The Vita Blog December 2020

The Families First Coronavirus Response Act (FFCRA) requires employers with less than 500 employees to provide employees with 80 hours of paid sick leave for specified reasons related to COVID-19. In addition, employers are required to provide up to 10 weeks of paid, job-protected leave for employees who have worked for their employer for at least 30 days and who are unable to work due to the need to care for a son or daughter whose school is closed or the unavailability of a childcare provider due to COVID-19. The legislation was due to sunset on December 31, 2020.

Extension

President Trump signed a relief bill into law on December 27, 2020. While the full FFCRA law was not extended into 2021, employers can now elect to continue allowing employees to take unused FFCRA paid sick and family leave and receive the federal tax credit for through March 31, 2021.

Employer Action Items

1. Decide whether to offer continued paid sick leave and paid family leave until March 31, 2021.
2. Communicate corporate decision and any process requirements to employees.
3. Confirm any state or local laws that impact decision.
   
   

Optional, Not Mandatory

Employers are not required to provide paid leave after December 31, 2020 (as was the case under the FFCRA through December 31, 2020). However, as of January 1, 2021, employers may voluntarily offer such leaves and may continue to take the same payroll tax credit as was previously afforded under the FFCRA.

The relief package does not change the qualifying reasons for which employees may take leave, the caps on the amount of pay employees are entitled to receive, or the FFCRA’s documentation requirements.

Same Pool of 80 Hours

The law also does not change the amount of leave that employees are entitled to take under the FFCRA. Under the FFCRA, full time employees are entitled to a one-time allotment of 80 hours of paid sick leave and 12 weeks of expanded family medical leave. Therefore, an employer is generally not entitled to a second tax credit for an employee taking leave in 2021, if that employee exhausted FFCRA leave in 2020.

Local Regulations

Despite the fact that employers are no longer required to provide FFCRA leave after the first of the year, employers should be mindful that some states and local governments have enacted COVID-19 leave laws, which may or may not expire at the end of the year. For example:

• New York: The quarantine leave law requires that New York employers provide job-protected sick leave to employees who are subject to a mandatory or precautionary order of quarantine or isolation. This does not expire at the end of the year.
• Colorado: The state-specific COVID-19 leave law sunsets on December 31, 2020. The state paid sick leave program begins phasing in on January 1, 2021.
• California: The COVID-19 leave law expires on December 31, 2020 or upon the expiration of the paid sick leave provisions of the FFCRA. Although the federal relief bill allows employers to claim a tax credit for paid sick leave provided into 2021, it does not appear to change the expiration date of the specific paid sick leave provisions of the FFCRA. Therefore, unless the state amends the law or issues guidance to the contrary, California’s leave law will likely expire at the end of the year. However, unlike the federal FFCRA, the California law allows an employee who is on leave on the date that the law expires to complete their leave, even if this extends the leave period past the law’s expiration date.

California Governor Gavin Newsom signed into law AB 685. The law aims to thwart exposure to COVID-19 in the workplace and protect employees from any such exposure. Specifically, it outlines important employer notice, reporting, and accountability measures to protect employees. It also authorizes the California Division of Occupational Safety and Health to prohibit entry into a place of employment if it is deemed to pose an Imminent Hazard Risk to employees.

Important Steps for Employers

Employers should be aware of these new legal requirements and ensure that they have a solid COVID-19 exposure response plan in place. Being adequately prepared to meet the quick employee and government agency notice requirements will be important for employers.

Effective Date and Termination Date

This law will be in effect from January 1, 2021 through December 31, 2022.

Requirement #1: Notice of Possible Exposure to Employees

If an employer has notice that a COVID-19 Qualifying Individual was present in the workplace, the employer must, within one business day of the notice, provide written notice of possible exposure to all employees who were onsite at the same workplace as the qualifying individual within the infectious period (as defined by the California Department of Public Health). This employee notice must include the following:

• That employees may have been exposed to COVID-19 at the worksite
• Information about COVID-19-related benefits and options for which they may be eligible under applicable law (local, state and federal), including workers’ compensation, COVID-19-related leave and sick leave, as well as employee anti-retaliation and anti-discrimination protections
• Centers for Disease Control and Prevention-compliant disinfection and safety plan details that the employer plans to implement and complete

Employee representatives (unions) and employers of subcontracted employees must be included in the above notices.

