The Internal Revenue Service and the Treasury Department recently provided guidance to employers requiring them to report the amount of qualified sick and family leave wages they have paid to their employees under the Families First Coronavirus Response Act on Form W-2. Read on to see how your business will be impacted.

What is the Families First Coronavirus Response Act?

On March 18, 2020, Congress passed the Families First Coronavirus Response Act (FFCRA) which requires certain employers to provide their employees with expanded family and medical leave for specified reasons related to COVID as well as expand food assistance and unemployment benefits and more.

Check out our blog for the details, but essentially the FFCRA:

1. Expands family and medical leave:
   -Two weeks (up to 80 hours) of expanded family and medical leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine.
   -Up to an additional 10 weeks of expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee is unable to work due to a bona fide need for leave to care for a child whose school or childcare provider is closed or unavailable for reasons related to COVID-19.
2. Expands paid sick leave:
   -Two weeks (up to 80 hours) of paid sick time at the employee’s regular rate of pay for any employee who is unable to work because he/she is quarantined or experiencing symptoms of coronavirus.
   -Employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
   -Two weeks (up to 80 hours) of paid sick time at two-thirds the employee’s regular rate of pay for any employee who is unable to work because of a bona fide need to care for an individual subject to quarantine or care for a child whose school or childcare provider is closed or unavailable.
   -Employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).

Recent Update

In Notice 2020-54, the IRS provides that employers will be required to report these amounts either on Form W-2, Box 14, or in a statement provided with the Form W-2. The guidance also allows employers to use some optional language in the form W-2 instructions for employees.

The wage amount that employers must report on Form W-2 will offer self-employed individuals, who are also employees, the information they need to find out how many sick and family leave equivalent credits they can claim in their self-employed capacities.

Questions? Contact us. Don’t forget to check out our Coronavirus Resource Center.