Employer

In response to the COVID-19 crisis, the IRS recently issued Notice 2020-52. It offers sponsors of safe harbor 401(k) plans with temporary relief from certain requirements applicable to midyear reductions or suspensions of contributions. The guidance also clarifies the requirements for midyear contribution reductions (during or after the pandemic) that affect only highly compensated employees (HCEs) participating in such plans. Permissible amendments IRS regulations generally require [...]

In Notice 2020-54, the IRS recently provided guidance to employers on Form W-2 reporting of qualified sick leave wages and qualified family leave wages. These are the wages paid to employees under the Families First Coronavirus Response Act. The guidance requires employers to report the amount of qualified sick leave wages and qualified family leave wages paid to those employees. Doing so enables self-employed individuals who also [...]

The COVID-19 pandemic and resulting economic fallout have spurred layoffs and furloughs for many employers. As the months pass, organizations that have retained employees face another dilemma: How should we handle compensation changes? Pay raises have been out of the question for some organizations. In fact, more than 25% of employers surveyed in June by global advisory firm Willis Towers Watson reported reducing salaries rather [...]

In Notice 2020-50, the IRS recently provided guidance on “coronavirus-related distributions” from retirement plans under Section 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here are some pertinent details for employers. Pension plans The Notice points out that Sec. 2202 doesn’t change the rules for when plan distributions are permitted to be made from employer retirement plans. Thus, a qualified pension plan isn’t permitted to [...]

The IRS recently announced special tax relief for leave-based donation programs set up by employers to aid those directly affected by the COVID-19 pandemic. Under such programs, an employer can allow its employees to give up vacation, sick or personal leave in exchange for a cash contribution by the employer to a qualified charitable organization. Two issues addressed Ordinarily, leave-based charitable donations must be included [...]

Under IRS regulations regarding electronic consents and elections, if a signature must be witnessed by a retirement plan representative or notary public, it must be witnessed “in the physical presence” of the representative or notary unless guidance has provided an alternative procedure. In Notice 2020-42, the agency recently established temporary alternative procedures that allow signatures witnessed via remote technology to satisfy the physical presence requirement at [...]

To cope with the COVID-19 crisis, many employers are taking employees’ temperatures and asking them general health-related questions as they report to work. A cogent question that often arises in light of this activity is: How do the requirements of the Health Insurance Portability and Accountability Act (HIPAA) apply to the information gathered? Covered entities HIPAA’s requirements to safeguard protected health information (PHI) apply only [...]

The IRS recently issued another notice extending tax deadlines because of the COVID-19 pandemic. Notice 2020-35 supplements IRS Notice 2020-23 and earlier guidance by extending the deadlines for certain additional time-sensitive actions relating to employment taxes; exempt organizations; employee benefit plans, including 401(k)s; Health Savings Accounts (HSAs); IRAs; and other specified accounts. With some exceptions, the extensions apply only to actions due to be performed on or [...]

The term “work-life balance” has been around for decades. For much of that time, the struggle to attain this elusive equilibrium has typically involved having too much “work” and not enough “life.” Employers have been urged to, among other things, create dynamic paid-time-off policies and encourage employees to use their vacation days regularly and sick days when necessary. In recent months, however, the imbalance may [...]

The novel coronavirus (COVID-19) pandemic has forced many people to cancel or postpone vacations, as well as travel plans to visit friends and family. While staying home to stay safe — and, often, to telework — many employees may not use as much paid time off (PTO) this year as they normally would. In a spirit of optimism, one hopes the situation next year will [...]

The IRS recently increased the carryover limit for Health Flexible Spending Arrangements (FSAs) to an amount indexed for inflation. The agency also clarified the ability of a health plan to reimburse individual insurance policy premium expenses incurred before the beginning of the plan year for coverage provided during the plan year. Boosted maximum Under IRS Notice 2020-33, the maximum $500 carryover amount for a plan year [...]

The IRS recently issued frequently asked questions (FAQs) regarding retirement plan distribution and loan relief under the Coronavirus Aid, Relief and Economic Security (CARES) Act. This relief applies to qualified individuals affected by the novel coronavirus (COVID-19) pandemic. It expanded distribution options and favorable tax treatment, increased plan loan limits and delayed repayment of outstanding plan loans. The FAQs explain that the IRS plans to [...]

Typically, when employers undertake major changes to how and where employees do their jobs, it’s only after copious planning and careful implementation. The novel coronavirus (COVID-19) pandemic eliminated this luxury in a matter of days for most organizations. That doesn’t mean that you still can’t apply change management — a mindful and open approach to organizational transformation — to your workforce challenges. Here are some [...]

The U.S. Department of Labor’s (DOL’s) Wage and Hour Division recently posted additional guidance regarding paid sick and emergency childcare leave under the Families First Coronavirus Response Act (FFCRA). Much of the guidance offers details and clarifications on the calculation of paid leave, including: How to calculate an employee’s regular rate of compensation, Whether the regular rate must be recalculated each time leave restarts, and [...]