HR Ledger, Inc.

COVID-19 Updates

We here at HR Ledger want to reassure you that we are still committed and dedicated to delivering Quality, Service and Value.  Rest assured that we will be doing our very best to process your payroll and will continue to adapt and find the best alternative available as any additional obstacles arise.

If you are unsure about your hours, or future work schedule, feel free to send your payroll in early for processing. We will try our best to accommodate your needs any way we can.

COVID-19

Informational Websites

PAYCHECK PROTECTION PROGRAM LOANS

Paycheck Protection Program Loans

Frequently Asked Questions (FAQs)

The Small Business Administration (SBA), in consultation with the Department of the Treasury, intends to provide timely additional guidance to address borrower and lender questions concerning the implementation of the Paycheck Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act). This document will be updated on a regular basis.

https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf

UNEMPLOYMENT EDD RULES

UNEMPLOYMENT EDD RULES

The EDD provides a variety of support services to individuals affected by COVID-19 in California.

https://www.edd.ca.gov/about_edd/coronavirus-2019.htm

STATE OF CA

STATE OF CA

Updates about Coronavirus (COVID-19) in California.

https://covid19.ca.gov/

STATE OF NV

STATE OF NV

Updates about Coronavirus (COVID-19) in Nevada.

https://nvhealthresponse.nv.gov/

COUNTIES COVID WEBSITES

COUNTIES COVID WEBSITES

The health and safety of our entire County Family and the nearly 40 million people you serve is of utmost importance to California State Association of Counties. We have added this resource page for county-specific communications resources.

https://www.counties.org/carousel/resources-regarding-coronavirus-covid-19

PAYROLL COMPANIES ARE A CRITICAL INFRASTRUCTURE SECTOR

PAYROLL COMPANIES ARE A CRITICAL INFRASTRUCTURE SECTOR

The Financial Services Sector represents a vital component of our nation’s critical infrastructure.

https://www.cisa.gov/financial-services-sector

CA STAY AT HOME ORDER

IRS GUIDANCE ON FFRCA

IRS GUIDANCE ON FFRCA

Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave.

https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

FAMILIES FIRST: Q & A

Families First Coronavirus Response Act: Questions and Answers

As provided under the legislation, the U.S. Department of Labor will be issuing implementing regulations. Additionally, as warranted, the Department will continue to provide compliance assistance to employers and employees on their responsibilities and rights under the FFCRA.

https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

FMLA INSIGHTS FAQS

FMLA Insights: Guidance & Solutions for Employers

DOL Publishes Second Round of FAQs on Paid Leave Law: Agency Addresses Documentation, Intermittent Leave, Furloughs, and “Top Off” Policies

FMLA INSIGHTS FMLA LEAVE

DOL Publishes Initial Guidance on How to Implement Emergency Paid Sick and Paid FMLA Leave

The Department of Labor issued an initial question and answer guidance aimed at helping employers administer emergency paid sick leave (EPSL) and paid FMLA leave (FMLA+) as part of the Families First Coronavirus Response Act (pdf), which aims to provide initial relief to American workers in the wake of the coronavirus pandemic.

SMALL BUSINESS OWNER’S GUIDE TO THE CARES ACT

The Small Business Owner’s Guide to the CARES Act

The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just passed by Congress are intended to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, as well as certain nonprofits and other employers.

https://www.hrledger.com/wp-content/uploads/2020/03/The-Small-Business-Owner’s-Guide-to-the-CARES-Act.pdf

SMALL BUSINESS ECONOMIC RELIEF & RECOVERY (CARE ACT)

Coronavirus (COVID-19): Small Business Guidance & Loan Resources

Health and government officials are working together to maintain the safety, security, and health of the American people. Small businesses are encouraged to do their part to keep their employees, customers, and themselves healthy.

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

COVID-19 Questions and Answers

Helping you better understand the Q&A associated with COVID-19 right now. 

How do I qualify for PPP loan forgiveness?

Businesses all over the nation have applied for the Paycheck Protection Program (PPP) loan. With many businesses now receiving the PPP loan, the next responsible question is:

How do I qualify for PPP loan forgiveness?

