Quick Hits - May 27, 2020 - American Society of Employers - ASE Staff

Quick Hits - May 27, 2020

Quick HitsFFRCA enforcement actions update:  On May 12, the Department of Labor’s Wage and Hour Division separately announced a pair of settlements that provide employees with back pay to which they were entitled but were denied when their employers refused to give them the emergency paid sick leave for COVID-19-related reasons guaranteed under the Families First Coronavirus Response Act (FFCRA). Together, the employers will provide $4,217 to the affected employees.  In the first case, investigators found that the construction company had failed to pay the employee for FFCRA-qualifying paid sick leave after the employee informed the company about their symptoms and medical diagnosis and was hospitalized. In the second case, an employer denied emergency paid sick leave while the employee was experiencing Coronavirus symptoms and seeking a medical diagnosis.  Source:  CCH 5/15/20

Paying for healthcare for furlough employee counts for Employer Retention Credit: Employers that qualify for the Coronavirus Aid, Relief, and Economic Security (CARES) Act's employee retention credit may treat health plan expenses paid to furloughed employees as qualified wages for purposes of the retention credit, according to a guidance document updated May 7 by the IRS.  Qualified employers that do not pay wages to laid off or furloughed employees but continue health coverage for those employees may treat the associated health plan expenses as qualified wages, the IRS said. Any such health plan expenses must be paid or incurred after March 12, 2020, and before January 1, 2021, and they are subject to a maximum of $10,000 per employee for all calendar quarters for all qualified wages.  The amount of qualified health expenses taken into account when determining the amount of qualified wages for a given employee should not include amounts that the employee paid for with after-tax contributions, IRS said. If an employee participates in more than one health plan sponsored by the employer, the allocated expenses of each plan in which the employee participates are aggregated for that employee.

Return-to-work building issues to be aware of:  Office buildings once filled with employees emptied out in many cities and states as shelter-in-place orders were issued. These structures, normally in constant use, have been closed off and shut down, and health risks might be accumulating in unseen ways.  “The buildings aren’t designed to be left alone for months,” said Andrew Whelton, an associate professor of civil, environmental, and ecological engineering at Purdue University. As lockdowns are lifted, bacteria that build up internally may cause health problems for returning workers if the problem is not properly addressed by facility managers. Employees and guests at hotels, gyms, and other kinds of buildings may also be at risk.  The biggest worry is Legionella Pneumophila. The bacteria can cause Legionnaires’ disease, a respiratory condition. It leads to death in about one in 10 cases, according to the Centers for Disease Control and Prevention. The National Academies of Science, Engineering, and Medicine estimates that over 52,000 Americans suffer from the disease each year. Because the effects of long-term water stagnation are so little understood, most of the guidelines are based on preventive measures and may not directly address reopening after long-term shutdowns.  Source:  NY Times 5/20/20

Sales compensation plans during the pandemic:  Sales compensation plans are undergoing significant revisions during the Coronavirus outbreak, according to a report from WorldatWork. The report cites survey data which found that 36% of organizations are already addressing sales compensation or plan to, while another 49% are developing a plan to address it.  The report said that, on average, organizations are "considering 2-3 actions" on sales compensation models. The most common actions under consideration are adjusting quotas (46%), adjusting performance measures (44%), and lowering plan thresholds (36%). Those are also the three most common actions that organizations have already implemented.   In terms of final compensation, 43% of companies anticipate their "sales organization will perform lower to plan," adding they will do their best to "minimize the compensation impact" while 38% believe their sales teams will earn less in 2020.  Source:  HR Dive 5/7/20

Could healthcare costs be reduced because of the pandemic? The Coronavirus pandemic could have some unforeseen consequences for employers: declining healthcare costs. That’s according to a new report from consulting firm Willis Towers Watson, which finds that COVID-19 could reduce employer healthcare costs by as much as 4% in 2020 due to a decrease in employees getting non-essential medical care. The analysis updates the group’s previous report from last month, which found sharply different results—that employers could see their healthcare costs increase up to 7% this year due to Coronavirus treatment and testing costs. The analysis paints a good-news-bad-news scenario: Healthcare costs may decrease for employers, but employees may not be getting the non-Coronavirus medical care they need during the pandemic. In turn, employees forgoing care may increase healthcare costs for companies in the long run, says Kim Buckey, vice president of client services at benefits company DirectPath.  Source: HR Executive 5/6/20

IRS announces 2021 HSA contribution rates: The IRS has announced the 2021 inflation-adjusted contribution limits for Health Savings Accounts (HSA).  The 2021 contribution limits for HSAs as compared to 2020 are:

 

2020

2021


Self-Only Contribution Limit

$3,550


$3,600


Family Contribution Limit

$7,100


$7,200

HDHP – Self-only Coverage

  • Annual deductible not less than:
  • Annual out-of-pocket expenses do not exceed:

 

 

$1,400


 

$1,400 (no change in 2021)


$6,900


$7,000

HDHP – Family Coverage

  • Annual deductible not less than:
  • Annual out-of-pocket expenses do not exceed:



$2,800



$2,800 (no change in 2021)

$13,800


$14,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 









Source:  Ameriflex 5/21/20 


Did you know?:  Working parents are spending about 60 hours a week on housework and child care, almost twice the amount done before quarantines began. Women were already investing more time on the home front; thanks to the crisis, they’ve added more time than men to their existing load.

And yet women are disproportionately at risk of losing jobs because of the pandemic, according to a Citigroup analysis. The global toll on GDP could be $1 trillion.  Source: Bloomberg 5/21/20

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