Updated 4/20/2020 4:12 pm

The IRS updated their FAQ to add #67:

If an Eligible Employer that employs a health care provider or an emergency responder excludes that employee from eligibility for required paid sick leave or expanded family and medical leave to be taken for one or more reasons related to COVID-19 but not for other such reasons, may the Eligible Employer claim the credit for paid leave it provides to that employee for any ‘non-excluded’ reason?

Yes. The FFCRA provides that Eligible Employers may exclude employees who are health care providers or emergency responders from the paid sick leave and expanded family and medical leave requirements.  Regulations issued by the Department of Labor Wage and Hour Division define which employees are considered health care providers and emergency responders for this purpose.

The preamble to the Department of Labor regulations explains that, because an employer is not required to exclude these employees from eligibility, if an employer does not elect to exclude a health care provider or emergency responder from taking paid leave under the FFCRA for a reason related to COVID-19, it is subject to all other requirements of the FFCRA.

For example, if an Eligible Employer excludes an employee who is a health care provider from taking paid sick leave to care for an individual family member, but does not exclude the employee from taking paid sick leave for reasons relating  to the employee’s own health status, the Eligible Employer is required to provide the employee with paid sick leave if the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis. In this case, the Eligible Employer may claim the credit for any such qualified sick leave wages it pays to the employee, as well as the credit for allocable qualified health plan expenses and the Eligible Employer’s share of Medicare tax on those qualified sick leave wages.

See our bulletin below for more information:

FFCRA Tax Credits for Small and Midsize Businesses

Late Friday, the Treasury, IRS and DOL announced a plan for small and midsize employers to start taking advantage of two new refundable payroll tax credits. The tax credits will fully reimburse employers for the cost of paid leave they must provide employees under the Families First Coronavirus Response Act ​(FFCRA). This action was taken in response to concerns that some employers could not afford the cash outlay until their next quarterly filing in June.

Other highlights from the news release IR-2020-57:

  • Employers can retain and access funds they would otherwise pay to the IRS in payroll taxes. If those amounts are insufficient, employers can seek an advance from the IRS by submitting a claim form which the IRS expects to process within two weeks. The claims form and instructions will be provided next week.
  • 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 child care is unavailable in cases where the viability of the business is threatened. The DOL will provide exemption details soon.
  • 30-day non-enforcement period for good faith compliance efforts.​

Employers should contact their payroll provider immediately to set up a code for these types of leaves.

If you have questions or need help, please contact one of our benefit consultants.