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CARES Act article from BCLP Benefits Blog

CARES Act article from BCLP Benefits Blog

April 8, 2020

Authored by: BCLP at Work

Our Employee Benefits and Executive Compensation colleagues have recently drafted an article on how the CARES Act limits executive compensation for U.S. businesses participating in CESA relief . Please click here for the full article: https://benefitsbclp.com/covid-19-cares-act-limits-executive-compensation-for-u-s-businesses-participating-in-cesa-relief/.

 

U.S. COVID-19: DOL (Yet Again) Publishes Revised Guidance on the Families First Coronavirus Response Act

This weekend, the Department of Labor (“DOL”) released yet another set of updated and revised Questions and Answers (“Q&A”) regarding the Families First Coronavirus Response Act (“FFCRA”).  This updated informal guidance comes just days after the DOL published its formal Temporary Rules (“Rules”) interpreting the FFRCA.  As we’ve summarized in earlier posts, the FFCRA was signed into law on March 18, 2020 and generally requires U.S. employers with fewer than 500 employees to provide paid sick leave (“Paid Sick Leave”) and emergency family and medical leave (“Emergency FMLA Leave”) benefits to employees in connection with COVID-19.

The FFCRA’s Paid Sick Leave and Emergency FMLA Leave provisions became effective on April 1, 2020; however, as the DOL previously announced, to enable covered employers to come into compliance with the new law, the DOL will observe a temporary period of non-enforcement through April 17, 2020.  This temporary period of non-enforcement only applies if an employer makes a reasonable, good faith attempt to comply with the FFCRA.  As such, if they have not already, employers should take steps to comply with the FFCRA immediately, and should continue to monitor and incorporate guidance from the DOL into their policies and practices.

Below is a summary of new or revised guidance outlined in the updated Q&A (that was not previously summarized in our earlier posts) that employers should consider as they comply with the FFCRA.  Links to our posts summarizing the earlier guidance are available here.

Revised Q&A Guidance

Coronavirus: UK Job Retention Scheme – government fills in some gaps in the guidance

Summary

As an update to our 27 March blog “Coronavirus: UK Job Retention Scheme – further government guidance”, the UK government has revised its online guidance to provide more information on how the Coronavirus Job Retention Scheme (CJRS) operates. A number of points have been clarified, whilst some important issues have still not been addressed.

The following CJRS points have been clarified:

Who can be furloughed?

Clarifications on who can be furloughed include:

  • Terminated and rehired staff: employees who were terminated on or after 28 February, whether or not for redundancy, can be furloughed, providing the employer rehires them. Previously the guidance only talked about those who were made redundant;
  • Carers/shielding employees: employees who are unable to work from home because they have caring responsibilities, or because they are shielding in line with public health guidance, are expressly covered;
  • Insolvency: employees of a company which is in administration may be furloughed, although the government expects administrators to only access the CJRS if there is a reasonable likelihood of rehiring them; and
  • Non-employees: whilst we already knew that non-employees such as agency workers who are paid through PAYE could be furloughed, the updated guidance highlights that company directors and salaried members of LLPs are also covered, as are apprentices.

What elements of staff remuneration can be reclaimed?

  • Fees, commission and bonuses: previously the guidance said these aspects of remuneration could not be part of the remuneration that could be reclaimed. However, the guidance now provides that

U.S. COVID-19: DOL Publishes Temporary Rules on the Families First Coronavirus Response Act

Over the past two weeks, the Department of Labor (“DOL”) has issued a variety of informal guidance regarding the Families First Coronavirus Response Act (“FFCRA”).  The FFCRA became effective on April 1, 2020, and on that same day, the DOL published a set of temporary rules interpreting the law (the “Rules”), which are effective immediately.  As we’ve summarized in earlier posts, the FFCRA was signed into law on March 18, 2020 and generally requires U.S. employers with fewer than 500 employees to provide paid sick leave (“Paid Sick Leave”) and emergency family and medical leave (“Emergency FMLA Leave”) benefits to employees in connection with COVID-19.

