The Second Coronavirus Relief Bill Does Not Extend the FFCRA’s Mandated Paid Sick Leave But Does Provide a Tax Credit to Employers Who Voluntarily Provide the Leave
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On December 21, 2020, Congress passed a second Coronavirus relief bill. In this bill, Congress, among other things, extended certain aspects of the Families First Coronavirus Response Act (FFCRA), which is set to sunset on December 31, 2020.
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As enacted, the FFCRA required employers with fewer than 500 employees to provide paid sick leave and expanded Family and Medical Leave Act (FMLA) leave for specified reasons related to COVID-19.
If enacted, the second coronavirus relief bill will provide the following as it relates to the FFCRA:
- As of January 1, 2021, employers will not be required to provide leave under the FFCRA.
- Beginning on January 1, 2021, covered employers who voluntarily provide emergency paid sick leave and/or emergency paid FMLA leave under the FFCRA will be eligible for a tax credit associated with the leave.
- The tax credit for providing paid sick leave and/or emergency paid FMLA leave under the FFCRA shall apply only to leaves taken between January 1, 2021 and March 31, 2021.
Given the foregoing, employers must take certain actions now. First, employers should determine whether they will provide FFCRA paid leave in 2021 and/or require employees on FFCRA leave in 2020 to return to work immediately in 2021, even if the life circumstances that made them eligible for FFCRA leave in 2020 remain. In making these determinations, employers should consider the impact the determinations could have on employee morale, the likelihood that ill employees will report to work out of a need to earn their paychecks and the employer’s bottom line as employers compare the need for employees to report to work versus the benefit the employer could receive from the tax credits. Second, employers must consider the fact that, while FFCRA-covered employers will no longer be required to provide paid leave under federal law as of January 1, 2021, many state and local governments enacted laws requiring paid COVID-19 related leave and those laws may extend beyond December 31, 2020.
For additional information, read our previous alerts on the FFCRA:
DOL Issues Regulations For New Federal Paid Sick and Family Leave Law
The Coronavirus Task Force at Klehr Harrison stands ready to assist you in your business and legal needs. We will continue to provide additional information and guidance as the COVID-19 situation develops.
Author Lee Moylan is chair of the labor & employment practice at Klehr Harrison.