Table of Contents:
Please note – the information provided below is not legal or tax advice. Organizations should always consult their legal counsel to understand how this legislation may impact their organization.
Getting employees paid accurately and on time:
In this unprecedented time, we know that you are working to support employees, serve customers and protect your communities. For businesses that are offering remote work options, implementing other social distancing protocols or experiencing interruptions in regular business operations, paying people by check may have become more difficult or even impossible. Likewise, cashing of “live” paper checks creates similar exposure for your employees.
Direct deposit and pay cards can provide more flexibility and reliability for both employers and employees. Once set up, wages can be funded instantly, and employees can access funds immediately from anywhere.
We strongly encourage you to have all your employees sign up to receive their pay by direct deposit or on an electronic wage card!
- Direct deposit sign up can be done on our Employee Portal.
- A Wage Card sign-up form can be downloaded here.
If an employee files a claim, they must put the proper employer on the claim, or it will get rejected.
Different states treat the PEO co-employment relationship differently, with some using the PEO’s name and SUI account, and others requiring the Client (your company) to keep its own SUI account.
PEO’s SUI Account: If a claim is filed in AL, AZ, CA, CO, DC, FL, GA, HI, ID, IL, IN, LA, MD, ME, MT, NC, NH, NM, NY, OK, OR, TX, UT, VA, WI, WV, the claimant should list the Employer as it appears on their W-2. (Either HR Service Group LLC, INFINITIHR LLC, or INFINITI HR West LLC). W-2s can be accessed by all employees on our Employee Portal.
All PEO Clients were sent an email on Monday 3/23/20 informing them of which Employer listed above they are under contract with.
Your Company’s SUI Account: If a claim is filed in AK, AR, CT, DE, IA, KS, KY, MA, MI, MN, MO, MS, ND, NE, NJ, NV, OH, PA, RI, SC, SD, TN, VT, WA, WY, the claimant should list your Company’s legal name as the Employer, and your FEIN, and your State Unemployment Account Number. If you are unsure of your State Unemployment Account Number, please email firstname.lastname@example.org to request that information.
State Unemployment Websites:
District of Columbia
As of 12/28/20 the CAA legislation extends $300 a week of federal pandemic unemployment assistance for another 11 weeks, through at least March 14, 2021. The CAA also establishes procedures to handle situations when people receiving expanded unemployment benefits refuse to return to work or accept an offer of employment without good cause.
Here is some information to help classify employees who may terminated or furloughed during this COVID19 pandemic, and to explain how the payroll system handles benefits deductions for those employees.
INFINITI HR Sponsored Benefit Plans (this is no change to our normal practice)
For any active employee with benefits who is not paid, the client will be billed the full premium (both employee contribution and employer contribution) during that specific pay period. The employee portion of the premium will be accrued in arrears for the employee, and once they have hours or payable wages, deduction adjustments for the premiums due will take place, and the client will be refunded for the premium paid by the employee. Under normal best practices, an employee can take unpaid leave for up to 30 days before benefits are terminated. Once 30 days is reached, benefits coverage will be terminated and a COBRA notification will be mailed to the employee.
Client Sponsored Benefit Plans (this is no change to normal practice)
For clients that use 3rd party brokers or benefit carriers outside of INFINITI HR, it is important to understand how those carriers will operate during this time. Please understand in these situations, INFINITI HR only acts as a clearing house to take employee deductions and return those funds to our clients. It is your responsibility to work with your broker or carrier directly to ensure you communicate your situation and how that impacts active benefits. INFINITI HR is not responsible for maintaining the continuity between our clients and 3rd party vendors. We will continue to take premium from employees being paid but it is your responsibility to continue to pay the carriers.
Mass Layoffs and Impact to Health Plans
Please carefully consider the following information as it pertains to client sponsored medical plans. Most carriers will require that at least 1 active employee be enrolled in the health plan to keep the plan active and in good standing. However some carriers may terminate a policy or re-price a plan if participation is reduced by 50%. Mass layoffs are happening and those employees that had coverage would be extended COBRA (where applicable based on group size) or state continuation in this scenario. We encourage all clients that sponsor their own plans to consult with their local brokers or health plan.
IMPORTANT NOTE: Should a business completely close with no active members on the health plan, then Benefits plans are terminated and COBRA will not be an option for any prior employees (as per Federal and State benefits continuation laws, but subject to change).
Employee Termination or Employee Status Change in Prism
If you need assistance to talk through your specific scenarios, please contact email@example.com.
Telehealth Benefits and Resource Page
Telehealth is a great option to help you and your family stay safe and one that has gained national attention during this crisis. It provides individuals access to board certified physicians, 24/7, to help diagnose and treat minor illnesses and specifically assist with COVID19. Here is a link to free COVID19 symptom checkers and telehealth services for our clients: COVID19 Free Telehealth Assessment.
