Employers subject to the Families First Coronavirus Relief Act (FFCRA or the Act) should be aware that they are no longer required to provide paid leave to employees for the COVID-19 related reasons specified in the Act. In the Consolidated Appropriations Act, 2021 (CAA), which became law on December 27, 2020, Congress allowed the FFCRA leave mandate to sunset effective December 31, 2020. However, Congress retained the FFCRA tax credit through the first quarter of 2021. This means that covered employers may voluntarily provide FFCRA leave to eligible employees through March 31, 2021, in which case they can recover the costs of the leave through the FFCRA’s fully refundable tax credit.
As a reminder, the FFCRA generally applies to private employers with up to 499 employees. (The Act also applies to public sector employers, with certain exceptions, but the tax credit does not apply to them.) Information about FFCRA leave, including employer coverage, employee eligibility, qualifying leave reasons, paid leave entitlements, documentation requirements, and the tax credit, can be found in our prior FFCRA blog posts, available here.
Note that the CAA does not restart the clock on FFCRA leave; therefore, employers cannot claim the tax credit for providing additional leave to employees who already exhausted their FFCRA leave entitlements in 2020. However, some uncertainty may exist for employees whose employers measure their entitlement to 12 weeks of Family and Medical Leave Act (FMLA) leave in a 12-month period using the “calendar year” method. It is unclear whether such employees are entitled to an additional 12 weeks of expanded FMLA leave under the FFCRA (i.e., leave to care for a son or daughter whose school or place of care is closed or child care provider is unavailable due to COVID-19) for which the employer can take an additional tax credit. Employers should watch for guidance on this issue from the Department of Labor (DOL) and the Internal Revenue Service (IRS).
Even though the FFCRA leave mandate has expired, employers still must pay employees for any qualifying leave taken through December 31, 2020, as DOL pointed out in its latest FFCRA Questions & Answers. Some employers may also have continuing obligations to provide paid COVID-19 leave in 2021 under state or local laws. Employers who continue to provide FFCRA leave voluntarily should comply with all FFCRA documentation requirements and provide the leave consistently to all eligible employees in order to avoid discrimination claims.
[View source.]
