As we move into 2021, many businesses are wondering whether there has been any change to the leave provisions of the Families First Coronavirus Response Act (FFCRA). The short answer is that the FFCRA leave requirements have not been extended beyond December 31, 2020, but there may be an incentive for business to consider voluntarily extending the use of any remaining FFCRA leave by their employees.
As a reminder, the FFCRA required all private employers with less than 500 employees to provide paid emergency sick leave for certain COVID-19-related absences and extended the Family and Medical Leave Act (FMLA) for employees caring for a child whose school or care provider is closed due to COVID-19. The FFCRA is set to expire on December 31, 2020, but with additional COVID-relief legislation being passed recently, businesses need to be aware of changes related to the FFCRA.
On December 21, 2020, Congress passed an appropriations bill containing additional COVID-19 relief, and President Trump signed the bill into law on December 27, 2020. The legislation provides additional Paycheck Protection Program funding, unemployment benefits, and a direct stimulus payment to individuals among other relief measures. Another key component of the legislation is the extension of tax credits tied to leave under the FFCRA.
Importantly, the new legislation does not extend the benefits of the FFCRA. Covered employers are not required to provide FFCRA leave benefits beyond the end of 2020. Thus, the emergency sick leave bank and expanded FMLA leave provisions provided by the FFCRA expire on December 31, 2020 and an employer does not have to allow the use of this leave beyond that date.
What the legislation does do is to encourage private employers who were covered by the FFCRA to voluntarily allow employees to use any remaining, unused, emergency sick leave and expanded FMLA leave provided by the FFCRA during the first three months of 2021. As encouragement for providing such benefits, private employers who voluntarily continue emergency paid sick leave and expanded FMLA leave under the FFCRA framework are eligible to continue taking the associated tax credits through March 31, 2021. It’s important to note that the tax credits through March 31, 2021 would only apply to the original leave allowance provided in the FFCRA (up to 80 hours in emergency paid sick leave and up to 12 weeks of FMLA leave). If an employee has exhausted their initial leave allotment, it does not appear that employers can claim tax credits for additional paid emergency sick leave it chooses to provide an employee in 2021. However, if an employee uses paid FMLA-expansion leave in 2020 and the employer’s 12-month period for FMLA leave resets on or before March 31, 2021, an employer should be able to claim tax credits for additional FMLA-expansion leave paid to employees through March 31, 2021.
Employers should evaluate this new legislation and determine whether they wish to extend the FFCRA leave policies for use in the first three months of 2021. It is critical to review existing leave policies, notify employees of policy changes in advance, and stay in tune with developments at the federal, state, and local levels. We anticipate that the Department of Labor and or Internal Revenue Service may issue new guidance around these changes. Also, with a new Congress and incoming Biden administration, it is unclear whether additional COVID-19 legislation could be on the way. If you have questions about the new COVID-19 relief legislation, its impact on your business, or any other employment law issue, reach out to one of our employment law attorneys, Julia Ketcham Corbett, Beth Serrill, or Alyssa Nelson. We will continue to be a resource to our clients as everyone navigates a constantly-changing employment environment.
