W. R. Berkley Corporation Announces Senior Executive Appointments

It’s refreshing to see some positive non-COVID news from the industry!

Congrats to our PEO carrier partner, Key Risk (owned by W.R. Berkley) and its new president, Scott A. Holbrook.  The former President, Robert W. Standen, was promoted to Executive Vice President.

Additional details below.

W. R. Berkley Corporation Announces Senior Executive Appointments

4/7/20

Robert W. Standen Named Executive Vice President

Scott A. Holbrook Appointed President of Key Risk Insurance

GREENWICH, Conn.–(BUSINESS WIRE)– W. R. Berkley Corporation (NYSE: WRB) today announced the appointment of Robert W. Standen as executive vice president with oversight responsibility for certain of the Company’s operating units. Scott A. Holbrook will succeed Mr. Standen as president of Key Risk Insurance, a Berkley Company. The appointments are effective immediately.

Mr. Standen joined Key Risk Insurance in 2003 as executive vice president and chief claims officer and assumed the role of president in 2007. He has been instrumental in advancing the operating unit’s leadership position and expansion in the mono-line workers’ compensation segment. His professional designations include Associate in Risk Management (ARM), Associate in Claims (AIC) and Associate in Loss Control Management (ALCM) from the Insurance Institute of America. Mr. Standen earned his Masters of Business Administration degree from St. Joseph’s University and graduated with a Bachelor of Science degree from LaSalle University.

Mr. Holbrook has 25 years of experience in the commercial lines property casualty insurance business. He most recently served as the senior vice president for the Mid-Atlantic division of a leading global insurer. Mr. Holbrook holds a Bachelor of Science degree in finance and marketing from the Virginia Commonwealth University School of Business and is a Chartered Property Casualty Underwriter (CPCU).

Commenting on the appointments, W. Robert Berkley, Jr., president and chief executive officer of W. R. Berkley Corporation, said, “We are pleased to have Rob assume this new position. His deep knowledge of the property casualty insurance business and hands-on experience in managing one of our operating units will be invaluable to our corporate oversight activities. We welcome Scott to the team and are confident that his extensive underwriting background, operating experience and independent agent and broker relationships will enable him to lead the Key Risk team in building upon its success.”

Key Risk Insurance delivers innovative and responsive workers’ compensation solutions that provide clients the freedom to do what they do best. With over 30 years of expertise and 100% focus on workers’ compensation, Key Risk Insurance works with employers to enrich each client’s risk management strategies by creating and executing comprehensive solutions proven to protect people, support business and exceed expectations. For further information about Key Risk please visit www.KeyRisk.com.

Founded in 1967, W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty insurance business: Insurance and Reinsurance & Monoline Excess. For further information about W. R. Berkley Corporation, please visit www.berkley.com.

Products and services are provided by W. R. Berkley Corporation’s subsidiaries and “operating units”. Operating units are not typically legal entities, but for marketing purposes may sometimes be referred to individually as “a Berkley company” or collectively as “Berkley companies”.

 DOWNLOAD THIS PRESS RELEASE PDF FORMAT

Karen A. Horvath
Vice President – External
Financial Communications
203-629-3000

Source: W. R. Berkley Corporation

 

