Coronavirus and Employers

Posted by tim  at March 27th, 2020

A note to our clients regarding Coronavirus legislation:

We wish the very best to you, your families, your employees, and your businesses during this difficult time. We especially extend our support and prayers to those affected directly by the Coronavirus pandemic. Because our team works remotely from home offices, our company remains open and we are prepared to help you navigate these uncertain economic times to the best of our ability.

If you have employees or are an employee, please note that there are new laws that you should be aware of. On March 18, 2020, President Trump signed into law H.R. 6201, requiring that, among other things, as a result of the Coronavirus, employers are required to pay affected employees FAMILY, MEDICAL, and / or SICK pay. This primarily includes employees who cannot work due to having an isolation order or quarantine (or are caring for someone who does), health restrictions, or school closures. Employers can receive a credit for wages paid under these circumstances on their quarterly 941 tax filings. This does NOT apply to jobs lost as a result of governors ordering businesses closed.

Today, March 27, 2020, President Trump signed into law the H.R.748 CARES Act, which, among other things, provides loans to employers who are affected by the Coronavirus. Loan forgiveness will be available to employers who meet certain criteria, such as retaining their workforce. The new law also provides enhanced unemployment benefits to employees who lost their jobs or whose hours were cut.

Please be aware that this is a fluid and changing situation with new federal and state legislation pending. Contact an attorney, CPA, or legal expert for more specific advice on legal or tax matters. Please note, however, that since this is a rapidly changing situation, getting real answers quickly may prove to be difficult.

If you are an employer, please contact us for assistance creating paychecks for FAMILY, MEDICAL, or SICK pay or to better understand these requirements.

Yours for clean books,

Tim Miller

Coronavirus Legislation for Employers

Considerations for Employers

• Today, President Trump signed the H.R.748 CARES Act, which, includes enhanced unemployment provisions for employees who lost their jobs.
• The bill is expected to have a provision for loans to employers who keep their workforce on payroll. Loans will then be eligible for loan forgiveness.
• Considering the potential impact of the pending legislation, I suggest that, where possible, employers consider waiting to make dramatic changes to their workforce until the legislation is passed and its effects on small businesses is better understood.
• The new bill is expected to have provisions for the IRS sending up to $1,200 per adult and $500 per child to each taxpayer. This should help blunt lost wages. Consider furloughing but not terminating employees. Based on media reports, rebate checks may be issued as early as the end of April.
• If employees do not qualify for Paid Family Leave (not being able to work because of school closures) or Paid Sick Leave (employee is under isolation or quarantine, or is caring for someone who is), then employers might consider paying employee advances until rebate checks are received from the IRS. If possible, employers might apply for loan and loan forgiveness and consider the advance a regular wage instead.
• Your state may also have some relief options such as business loans, employers credits, or incentives, etc.

Questions for Employers

Should my employees apply for Unemployment Benefits?

• If an employee’s job is terminated, an employee may apply for unemployment benefits. However, unemployment benefits may only replace 50 – 70% of typical pay, may take 2-4 weeks to receive, and employees will have the inconvenience of tracking and reporting hours worked to the State Unemployment Department.
• Consider keeping your employees on payroll as much as possible, and if they do not qualify for Emergency Paid Leave (many won’t), then consider applying for government loan, which will be eligible for loan forgiveness.

Does my UC rate increase if my employees apply for unemployment benefits?

• No. https://www.uc.pa.gov/COVID-19/Pages/Employer-COVID19-FAQs.aspx

Can my employees file for UC benefits if I reduce their hours because of COVID-19?

• Yes

​Can my employees file for UC benefits if they are told to isolate or quarantine?

• Yes, but if this is the case, then they may also be eligible for Emergency Paid Sick Leave, in which case, their employer can pay them and receive a credit to offset the cost.

State Support Programs (PA)

• Shared Work Program: https://www.uc.pa.gov/employers-uc-services-uc-tax/shared-work/Pages/default.aspx
• Rapid Response Assistance: https://www.dli.pa.gov/Individuals/Workforce-Development/warn/Pages/rra.aspx
• Additional PA Resources: https://dced.pa.gov/resources/

References

• House Bill 6201 – Families First Coronavirus Response Act: https://www.congress.gov/bill/116th-congress/house-bill/6201/text?r=194&s=2
• H.R.748 CARES Act (signed on 03/27/2020): https://www.congress.gov/bill/116th-congress/house-bill/748
• US Department of Labor Paid Leave Requirements https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
• PA Unemployment Questions and Answers: https://www.uc.pa.gov/COVID-19/Pages/Employer-COVID19-FAQs.aspx
• LA Times Article regarding paid leave https://www.latimes.com/business/story/2020-03-24/la-fi-coronavirus-paid-sick-leave-qualify

Disclaimer

CleanBooks does not hold the professional designation of CPA (Certified Public Accountant), and does not provide legal services. We recommend that you consult a tax attorney or CPA for any legal or tax advice.