COVID-19 and the Workplace How to Comply with Rapidly Changing Legislation April 2020

Presentedby:JaimeLizo3e,Tax&HRComplianceSolu@onsManager

Today’s Agenda

§ Reviewemployer-relatedprovisionsoftheFamiliesFirstCoronavirusResponseAct(FFCRA)§ Reviewemployer-relatedprovisionsoftheCoronavirusAid,ReliefandEconomicSecurity(CARES)Act§ Bestprac@ceswhenconsideringareduc@oninforce(RIF)§ Tipsfromourlegalteamformanagingtemporaryremoteworkers§ Whyandhowtocomplywithmandatoryemployeepos@ngregula@onsduringthis@me

Understanding the Families First Coronavirus Response

Act (FFCRA)

Introducing the FFCRA § SignedintolawMarch18;effec@veApril1§ Temporarymeasure—expiresDecember31,2020§ Extensivelegisla@oncoveringmanyaspectsoffederalCOVID-19response

§ Twokeypartsaffec@ngemployers:§ EmergencyPaidSickLeaveAct§ EmergencyFamilyandMedicalLeaveExpansionAct

§ Bo#omline:Certainemployersmustprovideemployeeswithpaidleaveforspecific,COVID-19reasons

Which Employers Are Affected? § Privateemployerswith<500employees

§ Employerswith<50employeesmayqualifyforexemp@on

§ Ifseekingexemp@on,documenthowcomplyingwiththelawwould“jeopardizetheviability”ofthebusiness

§ Lawmakesexcep@onforcertainhealthcareworkersandemergencyresponders(butthisisbeingchallenged)

§ Almostallpublicemployers

Which Employees Qualify? Employeeswhocannotwork(evenremotely)becausethey:§ AreexperiencingCOVID-19symptomsandseekingdiagnosis§ Havebeenadvisedbyhealthcareprovidertoself-quaran@neduetoCOVID-19§ Aresubjecttomandatoryfederal,stateorlocalgovernmentquaran@neorderrelatedtoCOVID-19§ Areexperiencinganyother“substan@allysimilarcondi@on”toCOVID-19(perSecretaryofHealthandHumanServices)

Which Employees Qualify? (cont.)

Employeeswhocannotwork(evenremotely)becausethey:§ Arecaringforanindividualwhoissubjecttoamandatorygovernmentquaran@neorderorwasadvisedbyhealthcareprovidertoself-quaran@ne

§ ArecaringfortheirchildwhoseschoolisclosedbecauseoftheCOVID-19emergency

§ ArecaringfortheirchildwhoseusualcaregiverisunavailablebecauseoftheCOVID-19emergency

FFCRA vs. FMLA § FFCRAispaidleavevs.unpaidleaveforFMLA§ FFCRAgenerallyhasnorequirementsforlengthofserviceorhoursworked

…withoneexcep-on§ FFCRAtakesprecedenceforspecificCOVID-relatedsitua@onoutlinedinthelaw§ Otherwise,unpaidleaveunderFMLAappliesforotherfamily&medicalleave

Amount of Paid Leave Varies Scenario1:Employeeisquaran@nedbygovernmentorderoradviceofhealthcareprovider,and/orisexperiencingCOVID-19symptomsandseekingdiagnosis

§ Uptotwoweeks(or80hours)ofpaidleaveatemployee’sregularpayrate

§ Cappedat$511/dayand$5,110total

Amount of Paid Leave Varies Scenario2:Employeeiscaringforanindividualsubjecttoquaran@neORexperiencingasubstan@allysimilarcondi@on

§ Uptotwoweeks(or80hours)ofpaidleaveattwo-thirdsofemployee’sregularpayrate

§ Cappedat$200/dayand$2,000total

Amount of Paid Leave Varies Scenario3:EmployeeiscaringforachildwhoseschoolisclosedorchildcareproviderisunavailableduetoCOVID-19

§ Uptotwoweeks(or80hours)ofpaidleaveattwo-thirdsofemployee’sregularpayrate

§ AND,ifemployed30+dayspriortoleave,upto10addi@onalweeksofpaidleaveatsamerate

§ Cappedat$200/dayand$12,000total

Important:EmergencypaidleaveunderFFCRAisinaddi-ontoanyexis@ngsickleaveand/orpaid@meoffalreadyofferedbyemployer.