Texas Mutual Dividend Checks Arriving Two Months Early

Dividend checks coming early to support our policyholders
We know that supporting our policyholders during this uncertain time is more important than ever, which is why our board of directors has voted to pay dividends two months early. Like many of you and your clients, we don’t know the economic impact that COVID-19 will have on our business, but we do know that we are in a good position to distribute this dividend in this critical time.
We’re proud to share that our teams are working hard to finalize this year’s individual dividend payout of $330 million to over 57,000 policyholders. This year marks the 22nd year that we are paying dividends to our policyholders, bringing the total to over $3.1 billion back to Texas businesses since 1999.
View dividends online on April 13, checks mailed April 20
On April 13, you will be able to log into texasmutual.com to view dividend information and amounts for your clients. We’ll send a reminder email when that information is available to view. Checks will be mailed April 20. Unfortunately, we won’t be able to offer hand-delivery to agents because of the stay-at-home order, but we encourage you to share the good news with your clients.
We are working diligently to deliver dividends to our policyholder owners ahead of schedule. We are on target to meet the dates communicated in this email, but appreciate your understanding if we need to make any adjustments.
Dividend questions?
We know that you may receive questions from your clients about dividends and we’re here to help you. In anticipation of the questions you may receive: At this time, we do not have direct deposit available. If your client needs us to reissue a check, they can call us at (800) 859-5995. You can view dividend amounts for qualifying policyholders on April 13. Policyholders can view dividend information in their accounts on April 20, which is when we will mail checks. View dividend FAQs for more information.
Thank you for trusting Texas Mutual to serve your clients. Learn more about our dividend program at texasmutual.com/ownershippays.

COVID-19 Impact to Insurance Programs and Carriers

I hope this post finds you safe and well in our new world.

As you may be aware, the most credible association in regards to insurance projections is the Casualty Actuarial Society (“CAS”) casact.org.  This is the fellowship of the “mathematical prophets”.

The below link is a very timely white paper that addresses the lines of insurance that will be most impacted due to this pandemic.  Specifically:

-Health Insurance

-Workers’ Compensation

-Liability (general and specialty casualty)

-Cyber

-Event cancellation

-Property

The full report can be accessed by clicking here.

I think that some of these lines of insurance are directly impacted, especially health, workers’ comp and event cancellation.  What that impact will be has yet to be understood as the cost of medical and timeline of indemnity unknown. Other lines have the potential to be impacted such as cyber and liability.  Property should have the least impact unless the feds step in.  If they force the issue and do not subsidize, the money is not there to cover the claims.

Our prayers to you and yours –

 

 

Workers’ Comp Premiums Could Skyrocket With COVID-19 Claims

Source: Bloomberg Environment

  • Health-care workers likely eligible for workers’ comp
  • Grocery, delivery workers will argue for eligibility

Health-care workers and emergency responders will benefit from rules eased in some states around workers’ compensation that will allow them to collect benefits if they can prove they caught Covid-19 on the job. Some say essential workers like grocery store employees and delivery workers also should qualify.

But employers need to be aware of the changing rules, and be prepared for the likely end result—skyrocketing premiums.

State workers’ compensation boards around the country are amending rules for benefits payouts to include health-care workers exposed to the virus and then quarantined.

Attorneys are keeping a close eye on the questions, such as who should be eligible to receive benefits, how does a worker prove they caught Covid-19 on the job, and how will an influx of successful claims affect businesses’ premiums to insurance carriers.

“If everybody who gets sick on the job is able to file a compensation claim and everyone is successful, it may bankrupt a company,” said Michael Duff, a workers’ compensation professor at the University of Wyoming.

Quarantined Workers

Workers’ compensation is a state-mandated insurance program that provides pay to workers who are injured on the job—in return, the worker agrees not to sue their employer. Like unemployment insurance, workers’ compensation rules vary by state.

In early March, Washington’s Department of Labor & Industries announced that it “will provide benefits to these workers during the time they’re quarantined after being exposed to COVID-19 on the job.”

And on March 13, Kentucky Gov. Andy Beshear’s office announced that Kentucky Employers’ Mutual Insurance will “expand coverage benefits to include the quarantine period for first responders and medical personnel,” a news release stated.

Still, many states haven’t changed their policies, and experts say proving causation can be tough for workers.

Proving Exposure at Work

Earlier this month, the Occupational Safety and Health Administration declared that coronavirus was a recordable injury—meaning an employer would have to notify the federal safety agency when a worker caught the disease at work—and issued guidance to that effect.

Safety attorneys said the guidance left confusion about how to prove whether a worker actually contracted the virus on the job, said Joshua Henderson, partner at Norton Rose Fulbright US LLP in California.

