Legislative Updates

Last April’s EBSA Disaster Relief Notice 2020-01 provided extensions for certain deadlines for COBRA, HIPAA, and claims filing timeframes, effective March 1, 2020. Under the extension, the affected timelines were “paused” until the earlier of the end of the “Outbreak Period” (60 days after the COVID-19 national emergency was declared over) or one year (February 28, 2021).

EBSA issued Disaster Relief Notice 2021-01 clarifying the timeline extensions granted in the earlier Notice.

Individuals and plans with timeframes that are subject to the relief under the Notices will have the applicable periods under the Notices disregarded until the earlier of:

(a)  1 year from the date they were first eligible for relief, or

(b)  60 days after the announced end of the National Emergency (the end of the Outbreak Period).

On the applicable date, the timeframes for individuals and plans with periods that were previously disregarded under the Notices will resume. In no case will a disregarded period exceed 1 year.

On February 27, 2021, the U.S. House of Representatives Passed the American Rescue Plan Act of 2021 (“Biden’s $1.9 trillion stimulus plan”). This bill provides additional relief to address the continued impact of COVID-19 (i.e., coronavirus disease 2019) on the economy, public health, state and local governments, individuals, and businesses.

Specifically, the bill provides funding for:

·         agriculture and nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP, formerly known as the food stamp program);

·         schools and institutions of higher education;

·         child care and programs for older Americans and their families;

·         COVID-19 vaccinations, testing, treatment, and prevention;

·         mental health and substance-use disorder services;

·         emergency rental assistance, homeowner assistance, and other housing programs;

·         payments to state, local, tribal, and territorial governments for economic relief;

·         multiemployer pension plans;

·         small business assistance, including specific programs for restaurants and live venues; and

·         programs for health care workers, transportation workers, federal employees, veterans, and other targeted populations.

The bill also includes provisions that

·         raise the federal minimum wage to $15 an hour by 2025;

·         extend unemployment benefits and related services;

·         provide a maximum recovery rebate of $1,400 per eligible individual;

·         expand and otherwise modify certain tax credits, including the child tax credit and the earned income tax credit;

·         provide premium assistance for certain health insurance coverage; and

·         require coverage, without cost-sharing, of COVID-19 vaccines and treatment under Medicaid and the Children's Health Insurance Program (CHIP).

The bill has now been referred to the Senate. Check back for updates to see if the bill becomes law.

 

On Feb. 25, the U.S. House of Representatives passed the Equality Act, a bill that proposes to amend federal civil rights law to prohibit discrimination against LGBTQ individuals in employment, housing and public schools, among other areas. The U.S. Supreme Court already has interpreted Title VII of the Civil Rights Act of 1964 to prohibit discrimination based on sexual orientation and gender identity, but the Equality Act would enshrine the prohibition in the statutory language and provide broader protections.

The bill has now been referred to the Senate. Check back for updates to see if the bill becomes law.

USERRA Requires Paid Leave if Comparable Leaves Are Paid

Employees who take off work for military duty may be entitled to paid leave from their employers, according to a Feb. 3, 2021, federal appeals court decision. The case, White v. United Airlines, Inc., was brought by a United Airlines pilot whose short leaves from work for Air Force Reserve duty were unpaid, although United paid pilots for other short-term leaves of absence, such as jury duty and sick leave.
 
The 7th Circuit Court of Appeals considered language in the Uniformed Services Employee and Reemployment Rights Act (USERRA) requiring that employees on military leave be provided the rights and benefits generally provided to similar employees on other leaves. Finding that “rights and benefits” included paid leave, the court reinstated the case and sent it back to the lower court for further proceedings.

Importantly, the 7th Circuit noted that White, the plaintiff, must now show that any paid leave of absence provided by United is comparable to any given stretch of military leave. Factors to be considered in this analysis, the court said, are the duration and purpose of the leave, as well as the ability of the employee to choose when to take the leave.

The 7th Circuit Court’s jurisdiction covers Illinois, Indiana and Wisconsin.

Watch for other jurisdictions' interpretations. 

On February 8, 2021, Circuit Judge Christina Klinger ruled on an election contest complaint that Constitutional Amendment A, a 2020 ballot measure that legalized marijuana in South Dakota beginning in 2021, was unconstitutional because it violated the state’s one-subject rule and revised the state’s constitution instead of amending it. The case is expected to be appealed to the South Dakota Supreme Court.

South Dakota Senate Bill 190, entered on February 3, 2021, seeks to revise provisions regarding unfair or discriminatory practices by including "sexual orientation, gender identity, or identification as a Native American Two-Spirit" as protected categories. 