Our summaries of the DOL’s informal guidance are available here, here, here, here, and here.  Below is a summary of new or revised information outlined in the Rules (that was not previously summarized in our earlier posts) that employers should consider as they begin complying with the FFCRA.

  • Covered Employers:
    • 500-Employee Threshold: The Rules confirm that the following individuals do not count toward the 500-employee threshold:
      • Independent contractors who provide services for an employer; and
      • Employees who have been laid off or furloughed and have not subsequently been reemployed.[1]
        • In light of this rule, employers who are above but relatively close to the 500-Employee Threshold should realize that, going forward over the course of 2020, layoffs and/or furloughs could bring them under the threshold and thus require compliance

Comparing Paid Sick Leave under U.S. and New York State Coronavirus Response Laws

The federal Families First Coronavirus Response Act (“FFCRA”), enacted March 18, 2020, and effective April 1, 2020, provides for two types of leave for employees of private employers with fewer than 500 employees: Paid Sick Leave (for six specified reasons related to COVID-19) and Emergency Family and Medical Leave Act (“EFMLA”) leave (to care for an employee’s son or daughter whose school or child-care facility is closed, or child care provider is unavailable, due to a public health emergency).

The New York State Paid Quarantine Leave Law (“NY Quarantine Law”), enacted and effective March 18, 2020, provides for sick leave when an employee is subject to a mandatory or precautionary governmental quarantine or isolation order due to COVID-19 (“Quarantine Order”).  Under the NY Quarantine Law, employers with 1-10 employees and $1,000,000 or less in net income in the previous tax year (Tier 1)  must provide unpaid sick leave for the duration of the Quarantine Order; employers with 11-99 employees and employers with 1-10 employees and a net income greater than $1 million in the previous tax year (Tier 2) must provide at least 5 days of paid sick leave plus unpaid sick leave for the duration of the Quarantine Order; and employers with 100 or more employees, as well as all public employers (regardless of number of employees) (Tier 3) must provide at least 14 days of paid sick leave. The legislative history of the law indicates that only employees who work in New York should be counted to determine employer obligations.

U.S. IRS Publishes Much-Anticipated Guidance on Documents that Employers Must Retain Under the Families First Coronavirus Response Act

The Families First Coronavirus Response Act (“FFCRA”), which generally requires U.S. employers with fewer than 500 employees to provide paid sick leave (“Paid Sick Leave”) and emergency family and medical leave (“Emergency FMLA Leave”) benefits to employees in connection with COVID-19, officially goes into effect today.  This also means that employers are now able to immediately seek a quarterly payroll tax credit equal to 100% of the qualified Paid Sick Leave and Emergency FMLA Leave wages paid to employees under the FFCRA.

As we summarized in an earlier post, this past weekend the Department of Labor (“DOL”) revised its guidance to refer employers to the Internal Revenue Service (“IRS”) for questions regarding what documentation employers must retain in order to receive a tax credit.  Late on March 31, 2020, the IRS published this much-anticipated guidance.  Below are highlights from the IRS’s guidance on document collection and retention for employers to consider as they begin to comply with the FFCRA.  Summaries of other aspects of the IRS’s guidance will be available soon.

  • Leave for Which Tax Credits are Available: The IRS guidance confirms that tax credits are available only for Paid Sick Leave and Emergency FMLA Leave taken between April 1, 2020 and December 31, 2020.  Moreover, tax credits are available only for Paid Sick Leave and Emergency FMLA Leave wages that are actually paid.  For example, if an employer is not required to pay certain Paid Sick Leave and/or Emergency FMLA Leave wages (because

US DOL Publishes Revised Guidance on the Families First Coronavirus Response Act

DOL Publishes Revised Guidance on the Families First Coronavirus Response Act

This weekend, the Department of Labor (“DOL”) released a revised and updated set of Questions and Answers (“Q&A”) regarding the Families First Coronavirus Response Act (“FFCRA”).  As we’ve summarized in earlier posts, the FFCRA was signed into law on March 18, 2020 and generally requires U.S. employers with fewer than 500 employees to provide paid sick leave (“Paid Sick Leave”) and emergency family and medical leave (“Emergency FMLA Leave”) benefits to employees in connection with COVID-19.

