Posts tagged ‘Presidential Executive Order’

Will Biden’s Executive Order Apply to Credit Unions?

Yesterday, President Biden took his most aggressive action yet to combat the spread of COVID-19.  First, he ordered the Department of Labor’s Occupational Safety and Health Administration (OSHA) to issue an emergency temporary standard that will “require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work” and must give employees paid time off to get the vaccine and paid time off to recover from any side effects.  Secondly, the President is ordering the establishment of guidelines mandating that federal contractors be vaccinated.  The precise impact of these orders on your credit union’s operations remains to be seen.

With the exception of certain industries, OSHA has not promulgated federal workplace safety standards in relation to COVID-19.  This is why New York felt the need to fill this gap by passing the HERO Act.  As I explained in a recent blog, New York’s Commissioner of Health has declared COVID to be a highly infectious disease which means that all New York employers must now have health screening protocols in place.  We will have to wait for the OSHA standards to see precisely what is going to be required of larger employers beyond the state mandates.

Another tricky issue that needs to be clarified is whether or not financial institutions are going to be considered federal contractors for purposes of the President’s vaccine mandate.  The President’s Executive Order technically does not mandate vaccinations, but instead mandates that guidance be issued defining precisely who is to be considered a federal contractor.  However, the President’s order stipulates that the definition of a federal contractor will be based on regulations being promulgated by the Department of Labor mandating that contractors provide a $15 minimum wage to their employees.  In addition, there must be a regulatory finding that the President’s actions will advance efficiency in the federal government’s procurement processes.  This last point is particularly important since the inevitable legal challenges to the President’s announcement yesterday will most likely be based on challenging the regulatory authority of the executive to issue these mandates. 

All this means we are weeks, and maybe months away from any additional vaccine mandates.  In the meantime, an increasing number of employers are mandating that their employees be vaccinated.  Of course, check with your attorney, but they are on solid legal ground in doing so, and your credit union would be as well. 

September 10, 2021 at 10:59 am Leave a comment

President’s Executive Order Raises Tricky Questions For Employers

Hello folks!  Yours truly is back and better than ever after a week in the Adirondacks.  I can think of no better way to get back in the swing of things than to talk about the potential consequences of an Executive Order issued by the President over the weekend.  Whether your idea of a good time is turning on Rachel Maddow or Tucker Carlson, this order raises unique questions for employers.

As many of you have probably already heard, negotiations with Congress over another COVID relief bill are stalled.  In response, the President issued an Executive Order ordering the Treasury Department to forgo collecting the employee’s portion of the payroll tax from September 1st to the end of the year.  This one is a lot trickier than it sounds.

From the day you started working you paid a tax under the Federal Insurance Contributions Act (FICA).  Everyone has fond memories of getting that first paycheck and seeing just how much the government takes from you to fund social security and a portion of Medicare.  Under FICA employers are obligated to withhold 6.2% of an employee’s income and employers are obligated to match that tax.

Pursuant to 26 U.S. Code § 7508A the Treasury Department has emergency powers to issue a forbearance for the collection of FICA.  In issuing the Executive Order the President cites the ongoing COVID crisis as justification for the forbearance.

Here’s where things get a little tricky though.  It is the employers obligation to withhold the employees portion of FICA [26 U.S. Code § 3102 (a)].  The employer sends the combined contributions to the Treasury.  Under the law, an employer is indemnified for withholding the employee portion and can be fined for refusing to do so [26 U.S. Code § 3102 (b)].

Against this backdrop, if the President’s Executive Order takes effect, as a matter of law, employers will remain responsible for the employee portion of FICA which they do not collect.  Remember, this is simply a forbearance on the collection of taxes meaning that all the money is still due, but at a future date.  In a best case scenario, Congress decides to make employers whole; but if not, we are in unchartered water.

The next step in this game of chicken is for the Treasury to issue guidance.  It will hopefully clarify what employers must or may do pursuant to this Executive Order.  In the meantime, let’s hope both sides come to their senses and actually pass a law making everyone’s responsibilities and financial obligations crystal clear.

August 11, 2020 at 9:19 am Leave a comment

Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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