Payment of Employees Under FFCRA – An Update

My last post provided a basic outline of the provisions of the Families First Coronavirus Response Act (“FFCRA”).  Since that time, additional guidance has been provided by the U.S. Department of Labor (“USDOL”) and the Internal Revenue Service (“IRS”) that contradicts some of the things said about FFCRA in that post.  The current interpretation of FFCRA on those points is set forth below.

POSTER REQUIREMENT

But first, as with all things involving the USDOL, there is a poster for FFCRA that all employers are required to post in a place in their offices where is it likely to seen by all employees.  If an employer has any employees working from home who do not come into the workplace on a regular basis, the employer is required to mail or email a copy of the poster to all such employees.  The Occupational Safety and Health Administration also has a poster that lists ten things employers can do to protect their employees from the Corona Virus outbreak.  There is no requirement that this poster be displayed in the workplace.

CHILD CARE SICK LEAVE

As noted in my last post, the two major components of FFCRA, the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”), both contain provisions that entitle employees to paid sick leave if they are unable to work due to having to care for their son or daughter whose school or place of care is closed, or child care provider is unavailable, due to Corona Virus related reasons.   My statement that such paid leave was available under EPSLA for persons other than the employee’s son or daughter has proven to be incorrect.  Both the EPSLA and the EFMLEA require the person being taken care of to be the employee’s child, as defined in the Family Medical Leave Act.  That definition includes adopted, foster, and stepchildren; a legal ward; and a child for whom the employee stands in loco parentis (i.e., one for whom the employee has day-to-day responsibilities to care for or financially support), as well as the employee’s biological children.

As sometimes happens when more than one federal agency is involved in the administration of a federal program, the IRS has issued guidance on the child care provisions of the EPSLA and the EFMLEA that conflicts with previously issued guidance by the USDOL.  The conflict concerns the age the employee’s child must be for the employee to qualify for paid sick leave to take care of them.  The USDOL’s guidance refers to children  who are under the age of 18.  The IRS guidance makes a distinction for children who are 15 or older.   If the child for whom an employee is caring is 15 or older, the IRS requires the employer to obtain an explanation from the employee of the “special circumstances” that require the employee to stay home to take care of that child.  Such an explanation is only required under the USDOL guidance for children who are 18 or older.  Since the IRS will be deciding if the documentation submitted by an employer is sufficient to entitle them to obtain credits against their FICA tax obligations, all employers should follow the IRS guidance on this point.

Both the USDOL and the IRS agree that only one parent of a child is entitled to paid sick leave.  So both parents can’t stay home to take care of a child or children whose school or place of care is closed, or child care provider is unavailable, due to Corona Virus related reasons .  However, it appears they can take turns taking care of such a child or children, if their respective employers will permit them to do so (i.e., take paid sick leave intermittently).  One parent does not have to stay home the whole time.

PAYROLL TAX DEFERRAL

The Coronavirus Aid, Relief, and Economic Security Act ( the “CARES Act“), which created the Paycheck Protection Program loan among other things, also permits all employers to defer payment of the social security portion of their FICA tax payments that were due after March 27, 2020 and before January 1, 2021 for almost two years.  Employers can choose to take advantage of this deferral when they file their Form 941 for each quarter.  One-half of all such taxes deferred must be paid, without interest, by December 31, 2021 and the other half must be paid by December 31, 2022.

This deferral program only applies to those taxes for which the employer did not receive a credit under the FFCRA programs or the employee retention tax credit program created by the CARES Act.  It cannot be used by any employer who obtained a Paycheck Protection Program loan for taxes that are due after that loan is forgiven.

 

Digiprove sealCopyright secured by Digiprove © 2020 Mark Burnette