On March 20, 2020, the Internal Revenue Service (IRS), the U.S. Department of the Treasury, and the U.S. Department of Labor provided some preliminary guidance on the Families First Coronavirus Response Act (Act), which significantly amends and expands the Family and Medical Leave Act (FMLA), by issuing Notice IR-2020-57 (Notice). You can access the Notice by clicking on this link to the IRS website. More extensive guidance will be issued next week.

Here are some important takeaways:

  • Employers can offset their qualified sick leave and qualified FMLA leave payments against their federal employment tax deposit requirements, including income tax withholding and employment tax withholding (employee portion) and employer match tax (collectively "941 taxes").
  • Although the refund procedure available where qualified sick leave and qualified FMLA payments exceed the 941 taxes is not yet finalized, the Notice states that the IRS expects to process in 2 weeks or less.
  • Tax exempt organizations with less than 500 employees can also use the qualified sick leave and qualified FMLA leave payments to offset their employment tax liability.
  • Regarding the small business exemption (fewer than 50 employees) from FMLA, the Notice states that the exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of a business as a going concern.
  • The U.S. Department of Labor will issue a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act so long as the employer acted reasonably and in good faith to comply with the Act. It then states that the U.S. Department of Labor will instead focus on compliance assistance during the 30-day period. Although not clear, this seems to suggest a 30-day grace period after enactment of the Act for an employer to come into compliance provided the employer meets the reasonable/good faith standard.

Please contact us with your questions or concerns. Our Legal Resource Group is available to address your needs.

COVID-19 Legal Resource Group:

Elwood F. Cahill, Jr.

Office line: (504) 299-2103

Cell number: (504) 723-5485

Email address: [email protected]

Richard P. Richter

Office line: (504) 299-2104

Cell number: (504) 915-7645

Email address: [email protected]

Steven I. Klein

Office line: (504) 299-2105

Cell number: (504) 208-7093

Email address: [email protected]

Debra J. Fischman

Office line: (504) 299-2109

Cell number: (504) 274-8919

Email address: [email protected]

Martha Y. Curtis

Office line: (504) 299-2111

Cell number: (504) 782-4659

Email address: [email protected]

Ryan D. Adams

Office line: (504) 299-2118

Cell number: (504) 638-7154

Email address: [email protected]

Ryan O. Luminais

Office line: (504) 299-2106

Cell number: (504) 261-9192

Email address: [email protected]

Jeffrey D. Kessler

Office line: (504) 299-2124

Cell number: (504) 208-7092

Email address: [email protected]

Travis A. Beaton

Office line: (504) 299-2116

Cell number: (206) 940-4730

Email address: [email protected]

Brandon W. Keay

Office line: (504) 299-2140

Cell number: (504) 214-8461

Email address: [email protected]

Co-Managing Members:

Leopold Z. Sher

Office line: (504) 299-2101

Cell number: (504) 931-5524

Email address: [email protected]

James M. Garner

Office line: (504) 299-2102

Cell number: (504) 931-5361

Email address: [email protected]

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