September 2020: Lost Wages Assistance and Payroll Tax Holiday Updates
Lost Wages Assistance and Payroll Tax Holiday Updates
Just in case you weren’t closely watching the news, August 8, 2020 was International Cat Day and actor Dustin Hoffman’s 83rd birthday. It was the 122nd anniversary of the invention of Corn Flakes and the 51st anniversary of the Beatles’ famous Abbey Road photograph. August 8th was also a busy day for presidential memorada, as President Trump signed two orders that impact our workplaces.
Federal Unemployment Benefit Extension
July 31st saw the expiration of the additional $600 per week in federal unemployment insurance benefit created by the CARES Act, leaving us wondering what might be coming next from Congress. When an extension of the program could not be agreed-upon by legislators, President Trump signed a presidential memorandum authorizing the Federal Emergency Management Agency (FEMA) to direct funds to be used for “lost wages assistance.” $300 per week would be available from the federal government, and an additional $100 per week was to be provided by each state participating in the program.
Governor Newsom has stated that California cannot afford to pay the additional $100 weekly benefit, so unemployment claims dated July 26th forward will be eligible for $300 in additional payments. According to the EDD web site, employees who have filed claims due to COVID-19 do not need to take any additional action to receive the new federal benefit. Payments will begin September 7th and will be issued retroactively to weeks beginning July 26th.
The duration of the Lost Wages Assistance program is unclear, as FEMA granted funding to cover just three weeks of unemployment benefits. Additional disbursements to states may be made on a weekly basis.
Payroll Tax Holiday
The president signed an additional memorandum directing the U.S. Treasury Department to defer the withholding of employees’ social security taxes for the period of September 1st to December 31st, 2020. Guidance on how this would be implemented was not provided until late last week, when the Treasury Department issued a brief, but very confusing, statement. Essentially, employers are permitted, but not required, to pause employees’ social security tax withholdings beginning this month.
However, this is not a forgiveness of tax obligations. Employers would be expected to collect the missed withholding amounts between January and April 2021 and remit them to the IRS along with normal tax payments. Employers could also be on the hook for the missed taxes of employees who leave the company during that “payback” time frame. This program may provide short-term financial relief for employees, but next year may be difficult for all involved.
Employers are encouraged to weigh the pros and cons with their payroll service and/or tax professionals to determine the best response to this program.
COVID-19 Update: Governor Newsom’s Blueprint for a Safer Economy
Today (August 28, 2020), Governor Newsom announced a new “Blueprint for a Safer Economy” that modifies earlier guidance. These new restrictions can be found on the state COVID-19 website, and include four categories into which a county may fall. These categories are based on the number of daily new cases (per 100k) and the percent of positive tests, and a county’s category determines which kinds of businesses may open.
Counties may advance in tiers, but must remain in a tier for at least three weeks before moving forward. Additionally, a county must meet the next tier’s criteria for two consecutive weeks before moving forward.
Fresno County currently falls into the “Widespread” category. Daily new cases are at 16.5, and the positivity rate is 11%.
Regardless of a county’s category, as of August 31, 2020, all retail and shopping centers, hair salons, and barber shops may open with modifications. Individuals can visit the website and enter “Fresno” (or any other county) to see the status of a given industry within the county.
COVID-19 Update: The Use of Expanded FMLA Leave for Distance Learning
New legal guidance indicates that an employee may be eligible to use up to 12 weeks of Expanded FMLA to facilitate the distance learning needsof his/her child(ren.)
With most California schools unable to begin on-campus instruction anytime in the near future, parents are struggling to make plans for children’s distance learning needs. Navigating online classroom time, other digital resources, and homework assignments presents a significant challenge for kids and parents alike.
