On December 21, 2020, Congress approved the Consolidated Appropriations Act, 2021. President Trump signed the bill on December 27, 2020. While the bill extends tax credits for eligible employers who voluntarily choose to allow employees to take leave under the Families First Coronavirus Response Act (FFCRA) through March 31, 2021, the new legislation does not require employers to provide the Emergency FMLA or the Emergency Paid Sick Leave time off under the FFCRA past December 31, 2020.
Employers that voluntarily continue to provide the Emergency FMLA and Emergency Paid Sick Leave under the FFCRA can still take payroll tax credits for the paid leave provided until March 31, 2021. The new legislation also does not require employers to provide additional Emergency Paid Sick Leave beyond the 80 hours set forth in the original FFCRA. Therefore, employees who have already used their maximum amount of time under the Emergency Paid Sick Leave provision of the FFCRA are not entitled to additional leave under this new legislation’s “extension” period and employers will not be able to claim the payroll tax credit for the additional leave taken by such employees.
The Emergency FMLA works differently, however, because the Emergency FMLA works in conjunction with the traditional FMLA. Thus, if an employer extends FFCRA benefits past December 31, 2020, an employee may have additional leave available under the Emergency FMLA depending on how the employer calculates the 12-month FMLA year (rolling or calendar year basis). If the employer calculates the 12-month FMLA year on a calendar year basis, an employee who used all 12 weeks of FMLA/Emergency FMLA leave in 2020 may start 2021 with a new bank of 12 weeks of leave. However, it is still an open question whether that time off will be paid under the Emergency FMLA and whether the employer can take payroll tax credits for the leave.
As with the original FFCRA legislation, the Department of Labor and IRS will probably issue guidance for employers that choose to provide this leave beyond December 31, 2020, but it may take weeks for them to do so. In the interim, employers need to consider whether they will stop offering the FFCRA benefits on December 31, 2020, or extend benefits through March 31, 2021 for those employees who have not exhausted their paid leave entitlement. Once the decision is made, it should be communicated to employees so they understand how their absences will be treated.