New Year, New Rules: Employer Implications of the New COVID-19 Relief Legislation
December 30, 2020
The Families First Coronavirus Response Act (FFCRA), passed as a short-term response to the pandemic, expires on December 31, 2020. The FFCRA requires covered employers to provide emergency paid sick leave and extended paid caregiver leave to employees who are absent from work for COVID-19 related reasons. Qualifying employers could offset the costs of FFCRA paid leave with a dollar-for-dollar tax credit. In the latest COVID-19 relief package, Congress declined to extend the FFCRA leave mandates but did extend the payroll tax credit for paid sick leave and paid family leave through March 31, 2021.
Congress also provided extended unemployment benefits for employees not able to work because of COVID-19 under the Pandemic Unemployment Assistance ("PUA") program which continues with modification into the new year.
For your convenience, key implications for employers are summarized below:
FFCRA Leave Optional
As of January 1, 2021, employers are no longer required to provide FFCRA leave. However, qualifying private employers may do so voluntarily and continue to receive the dollar-for-dollar tax credit for qualifying leave taken through March 31, 2021.
An employer's decision to voluntarily continue to offer FFCRA leave should be based on the specific workplace and its staffing needs, alternative working arrangements, other available leave, potential effect on employee morale, and employee retention.
If an employer continues to offer leave consistent with the FFCRA, the employer should:
- Continue to request and maintain documentation of the need for leave.
- Ensure it only provides paid leave to employees who have not already exhausted their "bank" of FFCRA leave. Employers will not receive federal tax credits for employees who have already exhausted their 80-hour and 10-week FFCRA leave in 2020.
- Follow the reinstatement rules under the FFCRA.
IMPORTANT: Whether or not employers elect to continue providing such paid leave, employers need to update or remove existing FFCRA policies to reflect expiration of the mandatory provisions on December 31, 2020.
Unemployment Benefits Further Expanded
To address the continued high unemployment rates, Congress expanded the eligibility period for unemployment insurance and provided additional federal benefits:
- Increased unemployment eligibility period. Individuals receiving unemployment insurance benefits through their state programs or through the PUA program are now eligible for an additional 11 weeks of benefits. Combined with the 13-week extension under the CARES Act, the extended unemployment eligibility period is now 24 weeks.
- Further federal supplement. Individuals receiving state unemployment insurance benefits and/or PUA will receive an additional $300 per week through March 14, 2021.
CAUTION: State and local laws may affect unemployment benefits and may create additional leave obligations for employers. Some states and local governments have passed laws providing employees with additional paid leave for reasons related to COVID-19.
We Can Help
Please contact Maslon's Labor & Employment Group if you need help transitioning your leave policies to the New Year.