Coping with COVID-19, the Coronavirus

These days, you can’t help turning on the news and getting updates, minute by minute, on the coronavirus (COVID-19). While it originated in China late last fall, it has quickly spread all over the world and has now arrived in the U.S. It’s changing how businesses operate and how we live our lives.

Here are a few facts about the virus:

  • COVID-19 started as an animal virus in a “wet market” in Wuhan, China, where farmed and exotic animals are tied up or stacked in cages. Many such animals are killed on-site to ensure freshness. According to Dr. Jeff Kwong, an epidemiologist and scientist with ICES and Public Health Ontario, “This virus is closely related to known bat viruses. That’s why it’s believed to have originated from a bat.” It has since developed the ability to spread from human-to-human. Because it’s a new virus, humans have never been exposed to it before and no one is immune from getting it.
  • It can be spread from person-to-person even before an individual feels ill or starts showing symptoms. Others don’t even become symptomatic, yet they can transmit the virus.
  • There are multiple ways to transmit the coronavirus. Currently, the CDC acknowledges it being spread by close contact, respiratory droplets in the air when an infected person coughs or sneezes, and by touching surfaces that an infected person has come in contact with. The virus has also been found in urine and feces.
  • At greatest risk for this virus are those with a compromised immune system, including individuals with severe chronic medical conditions, such as diabetes; respiratory conditions; cardiovascular disease; heart, lung or kidney disease; and senior citizens. It’s more lethal than seasonal flu.

Yet for all we know about the coronavirus to date, there’s so much more that we don’t know, such as how many fatalities can we expect. According to the New York Post, in 2020, the coronavirus could kill 10 times more Americans than cancer or heart disease. Potentially, this could mean 6.99 million deaths this year, with the pandemic potentially spreading well into 2021. To further complicate things, a person can test negative numerous times, only to then test positive. According to researchers, there’s no logic or explanation for this.

Protecting Your Business and Employees

Once individuals test positive in an area, state and local governments have been imposing strong protocols that can protect their citizens, yet these can hurt your business. Examples are:

  • Travel restrictions: If your employees need to travel locally, regionally, or to countries affected by the virus, this can pose a challenge. They may need to consider Skype or other remote means of participating in meetings. In addition, select cities, large and small, have had lockdowns imposed for the safety of their residents.
  • If your employees exhibit any of the symptoms of COVID-19, doctors recommend they should stay home from work so as not to infect others. On average, this can add up to two weeks or more, making it difficult for a business to continue functioning. Yet working remotely will protect you and your employees, allowing your business to continue to function.
  • If your employees commute to work using public transportation, in all likelihood, they’re in very close proximity to others, thus posing a higher risk for exposure/transmission of the virus. Then, there’s also the possibility that public transportation can be shut down for a designated period of time. Are your employees in a position to access alternate transportation that doesn’t put them at great risk? Do they have a backup plan?
  • If your business serves the public, including restaurants, the hospitality industry, retail, and other forms of entertainment, if your local or state government requires lockdowns in your area, how will you cope and take care of your employees?
  • Can you afford to undergo supply chain disruptions related to your business if lockdowns are put in place? How long can you afford to survive such disruptions?

Steps You Can Take to Protect Your Business

This is the time to pull out your disaster contingency plan, if you have one, and review, update, and implement it. Hopefully, your plan also includes solutions that address sick leave policies and supply chains.

There’s no guarantee that COVID-19 won’t hit your city or region. Be prepared.

  1. If any of your employees test positive for COVID-19, they should stay home. Does your sick leave policy address employees who lack leave or are unwilling to use it? According to the website www.officepulse.captivate.com, a study of 642 white-collar workers showed 70% of business professionals go into their office when they feel sick, because they feel stressed, overloaded with work, and fear falling behind.
  2. As of March 16, 2020, The Washington Post reports Congress has taken steps to cover employees according to the latest version of a bill to protect limits eligibility for 12 weeks of paid family leave for parents who care for children whose schools have closed. However, this legislation has a loophole that allows companies to get out of paying for two weeks of sick leave. Plus, small businesses under 50 employees and many health care providers can now be exempted from paying sick leave.
  3. As your business deals with possible temporary closings and/or potential absences due to the coronavirus, does your leave policy require adjustments? Will you offer sick leave to workers who normally don’t receive it? Do you offer paid or unpaid leave, as workers are less likely to take unpaid leave? Consider how you will handle employees who are put under quarantine, whether mandatory or voluntary.
  4. Are your employees set up to work remotely…from home? Your IT department will need to either set up this process or update it ASAP.
  5. Everyone is stressed. Communication is key when such a crisis occurs. Communicate what you expect from your employees during this challenging time and give them the opportunity to ask questions and express their concerns. Allay their fears by communicating with them often.
  6. Consider the following suggestions when it comes to communication: 
  • As mentioned earlier, review your company’s policies related to international and domestic business travel, if appropriate
  • Specify what you expect of your workers who feel ill
  • Clearly communicate any revisions to your absence policy or sick leave rules
  • Communicate your company’s plans regarding continuing operations if a local outbreak of the coronavirus occurs
  • Determine and convey to all of your employees who will work remotely and how they are expected to access your systems
  • Designate who are your “essential” employees who need to come in and who can work remotely

