Jul 162020
 

4 things to know

You have plenty of time to request Forgiveness, but we want you to keep the following things in mind:

  1. The SBA has provided clarity on who can use the simpler 3508EZ form to request Forgiveness. Check out the criteria below.
  2. Forgiveness isn’t necessarily all or nothing. You may be eligible for all, some, or no Forgiveness on your loan.
  3. Request Forgiveness only after you have spent all the funds that are eligible for Forgiveness.
  4. Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.

What form to use?

The Checklist for using SBA Form 3508EZ clarifies who can use the simpler form to request Forgiveness. You must meet one of these three criteria:

  • Are self-employed and have no employees OR
  • Did not reduce the salaries or wages of your employees by more than 25% and did not reduce the number of employees or hours of your employees OR
  • Did not reduce the salaries or wages of your employees by more than 25% and did experience reductions in business activity as a result of health directives related to COVID-19.  Business activity reductions could have resulted directly or indirectly from compliance with COVID Requirements or Guidance from federal, state or local government shutdown orders that prohibited you from maintaining the same Full Time Equivalency (FTE) employee levels.

Here is a link to the 3508EZ Form.

Borrowers that don’t meet the 3508EZ criteria can use the updated PPP Loan Forgiveness Application Form 3508.

Additional things to know

Here are additional updates from the SBA that apply to both PPP Loan Forgiveness Application Forms:

  • You now have a 24-week Covered Period to spend loan funds starting the date loan funds were deposited into your bank account. If you were funded prior to June 5, you can still use the 8-week period and Alternative Payroll Covered Period.
  • You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness.
  • You can use up to 40% of funds for eligible non-payroll costs.
  • Payments are generally deferred until 10 months after your 8-week or 24-week Covered Period ends.
  • If you apply for Forgiveness in the deferral period, you won’t have to start making payments on unforgiven amounts until the SBA provides a decision on your request or remits funds, or the deferral period ends.
  • If you do not apply for Forgiveness within the deferral period, you must begin making payments after your deferral period.

Next Steps

Before you apply for PPP Loan Forgiveness, we suggest you:

  1. Decide what is going to be your Covered Period per the rules (is it going to be 8 weeks or 24 weeks? Will it start with the funding date or a later date?)
  2. Let us know your chosen Covered Period.  We’ll then create custom reports to help you come up with FTE and compensation numbers for the application. Fill out this form to get in our queue.
  3. Gather the non-payroll documents you will submit with your forgiveness application.

We will provide your data in Excel so you can customize your reports per your bank’s requirements. Once the sheets are ready, we’ll post them on your Sharefile folder as usual.

Remember, we have hundreds of these to do, and they need to be done one by one, so  we appreciate your patience while we work through our list.

 Posted by at 15:27
May 292020
 

Many of our clients will soon be approaching the end of the 8-week “Covered Period” of Paycheck Protection Program Loans, and are working on understanding the PPP Loan Forgiveness application.

We anticipate that many of our clients will benefit from a convenient “package” of reports to help calculate loan forgiveness and provide 3rd party documentation.  Given the significant time required for us to generate hundreds of reports, we are asking our clients to “sign up” for a PPP Loan Forgiveness documentation package so that we can plan an efficient process and begin some of the work now before the 8-week periods end. 

The reports, which will include FTE calculations, employee rosters and excel and pdf payroll registers for needed date ranges in 2019 and 2020, will be uploaded to your ShareFile folder in the next few weeks.  Specific Covered Period or Alternate Covered Period reports will be run and uploaded later.

Clients who sign up prior to June 5 will get first priority and no additional fees.  Clients who do not sign up now will be able to sign up later, but we will work on them as time allows (no promises on how fast we can get you the information). Clients who need custom reports may incur additional fees.

Since payrolls and banking deadlines dictate our daily workloads, we ask for patience as we work to help you with your applications.

To sign up for the PPP forgiveness reports package, fill out this short form to add your company to the list.

