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New OSHA COVID-19 Guidelines

In late January 2021, the Occupational Safety and Health Administration (OSHA) issued updated guidance on mitigating and preventing the spread of COVID-19 in the workplace.

This guidance is meant to help employers and workers determine appropriate COVID-19 control measures, and to educate employers and workers about the risks of being exposed to or contracting COVID-19 in the workplace.

In this post, we’ll be highlighting the most important aspects of this updated guidance and what employers need to know moving forward. Specifically, we’ll discuss:

  • The Purpose of This New Guidance
  • Guidance Highlights
  • What Next for Employers

To read the new OSHA COVID-19 guidance in its entirety, click here.

The Purpose of This New Guidance

OSHA released this updated guidance with the purpose of helping employers plan their COVID-19 prevention and mitigation strategies. OSHA strongly recommends that employers implement COVID-19 prevention programs in the workplace, especially in industries where employees are unable to work from home. The most effective mitigation strategies engage workers and their union or representatives in strategy development, according to OSHA’s recommendations.

The guidance covers the following:

  • Hazard assessments
  • Measures to limit the spread of COVID-19 (roles of employers and workers and training on COVID-19)
  • Isolation or separation measures of infected workers from the workplace (physical distancing, installing barriers or staying home)
  • Use of personal protective equipment
  • Improvements in ventilation, hygiene and sanitation measures

We’ll discuss some highlights about some of the above topics in the following section.

Guidance Highlights

In this section, we’ve compiled some of the most important points from OSHA’s new guidance, organized into the sections that we explained in the previous section:

Hazard Assessments

Employers should conduct a hazard assessment of their workplaces. According to the new OSHA guidance, the purpose of this is, “…to identify potential workplace hazards related to COVID-19.” The guidance also suggests that, “This assessment will be most effective if it involves workers (and their representatives) because they are often the people most familiar with the conditions they face.”

Isolation or Separation Measures of Infected Workers from the Workplace

The OSHA guidance strongly recommends that employers do everything they can to minimize the negative impact of quarantine and isolation on infected workers. Specifically, they suggest:

  • Allow them to telework or work in an area isolated from others, when possible. If not possible, allow workers to use paid sick leave.
  • Consider implementing paid leave policies to reduce infection risk for everyone in your workplace.
  • Remember that The Families First Coronavirus Response Act (FFCRA) provides certain employers 100% reimbursement (primarily through tax credits) to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19. This option will remain through March 31, 2021.

Use of Personal Protective Equipment (PPE)

In the updated guidance, OSHA acknowledges that not every industry can allow employees to work from home. In many industries, the only way for employers to perform their job responsibilities is to be at work in person. In this case, the use of PPE is necessary. Specific guidance related to employer provision of PPE includes:

  • Determine what PPE is necessary to adequately protect your employees.
  • Provide all PPE, if necessary, including respirators, face shields, protective gowns, and gloves, to the workers at no cost.
  • Make sure to provide PPE in accordance with relevant OSHA standards and other industry-specific guidance. Later in this post, we’ll explain where you can find industry-specific guidance.
  • Understand that there are instances in which PPE is not required under OSHA standards or other industry-specific guidance. Some workers may have a legal right to PPE as a “reasonable accommodation” under the Americans with Disabilities Act (ADA). In other cases, workers may want to use it if they are still concerned about their personal safety (for example, if a family member is at higher-risk for severe illness, wearing a face shield in addition to a face covering as an added layer of protection). Employers should encourage and support voluntary use of PPE in these circumstances.

