On June 19, 2020, the IRS released Notice 2020-50, which provides additional guidance and relief for retirement plan participants taking coronavirus-related distributions and loans under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).  Under the CARES Act, “qualified individuals” may take coronavirus-related distributions of up to $100,000 from their eligible retirement plans without being subject to the 10% additional tax on early distributions.  In addition, a coronavirus-related distribution can be included in income ratably over the three-year period commencing with the year of distribution and the individual taking the distribution has three years to repay the distribution to the plan, or roll it over to an Individual Retirement Account (“IRA”) or other qualified retirement plan, with the effect of reversing the income tax consequences of the distribution.  In addition, the CARES Act allows plans to suspend loan repayments due from March 27, 2020 through December 31, 2020 and further allows for an increase in the dollar amount on loans made between March 27, 2020 and September 22, 2020 from $50,000 to $100,000.  Notice 2020-50 expands the definition of qualified individuals under the Act and provides additional, clarifying guidance regarding coronavirus-related distributions and loans.

Expansion of the Definition of “Qualified Individual”

Under the original language of the CARES Act, a qualified individual included the following persons:

On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (“PPPFA”) was signed into law.  The PPPFA is aimed at providing borrowers with additional flexibility to maximize forgiveness of loans received under the Paycheck Protection Program (“PPP”) established as part of the CARES Act.  The following provisions of the PPPFA are highlighted below for your consideration:

  • Extension of Application Period:  The PPPFA extends the final date by which PPP loans can be made from June 30, 2020 to December 31, 2020.  However, a congressional letter clarifies that June 30, 2020 remains the last day for accepting and approving PPP loans.  Although additional guidance may be issued on whether applications will be accepted until December 31, 2020, employers should err on the side of caution and apply for loans prior to June 30, 2020.
  • Repayment Term is Extended:  For those PPP loans originated on or after the date of enactment of the PPPFA, the repayment term for the unforgiven portion of the loan is extended from two to not less than five years.  However, borrowers and lenders may mutually agree to expand the repayment period under existing loans (entered into prior to enactment of the PPPFA).

This informative webinar addresses New Jersey businesses that have been shut down or operating on a limited capacity due to the Covid-19 pandemic. Our Labor & Employment attorneys, John H. Schmidt, Jr. and Lisa Gingeleskie, map out a prediction of the ‘new normal’ and discuss what post-pandemic reality may entail, including how and when to bring employees and customers back safely. While we can expect the road ahead to be potentially long and difficult, we offer guidelines and strategies for preparing for and documenting reopening procedures.

Topics of discussion include:

  • Addressing Employee Return to Work Concerns

On May 21, 2020, the U.S. Department of Labor (“DOL”) announced a final rule allowing employers to post retirement plan disclosures online or furnish them to workers via email.  The rule is aimed at reducing administrative expenses for employers and making information more readily available to workers.

ERISA-covered retirement plans must furnish multiple disclosures each year to participants and beneficiaries. The exact number of disclosures per year depends on the specific type of retirement plan, its features, and in some cases the plan’s funding status.  To deliver these disclosures electronically, plan administrators were previously required to comply with the regulatory safe harbor established in 2002 under 29 CFR 2520.104b-1(c), which required that disclosures be reasonably calculated to ensure that workers actually received the information, including confirmation that the transmitted information was actually received (e.g., using return-receipt or notice of undelivered electronic mail features, conducting periodic reviews or surveys to confirm receipt of the transmitted information).

On August 31, 2018, Executive Order 13847, entitled Strengthening Retirement Security in America, was issued. The Order directed the DOL to review whether regulatory or other actions could be taken to make retirement plan disclosures more understandable for participants and beneficiaries and to focus on reducing the production and distribution costs that retirement plan disclosures impose on employers.  In October 2019, the Department published a proposed regulation with a solicitation for public comment.  In response to the commentary received, a final rule creating a new voluntary safe harbor was established.  The new safe harbor permits the following two optional methods for electronic delivery:

The Department of Labor (“DOL”) and other federal agencies released updated model COBRA notices and expanded COBRA deadlines in an effort to reduce the risk of participants and beneficiaries losing benefits during the COVID-19 pandemic.

