Mandatory FFCRA Leave Expires December 31, 2020
On December 21, 2020, Congress passed the Consolidated Appropriations Act which has major implications for employees and paid leave for COVID-related reasons.
Quick Background
Emergency Paid Sick Leave
First, as we know, the Emergency Paid Sick Leave requires employers with less than 500 employees to provide up to two (2) weeks of full paid sick leave for any of the following reasons:
Subject to a Federal, State, or local quarantine or isolation order related to COVID-19,
Been advised by a health care provider to self-quarantine due to concerns related to COVID0-19.
Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
Caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
Caring for an individual who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
Caring for a son or daughter if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
As explained in my previous blog, employers obtain a tax credit for the monies paid out to employees on this leave.
Emergency Family Medical Leave
The Emergency Family Medical Leave requires employers with less than 500 employees to provide employees with paid leave (2/3 the regular rate of pay) for any of the following reasons:
Care for the son or daughter under 18 years of age of such employee if the school has been closed due to a Public Health Emergency.
Care for the son or daughter under 18 years of age of such employee if the Place of Care has been closed due to a Public Health Emergency.
The Child Care Provider of such son or daughter is unavailable due to a Public Health Emergency.
Just like the Paid Sick Leave, employers could get a tax credit for any monies paid out for this leave.
Sunset Provisions
Both of these statutory leaves have a sunset provision of December 31, 2020. In other words, according to the Paid Sick Leave Act, and the Emergency Family Medical Leave Expansion Act, as written, these leaves are not available come January 1, 2021.
Consolidated Appropriations Act, 2021
Congress passed the Consolidated Appropriations Act (“Stimulus”) on December 21, 2020, which addresses the tax credit and the sunset provisions of the Paid Sick Leave and the Emergency Family Medical Leave (collectively “COVID Leave”)
Section 286 of the Stimulus addresses the COVID Leave issue.
Paid Sick Leave
The Stimulus states that the Paid Sick Leave Act ceases to be mandatory for all covered employers (less than 500 employees) on January 1, 2021. However, businesses can choose to provide Paid Sick Leave and receive the tax credit through March 31, 2021.
Let’s break it down.
All covered employers must abide by the Paid Sick Leave Act through December 31, 2020. Any leave provided to employees through December 31, 2020, will get reimbursed through a tax credit.
Now, starting January 1, 2021, employers can choose if they want to provide Paid Sick Leave, as defined by the Paid Sick Leave Act.
If the employer chooses to provide the Paid Sick Leave, then they will receive a tax credit on money paid for the leave through March 31, 2021. (NOTE: Employers who choose to provide the leave through March 31, 2021, must abide by every section of the Paid Sick Leave Act in order to get the tax credit.)
Carry-Over
At this juncture, it does not appear that Employers who decide the extend the Paid Sick Leave in 2021 need to offer employees an additional two weeks of Paid Sick Leave in the New Year. As we know, the Paid Sick Leave Act was set to completely expire on December 31, 2021. Section 5102(b)(3) of the Paid Sick Leave Act explicitly stated that Paid Sick Leave would not carry over from one year to the next.
However, Section 286 of the Appropriations Act strikes that provision for employers who choose to extend the leave period. This means that employees who work for a company that extends the Paid Sick Leave Period through March 31, 2021, can carry-over their Paid Sick Leave from 2020. The Act is silent on whether employers must or may provide any additional leave for the employees who may have exhausted their Paid Sick Leave in 2020.
This is a big deal. This means that starting January 1, 2021, businesses are not required to provide Paid Sick Leave for employees. While Employers can provide this leave and get the tax credit through March 31, 2021, it is completely optional. So, if any employee gets COVID in the New Year, their employer is not required to provide paid leave.
NOTE: There are some states (ie- New Jersey) that have state specific COVID leave laws. This means, regardless of the federal law, state laws can still require paid leave. Prudent employers should consult with counsel to ensure compliance with state leave laws.
Emergency Family Medical Leave
The Stimulus states that the Emergency Family Medical Leave also ceases to be mandatory for all covered employers (less than 500 employees) on January 1, 2021. However, businesses can choose to provide Emergency Family Medical Leave and receive the tax credit through March 31, 2021.
Let’s break it down.
All covered employers must abide by the Emergency Family Medical Leave through December 31, 2020.
Any leave provided to employees through December 31, 2020, will get reimbursed through a tax credit.
Now, starting January 1, 2021, employers can choose if they want to provide Emergency Family Medical Leave as defined by the Emergency Family Medical Leave Act.
If the employer chooses to provide the Emergency Family Medical Leave, then they will receive a tax credit on money paid for the leave through March 31, 2021. (NOTE: Employers who choose to provide the leave through March 31, 2021, must abide by every section of the Emergency Family Medical Leave Expanded Act in order to get the tax credit.)
Just as explained above, this is a huge deal. This means that starting January 1, 2021, businesses are not required to provide Emergency Family Medical Leave for employees. Employers can provide this leave and get the tax credit, through March 31, 2021. However, providing the federal Emergency Family Medical Leave from January 1 through March 31, 2021, is completely optional.
It follows that if an employee needs to take time off for COVID-related child care issues, employers are not required to provide them with paid time off.
NOTE: It is important to reiterate that there are states (ie- New Jersey) that have state specific COVID leave laws. This means, regardless of the federal law, state laws can still require paid leave. Prudent employers should consult with counsel to ensure compliance with state leave laws.
What Does This Mean For Employers?
Employers need to assess what makes sense for their business in the New Year. Employers can choose to continue one leave over the other during the time period of January 1, 2021 through March 31, 2021. For instance, an employer can opt-in to continue providing Emergency Family Medical Leave through March 31, 2021, and not continue the Paid Sick Leave, and visa versa. Of course, employers can choose to continue both COVID Leaves through March 31, 2021.
Regardless of whether a company decides to continue the leave through January 1, 2021 or March 31, 2021, it is imperative that businesses make a plan for the New Year. Prudent employers must:
Identify the state leave laws for the localities where their employees are working. Many employers have gone almost completely virtual, which resulted in employees living in various jurisdictions and working remotely.
It is crucial for these companies to assess the local state leave laws where their employees reside (and thereby work). As mentioned above, there are many states and cities that have their own local sick leave laws that incorporate COVID leave.
Prepare a leave policy that is workable for conducting business beyond whichever date the employer decides to cease the federal paid leave.
Businesses should consult with counsel to ensure that leave policies are being implemented in a non-discriminatory way.