• The overall situation is evolving rapidly, with initial federal legislation passing last week and the Senate now approving a $2 trillion emergency relief/stimulus bill.

• As federal laws are clarified, many states are also in the process of rapidly considering legislation, especially related to sick leave.

• Much legislation will likely require significant and rapid regulatory guidance by the US Department of Labor (DOL) and other agencies.  Normally this process takes time so we are in uncharted territory and employers may not have clear guidance on various topics.  Some initial high level guidance has now been released by the DOL, IRS and others (see below).

• State by state changes are being made to unemployment compensation procedures: doing away with various face-to-face meetings and waiving eligibility periods.

• Issues will get complicated as state and federal changes are layered on top of your existing programs. In short, document your reasoning and understand that the existence of a “public health crisis” will dictate short-term interpretation of many laws.

• Ultimately, your ability to weather legislative evolution will influence your ability to take certain actions.

• COVID-19 has impacted several facets of employment-based immigration to the United States. Consult with immigration counsel to ensure proper measures are taken to maintain the status of H-1B visa holders and international students along with other employees on non-immigrant visas.

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Families First Coronavirus Response Act

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• The federal government has now adopted the Families First Coronavirus Response Act. The Act contains a wide range of provisions, including food and nutrition assistance and emergency paid leave. 

• The bill introduces new requirements for Emergency FMLA and emergency paid sick leave, and generally impacts companies with fewer than 500 employees.

• DOL has released initial regulatory guidance for this act, including clarification about counting employees (the Act generally applies to companies with fewer than 500 employees), calculation of pay for part-time and variable hour employees, calculation of regular rate of pay, and other administrative matters.

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1. Clarification is also provided that an employee who requests leave to stay home with a child due to coronavirus-related school or daycare closures may qualify for Paid Sick Leave AND Expanded FMLA for a total of up to 12 weeks of protected paid leave.

2. DOL Guidance on COVID-19 and the Workplace can be found here.

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• The IRS has also released initial high level guidance, with promises of more detailed guidance to come.  (Under the Act, employers that are required to provide paid sick leave and expanded FMLA are eligible for refundable tax credits applied against the employer’s quarterly payroll tax return.)

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1. Payroll taxes available for retention include withheld federal income taxes, as well as employee and employer share of Social Security and Medicare taxes. 

2. If there are insufficient amounts available via payroll taxes to cover the employer’s expenses related to the paid leave requirements, employers may file a request for an accelerated payment from the IRS and the IRS expects to process such requests in 2 weeks or less.

3. IRS Guidance on Refundable Tax Credits can be found here. 

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• A SHRM webcast on the Act (paid membership required) will be held on Friday, March 27 at 11 a.m. Pacific.  Thus far, the SHRM webcasts have been a timely and practical source of information on the latest thinking regarding COVID-19. 

 

Federal Emergency Relief/Stimulus

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• The Senate has now passed the $2 trillion emergency Additional stimulus/legislation is expected to pass very shortly (as soon as later today - March 26).  The bill could still change, but is expected to contain numerous provisions impacting employees, businesses and state and local government.

• Individual Assistance

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1. Direct payments of up to $1,200 for most individuals and $2,400 for most married couples filing jointly with an extra $500 for each child (phased out over $75K for individuals and $150K for married couples).

2. Unemployment insurance would be expanded, increasing the maximum benefit by $600 per week for up to four months.  Benefits would be available to workers who are part-time, self-employed or part of the gig economy.  People who are still unemployed after 13 weeks of state benefits end could get an additional 13 weeks of help.

3. Numerous provisions helping low-income individuals such as food assistance and help with avoiding eviction.

4. Homeowners with federally-backed mortgages would be protected from foreclosure for as long as 180 days.

5. Withdrawals from qualified retirement accounts for coronavirus-related purposes without penalty.

6. Students with federal loans could suspend payments until October.

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• Business assistance: 

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1. Small businesses provided access to nearly $350 billion loan program to cover monthly expenses like payroll, rent and utilities.  Loans do not have to be repaid if businesses maintain their workforce. (Assistance retroactive to February 15 to help bring back workers who have already been laid off.)

2. Financial assistance for hardest-hit industries, including passenger and cargo airlines.  

3. Companies receiving assistance would be barred from raising the pay of certain executives or from buying back stock for a certain number of years.

4. Companies that kept on workers despite a significant loss of revenue could get a tax credit.

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• Additional Assistance - numerous additional provisions including:

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1. Additional funding for hospitals and medical centers.

2. Relaxation of various Medicare provisions and previous cuts.

3. Rules for using and paying for telehealth services would be eased. 

4. State and local government assistance.

5. Child care programs would get a funding boost to help meet emergency staffing needs of health care workers and other critical workers.