the primary responsibility to deal with them.

On that note, put that mask on and enjoy the day.

December 13, 2021 at 9:13 am 1 comment

NY’s Hero Act Takes Center Stage

With the emergence of the omicron variant (doesn’t that sound like something out of a bad Arnold Schwarzenegger movie?), it may very well feel like we are extras filming a bad sequel, but I’m here to remind all of my faithful readers that the newest surge is coming about under a new statutory mandate which will impact your credit union’s operations regardless of whether you are a state or federal credit union.

I’ve talked about the Hero Act in the past but I think it is worth one more mention as businesses prepare for potential restrictions even as the legality of federal mandates continues to be litigated.

The Hero Act refers to New York State legislation which created minimum state level standards for businesses responding to an airborne infectious disease. Think of it as a state level OSHA mandate but only for airborne infectious diseases as declared by NY’s Department of Health. When the legislation was first enacted in April 2021, we were hopeful that employers would simply have to adopt an infectious disease plan and file it away. In September, however, the Department of Health declared COVID-19 and airborne infectious disease. Now with the emergence of a potentially more infectious variant which may be resistant to existing vaccines, employers should remind themselves of what they have committed to in their workplace policies and the consequences for non-compliance.

For example, in your policies you’ve detailed protocols on a broad range of issues ranging from mask wearing protocols to the appropriate distances between employees.  These are more than aspirational goals. As a matter of New York State law, employees have the right to bring violations of these workplace policies to their employer’s attention. If the employer fails to “cure these conditions” an employee may ultimately refuse to work based on a good faith belief that continuing to do so would expose them to an airborne infectious disease. You can also face fines and litigation.

The bottom line is that not only should you have an airborne infectious disease plan in place but you should make sure that it is being followed and that you have a procedure in place for documenting and responding to employee concerns.

In the meantime, the State has not imposed any additional health and safety requirements for your credit union at this time. However, yesterday Governor Hochul did urge businesses to “encourage” their employees and patrons to wear masks indoors. 

On that happy note, enjoy your day.  Yours truly is going to be scheduling his booster shot.

November 30, 2021 at 9:29 am 1 comment

Where Do Credit Unions Stand With Vaccine Mandates?

In September the President took two dramatic steps in response to COVID-19, both of which are now subject to litigation: He issued an Executive Order requiring all executive branch agency employees and their contractors to get vaccinated. Secondly, he ordered OSHA to promulgate emergency workplace safety standards mandating employers with 100 or more employees require their employees get vaccinated or agree to get tested for the vaccine on an ongoing basis.

In yesterday’s blog, I explained that credit unions are not subject to the President’s Executive Order because NCUA is an independent agency. In response, a reader asked me if this also meant that credit unions with 100 or more employees were exempt from the OSHA mandate. With the usual caveat that my opinions are my own, and not a substitute for legal advice from your retained attorney, the answer is that credit unions would be subject to OSHA’s vaccine mandate, but it remains to be seen whether or not it will ever take effect.

The financial service industry has not had to give much thought to OSHA in the past because it has never been made subject to industry specific workplace safety standards. Under the law regulating OSHA, however, an employer is any business engaged in commerce, a category which certainly includes credit unions of all shapes and sizes. As a result, if the OSHA mandated vaccine requirement ever takes effect, every credit union with 100 or more employees will have to comply. 

But it is far from certain that this requirement will ever make it through the legal gauntlet. The Court of Appeals for the Fifth Circuit has already issued a nationwide order blocking OSHA from implementing the emergency standard. In its decision, the Court explained that OSHA was exceeding the power given to it by Congress because the vaccination mandate “is a one-size-fits-all sledgehammer that makes hardly any attempt to account for differences in workplaces (and workers) that have more than a little bearing on workers’ varying degrees of susceptibility to the supposedly “grave danger” the Mandate purports to address.” BST Holdings, L.L.C. v. Occupational Safety and Health Administration, United States Department of Labor, 2021 WL 5279381, at *4 (C.A.5, 2021)

The next stop is the Sixth Circuit, but there is virtually no doubt that the issue will ultimately be decided by the Supreme Court, a court which has taken an increasingly narrow view of administrative powers.

So where does this leave credit union HR professionals as they ponder next steps? Most importantly, if you were hoping that the law would mandate that your employees be vaccinated, then you should prepare yourself for disappointment. That being said, no matter what happens with the President’s proposals, your credit union still has all the authority it needs to mandate vaccination and/or testing if it chooses to do so for those employees in the workplace.

On that note, enjoy your Thanksgiving and don’t let your crazy Uncle Al get under your skin.

November 23, 2021 at 10:13 am 1 comment

Fast And Furious: New COVID Guidance

Remember how in early July we were deluding ourselves into thinking that we were fast approaching a post-COVID nirvana in which we could all frolic freely without needing face masks, debating vaccine mandates or worrying about holding backyard barbecues?

