When to Use the Families First Coronavirus Response Act

With the focus on the PPP and EIDL options, a tax credit afforded by the Families First Coronavirus Response Act (“FFCRA”) has been mostly ignored by funeral home and cemetery owners. Recently, a Foresight accounting client reached out to our team when one of their funeral directors tested positive for COVID-19. In addition to the protocols and processes well publicized by the CDC and OSHA, we recommended that this firm continue to pay this employee wages under the provisions provided by the FFCRA. The following considerations led us to this conclusion:

Is the business considered a Covered Employer as defined by FFCRA – Yes

• Covered Employers: The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees.
• Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or childcare unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

Has the employee been employed for at least 30 days – Yes

Does the employee have a qualifying reason for leaving – Yes

Under the FFCRA, an employee qualifies for paid sick time if the employee is unable to work (or unable to telework) because:

1. Employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
2. Employee has been advised by a health care provider to self-quarantine related to COVID-19;
3. Employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. Employee is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
5. Employee is caring for a child whose school or place of care is closed (or childcare provider is unavailable) for reasons related to COVID-19.

What must our client, provide?

• Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because or 1, 2 or 3 listed above. Employees shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period), or
• Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of reason 4 listed above. Employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period), or
• Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because reason 5 listed above. Employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period—two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave.

Why should our client elect do this?

• Tax Credits for the Business
• Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA.
• Most payroll software includes designated payment codes to track these payments so that the credit is recognized when the business files the quarterly 941 tax document.
• Essentially, the employer retains the amount of payroll taxes equal to the amount of qualifying sick and childcare leave that it paid, rather than deposit them with the IRS.
• The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and
• Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
• Provide a responsible, safe, and healthy environment for the staff and community.
• Protect infected employee from lost wages and financial hardship.
• Foster a work culture that shows a high level of care about the welfare and health of employees.

In summary, our client can retain a valued employee while protecting his staff and minimizing the risk of spreading the virus in the community. For more detailed information including decision flow charts, please see the Department of the Treasury or SHRM websites.

As we navigate through these times of uncertainty and live out our new normal, we here are at The Foresight Companies want to be your source for all topics related to your business operations.

Please visit our COVID-19 new Business Operations Resource Center frequently as we continue to update as changes are occurring.

If you have any questions or concerns, please do not hesitate to pick up the phone and give one of us a call at 1-800-426-0165.

*Please note that as information is updated and modified, terms and conditions are subject to change.