On Monday, December 21, 2020, Congress passed another stimulus package to provide certain coronavirus relief for individuals and businesses, among other things. One looming question was whether Congress would extend the emergency paid sick leave (EPSL) and emergency paid family leave (EFMLA) provisions of the Families First Coronavirus Response Act (FFCRA) into next year?
The answer is – no. The FFCRA paid leave laws have not been extended, and thus the paid leave law mandates for employers who have fewer than 500 employees expire at 11:59pm on December 31, 2020.
However, Congress’s latest package does allow qualifying employers to voluntarily extend those benefits to employees during the period January 1, 2021 through March 31, 2021 if the employer so chooses, and the employer can continue to receive a credit against payroll taxes as before, with one caveat. In order to claim the payroll tax credits, the employer must comply with the requirements of the EPSL and/or EFMLA as if they were so extended through March 31, 2021.
Importantly, employers cannot claim payroll tax credits for any such paid leave in the first quarter of 2021 if the employee already used up his/her allotment of FFCRA emergency paid sick or family leave in 2020. There may be an exception to this for those employers who use the calendar year for determining the FMLA 12-month period, and hopefully the DOL or the IRS will provide some clarity through regulation, answers to FAQs, or other agency guidance. The new package also does not appear to prohibit an employer from choosing to continue the EPSL through March 31, 2020 but not the EFMLA, or vice versa. The best advice is to talk with your counsel if you have questions or if you are weighing whether to extend such paid leave benefits into the new year.