the US Senate unanimously passed the House bill that brings some further clarity to the PPP Loan Forgiveness plan. The new law named the Paycheck Protection Flexibility Act includes several monumental changes to the PPP Loan program. As of the drafting of this message, we are still awaiting the President’s signature. Given that the covered period on some of the earliest loans is coming up to eight weeks very soon, conventional wisdom indicates he will sign it.

Here is a brief synopsis.

• Safe harbor.

While there is still a bit of a safe harbor on SBA review for loans under $2 million, the SBA clarified that they may still review loans of any size in terms of the actual need the business had for loan and will consider whether the business could have obtained credit elsewhere or whether the business had excess liquidity it could have used instead of this particular loan. Speculation is this will be applied to some of the larger loans obtained by large public company, but the SBA wants to be clear that it has the authority to review any loan.

• Document retention.

Employers need to retain loan-related documents used to obtain forgiveness for six years. Important documents include payroll records, lease agreements, utility bills and cancelled checks.

• Timing.

Upon filing the forgiveness application, banks will have 60 days to review the material followed by a 90 day period for the SBA to review (total of about 5 months). It is unclear at this point what the timing of the filing of the forgiveness application is.

• Borrower responsibility.

Borrower bears the sole responsibility for calculating forgiveness. Banks are charged with reviewing the application in good faith. Initially the banks were responsible for calculating forgiveness.

• Loan repayment period.

New loans will have a repayment period of five years from the current two years. Existing loans can increase the repayment period to five years IF the bank AND the borrower agree. Speculation is the bank will agree in most cases.

• Covered period extended.

The covered period will be pushed from 8 weeks to 24 weeks from the date of the loan. Everyone saw this one coming and it is definitely good news for most borrowers. Borrowers retain the option to stick with an 8 week period.

• Rehire staff extended.

The date to rehire pre-COVID staffing levels has been changed from June 30, 2020 to December 31, 2020. This is huge for businesses that have not fully restaffed due to lagging business, especially in areas hurt by the ongoing protests.

• Rehire exemptions granted.

Two really big developments here. Borrowers may claim a forgiveness reduction exemption if you made good faith efforts to rehire former staff AND replace them with similarly qualified staff but were unsuccessful. Documentation will be key here. You must maintain records of communications with former and prospective employees as well as documentation of the efforts made.

In a bow to the restaurant business, which was very active lobbying in this process, an exemption may be claimed by businesses that are unable to return to former staffing levels as a result of health-related requirements or guidances from CDC, HHS, local health depts and others. This is very good news for the restaurant / bar business (among others) that may be slower to come back due to COVID related rules.

• Employer match on social security payroll tax (6.2%) deferred.

Under the previous plan, employers could either delay paying this tax OR get a PPP loan. Now employers who choose to may do both. The first half of the deferred tax is due Dec 31, 2021 and the second half a year later.

• The payroll percentage requirement reduced to 60%.

In order to prevent forgiveness reduction, borrowers had to spend at least 75% of loan proceeds on payroll. That number has now been reduced to 60%. There is a big caveat here though, at least for now. If your other allowable expenses exceed 40% of loan proceeds, then none of those expenses will be forgiven. This is likely to change back to the former sliding scale of the previous plan.

• What’s next?

There are still over $100 B in funds available. If you haven’t applied and your business has been negatively impacted by COVID, there is still time. There may be a deadline of Jun 30 imposed, so if you want to, do it now.

There is a strong lobbying effort underway by the banking business for automatic forgiveness of any loan under $150,000. These loans account for 86% of the loan volume but only 26% of the loan values. Banks figure it will save them millions of hours and as much as $7B in not having to review forgiveness applications for these loans. That is a strong argument from a traditionally powerful lobby.

The text of the law can be found here.

As Ohio gradually re-opens, you may experience employees who refuse to come to work. If that is the case, then employers are obliged to report that to ODJFS, as it may affect the ability of that employee to collect benefits.

The new policy will be posted here.

To collect benefits, you (employees) must be ready, willing, and able to work, and actively looking for work during each week (including your waiting week) in which you are claiming benefits.”

A few items to note.

