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Congress Does Not Extend Mandatory Paid Leave Under FFCRA But Allows Tax Credits to Employers Voluntarily Providing Paid Leave Through March 31, 2021

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

Congress’ COVID-19 relief legislation which is currently pending will have some effects on employers.  As you may have read or as you already may know, this relief package includes direct payments to individuals, extension of the enhanced unemployment benefits and additional moneys for the PPP relief.  Unfortunately, some provisions that we, as employers were hoping would be included appear to have been omitted including liability and employment law protections for employers. 

Please note that there is NOT an extension of the Families First Coronavirus Response Act (FFCRA) provisions which required employers to provide emergency paid sick or Family and Medical Leave Act leave to employees for qualifying reasons though December 31, 2020.  However, as you will see below, employers MAY voluntarily provide the leave/extend the leave through March 2021 and still receive the federal tax credit.   

Here is a brief summary of the law as it exists today. The final version may differ slightly and we will update you as necessary, these provisions are believed to be very close to final form:  

  • FFCRA Emergency Paid Sick Leave (EPSL) and Emergency Family Medical Leave Act (EFMLA) Leave Requirements:  While there was discussion of the EPSL and EFMLA either expiring completely on December 31, 2020 or being extended (with a new 10 days) for 2021, the final solution appears to be a  hybrid approach.  As currently written, the bill allows covered employers to voluntarily provide EPSL and EFMLA, which was otherwise set to expire next week on December 31, 2020, and to take the tax credit associated with this leave through March 31, 2021.

As you know, FFCRA required employers of fewer than 500 employees to provide employees up to 80 hours (two weeks) of paid leave when employees needed to miss work because they were sick with COVID-19, were quarantined due to COVID-19 exposure, or had children who needed child care due to COVID-19 related issues. In the recent Coronavirus Relief Act, Congress did NOT extend the EPSL or the EFMLA past December 31, 2020, and therefore, employers are no longer mandated to provide paid leave to employees under either the EPSL or EFMLA.

However, the Act does provide that beginning January 1, 2021, employers may voluntarily provide EPSL or EFMLA and take the tax credit associated with this leave. This tax credit is only available for leaves taken through March 31, 2021. So, while paid leave under FFCRA is no longer mandatory, if an employer chooses to provide paid leave, they are still eligible to take the tax credits through March 31, 2021.

Please note that because this continues to be based on the eligibility under the FFCRA, it appears that employees are still eligible only for a total of 80 hours (two weeks) of paid leave. If employees have already taken their 80 hours (two weeks) of paid leave, this voluntary extension does not give them any additional paid leave. This voluntary extension of paid sick leave would only be for employees who have not already used up their 80 hour (two week) entitlement.

In short, effective January 1, 2021, EPSL and EFMLA is no longer required; however, if covered employers voluntarily provide EPSL or EFMLA (for the qualifying reasons), the employer can take the tax credit for the leave.

  • Liability Shields: The bill does not include shields for employers facing COVID-19 related litigation exposure under state law or federal employment and labor laws.  While the Ohio law passed earlier in 2020 provides some shield for Ohio employers, there is not protection from federal law.        
  • Unemployment Compensation: As you may remember, through July, unemployed individuals received an additional $600 per week with their state unemployment benefits.  This bill includes an additional $300 per week for unemployment recipients through March 14, 2021. 
  • PPP:  The bill makes a number of changes to the existing PPP.  please consult with your accountants as to changes which include full deductibility of business expenses on forgiven PPP loans, expansion of the allowable PPP expenses to include supplier costs on existing contracts and purchase orders, worker protective equipment, nd technology expenditures.  It also allows borrowers to select their loan forgiveness covered period between 8 weeks and 24 weeks.

If you have any questions regarding this issue, please call Karen Soehnlen McQueen (kmcqueen@kwgd.com) or Michael J. Bogdan (mbogdan@kwgd.com) at (330) 497-0700 or any of the attorneys in Krugliak, Wilkins, Griffiths & Dougherty’s Labor & Employment Law Practice Section.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.

 
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