Improvements in Ventilation, Hygiene and Sanitation Measures

In addition to PPE, providing resources to help your employees maintain good personal hygiene is important to help them mitigate the risk of being infected with COVID-19. Specific recommendations include:

  • Provide tissues and no-touch trash cans.
  • Provide soap and warm or tepid water in the workplace in fixed worksites.
  • Place touchless hand sanitizer stations in multiple convenient locations throughout the office.
  • Provide workers with time to wash their hands often with soap and water (for at least 20 seconds) or to use hand sanitizer.
  • Place informational posters that encourage hand hygiene and physical distancing to help stop the spread of COVID-19 at the entrance to your workplace and in other workplace areas where they are likely to be seen. Be sure to include versions of the poster in different languages.
  • Promote personal health monitoring and good personal hygiene, including hand washing and good respiratory etiquette.
  • The supplies necessary to carry out each of the above hygiene recommendations should be provided at no cost to employees.

Other Measures to Limit the Spread of COVID-19

In addition to everything listed above, OSHA has recommended the following best practices to consider in order to limit the spread of COVID-19 in the workplace. Visit OSHA’s updated website for more information about these recommendations.

  • Assignment of a workplace coordinator. 
  • Identification of where and how workers might be exposed to COVID-19 at work. 
  • Identification of a combination of measures that will limit the spread of COVID-19 in the workplace, in line with the principles of the hierarchy of controls.
  • Consideration of protections for workers at higher risk for severe illness through supportive policies and practices. 
  • Establishment of a system for communicating effectively with workers in a language they understand.
  • Educate and train workers on your COVID-19 policies and procedures using accessible formats and in a language they understand.
  • Isolating workers who show symptoms at work. 
  • Performing enhanced cleaning and disinfection after people with suspected or confirmed COVID-19 have been in the facility.
  • Providing guidance on screening and testing.
  • Recording and reporting COVID-19 infections and deaths that occur in the workplace.
  • Implementing protections from retaliation and setting up an anonymous process for workers to voice concerns about COVID-19-related hazards.
  • Making a COVID-19 vaccine or vaccination series available at no cost to all eligible employees.
  • Not distinguishing between workers who are vaccinated and those who are not.

Industry Specific Guidance

OSHA has published a separate webpage with guidance for specific industries (click here to access this page). Some specific industries that are included are:

  • Airline Operations
  • Construction
  • Dentistry
  • Food Manufacturing and Processing
  • Laboratories
  • Manufacturing
  • Oil and Gas Operations
  • Pharmacies
  • Retail
  • Waste Management

Many other industries are included on the website, so be sure to take a look to see what is recommended for you and your employees.

What Next for Employers?

Keep in mind that OSHA will continue to update the guidance over time as new developments arise. OSHA fully intends to include additional situational and industry-specific guidance as we learn more about COVID-19 moving forward.

Employers should review this recent and any future guidance carefully and implement any new recommendations as applicable. Employers should consider assigning someone on their staff to regularly monitor the OSHA website for any changes in COVID-19 best practices and standards.

As we mentioned in the previous section, OSHA has published many industry-specific recommendations. Business leaders are strongly encouraged to review the specific guidelines that OSHA has provided for their industries.

Key Takeaways

OSHA has issued important updated COVID-19 guidelines for employers. These guidelines can be summarized into the following themes:

  • Hazard assessments
  • Measures to limit the spread of COVID-19
  • Isolation or separation measures of infected workers from the workplace (physical distancing, installing barriers or staying home)
  • Use of personal protective equipment
  • Improvements in ventilation, hygiene and sanitation measures
  • Industry specific guidelines.

Employers should carefully review the specific details of this guidance, which we’ve summarized in this post and are also available by clicking here. Employers should also consider assigning someone on their staff to regularly check back on OSHA’s website for further COVID-19 prevention guidelines. 

COVID-19 Burned Out HR Leaders Everywhere: Here’s How to Help

Many HR professionals would agree that the year 2020 was the most challenging year to date when it comes to managing human capital effectively. The COVID-19 pandemic forced businesses to adapt in a variety of ways, including restructuring workforces, transforming product offerings and operations, and doing everything possible to keep businesses open while physically distancing employees from one another. These challenges, among many others faced during the ongoing COVID pandemic, has led to burnout among many HR professionals.

