A guide for Missouri Businesses during Coronavirus
The rapid spread of COVID-19 across the US has growing implications for the nation’s employers and employees. Now more than ever, employers need our support, service and advice they can trust. We stand ready to assist you in navigating this challenging situation.Also, we want to be sure you are aware of our HR Support Center. This library of HR information has added several important resources to our content, including:
- Guidance from the CDC, OSHA, EEOC and HHS
- Tips to handle an infectious outbreak
- A sample communication for employers to send to their employees
We also cover the requirements and breakdowns for:
- Families First Coronavirus Response Act (FFCRA Act)
- Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
We know you count on us to be ready at times like these.
COVID-19 Federal Time Off
Please read below from our HR Resource Center.
The Families First Coronavirus Response Act was signed into law on March 18, 2020.
In the coming days and weeks, federal regulatory agencies, including the Department of Labor (DOL) and Health and Human Services (HHS), will provide guidance on how to execute or implement the new requirements. In the meantime, employers and advisors must rely on a good faith interpretation of the act’s text.
We are sharing everything we know below and will not be able to answer follow up questions about the act until agency guidance has been released, which will take some time. We will update this page when we have more information, and we encourage you to check here.
Employees will be eligible for two weeks of sick leave (full pay for self, 2/3 pay for family care) and use of 12 weeks of Family and Medical Leave Act (FMLA) leave (10 days unpaid and then up to 10 weeks at 2/3 pay) for several circumstances related to COVID-19.
Effective Date of Law
- The FMLA and Paid Sick Leave sections discussed below will go into effect on April 2, 2020 and expire December 31, 2020.
- It appears there is no retroactive application.
Key Elements for Employers
- FMLA expansion
- Paid sick leave
- Payroll tax credit
- Group health plan benefit mandate
Emergency FMLA Expansion
Covered Employers: Employers with fewer than 500 employees are covered.
Covered Employees: Any employee who has been employed for at least 30 calendar days, though employers can choose to exclude employees who are health care providers or emergency responders.
Covered Leave Purpose: To care for a child under 18 of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency, defined as an emergency with respect to the coronavirus declared by a federal, state, or local authority.
- Up to 12 weeks of job-protected leave.
- No pay for the first 10 days of leave (employee can, but is not required, to use any other leave available to them, including the emergency sick leave discussed below). Employers may not require employees to use paid leave during this period.
- After 10 days, employers must pay two thirds of the employee’s regular rate of pay for the number of hours they would normally be scheduled to work, capped at $200/day and $10,000 total.
Reinstatement to Position after Leave:
- The same reinstatement provisions apply under the traditional FMLA. However, restoration to position does not apply to employers with fewer than 25 employees if certain conditions are met: The job no longer exists because of changes affecting employment caused by an economic downturn or other operating conditions that affect employment caused by a public health emergency, subject to the following conditions: the employer makes reasonable efforts to return the employee to an equivalent position, and the employer makes efforts to contact a displaced employee if anything comes up within a year of when they would have returned to work.
Note: Employers covered here but not by the rest of the FMLA (i.e. those with fewer than 50 employees) are not subject to civil action by employees (only action by the Secretary of Labor). The act reserves the right for the Secretary to exclude certain care providers and first responders from the list of “eligible employees” and exempt small businesses with fewer than 50 employees if business viability was jeopardized.
Emergency Paid Sick Leave
Covered Employers: Employers with fewer than 500 employees.
Covered Employees: All employees (no matter how long they have been employed). Employees who are health care providers or emergency responders may be excluded.
Covered Leave Purposes:
- When quarantined or isolated subject to federal, state, or local quarantine/isolation order;
- When advised by a health care provider to self-quarantine (due to concerns related to COVID-19);
- When experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- When caring for an individual doing #1 or #2 (2/3 pay);
- When caring for a child whose school or place of care is closed due to COVID-19 (2/3 pay); or
- When the employee is experiencing any other substantially similar condition (2/3 pay).
