COVID-19 Frequently Asked Questions (FAQ)

With the passing of new government legislation, such as the Families First Coronavirus Relief Act (FFCRA) and CARES, we are sharing some FAQ that may be top of mind for your organization at this time.

 

*Please note that the resources provided by Vibe HCM do not, and are not intended to constitute or take the place of legal advice; instead, all information, content, links and materials made available in communications of this nature are for general informational purposes only. We recommend you seek counsel in interpreting the details around the Acts and how they will impact your organization.

**Please also note that the resources and information specific to FFCRA are intended for organizations with <500 employees. Please verify their applicability to your organization.

 

Online Resources

Q: Has the IRS issued any new Virus-Related Guidance?

A: A new set of Employee Retention Credit FAQs were released May 5th and can be found here COVID-19-Related Employee Retention Credits: Special Issues for Employers.

Additional FAQs for COVID-19 Related Tax Credits for Small and Midsize Businesses can be found here COVID-19 Related Tax Credits for Required Paid Leave .

PPP loan FAQs has recently been updated and can be found here COVID-19 Related Employee Retention Credits: Interaction with Other Credit and Relief Provisions .

Updated FAQs regarding health-care expenses as qualified wages can be found here COVID-19 Related Employee Retention Credits: Amount of Qualified Health Plan Expenses .

Labor Department Updates Guidance on Paid Sick, Family Leave and more details can be found here Families First Coronavirus Response Act: Questions and Answers

 

Q: Are there any online resources which collect information on the pandemic you would recommend?

Here are a few links from recognized leaders in HR that may be helpful as you are trying to review and understand all of the recent legislation and questions around them.

–  Think HR, an organization focused on providing proactive HR consulting and guidance: https://www.thinkhr.com/covid19/

–  Fisher Phillips, a law firm focused on labor and employment matters: https://www.fisherphillips.com/legal-alerts

As mentioned above, these resources are intended to be helpful from an informational perspective. We suggest you consult your legal counsel as required.

 

Legislation / Acts

Q: Is the CARES Act legislation available online?
A: Yes, you can view it here.

 

Q: Where can I find the Paycheck Protection Program Flexibility Act online?
A: See the actual bill here: https://www.congress.gov/bill/116th-congress/house-bill/7010/text and see here for a summary of the Act: https://home.treasury.gov/news/press-releases/sm1026

 

Q: Is the Families First Coronavirus Relief Act legislation available online?

A: Yes, you can view it here. The U.S. Department of Labor has provided some further clarification in question and answer format here.

 

CARES Act

Q: Under the CARES Act, Employer FICA tax payments can be delayed from the date of enactment, 3/27/2020, until 12/31/2020. The CARES Act specifies 50% of the 2020 Employer FICA amount my organization would owe is due in 2021 and the remainder is due in 2022. How do I get that set up for my organization if I use Vibe Pay?

A: Vibe HCM is currently performing internal testing regarding a method to avoid the collection of employer Social Security taxes that may be deferred until 2021 and 2022 in accordance with the recently signed CARES Act. As tax withholdings are an extremely important component of payroll, we are also working with our vendors and partners to understand the full implications and operation of this process throughout the remainder of 2020. We ask for your patience and cooperation by not posting your payroll early the week of 3/30/2020. The extra time will allow Vibe HCM to put our plans and processes in place to allow you to take maximum advantage of this program. For now, we ask two things:

1.   If you have consulted your legal counsel and believe your organization to be eligible for this Employer FICA Tax Deferral, please create a case indicating your desire to implement this change with GeneralSupport@vibehcm.com

2.   Until further notice, please do not use the Cash Analysis report to determine FICA ER withholdings. This report will require an update to accurately report cashflows resulting from deferred Employer FICA. While the report needs attention, our processes will ensure your Employer FICA is withheld from payrolls accurately and our Tax Filing Processes are being updated as well to ensure those amounts are handled correctly as well.

 

Q: My organization has determined we are eligible for a loan from the Small Business Administration (SBA) as defined by the CARES Act. Where do I go to apply and how can Vibe HCM help me with the application process?

A: Please visit this page for more information on options around these SBA loans and how to apply: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources. Please contact Vibe HCM via GeneralSupport@vibehcm.com if you need any assistance in locating reports required for the application process.

 

Q: My company has already paid or wants to pay Employee Retention Credit (ERC) eligible wages as defined by the CARES Act. How do I do that in Vibe Pay?

A:  The CARES Act allows for up to 50% of $10,000, or $5000, in combined annual wages and eligible health plan expenses to be claimed in tax credits. The date range for these credits is 3/13/2020 to 12/31/2020. Vibe HCM is currently developing new Earnings Codes for tracking these amounts. Two codes will be added to your Vibe Pay database next week.

  • EERETCREDT will be used to track the credit-eligible portion of wages, e.g. 50% of all eligible wages up to $10,000 annually per employee. For example, if $3000 in credit-eligible wages are to be paid, you would place $1500 of those wages into EERETCREDT and the remaining 50% of those wages would be coded to Regular or other Earnings, as appropriate.
  • EERETHLTH will be a new, non-cash Earnings Code used to track tax credit-eligible health plan expenses. For example, if you have determined that $500 in eligible health plan expenses coincide with the $3000 in wages described above, you would code $250 for EERETHLTH non-cash earnings.