We’ll address HR employee burnout in this post. Specifically, we’ll discuss:

  • Identifying the Issue
  • What HR Leaders Can Do to Improve the Situation
  • How Company Leadership Can Better Support their HR Team Moving Forward

Identifying the Issue

As an HR leader, you need to be able to understand burnout in yourself, your HR teammates, and all employees at your company.

HR professionals are often expected to be the most empathetic people in an organization. If someone is having a stress/anxiety or interpersonal related issue, HR will often be their first stop. This can lead to something called compassion fatigue. Showing empathy is a skill, but it’s not an easy one. Even the most empathetic people can feel drained of energy when they are showing compassion to multiple people in a short amount of time. This is one of the primary reasons that so many HR professionals are feeling burnout.

During 2020, HR was asked to make a lot of hard decisions. They were also charged with communicating these decisions to employees. Telling everyone that they need to work from home and isolate themselves from as many people as possible is no easy task. And in worst case scenarios, HR leaders were tasked with implementing large-scale furloughs or layoffs. On top of this, federal regulations became a moving target for HR leaders during COVID. Adapting to FFCRA in the midst of transitioning to remote work or altered operations was a super challenging task. After making these tough decisions, dealing with any pushback from staff, and navigating incredibly complex compliance challenges, it’s no wonder that burnout has become so common for HR employees.

What HR Leaders Can Do to Improve the Situation

As an HR leader experiencing burnout, it may be time to consider burnout best practices that could apply to anyone in your workforce. Think about the advice that you would give to any non-HR employee who might approach you with concerns about feeling burned out. What would you tell them? Take that advice, and apply it to yourself. Here are some things you might consider:

  • Don’t be afraid to take time off. HR employees too often feel like they have to be extra conservative with their vacation days. They feel like they have to set an example of when it is or is not appropriate to take time off. Throw this idea out the window! If you are experiencing burnout and you have PTO available, use it! Even if travelling is unrealistic right now due to COVID, taking a few days off and spending time exercising, doing hobbies, or relaxing with family and friends can go a long way towards quelling burnout.
  • Find a listening ear. It’s very possible that the employees best equipped to listen and show empathy about employee burnout are your HR coworkers. If you don’t feel comfortable discussing your burnout with them, reach out to friends you have in the industry. Think about who you worked with at a previous job, who you met at a conference in recent years, or someone you might be connected with on LinkedIn. Join and online community of HR leaders in your local area. You’ll be surprised at just how willing people in your professional network will be to help you by listening to your challenges and providing guidance.
  • Ask for the help you need. Most importantly, don’t be afraid to ask for help when you need it. HR employees don’t need to be examples of perfection. It’s okay to feel down and unmotivated during these troubling times. There is no shame in this. Whatever help you need, get it. A few months or years from now, you’ll thank yourself for doing whatever it took to get yourself back on track using healthy strategies.

How Company Leadership Can Better Support their HR Team Moving Forward

As counter intuitive as this might sound, HR isn’t always equipped to solve every people-related challenge in the workplace. Often the support of company leadership – the CEO, Founder, President, etc. – is needed.

Company leadership should go above and beyond to acknowledge HR accomplishments during this difficult time. Awarding the “employee of the month” title to someone in HR, sending a hand-written thank you note, or even a “shoutout” included in an internal company communication will go a long way towards making your HR team feel recognized for the hard work they have performed over the last year. Could you go as far as gifting your organization’s HR leader a gift certificate to a spa or have lunch delivered to their home form their favorite restaurant? Get creative in showing your HR teammates just how much their effort means to your company during this challenging time.

Also important, company leadership should consider potential gaps in employee benefits. Could your employee assistance program be expanded? What does your company’s mental health coverage lack? Understanding these gaps in benefits and acting on them will go a long way towards ensuring your entire team’s mental and physical health are cared for, and especially your HR staff during this challenging time.

Key Takeaways

Burnout among HR employees is becoming very common in the wake of the challenging year 2020. Compassion fatigue, combined with the weight of having to make and communicate so many challenging decisions, are the primary reasons for this burnout. HR employees can help themselves overcome burnout by doing the following:

  • Don’t be afraid to take time off.
  • Find a listening ear.
  • Get the help you need.

