Welcome to the inaugural release of our PErspectives COVID "newsflash" series. In our first news roundup, we bring to you highlights and key takeaways on the following topics:
- Key employer considerations under COVID legislation
- Sponsor debt purchases
The recently enacted Families First Coronavirus Response Act and CARES Act cover topics of interest to employers, including expanded paid leave, payroll retention tax credits, payroll tax deferral and unemployment insurance.
- Expanded Leave: Employees of companies
with fewer than 500 employees are eligible for expanded family and
sick leave through December 31, 2020.
- Employees can receive up to 12 weeks of leave (two unpaid and 10 paid) if unable to work/telework due to child care duties as a result of COVID-19 closures.
- Also entitled to two weeks of paid sick leave if not able to work/telework due to quarantine, diagnosis, or care for individuals quarantined due to COVID-19 or child care duties as a result of COVID-19 closures.
- Employers will receive a refundable tax credit for amounts paid under the new leave (subject to caps).
- Payroll Retention Tax Credits:
Employers whose operations have been fully or partially suspended
by a governmental authority due to COVID-19, or experienced a 50%
reduction in revenues (compared to same calendar quarter in prior
year) may be eligible for payroll retention tax credits.
- Refundable tax credit for 50% of "qualified wages" paid to employees; only applies to wages paid after March 12, 2020 and before January 1, 2021.
- Qualified wages generally means the social security wages paid to any employee that is currently idle (and qualified health plan expenses allocable to such wages).
- Qualified wages for any employee capped at $10,000 in the aggregate; credit capped at $5,000 per employee.
- Payroll Tax Deferral: All employers can defer payment of employer social security payroll taxes from March 28, 2020 to January 1, 2021; deferred amount is payable 50% on December 31, 2021 and 50% on December 31, 2022.
- Unemployment Insurance: Extends
unemployment benefits to individuals who are unable to work as a
result of COVID-19 and who may not otherwise be eligible for
regular unemployment compensation; provides for an additional
$600/week on top of state benefits.
- Individuals who have qualified for regular unemployment compensation will also receive the additional $600/week payment.
- Additional 13 weeks of unemployment compensation available through December 31, 2020.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.