In accordance with emergency powers granted in the wake of the COVID-19 pandemic, the Internal Revenue Service (IRS) and US Department of Labor (DOL) recently issued guidance temporarily extending a number of benefit plan-related deadlines and providing other relief for participants and plan sponsors having difficulty complying with these requirements during the COVID-19 pandemic. Below is a summary of the guidance, which is posted in the Employee Benefits Resources Section.

DOL and IRS Final Rule

The May 4, 2020, Final Rule generally suspends certain benefit plan deadlines for the duration of the “Outbreak Period,” which is an open-ended period beginning March 1, 2020, and ending 60 days after the end of the COVID-19 national emergency. The relief under the Final Rule is generally aimed at participants and beneficiaries, and mostly affects group health plans.


Continue Reading IRS and DOL Issue Sweeping Deadline Relief for Benefit Plan Participants and Plan Sponsors

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for, among other things, an “employee retention tax credit” for employers that are forced to suspend operations or experience a financial downturn. The CARES Act disqualified employers that received Paycheck Protection Program (PPP) loans from taking the employee retention tax credit. Some employers that received PPP loans are now contemplating repaying the loans based on recently released guidance clarifying the scope of employers that are eligible for the PPP. The guidance allows employers that received PPP funds to repay the funds by May 14 without penalty.


Continue Reading Employers That Repay PPP Funds by May 14 Are Eligible for Employee Retention Tax Credit

In a September 2005 release soon after Hurricane Katrina, the Internal Revenue Service (IRS) reported that for the first time ever, the IRS and the departments of Treasury and Labor would provide broad-based relief to retirement plan participants affected by a major disaster. Broad-based relief has been provided since to residents of specific disaster areas, but the 2020 coronavirus pandemic, known as COVID-19, is a disaster that has affected all communities in the United States. On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was quickly signed by President Trump.

Some employers and plan recordkeepers have been overwhelmed with calls from participants requesting plan loans or hardship distributions. Some plans do not allow loans or hardship distributions. Other plans allow hardship distributions, but existing rules may pose a problem for many participants.


Continue Reading Sample Employee Notice for Coronavirus-Related Retirement Distributions

The Families First Coronavirus Relief Act (the Act) was passed on March 18, 2020 and imposes paid leave obligations on most employers throughout the country. The bill contains special and often overlooked provisions affecting public agencies. Those provisions could provide a “trap” for public agencies that do not carefully review the bill.

Definition of “public agency.” A “public agency” is defined broadly to include the government of the United States; the government of a state or political subdivision of a state; or an agency of the United States, a state, or a political subdivision of a state, or any interstate governmental agency.

Application of employee threshold. For purposes of the law’s paid leave obligations, a covered employer in the private sector includes any employer with fewer than 500 employees. This threshold does not apply to public agency employers. Public employers with only one employee are covered by the bill’s paid leave provisions, meaning large public employers with more than 500 employees are covered by the paid leave provisions.


Continue Reading Families First Bill Contains Special Provisions Affecting Public Agencies

On March 18, 2020, President Donald Trump signed the Families First Coronavirus Response Act (FFCRA) in response to the spread of the novel coronavirus and the illness it causes, COVID-19. The Act goes into effect on April 1, 2020 and remains in effect through December 31, 2020.

As discussed in our prior client alerts “Recent Clarifications to Families First Coronavirus Relief Act” and “Senate Passes Coronavirus Bill Requiring Paid Leave,” the Act provides for up to 80 hours (two weeks) of Emergency Paid Sick Leave if an employee is unable to work or telework for one of six specified reasons. Additionally, the Act provides up to 12 weeks of Emergency Paid FMLA Leave for one qualifying reason — that the employee is unable to work or telework due to the need to care for the employee’s minor child because the child’s school or place of care has been closed due to this public health emergency. The first two weeks of Emergency Paid FMLA Leave is unpaid, though the Emergency Paid Sick Leave will be applied to cover the first two weeks.

