IRS Empowers Employers to Increase Health Coverage, FSA Election Flexibility During Pandemic; Clarifies HDHP COVID-19 Relief

On May 12, 2020, the Internal Revenue Service (“IRS”) published Notices 2020-29 and 2020-33. Notice 2020-29 is the latest installment in COVID-19 relief guidance targeted at health and welfare benefits. The Notice enables employers to provide flexibility to employees to modify their health coverage and flexible spending account (“FSA”) elections and gives employees until the end of 2020 (but not 2021) to use certain FSA amounts that may otherwise be forfeited. Unlike certain COVID-19 relief related to retirement plans, employers may make the relief under Notice 2020-29 available to all participants, regardless of whether they have suffered a COVID-19-related loss.

Notice 2020-33 allows employers to adopt an indexed maximum carryover amount for health FSAs, beginning with amounts that may be carried over from the 2020 plan year to the 2021 plan year.

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Tri-Agency Guidance Clarifies Some FFCRA and CARES Act Health & Welfare Provisions

On April 11, 2020, the Departments of Labor, Treasury, and Health and Human Services issued joint guidance on certain provisions of the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act relating to health and welfare benefits.  This post analyzes some of the key provisions in the guidance.

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CARES Act Expands COVID-19 Testing and Other Health and Welfare Benefits

On March 27, 2020, President Trump signed the largest economic stimulus bill in U.S. history: the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).  In this blog article, we take a closer look at the provisions affecting health and welfare plans.

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Unemployment Insurance Benefits under the CARES Act

In response to the growing unemployment numbers due to business slowdowns across the country, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides expanded unemployment insurance (UI) benefits to workers impacted by COVID-19.  The move is no doubt well intentioned, but serious questions have been raised about the specific benefit design adopted by Congress and the ability of state unemployment agencies—hardly models of efficiency in the best of times—to respond to the deluge of claims now inundating them.  In fact, one of the potentially most attractive UI features in the new law—its short-time compensation provisions—seems likely to face serious obstacles to implementation due to lack of administrative resources and the vagaries of state law.

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The CARES Act and Short-Time Compensation Programs

As reported in our Client Alert, the new Coronavirus Aid, Relief, and Economic Security (CARES) Act includes provisions to increase the use of short-time compensation (STC) programs (also known as work sharing or shared-work programs). Section 2108 of the CARES Act provides federal funding for 100% of the STC paid by states with programs already in place. In addition, Section 2109 provides federal funding for 50% of the STC paid by states that currently do not have formal programs but implement arrangements, and Section 2110 provides grants for implementing and improving STC programs.

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The Coronavirus Job Retention Scheme – Guidance for Businesses with Employees in the U.K.

On Friday 20th March, the U.K. Government announced various support measures for UK businesses.  One of these was the Coronavirus Job Retention Scheme (the “Scheme”), which it is hoped will reduce the risk that U.K. employers promptly dismiss employees in response to the Coronavirus outbreak.  Further guidance was published on 26th March, providing some much needed detail on various aspects of the Scheme, which is expected to be operational by the end of April.

Any employer in the U.K. can access the Scheme for assistance with salary payments to those employees that would otherwise have been at risk of dismissal for redundancy and who are described for the purposes of the Scheme as “furloughed workers” (a new concept in English law).  Some questions remain, but the key details of the Scheme are:

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U.K. Government Announces Self-Employment Income Support Scheme

Following its announcement on Friday 20th March to provide much-needed assistance to UK employers and employees in the short-term through the Coronavirus Job Retention Scheme, and intense pressure to provide similar assistance to self-employed workers, the UK Government has released details of a similar scheme intended to support this group: the Self-Employment Income Support Scheme (the “SEISS”).

The SEISS will support self-employed individuals (including consultants and members of partnerships) whose income has been negatively impacted by COVID-19, but is unlikely to apply to consultants who provide their services through a personal services company, given the criteria set out below.  Further, the Chancellor indicated that tax payable by the self-employed would, in future, need to be brought in line with that paid by employees.

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Ten Ways to Avoid Layoffs During the COVID-19 Pandemic

As the COVID-19 public health crisis continues, businesses are dealing with unprecedented disruptions to operations and workforce stability. Most employers undoubtedly want to assist their employees during this uncertain time, but they are struggling to balance the cost of maintaining their workforce with shrinking profits. The frequent result of such a balancing act is a mass layoff. While such a reduction in workforce may be inevitable, below are options that employers can consider to try to avoid that outcome. For all of these alternatives, employers should be careful to apply any changes consistently across the workforce to avoid claims of inequity or discrimination.

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German Labor Law Consequences of COVID-19

In view of the coronavirus crisis, employers are faced with numerous questions of employment law, ranging from the question of compulsory employment and possible release of employees in the event of illness or closure of the business, through remuneration issues in the event of a lack of childcare, to the currently extended options for receiving short-time work allowance in the event of absence of work. We prepared an alert describing the most important answers to these questions.  An English version is available here.

Arbeitgeber stehen angesichts der Coronaviruskrise vor zahlreichen arbeitsrechtlichen Fragestellungen, die von der Frage der Beschäftigungspflicht und möglichen Freistellungen von Arbeitnehmern im Krankheitsfall oder bei Schließung des Betriebes über Vergütungsfragen bei fehlender Kinderbetreuung bis hin zu den aktuell erweiterten Möglichkeiten zum Bezug von Kurzarbeitergeld bei Arbeitsausfall reichen. Nachfolgend sind die wichtigsten Antworten auf diese Fragen zusammengestellt.

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