“At the moment, the question of causation is where there is a lot of uncertainty,” Henderson said. “Whether it was caused by a condition at work.”

Some lawyers and activists think grocery store workers and delivery drivers are eligible for workers’ comp benefits, since their employers deem them essential workers and they could be at higher risk of COVID-19 exposure based on their persistent contact with the public as the pandemic rages across the country.

Duff argues that there are scenarios where a worker could establish causation is by citing one’s essential employee status.

“If you’re required to come in and deemed essential employees, because you are by definition required to come into work during a pandemic, then I think the argument would be, ‘My risk of contracting this disease is by definition higher than the general public.’ What you’re basically saying is, ‘My workplace increases the risk of me contracting the disease’,” Duff said.

He said he believes many workers will qualify for claims, causing employer premiums to rise, and the pandemic exposes fissures in workers’ compensation rules and labor law as a whole.

“If I was in management, I’d figure out a strategy that is fair but won’t hasten my demise or subject me to extraordinary financial pressure,” Duff said. “I would be thinking about how I would responsibly contest claims in a way that doesn’t make me look like an ogre.”

Jeff Eddinger, regulatory business management specialist at the National Council on Compensation Insurance, told Bloomberg Law that no national data is available that can outline the impact of COVID-19 on premiums. Assuming there’s an influx of workers’ compensation claims from the health-care sector, “that would certainly cause some upward pressure on claim costs in the system, but then I would say on the other side of that, during this time where people are telecommuting and some industries shut down, that creates downward pressure because people aren’t working. Those two things could offset each other.”

Duff said employers should develop practices and policies that can reasonably contest claims, but “don’t unreasonably respond to workers because my customers aren’t going to feel good about it.”

Grocery, Delivery, and Essential Workers

Edward W. Guldi, a New York plaintiff’s workers’ comp attorney at The Perecman Firm, P.L.L.C., also said it’s not likely grocery or delivery drivers would be successful in worker’s comp claims.

“Nurses are going to get their claims, the hospital workers, too,” Guldi said. “The people who aren’t are grocery store workers, waiters, office workers and delivery drivers and basically everybody else who doesn’t qualify.”

He compared their position to the Sept. 11 firefighters and first responders in New York who initially were denied workers’ compensation. Later, the state legislature passed Article 8-A, which addressed the complications caused by the two-year statutory filing deadline, allowing those injured or sickened in rescue, recovery, and cleanup efforts access to compensation.

The New York Committee for Occupational Safety and Health—an organization of unions, worker centers, and activists—already has begun lobbying for sick workers to receive workers’ compensation in New York. A representative from the organization wasn’t available for comment.

John Ruser, president and CEO of the independent, nonprofit Workers Compensation Research Institute, said one way to ensure nonhealth-care workers are covered by workers’ compensation is through state legislation.

“In some cases, legislators passed a law that said certain conditions are presumed to be work-related, therefore all claims that come from a class of workers related to COVID-19 would be compensable. Legislators can pass that,” he said.

Guldi said maybe the New York State Assembly “will do the right thing for those who have this illness. I know when George Pataki was governor, it took unions and police unions and 9/11 widows and lobbying to make that happen.”

To contact the reporter on this story: Fatima Hussein in Washington at fhussein@bloombergenvironment.com

To contact the editors responsible for this story: Cheryl Saenz at csaenz@bloombergtax.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

Brief Update on Recent Activities By David Daniel, Florida PEO Lobbyist

Image result for florida

Update on Recent Activities related to COVID-19 from FAPEO –

There is a lot of COVID-19 related activity we have been working on for Florida PEOs as we face these uncertain times.  This email is intended summarize our recent work.

Emergency Orders at DBPR

With the required annual financial reports due to the Department of Business and Professional Regulation we contacted Secretary Beshears and asked that he issue an order delaying their due date.  Secretary Beshears indicated to us would be taken care of.