• Employers should require employees wishing to take this leave to provide evidence that they are missing work due to a qualifying reason. Examples of evidence are a doctor’s note advising the employee to self-quarantine due to concerns related to COVID-19; a copy of the Federal, State or local isolation order (e.g., Shelter in Place order); a notice or email from the employee’s school or childcare facility indicating that it is closed. Employers should retain these documents to substantiate their claim for the tax credit.
• This leave only covers employees who are unable to work or tele-work. If an employee and employer agree to work outside of the employee’s normal schedule, then the employee is able to work. Paid leave is not available for this employee unless a COVID-19 qualifying reason prevents the employee from working the assigned schedule.
• It is possible to take “intermittent” leave, for those employees who can still work or tele-work but not their full schedule. Flexibility is encouraged.
• Employees who were or are laid-off, furloughed, or otherwise no longer asked to work, whether prior to April 1, 2020 or after, are not eligible for paid sick leave or expanded family and medical leave. These employees may be eligible for unemployment benefits. This is true whether the layoff was caused by lack of business, or as the result of a Federal, State, or local directive (e.g., Shelter in Place order).
• As a general matter, if an employer provides paid sick leave or expanded family and medical leave, this will count against the employee’s eligibility for unemployment insurance benefits. It may make the employee ineligible, or the employee may be eligible for partial unemployment benefits.
• Employees cannot unilaterally use accrued vacation time concurrently with this leave. Employers and employees can agree to using accrued leave as a supplement to bring the employee to a normal daily wage, but employers are not required to acquiesce

We continue to monitor developments. Thank you.

The IRS has issued some guidelines for the newly adopted paid leave provisions as they relate to the coronavirus. We are researching the release and will post more as soon as possible.

IRS rules permit employers to lend employees up to $10,000, interest-free, without invoking any tax consequence. Employers with the resources are able to provide this form of assistance for employees who may be struggling making ends meet because of COVID-19.

You may already know but Buckeye Payroll Services is now working remotely. Telephone calls will be routed accordingly, but the fax line is temporarily unavailable. Please check back to this site for updates on this and other COVID-19 developments that may affect your business.

LANSING, MICH. To mitigate the COVID-19 outbreak, the Unemployment Insurance Agency and Michigan Works! Agencies are strongly urging workers to avoid visiting their statewide offices and utilize user-friendly online resources for unemployment assistance. Eligible employees should apply for unemployment benefits at Michigan.gov/UIA or by calling 1-866-500-0017. A factsheet on how to apply for benefits can also be found here. Michigan Works! resources can be found at MichiganWorks.org or by calling 1-800-285-WORKS.

UIA and Michigan Works! statewide offices will remain open, but the agencies will be limiting the amount of people within the offices at one time.

“In an effort to protect the health and safety of our residents and promote social distancing, Michigan workers needing assistance from the UIA are strongly urged to avoid visiting our offices. The fastest and best method is online at Michigan.gov/UIA. You can also connect with our agency by calling 1-866-500-0017,” said UIA Director Steve Gray.

UIA online resources include:

• File a claim for unemployment benefits
• Chat with a customer service agent (M-F, 8am to 5pm)
• Send a message to a customer service agent (weekdays after 5pm and before 8am and weekends)
• Manage your account 24 hours a day, 7 days a week

The Michigan Works! Agencies are also encouraging people to avoid public spaces and will be limiting in-person visits. Impacted workers were formerly required to appear in-person at a Michigan Works! service center but that requirement has been waived because of the public health emergency. The agencies are encouraging all individuals to connect with their local Michigan Works! office by call 1-800-285-WORKS or visiting MichiganWorks.org to set up an appointment. Virtual and phone appointments will be prioritized.

Yesterday, Governor Whitmer signed Executive Order 2020-10 to temporarily expand eligibility for unemployment benefits.

Under the governor’s order, unemployment benefits would be extended to:

• Workers who have an unanticipated family care responsibility, including those who have childcare responsibilities due to school closures, or those who are forced to care for loved ones who become ill.
• Workers who are sick, quarantined, or immunocompromised and who do not have access to paid family and medical leave or are laid off.
• First responders in the public health community who become ill or are quarantined due to exposure to COVID-19.

Access to benefits for unemployed workers will also be extended:

• Benefits will be increased from 20 to 26 weeks.
• The application eligibility period will be increased from 14 to 28 days
• The normal in-person registration and work search requirements are suspended.

Under the order, an employer or employing unit must not be charged for unemployment benefits if their employees become unemployed because of an executive order requiring them to close or limit operations.

The order also expands the State’s Work Share program. Employers are encouraged to implement the program that permits employers to maintain operational productivity during declines in regular business activity instead of laying off workers. More information about Work Share can be found here.

Additional unemployment resources for employees can be found here and for employers here.

Updates will be posted to Michigan.gov/Coronavirus and CDC.gov/Coronavirus.

COLUMBUS, OHIO – The Ohio Department of Job and Family Services (ODJFS) is instructing Ohio employers planning layoffs or shutdowns as a result the coronavirus (COVID-19) pandemic to share the following mass lay-off number with their employees to speed the processing of unemployment benefits: 2000180. The agency also is providing instructions for employers to share with their employees about how to apply for benefits.

