On August 8, 2020, President Trump issued an executive order and three executive memoranda providing additional COVID-19 relief to individuals and businesses. Included in the orders were renter and homeowner eviction protection, unemployment compensation assistance, deferral of payroll tax obligations, and student loan payment relief.
Of particular importance to employers, one of the orders issued by President Trump temporarily defers the collection and payment of the employee portion of social security tax between September 1, 2020 and December 31, 2020. The deferment is only applicable for employees whose bi-weekly pre-tax compensation is less than $4,000. It is important to note that the memorandum authorizes the Secretary of the Treasury to issue guidance and to explore avenues to potentially eliminate the obligation to pay the deferred taxes all together. Until regulations are issued by the Department of the Treasury, employers should continue to comply with existing requirements regarding the payment of payroll taxes.
A second order provides for additional unemployment compensation up to $400 per week to eligible unemployed persons. This directive follows the July 31st expiration of the $600 unemployment benefit authorized under the CARES act. However, unlike the $600 under the Cares Act – which was completely covered by federal funds – this memorandum urges states to cover 25% (or $100 per week) of the additional benefits, subject to an agreement between the federal government and each state regarding the administration of the program and its funding. Additionally, the $400 per week benefit is only available to those already receiving at least $100 in state unemployment benefits. This differs significantly from the original $600 benefit, which only required claimants to be eligible for $1 of state unemployment benefits.
Governor DeWine stated this week that Ohio will apply to receive the additional funding from the federal government, but that the state will not be contributing 25%. This means that those eligible for the additional funds will only receive $300. However, because the state’s application for the funds has to be processed by the Department of Labor, it will likely be several weeks before unemployed Ohioans receive the benefits. Additionally, legal challenges are expected to be made to the orders issued by the President, meaning that there is a possibility a court strikes down some or all of the orders.
The attorneys at Fishel Downey Albrecht & Riepenhoff, LLP will continue to monitor the status of these executive orders. If you have any questions about this or any other matter, please contact us at info@fisheldowney.com or call 614-221-1216.