Company leadership should also take the initiative to help their HR team overcome burnout. Two ideal strategies for achieving this are:

  • Going the extra mile to make sure HR is acknowledged and thanked for the challenging work they have been performing over the last year.
  • Ensure that there are no gaps in benefits coverage that are limiting your team’s ability to take care of themselves and their mental health.

Launchways Provides HR Leaders the Support They Need So They Can Focus on Strategic Initiatives

At Launchways, we partner with organizations to help alleviate the administrative and compliance burdens placed on HR professionals. With Launchways’ support, HR leaders have more time to work on strategic initiatives rather than getting bogged down by tactical day-to-day items. Learn more about how Launchways helps HR leaders.

The Most Common Payroll Mistakes Your Startup Is Probably Making

Having smooth payroll processes in the foundation of smooth people operations. As much as your team likely enjoys their roles, it’s the regular paychecks that keep them coming back to work every day.

Conversely, if your payroll processes have errors or inefficiencies, it can wreak havoc on employee morale. Your employees will never know if the next paycheck will be on time and accurate. At startups where lean teams are tasked with throwing payroll on their to-do list, it’s all-too common for critical errors to be made.

In this post, we’ll cover:

  • What are Some Common Payroll Mistakes?
  • How to Avoid Common Payroll Mistakes
  • Outsourcing Payroll to Mitigate Payroll Risk

What are Some Common Payroll Mistakes?

There are several mistakes that are commonly made with inexperienced or overworked teams tackle payroll.

  • Misclassifying Employees: Tax laws and benefits contributions are generally different for independent contractors than they are for traditional, in-house employees. If an employee is classified incorrectly, it could cause inaccurate contributions towards benefits and taxes. These types of errors can cause significant headaches for both the employee and the employer as they attempt payroll corrections post-processing.
  • Failing to Send Tax Forms: Sending out your W-2 and 1099 forms as early as possible after the start of the calendar year can go a long way towards making tax season easier on your employees. On the other hand, if it’s late January and your employees have not receive all the forms they need to complete their taxes, they may be left feeling frustrated and anxious. Remember, many of your employees may be expecting significant returns. If you fail to send out tax forms in a timely matter, you’ll be delaying that refund.
  • Failing to Keep Complete Records: The Fair Labor Standards Act (FLSA) requires that employers keep three year’s worth of payroll records. The law requires that these records include number of hours worked, pay rates, payroll processing dates, and other key information. In order to protect your company from potential fines and lawsuits, be sure that your payroll recordkeeping practices are functioning properly. Also, be sure to check the local payroll recordkeeping laws where your business is headquartered. Some states require that records be kept for over three years.
  • Missing Key Payroll Deadlines: Processing payroll is a highly time-sensitive matter and issues with updating entries, working with banks, and more, can cause unexpected delays. Processing payroll just one day late could cause extreme financial issues for your employees, especially for those who are living paycheck to paycheck. Many startups believe they have a concrete plan for ensuring payroll is processed on time each cycle, but they often aren’t prepared for unexpected or irregular issues that come up.
  • Failing to Accurately Calculate Pay: The final common payroll mistake that we’ll address in this post is perhaps the most significant. Accurately calculating payroll is more complicated than simply multiplying an employee’s hourly rate by the number of hours they worked. When you factor in overtime, commissions, deductions, and PTO, calculating the gross pay for an employee suddenly becomes very complicated. Nothing will make your employees lose confidence in your company faster than receiving an inaccurate paycheck. Work with your whomever on your team is tasked with payroll to make sure all payroll systems and data entered are up to date. As we’ll discuss later in this post, you may even consider outsourcing your payroll to ensure accurate calculations and timely deposits.

