The EO raises many unanswered questions, such as what would happen if Congress chooses not to forgive payment of the tax and what should employers do. While employers hope to have guidance before September 1st on implementation of the tax relief order, they should begin preparing now. Those employers who use payroll companies should not delay in communicating the change in withholdings to the payroll company. Sometimes these companies need a bit of lead time to change their automatic withholdings. In-house payroll processors should be made aware as well of the temporary change. Finally, employees should be notified that while they will see an increase in their net pay possibly the remainder of the year, they should be prepared to pay the tax retroactively if not forgiven after the expiration of the EO. Meanwhile, a legal challenge to the President’s authority may also resolve many questions.
Stay tuned to the Workplace Report for updates on this and other ever-changing workplace employment issues.