Welcome to the backstitch HR law blog, a series where we provide the latest updates on upcoming and recently in-effect legislation. Our blog series will provide short snippets of State, Federal, and Global changes in HR and employment law, so your organization can continue to stay up to date in the legal world.
The Family First Coronavirus Response Act, the first bill to address the global pandemic, went into effect on April 1st. It drastically expands FMLA to allow for paid leave for employees sickened from COVID-19, as well as allowing leave for parents who take time off to care for their dependents due to schools and daycares closing. Paid leave has been extended to 12 weeks, while unpaid leave has been lowered to 10 days. Previously, employers of less than 50 employees were not subject to FMLA; now, employers with fewer than 500 employees are also included.
For organizations now struggling to afford sick leave, tax credits are offered to offset Social Security taxes up to 100% of the qualified sick leave paid out to employees. Employees are capped at $511/day if they are ill, or $200/day for family or childcare leave.
The Coronavirus Aid, Relief and Economic Security Act, a second phase of the Federal Government's COVID-19 response, provided more direct aid to individuals and businesses. These guidelines outlined in the CARES Act dramatically affect employee benefits. 401(k) plans typically have a 10% early withdrawal fee, which is now waived for qualified coronavirus-related distributions up to $100,000. Qualified individuals include anyone:
Diagnosed with SARS-CoV-2 or COVID-19 by a CDC approved test
Who has a spouse or dependent diagnosed with the disease
Experiencing financial burdens due to quarantines, furloughs, layoffs, or reduced hours due to the disease or care for spouses and dependents with the disease.
The CARES Act also expands the usage of some health plan options. HSAs can now be utilized for telemedicine options, even before the deductible has been met. HSAs, HRAs, and FSAs are also now eligible for the payment of non-prescription, over-the-counter medications and supplies, including face masks and feminine hygiene products. Finally, employers that offer a student load assistance benefit can expand their contribution to include other education-related expenses, and they can pay with pre-tax dollars.
Several laws outside of coronavirus-related legislation have been postponed. These will be addressed in the following months.
Make sure your company will be compliant with these new updates to avoid costly penalties and lost productivity. Follow this series to ensure your company is compliant with the many employment law changes happening in the future.