How to Avoid Common Payroll Mistakes

There are a few steps that you can take to avoid making the common payroll mistakes we covered in the previous section:

  • Keep a simple checklist of payroll processes. Even though your payroll process should be largely automated with technology, you should still have a detailed checklist that you can use to make sure payroll is processed accurately each cycle.
  • Consider running certain reports prior to payroll processing. Running reports like a deductions summary, payroll register, and cash requirement is a great strategy to catch any preexisting errors before they pollute the payroll cycle.
  • Don’t hold back when it comes to investing in payroll tools. Consult with your HR staff to determine if your payroll systems and technology are modern or out of date. Implementing the right Human Resources Information System (HRIS) for your business can easily make the difference between successful and unsuccessful payroll processing.
  • Make sure you fully understand what payroll is, especially if you don’t outsource your payroll. As a business leader, you should fully understand the payroll process from start to finish. If you can’t walk through the entire process in detail, don’t be surprised if you experience a payroll error sooner rather than later.

Outsourcing Payroll to Mitigate Payroll Risk

In order to avoid making costly payroll mistakes, consider outsourcing your payroll to an expert third party provider. Outsourced payroll providers are experts in all things payroll-related.

As a business owner, you constantly must worry about all aspects of your business. Marketing, finance, accounting, growth, investments, recruiting, onboarding, acquisitions, mergers, etc…the list could go on and on. Why add payroll—which is such a complex and crucially important task—to that list? Outsource your payroll so that you can focus on what matters most – growing your business! Hand off your payroll to a professional with years of experience avoiding and mitigating payroll risk.

Launchways is your trusted payroll partner. Get in touch with us about our payroll solutions today.

Key Takeaways

Some of the most common payroll mistakes are:

  • Misclassifying employees.
  • Failing to send tax forms.
  • Failing to keep complete records.
  • Missing key payroll deadlines.
  • Failing to accurately calculate pay.

To avoid these mistakes, consider doing the following:

  • Keep a simple checklist of payroll processes.
  • Run certain reports prior to payroll processing.
  • Don’t hold back when it comes to investing in payroll tools.
  • Make sure you fully understand what payroll is, especially if you don’t outsource your payroll.
  • Consider outsourcing your payroll to an expert payroll services provider.

What Employers Need to Know About the Second Round of PPP Loans

On Monday, Jan. 11th, The U.S. Department of Treasury and the U.S. Small Business Administration began accepting applications for the second round of Payment Protection Program (PPP) loans. This second round will continue until Mar. 31st, 2021.

Both new borrowers and certain existing borrowers are eligible for the second round of PPP loans. Now that applications have started, business leaders need to be prepared to follow the new requirements.

Information About the Second Round of PPP Loans

The rules for the second round of PPP Loans are, in many ways, similar to the initial round. That said, there are certain updates to the first round of funding that employers should be aware of. According to the U.S. Department of Treasury, the key updates include:

  • PPP borrowers can set their PPP loan’s covered period to be any length between eight and 24 weeks to best meet their business needs;
  • PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
  • The program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, and direct marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

Last year, the U.S. Small Business Administration (SBA) covered six months of payments on loans that existed as of Mar 27th, 2020  in addition to any new loans issued before Sep. 27th, 2020 under the CARES Act. Under the new bill, beginning in February of 2021, these same borrowers will receive an additional three months of payments from the SBA.

Additionally, for existing borrowers as of Dec. 27th, 2020, the new bill provides another five months of payments for industries that were hit the hardest by COVID-19. Other temporary changes include a guaranty increase from 75% to 90% and fee waivers through Sep. 30th.

Am I Eligible for a Second PPP Loan?

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts for any quarter in 2020 compared to 2019.

Those who are eligible can apply for up to 2.5 times the borrower’s average monthly payroll for 2019 or 2020, with a limit of $2 million. It’s important to note that this maximum is substantially less than the first round of the program which set the limit at $10 million.

Industries that were hit the hardest by COVID-19 (Accommodations, Food Service, etc.) can qualify for loans up to 3.5 times the borrower’s average monthly payroll.

What are the Rules for PPP Loan Forgiveness for Second Draw Loans?