“This measure will expedite the processing of benefits for individuals who lose their jobs as a result of the pandemic and allow them to receive their first benefit payments as quickly as possible,” said ODJFS Director Kimberly Hall. “We want to make sure all employers are aware of this number so that we can provide seamless service when processing claims.”

Ohioans can apply for unemployment online 24 hours a day, seven days a week, at unemployment.ohio.gov. It also is possible to file by phone at (877) OHIO-JOB (1-877-644- 6562) or TTY at (888) 642-8203, Monday through Friday 8 a.m. to 5 p.m.

Employers with questions should email UCTech@jfs.ohio.gov.

For more information about COVID-19 in Ohio, visit coronavirus.ohio.gov or call 1-833-4-ASKODH

In light of the recent concerns about the spread of COVID-19 (Coronavirus) into the US, we want you to know that Buckeye Payroll Services has developed a plan to assure that we can continue to serve our clients should we see significant infection from the virus in our communities. We will continue to monitor developments closely and take all necessary steps as warranted by events.

Undoubtedly you have considered this situation carefully as welland your business is most likely affected by the governments’ reactions to the virus. In Light of the recently announced restrictions on the size of groups to fewer than ten people, we have made some changes to our physical operation at the offices located at 5749 Park Center. Our reception area will be accessible during business hours but will only be staffed each day from 9:00 AM until 12:30 PM beginning today. Our staff are doing their very best to frequently sanitize surfaces and door handles throughout the day. If you need to stop by the office after 12:30 PM, it is advisable that you contact us either by email, text message or phone call ahead of time so that we are available to assist you when you arrive. In the event of further government restriction on travel and public events, this policy will be updated..

If your employees have been affected by the recent restriction on business and need any reports to complete their unemployment claims, we are here to provide information for you and them. Just let us know what you need.

We appreciate your patience in dealing with us during these trying times. We appreciate you as our client and will strive to ensure we meet your service needs at all times.

The governor of New York has ordered elimination of the tip-credit for employees in certain industries bringing their wage in line with the actual state minimum wage.

Under current law, as in Ohio, employees who receive tips may be paid less than the minimum wage so long as they earn enough tips to bring them up to the actual minimum wage. For certain businesses, this no longer will fly in New York. This a trend that may spread to other states.

The rationale is that, while tipping in certain industries is not uncommon, it is not consistent and employees cannot rely on tips for wages. Further, the tip is intended to supplement the worker’s income, not be a substitute for wages. Some of the industries affected are hair, beauty and nail shops, car washes, dog groomers and parking valets.

While the US Dept of Labor allows a “tip-credit” to be applied to minimum wage, it is looking at changing the rules. New York isn’t waiting and this is a trend that may extend into other states.

Food service and other hospitality workers that expect tips as part of the service are not included in this change.

The federal minimum wage lags behind the minimum wage enacted by many states, and in some cases, it lags far behind. The $7.25 wage has not changed in more than ten years, but perhaps the federal government is leaving it to be decided on a more local level. After all, the cost of living in Seattle, WA is a bit more then it is in Springfield, MO.

The minimum wage in Ohio now stands at $8.70 after a slight increase went into effect on Jan 1. Other states have a wage that dwarfs that of Ohio. The minimum wage in the state of Washington is currently $13.50.

The way stories of increasing minimum wage go is that there is initially a lot of hand-wringing over lost jobs, lost business, etc. Then the report goes that the reality is there is little loss of jobs, loss of businesses. But that is not always the case.

Canatta told King 5 that he expects to lose $40,000 this year with the increased minimum wage. Canatta says he’s already raised menu prices twice over the course of three years to compensate for the wage increase.

In 2021 Washington’s wage will hit the goal of $15.00/hr.

As of 10:00 AM on Monday, Jan 6, 2020 all phone lines to our offices are offline according to our provider. This includes fax lines. Efforts are being made to restore the lines as quickly as possible. We apologize for the inconvenience. We are responding to emails and cell phone calls, if you have those contact details.

The lines have been restored. Thank you for your patience.

Did you know that the IRS levies billions of dollars to employers each year largely the result of payroll errors?

Buckeye Payroll Services tracks and accurately files all of your payroll taxes so you can avoid those costly mistakes that lead to state and federal penalties. Partnering with Buckeye Payroll Services can be far less costly than even a single penalty from the IRS.

Drop us a line or sent a direct tweet to us @BuckeyePayroll if you would like to know more.