Vibe HCM encourages you to use the above codes going forward to track available employee retention credits.  Vibe HCM will assist you in processing an adjustment, prior to the end of the quarter, for retention credit wages paid prior to the deployment of these codes. Additional communication will be sent when Vibe HCM is ready to process the adjustment for retention credit wages paid prior to the deployment of these new codes.

 

Paycheck Protection Program (PPP) – part of CARES Act but modified on June 5th, 2020 by the PPP Flexibility Act

Q: What reports has Vibe HCM made available to help with PPP application and/or loan forgiveness?
A: Vibe HCM has created a Paycheck Protection Program Information report, to be used during the application process. This report may be found in Report Navigator > Favorites within Vibe Pay.

Additionally, Vibe HCM is developing a report for Paycheck Protection Program Loan Forgiveness. Please watch your inbox for more information regarding this new report, as soon as it is available to use.

 

Q: What changes were made to the Paycheck Protection Program (PPP) via the Paycheck Protection Program Flexibility Act?
A: The PPP Flexibility Act was signed into law by President Trump on June 5th, 2020. A summary of the Act may be found here: https://home.treasury.gov/news/press-releases/sm1026

 

Families First Coronavirus Response Act (FFCRA)

Q: What new codes are in place in Vibe Pay to reflect the recently enacted legislation? How will they work?

A: The new codes in Vibe Pay are Earnings Codes.

FFPSLEMP (Fed Paid Sick Leave Self 100%) pays at 100% of the employee’s normal pay.

FFPSLFAM (Fed Paid Sick Leave Family 67%) pays 67% of the employee’s normal rate and is considered Paid Sick Leave for the purpose of caring for a family member affected by the pandemic.

FF_FMLA (Fed Paid FMLA Leave 67%) pays at 67% and is to be used for extended leaves due to any aspect of the pandemic outlined in the guidelines of the Act (see next question for a summary of these scenario guidelines in the Act)

These will allow you to categorize hours to specific buckets of pay related to COVID-19 absences and will also allow you to break these hours out separately for reporting purposes. In TLM, these codes will be similar, but FFPSLEMP will also be available to request as Time Off, by default. FFPSLFAM and FF_FMLA will be available for use through time cards by default but we do not want to offer this code to employees for time off requests without being instructed to do so by you. These TLM codes will not be setup to count toward Overtime, by default. If you do not use TLM to manage Time Off, or if you would like to change how these codes behave, please send a request to GeneralSupport@vibehcm.com.

 

Q: What if I want to use my own custom codes, instead of the codes Vibe HCM is providing and recommending?

A: If you choose to use earning codes other than the standard earning codes, you will not be able to use the standard reporting and will incur custom report fees.  In addition, Vibe HCM will not be able to process the tax credits if you don’t use these codes.  If you have already set up unique earning codes to accommodate Families First Coronavirus Response Act we can make the change to use the standard for you now, if you choose.

 

Q: Are you setting up new codes for the required paid FMLA leave so it pays correctly and to track on reports to see weeks used as well as to determine amounts for this tax credit?

A: The new FFPSLFAM earnings code, as well as code FF_FMLA are configured to pay the Paid Federal Family Leave hours described by the FFCRA. Reports will be available for tracking this separately from FFPSLEMP which is to be used for Paid Federal Sick Leave, also created in the FFCRA.

 

Q: Am I required to use these codes for employees absent due to COVID-19?

A: Vibe HCM has not seen any requirement to use these new codes. However, for qualifying employers (under 500, non-governmental employers), hours missed due to COVID-19, as categorized by the document linked in the first question, are eligible for reimbursement by the Federal Government per the guidelines in the document linked above.

 

Q: Will I be reimbursed for time paid using these codes?

A: For qualifying employers (under 500, non-governmental employers), hours missed due to COVID-19, as categorized by the document linked in the first question, are eligible for reimbursement by the Federal Government per the guidelines in the document linked above.

 

Q: How is my company’s employee count determined?

A: Please see Department of Labor guidance on this page for an official response (question 2): https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

 

Tax Credits

Q: Are there different tax credit caps for Federal Paid Sick Leave and Paid Federal Family Leave Pay?

A: Yes. According to the document linked above, the credit only applies to companies with 500 or fewer employees. Credit caps apply as well, to each type:

  • Federal Paid Sick Leave credits are capped at 10 days
  • The credit amount is not to exceed the amount of required sick leave wages paid to an employee for any day (or portion thereof) of:
    • One hundred percent of wages up to $511 per day for employees (1) subject to quarantine order, (2) advised by a health care provider to self-quarantine, or (3) experiencing symptoms of COVID-19 and seeking a medical diagnosis.
    • Two-thirds of wages up to $200 per day for employees (1) caring for an individual subject to quarantine order or caring for an individual advised by a health care provider to self-quarantine; or
  • The formula for computing the credit tracks, dollar-for-dollar, the family leave provided for under the Act:
    • A credit will be triggered after a covered employee has taken credit-qualifying paid sick leave up to the cap of 10 days (which the employer is entitled to sick leave credit for);
    • Credit shall not exceed the amount of required family leave wages paid to an employee for any day (or portion thereof) up to $200, and in the aggregate with respect to all calendar quarters shall not exceed $10,000.

