Tax Credits for Employers, Part 2- Emergency Family and Medical Leave

Tax Credits for Employers, Part 2- Emergency Family and Medical Leave

The FFCRA includes an expansion of the Family and Medical Leave Act.

For qualifying employers, up to 12 weeks of leave must be provided to employees that qualify under this act.  A qualifying need is defined as an employee who is unable to work or telework because the employee needs leave to care for a son or daughter under age 18 whose school or place of care has closed or whose childcare provider is unavailable, because of an emergency with respect to COVID-19 declared by a federal, state, or local authority.

  • The first 10 days of leave is unpaid, by may be covered by the expanded sick time discussed separately if the leave qualifies. Otherwise, the employee may choose to substitute accrued leave during this period.
  • Following this 10 day period, an employer must provide paid leave to the employee for each additional day up to the 12 week cap. 
    • This pay is calculated at not less than 2/3 of the regular rate of pay, capped at $200 per day and $10,000 in the aggregate. 
  • Employers who pay family leave wages under the EFMLEA may claim a 100% credit against the employer’s share of payroll tax for each employee. 
  • Employers with fewer than 50 workers can apply for an exemption if having to provide paid family and medical leave would jeopardize the viability of the business. 

The U.S. Department of Labor has released a fact sheet for employees, a fact sheet for employers, and FAQs related to this bill. 

The DOL has also released a new poster mandated by the FFCRA to be posted in locations where other employee notices are placed.

Bill Krizner from The Krizner Group has provided a template to document employees requesting leave under the sick pay portion of this statute.

Further guidance will be forthcoming.  If you have any questions about qualifying for the tax credit, please don’t hesitate to contact our office.