Relief for Employers § EmployersarenotexpectedtocoverthecostofemergencypaidleaveunderFFCRA

§ Federalgovernmentwillreimbursethecostofqualified,COVID-relatedleave

§ Financialreliefwillcomeastaxcredits§ Keepproperdocumenta@ontoproveleavemeetsFFCRAcriteria

§ Consultataxadvisor

Recommended Documentation § Keepproperdocumenta@onforCOVID-relatedleave

§ Usewri3enleaverequestform§ Documenta@onshouldinclude:

§ Employee’sname§ Qualifyingreasonforreques@ngCOVID-relatedleave§ Date(s)forwhichleaveisrequested§ Ifduetoquaran@ne,includedetailsaboutquaran@neorderfromgovernmentagencyorhealthcareprovider

§ Ifduetochildcare,includedetailsaboutschoolordaycareclosure

Understanding the Coronavirus Aid, Relief and Economic

Security Act (CARES Act)

Introducing the CARES Act § SignedintolawMarch27§ $2trillion+s@muluspackagetoreduceeconomicimpactofCOVID-19

§ Goalistomaintainincomeforworkersthrough:§ Businessloans(tomaintainpayroll&benefits)§ Directfinancialassistancetoworkerswholosetheirjobs

Paycheck Protection Loans

§ Smallemployers(generallyupto500employees)§ Incen@vetokeepemployeesonpayroll§ Maxloanamount=averagemonthlypayrollduringprioryearX2.5(maxof$10million)§ 2-yearterm@1%;paymentsdeferred6months§ Canbeusedforpayroll,healthcarebenefits,rent,mortgageinterest,u@li@esandotheressen@alexpenses§ NOTtobeusedforFFCRApaidleave

Paycheck Protection Loans (cont.) § AvailablethroughSBA-approvedlendersun@lJune30§ Standardfeeswaived§ Noguaranteerequiredfromborrower§ Par-allyorfullyforgivableundercertaincondi-ons

§ Proceedsusedforqualifiedexpenses§ Atleast75%spentonpayroll§ Allemployeeskeptonfullpayrollforeightweeks

Loans for Larger Businesses

§ Businesseswith500-10,000employees§ Mustrestoreatleast90%ofemployeeswithin4monthsauer‘end’offederalCOVID-19emergency§ Nooutsourcingofjobsduringloantermandfortwoyearsauerloanrepayment§ Addi@onalrequirementsrelatedtounionac@vity

Employee Retention Tax Credit

§ ForemployersaffectedbyCOVID-19dueto:§ Suspensionofopera@onsunderCOVID-19shutdownorder§ Revenuedeclineof50%ormorecomparedtosamequarterinpreviousyear

§ Taxcreditagainstwagespaidfrom3/13/20-12/31/20§ 50%ofqualifiedwages,includinghealthcarecoverage,upto$5,000peremployee§ NotavailabletoemployersreceivingPaycheckProtec@onloansorgovernmentemployers

Extension of Payroll Tax Deadline

§ Tohelpwithcashflow

§ Employerpor@onof2020SocialSecuritytaxescanbedeferred§ Halftobepaidby12/31/21§ Remaindertobepaidby12/31/22

Assistance for Displaced Workers

§ Expandsandsupplementsstateunemploymentbenefits§ Adds$600perweektostatebenefits

§ Mustfirstqualifyforstatebenefit§ Extendseligibilityforupto13addi@onalweeks

§ ThroughJuly31§ Expandscoveragetoindependentcontractors,gigworkers&self-employed§ Mustbe“forcedtosuspendopera@ons”

Additional Benefits for Workers

§ Penalty-freere@rementaccountwithdrawals§ Upto$100,000from401(k)/definedcontribu@onplan§ No10%penalty,butincometaxwills@llbeowed§ Canreplaceamountwithdrawnovernextthreeyears(notsubjecttoannualcontribu@onlimits)

§ AvailableonlytoemployeesdirectlyaffectedbyCOVID-19:§ Employee,spouseordependentdiagnosedw/COVID-19§ Employeeexperiences‘adversefinancialconsequences’

Additional Benefits for Workers

§ Maximumre@rementaccountloanamountsdoubled§ Canborrowupto$100,000from401(k)orotherdefinedcontribu@onplan(oruptofullbalanceifbelow100k)

§ Samerequirementsaspenalty-free401(k)withdrawal:§ EmployeediagnosedwithCOVID-19§ Employee’sspouseordependentdiagnosedwithCOVID-19§ Employeesuffered‘adversefinancialconsequences’duetoCOVID-19

Best Practices when Considering a Reduction in Force (RIF)

Crunch the Numbers § Es@mateimpactonrevenueovernext6-12months§ Tightenupnon-payrollexpensesfirst§ Assesspayrollexpenselast§ Weighallop@onsunderFFCRAandCARESAct§ Consideralterna@vestoinvoluntarylayoffs

§ Reducedhours/salaries§ Temporaryfurloughs/leavesofabsence§ Voluntaryleaves/layoffs

Use Objective Criteria § Whichfunc-onsareessen@altomaintainopera@ons?§ Howmanyareneededtoperformeachfunc@on?