Stress COVID-19 precautions

Review what your employees need to know to protect themselves from the coronavirus. For example, remind everyone that they should cover their mouth and nose with a tissue when sneezing or coughing, or tell them to cough into their elbow. Emphasize the importance of handwashing for a minimum of 20 seconds. And, if your employees feel ill, insist that they stay home so as not to infect their co-workers.

At this critical time, you can never over communicate with your employees. It’s better for them to hear the same consistent message over and over. Some may feel stressed about what’s being communicated on the news and are seriously concerned about their at-risk loved ones. Others may be focused on what actions the government is taking in terms of school closures and city lockdowns. Then, too, they may have financial concerns about how they can afford to be off work for weeks at a time—especially if they don’t receive a paycheck. The message may not be easy to convey; however, as long as your employees know you’re being honest with them and communicating what you know when you know it, they’re more likely to understand that we’re all in this together and that they’re not alone.

Resource Guides for Dealing with Covid-19

A Hassle-free Payroll Process

Payroll Service Indianapolis

Every employee looks forward to receiving an accurate paycheck, whether weekly, bi-weekly, or monthly. However, no one thinks about what’s involved behind-the-scenes to make it possible, except those doing the work. The truth is there’s far more than meets the eye. And, if the responsibility is on your shoulders, you’re not alone if you feel stressed trying to juggle all the moving parts.

Because of the intricate detail involved, you need to be hypervigilant and have an in-depth knowledge of wage laws and payroll taxes at the local, state, and federal level, be up-to-date on employee deductions, and know your company’s internal processes. Below are tips to help you navigate through this complex maze.

To make it easier on yourself, make sure that new employees complete the proper paperwork for their status as soon as they come onboard. For example:

  • Federal W-4 assures the correct federal income tax is deducted. Also consider having a new Form W-4 completed annually and when your employees’ personal or financial situation changes.
  • State withholding forms (these are based on where your employee lives and works).
  • Form I-9 verifies the identity and employment authorization of individuals hired in the U.S.

In addition to completing these forms, there’s a list of additional forms that need to be completed, based on the employee’s status:

  • Employee or independent contractor? For employees, income tax, Social Security, and Medicare are withheld from paychecks. Independent contractors have no employee or employer taxes withheld.
  • Exempt and nonexempt? The difference is how that employee is paid. According to the Fair Labor Standards Act, an exempt employee does not receive overtime pay, nor do they qualify for the minimum wage. However, a non-exempt employee is typically paid based on the number of hours worked. And, if they exceed the standard number of working hours, they will receive overtime pay.
  • Calculating your employees’ overtime pay is more complex than basing it on exceeding the 40-hour work week and paying them accordingly. While employers must pay 1.5 times an employee’s regular pay rate to nonexempt employees for all hours over 40 in a work week, there are some exceptions for nonexempt employees who work for emergency services and hospitals.

Also, if your employee works different jobs requiring different pay rates within the same week, this makes the overtime calculation a bit more complicated. Check with the FLSA and your state’s overtime rules to assure that you’re calculating your employees’ overtime correctly.

  • Set your pay schedule and note federal banking holidays so you know in advance when to prepare your payroll or move up your processing day to work around those holidays. At the end of each year, it’s also a good idea to set the pay processing day schedule for the following year.
  • Keep track of the total number of hours and expense for each payroll period. This process is easier if you only have exempt employees. Nonexempt employees are different in that they can earn overtime, causing their wages to fluctuate. Monitor your nonexempt employees’ overtime closely. This will help you control labor costs and manage cash flow. And, if your nonexempt employees are consistently working longer than 40 hours, you’ll want to review your businesses processes.
  • Payroll withholding can fluctuate based on changes in your employees’ lives. This can affect your payroll processing throughout the year. For example, if an employee marries or divorces or changes their number of allowances, this will affect what’s withheld from their paychecks.

