Interpreting the Stay at Home Order; Federal Stimulus Bill Advances; FFCRA Guidance from DOL
By: Todd Masuda
As the surge in official actions related to the COVID 19 crisis overwhelms employers’s capacity to react, your lawyers at SSEG are here to help!
Interpreting the Ohio Stay At Home Order
Lt. Gov. John Husted urges employers to read the Stay At Home Order, make a good faith analysis of their company’s status under an applicable “essential business or operation” classification, and document their reasoning for their files.
SSEG attorneys can help businesses work through and document the appropriate classification of your business under the essential business and essential operations language. Please call your attorney if you have any questions.
Employers who conclude they are an essential business or operation must still comply with key provisions of the Order, which I described yesterday, here.
FFCRA Effective April 1, 2020
Guidance for the Families First Coronavirus Response Act (FFCRA) continues to trickle out. The Department of Labor issued interim guidance establishing April 1, 2020 as the effective date of the FFCRA.
The DOL also issued the mandatory FFCRA poster. Employers should post this notice alongside other workplace posters.
The FFCRA is a relatively complex law that will raise questions and hackles as employers work on interpreting employee rights to leave and seek the compensatory tax credits. At this point it is good to keep in mind that the FFCRA contains two separate leave rights – the Paid Leave Sick Act (PLSA) and the Enhanced Family Medical Leave Act (EFMLA) – as well as a payroll tax credit.
We still expect guidance on whether businesses with fewer than 50 employees may be exempt from this law. Employers of health care providers and first responders should know that they may exempt their employees from paid leave under the FFCRA.
SSEG attorneys are glad to help employers talk through the complexities of FFCRA leave rights and obligations.
Federal CARES Act Stimulus advances with unemployment law
Unemployment. The federal stimulus bill has been advancing through Congress. A key feature is an additional federal unemployment payment that would be available to a broadly defined range of workers, including those receiving benefits under state unemployment systems, as well as self-employed and gig economy workers. Individuals excluded from these benefits will include those who are able to telework with pay and those who are receiving paid sick time or leave benefits. The CARES Act unemployment benefits are meant to be paid in addition to regular state unemployment benefits.
Employee Retention Tax Credit. Qualified employers will be eligible for a payroll tax credit based on 50% of “wages” paid. A qualified employer is one who fully or partially shut down due to COVID-19 orders (including nonprofits), or, had suffered, during a quarter in 2020, a drop of gross receipts of 50% or more compared the same quarter in 2019. “Wages” includes health insurance premiums, and are capped at a total of $10,000 per employee. For employers with >100 employees, the credit is based on wages paid to employees who are not providing services; for employers with ≤100 employees, the credit is based on all wages paid. The total credit is capped at $10,000 per employee. The term of this credit applies to wages paid March 13 through December 31, 2020; for employers who qualify as a matter of diminished revenues, the credit ends when the employer has a 2020 quarter with >80% of gross receipts compared to the same quarter in 2020.
At first blush, it seems the ERTC will be particularly well suited to ease the burden for employers who choose to “furlough” their employees under Ohio’s relaxed unemployment laws and maintain their employees’ health coverage. For instance, a qualified employer who is maintaining health insurance for an employee working zero hours will still be able to claim a payroll tax credit of 50% of the health insurance costs incurred by the employer, even though direct cash compensation to the employee was zero.
The ERTC will not be available to employers who take the SBA “paycheck protection” loans offered in a the stimulus package, which will be the subject of a separate SSEG update.
**This information is offered for discussion, marketing and news purposes and is not intended to constitute legal advice.**