Duration of Leave:
- Full time employees are entitled to 80 hours of paid sick leave.
- Part time employees are entitled to sick leave equal to the number of hours worked on average over a typical two-week period.
Rate of Pay:
- Sick leave must be paid at the employee’s regular rate of pay for leave used for the employee’s own illness, quarantine, or care.
- Sick leave must be paid at two-thirds of the employee’s regular rate if taken to care for a family member or to care for a child whose school has closed, or if the employee’s childcare provider is unavailable due to the coronavirus.
- Pay is capped at $511/day and $5,110 total for reasons 1, 2, and 3 described above.
- Pay is capped at $200/day and $2,000 total for reasons 4, 5, and 6 described above.
Interaction with Other Employer-Provided Paid Sick Leave and other Paid Leave:
- This act does not pre-empt existing state and local paid sick leave requirements.
- Employers cannot require employees to use other leave first.
- Sick leave provided for under the act does not carry over from year to year, and the requirements expire December 31, 2020.
- Employers must post a model notice, which will be provided by the federal government.
Note: The act reserves the right for the secretary to exclude certain care providers and first responders from the list of “eligible employees” and exempt small businesses with fewer than 50 employees if business viability was jeopardized.
Payroll Tax Credit
- Applies to both the emergency FMLA expansion and the emergency sick leave.
- Dollar for dollar credit for sick leave and paid FMLA wages against the employer portion of Social Security taxes.
- Refund is possible for amounts that exceed what is available as a credit.
- Limits on what can be claimed mirror the caps for what must be paid.
For more information about the tax credit, the IRS provides a FAQ about how these tax credits will work for your business. Please note that APlus Payroll is unable to legally advise you on how your business will qualify for these credits.
Health Plan Benefit Mandate
- The act requires all insured and self-funded medical plans, including grandfathered plans, to cover diagnostic testing-related services for COVID-19 at 100 percent without any deductibles or co-pays.
- Examples include services provided by doctors, emergency rooms, and urgent care centers leading up to the decision that testing is needed, along with the actual lab-based testing.
- The mandate does not apply to treatment.
If you would like to discuss these changes further, please do give me a call. We care about you and being here for you.
Missouri and the CARES Act
The National Law Review has provided us with the best summary possible for the CARES Act and how it helps everyday Americans and businesses.
The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law, providing an unprecedented level of emergency assistance for individuals, families and businesses affected by the coronavirus epidemic.
The legislation includes a new loan program – the Paycheck Protection Program administered through the SBA – that provides up to $349 billion in loans to eligible entities, with such loans being subject to forgiveness under certain, specific circumstances. The 100 percent federally-guaranteed loans are available under a new subsection of the Small Business Act.
The loans may be used for a variety of purposes, including payroll costs (as described below), rent, utilities, mortgage interest (not principal balance) and interest on debt existing prior to February 15, 2020.
Eligible entities are those with less than 500 employees, including the following:
- 501(c)(3) nonprofit organizations
- Veterans organizations
- Certain tribal business concerns
- Eligible self-employed individuals
- Independent contractors
- Sole proprietorships
- Businesses in the accommodation and food services industry (NAICS 72) that have less than 500 employees per physical location
For the purposes of determining the 500 employee threshold, applicants should include full time, part-time and other basis employees. General SBA affiliations apply except such rules are waived with respect to:
- Businesses in the accommodation and food services industry (NAICS 72),
- Franchises assigned a franchise identifier code
- Business licensed under Section 301 of the Small Business Investment Act
Maximum Loan Amount:
Loans are available for the lesser of the average monthly payroll costs times 2.5 plus any Economic Injury Disaster Loan (EIDL) received after January 31, 2020 that are refinanced under subsection 36, or $10 million. Average monthly payroll costs are calculated based on the one-year period prior to the loan disbursal date except for seasonal employers and employers not in business between February 15, 2019 and July 30, 2019.
In the case of seasonal employers, the employer may choose to calculate the average monthly payroll costs based on the 12-week period starting February 15, 2019 or the period starting March 1, 2019 through June 30, 2019.
