News: Coronavirus (COVID-19)

"This notice provides that the tax credits for qualified sick leave wages and qualified family leave wages required to be paid by the Families First Coronavirus Response Act [FFCRA] will apply to wages paid for the period beginning on April 1, 2020, and ending on December 31, 2020. This notice also provides that days occurring during the period beginning on April 1, 2020, and ending on December 31, 2020, will be taken into account for credits for qualified sick leave equivalent amounts and qualified family leave equivalent amounts for certain self -employed individuals."

"The legislation, approved by voice vote ... amounts to the costliest stimulus plan in U.S. history. It includes checks for most Americans, boosted unemployment aid, help for small business as well as a massive loan fund for corporations -- at a time when unemployment is surging at a record pace, a consequence of businesses closing in compliance with social distancing guidelines."

"The House passed a sweeping, $2 trillion coronavirus relief package that will provide immediate assistance to many Americans, small businesses and major industries on the brink of economic collapse amid the ongoing pandemic.... President Donald Trump is expected to quickly sign the bill — the largest rescue package in U.S. history."

37 Q&As address implementation of Paid Sick Leave and Expanded Family and Medical Leave under FFCRA.  Questions include:

• As an employer, how do I know if my business is under the 500-employee threshold and therefore must provide paid sick leave or expanded family and medical leave?
• If providing child care-related paid sick leave and expanded family and medical leave at my business with fewer than 50 employees would jeopardize the viability of my business as a going concern, how do I take advantage of the small business exemption?
• What records do I need to keep when my employee takes paid sick leave or expanded family and medical leave?
• What documents do I need to give my employer to get paid sick leave or expanded family and medical leave?
• When am I able to telework under the FFCRA?
• If I am or become unable to telework, am I entitled to paid sick leave or expanded family and medical leave?
• May I take my paid sick leave intermittently while working at my usual worksite (as opposed to teleworking)?
• If my employer closed my worksite before April 1, 2020 (the effective date of the FFCRA), can I still get paid sick leave or expanded family and medical leave?   
• If my employer closes my worksite while I am on paid sick leave or expanded family and medical leave, what happens?
• If my employer reduces my scheduled work hours, can I use paid sick leave or expanded family and medical leave for the hours that I am no longer scheduled to work?
• I am an employer that is part of a multiemployer collective bargaining agreement, may I satisfy my obligations under the Emergency Paid Sick Leave Act through contributions to a multiemployer fund, plan, or program?
• Are contributions to a multiemployer fund, plan, or other program the only way an employer that is part of a multiemployer collective bargaining agreement may comply with the paid leave requirements of the FFCRA?

"Required documentation ... Telework still a bit murky  ... Increments of leave  ... Intermittent leave is limited  ... Shelter in place and business closure orders do not likely support the need for leave  ... Paid leave not available for furloughs and temporary layoffs ... 'Topping off' paid leave is prohibited unless both sides agree ... A word about group health benefits ... There still is much to be addressed by DOL."

"Most DC FSA plans run on a calendar year and a very common run-out period is either 90 days or until March 31st. In other words, many run-our periods for 2019 are expiring this week. Right now, many of the child care facilities are shut down. This may be creating an obstacle for your participants in getting the receipts to submit for substantiation. To provide relief to employees, a plan sponsor could change this run-out period temporarily."

"Your older, more experienced employees, who may now be more critical than ever to your workforce, may struggle with the need to access retirement income and remain employed if hardship withdrawals from a defined contribution plan are not enough. Leverage your defined benefit (DB) plan to retain essential talent.... Offer in-service distributions ... Waive suspension of benefits for rehired retirees ... Increase Normal Retirement Age."

"U.S. employers looking to reduce operating costs in the short term in response to the disruption caused by the COVID-19 pandemic may seek to reduce or suspend their matching or nonelective contributions in their 401(k) plan. [This article] summarizes the key issues facing employers in making the determination to suspend or reduce safe-harbor contributions."

"[DOL FAB 2020-1] suggests that employers have until April 17, 2020, to comply fully with the FFCRA provided they are making reasonable, good faith efforts to do so, e.g., making necessary payroll modifications, completing calculations for coordinating leave accruals with FFCRA leave entitlements, etc. However, the Bulletin strongly implies that employers will have to remedy and make employees whole for any noncompliance between April 1 and April 17, 2020. After April 17, 2020, the DOL will begin fully enforcing violations of the FFCRA."

"The due date for paying the 10% additional tax on amounts includible in gross income from distributions from a pension plan or IRA in 2019 is extended to July 15, 2020.... [E]xcess deferrals (and income) must be taken out of the retirement plan no later than April 15, 2020 ... The grace period for employers to make contributions to their qualified retirement plans on account of 2019 ... ends on July 15, 2020, if those employers normally would have to file income tax returns and make federal income tax payments by April 15, 2020."