Fast forward to mid-November and regulators are adjusting to a world in which COVID is a chronic condition and we have to adjust to this new normal. For credit unions in general, and compliance folks in particular, this means updating policies and procedures to make sure that you are keeping up with the latest COVID inspired dictates. Here are some of the latest developments I’ve spotted over the last week and a half:

  • The NCUA announced that it was extending the authority of federal credit unions to hold meetings remotely provided they have adopted the appropriate bylaws and send the appropriate notices to their membership. Remote flexibility is one of the good things to come out of the pandemic and I for one am glad to see that credit unions can continue to take advantage of this common sense measure.
  • Federal regulators, including the NCUA, recently announced that mortgage servicers were no longer going to be given a “get out of jail free card” when it comes to complying with RESPA’s mortgage servicing rules.

              In April of last year the same group of regulators issued a joint statement explaining that, “the current crisis could cause temporary business disruptions and challenges for mortgage servicers, including staffing challenges.” As a result, the regulators announced that they were giving servicers greater flexibility to comply with Regulation X. The same group of regulators now feels that the adjustment period has ended. The other day they announced that “servicers have had sufficient time to adjust their operations… agencies will apply their respective supervisory and enforcement authority to address any non-compliance with Regulation X”.  This one is a bit of a head scratcher to me because I could swear there is still plenty of evidence that staffing shortages persist and that members are still in need of enhanced forbearance assistance.  At least according to the CFPB.   

  • Never to be ignored, on October 28th New York’s Department of Financial Services issued its own guidance detailing its continuing expectations for mortgage servicers to work with consumers impacted by the pandemic. The guidance also encouraged servicers to participate in a new program being unveiled to provide financial support for eligible borrowers. I will have more about this program in the coming days.

On that note, visualize your post-COVID happy place and get to work.

November 16, 2021 at 9:24 am Leave a comment

What OSHA’s Vaccine Standard Means For Your Credit Union

It’s here! OSHA’s Emergency Temporary Standard mandating that businesses with 100 or more employees establish vaccination or regular testing policies, a regulatory pronouncement that has been more eagerly anticipated than a red wagon on Christmas morning, now starts the clock on additional workplace requirements. 

Here are some of the highlights after my initial review of this regulation:

  • Most importantly, this only applies to those of you with 100 or more employees. That being said, however, OSHA is accepting comments on whether or not it should extend this mandate to smaller employers.

If your credit union has determined that it is going to comply with the Executive Order mandating that employees of all federal contractors be vaccinated, then it does not have to comply with this regulation. However, NCUA has never taken the position that credit unions are federal contractors simply because they accept share insurance. I will provide further details on why I think this is so important to your credit union’s vaccination decisions in an upcoming blog.

  • This mandate does not apply to everyone. The preamble makes it clear that it does not apply to employees who work “exclusively” from home. In addition, remember that even with OSHA’s mandate, employees still get the protection of federal law when it comes to religious accommodations and the ADA.

This morning, I’ve already heard some mischaracterizations regarding precisely what is now mandated.  

  • Employers can mandate that all their workplace employees get vaccinated; mandate that all their employees either get vaccinated or get weekly COVID-19 tests or have a policy which mandates that some employees get vaccinated while others either provide proof of vaccination or weekly COVID tests.

In other words, you can make distinctions based on how isolated an employee’s job is. If you choose to allow employees to undergo regular testing those employees must agree to wear facemasks in the workplace.

If you choose the ongoing test option, the regulation does not mandate that the employer will cover the cost. It does not, however, preclude state law from mandating employer coverage.

Regardless of what policy you choose to adopt, you must obtain and maintain records on the vaccination status of all your employees. There are specific protocols you should follow for securing this information and this is one of the issues you should be sure to address with your HR attorney.

  • Employees must provide you with documentation of their coverage. In the event that an employee insists they have been vaccinated but cannot provide adequate documentation, there is the option of having them sign an affidavit. However, this is not a loophole. The specific language in the affidavit is specified in the regulation and puts the signer on notice that if they are lying they are violating federal law.

The clock has started to tick.  You now have 30 days to put a policy in place and 60 days to start the mandatory testing if you choose to go that route.  Let the lawsuits begin!  I sure do hope this is the year I get my red wagon.

November 5, 2021 at 9:05 am 1 comment

Can You Challenge A Hardship Declaration?

When the New York State Legislature gathered in early September and approved legislation extending New York’s foreclosure and eviction moratorium until January 15, 2022 for individuals suffering a COVID related hardship, it included a provision permitting landlords and lenders to challenge the validity of a person’s hardship claim. At the time that this bill was passed, it was unclear how much value this exception to the moratorium would actually have. We may get clarity on that issue in the near future.

The New York Law Journal is reporting that Justice Lawrence Knipel, administrative judge for civil matters in Kings County, has sent a letter informing homeowners facing foreclosure that they must attend in-person “foreclosure conferences” starting on October 25th. The letter explains to recipients that failure to attend these conferences could result in losing their foreclosure cases and informs the delinquent homeowners that they should bring any documents concerning their loan and current financial situation.

