House report is sharply critical of Treasury’s handling of payroll program

Ultimately, the subcommittee concluded that instead of preserving jobs, the Trump administration’s implementation of the Payroll Support Program “significantly weakened the Program’s impact on job preservation.”

The subcommittee’s assessment comes in stark contrast to how the program has played out for passenger airlines, which received the bulk of the more than $25 billion that was allocated to pay front-line workers. Airline and union leaders say the program saved tens of thousands of jobs until it expired Oct. 1 and have been aggressively pushing to extend it through the end of March.

“The Payroll Support Program has supported hundreds of thousands of aviation industry jobs, kept workers employed and connected to their healthcare, and played a critical role in preserving the U.S. airline industry,” the Treasury Department said in a statement. “Implementation focused first on the largest employers to help stabilize an industry in crisis and support as many jobs as possible for as long as possible. Treasury provided over 80% of the requested funds supporting over four hundred thousand jobs within 26 days of the enactment of the CARES Act.”

The subcommittee’s report also slammed contractors for laying off workers even as they sought to secure government aid.

“Documents uncovered during the Select Subcommittee’s investigation show that aviation contractors sought to avoid ‘unnecessary costs’ by terminating employees before executing [Payroll Support Program] agreements,” the report said.

The report found that aviation contractors laid off or furloughed nearly 58,000 employees before applying for assistance through the Payroll Support Program, 17 times the number reported by passenger carriers. At least 16,655 employees were laid off or furloughed between when the application period opened and when companies finalized their agreement with the Treasury Department.

The subcommittee said briefings with Treasury officials and contractors as well as its review of tens of thousands of documents found that the agency knew that companies were conducting layoffs, even as their applications for payroll support were pending, but failed to raise objections or require that furloughed employees be rehired once the funds were received. The subcommittee alleged that led companies to “urgently” fire employees before signing agreements.

“Treasury’s decision to allow layoffs while applications were pending, in conjunction with the delay in executing agreements, meant that many companies paused layoffs for far shorter than the six months Congress intended,” the report said.

The report noted that although Treasury officials have maintained they did not have the ability to lower payroll support awards to reflect the size of a company’s current workforce, the subcommittee argued that is not in keeping with the provisions of the Cares Act.

The report also said that in not imposing a deadline on when the funds had to be spent, Treasury gave companies little or no incentive to rehire workers.

“Many chose not to rehire workers and instead to use the funds to cover payroll for the remaining workers over a period of many months,” the report said.

The Payroll Support Program was created as part of the Cares Act to prevent massive

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State Police uncovered more trooper payroll issues last year. This time, they kept it in-house

When indictments were unfurled, his name was never mentioned. The state’s largest law enforcement agency never forwarded its investigation to prosecutors. The agency released it only last month, in response to a records request the Globe filed in December.

Lynch, who resigned as union president last year while facing union dissent, remains on the force today as a supervisor, relocated to a barracks that was at the center of the overtime fraud scandal. He collected $62,900 in overtime pay through August of this year, records show, significantly more than he earned in any year over the last decade.

Lynch’s case raises questions about how seriously the department handles pay abuse and how many other troopers may have escaped sanctions.

Dennis Galvin, a retired State Police major and president of the Massachusetts Association for Professional Law Enforcement, said prosecutors should examine the case.

“This continues to smear the image of the Massachusetts State Police,” he said. “It does not provide confidence that significant and meaningful changes have been made.”

In a statement, State Police spokesman David Procopio said the department never shared details with prosecutors because Lynch’s misconduct was “administrative in nature” and “relatively minor.” Procopio said Colonel Christopher Mason has since made changes to “foster a culture of accountability,” and the department “has reiterated to its members that such actions are not permissible under policy and implemented mandatory training.”

Procopio declined to say what discipline Lynch faced, but records reviewed by the Globe show he received a letter of counseling — the second-lowest form of discipline — ordering him to reread internal policies and not violate them again.

Governor Charlie Baker, through a spokeswoman, declined to comment, as did public safety Secretary Thomas Turco.