Employer-related coronavirus/Covid19 legislation:
The information provided below is not exhaustive, and as noted, is subject to interpretation and needed clarification from the DOL and IRS. Your company’s situation will be unique, and you should consult with your tax professional and legal counsel for advice on what is best for your business.
Coronavirus Aid, Relief, and Economic Security Act (CARES Act):
CARES Act – for an overview of the law click here.
Paycheck Protection Program (PPP) – for a detailed overview of the program, along with borrower information and the actual application, click here (links directly to US Treasury’s webpage). For the purposes of SBA eligibility, a client of a PEO is considered by themselves for headcount, and INFINITI HR will provide documentation of employment-related costs as described below.
The amount of loan eligibility for a business will be dependent on a 12 month look back of “payroll costs”, defined as compensation, cash tip equivalents, the cost of health benefits (including premiums), the cost of retirement benefits, the cost of leave (e.g., vacation, family, and sick leave), and the payment of state or local taxes assessed on employee compensation.
As of 12/28/20 the CAA legislation expanded the list of “other” expenses that count towards forgiveness. It includes many operating expenses (including supplies under certain circumstances) and much of the cost associated with retrofitting the workplace for safety concerns arising due to COVID-19. Of note, these expenses will be forgivable for both existing PPP loans and “second draw” loans.
Required loan application reports/documents:
INFINITI HR is making available to all clients:
- Total “payroll costs” over last 12 months = employee wage compensation + state/local taxes + employer paid benefits + employer retirement contributions
- 941 “reports” for last 4 quarters (not the actual reports for PEO clients, since they don’t exist for the Client’s FEIN)
- Number of FTEs paid per month for last 12 months
To request your loan application reports/documents please email HRIS@infinitihr.com.
PPP Loan Forgiveness Support(1) – download PDF
As of 12/28/20 the CAA legislation provided relief for employers with loans of less than $150,000. These employers will not be required to submit documentation along with their application for forgiveness. Employers should nevertheless maintain applicable documentation in the event of a future audit.
For loans in excess of $150,000, the forgiveness test period starts the day the loan money is received in the recipient’s bank account and lasts for either the 8- or 24-week period after disbursement. It is essential for you to keep good records throughout the use of this loan. You must prepare to prove that the money was used solely for payroll expenses and other sanctioned expenses. The forgiveness process will be looking at your bank statements for proof of how the money is spent. Keep in mind, once payroll has posted there is no going back to change it. Please inform your Payroll Specialist:
- Did you apply for a PPP loan? Yes / No
- If yes, was your loan application approved? Yes / No
- If yes, what is the funding date of your loan? __________________
PPP Loan Forgiveness Terms Summary(2)
How much of my loan will be forgiven? You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. At least 60% of it must be used for payroll costs and other “allowable expenses”.
You will also owe money if you do not maintain your staff and payroll.
- Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time-equivalent (FTE) employee headcount.
- Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
- Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
How can I request loan forgiveness? You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. The lender must make a decision on the forgiveness within 60 days.
Documentation you will receive from INFINITI HR if you have notified us that your PPP loan has been funded:
- Payroll Costs per pay period – your Payroll Specialist will provide you with a report that lists allowable “payroll costs” for each employee. Such costs include total wages*, state and local taxes levied on the wages, and the employer’s cost of benefits and/or contribution to a retirement plan. *Wages you have paid employees for sick leave or eFMLA must be excluded.
- FTE headcount – at the end of the 8 week period starting on your loan funding date, you will receive a report showing your number of full-time equivalent employees over that period. You will then compare this to the FTEs you had in either of two baseline periods. The baseline period can be either 2/15/19 to 6/30/19 or 1/1/20 to 2/29/20, whichever has fewer FTEs.
As additional more specific guidance on the loan forgiveness terms become available, INFINITI HR will keep you informed.
(1) While INFINITI HR aims to communicate important information to you accurately, please understand that every business has its own nuances, and there are many factors involved in receiving forgiveness. It is essential for you to learn what is best for your company’s situation. We are here to help execute your business’s plan, but we cannot create your plan. Please consult your lender and business advisor or accountant for any guidance on how to manage your PPP loan and its forgiveness.
(2) From Treasury Department PPP Information sheet 4/21/20.
Deferral of Payment of Employer’s Social Security Taxes – summary of benefits and requirements are:
- Not available if a company has had a PPP Loan forgiven
- No employer size (number of Employees) limit
- Client can defer Employer Social Security Deposits (6.2% of wages), non retroactively, from when they sign an INFINITI HR Deferral Addendum, through 12/31/20. A Deferral Addendum can be requested through firstname.lastname@example.org.
- The credit your company is due back will show up as a separate line item on our INFINITI HR invoice.
- Pay back requirements:
a) 50% by 12/31/21
b) 50% by 12/31/22
Employee Retention Tax Credit
With the recent passing of the Consolidated Appropriations Act (CAA) of 2021, some Infiniti HR Clients may be eligible for tax credits under the Employee Retention Credit (ERC) section of the legislation.
