Employment Law Changes in 2020
- Families First Coronavirus Response Act notices. The Families First Coronavirus Response Act (FFCRA) is an economic stimulus plan that was signed in March 2020 as one of two hallmark laws passed at the onset of the pandemic, the other one being the CARES Act. The FFCRA affects coverage for COVID-19 testing, expanded federal family and medical leave, and implemented a new federal paid sick leave law. With the FFRCA came numerous compliance notices that impacted HR teams working for private companies with less than 500 employees. Employers are required to post these notices in a clearly visible location at the worksite, or distribute them to employees through email if their workforce is still remote.
- Paid leave requirements. The FFCRA made major changes to paid leave requirements in order to help lessen the burden of the pandemic on employees. This includes two weeks of paid sick leave (up to 80 hours) at their regular pay rate if the employee is unable to work due to COVID-19 symptoms and/or quarantine. It also requires covered employers to provide two weeks of paid sick leave at two-thirds regular rate of pay if the employee is unable to work due to a “bona fide need to care for an individual subject to quarantine.” This applies to caring for a child (under 18) whose school or childcare is closed as a result of COVID-19. Finally, covered employers must provide 10 weeks of paid expanded family and medical leave at two-thirds regular rate of pay if the employee can’t work due to a “bona fide need to for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.”
- Tax deferral. On August 8, 2020, executive orders were signed to provide temporary COVID-19 relief, including a payroll tax measure that announced employers could defer the employee-paid portion of the required Social Security taxes. The IRS issued more details on the order, which clarified that employers can “defer withholding and payment of the employee’s portion of the Social Security tax” if the employee receives pay less than $4,000 before taxes each bi-weekly pay period. It’s important to note that these taxes are deferred, not forgiven, and they must be repaid between Jan. 1, 2021 and April 30, 2021. This applies to wages paid beginning Sept. 1, 2020 through Dec. 31, 2020.
- 1095-B and 1095-C deadline extension. The IRS announced on October 2, 2020, that the deadline for forms 1095-B and 1095-C was extended to March 2, 2021. Before that, the deadline for the forms to be furnished to employees was Jan. 31, 2020.
- I-9 Verification. Form I-9 is used to verify the identity and employment authorization of individuals hired for employment in the US. For businesses operating in remote-only capacities following the COVID-19 pandemic, the physical verification process deadline for I-9 forms was extended. The deadline continues to be extended and the new expiration date is now Nov. 19, 2020. Circumstances are subject to change, and this deadline may be deferred once again. Regardless, businesses should now be using the new Form I-9, which is set to expire Oct. 31, 2022; the previous version is no longer valid.
- New overtime exemption. The Department of Labor released a final rule increasing the wage threshold for employees eligible for overtime to $35,568 per year, or $684 per week, which started on Jan. 1, 2020. Employees making at or under this threshold are eligible for overtime pay under the Fair Labor Standards Act.
- HSA, FSA, and HRA changes. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that was passed March 27, 2020, provided changes to HSA, FSA, and HRA regulation. Those three highlighted changes include the following:
- Funds can now be used to purchase menstrual products, which were previously ineligible purchases for FSA, HSA, and HRA accounts.
- The provision mandating that a doctor’s prescription was required to pay for over-the-counter medicine using HSA, FSA, and HRA funds was removed.
- Telemedicine and other online medical services can be covered with HSA funds before a deductible has been met. Unless extended, this update will expire Dec. 31, 2021.
