Mandated FFCRA expired Dec. 31, 2020. Employers no longer need to provide employees with guaranteed paid leave benefits for COVID-19 qualifying absences. Instead, tax credits will be available to employers that voluntarily offered paid sick leave benefits to employees based on the FFCRA's original framework. This was announced in House Speaker Nancy Pelosi's stimulus deal press release.
Active Jan. 1, 2021, employers with under 500 employees can continue the provision of emergency paid sick leave (EPSL) or emergency paid FMLA leave (EFMLA) under the FFCRA and take the tax credit associated with those payments for leave taken through March 31, 2020. This will not grant employers the ability to acquire tax credit for paid leave that goes beyond what employees were entitled to under the original FFCRA or require them to grant employees additional paid leave. This update simply allows employers to let their employees exhaust FFCRA leave they would have been entitled to through March 31, 2021, instead of Dec. 31, 2020. Employers are free to discard all FFCRA paid leave entitlements at the end of this year.
What is Still Unclear?
It's unclear whether emergency paid leave under the FMLA extension resets to allow employees with children to receive 12 additional weeks of paid leave to care for their child if the child's school closes under COVID-19 related conditions.
Right now, it seems that the new leave is not available and that only the original, unpaid FMLA leave would reset. The Department of Labor and/or the IRS may provide some guidance in the coming weeks to clarify this update further.
Applicable employers must decide whether they will continue to offer the EPSL/EFMLA and communicate their company's position and policies to management and employees as necessary.
Note that employers will need to review local and state COVID-19 relief laws to fully understand their rights and obligations to employees.
If you have questions related to this update, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.
This regulatory update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.