The Department of Labor (DOL) has released a new model Employer CHIP Notice with information current as of Jan. 31, 2021. As a reminder, employers with group health plans that cover participants in states that provide premium assistance subsidies through Medicaid or the Children’s Health Insurance Program (CHIP) are required to notify their employees annually, regardless of the employer’s location.

The DOL’s model notice, which employers may use for this disclosure, is updated periodically to reflect changes in the states that offer premium assistance subsidies, as well as the contact information for those states. Click here for more information.

On January 29, 2021, the U.S. Department of Labor announced that its Occupational Safety and Health Administration (OSHA) issued new worker safety guidanceto:

• Help employers and workers implement a coronavirus protection program; and
• Identify risks that could lead to exposure and contraction;

The guidance recommends several essential elements in a prevention program:

• Conduct a hazard assessment.
• Identify control measures to limit the spread of the virus.
• Adopt policies for employee absences that don’t punish workers as a way to encourage potentially infected workers to remain home.
• Ensure that coronavirus policies and procedures are communicated to both English and non-English speaking workers.
• Implement protections from retaliation for workers who raise coronavirus-related concerns.

The guidance is not a standard or regulation, and it creates no new legal obligations. It contains recommendations as well as descriptions of existing mandatory safety and health standards. The recommendations are advisory in nature, informational in content, and are intended to assist employers in recognizing and abating hazards likely to cause death or serious physical harm as part of their obligation to provide a safe and healthful workplace.

On January 27, 2021, the U.S. Immigration and Customs Enforcement (ICE) announced the Employment Eligibility Verification (Form I-9) flexibility rule will be extended to March 31, 2021 because of COVID-19 and the need for precautions. This flexibility rule, applicable only to remote workplaces, defers the physical presence requirement for in-person verification of the Form I-9 identity and employment eligibility documentation. However, the flexibility rule does not apply if there are employees physically present at the workplace. If there are employees physically present, then an employer must verify their Form I-9 identity and employment eligibility documentation in-person.

On March 19, 2020, the DHS first announced that the physical presence requirements were deferred due to COVID-19. The DHS and ICE websites provide additional updates about when the extensions will end and when normal operations will resume.

On January 26, 2021, an Internal Revenue Service press release (IR-2021-21) reminded employers to take advantage of the extended employee retention credit for businesses that choose to keep their employees on the payroll despite the challenges posed by COVID-19. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, changed the employee retention tax credits previously made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including modifying and extending the Employee Retention Credit (ERC), for six months through June 30, 2021. Several of the changes apply only to 2021, while others apply to both 2020 and 2021.

As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70 percent of the qualified wages they pay to employees after December 31, 2020 and through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERC amount available is $7,000 per employee per calendar quarter, for a total of $14,000 in 2021.

Employers can access the ERC for the 1st and 2nd quarters of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Small employers, those with an average of 500 or fewer full-time employees in 2019, may request advance payment of the credit (subject to certain limits) on Form 7200, Advance of Employer Credits Due to COVID-19, after reducing deposits. In 2021, advances are not available for employers larger than this.

Effective January 1, 2021, employers are eligible if they operate a trade or business during January 1, 2021 through June 30, 2021, and experience either:

• A full or partial suspension of the operation of their trade or business during this period because of governmental orders limiting commerce, travel or group meetings due to COVID-19; or
• A decline in gross receipts in a calendar quarter in 2021 where the gross receipts of that calendar quarter are less than 80 percent of the gross receipts in the same calendar quarter in 2019 (to be eligible based on a decline in gross receipts in 2020 the gross receipts were required to be less than 50 percent).

Employers that did not exist in 2019 can use the corresponding quarter in 2020 to measure the decline in their gross receipts. In addition, for the first and second calendar quarters in 2021, employers may elect (in a manner provided in future IRS guidance) to measure the decline in their gross receipts using the immediately preceding calendar quarter (the fourth calendar quarter of 2020 and first calendar quarter of 2021, respectively) compared to the same calendar quarter in 2019.

In addition, effective January 1, 2021, the definition of qualified wages was changed to provide:

• For an employer that averaged more than 500 full-time employees in 2019, qualified wages are generally those wages paid to employees that are not providing services because operations were fully or partially suspended or due to the decline in gross receipts. 
• For an employer that averaged 500 or fewer full-time employees in 2019, qualified wages are generally those wages paid to all employees during a period that operations were fully or partially suspended or during the quarter that the employer had a decline in gross receipts regardless of whether the employees are providing services.  

Retroactive to the March 27, 2020, enactment of the CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not treated as payroll costs in obtaining forgiveness of the PPP loan.

Read more about COVID-19-related employee retention credits and how to claim the employee retention credit here.