The Families First Coronavirus Response Act (“FFCRA”), which required that employers with fewer than 500 employees provide sick and family leave benefits for certain COVID-19 related reasons, expired on December 31, 2020. The provision was not extended, therefore employers are not required to provide paid leave under the FFCRA after December 31, 2020.
Even though the FFCRA’s leave provisions were not extended into 2021, the Consolidated Appropriations Act, 2021 (“CAA, 2021”) passed on December 27th extended the FFCRA tax credit, which reimburses employers for the cost of providing FFCRA leave, through March 31, 2021. As a result, beginning on January 1, 2021, employers are no longer required to provide FFCRA leave; however, covered employers can voluntarily provide FFCRA leave. If an employer continues to offer such leave they may utilize the payroll tax credits to cover the cost of unused 2020 FFCRA benefits paid to employees through the end of March, 31,2021. The relief package does not change the qualifying reasons for which employees may take leave, the caps on the amount of pay employees are entitled to receive, or the FFCRA’s documentation requirements.
The law also does not change the amount of leave that employees are entitled to take under the FFCRA. Please reference our earlier article with detailed requirements. An employer is not entitled to a second tax credit for an employee taking leave in 2021, when an employee has already taken the allowed number of days in 2020.
The CAA, 2021 does not address whether employers can choose to extend only Emergency Paid Sick Leave (“EPSL”) or Emergency Family Medical Leave Act (“EFMLA”), or both. It does not prohibit or require employers who choose to continue EPSL to also continue EFMLA. Thus, pending additional guidance, it appears the two decisions may be made separately and may differ.
If you have questions about the FFCRA payroll tax credit or other payroll tax credits, please contact your HM&M Advisor.
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For more information check out HM&M’s COVID-19 Resources page.
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