Technology Paycom

Finding Support in Federal Relief Programs – and the Right Software


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Recent coronavirus relief legislation and cutting-edge HR software can work hand in hand to make life easier for many organizations.

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The Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act form the twin support structures of the federal legislative response to the 2020 COVID-19 pandemic. While both were signed into law in March, provisions and funding amounts have been subject to significant changes in the intervening months, and government agencies have released additional resources and guidance.

Emergency leave and payroll needs

Smaller businesses received some special attention in the form of FFCRA provisions pertaining to leave for employees affected by coronavirus, applicable to organizations employing fewer than 500 people, and certain public-sector employers. These included:

  • for full-time employees, up to two weeks of emergency paid sick leave
  • for part-time employees, paid sick leave equivalent to their average hours worked over a two-week period
  • per Family and Medical Leave Act expansion, up to 10 weeks of job-protected leave at two-thirds of normal pay

These provisions remain in effect. For employees who think they may qualify for leave under the FFCRA, the Department of Labor recently released a tool to help determine eligibility. This easy-to-use online resource walks employees through a series of options to help them make a quick determination.

The Paycheck Protection Program (PPP) served as another cornerstone of the effort to help smaller businesses. Established by the CARES Act and administered through the Small Business Administration, the PPP helps ensure businesses with 500 or fewer employees have sufficient funding to cover the costs of payroll. In most cases, as long as at least 60% of the loan’s funds goes toward payroll costs – with no more than 40% being used for non-payroll related costs such as interest on mortgages, rent and utilities – the loan can be fully forgiven, effectively making it more akin to a grant.

Also, in early June the Paycheck Protection Program Flexibility Act (PPPFA) was signed into law to provide additional leeway to loan recipients. It extends the time frame under which PPP funds can be spent and still qualify for forgiveness (from eight weeks to 24 weeks) and changes the maturity date for portions of loans that do not receive forgiveness (from two years to five years, for loans made on or after June 5), among other provisions.

How to leverage technology to automate COVID-19 support

Single-database business software provides further peace of mind by automating processes of interest to HR and accounting professionals. The provider should be immediately responsive to legislative developments, making real-time alterations to the system to accommodate federal provisions as they are put into effect.

For example, the FFCRA provides employees affected by COVID-19 with up to 80 hours of emergency paid sick leave at their regular pay rate. In response, effective HR software should quickly reflect new earning designations in its system, allowing applicable employees’ time away from work to be counted accordingly, with no negative impact on payment or other time-off accruals.

Similarly, per the Emergency Family and Medical Leave Act expansion in the FFCRA, applicable employees qualified for up to 10 weeks of additional job-protected leave at two-thirds of their regular pay rate. This required software updates to add a new option to the payroll system, under which employees could be automatically paid at a two-thirds rate, ensuring compliance and limiting the need for manual changes.

Furthermore, there are the tax benefits provided to organizations by both the CARES Act and the FFCRA. With many employers qualifying for voluntary deferral of the employer-side portion of Social Security taxes to 2021 and 2022, the right software must be ready to accommodate deferral as early as an organization’s next payroll. The same logic applies to the employer-side Social Security tax credits available to organizations paying sick leave or extended family medical leave to employees affected by COVID-19, and to organizations eligible for the Employee Retention Credit available under the CARES Act. To learn more, visit Paycom’s collection of resources at Paycom.com/COVID-19.