Check our blog for updates on regulations or resources that can be used to help you and your business achieve your financial goals.
On March 18,2020, the President signed the Families First Coronavirus Response Act (FFCRA or Act) into law. The legislation will enable covered employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus. This will be achieved through paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. These provisions will apply from April 1, 2020 through December 31, 2020.
In addition to the legislation outlined below, an additional estimated $2.2 trillion stimulus package is in the works. It has been passed by the Senate, but still needs to be passed by the house and signed by the President. Once that happens and the details are finalized, we will inform you on how that stimulus package, in conjunction with the information in this email, can benefit businesses and their employees.
More guidance regarding the details of these measures is anticipated to be released soon. Please know that we are receiving updates almost daily on the new laws being passed and will continue to share that information with you as it becomes available.
Department of Labor Poster
The DOL has provided a poster that each employer is required to keep posted, in conspicuous places on their premises where notices to employees are generally posted. This poster summarizes the Employees' Rights under the FFCRA.
Click here for a link to the DOL poster.
Click here for additional DOL information as it relates to COVID-19 and the Workplace.
Paid Sick Leave and Expanded Family and Medical Paid Leave
Generally, employers covered under the Act must provide employees with up to two weeks (80 hours, or a part-time employer's two-week equivalent) of paid sick leave based on the higher of their regular rate of pay, or the applicable state of Federal minimum wage, paid at:
- 100% for qualifying reasons #1-3 below, up to $511 daily and $5,110 total;
- 2/3 for qualifying reasons #4 and #6 below, up to $200 daily and $2,000 total; and
- Up to 10 weeks more of paid sick leave and expanded family and medical leave paid at 2/3 for qualifying reason #5 below for up to $200 daily and $12,000 total.
A part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
Qualifying Reasons for Leave Related to COVID-19
Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) due to a need for leave because the employee:
1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19 (this does not apply to recently announced "Stay-at-Home" orders);
2. has been advised by a health care provider to self-quarantine related to COVID-19;
3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
5. is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
6. is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees.
Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
All employees of covered employers are eligible for two weeks of paid sick time for specified reasons related to COVID-19. Employees employed for at least 30 days are eligible for up to an additional 10 weeks of paid family leave to care for a child under certain circumstances related to COVID-19.
Tax Credits to Help Offset Providing Paid Leave
For covered employers who are required to provide the above paid leave, the FFCRA offers some relief through tax credits. A payroll tax credit is available for up to $511 per day for paid sick leave and up to $200 per day for family and medical leave. This credit will be based on each employee's total for 10 days of paid leave. Employers should maintain records on employees who qualify for the paid leave, including the reason for the leave and the number of days taken in order to qualify for the credit.
This tax credit will result in an immediate dollar-for-dollar tax offset against payroll taxes. Where a refund is owed, the IRS will send the refund as quickly as possible.
Self-employed individuals under similar circumstances will also be eligible for tax credits which can be claimed on the income tax return and/or can reduce their estimated tax payments.
As mentioned above, more guidance regarding the details of these measures is anticipated to be released soon. Please know that we are receiving updates almost daily on the new laws being passed and will continue to share that information with you as it becomes available. Stay safe and healthy!
Sources: IRS and Department of Labor