DBPR Emergency Order 2020 – 01 was issued March 16.  In the order Secretary Beshears suspends and tolls for 30 days any existing renewal deadline for a license, permit registration or certificate.

DBPR Emergency Order 2020 – 03 was issued March 23, 2020.  The order suspends and tolls through May 31, 2020 all time requirements, notice requirements and deadlines for final agency action or applications for permits, licenses, rates and other approvals under any statutes or rules.

Unemployment Compensation

As you can imagine there are reports from DEO of increased filings for unemployment compensation insurance.  While the UC Fund has significant resources available, as we have seen in the last recession, the unemployment compensation trust fund can go from flush to negative in a short amount of time.

It is expected with the dramatic decline in business activity related to the social distancing and businesses closures, employers will be forced to make some tough decisions with their workforce.  As you know, 443.131 F.S allows the Department of Economic Opportunity the ability to not charge an employer’s unemployment compensation contribution rate for a declared national disaster or an disaster of national significance.  Further, 443. 116 F.S. creates the short-time compensation program which allows an employer to reduce work for employees in lieu of layoffs with DEO approval.  We have requested DEO make the decision that this event and the subsequent layoffs which will follow are not chargeable to an employer’s unemployment compensation rate.  Further we have asked that if an employer chooses a short-time compensation arrangement it would also not be chargeable to their UC rate.

To that end, last week Governor DeSantis indicated in a press conference this event would not be charged to an employer’s unemployment compensation rate.  We are awaiting the official announcement from DEO.  There is no word yet on the short-time compensation and will let you know when we hear more from DEO.

Essential Business Sectors under CISA Guidance

The state and the country have been grappling with the impacts of decisions on social distancing, shelter in place orders and mandatory business closures.  Several counties have already issued emergency orders closing non-essential employers including Miami-Dade, Broward, Alachua and Duval counties.  We have asked the Governor’s Office to include professional employer organizations as essential critical infrastructure workers in any statewide emergency order mandating business closure.  At the direction of the Governor’s Office, we have based our request on Cybersecurity and Infrastructure Security Agency guidance.  (See attached)

While the decision to issue a statewide emergency order closing all non-essential businesses has as not been made to date, our proactive efforts have placed us in the best possible position to remain open.

Additional Readings – Statues Issued

443.131 F.S. – Click here to read more.

443.1116-F.S. – Click here to read more.

DBPR – Emergency Order 2020 – Click here to read more.

CISA Guidance on Essential Critical Infrastructure Workers – Click here to read more. 

State of Florida Emergency Order – Click here to read more.

 

COVID-19’s Impact on the PEO Industry: Flash Survey by LL Roberts Group

PEOs Dealing with the Coronavirus

This PEO Flash Survey regarding how PEOs are dealing with the Coronavirus outbreak involved several interviews with PEO owners and executives, PEO brokers, Insurance brokers serving PEOs, bank representatives that work with PEOs and other vendors associated with the PEO Industry.  This confidential survey was conducted by LJ Roberts of the LL Roberts Group in a conversational or interview manner.  All parties interviewed in conjunction with this survey have been assured that their opinions, observations and comments will be kept confidential.  However, what I can share is that the PEOs, companies, agencies, and organizations interviewed are located and operate from coast-to-coast.  As a result, these observations and opinions are representative of a national perspective concerning the Coronavirus and its impact on PEOs and business in general.

The comments, opinions, insights, plans, and observations of those interviewed are presented as bullet points below:

  • “As a longtime veteran of the PEO Industry, I’ve never seen anything like this and believe that we are a long way from seeing the worst of it” was a comment made by one mid-sized PEO executive.  This observation was echoed by several of those interviewed.  This observation indicated that those interviewed are in uncharted waters and are now making difficult decisions on challenges not previously experienced by their organizations.

 

  • “I expect this to last for 6 months” was a comment made by one PEO owner and was consistent with many of the remarks made by the survey’s interviewees.