§ Minimize‘rounds’ofcuts

§ Whatobjec-vecriteriacanbeusedforselec@on?§ Tenure§ Seniority§ Produc@vity§ Workercategory§ Specificskillsets/knowledge

§ Consideradverseimpactonprotectedclassesunderfederallaws…§ Race,color,ethnicity,na@onalorigin,religion,gender,age(40orover),disability,veteranstatus,gene@cinforma@on

§ …andstateandlocallaws§ Sexualorienta@on,maritalstatus,smokers,etc.

Avoid Potential Discrimination

Pointer:Whenallelseisequal,”lasthired”isouenthefairestapproachforindividualsinsimilarposi@ons.

Consider Employee Notification Laws § FederalWorkerAdjustmentRetrainingandNo@fica@onAct(WARNAct)§ Employerswith100+full-@meemployeesmustgive60days’wri3enno@ceofplantclosingormasslayoff

§ Typicallydoesn’tapplytotemporaryclosings/layoffs(<6months)§ Excep@onsfornaturaldisastersor’unforeseeablebusinesscircumstances’

§ S@llmustprovideno@ceassoonasprac@cable,withexplana@onforreducedno@ceperiod(e.g.,pandemic)

Consider Employee Notification Laws

§ Alsocheckstatelaws§ Somestateshaveseparatelegalrequirementsrelatedtomasslayoffsandplantclosings

§ Somerequirementsmayapplytocurrentsitua@on§ Addi@onalno@cesarerequiredforindividuallayoffs/termina@onsunderstateandlocallaws

Determine Severance Benefits

§ Notrequiredbyfederallaw,butoueninclude:§  Severancepay(typicallyvariesbylengthofservice)§ Employer-paidbenefitsandCOBRApremiums§ Le3ersofrecommenda@on§ Outplacementservices§ Accesstointernaljobpos@ngs§ Waiverofnon-competerestric@ons§ Otheremployeeassistanceprograms

Pointer:Haveemployeessignaseveranceagreementreleasingemployerfromliabilityandprotec@ngagainstlegalclaims.Note:ConsultanaForneytoensureagreementcomplieswithallfederal,stateandlocallaws.

Communicate Decisions Clearly § Prepareascript§ Keeptothepointandbeconsistent§ Beclearonwhetherthelayoffistemporaryorpermanent§ Explainfinalpaychecks§ Providewri3endetailsregardingseverancebenefits,healthinsurancecon@nua@onop@onsandoutplacementservices

§ Describehowrecalls/rehireswillbehandled§ Temporary:Willjobbeheldorwillitdependonbusinessneed?§ Permanent:Willtheybeconsideredaheadofnewapplicants?

Compliance Tips for Managing Remote Workers

Update Remote Work Policies

§ Cri@calpoliciesinclude:§ Employercontrolofremoteworkdecisions§ Useofcompanyequipment§ Workschedules&expectedavailability§ Over@merestric@onsandapprovalprocesses§ Datasecurityandconfiden@ality

§ Remindemployeesthatallcurrentpoliciess@llapply

Establish Clear Boundaries for Non-Exempt Employees

§ Beclearaboutexpectedworkhours§ Canvarybyrole/department§ Canallowsomeflexibilitybasedonrole

§ Useelectronicsystemforclockingin/out,ifpossible§ Otherwise,requireweekly@mesheets

§ Emphasizethat‘offtheclock’workisstrictlyprohibited

Watch How You Manage Exempt Employees

§ Donottrackworkhoursforpaypurposes§ Donotestablishafixedworkschedule(unlessnecessitatedbyrole)

§ Youcansetexpecta@onsforwhenexemptemployeesmustbeavailableformee@ngsandcollabora@on

§ Otherwise,managetogoalsanddeliverables,nothoursworked

Provide Access to Mandatory Postings and Notifications

§ Communica@ngemployeerightsismoreimportantthanever§ Newlawsexpandemployeerights–federal,state,local§ Newlawsmeannewpos@ngsrequirements§ Employeeli@ga@onriskexpectedtoincreaseduetohard@mes&increasinglegalcomplexity

§ Pos@ngrequirementsapplytoremoteworkers(canbeelectronic)§ Mandatoryemployeehandoutsarealsochanging

§ Ouentriggeredbyleaverequestsandunemploymentclaims

New & Updated Solutions to Address COVID-19

§ MandatoryFFCRAPoster—laminated,bilingual§ FFCRAComplianceEssen@als§ IntranetLicensingServiceforElectronicPosters(6or12months)§ SmartApps–CompanyPolicies§ MandatoryEmployeeHandoutService

Learnmoreat:HRdirect.com/COVID-19

Questions

Reminder:AllaFendeeswillreceivealinktothepresenta-onandslidesinafollow-upemail.