Last week, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA”), which requires employers with fewer than 500 employees to provide employees expanded family and medical leave and paid sick leave benefits for Coronavirus-related reasons.  The FFCRA creates for certain private employers a refundable paid sick leave credit and paid child care leave credit that are intended to immediately and fully reimburse these employers, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.

On March 20, 2020, the Internal Revenue Service (IRS) and Department of Labor (DOL) jointly issued News Release IR-2020-57 to provide preliminary guidance on how eligible employers can begin taking advantage of the two refundable credits under the FRCRA.  According to this guidance, and additional forthcoming guidance, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.  The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes concerning all employees, not just those to whom the employer provides the qualified paid leave.  If these amounts are not sufficient enough to cover the cost of qualified paid leave, the employer will be able file a request for an accelerated payment from the IRS.

The announcement provides the following helpful example to illustrate how the refundable credit will work in practice:

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.  If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

The agencies’ announcement states that the DOL will be issuing a temporary 30-day non-enforcement policy, during which time the DOL will not commence any enforcement action against any non-compliant employer if the employer has acted reasonably and in good faith to comply with the FFCRA.

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Photo of Marc T. Finer Marc T. Finer

Marc Finer is the Chair of the Tax Practice Group.  He is also the Chair of the Firm’s Pro Bono Committee. Marc provides effective and innovative federal tax, multistate tax and business planning solutions for corporations, partnerships, limited liability companies, investment entities and…

Marc Finer is the Chair of the Tax Practice Group.  He is also the Chair of the Firm’s Pro Bono Committee. Marc provides effective and innovative federal tax, multistate tax and business planning solutions for corporations, partnerships, limited liability companies, investment entities and individuals. He regularly advises clients on federal, state and local income, compliance and reporting tax issues from operating businesses and investments.

Photo of Salvatore G. Gangemi Salvatore G. Gangemi

Salvatore G. Gangemi, a partner at Murtha Cullina, is a veteran labor and employment lawyer with nearly 30 years of litigation and counseling experience.

Employers from across the industry spectrum, including established companies in the senior living and health care fields; manufacturing, construction…

Salvatore G. Gangemi, a partner at Murtha Cullina, is a veteran labor and employment lawyer with nearly 30 years of litigation and counseling experience.

Employers from across the industry spectrum, including established companies in the senior living and health care fields; manufacturing, construction, retail and service firms; and emerging companies, seek Sal’s legal counsel to navigate today’s complex local, state and federal employment laws. His practice includes resolving disputes; advocating in courts and before administrative agencies; counseling on employment-related issues arising from acquisitions; and guiding clients in both long-range strategy and day-to-day administration of their workplaces and employees.

At the federal level, Sal brings extensive experience in OSHA investigations, audits and proceedings; the Fair Labor Standards Act (FLSA); Title VII discrimination matters; the Age Discrimination in Employment Act (ADEA); the Americans with Disabilities Act (ADA); and the Family Medical Leave Act (FMLA). He is also well-versed in state and local employment regulations.

Sal regularly represents clients in matters before the Equal Employment Opportunity Commission (EEOC), the U.S. Department of Labor and other federal agencies. On the state level, he appears before the New York State Division of Human Rights; the New York City Commission on Human Rights; the Connecticut Commission on Human Rights and Opportunities; the Connecticut Department of Labor; and the New York State Department of Labor. He has litigated cases involving misappropriation of trade secrets, restrictive covenants, breach of employment contract, fiduciary duty and other work-related common law claims.

Clients rely on Sal’s advice on routine human resources matters that arise in their businesses, including requests for reasonable accommodation for those with disabilities, family and medical leave issues, hiring and termination, and wage and hour concerns. Known for his proactive approach to identifying issues before they escalate, he conducts compliance training on sexual harassment prevention and other topics, performs worker classification practice and policy audits, and drafts employment policies and agreements. Sal shares his knowledge of the ever-evolving employment law landscape by speaking at events, conducting continuing legal education seminars and writing articles for a variety of publications.

Photo of Patricia E. Reilly Patricia E. Reilly

Patricia E. Reilly, a partner at Murtha Cullina, serves as chair of  the firm’s Labor & Employment practice and co-chair of the Education practice.

She litigates employment, wage and hour, and restrictive covenant cases in state and federal courts. She also appears before…

Patricia E. Reilly, a partner at Murtha Cullina, serves as chair of  the firm’s Labor & Employment practice and co-chair of the Education practice.

She litigates employment, wage and hour, and restrictive covenant cases in state and federal courts. She also appears before the Connecticut Commission on Human Rights and Opportunities, the EEOC, the Connecticut Department of Labor, and the U.S. Department of Labor. Whether resolving a matter pre-litigation or litigating a case to trial, Tricia uses her first-rate strategic litigation skills to advocate for her clients’ interests. She works closely with her clients to ensure that the litigation is executed with the highest degree of skill and professionalism.

In addition to maintaining a thriving litigation practice, Tricia advises clients on a wide range of employment law matters, including sexual harassment and discrimination avoidance; disability and pregnancy accommodation; FMLA; wage and hour compliance; and trade secrets and restrictive covenants. She also provides training and presents on labor and employment issues, particularly sexual harassment prevention.  Tricia represents clients in a wide range of industries and sectors, including education (colleges, universities and independent schools), health care, financial services, retail, food and beverage, transportation services, energy, and manufacturing.

Tricia is listed as a leading Labor and Employment Lawyer in Chambers USA. In addition, she is listed in Best Lawyers in America®. In 2017 and 2020, Best Lawyers in America® recognized her as “Lawyer of the Year” for New Haven, Litigation – Labor and Employment, and in 2020 Best Lawyers also recognized her as “Lawyer of the Year” for New Haven Employment Law – Management.  In 2019 and 2020, Super Lawyers listed Tricia among the Top 25 Women Attorneys in Connecticut.