President Trump Signs Stimulus Package Overview
December 29, 2020
President Trump Signs Stimulus Package, Overview

Recently, President Trump signed into law the new COVID-19 fiscal relief package. The package and its 5,000 plus pages are clearly too lengthy to go through in this format, but below are some bullets providing a 30,000-foot overview of the key provisions of the law and the areas affected:


Unemployment

  • Includes requirement for applicants to provide documentation of employment (not just self-certification as is currently the case) and requires states to verify applicant identity. Also includes Return-to-Work reporting requirements states to have a mechanism for employers to report when someone turns down a job and notifying claimants of the requirement to accept suitable work.
  • Additional federal $300 per week add-on from Dec. 26 through April 5, with an application deadline of March 14.
  • Extends federal funding of 50% of the cost for reimbursable employers until March 14. 
  • Extends and phases out Pandemic Unemployment Assistance (PUA), a temporary federal program covering self-employed and gig workers, to April 5, with an application deadline of March 14.
  • Extends and phases out Pandemic Emergency Unemployment Compensation (PEUC), which provides additional weeks when state unemployment runs out, to April 5.


Stimulus Checks

  • $600 Stimulus Checks/Payments per eligible individual, including dependent children.
  • Stimulus Checks begins to phase out for individuals with Adjusted Gross Income (AGI) of $75,000, $112,500 for head of household, and $150,000 for married filing jointly.
  • Ineligible individuals are nonresident aliens and adult dependents.
  • Retroactively fixes the “mixed status” issue from CARES where a resident is married to a nonresident alien. 


Paid Leave:

Families First Coronavirus Response Act (FFCRA) tax credits for paid leave are extended through March 31, 2021. However, the mandate to provide paid leave is not extended.

  • Allows self-employed individuals to use the prior year’s earnings for determining paid leave amount COVID Tax Provisions.
  • New York State’s Quarantine Leave Law, which requires that New York Employers provide job-protected sick leave to employees who are subject to a mandatory or precautionary order of quarantine or isolation, does NOT expire at the end of the year.
  • Employers should still consider the DOL’s past guidance on the FFCRA while determining how to comply with the new legislation until additional information is released. Additionally, it is critical that employers update their existing FFCRA leave forms to take into consideration the changes. Since employees are not eligible to receive more leave than was provided through the FFCRA, employers must ensure they keep accurate records to reflect leave provided for all employees.


Support for Small Business and Farmers


 Payroll Protection Program Modifications: additional $284.45 billion in funding

  • Extends covered period through March 31, 2021.
  • Clarifies that business expenses paid for with forgiven PPP funds remain deductible.
  • Simplifies the Loan forgiveness process for borrowers with PPP loans of $150,000 or less. 
  • Expands the forgivable expenses to include supplier costs and investments in facility modifications and personal protective equipment required to operate safely.
  • Enhances borrower flexibility by allowing borrowers to select their loan forgiveness covered period between 8 weeks and 24 weeks.
  • Allows PPP borrowers to include additional group insurance payments when calculating their PPP payroll costs. Covering insurance plans such as vision, dental, disability and life insurance.
  • Establishes the loan amount calculation for farmers and ranchers to align more accurately with recent years’ income.
  • Expands PPP eligibility for certain 501(c)(6) nonprofits and Destination Marketing Organizations with 300 or fewer employees that do not receive more than 15% of their revenue from lobbying.
  • Allows forgiveness for PPP loans and Economic Injury Disaster Loans (EIDL), emergency advance grants, preventing small business owners from being left with unexpected PPP loan balances.


Second round of PPP for businesses with 300 or fewer employees and a 25% revenue loss.

  • Max loan of 2.5X average monthly payroll up to $2 million.
  • Accommodations and Food Services may receive a loan up to 3.5X average monthly payroll.

 

Economic Injury Disaster Loans:

Additional $20 billion for the Small Business Administration’s (SBA’s) Economic Injury Disaster Loan (EIDL) advance program

 

Agriculture ($13 billion)

  • $1.5B to purchase food and agriculture products and distribute to Non-Governmental Organizations (NGOs).
  • Allows United States Department of Agriculture (USDA) to carry out a dairy recourse loan program to make purchases of dairy products from processors, packagers, merchants, marketers, wholesalers, and distributors.
  • $100M for Specialty Crop Block Grants.
  • Supports supplemental Dairy Margin Coverage support. Includes $400M to support dairy donations to non-profit entities like food banks.


