COVID-19 Payroll,
Tax & Unemployment

Helping You Navigate

The American Rescue Plan Act of 2021 has extended the tax credits available to employers with fewer than 500 employees under the Families First Coronavirus Response Act (FFCRA) through September 30, 2021.  This is voluntary for employers and expands employees’ rights to take sick leave and family leave.

If you opt in, there are two additional reasons that allow employees to qualify for FFCRA leave effective 4/1/21:

  1.  Employees unable to work because they are getting the COVID-19 vaccine or are recovering from any illness, injury or condition related to the vaccine, and
  2. Employees unable to work because they are seeking or waiting for the results of a diagnostic test or waiting on a medical diagnosis

It also extended the FFCRA in two important ways:

  1. The act extended the number of weeks an employee can take paid family leave from 10 weeks to 12 weeks
  2. It also reset leave hours to zero as of 4/1/21.  Any FFCRA leave prior to that does not count against their right to additional paid leave

https://www.dol.gov/general/american-rescue-plan

The Coronavirus Aid, Relief, and Economic Security (CARES) Act builds on the previous federal laws passed in response to COVID-19.

The CARES Act allows small and medium sized businesses to receive federal loans (in some cases forgivable) to cover payroll and other expenses. It aims to boost the economy with provisions that impact unemployment insurance, business loans, employer-sponsored health insurance, retirement savings, and employer-provided education assistance.

It also expands unemployment benefits for workers impacted by the outbreak, while extending unemployment eligibility to many who are otherwise not regularly entitled to receive such benefits.

The CARES Act Works for All Americans

The Families First Coronavirus Response Act (FFCRA) is a response to the economic impact of COVID-19. It offers paid sick leave or expanded family and medical leave for specific COVID-19-related to workers who are affected by the pandemic.*

Where can I find more information about FFCRA?

Families First Coronavirus Response Act: Questions and Answers

COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs

PPP Loan Forgiveness Report:

We will provide a PPP Loan Forgiveness report by Pay Date. Please reach out to your payroll specialist to request a Payroll Forgiveness by Pay Date.

Federal Student Loan Update:

Temporary Suspension of Federal Student Loan payments has been extended until January 31, 2020.

Click Here For more information on Federal Student Loans.

Payroll Tax & Unemployment Questions

How can an employer pay the deferred amount of the employer's share of Social Security tax it owes before the applicable date by which the deferred amount of the employer's share of Social Security tax must be deposited and paid?

The employer may pay the amount it owes electronically using EFTPS, by credit or debit card, or by a check or money order. The preferred method of payment is EFTPS. If an employer is using EFTPS, in order to pay the deferred amount, an employer that files Form 941 should select Form 941, the calendar quarter in 2020 to which its payment relates and payment due on an IRS notice in EFTPS. An employer that files annual returns, like the Form 943, 944, or CT-1, should select the return and 2020 tax year to make a payment. For more information, visit EFTPS.gov, or call 800-555-4477 or 800-733-4829 (TDD).

For example, if an employer that files Form 941 wants to pay $300 of its deferred employer’s share of Social Security tax, $100 of which is attributable to the second calendar quarter of 2020, and the other $200 of which is attributable to the third calendar quarter of 2020, the employer must make two payments through EFTPS. Each payment should be made for the calendar quarter to which the deferral is attributable, and the entry in EFTPS must reflect it as a payment due on an IRS notice. Thus, the employer would pay $100 for the second calendar quarter of 2020 using EFTPS and select payment due on an IRS notice in EFTPS while doing so and would also separately pay $200 for the third calendar quarter of 2020 using EFTPS and make the same selection.

Will there be any issues receiving our payroll package from Prestige during the New York State on Pause Executive Order?

Although there is a lockdown order in place for New York State, it will be “Business as usual” for Prestige. Payroll packages will be delivered as normal, unless you require an alternative method. Please direct requests or questions to your Payroll Specialist.

Furlough or Terminate, what should I do?

Generally, Furlough or temporary layoff is used with the understanding that the employee be recalled back to work if business conditions improve. Furlough status can be used to continue benefits or offer the employee COBRA while keeping the employee status active.

Terminations should be used when an employer is less certain that improved business conditions will allow the employee to be recalled. Benefits are typically terminated with a permanent lay off.

Please reach out to either your Payroll Specialist or Human Resource Business Partner to discuss your options in detail.

Can I opt-out of Federal Tax?

You can update your Federal or State taxes on the PrestigeGO mobile app or PrestigePRO employee portal. It is always recommended that you speak with your tax professional before changing your Federal or State tax withholdings.

How do I count hours worked by a part-time employee for purposes of paid sick leave or expanded family and medical leave?

A part-time employee is entitled to leave for his or her average number of work hours in a two-week period. Therefore, you calculate hours of leave based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, you may use a six-month average to calculate the average daily hours. Such a part-time employee may take paid sick leave for this number of hours per day for up to a two-week period and may take expanded family and medical leave for the same number of hours per day up to ten weeks after that.
If this calculation cannot be made because the employee has not been employed for at least six months, use the number of hours that you and your employee agreed that the employee would work upon hiring. And if there is no such agreement, you may calculate the appropriate number of hours of leave based on the average hours per day the employee was scheduled to work over the entire term of his or her employment.

When calculating pay due to employees, must overtime hours be included?

Yes. The Emergency Family and Medical Leave Expansion Act requires you to pay an employee for hours the employee would have been normally scheduled to work even if that is more than 40 hours in a week.
However, the Emergency Paid Sick Leave Act requires that paid sick leave be paid only up to 80 hours over a two-week period. For example, an employee who is scheduled to work 50 hours a week may take 50 hours of paid sick leave in the first week and 30 hours of paid sick leave in the second week. In any event, the total number of hours paid under the Emergency Paid Sick Leave Act is capped at 80.

If I am an employer, may I supplement or adjust the pay mandated under the FFCRA with paid leave that the employee may have under my paid leave policy?

If your employee chooses to use existing leave, you have provided, yes; otherwise, no. Paid sick leave and expanded family medical leave under the FFCRA is in addition to employees’ preexisting leave entitlements, including Federal employees. Under the FFCRA, the employee may choose to use existing paid vacation, personal, medical, or sick leave from your paid leave policy to supplement the amount your employee receives from paid sick leave or expanded family and medical leave, up to the employee’s normal earnings.
However, you are not required to permit an employee to use existing paid leave to supplement the amount your employee receives from paid sick leave or expanded family and medical leave. Further, you may not claim, and will not receive a tax credit, for such supplemental amounts.

If I want to pay my employees more than they are entitled to receive for paid sick leave or expanded family and medical leave, can I do so and claim a tax credit for the entire amount paid to them?

You may pay your employees in excess of FFCRA requirements. But you cannot claim and will not receive a tax credit for those amounts in excess of the FFCRA’s statutory limits.

Do I have to pay my employees if we close the company?

Paying employees is determined by their status under the Fair Labor Standards Act (FLSA) or under state law.
Generally, nonexempt employees are compensated for hours worked. With nonexempt employees, scheduled hours and hourly pay can be reduced unless “reporting time” pay is required under state or local regulations. While exempt employees must be compensated for any weeks in which some work is performed. Exempt employees are not required to be paid in which they perform no work.

A company may also have pay obligations covered under contractual agreements such as an employment contract or Collective Bargaining Agreement.

*The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements.