IRS identifies dates for starting and ending tax credits:  The IRS has announced that the employment tax credits for paid qualified sick leave and family leave wages required by the Families First Coronavirus Response Act (P.L. 116-127) (Act) will apply to wages and compensation paid for periods beginning on April 1, 2020, and ending on December 31, 2020. Additionally, days beginning on April 1, 2020, and ending on December 31, 2020, will be taken into account for the credits for paid qualified sick leave and family leave equivalents for certain self-employed individuals as provided by the Act. The refundable tax credits for most employers with fewer than 500 employees apply to qualified sick leave and family leave wages paid for the period from April 1, 2020, to December 31, 2020. Additionally, the self-employment tax credit will be determined based on days occurring during the period beginning on April 1, 2020, and ending on December 31, 2020.  Source:  CCH 4/2/20

How to get refundable tax credits:  The Treasury Department and the IRS have launched the Employee Retention Credit for businesses that have been financially affected by COVID-19 (IR-2020-62). The credit is specifically designed to encourage businesses to keep employees on their payroll.  The amount of the credit is 50% of qualifying wages paid up to $10,000 in total. Wages paid after March 12, 2020, and before January 1, 2021, are eligible for the credit. Wages taken into account are not limited to cash payments, but also include a portion of the cost of employer provided health care. Qualifying employers must fall into one of two categories for eligibility:

• The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.

• The employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the employer’s gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.

Qualifying employers can be immediately reimbursed for the credit by reducing their required deposits of payroll taxes that have been withheld from employees’ wages by the amount of the credit. Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their quarterly employment tax returns or Form 941, Employer's Quarterly Federal Tax Return, beginning with the second quarter. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer may receive an advance payment from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.   Source:  CCH 4/3/20

A PPP loan must be spent 75% on payroll costs: On April 2, 2020, the Small Business Administration (SBA) issued an interim final rule clarifying certain parts of the new Paycheck Protection Program (PPP). The new rule came just one day before PPP opened, and it includes several important clarifications. Most important, it states that borrowers must spend at least 75% of their loans on payroll costs to qualify for loan forgiveness.  In addition, the rule offers more detail on when loan forgiveness can be reduced. The CARES Act reduces forgiveness of a loan proportionally if an employer cuts employee headcount. To determine its baseline headcounts, an employer can use either (a) the average number of full-time equivalents (FTEs) it employed from January 1, 2020 to February 29, 2020, or (b) the average number of FTEs it employed from February 15, 2019 to June 30, 2019. Whichever average the employer chooses, it must maintain that number for at least the eight weeks after receiving a loan. If headcount falls below that number, the Act reduces loan forgiveness by a proportional amount.  The Act also reduces loan forgiveness if an employer cuts employee compensation but only if the compensation cuts are more than 25%.   Source: Littler  4/3/20

Violation of stay-at-home order in Michigan could cost $1,000: Executive Order 2020-21 is also known as the “Stay Home Stay Safe” order. That order, which went into effect March 24, spells out which work and services are considered “essential,” and will continue, with instruction for others to stay home. The earlier two announcements specifically addressed schools and certain businesses.  “A person can have coronavirus without knowing it,” Michigan Department of Health and Human Services director Robert Gordon said in the announcement. “They can spread the disease to others who can spread it to others. The only way to stop the spread is social distancing. A civil penalty and potential licensing actions send a strong message to Michiganders that social distancing is essential to saving lives.” Gordon gave the following instruction: “Chiefs of police, sheriffs, and other local law enforcement leaders are specifically authorized to investigate potential violations of EO 2020-11, EO 2020-20, and EO 2020-21. They may coordinate as necessary with the local health department and enforce this Order within their jurisdiction. Emergency Rules posted on michigan.gov Thursday state that violations of EO 2020-11, EO 2020-20, and EO 2020-21 are subject to a fine of up to $1,000 per day or per violation.  Source:  Monroe News 4/3/20

In Pennsylvania, woman fined $200 for violating stay-at-home order: A woman in Pennsylvania became the first person to be cited last week for violating the state's stay-at-home order meant to slow the spread of coronavirus, spurring questions from at least one state lawmaker if the ticket went too far. The 19-year-old woman, identified as Anita Shaffer, was pulled over by Pennsylvania State Police around 8 p.m. on March 29 in the town of Red Lion, located in York County, about 35 miles south of the state capital of Harrisburg.  Shaffer said she was told she was initially pulled over for a taillight that was out, but then asked if she was aware of the "stay-at-home act.”   In the citation Shaffer stated that she was "going for a drive" that Sunday night, two days after Gov. Tom Wolf issued a stay-at-home order that included York County.   “I am aware of it, but I didn’t know it pertained to just driving," she told Penn Live about what she said to the officer during the encounter.  The citation was  for at least $202.25, it states she "failed to abide by the order of the Governor and Secretary of Health issued to control the spread of a communicable disease, requiring the closure of all non-life-sustaining businesses as of 20:00 hours on March 29, 2020. To wit, defendant states that she was ‘going for a drive’ after this violation was in effect.”  The question was whether a Sunday drive violates the order.  It also turned out the taillight was working fine.  Source:  Fox News 4/5/20

How employers were handling COVID-19 issues before the FFRCA:  Employers weren't sure how to respond to the coronavirus pandemic, including in terms of how it relates to employee complaints, according to a survey results from law firm Blank Rome. At the time of the survey (conducted from March 19 to March 23 before the FFRCA), "only 12% of companies had received one or more COVID-19-related" employee complaints, and "more than 93% of the responses to the types of complaints received didn't fall within the traditional framework of employment complaints, including disability discrimination, retaliation, and OSHA," noted the survey results.  More than half (54%) of the workplaces reporting a COVID-19 positive employee were providing full pay to the employee during their time off, and 45% were allowing the employee to use PTO and then move to unpaid leave. Additionally, for employees who were symptomatic (but not yet diagnosed) and unable to work remotely, more than 40% of companies were paying wages and 48% of companies were allowing the use of PTO.  Of the employers that had temporarily shut down business operations, nearly half (49%) were continuing to pay employees. 21% were requiring the use of PTO, and 18% were allowing unpaid leave.  Source:  HR Dive 4/3/20

Insurance premiums may rise steeply next year:  Private health insurers are expected to raise premiums by as much as 40% to recoup the costs of Coronavirus testing and treatment, according to a new analysis from Covered California, the state's health care marketplace. Though it remains unclear how much the Coronavirus crisis will ultimately cost in health care expenditures, insurers will be submitting their 2021 rates to state regulators next month. Analyzing a wide range of models, Covered California expects that this year's care associated with the virus will cost between $34 billion and $251 billion, or between 2% of premiums and 21% of premiums. The analysis estimates that insurers would price the costs at double the rate into their 2021 premiums, projecting increases that range from as little as 4% to more than 40% for the 170 million workers and individuals who have private plans.  If California is any indication of the future, expect these rises for 2021 everywhere.  Source: Salon.com 4/5/20