Employee Retention Tax Credit expanded and extended through June 30, 2021

  • Credit rate increased from 50% to 70% of qualified wages.
  • Increases the limit on per-employee creditable wages from $10,000 for the year to $10,000 for each quarter.
  • Eligibility expansions
  • Reduction in the required year-over-year gross receipts decline from 50% to 20%, including a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility.
  • Increase in the 100-employee delineation for determining the relevant qualified wage base to employers with 500 or fewer employees.
  • Allows certain public instrumentalities to claim the credit.
  • Removes the 30-day wage limitation, allowing employers to, for example, claim the credit for bonus pay to essential workers; Allows businesses with 500 or fewer employees to advance the credit at any point during the quarter based on wages paid in the same quarter in a previous year.
  • Provides rules to allow new employers who were not in existence for all or part of 2019 to be able to claim the credit; and
  • Provides that employers who receive PPP loans may still qualify for the Employee Retention Tax Credit (ERTC) with respect to wages that are not paid for with forgiven PPP proceeds.

 

Financial Services

  • Includes an explicit “hold harmless” provision for PPP lenders.
  • Provides for PPP lender reimbursement by SBA for new PPP loans.
  • Loans of less than $50,000 that is equal to the lesser of 50% of the loan principal or $2,500. 
  • Loans of more than $50,000 and not more than $350,000 equal to 5% of the loan principal. 
  • Loans of more than $350,000 and less than $2,00,000 equal to 3% of the loan principal; and
  • Loans of more than $2,000,000 equal to 1%.
  • Clarifies lender reimbursement by SBA shall be made no later than 5 days post-disbursement.
  • Extends exemption from compliance with the Current Expected Credit Loss (CECL) accounting standard for an additional year, through January 1, 2022. 
  • Extends enhancement of the National Credit Union Administration’s (NCUA’s) Central Liquidity Facility (CLF) by temporarily increasing the CLF’s maximum legal borrowing authority and allowing more credit unions to borrow from the CLF. Access to this facility for an additional year, through December 31, 2021.
  • Extends the temporary suspension of the Generally Accepted Accounting Principles (GAAP) requirements for the Troubled Debt Restructuring (TDR) classifications on loans for an additional year, to January 1, 2022.

 

Rental Assistance

  • $25 billion for states, territories, tribes, and large cities to assist renters. Grantees are able to use funds to provide direct financial assistance or housing stability services to eligible households. 
  • Eligible households may receive up to 12 months of assistance, plus an additional 3 months if necessary, to ensure housing stability. Grantees can only commit to assistance in 3-month increments, after which point any household deemed to be eligible to receive the funds, must re-apply. 
  • An “eligible household” is defined as a renter household that meets the following criteria:
  • Qualifies for unemployment or has experienced a reduction in household income, incurred significant costs, or experienced a financial hardship related to COVID-19.
  • Demonstrates a risk of experiencing homelessness or housing instability; and
  • Has a household income at or below 80 percent of the median income of the area.
  • An application for rental assistance may be made directly to a grantee by either an eligible household or by a landlord on behalf of that eligible household. In general, grantees will provide funds directly to landlords and/or utility service providers. If a landlord does not wish to participate, the grantee may provide funds directly to the eligible household.
  • Extends the eviction moratorium issued by the Centers for Disease Control and Prevention (CDC) through January 31, 2021.

 

Airline Employees and Contractors:

  • $16B for the Payroll Support Program
  • Other Tax Provisions
  • Lower excise taxes for breweries, wineries, and distilleries made permanent
  • New Markets Tax Credit extended for 5 years
  • Work Opportunity Tax Credit extended for 5 years

 

Support for Infrastructure

 

Transportation: ($43 billion) 

  • $10B for Highway Infrastructure programs including $9.8 for Surface Transportation Block Grants to states
  • $14B in Transit Infrastructure Grants ($13.3B urban, $679M non-urban)
  • $2B in grants-in-aid for airports
  • $1B for Amtrak

 

Broadband:

$7 billion for high-speed broadband projects.

 

If you have any questions, please reach out to SimcoHR.


