As another year comes to a close, we recommend finding time to reflect on 2021…
Big news out of DC! Congress is about to pass its latest 600-page stimulus package that will dole out almost $2 trillion to various sectors, all under the pretense of COVID-19 relief. Much of what is coming is going to be helpful to the small business community and Americans that have been struggling throughout the pandemic. Below are a few highlights of the bill, and here is a presentation on the first 100 days of the Biden Administration and the potential effects on employment law. As soon as we get the final version, we will provide updates.
- The Families First Coronavirus Response Act credits are extended from March 31stto September 30th. These credits are expanded to include time off for COVID vaccinations and time off due to side effects of the vaccine. Employer-paid time off for COVID-related absence continues to be mandatory for Q2 and Q3 of 2021. The COVID-related paid time off hours reset for employees beginning April 1, 2021.
- The bill expands Targeted Economic Injury Disaster Loan (EIDL) Advances for businesses with an economic loss of greater than 50% and 10 or fewer employees. The bill provides for a supplemental advance of $5,000. The Targeted EIDL Advance will not be included in the taxable income of the recipient and related expenses paid with funds will be deductible.
- The Paycheck Protection Program (PPP) is expanded to include additional non-profit entities with additional funds appropriated to the program for these purposes.
- The bill creates a Restaurant Revitalization Fund which will provide grants to restaurants. Similar to the PPP, there will be required certifications, including a necessity certification, that must be made in order to obtain the grant. The first 21 days of the fund are set aside for small business concerns controlled by women, veterans, or the socially and economically disadvantaged. The grants are limited to $10M; $5M per physical location and are calculated based on the pandemic-related revenue loss of the eligible entity. The grant can be used for expenses similar to the PPP program, with notable additions such as maintenance expenses, construction to accommodate outdoor seating, walls, floors, fixtures, supplies, food and beverage costs, supplier costs, operational expenses, etc.
- The bill includes an additional $1,400 recovery rebate per eligible person. These amounts will be phased out based on adjusted gross income.
- The bill increases the child tax credit to $3,000 ($3,600 for qualifying children under age 6) for the 2021 tax year. However, the bill reduces the phase-out based on adjusted gross income. Under current law, the credit started to phase out for married filing joint taxpayers at $400k of adjusted gross income. This bill reduces the start of the phase-out for married filing joint taxpayers to $150k.
- There is an additional item that will allow employees that have left employment for any reason since the pandemic started to be offered Cobra. This will be subsidized so that the employee portion will be 15% of the premium and the Employer will pay the 85% portion and will be credited back through tax credits. This is wrought with efficiency issues and while congress has good intentions, this may create more problems than it solves.
Since the ERTC changes that were passed on December 27th, the IRS has not issued any FAQs about the way things are calculated. We are still working on our taskforce through our national association (NAPEO) to get the process changed from that of a manual one to an automated one. Our next task force meeting Monday, so I hope to have more info to share next week.
Vaccination is an important tool in controlling the pandemic, say public health leaders, who are asking employers to encourage and make it easy for workers to get vaccinated. Speaking Feb. 25 during a webcast for members of the Society for Human Resource Management (SHRM), U.S. Centers for Disease Control and Prevention (CDC) officials explained what employers can do to promote efforts to vaccinate employees.
40 % of U.S. workers say they probably or definitely won’t get the vaccine, even though it reduces the spread and severity of COVID-19. 70% of that group say they won’t get the vaccine even if their employer requires it and their refusal would mean losing their jobs. The most commonly reported reasons why U.S. workers probably or de¼nitely won’t get vaccinated, according to the survey, are that they are concerned about possible side effects (69%) they plan to wait and see if it’s safe, and then possibly get it later (58%), and they don’t trust COVID-19 vaccines (41%). SHRM released this article on what role the managers play when requiring all employees to be vaccinated. If you have any questions on COVID-19 policies for your business, please don’t hesitate to reach out.
Have a great weekend!