FFCRA Updates in the American Rescue Plan
The new stimulus package, signed by President Biden on March 11, 2021, includes changes to the COVID paid leave benefits originally passed in 2020 under the Families First Coronavirus Relief Act (FFCRA). Please pay attention to our updates as they arrive over the next few weeks. The legislation contains several areas where legislators have given “The U.S. Secretary of Labor” a mandate to expand on and write the rules. Our legislative watch team will make those available as we become aware of any changes.
Here we are summarizing the key points you need to know:
- Providing FFCRA paid leave continues to be voluntary
- FFCRA tax credits have been extended and are available through September
- Starting April 1st, employees can now use FFCRA for vaccine-related absences
- It’s all or nothing — don’t pick and choose which employees can use paid leave
- Banks of FFCRA sick and family leave time are reloaded on April 1st
FFCRA paid leave benefits are still voluntary. (For now)
Importantly, FFCRA pay continues to be voluntary, though legislative efforts are still being made to make it mandatory again. Employers can voluntarily choose to provide FFCRA paid leave benefits and get a dollar-for-dollar tax credit through September 30, 2021. These tax credits were previously set to expire at the end of March 2021.
Because these tax credits will still be available, we are recommending that employers continue to provide FFCRA benefits. Also, please note that many cities and states have passed their own emergency paid leave laws that may extend into 2021. As a result, you should continue to reach out to CEDR before you deny an employee’s paid leave request.
Eligibility for FFCRA benefits is expanded.
Congress recognized additional COVID-related reasons for being unable to work, and added additional eligibility criteria.
Employees are now eligible for paid FFCRA leave if they are:
- Seeking or awaiting COVID test results or diagnosis, either because of COVID exposure or because the employer requested the test/diagnosis.
- Obtaining the COVID vaccine.
- Recovering from any injury, disability, illness, or condition related to the COVID vaccine.
Ideally, the DOL will update its FFCRA FAQs in the near future to address questions surrounding these additional criteria.
Employees continue to be able to take FFCRA paid leave for all of the original eligibility criteria:
- Subject to a federal, state, or local quarantine or isolation order related to COVID-19.
- Advised by a healthcare provider to self-quarantine due to COVID-19 concerns.
- Experiencing COVID-19 symptoms and seeking medical diagnosis.
- Caring for an individual subject to a federal, state, or local quarantine or isolation order or advised by a health care provider to self-quarantine due to COVID-19 concerns.
- They must care for their child if the child’s school or place of care is closed or the child’s care provider is unavailable due to the public health emergency.
Anti-discrimination protections are expanded.
Employers who choose to provide FFCRA benefits in 2021 should do so consistently for all employees.
Starting April 1st, if you pick and choose which employees you’re willing to give paid leave to, you could actually lose your eligibility for tax credits. This could happen retroactively forcing you to refund what you receive. We recommend making a decision now about whether you are going to voluntarily offer FFCRA or not.
The law specifically says that you cannot discriminate in favor of highly compensated employees, full-time employees, or employees with tenure (seniority). Doing so will make you ineligible for tax credits.
You may be thinking that you are going to make eligibility decisions for each individual employee based on different criteria (which could be carefully done under the old rules), but that would be quite risky under the new rules. We are expecting the DOL to do some rulemaking around this which may significantly expand on the non-discrimination requirements.
Keep in mind that defending against an employee’s discrimination claim, valid or not, would end up costing you more than their paid leave in the first place — especially since you get the leave paid back through a tax credit anyway.
FFCRA paid leave benefits reset on April 1, 2021.
For employers who choose to provide FFCRA benefits in 2021, the amount of paid time off employees are eligible for will reset on April 1, 2021. This applies to both the two weeks of emergency paid sick leave and the 10 weeks of emergency paid family leave available under the law. Employers will continue to be able to get the dollar-for-dollar tax credit for this time through September 30, 2021.
In other words, after March 31, 2021, if you are going to grant leave and apply for the tax reimbursement, you should refill your employee’s FFCRA paid time off banks. Although we are still waiting for clarification from the DOL on this issue — as a voluntary benefit — employers may be able to provide the additional two weeks of emergency paid sick leave under FFCRA, but not the additional 10 weeks of emergency paid family leave. Stay tuned for additional guidance on this as we approach April 1st.
An additional tax credit is available for emergency paid family leave.
Employers can now receive an aggregate tax credit of $12,000 per employee for emergency paid family leave. This is up from $10,000. The total daily limit remains at $200.