IPS organizes payroll processing for employees on COVID-19 sick leave

IPS reminds all employers that we can help them follow the proper procedures when paying their employees for COVID-19 related sick leave.

According to the Families First Coronavirus Response Act (FFCRA)

  • Employers qualify for dollar-for-dollar reimbursement on all qualifying wages paid, qualified health plan expenses, and the eligible employer’s share of Medicare taxes.
  • These credit items are applied toward payroll federal employment taxes and can be carried forward to future payrolls should the amount of the credit exceed the current payroll’s liability.

Here’s how it works:

IPS helps companies establish the COVID-19 sick earnings, which are paid to the employee instead of their normal salary or hourly rate.  Those earnings are then automatically programmed to reduce the employers tax liability within the current payroll period. While on leave, the sick employee still receives their money and the employer is “reimbursed” right away as the payroll is processed in the form of a reduced tax liability.

The U.S. Department of Labor has excellent resources to help employers determine eligibility.

If one of your employees is qualified, please contact IPS Payroll Manager Camille Pierce.  Camille can assist in adding the necessary pay items to your account. This will allow for the proper credits to be applied, and ensure accurate quarterly and annual payroll tax reporting.