New legislation signed 3/18/20 to implement Coronavirus-related paid leave for workers and tax credits for small businesses to swiftly recover the cost of providing the leave.
Key Takeaways
- Paid Sick Leave for Workers– For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded child care leave when employees’ children’s schools are closed or child care providers are unavailable. There are maximum amounts for those directly affected by the virus and a reduced maximum amount for those involved in providing care to the affected individuals or providing child care.
- Complete Coverage– Employers receive 100% reimbursement for paid leave pursuant to the act. Health insurance costs included in the credit. The credit consists of reduction of the employers’ payroll taxes up to the maximum amounts of paid sick leave provided. Self-employed individuals receive an equivalent credit.
- Small Business Protection– 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 where childcare is unavailable in cases where the viability of the business is threatened. Details on how to obtain this exemption will be forthcoming from the Department of Labor.
- Easing Compliance– Requirements subject to 30-day non-enforcement period for good faith compliance effort. To take immediate advantage of the paid leave credits, businesses can retain funds that they would otherwise pay to the IRS in payroll taxes. If these amounts are not sufficient to cover the cost of the paid leave, employers can seek an advance from the IRS by submitting a streamlined claim form to be released
- Details-Because the ink is barely dry on this new law, there are lots of questions and applications yet to be determined. Several items of note, this law piggybacks on the Family and Medical Leave Act but extends the sick leave time and pay requirements to all employers, no matter the number of employees. And the Act includes all employees employed for at least 30 days. The act provides for an initial 10 day period of unpaid leave prior to the paid leave start. Benefits are not retroactive.
- Date: The provisions of this act are effective April 1, 2020. The Department of Labor will provide further information on implementation and regulations during the next 30 days. This information will include a notice of the leave benefits available for posting.
- Other items: This act includes multiple other provisions that increase funds for many departments including increased benefits for unemployment, for implementation and increased support of other benefits and programs during the pandemic.
- Additional note: Many banks are offering special resources or relaxed note payment schedules or special loans during this time. Please reach out to your personal banker to see if you may qualify.
- This information is the most up to date as of today (March 26, 2020) —but new information is available daily.
Below are useful links to information that may be useful or resourceful to you. Again these resources are changing daily, so please check the websites from time to time to stay up to date or sign up for notifications if available.
SBA Disaster Loan
PA Working Capital Access Program
https://dced.pa.gov/programs/covid-19-working-capital-access-program-cwca/
PA Unemployment (for employees)
https://www.uc.pa.gov/Pages/covid19.aspx
PA Unemployment – Employers
https://www.uc.pa.gov/COVID-19/Pages/default.aspx
We are here to help you through this crisis and very confusing-complicated period of time.
So please do not hesitate to contact the office if you are in need any assistance or questions answered with accounting, payroll or tax concerns during this stressful time.
Most importantly keep yourself, your family, friends, staff and co-workers Safe and Healthy!