Category: Employee Benefits

IRS Issues Guidance on an Employee’s Reduction in Hours and Involuntary Termination of Employment to Qualify for the 100 Percent COBRA Premium Subsidy

The American Rescue Plan Act of 2021 enacted on March 11, 2021 (the “Act”) provides a federally-funded, 100 percent subsidy for the premiums for COBRA continuation coverage from April 1, 2021 to September 30, 2021 for assistance eligible individuals. On May 18, 2021, the IRS issued Notice 2021-31, which provides comprehensive guidance on all aspects of the subsidy. The Notice is in the form of 86 questions and answers and spans 41 single-spaced pages. This news alert focuses on the guidance dealing with the two events that trigger entitlement to the subsidy: a reduction in hours and an involuntary termination of employment. The guidance on reduction in hours is found at Q&A 21 to 23, and on involuntary termination of employment at Q&A 24 to 34. Definition of Assistance Eligible Individual The Act defines an assistance eligible individual as an individual who: Is a qualified beneficiary for a period of COBRA continuation coverage that includes the months between April 1, 2021 and September 30, 2021; Is eligible for COBRA continuation coverage due to a reduction in hours or an involuntary termination of employment other than for gross misconduct; and Elects COBRA continuation coverage. Other COBRA qualifying events, such as a voluntary termination of employment, a child’s aging out of dependent status, or divorce, do not...

Employers and the American Rescue Plan Act of 2021 (ARPA)

The recently enacted American Rescue Plan Act of 2021 (ARPA) is an economic stimulus bill that will inject $1.9 trillion into the American economy to accelerate the recovery from the economic downturn and health emergency caused by the COVID-19 pandemic. Of special interest to employers, the ARPA in a number of respects expands legislation enacted in 2020 to address the COVID-19 crisis, such as the CARES Act and Families First Coronavirus Response Act (FFCRA). Perhaps the most publicized aspect of the ARPA is the direct $1,400 stimulus checks to individuals. However, other aspects of the ARPA are more directly of interest to employers. Non-Mandated Extension of FFCRA-Related Tax Credits Employers are not required to, but may voluntarily provide to employees Emergency Paid Sick Leave and Emergency Family and Medical Leave that previously had been mandated under the FFCRA. This program will terminate on September 30, 2021. This means employers may grant leave under the FFCRA to employees with eligible leave remaining and continue to receive the corresponding tax credits for those leave payments until that date. Otherwise, this program would have expired on March 31, 2021. While the emergency leave extensions under the ARPA are voluntary, employers should also consider any state or local leave requirements. Under the new legislation: Employers who provide up to...

New York State Enacts Law Providing Paid Time Off for COVID-19 Vaccination

Governor Andrew Cuomo recently signed legislation S2558A/A3354-B granting all public and private employees in New York paid leave to obtain a COVID-19 vaccine. The new legislation, which is effective as of March 12, 2021 and expires on December 31, 2022, amends the New York Civil Service Law (with respect to public employees), along with the New York Labor Law, and provides public and private employees with up to four hours of paid leave per vaccine injection. In connection with this legislation, the New York Labor Law was amended to add Section 196-c, which provides that: New York employees must receive paid COVID-19 vaccine leave of up to four hours per vaccine injection. Thus, employees receiving a two-injection COVID-19 vaccine (such as those currently offered by Pfizer and Moderna) will receive up to eight hours of paid leave to obtain the vaccine. The “four hour” maximum does not apply to an employee subject to a collective bargaining agreement (CBA) providing a greater number of hours of leave to obtain the vaccine or where an employer authorizes additional time off for employees to receive the vaccine. The leave must be paid at an employee’s regular rate of pay. The leave cannot be charged against “any other” employee leave. Accordingly, employers cannot require employees to use other available...

