Voluntary FFCRA Extension Through March 31, 2021
As Congress pushed through an additional COVID stimulus bill on the eve of the new year, it also temporarily extended the benefits afforded to employees under the Families First Coronavirus Response Act (FFCRA).
The FFCRA required employers with less than 500 employees to provide additional job protected paid leave for specific qualifying events (up to 80 hours of paid leave), and also provided up to 12 weeks of leave for parents who could not work because they needed to care for their children whose schools were closed due to COVID-19. For employers, any covered payments under FFCRA are eligible to be reimbursed to the employer by the federal government through a 100% tax credit. As a result, it is often a win-win for employers and employees – the employee gets paid, and in the end, the employer is reimbursed. The FFCRA benefits were set to expire on December 31, 2020.
On December 21, 2020, Congress did not extend FFCRA into 2021; however, they allowed employers to voluntarily continue providing paid leave benefits under FFCRA and to continue receiving the payroll tax credit through March 31, 2021. Thus, while FFCRA is no longer mandatory, employers can still provide these benefits to their employees and continue to offset their costs with the tax credit through the first quarter of 2021.
Key Takeaways for Employers
• Employers should not provide any additional leave under FFCRA to employees who have exhausted their bank of leave. The new legislation did not restart an employee’s entitlement to leave.
• Any FFCRA benefits taken in 2020 by employees will be applied to their leave bank in 2021. For example, if an employee used 48 hours of emergency paid sick leave in 2020, they should only be entitled to use an additional 32 hours.
• Employers will not be eligible to receive tax credits for any amount of paid leave that is greater than what employees are entitled to under FFCRA.
• If an employer provides voluntary FFCRA benefits in 2021, such leave is job protected and employers may not retaliate against an employee who takes such leave.
• Employees who took leave in 2020 are still protected by FFCRA’s anti-retaliation and anti-discrimination protections.
• If an employer provides FFCRA benefits in 2021, it is important to maintain proper documentation in the event of an IRS audit regarding the tax credit.
• If an employer chooses not to continue to offer paid leave under FFCRA, employees may choose to show up to work regardless of having COVID-19 symptoms to avoid missing a paycheck.
Employers should assess whether to continue offering FFCRA benefits and update their policies and practices accordingly. As with any policy change, employers should communicate these changes to their employees.
For additional help navigating these issues, feel free to contact Walker R. Lawrence, a partner in the employment law practice at Levin Ginsburg, at firstname.lastname@example.org, or Joseph A. LaPlaca, an attorney at Levin Ginsburg, at email@example.com.