We have compiled the answers in an easy-to-read format which allows you to know which expenses qualify and are eligible for forgiveness. The following areas are allowable for forgiveness within the PPP loan:

  • Payroll costs, including additional wages for tipped employees
    • Salary, wages, commissions, and tips which are capped at a total of $100,000 and prorated to the eight-week period for each employee
    • Paid time off (PTO) and leave which include all types of leave such as vacation, parental, family, medical and/or sick unless you are using credits from the FFCRA
    • Health care benefits
      • Health insurance plans
      • Dental and vision plans
      • Health FSAs
      • HRAs, but not QUSEHRA
    • State and local taxes, except for the employer’s share of FICA, RRTA, or federal income taxes reported on the form 941
  • Additional non-payroll costs that only 25% of your loan can be used for, IF you want the full loan amount to be forgiven include:
    • Interest for mortgages and certain debt
    • Business rent
    • Business utility cost

Useful tips to know for FULL loan forgiveness:

  • On mortgages, certain debt and rent, these agreements must have been signed prior to February 15, 2020.
  • Only 25% of your loan amount can be used for non-payroll costs under the category listed above.
  • You must maintain your employee headcount and compensation levels between February 15, 2020 and the end of the 8-week period following loan disbursement. If you have reduced your workforce or reduced compensation, you have until June 30, 2020 to rehire and restore salaries, otherwise your forgiveness amount is reduced.
  • The government is updating the forgiveness process weekly, so check regularly for updates.
  • For tipped employees, you can pay wages to cover what they would normally have earned in tips and have them forgiven.

You can use your funds in the PPP loan for expenses not on this list, but please note that the amount used will not be forgiven

When you are turning in your application for loan forgiveness, you must include the following documentation:

  • The number of full-time employees and pay rates your company paid during the eight-week period
  • Payroll tax filings with the IRS
  • State income, payroll, and unemployment insurance filings
  • Proof of payments for mortgage, rent and/or utility payments
  • Certification that all the information you are supplying is true and correct ensuring that your loan was used for forgivable purposes
  • Check with your lending bank to make sure you meet any additional requirements by them too

What steps do I need to take right now to have my loan forgiven?

Step 1: Create a budget ahead of time. Know how much you are going to allocate for each section to ensure you don’t spend more than the 25% of non-payroll expenses for forgiveness.

Step 2: Keep track of everything you spend your PPP funds on.

Step 3: Know what you need to provide at the end of the eight-week period and how soon and how each of the documents needs to be submitted. Check with your lender for any additional information they may require.

Step 4: Keep any documentation of items you spend your PPP funds on.

All lenders have 60 days from the date that you apply for forgiveness to decide whether or not you qualify. If any portion of your loan is not forgiven, those amounts must be repaid within two years. As a bonus, any forgiven loans will be excluded from gross income for tax purposes.

Tax Relief for Small Businesses

What do taxpayers need to do if they want to take advantage of relief from the California Department of Tax and Fee Administration?

Interested taxpayers should contact CDTFA by visiting cdtfa.ca.gov or calling 800-400-7115.

When will taxpayers start on these payment plans?

Given that the April deadline to file and pay sales and use tax returns has been extended to late July for all but the largest taxpayers, CDTFA expects that most participating taxpayers will begin their payment arrangements in late July of this year.

How will the payment plans work?

Qualifying sales and use taxpayers with deferred liabilities up to $50,000 will pay their tax due in 12 equal monthly installments. No interest or penalties will be assessed against the liability.

Is this only for tax payments due for the 1st quarter of 2020?

If taxpayers choose to use this program to distribute the burden of their May or June prepayments or their July return, CDTFA will work to accommodate those taxpayers.

What if taxpayers owe more than the $50,000 limit on the relief?

The maximum amount that any taxpayer can defer interest-free under this relief effort is $50,000.

What if taxpayers with more than $5 million in annual taxable sales need this relief?

We recognize that some taxpayers, particularly in low margin businesses, with annual taxable sales over $5 million may also need this relief. Those taxpayers are encouraged to reach out to CDTFA, which will work with them to provide relief where appropriate.

Is the deadline for filing California tax returns extended?

