Guidance Regarding Executive Order’s Payroll Tax Deferral

In early August, President Trump signed an Executive Memorandum directing the Secretary of the Treasury to defer the payment of payroll taxes from September 1 until December 31, 2020 for employees earning less than $4,000 per pay period (or $104,000 per year). Late in the day on August 28, 2020, the Treasury Department and IRS released guidance on the issue.

Employers may opt to temporarily stop deducting eligible employees’ payroll tax payments, from September 1 until December 31, 2020. The deferred payroll tax payments represent employees’ shares of Social Security taxes, in the amount of 6.2% of wages. Only Congress can change or forgive tax liability. If Congress does not enact legislation to forgive the deferred tax liability, employers would have to make these payroll tax payments or collect them from employees during the period January 1 to April 30, 2021 (“payback period”).

This payroll deferral presents potential challenges for both employees and employers. Unless the employer pays the employees’ portion of the tax payments that are owed, employees would pay the deferred tax payments along with their customary payroll tax payments in the first few months of 2021. This would result in double payment (12.4% of wages) during the payback period. While many employees may welcome the short-term cash gain in 2020, others fear the double financial hit in 2021. Employers share the concern this may be too financially burdensome for employees. Another potential issue for employers would be handling repayment for employees who are no longer employed, whether through termination, layoff, or resignation. Tax deferrals may also decrease Social Security funding. Given the first September payrolls start tomorrow, it is unlikely that any payroll systems are equipped to handle this change.

We encourage employers to tread carefully on this issue. Before implementing the tax deferral, employers should consult with their HR departments to assess employee interest and with their accountants to assess the tax risks. After that, communication with employees is critical to apprise them of any changes and the impact on their pay both now and in 2021.

Lake Effect HR & Law will continue to monitor developments related to COVID-19 relief. Please keep watching for blogs and emails from us for important legal updates and HR best practices. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Engaging & Retaining Employees, While Navigating FFCRA & FLSA

Five months after quickly transitioning to a “temporary” virtual workplace, many employees are still working at home. They are also managing caregiving and work responsibilities, as well as their own physical and emotional wellbeing. Employers are now struggling with how to adapt short-term fixes into sustainable, longer- term solutions that will engage and retain a virtual workforce.

In the face of this challenge, consider incorporating the following practices into your workplace culture to support your employees’ wellbeing and fulfill your organization’s mission and strategic initiatives.

  • Maintain flexible scheduling. As home and work priorities shift, employees may be more productive and focused during non-traditional business hours or blocks of time during the day, including evenings and weekends. When team members work different hours, encourage them to communicate and be transparent about their schedules. This will promote a productive workflow and strengthen working relationships.
  • Continue virtual work. If your team has proven they can be successful working virtually, continue to provide this flexibility. This may give those employees who need or want to work from another location an opportunity to spend the summer at their cabin, rent a VRBO, or stay with out-of-town family or friends for an extended time.
  • Welcome the interruptions. Intentionally or inadvertently, we have met (or heard in the background) our coworkers’ furry friends, kids, family, and roommates. We’ve had an opportunity to visit our coworkers’ homes through the lens of our computer cameras during video conferences. Rather than begrudging the interruption, welcome this opportunity to get to know one other as individuals, not just coworkers.
  • Encourage employees to collaborate on pod learning and/or caregiving responsibilities. As many school districts have decided on some version of virtual learning, employees may want the opportunity to work together to create pod learning or shared childcare. Connecting employees in this manner may provide them an opportunity to work alternate days or times. In addition, consider converting unused conference rooms to temporary classrooms or playrooms, just be sure to check with your worker’s compensation carrier.
  • Promote wellness benefits and other wellbeing resources. Work closely with your benefits broker, understand your current organization’s wellness benefits, and educate your employees on these offerings. During your annual renewal, consider additional, lower cost, but high health reward benefits to better support the wellness needs of your staff. These benefits may include an employee assistance plan (EAP) or subscription services to wellness apps, online yoga classes, coffee clubs, or other services that support wellness activities for your entire employee population, even those who do not participate in your health, dental, and vision plans. Focus as well on virtual activities your employees can engage in together, such as company-wide or departmental fitness or step per day goals.
  • Encourage use of paid time off. We might not be planning our once-in-a-lifetime vacation this year, but there are many adventures awaiting us locally. Remind employees of their PTO balance and encourage them to take time to recharge, this may include helping them efficiently tackle their work tasks so they can enjoy the time away. Add some fun and promote their time away by sharing pictures of their adventures on an internal shared site.
  • Support your wellness/social committee. A wellness committee is usually made up of a group of employees that are passionate about wellness and engaging their coworkers in some office fun. This group may be able to plan virtual celebrations, arrange for group wellness activities, or delivery company branded gifts to employees’ homes, like customized face masks and small hand sanitizers! Include gift certificates to encourage employees to support local restaurants and shops.
  • Review processes and procedures. Update processes and procedures to be more efficient and relevant in your current work environment. Review expense reimbursement procedures to determine if you should start reimbursing for employees’ virtual expenses, such as cell phone, internet, hotspot, or office supplies/equipment.
  • Evaluate leaders’ job duties and responsibilities. In addition to leading people, leaders have their own job responsibilities and deadlines to meet. Provide leaders more time to lead during these uncertain times by transferring job duties that may provide others a growth opportunity. You may find that after updating processes and procedures to be more efficient, employees may have more capacity and would welcome to learn a new skill.
  • Continue coaching and development efforts. Employees want and need frequent feedback and recognition, especially during times of change and uncertainty. Consider adapting your process to better suit your current workplace situation to ensure supervisors are frequently communicating with direct reports. Encourage managers to check in with their teams to find out how they are doing, if they need additional resources, and to remove any roadblocks.
  • Keep calm and communicate. The COVID-storm has not passed yet, keep communicating frequently with your employees. Now, more than ever, employees want to know how COVID-related changes are impacting the organization and themselves. Discuss with employees the direction of the organization, how they can support the organization’s initiatives, and when they achieve their goals.
  • Be true to your organization’s mission. When considering how to adapt your workplace, remember your guiding star – your organization’s mission, vision, values, and strategic plan.