 

  • “We are preparing for worst case scenarios” shared one PEO owner as he is having daily meetings with his senior staffers.

 

  • “This is the most overblown event that I have ever witnessed in my life” stated one PEO owner.  He went on to speculate that the Media was using this as a draw for viewers and readers.  He also feels that there are political factors at play (why the Coronavirus outbreak is so overblown in his opinion).

 

  • “We are reaching out to the state unemployment commission so that we can properly instruct clients on how their employees can get unemployment benefits quickly. While we are always thinking about fighting unemployment claims, this situation is different” shared one PEO owner.

 

  • “This Coronavirus situation will impact how we do business after it’s all over” was a comment made by one PEO representative.  Other interviewees expressed similar observations.

 

  • One PEO owner stated that “most of our client companies cannot go weeks without operating, so we are expecting several clients to simply go out of business”.  Clients going out of business was a possibility that several interviewees shared.

 

  • “This is going to be much worse that the 2008 economic crash” and “this will be the worst SUTA crash the PEO Industry has ever seen” were the comments from one PEO owner.  He also mentioned reports that he attributed to federal government representatives on TV that predicted a possible 20% unemployment rate on the other side of this crisis. He went on to say that he’s grateful that a lot of his clients are priced on client-based SUTA.

 

  • An expectation that the Millennials will be the most impacted from a psychological standpoint. Comments to the effect that the Millennials have never been “economically tested” were shared as a concern.

 

  • A big concern for most interviewees was “communication”, both internally and with their clients. “we need to double-down on our communication processes and initiatives” was one comment made.  Daily phone meetings with work at home employees will be crucial, shared one PEO executive.

 

  • “I can foresee us needing to call upon our rarely used credit line at our banks” was one PEO owner’s expressed expectation.

 

  • “We better be concerned with and thinking about our technology” stated one PEO owner who just placed an order for 6 laptops for possible assignment to work from home staffers.

 

  • “This is a time when leaders show what they are made of and new leaders or key players emerge” was a wise statement or insight

 

  • It was reported that numerous client companies of the PEOs represented in this survey have totally suspended operations or dramatically limited such.  The client company industries that seem to have been mostly impacted are restaurants and the hospitality industry at large, transportation companies and retailers.

 

  • Already, according to a couple the PEO owners interviewed, clients are requesting PEO rate reductions due to the crisis.  One PEO owner expressed concern with this becoming a growing request or expectation of his client base.

 

  • One PEO with an overweighed hospitality industries book of business was especially concerned.  Already mandated closures of restaurants and bars has impacted that PEO’s business, but how long will it be before people are comfortable going out to eat or to go to bars after the crisis is dealt with?—that was the concern expressed.

 

  • “Rotating staff” was a common initiative referenced by the PEO representatives interviewed.  Cutting their internal staffs at the office in half (or more) by having a rotation of having employees work one day at home and the next at the offices.  This was seen as a effort to support “social distancing” and to minimize the number of employees working at the office at one time.

 

  • “Certain job functions cannot or should not be performed by staffers from home” was a comment from one PEO representative.

 

  • “We expect that some of our clients and even our PEO will be taken advantage of by some workers that simply see this crisis as a opportunity to take time off from work” stated one PEO representative.

 

  • One crucial factor to consider when determining if PEO staffers will be allowed or instructed to work from home is the quality of their internet connectivity and computers.  Some employees lack either or both internet connectivity and/or a home computer or laptop. A few of the PEO representatives stated that they were assigning laptops to some staffers and a couple had recently bought extra laptops for this very purpose.

 

  • A PEO representative stated that they were having their staffers working from home use their office voiceover IP phones at home.  This was allowing them to receive and initiate calls from their office phone lines while working at home. Another PEO was having the office phones and extensions for staffers working at home forwarded to the employee’s cell phone while they are working from home.