While the application process will likely be easier for most, the forgiveness rules are, for the most part, the same as they were for the first round of PPP loans. Borrowers are eligible to have their loans forgiven in full provided they use the funds for eligible costs within the covered period (8-24 weeks from loan disbursement).

A minimum of 60% of the PPP loan must have been spent on payroll costs in order to qualify for full forgiveness. The rest can be used for business mortgage interest payments, rent, utilities, or other expenses under the new stimulus bill, such as specific operation expenses, supplier costs, and worker protection expenses. 

Please note: in order to receive maximum loan forgiveness, detailed documentation of PPP spending is necessary, including paid checks, payroll documentation, receipts, and billing statements.

What is the Process to Apply for Loan Forgiveness?

The U.S. Small Business Administration has until Jan. 20th, 2021 to develop forms and instructions for a forgiveness application for loans of up to $150,000. Borrowers who qualify will be required to include details about the number of employees retained and the amount spent on payroll in addition to signing and submitting the form.

Borrowers must also attest to the accuracy of the certification and compliance with PPP requirements. Simplified forgiveness applications will not require supporting documentation, however, they must be retained for up to four years for future review by the SBA. The new PPP program launched this week does not change the forgiveness process for loans over $150,000.

What’s Next?

Employers should review the criteria for this second round of PPP loans. Employers considering applying should prepare and have on hand all relevant documentation.

We will continue to monitor any additional developments regarding the PPP and deliver updates as necessary. For more information and support, contact Launchways.

What Employers Need to Know About the $900 Billion Stimulus Package

The leading news of the week from the political world has been the $900 billion stimulus package that was passed by Congress on Monday, December 21st. After several months of stalemate between the divided house and senate, a COVID-19 relief bill finally won enough votes to be placed on President Trump’s desk for his signature. It is expected that he will eventually sign it into law, although he has demanded revisions be included in some aspects of the bill.

In this post, we’ll talk about the most important aspects of this bill that employers need to be aware of. Specifically, we’ll discuss:

  • Unemployment Benefits Funding and Extension
  • Business Aid
  • Direct Economic Impact Payments
  • Other Important Aspects of the Bill

Unemployment Benefits Funding and Extension

The bill opens the door for unemployed Americans to receive $300 per week in federal aid in addition to any unemployment aid they may be receiving from their state. Unemployment benefit funds in some states have already dried up, but that will not affect an unemployed worker’s access to this federal aid. The bill lays out a timeline to provide this federal unemployment aid from the end of December 2020 through March 14, 2021, although the bill has language indicating it could last longer.

For added context on this aspect of the bill, recall that the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was passed on March 27, 2020, provided funding for states to waive any waiting week requirements for unemployment income throughout the pandemic. The CARES act also provided an additional $600 per week to all individuals receiving unemployment income benefits for weeks of unemployment ending before July 31, 2020. President Trump extended a portion of unemployment wages after the initial $600 per week expired.

The bill that was passed on December 21st includes an extension of Pandemic Unemployment Assistance (PUA). PUA is a program that allows employees who are not traditionally eligible to receive unemployment benefits to do so. Examples include:

  • Self-employed workers
  • Workers in gig industries (Like Uber)
  • Various types of independent consultants
  • Some hourly workers

An 11-week extension in base benefits through this PUA is also included within the bill.

Key Highlight: The new stimulus bill that was passed by Congress on December 21st, 2020, will provide $300/week for unemployed Americans. It also extends the Pandemic Unemployment Assistance program, which provides unemployment benefits for self-employed or gig workers.

Business Aid

The Small Business Administration (SBA) will receive $325 billion through this bill to assist businesses in the United States that have been affected by the COVID-19 pandemic.

Of this amount, $284 billion will go towards replenishing the Paycheck Protection Program (PPP), which provides forgivable small business loans to eligible applicants.