Reached by phone, Lynch said: “I’m not going to comment on this.”

The internal investigation determined Lynch was paid more than the actual hours he worked, including for a shift along the 2017 Boston Marathon route. He also had overlapped work assignments and changed the start time of paid details without authorization, including detail shifts directing traffic for Sunday services at a Revere church.

The department also found he had “misrepresented his knowledge” to a superior officer when first questioned. The department told the Globe it ultimately did not consider this lying, a more serious charge.

While the investigation does not identify how much he earned improperly, a conservative estimate is at least $2,000 during the four months investigators examined.

By comparison, troopers criminally charged or suspended without pay in the overtime scandal were accused of fraudulently collecting from nearly $3,000 to more than $51,000 over three years.

A spokeswoman for Attorney General Maura Healey declined to comment, but confirmed the office was never notified of Lynch’s case. US Attorney Andrew E. Lelling’s office declined to comment.

Brenda J. Bond-Fortier, a law enforcement expert and Suffolk University professor, said Lynch’s case is likely to anger taxpayers.

“People want assurances that the organization is changing, and these kinds of cases work against them,” she said.

This is

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Trump’s payroll tax deferral nixed for House employees

It wasn’t immediately known what the Republican-controlled Senate will do.

The deferral, which is available for workers earning less than $104,000 a year, was one of several unilateral moves Trump made in August that he said would boost the coronavirus-battered economy.

But the administration has had a hard time convincing private-sector employers to take part in the plan. Companies are concerned it is too risky or complicated, especially if Congress doesn’t ultimately excuse workers from having to pay back the taxes when the deferral expires at the end of the year.

Kiko raised similar concerns, citing recent Treasury Department guidelines.

“The taxes are deferred, and absent subsequent action by Congress, employees still owe, and employers are still required to collect the taxes,” he wrote. “Starting in January of 2021, employers would be required to begin withholding taxes from paychecks at higher rates to fully collect the tax owed by April 30, 2021.”

“Like all pay disbursing officials, the CAO must weigh the benefit of the deferral against the challenges of implementing this change and the practical impacts to the House workforce.”

The administration recently announced that the deferral would be applied to the paychecks of executive branch employees and the military. They’d have to repay their obligations next year unless Congress makes the deferral permanent.

Some GOP lawmakers have said they would like to hold back payroll taxes for their staffers under Trump’s directive. Kiko’s office didn’t immediately respond when asked if his decision was binding across all House offices.

But a Democratic staffer said it removes the option for Republican lawmakers, unless they get Kiko to alter his decision or create an exception. The administrative office has total control over payroll and would have to be directly involved in any kind of deferral, the staffer said.

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U.S. House staff won’t participate in payroll tax deferral

House Speaker Nancy Pelosi, D-Calif., holds her weekly press briefing on Capitol Hill on Aug. 13, 2020.

Jim Watson | AFP | Getty Images

The U.S. House of Representatives won’t be rolling out the payroll tax deferral to its employees.

Sept. 1 was the first day of President Donald Trump’s order deferring the 6.2% employees pay toward Social Security. The so-called holiday, which applies to workers whose biweekly pay is below $4,000, is in effect until the end of the year.

The tax delay is only a deferral and not forgiveness. Congress would need to pass legislation in order to forgive the taxes.

Though private employers are expected to shy away from adopting the deferral due to its complexity, the federal government will be extending it to its employees, including military service members.  

Employees of the House, however,  won’t be deferring their 6.2% share of Social Security taxes, according to an email to staffers from Philip Kiko, Chief Administrative Officer of the House.

The chief administrative officer handles a range of functions for House employees, including payroll administration and benefits.

“After reviewing the guidance and considering the unique structure of the House, the Office of the Chief Administrative Officer, with the concurrence of the Committee on House Administration, has determined that implementing the deferral would not be in the best interests of the House or our employees,” Kiko wrote.

“As a result, we will not implement the payroll tax deferral.”

Avoiding a surprise

Employers affected by the payroll tax deferral have the burden of withholding and remitting those delayed taxes to the IRS next year.

