Families First Coronavirus Response Act: How To Process Payments, Get Tax Reimbursements Through Payroll, And Other Important Information For Your Business April 14, 2020 COVID-19 Overview of the FFCRA: – Applicable for businesses with fewer than 500 employees. – Applies to leave taken between April 1, 2020, and December 31, 2020. – (1) Applicable businesses must provide two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. This is capped at $511/day, $5,110 total per employee. – (2) Applicable businesses must provide two weeks (up to 80 hours) of leave to an employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services. This is to be paid at 2/3 the employee’s pay and is capped at $200/day, $2,000 total per employee. – (3) Applicable businesses must provide to employees that it has employed for at least 30 days up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19. This is to be paid at 2/3 the employee’s pay and is capped at $200/day, $12,000 total per employee. – Applicable businesses qualify for a dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. The reimbursements are immediate, granted there are enough federal payroll taxes to offset the leave payments. (If you would owe $1000 in federal 941 payroll taxes and you pay out $600 in FFCRA leave, then you will only pay $400 in federal payroll taxes). – Applicable businesses must provide employees with notice of Employee Rights under the FFCRA. Here is the official labor poster which should be posted or distributed to employees electronically. – – Customers of our labor poster compliance service will be receiving laminated posters very soon. – There are a number of additional details to be mindful of regarding the FFCRA and here are 3 helpful resources: – – DOL: Families First Coronavirus Response Act: Employer Paid Leave Requirements – – DOL: Families First Coronavirus Response Act: Employee Paid Leave Rights – – DOL: Families First Coronavirus Response Act: Questions and Answers How to Process FFCRA leave in payroll: – There are 4 new earning codes set up that must be used for tax reimbursements to calculate. – – V01 – FFCRA Sick – This is to be used for sick pay as described in reason #1 above. – – V02 – FFCRA Care Leave 2/3 – This is to be used for care pay as described in reason #2 above. – – V03 – FFCRA ER Cost of Benefits – This is to be used in conjunction with the other three codes. Employers can get credit for the portion of the cost associated with health insurance while an employee is on FFCRA related leave. – – V04 – FFCRA FMLA – This applies to the additional 10 weeks described in #3 above. – The V01, V02, V03, and V04 codes must be used in order for the tax reimbursement calculation to function. DO NOT use any other code for the FFCRA payments if the intent is to be reimbursed. – Your federal 941 taxes will be reduced by the amount of FFCRA leave paid. This means that amount drafted for taxes will be reduced by the amount paid in FFCRA leave down to $0 in 941 taxes. – If FFCRA related payments exceed 941 taxes in a payroll, form 7200 can be submitted to the IRS to obtain the remaining reimbursement. – If you do not find the FFCRA earning codes in payroll, please contact us and we will make sure they are available for you.