If you have questions about managing and engaging a virtual workforce, leave requests, or other FFCRA or FLSA related questions, the HR and legal team at Lake Effect can help.

We are closely monitoring the impact of COVID-19 on the workplace. Keep watching for blogs and emails from your Lake Effect team for important legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Employers Must Submit Form for Unemployment Benefits Relief by August 15, 2020

As a reminder, Wisconsin Act 185 mandated that unemployment benefits that are the result of COVID-19 may be charged against the state’s UI fund balance and not to the employer’s UI account.

Wisconsin employers must submit Form UCB-18823-E by August 15 to ensure that COVID-19 related unemployment benefits for employees’ initial claims filed between May 17 – June 30, 2020 are not charged to employers’ UI accounts. For initial claims filed after June 30th, this same form must be submitted within 30 days after the employee’s initial claim is filed.

The Wisconsin Department of Workforce Development is not requiring employers to submit the UCB-18823-E form to receive relief for employees filing initial unemployment benefits claims during the weeks of March 15 – May 16, 2020.

We are closely monitoring the impact of COVID-19 on the workplace. Keep watching for blogs and emails from your Lake Effect team for important legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

DOL Updates FMLA Forms

On July 16th, the Department of Labor (DOL) updated Family and Medical Leave Act (FMLA) forms which employers may use to administer FMLA leaves within their organizations. The FMLA does not require the use of any specific form or format but using the forms can simplify leave administration and facilitate compliance for employers.

In the press release, the DOL announced that the forms collect the same information but are “simpler and easier to understand for employers, leave administrators, healthcare providers, and employees seeking leave.” Among the changes announced are boxes that can be checked instead of requiring written responses and electronic signature features. As the DOL stated, “[t]he changes reduce the amount of time it takes a healthcare provider to provide information, and help leave administrators review and communicate information to employees more directly and with greater clarity, reducing the likelihood of violations.”

The DOL also updated its guidance related to FMLA leave related to COVID-19. The two updates are:

  • Telemedicine visits are considered in-person visits for purposes of establishing a serious health condition (Guidance, Question #12)
  • Employers may require an employee returning from FMLA to get a COVID-19 test as long as all employees returning to the office are also required to get a test (Guidance, Question #13)

Note: The FMLA covers employers with 50 or more employees for at least the past 20 weeks. It also applies to public agencies, regardless of the number of employees, and to elementary and secondary schools, both public and private. The federal FMLA only applies to employees who have worked for a covered employer for a minimum of 12 months, although these 12 months do not need to be consecutive. Additionally, the employee must have worked at least 1,250 hours for the employer during the previous 12 months at a site where the employer has 50 or more employees within a 75-mile radius. See the differences between federal and WI FMLA here. If you are unsure if you are an FMLA covered employer, please contact us as noted below.

Lake Effect is here to answer your FMLA questions and/or help administer this process within your organization. Contact us at info@le-hrlaw.com or 1-844-333-5253.

OSHA reinstates normal reporting and investigation standards for COVID

On May 19, 2020, the Occupational Safety & Health Administration (OSHA) reversed an earlier enforcement policy for recording cases of COVID. As Lake Effect reported in April, OSHA had announced that it would not enforce its record-keeping requirements on employers to make COVID “work-relatedness” determinations, except when (1) there was objective evidence that an employee’s exposure to COVID-19 was work-related and (2) that evidence was reasonably available to the employer. At that time, OSHA noted that it may be difficult for employers to determine if an employee with COVID-19 contracted COVID-19 at work. Yesterday, OSHA revised that policy.

OSHA will now increase in-person worksite inspections and enforce COVID record-keeping requirements for all employers. Acknowledging the difficulty in determining where an employee may have contracted COVID, OSHA reminded employers that a case of COVID in the workplace is a recordable illness. Employers must record cases of COVID if all of the following are true:

  • An employee has a confirmed case of COVID-19;
  • The employee’s case of COVID is considered to be work-related*; and
  • The illness involves one or more of the recording criteria, including medical treatment beyond first aid or days away from work.

*Note that an illness is considered to be work-related “if an event or exposure in the work environment either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness. Work-relatedness is presumed for injuries and illnesses resulting from events or exposures occurring in the work environment” unless an exception applies.

Keep in mind that employers with 10 or fewer employees or in certain low hazard industries are exempt from OSHA reporting requirements unless the injury or illness results in hospitalization, amputation, or loss of an eye.

The legal and HR team at Lake Effect is closely monitoring the impact of COVID-19 on the workplace and will continue to provide our clients with updates as they are available. Please visit our COVID-19 resource page for all of our pandemic-related legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

IRS Increases Flexibility for Employer Health Plans, FSAs and Dependent Care Programs

On May 13, 2020, the IRS released new guidance giving employers greater flexibility in the administration of sponsored Sec. 125 cafeteria plans (including health insurance, flexible spending and dependent care plans), whether insured or self-insured. Under the new rules, an employer may amend plan documents to permit employees to make new health care elections or change current elections mid-year on a prospective basis (outside of the customary open enrollment period). An employer may also give employees more time to apply unused medical flexible spending and dependent care account dollars, recognizing that cancellation of medical procedures and school/day care closures during the pandemic have dramatically affected employee balances in these accounts.

Under the new guidance, employers may permit eligible employees covered by a Sec. 125 cafeteria plan to do the following:

  • Employer Sponsored Health Plans:
    • Allow employees to enroll in health care insurance plan on a prospective basis, even if the employee initially declined to elect coverage under the employer-sponsored health coverage.
    • Revoke an existing election and make a new election to enroll in different coverage sponsored by the same employer on a prospective basis.
    • Revoke an existing election, provided that the employee attests in writing that they are enrolled, or will immediately enroll, in other health coverage not sponsored by the employer. (The guidance provides a sample attestation.)
  • Medical Flexible Spending Plans and Dependent Care Spending Plans:
    • Revoke an election, make a new election, or decrease or increase an existing election applicable to a health flexible savings account or dependent care assistance program. (Employers can limit the election changes to be no less than amounts already reimbursed to the employee.)
    • Revise their plans to provide options for employees who have unused amounts at the end of the 2020 calendar year in one of two ways:
      • Grace Period: Allows plan participants to incur expenses and use the remaining funds in the account no later than March 15, 2021.
      • Carry over: Allows plan participants to carry over amounts up to $550 into their plan for the 2021 year.
      • Note: An employer would need to choose either the Grace Period or the Carry Over option, they cannot do both.

Keep in mind that the increased flexibility allowed by the new IRS guidance is optional, not required. To implement any of the above changes, an employer must adopt amendment(s) to applicable Sec. 125 cafeteria plans on or before December 31, 2021, and those amendments may be effective retroactively to January 1, 2020. The employer must also inform all eligible employees of any changes to the Sec. 125 cafeteria plans. Employers should work closely with their benefits brokers and health plan providers to make any of these changes.

The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

DWD’s Work-Share Program: Another Option to Avoid Layoffs

As employers evaluate options to address the impact of COVID-19 on their organizations, Wisconsin’s Department of Workforce Development (DWD) is encouraging participation in its Work-Share Program.

The Work-Share Program is designed to help employers avoid layoffs of at least two employees by reducing employees’ hours during slow business periods of up to six months. The state has adopted legislation relaxing some of the program’s requirements to make it more accessible for employers during the pandemic. Through December 31, 2020, the thresholds for work-share plans have been simplified and lowered, as follows:

  1. the plans are no longer restricted to a particular work unit;
  2. the plans normally apply to the greater of 20 positions or 10% of the employees in a work unit, but now the plans may cover at least two employees; and
  3. the participating employees’ reductions in hours previously could not exceed 50%, but now the participating employees’ hours may be reduced by 10-60%.

The intent of the program is to keep employees working and covered on employee benefit plans, while also allowing them to receive unemployment benefits. Participating employees are eligible for state and federal unemployment benefits, including employees earning more than $500/week from any employer/s who would otherwise be ineligible for unemployment. In addition, employers are required to maintain the participating employees’ health insurance coverage and coverage under any defined benefit or defined contribution retirement plan under the same terms and conditions that applied before participation in the work-share plan.

