Legal and Financial Resources Regarding COVID-19
The COVID-19 pandemic has created difficult circumstances for many families. You or your family member may be under quarantine, unable to work or fulfill their usual day-to-day tasks. Loss of income, employment, and/or health insurance pose serious challenges. Meanwhile, many levels of government have implemented resources for anyone experiencing difficulties related to COVID-19. Below is a list of some particular resources that individuals and families may find useful during this time.
1. Expanded Options for Loans From Your Retirement Fund
The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) allows employees who fit any of the following criteria to take out a tax-free, penalty-free loan of up to $100,000 from their retirement fund:
- A certified physician diagnosed you with COVID-19
- Your spouse or dependant child was diagnosed with COVID-19
- You lost income for any reason related to COVID-19 (self-quarantine orders, furlough, reduced hours, layoff)
If you fulfill any of the above criteria, you are eligible to take out a penalty-free loan of up to $100,000 from your 401(k) plan, 403(b)(7) or (9) plans, or governmental 457(b) plan. You must repay this loan within 3 years or less.
Additionally, any individual who currently has an active loan from their retirement fund had their payments deferred until December 31st, 2010.
2. Pre-Tax Student Loan Payments
Under a new provision, employees with educational debt may request their employer to make their payments on their behalf, and withhold the amount from their paycheck. The amount of the loan payments is excluded from the employee’s taxable income. Essentially, this provides the same benefits as 401(k) contributions to educational loan repayments.
3. Legal Requirements for Businesses, Employers, and Employees
The legal requirements and guidelines relating to COVID-19 can be confusing. Here is a breakdown of the legal responsibilities and requirements for employers and employees:
- An employer MAY legally require an employee to leave work and/or prohibit them from returning to work due to illness.
- An employer MAY NOT legally require an employee to provide certification and/or test results in order to return to work.
- An employer IS NOT REQUIRED to temporarily close their business facilities if an employee or patron who spent time within the facility tests positive for COVID-19. However, federal and local health guidelines may strongly recommend they do so.
- Employees MAY refuse to work, or at the very least, refuse to attend the company work site or office, if they believe the workplace environment places them in grave risk of contracting COVID-19. However, note that the general likelihood of contracting COVID-19 is generally insufficient grounds for refusing to work. If one or more co-workers have contracted COVID-19, or other factors relating to the workplace environment contribute to an immediate risk of exposure, employees may have sufficient grounds.
- Matters related to paid medical leave, worker’s compensation, and so on are best addressed on a case-by-case basis. While the federal government’s relief packages do provide benefits and resources related to emergency sick leave, restrictions and exclusions may apply.
The COVID-19 pandemic has caused fear and uncertainty throughout the world. In the midst of these troubling times, remember that you have tools and resources available to assist you. If you have any questions about your legal rights in the midst of COVID-19, please contact our offices at 218-464-3397.