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Covid-19
Coronavirus (COVID-19)
Employer Resources

Updated on Apr 08, 2020 at 06:31 AM



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Business Loan Resources

Small Business Paycheck Protection Program

The PPP provides small businesses (<500 employees, with some exceptions) with funds to pay up to 8 weeks of payroll costs including benefits. The loan amount is 2.5 times the average monthly payroll plus other expenses, up to $10,000,000. Funds can also be used to pay interest on mortgages, rent, and utilities. The funds are provided in the form of a loan that can be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities. Loan that are not forgiven will be deferred for six months. No collateral or personal guarantees are required. Conditions are that you must keep employees on the payroll throughout the 8 weeks. That is why the government is giving you the funds in the first place. Loans are through any approved SBA 7(a) lender. Check with your bank. The loan process opens on Friday, April 3 and there is a limited amount of funds available, so do not delay.

Small Business Paycheck Protection Program
SBA PPP Loan Application
Small Business Administration

The U.S. Small Business Administration is offering designated states and territories low-interest (2.75% to 3.75%) federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.

Disaster Assistance Website
State Sponsored Loans - Florida

Your state may also provide emergency loan assistance. In the state of Florida, there is the state sponsored Florida Small Business Emergency Bridge Loan Program. Amounts up to $100,000 are available for 1 year terms interest-free. Yes 0%. Applications are only accepted up until May 8th, 2020, contingent on the availability of funds. If you are not located in Florida, check with your state for information.

Disaster Loan Website

U.S. Government

The U.S. Department of Labor has a dedicated page of Coronavirus Resources. Information can be found there regarding Workplace Safety, OSHA, and more. As it does not directly relate to tax credits, we will not reiterate the details here.

U.S. DOL Coronavirus Resources
IRS Coronavirus Resources
U.S. Department of Education - Student Loan Suspension
H.R. 6201 - Families First Coronavirus Response Act

This Act was signed into law by the President on March 18th, 2020. This bill has many parts, but those related to payroll and employers are listed below. The effective date of the Act is on or before April 2nd, 2020.

Families First Coronavirus Response Act - Full Text of Act
Department of Labor; FFCRA Q&A
U.S. DOL Labor Poster
IRS Advance Payment of Employer Credit Form
Download our COVID-19 Leave and Payroll Tax Credit Webinar
Download our COVID-19 Leave and Payroll Tax Credit Guide
Paid Family & Sick Leave

Companies with fewer than 500 employees, up to 2 weeks (10 days/80 hours) of paid family and sick leave to deal with coronavirus-related issues, including staying home to care for children whose schools are closed. The employee must be unable to work, or telework, due to a need for leave under one of the following six reasons;

  1. The employee is subject to a COVID-19-related federal/state/local quarantine or isolation order.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis.
  4. The employee is caring for an individual who is subject to a federal/state/local quarantine order, or the individual has been advised to self-quarantine due to COVID-19 related concerns.
  5. The employee is caring for the employee’s son or daughter, if the child’s school (elementary or secondary) or child care facility has been closed or the child’s care provider is unavailable due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by Health and Human Services in consultation with the Department of the Treasury and the U.S. DOL.

Employers will receive a refundable payroll tax credit based on the employee’s regular rate of pay, but is limited to $511 per day and $5,110 total for employees based on their own condition. (Items 1-3 above.)

Employers will receive a refundable payroll tax credit based on two-thirds employee’s regular rate of pay, but is limited to $200 per day and $2,000 total for employees acting as a caregiver. (Items 4-6 above.)

Payroll tax credit includes employer health insurance and taxes related to wages paid under the Act.

Variable-hour employees will receive paid leave based on the average number of hours worked over the previous 6 month period ending on the date on which the employee takes the paid leave.

Part-time employees will receive paid leave in an amount of the average number of hours they work over a two-week period.

Exceptions exist for healthcare providers or emergency responders where the employer may exclude the employee from the Emergency Paid Sick Leave requirement.

Employers with less than 50 employees can file for exemption if the viability of their business would be in jeopardy. Form to file for exemption is not yet available. Failure to pay Emergency Paid Sick Leave will be found in violation of paying minimum wages under Section 6 of the FLSA.

This credit will remain in effect for Emergency Paid Sick Leave wages paid until December 31st, 2020.

Emergency Family Medical Leave

This is an expansion of the existing FMLA on a temporary basis. Currently, FMLA only applies to companies with 50 or more employees, but this Act will change those employers covered to fewer than 500 employees. Meaning if you have one employee, Emergency FMLA now applies to you. It also lowers the eligibility requirement where employees just need to have worked for at least 30 days prior to the designated leave.

Employees may take up to 12 weeks of job-protected leave if they are unable to work or telework, or to care for the employees child (under 18) if the child’s school or place of care is closed or the childcare provider is unavailable due to a public health emergency.

The first two weeks of Emergency FMLA may be unpaid, but the employee may elect to substitute any accrued-paid leave the company offers. After the two-week period, the employer must pay full-time employees at two-thirds the employee’s regular rate for the number of hours the employee would otherwise be normally scheduled for 10 additional weeks.

If the employee has a variable schedule and the employer is unable to determine the number of hours the employee would have worked, the employee would use the following calculation to determine the hours:

  • Average number of hours the employee was scheduled over the 6-month period ending on the date on which the employee takes the leave (including any leave hours the employee took during that period).
  • If the employee did not work over the 6-month period, the employer should use the number of hours the employer reasonably expected the employee to work per day when they were hired.

