Year-End Limit, Vaccine and Credit Updates

Client Alert
November 23, 2021

Key 2022 Benefits Related Limits




Taxable wage base



Compensation limit



Section 415(b) limit



Section 415(c) limit



Section 402(g)/401(k) limit



Catch-up contributions



HCE threshold



Officer (top heavy) threshold




Health Care Flexible Spending Accounts

2021 2022

Annual limit

$2,750 $2,850

Carry over limit

$550 $570

Health Savings Accounts

2021 2022

Individual contribution limit

$3,600 $3,650

Family contribution limit

$7,200 $7,300

The Federal Vaccine Mandate

Preparing for OSHA's COVID-19 Requirements

The Occupational Safety and Health Administration ("OSHA") has released an Emergency Temporary Standard ("ETS") regarding COVID-19-related compliance requirements, including vaccine and testing requirements, that apply to certain large employers.  OSHA estimates that the ETS, "will reach two-thirds of the nation’s private sector workforce."

What are the key deadlines for compliance?

A set of frequently asked questions reflect that employers generally must comply with the ETS by December 6, 2021, and that employers have until January 4, 2022 to comply with the requirement that employees who are not fully vaccinated undergo regular testing.  The ETS states that the rule is intended to preempt inconsistent state and local vaccine requirements, including bans or limits on an employer’s ability to require vaccination, face covering or testing.

Numerous plaintiffs filed lawsuits regarding the ETS.  In response to a stay issued in one of these lawsuits, OSHA announced that it "has suspended activities related to the implementation and enforcement of the ETS pending future developments in the litigation."  It is currently unknown when, if at all, the ETS will go into effect.

What is happening with the litigation?

On November 16, 2021, the lawsuits were consolidated at the Federal Court of Appeals for the Sixth Circuit, which normally hears appeals of decisions from federal courts in Kentucky, Michigan, Ohio, and Tennessee.  It is likely that the U.S. Supreme Court will ultimately be asked to decide the fate of the ETS.

Who does this apply to?

This ETS applies to private employers that have 100 or more employees in total, regardless of whether those employees work at the same location.  The details of this critical requirement are set forth in the FAQ, which state, for example, that an employer with five locations, and 20 employees working at each location, will be subject to the ETS and that whether employees are or are not already vaccinated is irrelevant for purposes of determining headcount.  Independent contractors are not included in an employer’s headcount, but part-time and seasonal employees are, which could affect businesses in seasonal industries.

This ETS also applies to certain government employers that are subject to OSHA state plans.  It does not apply to employees that are already covered by OSHA’s separate ETS for the healthcare industry or an executive order regarding vaccination.

Why does this apply only to employers with 100 or more employees? What about small employers?

OSHA has explained that the current ETS is limited to employers with 100 or more employees based on an economic feasibility determination.  OSHA is confident that the burdens the ETS will impose, which include paid time off for vaccination and record keeping responsibilities, are feasible for larger employers.  OSHA is actively considering whether small employers have the capacity to implement this standard.  While aspects of this ETS have been signaled in previous weeks, some of the biggest news is that small employers may have similar obligations in the coming months.

What do covered employers have to do?

Employers must: determine each employee’s vaccination status (unvaccinated, partially vaccinated, or fully vaccinated) and collect and maintain proof of vaccination status; provide four hours of paid leave (including travel time) for employees to be vaccinated; and provide certain leave for employees who experience post-vaccine side effects.  Fully vaccinated for this purpose means an employee’s status two weeks after receiving one or both injections, as applicable, of the vaccine but does not include any requirement to obtain a booster.

Employers must remove employees who have COVID-19 infections from the workplace, and they must report COVID-19 hospitalizations and fatalities to OSHA.

Covered employers are also required to create a vaccine workplace policy, but here, they have a choice.  Employers may create a mandatory vaccine policy that requires all employees to be vaccinated unless they have a legitimate exemption based on a disability, medical condition or religious belief or practice that conflicts with the vaccination requirement.  (Information on reasonable accommodations for disability or religious belief exceptions can be found here.)  Alternatively, employers may create an employee-option policy that gives each employee the choice of being vaccinated or undergoing regular testing and wearing a face covering in shared workspaces.  Under this alternative, unvaccinated employees, including generally those that qualify for a legitimate exemption, who report to a workplace where any other individuals are present at least once a week must be tested on a weekly basis; unvaccinated employees who report to shared workplaces less frequently must be tested within seven days before reporting to a workplace where others are present.

Regardless of which policy an employer chooses, the policy must be readily accessible to employees.  The ETS does not require fully vaccinated employees to wear face coverings in the office.

Does this apply to all employees?

No.  Employees whose work is exclusively remote or outdoors count toward the 100 or more employee headcount trigger for the ETS, but they are not required to be vaccinated or tested.

If employees are tested instead of vaccinated, who pays for testing?

The FAQ states that employers are not required to pay for testing.  However, other federal and state laws may be relevant to determining whether employers or employees must pay for regular testing of unvaccinated employees.  If employers pay for testing, they may consider using "pooled testing," which can be more cost-effective and is specifically allowed under the ETS. 

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If you have questions or need assistance in preparing required policies and employee communications, please contact a member of the Employment and Benefits Practice Group.

Going, Going, Gone. . . . The End of the Employee Retention Credit

The recently enacted Infrastructure Investment and Jobs Act (the "Infrastructure Act") introduced an early end to the employee retention credit.  Our first alert on the employee retention credit provided an overview of the provision, which was originally set to expire as of December 31, 2020.  We then covered the Consolidated Appropriations Act’s extension of the employee retention credit through June 30, 2021.  The American Rescue Plan Act of 2021 ("ARPA") further extended the availability of the credit through December 31, 2021.  In what appears to be the final act of this multi-part drama, for most employers the Infrastructure Act changes the expiration of this provision with respect to wages paid from December 31, 2021 to September 30, 2021 – three months earlier than provided under ARPA.  There is, however, an exception for "recovery startup businesses," generally smaller businesses begun after February 15, 2020, which are able to continue to take advantage of the credit for wages paid through December 31, 2021.

Please reach out to a member of the Employment and Benefits Practice Group if you have questions about whether your company may qualify as a recovery startup business or if you have any other questions about the many nuances of and changes to the employee retention credit.

Training Reminders

A variety of training requirements apply in the employment and benefits realm.  For example, so-called "covered entities," which potentially picks up employer sponsored self-insured health arrangements (such as HRAs and health care flexible spending accounts), are required to provide training with respect to protected health information ("PHI") under HIPAA.  In addition, other employment and/or benefits training is often encouraged by regulators, or viewed as a best practice, even where not required.  In Massachusetts, for example, employers are encouraged to conduct anti-discrimination and sexual harassment training annually.  And employees responsible for plans subject to ERISA, such as 401(k) plans, often benefit from fiduciary training and operational compliance reviews.

If you are interested in arranging training on these or other employment or benefits-related topics, please contact a member of the Employment and Benefits Practice Group.

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