As countless businesses have felt the harsh impact of COVID-19 and are looking for relief, on March 18, 2020 the Families First Coronavirus Response Act (FFCRA) was signed into law by President Donald Trump.
What is FFCRA?
The FFCRA requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.[1] The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020. [sourced by U.S. Department of Labor]
Frequently Asked Questions
How do you recommend we determine the amount to pay to our staff that gets variable amounts on each check due to hours and tips so it can be a standard amount for each check? Â Is this something that RASI can calculate for us?
- RASI has created a report to help clients determine the amount to pay their employees. The report will contain each of the following items over the last 6 months: 1) employee’s average hours worked per week; 2) employee’s average amount of hours paid per week (including sick leave and any type of PTO but not vacation because there are no hours associated to vacation pay); 3) employee’s regular rate of pay; and 4) employee’s 2/3 regular rate of pay.
If my employee files for and receives EDD payment, do I still provide them whatever that determined paycheck amount is, or do we deduct the amount they get from EDD?
- Assuming the employee is on unemployment benefits — question #29 at DOL website states “If your employer provides you paid sick leave or expanded family and medical leave, you are not eligible for unemployment insurance.”
- Question #23 at the same DOL web address above states “ If, prior to the FFCRA’s effective date, your employer sent you home and stops paying you because it does not have work for you to do, you will not get paid sick leave or expanded family and medical leave but you may be eligible for unemployment insurance benefits.”
Loan forgiveness is based on retaining employees and paying employees during the COVID-19 emergency. There are currently no guidelines on this but payroll history reports will prove when you paid an employee and how much. If there are any specific guidelines that require reports or filings to the IRS/DOL RASI will implement the necessary changes to streamline the reporting.
- RASI has created a report to help clients determine the amount to pay their employees. The report will contain each of the following items over the last 6 months: 1) employee’s average hours worked per week; 2) employee’s average amount of hours paid per week (including sick leave and any type of PTO but not vacation because there are no hours associated to vacation pay); 3) employee’s regular rate of pay; and 4) employee’s 2/3 regular rate of pay.
What services can RASI provide during this time to assist us in this daunting process?
- We are supplying numerous alerts and updates, and we are in the process of developing the necessary functionality to take advantage of the payroll tax credit under the FFCRA so that we can capture the necessary data to properly calculate and apply the payroll tax credit.
We are going to calculate the management fee we earn into the “labor cost” calculation because we pay our administrative people and marketing department out of those funds.  Are you aware if this is allowed?  Technically 1099 I would think.
- The guidance states “payroll expense”, 1099 is not “payroll” but there is no guidance on this yet. This will depend on the reporting requirements to calculate the Employee Retention Tax Credit under the CARES Act. If they use payroll reports/forms like the 941 or some other type of payroll reporting 1099 payments do not get reported. A self-employed individual would be entitled to tax relief in the way of a tax credit under section  7002 of the FFCRA for their self-employment taxes.
Resources
For more information & FAQ’s:
