Dear Valued Clients Potential Clients and Small Business Partners:
Key2 Accounting wants to let you know that we are here to stand by you, our small business clients and partners as we navigate the unchartered waters of the Coronavirus. We have provided some updated information concerning the closing of your business for the short term and what you need to do regarding your employees.
We are your human resources partners, but not the expert. In order to get you the information you truly need about coronavirus, we are providing our current payroll clients and any new clients, with a free 3 months account to Mammoth the human resources experts and several third party compliance tools. This service is providing an incredible amount of information valuable to employers at this time. You will have access to relevant letter templates, Q&A on timely topics, and updated news and information as it happens. At the end of the three month trial period, you may elect to continue the service at $9.95 per month.
Below is some information that we think you will find helpful with regards to your employees.
Employers preparing for Coronavirus:
• Actively encourage sick employees to stay home
• Separate sick employees
• Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees
• Perform routine environmental cleaning
• Advise employees before traveling to take certain steps
More detailed information about COVID-19 Community Guidance
Temporary Business Closure:
Many businesses are temporarily closing their doors to comply with different state regulations. You can let your employees know through a simple memo, here are some key points to include:
• Why the closure was decided
• Business closing date
• What to do with personal belongings, company property
• Changes made during the transition
• What to communicate to customers
• Unused benefits / final pay details / health insurance while out
• Job placement resources
• Unemployment benefits available
• Very general anticipated re-opening
• Whom to contact with questions and how
Employees are able to file for unemployment at the state they are employed in.
The link for Colorado unemployment claims.
The link for Hawaii unemployment.
Alternatives to Laying Off Your Employees As Business Slows Down
The Work-Share Program provides an alternative to laying off employees by allowing them to keep working, but with fewer hours. While an employee is working fewer hours, he or she may be eligible to collect part of his or her regular unemployment benefits.
Requirements and qualifications for employers:
• You must have reduced the normal weekly work hours by at least 10 percent, but by no more than 40 percent.
• The reduction must affect at least two out of all employees in the business, or a minimum of two employees in a certain unit.
• You must have paid as much in premiums as we paid your former employees in unemployment insurance benefits.
Paid Sick Leave for Workers:
Congress passes HR 6201 effective April 2, 2020 there is paid leave for COVID-19 related reasons, full-time employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable. For sick leave there is a maximum of $511 per day for a total of $5110. For caring for a child, family member being impacted then the pay is $200 per day, total $2000. Part-time employees are eligible for paid sick leave in an amount equal to an average number of hours they work over a 2 week period.
Complete Coverage:
• Employers receive 100% reimbursement for paid leave pursuant to the Act.
• Health insurance costs are also included in the credit.
• Employers face no payroll tax liability.
• Self-employed individuals receive an equivalent credit.
• Wages paid under the EPSLA and EFMFLEA are not considered wages.
To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
Example of Leave Credit:
If an eligible employer paid $6,000 in sick leave and is otherwise required to deposit $9,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $6,000 of the $9,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If an eligible employer paid $12,000 in sick leave and was required to deposit $9,000 in taxes, the employer could use the entire $9,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $3,000.
Small Business Exemption:
Small businesses with fewer than 50 employees will be eligible for an exemption from the pay leave requirements relating to school closings, child care unavailability, and staying home to care for a sick family-member where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.
If an employer chooses to pay this leave tax credits will be given against the payroll taxes to assist with paying this to employees.
Employers must post a notice advising employees of their rights under the Act. The Secretary of Labor will create this notice by March 25, 2020.
However, small employers are not exempt from paying employees up to two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.
What if my employee refuses to come into the office?
If your employee refuses to come into the office, is unable to telework, and you have made reasonable accommodations to address his/her concerns, you may be able to terminate the employee or put the employee on Leave Without Pay (LWOP) depending on the particular facts. If you elect to do LWOP, such a leave grant must be applied uniformly to all employees.
Apply for SBA Economic Injury Disaster Loan
Colorado has been declared an eligible disaster zone. The US Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic as a result of COVID-19
Income Tax Returns:
Personal Income Taxes not due until July 15th along with payments owed and 1st quarter estimates. Penalties and Interest will not be assessed. However, if someone is getting a refund we suggest filing your taxes right away.
Useful Links
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html
Posters, videos
https://www.cdc.gov/nonpharmaceutical-interventions/tools-resources/educational-materials.html
