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Quick Hits - September 2, 2020

Quick HitsMake sure you track employee hours who work remotely:  On August 24, the DOL’s Wage and Hour Division issued a Field Assistance Bulletin (2020-5) in order "to clarify" employers’ obligation to track the number of hours of compensable work performed by employees who are teleworking or otherwise working away from premises controlled by their employers. As the DOL noted, telework arrangements have been expanding in response to the COVID-19 pandemic.  The guidance reaffirms that an employer must pay its employees for all hours worked, including work not requested but allowed and work performed at home. Where the employer knows or has reason to believe that an employee is performing work, the time must be counted as hours worked. The guidance notes, among other things, that an employer’s obligation to compensate employees for hours worked can be based on actual knowledge or constructive knowledge of that work.  As to telework and remote work employees, the employer has actual knowledge of the employees’ regularly scheduled hours and may have actual knowledge of hours worked through employee reports or other notifications. Under the FLSA, the standard for constructive knowledge in the context of overtime "is whether an employer has reason to believe work is being performed," according to the guidance.  Source:  DOL Wage and Hour

How Pandemic Unemployment Assistance (PUA) attaches to school openings:  The new ETA guidance (Unemployment Insurance Program Letter No. 16-20, Change 3) provides states with information about the eligibility for Pandemic Unemployment Assistance (PUA) under the CARES Act for individuals who are caregivers. Similar to WHD’s FAQs, the ETA’s guidance explains when parents and caregivers may be eligible for PUA under various circumstances related to their child’s school’s reopening plans. The guidance explains how states should evaluate an individual’s eligibility for PUA when:  a child or other person in their household for whom the individual is the primary caregiver attends a school operating on an alternate day basis;  the individual chooses remote learning for their child when in-person instruction is available; and the school remains closed as a direct result of the coronavirus. In the first and last situation, the employee should be eligible for PUA.  In the second situation it will depend on the circumstances.  Source:  Department of Labor 8/27/20, CCH 9/1/20

89% of employers maintaining 401(K) matches: The overwhelming majority of companies offering matching contributions to their employee retirement plans have continued putting money on the table to help their workers save for retirement during the Coronavirus downturn.  Only 11% of employers suspended their company match in the second quarter, according to the latest retirement savings trend report from Fidelity Investments. As the spread of the novel Coronavirus began to affect the economy earlier this year, many companies, forced to close and send employees home, suspended or reduced matching contributions to their employee retirement plans. Amtrak, citing an unprecedented loss of ridership and revenue because of the pandemic, suspended its 401(k) match. Fidelity said the most popular match formula for the plans it manages is a 100% match for the first 3% of employee contributions, and then a 50% match for the next 2%. About 40% of 401(k) plans use this formula, according to Fidelity. More than three-quarters of workers received an employer contribution in the second quarter. The average employer contribution was $1,080. 80% of those who discontinued matches stated they will reinstate when financially feasible.  Source:  Washington Post 8/17/20

Do you have plans for the future of remote work? Prior to the pandemic, almost 60% of companies restricted remote work in some capacity, either not allowing employees to work from home, limiting days, or only granting approval when given a good reason. But now, half of leaders anticipate increasing the number of employees working permanently remote in the next two years, with 81% reporting that COVID-19 has boosted their confidence in going remote long-term.  However, research, commissioned by Terminal and conducted by Method Research, revealed that 95% of HR and engineer leaders believe that they successfully navigated the transition to a remote workforce through COVID. However, the data also shows that leaders' actions contradict their perception: most have invested little to no time or resources in building a remote work process, structure, and culture long-term.  More than two-thirds of HR and engineering leaders say they don't have a long-term plan.  45% of leaders without a long-term remote work strategy say their culture is okay for now, but not optimized for the long term.  Even among the few who do have a long-term plan, 61% of remote-work plans are less than a year old, and 40% have been developed solely in response to COVID-19.  The majority of leaders admit they spent more time planning the holiday party than planning for a remote work future (53%).  Source: Terminal

100th anniversary of the 19th Amendment – women’s right to vote!  On August 26, 1920, the United States Congress passed the 19th Amendment to the Constitution granting women full and equal voting rights. Every year on August 26, we commemorate this right with National Women’s Equality Day. The U.S. Constitution used throughout the document the word “men.”  Men took the word literally.  It took 131 years to have the 19th Amendment passed that gave women the right to vote.  On July 30, 1971, Rep. Bella Abzug (D-NY) presented a bill designating August 26th as Women’s Equality Day. That year, rallies, celebrations, and political debate filled the country on August 26th. By 1973, Congress passed a joint resolution declaring the day to be observed on August 26th of each year. Every year since each president declares this day as Women’s Equality Day commemorating the certification of the 19th Amendment to the United States Constitution.

Payroll tax deferral started on September 1:  On August 8, 2020, President Trump issued an executive order to give employees a "payroll holiday" in the form of a 6.2% tax deferral normally paid to Social Security, for September 1, 2020 to December 31, 2020. On August 28, the U.S. Department of Treasury and Internal Revenue Service (IRS) gave employers more guidance on this issue, but still left many questions unanswered.   First, the deferral only affects workers whose biweekly pay is less than $4000, pretax. The deferral is to be implemented on a pay period by pay period basis.  For now, this is not a forgiveness of the tax owed. Although, President Trump has promised to forgive the tax if reelected, it would require an act of Congress to forgive liability altogether.  Second, the IRS guidelines suggest that it is up to the employer – not the employee – to decide whether to implement the tax deferral. It is likely a voluntary decision by the employer, as the IRS guidance does not state that the deferral is mandatory.  If employers decide to go ahead and make any deferrals this year, those same amounts must be withheld and paid back starting on January 1, 2021 and ending on April 30, 2021. Again, the guidance issued does not indicate when or if employers have to begin the deferral.  Finally, the guidance also provides that the employer must "withhold and pay" the deferred taxes next year and, "If necessary...make arrangements to otherwise collect the total Applicable Taxes from the employee." This implies that the employer is probably responsible to pay any deferred amount to the IRS in the event the employee fails to repay it next year. For example, this situation may arise if the employee is no longer employed by the same employer in 2021.  Source: Forbes 8/28/20

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