Q: I have an assistant who has two small kids and has not been coming to the office since she does not have babysitting. She wants to know if she is eligible to still be paid by my office and, if so, how do we go about paying her and do we get a tax credit on the wages paid?
A: According to our firm’s payroll manager Greta:
In this case, your employee may be eligible for two-thirds of her pay for 12 weeks capped at $200 per day and $12,000 in the aggregate. If paid, the company would receive a dollar for dollar tax credit against their federal Payroll Taxes. However, your practice appears to be eligible for the small business exemption since you have fewer than 50 employees, possibly relieving you from this portion of the emergency paid Sick/Leave Act FFCRA.
A small business can be exempt from certain paid sick leave and expanded family and medical leave responsibilities if providing an employee such leave would jeopardize the viability of the business as a going concern as long as the:
1. employer employs fewer than 50 employees;
2. and the leave is requested because the child’s school or place of care is closed, or childcare provider is unavailable, due to COVID-19 related reasons; and an authorized officer of the business has determined that at least one of the following three conditions is satisfied:
a. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
b. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
c. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
If you determine you qualify for this exemption, then to elect this small business exemption simply document why your business with fewer than 50 employees meets the criteria and keep that documentation on file in your office. Otherwise, please abide by the regulations of the FFCRA available at: https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave#_ftn6 , pay your employee to stay home and take a tax credit against payroll taxes submitted each pay period.