Yes. All California taxpayers (individuals and businesses) can file and pay by July 15, 2020.

See information from the CA Franchise Tax Board for more information.

Small Business Disaster Relief Loan Guarantee Program

What is a loan guarantee?

A loan guarantee is a credit enhancement that helps mitigate the risk assumed by a lending institution when making a loan. With the Small Business Finance Center’s Disaster Relief Loan Guarantee Program, IBank agrees to guarantee up to 95% of the loan, removing the barriers to capital that often exist for small business borrowers that may not otherwise be eligible for traditional lending. This program also can assist those who may not be eligible for a U.S. Small Business Administration (SBA) loan.

Who is eligible to apply?

Small business entities that have been affected by loss, damage or other economic injury due to the COVID-19 pandemic and meet the program’s eligibility requirements.

What do you consider a small business?

The business must have between 1-750 employees and be established as an entity, including:

  • Sole Proprietor – Individual using legal name as business name that files a Schedule C, Schedule F, or has a fictitious business name or DBA statement
    • If the loan appears to be in the name of an individual, evidence of Sole Proprietorship will be required and may include a Schedule C, Schedule F, Seller’s Permit, and/or fictitious business name or DBA statement
  • Limited Liability Company
  • Cooperative
  • Corporation
  • Partnership
  • S-Corporation
  • Not-for-profit

The program will not accept an individual as the borrower. It is permissible for an individual to be a guarantor or co-borrower on the loan, but the primary borrower must be a small business. It does not consider citizenship or immigration status for eligibility requirements, as long as the entity/individual meets the above criteria. Trucking owners/operators are eligible as long as they are registered as a legal business entity.

AND

  • The business activity must be eligible under the program and in one of the industries listed in the North American Industry Classification System (NAICS) codes list, and
  • It must be located in a declared disaster area. A major disaster area declaration was made for the state of California on March 22, 2020 in regards to the COVID-19 pandemic.

What are excluded businesses? 

Businesses that are not eligible include passive real estate businesses (rental income, etc.).

Can I apply for a loan guarantee only if I am ineligible for federal disaster fund financing, such as a SBA loan? 

Yes, this program is designed for those who do not qualify for federal programs.

How much can I borrow?

The Small Business Finance Center’s Disaster Relief Loan Guarantee Program allows a maximum loan of $1.25 million and a maximum guarantee of $1 million. To serve as many California small businesses as possible, the COVID-19 disaster program is focused on serving small businesses, especially those in low-wealth and immigrant communities with needs from $500 to $50,000.

What are the loan terms?

The length of the loan can be negotiated with your lender, but the guarantee is good for up to seven years. The interest rate and loan criteria will be determined by the lender and could depend on the credit strength of the business. The guarantee is designed to lower the interest rate in exchange for a higher guarantee to your lender.

How can I apply?  

The Small Business Finance Center partners with Community Development Financial Institutions (CDFIs), Community Lending Institutions, and Financial Development Corporations (FDCs) to provide loan guarantees for small businesses.  To apply,

What is the timing for the funding of loans?

The program is in place and businesses can apply immediately. Once you provide your lender with complete information, you could be funded in a matter of days.

What can the money be used for?

The funds are meant to help small businesses through this challenging time. Loan proceeds can be used for business continuance or to cure “economic injury” as a result of COVID-19.

How will this program assist low-wealth and minority communities?

By working with the Community Development Financial Institutions (CDFIs) throughout the state of California, this disaster relief program can play an important role in generating economic growth and opportunity in some of our most distressed communities. CDFIs and mission-based lenders play a vital role across the state and have experience steering lending and investment to where it is needed and will matter the most, in particular in low-wealth and immigrant communities. CDFIs and our partner Financial Development Corporations (FDCs) that process the loan guarantees are embedded in communities across the state, speak several languages, and are invested in the community successfully managing its way through this pandemic.

Are faith-based businesses eligible for this loan guarantee program? 

Faith-based businesses (non-profit or otherwise) that have business activity outside of worship are eligible as long as they are a legal business that has been affected by the COVID-19 pandemic.

U.S. Small Business Administration Stimulus Programs

How does a small business get the $10,000 advance through the Economic Injury Disaster Loan program?

