As we shared with our readers previously, the Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020 – and with it, the obligation for covered employers to provide emergency paid sick leave and emergency family and medical leave.
Shortly before the end of 2020, Congress extended the tax credit that accompanied use of FFCRA to employers who wanted to voluntarily provide FFCRA paid leave after December 31st, 2020 through March 31, 2021.
The American Rescue Plan, signed into law on March 11, 2021, extends the tax credit for voluntarily providing FFCRA leave through September 30, 2021 and makes related changes. These provisions of the relief bill include the following:
- Extends the tax credits available for employers who voluntarily provide FFCRA leave from March 31, 2021 to September 30, 2021.
- Re-sets the 10-day limit for the tax credit for paid sick leave under the FFCRA beginning April 1, 2021. As a result, an employer could voluntarily provide an additional 10 days of FFCRA paid sick leave beginning April 1, 2021 through September 30, 2021, and would be eligible for a tax credit for doing so. But employers are not required to do so.
- Provides that the tax credits are available for paid sick leave and paid family leave provided for the additional following qualifying reasons:
- the employee is obtaining immunization (vaccination) related to COVID-19;
- the employee is recovering from any injury, disability, illness or condition related to such vaccination; or
- the employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 (or their employer has requested such a test or diagnosis).
- Adds non-discrimination rules to provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates in favor of highly compensated employees, full-time employees, or employees on the basis of tenure with the employer. This provision appears to be designed to compel employers who make the decision to voluntarily provide leave do so in an equitable manner, without discriminating against certain categories of workers.
We recommend you discuss these changes with your HR Consultant or an employment law attorney. If you decide to continue allowing FFCRA leave, update your policies and forms and communicate the changes to your employees accordingly.
Employers who choose to end the leave entitlement are reminded that some employees may still be entitled to leave (paid or unpaid) under other laws such as the regular Family and Medical Leave Act (FMLA), state and local laws, or company policy.
This article does not constitute legal advice and there are subtle variations in employment law as it pertains to this topic, depending on where your business operates. It is strongly suggested that you seek consultation or legal counsel before making decisions about policies.