These days your HR planning has to be pretty dynamic to keep in compliance with the latest HR updates. Travel bans change and form daily, new light is shed on COVID legislation like the FFCRA, and more tips and guidance are shared for getting PPP loan forgiveness. Even if your company’s employee policies for COVID were in compliance yesterday, or you’re checking in with your HR services company frequently, today you could be headed for trouble. Here are some of the latest HR updates that you need to know about.
The Latest HR Updates: President Trump’s Executive Orders
The president signed four executive orders in the last week. Of the four, only two are particularly applicable to employers. These are the proposed changes, but it’s important to know that they’re only the latest HR updates for right now. They may still be challenged and aren’t likely to be the final word. Still, they are indications of what may be coming down the pike on a few topics.
- A memorandum on authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease 2019: Most notably, this order temporarily calls for a bump of up to $400 a week to unemployment benefits through Dec 6, 2020. States are allowed to determine the level of benefit increase and are required to fund 25% of the increase. 75% of the cost for this will be shared by the federal government and states will use their Coronavirus Relief Fund allocations or other funds for the remainder. Governors must request from FEMA a grant for lost wages assistance and agree to the cost-sharing requirements.
- A Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster: This order will allow employees to defer payment of FICA tax on their wages between September 1, 2020 and December 31, 2020. This will be without penalties or interest. The memorandum permits employers to defer payment of the employee portion of these payroll taxes for personnel earning less than $4,000 on a biweekly basis. There is a potential that these taxes deferred could be forgiven, however, this is still being explored by the secretary of the U.S. Department of Treasury and would require congressional approval. Note that employers have already been allowed to defer paying their portion of the social security tax since April 1st, 2020.
The Latest HR Updates on the FFCRA: a NY court ruling that could change things nationally
Recently a judge in a New York Court made a landmark ruling that vacated portions of the Department of Labor rules surrounding the FFCRA. While this ruling doesn’t necessarily apply on a national level, it may be a hallmark of what’s to come. One of the best HR strategies you could apply here is to err on the side of caution when administering FFCRA leave, keeping in mind that this ruling may be applicable nation-wide.
- Work availability requirement: Originally, the DOL said that for employees to be eligible to use FFCRA benefits, the employer had to have work available for them during the time they needed leave. However, in the latest HR updates from this court ruling, that availability of work is irrelevant. If an employee is still employed, regardless of whether they’re on the schedule, they should be allowed to use FFCRA for qualifying reasons. The employee’s need is what will trigger the application of sick leave and expanded FMLA. This means that employees who are furloughed or temporarily laid off may be eligible for leave.
- Intermittent leave: The DOL’s rule states that employees must get approval from their employer to use intermittent leave to care for their children when their school or place of care is unavailable because of COVID-19. However, the court vacated this requirement and ruled that if an employee needs to take partial weeks or partial days off to care for their child (whose school or place of care is closed), the employer must allow it. Note that this only applies to leave for childcare purposes. If an employee takes intermittent leave because they’re sick or are caring for someone who is sick with COVID-19, thus risking spreading the virus, they cannot come and go into the workplace.
- The Definition of “Health Care Provider” has been narrowed: The DOL has a very broad definition of health care providers who can be exempt from the provisions under the FFCRA, which includes anyone who works for a healthcare entity. The court ruled that the definition is too broad. They wanted to ensure that it no longer focuses solely on employers, but instead considers the functions of the employee’s job. Note that the court didn’t provide a new definition of “Health Care Provider.” Because of this ruling, our HR consulting team recommend that employers apply the exemption only to employees who provide direct healthcare services. A good example of applying this new clarification is if you’re talking about a pharmacy. While a pharmacist should count as a ‘health care provider,’ the person ringing the checkout, or stocking shelves may not (even though they work at a pharmacy, which provides health care services).