Employers are required to keep records relating to any notices they provide to employees for at least three years.

* A COVID-19 Qualifying Individual is defined as someone who has a laboratory-confirmed case of COVID-19, who has a positive COVID-19 diagnosis from a licensed health care provider, who is subject to a COVID-19-related order to isolate by a public health official, or who died due to COVID-19.

Requirement #2: Notification to Local Public Health Agencies

If an employer has a COVID-19 outbreak** at a worksite, it must take the following steps:

• Notify the local public health agency within 48 hours of the outbreak
• Data reported must include:
• Number, names, occupations, and worksites of any qualifying individuals
• Business address where the outbreak occurred
• NAICS industry codes of the worksites where the qualifying individuals work and
• Continue to notify the local health department of subsequent laboratory-confirmed cases of COVID-19 at the worksite.

** COVID-19 Outbreak is currently defined by the California Department of Public Health as three or more laboratory-confirmed cases of COVID-19 among employees who live in different households within a two-week period of time.

Requirement #3: Imminent Hazard Notice at the Workplace

The law empowers the California Division of Occupational Safety and Health to prohibit the entry into or operation of a workplace that exposes employees to the risk of infection with COVID-19. It allows the OSH to impose such a prohibition to the extent that it constitutes an “imminent hazard” to employees. Lastly, employers are required to post a notice at the workplace if such a closure is mandated.

Need More Info?

The California Department of Industrial Relations has published FAQs to help employers navigate the requirements of this new law.

As the deadline approaches for the ACA required reporting of group health coverage offered in 2020, the IRS has issued IRS Notice 2020-76 regarding deadline extensions and requirements. This Notice provides parallel extensions and relief as has been offered in prior years.

History of Compliance Relief

In past years, the IRS provided relief to employers who made a good faith effort to comply with 1095-C and 1094-reporting requirements. The IRS provided relief that employers would not be subject to penalties for failure to correctly or completely file. This relief did not apply to employers that failed to timely file or furnish a statement, but it was a welcome relief to employers who made an honest effort to file the forms.
 

Good Faith Error Relief Again for 2020

Under the newly issued guidance, once again in 2020, no penalties will be imposed on employers that report incorrect or incomplete information (either on statements furnished to individuals or to the IRS) if a good faith effort at compliance was made. As in prior years, the relief is applied only when a good faith was made, not to any failure to timely furnish statements or file returns.

2020 is Last Year for Relief

The IRS also makes clear that 2020 is the final year the IRS intend to provide this good faith relief from penalties for incorrect or incomplete information returns.

Deadline for Furnishing Forms to Employees

The deadline for employers to furnish Form 1095-C to plan participants is now March 2, 2021. (The regular due date January 31). Due to this automatic extension, the permissive 30-day extension that the IRS may grant to an employer for good cause will not be available.
 

No Extension for Filing Forms with IRS

The IRS has not extended the deadline for employers to file Forms 1094-C and 1095-C with the IRS. Forms for calendar year 2020 must be filed by March 31, 2021 if filed electronically (or by March 1, 2021 if filed in paper form (because February 28 falls on a weekend). Employers may file Form 8809 to receive an automatic 30-day extension of this due date for forms due to the IRS.

A Different Process for 1095-B (Insurance Carrier Forms)

Because the individual shared responsibility payment has been reduced to $0 as of January 1, 2019, the IRS will not assess a penalty for failing to furnish Form 1095-B to individuals if two conditions are met:

• The reporting entity (insurance carrier) posts a notice prominently on its website stating that individuals may receive a copy of their 2020 Form 1095-B upon request (accompanied by an email address and a physical address to which a request may be sent), and
• A telephone number that individuals can use to contact the insurance carrier with any questions about the 1095 Forms.

The insurance carrier must then furnish a 2020 Form 1095-B within 30 days of the date the request is received.

Parallel Relief for Self-Funded Plans (for PT Employees)

This relief also applies to employers that are required to furnish Form 1095-C to employees enrolled in a self-funded health plan who are not a full-time employees for any month of 2020.

Reminder on CA Reporting Timing

While the federal deadline for filing is extended to March 31, 2021, the deadline for filing coverage confirmation reports to the state of California remains January 31, 2021. This applies to employers with self-funded plans. (Insurance carriers handle the reporting for fully insured plans.)