COVID-19 Update | Workforce Vlog #16

Eric Jones:

Hi everybody and welcome to this special edition of The Insight Beyond Payroll vlog, the coronavirus/COVID-19 edition. My name's Eric Jones. This is my business partner, Chilah Weller, and we are from Workforce PayHub.

Eric Jones:

Today we're going to go over a few items, Workforce PayHub's response to the COVID-19 crisis, the Family's First Coronavirus Response Act, and then the CARES Act that was just signed by President Trump this past Friday. Chila.

Chilah Weller:

So there's a lot to go through, but first and foremost, we wanted to assure you, because we are considered an essential service provider, being a small business payroll bureau, what measures we have taken in regards to COVID-19. So we have sent all of our staff to work remotely from home and we are taking rotating shifts and actually physically coming into the office so that we can print physical checks for all of those clients that it pertains to.

Chilah Weller:

In addition to being able to rotate time within the office, we also have set up an offsite printing station in the event that we are not able to come into the office. So this will include printing checks and pressure sealing them.

Chilah Weller:

It should also be noted that this is not a new procedure for our staff. We, at any given, time could have a staff working remotely.

Eric Jones:

Next we're going to talk about the Family's First Coronavirus Response Act that was passed by Congress and signed by the President a couple of weeks ago. The key issues, I'm just going to focus on the key issues that might affect you, our clients. The first is that they've enacted a new mandated Paid Sick Leave Act. This has been interesting because it's kind of been on the verge, and I believe the federal government for federal employees made this such a thing last year. It applies to all private employers and nonprofit and public under 500 employees or under.

Eric Jones:

The key thing about this is yes, while they mandate the two weeks of paid sick leave, they are actually going to reimburse you for that via a 941. So this will be your federal income tax that the employees withhold, the social security and Medicare that both the employer pays and the employee pays to help cover this. And let's say you don't have enough taxes to make whatever that coverage is, they will actually issue you a rapid refund of some sort, we're still waiting on the details from that, to make sure that you're made whole.

Eric Jones:

And then the Extended Family Medical Leave Act, it's a second leave that actually allows for, if a parent's child school or daycare has been shut down due to an order or because of health concerns because of COVID-19, you actually are able to pay them for up to 10 weeks. 12 weeks leave, up to 10 weeks of which can be paid after the first two weeks are unpaid. This too will be reimbursed similar to the paid sick leave. Now Chilah, how are we going to support our clients with this?

Chilah Weller:

It's a great question, Eric. We are working very closely with our software provider, who is providing daily guidance as to how we are going to be able to monitor effectively this tax credit. In addition to that, making sure that we're working with our clients for underpayment of taxes. And we will be working with you very closely and helping you work through all those various nuances.

Eric Jones:

Thank you for that, Chilah. I also want to note we thought this act would be retroactive for the leave based on when President Trump signed it. We have received guidance from the Department of Labor that it will not be backdated. So what that means is this credit and these leaves have to start on April 1st or after.

Eric Jones:

Now the schools, we already know here in Michigan and elsewhere, have been closed for weeks now. So you can start taking this credit, again, starting on April 1st, but you can't backdate the last two weeks if you did pay your employees. So just wanted to mention that.

Chilah Weller:

We recognize that this is a very trying time for not only these business owners, but for also your employees. And we want you to know, as an essential service provider, that we are here for you. We are not lawyers, however, we have a very close contact with our own legal counsel, and then of course we are reading the act to make sure that we understand it very clearly.

Eric Jones:

So next, let's talk about the latest and greatest, the CARES Act which was just passed by the Senate last Wednesday. It was passed by the House of Representatives on Friday and President Trump signed it shortly after 4:00 PM Eastern Standard Time Friday afternoon.

Chilah Weller:

So in regards to the CARES Act, there are many different facets of this. So the first one I'm going to focus on is the Payroll Protection Program. We're getting a lot of questions on this. So what this program is going to allow for is two and a half times your average monthly payroll. You are going to consult with an approved SBA loan provider. So you can call your local banks or someone that you already use to ask if they are a preferred provider, and they will be able to assist you in what that lookback period looks like based on your industry type.

Eric Jones:

Another key item from the CARES Act is that, so on the personal note, so this is going to affect you and your employees perhaps, is the government's actually given stimulus checks in the amounts of $1,200 per applicable adult and $500 per applicable child. Now there are income thresholds that you need to be aware of. For a single person, that income threshold is $75,000 before it starts to phase out. For a married filing jointly, that threshold is $150,000.

Eric Jones:

I would also want to note is they are going to be going based off your 2019 tax return, so if they can validate that your bank information is still correct, they will send a direct deposit like they would for your refund check. If they can't validate that bank account because they're going to ping it, they will send you a check.

Eric Jones:

Now, if you haven't completed your 2019 taxes yet, don't worry, they're also going to look at your 2018 taxes. Now, if you haven't done either your 2019 or your 2018 taxes, they're going to look at any other tax documents that they may have such as Medicare reimbursements or social security.

Eric Jones:

You will get your check or direct deposit as quickly as possible. We're being told those checks should start to be being cut or direct deposited in about three weeks.

Chilah Weller:

Thanks, Eric. One of the final pieces in regard to student loan forbearance. Within the act, there is a six month student loan forbearance.

Eric Jones:

So that's going to be 0% interest, no payments due. However, I would recommend if your employees or you can handle it, those payments to the state or whoever you got that loan from should actually hit your principal a little bit faster.

Eric Jones:

If you have questions about this, we can't provide legal advice, but we will help you manage this within our platform. So please don't hesitate to give us a call at (517) 759-4026 or you can email us at info@workforcepayhub.com.

Chilah Weller:

Stay safe everyone.

Eric Jones:

Stay safe.