Securely Store Documents

Once you’ve collected all the necessary documents on each employee in your business, you’ll need to store those documents in a safe place—whether this means storing digital versions or filing them in cabinets. According to the U.S. Equal Employment Opportunity Commission, all personnel records should be maintained for one year and all payroll records for three. In addition, you should keep Forms I-9 in a separate secure location different from where your employees’ other records are stored so that you can access them if the Department of Homeland Security, Department of Justice, or Department of Labor requests to see them.

Establish an Employment Tax Deposit Schedule

It’s critical to report and deposit your employees’ income, Social Security, and Medicare taxes to the IRS regularly throughout the year. These filings are based on the size of your payroll.

For example, deposit large payroll taxes semiweekly. With smaller payrolls, deposit your taxes on the 15th of the month. However, if the 15th falls on a weekend, you’ll need to pay the taxes on the first working day of the next week. To file these taxes, use IRS Form 941, Employer’s Quarterly Federal Tax Return (https://www.irs.gov/pub/irs-pdf/f941.pdf).

In addition, you’re required to pay federal unemployment taxes, along with state and local tax filings and payments. To help you remember when taxes are due, keep a calendar that features all critical dates pertinent to your business or bookmark the Employment Tax Due Dates page on the IRS website (https://www.irs.gov/businesses/small-businesses-self-employed/employment-tax-due-dates).

Keep Track of Tax Laws/Changes
As a business, you need to keep apprised of tax laws/changes. No one wants to be penalized for failing to keep up with changes and not withholding their employees’ taxes properly.

  • Indiana’s state minimum wage is $7.25/hr. Select states nationwide have increased their minimum wage in 2020. To determine the minimum wage for your state, go to: https://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx
  • Be aware that state and federal payroll tax and withholding rates generally change at the beginning of a year. However, in the instance when changes are made mid-year, they are retroactive to the beginning of that year. This means that you will need to recalculate taxes and make up the difference to the point in the year that this tax change was instituted.
  • As mentioned earlier, if the Fair Labor and Standards Act (FLSA) surpasses the state minimum wage, you’ll have to pay your non-exempt hourly employees based on the federal rate. And, note that the FLSA determines which employees are considered non-exempt.

Assess Your Company’s Internal Processes
While it’s vital to know federal, state, and local laws and practices, you must also be familiar with your internal policies that affect payroll. This includes paid time off, sick pay, benefits, 401(k), and commissions.

Your business has its own unique benefits plan. For example, some companies pay their employees’ health insurance, while others withhold funds from employees’ paychecks. Then, depending on the years of service or career level, your employees may be compensated accordingly. Plus, if you have a commission or bonus plan, that needs to be taken into account. If you offer a 401(k), do you match it? What determines who is eligible for the match? These types of factors affect payroll and need to be documented and monitored.

Enlist your department managers to help keep you abreast of changes within their departments. They can also report changes in employees’ status as they come up and pass on policy revisions and other payroll-related actions, accordingly.

Should You Automate?

Are you overwhelmed with all the responsibilities involved with managing payroll and taxes? You might want to consider incorporating automated payroll services or outsourcing your payroll needs.

Whether you outsource your payroll needs or incorporate automated payroll services, here are some benefits to consider.

  • Direct deposit and electronic paystubs save you time and paper.
  • Track tax changes. You know your withholdings are always accurate.
  • Simplifies reporting new hires and onboarding, making adding new staff flawless.
  • New employee data goes directly to payroll, while the related documents are stored digitally.
  • Eliminates the need for timesheets, thanks to online and mobile time clocks.
  • Employees can now make address changes and update their W-4 forms without involving payroll personnel.

Processing payroll can be stressful. It involves lots of detail and must be done right. However, creating a schedule, managing and securing your documents, and keeping up-to-date on withholding rates and tax laws, as well as monitoring your business practices, can help to reduce that stress. For the latest in payroll news, regularly monitor organizations like the American Payroll Association or the Society for Human Resource Management. Consider creating a team of network professionals whom you trust, such as your CPA and other payroll practitioners, and share best practices. Finally, don’t hesitate to ask for help when you’re overwhelmed with the most essential parts of your payroll process. Consider hiring professionals who solely handle all the responsibilities related to managing your payroll. And, remember, handling payroll responsibilities throughout the year will leave you less frazzled at the end of the year.