FFCRA Update - Emergency Paid Sick Leave and Emergency Paid FMLA
FFCRA update extends employer tax credits for providing both paid sick leave and paid family and medical leave under the Families First Coronavirus Response Act (FFCRA) through March 31, 2021 but does not extend mandated leave.
Mandated FFCRA Leave ends on December 31, 2020
As of January 1, 2021, covered employers may voluntarily provide emergency paid sick leave (EPSL) or emergency paid FMLA (EPFMLA) 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.
This amendment does not appear to give an employer a tax credit for an additional 80 hours of FFCRA leave on January 1, 2021. If an employee used 80 hours of paid sick leave (EPSL) earlier this year, for instance, they would not have access to 80 additional hours on January 1, 2021. Therefore, the employer cannot take the credit for additional EPSL provided in 2021. It merely extends the time during which the tax credit may be taken for employers that choose to continue providing EPSL. However, although not entirely clear, if the FMLA 12-month period resets under the employer’s particular policy, it seems that an employee would be entitled to paid FMLA once again. Hopefully the DOL or IRS will provide updated guidance on this, but lawyers feel that this interpretation seems to be the most logical based on a reading of the statutory text.
This is NavigationHR’s interpretation of the updated legislation as it sits on the President’s desk for signature and is provided for informational purposes only. It is not intended as legal advice and should not be relied upon as such. You should contact an attorney for any specific advice regarding the FFCRA’s application to your business.