Addressing Concerns Over Emergency Paid Sick Leave Mandate
We’ve had lots of questions from you, our loyal clients, indicating concern about how the 80 hours of Emergency Paid Sick Leave mandate will impact your business. This email serves to answer the most common questions referring specifically to the Families First Coronavirus Response Act signed by President Trump on March 18, 2020.
Let’s get started.
Does This Apply to Your Employees?
Which category do your employees fall into? Your staff may be distributed among one or more of the following:
Employees are working
Employees have reduced hours due to business slow down
Employees are ordered to stay home, but cannot work remotely
Employees are ill or caring for others
Employees Are Working
If you have employees who are working, either onsite or remotely, this act does not apply. The Families First Coronavirus Act is for those employees who are unable to work because of the virus outbreak.
Employees Have Reduced Hours
If your employees have reduced hours due to business slow down, this act does not apply. Your employees can file for unemployment benefits if they have been laid-off or have received a significant reduction in hours.
Emergency Paid Sick Leave Only Applies to Categories 3 & 4
The Families First Coronavirus Act is intended for those employees who cannot work because:
- They are ordered to stay home, but cannot work remotely or
- They are ill or caring for others (see specific details below)
The Emergency Paid Sick Leave benefit applies to companies with fewer than 500 employees. However, it only applies to these situations:
- When employees are unable to work because they are quarantined or isolated subject to a federal, state, or local quarantine/isolation order such as Governor Newsom’s “Stay at Home” order UPDATED: See here.
- When advised by a health care provider to self-quarantine (due to concerns related to COVID-19)
- When experiencing symptoms of COVID-19 and seeking a medical diagnosis
- When caring for an individual experiencing #1 or #2 (employee receives 2/3 pay)
- When caring for a child whose school or place of care is closed due to COVID-19 (2/3 pay)
Note: Companies with 0-50 employees may be eligible for an exemption.
When the employee is experiencing any other substantially similar condition (2/3 pay)
Reminder: The above does not apply if your employees are working on site or remotely.
When Does the Program Begin?
This program begins on April 1, 2020. Emergency Paid Sick Leave cannot be paid before then.
How Will the Employer Be Reimbursed?
Employers will be reimbursed for Emergency Paid Sick Leave wages by an offset against their total Federal tax deposit. This includes Federal withholdings, employee FICA, and employer FICA for all employees on your payroll. If Emergency Paid Sick Leave exceeds your Federal taxes, you can apply for a refund from the IRS. They have committed to processing these as quickly as possible.
What Is Allevity’s Process for Emergency Paid Sick Leave?
We are working zealously to sort out a fluid situation. As of today, the IRS has not released official guidance on how to process this relief. Therefore, the exact specifics of this program haven’t been revealed. In addition, no payroll software application can currently process this type of rebate. Our vendors are working diligently to provide a patch to accommodate this need.
Once we have clarification, we will communicate our process so you can act accordingly. We are hopeful this will occur early next week.
Allevity Is Here to Help
In a time of uncertainty, we are committed to helping you find clarity and the best solution for your company. Our mission is to be your best business decision. Don’t hesitate to contact your representative with any questions. We’re here to help.