Remember my post yesterday suggesting that FFCRA would be extended to 2021?
Well, that was a false start. Throw the five-yard flag on me.
Late last night, as I read through House Speaker Pelosi’s press release announcing a stimulus deal, I focused in on the following statement that the new stimulus bill:
Supports paid sick leave: The agreement provides a tax credit to support employers offering paid sick leave, based on the Families First framework.
Naturally, my tired brain read the “Families First” phrasing to mean that FFCRA stalwarts in Congress were able to negotiate an extension of FFCRA leave beyond its current expiration date of December 31, 2020.
Apparently, I was only half-correct, resulting in a two and one-half yard penalty.
Here’s the LATEST info:
FFCRA Leave Ends This Month, but Tax Credits Continue for Leave Voluntarily Extended to Employees
The current version of the bill, which is expected to be called for a vote this evening, results in the following:
- Mandated FFCRA Leave ends on December 31, 2020
- As of January 1, 2021, covered employers may voluntarily provide emergency paid sick leave or emergency paid FMLA Leave under FFCRA (as adopted earlier this year) and take the tax credit associated with this leave.
- The tax credit may only be taken for leave through March 31, 2021.
In other words, FFCRA leave is no longer required, but if covered employers voluntarily provide these leave benefits through March 31, 2021, they are eligible to take the tax credit for the leave.
Please note: I am not reading this amendment to mean that an employer can take a tax credit for an entirely new bucket of FFCRA leave on January 1, 2021. No, no, no! If an employee used 80 hours of paid sick leave (EPSL) earlier this year, for instance, they technically would not have had access to a new EPSL bucket on January 1, 2021. Therefore, the employer cannot take the credit for additional EPSL provided in 2021. That said, if the FMLA 12-month period resets under the employer’s policy, it seems apparent that an employee would be entitled to paid FMLA once again. Perhaps the DOL or IRS will provide updated guidance on this, but this interpretation seems to be the most logical based on a reading of the statutory text.
Also note: This bill does nothing for public employers, as unfortunately, they never were able to take the tax credit. For these folks, no mandatory FFCRA leave and no tax credit.
You want a taste of the new statutory language? Click here for 5593 pages of stimulus overload (pdf).
Don’t Forget State Laws
Like the federal government, many state and local governments enacted similar paid COVID-leave laws and ordinances earlier this year to assist employees dealing with COVID-19 or caring for family members affected by the pandemic. Although larger employers (with 500 or more employees) are not governed by FFCRA, several states and a few municipalities have enacted or amended paid sick leave laws to account for time off due to COVID-19 related reasons. For example, Colorado, New Jersey, Oregon, the District of Columbia and several cities in California (Emeryville, Long Beach, Los Angeles, Oakland, Sacramento, San Diego, San Francisco, San Jose, San Mateo, and Santa Rosa) have extended FFCRA-like benefits to employers not covered by the federal law.
Some of these laws also expire December 31, 2020. But some do not. It is critical that employers be mindful of other paid leave requirements under state and local laws, as well as their own paid leave and PTO policies.
What else is contained in this House bill?
For a more comprehensive analysis of this House bill, a few Littler colleagues and I review it here.