Employers may opt to temporarily stop deducting eligible employees’ payroll tax payments, from September 1 until December 31, 2020. The deferred payroll tax payments represent employees’ shares of Social Security taxes, in the amount of 6.2% of wages. Only Congress can change or forgive tax liability. If Congress does not enact legislation to forgive the deferred tax liability, employers would have to make these payroll tax payments or collect them from employees during the period January 1 to April 30, 2021 (“payback period”).

This payroll deferral presents potential challenges for both employees and employers. Unless the employer pays the employees’ portion of the tax payments that are owed, employees would pay the deferred tax payments along with their customary payroll tax payments in the first few months of 2021. This would result in double payment (12.4% of wages) during the payback period. While many employees may welcome the short-term cash gain in 2020, others fear the double financial hit in 2021. Employers share the concern this may be too financially burdensome for employees. Another potential issue for employers would be handling repayment for employees who are no longer employed, whether through termination, layoff, or resignation. Tax deferrals may also decrease Social Security funding. Given the first September payrolls start tomorrow, it is unlikely that any payroll systems are equipped to handle this change.

We encourage employers to tread carefully on this issue. Before implementing the tax deferral, employers should consult with their HR departments to assess employee interest and with their accountants to assess the tax risks. After that, communication with employees is critical to apprise them of any changes and the impact on their pay both now and in 2021.

Lake Effect HR & Law will continue to monitor developments related to COVID-19 relief. Please keep watching for blogs and emails from us for important legal updates and HR best practices. Contact us at info@le-hrlaw.com or 1-844-333-5253.

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The first provision of the PPPFA applies only to loans made after its enactment. With respect to those loans, amounts that remain owing after application for forgiveness (and thus convert to unpaid loans) will have a minimum maturity date of 5 years, and a maximum maturity date of 10 years from the date of the application for loan forgiveness. (Prior language did not specify the minimum maturity date.) Although this provision technically only applies to loans made after today, it does not prohibit lenders and borrowers from modifying prior loan agreements consistent with the new language.
Additional key elements of the PPPFA are effective as of the date of the original CARES Act:

• The “covered period,” i.e. the time period during which a business must spend PPP funds, is extended beyond the 8 weeks in the original law to the earlier of: (i) 24 weeks from the date on which the loan is originated; or (2) December 31, 2020. (Recipients of prior PPP loans may also elect to retain the original 8-week covered period.)
• Loan forgiveness will not be affected by a reduction in FTEs if a business can document:
  • It is unable to rehire individuals who were employees on 2/15/20; and
  • It is unable to hire similarly qualified employees for unfilled positions before 12/31/20;
    or
  • It is unable to return to the same level of business activity as it had on 2/15/20 due to compliance with requirements or guidance issued by the Secretary of Health and Human Services, the CDC or OSHA during the time period from 3/1/20 to 12/31/20, related to standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.
• A PPP loan recipient must use at least 60% of the covered loan amount for payroll costs, and may use up to 40% for mortgage interest, rent and utility payments. (Prior language required at least 75% of funds to be used for payroll and not more than 25% for mortgage interest, rent and utility payments.)
• Lenders must provide complete payment deferment relief to PPP loan applicants until the date on which the amount of forgiveness determined is remitted to the lender. If a PPP loan recipient fails to apply for forgiveness within 10 months after the last day of the covered period, the recipient must make loan payments starting 10 months after the last day of the covered period.

The legal and HR team at Lake Effect is closely monitoring new legislation and guidance and will continue to provide our clients with updates as they are available. Please visit our COVID-19 resource page for all of our pandemic-related legal updates and HR best practices. The attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

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The Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) have extended the flexibility in complying with requirements related to Form I-9 until July 31, 2023. See below for more information on how to obtain, remotely inspect, and retain copies of the identity and employment eligibility documents to complete Section 2 of Form I-9.

The current I-9 form is set to expire on October 31, 2022, but DHS and ICE have announced that employers are to continue using the current version beyond that expiration date until further notice.

** Update August/September, 2021 ***

We have two important updates for employers.

First, employers can continue remotely inspecting Form I-9, Employment Eligibility Verification through December 31, 2021. The Department of Homeland Security (DHS) has extended this flexibility as an ongoing precaution related to COVID-19. See below for more information on how to obtain, remotely inspect, and retain copies of the identity and employment eligibility documents to complete Section 2 of Form I-9.

