covid-19

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.
Continue Reading Unemployment Insurance Benefits under the CARES Act

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.
Continue Reading The CARES Act and Short-Time Compensation Programs

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

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.
Continue Reading Ten Ways to Avoid Layoffs During the COVID-19 Pandemic

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…

  • The speed and severity of the current crisis means UK employers face very difficult and pressing decisions.
  • Some intermediate steps can be taken to preserve workforces for a period and avoid immediate redundancies.
  • Some form of individual or even collective consultation with employees or their representatives may be necessary. This can be used as an opportunity to seek creative, collaborative solutions to preserve jobs in the short-term.
  • We set out a checklist of potential measures below.

Continue Reading Five Ways to Avoid Redundancies During The Coronavirus Crisis

Last night (Wednesday, March 18, 2020) the President signed the Families First Coronavirus Response Act after it passed the Senate in the afternoon by a vote of 90-8.  The Act requires all private health plans to cover COVID-19 diagnostic testing—coverage that most insured and large self-insured health plans already are providing.  The Act also requires employers with fewer than 500 employees to provide up to ten weeks of paid FMLA leave and two weeks of paid sick leave to employees affected by COVID-19.  For small employers subject to these new leave mandates, the Act provides tax credits to help offset the cost of the mandates.  This means that the tax credits are not available to employers with 500 or more employees, even if they provide paid leave equal to or in excess of that required of smaller employers under the Act.  It is noteworthy that the Senate voted down amendments that would have expanded the bill’s paid FMLA leave or replaced the bill’s paid leave with state unemployment benefits.
Continue Reading Impact of New Coronavirus Mandatory Leave and Testing Legislation Largely Limited to Smaller Employers

On March 13, 2020, the President declared the COVID-19 pandemic to be an emergency under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Stafford Act”).  The decision to declare an emergency is addressed in a letter from the President to Administration officials in which he explained that his decision to issue an emergency declaration was “based on the fact that our entire country is now facing a significant public health emergency.”

Employers may be wondering whether this declaration provides an opportunity to offer “qualified disaster relief payments” under Internal Revenue Code § 139 to employees as a means of mitigating the pandemic’s effects.  It is not entirely clear.  Because the President declared an emergency—not a major disaster—it is not clear, until we get further guidance from the IRS that employers that they may rely on Code § 139 as a means of providing tax-free benefits to their employees.  Section 139 refers specifically to a declared disaster as do the regulations under section 165(i), which are cross-referenced in the section 139 rules.  Less formal IRS guidance in the form of revenue procedures have conflated the two types of declarations in the past, however, and the IRS has indicated that for purposes of section 165(i), “a disaster includes an event declared a major disaster or an emergency.”  However, in the interim, employers may still adopt other policies, such as leave-sharing, that will ease the pandemic’s toll on affected employees.Continue Reading COVID-19 Emergency Declaration: Code § 139 Uncertain; Leave-Sharing Policies Permitted

The Internal Revenue Service has issued guidance (Notice 2020-15) that allows sponsors of high deductible health plans (“HDHPs”) to reimburse up to the full cost of medical care services and items for testing and treatment of COVID-19 before plan participants meet the plan’s minimum statutory deductible.  Accordingly, participants in a HDHP that waives…

Businesses are rapidly developing strategies to continue functioning and protect their workforces in the face of the growing Coronavirus COVID-19 outbreak. For obvious reasons, businesses may want to deploy health screening, testing, and professional medical advice services—including telemedicine—to their employees and dependents. It is critical that employers’ health plans support these efforts and not get…