 

Q: Is there a time frame during which Families First Paid Sick and/or Family Leave hours need to have been taken in to be eligible for a tax credit for qualified employers?

A: The eligibility period for Families First Paid Sick and/or Family leave earnings is between 4/2/2020 and their use will sunset on 12/31/2020. Any unused hours of Federal Paid Sick Leave or Federal Paid Family Leave are not required to be carried over to 2021.

 

Q: From a technical perspective, how will Vibe HCM be able to support claiming the tax credits associated with Federal Paid Sick and Federal Paid Family Leave?

A: Vibe HCM is awaiting proper guidance from the Federal government which indicates how the tax credits will be managed. Once we have obtained the information from a taxation standpoint, Vibe HCM will update clients accordingly. In the meantime, Vibe HCM is investigating building reports using the new standard codes that have been provided.

 

Garnishments

Q: Are garnishments suspended? Which states have issues temporary holds?  Should we stop garnishments for our employees?

A: A growing number of states have put general garnishments on hold. Garnishments are still required for child and spousal support payments.  Following is a list of states with temporary garnishment rules.

California exempted any federal, state, and local financial assistance provided in response to Covid-19 from levies and garnishments under Executive Order N-27-50, enacted April 23.

In the District of Columbia, creditors and debt collectors may not initiate, threaten, or act on a garnishment until at least 60 days after the Covid-19 emergency ends under D.C. Act 23-286, enacted April 13.

Illinois temporarily suspended wage garnishment orders under state Executive Order 2020-25. The order, which took effect April 14, suspended wage-deduction summonses, which are sent to employers and require the garnishment of employee wages to satisfy a creditor’s claim.

Massachusetts emergency regulation (940 C.M.R. 35.00), issued March 27 by the state attorney general, prohibits unfair, deceptive, or threatening practices by creditors or debt collectors related to garnishments. The rule remain in effect 90 days or until the state of emergency expires.

Minnesota temporarily suspended wage garnishments for consumer debt, such as loans and credit cards, under Executive Order 20-50, enacted May 4. Federal, state, local, and tribal relief payments for the virus are exempt from creditor claims, including garnishments.

Nevada court-ordered wage garnishments were temporarily suspended under Directive 017 , enacted May 1. The directive is to remain in effect until the end of the virus emergency that was declared March 12 by the state. New garnishment orders are not to be issued or served, and funds or property garnished after May 1 are to be returned, the directive said.

Oregon prohibited garnishments of federal CARES Act relief payments under Executive Order 20-18, enacted April 17. The order extended protections to the Coronavirus Aid, Relief, and Economic Security (CARES) Act payments that cover federal benefit payments, such as Social Security, disability, and veterans’ benefits, the state said.

The Texas Supreme Court issued an order April 9 that allows garnishments to be issued but suspends service of the garnishment until after May 7.

The Virginia Supreme Court, in guidance issued April 23, clarified that new garnishments are not to be issued during the virus emergency. Emergency hearings may be held remotely after a garnishment exemption is requested. The virus emergency was first declared March 16 and has been extended to May 17.

Washington temporarily suspended wage garnishments for consumer debt, such as credit cards or loans, under Proclamation 20-49, which enacted April 14. The measure, which aims to protect federal relief payments from debt collectors, is in effect until May 14. The measure also temporarily waived the accrual of interest on debt judgments.

Federal relief payments. Attorneys general from at least 25 states sent a letter to in a letter to Treasury Secretary Steven Mnuchin requesting that relief payments made during the coronavirus crisis be exempt from garnishments. The letter, sent April 13, was signed by the attorneys general of California, Colorado, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and Hawaii’s Office of Consumer Protections.

 

Q: Should my company stop garnishments on employees?

A: Vibe HCM recommends you consult legal counsel.

 

Q: How do I suspend garnishments in Vibe Pay on an employee if my company determines we should per legal counsel recommendation?

A: Update the end date of garnishment deduction with the pay period end date of the last payroll the deduction should be withheld.

 

FSA, Reimbursements and Election Periods

Q: Have any changes been made to Flexible Spending Account (FSA) plans, reimbursements, and/or Election periods?

A:
Flexible spending: Employees with work-sponsored health flexible spending arrangements can carryover up to $550 in unused funds from the 2019 plan year to 2020. Leftover FSA funds can be applied to qualified expenses incurred through Dec. 31.

–  Election period: Employers can allow mid-year changes to work-related plans featuring health care coverage, health FSAs, and dependent care assistance. Changes can be retroactive to Jan 1. Plan amendments period remains open through 2021.

Reimbursements: Allows for retroactive reimbursement of medical expenses incurred by participants in nascent individual coverage health reimbursement arrangements.

This guidance was issued on Tuesday 5/12/2020, found in these tandem notices: Notice 2020-29 and Notice 2020-33.

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