In the case of new employers not in business between February 15, 2019 and July 30, 2019, the average monthly payroll costs is calculated based on the period beginning January 1, 2020 through February 29, 2020.
Payroll costs include: employee salary, wages and commissions; payment of cash tips; payment of vacation; parental, family, medical or sick-leave; allowance for dismissal or separation; payment required for group health benefits (including insurance premiums); payment of retirement benefits; or payment of state or local tax assessed on employee compensation; and sole proprietor income or independent contractor compensation not in excess of $100,000.
Payroll costs exclude: compensation of an individual person in excess of $100,000 (as prorated for the period); federal employment taxes imposed or withheld taxes; compensation to an employee whose principal residence is outside of the U.S.; qualified sick leave for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act; and qualified family leave wages for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act.
These loans are available for up to a 10-year term at 4 percent interest, with six months (and up to one year) deferral of principal and interest payments. Notably, certain SBA requirements are waived. Loans are available with:
- No personal guaranties of shareholders, members or partners
- No collateral
- No proving recipient cannot obtain funds elsewhere
- No SBA fees (may still have to pay lender processing fee)
- No prepayment fee
Eligible entities may file applications with an SBA-approved lender, which has recently expanded in anticipation of the amount of loans needed. Lenders have been delegated authority to make loans without SBA review. Eligible applicants will have been in operation on February 15, 2020, and will have paid employees and payroll taxes or independent contractors.
Applicants will need to certify that the loan is necessary, and will be used to retain workers and pay eligible expenses. Applicants will further need to certify that no other application for a loan for the same purpose is pending and that the entity has not received any other loan for the same purposes through December 31, 2020.
The forgiven amount will be equal to the amount actually paid for payroll costs, salaries, benefits, rent, utilities and mortgage interest during the eight weeks following disbursement of the loan. Additional wages paid to tipped employees under Section 3(m)(2)(A) of the Fair Labor Standard Acts may also be forgiven.
The forgiveness amount is subject to reduction if there is a workforce reduction or a reduction in the salary or wages of an employee.
- The amount attributable to a workforce reduction will be equal to the initial forgiven amount multiplied by the quotient of average full time equivalents (FTEs) during the eight-week period divided by the average FTEs for the period from February 15, 2019 through June 30, 2019 or January 1, 2020 through February 29, 2020, as determined by the recipient
- The amount attributable to a salary or wage reduction will be the amount of any salary or wage decrease in excess of 25 percent of the total salary or wages during the most recent full quarter such employee was employed before the eight-week period. Only employees who did not receive, during any single pay period during 2019, wages or salary at an annualized rate of pay in excess of $100,000 are included in this calculation.
Reductions in workforce, salaries and wages that occur from February 15, 2020 to April 26, 2020 will be disregarded for purposes of reducing the forgiveness amount so long as the reductions are eliminated by June 30, 2020. As long as the workforce is brought back to full capacity prior to COVID-19 by that date, the loan is eligible for full forgiveness.
Borrowers must apply for forgiveness with the lender servicing the loan. Lenders have 60 days to review and make a determination. Any portion of the loan that is forgiven will be excluded from gross income.
Missouri Business Resources for COVID-19
Currently, Governor Michael L. Parson has issued “Stay Home Missouri” orders, requiring everyone to stay at home unless you are on essential business. This order is effective until late evening April 24th, 2020 and will be re-evaluated to see if extension is necessary.
All Missouri businesses are encouraged to file taxes online to prevent the spread of coronavirus. The Department of Economic Development has regular updates on the federal programs available for Missouri business owners.
St. Louis has released information on how the city’s business owners can receive economic assistance and relief.
Missouri Businesses: You are Not Alone
APlus Payroll is here to help businesses throughout COVID-19. We have the expertise to create comprehensive payroll codes that are FFCRA compliant, keep you up to date on the latest COVID-19 news, and answer your payroll and HR questions. Give us a call today.