FFCRA Benefits Become Optional and Unemployment Benefits Change With New Stimulus Package

On December 27, 2020, President Donald Trump signed the fourth major COVID-19 response bill into law. The stimulus package includes focused relief in a variety of areas (see our December 21, 2020 post), but two important elements are worth highlighting for employers. First, there have been several changes to pandemic-related unemployment insurance benefits since guidelines were first provided last spring. Second, the emergency paid sick leave and expanded family and medical leave benefits provided under the Families First Coronavirus Response Act (FFCRA), explained here, expired on December 31, 2020 and were not extended, but employers who opt to offer them remain eligible for tax credits. Unemployment Insurance (UI) Benefits Supplement and Extension The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provided eligible recipients of state unemployment benefits with an additional $600 per week in federal benefits, which expired in July 2020. The new stimulus package provides eligible individuals who are already collecting state-provided unemployment benefits with an additional $300 per week in federal benefits ($300 less than the last stimulus relief package) for up to 11 weeks through March 14, 2021. These payments, however, are not retroactive to July 2020. The new stimulus package also extends the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs. PUA provides benefits to individuals...

Amendments to Pennsylvania’s Unemployment Compensation Act Bring New Notice Obligations and Temporary Relief for COVID-19 Related Unemployment Benefit Charges for Employers

In connection with the continuing challenges arising from COVID-19, Pennsylvania Governor Tom Wolf recently signed into law amendments to Pennsylvania’s Unemployment Compensation Law, which are included in Act 9 of 2020 (“the Act”). The Act imposes new notice obligations on employers and includes “emergency provisions” that relax eligibility and access requirements for individuals filing COVID-19 related unemployment benefit claims and, among other things, provide relief to employers for charges incurred under certain circumstances. Some key provisions of the Act are discussed more fully below. New Notice Requirements The Act adds a new section (206.1) to Pennsylvania’s Unemployment Compensation Law, requiring employers to now provide separating employees with notice about the availability of unemployment compensation, regardless of whether the employer is liable for payment of contributions to the state’s unemployment compensation system. Although the Act is silent about the required form of notice, it must include the following information: Availability of unemployment compensation benefits to workers who are unemployed and qualify for benefits; An employee’s ability to file an unemployment compensation claim in the first week that employment stops or work hours are reduced; Availability of assistance and information about unemployment compensation claims on the Pennsylvania Department of Labor and Industries, Office of Unemployment Compensation’s website – www.uc.pa.gov – or at the department’s toll-free number, which...

New Jersey Further Expands Family Leave and Temporary Disability Benefits in the Wake of COVID-19

On April 14, 2020, Governor Phil Murphy signed into law Senate Bill S2374, which further amends the New Jersey Family Leave Act (FLA) and the New Jersey Temporary Disability Benefits Law (TDBL), including the Family Leave Insurance program (FLI), expanding on prior amendments signed into law on March 25, 2020 (included in Senate Bill 2304), as part of the state’s initial response to the early stages of the COVID-19 pandemic. These amendments are effective immediately and apply retroactively to leave taken on or after March 25, 2020. As the pandemic has continued, so too have the Legislature’s attempts to address its impact on New Jersey citizens, which have included efforts to protect New Jersey employees who are in need of temporary leave and/or income replacement benefits as a result of circumstances caused by COVID-19. Prior to the COVID-19 related amendments, eligible employees working for covered employers could, under the FLA, take up to 12 weeks of job-protected leave in any 24-month period for the following three reasons: The birth of a child, including a child born pursuant to a valid written agreement between the employee and a gestational carrier The adoption or foster care placement of a child Caretaking for a family member with a serious health condition As discussed in our prior blog post,...

Pennsylvania Issues New Executive Order Mandating Additional COVID-19 Disease Control Measures

On April 15, 2020, the Secretary of the Pennsylvania Department of Health issued an order aiming to blunt the continued and expansive spread of COVID-19 throughout Pennsylvania (“Order”). The Order, which took effect on April 19, 2020, requires additional disease control measures to further protect workers and customers of any life-sustaining business (“Business”) that has remained open during the COVID-19 disaster emergency. The original list of Businesses can be found here, and includes companies such as healthcare service providers; restaurants offering carry-out, delivery, or drive-through services; food, medical equipment, and chemical manufacturers; and utility and telecommunication companies, among others. The Order requires any such Business, other than a healthcare provider, to implement certain social distancing, mitigation, and cleaning protocols. These measures are in addition to those included in Pennsylvania’s April 6, 2020 building safety measures executive order, which requires covered businesses to clean and disinfect high-touch areas in accordance with CDC guidelines in spaces accessible to customers, tenants, or other individuals, and maintain pre-existing cleaning protocols established in the facility for all other areas of the building, ensure the facility has a sufficient number of employees to perform the required cleaning protocols effectively and in a manner ensuring the safety of occupants and workers, and make sure that the facility has a sufficient number of...