 

  • “Core crews” will be needed at the PEO’s base of operations were consistent responses with all the interviewees. When pressed for what team members at the PEO would be classified as “core” the common response was “our leaders” and those associated with getting printed checks and reports out to the clients. Payroll, IT, HR, and accounting were the types of personnel that would be called upon most during the Coronavirus outbreak according to most interviewees.

 

  • “Hyper-hygiene” was another practice that was referenced by several survey interviewees.  Emails, bulletins, texts, posters, handouts are all being utilized with the PEO’s internal staff and with their clients. Handwashing, using disinfectant cleansers, covering your mouth and nose when coughing or sneezing, etc… are all tips and practices being promoted.

 

  • Most of the PEO owners and executives interviewed stated that they have internal (PEO) planned staff reductions. Some have already implemented reductions and are considering more. The common observations is that revenues are dropping rapidly due to client company payroll reductions or total suspensions. “It’s easy math” said one PEO owner referencing that the PEO’s staff size and payroll are a factor of the revenue generated, which is based on client companies processing payrolls through the PEO.

 

  • “I’m focused on assessing the probable economic impact on our PEO and what I need to do now to prepare for a dramatic reduction in revenue” was shared by one PEO owner, however other interviewees expressed the same concern.

 

  • At least two of the PEO owners interviewed stated that they have not yet considered internal PEO staff layoffs but acknowledged that that would be a possibility.

 

  • A few of those interviewed said that they have already heard of PEOs that were contemplating closure.  Others predicted that there will be PEOs that “go out of business” as a result of the Coronavirus crisis.  At least one of the PEO owners interviewed said that he will be looking for a “fire sale of PEOs prior to them going under”.

 

  • After speaking with PEO bank representatives and the PEO representatives that work with treasury management, there does not seem to be any concern with banking.  Bank representatives confirmed that they are implementing their own “work from home” initiatives, reducing operating hours, and utilizing minimal branch staffs during this Coronavirus outbreak. The bankers feel like they are a crucial and required facet of not just serving the PEO Industry, but in supporting the worldwide economy and society—as a whole. No changes in how PEOs are served are planned at this time by the bank representatives interviewed.

 

  • An optimist PEO owner said that this is “SARS 2.0”.  He went on to state that his PEO had done very well since the last declared virus outbreak.

 

  • Increasing “cloud-based file share processes” was another initiative that some of the PEO representatives shared.  Those respondents stated that they already had such practices in place but would add staff members to that access and expand capacity to utilize this type of resource.

 

  • Some of the PEO owners expressed pride in how their key employees were stepping up and declaring their commitment to the PEO and the clients.  Volunteers for staying at the office (as part of the aforementioned “core crew”) were noted. At the same time, one PEO owner stated that this situation has been “enlightening” to him as it pertains to various staff members.

 

  • A question that asked (or fear expressed) was that WSEs that become infected with the Coronavirus will be eligible for workers’ compensation benefits.  This was a particular concern for those PEOs with large deductibles associated with the PEOs’ workers’ comp polices. One workers’ comp broker expressed that he expects that to end-up being the case (i.e. that Coronavirus claims will be compensable under workers’ comp). While SUTA rate increase were commonly fears and expected as a result of this crisis, might experience modifiers for the PEOs to be impacted as well, was at lease one PEO owner’s concern.

 

  • “Our leaders need to work hard to keep spirits up (referring to the PEO’s internal staff)” was a PEO owner’s comment.

 

  • A push to promote pay cards and direct deposits to those client companies that still issue paper checks is underway at some of the PEOs interviewed. A mild concern that FedEx might suspend operations was expressed by a couple of PEO representatives.

 

  • PEO representatives shared they are keeping a close eye on what the federal government is doing in the way of any “economic relief package”.

 

  • Asking PEO sales reps to stay away from the office was a precaution one PEO reported.  This is due to the salespeople moving amongst different locations (prospects and clients) stated the interviewee.