 Posted by at 07:54
Apr 242020
 

Here is a summary of the four provisions from the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) acts, including links to more detailed information. Please read each thoroughly, as we are including information about how we will work with you on these.

FFCRA Sick and Family Medical Leave

  • Refundable pay for those directly affected by COVID-19
  • Generally, the Act provides that covered employers (see below) must provide to all employees:
    1. Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking medical diagnosis; or
    2. Two weeks (up to 80 hours) of paid family leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine ((pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.

A covered employer must provide to employees that it has employed for at least 30 days:

  1. Up to an additional 10 weeks of paid expanded family leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. This earning type would begin only after the first two weeks of paid leave, during which time #2 above should be used. The employer must inform T4P when switching from Emergency Paid Sick/Family Leave to Emergency Extended Family Medical Leave.

Covered Employers: The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees. Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

Qualifying Reasons for Leave:

Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:

  1. Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 (note this does not include shelter-in-place orders);
  2. Has been advised by a health care provider to self-quarantine related to COVID-19;
  3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
  4. Is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
  5. Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
  6. Is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Under the FFCRA, an employee qualifies for expanded family leave if the employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19.

T4P cannot determine whether an employee qualifies for any of the FFCRA Emergency Paid Sick Leaves.

Check for documentation required from employees who request this leve pay to ensure they meet the qualifications. note that state-mandated shelter-in-place orders are not qualified reasons for this pay.

The total amount of refundable credit each quarter equals the total amount of these wages, plus the employer portion of Medicare tax. There is no employer portion of Social Security tax on these wages.

Refunds will occur in one or more of the following ways:

  • Reducing the amount of Federal 941 taxes due on a given payroll
  • Excess refund claimed on Form 941 for a given quarter (Q1 – Q4 2020)
  • Form 7200 may be used to get faster access to excess refunds, rather than wait for Form 941 refunds to process. Don’t file the form to request an advance payment for any anticipated credit for which you already reduced your tax deposits (https://www.irs.gov/instructions/i7200). A signed release form for T4P will be required. Clients must inform T4P about their filed Forms 7200 prior to the end of each quarter, and send us copies of all filed forms submitted for each quarter. The deadline for submitting to T4P copes of all Forms 7200 fled with the IRS will be the last day of each quarter.

Paycheck Protection Plan (PPP) loans

The Paycheck Protection Plan:

  • Allows businesses to apply for loans to pay for payroll costs, rent, and utilities.
  • Loans may be forgiven with no related imputed revenue if funds are used for qualifying payments and meet requirements (e.g. at least 75% used for payroll).
  • Loan application requirements are detailed by individual banks and lenders.
  • Once a loan is forgiven, businesses can no longer defer employer Social Security tax payments.
  • Businesses cannot utilize both the Employee Retention Credit and the PPP loan.
  • Not all loans or portions of loans are guaranteed to be forgiven. Obviously, the rules around this are not determined by T4P.
  • T4P cannot and will not police who has taken advantage of more than one option.

Employee Retention Credit

The ERC is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all qualified quarters is $10,000.00, so that the maximum credit per employee is $5,000.00.

Things to note:

  1. Businesses cannot utilize both the Employee Retention Credit and the Paycheck Protection Program Loan.
  2. To qualify, a business must be able to show a “significant decline in gross receipts” defined as a revenue decrease of more than 50% when compared to the same quarter last year.
  3. If you qualify for this program, your company has two options (current plan as of 4/14/2020):
    • When you run your payroll, tell T4P what portion of the pay will qualify for ERC, so we can code it correctly. We expect our software to support this feature starting in May.
    • For any amounts not covered in the point above, you will need to file Form 7200 to get an advance refund for this credit. A signed release form for T4P will be required. Clients must inform us about their filed Forms 7200 prior to the end of each quarter, and send us copies of all filled forms submitted for each quarter. The deadline for submission is the last day of each quarter.

Employer Social Security Tax Deferral

This program allows businesses to defer payments for the employer portion of Social Security taxes due between March 27, 2020 and December 31, 2020.

