** This article was sent to all of our Bennett/Porter clients via email on 4/3/2020 **
As an employer, there is so much information to try to review and absorb right now in regards to the administration of the new regulations around COVID-19. We hope you are looking to us to be your trusted advisor as we continue to provide comprehensive and easy to understand Payroll and HR guidance during this challenging time.The most common questions we are getting right now are around the obligations to offer Emergency Sick Leave and Emergency Family and Medical Leave (FFCRA) benefits and how to claim the credits for paying those benefits. Following is a summary:
The FFCRA paid benefits are effective for leaves taken between April 1, 2020 and December 31, 2020. There are no retroactive benefits under these leaves available, meaning an employee can only claim FFCRA leave beginning on April 1st and after.
Emergency Paid Sick Leave for Workers
There is no waiting period for this benefit.
Reason for Leave
An employee qualifies for Emergency Paid Sick Leave if one of the following reasons apply:
- The employee is subject to a federal, state, or local quarantine or isolation order related to COVID–19.
- The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID–19.
- The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to either number 1 or 2 above.
- The employee is caring for his or her child if the school or place of care of the child has been closed, or the childcare provider of such child is unavailable, due to COVID–19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Length of Leave
Employees are eligible for up to 80 hours (10 days) of Emergency Paid Sick Leave.
Pay During Leave (FFCRA Sick Leave 10 days or FFCRA Family Leave 10 days)
- FFCRA Sick Leave - If the sick leave is taken for reason 1, 2, or 3 above, the employee is entitled to their full regular rate of pay to a maximum of $511 per day and $5,110 total.
- FFCRA Family Leave - If the family sick leave is taken for reason 4, 5, or 6 above, the employee is entitled to two-thirds of their regular rate of pay up to $200 per day and $2,000 total.
Emergency Family and Medical Leave Expansion
All employees who have been employed with the company for at least 30 days.
Reason for Leave
Eligible employees who are unable to work (or telework) due to a need to care for their child when the school or place of care has been closed, or the regular childcare provider is unavailable due to a public health emergency because of COVID-19.
Length of Leave
Employees will be eligible for up to 12 weeks of leave between April 1st and December 31, 2020.
Pay During Leave (FFCRA FMLA 10 weeks)
The Expanded Family and Medical Leave will be unpaid for the first 10 days. Employees may take other paid leave benefits they are entitled to during the first 10 days (including Emergency Paid Sick Leave outlined above). After the first 10 days, employees will be entitled to two-thirds (0.67) of their regular pay for 10 weeks. The benefit is limited to a maximum of $200 per day and $10,000 total.
Documentation Needed from Employees
Question #44 on the IRS webpage specifically outlines the required documentation employers need to collect from employees to claim emergency benefits (see snapshot of this information below).
Overview of Employer Refundable Credit
Eligible employers (i.e. those with fewer than 500 employees) are entitled to refundable tax credits for paid qualified emergency sick leave wages and qualified expanded family and medical leave wages. It is important to track wages in each of the three separate benefits (FFCRA Sick Leave 10 days, FFCRA Family Leave 10 days, and FFCRA FMLA 10 weeks).
The IRS reports the following to provide credit to employers (through FIT, Social Security, and Medicare) for paying the emergency benefits to employees:
Benefits are 100% taxable to the employee, but there is no FICA taxable liability to the employer. If the benefits payments are higher than the taxes collected, employers will be eligible to file for a refund through the IRS. The IRS has issued Form 7200 for requesting refunds.
Following are additional resources for help administering regulations related to COVID-19: