WASHINGTON – The U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.
 
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.
 
Key Takeaways
 

• Paid Sick Leave for Workers 
  • For COVID-19 related reasons, 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.
• Complete Coverage
  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.
• Employers receive 100% reimbursement for paid leave pursuant to the Act.
• Fast Funds
  • An immediate dollar-for-dollar tax offset against payroll taxes will be provided
  • Where a refund is owed, the IRS will send the refund as quickly as possible.
  • Reimbursement will be quick and easy to obtain.
• Small Business Protection
  • ​​Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.

 

• Easing Compliance
  • Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

 
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.
 
Background
 
The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and Dec. 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.
 
Paid Leave
 
The Act provides that employees of eligible employers can receive 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. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional 10 weeks of expanded paid family and medical leave at 2/3 the employee’s pay.
 
Paid Sick Leave Credit
 
For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.
 
For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
 
Child Care Leave Credit
 
In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.
 
Prompt Payment for the Cost of Providing Leave
 
When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees' share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.
 
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
 
The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
 
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
 
Examples
 
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 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 $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
 
Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.
 
Small Business Exemption
 
Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability 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.
 
Non-Enforcement Period
 
Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.
 
For More Information
 
For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week.        

Typical Situation: Our client has to improve worker morale and avoid loss of productivity. Our client is also looking for ways for their employees reduce time away from work and reduce Training Expenses.     
Maybe there has been an employee Injury or death, news of worker (s) being injured on the job or equipment failure. 
 
When you hear a business owner say:

• “I need to reduce Worker Compensation Claims.”
• “I hate dealing with worker turnover.”
• “General: working Worker Safety/Prevention; Worker Safety Training “

 
They Provide FREE Safety Awareness to businesses with 2-250 employees within the U.S. 
Four and six hour, FREE courses on numerous safety topics.
 
How they Work: Harper provides free safety awareness courses from the Susan Harwood Training Grant. We provide high quality courses that instructed by OSHA Outreach Trainers. The courses are relevant as the training topics have been selected by needs of community that were surveyed. Courses offered until late Summer 2020.
 
You can introduce them:
“Harper College has FREE safety awareness courses taught by Safety Professionals and OSHA Outreach trainers.   These courses can reduce your business operating expenses, increase employee morale and turnover.  The website is:  www.harpercollege.edu/safety.”   

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Pursuant to Public Act 101-0177 the Illinois Equal Pay Act now bans employers and employment agencies from asking about applicants’ past wage and compensation histories. This law takes effect on September 29, 2019. Employers can be penalized for asking the applicant or the applicant’s current or former employers for wage or salary history. If they have not yet done so, employers should review their employment applications to make sure they do not ask for salary and wage history. They should also train those involved in hiring on the new law. For more information you may contact the Illinois Department of Labor at the Equal Pay Hotline 866-372-4365.
Frequently Asked Questions on Wage History Ban

1. Can employers ask for salary history or use salary history when determining whether to offer a job or when determining how much to pay the job applicant?
   No. It is unlawful for an employer to request or require a wage or salary history from a job applicant as a condition of being considered for employment or as a condition of employment.
2. Can employers ask about employment benefits that have been provided in the past to a job applicant during the application process?
    No. It is also unlawful for an employer to request or require a job applicant to disclose benefits or other compensation received at any current or former employer as a condition of being considered for employment or as a condition of employment.
3. Who is covered by the law?
   Illinois job applicants. This includes applicants to part-time and full-time positions, temporary or permanent, whether hourly or salary. The law however does not cover independent contractors.
4. Can employers use recruiters to determine applicants' salary histories?
   No. Recruiters, employment agencies, staffing agency or any other agent of an employer may not screen applicants based on their current or prior wages or salary histories, benefits or other compensation.
5. Can an employer ask a current or former employer of the job applicant for the applicant’s wage history?
   No. It is unlawful for an employer or their agent to ask for a wage or salary history, benefits or other compensation from an applicant’s employer or former employers when conducting verification or reference checks.
6. What if the employee already works for the company where he or she is applying?
   The prohibition does not apply if a job applicant’s salary history is a matter of public record or if the applicant is a current employee applying with the same employer.
7. Can an employer prohibit employees from discussing their salaries?
   No. An employer cannot prohibit its employees from disclosing their own salaries, benefits or other compensation to other individuals.
8. Can job applicants volunteer salary history information?
    Yes. Applicants may voluntarily disclose their prior wage or salary history including benefits or other compensation. The employer shall not consider or rely on the voluntary disclosures as a factor in determining whether to offer a job applicant employment, in making an offer of compensation, or determining future wages, salary or benefits.
9. Can employers provide a salary range to an applicant or discuss with an applicant their salary and benefits expectations?
   Yes. An employer can provide information about the wages, benefits, compensation, or salary offered in relation to a position. The employer can also engage in discussions with an applicant about the applicant’s expectations with respect to wage or salary or benefits.
10. Who do I contact if I have questions about the new law?
    You should call the Illinois Department of Labor at the Equal Pay Hotline 866-372-4365.

Typical Situation: Our client is growing and are unsure if they are legally complaint with employees. They feel they have been "winging it" in the area of HR, for too long and want to formalize processes. Or simply, they have many questions about employee issues and need answers we cannot provide (Legally and we just don’t know)
 
When you hear a business owner say:
 

• “I need to fire this person, but I don’t want to get sued”
• “There are so many laws changing, and I don’t know if our policies and practices are compliant.”
• “We’re having a hard time finding and retaining qualified candidates.”
• “We don’t need a full-time HR professional, but we need occasional help with employee relations issues.”

 
HR Source Provides

• HR Hotline: With unlimited access to the HR Hotline, members can talk to HR experts and employment law attorneys any time they have a question or concern.
• Benchmarking Surveys: Keep your organization competitive with the market’s most robust and timely data on wages, salaries, polices, benefits and executive compensation.
• Newsletter Updates: HR Source’s weekly newsletter keeps employers current on HR compliance issues and best practices.
• Training and Education: HR Source offers training programs focused on HR best practices, employment law compliance, leadership development and more.

 
How they Work
HR Source is a not-for-profit employers' association serving more than 1,200 companies and organizations. They provide human resources and legal support, publish compensation and benefits surveys, conduct HR and supervisory training, and more.
 
Matching Ideas with Resources:

What is a "Typical Situation" people are in when they realize they need help?
 

• They are growing and are unsure if they are legally complaint.
• Employees appear to be unhappy or have high turnover of staff and don't know what to do.
• They feel they have been "winging it" for too long and want to formalize processes.

What is something someone might say that would lead me to think of you?
 

• “If I could do this without employees I would.”
• “I feel like I've lost control of what people are doing - one person wants one thing and the other something else. I don't know what to do.”
• “My employees need someone to talk to that isn't me. Why do people come to me with their issues.”

What (Specifically) do they do?

Uncomplicate the people side of business. Help business owners success through and with their employees.

How do they do it?

Sitting down with the business owners to understand their needs and concerns. Create an action plan in order to achieve goals. Provide on-site support as needed so we are the go-to person for the employees and the owner. 

Matching Ideas with Resources