As COVID-19 cases continue to mount nationwide, so have lawsuits relating to fallout from the virus. On April 6, 2020, in one of the first COVID-19-related lawsuits of its kind, the estate of an Illinois Walmart Supercenter employee sued Walmart and the premises owner for wrongful death in Toney Evans v. Walmart, Inc., et al. My colleague Brodie Butland details the lawsuit in this Employer Law Report blog.
The Employee Retention Tax Credit
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law. The CARES Act introduced the Employee Retention Tax Credit (ERTC), a new tax credit to incentivize employers, who are economically distressed due to COVID-19, to retain employees.
How to claim COVID-19 tax credits under the FFCRA and the CARES Act
There are three COVID-19 related tax credits that were introduced under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which are subject to various limitations:
- Emergency Paid Sick Leave Act tax credits – a dollar-for-dollar tax credit for qualifying wage payments of emergency paid sick leave;
- Emergency Family and Medical Leave Expansion Act tax credits – a dollar-for-dollar tax credit for qualifying wage payments of family leave; and
- The Employee Retention Tax Credit – a tax credit equal to 50% of qualifying wages payments made to employees.
UPDATE: Tax credits available under the Families First Coronavirus Response Act
On March 18, 2020, the Families First Coronavirus Response Act (FFCRA) was signed into law requiring employers with fewer than 500 employees to make payments for COVID-19 related FLMA leave and paid sick leave required by the Act. To lessen this financial burden to employers, the act provides for refundable tax credits to offset payroll taxes. The FFCRA tax credits will be provided for eligible wages paid from April 1, 2020, to December 31, 2020.
How ESOP sponsors can survive the disruption from COVID-19
The spread of COVID-19 and the resulting disruption to the economy has led many employers to think creatively about how to manage cash, provide for the sustainability of their businesses and preserve the culture they have created with their employees and customers. These issues are especially critical for employee stock ownership plan (ESOP) companies, many of whom are in the process of their annual appraisal. These appraisals are important because they directly affect the size of the repurchase obligation – the cash companies must pay to participants for their distributions and diversifications during the year. Fortunately, there are some tools that ESOP companies may be able to utilize. This blog will describe ERISA fiduciary and other strategies ESOP companies can consider with respect to valuations and the related cash management needs those valuations will create.
Tax credits available under the Families First Coronavirus Response Act
This post was updated on April 7, 2020. Please read the update here.
On March 18, 2020, the Families First Coronavirus Response Act (FFCRA) was signed into law requiring employers with fewer than 500 employees to make payments for COVID-19 related FMLA leave and paid sick leave required by the act. To lessen this financial burden to employers, the act provides for refundable tax credits to offset payroll taxes. The FFCRA tax credits will be provided for eligible wages paid from April 2, 2020 to December 31, 2020.
Navigating employment issues in the wake of COVID-19 webinar
We have all felt the tremendous impact to our workplaces and daily lives following the COVID-19 outbreak We’ve also watched the daily press conferences announcing new legislation and executive orders–but what happens next?
My colleagues Leigh Ann Benedic and Mike Underwood hosted a discussion on effects of the Family First Coronavirus Response Act (FFCRA) on employers, state law developments and provide answered to frequently asked questions that will help you manage your workforce effectively through these unique times. Click here to watch the webinar recording.
This program was recorded on Monday, March 23, 2020 and may not reflect updates in regulations after that date.
IRC Section 409A v. COVID-19: The nonqualified and executive compensation clash, and how employers can navigate it
Unintended consequences are a fact of life. As one of many examples, after the Titanic sank, the United States enacted a law that required any American ship carrying over 100 tons of weight to have enough lifeboats for every passenger. It was a noble thought – no more rationing of lifeboats in the event of a future ship wreck. Unfortunately, the SS Eastland was a poorly designed ship. The additional lifeboats required by the new law added enough weight to cause the ship to roll over not too far away from shore. Some passengers were able to step on to dry land, but others were trapped as the ship took on water, leading to an unintended tragedy.
We may be seeing a similar (but far less tragic) example of unintended consequences play out in the executive compensation arena. In 2004, Section 409A was added to the Internal Revenue Code to restrict the ability of nonqualified plan participants from canceling their deferral elections and accelerating payment. Section 409A and other corporate reforms also restricted the ability to accelerate stock options and revise incentive plan performance goals and payouts.
Employer disclosures of COVID-19 diagnoses
As more test kits become available for COVID-19 and an increasing number of people are tested, there will be more positive diagnoses. Because of COVID-19’s rapid community spread, many employers will soon see positive diagnoses of their own employees. If an employee tests positive for COVID-19, an employer may want to limit workplace exposure by notifying its other employees of the positive diagnoses.
Navigating employment issues, help for small businesses and a delay in the tax deadline
There have been a number of helpful blogs recently from our colleagues at Porter Wright aimed at helping businesses navigate the COVID-19 outbreak.
Navigating Employment Issues in the Wake of COVID-19 webinar
We have all felt the tremendous impacts to our workplaces and daily lives following the COVID-19 outbreak We’ve also watched the daily press conferences announcing new legislation and executive orders, but what happens next?
As your workplace adapts to growing restrictions, Porter Wright invites you to a live webinar on Monday, March 23, 3:00 – 4:00 pm with Porter Wright’s Leigh Ann Benedic and Mike Underwood. We will discuss the effects of the Family First Coronavirus Response Act on employers, state law developments and provide answers to frequently asked questions that will help you manage your workforce effectively through these unique times.
We will also be taking some of your questions as time permits. This webinar has limited capacity, so please register today!
Financial assistance for small businesses amidst the COVID-19 outbreak
Across the country, state governments are ordering the indefinite closure of bars, restaurants, gyms, and other indoor spaces that may contribute to the community spread of COVID-19. At the same time, pending federal legislation may add additional financial burdens to small businesses that remain open and continue to operate. To help navigate potential sources of financial relief for small businesses, helpful information was curated by Porter Wright’s Victoria Hanohano-hong.
Read the full post on the Banking & Finance Law Report Blog.
UPDATE: Treasury delays April 15 tax filing and payment deadline
In response to the COVID-19 pandemic and the increased strain placed on individuals and business taxpayers during this time, the IRS has pushed back certain payment deadlines to ease the burden on taxpayers. Porter Wright’s Cassandra Rice and Gary Schulte explain the plan that impacts any person with a federal income tax payment due April 15, 2020.
Read the full post on the Banking & Finance Law Report Blog.