It’s a common misconception among employers that they could avoid paying overtime wages to an employee if they simply pay the employee a salary. While there are other criteria that must be satisfied in order to exempt an employee from overtime rules, the one overlooked rule is only recently come into play.

According to federal wage and hour rules, among the criteria is a mandated minimum wage for salaried employees and that minimum is increasing in 2020. Effective Jan 1, 2020, salaried employees must earn $35,568 annually ($684 per week), at a minimum, to qualify as exempt under the overtime rules. There are other criteria that must be satisfied as well.

If you would like more information in this regard, give us a call or send us a direct tweet @BuckeyePayroll.

Any employee beginning a new job after January 1, 2020 will need to complete a brand new 2020 W4. Also, all employees looking to make changes to their withholding after January 1, 2020 will also need to use the updated form. Please contact us with questions or requests for the revised form.

The Ohio Department of Taxation has released new withholding tables effective with payrolls that end on or after January 1, 2020. Employees who have Ohio income tax withheld from their pay may notice a decrease in the amount withheld giving them a bit more in their take-home pay.

New tax tables can be found here. Please let us know if you have any questions.

The mayor of the city of Toledo announced that due to several factors, the city will have more to spend than it anticipated. This includes increased revenues from income taxes and traffic fines (read: camera-based tickets) as well as savings from lower workers compensation and health care costs. The number could be $7 or 8 million.

The numbers are not certain and there will likely be no surplus since city financing is largely a shell game anyway.

To maximize awareness, the Ohio Department of Taxation is sharing a renewed alert from the Security Summit regarding a phishing e-mail scam which targets payroll or human resource departments requesting employee W-2 information. Please visit www.irs.gov for additional information.

Partners,

The Internal Revenue Service, state tax agencies and the tax industry today renewed their warning about an email scam that uses a corporate officer’s name to request employee Forms W-2 from company payroll or human resources departments.

This week, the IRS already has received new notifications that the email scam is making its way across the nation for a second time. The IRS urges company payroll officials to double check any executive-level or unusual requests for lists of Forms W-2 or Social Security number.

The W-2 scam first appeared last year. Cybercriminals tricked payroll and human resource officials into disclosing employee names, SSNs and income information. The thieves then attempted to file fraudulent tax returns for tax refunds.

This phishing variation is known as a “spoofing” e-mail. It will contain, for example, the actual name of the company chief executive officer. In this variation, the “CEO” sends an email to a company payroll office or human resource employee and requests a list of employees and information including SSNs.

The following are some of the details that may be contained in the emails: Kindly send me the individual 2016 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review. Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary). I want you to send me the list of W-2 copy of employees wage and tax statement for 2016, I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap. Working together in the Security Summit, the IRS, states and tax industry have made progress in their fight against tax-related identity theft, cybercriminals are using more sophisticated tactics to try to steal even more data that will allow them to impersonate taxpayers.

The Security Summit supports a national taxpayer awareness campaign called “Taxes. Security. Together.” and a national tax professional awareness effort called “Protect Your Clients; Protect Yourself.” These campaigns offer simple tips that can help make data more secure.

As you may be aware, the Ohio Bureau of Workers Compensation is changing the manner in which it collects premiums from Ohio employers. Effective June 30, 2105, premiums will be paid on a bi-monthly basis and will be paid from an invoice received from BWC.

As a matter of policy going forward, Buckeye Payroll Services will be unable to process your BWC payments unless we receive your bi-monthly invoice. This is, of course, subject to change as the practices of BWC change.

Employers across Ohio are receiving a mailing from Ohio BWC outlining the new process for BWC billing. The letter is for budgeting purposes and shows the employer an estimate of what they can expect to pay in the Fiscal Year 2015-2016. If you have any questions, you may consult with BWC. The mailing is not a bill, but simply an estimate of what the payments will look like.

The official invoice will be released in August.

The processing of outgoing mail from Toledo is now being handled in Detroit. This is unpopular among postal workers in Toledo, and the dissatisfaction has led to long delays of the delivery of outbound mail, even mail addressed to a Toledo address.

We are doing everything we can to craft a solution that works for everyone, and it isn’t easy. We appreciate your patience with us, and encourage you to voice your dissatisfaction with the way the system is being run at this point in time.

Please consider enrolling in direct deposit and eliminate the worry over late-arriving pay checks. Ask us for more information.

The following is a video tutorial from the Ohio Business Gateway and it describes the relationship between your company and Buckeye Payroll Services. It further shows you how to establish a connection between our two companies that will allow us to prepare your payroll tax returns/payments.

Please let us know if you have any questions.