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COVID-19: News and Updates |
| Special #10 - April 2, 2020 |
| - New Jobless Claims Double in a Week to
6.6 Million
By Roy Maurer
April 2, 2020
- ¶46,822 IRS sets start date for tax credits under Family First Coronavirus Response Act — FEDERAL NEWS,
(Apr. 2, 2020)
- LEGAL BULLETIN - IRS provides guidance to employers on coronavirus tax credits, and announces employee retention credit Constangy, Smith, Brooks & Prophete, LLP
(April 1, 2020)
- ¶46,820 Updated guidance clarifies who is a ‘health care provider,’ other aspects of FFCRA — AGENCY GUIDANCE,
(Apr. 2, 2020)
- ¶46,819 Presenteeism during a pandemic and three tips for combatting it — PRACTICE TIP, (Apr. 2, 2020)
- Georgia Department of Public Health COVID-19 Daily Status Report
(April 2, 2020)
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| | New Jobless Claims Double in a Week to 6.6 Million By Roy Maurer April 2, 2020
A total of 6.6 million U.S. workers filed for new unemployment benefits during the week ending March 28, doubling the previous week’s record total of 3.3 million. Millions more workers are expected to file for unemployment in the weeks ahead, due to the impact of the COVID-19 pandemic.
For context, before the coronavirus shuttered the U.S. economy, the highest week for claims was 695,000 in 1982. The Great Recession high was 665,000 in March 2009.
“The deterioration of the labor market in the past two weeks almost defies belief,” said Nick Bunker, an economist at the Indeed Hiring Lab. “Since March 14, approximately 3.8 percent of the working age population has filed for unemployment. The labor market is in a historic freefall.”
Layoffs, furloughs and hiring freezes have begun to surge, especially in the transportation, restaurant, hospitality and retail sectors, as the coronavirus spreads across the country and nonessential businesses have been ordered to close. The weekly jobless claims report is the most-timely economic indicator for measuring the impact of the virus on the U.S. economy.
SHRM |
| | ¶46,822 IRS sets start date for tax credits under Family First Coronavirus Response Act — FEDERAL NEWS, (Apr. 2, 2020)
The IRS has announced that the employment tax credits for paid qualified sick leave and family leave wages required by the Families First Coronavirus Response Act (P.L. 116-127) (Act) will apply to wages and compensation paid for periods beginning on April 1, 2020, and ending on December 31, 2020. Additionally, days beginning on April 1, 2020, and ending on December 31, 2020, will be taken into account for the credits for paid qualified sick leave and family leave equivalents for certain self-employed individuals as provided by the Act.
Expanded leaves. The Act’s Division C (Emergency Family and Medical Leave Expansion Act) and Division E (Emergency Paid Sick Leave Act) require employers with fewer than 500 employees to provide expanded paid family leave and paid sick leave to certain employees. These employees are unable to work or telework due to certain circumstances related to the coronavirus (COVID-19).
Tax credits for paid leave. The Act’s Division G provides payroll tax credits to employers that make the required leave payments to their employees. The Act also provides comparable credits for self-employed individuals carrying on any trade or business under Code Sec. 1402, if the self-employed individual would be entitled to receive paid leave if he or she were an employee of an employer (other than himself or herself).
The refundable tax credits for most employers with fewer than 500 employees apply to qualified sick leave and family leave wages paid for the period from April 1, 2020, to December 31, 2020. Additionally, the self-employment tax credit will be determined based on days occurring during the period beginning on April 1, 2020, and ending on December 31, 2020.
The Treasury Secretary selected the April 1 date in coordination with the U.S. Department of Labor’s determination of the effective date for employers’ compliance with the Emergency Family and Medical Leave Expansion Act and Emergency Paid Sick Leave Act requirements.
SOURCE: Notice 2020-21, I.R.B. 2020-16, April 13, 2020.
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| | LEGAL BULLETIN Constangy, Smith, Brooks & Prophete, LLP
April 1, 2020
IRS provides guidance to employers on coronavirus tax credits, and announces employee retention credit By Robin Shea
Winston-Salem Office
As most of our readers are aware by now, employers who are required to provide expanded Family and Medical Leave or Paid Sick Leave under the Families First Coronavirus Response Act are entitled to federal tax credits of 100 percent of the amounts paid to employees on qualified leaves.
The Internal Revenue Service has now issued guidance in the form of FAQs detailing how employers may apply for these credits, the documentation that must be retained, and other helpful information.