The taxes will be withheld from workers’ paychecks ratably — or proportionally over time — from Jan. 1 through April 30, 2021.

For employees who participate, they’ll see a 6.2% boost to pay this fall, but their pay will dip early next year as their employers recoup the deferred taxes from their compensation.

This is among the reasons that employers might be chilly toward putting the payroll tax suspension into effect.

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Though employers could opt into deferral, whether employees can opt out is ultimately up to the company they work for.

Military service members, for example, won’t be able to drop out of the deferral if their wages meet the appropriate threshold, according to the Defense Finance and Accounting Service’s website. This entity provides payroll services for the Department of Defense.

The House decision to skip the deferral arrives on the heels of a push among lawmakers to allow federal employees to opt out of the tax holiday.

“While some federal employees may want to defer their payroll tax payments, unions representing federal workers have made clear that many others do not,” wrote Sen. Chris Van Hollen, D-Md., in a Sept. 8 letter to Treasury Secretary Steven Mnuchin and Office of Management and

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House Democrat offers measures to block Trump’s payroll tax deferral

A House Democrat on Friday introduced two measures in an effort to block President TrumpDonald John TrumpNetanyahu privately condoned US arms sale plan with UAE: report Trump denies report he called U.S. service members buried in France ‘losers’, ‘suckers’ Jim Carrey pens op-ed comparing Trump to Michael Corleone in ‘The Godfather’ MORE‘s initiative to defer payroll taxes.

Rep. John Larson John Barry LarsonSenate Democrats take step toward vote on overturning Trump’s payroll-tax deferral Conservatives urge Trump to take unilateral action to suspend payroll tax collection House Dems introduce bill to require masks on planes and in airports MORE (D-Conn.), the chairman of the House Ways and Means Committee’s Social Security subpanel, introduced a bill to nullify IRS guidance implementing the Social Security payroll tax deferral. He also introduced a Congressional Review Act (CRA) resolution to overturn the IRS guidance.

Larson introduced the measures along with several other lawmakers, including Ways and Means Committee Chairman Richard NealRichard Edmund NealThe Hill’s 12:30 Report: First Kennedy to lose a Massachusetts election The Hill’s Morning Report – Presented by Facebook – Markey defeats Kennedy; Trump lauds America’s enforcers in Wisconsin Neal beats back primary challenge from progressive Alex Morse in Massachusetts MORE (D-Mass.). The House members introduced the measures after Senate Democrats also launched an effort to overturn the guidance, which implements a memo Trump signed last month.

Senate Minority Leader Charles SchumerChuck SchumerSchumer calls for accountability in Daniel Prude death in Rochester Top Democrats press Trump to sanction Russian individuals over 2020 election interference efforts Fauci says he ‘would not hesitate for a moment’ to take coronavirus vaccine MORE (D-N.Y.) and Senate Finance Committee ranking member Ron WydenRonald (Ron) Lee WydenHillicon Valley: Russia ‘amplifying’ concerns around mail-in voting to undermine election | Facebook and Twitter take steps to limit Trump remarks on voting | Facebook to block political ads ahead of election Top Democrats press Trump to sanction Russian individuals over 2020 election interference efforts On The Money: Deficit to reach record .3 trillion | Senate Democrats push to overturn Trump’s payroll-tax deferral | Private sector adds 428K workers in August as job growth slows MORE (D-Ore.) on Wednesday sent a letter to the Government Accountability Office (GAO) asking for a determination about whether the IRS guidance is a rule for purposes of the CRA.

If the government watchdog determines that the guidance is a rule for CRA purposes, Senate Democrats would be able to force a vote on the Senate floor on a resolution to overturn the guidance. But the measure would face an uphill battle given the Republican majority in the chamber.

A spokesperson for Larson said there hasn’t been a response yet from GAO.

Under the IRS guidance, employers can stop withholding employee-side Social Security taxes through the end of the year for workers making under $4,000 biweekly. The money would then be collected by increasing the amount of taxes withheld from workers’ paychecks in the first few months of 2021.

The federal government is

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