In order to request the advance of up to $10,000, eligible businesses must apply for the SBA’s Economic Injury Disaster Loan Program at sba.gov.  SBA has simplified the application, and as of Monday, March 30th, the loan and loan advance can both be requested through the Small Business Administration. Businesses who have applied before March 30th will need to reapply or contact SBA for assistance.

Which banks are offering the Paycheck Protection Program forgivable loans?

Interested borrowers can contact any SBA participating bank, credit union, or nonprofit lenders. For more information, contact your local bank or reach out to SBA’s local district offices for assistance.

Where do I find more information on the allowable expenses for a forgivable loan under the Paycheck Protection Program?

SBA is finalizing detailed guidelines for lenders. You can visit sba.gov for more detailed program information.

Are the SBA programs available to small businesses right now?

The Economic Injury Disaster Loan (EIDL) is available for you to apply right away. The Paycheck Protection Program (PPP) will be available for small businesses and sole proprietors beginning April 3. Independent contractors and self-employed can apply April 10th.

How do I reach SBA for any questions or assistance?

SBA has district offices throughout the state that are open to answer questions and they can be found on the SBA website.  You can also reach SBA at a 24hr Customer Service Center at: 1-800-659-2955 / 1-800-877-8339 (TTY), or you can contact the SBA by email at: disastercustomerservice@sba.gov.

How does a business know if it is eligible for an SBA loan or loan guarantee program?

Small business with 500 or fewer employees are eligible to apply for the Economic Injury Disaster Loan (EIDL), the Paycheck Protection Program (PPP), and/or the Small Business Debt Relief Program. Visit SBA’s comprehensive COVID-19 support website to find out more about SBA’s eligibility requirements.

How does a small business know which SBA loan or loan guarantee program is the right one? Can a small business apply to more than one?

The SBA is offering a variety of capital assistance programs to suit the range of needs for small businesses. SBA has a 24hr Customer Service Center at: 1-800-659-2955 / 1-800-877-8339 (TTY), or you can contact the SBA by email at: disastercustomerservice@sba.gov. It is important to note that while businesses can apply for and receive more than one form of capital assistance through the SBA, they cannot be used for the same purpose.

How do I get SBA to cover my loan payments on my existing 7(a), 504, or microloan if I cannot pay due to COVID-19?

SBA has a Debt Relief program and will pay the principal and interest of existing SBA loans.  Please contact your lender for information.

If I need help to figure out which program is best for me or to get help submitting an application, where can I find support?

California’s network of small business support centers help businesses figure out which loans and programs are best for them, develop resiliency strategies, and find other resources. To find the closest center, go to: business.ca.gov/centers.

Employers

How do I maintain a safe workplace?

What precautions should healthcare workers and organizations take?

See Cal/OSHA interim Guidance for Protecting Healthcare Workers.

How can I avoid laying off employees if my business is impacted by COVID-19?

Apply for the Unemployment Insurance (UI) Work Sharing Program.

Stay Home Order

What businesses and organizations are exempt from the stay-home-order?

Businesses and organizations that provide critical infrastructure for the state are exempted, including health care and public health, public safety, food and agriculture and media. See the full list of exempt sectors (pdf).

I run/work at an exempted business or organization, as defined by the Stay home order. Do I need to get an official letter of authorization from the state to operate?

No. If your business or organization is in the list of exempt sectors, it may still operate. You do not need to obtain any specific authorization from the state to do so.

What is the difference between a Furlough and a Layoff?

A. What are furloughs?

Furloughs are periods where employees are not working nor getting paid. Essentially, workers are placed on temporary unpaid leave until the business reopens. Often times, furloughed employees retain their “employed” status and continue to receive their benefits. Depending on the employer (and potential contract or union stipulations), employees may even be allowed to work for other businesses while on furlough from their primary employer.

What are layoffs?

Whereas furloughs are temporary arrangements, layoffs are permanent. Layoffs are mass firings of employees, sparked by a need to cut expenses to save an organization in crisis—not typically due to employee performance. Unlike furloughed employees, laid-off employees no longer have access to their employee benefits. However, they are typically entitled to unemployment assistance.