As we reported previously, employers will be allowed to withhold from their quarterly payroll tax deposits the amounts paid for qualifying leave. This includes the cost of health insurance and the employer’s share of the Medicare tax. If the amount withheld is not enough to cover the employer’s costs, then the employer may apply using IRS Form 941 for an accelerated refund of the balance, which the IRS says it will process and issue in two weeks or less.
The tax credit is available starting today, which is also the effective date of the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act provisions of the FFCRA. The emergency FMLA and the Paid Sick Leave Act will expire on December 31, and the tax credits will not be available for leave taken after that date.
We strongly recommend that employers who believe they may be eligible for these tax credits read through all of the FAQs and the links provided; however, here are some highlights (links are in the IRS publication):
17. May an Eligible Employer reduce its federal employment tax deposit by the qualified leave wages it has paid without incurring a failure to deposit penalty?
Yes. An Eligible Employer will not be subject to a penalty under section 6656 of the Internal Revenue Code for failing to deposit federal employment taxes relating to qualified leave wages (and allocable qualified health plan expenses and the Eligible Employer’s share of Medicare tax on the qualified leave wages) in a calendar quarter if:
the Eligible Employer paid qualified leave wages to its employees in the calendar quarter before the required deposit,
the amount of federal employment taxes that the Eligible Employer does not timely deposit is less than or equal to the amount of the Eligible Employer’s anticipated tax credits for these qualified leave wages (and allocable qualified health plan expenses and the Eligible Employer’s share of Medicare tax on the qualified leave wages) for the calendar quarter as of the time of the required deposit, and
For more information about the relief from the penalty for failure to deposit federal employment taxes on account of qualified leave wages, see Notice 2020-22 (PDF).
31. Does the amount of qualified health plan expenses include both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the Employee?
The amount of qualified health plan expenses taken into account in determining the credits generally includes both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee with pre-tax salary reduction contributions. However, the qualified health plan expenses should not include amounts that the employee paid for with after-tax contributions.
44. What information should an Eligible Employer receive from an employee and maintain to substantiate eligibility for the sick leave or family leave credits?
An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if the employer receives a written request for such leave from the employee in which the employee provides:
The employee’s name;
The date or dates for which leave is requested;
A statement of the COVID-19 related reason the employee is requesting leave and written support for such reason; and
A statement that the employee is unable to work, including by means of telework, for such reason.
In the case of a leave request based on a quarantine order or self-quarantine advice, the statement from the employee should include the name of the governmental entity ordering quarantine or the name of the health care professional advising self-quarantine, and, if the person subject to quarantine or advised to self-quarantine is not the employee, that person’s name and relation to the employee.
In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care.
45. What additional records should an Eligible Employer maintain to substantiate eligibility for the sick leave or family leave credit?
An Eligible Employer will substantiate eligibility for the sick leave or family leave credits if, in addition to the information set forth in FAQ 44 (“What information should an Eligible Employer receive from an employee and maintain to substantiate eligibility for the sick leave or family leave credits?”), the employer creates and maintains records that include the following information:
Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework and qualified sick leave and qualified family leave.
Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages. See FAQ 31 (“Determining the Amount of Allocable Qualified Health Plan Expenses”) for methods to compute this allocation.
Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).
46. How long should an Eligible Employer maintain records to substantiate eligibility for the sick leave or family leave credit?
An Eligible Employer should keep all records of employment taxes for at least 4 years after the date the tax becomes due or is paid, whichever comes later. These should be available for IRS review.
Employee Retention Credit
The IRS also announced yesterday that a tax credit will be available to employers who retain employees during the coronavirus crisis. The credit is available to employers of any size, provided that they are not recipients of small business loans. State and local governments, and their instrumentalities, are not eligible for the credit.
Qualifying employers can receive a maximum credit of 50 percent of $10,000 in qualifying wages. An eligible employer will qualify if
The employer's business is fully or partially suspended by government order due to COVID-19 during the calendar quarter, or
The employer's gross receipts are below 50 percent of the comparable quarter in 2019. Once the employer's gross receipts go above 80 percent of a comparable quarter in 2019, they no longer qualify after the end of that quarter
(Quoted from IRS web page, with minor edits.)
The amount of “qualifying wages” is based on the size of the employer as of calendar year 2019. There is one formula for employers with fewer than 100 employees, and a different formula for employers with 100 or more employees.
