Paid Sick Leave Tax Credit Extended into Spring of 2021

It’s been almost a year since we started navigating the new norm ushered in by COVID-19. While we now have emergency use authorization (EUA) vaccines for its prevention, cases continue to rise at a high rate as we await wide distribution. However, there is some much-needed relief for employers that continue to struggle keeping their workplace as safe as possible.

Congress Voted to extend the Families First Coronavirus Response Act (FFCRA), which was set to expire with the New Year, to cover the first quarter of 2021. The bill provides tax credits to employers providing Emergency Paid Sick Leave to employees.

In late December, Congress voted to extend the COVID-19 relief bill providing numerous benefits to those impacted by the virus. Part of the bill, which was originally passed in March of 2020, encourages but does not require certain employers to extend benefits included in FFCRA to employees. The FFCRA provided a refundable payroll tax credit for mandated paid sick and family leave which expired on Dec. 31.

The relief bill now extends the tax credits to March 31. Employers may choose to extend this benefit to employees beginning on Jan. 1.

The following benefits may continue to be offered to employees under the FFCRA:

Emergency Paid Sick Leave (EPSL) – Provides 80 hours of paid leave for qualifying employees 

• Employees who qualify under this section are entitled to 80 hours total from April 1, 2020 through March 31, 2021. If the employee has already exhausted 80 hours of leave under this provision, they will not be granted an additional 80 hours on Jan. 1, 2021. 
• Applies to employees under quarantine or isolation order related to COVID-19 or who have been advised by a health care provider to self-quarantine for reasons related to COVID-19. 
• Applies to employees experiencing symptoms of COVID-19 and are seeking medical diagnosis, caring for a family member who is quarantined or has been advised to quarantine, or is caring for his/her child if the school, place of care or childcare provider of the child has been closed or is unavailable due to COVID-19 precautions. 
• Employees who are subject to a quarantine or isolation order issued by a governmental entity for the population at large related to COVID-19 are also eligible for this benefit.  

Emergency Family Leave (EFL) in conjunction with FMLA – Available to employees who have worked for the employer for at least 30 days 

• Provides 10 weeks of benefit time at 2/3 of the employee’s regular pay rate provided the employee is unable to work or telecommute due to the employee caring for his/her child if the school, place of care or childcare provider is closed or is unavailable due to COVID-19 precautions. This leave may also be used for employees whose child/children are completing online learning versus in-person learning. 
• This leave does not add additional weeks of FML protection to an employee’s FML accrual. 
• FML leave for any reason other than to care for a child remains unpaid or requires the use of accrued benefit time. 
• Employees may take a total of 12 weeks of leave during a 12-month period. If the employee takes some but not all 12 weeks of EFL, the employee may use the remaining portion of FMLA leave for a serious medical condition, as long as the total time taken does not exceed 12 weeks per year. 

Employers should strongly consider extending these benefits in an effort to continue to encourage workplace safety while also providing financial assistance to their employees.