Several pieces of legislation were passed and signed into law at the end of 2020 as part of the second round of COVID-19 stimulus relief. One of those laws was the Consolidated Appropriations Act (CAA 2021) which extends some of the relief offered under the Families First Coronavirus Response Act (FFCRA). While not as extensive as FFCRA, employers can offer some additional benefits to employees while still receiving the tax benefits allowed under FFCRA. There are limitations on time and scope that employers should study before deciding whether to offer the additional benefits allowed under CCA 2021.

CAA 2021 allows FFCRA-covered employers to voluntarily extend two types of emergency paid leaves through March 31, 2021 that were originally mandated between April 1, 2020 and December 31, 2020 by the FFCRA. These include the Emergency Paid Sick Leave (EPSL) and Emergency Family and Medical Leave (EFMLA).

Under the new legislation, private businesses and non-profits with fewer than 500 employees can take tax credits for FFCRA leaves taken between January 1, 2021 and March 31, 2021. The new legislation still excludes employees of government entities.

A.    Compliance for Employers who choose to extend FFCRA leaves is key:

1.     Emergency Paid Sick Leave (EPSL) Carryover

The FFCRA provided up to 10 days (up to eighty (80) hours) of EPSL, with varying levels of pay (depending on the reason for days off), for any of six COVID-19 qualifying reasons between April 1, 2020 and December 31, 2020. Carryover of unused EPSL into 2021 was not allowed under the FFCRA, the benefits were only available until December 31, 2020.

However, the CAA 2021 amends the carryover provision of EPSL. Employers may now voluntarily choose to permit the carryover of unused 2020 EPSL into the first quarter of 2021. If they do, EPSL tax credits associated with this paid leave can be taken through March 31, 2021.

Notably, CAA 2021 does not provide employees with additional EPSL days. It only extends an employer’s allowance of the tax credit under the FFCRA if those days are taken. For example, if an employee used all of the 10 days available under EPSL in 2020, he/she does not receive additional days, rather the employee has nothing to carry over into the first quarter of 2021 should their employers decide to allow EPSL carryover. However, if the employee does have remaining days under EPSL, and they meet a qualifying reason to take those days up to March 31, 2021 and the employer has allowed that option then the employer will also receive the tax credit for paying that employees’ wages for those days.

If as an employer, your company chooses to allow employees to carryover EPSL benefits, then it should be offered to all employees fairly and without discrimination. As with all legislation involving employees’ benefits and rights, as an employer your policies including benefits offered should not violate any federal or state discrimination statutes, including Title VI, American with Disabilities Act (ADA), Older Americans Protection Act.

2.    Emergency Family and Medical Leave Act (EFMLA Leave) Extension

The FFCRA amended the Family and Medical Leave Act (FMLA or regular FMLA) to add EFMLA as a new qualifying reason for leave. EFMLA is available when an employee is needed to care for a child because of the closure of a school or place of care, or day care being unavailable, due to COVID-19.

Significantly, some EFMLA rules differ from regular FMLA rules. For example:

a.    EFMLA applies to different employers (e.,those with fewer than 500 employees) than those covered by regular FMLA (i.e., those with more than 50 employees).
b.    As to eligibility, employees are eligible for EFMLA after only 30 days of employment, whereas under regular FMLA, employees must meet three additional onerous requirements before becoming eligible (e.,12 months of service; 1,250 hours worked in the preceding 12-month period; and assigned to work at a site with least 50 employees within a 75 mile radius).
c.    Certification of EFMLA leave is, necessarily, quite different from what employers can require of employees seeking regular FMLA leave.
d.    EFMLA provides 2/3 pay for 10 of its 12 weeks, whereas regular FMLA is 12 weeks of unpaid leave.

Since this bill amends and/or extends an existing law, employers are encouraged to consult FMLA to answer EFMLA questions not covered in the FFCRA. Additionally, the Department of Labor’s website answers questions surrounding FFCRA and therefore, can be a good source of guidance.

Like the EPSL extension, whether to extend EFMLA under the CAA 2021 is voluntary, it is at the option of the employer. Private and non-profit employers who choose to continue providing EFMLA can claim the payroll tax credit through March 31, 2021.

Employers should evaluate their decision as to whether to extend EFMLA with care and consultation of their HR Manager and/or employment counsel because there are unanswered questions about the logistics of the extended EFMLA leaves. Here are two examples of the uncertainty:

Like the EPSL extension, whether to extend EFMLA under the CAA 2021 is voluntary, it is at the option of the employer. Private and non-profit employers who choose to continue providing EFMLA can claim the payroll tax credit through March 31, 2021.

Employers should evaluate their decision as to whether to extend EFMLA with care and consultation of their HR Manager and/or employment counsel because there are unanswered questions about the logistics of the extended EFMLA leaves. Here are two examples of the uncertainty:

a.    Does the amount of leave start again?
The FFCRA did not provide an additional 12 weeks of EFMLA leave to employees who were otherwise eligible for regular FMLA. Rather, the FFCRA limited regular FMLA and EFMLA, combined, to a total of 12 weeks. Whether the CAA 2021’s voluntary extension of EFMLA will provide employees with another 12 weeks of EFMLA in 2021, is unclear.

b.    When does the amount of leave start again?
The question involves when the “12-weeks-in-12-months” clocks for FMLA and EFMLA start or end and how that interacts with the extension allowed per CCA 2021 if that calculation period extends from 2020 to 2021. There are several options for calculating FMLA in your policy. The choices can be:

1.    Calendar year,
2.    Another fixed 12-month period, such as employee anniversary date,
3.    The 12 months measured forward from the employee’s first use of FMLA, or
4.    A rolling 12-months measured backward from any date the employee uses FMLA.

You will want to consult with HR manager and/or employment counsel as to which option would be most beneficial to your company (or is already in place in your company) and how that relates to the extension(s) allowed under CCA 2021 given the time period the tax credit is provided to the employer (i.e. allowed until March 31, 2021).

And as with EPSL, employers should not make that decision on a case-by-case, employee-by-employee basis.  If the employer chooses to allow extensions under EFMLA, then all employees should be eligible.

B.    Importance of Consultation on Your Company’s Decision:

The CAA 2021 does not prohibit or require employers who choose to continue EPSL to also continue EFMLA. Thus, it appears the two decisions can be made separately and can differ.

Therefore, employers should review their COVID-19 related leave policies as employees will likely continue to need leave in 2021. Employers should also evaluate their decision in conjunction with State and local sick leave laws already in place.

You should always consult with an attorney, human resources manager, and risk management before deciding how to proceed. The attorneys in our Austin and Dallas offices are available to answer any questions you may have.

 

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