If you have payroll with employees (where taxes are taken out of paychecks), you will be able to help your employees through paid sick leave. The government will then use tax credits to, in essence, pay you back for the paid leave costs you incur.
Emergency Paid Sick Leave
Effective April 2 through December 31, 2020
Private employers with fewer than 500 employees and all government employers must provide two weeks of paid sick leave to their employees (including part-time employees).
Businesses with less than 50 employees are exempt, but will need to file exemption paperwork. *This is not officially written up in regulations at this time, but we believe will be made available as an exemption document to filed with the tax return.
The leave must be provided in instances where an employee:
Paid sick leave is to be calculated based on the greater amount of the employee's regular rate of pay or the applicable minimum wage rate. There is a two-tiered pay rate:
Emergency Family and Medical Leave
Effective April 2 through December 31, 2020, the legislation expands the reasons for which Family and Medical Leave Act (FMLA) leave may be taken to include where an employee is unable to work (or telework) due to a need to leave to care for a son or daughter under 18 years of age, and the child's school or place of care has been closed or a child care provider is unavailable due to a public health emergency.
Eligible employees may take up to 12 weeks of this emergency leave, with the first two weeks being unpaid (employees may substitute vacation leave, personal leave, or sick leave for the unpaid leave), and the remaining 10 weeks being paid at a rate of at least two-thirds of the employee's regular rate of pay (not to exceed $200 per day). Covered employers are those with fewer than 500 employees.
Notify your employees of the Available Paid Sick Leave — Link Coming soon
Current Paid Leave Policies Come First
If you already have a paid sick leave policy and/or are in states requiring paid leave policies, you must first satisfy the policies already in place. Then the federal emergency Paid Sick leave comes into play and becomes available for the tax credit.
Tax Credits for Businesses
To help employers with the costs associated with providing paid sick leave and paid family and medical leave, the legislation provides businesses with a payroll tax credit for providing the required leave. The payroll tax credit will apply to the social security tax on the Quarterly 941 payroll tax filings.
Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they 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.
If there are not sufficient payroll taxes to cover the cost of paid qualified sick and child care leave, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.
State Laws on Paid Sick Leave
Some States have sick leave laws in place to ensure employees are entitled to the benefit within the State limits. If your employees work in a State with mandatory sick leave, you must comply as an employer. There are 11 States and Washington D.C. with sick leave laws. Follow this link to check what States have sick leave laws and what each of them entail.