Under the Families First Coronavirus Response Act (FFCRA), employers with fewer than 500 employees are required to provide certain paid sick and family leave to their employees. Refundable payroll tax credits are available, on a quarterly basis, to an eligible employer for the paid family and sick leave wages (qualified wages) required to be paid under the FFCRA.
The Internal Revenue Service (IRS) has issued guidance, in the form of frequently asked questions (FAQs), related to those refundable payroll tax credits for required paid sick and family leave. Included in the myriad of topics addressed in the FAQs is the identification of the documentation that an employer is required to collect and maintain in order to support the payroll tax credits taken by the employer. The IRS has indicated that these FAQs will be updated as necessary.
The U.S. Department of Labor (DOL) also issued FFCRA FAQs that echo the IRS Guidance. Specifically, the DOL has indicated that an employer must retain the same information that the employer is required to maintain under IRS guidance in order to support the payroll tax credit for FFCRA-required paid sick and family leave. (Notably, if an employee fails to provide the documentation necessary to support the tax credit, the employer is not required to provide the requested paid sick or family leave.) In addition, as promised by the DOL, the FFCRA regulations identify the documentation that small businesses are required to maintain to support claims that they are exempt from certain requirements of the FFCRA.
Brownstein has prepared a client alert and chart that identify the documentation required to be (i) collected and maintained by an employer in order to support its payroll tax credits; (ii) submitted by the employee seeking leave, and (iii) maintained by small businesses to support claimed exemptions from certain leave requirements under the FFCRA. It also provides practical considerations for collecting and maintaining both types of documentation.
Information is changing daily and some of the content included in this alert may have changed or been updated since publication.
For additional information or assistance with a particular issue, please contact a member of the Brownstein Business Reopening Response Team.
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The information in this article is accurate as of the publication date. Because this law in this area is changing rapidly, and articles are not automatically updated, continued accuracy cannot be guaranteed.