IRS relief available for midyear contribution changes to safe harbor 401(k)s - 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) […]
Form W-2 reporting of COVID-19-related sick leave and family leave - 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 […]
Communicate carefully about compensation during the pandemic - 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 […]
IRS guidance on “coronavirus-related” retirement plan distributions - 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 […]
COVID-19-related leave donation programs now eligible for tax relief - 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. […]
IRS relief addresses physical presence requirement for retirement plan signatures - 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 […]
How HIPAA applies to COVID-19-related temp checks and info gathering - 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 […]
COVID-19-related deadline relief affects HSAs and retirement plans - 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 […]
Consider “windowed work” for work-life balance - 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 […]
What rules apply to “PTO buying” under a cafeteria plan? - 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 […]