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Impact of COVID on Employee Benefits and Compensation

Whether employees are covered on your employer benefits plans or not, specific notices or actions may be required to remain compliant. Communicate these changes to employees as soon as possible.  Review issues including:

Group health insurance

  • Determine waiting-period issues due to leave or reinstatement; review any revised eligibility requirements regarding furlough or layoff and decide when and if any changes will be reversed.
  • Confirm coverage changes, such as incorporating telehealth benefits and services not subject to deductibles.
  • If the organization paid an employee’s premiums during a leave of absence, determine how or if the organization will recover payment from the employee.

Flexible spending accounts

403(b)7 and other pension plans

  • Review eligibility issues due to furlough or layoff.
  • Consider any break in service matters or counting years of service issues.
  • Evaluate any in-service loans employees may have or may want to consider, including eligibility and payback procedures.
  • Understand IRS guidance on hardship withdrawals for employees affected by COVID-19.

Paid leave

  • Review state or local paid leave laws and ensure that employees understand the eligibility requirements.
  • Determine if there will be organizational PTO adjustments, such as increasing or decreasing paid leave benefits or other restrictions when using paid leave.
  • Know the coordination of leave benefits and communicate these to employees.

Compensation

As an employer, you may have made compensation changes during the pandemic, or you may need to make them to reopen. Review and communicate to staff how the crisis has affected compensation policies. Issues include:

  • How will you address any missed pay increases, and will you pay increases retroactively?
  • Will you make or revoke pay changes? If required, understand how to reduce salaries for exempt employees.
  • Determine if exempt to nonexempt or full- to part-time employee status is necessary to reopen.
  • Will the organization offer (or revoke) hazard pay?
  • Consider a pay equity audit as workers return.

Unions

Employers with unionized workforces may have additional considerations, including:

  • Determine bargaining obligations when implementing changes to required bargaining matters such as wages and benefits.
  • Review existing no-strike clauses to ensure continued work during future infectious disease outbreaks.
  • Under Section 501 of the National Labor Relations Act (NLRA), determine obligations for hazard pay during “abnormally dangerous conditions.”

Remote work considerations

Telecommuting may work during the pandemic for employers and employees. You may consider implementing telecommuting as a work/life balance tool and cost-saving measure.  Matters to consider include:

  • Implement remote work policies to keep employees safe.
  • Stagger days in the office and at home among team members or offer part-time remote work on alternate days.
  • Report employee requests to continue to work from home, including longer-term agreements.
  • Update technology and technology policies to support virtual staff.
  • Consider the long-term cost savings or impact of offering remote work.

Communications

Establish a clear communication plan that allows employees and clients to understand how you plan to reopen and renew workplace operations. Topics include:

  • How staying home when sick and workplace physical distancing policies safeguard staff and others.
  • Describe training on workplace safety and disinfection protocols.
  • Prepare exposure-response communications for any affected employees and clients.
  • Develop media communications on return-to-work timetables, safety protections, workplace exposures, and how the organization supports workers and others.

New-hire paperwork

Employees returning to work who remained on the payroll would not need to complete new paperwork. However, it may be best to follow standard hiring procedures for those separated from employment, such as laid-off workers.

  • Determine employment application and benefits enrollment requirements for rehired workers.
  • Adjust orientation procedures as necessary.
  • Submit new-hire reports for new and rehired workers.
  • Notify the state unemployment department about recalled workers, whether rehired or not.
  • Address I-9 issues.
    • Update any expired work authorization documents or track which need updating as soon as the employee receives new documents.
    • Determine if you will have employees complete Section 3 of their original I-9 or complete a new I-9 form.

Policy changes

You may need to update or develop policies to address many issues. Examples include:

  • Paid leave policies.
  • Attendance policies to encourage sick employees to stay home.
  • Time-off request policies.
  • Flexible schedules.
  • Meal and rest break policies adjustments to stagger times and processes to promote physical distancing.
  • Travel policies for essential/nonessential travel and the impact of any travel restrictions.
  • Telecommuting policies.
  • Information technology policies regarding remote work hardware, software, and support.

Continuity plans

You may have learned lessons regarding your operational continuity plan, or lack thereof, during the pandemic. Now is the time to review and update your plans to prepare for future pandemics and other emergencies.

  • Implement or update your organization’s continuity plan and include infectious disease control.
  • Amend existing plans and incorporate the latest emergency information and protocol changes for responding to local, regional, or global crises.
  • Update plan resources and contact information to confirm accuracy.
  • Establish a pandemic task force that monitors external and internal data and recommends appropriate protocols.
  • Implement tests and exercises with employees to practice new or revised emergency plans.