- Documentation requirements: The court ruled that an employee can begin to take FFCRA leave prior to presenting documentation to their employer. It does still need to be completed, but its completion should no longer be a barrier to taking the leave.
The Latest HR updates on COVID leaves by state
Eleven states (Maine, Michigan, Nevada, Washington, Oregon, California, Arizona, New York, Massachusetts, Rhode Island, New Jersey, Maryland) D.C., and several cities and counties now have laws requiring that eligible employees get paid time off if they are sick or need to care for sick family members. Maine, Michigan, and Nevada require employers to provide general paid time off for workers as needed, including sick leave. The duration of leaves allowed, accrual rates, and other details will vary by law and location. These state and local laws may not, depending on the state mandate, however, necessarily apply to:
- Employees in some small companies or organizations
- Part-time workers
- Employees who have only worked for their employer for a short duration
In the latest HR updates for mid August, eight states have enacted laws offering paid family leave with partial wage replacement up to a designated cap. This is leave to care for children, spouses, parents, partners, and in some locations, the law extends to all blood relatives. The duration varies, but most leaves can be between 6 and 12 weeks. These states are: California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island, and Washington.
The Latest HR Updates on the FFCRA’s shortcomings— and how states are addressing them
The FFCRA stipulates that private employers with less than 500 employees, as well as certain public employers, must:
- Offer up to two weeks of fully paid sick leave for workers who can’t work because of their own quarantine, symptoms, or diagnosis of coronavirus.
- Offer up to two-thirds of regular pay for two weeks if their employees cannot work because they need to care for somebody in quarantine or a child whose school or daycare is closed because of COVID.
- Offer paid family leave of up to 12 weeks (after a 10-day unpaid period) to workers who can’t work because their child’s school or day care has been closed due to coronavirus. This leave must be paid out at two-thirds of the employee’s regular pay.
But, be aware that the FFCRA does not apply in these circumstances:
- Employees in private businesses with more than 500 employees
- Health care workers, emergency responders, and certain federal employees might be excluded
- Employees at workplaces with less than 50 employees might be excluded.
In some of the latest HR updates from state and local governments, they’re passing laws to try to cover the gaps, and others are likely to follow suit. They are creating specific requirements for coronavirus-related paid sick leave and allowable uses. (California, Colorado, and New York are some of the states doing this.) Some cities (like Los Angeles and San Francisco) are also adding emergency protections for sick or quarantined workers. Some locations (like New Jersey and Seattle) have issued guidelines on how existing paid leaves apply to COVID-oriented circumstances.
New York, Massachusetts, and California have all batted around legislation in this area. While their specific policies will be helpful for employers in those states to see, it’s also a potential indicator of what other states will soon do. You should constantly be checking in with your HR providers (or checking yourself) to see if your state or city passes paid sick leave laws that you may need to follow.
New York: They passed the most generous paid leave package of any state thus far, requiring large employers to offer 14 days of paid sick leave during any quarantine or isolation order. Mid-size employers and small employers (worth more than $1 million) are required to offer 5 days of paid sick leave for any quarantine or isolation order. Small employers (below $1 million) need to offer job-protected unpaid leave for the duration of any quarantine or isolation order. Any worker that doesn’t receive a full 14 days of paid sick leave can apply for “quarantine leave” benefits for the remainder of the 14-day quarantine. This leave will be paid using a combination of state Temporary Disability Insurance and Paid Family and Medical leave insurance benefits.
California: The state created some provisions specifically to protect food sector workers via an executive order by the governor. The state will provide two weeks of supplemental paid sick leave to certain workers if they meet specified qualifications. This will be paid out for a maximum of 80 hours. This order is meant to cover employees who work for companies and organizations with over 500 workers.
