Families First Coronavirus Relief Act (FFCRA) Updates
We would like to continue to pass along useful information to you as it relates to the Families First Coronavirus Relief Act. The regulations that are coming out continue to evolve at a furious pace.
Department of Labor (DOL) Updates
First, the Department of Labor (DOL) has issued a few items in the last 72 hours. They have posted a useful Q&A that we would encourage you to read. You can read the Q & A in its entirety HERE.
Q&A 1: The FFCRA is effective April 1 (not April 2 as previously stated).
Q&A 11: You cannot deny an employee leave if they qualify under the FFCRA.
Q&A 13: Also, any leave taken prior to April 1 will NOT count. Which means employees’ who qualify under FFCRA for paid leave (emergency sick leave and/or extended paid family medical leave) will need to be paid beginning April 1.
If you are an employer with less than 50 employees, there is an exception you can apply for. More information related to this is forthcoming.
Next, there is a posting requirement related to FFCRA. Generally, DOL posters must be displayed in a conspicuous place. That requirement still stands. But given that many businesses have remote workers, you will need to also electronically send this note to your employees if they are not coming into the building.
Related to the poster, the DOL issued a FAQ about the posting requirements.
While we await more specific guidance from the DOL, they have created a useful fact sheet for employers.
For many of you, telecommuting for employees is new. If you do not have a formal telecommuting policy, you may want to use this sample agreement with your employees during this time. (customize to fit your organization).
Tax Credit Information
We have received some clarity on the “tax credits” that have been eluded to in the last week or so. The IRS has posted this information that you may want to become familiar by clicking here. Clark Hill attorneys have provided the language below regarding the tax credits. This is something you will want to review with your company’s tax experts.
From Clark Hill:
In funding these new benefits, the Act provides that employers may take a 100% tax credit (up to the daily/aggregate caps) against employer-side FICA and Medicare taxes. The IRS also issued guidance regarding its planned regulations implementing the Act’s tax credit provisions.
The IRS’s planned regulations will allow employers to immediately retain withheld federal income taxes, the employee’s portion of Social Security and Medicare taxes, and the employer’s share of Social Security and Medicare taxes relating to all employees in order to reimburse themselves for EPSLA and EFMLA benefits paid and costs to maintain health insurance coverage during EPSLA or EFMLA leave.
If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
If there are insufficient payroll taxes to cover EPSLA and EFMLA benefits, employers will be able to file a request for accelerated tax credit payments with the IRS. The IRS states that it will be able to process these requests in two weeks or less.
If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.
The IRS’s planned regulations expand upon the Act text in two key respects: (1) the scope of taxes subject to the Act’s tax credit are expanded beyond just the employer portion of FICA and Medicare and (2) the tax credit may also be used to offset the costs of maintaining employee health insurance during EPSLA or EFMLA leave.
While BeneProPro is not permitted to provide you financial advice, we strongly suggest you seek out the advice from a qualified tax expert in the near future regarding recouping monies related to FFCRA expenditures.
Oakland County Business Requirements
Finally, if you have locations or employees in Oakland County, Michigan, please be advised that Oakland County Executive David Coulter issued an executive order on March 24, 2020 requiring businesses who are currently open to actively screen employees for COVID 19, each day. This order must be posted at the entrance of any location in Oakland County that is open for business. The business screening checklist can be found here.
Please note that this information is general and provided for guidance only. It reflects BenePro’s understanding of the available information as of the date released and is subject to change. It is not intended to provide legal advice.