FFCRA Payroll Tax Credit – Easing the Burden for Employers

Mar 23, 2020 | General News

Federal Law Alert

3/25/20

COVID-19: April 1 Effective Date for FFCRA Leaves
On Tuesday, March 24, the Department of Labor (DOL) announced that the effective date of the leaves available through the Families First Coronavirus Response Act (FFCRA) will be April 1, 2020.

Based on the language in the bill, the effective date was widely believed to be April 2.

The DOL announced the effective date in a “Questions and Answers” document where it also provided answers to some common questions. Other than the April 1 effective date, the information is in line with what we have been advising. The DOL also released two Fact Sheets, both of which appear to contain the same information, but it’s possible they will each be updated in the future with information that is geared more toward employees or employers.

Questions and Answers
Fact Sheet for Employees
Fact Sheet for Employers

While the links above do not provide much new information, they are worth reviewing. We are still waiting on regulations from the DOL to answer many questions about how these leaves will be administered and how they will interact with other leaves. We will post updated information in the HR Support Center as soon as it is released.

3/23/20

On Friday, March 20, the U.S. Treasury, IRS, and U.S. Department of Labor announced their plans for making the paid leave provisions in the Families First Coronavirus Response Act (FFCRA) less burdensome for small businesses. Key points include:

  • To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
  • The Department of Labor will release “simple and clear” criteria for businesses with fewer than 50 employees to apply for exemptions from the leave provisions related to school and childcare closures; and
  • There will be a 30-day non-enforcement period for businesses making a reasonable effort.

We know that for many of our clients, business slowdowns related to the spread of COVID-19 have made it hard to imagine how they could bear any additional expenses. We encourage anyone with these concerns to read the linked announcement carefully.

The full announcement can be found here: Treasury, IRS, and Labor Announcement on FFCRA Implementation.

Including the information in the link above, this is all we currently know about the payroll tax credit under the FFCRA and how to access or administer it. We will update the HR Support Center as soon as new information or guidance is available. You can learn more about the details of the leaves (who is covered, what it’s for, duration, etc.) on the HR Support Center by searching for “FFCRA.”