** This article was originally sent to our Bennett/Porter clients via email on 4/9/2020 **
There has been no shortage of information in the last couple of weeks regarding COVID-19 and the Federal mandate about paying employees who are sick with the virus, have been ordered to stay home to self-quarantine, or have a family member who is affected by the virus and who the employee must take care of. Despite all of the information, there are still many outstanding questions employers are encountering as they administer the processes around this mandate.
Christy, a member of Bennett/Porter’s Management Team, has written several articles on the B/P Blog about COVID-19 earnings – including one last week in which she described the new rules for payment of COVID-19 earnings: How to pay for COVID-19. It is very important to note that the new Emergency Paid Sick Leave and Emergency Family and Medical Leave Expansion benefits are ONLY available to employers with less than 500 employees. To determine if your organization qualifies please refer to the DOL website(Question #2) for guidance. Also, these benefits are effective between April 1 – December 31, 2020, and they are not retroactive.
Our People Savvy HCM software has recently been enhanced to include the necessary payroll earnings codes for tracking the three different types of COVID-19 pay, and it is well on its way to using the new COVID-19 Earnings codes where applicable. The Time & Labor Management (TLM) module has also been configured to help employers with the tracking of required leaves of absence.
Last week, Sage released new COVID-19 Tax Rules for Payroll – which are available in a new Payroll download for Sage 100 versions 2018, 2019, and 2020 – as well as some program changes (adding 12 more designations for FICA and Medicare taxes, depending on which COVID-19 Earnings code is used!). We will be helping Sage Payroll clients add COVID-19 Earnings codes to Sage 100 Payroll to accommodate the three different types of COVID-19 Earnings. Marty and Lisa have worked diligently over the last couple of days developing a spreadsheet to help clients track their COVID-19 Earnings, taxes, and apportioned healthcare deductions on an individual payroll and individual employee basis. We have added earnings and hours to the spreadsheet for tracking purposes, because there is a limit to both hours and earnings for the new codes, which the software does not track. We have kept the three different earnings codes and their taxes separate on the spreadsheet for easier reconciliation of not only the tax payments you will be making on a payroll-by-payroll basis, but also for easier reconciliation at quarter end. We are confident the 941 Form will be revised for the 2nd quarter – we’re just not sure how the government will require the COVID-19 credits be accounted for…which is another reason for the spreadsheet!
For Sage Payroll Versions 2017 and below, we can still set up the three different earnings codes and mark the appropriate taxes (Employer FICA is not applicable to the COVID-19 Earnings). We think the spreadsheet that we’ve developed will be critical for you to keep track of taxes and the credits you can take against your payroll tax payments, since we do not have the ability in v.2017 and below to track separate FICA and Medicare accounts related to COVID-19.
If you have employees that you need to use COVID-19 Earnings for, please give our office a call at (503) 620-3484 and we can help you set up the new earnings codes (and tax rules if you have v.2018-2020), as well as explain how to use the spreadsheet. You’ll be invoiced for a regular support call at your regular rate, and we’ll include the spreadsheet with that call.