Things to know:

  • Deferrals are not allowed once a PPP loan has been forgiven.
  • Deferred amounts will not be forgiven, and are due as follows:
    • 50% of deferred amount due December 31, 2021
    • Remaining amount due December 31, 2022
  • If you elect to defer these payments, you will be responsible and must make the payments directly to the IRS, without any further involvement or reminders from T4P
  • Signed release form is required

 Posted by at 13:05
Dec 042018
 

A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees’ business expenses. How you report a reimbursement or allowance amount depends on whether you have an accountable or a nonaccountable plan. If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement.

These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee.

 

Accountable plan.

To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules.

  1. They must have paid or incurred deductible expenses while performing services as your employees. The reimbursement or advance must be payment for the expenses and must not be an amount that would have otherwise been paid to the employee as wages.
  2. They must substantiate these expenses to you within a reasonable period of time.
  3. They must return any amounts in excess of substantiated expenses within a reasonable period of time.

Amounts paid under an accountable plan aren’t wages and aren’t subject to income, social security, Medicare, and FUTA taxes.

If the expenses covered by this arrangement aren’t substantiated (or amounts in excess of substantiated expenses aren’t returned within a reasonable period of time), the amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a nonaccountable plan. This amount is subject to income, social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time.

A reasonable period of time depends on the facts and circumstances. Generally, it is considered reasonable if your employees receive their advance within 30 days of the time they incur the expenses, adequately account for the expenses within 60 days after the expenses were paid or incurred, and return any amounts in excess of expenses within 120 days after the expenses were paid or incurred. Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days.

 

Nonaccountable plan.

Payments to your employee for travel and other necessary expenses of your business under a nonaccountable plan are wages and are treated as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. Your payments are treated as paid under a nonaccountable plan if:

  • Your employee isn’t required to or doesn’t substantiate timely those expenses to you with receipts or other documentation,
  • You advance an amount to your employee for business expenses and your employee isn’t required to or doesn’t return timely any amount he or she doesn’t use for business expenses,
  • You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business, or
  • You pay an amount as a reimbursement you would have otherwise paid as wages.

Source:  IRS Publication 15

 Posted by at 10:17
Dec 032018
 
A recent judgment by the U.S. District Court for the District of Oregon requires the owner of a courier service, Gerald Brazie, Jr., and three of his Portland-based companies (Senvoy LLC, Driver Resources LLC, and ZoAn Management Inc.) to pay their drivers $3,087,100 in wages and liquidated damages as well as $112,900 in civil money penalties for violations of the Fair Labor Standards Act (FLSA).  The companies must also classify all drivers as employees and obtain a third party audit to ensure compliance with the FLSA.

 

The companies initially classified the drivers as employees but converted them to independent contractors in 2010.  As independent contractors, drivers were not paid overtime, minimum wage, or reimbursed for the costs of operating and owning or leasing their vehicles.  The change in classification reflected an attempt to keep up with competitors who treated drivers as independent contractors pursuant to a common industry practice.

 

The District Court evaluated the relationship between the companies and drivers and ultimately found the drivers should be classified as employees based on the FLSA’s economic realities test.  For example, the company controls the manner in which the work is performed in several ways including requiring drivers install a specific cell phone application for GPS tracking, requiring drivers wear uniforms, and preventing drivers from freely rejecting work.  The drivers have little ability to profit depending on their own managerial skills because of limitations on hiring their own employees and working for other employers.  These and other factors outweigh the fact that the drivers invest in their own vehicle, cell phone, uniform, fuel, and insurance, which tend to weigh in favor of an independent contractor classification.

 

This case is an important reminder that industry practice is not a defense to worker misclassification, and businesses should conduct a careful analysis to ensure compliance with federal and state law.

Source:  Barran Liebman LLP

 Posted by at 16:39
Apr 182018
 

In January of 2018, significant new laws affecting cleaning services in Oregon went into effect.  Property Services contractors are required to obtain a labor contractor license from the Oregon Bureau of Labor and Industries (BOLI).  Initially, BOLI was also requiring all property services contractors to submit weekly certified payroll reports.  As of March 12, 2018, certified payrolls report are no longer required.

