Payroll Tax Deferral Update: Treasury Guidance Answers Certain Questions and Raises Others Only Days Before Start of Implementation

Late in the afternoon of August 28, 2020, the Internal Revenue Service (IRS) issued Notice 2020-65 (the Notice) permitting the deferral of employers’ obligation to withhold and deposit with the IRS the employee portion of certain social security (and related railroad retirement) taxes imposed under Sections 3101(a) and 3201(a) (FICA Withholding Taxes) of the U.S. Internal Revenue Code of 1986, as amended (the Code). The Notice follows President Trump’s August 8, 2020, executive memorandum (the Memo) directing the IRS to issue such guidance, and the deferral period begins on September 1. While the Notice specifies how FICA Withholding Tax deferral is to be effected and how deferred amounts are to be collected, a number of significant questions remain unanswered.

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The Lost Wage Assistance Program Provides Relief After the CARES Act $600 Weekly Benefit Expired

On August 8, 2020, President Trump authorized the creation of the Lost Wage Assistance (LWA) program to provide lost wage assistance to unemployed individuals as a result of COVID-19. The LWA is intended to provide additional unemployment assistance after the Coronavirus Aid, Relief and Economic Security (CARES) Act’s $600 per week supplement expired on July 31, 2020. Under the LWA program, eligible claimants may receive $300 or $400 in supplemental benefits.

The Federal Emergency Management Agency (FEMA) will provide grants to participating states, territories and the District of Columbia for lost wage assistance. States may provide eligible claimants $400 per week, with a $300 federal contribution, in addition to an individual’s regular weekly unemployment benefit (UI) amount. The benefit is funded using 75% from the Disaster Relief Fund administered by FEMA and the remaining 25% through state unemployment insurance funding.

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NLRB Expands Employer Options for Social Media and Non-Disparagement Rules

With the COVID-19 emergency impacting employers’ operations and the way employees work, more and more employees may start taking to social media to vent their opinions about work and current events (sometimes intertwining the two). Employee social media expression can damage an organization’s brand and violate its social media and non-disparagement rules. Discipline for social media expression can run afoul of the National Labor Relations Act (NLRA), which provides certain protections for employee speech, including social media speech, so that employees often believe that anything goes in this forum. Fortunately for employers, the National Labor Relations Board (NLRB) recently clarified the types of employee social media activity employers may regulate, giving employers more latitude to discipline employees for social media conduct that violates employer rules and threatens the employer’s reputation.

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As Hair Discrimination Bans Grow, New York City Seeks Public Comment on Proposed Rule

July 3, 2020, marked the one-year anniversary of California becoming the first jurisdiction in the country to pass the Create a Respectful and Open Workplace for Natural Hair (CROWN) Act, prohibiting discrimination based on natural hairstyles and textures. One year later, many more jurisdictions have followed suit.

The CROWN Act is now law in seven states – California, New York, New Jersey, Virginia, Colorado, Washington and Maryland – and eight additional states have either pre-filed, filed or formally stated an intent to introduce their own bills outlawing hair discrimination, including Illinois, Massachusetts, Michigan, Minnesota, Ohio, Pennsylvania, Rhode Island and South Carolina. On August 11, Nebraska also passed a bill but was promptly vetoed by the governor. A further 15 states introduced bills that failed to move through the legislature before the end of the legislative session. Companion bills were also introduced in the U.S. Senate and House of Representatives in late 2019.

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No Reprieve: New Title IX Regulations Take Effect as Scheduled

Educational institutions hoping for a last-minute reprieve from the new Title IX regulations scheduled to go into effect August 14 are out of luck. Earlier this week, the Southern District of New York denied a nationwide preliminary injunction sought by the state of New York to delay implementation of the new regulations (State of New York, et al. v. United States Department of Education, et al.).

And, just days later, the U.S. Department of Education (ED) defeated another preliminary injunction motion filed by 17 states and the District of Columbia in federal court in Washington, D.C. (Commonwealth of Pennsylvania, et al. v. Elisabeth DeVos, et al.). A third preliminary injunction motion is pending in the District of Massachusetts — however, earlier this month, the court there denied a motion to expedite a hearing, stating that “a prompt September hearing is fully appropriate.”

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Modernized OFCCP Website Tools: The National Pre-Award Registry and VEVRAA Hiring Benchmark Database

On August 10, 2020, the Office of Federal Contract Compliance Programs (OFCCP) updated its website, including revamping the National Pre-Award Registry and the VEVRAA Hiring Benchmark Database. These new features provide helpful information to contactors and contracting officials and help to streamline navigation among OFCCP’s website content and tools. Furthermore, the updated tools enhance information accessibility to individuals with vision impairments.

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