To participate, employers must submit an application to the DWD. The application must outline, among other things, information about the employees who will participate in the plan and the reduction in the employees’ hours. DWD has dedicated staff to handle questions about the Work-Share Program and is expediting the review of work-share applications.

The legal and HR team at Lake Effect is closely monitoring the impact of COVID-19 on the workplace and will continue to provide updates as they are available. Check out our COVID-19 resource page for all of our pandemic-related legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Recovery Readiness Guide For Employers

As businesses prepare to reopen or resume full operations amid COVID-19, there will be new challenges and questions. No one has all the answers, but Lake Effect can help you anticipate some of the issues that are likely to arise as you reopen and/or return more employees to the worksite. We do not know when business will return to “normal,” but employers can put measures in place to be successful and compassionate as we introduce our employees and workplaces to our “new normal.”

Lake Effect has prepared detailed guidance to help employers welcome their teams. Below is an outline of those steps; if you would like to schedule a time to discuss a plan tailored to your organization, please let us know.

As always, the attorneys and HR professionals at Lake Effect HR & Law are available to advise you as you develop plans to restore operations and welcome team members back to the workplace. We look forward to helping our partners bounce back. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Steps to Welcome Team Members Back to Work in the Wake of COVID-19

STEP 1: MAKE THE DECISION TO RESTORE OPERATIONS

Who will decide?
How will you notify employees?
How will the return be implemented?

STEP 2: RESTORE, RECALL, AND REHIRE EMPLOYEES WHO WERE FURLOUGHED, LAID OFF OR TERMINATED

Furloughed Employees
Laidoff Employees
Terminated Employees
Work-share Program
Other considerations

STEP 3: CHOOSE EFFECTIVE SCHEDULING STRATEGIES

Continue telework for some
Ensuring social distancing
Other considerations

STEP 4: PLAN FOR ENHANCED CLEANING IN THE WORKPLACE

Cleaning plans and practices
Changes in utilization of space and equipment
Possible limitations on plans

STEP 5: EVALUATE PHYSICAL WORKPLACE, PROTECTIVE GEAR AND OTHER SAFEGUARDS

Changes to workspace and protective gear
Changes to interactions and gatherings

STEP 6: ASSESS OF EMPLOYEE HEALTH

Screening and/or testing
Logistics of testing

STEP 7: ADDRESS EMPLOYEE CONCERNS AND NEEDS

Communicate all post-quarantine changes and expectations
Monitor employees’ wellbeing
Assess employee morale
Prevent harassment and discrimination

STEP 8: CONSIDER & MONITOR POTENTIAL ISSUES UNDER ADA, OSHA, AND NLRA

ADA Issues
OSHA issues
NLRA issues

STEP 9: ANTICIPATE EMPLOYEE LEAVE REQUESTS

STEP 10: TRAIN SUPERVISORS AND MANAGERS

STEP 11: REVIEW AND UPDATE EXISTING POLICIES

STEP 12: PLAN AHEAD

Emergency Order #34: Interim Order to Turn the Dial

On April 27, 2020, the Evers Administration released Emergency Order #34 entitled “Interim Order to Turn the Dial.” In this order, the administration expands slightly the permissible business operations set forth in Emergency Order #28, “Safer at Home Order.” This Order takes effect on Wednesday, April 29, 2020 at 8:00 a.m.

While Section 14 of “Safer at Home” permitted curb-side pick-up as part of Minimum Basic Operations, this Order adds “curb-side drop-off of goods or animals for the purpose of having those goods or animals serviced, repaired, or cared for by the business.” Staff within the business or facility is still limited to 1 person in a room or confined space and payment must be made by phone or online (i.e., no transfer of cash or check and no signature for receipt). All arrangements must be scheduled in advance, and customers may not enter the business or facility to ensure proper social distancing.

This Order also expands Minimum Basic Operations to include rental of recreational equipment “including but not limited to boats, kayaks, canoes, paddle boats, golf carts, snowmobiles, and ATVs.” The staff count, payment methods, scheduling requirements, and prohibition against customers entering the business or facility mirror those set forth above for curb-side drop-off. All rental equipment must be thoroughly cleaned been uses.

Finally, the Order expands Minimum Basic Operations to include car washes, provided the car wash is entirely automatic or self-service. All high-touch surfaces must be cleaned between use if possible, or as frequently as practicable.

Consistent with its “Badger Bounce Back” plan, the Evers Administration is progressing towards its stated goal of gradually reopening businesses and operations across the state. As always, the attorneys and HR professionals at Lake Effect HR & Law are available to advise you as you develop plans to restore operations and welcome team members back to the workplace. We look forward to helping our partners bounce back. Contact us at info@le-hrlaw.com or 1-844-333-5253.

Lake Effect HR & Law, LLC
(844) 333-5253 (LAKE)
info@le-hrlaw.com

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