From presidential memorandums for a payroll tax deferral and extended unemployment insurance benefits to new guidance from the CDC and DOL, COVID-19 conundrums continue to challenge employers. Keep reading to learn more about these recent national updates.
In early August, two presidential memorandums were issued in response to the ongoing economic fallout of COVID-19 that directly impacts employers: the Disaster Relief Memorandum and the Tax Memorandum. The DOL modified and clarified the original Disaster Relief Memorandum (Lost Wages Assistance) in their August 12th advisory. Additional guidance issued by the Treasury Department last week provides some clarification on points of the Tax Memorandum (payroll tax deferral) that were previously unclear.
Lost Wages Assistance (LWA)
What is it?: Extension of COVID-19 related federal unemployment benefits; original benefits expired under the CARES Act on July 31, 2020.
The details:
Eligible claimants can receive $300 weekly of federal supplement in addition to the state unemployment benefits they are receiving.
States must apply for a grant from FEMA to implement the LWA program.
Eligible claimants are individuals
providing self-certification that they are unemployed or partially unemployed due to disruptions caused by COVID-19, and
receiving, for the week of unemployment with respect to which LWA is sought, at least $100 of regular UC or from any of the UC programs
LWA is payable for weeks of unemployment ending on or after August 1, 2020 through weeks of unemployment ending before December 27, 2020.
What’s not clear:
How long will the money last? The LWA program may terminate earlier than December 27th if the allotted $44 billion dollars runs out or the total balance of the DRF account decreases to $25 billion.
Resources:
LWA approved states: https://www.fema.gov/fact-sheet/lost-wages-assistance-approved-states
DOL advisory on the LWA program: https://wdr.doleta.gov/directives/attach/UIPL/UIPL_27-20.pdf
Payroll Tax Deferral
What is it: Allows employers to voluntarily defer the employee portion of federal payroll taxes, specifically the 6.2% social security tax payment, for the period September 1, 2020 – December 31, 2020.
The details:
Employers are not required to defer withholding and payment of any taxes under the Memorandum or Notice. Thus, it is voluntary for employers. Eligibility limited to employees with biweekly earnings of less than $4,000 gross; eligibility can be determined on a pay period by pay period basis
Taxes are deferred - barring any Congressional action, payments are deferred, not forgiven and will need to be paid through installments between January 1, 2021 – April 30, 2021
Although the deferral provides employees with a higher take home for a short period of time, this may result in future confusion and hardship when employers are forced to remit the 6.2%
What’s not clear:
There is no guidance on whether an employee can elect or decline the deferral if an employer elects to participate.
Resources:
IRS Guidance August 28, 2020: https://www.irs.gov/pub/irs-drop/n-20-65.pdf
Workplace Violence Associated with COVID-19
In August (and updated as recently as September 1), the CDC published guidance on “Limiting Workplace Violence Associated with COVID-19 Prevention Policies in Retail and Service Businesses”. Geared towards customer-based businesses open during the pandemic, this guide provides strategies for mitigating workplace violence issues that may arise as a result of COVID-19 policies and practices like masks, social distancing, etc.
Resources:
The guide provides specific action items for employers to prevent COVID-19 workplace violence as well as general workplace violence resources and training: https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/business-employers/limit-workplace-violence.html
FFCRA News
Now that it’s back to school (well, sort of!), many employers are managing increased employee requests for FFCRA leave to care for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19. The DOL issued additional FFCRA FAQ’s (#98, #99 and #100) that address questions about partial school closures and eligibility for FFCRA when parents have an option between remote and in-person learning.
And here’s one for employers to watch in the coming weeks…the FFCRA rules may be re-written in response to a lawsuit filed by the State of New York against the DOL. The ruling by a NY federal judge increases the number of employees eligible for COVID-19 related leave and will change leave administration policies and procedures. It is uncertain if this ruling will apply to NY employers only or will extend more broadly to employers nationwide.
Resources:
Stay tuned!
Coming soon from THRM, a look at recent statewide updates - there is pending COVID-19 related legislation that could have significant impact on CA employers. In the meantime, please reach out to Edna or your THRM consultant for any support you may need while navigating these complex and confusing times in your workplace.
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