It’s 2021. Do employers still need to pay for COVID-19 related Leave?
Confused? You are not alone. News articles vary between saying the Families First Coronavirus Response Act (FFCRA) expired and discussing how it was extended. What does all of this mean? Here’s what employers need to know:
What is the Families First Coronavirus Response Act (FFCRA)?
The FFCRA contains a number of new laws and small amendments to existing law, but for the purposes of this article we are focusing on three sections: Emergency Paid Sick Leave, Expanded FMLA (Family Medical Leave Act) and Tax Credits for Paid Sick and Paid Family and Medical Leave. The Emergency Paid Sick Leave Act implemented the requirement small businesses employers have all come to know – the required payment of up to 80 hours of sick leave for employees impacted by COVID-19. The Expanded FMLA broadened existing FMLA rules to apply in COVID-19 related childcare situations. Tax Credits for Paid Sick and Paid Family and Medical Leave addressed how businesses can cover the costs for these paid leave requirements. Each of these sections were set to expire on 12/31/20.
Did the FFCRA expire on December 31, 2020?
Yes and no. (Love that answer don’t ya?) What does that mean: The required paid leave aspect of the law expired, but the ability to use tax credits was extended.
So what does that mean for employers in 2021?
The emergency paid “sick leave” and expanded “family and medical leave” requirements of the FFCRA are no longer mandated as of December 31, 2020. That does not mean employers are not obligated to pay for time taken before 2021. Employers can still be sued for violating these provisions while they were in effect. What it does mean is that, unless new legislation is passed, an employee is not automatically entitled to FFCRA leave after December 31, 2020. However, employers may voluntarily decide to extend and provide FFCRA leave into 2021. Before you decide to extend, take note of the limitation on tax credits (discussed below).
So I don’t have to pay employees if they are out sick with COVID-19?
Not necessarily, your company sick leave policies will apply.
What did happen in December, 2020?
H.R. 133: Consolidated Appropriations Act, 2021(also referred to as ‘The Relief Bill’) was signed into law on December 27, 2020. While the law addresses a large number of topics, for the purposes of this article we are focusing on Section 286 of the Relief Bill (“Extension of Credits for Paid Sick and Family Leave”).
Although FFCRA leave is no longer mandated, the Relief Bill allows employers another calendar quarter of paid leave tax credits and amends certain provisions of the FFCRA to allow employers to take a payroll tax credit for providing emergency paid “sick leave” and paid expended “family and medical leave” into the first quarter of 2021 for two purposes: (1) to recover costs of providing required FFCRA leave in 2020, and (2) to voluntarily provide paid emergency “sick leave” and emergency “family and medical leave” through March 31, 2021. In other words: (1) if an employee took FFCRA-required leave in 2020, then the employer can take the appropriate tax credits in 2021; and (2) if an employer elects, voluntarily, to provide paid leave to an employee for an FFCRA-qualifying reason in Q1 of 2021, then it can take payroll tax credits for providing such paid leave.
For those following The Department of Labor’s FFCRA Guidance, the DOL published two new questions and answers related to the expiration of the FFCRA:
- I was eligible for leave under the FFCRA in 2020 but I did not use any leave. Am I still entitled to take paid sick or expanded family and medical leave after December 31, 2020? (added 12/31/2020)
Your employer is not required to provide you with FFCRA leave after December 31, 2020, but your employer may voluntarily decide to provide you such leave. The obligation to provide FFCRA leave applies from the law’s effective date of April 1, 2020, through December 31, 2020. Any change to extend the requirement to provide leave under the FFCRA would require an amendment to the statute by Congress. The Consolidated Appropriations Act, 2021, extended employer tax credits for paid sick leave and expanded family and medical leave voluntarily provided to employees until March 31, 2021. However, this Act did not extend an eligible employee’s entitlement to FFCRA leave beyond December 31, 2020.
Employers with questions about claiming the refundable tax credits for qualified leave wages should consult with the IRS. Information can be found on the IRS website (http://www.irs.gov/coronavirus/new-employer-tax-credits).
- I used 6 weeks of FFCRA leave between April 1, 2020, and December 31, 2020, because my childcare provider was unavailable due to COVID-19. My employer allowed me to take time off, but did not pay me for my last two weeks of FFCRA leave. Is my employer required to pay me for my last two weeks if the FFCRA has expired? (added 12/31/2020)
Yes. WHD will enforce the FFCRA for leave taken or requested during the effective period of April 1, 2020, through December 31, 2020, for complaints made within the statute of limitations. The statute of limitations for both the paid sick leave and expanded family and medical leave provisions of the FFCRA is two years from the date of the alleged violation (or three years in cases involving alleged willful violations). Therefore, if your employer failed to pay you as required by the FFCRA for your leave that occurred before December 31, 2020, you may contact the WHD about filing a complaint as long as you do so within two years of the last action you believe to be in violation of the FFCRA. You may also have a private right of action for alleged violations.
If you have questions about how the Relief Act impacts your business or would like to schedule an initial consultation, please contact Navigant Law Group, LLC at (847) 253-8800 or email us at firstname.lastname@example.org.
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