Pay is limited to $200 per day and $10,000 in the aggregate per employee.

Employers will receive a refundable payroll tax credit based on the employer costs for providing the Emergency Family Medical Leave as well as the employer's contributions for health insurance premiums and employer payroll taxes for the period of leave related to wages paid under the Act, uncapped.

Employers with fewer than 50 employees can be exempt from the requirements when the imposition of such requirements would jeopardize the viability of the business as a going concern.

Under the Act, an employee should receive a restoration of their position. However, if the employer has fewer than 25 employees the employer is not required to restore the employee’s position if the following conditions are met:

  • The employee takes leave under the Act
  • The position held by the employee when the leave commenced does not exist due to economic conditions or changes in operating conditions that affect employment and are caused by the Public Health Emergency
  • The employer makes reasonable efforts to restore the employee to an equivalent position with equivalent pay, benefits, etc.
  • The employer makes a reasonable effort to contact the employee if an equivalent position becomes available for a period of one year commencing the earlier of (1) the date the qualifying need concludes or (2) the date that is 12 weeks after the date of which the employee’s leave commences.

The CARES Act amends this section to extend paid leave to employees who were laid off after March 1, 2020, had worked for the employer for at least 30 of the last 60 days, and were rehired by the employer.

The Emergency FMLA will remain in effect until December 31st, 2020.

H.R. 748 Coronavirus Aid, Relief, and Economic Security Act (CARES)
Coronavirus Aid, Relief, and Economic Security Act - Full Text
Employee Retention Credit

Eligible employers are allowed a credit against employment taxes for each calendar quarter equal to 50% of qualified wages paid to each employee. The wage amount is limited to $10,000 across all calendar quarters ($5,000 maximum credit, per employee). The credit is fully refundable because the employer may receive a refund if the amount of the credit is more than certain federal employment taxes owed.

An eligible employer is defined as one that was carrying on a trade or business (including not for profit) during calendar year 2020 and is either;

  1. The employer's business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.
  2. The employer's gross receipts are below 50% of the comparable quarter in 2019. Once the employer's gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.

Eligible wages are;

  1. In the case of employers with more than 100 full-time employees (within the meaning of ACA Section 4980H), wages paid by such eligible employer to employees that provided no services during the shutdown.
  2. In the case of employers with less than 100 full-time employees (within the meaning of ACA Section 4980H), wages paid by such eligible employer without regard to whether the employer was in operation. All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or subsection (m) or (o) of section 414 of such Code, shall be treated as one employer for purposes of this section.

The credit will also include the eligible employer's qualified health plan expenses attributable to the eligible wages, but not to exceed the $5,000 limit per employee. If the credit exceeds the tax amount due, the employer can file the IRS Form 7200 to request an Advance Payment of Employer Credits to receive a check for an advance.

This credit is not available to businesses receiving a Small Business Interruption Loan under section 1102 of the Act or if a Work Opportunity Tax Credit is allowed for the Employee.

Delay of payment of employer payroll taxes

The Act allows for most employers to defer paying their share of OASDI (Social Security) tax from now through December 31, 2020. Half of this deferred amount would be due on December 31, 2021 and the other half by December 31, 2022.

This does not apply to any employer that has had indebtedness forgiven under section 1105 of the Act with respect to a loan under 7(a) of the SBA.


Unemployment

Many states have enacted special rules regarding unemployment surrounding the COVID-19 pandemic. Each state we have identified as having a special page on COVID-19 is listed below. It is also important for employers to note that some states have a law such as the state of Florida already on their books;

“If an individual is separated from work as a direct result of a natural disaster declared under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. ss. 5121 et seq., benefits subsequently paid to the individual based on wages paid by the employer before the separation may not be charged to the employment record of the employer.”

443.131(3)(a)4. Florida Statutes

Therefore, it is important that if you are laying off employees as a result of COVID-19, you make that clear to your employees, then in your response to the state's unemployment claim notice you reiterate the reason for the termination. This way the benefits paid by the state will not affect your future unemployment tax rate.

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Mass Layoffs

Worker Adjustment and Retraining Notification (WARN) Act Compliance

The Worker Adjustment and Retraining Notification (WARN) Act helps ensure advance notice in cases of qualified plant closings and mass layoffs. This applies to the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment for 50 or more employees, excluding any part-time employees. An employment action that results in the effective cessation of production or the work performed by a unit, even if a few employees remain, is a shutdown. A temporary shutdown triggers the notice requirement only if there are sufficient number of terminations, layoffs exceeding 6 months, or reduction in hours of work as specified under the definition of employment loss.

Details of the WARN Act can be found here

There are situations where WARN does not require a 60 day notice including unforeseen business circumstances, and while this pandemic could likely meet the requirements of this exception, the Department of Labor has not provided any guidance as of the time of this writing.


States

Colorado Emergency Paid Sick Leave
Kentucky Emergency Paid Sick Leave - Pending
New York Emergency Paid Sick Leave - Pending

Past Webinars

What's An Employer To do - Coronavirus and Employment Law

HR Guidance and Best Practices Webinar (3/23/20 @ 4PM)

Download the Slideshow
HR Guidance and Best Practices Webinar (3/31/20 @ 4:30PM)

Download the Slideshow
While PayMaster, Inc. makes every attempt to ensure the accuracy and reliability of the information provided on this website, the information is provided “as-is” without warranty of any kind. PayMaster, Inc. does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained. Consult with your CPA, Attorney, and/or HR Professional as these Acts and Laws are brand new and can be subject to interpretation or further clarification, guidance and rulemaking from the government.
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