It was previously viewed that the ability to use Expanded FMLA to care for a child whose school or day care is closed did not extend to the desire to provide educational support. However, the U.S. Department of Labor (DOL) seems to give parents the ability to define “care” for themselves. In its ever-growing list of FAQs, the DOL states that in order to use Expanded FMLA, the employee must provide:
• The name of the child being cared for;
• The name of the school, place of care, or child care provider that has closed or become unavailable; and
• A statement that no other suitable person is available to care for the child. (See FAQ #15)
There is no clear definition for the term “suitable” so a parent may reasonably determine that “suitable care” includes the ability to oversee and support distance learning. A grandparent or other person whose care has been sufficient during the summer may no longer be viewed as suitable once the school year begins.
Further, the DOL gives a fairly broad definition of “place of care,” stating, “Examples include day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs, and respite care programs.” (See FAQ #67) This indicates that “care” may involve more than simply physical attention, supervision, and general safety.
We understand that allowing several employees to be off work for this purpose could significantly impact your business operations. The FFCRA does allow an employer of fewer than 50 employees to exempt itself from providing Expanded FMLA leave “when doing so would jeopardize the viability of the small business as a going concern.” (See FAQ #58) Legal guidance is recommended to determine whether a small business can lawfully exclude itself from providing leave. Health care providers and emergency responders may also exclude themselves. (See FAQs #56 and #57)
The DOL states that employers and employees are encouraged “to collaborate to achieve flexibility and meet mutual needs.” Intermittent leave, reduced work schedules, and telework arrangements may be options for allowing your employees to provide the desired care for their children while also accomplishing the needs of your business.
We understand how complicated and confusing these decisions can be, and you’re not in this alone! Contact one of our certified Consultants to discuss the specific scenarios being reported by your employees.
COVID-19 Update: New CDC Guidance on Home Isolation
On July 20th, the CDC published updated recommendations for home-isolation due to COVID-19 symptoms, infection, and exposure. A test-based strategy is no longer recommended. According to the CDC, “Accumulating evidence supports ending isolation and precautions for persons with COVID-19 using a symptom-based strategy. Specifically, researchers have reported that people with mild to moderate COVID-19 remain infectious no longer than 10 days after their symptoms began.”
Symptomatic Employees (with or without a positive COVID test)
The employee should stay away from work and self-isolate at home until all of the following are met:
– At least 10 days since the onset of symptoms, and
– At least 24 hours since the resolution of fever without medication, and
– Other symptoms have improved.
COVID-Positive Test Without Symptoms
The employee should stay away from work until at least 10 days have passed since the date of the positive COVID-19 test, if he/she does not develop any symptoms. If symptoms develop, refer to the timelines above.
Direct Exposure to a COVID-19 Patient
If your employee reports having been in close contact with a person who has tested positive for COVID-19, he/she should stay away from work and self-isolate at home for 14 days from the date of exposure to monitor of symptoms. If symptoms develop, refer to the timelines above.
Note that the Fresno County Department of Public Health defines “direct contact” as spending 15 minutes or more time within 6 feet or less while unmasked. The CDC provides the following examples of “close contact”:
– You were within 6 feet of someone who has COVID-19 for at least 15 minutes.
– You provided care at home to someone who is sick with COVID-19.
– You had direct physical contact with the person (touched, hugged, or kissed them).
– You shared eating or drinking utensils.
– They sneezed, coughed, or somehow got respiratory droplets on you.
If your employee reports incidental contact that does not meet the definitions above, he/she is not required to self-quarantine, but should strictly adhere to distancing and masking protocols.
Living in the Same Household with a COVID-19 Patient
Many employers are navigating the challenging situation of an employee whose household seems to be passing COVID-19 infection from one person to the next. The CDC addresses this dilemma with the following scenarios:
– If it is possible to avoid close contact with the infected person, the employee should self-isolate for 14 days from when the COVID-positive person began home isolation.
– The 14-day timeline should be restarted if the employee has close contact with the infected person, or if an additional member of the household becomes infected with COVID-19.
– If ongoing close contact cannot be avoided due to the need to provide care, or because of close quarters in the home, the self-isolation should last for 14 days after the COVID-positive person has been cleared to end home isolation.
