In addition to the limitations of qualifying for the ERC under either the gross receipts test or a government shutdown order, any business that qualifies as a large employer under the rules of the ERC also faces special constraints on what counts as qualified wages for their ERC calculation.
According to the law, the only wages a large employer can count are the "wages paid to an employee for time that the employee is not providing services," which may include some health plan expenses.
For example, if an employee only worked 10 hours, but the business still paid them for 40—plus full health coverage—then a large employer could count 30 hours of this employee's wages towards their ERC calculation, along with 75% of the health plan expenses.
These rules apply to any employee who was paid for not providing services, including hourly, part-time, non-exempt salaried employees, and exempt salaried employees.
For more in-depth information about the rules around qualified wages for large employers, make sure to check out our article "What counts as qualified wages for large employers?"
