Regulatory Compliance

NADA Chairman Rhett Ricart Addresses NADA Members in New Video

MARCH 27 -- NADA Chairman Rhett Ricart released a video in which he discusses the challenges facing dealers during the pandemic and highlights NADA's priorities, activities and resources available.

Watch the video

Fisher Phillips' Publishes "Comprehensive and Updated FAQs for Employers on the COVID-19 Coronavirus"

MARCH 30 -- The “Families First Coronavirus Response Act” will take effect on April 1, 2020, ushering in an emergency expansion of the federal Family and Medical Leave Act and federal paid sick, among other things. The Fisher Phillips Automotive Dealership Practice Group has collected the most frequently asked questions (FAQs) from dealerships across the country and assembled best guidance in one source. Read the FAQs

NADA Publishes FAQs on Recently Passed Coronavirus Paid Leave Bill

MARCH 27 -- NADA publishes regularly updated frequently asked questions (FAQs) on the Families First Coronavirus Relief Act (FFCRA) that has been signed into law by President Trump. The FFCRA includes provisions that provide paid leave to workers affected by the coronavirus and offsets cost to businesses by offering fully refundable tax credits. View the FAQs

DOL Issues Updated Q&A on Coronavirus Law

MARCH 27 -- As provided under the new Coronavirus legislation, the U.S. Department of Labor is issuing implementing regulations under "Families First Coronavirus Response Act: Questions and Answers." Additionally, as warranted, the Department will continue to provide compliance assistance to employers and employees on their responsibilities and rights under the FFCRA. Read more

DOL Wage and Hour Division Publishes 'COVID-19 and the American Workplace'

MARCH 25 -- The U.S. Department of Labor continues to release new guidance on the new federal emergency leave mandates, including additional fact sheets, questions and answers, guidance on the mandated poster(s) and clarification regarding the 30-day enforcement policy. NADA will incorporate these changes into its dealer-specific FAQs. |  Visit the DOL website

NADA Sends Letter to DOL on Interpretation of Coronavirus Law

MARCH 23 -- NADA has sent a letter to US Department of Labor on 500 employer rule interpretation of Families First Coronavirus Response Act (FFCRA) Regulations and Guidance on the Families First Coronavirus Response Act (FFCRA). Read the letter

U.S. Department of Labor Releases Guidance on Sick Leave and Other Issues During Coronavirus

MARCH 23 -- As provided under the Families First Coronavirus Response Act (FFCRA), the U.S. Department of Labor will be issuing implementing regulations. Additionally, as warranted, the Department will continue to provide compliance assistance to employers and employees on their responsibilities and rights under the FFCRA. View the website

Treasury Department Clarifies the Cash-flowing of Temporary Paid Sick and FMLA Leave

MARCH 21 -- The Department of Treasury yesterday issued an important announcement regarding how it plans to implement the recently enacted federal legislation relating to paid sick and FMLA leave. This announcement should address concerns that some dealers and dealer advisors have expressed about certain provisions under the new law. Specifically, people are concerned that the tax credit provisions of the legislation are insufficient to ensure the orderly funding of the payment obligations imposed, despite the fact that all of the direct costs a dealer would bear would ultimately be repaid via a refundable tax credit. 

Show more

As can be seen in the announcement, Treasury’s implementing guidance should address the concerns that dealers will not have sufficient cashflow to fund the new entitlements. 

Here are the particulars: Regarding the source of funding available to dealers providing the mandated sick and FMLA leave, the Treasury announcement states as follows: 

“When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees' share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS. 

Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.” (Emphasis added.) 

This would mean that all dealership taxes held in escrow, including both employee income and payroll taxes and employer payroll taxes, could be used to pay employees on qualifying leave rather than be paid to the IRS. Importantly, this would allow employers to draw funds from the payroll and income tax they withhold from or pay on behalf of all employees and not just those to whom they must provide paid leave under the new statute. 

For example, if a dealership must provide paid leave under the statute to 10 of its 100 employees, the dealership could use the amount it withholds in income and payroll taxes from all 100 of its employees to meet this obligation. While dealerships would still report income and payroll taxes on its quarterly return, it would receive a credit from the IRS that would offset this amount. 

Consequently, unless a dealership ends up having a significant percentage of its employees utilizing the new statutory leave entitlement, it should find that the collective amounts of its income and payroll tax withholdings are sufficient to meet its funding obligations under the new statute.

And, even if a dealer’s withholdings are not sufficient to pay the full amount of the new leave entitlement, Treasury’s announcement states that it will create a mechanism for a dealer to apply for and obtain payment of the remaining credit in two weeks. Here is the precise language Treasury used:

“If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.” (Emphasis added.)   

NADA has submitted comments which ask that the actual regulations issued by Treasury confirm the availability of these pools of immediately available funds to pay for the mandated leave.

Show less

NADA Hosts Webinar on COVID-19 Best Practices, Impact of New Legislation

MARCH 19 -- Labor attorney Rick Warren reviews key pandemic-related legal issues and mandates for automobile dealerships. Also joining are NADA's David Regan and Doug Greenhaus, who discuss legal compliance and prudent policies impacting franchised dealerships, their employees and their customers. Watch the webinar

NADA Coronavirus News

Stronger Together: Auto Industry Unites to Get Through COVID-19

POSTED ON March 30, 2020

The entire auto industry is pulling together to weather the COVID-19 outbreak in the United States and alleviate its long-term impact on auto retail sales.  
Be on the Lookout for Fake Coronavirus Tracking Sites Infecting IT Systems

POSTED ON March 30, 2020

Hackers are leveraging the popularity of these tracking maps to steal usernames, passwords, credit card numbers, browsing history, cookies and other information stored in users’ browsers.  
U.S. Chamber Issues Summary of New SBA Loan Programs

POSTED ON March 30, 2020

The CARES Act provides $2 trillion of stimulus to individuals, businesses, and hospitals and other impacted industries in response to the economic distress caused by the pandemic.  
White House Provides Update on COVID-19 Pandemic

POSTED ON March 26, 2020

Today, the White House released an updated comprehensive list of tools and resources in the fight against coronavirus.