Pros and Cons

Laying off employees might seem like an enticing option to an employer who needs to save money, but it may not be the right decision in every situation. Here are some other considerations to keep in mind when determining whether a furlough or a layoff is the best option:

  • Laying off most or all of the workforce would necessitate recruiting, hiring and training a similar number of people once the ordeal is over. This can be extremely costly and time-consuming.
  • Employers may still be obliged to provide benefits to their workers during a furlough. This can be too much of a burden in itself and force an organization into a mass layoff anyway.
  • Furloughing some employees enables employers to keep a “rotating” schedule, where everyone has reduced hours instead of only a few having full hours.
  • Layoffs immediately free up lots of money, in terms of benefits and salary payments.
  • A furlough or layoff may trigger bargaining obligations, depending on the business.
  • Furloughs enable employers to resume operations quickly after the situation changes.
  • Furloughed employees may, in certain instances, still be able to use paid time off, reducing cost savings for employers.
  • Furloughed employees may resent the business if they don’t receive any compensation (e.g., paid time off, health benefits or reduced hours) during this period. Disgruntled workers may not be eager to be productive when they return.
  • Furloughed employees are generally still eligible for protected leave under the Family and Medical Leave Act. Laid-off employees are not.
  • Furloughed employees may be entitled to health benefits under some provisions of the Affordable Care Act.

Making the Decision

At the end of the day, employers should do what’s right for their business. Even if that means layoffs, employers should handle the situation with tact. Here are a few tips for navigating this tough decision:

Develop a Plan

Be it a furlough or a layoff, employers must decide how they will handle an impending crisis. This could mean a limited staff reduction or something more severe. In the case of a furlough, employers should try to be as accommodating as possible. If only some workers must be furloughed, a rotating schedule may be a more equitable decision.

Communicate Honestly

Regardless of what an employer chooses, transparent communication is crucial. Let employees know that this situation is not a result of anything they did. Employees should also know that the precipitating factor was outside of the employer’s control (as opposed to mismanagement).

Be sure to clarify the benefits situation of employees as well. Furloughed employees may still have access to some of their benefits, unlike those who were laid off. Laid-off employees will want to know about any severance they’re entitled to.

Keep in Touch With Furloughed Employees

Employees on furlough should not conduct any work whatsoever. However, that doesn’t mean they can’t stay in contact with their employer or co-workers. In fact, occasional check-ins are encouraged to help workers maintain a sense of normalcy. Through email or text, employers should keep workers updated on the status of the business and when to expect resumed operations.

Legal Considerations

Employers should consult with their legal counsel prior to laying off or furloughing employees, as employers must ensure compliance with all applicable state and federal laws. The following are just a few laws to consider:

Title VII of the Civil Rights Act

Title VII protects against employment discrimination. When choosing which employees to furlough or lay off, employers must avoid basing decisions on protected statuses, like race, religion, gender or age.

The WARN Act

The Worker Adjustment and Retraining Notification (WARN) Act entitles workers to 60 days’ advance notice of impending layoffs. Employees typically must be made aware if the layoff is permanent or, in the case of a furlough, when they can expect to return. Note that there are also state-specific nuances associated with the WARN Act, and some exceptions apply, so employers would do well to consult with legal counsel prior to acting.

The FLSA

The Fair Labor Standards Act (FLSA) distinguishes between “exempt” and “nonexempt” employees. It is important to note that the FLSA requires exempt employees be paid their full salaries for any workweek in which any work is performed, even when their hours are reduced.

Conclusion

Deciding whether to lay off or furlough employees is not an easy task. Employers must weigh the welfare of their employees against the financial realities of running a business. In these situations, transparency is key for a smooth transition.

What Criteria Determine If I am Exempt from the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act?

One of the most frequent questions that we have received since the passing of the Families First Coronavirus Response Act (FFCRA) is how can an employer become exempt from the Act. Under the Act, employers with fewer than 50 employees are exempt from the Act if complying with the Act would jeopardize the company’s ability as a going concern. If an employer believed this was the case, they must petition the Department of Labor (DOL) for the exemption.