Notably, the new guidance includes a revision to the guidance that was just issued last Thursday, March 26, regarding what documentation employers must collect from employees requesting leave under the FFCRA.  Our summary of the DOL’s initial guidance is available here, but please note that in light of the DOL’s updated guidance, employers should rely on this post’s summary of documentation requirements.  The new guidance does not explicitly outline what documentation employers must collect.  Instead, it notes that if employers want to seek a tax credit for the Paid Sick Leave or Emergency FMLA Leave, they should “retain appropriate documentation.” The DOL then refers employers to consult with “Internal Revenue Service (IRS) applicable forms, instructions, and information for the procedures that must be followed to claim a tax credit, including any needed substantiation to be retained to support the credit.”

In addition to this revision, the updated guidance includes a number of questions and answers regarding new and key

U.S. DOL Publishes Additional Guidance on the Families First Coronavirus Response Act

On March 26, 2020, the U.S. Department of Labor (“DOL”) released an updated set of Questions and Answers (“Q&A”) regarding the Families First Coronavirus Response Act (“FFCRA”).  As we’ve summarized in earlier posts, the FFCRA was signed into law on March 18, 2020 and generally requires U.S. employers with fewer than 500 employees to provide paid sick leave (“Paid Sick Leave”) and emergency family and medical leave (“Emergency FMLA Leave”) benefits to employees in connection with COVID-19.

The updated Q&A builds on guidance and model notices that the DOL published earlier this week.  Below are some highlights from the updated Q&A for employers to consider as they prepare to comply with the FFCRA:

  • Documentation: Employers must require employees to provide appropriate documentation to support their need for Paid Sick Leave and Emergency FMLA Leave. This documentation must be retained if an employer intends to seek a tax credit for the leave.
    • For Paid Sick Leave – This documentation should include the employee’s name, qualifying reason for requesting leave, statement that the employee is unable to work (including telework) for that reason, and the date(s) for which leave is requested. Employers should also require documentation demonstrating the reason why the leave is necessary, including: (i) the sources of any quarantine or isolation order (including a copy of any federal, state, or local quarantine or isolation order); and/or (ii) the name of the health care provider advising the employee to self-quarantine, along with a note

Coronavirus: UK Job Retention Scheme – further government guidance

Summary

As an update to our earlier blog “Coronavirus: UK Job Retention Scheme – what we know so far from the UK government’s 20 March 2020 announcement”, please see below for further details.

Analysis of updated government guidance in relation to the Coronavirus Job Retention Scheme (as at 27 March 2020) >

DOL Publishes Model Notice for the Families First Coronavirus Response Act

On March 25, 2020, the Department of Labor (“DOL”) published model notices for federal and private employers regarding employees’ rights under the Families First Coronavirus Response Act (“FFCRA”).  As we’ve summarized in earlier posts, the FFCRA was signed into law on March 18, 2020 and generally requires U.S. employers with fewer than 500 employees to provide paid sick leave and emergency family and medical leave (“Emergency FMLA”) benefits to employees in connection with COVID-19.

The model notices, along with Frequently Asked Questions regarding the notices, follow a series of other informal guidance issued by the DOL in the last week.  Below are some highlights from the new guidance for employers to consider regarding the notices:

  • Posting Requirement: All covered employers, including small businesses, must post the model notice.
  • Posting Location: Employers must post the notice either in one location where all employees will see it or in various locations to accommodate all employees if no single location is available.  If workplaces are closed due to local stay-at-home orders, physical posting may not be possible at this time, in which case electronic posting is probably required.
  • Electronic Posting: Employers may, but are not required to, satisfy their posting obligations by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.
  • Languages Other than English: The DOL is working on non-English versions of the model notices, but employers are not required to post the notices in any
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