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Questions addressed about temporary layoffs

Group of business owners gathered at a table

This is a challenging time for both employers and employees, as we all navigate changes from the impact of the coronavirus and COVID-19. Here, we respond to some questions from employers about recent legislation and handling specific situations in the workplace:

What programs are currently available to assist my employees during our temporary layoff?
At the current time, your employees can file for unemployment compensation online. On the state of Michigan coronavirus website there are additional quick links for additional community resources.

Our staff recently attended a webinar regarding the Families First Coronavirus Relief Act (FFCRA) that goes into effect April 1, 2020. We will send out a summary of the program and details shortly. Our partners at Dickinson Wright also share some insight on the law here.

Am I required to provide time off to my employees during Michigan Gov. Gretchen Whitmer’s COVID-19 Executive Order, which runs from March 24 to April 13, 2020? It essentially orders citizens to stay home unless leaving the house to get food or other essentials.
Unless your company provides essential services under the Governor’s act, your employees should be allowed to be at home at this time. During this last part of March, you are not required to provide paid time off, however, you may choose to allow your employees to use accrued vacation or paid time off.

If an employer lays off employees now, will that affect the unemployment tax rates as they normally do, or is there some sort of forgiveness during this crisis time?
An employer or employing unit that is required to close or limit operations due to an executive order will not have an unemployment insurance tax rate increase if employees file for benefits.

If we do not lay off employees, but pay them during the Executive Order period, are we eligible for the FFCRA credit? Is the credit a permanent reduction in payroll taxes or will the taxes need to be paid at a future date?
The FFCRA will require certain employers to provide employees paid time off for a variety of COVID-19 situations, including when an employee cannot work due to a quarantine pursuant to a Federal, State, or local government order. As the FFCRA does not go into effect until April 1, 2020, any paid time off given to employees during the month of March may not be eligible to under the program.

Credits will be requested at the time of the quarterly tax filing. If an employer is eligible for more credit than the amount of their taxes, a refund may be possible.

What are the immediate requirements to provide notice of the changes to our employees?
Each covered employer must post a notice of the Families First Coronavirus Response Act (FFCRA) requirements in a conspicuous place on its premises. An employer may satisfy this requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website.

Here are two posters that can be posted in the workplace:

If an employee is laid off, is there anything that could exclude the employee from any bailouts, tax credits or other assistance?
Nothing that we are aware of at this time. Again, see information above regarding the effective date of the FFCRA. It has been confirmed to be effective on April 1, 2020. Tax credits for paid time off related to COVID-19 are expected to be made at the time of second quarter tax filings.

What type of relief or tax credits are available to employers?
The third Coronavirus stimulus package was passed this afternoon and will be signed into law imminently. We intend on reviewing all three bills as it relates to employment and taxes and will update you on Monday.