Under the Families First Coronavirus Response Act (FFCRA or Act), employers with less than 500 employees were required to provide paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.
The Act which ended on December 31, 2020, allowed for the following:
- Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or
- Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19, and/or the employee is experiencing a substantially similar condition as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of the Treasury and Labor; and
- Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.
Small businesses with fewer than 50 employees could have qualified for exemption from the requirement to provide leave due to school closings or child care unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
What happens now?
On December 27, 2020, President Donald Trump signed the “Consolidated Appropriations Act, 2021” (the “Relief Bill”), a small portion of which pertains to the FFCRA’s paid-leave requirements.
According to the National Law Review (NLR) the Relief Bill allows employers, on a voluntary basis, to continue to provide such leave through March 31, 2021, in exchange for a payroll tax credit.
NLR shares the following guidance:
Although FFCRA leave is no longer required, the Relief Bill allows employers another calendar quarter of paid leave tax credits. Section 286 of the Relief Bill (“Extension of Credits for Paid Sick and Family Leave”) 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.
As discussed above, voluntarily providing FFCRA paid leave may be a good option for employers seeking to help employees through difficult circumstances caused by COVID-19, as the pandemic shows no signs of subsiding yet. To seek such payroll tax credits, however, employers must acquaint themselves with the rules regarding FFCRA leave eligibility and keep accurate records.
