Here are our latest observations on the impact of COVID – 19 on employers. 
Miller Johnson hosted a good webinar this morning on the Families First Coronavirus Response Act.  You can find the recording here.  A number of questions were answered throughout their presentation but many more remain and they plan to host a Q&A at 8:00 am tomorrow morning (Tuesday) to address them (there were over 150 questions they were not able to get to).  We had a number of key takeaways: 

  • First and foremost the biggest takeaway was their answer to a question right at the end of the session where they stated that the act does not apply to any employees who are laid off before it goes into effect.  That said, the primary objective of the legislation and the additional legislation being worked on currently is to keep as many people employed as possible in anticipation of the eventual recovery.
  • The act is not retroactive after it goes into effect on 4/2/20.  Many attendees asked if they would be reimbursed for sick leave provided to employees prior to 4/2 and the conclusion of the Miller Johnson team is no.  If an employer provides a paid sick leave benefit before 4/2, they should expect they will need to do so again and will only be reimbursed for the second benefit. 
  • How will employers be reimbursed?  There are two primary avenues an employer will have for obtaining the reimbursement for the benefits from the act outlined by the IRS.  
    • Expedited claim process: Employer can stop withholding and depositing federal income tax, Social Security and Medicare taxes.
    • To fill in the gaps left by the first approach, the IRS will be issuing refundable tax credits “as quickly as possible”.
  • Many participants asked about requiring documentation from employees to verify they qualify for the sick pay or expansion of FMLA and the conclusion was that while not prohibited it would be difficult in practice to implement effectively.  Our takeaway was not to let the 2% who will take advantage of things overly complicate the process of implementation. 
  • Finally, while the guidance is outstanding the IRS has indicated it will also reimburse employers for the employers pro-rated share of providing health insurance to employees during the duration of the benefit. 

It is anticipated that at 11:00 today that the Governor is going implement an executive order requiring most individuals to shelter in place.  It is our understanding that individuals who are out of work as a result of this order will qualify for the sick leave benefit but not the expansion of FMLA at this time.  We will work to confirm this and update you as soon as we have confirmation.  
Please don’t hesitate to contact us with any questions you may have or if there is anything that we can do to take something off of your plate.