Financial Resources for Employees During COVID-19
As a result of the unprecedented COVID-19 crisis, many employers are being forced to make difficult decisions relating to their workforce, adversely affecting the lives of valued team members. The following are employee specific areas of potential financial relief, which can be used by employers as points of discussion when trying to help staff their business through this difficult period:
- FFCRA Paid Sick Leave: As we previously covered, under the Families First Coronavirus Response Act, employees may be entitled to: (1) two weeks of paid sick leave to self-isolate/quarantine, seek diagnosis or care for COVID-19 symptoms, or to care for a child or family member with COVID-19 symptoms, and/or (2) up to 12 weeks of expanded Family and Medical Leave for reasons related to COVID-19, including proportionate paid leave the final 10 weeks. Our full discussion of FFCRA can be found here: Update: Congress Passes Emergency Paid Sick Leave & FMLA Changes Applicable to Many Employers
- Employer Provided Paid Time Off: As during any period of employment, employees are entitled to use any accrued company provided paid time off, which includes both sick leave and vacation time.
- Private or Employer-Provided Disability Insurance: Depending on an employer's benefit plan, certain employees may be eligible for reimbursement for covered wage losses, medical care, and other expenses incurred while quarantined or diagnosed with COVID-19 and unable to work.
- State-provided Disability Insurance Benefits: Certain states like California, New Jersey, and New York are providing short term benefit payments to eligible workers who have full or partial loss of wages due to non-work-related illness or injury.
- Workers' Compensation: Employees who contract COVID-19 related illness while at work may be eligible for workers' compensation benefits.
- Unemployment Benefits: The Illinois Department of Employment Security recently adopted emergency unemployment rules, including that temporarily laid off individuals may qualify for benefits. Our full discussion of those emergency rules can be found here Emergency Unemployment Rules Adopted As COVID-19 Response. Further, under the Federal CARES Act, employees may be eligible for an additional $600 supplement to their unemployment benefits, as well as an additional 13 weeks of extended benefits. The CARES Act also expands coverage to those who are self-employed or independent contractors.
- CARES Act Stimulus: Under the recently passed CARES Act, taxpayers who filed tax returns for either 2019 or 2018 and make up to $75,000 for individuals (up to $150,000 for married couples) will automatically receive a payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child. Payments phase out for individuals with incomes over $75,000 and couples over $150,000. The CARES Act also allows individuals to withdraw up to $100,000 from their retirement accounts, without penalty, if paid back within three years and provides some individual student loan relief. Our full discussion of the CARES Act can be found here: Update:Congress Passes CARES Act to Stimulate Business Efforts.
- Paycheck Protection Program: In addition to the small business loans available to employers under the Paycheck Protection Program under the CARES Act, certain independent contractors may also qualify to apply for loans.
- Employee Benefit Plans: Plans have the option of allowing employees to take tax free hardship withdrawals for up to $100,00 for COVID-19 related reasons. Plans may also offer double the amount of hardship loans (up to $100,000 or 100% of the vested account balance) between now and September 23, 2020 for COVID-19 related reasons, as we discussed further here: CARES Act Changes Rules for Qualified Retirement Plans, Suspends Required Minimum Distributions for 2020.