Infiniti is putting together a process to accommodate the 2020 Form 941 amendments that will be required for 2020 “retro” Employee Retention Credits (ERC). The IRS has recommended that we, as a PEO, only file an amended return once a month to avoid creating confusion (for the IRS) and delaying the processing of the refunds. We will be sending out a communication shortly to notify you of the timeline and the process for the amendments.
Since there are numerous business qualification factors that determine your company’s eligibility, the IRS (and Infiniti HR) recommends that you consult with your CPA or business tax advisor to evaluate your unique business circumstances. Several of the general qualification factors include:
- For new 2021 ERC credits (Jan 1, 2021 through June 30, 2021)
- Number of FTEs less than 500
- Comparisons of your 2021 revenue to your 2019 revenue
- Separating out wages paid to your employees during 2021 using PPP loan funds, as they are not eligible for ERC
- For retroactive 2020 ERC credits
- Number of FTEs less than 100
- Comparisons of your 2020 revenue to your 2019 revenue, and/or time periods your business was subject to a mandatory full or partial shutdown
- Separating out wages paid to your employees during 2020 using PPP loan funds, as they are not eligible for ERC
Additional information about the ERC is available from the IRS at:
If you and your CPA determine that your business is eligible for the ERC, please send your data to: Tax@Infinitihr.com.
Use the following Pay Codes to designate applicable wages per employee
- ERTCL100 if your company has less than or equal to 100 employees
- ERTCG100 if your company has greater 100 employees
Paid Leave – Families First Coronavirus Response Act (FFCRA)/American Rescue Plan Act (ARPA) (4/20/2021)
See Dept. of Labor website and the IRS website for more information.
There are two federal provisions providing paid leave to employees forced to miss work because of the COVID-19 outbreak:
- emergency paid sick leave (EPSL)
- emergency expansion of the Family Medical Leave Act (EFMLA)
As of 1/1/2021, employers of 500 or fewer employees are no longer required to provide this leave. However, if you choose to continue to provide EPSL and EFMLA under the terms of the FFCRA and ARPA, you may continue to take the available tax credits through September 30, 2021.
In addition, each employee’s available EPSL bank has been reset to 10 days/80 hours as of 4/1/2021.
Reasons for Leave:
Effective 4/1/2021, EPSL and EFMLA are now allowed to be taken when:
- An employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- An employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; or
- An employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
- An employee is caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- An employee is caring for his or her child whose school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons;
- An employee obtains immunization (vaccination) related to COVID-19;
- An employee is recovering from any injury, disability, illness or condition related to such vaccination; or
- An employee is seeking or awaiting results of a diagnostic test or medical diagnosis for COVID-19 (or their employer has requested such a test or diagnosis).
We recommend you discuss your options with your HR Consultant or an employment law attorney, and update your policies accordingly.
How will it work?
If you are a ‘PEO’ Client of INFINITI HR (meaning in a co-employment relationship):
We have setup Employee Pay Codes in PRISM for use if an employee needs to be paid under the provisions bulleted below. Contact your Payroll Specialist to ensure these codes are available for use in your company.
EPSL Reasons 1, 2, 3, 6, 7, & 8 – use pay code EPSLS21 – paid at 100% of regular pay for up to 10 days
EPSL Reasons 4 & 5 – use pay code EPSLCC21 – paid at 67% of regular pay for up to 10 days
- The credit your company is due back – from taxes that would have otherwise been due – will show up as a separate line item on our INFINITI HR invoice.
- Your company will be required to complete and file IRS Form 7200 and provide INFINITI HR with a copy.
Emergency FMLA – use pay code EFMLA – paid at 67% of regular pay for up to 12 weeks total.
The pay codes are limited to maximum of 80 hours/$5110 for EPSLS21; 80 hours/$2,000 for EPLSCC21 and $12,000 for EFMLA. Actual use per employee must be tracked by the worksite employer.
If you are an ‘ASO’ Client of INFINITI HR (NOT in a co-employment relationship / your company is the employer):
The same processing guidelines apply as above with the PEO relationship, with the exception that, because ASO Clients are the employer, INFINITI HR will file the actual Form 941 for ASO Clients, along with appropriate adjustments.
The Employee Pay Codes listed above will be applicable.
NOW EFFECTIVE: Additional California Supplemental Paid Sick Leave (CA SPSL)
California recently passed SB 95, which requires employers of 26+ employees to provide Covid-related Supplemental Paid Sick Leave (“CA SPSL”) in 2021 (a new bank of leave for this year) for the Covid-19 related reasons listed below to any of their employees who work in CA. Employers must provide this leave beginning on March 29, 2021, retroactive to 1/1/2021. Requirements end on September 30, 2021.
If this applies to your company, click here for a detailed overview, including which pay codes to use for employees who request the leave.