The initial bill was somewhat vague as to exactly what an employer has to do to prove their viability as a going concern was in danger. Recently the DOL released some clarification around this issue. In order to claim the exemption, an authorized officer of the employer must determine that one of the following three criteria have been met:

  1. The provision of the paid sick leave or expanded family and medical leave would result in the employer’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity.
  2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the employer because of their specialized skills, knowledge of the business, or responsibilities
  3. There are not sufficient workers who are able, willing and qualified and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

If an employer under 50 employees meets one of the conditions above and wishes to obtain an exemption, they should contact the Department Labor to request their exemption.

Small Business Economic Relief and Recovery

The Treasury Department and the Internal Revenue Service launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

Does my business qualify to receive the Employee Retention Credit?

The credit is available to all employers regardless of size, including tax-exempt organizations. There are only two exceptions: State and local governments and their instrumentalities and small businesses who take small business loans.

Qualifying employers must fall into one of two categories:

  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.

These measures are calculated each calendar quarter.

How is the credit calculated?

The amount of the credit is 50% of qualifying wages paid up to $10,000 in total. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Wages taken into account are not limited to cash payments, but also include a portion of the cost of employer provided health care.

How do I know which wages qualify?

Qualifying wages are based on the average number of a business’s employees in 2019.

Employers with less than 100 employees: If the employer had 100 or fewer employees on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not. If the employees worked full time and were paid for full time work, the employer still receives the credit.

Employers with more than 100 employees: If the employer had more than 100 employees on average in 2019, then the credit is allowed only for wages paid to employees who did not work during the calendar quarter.

I am an eligible employer. How do I receive my credit?

Employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees’ wages by the amount of the credit.

Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941 beginning with the second quarter. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.

Eligible employers can also request an advance of the Employee Retention Credit by submitting Form 7200.

Where can I find more information on the Employer Retention Credit and other COVID-19 economic relief efforts?

Updates on the implementation of this Employee Retention CreditFrequently Asked Questions on Tax Credits for Required Paid Leave  and other information can be found on the Coronavirus page of IRS.gov.

SBA Small Business Economic Relief and Recovery (CARE Act)

Coronavirus Emergency Legislation

In response to the effect on daily life, including in our workplaces, Congress has passed emergency Legislation in an effort to give relief to US workers. Unfortunately, the rush to pass the legislation precluded a careful evaluation of the potential detrimental effect on employers. Therefore, the hastily passed law may have some serious consequences for many employers, including many medium to small employers, trying to deal not only with the plight of their employees, but also with the concerns of their own businesses. 

Since the legislation is so new, there has been little time to evaluate the provisions of the new law. But maybe more importantly, the legislation was passed in such a hurry that many questions regarding interpretation of the law were left unanswered. Finally, most laws passed with deliberate speed have the benefit of not only being more well thought out but also generally have a period of time where the governing agency promulgates regulations that clarify the legal requirements. Once again, this law was passed so swiftly that there are no regulations to provide guidance at this time. 

Within these constraints, below are some provisions of the law that was passed.

Emergency Family and Medical Leave Expansion Act

The “Emergency Family and Medical Leave Expansion Act”, amends the Family And Medical Leave Act for leave in the event of a public health emergency. It is currently scheduled to go into effect on April 2, 2020 and ends December 31, 2020. 

Under this amendment, an employee is qualified if the employee has been employed for 30 calendar days. While the FMLA previously only applied to employers with 50 or more employees, for purposes of this new emergency leave, the threshold is changed to include every employer with fewer than 500 employees unless the employer can meet the exemption referenced below. Therefore, many employers who are not subject to the FMLA leave for “normal” circumstances will be subject to providing leave for public emergency reasons. So, many employers unfamiliar with providing FMLA may have to become accustomed to doing so. The law provides that the Secretary of Labor has the authority to issue regulations to exempt small businesses with fewer than 50 employees when the imposition of the Act’s requirements would jeopardize the viability of the business as a going concern. However, the Secretary has not yet issued the small business exemption regulations and there is no way of knowing whether the Secretary will do so.