There are a myriad of questions and issues for employers to work through in applying these new provisions. Our team has been working non-stop to interpret these provisions, review new guidance, and provide answers. In addition, the Department of Labor (DOL) has established the COVID-19 and the American Workplace webpage, which includes a variety of fact sheets, Question-and-Answer pages, and workplace posters available to employers detailing these provisions.


Continue Reading Who Is a “Health Care Provider” Exempt From Paid Leave Requirements Under the Families First Coronavirus Response Act?

By now, you’re likely aware of the Families First Coronavirus Response Act (FFCRA). This law, which will take effect on April 1, 2020, requires certain employers to provide employees with paid sick leave under the Emergency Paid Sick Leave Act (EPSL) or expanded paid family and medical leave under the Emergency Family and Medical Leave Expansion Act (expanded FMLA) for several reasons related to COVID-19. As a refresher, the FFCRA generally provides that employees of covered employers are eligible for one of the following:

  • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is (1) unable to work or telework because the employee is quarantined (due to a federal, state, or local government order or the advice of a health care provider) and/or (2) experiencing COVID-19 symptoms and seeking a medical diagnosis; or
  • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay where the employee is (1) unable to work or telework while caring for an individual subject to quarantine (due to a federal, state, or local government order or the advice of a health care provider), (2) unable to work or telework because of a need to care for a child (either a minor child under 18 years of age or an adult child who has a mental or physical disability and is incapable of self-care because of that disability) whose school or child care provider is closed for reasons related to COVID-19, and/or (3) experiencing a substantially similar condition as specified by the secretary of health and human services, in consultation with the secretaries of the treasury and labor; and
  • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee who has been employed for at least 30 calendar days is unable to work or telework due to a need to care for a child whose school or child care provider is closed for reasons related to COVID-19.

Private employers with fewer than 500 employees and certain public employers are covered. Small businesses with fewer than 50 employees may qualify for exemption, which is discussed below.


Continue Reading With Effective Date of the FFCRA Looming, DOL Offers Answers to Pressing Paid Leave Questions

On March 19, 2020, Senate Republicans rolled out a $1 trillion economic stimulus plan commonly referred to as “Phase III” of the legislative response to the coronavirus pandemic. The bill — the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) — provides additional detail on the paid leave provisions in the “Phase II” bill and contains some additional provisions that affect employees.

Continue Reading Senate Unveils Stimulus Bill That Affects Employers

On March 18, 2020, the Senate passed the “Families First Coronavirus Response Act,” which contains provisions related to mandatory paid leave for employers with fewer than 500 employees. A summary of the bill, which is supposed to be effective within 15 days of enactment, is below.

The bill creates a new paid leave benefit called “emergency paid leave.”

Reasons for Leave: Employees who are eligible for “emergency paid leave” are those individuals who are unable to work due to one of the following conditions or situations: (i) the employee is subject to a federal, state, or local isolation or quarantine order; (ii) the employee has been advised by a health care provider to self-quarantine; (iii) the employee is experiencing symptoms of coronavirus and seeking a medical diagnosis for the symptoms; (iv) the employee is caring for an individual who is subject to a quarantine order or who has been advised to quarantine by a health care provider; or (v) the employee is caring for a child because the child’s school or place of care has been closed due to COVID-19.


Continue Reading Senate Passes Coronavirus Bill Requiring Paid Leave

One of the bigger questions with the Emergency Paid Sick Leave Act is an employer having to pay for leave because “the employee is subject to a federal, state or local quarantine or isolation order related to COVID-19”. Does that apply when the business itself is shut-down by the government, but the employee is free

On March 14, 2020, the House of Representatives passed H.R. 6021, the “Families First Coronavirus Response Act,” which contains provisions related to mandatory paid leave for employers with fewer than 500 employees. Since passage, the House has been working on “technical corrections” to the bill prior to sending the bill to the Senate for consideration. The technical corrections were voted on and passed by the full House late in the evening on March 16, 2020.

Continue Reading Technical Corrections to House Bill Significantly Change Previous Provisions Regarding Paid Leave