To our valued business partners and clients,
Last week we issued daily updates on the coronavirus pandemic, including FAQs, updates on pending legislation, and links to financial resources for small businesses. If you missed those updates, please check out our website: https://www.mbahro.com/blog/.
We are doing everything we can to help you through this public health crisis. We will continue to update you on new developments and resources. This crisis has already upended many of your businesses, but I want you all to know that MBA is, and will continue to be, there for you. The majority of the internal MBA employees are already successfully working remote. In fact, approximately 90% of internal MBA employees have been working remote since last week and that has not reduced our capacity to successfully service our clients at all. We will get through this together.
Proposed Legislation Update
The Senate’s proposed Coronavirus Aid, Relief, and Economic Security Act (CARES) failed to pass after a second vote on it earlier today. The bill represents important relief for small businesses and everyday Americans. Negotiations are still ongoing. A full copy of the bill can be found here.
The House proposed a third pandemic relief bill today called the Take Responsibility for Workers and Families Act. This bill is over 1,000 pages long and includes relief for small businesses but requires the funds to be used for employee wages and benefits. House Speaker Pelosi’s statement outlining aspects of the bill can be found here.
Families First Coronavirus Response Act
The President signed into law the Families First Coronavirus Response Act (FFCRA) late last week. The Department of Labor issued FAQs and additional information about the Act, which can be found here. The IRS also issued a press release on how the IRS plans on implementing the new law. Importantly, specific regulations, notices, and procedures are still pending.
Frequently Asked Questions about FFCRA:
I can’t afford to pay my employees paid sick leave and emergency FMLA. How can employers obtain prompt payment from the federal government for funds we payout under the new law?
Generally, employers must withhold federal income taxes and the employee’s share of Social Security and Medicare taxes. The employers then deposit these taxes, along with the employer’s portion of Social Security and Medicare taxes. The IRS will be letting employers keep the portion of their payroll taxes equal to the amount of paid sick leave and child care leave the employer will be paying out. The IRS will be releasing guidance later this week on when employers can start retaining these tax payments.
What if the wages I paid employees under the new law exceed my employment tax liability? The IRS will reimburse employers as quickly as possible. The IRS will be releasing guidance later this week on how employers can obtain a refund from the IRS if their reimbursement exceeds their payroll taxes.
When does this new law go into effect? April 2, 2020
Do I have to pay employees paid sick leave prior to April 2, 2020?
No, employers do not have to pay employees federal paid sick leave until April 2, 2020. However, many states and local governments have paid sick leave requirements. Employers should still comply with those applicable laws.
We are actively monitoring applicable legislative and governmental actions. If you have questions or concerns, please reach out to us at 727-563-1500.
Sean McConnell, CEO