Updated Model COBRA Notices

Under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), an individual who was covered by a group health plan on the day before the occurrence of a qualification event, i.e. termination of employment or a reduction in hours that results in loss of coverage under the plan, may be able to elect COBRA continuation coverage upon that qualifying event. Under COBRA, group health plans must provide covered employees and their families certain notices explaining their COBRA rights. The first is a written notice of COBRA rights, called a “general notice,” which is given to an employee and spouse at the time of commencement of coverage. A group health plan must also provide an employee and spouse with an “election notice” upon a qualifying event, which outlines how to make an election under COBRA continuation coverage. The DOL has created model notices, which plans can use to satisfy these requirements under COBRA.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), signed into law on Friday March 27, 2020, introduced the Paycheck Protection Program (the “PPP”) with the intended goal of preventing job loss and small businesses failure due to losses caused by the COVID-19 pandemic. The PPP was designed to support small business and employees by providing forgivable loans to employers if they maintained their employees and payroll. It was initially funded with $349 billion on a first come, first serve basis. Initial applications from small businesses and sole proprietorships opened on April 3, 2020 and all of this initial funding was exhausted within 13 days, or by April 15, 2020.

On Tuesday, April 21, 2020, the Senate passed an “interim” coronavirus relief Bill, titled the “Paycheck Protection Program and Health Care Enhancement Act” (the Senate Bill). The Senate Bill amends the CARES Act to (i) increase the amounts authorized for the PPP in accordance with Section 7(a) of the Small Business Act, increase the Economic Injury Disaster Loans (EIDL loans), and increase emergency grants under the CARES Act, and (ii) authorize additional funding for hospital and provider recovery and

coronavirus testing.

On March 26, 2020, Governor Murphy signed into law S-2304 expanding the scope of the New Jersey Earned Sick Leave Law, the New Jersey Family Leave Act, and the New Jersey Temporary Disability Benefits Law to broaden benefits available to employees who are absent from work due to epidemics such as the coronavirus (COVID-19) pandemic.  These changes, as set forth more fully below, became effective immediately.

New Jersey Earned Sick Leave Law

Under New Jersey’s Earned Sick Leave Law, employees may use earned sick leave for absences related to, among other reasons, the closure of the “employee’s workplace, or the school or place of care of a child of the employee, by order of a public official due to an epidemic or other public health emergency, or because of the issuance by a public health authority of a determination that the presence in the community of the employee, or a member of the employee’s family in need of care by the employee, would jeopardize the health of others”.

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On March 27, 2020, the Coronavirus, Aid, Relief and Economic Security Act (the “CARES” Act) was passed, making it the third federal law to address the coronavirus (COVID-19) public health pandemic.  The Act, designed to provide additional relief to those affected by the pandemic, contains multiple provisions that specifically implicate multiemployer plans as set forth more fully below.

Coronavirus Related Distribution

The Act allows defined contribution plans to adopt provisions allowing for early distributions, up to a maximum of $100,000, for qualified individuals who have been adversely affected by the coronavirus pandemic.  Qualified individuals include the following:

It has been nearly two years since the viral #MeToo tweet that sparked a national debate about sexual harassment in the workplace. While #MeToo has not changed the legal standard by which sexual harassment is defined in New Jersey, it has had a dramatic impact on the way sexual harassment is perceived and tolerated in our culture. Perhaps the movement’s biggest impact can be seen in the passage of both federal and state legislation aimed at providing greater protections to victims of workplace sexual harassment. This article takes a closer look at these legislative initiatives as well as potential changes on the horizon.

Federal Legislation

2017 Tax Cuts & Jobs Act

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On the symbolic anniversary of the signing of the Diane B. Allen Equal Pay Act, considered the strongest pay equity legislation in the nation, Lisa Gingeleskie spoke to Tom Bergeron of ROI-NJ about what companies in New Jersey need to do to be compliant.  Lisa says she feels the Equal Pay Act, signed into law by Gov. Phil Murphy last April, is not getting the attention it deserves. And that businesses — large and small — are taking a big risk if they do not make it a bigger priority.

To read NJ-ROI’s full interview click here.

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