Here are some information to help you and your employees weather this pandemic. (Information presented here is merely a summary, and is not intended as advice.)
YOU ARE REQUIRED TO OFFER MANDATORY PAID SICK LEAVE AND POST NOTICE: Effective April 1 through December 31, 2020, the Familes First Coronavirus Response Act requires most employers to provide mandatory COVID-19-related sick leave and family medical leave to their employees. Each covered employer must post a notice the act's requirements in a conspicuous place on premises, or alternatively email or direct mail the notice to employees or post on an employee information interla or external website. For this purpose, the Department of Labor has published a SAMPLE POSTER you can download.
The IRS will reimburse you dollar for dollar for qualifying expenses by way of a payroll tax credit. The required payments and credits are as follows.
- If the worker has been diagnosed with COVID-19, or is quarantined (including self-imposed quarantine on the advice of a health care provider), the sick leave payment and credit are based on the worker's regular wage up to $511 per day for up to 10 days.
- If the worker is caring for another person who has been diagnosed or is quarantined, the sick leave payment and credit are two-thirds (2/3) of the worker's regular wage up to $200 per day for up to 10 days.
- If the worker is caring for a child or other individual unable to care for themselves due to the COVID-19-related closing of their school, child care facility, or other care program and such leave exceeds ten days, the expanded family medical leave payment and credit are two-thirds (2/3) of the worker's regular wage up to $200 per day for up to 10 weeks.
Qualifying wages are exempt from FICA tax, though still subject to Medicare tax.The credit is taxable to the employer, and is based on the net pay plus federal income tax withheld, the employer and employee share of Medicare, and the employer's share of tax-free health insurance. The credit can be used to reduce your required 941 tax payments (subject to limits); the remainder can be claimed as an advance on IRS Form 7200, which they expect to process in two weeks or less.
Similar credits will be provided to self-employed workers, and can be applied against their self-employment tax.
For more details, see the Department of Labor's Questions and Answers about the Familes First Coronavirus Response Act.
YOUR MICHIGAN UIA ACCOUNT WILL NOT BE CHARGED FOR COVID-19-RELATED BENEFITS. To help your employees with their claims, you may give your employees UIA Form 1711 (Unemployment Compensation Notice to Employee) filled in with your 10-digit UIA Employer Account Number (EAN) and your 9-digit Federal Employer Identification Number (FEIN) as weill as your legal name and any DBA used by your business. When appropriate, use this form to officially inform them that their layoff is expected to be temporary (so they are not required to register for and seek work) by checking the Waiver box and entering the appropriate dates. You may also provide a copy of UIA Fact Sheet #160 Claiming Unemployment Benefits in Michigan (COVID-19 Guide) to guide them through the application process. UIA recommends applying online during non-peak times between 8:00 pm and 8:00 am. Advise your employees they will be asked to specify whether they are:
- A worker who has been diagnosed with COVID-19, is quarantined, is caring for another person who has been diagnosed or is quarantined, or is caring for another person due to closure of their school, child care, or other care program, and is not on sick leave, or
- A worker laid off because of an executive order (whether due to a temporary shut down or a layoff/temporary leave due to COVID-19).
If you are looking to reduce hours for employees by 10% - 60%, Michigan Workshare may be a good opportunity to help your employees. Rather than having to select and laying off specific workers, ALL employees in a workgroup endure the same reduction in hours, AND may also qualify for the same percentage of their Michigan unemployment benefits while working to supplement their reduced wages. See UIA Fact Sheet #156 Work Share Program (March 2020) for more information.
(Last updated April 23, 2020)