As with the credits for expanded FMLA and paid sick leave under the FFCRA, the amount of the applicable Employee Retention Credit can be withheld from the employer’s quarterly payroll tax deposits or, if that is not enough to cover the credit, the employer can apply for a refund of the balance.
Employers who believe they may qualify for the Employee Retention Credit are advised to read the entire IRS publication on this subject, linked above.
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| | ¶46,820 Updated guidance clarifies who is a ‘health care provider,’ other aspects of FFCRA — AGENCY GUIDANCE, (Apr. 2, 2020)
The DOL’s Wage and Hour Division (WHD) continues to publish a steady stream of guidance aimed at providing updated information to employees and employers about the protections and relief available under the Families First Coronavirus Response Act (FFCRA), which went into effect on April 1, 2020.
Signed into law by President Trump on March 18, the comprehensive legislation expands the FMLA to include public emergency family and medical leave, and it provides emergency unemployment insurance, emergency paid sick leave, and tax credits to employers for paid sick and paid family and medical leave, among other relief. It was the first round of legislative relief for employers and employees alike, quickly followed by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law by the President on March 27.
Updated guidance. The updated guidance adds to earlier guidance posted by the WHD, particularly, questions and answers addressing critical issues such as the definition of a "health care provider," and the scope of the small business exemption for purposes of exclusion from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, as well as whether public sector employees may take paid family and medical leave.
The WHD has also posted two recently released posters and fact sheets in Spanish on its COVID-19 website.
Who is a "health care provider?" This question matters for two reasons: (1) health care providers may advise individuals to self-quarantine due to concerns related to COVID-19—a qualifying reason for paid sick leave; and (2) an employer may exclude a health care provider from paid sick leave and/or expanded family and medical leave.
Self-quarantine advice. In the first circumstance, the term "health care provider" "means a "licensed doctor of medicine, nurse practitioner, or other health care provider permitted to issue a certification for purposes of the FMLA," the WHD explained.
Exclusion from paid sick leave and/or expanded FMLA. In the second circumstance, a health care provider "is anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity," according to the WHD.
Notably, this definition includes any permanent contractsor temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.
Also included in this definition is anybody employed by an entity that contracts with any of these institutions, employers, or entities to provide services or to maintain the operation of the facility.
Further included is anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments—including any individual that the highest official of a state or territory, including the District of Columbia, determines is a health care provider necessary for that state’s or territory’s or the District of Columbia’s response to COVID-19.
Be judicious! In an effort to minimize the spread of the coronavirus, the DOL is encouraging employers to be judicious when using this definition to exempt health care providers from the FFCRA.
Small business exclusions. The FFCRA includes a small business exemption from emergency paid sick leave and emergency family and medical leave requirements when certain conditions are met. An employer, including a religious or nonprofit organization, with fewer than 50 employees (a small business) is exempt from providing (1) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons, and (2) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern.
"Going concern." The exemption may be claimed when an authorized officer of the business has determined that:
- The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- 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 small business because of their specialized skills, knowledge of the business, or responsibilities; or
- 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.
Full- and part-time employees. The updated guidance also clarifies who is considered a full-time versus part-time employee and for what purposes under the FFCRA.
For Emergency Paid Sick Leave Act purposes, a full-time employee is one who is normally scheduled to work 40 or more hours per week, while a part-time employee is one who is normally scheduled to work fewer than 40 hours per week.
In contrast, the Emergency Family and Medical Leave Expansion Act does not distinguish between full- and part-time employees, but the number of hours an employee normally works each week will affect the amount of pay the employee is eligible to receive.
Available guidance. This latest guidance, released on March 28, adds to a growing list of compliance assistance materials published by WHD, including the English-language versions of a Fact Sheet for Employees, a Fact Sheet for Employers, and two new required posters—one for federal workers and one for all other employees, as well as Questions and Answers about posting requirements, and a Field Assistance Bulletin describing WHD’s 30-day non-enforcement policy.
"The response to the guidance we’ve published so far has illustrated the critical need that workers and employers have for this important information," WHD Administrator Cheryl Stanton said in a statement. "This round includes some of the most common questions we are receiving and will help ensure that the American workforce has all the tools and information needed in these very trying times. We encourage everyone to check the Wage and Hour Division website frequently, as we continue to add guidance to help everyone understand what they are entitled to as we prepare for these vital new benefits to go into effect on April 1, 2020."