 

  • “During and after this crisis, we will be considering our expanded use of outsourcing non-client facing functions for our PEO (back office functions like reconciliations and payroll processing were mentioned)” was shared by one PEO owner.  He said that he thinks that this type of outsourcing (to India) could reduce the costs associated with those functions by as much as 50%.

 

  • “We are looking at every cost cutting measure that we can take in order to deal with lost revenue” stated a PEO owner.  He mentioned staff reductions, elimination of travel and entertainment expenses, and reduced hours for part time workers.

 

  • Interestingly, a couple of the PEO owners are planning “sales promotions” such as “no admin fees” for one, two and even three months for new accounts that come onboard during this crisis.  Also, sales promotions are being implemented by some PEOs in the form of bonuses on new business to be paid to the agents or brokers.

 

  • The PEO brokers seem to be the most stunned as they feel that they have no control and are dependent on the PEOs to tell them what is happening and what will happen moving forward.  Of course, PEO commissions to brokers are based on payrolls processed and typically do not involve any form of “base salary”.

 

  • Some PEO vendors and insurance brokers expressed that the adverse impact on them will likely be somewhat delayed as reported workers’ comp premium collections are not immediate and PEO failures are not yet identified or reported. They seem to feel a bit “powerless” in assisting their PEO clientele.

We will continue to communicate with our survey respondents and will look to provide an update later during this Coronavirus crisis in order to keep our PEO friends and affiliates aware of Industry veterans’ experiences, observations, and opinions.  Please let us know if you have any questions or additional comments that you want to share.

LL Roberts Group

 

Components of COVID-19 Relief Legislation

Below is a summary of the COVID-19 Relief Package from our friends at FisherBroyles

Components of H.R. 6201, COVID-19 relief legislation Temporary Expansion of Family and Medical Leave

  • H.R. 6201 would require employers with fewer than 500 employees to provide up to 12 weeks of job-protected leave, ten weeks of which would be paid.
  • Leave would be for “qualifying need related to a public health emergency.”
  • Qualifying need is defined as to mean “the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school [meaning a primary or secondary school only] or place of care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency.”
  • A “public health emergency” is then defined to mean “an emergency with respect to COVID-19 declared by a Federal, State, or local authority.”
  • The leave applies to employees who have been employed for at least 30 calendar days, rather than the 12-month period under the current FMLA.
  • The Secretary of Labor has the regulatory authority to exempt employers with fewer than 50 employees if the provision of paid FMLA leave “would jeopardize the viability of the business as a going concern.”
  • Employers with 25 or more employees would be required to reinstate employees after their FMLA leave period ends.
  • Employers with fewer than 25 employers do not have to reinstate an employee if they are experiencing significant economic hardship.
  • The first 10 days for which an employee takes leave could be unpaid leave, or the employee could choose to substitute any accrued vacation, personal or sick leave (including in certain instances the emergency paid “sick” leave described below).
  • After the initial 10 days, the employer would be required to provide paid leave based on an amount that is not less than two-thirds of an employee’s regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work.
  • The bill caps the amount of the paid leave, per employee, to no more than $200 per day or $10,000 in the aggregate.
  • This provisions would be effective “not later than 15 days after the date of enactment.”

Creation of a Temporary Paid Sick Leave Program

  • H.R. 6201 requires employers to provide full-time employees with 80 hours of certain emergency paid “sick” leave related to the coronavirus (with special rules for part-time employees).
  • The paid sick leave could be used in any of the following circumstances:
    • The employee is subject to a federal, state or local quarantine or isolation order related to COVID-19.
    • The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19
    • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
    • The employee is caring for an individual who
      • Is subject to a federal, state or local quarantine or isolation order related to COVID-19, or
      • Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
    • The employee is caring for a son or daughter where the school or place of care of the son or daughter has been closed or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
    • The employee is experiencing any other substantially similar condition specified by the Secretary of HHS in consultation with the Secretary of the Treasury and the Secretary of Labor.
  • Full-time employees would be entitled to 80 hours of paid leave
  • Part-time employees are entitled to “a number of hours equal to the number of hours that such employee works, on average, over a 2-week period.”
  • The required paid leave ends with the employee’s next scheduled work shift following the end of the qualifying need.
  • The required sick pay is calculated based on the employee’s regular rate of pay or, if higher, the applicable minimum wage rate.
  • In the case of leaves to care for a family member or child, however, the required sick pay is based on 2/3rds of the regular rate of pay.
  • For part-time employees whose schedule varies from week to week, special rules apply to calculate the average number of hours.
  • The maximum amount of required sick pay per employee is $511 per day and $5,110 in the aggregate.
  • In the case of leaves to care for a family member of child, however, the maximum amount of required sick pay per employee is $200 per day and $2,000 in the aggregate.
  • The bill imposes notice requirements and prohibits employers from discharging, disciplining or discriminating against employees who take paid sick leave.
  • The Secretary of Labor is instructed to provide a model notice within seven days after enactment.
  • An employer is also prohibited from requiring employees to look for or find replacement employees to cover the hours during which the employee is using the paid sick time.
  • Violations are punishable under the FLSA.
  • The paid leave provisions go into effect “not later than 15 days after the date of enactment” and expire on December 31, 2020.

Refundable Tax Credits to Pay for Leave

  • H.R. 6201 provides provide a series of tax credits to those employers subject to expanded FMLA and emergency paid “sick” leave requirements.
  • The employer-related credits, which are refundable, would be applied against the employer portion of Social Security taxes for each quarter equal to the “qualifying” paid leave wages paid by the employer.
  • The tax credits would apply with respect to both the FMLA-expanded paid leave as well as the emergency paid “sick” leave.
  • The amount of the tax credits varies based on the type of leave.

Tax Credit for Expanded FMLA Leave

  • H.R. 6201 would provide employers a refundable tax credit equal to 100 percent of the “qualified family leave wages” that the employer is required to pay for a given quarter under the Expanded FMLA Leave.
  • The amount of the qualified family leave wages that would be taken into account for purposes of the credit per employee is $200 for any day for which the employer pays the employee qualified family leave wages, up to a maximum amount for all calendar quarters of $10,000 per employee.

Tax Credit for Emergency Paid “Sick” Leave

  • H.R. 6201 would provide employers a refundable tax credit equal to 100 percent of “qualified sick leave wages” that the employer is required to pay for a given quarter under the Emergency Paid Sick Leave Act.
  • The amount of qualified sick leave wages for purposes of the credit would vary depending upon the reason for the leave.
  • For employees who must self-isolate, obtain a coronavirus diagnosis or comply with a self-isolation recommendation from a public official or health care provider, the amount of qualified sick leave wages taken into account is capped at $511 per day.
  • The bill also allows for an increase in the amount of the tax credit equal to the amount “of the employer’s qualified health plan expenses as are properly allocable to the qualified family [or sick] leave wages for which such credit is allowed.”
  • The tax credit would apply to wages the employer pays between (1) a date that the Secretary of the Treasury must specify within 15 days after the date of enactment and (2) December 31, 2020.

Free Coronavirus Testing

  • H.R. 6201 would require that group health plans and health insurance issuers of group to cover FDA- approved COVID-19 diagnostic testing products.
  • Cost covered include the items and services furnished during a provider visit (office, telehealth, urgent care and emergency room) to the extent those items and services relate to the furnishing or administration of the testing product or the evaluation of the individual’s need for the testing product.
  • The mandated coverage must be provided without “any cost sharing (including deductibles, copayments and coinsurance) requirements or prior authorization or other medical management requirements.”
  • The requirement to cover COVID-19 testing costs starts from the date of enactment until the Secretary of HHS determines that the public health emergency has expired.

To see COVID-19 information, please visit fisherbroyles.com