Article written by Matt Harris on the Viewpoint blog.
In an effort to ease financial burdens related to the COVID-19 outbreak, the U.S. Congress passed the Families First Coronavirus Response Act. Effective April 1, 2020, FFCRA requires companies with fewer than 500 employees to provide 12 weeks of protected leave to employees for missed work related to the outbreak.
This means a lot of contractors — many of whom we work with — will need to make adjustments to their current payroll set-ups to ensure both compliance with the FFCRA and with state unemployment guidelines.
What Do I Need to Know about the FFCRA?
Some key points about FFCRA employers need to be aware of:
- The Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020 and includes three specific paid leave provisions impacting virtually all employers with less than 500 employees. These provisions become effective April 1, 2020 and run through December 31, 2020.
- The first is a new employee benefit of up to 2 weeks of paid sick leave when an employee is unable to work due to a COVID-19 quarantine order affecting themselves or someone they provide care for.
- The second is an expansion of the Family Medical Leave Act (FMLA), and provides up to 10 additional weeks of paid leave for an employee who misses work to care for their child because of a school or childcare closure due to COVID-19.
- The third is the credit employers can claim when making their payroll tax payments following each pay period. Employers will be able to claim full credit for the leave paid plus costs related to maintaining healthcare coverage for these employees. Additionally, employers are not required to pay their usual share of Social Security on these earnings.
- Our office products -- ProContractor, Spectrum, and Vista – can help our customers setup and track these newly required leave benefits, the liabilities owed the government, and the portion of those funds our customers can recover.
- Most importantly, our customers can calculate their monies owed and instead of seeking a future refund, receive an immediate reduction in the amount of tax liabilities they must pay the government, improving their short term cash flow and helping fund these benefits.
What Steps Can You Take?
We will be running the following webinars to assist you with setting up your FFCRA compliance. There are separate webinars depending on your ERP: Spectrum, Vista or ProContractor. Click the links below to register. We will also be providing recordings of the webinars to those who register, but are unable to attend.
- Vista: Wednesday, April 8 at 9:00 AM PT. Register here.
- Spectrum: Wednesday, April 8 at 11:00 AM PT. Register here.
Our goal is to help prepare you based on what we know today, however the IRS has yet to provide final guidance and changes to FFCRA may be forthcoming. We will continue to provide guidance as we receive recommendations from federal agencies.
Additionally, we have created guides to help you make required adjustments in your Viewpoint software to ensure FFCRA compliance and simplify tax filings further down the road to recoup costs for your business. Please click the links below based on your current ERP: