FFCRA Leave Expires; Payroll Tax Credits Available Until March 31, 2021

The paid leave requirements of the Families First Coronavirus Response Act (FFCRA) ended on December 31, 2020.  As a reminder, these leave requirements had two components:  (1) up to 80 hours of emergency paid sick leave, which could be used by an employee who was unable to work for any of six specific COVID-19 related reasons; and (2) an expansion of the Family Medical Leave Act, providing up to 12 weeks of partially paid leave to an employee who was unable to work due to the need to care for a child due to school closure/unavailability of child care.  An employer with less than 500 employees who provided leave under FFCRA was able to claim a payroll tax credit for FFCRA leave provided so long as basic documentation requirements were met.

The recently signed stimulus package (The Consolidated Appropriations Act) did not extend these leave requirements.  It did, however, extend until March 31, 2021, the ability of previously-covered employers to claim the payroll tax credit if they voluntarily provide leave in either category. 

The federal Department of Labor released the following guidance over the weekend in an update to its FFCRA FAQ -

"I was eligible for leave under the FFCRA in 2020 but I did not use any leave. Am I still entitled to take paid sick or expanded family and medical leave after December 31, 2020? (added 12/31/2020)

Your employer is not required to provide you with FFCRA leave after December 31, 2020, but your employer may voluntarily decide to provide you such leave.  The obligation to provide FFCRA leave applies from the law’s effective date of April 1, 2020, through December 31, 2020.  Any change to extend the requirement to provide leave under the FFCRA would require an amendment to the statute by Congress.  The Consolidated Appropriations Act, 2021, extended employer tax credits for paid sick leave and expanded family and medical leave voluntarily provided to employees until March 31, 2021.  However, this Act did not extend an eligible employee’s entitlement to FFCRA leave beyond December 31, 2020.

Employers with questions about claiming the refundable tax credits for qualified leave wages should consult with the IRS.  Information can be found on the IRS website."

The new stimulus package only extends the availability of the payroll tax credit – it does not require employers to provide any further emergency paid sick leave.  This means that employers could simply make available to employees whatever remains of the initial “up to 80 hours” emergency paid sick leave allotment.  Employers could take a similar approach with expanded family medical leave; however, leave under the Family Medical Leave Act is based on a 12-month leave year, so it is unclear whether employers who allow employees to use up their 2020 allotment of expanded family medical leave for the school closure/child care reason could find themselves liable to provide an additional 12 weeks of leave if employees become eligible for it before March 31, 2021, based on the employer’s standard leave year.

The extension of the availability of the payroll tax credit and the reality of the continuing strain on employees caused by COVID-19 certainly places employers in a quandary as to whether to continue offering all or some of the leave created by FFCRA, revert to enforcement of standard leave policies, or to find some middle ground.  Whichever path employers choose, they should quickly provide notice to employees regarding any change in policy or procedure.

Melissa Calhoon Jones, chair of the labor and employment group, counsels companies on employment, labor, and immigration issues.  For more information about this regulation and other employment concerns, please contact her or any member of the employment group.

This has been prepared by Tydings for informational purposes only and does not constitute legal advice.