Employees who have been on the payroll for 30 calendar days are entitled to leave for a “qualifying need related to a public health emergency.” A “qualifying need” is limited to circumstances where an employee is unable to work (or telework) due to: 

  1. a need for leave to care for the son or daughter under 18 years of age of such employee 

if the school or place of care has been closed, or 2. the child care provider of such son or daughter is unavailable, due to a public health emergency. 

The first ten days of this emergency leave are unpaid; however, an employee may elect to use accrued paid leave (vacation, personal or sick leave). The employer may not require the employee to use accrued leave. 

After the 10 day period, the employer must pay wages for the remaining leave which could be up to 12 weeks. The leave must continue to qualify for an emergency leave reason for the employer to be required to pay. For instance, schools that are closed now will hopefully not be considered closed when the semester ends and summer break begins. Therefore, when school is not in session, the leave may not qualify. Child care provider leave might be another analysis. Hopefully the regulations which are going to be issued by the Secretary of Labor will address this. 

Paid leave is calculated based on 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 employees’ paid leave is limited to a maximum of $200 per day and $10,000 in the aggregate. 

The law has protections for job restoration upon return from leave. The law provides an exception for employers with fewer than 25 employees, if the employee’s position no longer exist due to economic conditions or other changes in operating conditions of the employer that (i) affect employment; and (ii) are caused by a public health emergency during the period of leave. The employer, however, must also make reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent employment benefits, pay, and other terms and conditions of employment. If this effort fails, the employer must make reasonable efforts to contact the employee if an equivalent position becomes available for a 1 year period measured from the date the need for leave ends or the 12 week period ends. 

The law allows the Secretary of Labor to exclude health care providers and emergency responders from the definition of employees who are allowed to take such leave, and to exempt small businesses (defined as those with fewer than 50 employees) if the required leave would jeopardize the viability of their business. The final bill also expressly provides that employers may exclude employees who are health care providers or emergency responders from this emergency FMLA entitlement. 

The requirements under this law are scheduled to expire December 31, 2020.

Emergency Paid Sick Leave Act

The “Emergency Paid Sick Leave Act” which is scheduled to go into effect on April 2, 2020, requires an employer to immediately provide paid leave to an employee unable to work (or telework) due to a need for leave because: 

(1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19; (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 a medical diagnosis; (4) The employee is caring for an individual who is subject to quarantine or isolation order or has been advised by a health care provider to self-quarantine; (5) The employee is caring for a son or daughter of such employee if 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, or (6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor. 

Generally, a full time employee is entitled to paid sick time of 80 hours and part-time employee to an amount equal to the average hours the employee works over a 2-week period. 

An employer’s liability for qualified sick leave wages is $200 per day ($511 in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3)) for any day (or portion thereof).. The law provides that the government will reimburse the employer for the paid leave which may be done in the form of a tax credit. More details regarding how reimbursement will be conducted will be necessary. 

The law protects employees from retaliation by their employer if they take leave in accordance with the law. The failure to pay the wages is treated as a failure to pay minimum wages in violation of the Fair Labor Standards Act. 

The requirements under this law are scheduled to expire December 31, 2020.

Relief for Employers

The current law includes tax credits and other means of reimbursement for employers required to comply with this law. We anticipate additional legislation to provide monetary relief for employers. 

We plan to continue to provide updates as the law may be amended and regulations passed. If you have specific questions, please call. 

IRS Extension on Form 5500 Deadline

IRS Extends Deadline for Forms 5500
Due Before July 1, 2020

On April 9, 2020, the IRS issued Notice 2020-23 to extend key tax deadlines for individuals and businesses in response to the ongoing COVID-19 pandemic. This new tax relief is provided under Section 7508A of the Internal Revenue Code (Code), which gives the IRS authority to postpone deadlines for taxpayers affected by federally declared disasters.

Form 5500 – Automatic Deadline Extension

IRS Notice 2020-23 extends the Form 5500 filing deadline for ERISA-covered retirement and welfare plans that have an original or extended filing deadline on or after April 1, 2020, and before July 15, 2020. These plans have until July 15, 2020, to file their Forms 5500.

This deadline extension is automatic, which means that plan sponsors do not have to have to call the IRS or file any extension forms, or send letters or other documents to receive this relief. Additional filing extensions must be requested by using the appropriate extension form by July 15, 2020, but the extension may not go beyond the original or regulatory extension date.

