The Families First Coronavirus Response Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.
FFCRA becomes effective April 2, 2020
The legislation will enable 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.
Paid Sick Leave for Workers
For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child-care leave when employees’ children’s schools are closed or child-care providers are unavailable.
Complete Coverage
Employers receive 100% reimbursement for paid leave pursuant to the Act.
– Health insurance costs are also included in the credit.
– Employers face no payroll tax liability.
– Self-employed individuals receive an equivalent credit.
Fast Funds
– Reimbursement will be quick and easy to obtain. An immediate dollar-for-dollar tax offset against payroll taxes will be provided.
– Where a refund is owed, the IRS will send the refund as quickly as possible.
Small Business Protection
Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or where child-care is unavailable in cases where the viability of the business is threatened.
Unemployment Alert for reimbursing employers:
Governor Walz’s executive order states it “Relieves taxpaying employers of benefit charges associated with the COVID-19 pandemic. This means that your UI tax rate will not increase if your workers collect unemployment benefits because of COVID-19.” From this language, IT IS NOT CLEAR if reimbursing employers will have any benefits paid to their employees charged to their reimbursement account and be required to repay those benefits to the state.
To learn more, click the link HERE to read the updates surrounding FFCRA.
Be sure to check carefully if your business is eligible for the leave based on isolation/quarantine orders or school closures.
At All In One Accounting, we take businesses from financial chaos to business clarity and beyond. Our elite team of Accountants, Controllers, and CFOs are ready to help you in these uncertain times. Visit our website here for a free consultation with one of our accounting professionals.
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