FAQs About COVID-19 and Your Business Today
Automatic Data Processing, Inc. recently held a webinar called Compliance Trends in 2021 where they found that many viewers had questions surrounding COVID and the way that it will continue to affect their businesses. They took the time to answer several of them thoroughly, and we took the time to pick out some of our favorites and list them below.
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Q: Do I have to pay employees for the time they spend getting vaccinated?
A: If you simply recommend vaccination, you're under no obligation to pay employees for the time they spend getting the shot. However, if you require vaccination, you would generally need to pay employees for the time they spend complying with the requirement.
Q: If I require vaccination, how much do I need to pay employees for this time?
A: Employers are permitted to pay non-exempt employees at a rate that differs from their normal rate of pay for nonproductive time, as long as the wage meets or exceeds the highest applicable minimum wage per hour. For example, if the employee's normal wage is $15.00 per hour and the highest applicable minimum wage where the employee works is $11.50 per hour, you may pay them $11.50 per hour (but not lower) for time spent getting vaccinated. It's a best practice, and a requirement in certain jurisdictions, to notify the employee in writing of the separate rate before they perform nonproductive work.
Q: Since the federal Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020, do we have to pay employees if they miss work due to COVID-19?
A: Effective April 1, 2020, the FFCRA required employers with fewer than 500 employees to provide emergency paid sick leave (up to 80 hours) and public health emergency leave (up to 12 weeks) to employees and established tax credits for employers that do so. The FFCRA's leave requirements expired on December 31, 2020. However, the tax credit portion of the law was extended through March 31, 2021 for employers that voluntarily offer either type of leave.
While the FFCRA's leave requirements ended, some states and local jurisdictions have stepped in with their own leave requirements. For instance, as of January 1, 2021, all Colorado employers must provide up to 80 hours of public health emergency leave to employees. A number of cities in California have also extended their COVID-19 related leave laws beyond December 31, 2020.
Separately, states and local jurisdictions may have paid leave laws that were enacted prior to the pandemic that may cover situations related to COVID-19. Check your state and local laws to ensure compliance with all applicable laws. Even in the absence of a requirement to provide paid time off to employees for reasons related to COVID-19, many employers are offering paid leave to employees to encourage sick workers to stay home and prevent the spread of the illness.
Q: I'm a small employer with fewer than 50 employees. I heard that small employers aren't entitled to the tax credits for providing FFCRA leave? Is that true?
A: No, under the FFCRA, all employers with fewer than 500 employees are generally entitled to tax credits when they provide FFCRA leave to employees. Unless extended, the tax credits are available for FFCRA leave provided through March 31, 2021.
Q: Do I have to pay out unused COVID-19 leave or sick leave when an employee leaves the company?
A: To date, none of the laws that require COVID-19 leave or paid sick leave mandate that employers pay employees for unused leave when their employment ends. However, if you bundle such leave with vacation and other paid time off in a single policy (if allowed), payout of unused time may be required depending on the state. Absent a state requirement, employers are under no obligation to pay departing employees for unused COVID-19 or paid sick leave unless they've promised otherwise.
Q: What happens if an employee exhausts all their COVID-19 leave and sick leave and is still unable to return to work?
A: Determine whether the employee is entitled to additional leave under federal, state, or local law. For instance, if the employee has a serious health condition or is caring for someone with a serious health condition, they may be entitled to unpaid leave under the federal Family and Medical Leave Act and/or similar state laws. Even if the employee exhausts all of their leave, if they have a condition that qualifies as a disability, paid or unpaid leave may be considered a reasonable accommodation, absent undue hardship.
Q: To get a second PPP loan, do we need to have submitted the loan forgiveness application for the first PPP loan?
A: Borrowers may obtain a second PPP loan, even if an application for forgiveness of an original PPP loan hasn't been filed. Initial loans are available to new borrowers with 500 or fewer employees, and subsequent ("Second Draw") PPP loans of up to $2 million are available to organizations with 300 or fewer employees that can document revenue declines of 25 percent or more in any quarter of 2020 compared to the same quarter of 2019. A borrower must have used (or will use) the full amount of the first PPP loan on or before disbursement of the Second Draw loan.
Q: How long will the PPP remain open?
A: PPP loan applications must be filed by March 31, 2021, but businesses should consider applying for PPP loans as soon as possible since appropriated funds are limited.
Q: We received a PPP loan but don't have enough work to maintain a 40-hour workweek for all our employees. Does reducing employees' hours affect PPP loan forgiveness?
A: Depending on the size of the reduction in hours and other factors, it could result in a lower forgiveness amount. For details on PPP loan forgiveness rules, visit our COVID-19 Resource Center.
If you are wondering what steps you can take to help navigate the changes COVID-19 has called on your business to make, give us a call at 307-543-5084 or email us at firstname.lastname@example.org today!
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