In addition, IRS Rev. Proc. 2018-58 provides that any postponement of the Form 5500 filing due date by the IRS under Code Section 7508A will also be permitted by the Department of Labor and Pension Benefit Guaranty Corporation for similarly situated plan administrators.

IRS Notice 2020-23 does not extend the filing deadline for 2019 Form 5500 filings for calendar year plans, which are due on July 15, 2020.

What Steps Employers Should Take

Employers should work with their tax advisors to determine if any upcoming tax filing or payment deadlines, including the Form 5500, have been postponed. Employers with calendar year plans should be prepared to file their Forms 5500 by July 15, 2020, or request an extension by this date.

Rules Affecting Employers as of Wednesday, March 18th

Families First Corona Virus Response Act

March 18th, the president signed the Families First Corona Virus Response Act into law. Of special interest to us and our customers are the employer-related sections. Among other things, this law mandates emergency paid sick leave and paid FMLA to cover specific circumstances related to COVID-19. (It offers payroll tax credits to offset wages paid under these sections.)

Employers have two weeks from today (until April 2, 2020) to implement this mandate. The DOL will publish employee notice samples within one week. We can also expect additional guidance on wage determination for variable hour workers and other clarifications from the Secretary of Labor.

Our customers will need assistance in managing these new programs through our system. We encourage you to contact customers, review their current benefit settings, and coordinate with their payroll providers.

The Attendance on Demand team will follow up soon with best practices and considerations for configuring our system to support the emergency sick and FMLA requirements. In the meantime, you can become familiar with the Act’s mandates.

EMERGENCY PAID SICK LEAVE

The emergency paid sick leave provision applies to employers with fewer than 500 employees. It allows a waiver for employers with fewer than 50 employees when the viability of the business would be jeopardized by paying emergency sick leave. However, the waiver process is yet to be defined.

Benefit Amount

2 weeks of employer paid emergency sick leave defined as:

  • 80 hours for full time employees
  • Average number of hours over 2 week period for part time employees
  • When part time hours vary significantly, 2 weeks of leave determined by
    • Weekly average hours over the 6 months preceding the first use of emergency sick leave
    • If employed less than 6 months, the expectation set at hire for average weekly hours

Benefit Management

The act specifies the following rules for administration of emergency paid sick leave:

  • It is available immediately to all employees, regardless of length of employment.
  • It is available only for purposes described in the following section.
  • Employees cannot be required to use other forms of paid leave first.
  • Employees cannot be required to find a replacement employee.
  • Employer may require reasonable notice after the first day of paid sick leave in order to continue receiving it.
  • Employers of healthcare workers and emergency responders may opt out for these employees.
  • Valid through December 31, 2020 or earlier if need ceases.
  • No carryover.
  • No payout on separation.

Use and Compensation

EMERGENCY FMLA EXPANSION

FMLA rules are temporarily changed to provide payment for employees who must miss work because they are caring for their own children when schools are closed or day care is unavailable due to COVID-19. This benefit expires December 31, 2020.

Eligibility

  • Employer eligibility changed to any employer with fewer than 500 employees. (As with the emergency sick leave, the law establishes an as-yet undefined process for employers with fewer than 50 employees to apply for a waiver.)
  • Employee eligibility changed to employed 30 calendar days.
  • Employers may opt out for healthcare workers and emergency responders.

Qualifying Event

  • Employees unable to work or telework due to caring for son or daughter under 18 when school or daycare is closed or child care provider is unavailable due to COVID-19.
  • Applies to hours they would otherwise be working during the COVID-19 healthcare emergency.

Payment

  • Leave unpaid for first 10 days.
    • Employee may elect to use any accrued leave including the emergency leave during this time
  • After 10 days
    • Not less than two-thirds of an employee’s FLSA regular rate of pay
    • Not to exceed $200 per day and $10,000 in total

ADDITIONAL RESOURCES

The following links provide more information about the Families First Corona Virus Response Act:

In addition, look for communication from Attendance on Demand in the coming days with technical tips about configuration.