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Top 5 HR Trends That Will Shape Businesses in 2025

January 7, 2025
As 2025 kicks off, the HR landscape is evolving faster than ever before. Technology, shifting workforce expectations, and the need for businesses to be agile in a dynamic global environment are all driving change. What worked yesterday may not be enough today, and companies must adapt to stay ahead. Here are the top five HR trends you’ll need to watch closely in 2025: 1. AI is Changing the Hiring Game Artificial intelligence is no longer just a buzzword in HR—it’s a game-changer. Tools that can scan resumes, match candidates to roles, and even conduct initial assessments are becoming staples for businesses aiming to save time and improve hiring outcomes. In 2024, many organizations began integrating AI to remove unconscious bias and make their hiring practices more inclusive, and this trend is expected to accelerate. 2. Flexibility Isn’t Just a Perk Anymore Hybrid and remote work models are here to stay, but the conversation has shifted. In 2025, it’s less about offering flexibility and more about making it work effectively. Companies are adopting sophisticated tools for remote collaboration, redefining performance metrics, and ensuring policies address the nuances of managing both in-office and remote teams. The focus is on maintaining productivity without compromising employee well-being. 3. Wellness Goes Beyond Gym Memberships In recent years, wellness programs have evolved beyond basic offerings like gym memberships to address a wider range of employee needs. As companies recognize the link between employee well-being and productivity, they’re broadening their focus to include mental health, financial stability, and holistic support. In 2023 and 2024, for example, Delta expanded its employee wellness initiatives by improving access to mental health care. The airline worked with Spring Health, a new EAP provider, to create a larger and more diverse network of mental health professionals, offering better support for both employees and their household members. Looking ahead to 2025, wellness will become more deeply integrated into company cultures. Expect companies to go beyond providing reactive support to fostering proactive wellness through personalized tools, such as mental health apps, financial coaching, and enhanced benefits like paid leave for caregiving. With these programs, businesses are not just addressing immediate health concerns but also empowering employees to manage their overall well-being in a more holistic way. The focus will be on creating a supportive, sustainable work environment that helps employees thrive both at work and in their personal lives. 4. Upskilling is a Competitive Necessity Technology is evolving faster than ever, and companies are racing to keep up. Upskilling employees in areas like data analysis, AI, and emerging tech became a priority in 2024, and it’s clear that this trend will only grow. Businesses that invest in continuous learning programs—whether through certifications, on-the-job training, or digital learning platforms—are better positioned to stay ahead in their industries. 5. Data is Driving HR Decisions HR is leaning heavily on people analytics to guide decision-making. Instead of relying on intuition, businesses are using data to understand employee engagement, pinpoint reasons for turnover, and improve productivity. The emphasis on metrics like employee sentiment and workforce utilization gained traction last year, and more organizations are embedding analytics into their HR strategies to tackle challenges proactively. Final Thoughts The HR landscape in 2025 will be shaped by these transformative trends. Businesses that embrace innovation and prioritize their people will find themselves not just adapting but thriving in the evolving workplace. As these trends unfold, staying proactive and flexible will be the key to turning challenges into opportunities.

IRS Announces 2025 PCORI Fee Update

January 6, 2025
The IRS has released the 2025 Patient-Centered Outcomes Research Institute (PCORI) fee , which will increase to $3.47 per covered life —a $0.25 increase from 2024. This fee applies to plan years ending on or after October 1, 2024 , and before October 1, 2025 . What is the PCORI Fee? The PCORI fee was introduced as part of the Affordable Care Act (ACA) to help fund the research conducted by the Patient-Centered Outcomes Research Institute (PCORI). This research focuses on improving healthcare outcomes by comparing different medical treatments. The fee is levied on insurers, as well as self-insured and level-funded health plans. The fee is calculated based on the average number of covered lives under a plan and is due once a year, with the filing occurring during the second quarter on Form 720 , the Quarterly Federal Excise Tax Return . The payment is due by July 31 each year. Key Details for Employers and Plan Sponsors Who is Affected? : The fee applies to health insurers, self-insured health plans, and level-funded health plans. When is it Due? : The fee must be reported on Form 720 and paid by July 31 each year. How is it Calculated? : The fee is based on the average number of covered lives during the plan year. The updated $3.47 per covered life fee will be in effect for health plans with policy years ending between October 1, 2024, and October 1, 2025. Employers should be prepared to account for this increase when filing for 2025. For more information on the PCORI fee and its reporting requirements, consult the IRS Bulletin 2024-49 , published on December 2, 2024, or visit the IRS PCORI Fee page . 

