Tag: Employment Law

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Consolidated Appropriations Act 2021: What Employers Need to Know

On December 27, 2020, the U.S. government enacted the Consolidated Appropriations Act, 2021, which is the second-largest federal stimulus package after the $2 trillion CARES Act passed back in March. Within the bill is the Coronavirus Response and Relief Supplemental Appropriations Act (the “Act”). The Act was enacted to help relieve the financial stresses businesses are experiencing during this economic downfall. The Act extended the Paycheck Protection Program (the “PPP”), enhanced the Coronavirus Aid, Relief, and Economic Security Act’s (the “CARES Act”) relief, and provided additional relief. Below is a summary of changes to the PPP, tax provisions, business meal deduction, and employment benefits.

Expansion of the Paycheck Protection Program

The Act added an additional $284 billion for forgivable PPP loans and extended the program to March 31, 2021. Small businesses categorized as “hard-hit” businesses that received PPP loans in 2020 will be eligible for a second round of funds. The eligibility requirements for the second round of PPP loans are:

  • Have 300 or fewer employees;
  • Have used or will use the full amount of their first PPP loan; and
  • Show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

The additional eligibility requirements stated above do not apply to first-time borrowers. The size of a PPP loan is limited as follows:

  • A business may obtain 2.5 times its average monthly payroll; or
  • A business in Accommodation and Food Service (NAICS Code 72) may obtain 3.5 times its average monthly payroll.

The second round of PPP loans are capped at $2 million per borrower; whereas, the first-time borrowers remain capped at $10 million.

Enhancements to the PPP

Expanded forgivable expenses, including:

  • Operational Expenditures: software and cloud computing service payments used to facilitate, without limitation, business operations, service or product delivery, payroll, processing, billing, accounting, inventory, and human resource functions.
  • Supplier Costs: payments to suppliers of goods that are essential to operations at the time made pursuant to an order or contract in effect prior to the covered period.
  • Property Damage: costs related to any public disturbances that occurred in 2020, to the extent not covered by insurance or other compensation.
  • Worker Protection Costs: costs related to compliance with regulations issues by CDC, HHS, OSHA or any state or local government authority after March 1, 2020 and ending on the date when the national emergency declared by the president related to Covid-19 safety measures expires.

Additional Notable Updates

  • Expenses paid with proceeds of PPP loans are deductible for income tax purposes, a change from prior IRS rules. This may be the most significant change for many businesses.
  • Borrowers may self-elect a covered period between 8 and 24 weeks from receipt of the PPP loan.
  • Repealed the requirement that borrowers must deduct the $10,000 Economic Injury Disaster Loan advance amount from the forgivable amount of the PPP loan.
PPP Loan Proceeds

A business whose PPP loan is forgiven is not required to include the amount forgiven in gross income. Also, tax deductions are permitted for otherwise deductible expenses paid using the proceeds of a forgiven PPP loan, and there is no corresponding reduction in the basis of business assets. Therefore any forgiven PPP loan is effectively tax-exempt income.

Other Provisions
  • Employers who deferred withholding of the employee payroll taxes under the presidential memorandum dated August 8, 2020 now have until December 31, 2021 to arrange for withholding from employees and repay the deferred amounts.
  • Businesses that receive CARES Act loan forgiveness are not required to include amounts forgiven in income and are permitted tax deductions for otherwise deductible expenses paid.
  • Employer tax credit for paid family and medical leave extended through 2025.
  • Employer may continue to pay up to $5,250 per employee toward an employee’s “eligible student loan repayments” and the payments will be excluded from employee’s income through 2025.
Business Meal Deduction

The Act increased the limit on deducting business meals, including takeout and delivery meals, provided by restaurants to fully deductible. This rule applies to expenses paid or incurred in 2021 and 2022. All other existing requirements continue to apply when you dine with current or prospective customers, clients, suppliers, employees, partners, and professional advisors. Thus, to be deductible:

  • The food and beverages cannot be lavish or extravagant under the circumstances; and
  • You or one of your employees must be present when the food or beverages are served.

If food or beverages are provided at an entertainment activity, either they must be purchased separately from the entertainment or their cost must be stated on a separate bill, invoice, or receipt. This is required because the entertainment, unlike the food and beverages, is nondeductible.

Impact on Labor & Employment

Unemployment Benefits

The Act extended existing pandemic unemployment insurance programs under the CARES Act, the Pandemic Unemployment Assistance program, and the Pandemic Emergency Unemployment Compensation program. The Act provided an additional 13 weeks of benefits to those individuals who have exhausted their regular state benefits in addition to a supplemental federal unemployment benefit of $300 per week for up to 10 weeks to March 14, 2021. Additionally, the Act added program integrity provisions that require documentation of earnings and employment and compelled states to have processes for verifying an applicant’s identity to combat fraud and abuse in the unemployment programs.

Paid Sick Leave

The Act provides a tax credit to support employers that offer paid sick leave to employees. The Families First Coronavirus Response Act is no longer required as of December 31, 2020, but if covered employers voluntarily provide these benefits through March 31, 2021, those employers are eligible to take the tax credit for the leave. Also, the Act extended refundable payroll tax credits and employee eligibility for the paid sick and family leave to March 2021.

Next Steps

When it comes to the Coronavirus Response and Relief Supplemental Appropriations Act, there are a lot of changes for employers and business owners to know. It is important to understand all your options and develop a strategy to maximize your benefits. Epiphany Law attorneys will partner with you to create a plan that will help your business efficiently and effectively achieve your desired results. You can contact us here.

