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Paid Leave Benefits for the Restaurant and Retail Industry

Under Provisions of the Families First Coronavirus Response Act (FFCRA)

Department of Labor (DOL) Resources through Q&As and other Guidance

Refer to the links below for the DOL questions and answers on paid sick leave and expanded family and medical leave, as well as fact sheets and a workplace poster.

The effective date of the Families First Coronavirus Response Act (FFCRA), which includes the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Leave Expansion Act (EFMLEA) is April 1, 2020, and applies to leave taken between April 1, 2020, and December 31, 2020.

Be aware of the small business exemption for businesses with fewer than 50 employees. If paid leave would jeopardize the viability of your business as a going concern, you should elect this small business exemption. Guidance on the scope of the exemption and how to obtain it is expected soon.

On the Department of Labor’s website, see the following guidance: Q&As, Employer Fact Sheet, and Employee Fact Sheet and Workplace poster.

We would like to highlight the availability of mixed arrangements, allowing both teleworking and intermittent leave arrangements. This will be a tremendous help to both employees and employers, allowing employees to maximize their earnings as well as working to keep employers operating.

The answer below was taken from the DOL’s Q&As. Please refer to the link for more scenarios that will help both employers and employees plan for paid leave.

“20. May I take my paid sick leave or expanded family and medical leave intermittently while teleworking?”
Yes, if your employer allows it and if you are unable to telework your normal schedule of hours due to one of the qualifying reasons in the Emergency Paid Sick Leave Act. In that situation, you and your employer may agree that you may take paid sick leave intermittently while teleworking. Similarly, if you are prevented from teleworking your normal schedule of hours because you need to care for your child whose school or place of care is closed, or child care provider is unavailable, because of COVID-19 related reasons, you and your employer may agree that you can take expanded family medical leave intermittently while teleworking.

You may take intermittent leave in any increment, provided that you and your employer agree. For example, if you agree on a 90-minute increment, you could telework from 1:00 PM to 2:30 PM, take leave from 2:30 PM to 4:00 PM, and then return to teleworking.

The Department encourages employers and employees to collaborate to achieve flexibility and meet mutual needs, and the Department is supportive of such voluntary arrangements that combine telework and intermittent leave.”

For assistance navigating the resources available to you and your business, please contact a member of Withum’s Consumer Products team.

IRS Resources: Understanding Employer Paid Leave Tax Credits

COVID-19 Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses

Employers need to be aware of required paid leave for employees and available credits to essentially reimburse employers for these paid leave situations. Eligible Employers can obtain two types of Paid Leave Credits through fully refundable tax credits for required paid leave.

  1. Paid Sick Leave – which also includes caring for others due to COVID. This includes up to 80 hours of paid leave.
  2. Paid Family Leave – in addition to Paid Sick Leave – caring for children due to COVID-19 school closings and closing of or unavailable child care. Up to ten weeks of qualifying leave can be counted towards the family leave credit.

Below find the IRS website link and overview of the above paid leave benefits and credits to employers.

On the IRS’s website, see the following guidance: FAQs, Form 7200 and Instructions, IR-2020-62, and Notice 2020-22.

The Below Overviews are Extracts from the IRS Website Referred to Herein

Overview of Paid Sick Leave Refundable Credit

The EPSLA requires Eligible Employers to provide employees with paid sick leave if the employee is unable to work (including telework) due to any of the following:

  1. The employee is under a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  5. The employee is caring for the child of such employee if the school or place of care of the child has been closed, or the child care provider of such child is unavailable, due to COVID–19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services.

An employee who is unable to work for reasons due to a COVID-19 circumstance described in (1), (2) or (3) above is entitled to paid sick leave for up to two weeks (up to 80 hours) at the employee’s regular rate of pay, or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to $511 per day and $5,110 in the aggregate. For more information, see “What is the rate of pay for qualified sick leave wages if an employee is unable to work due to their own health needs?

An employee who is unable to work due to a COVID-19 circumstance described in (4), (5) or (6) above is entitled to paid sick leave for up to two weeks (up to 80 hours) at 2/3 the employee’s regular rate of pay or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to $200 per day and $2,000 in the aggregate. For more information, see “What is the rate of pay for qualified sick leave wages if an employee is unable to work because he or she needs to care for others?

The Eligible Employer is entitled to a fully refundable tax credit equal to the required paid sick leave. This tax credit also includes the Eligible Employer’s share of Medicare tax imposed on those wages and its allocable cost of maintaining health insurance coverage for the employee during the sick leave period (qualified health plan expenses). The Eligible Employer is not subject to the employer portion of social security tax imposed on those wages.

Overview of Qualified Paid Family Leave Refundable Credit

In addition to the qualified paid sick leave credit, an employee who is unable to work (including telework) because of a need to care for a child whose school or place of care is closed or whose child care provider is unavailable due to COVID-19, as described in (5) above, is entitled to paid family and medical leave equal to two-thirds of the employee’s regular pay, up to $200 per day and $10,000 in the aggregate. Up to ten weeks of qualifying leave can be counted towards the family leave credit.

The Eligible Employer is entitled to a fully refundable tax credit equal to the required paid family and medical leave (qualified family leave wages). This tax credit also includes the Eligible Employer’s share of Medicare tax imposed on those wages and its cost of maintaining health insurance coverage for the employee during the family leave period (qualified health plan expenses). The Eligible Employer is not subject to the employer portion of social security tax imposed on those wages.

If you have any additional questions regarding paid leave benefits please reach out to a member of our Consumer Products team.

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