The latest developments on the COVID-19 pandemic as of March 23rd, 2020:
- Sick leave credit clarification. The Families First Coronavirus Response Act takes effect on April 2 and covers all companies with up to 500 employees. The employee has to use 10 work days of unpaid leave or other PTO before the employer is eligible to take the credit for that employee. As a result, an employee is not eligible to start accruing the benefits for the credit until April 16 in most cases. Once the employer has pay periods that include days where the employee is eligible, that employer can begin reducing the payroll deposits by the amount of credit that applies to those pay periods.
- And another. Employers will be able to offset both employer taxes and employee withholding deposits with the sick leave credit. Thus, they can offset their entire 941 liability with the credit. The IRS also announced that they will have an expedited refund process for employers who’s credit exceeds their deposit liability. They expect to process these refunds within two weeks from the filing date.
- Beware of unemployment scams. Be sure to carefully review unemployment documents you receive from your state department of labor. The documents should list only those employees who should actually receive unemployment benefits. You have a limited time to file an appeal. In Colorado, it must be received by the state within 20 calendar days of the date the Notice of Decision was mailed. If the 20th calendar day is a Saturday, Sunday, or legal holiday, the due date of the appeal becomes the next business day.
- Update on postponed tax payments. Friday’s announcement that the 4/15 tax deadline had been postponed to 7/15 left some unanswered questions, one of which was the affect on the previous decision to allow deferral to 7/15 of tax payments up to $1 million. Treasury clarified today that there will be no limitation on the amount of the payment that may be postponed to 7/15.
- (From BBSI) Laying off employees? If you are worried the only option is to lay off your employees, there are actually several options to consider. See below for pros and cons to each one:
- Work Share: These allow you to retain your employees but reduce the number of hours they work. Employees have their lost wages made up through a portion of their weekly unemployment compensation payments. You will need to send an application to the state to get this process started. For more information on Colorado’s workshare program, click here.
- Furlough: If you offer benefits, this may be one option to retain your employees because while they are on a partial or full “leave without pay,” they continue to keep their benefits. You should make special arrangements to collect benefit deductions if they pay a portion of the benefits premiums. For salaried workers, extra care should be taken to avoid violating wage and hour laws. This option may help retain talent while they are able to collect unemployment.
- Lay Off -Job Attached: This is a termination of employment where you expect them to return within 16 weeks from the date of termination. Employees know that once you are able to hire them back you will call them. They are, therefore, not required to provide the CO Department of labor a regular update on their job search activities. For more information on this option, click here. (NOTE: If you lay off more than 50 employees, you must comply with the federal WARN Act. The state threshold for employers obligated to comply with WARN is 100 employees. For more information on that law, click here.)
- Lay off: This is termination of employment where you do not know when they will return to work. Employees are eligible for unemployment benefits. If employees need access to the website to get the process started, send them this link: Start a Claim with CO Unemployment
- City and County of Denver stay at home order. Mayor Michael Hancock officially issued a stay at home order today for all residents and businesses within the city and county of Denver. It begins tomorrow at 5pm and is effective through April 10th. Here is a link to the official Public Health Order.
Let us know if you have any questions regarding today’s developments. We will continue to keep you up to date regularly.