Labor Provisions found within the CARES Act

Apr 3, 2020

The Key Labor and Other Provisions highlighted herein include key changes made to the Families First Coronavirus Response Act, federal authority extensions to the Department of Labor, hiring flexibility for certain federal agencies, and protection for renters. Additional installments will address the other major components of The Coronavirus Aid, Relief, and Economic Security Act (CARES). You may access the full text of the law at the following link: https://www.congress.gov/bill/116th-congress/house-bill/748/text/enr?q=%7B%22search%22%3A%5B%22hr748%22%5D%7D&r=1

Limitation on paid leave

The Act reiterates that no employer shall be required to pay more than $200 per day and $10,000 in the aggregate to each employee for paid leave under the Emergency Family and Medical Leave Expansion Act. Similarly, the Act reiterates that an employer shall not be required to pay more than $511 per day or $5,110 in the aggregate for an employee, when the employee is taking leave due to being subject to a government isolation order relating to COVID-19, the employee has been advised by healthcare provider to self-quarantine, or the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; or more than $200 per day or $2,000 in the aggregate for each employee, when the employee is taking leave to care for an individual who is subject to a quarantine or isolation order, to care for a child due to closures regarding COVID-19, or the employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

Paid leave for rehired employees

It allows an employee who was laid off by an employer March 1, 2020, or later to have access to paid family and medical leave in certain instances if they are rehired by the employer. The employee must have worked for the employer at least 30 of the last 60 calendar days prior to being laid off.

Advance refunding of credits

We recommend reaching out to your payroll processor to understand how these credits will be administered by your payroll company. Some payroll processors have advised us that they don’t have systems in place yet but are recommending that a separate payroll item be set up for Paid Sick Leave and Paid Family Leave.  This will allow them to quickly and easily implement the changes the payroll processing company will need to comply with the new law.

Expansion of DOL Authority to postpone certain deadlines

The Act provides that certain plan reporting, and possibly funding deadlines might be extended should the DOL decide.  If you are a business with a retirement plan, we recommend that you reach out to your Third Party Administrator (TPA) to find out how this might apply to you. 

Single-employer plan funding rules

Certain plan funding deadlines might be extended, and the possible calculation of the funding amount could also be amended.  If you are a business with a defined benefit plan, we recommend that you reach out to your TPA to find out how this might apply to you. 

As your trusted advisors, we are committed to keeping you well-informed with any new legislation passed by Congress as well as any new pronouncements by the Department of Treasury that may affect you. Please do not hesitate to reach out to KHA with any additional questions you may have.  

These sources are simply included for informational purposes. KHA Accountants, PLLC, its partners and others do not provide any assurance as to the accuracy of these items or the information included therein. As such, KHA Accountants, PLLC cannot be held liable for any information derived from referenced sources. This is intended for illustrative and discussion purposes only.

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