Update on New Coronavirus Bill and more Q&A for Dentists

Dear PracticeCFO Clients,

 

We wanted to give you an update on the new bill that was passed, along information that may be relevant to you during this time. We’ve constructed this email in Q&A format.

 

  1. The president signed the new Coronavirus bill last night – what does it mean for me? (Note, this is separate and different than State programs we’ve outlined in our prior emails)

If you work for a company with fewer than 500 employees or the government:

EMERGENCY PAID SICK LEAVE ACT
COVID Related Items Employee Who Must Quarantine Because They are Sick with COVID-19 or seeking a Diagnosis or subject to a government quarantine order Employee Who is Caring for a Family Member with COVID-19 Diagnosis Employee Who is Caring for Child(ren) whose school or daycare has closed as a result of COVID-19 concerns
Rate of Sick Pay to Pay to Employee Regular Pay Rate 2/3rd of Regular Pay Rate 2/3rd of Regular Pay Rate
Who Pays Sick Pay Employer Employer Employer
Hours of Benefit – Full Time Employee 80 hours (2 weeks) 80 hours (2 weeks) 80 hours (2 weeks)
Hours of Benefit – Part Time Employee The number of hours they normally work in a 2-week period (averaged over past 6 months) The number of hours they normally work in a 2-week period (averaged over past 6 months) The number of hours they normally work in a 2-week period (averaged over past 6 months)
Exemptions* Employers who are healthcare providers* or emergency responders at their election. Employers who are healthcare providers* or emergency responders at their election. Employers who are healthcare providers* or emergency responders at their election.
Date Eligible First day of work missed First day of work missed First day of work missed
Tax Credit to Employer; this is credited to the employer’s quarterly Payroll Tax filing (Form 941) as a reduction to Employer FICA Tax Capped at $511/day Capped at $200/day Capped at $200/day
When does Employer Get Credit With Quarterly Payroll Tax Filing (Form 941) With Quarterly Payroll Tax Filing (Form 941) With Quarterly Payroll Tax Filing (Form 941)
Does Benefit Carry over to 2021 or Reduce Other Sick Pay Benefits? No No No
Effective Dates April 2 2020 – December 31 2020 April 2 2020 – December 31 2020 April 2 2020 – December 31 2020
 

 

 

EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT
COVID Related Item Employee Who Must Quarantine Because They are Sick with COVID-19 or seeking a Diagnosis Employee Who is Caring for a Family Member with COVID-19 Diagnosis Employee Who is Caring for Caring for Child(ren) whose school or daycare has closed as a result of COVID-19 concerns
Expanded Family and Medical Leave Act (12 total weeks) Not Eligible Not Eligible After 10 Days of Unpaid leave, employer will pay employee who is unable to work or telework, and who must have been employed at least 30 days prior with that employer, no less than 2/3rds of usual pay for up to 10 weeks, up to $200/day, and $10,000 in total.  During the 10-day unpaid period, an employee may elect to to use any accrued paid leave benefits.
Exemptions Not Applicable Not Applicable Businesses with fewer than 50 employees can petition Department of Labor for exemption “when the imposition of such requirements would jeopardize the viability of the business.”  There is also language allowing the Secretary of Labor to exclude healthcare providers* and emergency responders.
Effective Dates April 2 2020 – December 31 2020 April 2 2020 – December 31 2020 April 2 2020 – December 31 2020

https://www.fisherphillips.com/resources-alerts-congress-finalizes-covid-19-coronavirus-response-act

 

* Under federal regulations, a “healthcare provider” is defined as: a doctor of medicine or osteopathy, podiatrist, dentist, chiropractor, clinical psychologist, optometrist, nurse practitioner, nurse-midwife, or a clinical social worker who is authorized to practice by the State and performing within the scope of their practice as defined by State law, or a Christian Science practitioner.  A health care provider also is any provider from whom the University or the employee’s group health plan will accept medical certification to substantiate a claim for benefits.  More detail here: https://www.law.cornell.edu/cfr/text/29/825.125.  I read this to only apply to dentists–not Hygienists, Assistants, or Office Personnel. There is an exemption for small businesses with fewer than 50 employees if the required leave would jeopardize the viability of their business. However, we believe that this exemption must be obtained from the Department of Labor.

 

  1. How do the above benefits interact with Unemployment?  Sick Pay received may or may not reduce UI benefits, depending on state and what kind of exceptions they make in this still fluid situation.  Still worth it to apply to UI.

 

  1. Can practice owners get Unemployment? If you had a W-2, you were paying into Unemployment and are eligible to apply.  If your hours are reduced or zero, you can apply.  Benefits max around $450-$550 depending on state.  Most states look back at the past 4 or 5 calendar quarters of reported earning to determine base rate and benefit.  Some also have minimum earnings around $3,000 per quarter to qualify.

 

  1. Should I withhold tax from my Unemployment (they usually offer 10% withholding)? I’d advise it so you don’t end up with a large tax bill later.

 

  1. Should I lend money to my employees? I really advise against this.  This is a good deed that will likely come back to bite you, as it blurs employment law with personal relationships.  You can’t garnish their checks to repay you without a court order and any effort to collect could appear like harassment.  It could also be construed as wages if not documented properly or discrimination if not offered to all employees equally.

 

  1. Other cash saving tip of the day:  Ask your bank to defer your mortgage payments.  There is no requirement for them (yet) to do this, but many lenders are taking down borrower names and will notify you if they voluntarily or involuntarily implement this type of program.  Same deal with student loans.

 

  1. Advice on Investing: For those of you who heed Warren Buffet’s advice about being greedy while others are fearful, we recommend you “ladder in” new investment dollars, meaning put a portion in bit by bit over the coming weeks or months, therefore not having buyer’s regret by putting it all in at once and having a down day.  After all, “the stock market is a device for transferring wealth from the impatient person to the patient person.” Click here to read more.

 

 

WordPress Image Lightbox