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Update on Federal Paid Leave Mandates under the Families First Coronavirus Response Act, H.R. 6201

March 21, 2020
On March 20, Treasury, IRS and DOL announced their intent to implement these new mandates. Items to note:
 
  • SMALL BUSINESS EXEMPTIONS: It appears that guidance/regulations will be issued from the Secretary of Labor to exempt small businesses with fewer than 50 employees from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern.
  • PROMPT PAYMENT FROM IRS TO EMPLOYERS MANDATED TO PROVIDE LEAVE: 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 qualified sick and child care leave paid, 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.

For more information, please contact Claiborne Guy, Director, Employment Policy & Practices at claiborne.guy@agc.org.

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