Families First Coronavirus Response Act (FFCRA) & Sage 50

I ran across an article from Sage giving their recommendations for setting up payroll fields for paying sick leave and family leave required under the Families First Coronavirus Response Act (FFCRA). So I thought I would send out this newsletter apart from my regular cycle to pass along that information as well as a little bit about which businesses are affected by the FFCRA and some links to the Paycheck Protection Program that provides assistance to small businesses through the SBA. I'm definitely not an expert on the FFCRA and this is certainly not a comprehensive guide, but the links below will help to give you an overview of what you need to know. You should consult a CPA or an HR expert for details of complying with the act, but I can assist you with any Sage 50 related tasks you need to implement for compliance or reporting.

What is the FFCRA and Which Businesses Are Affected?
Sage 50 Setup Guidelines for FFCRA
What Assistance is Avaiable to Employers Under the Paycheck Protection Program?

Steve Collins
IQ Accounting Solutions LLC
918-851-9713
scollins@iqaccountingsolutions.com
www.iqaccountingsolutions.com

What is the FFCRA and Which Businesses Are Affected?

The following is an excerpt from the U.S. Department of Labor website. You can (and should) read the whole document at https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave

The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.[1] The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020.

Generally, the Act provides that covered employers must provide to all employees:[2]

Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
Two weeks (up to 80 hours) of paid sick 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 (pursuant to Federal, State, or local government order or advice of a health care provider), or care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor.

A covered employer must provide to employees that it has employed for at least 30 days:[3]

Up to an additional 10 weeks of paid 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 child care provider is closed or unavailable for reasons related to COVID-19.

Covered Employers: The paid sick leave and expanded family and medical leave provisions of the FFCRA apply to certain public employers, and private employers with fewer than 500 employees.[4] Most employees of the federal government are covered by Title II of the Family and Medical Leave Act, which was not amended by this Act, and are therefore not covered by the expanded family and medical leave provisions of the FFCRA. However, federal employees covered by Title II of the Family and Medical Leave Act are covered by the paid sick leave provision.

Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.

For more information from the DOL I would recommend these additional pages:
https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

FFCRA Setup Guidelines for Sage 50

If you need to pay COVID-19 related sick leave or family medical leave as required under the FFCRA, here are Sage's current recommendations on how to set up additional fields to track those pay types. If you need to give an employee regular pay as well as FFCRA sick or family leave, you should issue two separate paychecks, one for the regular pay and a second check for the FFCRA related pay. That will make reporting easier later. Sage is continuing to monitor what reporting will be required related to FFCRA.

Here is the article as it currently appears in the Sage knowledgebase:

Families First Coronavirus Response Act (FFCRA/HR 6201) setup guidelines

Products

Sage 50—U.S. Edition

Country

North America

Description

The Families First Coronavirus Response Act (FFCRA/HR 6201) outlines that certain employers provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.

For COVID-19 related reasons, employees receive up to 80 hours of Paid Sick Leave and expanded childcare leave when employee’s children’s schools are closed, or childcare providers are unavailable. When paying employees with this Leave, it is important and recommended NOT to include any regular hours or overtime type of pay. If partial regular hours need to be computed and paid in addition to this type of pay, the employee will ideally receive two separate paychecks.

For more information regarding specifics of the new law, please refer to the U.S. Department of Labor web site:
https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

Resolution

Section I – Pay Level Setup

In the product, from the Maintain menu, select Payroll > Payroll Settings
The Payroll Settings window appears. On the left Navigation bar, click Company Information.
Click on the Pay Types option that is revealed. The Pay Types for Hourly and Salary pay types are displayed.
If you have Hourly employees, in the next three available fields (generally included with the text “Rate”), add the following Pay Level rate levels with the following naming conventions:
1. EHMPaidSickLv
2. EHRMPaidFMLA
3. EHMPaidSickOth
If you have Salary employees, in the next three available fields (generally included with the text “Salary”) featured in the lower portion, add the following naming conventions:
1. ESMPaidSickLv
2. ESRMPaidFMLA
3. ESMPaidSickOth
Verify that the Payroll expense account number and Payroll tax expense account number fields contain valid General Ledger account numbers for which you would like this pay to post.
Click the Finish button.

In steps 4 and 5 above, you defined the Paid Sick Leave and FMLA Pay Level categories for hourly and salaried employees respectively.

Any field ending in PaidSickLv is representative of Paid Sick Leave pay:
The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee's regular rate of pay up to $511.00 per day (or $5,110.00 in the aggregate) where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis.

Any field ending in PaidSickOth is representative of Paid Sick Leave pay that meet the following conditions:
Applies to employee to care for others subject to childcare provider not available or employee experiencing any other similar condition stated or to be specified by the Secretary of Health and Human Service in consultation with the Secretary of Treasury and the Secretary of Labor.

Any field ending PaidFMLA is representative of Emergency Family and Medical Leave Act pay:
An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee's regular rate of pay up to $200.00 per day (or $2,000.00 in the aggregate). An employee who is unable to work due to a need to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee's regular rate of pay up to $200.00 per day.

Section II – Employee Record Setup

In the product, from the Maintain menu, select Maintain Employees/Sales Reps.
The Maintain Employees & Sales Reps window appears. Select the affected Employee record, whether Hourly or Salaried.
Click the Pay Info tab.
1. For an Hourly employee, define the Hourly Pay Rate for the EHMPaidSickLv and/or EHRMPaidFMLA where applicable.
2. For a Salaried Employee, define the Salary Pay Rate for the ESMPaidSickLv and/or ESMPaidFMLA where applicable.
Repeat steps 2 through 3 when the need arises to configure an Employee record impacted under the Act’s criteria.
When paying the affected Employee(s) in Payroll Entry, please ensure that only the fields ending in PaidSickLv, PaidFMLA and PaidSickOth contain hours or dollar entries depending on the employee’s pay type.

Section III – Reporting

In the future, it is anticipated these values will need to be reported on quarterly tax forms submitted to Government authorities. This section will be expanded later to elaborate on the procedures established at that time, but in the interim, use the following steps to produce Payroll Reporting that will summarize the pay data disbursed to affected employees defined under the Act’s criteria:

From the Reports & Forms menu, select Payroll.
The Select a Report or Form window appears with the Payroll section highlighted. Double-click the Payroll Register report.
The Hourly and Salary pay rate types are displayed on this report, with historical pay data for each employee.
You may choose to use the report options to include only the affected employee record and save the filtered selections to a customized report. As more employees are impacted, you may use the report options to include the additional employee records and save the customized report with these changes.

What Assistance is Avaiable to Employers Under the Paycheck Protection Program?

The federal government is making loans, which in certain cases will be forgiven when used to cover payroll and certain other approved costs. These loans are being handled by the Small Business Administration (SBA) but are separate from other SBA loans and programs. Here is a very brief summary of the program taken from the SBA website.

"The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of 1%."

For complete details on the Paycheck Protection Program and other assistance avaiable through the SBA visit:

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

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Steve Collins
IQ Accounting Solutions LLC
918-851-9713
10611 E 17th Place
Tulsa, OK 74128