Business owners will be happy to learn that certain firms that had already applied for, received and exhausted PPP funds will be eligible to apply for another PPP loan. The eligibility requirements are as follows:

  • A small business must have less than 300 employees
  • The business must have sustained at least a 30% loss in revenue during any quarter of 2020
  • Small 501(c)(6) organizations with 150 or fewer employees that are not lobbying organizations would be eligible for a PPP loan with this round of funding

The bill also affects the PPP in the following ways:

  • Supplier and investment costs related to modifying facilities and obtaining personal protective safety equipment are now eligible expenses for loan forgiveness
  • The loan forgiveness process for businesses that have borrowed $150,000 or less in PPP loans has been simplified
  • It has been confirmed that business expenses paid for with PPP funds are tax deductible

It is important to note that businesses interested in applying for a PPP loan should consult with their lender. Money should never be borrowed without consulting an expert first.

There are two other relevant aspects of this new bill that will affect some businesses:

  • The bill directs $15 billion in funding for independent live-venue operators
  • The bill adds another $20 billion for small business grants

Key Highlight: The new stimulus bill replenishes funding for the Paycheck Protection Program (PPP). Some business owners will be able to apply for a PPP loan for a second time. The bill also expands eligible expenses for loan forgiveness and simplifies some processes.

Direct Economic Impact Payments

The part of this bill that has received the most news coverage is another round of stimulus checks. Eligible Americans received a first round of stimulus checks under the CARES Act last spring. Under the CARES Act, individuals earning up to $75,000/year or married couples (who file jointly) earning up to $150,000 were eligible to receive the full payment of $1,200 per individual or $2,400 per couple. A $500 payment was included for each qualifying child.

The new bill follows the same eligibility requirements as we saw under the CARES Act. However, instead of being eligible for a $1,200 payment, qualifying taxpayers are only eligible for a payment of $600 per individual or $1,200 per married couple. Parents will be eligible to receive $600 for each qualifying child. President Trump is currently demanding congress increase the payment amount provided, although it remains to be seen how this will pan out.

Key Highlight: The new bill, as it stands, will provide stimulus payments of $600 per individual, or $1,200 for married couples filing jointly. Parents will be eligible to receive $600 for each qualifying child. As with the CARES Act earlier in 2020, eligibility requirements apply.

Other Things to Know About the Bill

There are a few other general aspects of this bill that business owners should be aware of.

Other provisions in the bill:

  • U.S. Postal Service—$10 billion
  • Health Care Provider Relief Fund—$35 billion
  • COVID-19 Testing and Tracing and Vaccine Distribution—$69 billion
  • Transportation Industry Relief (Airlines, Airports, Buses, Transit and Amtrak)—$45 billion
  • Education—$82 billion
  • Housing Assistance (Rental)—$25 billion
    • Additionally, the bill extends the federal moratorium on evictions until the end of January 2021

What’s not included in the bill:

  • There is no direct aid provided to state, local, or tribal governments
  • The Families First Coronavirus Response Act (FFCRA) was not explicitly extended by this bill
    • This means that employers are no longer required to provide federal FFCRA leave later than December 31, 2020
    • Keep in mind that some states have passed their own FFCRA-like legislation

Key Highlight: Several industries will receive significant federal funding under the new bill. The bill includes no direct aid to local governments. Also, the FFCRA is not extended by this new bill.

Key Takeaways

The new $900 billion stimulus package will not be official until it is signed by President Trump. Trump has criticized certain aspects of the bill, and it currently demanding some updates. It’s expected he will eventually sign it into law. The most important things for employers to know about the bill are as follows:

  • The new stimulus bill will provide $300/week for unemployed Americans. It also extends the Pandemic Unemployment Assistance program, which provides unemployment benefits for self-employed or gig workers.
  • The new stimulus bill replenishes funding for the Paycheck Protection Program (PPP). Some business owners will be able to apply for a PPP loan for a second time. The bill also expands eligible expenses for loan forgiveness and simplifies some processes.
  • As it stands, the new bill will provide stimulus payments of $600 per individual, or $1,200 for married couples filing jointly. Parents will be eligible to receive $600 for each qualifying child. As with the CARES Act earlier in 2020, eligibility requirements apply.
  • Several industries will receive significant federal funding under the new bill. The bill includes no direct aid to local governments. Also, the FFCRA is not extended by this new bill.