Massachusetts: There is a proposed order in Massachusetts that is trying to address deficiencies in the FFCRA for employees who are lacking childcare. If passed, it will prohibit an employer from terminating a worker who can’t physically report to work because they have no childcare. The order will allow employers to require staff to use PTO if they can’t perform their job due to a lack of childcare. It also requires employers to do their best to offer reasonable accommodation to employees who don’t have childcare, including telecommuting and flexible schedules. Perhaps most aggressively, any employee that can’t perform their job because of a lack of childcare and who has exhausted all their PTO benefits will be eligible for unemployment until 90 days after the COVID crisis has passed. At the end of this period, they will be entitled to return to their positions.
The Latest HR Updates on Travel Restrictions
Currently, 11 states have passed travel restrictions, which must be followed, and 4 states have implemented travel requests. These orders are changing constantly, so you should make sure you’re aware of the details. The best way to protect your company is to have a travel policy that includes a requirement that employees keep you apprised of their travel plans. Decide now how you want to handle it if employees tell you they’ll be traveling to high risk states. Keep in mind that depending on where they travel to, an employee may be required to quarantine after their travel, and they may be eligible for leave under the FFCRA if so. If you state has stringent language in its travel order, it’s more likely that an employee’s quarantine leave will be covered under the FFCRA. You should also keep in mind that you may want your policy to address whether COVID testing will be required of an employee returning from a high-risk state. If you’re deciding to require testing, proceed with caution. There are many factors to consider, including your company or organization paying for testing, as well as payment for the time the employee takes to get the test. At the time of publication, these are the states with some form of travel restrictions in place:
- New Jersey
- New Mexico
- New York,
- Rhode Island
- South Carolina
- As well as Chicago and DC
The latest HR Updates on PPP Loans
The SBA recently released a new FAQ on August 4th that provides more information about the PPP loan forgiveness process. These are some of the most helpful insights from that document.
- Payroll costs incurred during the Covered Period or the Alternative Payroll Covered Period, but paid after the Covered Period or the Alternative Payroll Covered Period are eligible for loan forgiveness. This is only true if the payroll costs are paid on or before the next regular payroll date after the Covered Period or Alternative Payroll Covered Period.
- Payroll costs that were incurred before the Covered Period and paid during the Covered Period are eligible for loan forgiveness.
- If the borrower uses a biweekly or weekly payroll cycle, they can choose to calculate eligible payroll costs using the eight-week (for borrowers that received their loans before June 5, 2020 and elect this Covered Period length) or 24-week period that begins on the first day of the first payroll cycle following the PPP Loan Disbursement Date (this is referred to as the Alternative Payroll Covered Period). If a borrower has a bi-monthly or less frequent pay cycle, they must calculate payroll costs for partial pay periods. Both the Covered Period or Alternative Covered Period will end no later than December 31, 2020 for any borrower.
- For calculating cash compensation, borrowers should use the gross amount before deductions for taxes, employee benefits payments, and similar payments.
- Payroll costs can include all forms of cash compensation paid to employees, including tips, commissions, bonuses, and hazard pay. Note that forgivable cash compensation per employee is limited to $100,000 on an annualized basis.
- Nonpayroll costs incurred prior to the Covered Period, but paid during the Covered Period are eligible for loan forgiveness. This includes mortgage interest costs, business rent or lease costs, and business utility costs.
- Nonpayroll costs are eligible for loan forgiveness if they were incurred during the Covered Period and paid on or before the next regular billing date. This is true even if the billing date is after the Covered Period.
- The Alternative Payroll Covered Period applies only to payroll costs. The Covered Period always starts on the date the lender makes a disbursement of the PPP loan. Nonpayroll costs must be paid or incurred during the Covered Period to be eligible for loan forgiveness.
- Covered utility payments that are eligible for forgiveness include a “payment for a service for the distribution of . . . transportation” under the CARES Act. These expenses include transportation utility fees assessed by state and local governments. Payment of these fees by the borrower is eligible for loan forgiveness.
Want to dive deeper into these latest HR updates? Listen to the full webinar here.
Are you and your employee policies prepared for another remote semester in schools? Register for next week’s webinar here.
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