"The CARES Act provides companies ... additional time to meet their single-employer plan funding obligations by delaying the due date for 'minimum required contributions' otherwise due during 2020 until Jan. 1, 2021, at which time the 2020 contributions plus interest will be due.... The CARES Act also provides plan sponsors with the option to use the plan's funded status for the last plan year ending before Jan. 1, 2020 for purposes of determining the funding-based benefit limitations under Internal Revenue Code Section 436 for plan years that include calendar year 2020."

"[T]he DOL will look to the 'integrated employer test' to determine whether two or more entities will be treated as a single employer for purposes of determining covered employer status under the EFMLEA.... The guidance confirms that paid leave an employer provided prior to April 1, 2020 for reasons covered under the FFCRA will not count towards the new paid leave requirements."

"The paid leave provisions 'apply to leave taken between April 1, 2020 and December 31, 2020' and this leave is not retroactive. This may indicate that an employer who grants this leave before April 1 may not be able to take advantage of the tax credit.... Little guidance is provided for the small business (under 50 employees) exception. Instead, DOL instructs these small employers to maintain records as to why they cannot meet the FFCRA's requirements and look for additional regulations to come."

"The stimulus package provides short-term relief for single-employer DB plans by delaying all 2020 minimum required contributions until 2021 and easing benefit restrictions, among other provisions.... The legislation makes it easier for participants affected by the virus or the resulting economic downturn to access their retirement savings.... Nongovernmental employers have until the end of the first plan year beginning on or after Jan. 1, 2022, to amend their plans for the relief."

"[A] poster in the break room cannot effectively inform employees of their rights and obligations. In light of this concern, the DOL has provided that an employer may satisfy the posting requirement by emailing or directly mailing the poster to its employees or by posting the notice on an employee information internal or external website."

"[T]here are still open questions: [1] Whether local, state or federal 'stay at home' or 'business closure' orders could, under any circumstances, be considered 'quarantine' or 'isolation' orders allowing an employee to qualify for benefits under the paid sick leave law in any circumstance ... [2] Application of the integrated employer test to the paid sick leave provisions; [3] Whether FFCRA leave may be used intermittently; and [4] How employers with fewer than 50 employees will effectively demonstrate that compliance will jeopardize the viability of their business. (Note: The [DOL] has already indicated that it will be issuing criteria on this point.)"

"[C]onsider whether now is a good time for a special meeting of your investment committee ... [C]areful documentation of decisions -- and the reasons behind them -- is critical to protecting yourself against litigation.... [C]heck in with your plan's service providers to verify how they will continue services amidst COVID-19's disruptions."

"How much does an employer need to pay an eligible employee under the leave? ... How does an employer determine an employee's normal hours of work if the employee's schedule varies? ... How are employers supposed to be able to afford these payments?"

"How much Sick Leave is an employer responsible to pay an employee? ... How much does an employer need to pay an eligible employee under the Sick Leave provision? ... How are employers supposed to be able to afford these payments?"

"Option contracts (i.e. puts and calls) allow investors to buy or sell risk and potential return, allowing investors to create exactly the risk and return profile they desire with potential outcomes defined in advance and secured by contract. Some option combinations are quite attractive today given increased market volatility."

"Employees may now use their paid sick leave in expanded circumstances, including: [1] the closure of a school or workplace due to a state of emergency; [2] if the presence of the employee or their family member would jeopardize the health of others; or [3] if the employee must be isolated or quarantined or care for a family member in quarantine because of exposure or suspected exposure to a communicable disease."

"According to the FAQs, the number of paid sick days required by the law is calendar days -- not work days. So, the five days of paid sick leave that an employer with 11-99 employees is required to provide is not a full work week of paid sick leave.... Similarly, the 14 days of paid sick leave that a public employer or a private employer with 100 or more employees is required to provide is essentially two calendar weeks of paid sick leave.... The FAQs also provide some guidance regarding the rate at which the sick leave must be paid under the law."

"The initial determination of whether an employer's contribution cessation is permanent or temporary is made by the plan sponsor (the board of trustees of the [multiemployer plan]) and is generally upheld unless shown by the preponderance of the evidence to be clearly erroneous.... [B]ased on current guidance, a [multiemployer plan] does not have a solid legal basis to assess complete or partial withdrawal liability against an employer for a cessation of contributions as a result of a furlough in connection with COVID-19."

"[1] Can an employer provide a 'premium holiday?' ... [2] Are there ways to further extend coverage for employees who are terminated or furloughed? ... [3] Does COBRA apply to employees who are furloughed, and when? ... [4] We use the look-back method to determine full-time employees for [ACA] employer mandate purposes. What should we be aware of if we furlough employees or reduce their hours? ... [5] Might the furloughed employee be eligible for short-term disability? what factors would be important to review to make that judgment?"

"Code Section 139 provides that individuals may exclude 'qualified disaster relief payments' from gross income.... So, what do these expenses include?"