Second, as communities focus on how they can support recent refugees from Afghanistan and elsewhere, employers are reminded that refugees may work immediately upon arrival to the United States. While refugees wait for their Employment Authorization Document (EAD), they may present their Form I-94, Arrival-Departure record as proof of their permission to work in the United States, along with a document that establishes identity.

** Update June, 2021 ***

The Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) has once again extended the flexibility in complying with requirements related to Form I-9, Employment Eligibility Verification, due to COVID-19.

The temporary guidance was set to expire May 31, 2021 and has been extended to August 31, 2021 due to ongoing precautions related to COVID-19. Employers and workplaces operating remotely can continue to inspect the Section 2 documents of the Form I-9 virtually through August 31, 2021.

See our below for more information on how to obtain, remotely inspect, and retain copies of the identity and employment eligibility documents to complete Section 2 of Form 1-9.

** Update April, 2021 ***

The Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) extended the flexibility in complying with requirements related to Form I-9, Employment Eligibility Verification, due to COVID-19. The temporary guidance was set to expire March 31 and has been extended to May 31, 2021 due to ongoing precautions related to COVID-19. Employers and workplaces operating remotely can continue to inspect the Section 2 documents of the Form I-9 virtually through May 31, 2021. See our original blog, below, for more information on how to obtain, remotely inspect, and retain copies of the identity and employment eligibility documents to complete Section 2 of Form I-9.

** March 27, 2020 **

Over the past two weeks, the HR professionals and attorneys at Lake Effect HR & Law have been helping our clients weather the storm of COVID-19. Every day, we meet as a group on Microsoft Teams to collaborate on client issues, discuss and assess the latest developments, share legal and HR research we have conducted, and, equally as important, touch base with each other as friends, not coworkers. At the end of each meeting, we share quick tips that we have gained throughout the prior 24 hours. Please find below some of our latest tips for employers:

• Set up New Pay Codes for EFMLEA and EPSLA paid leaves: Establish two new pay codes in your payroll system to track employee time for paid time off under the Emergency Family and Medical Leave Expansion Act (EFMLEA) and the Emergency Paid Leave Act (EPLA). This will facilitate your ability to receive tax credits. See our summary of these acts Families First Coronavirus Response Act – Enacted 3/18/2020 which are part of the Families First Coronavirus Response Act.
• Inspection of Employee’s Form I-9 Work Authorization Documentation: Employers will not be required to review new hires’ identity and employment authorization documents in the employee’s physical presence when the new hire will immediately be working remotely due to COVID-19. Employers must still inspect the Section 2 documents over video conference, fax, or e-mail and obtain and retain copies of the documents within three business days. Employers are instructed to enter “COVID-19” as the reason for the physical inspection delay in the additional information field in Section 2. Employers that avail themselves of this option must provide written documentation of their remote onboarding and telework policy for each employee. This exception to the usual I-9 process will remain in effect until May 19th, or within three business days after the termination of the national emergency, whichever comes first.
• Direct Deposit of Paychecks: Encourage employees to sign up for direct deposit or pay cards in the event you are unable to deliver live paychecks in person or if mail is disrupted.
• Concerns About Employees’ Safety and Wellness while WFH: Encourage managers to conduct wellness checks on employees who are working from home. Certainly, check on employees COVID-19 related wellbeing. Further, not every home is a safe haven and some of your employees may have the additional stressors, including but not limited to finances, domestic violence, mental health, or addictions. Encourage your managers and HR to share resources for employees, including your employee assistance plan (EAP) and community resources like United Way’s 211, which is designed to connect people to needed social services, confidentially and free of charge. Individuals can call 2-1-1 or 877-947-2211 for help through United Way. If you need assistance finding resources, let us know and we can try to help.

The legal and HR team at Lake Effect is closely monitoring the impact of COVID-19 on the workplace. Keep watching for new blogs  or subscribe to our mailing list for important legal updates and HR best practices. If you have any questions regarding our quick tips, the attorneys and HR professionals at Lake Effect HR & Law are ready and willing to help. Contact us at info@le-hrlaw.com or 1-844-333-5253.

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