As COVID-19 continues to spread throughout the United States, there has been a massive upheaval of the American workplace. Employers have found themselves drafting and implementing policies and procedures addressing a wide array of issues including remote work, layoffs, furloughs, pay cuts, workplace conditions and many more. Not surprisingly, the uncertainty wrought by COVID-19 has left employers at an increased risk of exposure to employment-related claims alleging wrongful termination, discrimination, retaliation and many others.
The below article serves as a guide to the most common potential causes of action related to COVID-19 that may lead to employment-related litigation, including:
- Workplace Health and Safety
- Leave Claims (FMLA and FFCRA)
- Wage and Hour
- Wrongful Termination
- Disclosure of Confidential Information
As is the case with all inherently legal issues, employers are strongly recommended to seek the guidance of legal counsel when faced with any of the claims discussed herein.
Common Employment Practices Claims Arising Out of COVID
The U.S. Department of Treasury (Treasury) and the Small Business Administration (SBA) recently released the Paycheck Protection Program (PPP) Loan Forgiveness Application and instructions for small businesses to use when applying for PPP loan forgiveness with their lender.
The below article provides a general overview of the Application and information about loan forgiveness eligibility under the PPP. For more information about your organization’s loan, please contact your lender.
The Application is an 11-page document that consists of four parts:
1. PPP Loan Forgiveness Calculation Form
2. PPP Schedule A
3. PPP Schedule A Worksheet
4. Optional Demographic Form
Employers must submit the first two items to the same lender they applied for and received the PPP loan from. In addition to helping employers calculate the amount of PPP forgiveness they are eligible to receive, the Application also clarifies definitions, guidance and documentation requirements for applying for loan forgiveness.
The Application and accompanying instructions clarify administrative questions surrounding PPP loans but do not provide guidance on how quickly forgiveness will work and whether bonuses are includable under compensation. Look for the SBA and Treasury to issue regulations and guidance related to these issues in the near future.
SBA Form 3508 PPP Forgiveness Application
SBA Unveils PPP Forgiveness Application
On May 20, 2020, the IRS released Revenue Procedure 2020-32 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2021.
Eligible individuals with self-only HDHP coverage will be able to contribute $3,600 to their HSAs for 2021, up from $3,550 for 2020.
Eligible individuals with family HDHP coverage will be able to contribute $7,200 to their HSAs for 2021, up from $7,100 for 2020.
Individuals who are age 55 or older are permitted to make an additional $1,000 “catch-up” contribution to their HSAs.
The minimum deductible amount for HDHPs remains the same for 2021 plan years ($1,400 for self-only coverage and $2,800 for family coverage). However, the HDHP maximum out-of-pocket expense limit increases to $7,000 for self-only coverage and $14,000 for family coverage.
Employers that allow employees to make pre-tax HSA contributions should update their plan communications for the increased contribution limits.
HSA HDHP Limits Increase for 2021
Due to the COVID-19 pandemic, employers and unions that are subject to equal employment opportunity (EEO) reporting under Title VII of the Civil Right Act will not be required to file EEO surveys in 2020, the U.S. Equal Employment Opportunity Commission (EEOC) announced on May 8, 2020.
The following EEO surveys, which the EEOC had previously expected to open in 2020, have been delayed:
- The 2019 EEO-1 Component 1 (required from private employers with 100 or more employees and certain federal contractors);
- The 2020 EEO-3 (required from local referral unions with 100 or more members); and
- The 2020 EEO-5 (required from public elementary and secondary school districts with 100 or more employees).
According to the EEOC, delaying the 2020 collections will help ensure that filers are better positioned to provide accurate, valid and reliable data in a timely manner. In the meantime, the EEOC also plans to make direct contact with EEO-1, 3, and 5 filers about the delayed opening of the surveys.
EEOC Delays EEO-1, EEO-3 and EEO-5 Reports Until 2021
On May 15th Tom Raffio, President & CEO of Northeast Delta Dental, made several announcements, including:
- Extending rate holds for fully insured employers renewing July – December.
- Issuing a one time premium credit for fully insured employers on their July bill based on their June premium.
- Self-insured employers will see a one time administrative fee credit on their July bill.
ACA Marketplace plans and ACA-compliant plans sold outside the Marketplace are excluded from this credit.
Contact your NEEBCo representative with questions.
On May 12, 2020, the IRS released Notice 2020-29, which:
- Provides temporary flexibility for mid-year election changes under a Section 125 cafeteria plan during calendar year 2020, and
- Allows employers to permit employees to apply unused amounts remaining in a health FSA or a DCAP at the end of a plan year ending in 2020 (or a grace period ending in 2020) to pay or reimburse expenses incurred through Dec. 31, 2020
The health FSA carryover limit for unused funds remaining at the end of a plan year is also increased from $500 to $550 for plan years beginning in 2020.
