17 March 2020
Summary
Over the last several days, attempts to contain and slow the spread of the novel coronavirus are severely disrupting everyday life in the USA. Worries are running the gamut from, “Where can I find toilet paper?” to “I can’t work, I’m not being paid, how can I pay for toilet paper?”
On Friday March 13 the US House of Representatives passed HR 6201 “Families First Coronavirus Response Act” to address a myriad of immediate concerns for the health and well-being of US citizens. Today the House is working on amendments prior to sending the bill to the Senate. It is expected to be taken up by the US Senate this week and will likely be presented for the President’s signature later this week.
Three specific provisions address the income disruptions the coronavirus emergency response is causing. One covers workers who need paid sick leave because they or a family member have contracted coronavirus and another addresses employer reimbursement for paid family leave paid. A third covers unemployment benefits to those who lose a job (permanently or temporarily) as a result of coronavirus. We are watching this closely and will update information as it is available.
It is vital to recognize that employees must be paid legally, or “on the books,” in order to receive benefits from unemployment insurance or for an employer to be reimbursed for paid leave provided to employees.
Furlough: Emergency Unemployment Insurance Stabilization and Access Act of 2020
Many nannies and other hourly workers will be temporarily laid off due to the coronavirus. To provide income to employees furloughed for this reason, the act provides funding to state unemployment programs to provide unemployment benefits and to enhance program administration.
Although the act has not yet passed, a nanny or any furloughed employee can apply for unemployment benefits TODAY.
President Trump issued an executive order last week directing the US Department of Labor, which oversees and ultimately guarantees all state unemployment insurance programs, to provide guidance to the states outlining flexibility they have during the coronavirus pandemic.
“… federal law permits significant flexibility for states to amend their laws to provide UI benefits in multiple scenarios related to COVID-19. For example, federal law allows states to pay benefits where: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; and (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.” ~ News Release March 12, 2020.
Any employee can make an unemployment claim, whether the employer was paying legally or not. If a claim is filed and the family has not met their tax obligations, both the state and the Internal Revenue Service will pursue the employer for the back taxes and penalties.
Conclusion
While significant and rapid steps are underway to minimize the economic impact of income disruptions caused by the coronavirus pandemic, it is vital to recognize that employees must be paid legally, or “on the books,” in order to receive benefits from unemployment insurance or for an employer to be reimbursed for mandatory paid leave provided to employees.
HomeWork Solutions is available to assist employers in catching up with 2019 nanny tax obligations to ensure that valued nannies and caregivers are not placed at economic risk during the coronavirus pandemic. HomeWork Solutions will waive fees for preparation of 2019 payroll tax filings for new clients in order to ensure that domestic employees have access to paid sick leave and unemployment benefits. Call HWS at 866.959.7812 or enroll online at HomeWorkSolutions.com and mention “Free 2019” during registration. This is a limited time offer and continued use of payroll and tax preparation services for 1 year is required to qualify for this offer.