Attorneys from Brooklyn Legal Services sent a letter to the State’s Chief Administrative Law Judge, Lawrence Marks on Wednesday that these proposed hearings “plainly violate ‘New York’s foreclosure moratorium.”  Marks is responsible for the day-to-day operations of the court system in New York State.

Under the law, any party facing foreclosure and eviction can declare that their financial situation has been negatively impacted by the COVID-19 pandemic. Furthermore, these declarations are presumptively valid; this means that the burden is on the foreclosing party to prove that the delinquent homeowner is not suffering a COVID related hardship. What the lawyers seem to be questioning is whether the judge has the authority to mandate hardship conferences even in cases where lenders have not challenged these declarations. Stay tuned.

CUSOs Just Got More Powerful

You probably already know this, but in case you don’t, over the objection of Chairman Todd Harper, NCUAs Board voted two-to-one to expand the authority of Credit Union Service Organizations. The Board’s vote was the first in what may ultimately be a series of steps it takes to expand the flexibility federal credit unions have in relation to CUSO investments. Under the new rule, the list of permissible CUSO activities is being expanded to include any type of loan that an FCU may originate. The new rule also allows the Board the flexibility to grant future CUSO powers outside of the formal rulemaking process. The new rule is effective 30 days after it is published in the Federal Register.

A second regulation passed by the Board yesterday amends the CAMEL rating system by creating a separate category assessing a credit union’s sensitivity to market risk. This change puts NCUA on par with banking regulators. On that note, enjoy your weekend.

October 22, 2021 at 9:49 am Leave a comment

What To Do When Your Employee Requests A Religious Accommodation

There are three things I know for certain this morning: One is that I will get more sleep with the Yankees not in the playoffs (I have no idea why they have to start games so late).

Secondly, the Bronx Bombers will overpay for marquee talent in the off-season and be proclaimed World Series favorites by the baseball intelligentsia even though they have won only one World Series in the last 19 years.

Finally, your credit union will most likely have to decide how to respond to an employee who wants a workplace accommodation based on their religious beliefs. As much as I would like to continue my Yankee diatribe, I have a sneaking suspicion that the last topic has more relevance to your credit union day. Here is a quick primer designed to get you thinking about your own HR protocols.

First, under both state and federal law, employers are responsible for working with employees whose genuine and sincere religious beliefs conflict with their employment obligations. This means that if your credit union either mandates vaccinations or is ultimately mandated to make sure it’s employees are vaccinated, there may be employees who refuse to get vaccinated on religious grounds. 

What is a genuine and sincere religious belief? Suffice it to say that the courts are not comfortable with employers second guessing what constitutes a religious belief. In one recent case, a West Virginia coal miner successfully sued for religious discrimination after he resigned rather than use a hand scanner to check into work. He explained that hand scanners constituted the mark of the devil. In upholding his lawsuit the court explained that “it is not an employer’s place, nor a court’s place, to question the correctness or even the plausibility of an employee’s religious understandings.” [U.S. Equal Employment Opportunity Commission v. Consol Energy, Inc., 860 F.3d 131 (C.A.4 (W.Va.), 2017)]. On a practical level, this means that if you find yourself debating how religious the employee really is or debating doctrine you are going down the wrong path. You can, however, ask for a connection between the religious beliefs and refusal to get vaccinated. 

Assuming the employee has a genuine and sincere religious belief which conflicts with a vaccine mandate, are you required to accommodate the employee? Maybe, maybe not. Under both state and federal law an employer doesn’t have to accommodate an employee where doing so would constitute an “undue burden.” Under federal law, an undue burden has been defined as any accommodation that requires an employer to make any accommodation for an employee’s religion if doing so would pose more than a “de minimis” burden. Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977).

In contrast, New York has a much higher standard for employers claiming hardship under New York law [N.Y. Exec. Law § 296(10)(d)(1)]. An undue hardship means an accommodation requiring significant expense or difficulty including a significant interference with the safe or efficient operation of the workplace. What standard will ultimately be applied to your credit union may vary depending on the legal basis for a vaccine mandate. For now, keep in mind that as New York employers, your credit union may have to deal with a higher standard. 

So what does all this mean? It means that you are not going to categorically reject an employee’s request for religious accommodation. Instead, you are going to discuss the need for a religious accommodation and assuming that the requested accommodation is genuine and sincere you are going to develop a framework for accommodating employees when it is reasonable to do so and be prepared to explain to both the employee and the courts when you decide doing so constitutes an undue burden. You want to make sure that you treat all accommodations in as fair and equitable a way as possible given the need to run your credit union.

As you can see, these are tricky issues.  If you are confronted with a request, you are being penny wise and pound foolish if you don’t consult with your friendly neighborhood HR attorney.

On that note, Go Rays!

October 6, 2021 at 10:53 am Leave a comment

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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