Over the weekend, President Trump signed an executive order purporting to defer the payment of the employee’s share of the Social Security portion of FICA (payroll) tax from September 1, 2020, until December 31, 2020. The order is limited to only the employee’s share of the Social Security portion of the payroll tax, which is currently set at 6.2%. The order does not affect the Medicare portion of the payroll tax (1.45%), nor does the order affect the employer portion of the payroll tax, so these will still have to be withheld (where applicable) and deposited on a timely basis. The order also limits deferrals to employees with biweekly, pretax income of less than $4,000, or a similar amount where a different pay period applies. This roughly equates to an annual salary of $104,000. Importantly, the order is not a suspension of the payroll tax (a “payroll tax holiday”), but merely a deferral. The president directed the Treasury to seek ways to implement a full suspension at a later date, including by legislative action.

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Companies and organizations worldwide are facing a difficult question: As the fight against the COVID-19 pandemic shifts gears from emergency to maintenance, how can we reopen and run our businesses — from Day One and beyond — in a manner that preserves jobs and generates revenue without risking the health and safety of our employees and customers? The answers to this question are not simple, nor is there a one-size-fits-all solution.

Continue Reading COVID-19 Back-to-Work Toolkit: Helping Businesses Protect Lives and Livelihoods