We understand how complicated and confusing these decisions can be, and you’re not in this alone! Contact one of our certified Consultants to discuss the specific scenarios being reported by your employees. Give us a call at: 559.431.8090
Back to School… Sort Of
On Friday, July 17, Governor Newsom announced plans for how California schools would be permitted to operate for the 2020-2021 school year. Schools located in counties that are on the state’s Monitoring List for COVID-19 cases must not physically open for in-person instruction until the county has come off the Monitoring List for 14 consecutive days. As of July 20, the Monitoring List includes Fresno, Tulare, Kings, Merced, and Madera counties, among several others. Even when a school is allowed to reopen, positive COVID cases in students or teachers could cause the campus to close again.
Ever since schools were closed in mid-March, most parents have been nervously awaiting news about how reopening would be handled, and the state-wide directive has been met with relief by some families and disappointment by others. Wide-ranging views about the health risks aside, the fact that our kids will most likely continue to be home for the next several weeks or months, and the responsibility to provide instruction and homework oversight, is likely causing a great deal of anxiety and stress for many on your staff.
So what is an employer to do? How can you demonstrate understanding and flexibility, while ensuring that work gets done effectively? With the start of the school year 3 to 4 weeks away, now is a great time to talk with employees and agree on a plan, which may include one or more of the following options:
Leaves of Absence Under the FFCRA
– Effective April 1, 2020, the Families First Coronavirus Response Act created a new qualifying reason for leave under the Family Medical Leave Act (FMLA). Under this FMLA Expansion (FMLA-E), an employee who has been employed for at least 30 days is eligible to take up to 12 weeks off work to care for a son or daughter whose school or day care is closed or unavailable.
The first ten workdays of FMLA-E is unpaid, and an employee may choose to use available emergency paid sick leave or vacation/PTO. EPSL used for this purpose is paid at 2/3 the employee’s regular rate of pay, up to $200 per day.
– After the first ten days, leave is paid by the employer at 2/3 the employee’s regular rate of pay, up to a maximum of $200 per day.
Health insurance benefits must be maintained in the same manner as if the employee were working.
– If you are a covered employer under traditional FMLA, an employee is not entitled to an additional 12 weeks of leave. Time off for other qualifying reasons in the current 12-month period will reduce his/her ability to take FMLA-E leave.
– Technically, FMLA-E is to be used when there is no other suitable person available to care for the child(ren), not for when the parent wants to deliver a preferred homeschool experience. If another parent, grandparent, or care provider is available, assisting with distance learning may not be a qualifying reason for leave.
FMLA-E applies to employers of fewer than 500 employees, but healthcare organizations and employers of fewer than 50 employees may be allowed to exempt themselves from providing this leave. We recommend seeking legal counsel and giving employees very clear notice prior to denying a request for time off.
If your employee is able to work from home, a continuous or intermittent teleworking arrangement may be a positive solution.
– Be clear about scheduling, and your expectations for communication and deliverables. It is unlikely that your employee will be able to put in a full traditional work schedule while also facilitating distance learning for his/her child(ren). Everyone should be on the same page about how many hours will be devoted to work, and what should be accomplished each day.
– Prepare a teleworking agreement to document the approved schedule, use of company-owned equipment, privacy and confidentiality policies, timekeeping and meal period reminders, etc.
– Intermittent FMLA-E may be used for the normally-scheduled hours that the employee will not be working.
Reduced Work Schedules or Discretionary Leaves
If an employee has already exhausted his/her time off under FMLA-E, or teleworking is not a realistic option, a short-term schedule reduction or leave of absence may be necessary. These situations may impact the employee’s eligibility for health insurance and other benefits, so be sure to have clear discussions prior to beginning the arrangement.
Creative Shared Instruction
In some neighborhoods, several families are creating a rotating schedule of care and school instruction for elementary-age children, allowing parents to focus on work or other responsibilities on their “off days.” If some of your employees have children in the same school district, they may be able to get creative with a plan that allows them to minimize time away from the office. (Of course, safety precautions such as masks and social distancing should always be implemented.)
We understand that this topic is a tough one to navigate for employees and managers alike. Contact one of our Consultants if we can assist you in
determining the best approach for your team. 559-431-8090.