Click here for the link to BOLI’s revised rule.

To read more about which professions fall under the Property Services/Janitorial Services rule, and the link to the revised 2018 Labor Contracting in the Janitorial Services Industry handbook, click here.

 Posted by at 07:47
Apr 132018
 

The Tax Cuts and Jobs Act signed into law by the President on December 22, 2017 made changes to Qualified Transportation Fringe Benefits that effect employers and employees.

Employers can no longer deduct the expenses for providing tax-free qualified transportation fringe benefits to employees, unless the employer treats the transportation fringe benefit as taxable W-2 wages to the employee.

Employees may still pay for transportation expenses with pre-tax dollars.

A Qualified Transportation Fringe is defined as:

  • Transportation in a commuter highway vehicle for travel between the employee’s residence and place of business
  • Transit passes
  • Qualified parking
  • Qualified bicycle commuting reimbursement

For 2018, the monthly limit on the amount that may be excluded from an employee’s income for qualified parking benefits will be $260 for parking at or near an employer’s worksite, or a facility from which the employee commutes via transit, vanpool or carpool.

Previously qualified Bicycle Commuting Benefits are no longer eligible as a tax free benefit.

 Posted by at 09:23
Sep 232017
 

When T4P runs your payroll, we always make sure you are notified of your cash requirement amounts.

The fund transactions will be of different types:  payroll direct deposit, live checks, taxes and payroll service invoice.

In your payroll bundle there is one report in particular that brings it all together for you:  the Cover Page.

On the right side of the Cover Page you will notice a Bank Information section which will look something like this:

Sample of Bank Account Information section of Cover Page

Remember, the electronic debits will be effective early morning the banking day before your pay date (before the bank even opens), unless you have made a different arrangement with your Payroll Specialist.

 Posted by at 10:31
Sep 232017
 

Oregon Saves is a new state-sponsored program that provides a vehicle for employees to save for retirement.

This program applies to all employers who don’t already offer a retirement plan to their employees.

Eligible employers will need to implement on the following timeline:

  • more than 100 employees: enroll in October 2017, start participating November 15th, 2017
  • 50 – 99 employees: enroll in April 2018, start participating May 15th, 2018
  • 20 – 49 employees: enroll in November 2018, start participating December 15th, 2018
  • 10 – 19 employees: enroll in April 2019, start participating May 15th, 2019
  • 5 – 9 employees: enroll in October 2019, start participating November 15th, 2019
  • 4 or fewer employees: enroll in April 2020, start participating May 15th, 2020

Most interaction with the plan will be through a website. Oregon Saves will mail an enrollment form to all employers of record in the state with instructions on either certifying they are exempt, or enrolling in the program.

New employers will be subject to the rules starting 90 days after being deemed an employer.

Once an employer is a participant in Oregon Saves, all new hires will be enrolled by default, with a savings rate of 5% of gross earnings. The rate will automatically increase each year thereafter by 1%, up to a maximum savings rate of 10%.

Employees can choose to change their savings rate, including stopping contributions.

Here is an introductory video that explains the program:

 Posted by at 10:18
Sep 232017
 

The minimum wage in Washington State is $11.00 per hour in 2017.  This minimum wage applies to all jobs, including agriculture. Employers must pay employees age 16 and older at least $11.00 per hour in 2017.

Employers are allowed to pay 85% of the minimum wage to employees under age 16. For 2017, this equates to $9.35 per hour.

Seattle, Tacoma, and the City of SeaTac currently have higher minimum wage rates. The local rate applies if it is higher than the state minimum wage rate.

Overtime pay requirements are not affected.

The minimum wage will increase annually over the next three years:

  • 2018: $11.50
  • 2019: $12.00
  • 2020: $13.50

Source: Washington Department of Labor & Industries

 Posted by at 08:43