April 9, 2020
New Federal Legislation: Implications for Libraries
Two Coronavirus-related federal legislative packages have been approved since March 18, 2020.
- The Families First Coronavirus Response Act (FFCRA) requires nonprofit organizations that employ fewer than 500 employees to provide emergency paid leave for Coronavirus absences and up to an additional 10 weeks of paid expanded family and medical leave. The costs for these benefits will be covered by tax credits applied to the employer's share of employment taxes.
- The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a variety of financial relief programs that nonprofit employers should review and consider participating.
Families First Coronavirus Response Act Employer Requirements
Effective April 1, 2020, the FFCRA requires employers (including nonprofits) with fewer than 500 employers to provide all employees with:
- 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.
Small organizations 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.
In addition, for workers employed for at least 30 days by an employer with fewer than 500 employees, the employer must provide:
- 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.
Employers must notify employees of these rights by April 1, 2020. The Department of Labor has a mandatory leave rights poster which contains this information. It can be posted (physically or digitally) or sent electronically to employees.
To learn more about the FFRCA, see the Department of Labor's:
Paying for FFRCA Required Employee Benefits
To pay for these leave benefits, employers will receive a credit in the full amount of the qualified sick leave wages and qualified family leave wages, plus allocable qualified health plan expenses and the employer's share of Medicare tax, paid for leave during the period beginning April 1, 2020, and ending December 31, 2020. If the amount of the credit exceeds the employer portion of these federal employment taxes, then the excess will be refunded to the employer.
To learn more about the FFRCA's tax credit program, see the Internal Revenue Services' website:
Other Helpful Information on the FFRCA
The Pennsylvania Association of Nonprofit Organizations (PANO) is helping nonprofit employers understand the FFRCA:
Coronavirus Aid, Relief, and Economic Security (CARES) Act
The CARES Act provides several programs that could provide financial relief to employers' COVID-related costs. They are:
1. Paycheck Protection Program – Small businesses and non-profits with 500 employees or less are eligible to apply for a "forgivable" Small Business Administration (SBA) loan to help cover payroll and other operating expenses like rent, mortgage interest payments, utilities, and interest on prior debt. Loans are forgiven and convert to an SBA grant if certain conditions, such as maintaining or quickly rehiring employees and maintaining salary levels. The application period opened on Friday, April 3, 2020. Libraries that want to participate should apply quickly since there is an expenditure cap. For more information, the Treasury Department has also released helpful guidance:
2. Economic Injury Disaster Loans and Emergency Grant Program – For eligible non-profits with 500 or fewer employees, SBA emergency grants of up to $10,000 are available along with low-interest loans to help with temporary losses of revenue. Emergency funds can be used for expenses like paid sick leave, payroll, and meeting increased costs.
3. Employee Retention Tax Credit – Non-profits that have been forced to fully or partially suspend operations, or that have seen a significant drop in revenues (including donations), are eligible for a fifty-percent (50%) credit for wages paid to furloughed or reduced-hour employees. For non-profits with 100 employees or less, the credit is based on all wages paid, regardless of whether an employee is furloughed. There is an overall limit on wages per employee of $10,000. The credit will first be claimed against the non-profit's quarterly payroll tax liability and can then be recouped through a refundable tax credit. However, non-profits are not eligible for the Employee Retention Tax Credit if they participate in the Paycheck Protection Program.
4. Delayed Payment of Payroll Taxes – Employers may delay payment of employer payroll taxes until 2021 and 2022, with 50% of the liability being paid at each date. However, employers are not eligible if they have a loan forgiven under the new Paycheck Protection Program (Section 2202 of the CARES Act.)
5. Institute for Museum and Library Services (PDF) – The Institute of Museum and Library Services will receive $50 million to help ensure digital equity, including grants to states to expand libraries' digital network access, purchase internet accessible devices, and provide technical support services. Specific details about how these funds will be made available are not yet known.
6. Benefits for Individual Donors – Individual donors may be eligible for an "above-the-line" deduction (a universal or non-itemizer deduction that applies to all taxpayers) for total charitable contributions made in 2020 of up to $300. The bill also lifts the existing cap on annual contributions for those who itemize, raising it from 60 percent of adjusted gross income to 100 percent (Section 2104 of the CARES Act.)
7. Benefits for Corporate Donors – Corporate donors may be eligible to deduct qualified contributions only to the extent that the total of such contributions does not exceed 25 percent (Section 2105 of the CARES Act.)
Information and Questions
Information and future guidance related to library services will be announced through the Office of Commonwealth Libraries' website and via our statewide email distribution lists.
Questions about COVID-19 issues should be directed to PDE's emergency response account at: RA-EDEmergencyResponse@pa.gov.
Glenn R. Miller, Deputy Secretary & Commissioner for Libraries