FFCRA Paid Leave Obligations, but not Tax Credit, Set to Expire on December 31
As many of you know by now, the Families First Coronavirus Response Act (“FFCRA”), which was enacted in March, requires employers with fewer than 500 employees to provide two types of paid leave benefits for certain absences related to COVID-19: (1) up to 80 hours of emergency paid sick leave (“EPSL”); and (2) up to 12 weeks of expanded family medical leave (“EFML”). The FFCRA provides that the paid leave mandates were to expire on December 31, 2020. Many anticipated that the paid leave mandates would be extended into 2021 as part of a pandemic relief package. The stimulus bill approved by Congress and signed into law by President Trump on December 27, however, did not contain such an extension. As a result, private employers with less than 500 employees will no longer be required to pay EPSL or EFML as of January 1, 2021.
While employers will no longer be required to provide paid EPSL or EFML as of January 1, 2021, the recently enacted stimulus bill extended the FFCRA tax credit to employers who voluntarily choose to offer such paid leave from January 1, 2021 through March 31, 2021. As a result, while employers are no longer required to provide the paid leave mandated by the FFCRA, covered employers who choose to offer such leave may utilize payroll tax credits to cover the cost of such paid leave through March 31, 2021.
In order to be eligible for the tax credit, the employee who is provided the paid leave must have been eligible to receive such leave under the FFCRA (i.e., the employee qualifies as an eligible employee, the need for leave is for a covered reason, the employee has leave available, etc.). Thus, if an employee has already received his or her 80 hours of paid sick leave under the FFCRA, the employer would not be able to take a tax credit in 2021 for voluntarily paying an additional 80 hours of paid sick leave.
As a reminder, the FFCRA requires covered employers to provide paid sick leave to eligible employees for the following reasons:
- Two weeks (up to 80 hours) of paid EPSL at the employee’s regular rate of pay where s/he is unable to work because s/he is quarantined (pursuant to federal, state, or local government order or advice of a healthcare provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
- Two weeks (up to 80 hours) of paid EPSL at two-thirds the employee’s regular rate of pay if s/he is unable to work because s/he has to care for an individual subject to quarantine order, or to care for a child (under 18) whose school or child care provider is closed or unavailable due to COVID-19; and
- Up to an additional 10 weeks of paid EFML at two-thirds the employee’s regular rate of pay where an employee is unable to work because s/he must care for a child whose school or child care provider is closed or unavailable due to COVID-19.
Employers should ensure that they are applying their leave policies consistently and uniformly. If you have any questions about the above or if you would like assistance reviewing your leave policies, please do not hesitate to contact Bryan Niemeyer, Certified Labor and Employment Law Specialist, FGKS Law, at 937-492-1271 or bniemeyer@fgks-law.com.
