More COVID 19 Q&A for Dental Practice Owners

Dear Client, We continue to monitor feeds on the new bill and other programs that might help you. We’re also answering a lot of questions from clients. Here is another set of Q&A that might help you through this time: 1.With the new bill that just passed, it states there is an exemption for Health Care Providers.  Is my practice exempt as a Health Care Provider? It’s not entirely clear, but we spoke with two attorneys and both have said that the law generally interprets a health care provider as the provider and the provider’s W2 staff members. If this is the case, you are not required to pay any sick or family leave other than any standard sick or vacation time the staff member has accrued.  Your staff will want to file for unemployment insurance. 2.If there is no automatic exemption for my practice as a “Health Care Provider,” I noticed I can get an exemption from the Department of Labor if the imposition of such requirements would jeopardize the viability of my business. How do I obtain a this exemption? There is virtually no clarity that we are aware of on this. If you know, please share the love. 3.If I’m not exempt, and if I have staff members that are required to stay at home to watch their children who are out of school for COVID reasons, how much exactly do I need to pay them and for how long? You would potentially need to pay them up to 12 weeks total. The first two week as sick pay and the remaining 10 weeks as paid family leave. You would pay them 2/3rds of their standard pay, with a max pay of $200/day. At $200/day for 12 weeks, that would be a max pay of $12,000.  A FICA tax credit can be received to fully offset in subsequent quarters. See below for details. 4.What’s the most I’d be required to pay my staff? Although there is significant hardship to closing your doors and not receiving patient revenue, most of our clients have overestimated the amount they will need to pay for their staff. Please keep these items in mind:
  • It’s likely that you’re exempt because of the health care prover exemption.
  • If you’re not exempt, remember that if none of your staff have COVID, are caring for someone with COVID, or are required to stay at home to care for children out of school for COVID reasons, then none of the new bill’s required sick and family leave pay apply to you. Your only obligation is to pay the staff any accrued sick or vacation time they request. Beyond that, it’s up to the employee to file for unemployment insurance.
  • If you have an employee or two that are required to stay at home to watch children, can they work from home (such as an office manager)? If so, you’ll pay them for working at home and being productive (e.g. billing/scheduling), but are not required to pay them for being at home caretaking.
  • If you do have to pay an employee or two for caretaking because they are required to be with their children AND they can’t work from home, then your max out of pocket is $200/day/employee. The bill doesn’t start until April 2nd. Any time between now and then doesn’t require that you pay them. The time kids are out of school from COVID would be about 6-8 weeks of pay you could be on the hook for. Of course if they have a day-care provider that doesn’t open doors by summer, it could be longer.  However, again, signs point to you being an exempt health care provider. And if you aren’t exempt and do pay, you’ll be out of pocket until you receive a tax credit from the government. See below for more on this credit.
5.Who much unemployment will my staff receive? That depends on your state. In CA, the max unemployment insurance income is $450/week. That is for full unemployment. If your staff continue to work under a reduced schedule, they can receive partial unemployment insurance. Partial unemployment insurance would be equal to their full UI income less 75% of what you pay them. For example, if your staff would receive $450 on full UI, but you pay then $320 in a week, they would receive $210 from UI. This is calculated as $450-(75%x$320)=$210. So  your staff member in this scenario would earn $320 from you and $210 from unemployment, for a total of $530. 6.If I decide to pay my non-working staff now, as a good gesture, for two weeks, can this pay apply to satisfying the sick/Family leave requirement that might arise next month if there if a general mandated quarantine, or the staff are forced to stay at home to caretake children? No. The pay must be during the time they are sick or caretaking after April 2nd. 7.Should I still pay my staff while my office is closed even if I’m not required to as a show of support? Your call. Rahm Emanuel said, “You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before.” If it can be balanced, this is an excellent opportunity to build good will with your team. Great dental offices generally have a close, family-feel environment. There is longevity and loyalty between doctors and staff.  You can offer to issue a free week, or two, of pay and write a letter to your team letting them know how much you care and want to support them through this difficult time, in spite of the challenge it’s presenting to the practice. Remember however that (1) we don’t know the severity of this crisis yet, so don’t be overly generous and (2) all pay should be run through payroll.  However, any pay you give them may reduce their Unemployment benefit during the same period. (See question above). 8.Is the ADA doing anything to help? The ADA is asking for your petition to the government to provide programs aimed at helping dentistry in an COVID-19 relief packages. Click here to help. 9.If I do have to pay sick or family leave because of this new bill, I hear there is a tax credit. What is it and how do I get it? Yes. If you do pay sick and family leave under this bill, you will receive a tax credit. The credit is dollar for dollar of what you paid. It is received as an offset, or reduction, to the employer portion of the FICA taxes you pay for each staff member (7.65% of wages paid).  So if you paid out $3,000 in sick leave mandated by this bill, you will receive a credit of $3,000 against the FICA taxes you owe. If the credit exceeds the amount of FICA you owe in a given quarter, you will received a refund for the difference (i.e. this is a refundable tax credit). The amount you can receive per quarter for mandated sick wages you paid is limited to $5,110 for an employee that had COVID and $2,000 for an employee that was a caregiver for someone with COVID. The amount you can receive per quarter for employees you paid that were on qualified family leave for COVID is $10,000 per quarter. This is also refundable.   Thrive!
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