Source: Written by Pamela Wolf, J.D.
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| | ¶46,819 Presenteeism during a pandemic and three tips for combatting it — PRACTICE TIP,(Apr. 2, 2020)
As coronavirus (Covid-19) continues to spread globally, employers should be discouraging, and tackling, ‘presenteeism’ amid government warnings around social distancing and self-isolation. With business practices, and management, being put to the test, John Williams, Head of Marketing at Instant Offices delves into the reality of presenteeism and what businesses can do to help keep employees safe during a pandemic.
A global issue. The idea that being at work against all the odds is a sign of loyalty and commitment couldn’t be further from the truth. Studies suggest those who show up for work ill are significantly less productive than when they are well, and that the costs of presenteeism far outweigh those of illness-related absenteeism or disability. Here are some global statistics on the impact that presenteeism has around the world:
- Presenteeism in the UK has more than tripled since 2010, with 83 percent of employees saying they’d seen it happen in 2019, compared to just 24 percent in 2010.
- The number of UK employees taking sick leave fell to an all-time low—just 5.9 days per person per year.
- In the US, presenteeism is costing businesses around $226 billion per year.
- In Japan, the cost is estimated at $3,055 per employee per year.
- In the UK, reduced work efficiency caused by mental ill-health costs $790 per employee per year.
Understanding presenteeism. Previously defined as “showing up to work when one is ill” the concept of ‘presenteeism’ has evolved to include a wide range of detrimental behaviors relating to how we work. This includes employees who arrive early and stay late to show commitment, those who work during annual leave and those who respond to emails at all hours, mistaking an unhealthy attitude towards work as a strong work ethic, often to the detriment of their personal wellbeing. Although those working from home are generally more productive than in an office, remote workers are, on average, working an extra 1.5 days a week, as they feel it is easier to finish a task as they don’t need to think about commuting.
A report on presenteeism by Employment Studies found some of the leading causes of presenteeism include:
- Manager behavior: Due to a sense of responsibility, managers can also be presenteeism culprits, unknowingly putting pressure on employees to act the same way.
- Concern for colleagues: Studies show employees are likely to go to work ill to avoid a colleague dealing with an additional workload or pressure, especially in situations where there is no replacement.
- Company culture: Studies have found perfect attendance to be seen as a sign of commitment to a job, while taking time off sick is seen as a sign of under-performance, particularly in the private sector; a work ethic can be unknowingly perpetuated in an organization by senior managers and long-time employees.
- Job stress: When it comes to stress and presenteeism, the correlation between the two is high, and employees who feel unsure about their job security are more likely to show up when ill.
Combatting presenteeism during a pandemic. As with anything new and unknown, there is a level of uncertainty that comes with a pandemic. Keep an eye on the news, and reiterate decisions that could affect their job/ability to work as quickly as possible to reassure people. In addition:
- Ensure employees know that they are able to work from home. Although it may not be possible for all roles and industries, companies where staff are able to carry out tasks out the office, should let employees know this is something they can do as soon as possible.
- Encourage senior members to lead by example. By managing their own absence and presence and encouraging a healthy work-life balance, line managers and senior members of staff can act as better role models for the organization, inspiring their teams to do the same. Ensure employees are ‘online’ during working hours and encourage them to log off at the end of the day as normal.
- Enable flexibility. Employees who adjust their working hours and environment are less likely to fall into the cycle of presenteeism. By offering options such as flexible working options or hours, employees can feel more in control and still maintain their work.
Source: Instant Offices.
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| | Georgia Department of Public Health COVID-19 Daily Status Report
Today’s significant increase in cases is in part due to additional laboratories reporting to DPH, and also improvements in electronic reporting from other laboratories. Patient information is often incomplete and DPH works to complete the records, so data will change over time.
Georgia Department of Public Health COVID-19 Daily Status Report For: 04/02/2020
These data represent confirmed cases of COVID-19 reported to the Georgia Department of Public Health as of 04/02/2020 11:28:33.
A confirmed case is defined as a person who has tested positive for 2019 novel coronavirus.
COVID-19 Confirmed Cases: No. Cases (%)
Total 5348 (100%)
Hospitalized 1056(19.75%)
Deaths 163 (3.05%)
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Employers Resource Websites Links for COVID-19 Pandemic
Department of Labor Links Federal Bills and Legal Resources Links Chamber of Commerce / Business Information Government and CDC Information
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Georgia Employers' Association |
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