New COVID-19 Guidance Issued by IRS and DOL

Published Wednesday, September 2, 2020 10:00 am

DOL Issues New Guidance for Childcare Under the FFCRA

On August 27th, the DOL released new Frequently Asked Questions (FAQs) regarding childcare leave under the Families First Coronavirus Response Act (FFCRA). As a reminder, Emergency Paid Sick Leave (EPSL) and Emergency Family Medical Leave (EFML) are available to most employees in companies under 500 employees, with some exceptions, when their children’s school is closed or when childcare is unavailable due to COVID-19 and that employee is unable to telework.

Below are summarized versions of the newly released FAQs:

Question: An employee’s children’s school is operating on an alternate day (or other hybrid-attendance) basis. The school is open each day, but students alternate between days attending school in person and days participating in remote learning. They are permitted to attend school only on their allotted in-person attendance days. Can an employee take FFCRA for these reasons?

Answer: Yes, an employee is eligible to take paid leave under the FFCRA on days when their child(ren) do not attend school in-person and instead, they have to engage in remote learning. This is only the case if the employee actually needs to take leave to care for their child(ren) during this time and only if no other person is available to do so. Under the FFCRA, the school is effectively “closed” when a child cannot attend in-person classes. With that, employees may take paid leave under the FFCRA on each of their child(ren)’s remote-learning days.

Question: An employee told me that their child(ren)’s school is giving them an option of having their child(ren) attend classes in-person or participate in remote learning this fall.  The employee chose remote learning out of fear their child(ren) may get COVID-19 from in-person learning. Can this employee use paid leave under FFCRA for this reason?

Answer: No, an employee would not be eligible for paid leave under the FFCRA because their child(ren)’s school is not “closed” due to COVID–19 related reasons; it is in fact open for in-person attendance. With that, FFCRA is not available if an employee’s child(ren) is home not because their school is closed, but because the employee has chosen to not enroll their child(ren) in in-person learning.

Question: An employee’s child(ren)’s school is beginning the school year with remote learning due to COVID-19, but the school announced that it will continue to evaluate health risks and that it will make a decision about re-opening for in-person learning later in the school year. Can the employee take FFCRA for this reason?

Answer: Yes, an employee would be eligible for paid leave under the FFCRA while their child(ren)’s school remains closed. If their child(ren)'s school reopens, the availability of paid leave under the FFCRA will depend on the particulars of the school’s operations (such as hybrid learning). 

IRS Issues Guidance for President Trump’s Payroll Tax Deferral 

On August 28th, the Department of Treasury and IRS released guidance for the August 08, 2020 Presidential Memorandum regarding payroll taxes. Specifically, employers are allowed, but are not required, to defer the employee portion of Social Security taxes from September 1, 2020 through December 31, 2020. Employers may only defer such taxes for employees who have taxable wages that are less than $4,000 per bi-weekly pay period, which is equivalent to approximately $104,000 per year. This tax reprieve must be repaid by the affected taxpayer between January 1, 2021 and April 30, 2021 or interest, penalties, and additions to tax will begin to accrue on May 1, 2021. It is important to note that this IRS guidance fails to clarify what an employer’s obligation would be if the employer is not able to collect the deferred Social Security taxes if the employee is no longer receiving a paycheck from that employer.

Cascade will continue to monitor this and we will keep you updated should any additional guidance be released. Please don’t hesitate to reach out if you have any questions!

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