New York State Enacts Expansive Statewide Sick Leave Law

On April 3, 2020, Governor Cuomo signed into law New York State’s fiscal year 2021 budget, which adds a new section 196-b to the New York Labor Law to include sick leave requirements for New York employers of all sizes, and which the Governor’s office has described as the strongest paid sick leave law in the nation. Although employees may not begin to use sick leave under the new law until January 1, 2021, current employees begin to accrue leave on September 30, 2020. (As discussed in our prior blog, the State also recently passed a COVID-19 sick leave law that provides leave for New York employees who are subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19.) Key provisions of the new law are summarized below. Amount and Accrual of Sick Leave The amount of sick leave an employer must provide employees, and whether such leave must be paid, depends on an employer’s size, and for certain employers, income level. Employers with four or fewer employees in any calendar year must provide employees with up to 40 hours of unpaid sick leave in any calendar year; except that if such an employer has a net income of greater than $1,000,000 in the previous tax year, the leave must be...

The U.S. DOL Issues Updated Guidance on CARES Act Unemployment Programs

Since our March 28, 2020 post, “Phase Three COVID-19 Response Bill Now Law: What it Means for Businesses and Employees,” the United States Department of Labor (DOL) has issued three additional Unemployment Insurance Program Letters (UIPL), No. 15-20, No. 16-20, and No. 17-20, to provide additional guidance to states on the administration of the three unemployment insurance programs available under the CARES Act. UIPL No. 15-20 UIPL No. 15-20, issued on April 4, 2020, addresses Section 2104 of the CARES Act—Federal Pandemic Unemployment Compensation (FPUC) benefits—which provides “eligible” individuals who are already collecting state-provided unemployment benefits an additional $600 per week in federal benefits through July 31, 2020. Who is eligible for the additional $600 FPUC payments? Individuals collecting regular unemployment compensation under state programs, Pandemic Emergency Unemployment Compensation (PEUC), Pandemic Unemployment Assistance (PUA), Extended Benefits (EB), Short-Time Compensation (STC), Trade Readjustment Allowances (TRA), Disaster Unemployment Assistance (DUA), and Payments under the Self-Employment Assistance (SEA) program. FPUC is not available, however, for those receiving “additional benefits” (referred to as “extended benefits” by state UC programs) that extend the duration of benefits during high unemployment to those in approved training programs who have exhausted benefits, or for several other reasons. Individuals must be eligible for and receiving benefits under the above programs in order to be...

Employers Must Act Fast: Families First Coronavirus Response Act Signed Into Law

To follow up on our recent blog post, “Workplace Planning for Coronavirus Concerns,” we are summarizing for our clients the Families First Coronavirus Response Act (FFCRA), which President Trump signed into law on March 18, 2020. The House of Representative passed an earlier bill on March 14, but – two days later – revisited and significantly altered the bill on March 16, before sending it to the Senate for consideration. On March 18, the Senate passed the revised House version with no changes, and, that same day, the amended bill was signed into law. The FFCRA takes effect not later than April 2, 2020 (15 days after its enactment) and expires on December 31, 2020. With respect to employers, it contains certain provisions of particular note, including the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act, discussed below. Emergency Family and Medical Leave Expansion Act The Emergency Family and Medical Leave Expansion Act (“Emergency FMLA” or the “Act”) applies to employers with fewer than 500 employees (“covered employers”). Employees who have been employed by a covered employer for 30 calendar days are eligible for up to 12 weeks of emergency paid family medical leave due to a “qualifying need” arising from “a public health emergency” with respect to COVID-19...