When to Update Your Company’s COVID-19 Policy

Keeping current with CDC guidelines and vaccination roll-out

In recent weeks, CDC recommendations regarding the length of quarantines have changed. And, as the COVID-19 vaccine becomes available to the public, employers may need to review and update their policies to better reflect the current situation. The below are some of the top questions employers are asking regarding how they can better protect their employees, customers and their business.

Q: Can I mandate employees receive the COVID-19 vaccine?

A: This answer may vary by industry, location and whether your workforce is unionized. Currently, many health care companies have already mandated employees receive annual flu shots. Both the Occupational Safety and Health Administration (OSHA) and the U.S. Equal Employment Opportunity Commission (EEOC) have determined these policies to be permissible for health care workers. However, both OSHA and EEOC require employers to consider granting accommodations to employees who refuse to vaccinate due to a medical condition, disability or even religious belief.

Employers with unionized workforces will also need to consider the National Labor Relations Act as well as any labor contract obligations. If there is no collective bargaining agreement that already exists regarding mandatory vaccination, the employer may be required to first bargain to agreement before a mandatory vaccination policy can be enacted.

Business owners and employers should also ensure their policies are compliant with any pertinent state laws. Currently there is no Wisconsin state law prohibiting employers from requiring employees get vaccinated as a condition of employment. However, some states do permit employees to opt out.

In addition to the legalities of the issue, employers need to consider practical matters such as how a vaccine requirement could impact recruitment and retention. According to recent Gallup polling, 42 percent of U.S. adults say they are hesitant about getting the COVID-19 vaccine.

Q: If employees do get vaccinated, will they still need to comply with a mask mandate?

A: State mask mandates will most likely stay in effect while vaccine administration is rolled out. Most states now require face masks to slow and reduce the spread of COVID-19.  OSHA has offered guidance and generally recommends that employers encourage employees to wear face coverings while in the workplace. Until OSHA and CDC guidance changes, employers should stay compliant with current recommendations. It’s important the company’s COVID-19 policy demonstrates a proactive approach to protecting employees’ health and preventing outbreaks. Since March, there have been over 1,400 lawsuits filed against employers due to alleged coronavirus labor and employment violations. One of the most effective ways to protect both your employees and your business is to develop, document and enforce policies that are consistent with OSHA and CDC guidance.

Q: Now that the CDC has shortened their quarantine timeline, can I adjust our company’s COVID policy accordingly?

A: Employers now have more options for quarantine guidelines, however symptoms must continue to be monitored through Day 14. On December 2, the Centers for Disease Control and Prevention announced new quarantine guidelines for employers. Previously, the CDC had advised a standard 14-day quarantine for employees who came into close contact with individuals who tested positive or were presumed positive. The new guidelines now offer the following alternatives.

  • Quarantine can end after Day 10 without testing and no symptoms have been reported during daily monitoring.
  • Quarantine can end after Day 7 IF a diagnostic specimen tests negative and if no symptoms were reported during daily monitoring. The specimen may be collected and tested within 48 hours before the time of planned quarantine discontinuation, but cannot be discontinued earlier than after Day 7.

To ensure your company’s COVID-19 policy meets your legal responsibility and limits your risk of litigation, it’s a good idea to reach out to legal counsel. Together, you can evaluate your options and you’ll stay up-to-date with the rapid changes from guidance at local, state and national level.

Does Your Company Have a Return to Work Strategy?

Article co-written and researched by attorneys Tracy Melvin and Alexis Merbach.

Many businesses are still figuring out how to manage HR issues in a pandemic. They are following the changes in every order and stimulus/relief package passed, and effectively rolling with the punches. Among the confusion and uncertainty, they have found ways to persevere. However, as states and cities now start to reopen—in turn allowing businesses to do the same—there is one question that remains…is the business prepared to get back to work?

There are several policies to consider as a business reopens. Some policies may not be new to the organization and likely are already be in place. Regardless, now is a great time to dust them off. Having correct policy documentation in place is crucial to ensuring the organization is proactively approaching and appropriately responding to the impact of COVID-19.

Businesses should draft or update the following policies as they work to reopen their doors:
  • Telework – Have a clear policy that outlines expectations for remote workers.
  • Anti-harassment & discrimination – There have already been many stories of employees being treated differently because they have or suspect they may have contracted COVID-19. Ensuring anti-harassment and discrimination policies are in place can set expectations and help minimize any potential risk.
  • Reasonable accommodations – Have a policy in place detailing how you will engage in an interactive reasonable accommodation process.
  • Overtime – To combat any wage & hour issues, employers may want to consider a policy requiring overtime to be pre-approved.
  • “Off the Clock” Work – Considering some employees may still be furloughed, laid off, or on reduced-hour schedules, implementing an “off the clock” policy makes it clear that employees are prohibited from checking e-mail, making phone calls, etc. for free. Employees must be compensated for all time worked.
  • Safety – Document workplace safety measures, including policies for proper cleaning, protective equipment, and social distancing measures, that have been put in place to prevent spread of the virus.
  • Health & wellness – Draft policies related to any health questionnaire or temperature check process, including that any health information will be properly protected.
  • Leave – Consider implementing a temporary leave request policy related to the two paid leaves under Families First Coronavirus Response Act.

Drafting or updated workplace policies is a great first step; however, businesses need to ensure effective implementation of these new or updated policies.

There are a few ways to do so effectively:
  • Train supervisors and managers on current, updated, and new policies. This will ensure consistency across the management team and present a united front to employees.
  • Consider cross-training your workforce to accommodate employee absences.
  • Any new or updated policies should be communicated to employees to ensure compliance throughout the organization. Distribute current and updated policies, have employees sign an acknowledgement that they have reviewed, understand, and will adhere to the policies, and continue communication about policies regularly.

To learn more, make sure to watch the webinar below. If you have questions or would like assistance developing a strategy to reopen,  contact us here.