COVID-19 Update August 27, 2020

Our thoughts and prayers go out to the people of Louisiana and Texas and other businesses affected by Hurricane Laura. It looks like the storm is going to continue blowing through the country, hitting major cities on its way back out to the Atlantic. Luckily, our clients have been spared for the most part, and we are continuing outreach efforts.

As if the devastation isn’t enough, evacuations could result in a rise of COVID-19 cases. The governor of Louisiana announced that the state will remain in Phase 2 for another two weeks, even though the numbers are trending in the right direction. Additionally, the Louisiana Workforce Commission reported $240 million in payments to almost 300,000 out-of-work residents on Wednesday seeking an additional $300-per-week federal unemployment benefit.

As you begin to prepare for 2021, it is anticipated that health plan costs will rise an average of 5.3%. Costs per worker, including premiums and out-of-pocket spending, could hit $15,500, and Delta is working on having a new plan available for clients to review before January. In other benefits news, the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which became law in December 2019, created a new type of multiple-employer 401(k) plan called a pooled employer plan (PEP), so more employers are hopping on the PEO/ASO bandwagon. The biggest difference between the new option and what Delta offers is that we are the fiduciary for our plan. We have commonality because everyone runs their payroll through Delta, allowing us to deduct the amounts from employees and send it directly to our 401k provider. There are many uncertainties for this new pooled plan, such as the named fiduciary of the PEP, the responsible party for the audit, etc.

The Department of Labor (DOL) has released guidance about reducing salaries during the Coronavirus pandemic. Under the federal Fair Labor Standards Act (FLSA), an employer can generally reduce exempt employees’ regular salary for COVID-19-related reasons. However, the reduction cannot be made after the fact or based on the employer’s day-to-day or week-to-week needs, according to the DOL.

Please let us know if there are any questions on these topics or if you have any disaster recovery concerns where we can be of assistance.