2020 was a whirlwind of human resources activity. Employers and their human capital management teams had to make sure they were aware of and complying with legislative changes while balancing workforce challenges, workplace safety and business closures as a result of the COVID-19 pandemic. The Consolidated Appropriations Act (CAA) was signed into law at the end of the year to provide paid leave to employees, and the Paycheck Protection Program (PPP) was instated to help struggling businesses and organizations. While the vaccine rollout offers some optimism, a human resources professional’s work is never done. For us in the profession, this year will be one for the books (actually, don’t forget to keep track of this information in your companies’ books!).
What’s New: The Consolidated Appropriations Act (CAA)
The CAA’s benefits were extended until March 31, 2021. While a voluntary program, it aims to provide employers with a way to pay their employees on leave under the Families First Coronavirus Response Act (FFCRA) requirements. The tax credit, in addition, was extended but there is no reset of benefit limits – so if you maxed out in 2020, there are no additional benefits this year.
Flexible Spending Accounts
The relief bill offered employers the option to adopt relief provisions for health flexible spending and dependent care accounts. Some of those temporary provisions include:
- Healthcare and dependent care flexible spending account funds can be carried over, so participants’ unused benefits and contributions from the end of 2020 may be used in the 2021 plan year (unused funds from 2021 can also carry over into the 2022 plan year)
- Employers can increase the maximum age of eligible dependents from age 13 years old to 14
- Employees can make prospective elections changes to their plans without having experienced a change in status event
Employer-provided Student Loan Repayment
The CARES Act temporarily allowed employers to provide student loan repayment options as a benefit to employees. This was extended until December 31, 2025. This also expands unemployment insurance and extends the Employee Retention Tax Credit (ERC).
Other extensions include deferred payroll taxes and the Work Opportunity Tax Credit (through December 31, 2025).
The Paycheck Protection Program (PPP) Round Two
The PPP Second Draw offers another round of financial assistance for businesses, employers and healthcare providers. Through March 31, 2021, organizations can borrow a loan if eligible. The ERC and the Employee Social Security Tax Deferral Repayment are also available until June 30, 2021 and December 31, 2021, respectively.
Presidential Election Impact
Under the new administration, we are expecting to see a few significant changes enter into legislation. Here’s what President Joe Biden proposes:
- Raise the minimum wage to $15 an hour
- Eliminate exemptions on employer sizes under the Emergency Paid Leave Act
- Extend the Emergency Paid Leave measures until September 30, 2021
- Extend and expand unemployment benefits
This plan, referred to as the American Rescue Plan, is an ongoing conversation in Congress and currently passed by the House. We also expect to see possible changes in the taxation of remote employees and teleworkers.
During this extremely unique and difficult time, your organization must be dedicated to providing attentive responses to employees and a safe and healthy work environment – one that encourages productivity, flexibility and comfortability whether workers are at-home or socially distanced in-person. Do you have policies or tactics in place that address the following items?
- Remote learning and development
- Online resources, tools and employee handbook
- Remote workforce training
- Cybersecurity protections and training
- Strong communication
- Emphasis on culture and team building in remote environment
- A way to monitor productivity and performance
- Diversity and inclusion training
- Employees’ physical health and safety
- Employees’ mental health
- Wellness programs
- Structure around furloughs, paid leave, temporary leave or similar
Sikich’s human capital management team is made up of HR, payroll, HCM technology experts who can help support you in your human capital management efforts or get you started on a project or implementation. Please contact us if you’d like to learn more about changes and expectations for the rest of 2021.