Insight

What COVID-19 legislation means for nonprofits and their staffers

Whether your not-for-profit is newly deluged with demand for services or you’ve closed doors temporarily, it’s important to keep up with legislation responding to the coronavirus (COVID-19) crisis. On March 18, the Families First Coronavirus Response Act was signed into law to provide American workers affected by the pandemic with extended sick and family leave benefits.

The new law applies to your nonprofit if you have fewer than 500 employees, although you may be exempt if you have fewer than 50. Here are some details.

3 things to know

There are three important components of the new law:

1. Paid sick leave. If a staffer is ill, is instructed to be isolated by a physician or government authority or is caring for a sick family member or child whose school has closed, your organization must provide two weeks of paid leave. Pay part-time workers based on their average hours over a two-week period. Benefits are capped at $511 per day and $5,110 total for employees on leave because of their own health issue, or $200 per day and $2,000 total to care for others.

2. Job-protected leave. You must provide 12 weeks of job-protected leave for employees who need to take care of a child due to the closure of a school or day care center. This provision updates existing rules under the Family and Medical Leave Act. Employers are now required to pay workers two-thirds of their regular wages, not to exceed $200 per day and $10,000 total. You aren’t required to pay employees during the first 10 days off; however, they may choose to use accrued time off benefits at this time.

3. Employer payroll tax credits. To help employers pay for time off, the law enables tax credits. You may claim a 100% refundable payroll tax credit on wages associated with paid sick and medical leave and other expenditures associated with health benefit contributions. Additional wages paid to staffers due to the law’s leave requirement aren’t subject to the employer portion of the payroll tax.

Unemployment assistance

Congress has also provided $1 billion in emergency grants to states to process and pay unemployment insurance benefits. So if you need to lay off staffers during the extended COVID-19 crisis, this provision can help them manage the financial burden.

Of course, more is likely to be needed. Legislators are currently working out a deal to provide furloughed and laid-off workers with direct financial assistance as well as loans and other financial support for employers. Keep your eye on the news.

Staying afloat

If you have questions about how the Families First Act applies to your nonprofit, please contact us. Also, because many nonprofits operate on thin margins at the best of times, you may worry about staying afloat. We can analyze your position and help you come up with possible survival strategies.

© 2020

Related Insights

Passing the public support test | quickbooks consulting in cecil county md | Weyrich, Cronin & Sorra

Non-Profits

Passing the public support test

Unless 501(c)(3) organizations prove they’re publicly supported, the IRS assumes they’re private foundations. The distinction is important,…
Child tax credit: The rules keep changing but it’s still valuable | cpa in cecil county md | Weyrich, Cronin & Sorra

Tax Prep, Planning & Strategy

Child tax credit: The rules keep changing but it’s still valuable

If you’re a parent, you may be confused about the rules for claiming the Child Tax Credit (CTC). The rules and credit amounts have changed…
There still may be time to make an IRA contribution for last year | accountant in elkton md | Weyrich, Cronin & Sorra

Tax Prep, Planning & Strategy

There still may be time to make an IRA contribution for last year

If you’re getting ready to file your 2022 tax return, and your tax bill is higher than you’d like, there may still be an opportunity to lower…

Connect with us

Use the form below to send us an email. WCS responds directly to all inquiries and general questions within 24 hours of posting.

This contact form is deactivated because you refused to accept Google reCaptcha service which is necessary to validate any messages sent by the form.