Last week, we posted an update for small business owners regarding the new Families First Coronavirus Response Act (FFCRA). Remember, this mandatory law will go into effect on April 2, 2020 and will apply to small business owners who were previously exempt from FMLA.On Friday, March 20th, the US Department of Labor along with the US Treasury and the IRS announced plans to help small business owners implement the FFCRA. Since the law’s passage on Wednesday, many small business owners have expressed concern about the inability to bear the financial burden that could be imposed under the FFCRA. For small business owners, the financial strain of covering the costs of emergency paid leave could jeopardize the businesses’ ability to stay open. This is especially true in an economy strained under the impact of the novel coronavirus.
Many of our small business owner clients want to protect their employees, both by working to prevent the spread of COVID-19 and by making sure their employees still have jobs to return to despite the slowdown in our economy.
These small business owners should be relieved to know that the federal government is working to ease these burdens on employers. The full announcement from the IRS can be found here, but below are the key points for small business owners to know:
- Payroll Tax Credit
- As a reminder, under the FFCRA employers are given an immediate dollar-for-dollar tax offset against payroll taxes.
- Immediate Reimbursement
- If the payroll tax credit is not sufficient to cover the cost of paid leave under the Act, businesses can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released this week.
- Grace Period
- There will be a 30-day non-enforcement period for good faith compliance efforts.
- Exemption Guidelines
- For small businesses (fewer than 50 employees) the Department of Labor will release “simple and clear” guidelines for obtaining an exemption from the leave provisions related to school and childcare closures.
We are in unprecedented times, and our laws are changing rapidly. We are committed to keeping our small business owners up to date as new information becomes available. If you have more questions about how to comply with the FFCRA and how to apply for relief, we’re here to help. Contact us for more information. We know times are challenging, and staying informed about all of the resources available to your business and your employees is key. We will continue to keep you updated.