How To Address Unemployment Fraud During COVID-19

Among the many challenges brought on by the COVID-19 pandemic, one issue facing employers has proven to be more difficult to face than others. Unemployment fraud has become an excessive problem for many – one that, until now, many employers haven’t had to concern themselves with. Unemployment claims are being processed in numbers that have never been seen before, and many state unemployment departments are doing so with insufficient controls and outdated systems.

We hope to provide employers with the information they’ll need to understand and address this growing issue by offering a set of best practices and action steps for both employers and employees that have been affected by fraudulent unemployment claims.

A Case of Unemployment Fraud

The Illinois Department of Employment Security or IDES is the agency responsible for processing unemployment claims in the state of Illinois. They receive claims, verify them using data reported by employers, and then process payments if employees are found to be eligible – a rather straight forward process under typical circumstances. However, due to COVID-19 and the impact it has had on the workforce, they have seen a tremendous increase in the number of claims being processed. In addition, there is a demand to process claims more quickly. In meeting this demand, the level of scrutiny used to process claims has decreased. With heightened demands, less scrutiny, and the use of insufficient controls, the result has been excessive fraud.

The IDES reports receiving approximately 14,000 claims of identity theft in only five months. A dramatic increase compared to just a year ago, reporting just 651 in the same time frame. There have been several reports from employees of other instances indicative of fraud as well, such as IDES debit cards unexpectedly arriving in the mail, letters for deceased spouses, and claims for children who have never been employed.

Multiple stories from Illinois and national news stations revealed several cases of fraudulent activity in both the state of Illinois and nationwide. You can view them here:

What Does It Mean For Employers?

Unemployment benefits function similarly to health insurance. In most instances, the employer will pay into an unemployment fund which is handled by the state and determined by their tax rate. Unemployment claims are granted based on the eligibility of the employee (despite how much the employer has paid into the fund). In the case of Illinois, the tax rate is determined by the dollar amount of claims paid by the employer in the previous year as a portion of total payroll. This creates a big issue the more claims there are to be paid. The tax rate increases as the number of claims paid out rises. Therefore, fraudulent unemployment claims have a direct impact on the amount paid in unemployment taxes. The difference, based on the current minimum and maximum tax rates, could be as much as ten times more than what is normal.

How Employers Can Take Action

Regardless of legitimacy, when an unemployment case is filed, employers will receive a notice of claim. As the employer, if you receive a notice of claim, and the employee is still employed, you should immediately dispute the claim according to the process of your state. Additionally, you should take the opportunity to alert the department responsible for processing claims that there is suspected fraud on the claim. You should also notify the employee that the claim is filed for that there is suspected fraud in their name.

How Employees Can Take Action

As an employee, if you receive notice of a fraudulent unemployment claim from an employer or a notification of unemployment benefits when you haven’t filed, it is likely due to some form of identity theft. Identity theft can be a very serious issue so it is imperative that you follow these steps:

  • DO NOT cash any checks or use any debit cards received
  • Contact IDES to notify them of suspected fraud (submit online here OR call 800-814-0513)
  • Contact the Illinois Attorney General’s Identity Theft Hotline (call 866-999-5630)
  • Contact their Identity Theft provider (i.e. LifeLock, Experian, Identity Guard)
  • Place a Credit/Security Freeze on your credit report.
  • Contact the Federal Trade Commission for additional information and guidance

The Importance of Unemployment Fraud Awareness

Unemployment fraud is an incredibly serious matter and it deserves the attention of every employer. Failing to be aware of unemployment fraud is a failure to protect your company’s interests and the interests of your employees. For assistance with communicating this information to your employees, contact your HR manager or HR advisor. If you’d like more information on the topic of unemployment fraud or other human resources topics, please contact us at Launchways.