Greater Memphis Chamber COVID-19 Employer Impact Q&A
Comprehensive HR/Payroll, Benefits & Recruitment ü Serving small to large businesses & nonprofits for 33+ years ü Private Memphis based company ü Clients across all 50 states & 1000s of work locaRons ü ESAC cerRfied | NAPEO Member & Chair ü Processed $1.5B in payroll & 80,000 W2s in 2019
Adams Keegan COVID-19 Expert Consultants Marty Barton Charles Rodriguez SVP/Legal Counsel VP of Human Capital Management Marty.Barton@AdamsKeegan.com Charles.Rodriguez@AdamsKeegan.com 901-683-5353 770-709-7204
Happening Now Medical Plans ü SBA Emergency Expanded WORK Paid Sick ü $600 FMLA Leave TN UI Benefit Last Week & FFCRA CARES Act Today
Employer Priority Item #1 § April 1 – Families First Coronavirus Reponses Act ‒ Applies to Employers with 499 or less Employees ‒ 2 Key emergency provisions 1. Paid Sick Leave: 10 days at full pay (max. $5,110 maximum) 2. FMLA Expansion: up to 12 weeks of pay (2/3 pay up to $200/day) ‒ Tax credits for payroll and benefits, TBD ‒ Pos`ng no`ce requirement hbps://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf ‒ Updated provision for exemp`ng Employers under 50 Employees ‒ Safe harbor on compliance un`l 4/17
CARES ACT I. Loan Provisions II. Unemployment Benefits III. ReRrement Plan Flexibility IV. Special Tax Credits & Deferrals V. ExecuRve CompensaRon Limits
CARES ACT – Paycheck ProtecRon Program SBA’s 8 Week Loan-to-Grant Program Eligible covered expenses Up to 2.5x the average total monthly § Payroll costs ü payments for payroll costs incurred Costs related to the con`nua`on of group ü during the one-year period prior to the health care benefits during period of paid date on which the loan is made; sick, medical or family leave, and insurance premiums The amount of loan forgiveness is further § reduced by: Employee salaries, commissions, or similar ü compensa`on ‒ The average number of full-`me equivalent employees per month employed by the eligible Payments of interest on any mortgage ü recipient during the covered period; obliga`on ‒ The amount of any reduc`on in total salary or Rent ü wages of certain employees during the covered period that is in excess of 25%… U`li`es ü Interest on any other debt obliga`ons ü incurred before the covered period
CARES ACT – Tax Credits 50% Employee RetenRon Tax Credit § ‒ Another op`on allows employers (regardless of size) that are uniquely affected by COVID-19 to claim a refundable tax credit against the employer por`on of payroll tax equal to 50% of certain wages paid to an employee between March 13, 2020 through the end of the year. Only $10,000 of wages could be taken into account for any employee. ‒ This 50% credit would be available to businesses (1) that have had their opera`ons fully or par`ally suspended by government order due to COVID-19; or (2) that experienced a 50% decline in gross receipts during a 2020 calendar quarter when compared with the same quarter in 2019. Social Security Tax Deferral: • ‒ Another provision that is available to employers of all sizes is the ability to defer the payment of the employer por`on of Social Security taxes (6.2% of wages) for the remainder of 2020. Fily percent of those deferred taxes would have to be repaid by the end of 2021, with the remainder due by the end of 2022.
Q&A 1. Right now, there is no work to be done…it seems it may be in the best interest of both employee and employer for the employee to get paid and not impact the payables for the company. 2. What about 1099s? 3. What about aggregated business with different FEINs? 4. If we must cerHfy that the loan is necessary for “ongoing operaHons”... We are closed, but sHll have all of the normal expenses. Will this count as “ongoing operaHons”. 5. What about mulHple loans: PPP and Emergency Grants ?
SBA & Unintended Consequences Determine which opRon is best for your individual business: 1. Talk to your lender, ASAP 2. DifferenRate separaRons, Layoffs, Furloughs, Rehires 3. Communicate thoughgully with your people, or else…
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