Permitted Election Changes
For employer-sponsored health coverage, a Section 125 cafeteria plan may permit an employee to prospectively:
- Make a new election if the employee previously declined coverage;
- Revoke an existing election and enroll in different health coverage sponsored by the employer; or
- Revoke an existing election, if the employee is or will be enrolled in other health coverage.
Employees may also prospectively revoke an election, make a new election or decrease or increase an existing election for a health FSA or DCAP. A plan may permit any of the election changes described in the notice, regardless of whether they satisfy existing mid-year election change rules.
An employer using this relief may determine the extend to which such changes are permitted and applied. If these changes are permitted, the employer must adopt a plan amendment by Dec. 31, 2021, and inform employees of the change. The amendment may be retroactive to Jan.1, 2020. Changes to the plan may also implicate other applicable laws, such as participant notification requirements under ERISA.
IRS Provides More Options for Unused Funds in Health FSAs and DCAPs
New COVID-19 Guidance for Section 125 Mid-year Election Change Rules
Governor Sununu announced that non-essential businesses shall continue to close their physical workplaces and facilities to workers, customers and the public until May 31, 2020.
Effective immediately, businesses that are deemed essential shall comply with the Universal Business Guidelines listed as Exhibit B in the Governor’s order. These guidelines are based on recommendations from the U.S. Centers for Disease Control and Prevention (CDC), Equal Employment Opportunity Commission (EEOC) and Occupational Safety and Health Administration (OSHA).
Some of the required guidelines include:
- Employers must require all employees who are sick or not feeling well to stay home.
- Employers must develop a COVID-19 symptom screening process for all employees reporting for work to include the below questions, and instruct the employee to leave the premises immediately and to seek medical advice for any questions answered “yes”:
- Have you been in close contact with a confirmed case of COVID-19?
- Have you had a fever or felt feverish in the last 72 hours?
- Are you experiencing any respiratory symptoms including a runny nose, sore throat, cough, or shortness of breath?
- Are you experiencing any new muscle aches or chills?
- Have you experienced any new change in your sense of taste or smell?
- All employees should also wear a cloth face covering while at work and in potential close contact with others.
- Employers should take the temperatures of their employees on-site with a nontouch thermometer each day upon the employees arrival at work. If this is not possible, temperatures can be taken before arriving as long as it can sufficiently be authenticated by the employee. Normal temperature should not exceed 100.0 degrees Fahrenheit.
- Employers must strongly promote frequent hand hygiene and alcohol-based hand sanitizer must be made readily available.
- Employers must implement workplace cleaning and disinfection practices.
Food service, campgrounds, state parks, hospitals, manufacturing and retail employers are subject to the orders in Exhibit C. Golf services, cosmetology providers and drive-in movie theaters are subject to the guidelines in Exhibit D.
Refer to the below link for details on the requirements in the various Exhibits and contact your NEEBCo representative with questions.
Governor Sununu Emergency Order #40
On May 7, 2020, the Equal Employment Opportunity Commission (EEOC) issued additional answers to frequently asked questions (FAQs) about how employers should comply with the Americans with Disabilities Act (ADA) while also observing all applicable emergency workplace safety guidelines during the coronavirus pandemic.
Employers are subject to the ADA if they have 15 or more employees.
The EEOC’s pandemic guidance clarifies that employers may:
- Ask employees if they have COVID-19 symptoms;
- Require employees to stay home (and to provide medical notes before returning to work) if they have COVID-19 symptoms; and
- Screen applicants for COVID-19 symptoms after making conditional job offers.
The FAQs address testing, temperature monitoring, job offers, reasonable accommodation and confidentiality. Refer to the below Compliance Bulletin for details.
EEOC Updates Employer Guidance on Coronavirus and the ADA
Employers seeking ways to help their employees during the coronavirus (COVID-19) pandemic may want to consider implementing a leave-sharing program. These programs allow employees to donate some of their accrued paid leave time, such as paid time off (PTO), vacation or sick leave, for the benefit of other employees who need additional paid leave. During the COVID-19 crisis, many employees may exhaust the leave available to them through illness, quarantine or isolation, or caregiving responsibilities.
Although the IRS has approved leave sharing in the context of medical emergencies and major disasters, it has not issued guidance on leave-sharing programs specifically for COVID-19, despite major disaster declarations for all 50 states due to the pandemic.
While these programs can be beneficial to both employers and employees, they need to be carefully structured in order to avoid negative tax consequences for the employees who donate their unused paid leave. Refer to the attached Compliance Overview for details.
Employee Leave-Sharing Programs and Coronavirus
Section 127 of the Internal Revenue Code already allows employers to pay up to $5,250 per year toward employees’ qualified educational expenses—such as for tuition and textbooks—on a tax-free basis. The new CARES Act provision temporarily expands that law to include student-loan repayment assistance as qualified educational expenses.
Under this provision, employer payments toward their employees’ qualified educational loans between March 27, 2020, and Dec. 31, 2020, may be excluded from the employees’ taxable income, resulting in tax advantages for both parties.
Refer to the attached Compliance Bulletin for details.
CARES Act Allows Tax-free Student Loan Assistance