Federal DOL Restores Simplified Tip Credit Rule: Employer Guidance

January 6, 2025
In a move welcomed by many employers in the hospitality and service industries, the U.S. Department of Labor (DOL) has officially reinstated the pre-2021 tip credit rule. This change, effective December 17, 2024, follows a recent court of appeals decision that vacated the “80/20/30” tip credit rule that had been implemented under the Trump administration. If you’re wondering what this means for your business, don’t worry—this update doesn’t require any immediate action on your part. What Was the "80/20/30" Rule? Before we dive into the implications of the DOL’s latest rule change, let’s quickly review the "80/20/30" rule. This rule, introduced in 2021, placed specific restrictions on how much time tipped employees (such as waitstaff and bartenders) could spend on non-tip-generating duties (e.g., cleaning, setting up, and other side work). The rule essentially required that tipped workers spend at least 80% of their work hours on tip-generating activities to continue qualifying for the tip credit. Moreover, under the "80/20/30" rule, employers could no longer use the tip credit to offset wages for certain non-tip-producing activities, and they had to ensure that employees spent no more than 30 minutes at a time on side duties. This increased the burden on employers, as it required more careful tracking of employee duties and work hours to remain in compliance. Why Was the Rule Vacated? The court of appeals decision in August 2024 ruled that the "80/20/30" rule was too restrictive and inconsistent with the intent of the Fair Labor Standards Act (FLSA), which allows employers to take a tip credit for workers who perform both tipped and non-tipped duties. The court found that the new rule created unreasonable administrative burdens and restrictions that were not in line with past practices or legal precedents. In response to this ruling, the DOL moved quickly to restore the pre-2021 tip credit rule. What Does the Reinstatement of the Pre-2021 Rule Mean for Employers? With the reinstatement of the pre-2021 tip credit rule, the DOL has effectively simplified the way employers can apply the tip credit to their workers. Under the prior rule, employees who perform a combination of tipped and non-tipped duties can still qualify for the tip credit, as long as their primary job responsibility is related to tipped work. Employers no longer have to track the precise breakdown of time spent on tip-generating vs. non-tip-generating activities in the same way. This returns to the more flexible guidelines where as long as tipped employees perform "related" duties (e.g., cleaning their station, setting up for service), they can still receive the tip credit for those hours, provided those activities don’t dominate their workday. What Action Is Needed from Employers? For most employers, this change will not require any immediate action, as the final rule effectively restores the pre-2021 approach. The main thing to note is that employers should continue to comply with the broader requirements of the Fair Labor Standards Act (FLSA) and ensure they are properly paying employees at least the federal minimum wage (including tips) when they apply the tip credit. Here are a few things to keep in mind: Reassess Timekeeping Systems: While the rule change simplifies some aspects of record-keeping, employers still need to ensure they have a timekeeping system in place that accurately tracks the hours worked by tipped employees. It is essential to ensure that the wages (base pay plus tips) equal at least the federal minimum wage. No Need for Immediate Adjustments: If you were already applying the pre-2021 tip credit rule, no changes are necessary on your part. For those who had adjusted to the "80/20/30" rule, reverting back to the previous method should not require significant changes. State and Local Laws: Employers should still be mindful of any state or local laws that may have stricter requirements than federal law. Always check your state’s labor regulations to ensure full compliance. Why Is This Change Important? The reinstatement of the simplified tip credit rule provides relief to many employers, particularly in industries like restaurants, hotels, and other service-based businesses where tipping is common. The pre-2021 rule is seen as more employer-friendly, offering more flexibility in how tipped employees can spend their time without losing eligibility for the tip credit. For employers, this means less administrative burden, reduced risk of compliance issues, and potentially fewer legal challenges. This shift is a step toward simplifying labor law compliance for businesses already struggling with the complexities of wage and hour rules. Looking Ahead As we move further into 2025, it’s important for employers to stay informed of any future changes in federal labor regulations. While this change restores a previous rule, the DOL’s stance on tip credits and wage issues can continue to evolve. Employers in tip-dependent industries should continue to monitor updates from the Department of Labor and legal rulings to ensure ongoing compliance. The DOL’s restoration of the pre-2021 tip credit rule is a welcome change for many businesses, offering a return to simpler guidelines and less restrictive requirements. For most employers, no immediate action is required, but it’s always a good idea to review your practices to ensure they align with the updated rule. If you need further assistance in navigating these changes, reach out to Simco to ensure your business stays compliant in 2025 and beyond. 

Have a question? Get in touch.

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